10:37     MAGNUM INT'L<00305>-Announcement&Resumption of Trading (2)          

    The Capital Reduction and increase in authorised share capital            
                                                                              
    The Directors propose to implement the Capital Reduction which will       
    involve (i) the reduction of the par value of each Share in issue from    
    HK$0.10 to HK$0.001 by cancelling the paid up capital to the extent       
    of HK$0.099 on each Share in issue on the date upon which the Capital     
    Reduction becoming effective, such that the par value of each Share       
    will be reduced to HK$0.001 and the issued share capital of the Company   
    of approximately HK$61,502,418 shall be reduced by approximately          
    HK$60,887,394 to approximately HK$615,024; and (ii) the transfer of       
    the credit arising from the cancellation of paid up capital to the        
    contributed surplus account of the Company.                               
                                                                              
    Capital Reduction Completion is subject to the conditions as set out      
    in the paragraph headed ``Conditions of the Capital Reduction'' under     
    the section headed ``IV. The Capital Reduction and increase in            
    authorised share capital'' below.                                         
                                                                              
    The Directors also propose to seek the approval from Shareholders at      
    the SGM to increase the authorised share capital from HK$100,000,000      
    to HK$1,000,000,000 by the creation of an additional 900,000,000,000      
    new ordinary shares of HK$0.001 each, such new shares, if issued,         
    shall rank pari passu in all respects upon Capital Reduction              
    Completion with the existing issued shares of new par value of            
    HK$0.001. The effectiveness of the increase in the authorised share       
    capital will be conditional upon Capital Reduction Completion.            
                                                                              
    The Compromise Deed                                                       
                                                                              
    On 8 April 2005, the Company, MGL and Unichina entered into the           
    Compromise Deed, pursuant to which, the Company, MGL and Unichina have    
    agreed that the Shareholder's Loan shall be fully settled in the          
    following manner: (i) as to HK$35 million payable by Unichina, on         
    behalf of the Company, upon the Subscription Completion to MGL as         
    directed by the Company in writing; (ii) as to the Balance                
    Shareholder's Loan (being approximately HK$65.8 million as at 8 April     
    2005) by issuance of the Secured Promissory Note which is repayable       
    after 12 months upon the date of its issuance and to be secured by        
    (a) the grant of the Property Charges in favour of MGL over the           
    Properties (including six commercial units, one residential unit and      
    two car parking spaces) by each of the Property Owners; and (b) the       
    grant of the Share Mortgages in favour of MGL over all of the issued      
    shares in each of the Property Owners; and (iii) as to HK$15.6 million    
    by issuance of the Unsecured Promissory Note to MGL which is repayable    
    after six months from the date of its issuance and is unsecured.          
    Pursuant to the Compromise Deed, Unichina has also agreed to take         
    relevant steps as set out in the Compromise Deed to facilitate the        
    repayment of the Shareholder's Loan by the Company (details of which      
    are set out under the section headed ``V. The Compromise Deed'' of        
    this announcement). The Compromise Deed is conditional upon certain       
    conditions as set out in the paragraph headed ``Conditions of the         
    Compromise Deed'' under the section headed ``V. The Compromise Deed''     
    below.                                                                    
                                                                              
    The Subscription Agreement                                                
                                                                              
    On 8 April 2005, the Company, Unichina and MCB entered into the           
    Subscription Agreement, pursuant to which, the Company has agreed to      
    issue and Unichina has agreed to subscribe for the Convertible Bond       
    with a face value of HK$35 million. Assuming exercise in full of the      
    conversion rights attaching to the Convertible Bond at the conversion     
    price of HK$0.04735 per Share, a total number of 739,176,346 Shares       
    will be issued. The conversion price of HK$0.04735 per Share is           
    equivalent to the share offer price under the Share Offer. The Company    
    intends to apply the net proceeds from the issuance of the Convertible    
    Bond for repayment of part of the Shareholder's Loan as agreed under      
    the Compromise Deed. The Subscription Agreement is conditional upon       
    certain conditions as set out in the paragraph headed ``Conditions        
    of the Subscription Agreement'' under the section headed ``VI. The        
    Subscription Agreement'' below.