NEWS RELEASE

Proposed Sale and Leaseback of TIC Tech Centre at 25 Pandan Crescent Singapore 128477

SINGAPORE, 3 May 2004 - Mainboard listed Teckwah Industrial Corporation ("Teckwah" or "the Group") today announced that the Company has entered into a conditional Put and Call Option Agreement ("the "Put and Call Option Agreement") with Mapletree Investments Pte Ltd, for the sale and leaseback of Private 7810K of Mukim 5, together with the building erected thereon known as TIC Tech Centre, 25 Pandan Crescent Singapore 128477 (the "Building"), and the Automated Storage and Retrieval System ("ASRS") ("the Proposed Transaction").

1. Sale and Leaseback Consideration

The sale price of the proposed transaction is S$48,000,000 and was arrived at on a willing buyer and willing seller basis.

The sales price is payable as follows :-

i) Upon the signing of the Put and Call Option Agreement, an option fee of S$ 48,000.
ii) On completion of the Sale and Purchase Agreement, which is scheduled approximately ten weeks from the date of the Put and Call Option Agreement, the full price of S$48,000,000 (inclusive of the option fee.)

2. Conditions Precedent

The proposed sale constitutes a major transaction by the Group under Chapter 10 of the Singapore Exchange Securities Trading Limited's Listing Manual and accordingly, is subject to shareholders' approval at an extraordinary general meeting ("EGM") to be convened at a later date.

A circular to shareholders, together with notice of the EGM, will be despatched to shareholders of the Company in due course. The circular will contain, inter alia, details of the Proposed Transaction.


3. Valuation

At completion, the book value (less depreciation) of the Building and ASRS will be approximately S$45,000,000. Accordingly, the excess of the proceeds from the Proposed Transaction over the book value of the Property is S$3,000,000.

There were no recent valuations done on the property.


4. Use of Proceeds

The proceeds of the Proposed Transaction will be used to reduce bank borrowings of approximately $20 million and to provide additional investment and working capital for the Group's business.


5. Financial Effects
(a) Earnings

Assuming that the Proposed Transaction had been completed on 1 Jan 2003 and based on the Group's audited consolidated financial statements for the year ending 31 December 2003, the proforma effects on the consolidated earnings of the Group as follows:-

(b) Net Tangible Assets ("NTA")

Assuming that the Proposed Transaction had been completed on 31 December 2003 and based on the Group's audited consolidated financial statements for the year ending 31 December 2003, the proforma effects on the consolidated earnings of the Group are as follows:-

(c) Gearing

If the proceeds from the Proposed Transaction are used to reduce the bank borrowings, the Group's gearing ratio will improve from 0.34 times to 0.07 times.


6. Rationale of the Proposed Transaction
The Proposed Transaction will enable the Group to re-deploy its capital more efficiently towards developing the existing businesses of the Group. It is in line with the Group's strategy to remain asset light and to focus on its core competencies to build new capabilities.

Together with the proposed sale, the Company has entered into an agreement to leaseback 83% of the Building and the entire ASRS for a term of 10 years with an option to extend for another 5 years, commencing from the date of delivery of possession of the Building to Mapletree Investments Pte Ltd, at a quarterly rental of S$1,366,000 for the first 3 years. This will allow the Company to have the continuous use of the existing Building (which was built to the Company's specific requirements) as well as the naming right.


7. Interests of Directors and Controlling Shareholders
None of the Directors or controlling shareholders of the Company has any interest, direct or indirect, in the Proposed Transaction.