09:49 AV CONCEPT HOLD<00595> - Announcement & Resumption (8) In attaching a value of US$20 million to the entire equity interest of AV Chaseway, the Directors have made reference to, among other things, AV Chaseway's estimated unaudited net profit attributable to shareholders for the year ended 31 March 2005 (being approximately HK$13 million, hereinafter referred to as the "Profit Estimate"), estimated earnings before interest, tax, depreciation and amortization for the same year (being approximately HK$23 million, hereinafter referred to as the "Estimated EBITDA"), the Profit Estimate minus the Adjustment (defined below) (being approximately HK$9 million, hereinafter referred to as the "Adjusted Profit Estimate") and the Estimated EBITDA minus the Adjustment (defined below) (being approximately HK$19 million, hereinafter referred to as the "Adjusted EBITDA"). The "Adjustment" refers to the Directors' estimate of the gross profit contribution from business derived from BreconRidge for the year ended 31 March 2005 (being approximately HK$4 million). The value of US$20 million represents approximately 12 times the Profit Estimate and approximately 7 times the Estimated EBITDA. The value of US$20 million further represents approximately 17 times the Adjusted Profit Estimate and approximately 8 times the Adjusted EBITDA. The actual gain or loss on Disposal to be recorded at the appropriate juncture will depend on the occurrence of the exact event leading to the disposal of the First Tranche Shares and/or the Second Tranche Shares and the timing of such event. As such, Shareholders are advised to interpret any estimated amounts with caution. The Directors estimate that the expected gain on disposal of the First Tranche Shares upon Initial Closing would amount to approximately HK$40 million. As stated in the section headed "General" below, the Company will make further announcement(s) upon the transfer of the BreconRidge Warrant Shares and/or the Final Closing BreconRidge Shares and/or the Second Tranche Shares or an exit. The Company will include the then expected gain or loss on disposal in the further announcement to be made regarding the relevant event. The Directors believe that the terms of the Agreement and ancillary agreements/documents are fair and reasonable and in the interests of the Shareholders as a whole. GENERAL The Disposal constitutes a major transaction of the Company pursuant to Chapter 14 of the Listing Rules which is subject to the approval of the Shareholders. An EGM will be convened to seek relevant Shareholders' approval for the transactions contemplated under the Agreement and ancillary agreements/documents. A circular containing, among other things, the particulars of the Agreement and a notice convening the EGM will be despatched to the Shareholders as soon as practicable. Further announcement(s) will be made by the Company upon the transfer of the BreconRidge Warrant Shares and/or the Final Closing BreconRidge Shares and/or the Second Tranche Shares or an exit. In the event the Group receives cash eventually for the Disposal, the Company will include the then intended use of such cash in the further announcement to be made regarding the relevant event. Shareholders should note that the Agreement is conditional upon a number of conditions which may or may not be fulfilled. Accordingly, Shareholders and the public should exercise caution when dealing in the Shares. Trading in the Shares on the Stock Exchange has been suspended at the request of the Company with effect from 9:30 a.m. on 25 April 2005 pending the release of this announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 10 May 2005. DEFINITIONS "Agreement" an agreement dated 25 April 2005 (as amended by a supplemental agreement dated 28 April 2005) entered into between AVCC and BreconRidge as set out in the section headed "The Agreement" in this announcement "associates" has the same meaning as ascribed to it under the Listing Rules "AVCC" AV Concept (China) Industrial Co., Limited, a company incorporated in Hong Kong and a wholly owned subsidiary of the Company