China Yuchai International Limited announced that its wholly-owned subsidiary Venture Lewis Limited (VLL) has entered into a loan agreement with HL Global Enterprises Limited (HLGE) for the extension of a loan of SGD 68,000,000 to HLGE. The original amount of the Loan was SGD 93,000,000 which was granted to HLGE in February 2009 to refinance the zero coupon, unsecured, non-convertible bonds issued by HLGE in 2006 and which matured on July 3, 2009. The principal amount has been reduced to SGD 68,000,000 pursuant to partial repayments totaling SGD 25,000,000 made by HLGE in 2011, 2012 and 2013 from disposal of assets.

The Company through another wholly-owned subsidiary, Grace Star Services Ltd., owns 48.9% of the issued ordinary shares of HLGE. The unsecured Loan has, pursuant to the terms of the 2016 Loan Agreement, been extended for one year from July 2016 and is due for repayment in July 2017. Under the terms of the 2016 Loan Agreement, the interest payable is the aggregate of a margin of 0.5% per annum and the 12-month Singapore Interbank Offer Rate ("SIBOR") expressed in a percentage rate as calculated by Reuters as the official calculation agent of SIBOR for the Association of Banks in Singapore, for Singapore Dollars, as at 11.00 a.m. on January 26, 2016.

In the event the interest rate charged on external funds utilized by China Yuchai for their investment in HLGE is increased, the Company has a right to negotiate with HLGE with a view to agreeing on an increase in the interest rate payable by HLGE under the 2016 Loan Agreement subject to compliance with certain regulatory requirements. A negative pledge undertaking against any disposal or creation of security over substantially all of HLGE's assets without VLL's consent is also included.