Listed Companies' Announcement


FEDERAL INTERNATIONAL (2000) LTD

FEDERAL INTERNATIONAL ACQUIRES MAJORITY STAKE IN KVC (UK) CO LTD


Mainboard-listed Federal International (2000) Ltd ("Federal"), today announced that it has acquired a 70% stake in KVC (UK) Ltd ("KVC (UK)"), a valve manufacturer, for a total consideration of 210,000 Sterling Pounds comprising 210,000 ordinary shares of 1 Sterling Pound each. This acquisition was made through exercising our option to convert loan extended to KVC Co. Ltd. (Japan) by one of our subsidiary, Federal Hardware Engineering Co. Pte Ltd.

After the sale, KVC Co Ltd (Japan) will continue to hold 15% of the shareholding of KVC (UK) while the remaining 15% will be held by three British nationals who are the key management members of KVC (UK). The three individuals are Alan Smith, Alan Castles, and Kenneth Small. They are respectively the Managing Director, Quality Assurance Director, and Technical Director of KVC (UK) Ltd.

Located in Scotland, KVC (UK) designs and manufactures API6D and API6A pipeline ball valves from sizes " to 24"; pressure class of ASME 150 through 2500 and API 2000# to 10000#. These valves, which are manufactured in carbon steel, stainless steel and super alloys, are used in the oil and gas industry. The company is ISO 9001 certified.

The investment in KVC UK is funded by internal resources. The relationship between Federal and KVC (Japan) stretches back to 1992 when the former became the exclusive distributor for KVC's products in the Asia Pacific region. After this acquisition, Federal will still continue to hold the exclusive distributorship for the Asia Pacific region, while KVC (UK) will assume full manufacturing and marketing responsibilities for UK, Europe, Scandinavia, USA and the Middle East.

The acquisition is not expected to have a material effect on the net tangible assets or earnings per share for the year ending 31 December 2001.

None of the directors or substantial shareholders of the Company has any interest, direct or indirect, in the above acquisition.
Submitted by Chng Geok, Company Secretary on 27/08/2001 to the SGX