09:52 PERFECTECH INTL<00765> - 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 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. PERFECTECH INTERNATIONAL HOLDINGS LIMITED (incorporated in Bermuda with limited liability) (Stock Code: 765) DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION OF 41% EQUITY INTEREST IN PERFECTECH INTERNATIONAL MANUFACTURING LIMITED AND GRANTING OF CORPORATE GUARANTEES IN RESPECT OF PAYMENT OF CONSIDERATION TO CONNECTED PERSONS Joint financial advisers to the Company INCU Corporate Finance Limited Phoenix Capital Asia Limited The Board announced that Freshwater Trading Limited, a wholly owned subsidiary of the Company, had entered into the Sale and Purchase Agreements with the Vendors on 22 April 2005 for the acquisition of 41% equity interest in PIML. The Consideration of HK$17,083,000 will be satisfied in cash. The Consideration was determined after arm's length negotiation between the parties to the Sale and Purchase Agreements with reference to its financial performance, the net asset value and future prospect of PIML and synergy effect arising from the Acquisition. PIML is a company incorporated in the British Virgin Islands and its subsidiaries are principally engaged in (i) the manufacturing and trading of toys and consumer products (such as plastic cup holders used in cars); (ii) the manufacturing of plastic injection moulds for plastic toys; and (iii) provision of technical services involving high precision injection assembly of such moulds (EMS). As at the date of this announcement, the equity interest of PIML is beneficially held as to 59% by the Purchaser, 22.5% by First View, 13.5% by Glennie and 5% by Great Venture. Upon Completion, PIML will become an indirect wholly owned subsidiary of the Company. First View and Glennie are substantial shareholders of PIML and accordingly are connected persons of the Company as defined under the Listing Rules. Glennie is 100% beneficially owned by Mr. Lee who is also a director of PIML. Other than being a substantial shareholder of PIML, to the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, First View and its ultimate beneficial owner, Mr. Lau Kim Hung, Jack, are third parties independent of and not connected with the Company and its connected persons (as defined in the Listing Rules). Upon Completion, First View will cease to be a connected person of the Company and Mr. Lee will resign as a director of PIML. Mr. Lee and his associates including Glennie shall continue to be connected persons of the Company under the Listing Rules in view of his past directorship of PIML within the preceding twelve months. To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, Great Venture and its ultimate beneficial owner, Mr. Chui Ming Kay, other than its 5% shareholding in PIML, are third parties also independent of and not connected with the Company and its connected persons (as defined in the Listing Rules). Save for being shareholders of PIML, First View, Glennie and Great Venture and their respective ultimate beneficial owners are all independent of each other. However, as the Great Venture Agreement is conditional upon the First View and Glennie Agreement, Great Venture and its ultimate beneficial owner are deemed to be connected persons of the Company under Rule 14A.06 of the Listing Rules. As the Vendors are connected persons of the Company and the applicable Percentage Ratios for the Acquisition are greater than 2.5% but below 25%, the Acquisition constitutes a connected transaction of the Company under the Listing Rules and are subject to the reporting and announcement requirement and the approval of the independent Shareholders set out in the Listing Rules. As no Shareholders or its respective associates has any material interest in the Acquisition, no Shareholder needs to abstain from voting at the general meeting. In addition, as the applicable Percentage Ratios for the Acquisition exceed 5% but are below 25%, the Acquisition also constitutes a discloseable transaction of the Company under the Listing Rules. The Independent Board Committee comprising Mr. Lam Yat Cheong, Mr. Yip