09:33 CH CONSERVATION<00290> - Announcement & Resumption (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 Conservational Power Holdings Limited (Incorporated in the Cayman Islands with limited liability) (Stock Code: 290) MAJOR AND CONNECTED TRANSACTION PROPOSED DISPOSAL OF 51% EQUITY INTEREST IN THE JV COMPANY IN THE PRC AND RESUMPTION OF TRADING Reference is made to the announcement of the Company dated 9 March 2005 in which it was stated that the Company is in preliminary discussion with a connected party in relation to a proposed disposal of the Company's interest in its waste incineration and processing business. The parties to the S&P Agreement have been negotiating the terms and conditions of the Disposal and a term sheet containing principal terms of the Disposal was entered into by the Company and CSCP on 28 March 2005. After the signing of the term sheet, the parties to the S&P Agreement continued with the negotiation and finalization of the other principal terms and conditions of the S&P Agreement. The Company announces that on 7 April 2005, the S&P Agreement was entered into by the Company as vendor and CSCP as purchaser in respect of the Sale Shares and the Sale Loan for an aggregate consideration of HK$76 million (which was supplemented by the Supplemental Agreement on 8 April 2005). The Sale Shares represents the entire issued share capital of HTH, the principal asset of which is the 51% equity interest in the JV Company. The consideration for the Disposal shall be satisfied at Completion by the issue and allotment of 100 million Preference Shares in the share capital of CSCP to the Company or its nominee as it may direct. In consideration of the amount of HK$1.00 payable by the Company to CSCP on Completion, CSCP agrees to grant and the Company agrees to accept the right to subscribe at the price of HK$0.76 per New Option Share for 50,000,000 New Option Shares, subject to adjustment in the event of consolidation or subdivision of shares of CSCP. The Disposal constitutes a major transaction for the Company under the Listing Rules. As CSCP is deemed to be an associate of Mr. Hon who is a Director and a substantial shareholder of the Company and an associate of Mr. Chan who is a Director and the Chairman of the Company, the Disposal also constitutes a connected transaction for the Company under the Listing Rules and is therefore subject to the approval of the Independent Shareholders at the EGM by poll. A circular containing, inter alia, details of the Disposal, the S&P Agreement, the recommendation from the independent board committee and the advice of the independent financial adviser in respect of the S&P Agreement and transactions contemplated thereunder, the Preference Shares and the New Options and a notice to convene the EGM, will be despatched to the Shareholders as soon as practicable. At the request of the Company, trading of the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. on Tuesday, 29 March 2005. The Company has applied for resumption of trading of the Shares on the Stock Exchange with effect from 9:30 a.m. on Wednesday, 13 April 2005. THE S&P AGREEMENT DATED 7 APRIL 2005 AS SUPPLEMENTED BY THE SUPPLEMENTAL AGREEMENT DATED 8 APRIL 2005 Parties Vendor: the Company Purchaser: China Sciences Conservational Power Limited, a company incorporated in Hong Kong with limited liability and the ordinary shares of which are listed on the main board of the Stock Exchange. The principal businesses of CSCP are computer hardware and provision of maintenance support services, software design and development. As stated in an announcement made by CSCP dated 1 April 2005, it is committed to diversify its existing business into waste incineration and processing business in the PRC. Assets to be disposal Sale Shares: 2 shares of HK$1.00 each in the capital of HTH, representing the entire issued share capital of HTH.