10:06 MOULIN INT'L<00389> - Announcement & Resumption (2) PLACING OF EXISTING SHARES AND SUBSCRIPTION TOP-UP FOR NEW SHARES The Directors of the Company are also pleased to announce that on 19 February 2005, the Vendor and the Company entered into the Placing and Subscription Agreement with the Placing Agent, pursuant to which the Placing Agent will procure purchasers to acquire, or failing which will itself as principal acquire, and the Vendor will sell, or procure the sale of, in aggregate 54,773,674 existing Shares at the Placing Price of HK$5.724 per Share. The Placing Shares represent approximately 11.0% of the existing issued share capital of the Company of 499,200,562 Shares and approximately 9.1% of the issued share capital of the Company as enlarged by the Subscription Top-up. The Placing Price represents (i) a discount of approximately 10.6% to the closing price of HK$6.4 per Share as quoted on the Hong Kong Stock Exchange on 18 February 2005; (ii) a discount of approximately 7.8% of the average closing price of approximately HK$6.21 per Share as quoted on the Hong Kong Stock Exchange for the last 5 trading days up to and including 18 February 2005, and (iii) a discount of approximately 8.6% to the average closing price of approximately HK$6.26 per Share as quoted on the Hong Kong Stock Exchange for the last 10 trading days up to and including 18 February 2005. Pursuant to the Placing and Subscription Agreement, the Vendor has also conditionally agreed to subscribe or procure the subscription of an aggregate of 54,616,106 New Shares at the Placing Price. The New Shares represent approximately 10.9% of the existing issued share capital of the Company of 499,200,562 Shares and approximately 9.9% of the issued share capital of the Company as enlarged by the Subscription Top-up. The issue of 45,224,006 new Shares upon conversion of the Convertible Bonds at an initial conversion price of HK$7.098 per Share (assuming full conversion of the Convertible Bonds) (as described above under the section headed "Issue of Convertible Bonds") and the issue of 54,616,106 new Shares under the Subscription Top-up at the Placing Price of HK$5.724 represent a weighted average issue price of approximately HK$6.35 per Share. The Company will apply to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the New Shares. The net proceeds from the Subscription Top-up are estimated to be approximately HK$303 million, which the Company intends to use for general working capital and to further expand the Group's retail operations in China. GENERAL As the Subscription Agreement and the Placing and Subscription Agreement may or may not complete, Shareholders and prospective investors are advised to exercise caution when dealing in the Shares of the Company. At the request of the Company, trading in the Shares on the Hong Kong Stock Exchange has been suspended since 9:30 a.m. (Hong Kong time), on 21 February 2005 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares on the Hong Kong Stock Exchange with effect from 9:30 a.m. (Hong Kong time) on 22 February 2005. 1. ISSUE OF CONVERTIBLE BONDS SUBSCRIPTION AGREEMENT DATED 19 FEBRUARY 2005 Introduction The Directors are pleased to announce that on 19 February 2005, the Company entered into the Subscription Agreement with the Manager in connection with the issue of the Convertible Bonds with an aggregate principal amount of HK$321 million. The Convertible Bonds are denominated in HK dollars and are convertible into Shares. Parties (a) the Company; and (b) the Manager. The Manager is the manager in respect of the subscription and issue of