10:13 FIRST NATURAL<01076> - Announcement (1) 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 disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement appears for information purposes only and does not constitute an offer or invitation to acquire, subscribe for or purchase any securities nor is it calculated to invite any such offer or invitation. FIRST NATURAL FOODS HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock code: 1076) ANNOUNCEMENT PROPOSED ISSUE OF ADDITIONAL WARRANTS Reference is made to the announcement of the Company dated 4 April 2003. The Company entered into the Subscription Agreements on 28 March 2003 in respect of the placement of 2.5% coupon Bonds with detachable warrants attached due 9 April 2008. Ex-Warrant A Bonds and Ex-Warrant B Bonds issued pursuant to the Subscription Agreements were redeemable by the Bondholders on 9 April 2004 and 9 April 2005 respectively. The Company has not, on or before the respective deadline for serving a notice of redemption, received any written notices of redemption in respect of Ex-Warrant A Bonds and Ex-Warrant B Bonds. Accordingly, as none of the Bonds has been redeemed, the dates of redemption of the Ex-Warrant A Bonds and Ex-Warrant B Bonds have, according to the terms of the Subscription Agreements, been automatically extended to 9 April 2006 and 9 April 2007 respectively. Pursuant to the terms of the Subscription Agreements, the Company is required, subject to having obtained all relevant approvals, to issue to each Bondholder one Additional Warrant for each Bond, the redemption date of which has been extended. As at the Latest Practicable Date, there were in aggregate 540 Ex-Warrant A Bonds and Ex-Warrant B Bonds outstanding. The issue of the Additional Warrants is subject to the approval of the Stock Exchange, the Shareholders and the Warrantholders. As such, the Board proposes to convene a meeting of the Shareholders and a meeting of Warrantholders to seek their approval for the issue by the Company of the Additional Warrants. The Additional Warrants, if issued, will rank equally with the existing Warrants and will not be listed on the Stock Exchange or on any other stock market. As at the Latest Practicable Date, there were 710 Warrants outstanding. If the Additional Warrants are issued, the Company will have in aggregate 1,250 Warrants and Additional Warrants outstanding. Assuming full exercise of the Additional Warrants and based on the current Subscription Price of HK$0.34 per Share, subject to adjustment, the Company will issue approximately 63,529,412 new Subscription Shares, representing (1) approximately 6.92% of the Company's total existing issued share capital; (2) approximately 6.47% of the Company's issued share capital as enlarged by the issue of Subscription Shares upon the exercise in full of the subscription rights attaching to the Additional Warrants, but without taking into account the Shares which may fall to be issued upon the exercise of the subscription rights attaching to the existing Warrants; and (3) approximately 5.96% of the Company's issued share capital as enlarged by the issue of Subscription Shares upon the exercise in full of the subscription rights attaching to the outstanding Warrants and the Additional Warrants. A circular containing, amongst others, (i) further information on the Additional Warrants; (ii) details of the advice of the independent financial adviser; and (iii) a notice convening the SGM, will be despatched to Shareholders as soon as practicable.