12:04     LUEN THAI<00311> - Announcement (3)                                 

    Completion of the Subscription will take place upon                       
    the fulfillment of all conditions listed above and is                     
    expected to take place within 14 days from the date                       
    of the Subscription Agreement. Should completion of                       
    the Subscription fail to take place within 14 days from                   
    the date of the Subscription Agreement, the                               
    Subscription will be subject to the relevant                              
    requirements as set out in Chapter 14A of the Listing                     
    Rules.                                                                    
                                                                              
    EFFECTS OF THE PLACING AND THE SUBSCRIPTION                               
    The effects of the shareholding structure of the                          
    Company pursuant to the Placing and the Subscription                      
    are as follows:                                                           
                                                                              
    Immediately before Placing                                                
    After Placing but before Subscription                                     
    After Placing and Subscription                                            
    No. of Shares   %   No. of Shares   %   No. of Shares                     
    %                                                                         
                                                                              
    Capital Glory Limited (Note 1&2)   614,250,000   68.1                     
    524,050,000   58.1   614,250,000   61.9                                   
    Union Bright Limited (Note 1&3)   60,750,000   6.7                        
    60,750,000   6.7   60,750,000   6.1                                       
                                                                              
    Sub-total   675,000,000   74.8   584,800,000   64.8                       
    675,000,000   68.0                                                        
                                                                              
    Public Shareholders                                                       
    Yue Yuen Industrials   89,100,000   9.9   89,100,000                      
    9.9   89,100,000   9.0                                                    
    Other public shareholders   138,200,000   15.3                            
    228,400,000   25.3   228,400,000   23.0                                   
                                                                              
    Total   902,300,000   100.0   902,300,000   100.0                         
    992,500,000   100.0                                                       
                                                                              
    Notes:                                                                    
    1.   Parties acting in concert.                                           
                                                                              
    2.   Capital Glory Limited is a wholly-owned                              
    subsidiary of Helmsley Enterprises Limited, which is                      
    in turn owned by a number of trusts for the benefits                      
    of the Tan family.                                                        
                                                                              
    3.   Union Bright Limited is a wholly-owned subsidiary                    
    of Tan Holdings Limited, which is in turn wholly-owned                    
    by the Tan Family Trust.                                                  
                                                                              
    REASONS FOR THE PLACING AND SUBSCRIPTION                                  
    The Company is one of the largest apparel                                 
    manufacturers in Asia, with an existing product                           
    portfolio consisting of knit, woven and sleep wear.                       
    The Group focuses on becoming a supply chain partner                      
    with its customers, by providing volume manufacturing,                    
    design & research capabilities, sourcing services,                        
    inventory management and logistics & distribution                         
    functions.                                                                
                                                                              
    With quota elimination in 2005, it is expected that                       
    apparel retailers and branded apparel makers will buy                     
    from fewer suppliers to reduce administration and                         
    coordination costs spent in sourcing. However,                            
    apparel retailers and branded apparel makers                              
    generally need to source a wide assortment of                             
    different categories of apparel, therefore,                               
    manufacturers are increasingly looking to expand                          
    their production with the capability to produce a                         
    wider assortment of different categories of apparel                       
    through organic growth or acquisitions.                                   
                                                                              
    In order to capture the business opportunities                            
    following quota elimination, the Group intends to                         
    expand into new product types in order to attract new                     
    customers and/or gain market share. It is the Group's                     
    strategy to expand its product portfolio by both                          
    developing new product types internally and by way of                     
    acquisition. In the past, the Group has expanded its                      
    product portfolio to sleep wear and ladies wear                           
    through acquisitions. The Directors are considering                       
    to expand the product portfolio of the Group to include                   
    ladies' intimate wear, knitwear and cotton pants.                         
                                                                              
    The Company is now assessing the feasibility of                           
    developing new product types either internally or by                      
    way of acquisition, or the combination of both.