09:34 PEARL ORIENTAL<00600> - Announcement & Resumption (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. PEARL ORIENTAL ENTERPRISES LIMITED (incorporated in the Cayman Islands with limited liability) (Stock Code: 600) PLACING OF 200,000,000 EXISTING SHARES AND CONNECTED TRANSACTION IN RELATION TO PROPOSED SUBSCRIPTION OF 200,000,000 NEW SHARES AND PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL FROM HK$90,000,000 TO HK$250,000,000 Placing agent Sun Hung Kai Investment Services Limited The Placing On 7 January 2005, Mr. Law entered into the Placing Agreement with the Placing Agent, pursuant to which the Placing Agent would on a best effort basis procure purchasers to acquire, and Mr. Law would sell 200,000,000 existing Shares at a price of HK$1.00 per Share. The Placing Price of HK$1.00 per Share represents (i) a discount of approximately 21.26% to the closing price per Share of HK$1.27 on 7 January 2005 (the last trading day prior to suspension of trading in the Shares pending the release of this announcement); and (ii) a premium of approximately 21.95% to the average closing price per Share of approximately HK$0.82 as quoted on the Stock Exchange for the last 5 trading days up to and including 7 January 2005. The Placing Shares represent approximately 16.83% of the existing issued share capital of the Company. Upon completion of the Placing, the shareholding percentage of Mr. Law and his associates in the Company will decrease from approximately 16.83% to 0%. The Placing Shares will be placed to not less than 6 independent professional, institutional and/or individual investors. Warning: The Placing Agreement contains provision granting the Placing Agent the right to terminate the Placing Agreement on the occurrence of certain events including force majeure occurring prior to completion of the Placing. For this purpose, force majeure includes any event, development or change resulting in a material adverse change in political, economic, fiscal, financial, regulatory or stock market conditions and which in the Placing Agent's reasonable opinion would materially adversely affect the success of the Placing. If the Placing Agent exercises such right (i.e. at any time prior to the Placing Completion Date which is expected to be on or about 14 January 2005), the Placing will not proceed. The Subscription Pursuant to the Subscription Agreement, Mr. Law has conditionally agreed to subscribe for 200,000,000 new Shares at the subscription price of HK$1.00 per Share. The 200,000,000 new Shares represent (i) approximately 10.15% of the issued share capital of the Company as enlarged by the Subscription (assuming the Subscription occurs immediately after completion of the 2004 Placing and the Acquisition), or (ii) approximately 14.41% of the issued share capital of the Company as enlarged by the Subscription only. Immediately upon completion of the Subscription (assuming the Subscription occurs immediately after completion of the 2004 Placing and the Acquisition), the shareholding of Mr. Law and his associates in the Company will increase from 0% to approximately 10.15%. The net proceeds from the Subscription are estimated to be approximately HK$199 million, of which approximately HK$188 million will be applied to satisfy a portion of the cash consideration payable for the Acquisition and the remaining balance of approximately HK$11 The Exchange endeavours to ensure the accuracy and reliability of the information provided, but does not guarantee its accuracy 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 the information relating to exotic warrants. Investors are reminded to refer to the related warrant listing documents for details of the terms and conditions of the warrant. Stock Code (List Date) Salient Features -------------- ------------------------------------------------------ 9080 European-style Locked-In Return Call Warrants 1/9/2003 May only be exercised on 1/4/2005 Cash Settlement Amount is the sum of all Quarterly Cash Settlement Amounts divided by the number of Quarterly Fixing Dates, less the Exercise Expenses. The Quarterly Cash Settlement Amount in respect of each Quarterly Fixing Date is the greater of (i) zero and (ii) the arithmetic mean of the closing price of one underlying share on the five business days immediately preceding the relevant Quarterly Fixing Date less the Exercise Price. The Quarterly Fixing Dates are 2nd January 2004, 1st April 2004, 2nd July 2004, 4th October 2004, 3rd January 2005 and 1st April 2005. 9081 European-style Locked-In Return Call Warrants 1/9/2003 May only be exercised on 1/4/2005 Cash Settlement Amount is the sum of all Quarterly Cash Settlement Amounts divided by the number of Quarterly Fixing Dates, less the Exercise Expenses. The Quarterly Cash Settlement Amount in respect of each Quarterly Fixing Date is the greater of (i) zero and (ii) the arithmetic mean of the closing price of one underlying share on the five business days immediately preceding the relevant Quarterly Fixing Date less the Exercise Price. The Quarterly Fixing Dates are 2nd January 2004, 1st April 2004, 2nd July 2004, 4th October 2004, 3rd January 2005 and 1st April 2005. 9096 European-style Locked-In Return Index Call Warrants 4/9/2003 May only be exercised on 30/3/2005 Cash Settlement Amount is the sum of all Quarterly Cash Settlement Amounts divided by the number of Quarterly Fixing Dates, less the Exercise Expenses. In respect of each board lot of 10,000 Warrants, the Quarterly Cash Settlement Amount in respect of each Quarterly Fixing Date is the greater of (i) zero and (ii) the excess of the average of the quotations for the Index recorded at the end of every five minute period on such Quarterly Fixing Date over the Strike Level, multiplied by HK$1.00, further multiplied by 10,000 and divided by 4,000. The Quarterly Fixing Dates are 30th December 2003, 30th March 2004, 29th June 2004, 28th September 2004 30th December 2004 and 30th March 2005.