09:45 FORTUNA INT'L<00530>-Announcement & Resumption of Trading(2) Information of the Target Company The Agreement was entered into between the Purchaser and the Vendor pursuant to which the Vendor has agreed to sell and the Purchaser has agreed to purchase the Sale Share, representing 30% of the entire issued share capital of the Target Company. The Target Company is now beneficially owned as to 60% by the Vendor, 10% by Mr. Ho and 30% by Ferrocid. The Target Company is a company incorporated in Macau which has the right to use and occupy the Hotel for a period up to 2nd April 2010 and, unless early terminated, such right will be automatically renewed for further term under the laws of Macau. However, the exact length of the renewable term has not been determined between the owner of the Hotel and the Target Company. The Hotel is located at No. 612 Avenida de Almeida Ribeiro(*) which is sitting close to sight-seeing points and shopping districts. The Hotel was built in 1941 and is a historical landmark which signifies the prosperous era of the Avenida de Almeida Ribeiro district in the 50's. The Hotel was run by a renowned family in Macau for almost 60 years until it was closed down in year 2000. The Hotel was deserted for more than 4 years until the Target Company obtained the right to use and occupy the Hotel from the owner in April 2004. As far as the Directors are aware, the owner of the Hotel does not have any relationship with the Vendor. The Target Company aims at renovating the Hotel and converting it into a new hotel under the management of the Target Company. In view of the historical value of the Hotel, only the interior of the Hotel will be renovated and the classic external appearance of it will be kept. The renovation of the Hotel has been carrying out since early December 2004. The Hotel has not yet commenced business as at the date of this announcement. The area in which the Hotel is situated is included in the redevelopment plan of the Government of Macau under the Ponte 16 theme park construction project which aims at boosting the tourist industry in that area. In view of the active participation of the Government of Macau in developing more tourist attractions, which include the development of cultural, gaming and leisure-related industries, the Target Company refurbishes the Hotel to attract more guests so as to take advantage of the redevelopment of that area. The new renovated Hotel will consist of 50 guest-rooms with gross floor area of 53,076.10 sq. ft. The new renovated Hotel will also include a casino, restaurants, coffee shop, sauna, business centre and retail outlets. The Vendor, Mr. Ho and Ferrocid will be responsible for refurbishing the Hotel. The Vendor shall be responsible for procuring funding for the renovation of the Hotel and no capital commitment is required from the Company for the renovation. The Target Company is in the process of applying for the necessary licences for operating the Hotel and procuring licensed casino operator for the operation of the casino to be established therein. Upon completion of the renovation of the Hotel, all the facilities, equipment, fixtures and furniture therein the Hotel, will become assets of the Target Company. Consideration and terms of payment The Consideration for the Sale Share is HK$50 million and shall be payable in full by the Purchaser to the Vendor upon Completion. A sum of HK$1 million was paid upon signing of the Agreement as the deposit (which is refundable) for the Acquisition and the remaining balance of HK$49 million will be satisfied either by way of cash or issuance and allotment of the Consideration Shares at HK$0.05 each to the Vendor. The Agreement provides that the balance of the Consideration can be satisfied either by way of cash or Consideration Shares at the discretion of the Purchaser. Such clause is to allow flexibility and ensure fairness to the parties in view that the condition precedents may take months to be completed and no one can be certain as to the then market condition by the time of Completion. In this regard, the Directors consider that such clause is in the interest of the Company. The Consideration Shares Unit Price is (i) a premium of 19% to the closing price of HK$0.042 per Share as quoted on the Stock Exchange on 19th January 2005, being the last trading day of the Shares pending the release of this announcement, and (ii) a premium of 10.6% to the average closing price of HK$0.0452 per Share for the last 5 trading days up to 19th January 2005. As at 19th January 2005, based on the closing price of HK$0.042 per Share, the Consideration Shares amount to HK$41,160,000.