10:41 JINHUI HOLDINGS<00137> - 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. JINHUI HOLDINGS COMPANY LIMITED (Incorporated in Hong Kong with limited liability) Stock Code: 137 DISCLOSEABLE TRANSACTION ACQUISITION OF A VESSEL The Board announces that on 31 March 2005 Jinrong Marine entered into a Memorandum with the Vendor for the acquisition of a Vessel. Under the Memorandum, Jinrong Marine agrees to acquire from the Vendor, one deadweight 28,200 metric tons bulk carrier, which will be delivered during the period from 1 November 2005 to 30 November 2005. The consideration for the Vessel is US$27,800,000 (approximately HK$216,840,000). Under the Listing Rules, the Acquisition constitutes a discloseable transaction for the Company. A circular containing, amongst other things, further information relating to the Acquisition will be despatched to the shareholders of the Company as soon as reasonably practicable. INTRODUCTION The Board announces that on 31 March 2005, Jinrong Marine, a wholly owned subsidiary of Jinhui Shipping, entered into a Memorandum with the Vendor. The Vendor is an independent ship owning company incorporated in Malta, and to the best of the Board's knowledge, information and belief having made all reasonable enquiry, the Vendor and it's respective ultimate beneficial owners are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company. THE ACQUISITION The consideration for the Acquisition of the Vessel is US$27,800,000 (approximately HK$216,840,000) and will be payable in the following manner: (1) a deposit of US$2,780,000 will be payable by Jinrong Marine within three banking days from the date of signing of the Memorandum to a bank account in the joint names of Jinrong Marine and the Vendor and will be released to the Vendor on the delivery of the Vessel; and (2) the balance of the consideration for the Vessel will be payable on the delivery of the Vessel which will take place sometime between 1 November 2005 and 30 November 2005 at the Vendor's option. The Vessel is a deadweight 28,200 metric tons bulk carrier built in 2002. The purchase price for the Vessel will be payable in United States Dollars. The purchase price will be funded by the internal resources and bank loans of Jinhui Shipping and its subsidiaries. The purchase price was determined by reference to the prevailing market values, as ascertained from independent sources including (but not limited to) industry reports and recent comparable transactions, at or about the time of entry into the Memorandum, driven by supply and demand and based on arm's length negotiations with the Vendor. The Directors are of the view that the purchase price for the vessel is fair and reasonable. The Memorandum provides that the expected time for delivery of the Vessel will take place on or before 30 November 2005. Subject to the terms of the Memorandum, if there is a delay in the delivery of the Vessel, Jinrong Marine may at its option rescind the Memorandum (as the case may be) and the full amount of all sums paid by Jinrong Marine with interest thereon shall be returned to Jinrong Marine (as the case may be). GUARANTEE Jinhui Shipping, the intermediate holding company of Jinrong Marine, will guarantee the performance of the obligations of Jinrong Marine under the Memorandum in favour of the Vendor. REASONS FOR THE ACQUISITION The principal businesses of the Group include international ship chartering, ship owning and trading. The Directors continuously review the prevailing market conditions of the shipping industry and monitor and adjust the Group's fleet size as appropriate. The Directors are of