09:28     TOWN HEALTH<08138>-Announcement & Resumption of Trading (2)         

    announcement. The voting in relation to the                               
    Subscription at the EGM will be conducted by poll.                        
                                                                              
    Immediately upon Completion, Broad Idea and its                           
    concert parties will be interested in 2,548,262,701                       
    Shares, representing approximately 61.68% of the                          
    issued share capital of the Company as enlarged by                        
    the allotment and issue of the Subscription Shares                        
    to Broad Idea (assuming the conversion rights                             
    attaching to the Convertible Bonds have not been                          
    exercised), and accordingly Broad Idea will be                            
    required under Rule 26.1 of the Takeovers Code to make                    
    a mandatory unconditional cash offer for all the                          
    issued Shares. The principal terms of the Offer are                       
    set out under the section headed "Possible mandatory                      
    cash offer" below. Kingston Corporate Finance and                         
    Kingston Securities are satisfied that there are                          
    sufficient financial resources available to Broad                         
    Idea to satisfy the full acceptance of the Offer and                      
    the Subscription Price of the Subscription Shares.                        
                                                                              
    The independent board committee of the Company and                        
    Altus Capital Limited will also advise on the Offer.                      
    The Company will send the offeree document in relation                    
    to the Offer to the Shareholders in accordance with                       
    the Takeovers Code. The Company and Broad Idea will                       
    use all reasonable endeavours to combine the                              
    aforesaid offeree document with Broad Idea's offer                        
    document into a composite offer document to be posted                     
    to the Shareholders.                                                      
                                                                              
    Given that the Subscription is conditional, among                         
    others, upon the passing of an ordinary resolution                        
    by the Independent Shareholders at the EGM and the                        
    annual results of the Group for the year ended 31 March                   
    2005 will be included in the composite offer document                     
    so as to allow the Shareholders to make an informed                       
    decision on whether to accept the Offer, an                               
    application will be made by Broad Idea to the                             
    Executive for a waiver pursuant to Rule 8.2 of the                        
    Takeovers Code to postpone the despatch of the offer                      
    document containing the details of the terms of the                       
    Offer, the form of acceptance and transfer of the                         
    Shares to the Shareholders to the later of (i) a date                     
    falling within 7 days after the fulfillment of the                        
    conditions of the Subscription Agreement or (ii) a                        
    date falling within 10 days after the announcement                        
    of annual results of the Group for the year ended 31                      
    March 2005, which is expected to be released on or                        
    before 30 June 2005, in order to give sufficient time                     
    to Altus Capital Limited to consider the annual                           
    results of the Group for the year ended 31 March 2005                     
    and advise the Shareholders accordingly.                                  
                                                                              
    Shareholders and potential investors should be aware                      
    that the Subscription Agreement is conditional upon                       
    the satisfaction or waiver of a number of conditions                      
    as set out under the section headed "Conditions of                        
    the Subscription Agreement" of this announcement and                      
    that the making of the Offer is subject to the                            
    completion of the Subscription. Accordingly the                           
    Subscription may or may not proceed and the Offer may                     
    or may not be made. Shareholders and potential                            
    investors are advised to exercise caution when                            
    dealing in the Shares.                                                    
                                                                              
    At the request of the Company, trading in the Shares                      
    on GEM was suspended with effect from 9:30 a.m. on                        
    Wednesday, 16 March 2005. Application has been made                       
    by the Company for the resumption of trading in the                       
    Shares on GEM with effect from 9:30 a.m. on Thursday,                     
    21 April 2005.