Listed Companies' Announcement

FEDERAL INTERNATIONAL (2000) LTD

NEWS RELEASE - FEDERAL'S SUBSIDIARY SELLS ITS 50% STAKE IN SHANGHAI KVC FOR RMB 8.0 MILLION [S$1.65 million]


FEDERAL'S SUBSIDIARY SELLS ITS 50% STAKE IN SHANGHAI KVC FOR RMB 8.0 MILLION [S$1.65 million]

August 31 2004, Singapore – Federal Hardware Engineering Co Pte Ltd (FHE), a wholly-owned subsidiary of Federal International (2000) Ltd ("Federal"), has entered into Sales & Purchase Agreement to sell its 50% stake in Shanghai KVC Valve Co Ltd (Shanghai KVC).

Shanghai KVC was set up in 1993 and its core business is the manufacture and export of valves under OEM arrangement. Shanghai KVC has accumulated losses of S$2,239,751 as at 30 June 2004.

The buyer is Shanghai General Machinery (Group) Corporation of China ("Shanghai GM") and the purchase consideration is RMB 8.0 million (about S$1.65 million) which will be paid in cash. Shanghai GM will pay 30 per cent upon signing of sales and purchase agreement, whilst the balance of 70 per cent will be paid before 31 December 2004.

The consideration for the sale transaction was arrived at on a willing buyer-willing seller basis after taking into account of the net tangible assets, revaluation of fixed assets and intangible assets of Shanghai KVC.

Proceeds from the sale will be used to reduce FHE's borrowings.

The above transaction will have a positive material impact on the earnings per share but is not expected to have a material impact on the NTA per share of the Company for the financial year ending 2004.

None of the Directors or substantial shareholders of the Company has any interest, direct or indirect, in the above transaction.

About Federal International (2000) Ltd

Listed on the Mainboard of the Singapore Exchange, Federal International (2000) Ltd ("Federal" or "the Group") is a value-added distributor and provider of turnkey EPC (engineering, procurement & construction) solutions for the energy & infrastructure industries. Currently the group is principally involved in the distribution of flowline control products (e.g. valves, structural steel, steel flanges/connectors and pipe fittings) to the oil and gas, power, chemical and pharmaceutical industries.

Federal is also involved in upstream activities such as research & development and manufacturing of valves and valve-related equipment through its subsidiary – Houston-based HP & T Products, Inc. and KVC Co. Ltd (Japan) and KVC (UK) Ltd, in which it has acquired strategic stakes. By moving upstream into the design and manufacture of specialized values and related products, Federal aims to be an integrated service provider and procurement specialist in the energy and infrastructure industries offering a complete one-stop service.

About Shanghai General Machinery (Group) Corporation

Shanghai General Machinery (Group) Corporation consists of Shanghai General Machinery (Group) Corporation, Sales Company Shanghai General Machinery (Group) Corporation, Goods & Material Company Shanghai General Machinery (Group) Import & Export Corporation.

Shanghai General Machinery (Group) Corporation is one of the subsidiaries of Shanghai Electric (Group) Corporation, which has an asset base of RMB300 million. Its affiliated sales company and goods & material company have recently developed into comprehensive business companies integrated with design, technical consultation, engineering, equipment sales, installation and commissioning, maintenance, etc. They have provided refrigeration and air conditioning equipment, pumps, machinery, valves, vacuum pumps and other fitted equipment to Hong Qiao International Airport, Bao Steel Complex, Kun Ming International Expo, Wu Lu Mu Qi Airport, Office of the State Council, Qin Shan Nuclear Power Station. Products have been marketed to North America, West Europe, Africa, Middle East, Japan and Southeast Asian countries.

Issued on behalf of Federal (International) 2000 Ltd

For more information, please contact:

Ms Tham Moon Yee / Ms Geraldine Goh
Stratagem Consultants Pte Ltd
Tel : 65 6227 0502
Fax : 65 6227 5663
Email : tmy@stratagemconsultants.com / geraldine@stratagemconsultants.com



Submitted by Koh Kian Kiong, Director on 31/08/2004 to the SGX