09:36 SUNNY GLOBAL<01094>-Announcement & Resumption of Trading(3) The Group has been principally engaged in the design, manufacture and sale of a wide range of leisure and athletic footwear in the PRC, and IT businesses such as the provision of system integration services, facility management services and the development of IT infrastructure network in the PRC and Hong Kong. For the past two years, the footwear business section had undergone a tough period. The price pressure was attributable to the keen competition amongst market players induced by an adverse global over-supply business environment. Given the volatility of the price of crude oil which in turn affects the price of the essential raw materials for making footwear and the soaring of labour cost in the PRC, the footwear division of the Group has been suffering from a costly manufacturing cost. In view of this adverse business environment and the uncertainty in the manufacturing cost of footwear business, the Directors consider that the prospect of the businesses of the Kaitai United Group are not pronouncing and accordingly consider the Disposal a suitable opportunity for the Company to realise its investment in Kaitai United. The Directors are of the view that the terms of the Disposal are fair and reasonable and in the interests of the Shareholders as a whole. Following the Disposal, the Directors shall continue to develop the Company's existing business with the trading arm of the footwear business section and the information technology related business section. The Directors shall continue to explore and review any potential business opportunities with an aim to strengthen the quality of the investment portfolio and improve the overall financial performance of the Company. A gain expected to accrue to the Group following completion of the Disposal would be approximately HK$1.1 million for the year ending 30 September 2005 (that is the difference between the consideration of the Disposal and the unaudited consolidated NAV of the Kaitai United Group as at 31 January 2005). As at 31 January 2005, the Kaitai United Group had an unaudited consolidated NAV of approximately HK$6.9 million. Before completion of the Disposal, the Kaitai United Group are wholly-owned subsidiaries of the Company. Upon completion of the Disposal, the Kaitai United Group will cease to be the subsidiaries of the Company. The accounts of the Kaitai United Group will no longer be consolidated to the financial statements of the Group. USE OF PROCEEDS The aggregate consideration of the Disposal of approximately HK$12.9 million will be satisfied by Jade Paradise in three installments in accordance with the Schedule. The net proceeds from the Disposal are expected to be an amount of approximately HK$12.9 million and will be applied for the general working capital requirements of the Company for its existing businesses. As at the date hereof, there is no specific plans identified by the Company in utilising the net proceeds for its existing business and no specific investments has been identified by the Company. Hence, no breakdown on the use of net proceeds between the Company's existing investments and any future investments is available. Save for the liabilities and debts of the Group arose in the normal course of business, the Group has no other liabilities and debts as at the date hereof which shall be met by the proceeds from the Disposal. The Company will comply with the requirements of the Listing Rules and make such announcement or disclosure as and when required. GENERAL As the applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Disposal exceed 25% but are below 75%, the Disposal constituted a major transaction for the Company under the Listing Rules and is therefore conditional on the approval of the Shareholders at a general meeting. A circular containing further particulars of the Disposal together with the notice of the SGM to be convened for the purpose of approving the Disposal will be despatched to the Shareholders as soon as practicable. Dealings in the shares of the Company on the Stock Exchange has been suspended at the request of the Company with effect from 9:30 a.m., 17 March 2005 pending release of this announcement. Application has been made by the Company for the resumption of dealings in the shares of the Company on the Stock Exchange on 9:30 a.m., 1 April 2005. DEFINITIONS `Agreement' the sale and purchase agreement between Fortress Ocean and Jade Paradise dated 31 March 2005 in relation to the Disposal `Company' Sunny Global Holdings Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Stock Exchange `Directors' the directors of the Company `Disposal' the sale of the Sale Shares and the assignment of the Sale Debt by Fortress Ocean pursuant to the Agreement