09:27 UNITED PACIFIC<00176> - Announcement & Resumption (2) The Purchasers are both beneficially owned by Ng Poon On and Wu Poon Tak who each hold 50% of the shares of each company. As at the date of the Preliminary Agreements, to the best of the Directors' knowledge, information and belief, having made all reasonable inquiries, the Purchasers and their ultimate beneficial controlling shareholders, Ng Poon On and Wu Poon Tak, are third parties independent of the Company and its connected persons (as defined in the Listing Rules). The parties intend to enter into formal sale and purchase agreements by 29 April 2005. The closing of each Sale is tentatively scheduled on 30 May 2005, but there is no assurance that the Sales can be completed on schedule or at all. There is no long stop date for the Sales. Shareholders and investors should exercise caution when dealing in the shares of the Company. 2. The Properties Both the Properties described above are held under Government leases for a term of 75 years commencing from 1973 and renewable for a further term of 75 years. Both Properties were revalued as at 31 March 2004 by Castores Magi (Hong Kong) Limited, independent and registered property valuers, who valued the Warehouse at HK$4,622,000, and the Office at HK$5,361,000. As at 31 March 2005, the aggregate book value of both Properties, after depreciation, is approximately HK$9.6 million. 3. The Sale Price and Payment Terms The aggregate Sale Price of HK$11.48 million for both Properties had been negotiated as a package deal on an arm's length basis and determined with reference to prevailing market conditions in Hong Kong and comparable sale and purchase transactions of similar property in Hong Kong within the last 6 months. The Purchasers paid a non-refundable deposit of HK$1,148,000 in aggregate, representing 10% of the Sale Price, on signing the Preliminary Agreements, and a further part-payment of HK$1,722,000 in aggregate, representing 15% of the Sale Price, will be made upon signing the Formal Agreements, with the balance to be paid by cash settlement at the closing. 4. Conditions Precedent and Specific Performance In accordance with the Preliminary Agreements the closing of the Sales is subject to the following conditions precedent: 1. execution of the Formal Agreements by the parties; and 2. contemporaneous closing of the Sales, neither of which shall be deemed completed until the other is completed. Under the Preliminary Agreements, each party is entitled to seek specific performance for breach. As at this date, the conditions precedent remain outstanding and there is no assurance that the Sales will be completed on schedule or at all. 5. Reasons for Disposal and Use of Proceeds The principal business of the Group is manufacturing. The Company had no immediate use for the Properties when it vacated them around October 2004 to move into more strategic office premises in Central, Hong Kong, and to outsource warehouse and logistics functions as part of on-going efforts to be cost-effective. The Properties have all along been used by the Group but since 1 February 2005, the Properties have been let out on two-year tenancies expiring in February 2007. Therefore, the Properties did not generate any income for the two financial years ended 31 March 2003 and 31 March 2004 respectively of the Group immediately preceding the date of the Preliminary Agreements, and since 1 February 2005, the Properties generate an aggregate annual rental income of approximately HK$1,008,000 (the Office accounting for HK$493,000 and the Warehouse accounting for HK$515,000), which represents a yield of approximately 8.78% based on the Sale Price. However, the Company has no assurance that such rental yields are sustainable in the long term. The Sale Price represents an aggregate premium of 20% to the book value of the Properties which stand at HK$9.6 million as at 31 March 2005. The Company expects to realise an aggregate net gain of approximately HK$1.7 million (the Office accounting for HK$0.3 million and the Warehouse accounting for HK$1.4 million), subject to audit, if the Sales close successfully. The Directors consider the terms of the Preliminary Agreements, including as to the Sale Price, to be fair and reasonable to the Company and in the interests of Shareholders as a whole. Taking into account the recent prevailing good conditions of the Hong Kong property market, the Board is of the opinion that it is timely to dispose of the Properties at this time to capture this profit-taking opportunity after years of downturn in 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. United Pacific Industries Limited (Incorporated in Bermuda with limited liability) (Stock Code: 176) POSSIBLE DISCLOSEABLE TRANSACTIONS DISPOSAL OF PROPERTIES The Board announces that on 18 April 2005, a wholly-owned subsidiary of the Company entered into preliminary sale and purchase agreements with independent third party Purchasers for the sale of the Properties. Pursuant to the Preliminary Agreements, the Vendor agreed to sell and the Purchasers agreed to purchase the Properties. These comprise a warehouse and an office on two floors of Chai Wan Industrial Centre in Hong Kong. The aggregate cash consideration is HK$11.48 million. The closing of the Sales is subject to certain conditions listed below which remain to be satisfied. Consequently, the Company cannot give guidance at this stage whether the transactions will be completed. Shareholders and investors should exercise caution when dealing in the shares of the Company. The disposal of the Properties will constitute only discloseable transactions and does not require Shareholders' approval. The Company will issue an information circular to Shareholders as soon as possible. At the request of the Company, trading of the shares of the Company on the Stock Exchange was suspended with effect from 9:30 a.m. on 19 April 2005 pending the issue of this announcement. Application has been made to the Stock Exchange for resumption of trading of the shares of the Company with effect from 9:30 a.m. on 20 April 2005. 1. Preliminary Sale and Purchase Agreements Pursuant to the Preliminary Agreements, the Vendor agreed to sell and the Purchasers agreed to purchase the Properties. Details of the preliminary agreement for sale of the Warehouse are set out below: Date: 18 April 2005 Vendor: Pantene Industrial Company Limited, a wholly-owned subsidiary of the Company Purchaser: Hemspeed Limited, a company incorporated in Hong Kong with limited liability Sale Price: HK$5,990,000 Property (Warehouse): Unit A on 15th Floor of Chai Wan Industrial Centre, 20 Lee Chung Street, Chai Wan, Hong Kong with a gross floor area of approximately 9,944 square feet used as a warehouse, together with Car Parking Space No. 17 on Ground Floor of the said building, sold on an `as is' basis, subject to existing tenancy Details of the preliminary agreement for the sale of the Office are set out below: Date: 18 April 2005 Vendor: Pantene Industrial Company Limited, a wholly-owned subsidiary of the Company Purchaser: Hua Po Arts & Crafts Manufacturing Company Limited, a company incorporated in Hong Kong with limited liability Sale Price: HK$5,490,000 Property (Office): Unit B on 19th Floor of Chai Wan Industrial Centre, 20 Lee Chung Street, Chai Wan, Hong Kong, with a gross floor area of approximately 9,521 square feet used as office space, sold on an `as is' basis, subject to existing tenancy