Renaissance Services SAOG has responded to the letter of Muscat Securities Market (MSM) dated 19 January 2012, as per the following text:

Subject: Fall in Share Price

I write in response to your letter Ref: MSM/81/2012, dated 19 January 2012 in which you have requested us to advise you if we are aware of any reasons for the recent noticeable sharp fall in share price and high volume of trading orders.

We are not aware of any reason for either the downward movement in share price or the volume of trading.

After 10 consecutive years of record performance and growth, it is well-documented that 2011 has been a difficult period for the company. The challenges and problems we have faced have been fully disclosed to the market and all stakeholders through quarterly statements and other announcements. There has been no material change to any of the key issues.

The company announced a re-financing initiative, which we anticipated should be completed by now. This initiative is progressing extremely well. Our revised target for completion is end January or early February 2012. In the meantime, the company has finished 2011 with a positive liquid balance sheet and all financial commitments continue to be met on schedule.

We do not make forward-looking statements on profit & loss performance, but we note that most analysts and observers have predicted a 2011 result at +/- break-even. The annual audit is in progress so the actual figure shall be known in due course. At the time of writing, nothing has occurred that should require market commentators to revise their estimates.

In the operating businesses the Marine and Contract Services businesses continue to perform well on a clear growth path. We have reported difficulties in the Engineering businesses and, while we have substantially reduced costs in those businesses, the challenges persist as we enter 2012. However, there are some modest new contract gains and we have no reason to alter our assertion to break-even those businesses over the course of 2012.

So it may be seen that there is no material difference to any of the key issues that we have already fully disclosed in the public domain. This is why we see no reason for the sharp fall in share price in excess of the market trend, accompanied by unusual trading volumes.

In terms of matters not yet disclosed to the market, there are only positive matters pending announcement: The Marine business has been awarded a significant and important new contract in a strategically important offshore oilfield market. Our announcement of this award is imminent, pending formal disclosure approval from the client. We shall also announce the outcome of the re-financing initiative in its final form once complete.