10:03 CHINA ELECTRON<00085> - Announcement (7) The SGM will be convened to consider and, if thought fit, to approve the Acquisition and the Capital Reorganisation. GENERAL INFORMATION A circular containing, among other things, details of the Acquisition, the Capital Reorganisation and the proposed change of board lot size, the letter from Altus to the Independent Board Committee and the Independent Shareholders regarding the Acquisition, the letter from the Independent Board Committee to the Independent Shareholders regarding the Acquisition and the notice to the Shareholders convening the SGM will be despatched to the Shareholders as soon as practicable. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning: "Acquisition" the proposed acquisition by the Company of a 48% equity interest in CECW from China Electronics Industry subject to and upon the terms and conditions of the Equity Transfer Agreement "Altus" Altus Capital Limited, a deemed licensed corporation to carry out type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the terms of the Acquisition "associates" has the meaning ascribed to this term under the Listing Rules "Business Day" a day (excluding Saturdays) on which banks are generally open for business in Hong Kong and the PRC throughout their normal business hours "Capital Reduction" the proposed reduction of the nominal value of the issued Shares from HK$0.01 each to HK$0.00125 each by the cancellation of HK$0.00875 paid up on each issued Share "Capital Reorganisation" the Capital Reduction and the Share Consolidation "CEC" * (China Electronics Corporation), a stated-owned enterprise established under the laws of the PRC, the ultimate controlling Shareholder and the warrantor under the Equity Transfer Agreement "CEC Group of Companies" CEC and its subsidiaries "CECW" * (CEC Wireless R&D Ltd.), a sino-foreign equity joint venture among China Electronics Industry, Cellon Hongkong Ltd. and Cellon Incorporation "Cellon Group" Cellon International Holding Corp. and its subsidiaries, including Cellon Hongkong Ltd. and Cellon Incorporation "China Electronics Industry" * (China Electronics Industry Corporation), a state-owned enterprise established under the laws of the PRC, a wholly-owned subsidiary of CEC, and the vendor under the Equity Transfer Agreement "Company" China Electronics Corporation Holdings Company Limited, a company incorporated in the Cayman Islands and continued in Bermuda with limited liability and whose issued Shares are listed on the main board of the Stock Exchange "Completion" completion of the Acquisition in accordance with the terms of the Equity Transfer Agreement "connected person" has the meaning ascribed to this term under the Listing Rules "Directors" directors (including the independent non-executive directors) of the Company "Equity Transfer Agreement" the conditional equity transfer agreement dated 4 April 2005 entered into among China Electronics Industry as vendor, the Company as purchaser and CEC as warrantor "Group" the Company and its subsidiaries "GPRS" General Packet Radio Service, a standard for wireless communications which runs at speeds up to 115 kilo bits per second, compared with current GSM systems' 9.6 kilo bits