09:36     SKYNET(INTL GP)<00577> & PAUL Y-ITC<00498> - J.Ann. (3)             

    The following is a summary of the shareholding                            
    structure of Paul Y Engineering as at the date of this                    
    announcement and immediately upon completion of the                       
    Placing:                                                                  
                                                                              
    Shareholder                                                               
    Shareholding as at the date of this announcement                          
    Shareholding upon completion of the Placing                               
    Consolidated Shares   %   Consolidated Shares   %                         
                                                                              
    Paul Y   531,826,317.0   92.2   375,826,317.0   65.2                      
    Public Shareholders   44,873,077.8    7.8                                 
    200,873,077.8   34.8                                                      
                                                                              
    Total   576,699,394.8   100.00   576,699,394.8                            
    100.00                                                                    
                                                                              
    The Placing Shares will be placed to not less than six                    
    placees (which are mainly institutional investors);                       
    and each of the Placing Agent and the placees procured                    
    by the Placing Agent and their respective ultimate                        
    beneficial owners are third parties independent of                        
    Paul Y Engineering and Paul Y and their respective                        
    connected persons (as defined in the Listing Rules).                      
    It is expected that no new substantial shareholders                       
    will result from the Placing.                                             
                                                                              
    Upon completion of the Placing, the shareholding                          
    interest of Paul Y in Paul Y Engineering will decrease                    
    from approximately 92.2% to approximately 65.2%. The                      
    net proceeds of approximately HK$152.8 million                            
    arising from the Placing are intended to be used by                       
    Paul Y for its general working capital purposes. As                       
    a result of the Placing, an estimated gain of                             
    approximately HK$65 million will be recorded by Paul                      
    Y for the year ending 31st March, 2005.                                   
                                                                              
    Following completion of the Placing, the public float                     
    of Paul Y Engineering will be restored.                                   
                                                                              
    Reference is made to the announcement of Paul Y                           
    Engineering dated 3rd September, 2004 and the Circular.                   
    Given the demand for existing shares (as compared to                      
    the placing of new shares which may take a longer time                    
    to complete) and the public float of Paul Y Engineering                   
    will be restored by the Placing as mentioned above,                       
    the Board has decided not to proceed with the placing                     
    of new Consolidated Shares pursuant to the conditional                    
    placing agreement dated 30th August, 2004 entered into                    
    between Paul Y Engineering and the Placing Agent.                         
    Notwithstanding that no proceeds will be received by                      
    the Paul Y Engineering Group from the Placing for                         
    working capital purpose, the directors of Paul Y                          
    Engineering are of the opinion that taking into                           
    account the existing cash and bank balances, the                          
    available unutilised credit facilities, the net                           
    proceeds from the Open Offer and the available                            
    Facility, the Paul Y Engineering Group will have                          
    sufficient working capital for its present                                
    requirements.                                                             
                                                                              
    SUSPENSION AND RESUMPTION OF TRADING IN SHARES OF PAUL                    
    Y ENGINEERING                                                             
    Trading in the shares of Paul Y Engineering on the Stock                  
    Exchange has been suspended at the request of Paul Y                      
    Engineering with effect from 9:30 a.m. on 16th October,                   
    2003.                                                                     
                                                                              
    As at the date of this announcement, no winding up                        
    petition has been filed against any member of the Paul                    
    Y Engineering Group. Following the restoration of the                     
    public float of Paul Y Engineering upon completion of                     
    the Placing and the issue of a resumption announcement                    
    which is expected to be published on Thursday, 27th                       
    January, 2005, it is expected that the trading of                         
    shares of Paul Y Engineering will resume on Thursday,                     
    27th January, 2005. Application will be made by Paul                      
    Y Engineering for the resumption of trading in shares                     
    of Paul Y Engineering with effect from 9:30 a.m. on                       
    Thursday, 27th January, 2005.