09:46 KINGBOARD CHEM<00148> - Announcement (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. KINGBOARD CHEMICAL HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) (stock code: 148) MAJOR TRANSACTION EXTENSION OF TIME FOR PUBLICATION OF THE SUPPLEMENTAL ANNOUNCEMENT Voluntary conditional cash offers in Hong Kong by Citigroup Global Markets Asia Limited on behalf of EASE EVER INVESTMENTS LIMITED, an indirect wholly-owned subsidiary of Kingboard Chemical Holdings Limited, to acquire all of the issued shares in the capital of, and for cancellation of all outstanding options of, ELEC & ELTEK INTERNATIONAL HOLDINGS LIMITED (other than those already owned by the Hong Kong Offeror or parties acting in concert with it) and Mandatory unconditional cash offer in Singapore by Citigroup Global Markets Singapore Pte. Ltd. on behalf of ELITELINK HOLDINGS LIMITED, an indirect wholly-owned subsidiary of Kingboard Chemical Holdings Limited, to acquire all of the issued and paid-up ordinary shares in the capital of ELEC & ELTEK INTERNATIONAL COMPANY LIMITED (other than those already owned by the Singapore Offeror or parties acting in concert with it and those owned by Elec & Eltek International Holdings Limited) Financial Adviser to the Hong Kong Offeror Citigroup Global Markets Asia Limited The Company has applied to the Stock Exchange for an extension of time for the publication of the Supplemental Announcement in relation to, among other things, certain financial information of the E&E Group and the Enlarged Group, to 25 January 2005. Reference is made to the announcement dated 12 October 2004 (the "Offer Announcement") issued by the Company and the Hong Kong Offeror and the circular dated 3 November 2004 (the "Major Transaction Circular") issued by the Company in respect of, among other things, the Transactions. Unless otherwise defined, terms defined in the Major Transaction Circular shall have the same meanings in this announcement. FURTHER INFORMATION IN RELATION TO THE E&E GROUP AND THE SUPPLEMENTAL ANNOUNCEMENT As stated in the Major Transaction Circular, the Company has undertaken to the Stock Exchange that it would publish, by way of a paid announcement in the newspapers (the "Supplemental Announcement"), within 42 days after the Hong Kong Offers have become The Warrants will be automatically exercised on the Expiry Date (without any notice being given to the holders of the Warrants) if the Cash Settlement Amount on the Expiry Date is greater than zero and the Issuer will pay to the holders of the Warrants an amount less Exercise Expenses calculated in accordance with the Conditions. If the Cash Settlement Amount is less than or equal to zero, all Warrants shall be deemed to expire on the Expiry Date without value. The Warrants constitute general unsecured contractual obligations of the Issuer and of no other person. If you purchase the Warrants you are relying upon the creditworthiness of the Issuer. Application will be made to the Listing Committee of the Stock Exchange for listing of, and permission to deal in, the Warrants. The Issuer has been informed that consideration of such application will go through the normal application procedure pursuant to the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules") and no guarantee that such approval will be granted can be given. If such permission is granted, it is anticipated that dealings in each series of Warrants will commence on the Stock Exchange on or about 13 January 2005. Copies of the published audited consolidated financial statements of the Issuer and its controlled entities ("Macquarie Group") for the two financial years ended 31 March 2003 and 31 March 2004, the 2005 Interim Directors' report and financial report of Macquarie Group for the half year ended 30 September 2004, the Base Listing Document dated 20 July 2004, (updated by an addendum dated 25 November 2004 (the "Addendum")), the Addendum, the relevant Supplemental Listing Document to be dated on or about 12 January 2005 and a Chinese translation of each document may be inspected, from the date of the commencement of dealings in each series of Warrants on the Stock Exchange up to and including the relevant Expiry Date, during usual business hours on any business day at the offices of Macquarie Equities (Asia) Limited, 19th Floor, Citic Tower, 1 Tim Mei Avenue, Central, Hong Kong. As at the date of this announcement, the Issuer has short-term and long- term credit ratings of, respectively, A1 and A by Standard and Poor's Ratings Group; P-1 and A2 by Moody's Investors Service Inc.; F-1 and A+ by Fitch Ratings Ltd . Prospective purchasers of the Warrants should be aware that the price of the Warrants may fall in value as rapidly as they may rise and prospective purchasers should be prepared to sustain a total loss of the purchase price of their Warrants. In choosing to deal in the Warrants a prospective purchaser should consider carefully whether the Warrants are suitable for him/her in light of his/her experience, objectives, financial position and other relevant circumstances. The Issuer has appointed Macquarie Equities (Asia) Limited of 19th Floor, Citic Tower, 1 Tim Mei Avenue, Central, Hong Kong, (Broker ID Number 9589) as liquidity provider (the "Liquidity Provider") by responding to requests for bid and offer quotes for the purpose of making a market in the Warrants. A request for a quote may be obtained by calling the telephone number 2823 3788. Prospective purchasers of the Warrants should be aware that such appointment does not guarantee liquidity in the market in the Warrants, further, the Liquidity Provider may be the only market maker for the Warrants and the secondary market in the Warrants may therefore be limited. Based on the Issuer's own calculations and information, the implied volatility, the effective gearing, the gearing and the premium in respect of each series of Warrants were as follows: Warrants Implied Volatility Effective Gearing Gearing Premium 1st Series Warrants 40.00% 4.21x 7.37x 12.03% 2nd Series Warrants 40.00% 3.24x 7.55x 14.78% It should be noted that the above values should not be compared to similar information provided by other derivative warrant issuers as different issuers adopt different valuation models. The Issuer may enter into discount, commission or fee arrangements with brokers and/or any of its affiliates with respect to the primary and/or secondary market in the Warrants. In respect of the Warrants, the Issuer has entered into arrangements where it will agree to pay commission of up to 1.00% to certain brokers on behalf of clients of the relevant brokers. Such arrangements may result in a benefit to persons buying and selling the Warrants through nominated brokers by reducing the commission that would have been paid directly by such holders of the Warrants. The Issuer is regulated by the Australian Prudential Regulation Authority and is not regulated by any of the bodies referred to in Rules 15A.13(2) or (3) of the Listing Rules. The Issuer does not carry on banking business in Hong Kong. It is not an Authorised Institution under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) and therefore is not subject to the supervision of the Hong Kong Monetary Authority.