09:37 EMPEROR IHL<00163> - Announcement (2) Purchaser : Worthly Strong Investment Limited, a company incorporated in Hong Kong and an indirect wholly-owned subsidiary of the Company and a substantial shareholder of EEH The Vendor is therefore a connected person of the Company within the meaning of the Listing Rules. Asset to be acquired The asset to be acquired is the Sale Shares which represent approximately 11.24% shareholding interest in EEH. The original purchase cost of the Sale Shares (which were purchased on 23 November 2004) is US$17 million (equivalent to approximately HK$132.6 million). EEH is a company listed on the Stock Exchange and 22.04% of the total issued share capital of which is currently held by the Company, through Worthly Strong. EEH has been engaging in property investment and development in the PRC with its principal development project in Shanghai. EEH has recently expanded its business scope to the tourist and entertainment sector by entering into a joint venture hotel project with casino operation in Macau. It further extends its tourist and entertainment business by acquiring the cruise ship "Golden Princess" which was completed on 15 February 2005. The unaudited consolidated net asset value of EEH and its subsidiaries as at 30 September 2004 is approximately HK$364 million. The audited consolidated results before and after taxation of the EEH and its subsidiaries for the two financial years ended 31 March 2003 and 31 March 2004 and the unaudited consolidated results of EEH and its subsidiaries for the six months ended 30 September 2004 which are extracted from the latest interim and annual reports of the Company are as follows:- For the year ended 31 March 2003 2004 For the six months ended 30 September 2004 HK$'000 HK$'000 HK$'000 Profits/(Loss) before taxation (585,288) 102,291 15,647 Profits/(Loss) after taxation (598,266) 86,382 15,653 Consideration The consideration for each Sale Share is HK$1.58 (i.e. HK$164,966,220 in aggregate for 104,409,000 Sale Shares) which is equivalent to the closing price of HK$1.58 of the shares of EEH as quoted on the Stock Exchange on 15 February 2005, being the last trading day before the publication of this announcement. Worthly Strong will settle the consideration of the Sale Shares by procuring the Company to allot and issue 129,894,661 new Shares to the Vendor at the closing price of HK$1.27 per Share which is equivalent to the closing price of HK$1.27 of the Shares as quoted on the Stock Exchange on 15 February 2005, being the last trading day before the publication of this announcement. The issue price of the Consideration Shares is arrived at after arm's length negotiations. Although the Vendor previously undertook on 23 November 2004 of its own accord to EEH that it will not dispose of the Sale Shares within 6 months after their issue, EEH agreed to release such undertaking after discussions with the Vendor and the AY Trust (the Company was informed of such discussions) that the aggregate shareholding interest in EEH by the Vendor, the AY Trust and the Company which are acting in concert will not be changed and no adverse impact will be resulted on EEH. It has always been the investment policy of the AY Trust to invest in EEH indirectly through its shareholding in the Company. The Vendor sells the Sale Shares to Worthly Strong in order to match with this investment policy. The Consideration Shares represents approximately 13.08% of the existing issued share capital of the Company and approximately 11.57% of the issued share capital of the Company after the Acquisition. The shareholding structures of the Company before and after the Acquisition are set out below.