09:56 KERRY PPT<00683> - 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. KERRY PROPERTIES LIMITED (Incorporated in Burmuda limited liability) website: www.kerryprops.com (Stock Code: 00683) MAJOR TRANSACTION SECOND CLOSING The Board is pleased to announce that Second Closing took place on 13 January 2005. All Second Closing Conditions had been satisfied except three Second Closing Conditions as disclosed below. As a result of Second Closing and upon concluding the registration procedures with the relevant PRC industry and commerce registration authority, the Company will indirectly hold 70% of Eas PRC and the remaining 30% will be held by Huatong. The Company has also decided to consolidate Eas PRC as its subsidiary with effect from the First Closing i.e. 31 December 2004. Reference is made to the Company's announcement dated 24 September 2004 relating to the proposed acquisition by Kerry Logistics from Huatong of the Treasure Lake Shares and the Eas PRC Shares in accordance with the terms and conditions of the Sale and Purchase Agreement (the "First Announcement"), the Company's announcements dated 18 October 2004 and 15 December 2004 both relating to a time extension for despatch of the circular (the "Circular"), the Company's announcement dated 28 December 2004 relating to shareholders' approval, differences detected during due diligence and audit and despatch of the Circular and the Company's announcement dated 4 January 2005 in relation to the First Closing. Unless the context otherwise requires, terms defined in the First Announcement shall have the same meanings when used in this announcement. The Board is pleased to announce that Second Closing took place on 13 January 2005. All Second Closing Conditions had been satisfied except the following: (i) the condition ("Second Closing Condition I") that requires any First Closing Condition waived by Kerry Logistics (if such condition is conditionally waived, any relevant conditions attaching to such waiver) being fulfilled; (ii) the condition ("Second Closing Condition II") that requires the legal opinion addressed to Huatong and copied to Kerry Logistics by Huatong's PRC legal advisor in form and substance satisfactory to Kerry Logistics to confirm, inter alia, that the Restructuring has been legally and validly completed in accordance with all relevant PRC laws and regulations; and (iii) the condition ("Second Closing Condition III") that requires the auditors of Kerry Logistics to issue to Kerry Logistics and Huatong a statement relating to, inter alia, the NAV of Eas PRC (the "NAV Statement"). In relation to Second Closing Condition I, as announced by the Company on 4 January 2005, Kerry Logistics waived the First Closing Condition relating to the execution of documents to confirm the beneficial ownership of Eas PRC in four companies on the basis that this should be done on or after the Second Closing. The requirement attaching to that waiver has not yet been satisfied at the Second Closing with respect to one out of the four companies, but it is a term of the waiver of the relevant First Closing Condition that the requirement may be satisfied after the Second Closing. The total asset value attributable to the equity interest of Eas PRC in that company represents less than 1.5% of the total asset value of the Eas PRC Group as at 30 June 2004 based on the Accountants' Report of the Eas PRC Group set out in Appendix III to the Circular. Second Closing Condition I has therefore been waived to allow the Second Closing to take place on terms that Eas PRC be compensated by Huatong for any related economic loss that Eas PRC may suffer as a result of Huatong failing to discharge its obligation to procure the execution of documents to confirm the beneficial ownership of Eas PRC in the company aforementioned. By way of background to the waiver of Second Closing Condition II and Second Closing Condition III, Kerry Logistics has moved forward the Second Closing because the most fundamental Second Closing Condition about approval by relevant PRC authorities to the transfer of the Eas PRC Shares has already been satisfied. As disclosed in the Circular,