09:35 REGENT PACIFIC<00575> - Announcement & Resumption (2) Pursuant to the Acquisition Agreement, BIH Group has agreed to dispose of its 77.75% shareholding in Bridge and RPCA and SWIB have agreed to dispose of their respective 0.47% and 8.64% interests in Bridge for a total cash consideration of KRW 131 billion (US$127.8 million or HK$996.8 million), to be shared among the Sellers on a pro rata basis according to their respective shareholding interests. Accordingly, the amounts to be received by the BIH Group and RPCA before Korean taxes will be approximately KRW 117.3 billion (US$114.4 million or HK$892.3 million) and KRW 706.2 million (US$0.7 million or HK$5.5 million) respectively. All consideration to be paid will be subject to Korean securities transaction tax at the rate of 0.5% of the consideration and other Korean taxes if applicable. The consideration comprises both an up front cash payment of KRW 2 billion (US$1.95 million or HK$15.2 million), payable within 5 business days of the date of the Acquisition Agreement, and a deferred payment of KRW 129 billion (US$125.9 million or HK$982 million), payable after the relevant interests have been sold but within 15 business days of completion of the contemplated merger between Bridge and Leading. Shareholders should note that the disposal of the Sellers' interests in Bridge and payment of the KRW 129 billion deferred consideration is subject to a number of conditions, including, without limitation, the following: 1. Completion of a due diligence exercise by Bridge on Leading in connection with the contemplated merger. 2. Korean regulatory approvals, of both the disposal of the Sellers' interests in Bridge and the contemplated merger between Bridge and Leading. 3. Shareholders' approvals required under Korean law (from both Bridge and Leading shareholders). 4. Execution of a merger agreement and completion of the contemplated merger between Bridge and Leading, including the execution of related security documents. Upon completion of the disposal and subsequent merger of Leading and Bridge, the Acquisition Agreement provides for the Sellers to be granted security in support of payment of the deferred consideration. The form of security to be granted to the Sellers takes various forms, including a share pledge over the Sellers' interests in Bridge to be transferred to Leading, a pledge over discrete assets of Bridge, proxies over shares in both Leading and Bridge granted in favour of the Sellers and retained control of Bridge's board of directors. Each of the before mentioned security arrangements are contemplated as falling away upon payment (in full) of the deferred consideration. If the deferred consideration is not paid on the day prescribed by the Acquisition Agreement, then the Sellers shall be entitled to (i) enforce the before mentioned security arrangements to recover any unpaid sum; (ii) interest on any amount still outstanding and/or (iii) terminate the Acquisition Agreement and recover damages for breach of contract. The Acquisition Agreement affords the Sellers other termination rights, including the right to terminate where the conditions have not been satisfied by 3 months from the date of the Acquisition Agreement. Given the nature of the above conditions, including the contemplated merger, it is difficult to predict when the disposal may complete. However, the Directors understand that the BIH Group is hopeful of receiving (in full) the deferred consideration by 31 July 2005. As at the date of this announcement, the Company has not yet received any financial information from the BIH Group, which would enable it to accurately quantify the financial impact that this transaction would have on the Group's financial statements. Further announcements will be made as and when appropriate. The BIH Group had contributed a loss of US$13.5 million (HK$105 million) to the Group's loss of US$14.3 million (HK$111.2 million) for the six-month period ended 30 September 2004 and it had contributed a profit of US$6.7 million (HK$52.1 million) to the Group's profit of US$5.1 million (HK$39.6 million) for the financial year ended 31 March 2004. While the Acquisition Agreement has been signed, there can be no assurance, however, that the conditions to the disposal and payment of the deferred consideration will be satisfied. Shareholders and potential investors should note that discussions between Bridge and Leading, as to the terms of the merger, are still ongoing and that no definitive merger agreement has been entered into. Therefore, there can be no assurance that the execution of the Acquisition Agreement will result in a successful realisation of the Sellers' respective interests in Bridge. Leading and its controlling shareholder are independent third parties. BIH is an investment holding company that was incorporated in the Cayman Islands on 14 September 1999 with limited liability. The Company holds 40.2% of the issued share capital of BIH and SWIB owns