TSC Acquires Offshore Platform Equipment Manufacturer

TSC Offshore Group has entered into an agreement to purchase an offshore platform equipment manufacturer for a consideration of HK$12,900,000 and a sale loan of RMB1,200,000 (equivalent to approximately HK$1,349,450). The acquisition will provide the Group with access to an innovative jacking gear box, which together with TSC's jacking control system, allows the Group to offer a complete jacking system.

On October 31, 2008, the Company entered into a Sale and Purchase Agreement with Lewiside Investments Limited to acquire the entire issued share capital and a sale loan of Center Mark International Limited for a consideration of HK$12,900,000 and RMB1,200,000 (equivalent to approximately HK$1,349,450) respectively.

 The consideration for the sale loan will be satisfied in cash funded the Company's internal resources, while that for the entire issued share capital of Center Mark will be settled by way of the allotment and issue of 10,000,000 consideration shares at an issue price of HK$1.29 per share to Lewiside Investments.

The Consideration Shares represent approximately 1.82% of the existing issued share capital of the Company and approximately 1.79% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares.

Center Mark's sole business is the holding of a wholly-owned subsidiary, Zhengzhou Jier Technology Limited. Zhengzhou Jier is principally engaged in research and development, fabricating and sales of equipment used for offshore platforms and offshore projects. Center Mark's unaudited turnover and profit after tax for the period from January 24, 2008 (date of incorporation) to August 31, 2008 were RMB9,659,502 and RMB2,183,005 respectively. Its net asset value as at 31 August 2008 was RMB2,183,008.

"The acquisition shall create synergistic benefits to both TSC and Zhengzhou Jier in terms of expansion of both companies' products. Zhengzhou Jier's professional technical team and innovative jacking gear box, together with our capability in designing and manufacturing jacking control system, will enable us to provide complete various jacking systems to our customers, and hence greatly enhance our competitive edge in providing rig turnkey solutions to various jack-up platforms," said Morgan Zhang, the Chief Executive Officer of TSC Offshore Group Limited.

"This move is in line with our strategy to pursue potential investment and acquisition opportunities that provide synergies in respect of product expansion and greater market penetration," said Jiang Binghua, the Executive Chairman of TSC Offshore Group Limited.

To maintain stability in professional staff and ensure continuity in management of Zhengzhou Jier, the Company has included in the Agreement a condition that it will transfer to Center Mark 2,000,000 Consideration Shares on every anniversary of the date of completion of the Agreement until the end of the fifth anniversary.