DBS Lead Financing For Singapore's First Desalination Plant

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Subsidiary of Hyflux signs S$165M syndicated loan

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Landmark Facility Oversubscribed By More Than 30%

SINGAPORE, DECEMBER 12, 2003 - DBS Bank announced today that a S$165 million syndicated loan to build Singapore's first desalination plant was more than 30% oversubscribed.

The 18-year facility was made to SingSpring Pte Ltd (SingSpring), a wholly-owned subsidiary of Hyflux Ltd, an SGX main-board listed water treatment specialist.

DBS Bank, the co-ordinating arranger, said the landmark project financing deal attracted interest from three global banks. KBC Bank, ING Bank and Standard Chartered Bank will join DBS as members of the syndicate.

Proceeds from the loan will be used to fund the project to develop, design, procure, construct, test and commission the plant.

The S$165 million issue comprises a senior debt facility of up to S$158.5 million to fund 80 per cent of the project costs, and a contingency facility of up to S$6.5 million to pay for 70 per cent of any cost overrun. The balance of the total project costs or cost overrun will come from Hyflux's equity contributions into SingSpring.

Hyflux was awarded the contract by the Public Utilities Board (PUB) for Singapore's maiden seawater desalination plant in January this year.

Construction is scheduled to begin in January 2004. When completed in 2005, the plant will be able to produce a daily capacity of 136,380 cubic metres of water.

The loan will be repaid over a period of up to 18 years from the date of commercial operation of the plant. For the first 10 years, the interest rate has been fixed under an interest rate swap facility with DBS Bank.

Speaking at the loan signing ceremony held today, DBS Bank's Vice-Chairman and CEO Jackson Tai said the fact that the landmark loan is oversubscribed by more than 30% is testament to the lending community's faith in Hyflux's energetic CEO, Olivia Lum, and her capable team.

"It is exciting for DBS Bank to be partnering such a dynamic Asian pioneer in the highly competitive water treatment market," he added.

"We are particularly impressed with the inroads Hyflux has made in regional markets particularly in Malaysia and China where it has more than held its own against intense competition."

Valued at S$54 million during its IPO in January 2001, Hyflux today commands a market capitalization of around S$451 million. Having grown its market capitalization six-fold, Hyflux ranked as one of the best-performing companies on the Singapore Exchange's Sesdaq Board and has since been upgraded to the Mainboard in April 2003. US magazine, Forbes ranked Hyflux as one of the world's Best 200 Small Companies last year.

About DBS

Headquartered in Singapore, DBS is one of the largest financial services groups in Asia. The largest bank in Singapore and one of the top five in Hong Kong as measured by assets, DBS has dominant positions in consumer banking, treasury and markets, securities brokerage, equity and debt fund raising. Beyond the anchor markets of Singapore and Hong Kong, DBS serves corporate, institutional and retail customers through its operations in Thailand, The Philippines, and Indonesia. In China, the bank has branches and representative offices in Shanghai, Beijing, Shenzhen, Fuzhou and Tianjin. The Bank's credit ratings are among the highest in the Asia-Pacific region. More information about DBS Group Holdings and DBS Bank can be obtained from our website www.dbs.com.