10:44 PREMIUM LAND<00164>-Announcement & Resumption of Trading(13) Convertible Notes and the Guaranteed Convertible Notes are exercised in full, the shareholding of the holders of the Underwritten Convertible Notes and the Guaranteed Convertible Notes and the substantial Shareholder immediately before such allotment and exercise of the conversion rights in full, and immediately after such allotment and exercise of conversion rights in full, are as follows: Upon completion of the Share Subscription Agreement, the Placing Agreement and the CB Subscription Agreements (assuming no (assuming no (assuming full conversion of conversion of conversion of the convertible the convertible (assuming no the convertible notes subscribed notes subscribed (assuming full conversion of notes subscribed by Peakhill by Peakhill conversion of the convertible by Peakhill Investments Investments the convertible notes subscribed Investments Limited on Limited on notes subscribed by Peakhill Limited on 7 December 2004 7 December 2004 by Peakhill Investments 7 December 2004 and the and the Investments Limited on only and no Guaranteed Underwritten Limited on 7 December 2004, conversion on the Convertible Convertible 7 December 2004, Underwritten Underwritten Notes and full Notes and full the Underwritten Convertible Convertible conversion on conversion on Convertible Notes and Notes and the Underwritten the Guaranteed Notes and the Existing the Guaranteed the Guaranteed Convertible Convertible Guaranteed Name Shareholdings % Convertible Notes) % Convertible Notes) % Notes only) % Notes only) % Convertible Notes) % United Jumbo Limited (Note 1) 1,030,468,350 19.03 1,030,468,350 17.34 1,030,468,350 14.67 1,030,468,350 14.76 1,030,468,350 12.06 1,030,468,350 9.66 Peakhill Investments Limited (Note 2) - 0 - 0 1,080,000,000 15.38 - 0 - 0 1,080,000,000 10.13 Share Subscriber - 0 530,000,000 8.91 530,000,000 7.55 530,000,000 7.59 530,000,000 6.20 530,000,000 4.97 REASONS FOR THE ISSUE OF SUBSCRIPTION SHARES, UNDERWRITTEN CONVERTIBLE NOTES AND GUARANTEED CONVERTIBLE NOTES AND USE OF PROCEEDS The Group's principal activities include securities trading and investments, property development and sales, trading of building materials and renovation services and operation of toll highway. As at the date of this announcement, the Group owns certain sites in Hong Kong which are intended for redevelopment purposes and currently is considering the redevelopment on those sites. It is intended that these sites are for residential and/or commercial use and for sale and/or leasing purposes depending on the then market conditions. The net proceeds to be raised by the Company from the issue of the Subscription Shares and the Underwritten Convertible Notes (after deducting the expenses relating thereto) will amount to approximately HK$45.5 million. It is the intention of the Company to use such proceeds, together with the proceeds from previous fund raisings, for property investment in Macau. The Board considered that given the recent upturn of the market condition and the general economic environment in Hong Kong, the timing of raising additional funds was in the best interests of the Company and the Shareholders as a whole and with more capital on hand, the Group's financial position can be strengthened and the Group is in a better position in grasping future investments opportunity notwithstanding that there are frequent fund raising activities of the Group in the past financial year and the shareholding interest of the Shareholders has been diluted. The Group considers that the imposition of macro-economic control policy in the PRC in 2004, coupled with the oversupply problem, put the property market in the PRC into a very difficult year. In view that the economy of Macau has been booming recently following the implementation of the Closer Economic Partnership Arrangement that stimulates business travels and mainland individuals visit to Macau, the Directors are confident that the property market will continue to be prosperous in line with the economy. Therefore, the Group is optimistic about the property market in Macau and looking for investments opportunity. Although no specific targets or types of properties have been identified as at the date of this announcement, the Group has identified property investment in Macau as a direction in the future. The Directors are of the view that although the issue of the Subscription Shares will lead to a dilution effect on the shareholding of the Company, such fund raising activity will improve the liquidity and gearing ratio of the Group while strengthening the Shareholders' base. The Directors also consider that the Underwritten Convertible Notes and Guaranteed Convertible Notes are the appropriate means through which the Group can raise funds as it provides the Company with immediate funding without immediate further dilution of the shareholding of the existing shareholders of the Company notwithstanding that their Shareholding interests will be diluted if the subscription rights of the Underwritten Convertible Notes and the Guaranteed Convertible Notes are so exercised and the maturity of the Underwritten Convertible Notes is only 6 months from the date of issue. As at the date of this announcement, neither Peakhill Investments Limited which will be issued with convertible notes of the