Asset Acquisitions and Disposals::Termination of the amended and restated CSPA/ Entry into new CSPA

KENCANA AGRI LIMITED

(Incorporated in the Republic of Singapore)

(Company Registration Number: 200717793E)

(the "Company")

PROPOSED DISPOSAL OF 78.5% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF PT CAHAYA PERMATA GEMILANG WHICH CONSTITUTES AN INTERESTED PERSON TRANSACTION UNDER CHAPTER 9 AND A MAJOR TRANSACTION UNDER CHAPTER 10 OF THE LISTING MANUAL OF THE SINGAPORE EXCHANGE SECURITIES TRADING LIMITED RESPECTIVELY

1. • TERMINATION OF THE AMENDED AND RESTATED CSPA
   • ENTRY INTO NEW CONDITIONAL SHARES SALE AND PURCHASE AGREEMENT
2. TERMINATION OF THE AMENDED AND RESTATED CSPA
   Unless otherwise defined, all capitalised terms used herein shall have the meanings ascribed to them in the Company's announcements dated 31 October 2019, 12 December 2019, 23 January 2020, 24 March 2020, 5 May 2020 and 5 March 2021 (the "Previous Announcements").
   The board of directors (the "Board" or the "Directors") of Kencana Agri Limited (the "Company" and together with its subsidiaries, the "Group") refers to the Previous Announcements and wishes to provide the shareholders of the Company with an update on the status of the Proposed Disposal.
   The relevant parties have agreed to revise certain key terms of the proposed disposal of 78.5% of the issued and paid-upshare capital of PT Cahaya Permata Gemilang (i.e., the Target) by SWK, a subsidiary of the Company, in order to take into account the recent market developments in the energy sector in which the Target is operating, as well as the global economic trends, including the impact of the COVID-19 pandemic.
   In addition, PT Kencana Energi Lestari, Tbk. ("KEL") will no longer be acquiring 78.5% of the Target directly. Instead, a special purpose vehicle, PT Biomassa Energi Jaya ("BEJ"), has been incorporated to acquire 78.5% of the Target. BEJ is 49% owned by KEL, and the remaining 51% is owned by PT Paramata Indah Lestari, an Indonesian entity which is owned by Mr. Henry Maknawi and his sons.
   In view of these changes, as well as the expiry of the long stop date under the Amended and Restated CSPA on 30 June 2020, the parties have on 10 August 2021 mutually agreed to terminate the Amended and Restated CSPA (the "Original CSPA"). Concurrent with such termination, a new conditional shares sale and purchase agreement has been entered into between BEJ, SWK, the Company and the Target for the acquisition by BEJ of 78.5% of the Target (the "New CSPA").
   A summary of the differences in the key terms of the Original CSPA and the New CSPA are set out in Annex 1hereto.

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1. ENTRY INTO NEW CONDITIONAL SHARES SALE AND PURCHASE AGREEMENT

1. INTRODUCTION

1. On 10 August 2021, PT Biomassa Energi Jaya ("BEJ" or the "Buyer"), PT Sawindo Kencana ("SWK" or the "Seller"), the Company and PT Cahaya Permata Gemilang ("CPG" or the "Target") entered into a conditional shares sale and purchase agreement (i.e., the New CSPA) pursuant to which the Buyer (and/or its wholly-owned subsidiary) intends to acquire 78.5% of the issued and paid-up share capital of the Target (the "Sale Shares") for an aggregate consideration of US$2,375,326 (approximately Rp34,449,350,418) (the "New Proposed Disposal"). The current shareholding structure of the Target and its subsidiaries is set out in Annex 2hereto.
2. The relative figures of the New Proposed Disposal computed on the bases set out in Rule 1006 of the listing manual (the "Listing Manual") of the Singapore Exchange Securities Trading Limited (the "SGX-ST") exceed 20%. Accordingly, the New Proposed Disposal is a major transaction in respect of which the approval of the shareholders (the "Shareholders") of the Company is required.
3. As described in Section 2.1 of this announcement, the Buyer is an interested person (as defined in the Listing Manual) ("Interested Person") and the New Proposed Disposal is an interested person transaction (as defined in the Listing Manual) ("Interested Person Transaction"). The consideration for the New Proposed Disposal represents approximately 17.35% of the Group's latest audited net tangible assets ("NTA") for the financial year ended 31 December 2020 ("FY2020"). Accordingly, the New Proposed Disposal is an Interested Person Transaction in respect of which the approval of the Shareholders who are independent for the purposes of the New Proposed Disposal as an Interested Person Transaction (the "Independent Shareholders") is required.

2. THE NEW PROPOSED DISPOSAL

2.1. Information on the Buyer

1. BEJ is a limited liability company established under the laws of the Republic of Indonesia. It is 49% owned by KEL, and the remaining 51% is owned by PT Paramata Indah Lestari ("PIL"), an Indonesian entity which is owned by Mr. Henry Maknawi and his sons.
2. KEL is a public company listed on the Indonesia Stock Exchange and established under the laws of the Republic of Indonesia, and is a leading renewable energy provider in the Republic of Indonesia providing renewable energy for the needs of industries and households. The Maknawi family is a controlling shareholder of KEL, and holds in aggregate a 67.85% interest in KEL, both individually and through PIL.
3. The Maknawi family, through Kencana Holdings Pte. Ltd. and Mr. Henry Maknawi, is also a controlling shareholder of the Company and holds in aggregate a 53.77% interest in the Company. In addition, Mr. Henry Maknawi is a director on both the boards of KEL and the Company. Mr. Albert Maknawi is the chief executive officer of the Company, and is also the president commissioner of KEL.

2.2. Information on the Target

2.2.1. CPG is a limited liability company established under the laws of the Republic of Indonesia, and is engaged in the independent power producer business with biomass as its fuel. It is 78.5%

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owned by the Seller, and the remaining 21.5% is owned by Enco Power Pte. Ltd. (formerly known as Kencana Bio-EnergyPte. Ltd.) ("Enco Power"). Enco Power is the wholly-ownedsubsidiary of Enco Ventures Singapore Pte. Ltd. ("Enco").

2.2.2. CPG owns 99.9% of PT Listrindo Kencana ("LK"), which in turn owns 99% of PT Energy Karya Persada ("EKP", and together with the Target and LK, the "Target Group"). Please refer to Annex 2hereto for further details on the current shareholding structure of the Target Group.

2.3. Principal Terms of the New Proposed Disposal

The principal terms of the New Proposed Disposal are set out as follows:

	Consideration	:	US$2,375,326 (approximately Rp34,449,350,418). Please
				refer to Annex 1hereto for further details.
				The consideration was determined pursuant to commercial
				negotiations between the Seller and the Buyer in good faith and
				on an arm's length basis, and was reviewed and approved by
				the directors of the Company who are independent for the
				purposes of the New Proposed Disposal as an Interested
				Person Transaction (the "Independent Directors"), taking into
				account the following factors:
				(a)	the audited accounts of the Target Group as at 31
					December 2020 (after adjusting for the amount of the
					shareholders loan owed by the Target to SWK as at 31
					December 2020) in which the net assets and net tangible
					assets value of the Sale Shares (i.e., 78.5% of the issued
					share capital of the Target) are both recorded as US$0.6
					million;
				(b)	the financial performance of the Target Group during
					FY2020;
				(c)	the value of the SWK Land1 as determined by the Land
					Valuer (as defined below);
				(d)	the lease fees payable for a term of six years under the
					SWK Lease Agreements (as defined below) which was
					calculated based on the market rental value as determined
					by the Land Valuer;
				(e)	the value of the To Be Repaid SWK Loan2; and

• "SWK Land" means part of the land owned by SWK in the area of approximately 5 (five) Ha under the HGU 01/1997, where "HGU 01/1997" means the Right to Cultivate Certificate Number 01/Bangka dated 10 October 1997.

• As at 30 June 2021, the amount of the shareholders loan owed by the Target to its shareholders, Enco Power and SWK, is Rp4,155,096,277 (approximately US$286,499) and Rp44,527,744,850 (approximately US$3,070,244) respectively (the "Aggregate Loan Amount"). As part of the purchase consideration, an amount of US$1,103,287 will be paid by the Buyer (either directly or through the Target) to SWK in discharge of the corresponding amount of the shareholders loan owing from the Target to SWK within one year from completion of the sale under the New CSPA (the "To Be Repaid SWK Loan").

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		(f)	the assumption by the Buyer of the PT PLN Penalty (as
			defined below) with effect from 1 January 2021.
Terms of Payment	:	Please refer to Annex 1hereto for further details.
Conditions Precedent	:	(a)	Execution of a conditional shares sale and purchase
			agreement between BEJ, Enco, Enco Power and the
			Target in relation to the transfer of all the shares in the
			Target owned by Enco Power to BEJ or a party nominated
			by it / its wholly-owned subsidiary (the "Enco Power Sale").
		(b)	Completion of the conversion of the Remaining
			Shareholders Loan3.
		(c)	The conversion of the Remaining Shareholders Loan being
			announced in two nationally circulated newspapers.
		(d)	Completion of legal and financial due diligence on the
			Target Group and the results of such legal and financial due
			diligence being satisfactory to the Buyer.
		(e)	Execution of a new long-term lease agreement between
			SWK and EKP in relation to the portion of the SWK Land
			which is temporarily being used by EKP for its business
			activity, and a new long-term lease agreement between
			SWK and LK in relation to the portion of the SWK Land
			which is temporarily being used by LK for its business
			activity (collectively, the "SWK Lease Agreements").
		(f)	Execution of a conditional land sale and purchase
			agreement relating to the SWK Land between the Buyer
			and EKP, and a conditional land sale and purchase
			agreement relating to the SWK Land between the Buyer
			and LK (collectively, the "SWK Land Sale Agreements").
		(g)	Approval from the creditors of the Target and the Seller
			having been obtained by the Target and the Seller for: (i)
			the execution of the SWK Land Sale Agreements; (ii) the
			New Proposed Disposal; (iii) the SWK Lease Agreements;
			and (iv) the conversion of the Remaining Shareholders
			Loan.
		(h)	The shareholders of the Target approving the following
			matters: (i) the New Proposed Disposal; (ii) the change to
			the composition of the board of directors and board of
			commissioners of the Target; (iii) the amendment to the

• Subject to the necessary approvals having been obtained, the remaining amount of the shareholders loan (i.e., the Aggregate
  Loan Amount less the To Be Repaid SWK Loan) (the "Remaining Shareholders Loan") will be converted into share capital in the Target prior to completion of the sale under the New CSPA. On conversion of the Remaining Shareholders Loan, with the necessary adjustments made as between Enco Power and SWK, the shareholding of Enco Power and SWK in the Target will remain at 21.5% and 78.5% respectively.

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			articles of association of the Target; and (iv) the change to
			the shareholding composition of the Target.
		(i)	The relevant authority approving the following matters: (i)
			the New Proposed Disposal; (ii) the change to the
			composition of the board of directors and board of
			commissioners of the Target; (iii) the amendment to the
			articles of association of the Target; and (iv) the change to
			the shareholding composition of the Target.
		(j)	The passing of the required resolutions of Enco Power to
			approve the Enco Power Sale.
		(k)	The Target having announced the change of control due to
			the New Proposed Disposal: (i) in a nationally circulated
			newspaper; and (ii) to its employees.
		(l)	Delivery of the documents evidencing the payment of the
			settlement by the Seller and/or the Company of all
			compensation due and payable, including but not limited to
			severance payments, any outstanding payments, and any
			related payments as required under the laws and
			regulations, to all the Target's employees who elect to
			resign from the Target.
		(m) The release and discharge of the Seller as a guarantor of
			the loan given by OCBC NISP to LK, and the participation
			of KEL and PIL are guarantors in its place.
		(n)	KEL and PIL jointly and severally guaranteeing the To Be
			Repaid SWK Loan.
Conditions	:	General Conditions Subsequent(to be fulfilled within five
Subsequent		business days from the date on which completion of the New
		Proposed Disposal ("Completion") occurs (the "Completion
		Date"))
		(a)	The issuance of approval and/or notification receipt from
			Minister of Law and Human Rights of Republic of Indonesia
			with respect to: (i) the change of the shareholding
			composition of the Target due to the New Proposed
			Disposal; (ii) the change to the composition of the board of
			directors and board of commissioners of the Target; and (iii)
			the amendment to the articles of association of the Target.
		(b)	The Target having announced the Completion in a
			nationally circulated newspaper.
		(c)	The issuance of share certificates in the name of BEJ
			(and/or its wholly-owned subsidiary) and shareholders
			register of the Target which reflects the shareholding
			composition of the Target upon Completion.
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