09:35 PEARL ORIENTAL<00600> - Announcement & Resumption (4) 2.2 The new Shares 200,000,000 new 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. 2.3 The Subscription Price The Subscription Price of HK$1.00 per Share is equivalent to the Placing Price. With respect to the Subscription Price per Share, the Directors (including the independent non-executive Directors) have taken into account information from the Placing Agent as well as recent market transactions of similar size and are of the view that the Subscription Price per Share is acceptable to the Company and comparable with other recent market transactions. The Directors (excluding the independent non-executive Directors), having considered the reasons for the Placing and the Subscription set out in paragraph 4 below, are of the view that the terms of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. The independent non-executive Directors shall express their views on the Subscription Agreement after considering the opinion of the independent financial adviser to the independent board committee of the Company and the Independent Shareholders. 2.4 Conditions of the Subscription Agreement Completion of the Subscription Agreement is conditional upon: (a) completion of the Placing; (b) the approval of the issue and allotment of the 200,000,000 new Shares to be issued as a result of the Subscription by the Independent Shareholders at the Extraordinary General Meeting (by poll); and (c) 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 pursuant to 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. 2.5 Ranking of the new Shares The 200,000,000 new Shares, when issued and fully paid, will rank equally with the existing Shares in issue as at the date of issue of the new Shares. 2.6 Completion of the Subscription Subject to fulfillment of the conditions of the Subscription Agreement, completion of the Subscription will take place on the third business day after the date when all the conditions set out above are satisfied or such later date as the Company and Mr. Law may agree in writing. If the conditions of the Subscription Agreement are not fulfilled on or before 31 March 2005 (or such other date or time as may be agreed between the Company and Mr. Law), then Mr. Law and the Company shall not be bound to proceed with the Subscription and allotment and issue of the 200,000,000 new Shares under the Subscription Agreement and such agreement shall cease to be of any effect save in respect of claims arising out of antecedent breach of the Subscription Agreement. 3. EFFECT ON THE SHAREHOLDING FOLLOWING COMPLETION OF THE PLACING AND THE SUBSCRIPTION Reference is made to the announcements issued by the Company on 22 December 2004 and 6 January 2005 regarding the 2004 Placing and the Acquisition. Assuming the Subscription occurs immediately after completion of the 2004 Placing (expected completion date to be on or about 14 January 2005) and the Acquisition (expected completion date to be on or before 28 February 2005), the shareholding in the Company before and after completion of the Placing and the Subscription are summarised as follows: Shares in issue Number of Shares as at the date of Number of Shares immediately after Number of Shares the announcement immediately after completion of the 2004 after completion (i.e. before completion Number of Shares