09:47     CHINA WATER<00855> - Announcement & Resumption (3)                  

    Conditions:   The Subscription by the Vendor of the New Shares            
    is conditional upon:                                                      
                                                                              
    (i)   completion of the Placing;                                          
                                                                              
    (ii)   the granting of the listing of, and permission to deal             
    in, such New Shares by the Stock Exchange; and                            
                                                                              
    (iii)   the Bermuda Monetary Authority approving the issue of             
    the Subscription Shares (if required).                                    
                                                                              
    Completion of the Subscription:   The Subscription, which is              
    expected to be completed on or before 18th April, 2005, being             
    the date falling fourteen days from the date of the                       
    Subscription Agreement and Placing Agreement, If the                      
    Subscription is not completed within 14 days after the date of            
    the Placing Agreement and the Subscription Agreement, the                 
    Company will then comply with the relevant connected                      
    transaction requirements under the Listing Rules.                         
                                                                              
    Application for Listing:   Application will be made to the                
    Stock Exchange for the granting of the listing of, and                    
    permission to deal in, the New Shares.                                    
                                                                              
    EFFECT OF THE PLACING AND THE SUBSCRIPTION                                
    The shareholdings in the Company before and after the Placing             
    and the Subscription are summarized as follows:                           
                                                                              
    At present                                                                
                                                                              
    Immediately after completion of the Placing but before                    
    Subscription                                                              
                                                                              
    Immediately after completion of the Placing and Subscription              
                                                                              
    Number of Shares   %   Number of Shares   %   Number of Shares            
    %                                                                         
                                                                              
    Assets Full Resources Limited                                             
         129,432,301   26.89%   71,832,301   14.92%   129,432,301             
    24.02%                                                                    
    Tsui Chi Kin (Note)   11,250,000   2.34%   11,250,000   2.34%             
    11,250,000   2.09%                                                        
    Placees   -   -   57,600,000   11.97%   57,600,000   10.69%               
    Other Public Shareholders                                                 
         340,619,399   70.77%   340,619,399   70.77%   340,619,399            
    63.20%                                                                    
                                                                              
    Total   481,301,700   100%   481,301,700   100%   538,901,700             
    100%                                                                      
                                                                              
    Note:   Mr. Tsui Chi Kin is the executive director of the                 
    Company.                                                                  
                                                                              
    REASONS FOR THE PLACING AND THE SUBSCRIPTION AND USE OF                   
    PROCEEDS                                                                  
    The Company is principally engaged in city water supply and               
    sewage treatment business in the PRC and the provision of                 
    subcontracting services and manufacturing and sale of                     
    electronic products.                                                      
                                                                              
    The following table summaries the capital raising activities              
    of the Group for the 12 months immediately before the date of             
    this announcement:                                                        
                                                                              
    Date of announcement                                                      
                                                                              
    Event                                                                     
                                                                              
    Net proceeds                                                              
                                                                              
    Intended use of proceeds                                                  
                                                                              
    Actual use of proceeds as at the date of this announcement                
                                                                              
    19th July, 2004                                                           
                                                                              
    Open offer of new shares of HK$29.2 million                               
                                                                              
    HK$27.6 million                                                           
                                                                              
    HK$11 million for its general working capital;                            
                                                                              
    Approximately HK$10.1 million has been used as the intended               
    purposes and remaining balance of approximately HK$0.9 million            
    held as bank balances of the Group.