09:51     COSCO INTL HOLD<00517> - Announcement (6)                           

    REASONS FOR THE TRANSACTIONS                                              
                                                                              
    By entering into the Continuing Connected Transactions, the Group         
    will benefit by securing a reliable source of supply of technology        
    and know-how in relation to the coatings production of the Kansai         
    Companies and high quality raw materials. Relying on the                  
    recommendations and long term customers of container coatings and         
    marine coatings of the Kansai Group and the COSCO Group, the Group        
    will be able to gain advantage to the sales network of both the COSCO     
    Group and the Kansai Group. The Directors believe that the                
    Continuing Connected Transactions are conducted in the usual and          
    ordinary course of business of each of the Kansai Companies, and          
    are based on normal commercial terms. The Directors consider that         
    the terms of the Continuing Connected Transactions are fair and           
    reasonable and in the best interest of the Company and the                
    Shareholders as a whole.                                                  
                                                                              
    LISTING RULES REQUIREMENTS                                                
                                                                              
    As the Continuing Connected Transactions for the Kansai Companies         
    constitute non-exempt continuing connected transactions of the            
    Company under Rule 14A.35 of the Listing Rules, they will be subject      
    to the disclosure requirements under Rules 14A.45 and 14A.46 of the       
    Listing Rules, the annual review requirement under Rules 14A.37 to        
    14A.41 of the Listing Rules and are subject to independent                
    shareholders' approval at general meeting by way of poll under Rule       
    14A.35(4) of the Listing Rules. The Company will seek approval from       
    the Independent Shareholders of the Continuing Connected                  
    Transactions and their respective caps for a period of three              
    financial years ending 31st December 2007.                                
                                                                              
    GENERAL                                                                   
                                                                              
    The Group is principally engaged in the businesses of ship trading        
    and supplying services, property investment and development,              
    infrastructure investment, and building construction.                     
                                                                              
    The Kansai Companies are principally engaged in the businesses of         
    manufacturing and sale of marine coatings, container coatings,            
    anti-corrosion coatings and the petro-chemical products in                
    relation thereto.                                                         
                                                                              
    Japan Kansai is principally engaged in coatings business worldwide        
    and listed on the Stock Exchange of Tokyo. By virtue of Japan             
    Kansai's more than 10% equity interests in the Kansai Companies,          
    Japan Kansai is a connected person of the Company. So far as the          
    Board is aware, save as its interests in Kansai Companies, the Japan      
    Kansai and its associates (as defined under the Listing Rules) have       
    no interests in any shares of the Company or its subsidiaries.            
                                                                              
    NKM is principally engaged in the businesses of provision of              
    technologies and environmental-friendly products relating to              
    marine coating business worldwide.                                        
                                                                              
    As COSCO is the ultimate controlling shareholder of the Company and       
    COSCO Hong Kong being the controlling Shareholder and Japan Kansai        
    having 35.29% equity interest in each of the Kansai Companies, the        
    transactions between the Kansai Companies and members of the Kansai       
    Group and the COSCO Group constitute continuing connected                 
    transactions for the Company under the Listing Rules.                     
                                                                              
    The Board appointed an independent board committee to consider and        
    advise the Independent Shareholders on the terms of the Continuing        
    Connected Transactions and the annual caps relating thereto. An           
    independent financial adviser will be appointed to advise the             
    independent board committee of the Company regarding the Continuing       
    Connected Transactions. COSCO, True Smart and their respective            
    associates will abstain from voting in relation to the resolutions        
    to be proposed at the SGM to approve the Continuing Connected             
    Transactions and the relevant caps.                                       
                                                                              
    A circular containing particulars of the Continuing Connected             
    Transactions, letter from the independent board committee, an             
    opinion of the independent financial adviser together with a notice       
    to convene the SGM to approve the Continuing Connected Transactions       
    will be despatched to the Shareholders as soon as practicable.            
                                                                              
    DEFINITIONS                                                               
                                                                              
    In this announcement, the following expressions have the meanings         
    set out below unless the context requires otherwise:                      
                                                                              
    "associates" has the meaning ascribed to it under the Listing Rules       
                                                                              
    "Board" the board of Directors                                            
                                                                              
    "Circular" the circular of the Company dated 12th December 2003