ESTABLISHMENT OF AN ASSOCIATED COMPANY

____________________________________________________________________

The Board of Directors of Low Keng Huat (Singapore) Limited (?LKH? or the ?Company?) is

pleased to announce that the Company, together with its joint-venture partner, Kheng Venture

Pte Ltd (?KV?), will, through a joint venture company, Peak Garden Pte Ltd (?PG?), be acquiring

the property known as Minton Rise Condominium at

(the ?Property?), details of which are as follows:

(i) Purchase Price : S$209,000,000 (which is equivalent to approximately

S$237 per square foot per plot ratio inclusive of

estimated development charge)

(ii) Tenure : 100-year leasehold (commencing from 1 March 1985)

(iii) Land Area : approximately 472,379 square feet

(iv) Plot Ratio : 2.8

(v) Permissible Gross Floor Area : approximately 1,322,660 square feet

The sale and purchase shall be subject to certain conditions, including the approval of the Strata

Titles Board, being fulfilled. Completion of the sale and purchase shall take place within three

months from the date of the sale and purchase agreement or approval of the Strata Titles Board,

whichever is later.

PG shall pay a deposit 10% of the Purchase Price upon signing the sale and purchase

agreement. The remaining 90% of the Purchase Price shall be paid on completion of the sale

and purchase of the Property.

PG?s proposed ordinary share capital is S$1,000,000 which will be subscribed by LKH and KV in

the proportion of 40:60. PG is therefore an associated company of LKH. The purchase and

subsequent redevelopment of the Property by PG will be financed by internal funds and bank

borrowings. The acquisition is not expected to have a material impact on LKH group?s net

tangible assets or earnings per share for the financial year ending 31 January 2008.

To the best of the Directors' knowledge, none of the Directors or controlling shareholders of the

Company has any interest, direct or indirect, in the above transaction save for their shareholding

in the Company.

BY ORDER OF THE BOARD

Low Keng Boon

Managing Director

1st February 2007

Low Keng Huat (Singapore) Limited

"S$35m in Section 44 credit account: Potential for special dividend. Management has indicated that LKH has some S$35m remaining in its Section 44 account. This means LKH could distribute a special dividend of up to S$1.40 provided it is able to raise an additional S$140m in order to use its Section 44 credits. LKH could do a rights issue, increase its borrowings, or use a combination of both."



My comments: Maximum special div of $1.40 per share is correct but due to balance in Retained Earnings of only $70m+, the special div is restricted to about $0.60 per share which is good enough (if declared).