3SBio Inc. — Capital/Financing Update 2005

Jun 22, 2005

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.

HONGKONG CHINESE LIMITED 香港華人有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 655)

CONNECTED TRANSACTION

DEED OF NOVATION AMONGST HKCL INVESTMENTS LIMITED, AURIC PROPERTY PTE. LTD. AND TIMEMORE LIMITED (A WHOLLY-OWNED SUBSIDIARY OF LIPPO CHINA RESOURCES LIMITED) AND DISPOSAL OF HKCL INVESTMENTS PTE. LTD. TO TIMEMORE LIMITED

Reference is made to the announcement of HKC made on 20th May, 2005 in relation to the entering into of the Auric Property Sale and Purchase Agreement between HKCL Investments and Auric Property, a wholly-owned subsidiary of Auric Pacific in which LCR is indirectly interested as to approximately 51.2 per cent. HKCL Investments is a wholly-owned subsidiary of HKC. Under the Auric Property Sale and Purchase Agreement, HKCL Investments agreed to sell and Auric Property agreed to acquire the entire issued share capital of HKCL Pte and the related Shareholder’s Loan of S$1,404,549.11 (equivalent to approximately HK$6,495,000). HKCL Pte has entered into the Property Acquisition Agreement dated 18th February, 2005 for acquiring the Property and completion of the Property Acquisition Agreement took place on 17th June, 2005.

It is the intention of HKC to gradually reduce its property development projects on hand. Accordingly, it had been agreed that, prior to completion of the Property Acquisition Agreement, HKCL Investments shall novate its rights and obligations as vendor under the Auric Property Sale and Purchase Agreement to Timemore, a wholly-owned subsidiary of LCR, which shall hold HKCL Pte as well as the interests in the Property Acquisition Agreement prior to completion of the Auric Property Sale and Purchase Agreement. Accordingly, on 17th June, 2005, HKCL Investments, Timemore and Auric Property entered into the Novation Deed whereby all rights, benefits and liabilities of HKCL Investments as vendor under the Auric Property Sale and Purchase Agreement shall be novated to Timemore with immediate effect and prior to completion of the Property Acquisition Agreement. On the same day and simultaneously with the entering into of the Novation Deed, HKCL Investments and Timemore entered into the Sale and Purchase Agreement, the completion of which has taken place immediately following signing thereof but prior to completion of the Property Acquisition Agreement.

The Purchase Price paid by Timemore for the Sale Shares and the Shareholder’s Loan under the Sale and Purchase Agreement, in aggregate, amounted to S$2,400,000 (equivalent to approximately HK$11,098,000) which is the same as the consideration under the Auric Property Sale and Purchase Agreement and was determined after arms’ length negotiations and based on normal commercial terms.

HKCL Investments is a wholly-owned subsidiary of HKC. Since HKC is beneficially owned as to approximately 72.26 per cent. by LCR, LCR is a substantial shareholder and a connected person of HKC. Since Auric Property is a wholly-owned subsidiary of Auric Pacific which is in turn an indirect subsidiary of LCR, each of Auric Property and Auric Pacific is an associate of LCR. Therefore, Auric Property is a connected person of HKC. Also, since Timemore is a wholly-owned subsidiary of LCR, Timemore is an associate of LCR and therefore, is a connected person of HKC. Accordingly, each of the Sale and Purchase Agreement and the Novation Deed constitutes a connected transaction for HKC under Rule 14A.13 of the Listing Rules. Since the relevant percentage ratios for the Purchase Price exceed 0.1 per cent. but are less than 2.5 per cent., HKC is exempt from the independent shareholders’ approval requirements and only subject to the reporting and announcement requirements for connected transactions under Rule 14A.32 of the Listing Rules.

At the request of HKC, trading in its shares on the Stock Exchange was suspended with effect from 9:30 a.m. on 21st June, 2005 pending the release of this announcement. Application has been made by HKC to the Stock Exchange for resumption of trading in its shares with effect from 9:30 a.m. on 23rd June, 2005.

* For identification purpose only

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INTRODUCTION

Reference is made to the announcement of HKC made on 20th May, 2005 in relation to the entering into of the Auric Property Sale and Purchase Agreement between HKCL Investments and Auric Property, a wholly-owned subsidiary of Auric Pacific in which LCR is indirectly interested as to approximately 51.2 per cent. HKCL Investments is a wholly-owned subsidiary of HKC. Under the Auric Property Sale and Purchase Agreement, HKCL Investments agreed to sell and Auric Property agreed to acquire the entire issued share capital of HKCL Pte and the related Shareholder’s Loan. HKCL Pte has entered into the Property Acquisition Agreement for acquiring the Property.

It is the intention of HKC to gradually reduce its property development projects on hand. Accordingly, it had been agreed that, prior to completion of the Property Acquisition Agreement, HKCL Investments shall novate its rights and obligations as vendor under the Auric Property Sale and Purchase Agreement to Timemore, a wholly-owned subsidiary of LCR, which shall hold HKCL Pte as well as the interests in the Property Acquisition Agreement prior to completion of the Auric Property Sale and Purchase Agreement. Accordingly, on 17th June, 2005, HKCL Investments, Timemore and Auric Property entered into the Novation Deed whereby all rights, benefits and liabilities of HKCL Investments as vendor under the Auric Property Sale and Purchase Agreement shall be novated to Timemore with immediate effect and prior to completion of the Property Acquisition Agreement. On the same day and simultaneously with the entering into of the Novation Deed, HKCL Investments and Timemore entered into the Sale and Purchase Agreement, completion of which has taken place immediately following signing thereof but prior to completion of the Property Acquisition Agreement.

DETAILS OF THE NOVATION DEED Date:

17th June, 2005

Parties:

Novator: HKCL Investments, being a wholly-owned subsidiary of HKC, which in turn is a 72.26 per cent. owned subsidiary of LCR Novatee: Timemore, being a wholly-owned subsidiary of LCR Purchaser: Auric Property, being a wholly-owned subsidiary of Auric Pacific, in which LCR is indirectly interested as to approximately 51.2 per cent.

Subject matter of the Novation Deed:

HKCL Investments has agreed to novate in favour of Timemore all its rights, benefits and liabilities as vendor under the Auric Property Sale and Purchase Agreement with immediate effect. Each of HKCL Investments, Timemore and Auric Property has agreed that, with immediate effect, Timemore shall substitute HKCL Investments as vendor under the Auric Property Sale and Purchase Agreement, and HKCL Investments shall be released from further performance of the Auric Property Sale and Purchase Agreement. The said novation as evidenced by the signing of the Novation Deed has taken place prior to completion of the Property Acquisition Agreement.

Under the Novation Deed, completion of the Auric Property Sale and Purchase Agreement shall take place on the third business day after all conditions under the Auric Property Sale and Purchase Agreement have been fulfilled. The condition which remains outstanding as at the date of this announcement is the obtaining of the approval from the shareholders of Auric Pacific at an extraordinary general meeting to be convened by Auric Pacific, and accordingly, HKC is not in a position to advise the expected completion date of the Auric Property Sale and Purchase Agreement.

DETAILS OF THE SALE AND PURCHASE AGREEMENT Date:

17th June, 2005

Parties:

Vendor: HKCL Investments

Purchaser: Timemore

Subject matter of the Sale and Purchase Agreement:

HKCL Investments has unconditionally agreed to sell and Timemore has unconditionally agreed to purchase an aggregate of 1,000,000 Shares in the issued share capital of HKCL Pte, representing the entire issued share capital of HKCL Pte, and, by way of assignment, the related shareholder’s loan due from HKCL Pte to HKCL Investments in the aggregate amount of S$1,404,549.11 (equivalent to approximately HK$6,495,000). The Shareholder’s Loan was advanced by HKCL Investments to HKCL Pte on an interest free basis and repayable on demand, and no security or guarantee has been provided for the Shareholder’s Loan.

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Completion:

Completion of the Sale and Purchase Agreement took place immediately following signing of the Sale and Purchase Agreement, but prior to completion of the Property Acquisition Agreement.

Purchase Price:

The Purchase Price for the Sale Shares and the Shareholder’s Loan amounted to, in aggregate, S$2,400,000 (equivalent to approximately HK$11,098,000) which is the same as the consideration under the Auric Property Sale and Purchase Agreement and was paid by Timemore to HKCL Investments in cash on completion of the Sale and Purchase Agreement. The Purchase Price was determined by reference to the unaudited net asset value of HKCL Pte and the outstanding amount of the Shareholder’s Loan as at 30th April, 2005. Since the entire issued share capital of HKCL Pte has been transferred to Timemore at net asset value, no gain or loss has accrued to or has been incurred by HKC as a result of the disposal of HKCL Pte.

The Purchase Price was negotiated and determined on an arms’ length basis and normal commercial terms.

Business activity of HKCL Pte:

HKCL Pte has entered into the Property Acquisition Agreement with the Property Vendors (being the 30 proprietors of the Property who collectively own all of the apartment units and the common areas comprised in the Property, and who, to the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, are third parties independent of HKC and its connected persons) for acquiring the Property, being the whole of the development known as Newton Heights and located at 1 Newton Road, Singapore, for an aggregate consideration of S$43,620,000 (equivalent to approximately HK$201,699,000), details of which have been disclosed in joint announcements made by Lippo, LCR and HKC on 25th February, 2005 and 18th May, 2005, and a circular issued by HKC on 21st March, 2005. In accordance with the terms and conditions of the Property Acquisition Agreement, HKCL Pte has paid to the Property Vendors’ solicitors a deposit in the aggregate amount of S$2,181,000 (equivalent to approximately HK$10,085,000). Completion of the Property Acquisition Agreement took place on 17th June, 2005, after completion of the Sale and Purchase Agreement which took place on the same day. The remaining balance of S$41,439,000 (equivalent to approximately HK$191,614,000) for acquisition of the Property was financed by a bank loan taken out by HKCL Pte after completion of the Sale and Purchase Agreement.

Apart from entering into the Property Acquisition Agreement and attending to the matters incidental thereto, HKCL Pte has not carried out any other business since its incorporation on 26th November, 2003. As at 30th April, 2005, the unaudited net asset value and total assets of HKCL Pte and the Shareholder’s Loan amounted to S$995,451 (equivalent to approximately HK$4,603,000), S$2,400,000 (equivalent to approximately HK$11,098,000) and S$1,404,549.11 (equivalent to approximately HK$6,495,000), respectively. As at 30th April, 2005, the total assets of HKCL Pte comprised the deposit paid by HKCL Pte under the Property Acquisition Agreement in the amount of S$2,181,000 (equivalent to approximately HK$10,085,000) and other assets (being prepayments and other receivables incidental to the acquisition of the Property) of S$219,000 (equivalent to approximately HK$1,013,000). For the period from 26th November, 2003 (being the date of incorporation of HKCL Pte) to 31st December, 2004, HKCL Pte recorded an audited loss (before tax and after tax) of S$3,129 (equivalent to approximately HK$14,000).

The major terms and conditions of the Auric Property Sale and Purchase Agreement are substantially the same as those of the Sale and Purchase Agreement. Apart from the fact that the Sale and Purchase Agreement is unconditional and completion of the Sale and Purchase Agreement took place immediately following its signing, and the substitution of Auric Property by Timemore as purchaser, the terms of each of the Auric Property Sale and Purchase Agreement and the Sale and Purchase Agreement are the same.

LISTING RULES IMPLICATIONS

HKCL Investments is a wholly-owned subsidiary of HKC. Since HKC is beneficially owned as to approximately 72.26 per cent. by LCR, LCR is a substantial shareholder and a connected person of HKC. Since Auric Property is a wholly-owned subsidiary of Auric Pacific which in turn is an indirect subsidiary of LCR, each of Auric Property and Auric Pacific is an associate of LCR. Therefore, Auric Property is a connected person of HKC. Since Timemore is a wholly-owned subsidiary of LCR, it is an associate of LCR and therefore, is a connected person of HKC. Accordingly, each of the Sale and Purchase Agreement and the Novation Deed constitutes a connected transaction for HKC under Rule 14A.13 of the Listing Rules. Since the relevant percentage ratios for the Purchase Price exceed 0.1 per cent. but are less than 2.5 per cent., HKC is exempt from the independent shareholders’ approval requirements and only subject to the reporting and announcement requirements for connected transactions under Rule 14A.32 of the Listing Rules.

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REASONS FOR THE NOVATION DEED AND THE SALE AND PURCHASE AGREEMENT

As mentioned in the announcement of HKC made on 20th May, 2005, HKC intends to streamline the management and administration of its property investments by gradually reducing its property development projects on hand, and in view of this, HKC considered that it would be commercially beneficial to transfer to Auric Pacific its interests in HKCL Pte which shall acquire the Property pursuant to the Property Acquisition Agreement. Completion of the Auric Property Sale and Purchase Agreement has yet to take place pending the fulfillment of the condition on obtaining the approval of the shareholders of Auric Pacific. Auric Pacific requires more time for obtaining the approval from its shareholders and therefore did not obtain such approval prior to completion of the Property Acquisition Agreement. Since completion of the Property Acquisition Agreement was scheduled for 17th June, 2005 and in line with the intention of HKC to divest its interests in the Property prior to completion of the Property Acquisition Agreement, HKC considers it appropriate to, prior to completion of the Property Acquisition Agreement, novate the rights and obligations of HKCL Investments as vendor under the Auric Property Sale and Purchase Agreement to Timemore, a wholly-owned subsidiary of LCR, which shall hold, through HKCL Pte, the interests in the Property prior to completion of the Auric Property Sale and Purchase Agreement. The proceeds from the disposal of the entire issued share capital of HKCL Pte are intended to be used as general working capital of HKC.

The Directors, including the independent non-executive Directors, believe that the terms of each of the Novation Deed and the Sale and Purchase Agreement are fair and reasonable and in the interests of the shareholders of HKC as a whole.

INFORMATION ON TIMEMORE, HKC AND AURIC PACIFIC AND THEIR RESPECTIVE SUBSIDIARIES

The principal business activity of Timemore is investment holding. Timemore is currently holding only the entire issued share capital of HKCL Pte.

The principal business activity of HKC is investment holding. Its subsidiaries (including HKCL Investments and HKCL Pte) are principally engaged in investment holding, property investment and development, fund management, underwriting, corporate finance, securities broking, securities investment, treasury investment, money lending, banking and other related financial services.

The principal business activity of Auric Pacific is investment holding. The principal business activities of its subsidiaries are food manufacturing, wholesale distribution of food and allied fast-moving consumer goods and investment holding.

The principal business activities of Auric Property are investment holding and property investment.

SUSPENSION AND RESUMPTION OF TRADING IN SHARES OF HKC

At the request of HKC, trading in its shares on the Stock Exchange was suspended with effect from 9:30 a.m. on 21st June, 2005 pending the release of this announcement. Application has been made by HKC to the Stock Exchange for resumption of trading in its shares with effect from 9:30 a.m. on 23rd June, 2005.

DEFINITIONS

In this announcement, the following terms and expressions (unless the context otherwise requires) shall have the following meanings:

“Auric Pacific”	Auric Pacific Group Limited, a company incorporated in Singapore
	with limited liability whose shares are listed on the Singapore
	Exchange Securities Trading Limited and in which LCR is indirectly
	interested as to approximately 51.2 per cent.
“Auric Property”	Auric Property Pte. Ltd., a company incorporated in Singapore with
	limited liability and a wholly-owned subsidiary of Auric Pacific
“Auric Property Sale and	the conditional sale and purchase agreement between HKCL
Purchase Agreement”	Investments as vendor and Auric Property as purchaser in relation to
	the sale and purchase of the Sale Shares and the assignment of the
	related Shareholder’s Loan dated 20th May, 2005
“connected person”	shall have the meaning set out in Rule 14A.11 of the Listing Rules
“Directors”	the directors of HKC

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“HKC”	Hongkong Chinese Limited (香港華人有限公司*), a company
	incorporated in Bermuda with limited liability, the shares of which
	are listed on the Stock Exchange and whose shares are owned as to
	approximately 72.26 per cent. by LCR
“HKCL Investments”	HKCL Investments Limited, a company incorporated in the British
	Virgin Islands with limited liability and a wholly-owned subsidiary of
	HKC
“HKCL Pte”	HKCL Investments Pte. Ltd., a company incorporated in Singapore
	with limited liability on 26th November, 2003 and, prior to completion
	of the Sale and Purchase Agreement, a wholly-owned subsidiary of
	HKCL Investments
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China
“LCR”	Lippo China Resources Limited力寶華潤有限公司, a company
	incorporated in Hong Kong with limited liability whose shares are
	listed on the Stock Exchange
“Lippo”	Lippo Limited力寶有限公司, a company incorporated in Hong
	Kong with limited liability whose shares are listed on the Stock
	Exchange
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Novation Deed”	the novation deed dated 17th June, 2005 amongst HKCL Investments,
	Timemore and Auric Property in relation to novation by HKCL
	Investments as vendor to Timemore all its rights, benefits and liabilities
	under the Auric Property Sale and Purchase Agreement
“percentage ratios”	shall have the meaning set out in Rule 14.04 of the Listing Rules
“Property”	the whole of the development known as Newton Heights and located
	at 1 Newton Road, Singapore
“Property Acquisition Agreement”	the conditional terms of sale between HKCL Pte and the Property
	Vendors dated 18th February, 2005 in relation to the acquisition of
	the Property, details of which have been disclosed in joint
	announcements made by Lippo, LCR and HKC on 25th February,
	2005 and 18th May, 2005, and a circular issued by HKC on 21st
	March, 2005
“Property Vendors”	the 30 proprietors of the Property who collectively own all of the
	apartment units and the common areas comprised in the Property
“Purchase Price”	the aggregate amount of the consideration paid by Timemore to HKCL
	Investments for the Sale Shares and the Shareholder’s Loan under the
	Sale and Purchase Agreement, being S$2,400,000 (equivalent to
	approximately HK$11,098,000)
“Sale and Purchase Agreement”	the sale and purchase agreement between HKCL Investments as vendor
	and Timemore as purchaser in relation to the sale and purchase of the
	Sale Shares and the assignment of the related Shareholder’s Loan
	dated 17th June, 2005
“Sale Shares”	an aggregate of 1,000,000 Shares, representing the entire issued share
	capital of HKCL Pte
“Shares”	ordinary shares of S$1.00 each in the issued share capital of HKCL
	Pte

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“Shareholder’s Loan” the shareholder’s loan in the aggregate amount of S$1,404,549.11 (equivalent to approximately HK$6,495,000) owing by HKCL Pte to HKCL Investments and assigned to Timemore under the Sale and Purchase Agreement “Stock Exchange” The Stock Exchange of Hong Kong Limited

“substantial shareholder” shall have the meaning set out in Rule 1.01 of the Listing Rules “S$” Singapore dollar, the lawful currency of Singapore “Timemore” Timemore Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of LCR

For use in this announcement and for illustration purposes only, conversion of Singapore dollar into Hong Kong dollar is based on the approximate exchange rate of S$1 to HK$4.6240 as at 16th June, 2005. No representation is made that any amount in Hong Kong dollar and Singapore dollar could be converted at such rate.

By Order of the Board Hongkong Chinese Limited Andrew Hau Secretary

Hong Kong, 22nd June, 2005

As at the date of this announcement, the board of Directors of HKC comprises eight directors, of which Dr. Mochtar Riady and Mr. Leon Nim Leung Chan are non-executive Directors, Messrs. Stephen Riady, John Luen Wai Lee and Kee Yee Kor are executive Directors and Messrs. Albert Saychuan Cheok, Victor Ha Kuk Yung and King Fai Tsui are independent non-executive Directors.

“Please also refer to the published version of this announcement in The Standard.”

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