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Financial & Corporate Releases

Creative Signs MOU for the Proposed Sale and Leaseback of its Headquarters Building - Creative Resource for S$250 Million

SINGAPORE - March 24, 2008 - Creative Technology Ltd., a worldwide leader in digital entertainment products, today announced that the Company has signed a Memorandum of Understanding (MOU) with a buyer for the proposed sale and leaseback of the Creative Resource building, which houses the corporate headquarters of the Company and its subsidiaries in Singapore.

The sale price for this proposed transaction is S$250 million (US$180 million), with a leaseback of the whole building for a period of five years with an option for additional periods of three and two years.

The proposed sale and leaseback transaction is conditional upon and subject to certain conditions, including but not limited to, satisfactory completion of legal and building due diligence by the purchaser, the Company's shareholders' approval of the transaction, and applicable regulatory approvals.

The proposed sale of the property constitutes a major transaction under Rule 1006 of the Singapore Exchange Securities Trading Limited Listing Manual and accordingly is subject to shareholders' approval at an Extraordinary General Meeting of the Company (EGM) to be convened at a later date. A circular to the Company's shareholders, together with notice of the EGM, will be dispatched to shareholders in due course. The circular will contain more details of the proposed transaction.

The proposed transaction is expected to be completed by the end of June 2008.

Creative expects to make a gain on sale of the property of about S$200 million (US$144 million) from this transaction. In accordance with US GAAP, this amount will be treated as a deferred gain and will be amortised and recognised in the Company's Income Statements over the lease term of five years.

About Creative
Creative is a worldwide leader in digital entertainment products. Famous for its Sound Blaster sound cards and for launching the multimedia revolution, Creative is now driving digital entertainment on the PC platform with products like its highly acclaimed ZEN™ portable audio and media players. Creative's innovative hardware, proprietary technology, applications and services leverage the Internet, enabling consumers to experience high-quality digital entertainment -- anytime, anywhere.

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