09:12     CHINA STAR ENT<00326> - 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.                         
                                                                              
    CHINA STAR ENTERTAINMENT LIMITED                                          
    (Incorporated in Bermuda with limited liability)                          
    (Stock Code: 326)                                                         
                                                                              
    PLACING OF EXISTING SHARES AND                                            
    TOP-UP SUBSCRIPTION OF NEW SHARES                                         
                                                                              
    PLACING AGENT                                                             
                                                                              
    KINGSTON SECURITIES LIMITED                                               
                                                                              
    Top-Up Placing and Subscription                                           
    On 24 February 2005, the Vendors entered into the Top-Up                  
    Placing Agreement and the Subscription Agreement with the                 
    Placing Agent and the Company respectively. Pursuant to                   
    the Top-Up Placing Agreement, the Vendors have agreed to                  
    place, through the Placing Agent, an aggregate of                         
    76,600,000 existing Shares, on a fully underwritten basis,                
    to not less than six independent investors at a price of                  
    HK$0.50 per Share. Pursuant to the Subscription Agreement,                
    the Vendors conditionally agreed to subscribe for an                      
    aggregate of 76,600,000 Subscription Shares at a price of                 
    HK$0.50 per Share.                                                        
                                                                              
    The Top-Up Placing Shares and the Subscription Shares                     
    represent (i) about 17.25% of the existing issued share                   
    capital of the Company of 443,941,608 Shares; and (ii)                    
    about 14.72 % of the issued share capital of the Company                  
    of 520,541,608 Shares as enlarged by the Subscription.                    
                                                                              
    The Top-Up Placing Price and the Subscription Price of                    
    HK$0.50 represents (i) a discount of about 13.79% to the                  
    closing price of HK$0.58 per Share as quoted on the Stock                 
    Exchange on 24 February 2005, being the last trading day                  
    before this announcement; (ii) a discount of about 14.68%                 
    to the average of the closing price per Share of HK$0.586                 
    as quoted on the Stock Exchange for the last five trading                 
    days up to and including 24 February 2005, being the last                 
    trading day before this announcement; and (iii) a discount                
    of about 12.89% to the average of the closing price per                   
    Share of HK$0.574 as quoted on the Stock Exchange for the                 
    last ten trading days up to and including 24 February 2005,               
    being the last trading day before this announcement.                      
                                                                              
    The Subscription is conditional upon the Stock Exchange                   
    granting listing of, and permission to deal in, the                       
    Subscription Shares.                                                      
                                                                              
    The gross proceeds from the Subscription will be about                    
    HK$38.30 million. The net proceeds from the Subscription                  
    of about HK$37.30 million will be used for general working                
    capital of the Group and/or any future possible                           
    acquisition which is yet to be identified. As at the date                 
    of this announcement, the Company has no concrete plans                   
    or targets for the future possible acquisition.                           
                                                                              
    THE TOP-UP PLACING AGREEMENT                                              
    On 24 February 2005, the terms of the Top-Up Placing were                 
    fixed and the Vendors entered into the Top-Up Placing                     
    Agreement with the Placing Agent. Pursuant to the Top-Up                  
    Placing Agreement, the Vendors have agreed to place,                      
    through the Placing Agent, an aggregate of 76,600,000                     
    existing Shares, on a fully underwritten basis, to not less               
    than six independent investors at a price of HK$0.50 per                  
    Share.                                                                    
                                                                              
    Date                                                                      
    24 February 2005                                                          
                                                                              
    Parties involved                                                          
    The Placing Agent and the Vendors                                         
                                                                              
    Placing Agent                                                             
    Kingston Securities Limited is the Placing Agent and will                 
    receive a placing commission of 2.0% on the gross proceeds                
    of the Top-Up Placing paid by the Company, which was                      
    arrived at after arm's length negotiations between the                    
    Company and the Placing Agent. The Placing Agent is not                   
    a connected person (as defined in Listing Rules) of the                   
    Company and are third parties independent of the Company                  
    and its connected persons.