09:24 CAPITAL STRAT<00497> - 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. CAPITAL STRATEGIC INVESTMENT LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 497) DISCLOSEABLE TRANSACTION DISPOSAL OF SHARES IN CAPITAL ESTATE LIMITED The Board announces that on 17 May 2005, Success Field, a wholly-owned subsidiary of the Company, entered into the Disposal Agreement with Supervalue to dispose of the Sale Shares for an aggregate consideration of HK$40,413,608.00. As the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules, a circular containing, amongst others, details of the Disposal Agreement will be sent to the Shareholders within 21 days from the publication of this announcement. The Disposal Agreement Date of agreement: 17 May 2005 Vendor: Success Field Purchaser: Supervalue, to the best of the Directors' knowledge, information and belief, having made all reasonable enquiry, each of Supervalue and its beneficial owner is an independent third party and not a connected person of the Company or any of its subsidiaries or any of their respective directors, chief executive and substantial shareholders or any associates of any of them. Sale Shares: 859,864,000 shares in Capital Estate, representing approximately 17.63% of the issued share capital of Capital Estate. Pursuant to the Disposal Agreement, Success Field has disposed of the Sale Shares to Supervalue at HK$0.047 per Sale Share, representing an aggregate consideration of approximately HK$40,413,608.00. The consideration was satisfied by a cashier order paid to the Group at the signing of the Disposal Agreement. The consideration per Sale Share represents (i) a premium of approximately 46.88% over the closing price of HK$0.032 per Sale Share as quoted on the Stock Exchange on 17 May 2005, being the last trading day of the shares of Capital Estate before the Disposal; (ii) a premium of approximately 47.34% over the average closing price of HK$0.0319 per Sale Share as quoted on the Stock Exchange for the last 10 trading days up to and including 17 May 2005; and (iii) a premium of approximately 53.09% and 42.86% over the audited and unaudited consolidated net asset value per Sale Share of HK$0.0307 and HK$0.0329 as at 31 July 2004 and 31 January 2005 respectively. The consideration was made on normal commercial terms and after arm's length negotiations. The Disposal Agreement was completed on 17 May 2005. Information about the Purchaser Supervalue is a company incorporated in the British Virgin Islands and whose principal activity is the holding of the Sale Shares. Mr. Chu Nin Yiu, Stephen is the sole shareholder and sole director of Supervalue. Each of Supervalue and Mr. Chu Nin Yiu, Stephen is an independent third party and not a connected person of the Company, its subsidiaries, the directors, chief executive or substantial shareholders or any of their associates as defined in the Listing Rules. After completion of the Disposal, Supervalue became interested in 17.63% of Capital Estate and became a substantial shareholder thereof. Dato' Choo Yeow Ming, an executive Director and the executive chairman of the Company, and Mr. Chow Hou Man, the financial controller of the Company, have resigned as the executive chairman and executive director of Capital Estate with effect from 17 May 2005 and Mr. Chu Nin Yiu, Stephen has been appointed an executive director and the executive chairman of Capital Estate from 17 May 2005. Reason for the Disposal The Directors consider the Disposal a good opportunity to realise its investment in view of the current market conditions. The Disposal