09:51 REXCAPITAL<00155> - Announcement & Resumption of Trading(4) (b) the occurrence of any local, regional, national or international event or change of a political, military, financial, economic or other nature which in the opinion of the Placing Agent will or may be expected to have a material adverse effect on the Warrant Placing. If the Placing Agent exercises such right, the Warrant Placing will not proceed. REASONS FOR THE WARRANT PLACING The Board believes the Warrant Placing is an appropriate means of fund raising exercise for the Company. The Warrant Placing does not have any immediate dilution effect on the shareholding of the existing Shareholders. In addition to the net proceeds that will be raised upon Completion, further proceeds will be raised upon the exercise of the subscription rights attaching to the Warrants by the holders of the Warrants during the subscription period. It is intended that the net proceeds from the Warrant Placing of approximately HK$23.6 million will be applied as general working capital of the Group. The net proceeds from the Warrant Placing will not be used to finance the completion of the major transaction as previously announced by the Company in its announcements dated 13 January 2004 and 8 April 2005, the completion of which was extended to 9 May 2005. Notwithstanding the outstanding receivable of the Group as announced by the Company in its announcement dated 15 April 2005, the fund raised from the Warrant Placing is not essential for the purpose of financing the operations of the Group, as the Group currently has sufficient working capital to carry on its principal business activities. The Group is principally engaged in the provision of financial advisory services, participation in primary and secondary securities market and money lending business for which a solid financial position is no doubt advantageous for the growth of its principal business. The Directors are of the view that the Warrant Placing is a good opportunity to strengthen the Company's financial position and enhance its ability to develop and capture business opportunities as and when they arise. In view of the above, the Directors consider that the Warrant Placing is in the interests of Company and the Shareholders. The Board considers that the terms of the Warrant Placing including the Warrant Issue Price and the Exercise Price have been arrived at after arm's length negotiations between the Company and the Placing Agent and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. The following table summaries the fund raising activities of the Group for the 12 months immediately preceding the date of this announcement: Actual use of proceeds as at Date of Intended use the date of this announcement Event Net proceeds of proceeds announcement 8 November 2004 Placing of HK$13 million General working General working Shares capital purposes and capital for the future investment daily running of business of the Group CHANGES OF SHAREHOLDING STRUCTURE As at the date of this announcement, the Company has 2,752,451,858 Shares in issue. The shareholding structure of the Company as at the date of this announcement and immediately upon exercise of the subscription rights attaching to the Warrants in full are as follows: Immediately after exercise of the subscription At the date of rights attaching Shareholder this announcement to the Warrants in full Approximate Approximate No. of Shares percentage No. of Shares percentage Mr. Chan How Chung, Victor ("Mr. Chan") (Note) 689,060,662 25.03 689,060,662 20.87 Warrant holders - - 550,000,000 16.65 Other public Shareholders 2,063,391,196 74.97 2,063,391,196 62.48