09:57 CHINA VELOCITY<00149> - 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. China Velocity Group Limited (Incorporated in Bermuda with limited liability) (Stock Code: 149) DISCLOSEABLE TRANSACTION: ACQUISITION OF RENOWED The Directors announce that on 4 April 2005, the Agreement was entered into between the Vendor and the Purchaser which sets out the terms in respect of the proposed acquisition of the Sale Share and the Sale Loan for the aggregate purchase price of HK$35,000,000. The Acquisition constitutes a discloseable transaction of the Company under the Listing Rules. A circular of the Company in relation to the Acquisition will be dispatched to shareholders of the Company as soon as reasonably practicable. Agreement dated 4 April 2005 Parties: The Vendor and the Purchaser To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, the Vendor is an Independent Third Party. The Vendor was introduced to the Purchaser by a business associate of the Purchaser who is an Independent Third Party but who knew one of the senior managers of the Group. Interest Acquired: The Sale Shares and the Sale Loan being the unsecured and interest free shareholder loan of HK$47,340,992.20 owed by Renowed to the Vendor based on the unaudited management account of Renowed as at 31 December 2004. Consideration: The aggregate purchase price for the Sale Shares and the Sale Loan is HK$35,000,000 which has been determined at arm's length negotiation with reference to the consolidated negative net tangible asset value of Renowed of approximately HK$12.3 million as at 31 December 2004 and taking into account an independent valuation of the Property of HK$35 million done by RHL Appraisal Limited, an independent firm of professional valuers, on an open market basis as at 31 December 2004. The Directors consider that the terms of the transaction are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. HK$3.5 million of the Consideration has been paid in full by the Purchaser to the Vendor upon signing of the Agreement as a refundable deposit ("Deposit") which shall be applied in full as payment of the Consideration upon completion. The Consideration paid by the Purchaser shall be refunded in the event that the condition precedent is not fulfilled on or before the Long Stop Date or if the Agreement is terminated. Condition Precedent: Completion of the Agreement is conditional upon the Vendor and/or the Purchaser having obtained all necessary approvals, if any, in respect of the transaction contemplated under the Agreement and pursuant to the Listing Rules. If the condition precedent is not fulfilled on or prior to the Long Stop Date, the Agreement shall terminate and none of the parties shall have any claim against the other for costs, damages, compensation or otherwise (save in respect of the non-refundable payment referred to in the section headed "Consideration" above). Reasons for and benefits of the Acquisition The Company is principally engaged in property development in the PRC. The Vendor, an Independent Third Party, is a PRC individual who invests in property projects. Information on the Property The Property being the development site of Longling Portion, Bantian Yangmei Estate, Buji County, Longgang District, Shenzhen, the PRC with an aggregate site area of approximately 91,901.90 square meters located at designated areas for residential use was acquired by Superwide in 29 February 2004 and is beneficially owned by it. Superwide is in turn a wholly owned subsidiary of Renowed. The Property comprises a development site with an area of approximately 91,901.9 square metres. It is free from any mortgage The development site is currently vacant, and the Company plans to develop residential