09:50     YANION INT'L<00082> - Announcement & Resumption (9)                 

    investors and Independent Third Parties to both the                       
    Company and the Vendors, to raise gross proceeds of                       
    approximately HK$780,000,000 (subject to the then                         
    market conditions). The expected net proceeds from                        
    the Placing, after deducting all relevant fees and                        
    expenses, will be applied as to HK$50,000,000 to                          
    satisfy the cash consideration for the Sale Shares,                       
    approximately HK$600,000,000 for paying up the                            
    registered capital of Yingkou Steel JV on the part                        
    of Guohua International (which in turn will be used                       
    by Yingkou Steel JV as to approximately                                   
    HK$585,000,000 to pay up its committed portion of the                     
    Capital Increase and as to approximately                                  
    HK$15,000,000 for its high density steel                                  
    manufacturing business), and the remaining balance                        
    as general working capital of the Group. As the                           
    Placing Agreement has not been entered into, the                          
    Placing may not proceed, in which event, the                              
    Acquisition will lapse. Investors should note that                        
    as the issue price of the Placing Shares has not yet                      
    been determined, the amount of the gross proceeds to                      
    be raised under the Placing may be more or less than                      
    HK$780,000,000.                                                           
                                                                              
    At present, the Company intends to raise not less than                    
    HK$780,000,000 from the Placing. In the event that                        
    the indication of the level of interests in the                           
    Placing is less than HK780,000,000, the Company may                       
    or may not proceed with the Placing and the                               
    Acquisition depending on the exact level of interests                     
    in the Placing. If the indication of the level of                         
    interests in the Placing is less than HK$780,000,000                      
    and the Company decides to proceed with the Placing                       
    and the Acquisition, the amount to be applied towards                     
    the general working capital of the Group will be                          
    adjusted thereto. If the indication of the level of                       
    interests in the Placing is less than HK$780,000,000                      
    and the Company decides not to proceed with the                           
    Placing and the Acquisition, a further announcement                       
    will be issued as and when appropriate.                                   
                                                                              
    Since the Placing Shares will be placed to Independent                    
    Third Parties, the Company is of the view that the                        
    connected persons together are not expected to hold                       
    30% or more of the Enlarged Share Capital upon                            
    completion of the Acquisition and the Placing. In                         
    addition, it would not involve any change in control                      
    of the Company.                                                           
                                                                              
    As at the date of this announcement, save for four                        
    Directors who in aggregate hold approximately 1.8%                        
    of the issued share capital of the Company, no other                      
    connected person hold any Shares. The Company has                         
    undertaken to the Stock Exchange that the Company will                    
    take appropriate steps to ensure that not less than                       
    25% of the Shares in issue will be held by the public                     
    immediately following completion of the Acquisition                       
    and the Placing.                                                          
                                                                              
    A further announcement will be made by the Company                        
    as soon as practicable after the Company and Kim Eng                      
    Securities have entered into the Placing Agreement                        
    otherwise an announcement stating that the Company                        
    will not proceed with the proposed Placing will be                        
    issued as and when appropriate.                                           
                                                                              
    Save for the issuance of convertible notes for an                         
    aggregate principal amount of HK$21,500,000 at                            
    conversion price of HK$0.43 per Share in April 2004                       
    (which have been fully converted into 50,000,000                          
    Shares as at the date of this announcement and the                        
    proceeds thereof have been used as general working                        
    capital of the Group as announced), there were no                         
    other fund raising activities made by the Company