10:40     MAGNUM INT'L<00305>-Announcement&Resumption of Trading (9)          

    IV.  THE CAPITAL REDUCTION AND INCREASE IN AUTHORISED SHARE CAPITAL       
                                                                              
    The proposal for the Capital Reduction                                    
                                                                              
    The Directors intend to put forward a proposal to the Shareholders        
    to effect the Capital Reduction which will involve:                       
                                                                              
    (a)  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       
    becomes effective such that the par value of each issued share of the     
    Company 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 HK$615,024;                                
                                                                              
    (b)  the reduction of the nominal value of all unissued Shares from       
    HK$0.10 to HK$0.001 each; and                                             
                                                                              
    (c)  transfer the credit arising from the cancellation of paid up         
    capital to the contributed surplus account of the Company.                
                                                                              
    Conditions of the Capital Reduction                                       
                                                                              
    Capital Reduction Completion is conditional on the following              
    conditions being fulfilled:                                               
                                                                              
    (a)  the passing by the Shareholders of a special resolution to           
    approve the Capital Reduction at the SGM;                                 
                                                                              
    (b)  the Listing Committee granting the listing of, and permission        
    to deal in, the Shares of new par value in issue following the Capital    
    Reduction becoming effective;                                             
                                                                              
    (c)  the Bermuda Monetary Authority approving or agreeing to approve      
    the Capital Reduction and the publication of a notice of the Capital      
    Reduction in Bermuda; and                                                 
                                                                              
    (d)  compliance with all applicable laws,                                 
                                                                              
    and will become effective upon fulfillment of all of the above            
    conditions on or before S&P Completion.                                   
                                                                              
    Impact of the Capital Reduction                                           
                                                                              
    As stated in the sub-paragraphs (a) and (c) under the paragraph headed    
    ``The proposal for the Capital Reduction'' above, the Capital             
    Reduction will involve the reduction of the issued share capital of       
    the Company by approximately HK$60,887,394 so that a credit of such       
    amount will arise following the reduction in par value of the issued      
    share capital of the Company. Such credit amount will be transferred      
    to the contributed surplus account of the Company and as a result,        
    the Company's contributed surplus account will increase by                
    approximately HK$60,887,394 upon the Capital Reduction becoming           
    effective.                                                                
                                                                              
    Upon the Capital Reduction becoming effective and on the basis of         
    615,024,175 Shares in issue at that time, the authorised share capital    
    of the Company will be HK$100,000,000 divided by 100,000,000,000          
    Shares of HK$0.001 each and its issued share capital will be              
    HK$615,024 divided into 615,024,175 Shares of par value of HK$0.001       
    each.                                                                     
                                                                              
    Other than the expenses to be incurred in relation to the Capital         
    Reduction itself, the implementation of the Capital Reduction will        
    not, in itself, alter the underlying assets, business operations,         
    management or financial position of the Company or affect the             
    proportionate interests of the Shareholders.                              
                                                                              
    Reason for the Capital Reduction                                          
                                                                              
    Immediately upon the Capital Reduction becoming effective, the par        
    value of each of the issued and unissued Shares will be reduced from      
    HK$0.10 to HK$0.001 per Share. The closing price per Share as at 7        
    February 2005 (being the last full trading date prior to the              
    publication of this announcement) was HK$0.108. The Directors expect      
    that the Capital Reduction will give the Company greater flexibility      
    in pricing any issue of new Shares in future.