09:11     EGANA JEWELLERY<00926> - Announcement (1)                           

    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 howsoever arising from or in reliance upon        
    the whole or any part of the contents of this announcement.               
                                                                              
    EGANA JEWLLERY  & PEARLS LIMITED                                          
    (Incorporated in the Cayman Islands with limited liability)               
    (stock code: 926)                                                         
                                                                              
    ISSUE OF TRANCHE 3A BONDS OF UP TO US$5,000,000 PURSUANT                  
    TO THE SUBSCRIPTION AGREEMENTS ENTERED INTO BETWEEN                       
    MERRILL LYNCH AND THE COMPANY                                             
                                                                              
                                                                              
    Reference is made to the Company's announcements dated 10th               
    February, 2004, 26th February, 2004 and 13th January, 2005.               
                                                                              
    The Board of Directors of the Company is pleased to announce that         
    the Stock Exchange has formally approved the listing of and the           
    permission to deal in the new Shares of the Company which fall to be      
    issued upon the exercise of the conversion rights under the Tranche       
    3a Bonds and the subscription of new Shares under the Subscription        
    Rights by Merrill Lynch.                                                  
                                                                              
                                                                              
    Reference is made to the Company's announcements dated 10th               
    February, 2004, 26th February, 2004 and 13th January, 2005 regarding      
    the issue of the Bonds (the `Announcements'). Unless the context          
    otherwise requires, defined terms used in this announcement shall         
    have the same respective meanings as in the Announcements.                
                                                                              
    Tranche 3a Bonds                                                          
    The Board of Directors of the Company is pleased to announce that         
    the Stock Exchange has formally approved the listing of and the           
    permission to deal in the new Shares of the Company which fall to be      
    issued upon the exercise of the conversion rights under the Tranche       
    3a Bonds and the subscription of up to 3,518,342 new Shares under the     
    Subscription Rights by Merrill Lynch. The total number of new Shares      
    to be issued under the Tranche 3a Bonds and Subscription Rights           
    should be within the limit of 76,195,132 Shares.                          
                                                                              
    Public Float                                                              
    At the date of this announcement, the issued ordinary share capital       
    of the Company is HK$193,785,649 comprising 387,571,298 Shares.           
    EganaGoldpfeil, the single largest shareholder of the Company,            
    currently holds 246,121,144 Shares, representing approximately 63.50%     
    of the existing issued ordinary share capital of the Company.             
                                                                              
    If based on the assumption made in the Company's announcement dated       
    13th January, 2005 in calculating the total number of new Shares to       
    be issued if Merrill Lynch fully exercises its conversion rights          
    under the Tranche 3a Bonds and Subscription Rights, the percentage of     
    shares holding of EganaGoldpfeil in the enlarged issued share capital     
    of the Company will be 58.86%.                                            
                                                                              
    Dilution Effect on Shareholders                                           
    As the Company foresees the future dilution effect on the                 
    Shareholders of the Company in relation to the issue of Tranche 3a        
    Bonds, the Company will promptly keep the Shareholders informed of        
    the level of dilution effect and all relevant details of the              
    conversion and/or exercise of the Subscription Rights by way of an        
    announcement published in the newspapers in the following manners:-       
                                                                              
                                                                              
    1.                                                                        
    Within 5 trading days after the end of each month, the Company will       
    make an announcement disclosing details of the conversion rights          
    exercised by Merrill Lynch under the Tranche 3a Bonds and Shares          
    subscribed under the Subscription Rights during that month, which         
    include, inter alia, the total principal amount converted, number of      
    Shares converted, the floating / fixed conversion price and the           
    percentage of dilution effect on the existing shareholders;               
                                                                              
    2.                                                                        
    The Company will make an announcement as soon as possible when the        
    conversion of Shares hit every 5% threshold of the Company's issued       
    share capital (based on the level of dilution effect on cumulative        
    basis);                                                                   
                                                                              
    3.                                                                        
    If the Company forms the view that any issue of new Shares under the      
    Tranche 3a Bonds will trigger the disclosure requirements under Rule      
    13.09 of the Listing Rules, then Company is obliged to make such          
    disclosures regardless of the issue of any announcements in relation      
    to the Tranche 3a Bonds; and                                              
                                                                              
    4.                                                                        
    If the conversion rights under the Tranche 3a Bonds are fully             
    exercised and Shares under the Subscription Rights are fully              
    subscribed by Merrill Lynch or either party exercises its rights for      
    an early redemption of the Tranche 3a Bonds, then the announcement        
    requirements set out in the above conditions (1) to (3) will cease        
    immediately.