09:42 PIONEER GLOBAL<00224>-Announcement&Resumption of Trading(3) exercise its right to transfer its interests in the Underlying Joint Venture. Such rights can only be exercised at any time on or after the first anniversary of the closing of the acquisition of the Property by the Underlying Joint Venture. Board representation The board of the Joint Venture consists of four directors. Pine International has the right to appoint two directors and Wachovia and MSREF each has the right to appoint one director. None of the directors of the Joint Venture has a casting vote. Purpose of the Joint Venture It is the intention of the Parties to co-invest in the Property indirectly through their participation in the Joint Venture which will in turn take up a 50% interest (by subscribing for a 50% shareholding at par and providing a proportionate shareholder's loan) in the Underlying Joint venture, which has on 30 March 2005 contracted to acquire the Property at HK$600,000,000 from a third party. (The Property has been independently valued by Jones Lang LaSalle at HK$650,000,000 as at 18 March, 2005.) It is currently expected that the acquisition of the Property will be completed in early May 2005. The third party vendor of the Property and its ultimate beneficial owners are independent of and not connected with the Company or any of the connected persons (as defined in the Listing Rules) of the Company. It is intended that shortly before the Underlying Joint Venture completes the acquisition of the Property, the Joint Venture will acquire a 50% shareholding in the Underlying Joint Venture. The remaining interest in the Underlying Joint Venture will continue to be held by MSREF. The Underlying Joint Venture intends to fund the acquisition costs of the Property to the maximum extent possible by a bank loan, secured on the Property without recourse to the shareholders of the Underlying Joint Venture or the shareholders of the Joint Venture. The actual amount of contribution (by way of subscription and shareholder's loan) by the Joint Venture to the Underlying Joint Venture is yet to be determined as at the date of this announcement. Such amount will be determined taking into account the actual sum of bank financing to be obtained by the Underlying Joint Venture. Pending the final determination of the amount of bank loan to be obtained by the Underlying Joint Venture, the Joint Venture has advanced to the Underlying Joint Venture all of the contributions (capital and shareholder's loans) received from the Parties on an interest-free basis. To the extent that there is any balance of the acquisition costs of the Property such balance will be funded by way of proportionate shareholder's loans which are to be provided by the shareholders of the Underlying Joint Venture. The Company will comply with all applicable requirements under the Listing Rules if the Group advances any further shareholder's loan to the Joint Venture Company to enable it to make any necessary shareholder's loan to the Underlying Joint Venture, including but not limited to, by the issue of further announcement (if required). It is also proposed that the Group will enter into an agreement with the Underlying Joint Venture pursuant to which the Group will provide construction and management services in relation to the Property to the Underlying Joint Venture. Guarantee As the Group is taking up its interest through its wholly-owned subsidiary, Pine International, the Company has agreed to unconditionally and irrevocably guarantee to Wachovia the punctual performance of Pine International's obligations under the Joint Venture Agreement. REASONS FOR AND BENEFITS OF THE JOINT VENTURE AGREEMENT The Group is principally engaged in property and hotel investment and management business. The Group's 50% participation in the Joint Venture, which will in turn take up a 50% interest in the Underlying Joint Venture, will result in the Group acquiring an attributable 25% interest in the Property (with MSREF and Wachovia holding an attributable 60% and 15% interest respectively). The Group intends to hold the Property for investment purposes. Assuming completion of the Joint Venture's subscription for a 50% shareholding in the Underlying Joint Venture, the Underlying Joint Venture will be treated as an associated company of the Joint Venture and its financial results will be equity accounted for in the Joint Venture's financial statements. The Joint Venture will itself be accounted for as an associated company of the Group and its financial results will be equity accounted for in the Group's financial The Stock Exchange of Hong Kong Limited received notifications regarding the daily trading summary of derivative warrants as follows:- Trade Date - 12042005 Average Percent Number (HK$) per of Issue of Warrant Number of Still Stock Stock Warrants Bought Warrants Still out in Short Name Code Bought/(Sold) /(Sold) out in Market Market --------------- ---- ------------- --------- -------------- -------- DS-BOCHK@EC0505 9351 - - 440,500 2.20% DS-HSBC@EC0504 2222 - - 403,000 0.81%