10:16 REXCAPITAL<00155> - Announcement 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. REXCAPITAL International Holdings Limited (Incorporated in Bermuda with limited liability) (Stock code: 155) ANNOUNCEMENT Termination of the acquisition of REXCAPITAL Financial Group Limited Reference is made to the joint announcement of REXCAPITAL International Holdings Limited (the "Company") and REXCAPITAL Financial Holdings Limited (the "Vendor") dated 8 April 2005 regarding the further extension of the completion date of the sale and purchase agreement dated 12 January 2004 entered into between the Vendor and REXCAPITAL Group Limited (the "Purchaser"), a wholly-owned subsidiary of the Company, under which the Vendor has agreed to sell to the Purchaser (the "Transaction") the entire issued share capital of REXCAPITAL Financial Group Limited ("RFGL"), as amended by the supplemental letters dated 8 April 2004, 27 May 2004, 29 June 2004, 29 July 2004, 25 August 2004, 23 September 2004, 25 October 2004, 26 November 2004, 29 December 2004, 4 January 2005, 28 January 2005 and 8 April 2005 (the "Agreement"). Under the Agreement, the consideration payable by the Purchaser for the Transaction was HK$229 million and the Transaction constituted a major transaction of the Company. As previously disclosed, the supplemental letters were entered into to extend the long stop date of the Agreement until all the conditions of the Agreement were fulfilled and to extend the completion date of the Agreement to provide the Purchaser with further time to conduct an update due diligence review on RFGL and its subsidiaries (the "RFGL Group"). The Company wishes to inform its shareholders that the Purchaser has on 6 May 2005 issued a letter to the Vendor, exercising its right under the Agreement to terminate the Agreement with immediate effect since the Purchaser was not satisfied with the results of its update due diligence review on the RFGL Group. The Company has not received any objection to the termination from the Vendor. If there is any new development in this matter (including any matter having a material adverse effect on the Company), the Company shall make a further announcement. The termination of the Agreement does not have any financial impact on the Company. Meanwhile, the Company shall continue its existing business and shall continue to look for other investment opportunities, however no specific target has been identified at the moment. As previously disclosed, the directors of the Company decided to enter into the Agreement because at that time they considered that the Agreement will be in the interests of the Company and its shareholders as a whole as the Transaction will allow the Company to strengthen its existing business, widen the scope of its services and provide a complete platform for its principal business and hence broaden its earnings base. RFGL is an investment holding company and its subsidiaries are principally engaged in the provision of financial services including broking, securities margin financing and asset management. The Company is principally engaged in investment holding. The subsidiaries of the Company are principally engaged in strategic investments and capital market activities in Asia, i.e. participation in primary and secondary securities market and provision of capital market advisory services. There is no shareholding relationship between the Company and the Vendor. The Company has been informed by Mr. Chan How Chung, Victor, who is an executive director of both the Company and the Vendor, that as at the date of this announcement, he is interested in 25.03% and 67.95% (including deemed security interest in the Vendor) of the issued share capital of the Company and the Vendor respectively. As at the date of this announcement, the board of directors of the Company comprises five executive directors namely Mr. Chan How Chung, Victor, Ms. Lee Huei Lin, Mr. Chan Wai Kwong, Peter, Mr. Chu Chik Ming, Jack and Mr. Seligman Pierre and three independent non-executive directors namely Mr. Chow Siu Ngor, Mr. Yin Tat Man and Mr. Chan Pei Cheong, Andy. By order of the Board REXCAPITAL International Holdings Limited Chan How Chung, Victor Chairman Hong Kong, 6 May 2005