11:28     IPE GROUP<00929> - Announcement & Resumption (6)                    

    proceeds from the IPO and as to approximately HK$10                       
    million from long term bank loans. The remaining                          
    construction costs of approximately HK$30 million are                     
    expected to be financed from internal resources of                        
    the Group and/or debt financing.                                          
                                                                              
    To match with the increase in production facilities                       
    brought from the acceleration of the Zengcheng                            
    Development Project, the Group orders more new                            
    machineries and therefore requires additional funds                       
    as well as general working capital to complement its                      
    expansion plan. These new machineries including CNC                       
    Precision Automatic Lathe, die casting machines,                          
    tapping centre, grinding machines and precision                           
    measuring system will be delivered by September 2005                      
    to meet the completion of the remaining phases of the                     
    Zengcheng Development Project. The Directors expect                       
    that the Group will spend approximately HK$160                            
    million (in which approximately HK$103.6 million has                      
    been disclosed as capital commitment in the 2004                          
    annual report of the Company) for the acquisition of                      
    new machineries, of which approximately HK$9.35                           
    million has been spent and financed from the internal                     
    resources of the Group. The remaining acquisition                         
    costs of approximately HK$150.65 million are expected                     
    to be financed as to approximately HK$61.55 million                       
    from the proceeds from the Placing and the                                
    Subscription, and as to the remaining amount of                           
    approximately HK$89.1 million from internal                               
    resources of the Group and/or debt financing. As such,                    
    the net proceeds of the Subscription, after deduction                     
    of the placing commission and other related expenses,                     
    of approximately HK$111.55 million will be used as                        
    to approximately HK$61.55 million (as mentioned above)                    
    for the acquisition of new machineries and                                
    approximately HK$50 million for general working                           
    capital uses in order to cope with the increase in                        
    production capacity of the Group in 2005. Additional                      
    general working capital is required in view of the                        
    expected increase in the business and turnover of the                     
    Group as well as the increase in production facilities                    
    resulting from the acceleration of the completion of                      
    its expansion plan. It is expected that upon                              
    completion of the above expansion plan, the                               
    production capacity of the Group will increase by a                       
    further 40% as compared to 2004.                                          
                                                                              
    Accordingly, a fund raising by way of Placing and                         
    Subscription is conducted by the Group within a                           
    relatively short period of time after completion of                       
    the IPO.                                                                  
                                                                              
    For the reasons stated above, the Board considers that                    
    it is beneficial to the Company and the Shareholders                      
    as a whole to raise capital for the future business                       
    development of the Group by way of the Placing and                        
    the Subscription as it will broaden the capital and                       
    shareholder base of the Company thereby increasing                        
    the liquidity of the Shares.                                              
                                                                              
    The Directors consider that the Placing Agreement and                     
    Subscription Agreement are entered into upon normal                       
    commercial terms following arm's length negotiations                      
    between the Company, Tottenhill and the Placing Agent                     
    and that the terms of the Placing Agreement and the                       
    Subscription Agreement are fair and reasonable and                        
    are in the interests of the Company and the                               
    Shareholders as a whole.                                                  
                                                                              
    The Directors confirm that save and except the IPO,                       
    no fund raising exercise has been carried out for the                     
    past 12 months immediately prior to the date