The Board of Directors of HANDAL RESOURCES BERHAD wishes to inform that the Company has on 23 April 2014 subscribed for the second tranche of 2,588,000 Irredeemable Convertible Preference Shares ("ICPS") of RM1.00 each at the issue price of RM1.00 each in the subsidiary company, HANDRILL SDN BHD ("HSB") (“Proposed Subscription”). Information on HSBHSB was incorporated on 11 January 2008 and is principally involved in providing consultancy for engineering project support services. HSB is registered with and licensed by Petronas as Rig Owner / Rig Operator. HRB currently holds 4,410,016 ordinary shares of RM1.00 each in HSB representing 98.88% of the ordinary issued and paid up capital of HSB and the first and second tranche totalling to 15,288,000 ICPS held by HRB represents 100% of the preference share capital of HSB. The balance of the ordinary shareholding is held by En Amir Hasnizam Bin Meor Nordin. The ICPS are not entitled to dividends or voting rights and are convertible to ordinary shares of RM1.00 each upon notification by HSB that it has secured sizeable work contracts. The conversion rate is of one (1) ordinary share of RM1.00 for every RM1.00 of the ICPS.ConsiderationThe consideration for the Proposed Subscription amounting to RM2,588,000 is satisfied through internally generated funds. Rationale for the Proposed AcquisitionThe HRB Group is principally involved as a fully integrated offshore crane service and manufacturing provider specializing in the oil and gas industry. HSB possess a Petroliam Nasional Berhad license and the increase in capital of HSB will enable it to bid for larger contracts. Financial EffectsThe Proposed Subscription will not have any effect on the issued and paid-up share capital of the Company and shareholdings of the substantial shareholders of the Company as the purchase consideration will be satisfied entirely in cash. The Proposed Subscription is not expected to have any material effect on the earnings per share, net assets and gearing of HRB Group for the financial year ending 31 December 2014. The Proposed Acquisition is however expected to contribute positively to the future earnings of the HRB Group when HSB secures sizeable work contracts.Approval requiredThe Proposed Subscription does not require the approval of the Company’s shareholders. Directors/Major shareholders’ interestNone of the other Directors or major shareholders of HRB or persons connected to them have any interest, direct or indirect, in the Proposed Subscription. Directors’ statementThe Board of Directors are of the opinion that the Proposed Subscription is in the best interest of the Company. Applicable Percentage RatioThe highest percentage ratio applicable to the Proposed Subscription is 3.59%. This announcement is dated 23 April 2014.