09:52     COSCO INTL HOLD<00517> - Announcement (2)                           

    Company will be the principal, interests accrued, penalty payment (up to  
    3.8% of the amount of Loan Facility, i.e. RMB5,700,000), fees and/or      
    otherwise which are payable under the Loan Agreement. Save for the        
    Guarantee, there is no other security or charges provided for the Loan    
    Facility.                                                                 
                                                                              
    The Company, COSCO GZ, Guangzhou Yihe and the Borrower also entered into  
    the Commitment Agreement whereby the parties agreed, amongst other        
    things, the followings:                                                   
                                                                              
    (i)        in the event that the Borrower does not have enough funding    
    to make full repayment of the Loan Facility when it falls due, the        
    Borrower will issue a funding notice to each of the Guarantors requiring  
    it to make available to the Borrower such funds by way of shareholder's   
    loans ("Shareholder's Loan") in the proportion to its shareholding        
    interest in the Borrower. If any one of the Guarantors cannot provide     
    funding to the Borrower in accordance with the funding notice             
    ("Defaulting Guarantor"), its Shareholder's Loan ("Defaulted Amount")     
    will be provided by the other remaining Guarantors and each Guarantor     
    shall bear the amount calculated by multiplying the Defaulted Amount by   
    its percentage of equity interest in the Borrower and divided by the      
    total percentage of equity interests of the remaining Guarantors in the   
    Borrower and they shall enter into a loan agreement with the Defaulting   
    Guarantor in respect of the Defaulted Amount;                             
                                                                              
    (ii)        no profit of the Borrower may be distributed until all        
    outstanding bank loans and Shareholders' Loans have been repaid in full;  
                                                                              
    (iii)        if the Defaulted Amount remain outstanding in the event of   
    the termination or liquidation of the Borrower, the capital contribution  
    distributable to the Defaulting Guarantor, in proportion to the equity    
    interest of the Defaulting Guarantor in the Borrower, shall be repaid to  
    the Guarantors who have provided the Shareholders' Loans on behalf of     
    the Defaulting Guarantor;                                                 
                                                                              
    (iv)        the director of the Borrower nominated by the Defaulting      
    Guarantor shall abstain from voting in any board meeting from the date    
    of default until the Defaulted Amount and accrued interest are provided   
    by the Defaulting Guarantor to the Borrower;                              
                                                                              
    (v)        any officer nominated by the Defaulting Guarantor to the       
    Borrower shall refrain from carrying out his/her duties and the           
    remaining Guarantors shall be entitled to nominate other person to        
    replace such officer from the date of default until the Defaulted Amount  
    and accrued interest are provided by the Defaulting Guarantor to the      
    Borrower.                                                                 
                                                                              
    RELATIONSHIP BETWEEN THE PARTIES                                          
                                                                              
    Set out below is the shareholding relationship between the Company and    
    the other parties to the Loan Agreement, the Guarantee and the            
    Commitment Agreement:                                                     
                                                                              
    So far as the Board is aware, save for its interests in the Borrower,     
    Guangzhou Yihe and its associates have no interests in any shares of the  
    Company or its subsidiaries.                                              
                                                                              
    REASONS FOR THE TRANSACTIONS                                              
                                                                              
    Prior to the solicitation of the Loan Facility, the Borrower had          
    explored various alternative means of funding for the Project including   
    applying for bank loans from third party commercial banks. After having   
    considered the terms of the loan facilities offered by other third party  
    commercial banks, the Company is of the view that the terms of the Loan   
    Facility is most favourable as it offers the most preferential interest   
    rate, longest repayment term, no penalty for early repayment, no other    
    security required, no limitation on mortgage or charges and the approval  
    procedure is less time consuming. By providing the Guarantee, the         
    Borrower will be able to obtain sufficient funding for the Project. The   
    Directors believe that the provision of a guarantee by the holding        
    company to a financial institution to facilitate the granting of loan     
    facility to a subsidiary is in the usual and ordinary course of business  
    of the Company.                                                           
                                                                              
    The Company considers that the terms of the Guarantee and the Commitment  
    Agreement, being arrived after arm's length negotiation with the Lender   
    are on normal commercial terms. The Directors consider that the terms of  
    the Guarantee and the Commitment Agreement are fair and reasonable and    
    in the best interest of the Company and the Shareholders as a whole.      
                                                                              
    LISTING RULES REQUIREMENTS                                                
                                                                              
    The Borrower is owned as to 51%, 29% and 20% equity interests by the      
    Company, COSCO GZ and Guangzhou Yihe respectively. As the Lender and      
    COSCO GZ are subsidiaries of COSCO, the ultimate controlling shareholder