09:42     MAYER HOLDINGS<01116> - Announcement (2)                            

    Guarantee  :  a guarantee to be provided by Guangzhou Mayer which will    
    incorporate repayment guarantee on all indebtedness under the Loan        
                                                                              
    To the best of the Directors' knowledge, information and belief after     
    having made all reasonable enquiries, the Lender and its ultimate         
    beneficial controlling owners are third parties independent of the        
    Company, Taiwan Mayer, and the other connected persons of the Company.    
                                                                              
    THE GUARANTEE                                                             
                                                                              
    Guangzhou Mayer shall provide the Lender with a guarantee to secure the   
    obligations of the Borrower in respect of the Loans to be drawn by the    
    Borrower under the Loan Facilities for not more than 24 months            
    commencing from the date of execution of the Guarantee, which shall       
    include repayment guarantee on all indebtedness under the Loan            
    Agreements. The Guarantee is expected to be executed in April or May      
    2005 and would take effect until the expiration of two years from the     
    repayment date of the Loan. The maximum exposure of Guangzhou Mayer       
    will be the principal, the interests accrued, fees or otherwise which     
    are, or may become payable under the Loan Agreements as to be agreed      
    between the Lender and the Borrower.                                      
                                                                              
    Guangzhou Mayer will receive a back-to-back guarantee from Taiwan Mayer   
    in respect of the granting of the Guarantee, pursuant to which in the     
    event that the Guarantee is enforced by the Lender as a result of the     
    default of the Borrower under the Loan Agreements, Guangzhou Mayer        
    shall have the right to be fully indemnified by Taiwan Mayer. The         
    Borrower will also pay an annual guarantee fee in cash amounting to       
    0.75% of the amount of the Loan Facilities which is payable after every   
    six months to Guangzhou Mayer as agreed between the Borrower and          
    Guangzhou Mayer. The amount of the annual guarantee fee was determined    
    after arm's length negotiation between the Borrower and Guangzhou Mayer   
    which has taken account of the provision of a back-to-back guarantee      
    from Taiwan Mayer and the opportunity of business co-operation with the   
    Borrower.                                                                 
                                                                              
    SHAREHOLDING STRUCTURE OF THE BORROWER                                    
                                                                              
    Set out below is the existing shareholding relationship between the       
    Company and the Borrower:                                                 
                                                                              
    Taiwan Mayer                                                              
                                                                              
    100%                                                                      
                                                                              
    100%                                                                      
                                                                              
    Shanghai Auto Motive Industry Corporation (Group)(*)                      
                                                                              
    Mayer Auto Ltd.                                                           
                                                                              
    Mayer Corporation Development International Limited                       
                                                                              
    The Public                                                                
                                                                              
    75%                                                                       
                                                                              
    25%                                                                       
                                                                              
    100%                                                                      
                                                                              
    100%                                                                      
                                                                              
    100%                                                                      
                                                                              
    The Company                                                               
                                                                              
    100%                                                                      
                                                                              
    SAIC HK Limited(*)                                                        
                                                                              
    Shanghai Automobile Nonferrous Casting Plant(*)                           
                                                                              
    Sino Regal Assets Ltd.                                                    
                                                                              
    Baiman Investments Pte Ltd.                                               
                                                                              
    other shareholders                                                        
                                                                              
    20%