09:34 PEARL ORIENTAL<00600> - Announcement & Resumption (2) million will be applied as additional general working capital. In the event that the Acquisition does not proceed, the Company will continue to look for other investment opportunities, including but not limited to, hotel and casino-related gaming business in Macau, and to apply the funds raised from the Subscription accordingly. Completion of the Subscription is conditional upon, completion of the Placing, the issue of the 200,000,000 new Shares to Mr. Law under the Subscription Agreement having been approved by the Independent Shareholders at the Extraordinary General Meeting, and the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the 200,000,000 new Shares to be issued under the Subscription Agreement. An application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the 200,000,000 new Shares to be issued pursuant to the Subscription Agreement. As Mr. Law is a Director and a substantial Shareholder and, accordingly, he is a connected person of the Company as defined under the Listing Rules, the Subscription will constitute a connected transaction of the Company under the Listing Rules. Accordingly, Mr. Law and his associates will abstain from voting at the Extraordinary General Meeting to be held to consider the Subscription. A circular containing, among other things, further details of the Placing and the Subscription, the letter from the independent financial adviser to the independent board committee of the Company and the Independent Shareholders in relation to their opinion on the Subscription, the letter from the independent board committee of the Company in relation to their recommendation to the Subscription and notice of the Extraordinary General Meeting will be dispatched to the Shareholders as soon as practicable in accordance with the Listing Rules. An independent financial adviser to the independent board committee of the Company and the Independent Shareholders will be appointed to consider the Subscription. Proposed increase in authorised share capital The Board wishes to propose an increase in the authorised share capital from HK$90,000,000, divided into 1,800,000,000 shares of HK$0.05 each to HK$250,000,000, divided into 5,000,000,000 shares of HK$0.05 each. Such increase shall be conditional upon the approval of a resolution by the Shareholders at the Extraordinary General Meeting. Suspension and resumption of trading in the Shares At the request of the Company, trading in the Shares has been suspended with effect from 9:30 a.m. on 10 January 2005 pending the issue of this announcement. Application has been made by the Company for the resumption of trading in the Shares with effect from 9:30 a.m. on 12 January 2005. 1. PLACING AGREEMENT DATED 7 JANUARY 2005 1.1 Parties (a) Mr. Law; and (b) the Placing Agent. Sun Hung Kai Investment Services Limited, the Placing Agent, is not acting in concert with Mr. Law. It does not own any Shares prior to the completion of the Placing, and is not a connected person (as defined in the Listing Rules) of the Company and is independent from and not connected with the Company and its connected persons. 1.2 The Placing Shares 200,000,000 existing Shares, representing approximately 16.83% of the existing issued share capital of the Company, and (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. 1.3 The Placing Price The placing price of HK$1.00 per Share was arrived at after arm's length negotiation between Mr. Law and the Placing Agent.