10:25 HUALING<00382> - Announcement & Resumption (2) Shares, representing 42.2% of the issued share capital of the Company. Pursuant to the Underwriting Agreement, Midea International has undertaken that such 670,076,808 Shares will remain beneficially owned by Midea International from the date of this announcement up to the Record Date and will continue to have registered address in Hong Kong, and Midea International will accept on or before the Latest Acceptance Date, and pay for, such number of Rights Shares to be provisionally allotted to Midea International pursuant to the Rights Issue in respect of its existing holding of 670,076,808 Shares. The Underwriting Agreement contains provisions granting Midea International the ability to terminate its obligations thereunder on the occurrence of certain events as set out under the section headed "Termination of the Underwriting Agreement" on or before the second Business Day after the Latest Acceptance Date. The Company and Midea International will jointly undertake to the Stock Exchange that, if necessary, the Company and Midea International will take appropriate steps, including but not limited to the placing down of the Shares held by Midea International within a reasonable period of time as permitted by the Stock Exchange after the completion of the Rights Issue to ensure not less than 25% of the Shares are held by the public at all times in order to comply with the minimum public float requirement under Rule 8.08 of the Listing Rules. The Rights Issue is conditional upon the fulfillment of the conditions set out under the section headed "Conditions of the Rights Issue" below. If the conditions are not fulfilled, the Rights Issue will not proceed. Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Rights Shares in both nil-paid and fully-paid forms. The Shares will be dealt in on an ex-rights basis from Thursday, 16 June 2005. Dealings in the Rights Shares in the nil-paid form will take place from Tuesday, 28 June 2005 to Wednesday, 6 July 2005 (both days inclusive). If the conditions of the Rights Issue are not fulfilled and/or waived on or before Wednesday, 13 July 2005 (or such later time and/or date as the Company and Midea International may determine), or the Underwriting Agreement is terminated by Midea International, the Rights Issue will not proceed and the Rights Issue will lapse. Any persons contemplating buying or selling Shares from the date of this announcement up to the date on which all the conditions of the Rights Issue are fulfilled, and any dealings in the Rights Shares in their nil-paid form between Tuesday, 28 June 2005 to Wednesday, 6 July 2005 (both dates inclusive), bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholders or other persons contemplating dealing in the Shares or nil-paid Rights Shares are recommended to consult their own professional advisers. INCREASE IN AUTHORISED SHARE CAPITAL As at the date of this announcement, the authorized share capital of the Company is HK$300,000,000 divided into 3,000,000,000 Shares. To cater for the issuance of Rights Shares pursuant to the Rights Issue, resolutions will be proposed, and if thought fit, passed at the EGM to approve the increase in the authorised share capital of the Company from HK$300,000,000 to HK$1,000,000,000 by the creation of an additional 7,000,000,000 Shares. The Directors have no present intention to allot and issue new Shares other than the Rights Shares and the Shares which may fall to be issued upon the exercise of the outstanding options granted under the 1993 Share Option Scheme.