09:05 LINEFAN TECH<08166>-Announcement & Resumption of Trading (1) This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities. The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss however arising from or in reliance upon the whole or any part of the contents of this announcement. LINEFAN TECHNOLOGY HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8166) PROPOSED SHARE CONSOLIDATION PROPOSED RIGHTS ISSUE OF NOT LESS THAN 78,533,230 RIGHTS SHARES AND NOT MORE THAN 79,433,230 RIGHTS SHARES TO QUALIFYING SHAREHOLDERS ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY TWO CONSOLIDATED SHARES HELD AT A SUBSCRIPTION PRICE OF HK$0.10 PER RIGHTS SHAREAND RESUMPTION OF TRADING Financial adviser KINGSTON CORPORATE FINANCE LIMITED SHARE CONSOLIDATION The Directors propose that every ten issued and unissued Shares of HK$0.01 each be consolidated into one Consolidated Share of HK$0.10. The board lot for trading in the ordinary shares in the capital of the Company will be changed from 10,000 Shares to 10,000 Consolidated Shares. THE RIGHTS ISSUE The Company proposes to raise not less than approximately HK$7.85 million before expenses through the Rights Issue of not less than 78,533,230 Rights Shares and not more than 79,433,230 Rights Shares at a price of HK$0.10 per Rights Share. Qualifying Shareholders will be offered one Rights Share for every two Consolidated Shares (as if the Share Consolidation had taken effect) held on the Record Date. The Rights Issue is not available to Excluded Shareholders. In order to continue develop its existing technology and products as well as to expand its market presence to a nationwide scale, the Group intends to utilize the net proceeds of the Rights Issue of not less than approximately HK$7 million as to (i) approximately HK$4.5 million for future investments projects; (ii) approximately HK$1 million for upgrading and improvement of existing technology and equipment; (iii) approximately HK$0.5 million for marketing and promotional activities; and (iv) the balance of approximately HK$1 million for general working capital of the Group. WARNING OF THE RISKS OF DEALING IN SHARES AND NIL-PAID RIGHTS SHARES Shares will be dealt with on an ex-rights basis from Wednesday, 23 March 2005. Dealings in the rights Shares in the nil-paid form will take place from Thursday, 7 April 2005 to Wednesday, 13 April 2005 (both dates inclusive). If the Underwriting Shareholders terminate the Underwriting Agreement as amended by the Supplemental Agreement, or the conditions of the Underwriting Agreement as amended by the Supplemental Agreement are not fulfilled or waived, the Rights Issue will not proceed. Any person dealing in the Shares on an ex-rights basis and any person dealing in the nil-paid Rights Shares will accordingly bear the risk that the Underwriting Agreement as amended by the Supplemental Agreement may not become unconditional and the Rights Issue may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares from now up to the date on which the Underwriting Agreement as amended by the Supplemental Agreement becomes unconditional, and/or contemplating selling or purchasing the nil-paid Rights Shares who is in any doubt about his/her position is recommended to consult his/her own professional advisers. Shareholders and interested public are reminded to exercise caution when dealing in the Shares. At the request of the Company, trading in the Shares on GEM has been suspended from 9:30 a.m. on 19 January 2005 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for resumption of trading in the Shares on GEM with effect from 9:30 a.m. on 21 February 2005. By order of the Board The Stock Exchange has received a message from Grandmass Enterprise Solution Limited which is reproduced as follows: "In order to alleviate the difficulties arising from the existence of odd lots from the share consolidation and change in board lots, the Company has agreed to procure Friedmann Pacific Securities Limited to stand in the market to provide matching services for the odd lots of Shares and Open Offer Shares on a "best endeavour" basis during the period from Tuesday, 25 January 2005 to Monday, 21 February 2005 (both days inclusive). Shareholders who wish to take advantage of this matching facility either to dispose of their odd lots of Shares or to top up to board lots of 10,000 shares, may contact Mr. Liu Sai Kwong, Friedmann Pacific Securities Limited at Suite 2906, 29th Floor, Bank of America Tower, 16 Harcourt Road, Central, Hong Kong or telephone number (852) 31010927."