10:10 WING ON TRAVEL<01189>& CHINA STRATEGIC<00235>-JA & Resume(1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities. WING ON TRAVEL (HOLDINGS) LIMITED CHINA STRATEGIC HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Incorporated in Hong Kong with limited liability) Stock Code: 1189 Stock Code: 235 PLACING OF 6,000 MILLION EXISTING SHARES AND SUBSCRIPTION OF 6,000 MILLION NEW SHARES (INVOLVING DISCLOSEABLE TRANSACTIONS OF CSH IN RESPECT OF THE DISPOSAL AND SUBSCRIPTION OF 2,340 MILLION SHARES, AND A CONNECTED TRANSACTION OF WING ON TRAVEL IN RESPECT OF THE ISSUE OF 2,340 MILLION SHARES UNDER THE SUBSCRIPTION) On 30 November 2004, Wing On Travel entered into two placing and subscription agreements with CEL, a subsidiary of CSH and a substantial shareholder of Wing On Travel, and the Placing Agent pursuant to which the Placing Agent agreed to place, 6,000 million Shares at the price of HK$0.028 per Placing Share to no less than six Placees who are Independent Third Parties procured by the Placing Agent and CEL would subscribe for up to 6,000 million new Shares at the same price of HK$0.028 per Subscription Share. CEL's obligation to subscribe for Subscription Shares in excess of 3,660 million, and Wing On Travel's obligation to issue those Subscription Shares, are conditional upon Independent Shareholders approval of such issue being obtained. The Subscription Shares represent approximately (i) 21.0% of Wing On Travel's existing issued share capital; and (ii) 17.4% of Wing On Travel's issued share capital as enlarged by the Subscription (assuming the maximum of 6,000 million Subscription Shares are issued). The Placing is fully underwritten by the Placing Agent. The Placing is subject to termination on the occurrence of certain events, set out in greater detail below, at any time before completion of the Placing. Completion of the subscription is subject to the satisfaction of certain conditions as described below. If these conditions are not fulfilled, the Subscription will not proceed. As the General Mandate will have been largely utilized by the issue of Subscription Shares pursuant to the First Placing Agreement, further issues of Subscription Shares under the Second Placing Agreement requires the approval of shareholders of Wing On Travel. As a result, the Second Placing Agreement falls outside the ambit of Rule 14A.31(3) of the Listing Rules, and constitute a connected transaction of Wing On Travel which requires Independent Shareholders approval under the Listing Rules. Wing On Travel will as soon as practicable issue a circular to its shareholders in respect of the Second Placing Agreement, which circular will also contain a letter from an independent board committee of Wing On Travel, a letter from an independent financial adviser to be retained by Wing On Travel to advise its independent board committee and the Independent Shareholders and also a notice convening a special general meeting of Wing On Travel for the purpose of seeking shareholders approval for the issue of Subscription Shares under the Second Placing Agreement. CEL and its associates will abstain from voting on the resolution to approve the issue of Subscription Shares under the Second Placing Agreement at that special general meeting. Voting on that resolution will be taken by poll. The sale of 2,340 million existing Shares and the subscription of 2,340 million new Shares by CSH under the Second Placing Agreement also constitutes a discloseable transaction of CSH under the Listing Rules as the consideration ratio in respect of each such transaction exceeds 5% but is less than 25%. A circular containing, amongst other things, information in respect of the disposal and subscription of 2,340 million Shares will be dispatched by CSH to the shareholder of CSH as soon as practicable. Trading of the shares of Wing On Travel and the shares of CSH on the Stock Exchange were suspended at 9:30am on 26 November 2004 pending the issue of the announcement. Application has been made to the Stock Exchange for the resumption of trading of the shares of Wing On Travel and CSH respectively, with effect from 9:30am on 1 December 2004. PLACING AGREEMENTS DATED 30 NOVEMBER 2004 Pursuant to the Placing Agreements, the Placing Agent agreed to place on a fully underwritten basis 6,000 million existing Shares at a price of HK$0.028 per Placing Share on behalf of CEL and CEL would subscribe for 6,000 million new Shares equivalent to the number of Placing Shares placed. The First Placing Agreement relates to the sale and the conditional subscription of 3,660 million Shares. The Second Placing Agreement relates to the sale and the conditional subscription of up to 2,340 million Shares. The terms of both Placing Agreements are substantially the same (save to the extent disclosed below). The performance of neither Placing Agreements is conditional upon the other. The terms of the Placing Agreements are set out below: A. In respect of the Placing Vendor: CEL, which owns through its wholly-owned subsidiary 8,650 million Shares as at the date of this announcement, representing approximately 30.3% of the existing issued share capital of Wing On Travel, which comprises approximately 28,567 million Shares. Placing Agent: Deutsche Bank AG, Hong Kong Branch, an Independent Third Party. The Placing Agent is entitled to receive a commission equal to 3.6% of the aggregate placing price of the Placing Shares. Number of Shares to be placed: 6,000 million existing Shares held by CEL Group. 3,660 million Placing Shares and 2,340 million Placing Shares represent (i) approximately 12.8% and 8.2% respectively of Wing On Travel's existing issued share capital; and (ii) approximately 10.6% and 6.8% respectively of Wing On Travel's issued share capital as enlarged by the Subscription (assuming the maximum of 6,000 million Subscription Shares are issued). The 6,000 million Placing Shares represents (i) 21% of Wing On Travel's existing issued share capital; and (ii) approximately 17.4% of Wing On Travel's issued share capital as enlarged by the Subscription (assuming the maximum of 6,000 million Subscription Shares are issued). The Placing is fully underwritten by the Placing Agent subject to the termination rights of the Placing Agreement described below. Completion of the Subscription is subject to the satisfaction of certain conditions as described below. If these conditions are not fulfilled, the Subscription will not proceed. Placees: Not less than six professional, institutional and/or individual investors procured by the Placing Agent for each of the Placing Agreements. Each of the placees and their respective ultimate beneficial owners will be an Independent Third Party. The board of Wing On Travel does not expect any placee will become a substantial shareholder of Wing On Travel (as defined in the Listing Rules) as a result of the Placing. Placing Price: HK$0.028 per Placing Share. The Placing Price represents (i) the same closing price of HK$0.028 per Share as quoted on the Stock Exchange on the Last Dealing Date (being the last day of trading in the Shares on the Stock Exchange prior to the release of this announcement); (ii) a discount of approximately 17.2% to the average closing price of HK$0.0338 per Share as quoted on the Stock Exchange for the last five trading days up to and including the Last Dealing Date and (iii) a discount of approximately 2.1% to the average closing price of HK$0.0286 per Share as quoted on the Stock Exchange for the last ten trading days up to and including the Last Dealing Date. Conditions of the Placing: Placing under both Placing Agreements is unconditional. Completion of the Placing: Apart from the Placing Agent's termination right referred to below, the Placing is unconditional and completion of the Placing is expected to take place on 3 December 2004. Termination: The Placing is subject to termination on the occurrence of certain events prior to completion of the Placing, including: (a) any material breach of the warranties given by Wing On Travel and