The Board of Directors of Pacific Star Development Limited refer to the announcement dated 24 December 2018 relating to the Group's SGD 70 million loan facility. Unless otherwise defined herein, capitalized terms shall have the meanings as ascribed to them in the Loan Facility Announcement. Pursuant to the terms of the Loan Facility, the Group was to repay the outstanding principal amount as well as accrued interest to the Lenders on 24 December 2020. Such payment included a cash interest component of SGD 1,547,195.47. The current COVID-19 pandemic has exerted a profound negative impact on the Group's operations. Hence, with the objective of conserving cash, the Group had been in discussions with the Lenders to seek an extension of the maturity date of the Loan Facility as well as a capitalisation of the Cash Interest. On 7 January 2021, the Lenders informed Twin Prosperity Group Limited (a wholly owned subsidiary of the Group) that they have agreed to capitalise the Cash Interest (the "Capitalisation of Interest"). Pursuant to such Capitalisation of Interest, the Cash Interest amount would be added to the outstanding principal amount under the Loan Facility and will subsequently be treated for all purposes of the Loan Facility as part of the principal amount of the Loan and accrue interest and be repayable in accordance with the Loan Facility. Consequently, the Cash Interest need not be paid in cash. The Capitalisation of Interest is beneficial to the Group from a cashflow perspective because it allows the Group to conserve cash in the immediate term. The Capitalisation of Interest is not expected to have any material impact on the consolidated net tangible assets and earnings per share of the Group for the current financial year ending 30 June 2021. Separately, the Group continues to be in discussions with the Lenders on an extension of the maturity date of the Loan. The Lenders have informed the Company that in relation to the extension request, they are currently evaluating various options and will respond more definitively in due course. The Lenders have indicated that they understand the restrictions to sales and marketing efforts as a result of the COVID-19 pandemic situation in Malaysia and regionally, and remain supportive of the Group. In the interim, the Lenders continue to reserve their rights in relation to the expiry of the maturity of the Loan. The Company will update its shareholders on the progress of these discussions in due course.