11:08 MELCO INT'L DEV<00200> - Announcement (21) (ii) as disclosed in the announcement and circular of Melco respectively dated 13th September 2004 and 11th October 2004, Melco has entered into an agreement with STDM pursuant to which Melco has agreed to acquire 50% equity interests in Great Wonders from STDM for a consideration of HK$100 million, which would be settled by way of issue of the First Convertible Bond (as defined in the announcement of Melco dated 13th September 2004) to STDM with the principal amount of HK$100 million with a conversion right to convert the same into 25,000,000 Shares at a conversion price of HK$4.0 per Share. After obtaining the independent shareholders' approval (by way of poll) of the agreement, the First Convertible Bond and the issue and allotment of Shares upon conversion of the First Convertible Bond at the extraordinary general meeting of Melco held on 2nd November 2004, Melco issued the First Convertible Bond to STDM on 9th November 2004; (iii) as disclosed in the announcement and circular of Melco respectively dated 23rd November 2004 and 5th January 2005, Melco has entered into an agreement with STDM pursuant to which Melco has agreed to acquire additional 20% equity interests in Great Wonders from STDM for a consideration of HK$56 million, which would be settled by way of issue of the Second Convertible Bond (as defined in the announcement of Melco dated 23rd November 2004) to STDM with the principal amount of HK$56 million with a conversion right to convert the same into 6,829,268 Shares at a conversion price of HK$8.2 per Share. After obtaining the independent shareholders' approval (by way of poll) of the agreement, the Second Convertible Bond and the issue and allotment of Shares upon conversion of the Second Convertible Bond at the extraordinary general meeting of Melco held on 20th January 2005, Melco issued the Second Convertible Bond to STDM on 8th February 2005; and (iv) as disclosed in the announcement of Melco dated 15th October 2004, Melco has carried out a top-up placing of 75,900,000 Shares at a placing price of HK$5.2 per Share on 15th October 2004. The net proceeds generated from the top-up placing were approximately HK$377 million, out of which approximately HK$94 million was earmarked for the expansion of the business of Mocha Slot, as to approximately HK$207 million for the development of the "Park Hyatt" luxury hotel project and as to the remaining approximately HK$75 million as working capital for the Group. As at the date of this announcement, Melco has utilized a total sum of approximately HK$29.3 million mainly for acquisition of hardware and systems for the business of Mocha Slot and a total sum of approximately HK$56.4 million in connection with the "Park Hyatt" luxury hotel project. It is the present intention of Melco to utilize the net proceeds of the top-up placing according to the intended application thereof as disclosed in the announcement dated 15th October 2004. To the extent that the net proceeds from the top-up placing are not immediately required for the above purposes, Melco has placed such funds in short-term deposits with banks and/or financial institutions. IMPLICATIONS UNDER THE TAKEOVERS CODE, POSSIBLE PLACING AND POSSIBLE WHITEWASH WAIVER The Concert Party currently holds Shares representing approximately 52.76% of the total voting rights of Melco. Great Respect is deemed under the Takeovers Code to be a member of the Concert Party. As set out in Note 10 to Rule 26.1 of the Takeovers Code, in general, the acquisition of convertible securities does not give rise to an obligation under Rule 26 of the Takeovers Code to make an offer, but the exercise of any conversion rights will be considered to be an acquisition of voting rights for the purpose of Rule 26 of the Takeovers Code. Accordingly, the issue of the Convertible Loan Notes on completion of the First Agreement will, in and of itself, not have any Takeovers Code consequences prior to the exercise of the conversion rights under the Convertible Loan Notes.