09:38 HOP HING HOLD<00047> - Announcement (3) 19 units located at 9 Ping Tong Street East, Tong Yan San Tsuen, Yuen Long, New Territories with an estimated aggregate gross floor area of approximately 83,300 sq.ft. comprising part of the Properties. 4. Rental The aggregate monthly rental for the Leased Properties amounts to approximately HK$278,200 (inclusive of government rates and air-conditioning charges) which will be payable in cash by the Vendor to Wytak on a monthly basis. Such monthly rental has been determined with reference to the prevailing market rates and is considered by the independent property valuer as fair and reasonable. REASONS FOR THE SHARE PURCHASE AGREEMENT AND THE TENANCY AGREEMENT The Group is principally engaged in the extraction, refining, bottling, packaging and distribution of edible oils. As stated in the annual results announcement of the Company for the year ended 31 December 2004 dated 28 April 2005, the Group sustained an audited consolidated net loss attributable to Shareholders of HK$12.0 million for the year ended 31 December 2004. As at 31 December 2004, the audited consolidated net asset value of the Group amounted to approximately HK$409.6 million, and the Group had total bank borrowings of approximately HK$282.0 million, of which, an aggregate amount of HK$59.0 million is due repayable within one year. Since 31 December 2004, the Group has considered and taken various measures to reduce its indebtedness and improve its financial position. The Disposal will reduce the Group's bank borrowings from approximately HK$282.6 million before Completion to approximately HK$156.8 million after Completion (representing a reduction of approximately HK$120.0 million as this is the amount owed to banks by Wytak (a company which is, upon Completion, no longer a member of the Group) and a reduction of approximately HK$5.8 million as the aggregate consideration of the same amount for the Disposal will be applied to reduce other bank borrowings of the Group). Therefore, the Group's financial position will be improved as a result of the Disposal. The Company will record a gain on the Disposal of approximately HK$0.5 million. As the Group currently occupies the Leased Properties for its own use, the Tenancy Agreement facilitates the continuation of such occupation. The Directors consider that to ensure the terms of the leasing of the Leased Properties by the Vendor from Wytak will continue to be determined on an arm's length basis and on normal commercial terms, the Vendor will decide in due course whether to enter into a new tenancy agreement with Wytak upon expiry of the Tenancy Agreement and if so, the relevant terms of such new tenancy by reference to the then prevailing market rates and conditions. The Directors (including the independent non-executive directors) consider that the terms of the Share Purchase Agreement and the Tenancy Agreement are on normal commercial terms which are fair and reasonable so far as the Company and the Independent Shareholders are concerned and that the Disposal and the leasing of the Leased Properties will benefit, and are in the best interests, of the The Stock Exchange of Hong Kong Limited received notifications regarding the Pre Listing trading summary of derivative warrants as follows:- Trade Date - 03052005 Average Percent Number (HK$) per of Issue of Warrant Number of still Stock Stock Warrant Bought Warrants Still out in ShortName Code Bought/(Sold) /(Sold) out in Market Market --------------- ---- ------------- --------- -------------- -------- MB-C MOB@EP0512 4874 - - - 0.00% MB-C MOB@EP0512 4874 - - - 0.00% MB-HSBC @EC0512 4875 - - - 0.00% MB-HSBC @EC0512 4875 - - - 0.00%