General Announcement
Reference No O&-051010-63060

Submitting Merchant Bank	:	K & N KENANGA BHD
Company Name	:	ASIAEP BHD (MESDAQ Market)
Stock Name	:	ASIAEP
Date Announced	:	10/10/2005


Type	:	Announcement
Subject	:	asiaEP BERHAD ("asiaEP" or the "Company") PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 82,777,778 NEW WARRANTS ON THE BASIS OF ONE (1) NEW WARRANT FOR EVERY THREE (3) EXISTING ORDINARY SHARES OF RM0.10 EACH HELD IN ASIAEP ON AN ENTITLEMENT DATE TO BE DETERMINED LATER

Contents :

1. INTRODUCTION

Kenanga

Warrants

asiaEP Shares

Shares

Proposed Rights Issue

ESOS

Proposed Acquisition of Cimtek

Proposed Call Option

"Conversant"

On 7 October 2005, Kenanga announced that the Company had entered into a conditional sale of shares agreement with Cheong Kong Wai ("Vendor"), for the proposed acquisition of 1,001 ordinary shares of SGD0.01 each in Conversant ("Sale Shares"), representing 100% of Conversant's current issued and paid-up share capital for a total purchase consideration of RM9,900,000 (to be described hereon as the "Proposed Acquisition of Conversant").

The purchase consideration of RM9,900,000 for the Sale Shares is to be satisfied by a total cash consideration of RM4,950,000 and the balance RM4,950,000 via the issuance of 18,333,334 new ordinary shares of RM0.10 each in asiaEP at an issue price of RM0.27 per share to the Vendor.

2. REVISIONS TO THE PROPOSED RIGHTS ISSUE OF WARRANTS

3. UTILISATION OF PROCEEDS

	RM'000
Working capital for the asiaEP Group *	628
Defrayment of expenses incidental to the Proposed Rights Issue **	200
Total	828

Note:-

* If the amount of proceeds that are to be raised pursuant to the Proposed Rights Issue is less than the maximum amount of approximately RM0.828 million, the amount proposed to be allocated towards working capital will be adjusted accordingly.

** If the actual expenses are higher than budgeted, the deficit will be funded out of the portion allocated for working capital of the asiaEP Group. Conversely, if the actual expenses are lower than budgeted, the excess will be utilised for working capital purposes.

4. FINANCIAL EFFECTS

Minimum Scenario:	Assuming:- (1) none of the Unexercised ESOS Options(1) and Additional ESOS Options(2) are exercised into new asiaEP Shares; and (2) the Proposed Acquisition of Conversant is not completed prior to the entitlement date of the Proposed Rights Issue.
Maximum Scenario:	Assuming:- (1) full exercise of all the Unexercised ESOS Options and Additional ESOS Options; and (2) completion of the Proposed Acquisition of Conversant prior to the entitlement date of the Proposed Rights Issue.

Notes:

(1)

Refers to the 25,230,740 unexercised options granted under asiaEP's ESOS, which entitle the option holders to subscribe for a total of 25,230,740 new asiaEP Shares.

(2)

Refers to the 4,769,260 ungranted options, which upon granting will entitle the option holders to subscribe for a total of 4,769,260 new asiaEP Shares.

4.1 Share Capital

The proforma effects of the Proposed Rights Issue on the issued and paid-up share capital of asiaEP are set out in Table 1 of this announcement.

4.2 Net Tangible Assets ("NTA")

The proforma effects of the Proposed Rights Issue based on the audited NTA of asiaEP as at 28 February 2005 are set out in Table 2 of this announcement.

4.3 Earnings

The Proposed Rights Issue is not expected to have any material effect on the earnings of asiaEP for the financial year ending 28 February 2006.

4.4 Substantial Shareholders

The proforma effects of the Proposed Rights Issue on the shareholdings of the substantial shareholders of asiaEP as at 7 October 2005 (being the date prior to the date of this announcement) are set out in Table 3 of this announcement.

4.5 Dividends

5. TIMEFRAME FOR SUBMISSION

Submission in relation to the Proposed Rights Issue to the SC is expected to be made within one (1) month from the date of this announcement.

This announcement is dated 10 October 2005.