09:46 CHINA WATER<00855> - Announcement & Resumption (2) Placing Price: The Placing Price of HK$0.50 per Share is fixed on 4th April, 2005 and is determined based on arm's length negotiations among the Company, the Vendor and the Placing Agent with reference to the closing price of HK$0.52 quoted on the Stock Exchange immediately before the suspension of trading of the Shares on 4th April, 2005. The Placing Price represents a discount of approximately 3.8% to the closing price of HK$0.52 quoted on the Stock Exchange immediately before the suspension of trading of the Shares on 4th April, 2005 and a discount of approximately 1.96% to the average closing price of the Shares of approximately HK$0.51 per Share over the last five consecutive trading days up to and including 4th April, 2005. The net Placing Price, after deducting expenses, is approximately HK$0.49 per Share. Rights: The Placing Shares will be sold free of any lien, charge, encumbrances and third party rights. The placees, or the Placing Agent if it elects to take up any Placing Shares, will receive all dividends and distributions declared, made or paid after the date of the Placing Agreement. Placing Agent: China Everbright Securities (HK) Limited, being the Placing Agent has agreed to procure not less than six placees (which will be professional and institutional investors) for the Placing Shares on a best endeavour basis. The Company expects that the total amount of the expenses to be borne by the Company in relation to the Placing is approximately HK$0.7 million which included the commission payable to the Placing Agent. The commission payable to the Placing Agent in relation to the Placing amounts to approximately HK$576,000 or 2.0% of the Placing Price per Share for the Placing Shares. Independence of the Placing Agent and the Placees: The Placing Agent and its ultimate beneficial owners are not connected persons of the Company and are independent of the Company and any connected persons of the Company. The Placees and their respective ultimate beneficial owners are not connected persons of the Company and are also independent of the Company and any connected persons of the Company. Upon completion of the Placing and Subscription, none of the Placees and their respective ultimate beneficial owners owns more than 5% or more of the enlarged share capital of the Company. Completion of the Placing: Completion of the Placing is expected to take place on 11th April, 2005, or such later date as may be agreed by the Company, the Vendor and the Placing Agent. SUBSCRIPTION UNDER THE SUBSCRIPTION AGREEMENT Subscriber: The Vendor. Issuer: The Company. Number of New Shares: The Company has agreed to allot and issue to the Vendor and the Vendor has agreed, conditionally as referred to below, to subscribe for the New Shares. The New Shares represent approximately 11.97% of the existing issued share capital of the Company and approximately 10.69% of the issued share capital of the Company as enlarged by the issued of the New Shares. The number of New shares to be subscribed by the Vendor will be exactly the same as the total number of Placing Shares placed and/or purchased by the Placing Agent. Subscription Price: HK$0.50 per Share. The Company will bear all the costs and expenses in relation to the Placing and Subscription which amounts to approximately HK$0.7 million. General mandate to issue New Shares: The New Shares will be issued under the general mandate granted to the Directors pursuant to a resolution passed by the shareholders of the Company on 15th September, 2004 to issue up to a total of 87,608,340 Shares. As at the date of this Announcement, 30,000,000 new Shares have been issued under the general mandate granted on 15th September, 2004 which related to the placing of existing shares and subscription for new shares of 30,000,000 at HK$0.5 each as disclosed in a press announcement dated 15th March 2005. Ranking: The New Shares, when fully paid, will rank pari passu in all respects with the existing Shares of the Company in issue as at the date of issue of the New shares.