Ramly Ali J:

The petitioner (Sateras Resources (Malaysia) Bhd. is seeking sanction of this court for a scheme of arrangement and compromise between the petitioner and it's shareholders and creditors (Proposed Scheme) pursuant to Companies Act 1965, ss. 176(3) and Companies Act 1965, ss. 176 (4). The Proposed Scheme is as set out in the Petitioner's Explanatory Statement to Shareholders and Scheme Creditors and Circular to Shareholders dated 18 August 2004.

Proposed Restructuring Scheme

The principal terms of the Proposed Restructuring Scheme are as follows:

(a) proposed acquisition of 4,500,000 ordinary shares of RM1 each in Ace, representing the entire issued and paid-up capital share capital of Ace, by Salwan Corporation (Salwan) from the vendors of Ace for a purchase consideration of RM140,000,000 to be satisfied via the issuance of 140,000,000 new Salwan shares at par;

(b) proposed acquisition of a parcel of a 62-year leasehold land held under PN 3940, Lot No. 24, Town of Petaling Jaya, District of Petaling, State of Selangor Darul Ehsan, by Salwan from AAPSB for a purchase consideration of RM33,600,000 to be satisfied via the issuance of 9,000,000 new Salwan shares at par and RM24,600,000 nominal value of RCSLS at 100% of its nominal value;

(c) proposed share exchange of the entire issued and paid-up share capital of the petitioner of RM200,840,538 comprising of 200,840,538 Sateras shares with 2,000,000 new Salwan shares to be issued at par on the basis of one (1) new Salwan share for approximately every one hundred (100) existing Sateras shares held, via a scheme of arrangement between the petitioner and its shareholders under s. 176 of the Act;

(d) proposed settlement of debt whereby debts owing by the petitioner to its Scheme Creditors are to be satisfied via the issuance of 15,000,000 new Salwan shares to be issued at par;

(e) proposed placement of up to 15,000,000 Salwan shares by Salwan, on behalf of the Scheme Creditors and a minimum of 24,500,000 Salwan shares by the Vendors of Ace to meet the public shareholding spread requirement pursuant to the Listing Requirements;

(f) proposed disposal of the petitioner by Salwan to a special purpose vehicle (SPV) for a cash consideration of RM1; and

(g) proposed transfer listing with the de-listing of the petitioner from the official list of the main board of Bursa Malaysia Securities Berhad ("Bursa Securities") and the listing of Salwan in place of the petitioner on the main board of Bursa Securities.

In brief, the effect of the Proposed Scheme on the creditors can be summarized as follows:

(i) The petitioner will be sold for RM1 and in exchange of the listing status of the petitioner, Salwan will pay a sum of 6.5 sen to every ringgit owed to each of the petitioner's creditor and issue one (1) new Salwan share for every one hundred (100) shares of the petitioner;

(ii) Upon the completion of the Proposed Scheme, the petitioner will be free from all its debts and yet would continue to have substantial assets in the form of shares in various subsidiaries and claims against the various vendors arising from profit guarantees and/or warranties given to the petitioner up to the tune of about RM120 million.

In compliance with Companies Act 1965, ss. 177 and pursuant to court orders dated 29 July 2003, 3 November 2003, 10 February 2004 and 11 August 2004 granting the petitioner leave to convene the Scheme Meetings, the Scheme Meetings were convened on 10 September 2004 among the Shareholders and Scheme Creditors. The results of the said meetings as claimed by the petitioner are as follows:

(a) 48 of the 54 Shareholders representing 99.4% in value of the Shareholders present and voting approved the Propsed Share Exchange; and

(b) 32 of the 41 Scheme Creditors representing 98.8% in value of the Scheme Creditors present and voting representing approved the Proposed Settlement of Debt.

Opposition To The Proposed Scheme

The following parties (interveners) opposed the