09:16     MATSUNICHI<00283> - Announcement & Resumption (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.                                
                                                                              
                                                                              
    MATSUNICHI COMMUNICATION HOLDINGS LIMITED                                 
    (incorporated in the Hong Kong with limited liability)                    
    (Stock Code:283)                                                          
                                                                              
                                                                              
    PLACING AND SUBSCRIPTION OF SHARES AND RESUMPTION OF TRADING              
    IN SHARES                                                                 
    Lead Manager                                                              
    ICEA CAPITAL LIMITED                                                      
    Co-Lead Manager                                                           
    G.K. GOH securities (H.K.) LIMITED                                        
                                                                              
    The Directors announce that both the Placing Agreement and the            
    Subscription Agreement were entered into on 22 February 2005.             
    Pursuant to the Placing Agreement, the Placing Agents have                
    agreed to place up to 80,000,000 existing Shares owned by Jade            
    Forest to independent placees at the Placing Price. The                   
    Placing is made on a best-efforts basis. Pursuant to the                  
    Subscription Agreement, the Company has conditionally agreed              
    to allot and issue to Jade Forest up to 80,000,000 new Shares             
    at the Placing Price subject to completion of the Placing, as             
    well as the granting of the listing of, and permission to deal            
    in the new Shares by the Listing Committee.                               
                                                                              
    Upon completion of the Placing and assuming the maximum number            
    of Shares are placed, the interest of Jade Forest and parties             
    acting in concert with it in the issued share capital of the              
    Company will be reduced from about 71.5% to about 57.9% and               
    such interest will then be increased to about 63.0% after                 
    completion of the Placing and the Subscription.                           
                                                                              
    Assuming the maximum number of Shares are placed and                      
    subscribed, the net proceeds of the Subscription is expected              
    to be not less than HK$202 million, of which it is expected               
    that no less than HK$95 million will be used to finance                   
    development of new products and the remaining balance being               
    not more than HK$107 million for general working capital of               
    the Group.                                                                
                                                                              
    Trading in the Shares on the Stock Exchange has been suspended            
    since 9:30 a.m. on 23 February 2005 at the request of the                 
    Company. The Company has submitted an application to the Stock            
    Exchange for the resumption of trading of the Shares at 9:30              
    a.m. on 24 February 2005.                                                 
                                                                              
    PLACING AGREEMENT                                                         
    Date   :   22 February 2005                                               
                                                                              
    Parties   :   (1)   Jade Forest                                           
    (2)   ICEA                                                                
    (3)   GK Goh                                                              
                                                                              
    THE PLACING                                                               
                                                                              
    1.   Placing of Existing Share                                            
                                                                              
    80,000,000 Shares, representing about 13.6% of the existing               
    issued share capital of the Company and about 12.0% of the                
    issued share capital of the Company as enlarged by the                    
    Subscription.                                                             
                                                                              
    2.   Placing Price                                                        
                                                                              
    HK$2.6 per Share. The Placing Price was arrived at after arm's            
    length negotiation.                                                       
                                                                              
    HK$2.6 per Share, i.e., being the Placing Price, represents (i)           
    a discount of approximately 8.0% to the closing price of                  
    HK$2.825 per Share of 22 February 2005, being the date of the             
    Placing Agreement; (ii) a discount of about 6.5% to the 5-day             
    average closing price for the period from 16 February 2005 to             
    22 February 2005 of about HK$2.78 per Share; and (iii) a                  
    discount of approximately 6.1% to the 10-day average closing              
    price of the period from 4 February 2005 to 22 February 2005              
    of about HK$2.77 per Share as quoted on the Stock Exchange.               
                                                                              
    The Directors consider that based on the market price of the              
    Shares, the Placing Price and the terms and conditions of the             
    Placing Agreement are fair and reasonable and in the best                 
    interests of the Company and the Shareholders as a whole.