10:19     139 HOLDINGS<00139>-Announcement & Resumption of Trading (3)        

    The Preliminary Agreement is legally binding. The Consideration           
    will amount to HK$500 million and will be settled as follows:             
                                                                              
    (i)     HK$250 million in cash, of which HK$25 million will be placed     
    in an escrow account upon signing of the formal SP Agreement              
    and will be released to the Vendor within 14 days after Walterford        
    is satisfied with the relevant due diligence results and the              
    remaining HK$225 million will be paid upon Completion of the              
    Proposed Acquisition; and                                                 
                                                                              
    (ii)    Convertible Notes with aggregate principal amount of              
    HK$250 million.                                                           
                                                                              
    The cash portion of the Consideration will be financed as to              
    approximately HK$62.7 million by the proceeds of the Placing              
    and as to the balance of approximately HK$187.3 million by                
    internal resources of the Group. The financing of the cash                
    portion of the Consideration will be finalised pending outcome            
    of the proposed placing of new Shares. In the event that the              
    Proposed Acquisition proceeds but Placing does not proceed, the           
    cash portion of the Consideration will be financed by internal            
    resources of the Group.                                                   
                                                                              
    The form of Consideration is agreed between Walterford and the            
    Vendor after arm's length negotiation. The Directors (including           
    the independent non-executive Directors), subject to the final            
    terms under the SP Agreement, consider the proposed payment terms         
    of the Consideration under the Preliminary Agreement are fair             
    and reasonable.                                                           
                                                                              
    The Consideration was determined with reference to the book value         
    of the Shareholder's Loan and the net asset value of SDFP of              
    approximately HK$99.7 million as shown in the unaudited                   
    management accounts of SDFP as at 31 December, 2004. The Company          
    will engage an independent valuer to conduct a formal property            
    valuation on the property interests of SDFP and such valuation            
    report will be set out in the circular to be despatched to the            
    Shareholders.                                                             
                                                                              
    The Directors expect that the terms of the SP Agreement will              
    be substantially the same as those stated in the Preliminary              
    Agreement. Any significant deviation in the terms of the SP               
    Agreement will be disclosed in a further announcement of the              
    Company.                                                                  
                                                                              
    Principal terms of the Convertible Notes                                  
                                                                              
    Aggregate principal amount:     HK$250 million                            
                                                                              
    Conversion price:       HK$0.10 per Share                                 
                                                                              
    Term:   Two years from Completion of the Proposed Acquisition             
                                                                              
    Interest:       3.5% per annum                                            
                                                                              
    Exercise period:        Exercisable at any time after the lapse of        
    6 months from Completion of the Proposed Acquisition                      
                                                                              
    The final terms of the Convertible Notes will be agreed by the            
    Company, Walterford and the Vendor prior to the entering of the           
    SP Agreement. The Directors expect that the terms of the                  
    Convertible Notes including the conversion price will be                  
    substantially the same and have no present intention to adjust            
    the conversion price. Any significant deviation in the terms              
    of the Convertible Notes will be disclosed in a further                   
    announcement of the Company.