09:29     CITIC PACIFIC<00267> - Announcement (3)                             

    The aggregate Compensation of RMB500 million                              
    (approximately HK$470 million) shall be paid by                           
    Sunspark in cash to Sunburst (as to approximately                         
    RMB153.8 million (approximately HK$144.6 million)),                       
    SDIC (as to approximately RMB146.2 million                                
    (approximately HK$137.4 million)), Jiangsu                                
    Provincial Investment (as to RMB100 million                               
    (approximately HK$94 million)) and Wuxi Power (as to                      
    RMB100 million (approximately HK$94 million)), which                      
    will approximately be in proportion to their                              
    respective equity interests in the Joint Venture.                         
                                                                              
    The Compensation was determined after arm's length                        
    negotiation between Sunspark and all other JV                             
    Shareholders with reference to the aggregate past                         
    profits and profit potentials of Phase I and Phase                        
    II and the aggregate unaudited book values of Phase                       
    I and the Phase II of RMB1,674 million (approximately                     
    HK$1,574 million). The Compensation will be funded                        
    by the internal resources of the Company.                                 
                                                                              
    Implementation of the Variation Arrangement                               
    The Variation Arrangement is subject to governmental                      
    approval and will be implemented by way of formal                         
    agreement to amend the JV Contract and Articles.                          
                                                                              
    REASONS AND BENEFITS FOR THE VARIATION ARRANGEMENT                        
    The Company's long term objective remains to develop                      
    a large diversified business focusing on                                  
    infrastructure, which includes, among others, power                       
    generation. The Variation Arrangement represents a                        
    good opportunity for the Group to enhance its power                       
    business in the PRC, and the stability and quality                        
    of the long term profitability of the Group. The                          
    Directors (including the independent non-executive                        
    Directors) are of the view that the terms of the                          
    Agreement are normal commercial terms, and are fair                       
    and reasonable and in the interest of the shareholders                    
    of the Company as a whole.                                                
                                                                              
    INFORMATION ON THE COMPANY AND OTHER JV SHAREHOLDERS                      
    The principal businesses of the Company comprise the                      
    provision of basic infrastructure in Hong Kong and                        
    the PRC including power generation, communications,                       
    aviation and civil infrastructure and the                                 
    manufacturing of special steel, marketing and                             
    distribution of motor vehicles and consumer products                      
    and property investment and development. The                              
    principal business of Sunburst, Jiangsu Provincial                        
    Investment, SDIC and Wuxi Power is investment                             
    holding.                                                                  
                                                                              
    GENERAL                                                                   
    Wuxi Power and its holding company are substantial                        
    shareholders of certain subsidiaries of the Company.                      
    Accordingly, Wuxi Power is a connected person of the                      
    Company. SDIC is a connected person of the Company                        
    due to its substantial interest held in a subsidiary                      
    of the Company. Hence, the Agreement constitutes a                        
    connected transaction for the Company under the                           
    Listing Rules. Pursuant to the Listing Rules, as each                     
    of the applicable Percentage Ratios is less than 2.5%,                    
    the Agreement is only subject to announcement and                         
    reporting requirements and does not require the                           
    approval of the independent shareholders of the                           
    Company. The Agreement is accordingly disclosed in                        
    this announcement and will be disclosed in the                            
    Company's forthcoming annual report pursuant to Rule                      
    14A.45 of the Listing Rules.                                              
                                                                              
    DEFINITIONS