10:05     SOLARTECH INT'L<01166> - Announcement (4)                           

    Public                                                                    
    - existing      74.92%          74.92%          62.43%                    
    - Placees       -               20.00%          16.67%                    
                                                                              
    100.00%         100.00%         100.00%                                   
                                                                              
    As the date of this announcement, the existing                            
    authorised share capital of the Company comprises                         
    30,000,000,000 Shares out of which 326,974,362 Shares                     
    are issued and fully paid up.                                             
                                                                              
    USE OF PROCEEDS                                                           
    The gross proceeds from the Placing will be HK$18.31                      
    million. The expenses of approximately HK$0.51                            
    million in relation to the Placing and the                                
    Subscription will be borne by the Company. The net                        
    proceeds raised per new Share upon the completion of                      
    the Placing and the Subscription will be                                  
    approximately HK$0.272 per Share. The net proceeds                        
    of about HK$17.80 million from the Placing and the                        
    Subscription will be used for purchasing raw                              
    materials (including copper wires and PVC resin) for                      
    production of cable and wires.                                            
                                                                              
    REASONS FOR THE PLACING AND THE SUBSCRIPTION                              
    The Directors consider the timing of the fund raising                     
    by the Placing and the Subscription is appropriate                        
    as the recent stock market has shown the sign of                          
    recovery and the Placing will be attractive to the                        
    potential investors. The Directors consider that                          
    notwithstanding that the Placing and the Subscription                     
    will result in the dilution of the existing                               
    shareholding interest of the shareholders of the                          
    Company, the Placing and the Subscription represent                       
    an opportunity to raise capital for the Company to                        
    enhance the general working capital base and the                          
    existing business of the Group.                                           
                                                                              
    GENERAL                                                                   
    The Group is principally engaged in manufacture of                        
    and trading in cables and wires, copper rods and                          
    connectors and terminals.                                                 
                                                                              
    The Directors consider the terms of the Placing                           
    Agreement and the Subscription Agreement to be fair                       
    and reasonable and in the interests of the Company                        
    and the Shareholders as a whole. The Subscription                         
    Shares will rank, upon issue, pari passu in all                           
    respects with the Shares in issue on the date of                          
    allotment and issue of the Subscription Shares.                           
                                                                              
    The following table summaries the capital raising                         
    activities of the Company for the 12 months                               
    immediately before the date of this announcement:                         
                                                                              
                    Actual use of                                             
    Discount/                       net proceeds                              
    premium         Intended        as at the                                 
    to the  Net     use of net      date of this                              
    Date of                 market  proceeds        proceeds                  
            announcement                                                      
    announcement    Event   Placees price   (approximately)                   
            (approximately) (approximately)                                   
                                                                              
    17 June 2004    Placing of      not fewer       Same as the               
            HK$14.2 million for general     HK$14.2 million                   
    54,000,000      than 6  closing price           working                   
    capital for purchasing of                                                 
    existing Shares independent     of HK$0.27                                
            raw materials                                                     
    at HK$0.27 per  investors       per Share as                              
            which is in                                                       
    Share and               quoted on the                   line with the     
    Subscription of         Stock Exchange