APT Satellite Holdings Limited — Proxy Solicitation & Information Statement 2002

Jun 28, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in CAPITAL AUTOMATION HOLDINGS LIMITED (the “Company”), you should at once hand this circular and the enclosed form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

CAPITAL AUTOMATION HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

PROPOSALS FOR CHANGE OF COMPANY NAME ISSUE OF SECOND NOTES

ISSUE AND ALLOTMENT OF SHARES ON CONVERSION

OF THE SECOND NOTES

INCREASE OF AUTHORISED SHARE CAPITAL

GRANT OF GENERAL MANDATE TO ISSUE SHARES

A letter from the Board of the Company is set out on pages 4 to 8 of this circular. A notice convening the special general meeting of the Company to be held at Hennessy Room, 7/F Conrad Hotel, Pacific Place, 88 Queensway, Hong Kong on 20th June 2002 at 10:00 a.m. is set out on pages 9 to 11 of this circular.

Whether or not you intend to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible to the Company’s Hong Kong branch registrar, Abacus Share Registrars Limited, at 5th Floor, Wing On Centre, 111 Connaught Road, Central, Hong Kong and in any event not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the meeting or any adjourned meeting should you so desire.

25 May, 2002

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.	Change of the Company Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.	Issue of Second Notes and issue and allotment of Shares
	upon conversion of the Second Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.	Application for listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.	Increase in authorised share capital of the Company . . . . . . . . . . . . . . . . . . . . . . . 7
6.	Grant of General Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9.	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Notice of	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

– i –

DEFINITIONS

In this circular, the following expressions shall have the same meanings set out below unless the context requires otherwise:

“Acquisition Agreement”	the agreement in relation to acquisition of 100% interest
	in Artway entered into between Link Zone, Mr. Han and
	the Company on 10th April 2002
“Artway”	Artway Development Limited, a company incorporated
	in the British Virgin Islands and the shares of which are
	beneficially owned by Mr. Han before completion of the
	Acquisition Agreement
“Board”	the board of Directors
“Companies Ordinance”	the Companies Ordinance (Chapter 32 of the Laws of
	Hong Kong)
“Company”	CAPITAL AUTOMATION HOLDINGS LIMITED, an
	exempted company incorporated in Bermuda with limited
	liability and the Shares of which are listed on the Stock
	Exchange
“Director(s)”	director(s) of the Company
“First Notes”	the convertible notes in the principal amount of
	HK$37,500,000 in denomination of HK$500,000 issued
	by the Company on 22nd April 2002
“General Mandate”	A general and unconditional mandate to allot, issue and
	otherwise deal with 20% of the aggregate of the nominal
	amount of the issued share capital of the Company in
	issue as at the date of passing the relevant resolution,
	being the mandate referred to in the resolution numbered
	5 in the notice convening the Special General Meeting
“Group”	the Company and its Subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

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DEFINITIONS

“Latest Practicable Date”	24th May 2002, being the latest practicable date prior to
	the printing of this circular for the purpose of ascertaining
	certain information for inclusion in this circular
“Link Zone”	Link Zone International Limited, a company incorporated
	in the British Virgin Islands and the shares of which are
	wholly owned by Mr. Han
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Mr. Han”	Mr. Han Yuejun, who beneficially owns a majority
	interest in the Property and is an independent third party
	not connected with the Directors, chief executive or
	substantial shareholders of the Company, its subsidiaries
	or any of their respective associates.
“Notes”	the First Notes and the Second Notes
“PRC”	the People’s Republic of China
“Property”	Area no. 7, Xi Ba He Bei Lane, Chaoyang District,
	Beijing, the PRC中國北京市朝陽區西壩河北里7號
	院土地(北三環東路甲7號）
“Second Notes”	the convertible notes in the principal amount of
	HK$37,500,000 in denomination of HK$500,000 which
	is subject to the Shareholders’ approval for the issue of
	the Second Notes and issue and allotment of Shares upon
	conversion of the Second Notes and fulfillment of all
	applicable laws and regulations may be issued pursuant
	to the Acquisition Agreement by the Company
“Share(s)”	the ordinary share(s) of HK$0.10 each in the share capital
	of the Company
“Shareholder(s)”	holder(s) of Share(s)
“Special General Meeting”	a special general meeting of the Company to be held at
	Hennessy Room, 7/F Conrad Hotel, Pacific Place, 88
	Queensway, Hong Kong on 20th June 2002 at 10:00
	a.m. notice of which is set out on pages 9 to 11 of this
	circular

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DEFINITIONS

“Stock Exchange” The Stock Exchange of Hong Kong Limited “Subsidiaries” means a company which is for the time being and from time to time a subsidiary (within the meaning of section 2 of the Companies Ordinance as modified from time to time) of the Company, whether incorporated in Hong Kong or not

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LETTER FROM THE BOARD

CAPITAL AUTOMATION HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

Executive Directors

Mr. Wong Kwong Yu (Chairman) Mr. Lam Pang Mr. Ng Kin Wah

Registered Office: Cedar House 41 Cedar Avenue Hamilton HM 12 Bermuda

Independent Non-executive Directors:

Mr. Peng Chengzhi Mr. Ng Lap Kwan

Head office and principal place of business in Hong Kong: Unit 6110, 61st Floor The Center 99 Queen’s Road, Central Hong Kong

25 May, 2002

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR CHANGE OF COMPANY NAME ISSUE OF SECOND NOTES ISSUE AND ALLOTMENT OF SHARES ON CONVERSION OF THE SECOND NOTES INCREASE OF AUTHORISED SHARE CAPITAL GRANT OF GENERAL MANDATE TO ISSUE SHARES

1. INTRODUCTION

On 22nd May 2002, the Board announced its proposals to change the Company’s name, issue of Second Notes, issue and allot Shares to be issued upon conversion of the Second Notes, increase authorised share capital of the Company and grant the General Mandate. The resolution for the change of the Company’s name will be proposed as a special resolution. The resolutions for the issue of Second Notes, issue and allotment of Shares to be issued upon conversion of the Second Notes, increase of authorised share capital of the Company and grant of General Mandate will be proposed as ordinary resolutions. The proposed resolutions will be set out in the notice of the Special General Meeting.

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LETTER FROM THE BOARD

This circular is to give you further details of the proposals for the change of the Company’s name, issue of Second Notes, issue and allotment of Shares to be issued upon conversion of the Second Notes, increase of authorised share capital of the Company and grant of General Mandate.

2. CHANGE OF THE COMPANY NAME

On 22nd May 2002, the Board announced its proposal to change the English name of the Company to “CHINA EAGLE GROUP COMPANY LIMITED” and adopt “中國鵬潤集 團有限公司 ” as the Chinese translation of the Company’s name for identification purposes. The change of the Company’s name is subject to the passing of a special resolution by the Shareholders at the Special General Meeting to approve the change of name and the approval of the Registrar of Companies in Bermuda. The Company will apply to the Registrar of Companies in Bermuda for approval of the change of name upon passing of the special resolution.

The Board believes that the proposed change of name better identifies the new management and substantial shareholders of the Company.

The Shares are listed on the Stock Exchange. The proposed change of the Company’s name will not affect any of the rights of the Shareholders. Upon the change of the Company’s name becoming effective, all existing share certificates in issue under the name of “CAPITAL AUTOMATION HOLDINGS LIMITED” will continue to be evidence of title to the Shares and valid for trading, settlement and registration purposes. For the purposes of saving cost which is in the interest of the Company, there will not be any free exchange of certificates for Shares following the change of the Company’s name. Any issue of share certificates upon the change of the Company’s name becoming effective will be in the new Company’s name. The size of board lot for trading in the Shares will remain unchanged after the change of the Company’s name has become effective. A further announcement will be made should the change of the Company’s name become effective.

3. ISSUE OF SECOND NOTES AND ISSUE OF SHARES UPON CONVERSION OF THE SECOND NOTES

On 22nd May 2002, the Board proposed to seek the Shareholders’ approval at the Special General Meeting for the issue of Second Notes and for the issue and allotment of Shares upon conversion of the Second Notes subject to the fulfilment of all applicable laws and legislations. Pursuant to the Acquisition Agreement, there is a remaining balance of the consideration of HK$37,500,000 to be payable by the Company on 10th July 2002 either by (i) the issue of the Second Notes subject to fulfilment of laws and regulations or (ii) in cash at the option of the Company which will depend on the cash flow position of the Group. For details of Acquisition Agreement, please refer to the circular of the Company dated 8th May 2002.

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LETTER FROM THE BOARD

Terms of the Notes

Issue:

Up to an aggregate principal amount of HK$75,000,000 due 2004 and convertible into Shares at the option of the holders of the Notes. The Notes will be in registered form in denomination of HK$500,000 each or integral multiples thereof.

Interest: The Notes bear interest from the date of its issue at the rate of 2% per annum. Such interest is payable semi-annually in arrears.

Maturity: The second anniversary of the date of issue of the Notes. There are no early redemption rights under the terms of the Notes.

Transfer of the Notes:

The Notes may be assigned to any third party subject to compliance with the terms and conditions of the Notes and further subject to the conditions, approvals, requirements and any other provisions of or under all applicable laws and regulations. The Directors do not intend to apply for the listing of the Notes on any stock exchange.

Conversion period:

On any business day after the expiry of six months from the issue of the Notes and at least five business days prior to maturity.

• Conversion price:

The lower of (1) the price of HK$0.12 per Share which represents a discount of about 70.0% to the closing price of HK$0.40 per Share quoted on the Stock Exchange on 10th April 2002, being the date of the Acquisition Agreement, a discount of about 68.3% to the average closing price of approximately HK$0.378 per Share for the ten trading days up to and including 10th April 2002, a discount of about 75.5% to the closing price of HK$0.49 per Share quoted on the Stock Exchange on the Latest Practicable Date and a discount of about 73.3% to the average closing price of approximately HK$0.45 per Share for ten trading days up to and including the Latest Practicable Date, subject to adjustment for, amongst other

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LETTER FROM THE BOARD

things, subdivision or consolidation of shares, bonus issues, rights issues and other dilution of events, and (2) 93% of the average closing price per Share for the five trading days immediately prior to the date of the notice given in respect of the exercise of the conversion rights of the Notes.

The Second Notes may or may not be issued. If the Company decides to issue the Second Notes, such issuance will be subject to the Shareholders’ approval for the issue of Second Notes, issue and allotment of Shares upon conversion of the Second Notes and fulfilment of all applicable laws and regulations. A further announcement will be made should the Company decide to issue the Second Notes or cash.

4. APPLICATION FOR LISTING

Application will be made to the Listing Committee of the Stock Exchange for the listing of and permission to deal in the Shares which may fall to be issued pursuant to the conversion of the Second Notes.

5. INCREASE IN AUTHORISED SHARE CAPITAL

On 22nd May 2002, the Board announced its proposal to increase the authorised share capital of the Company from HK$500,000,000 to HK$2,000,000,000 by the creation of an additional 15,000,000,000 new Shares. The Directors consider that the proposed increase in the authorised share capital is in the interests of the Company as it will provide flexibility and assist in the future development of the Group. The Directors have no present intention to issue any part of that capital .

6. GRANT OF GENERAL MANDATE

Although new general mandate for the allotment and issue of Shares has been granted to the Directors at a special general meeting of the Company held on 27th March 2002, 312,500,000 Shares will be issued upon the exercise of the conversion rights attaching to the First Notes on the assumption that the conversion price is HK$0.12 per Share. Consequently, most of such mandate will be utilised. Therefore, the Directors also seek the approval of the Shareholders to grant the General Mandate at the Special General Meeting.

7. SPECIAL GENERAL MEETING

At the Special General Meeting, a special resolution will be proposed for the Shareholders to consider and, if thought fit, approve the change of the Company’s name and ordinary resolutions will be proposed for the Shareholders to consider and if thought fit, to approve the issue of the Second Notes, issue and allotment of Shares upon conversion of the Second Notes, the increase in authorised share capital of the Company and the grant of General Mandate.

– 7 –

LETTER FROM THE BOARD

A notice convening the Special General Meeting is set out on pages 9 to 11 of this circular.

Enclosed is a form of proxy for use at the Special General Meeting. Whether or not you propose to attend the said meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to Company’s Hong Kong branch registrar, Abacus Share Registrars Limited, at 5th Floor, Wing On Centre, 111 Connaught Road, Central, Hong Kong as soon as possible and in any event not later than 48 hours before the respective time for the holding of such meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude Shareholders from attending and voting at the meeting or any adjourned meeting should they so desire.

8. RECOMMENDATION

The Directors consider that the change of the Company’s name, issue of the Second Notes, issue and allotment of Shares to be issued upon conversion of the Second Notes, increase of authorised share capital of the Company and grant of General Mandate are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of all of the special and ordinary resolutions to be proposed at the Special General Meeting.

9. GENERAL

The English text of this circular and the enclosed form of proxy shall prevail over the Chinese text.

Yours faithfully,

By order of the Board of

CAPITAL AUTOMATION HOLDINGS LIMITED Wong Kwong Yu Chairman

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NOTICE OF SPECIAL GENERAL MEETING

CAPITAL AUTOMATION HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that a special general meeting of CAPITAL AUTOMATION HOLDINGS LIMITED (the “Company”) will be held at Hennessy Room, 7/F Conrad Hotel, Pacific Place, 88 Queensway, Hong Kong on 20th June 2002 at 10:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions:

SPECIAL RESOLUTION

• 1 “THAT the name of the Company be changed from “CAPITAL AUTOMATION HOLDINGS LIMITED” to “CHINA EAGLE GROUP COMPANY LIMITED” and “中國鵬潤集團有限公司 ” be adopted as the Chinese translation of the Company’s name for identification purposes.”

ORDINARY RESOLUTIONS

• 2 “ THAT the issue of Second Notes (as defined in the Circular of which this notice forms part) in pursuance of an agreement in relation to acquisition of 100% interest in Artway Development Limited entered into between Link Zone International Limited, Mr. Han Yuejun and the Company on 10th April 2002 be and is hereby approved.”

• 3 “ THAT subject to passing the ordinary resolution no. 2 above and the fulfillment of applicable laws and regulations the directors of the Company (the “Directors”) be authorised to issue and allot 312,500,000 shares of HK$0.10 each in the share capital of the Company upon conversion of the Second Notes be and is hereby approved.”

• “ THAT the authorised share capital of the Company be increased from HK$500,000,000 to HK$2,000,000,000 by the creation of additional 15,000,000,000 shares of HK$0.10 each (“Shares”) ranking pari passu in all respects with the existing Shares.”

• 5 “ THAT

• (a) subject to paragraph (c) of this resolution, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.10 each in the share capital of the Company (“Shares”) and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved in substitution for and to the exclusion of any existing authority previously granted;

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NOTICE OF SPECIAL GENERAL MEETING

• (b) the approval in paragraph (a) of this resolution shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital in the Company allotted or agreed conditionally or unconditionally to be allotted, whether pursuant to an option or otherwise, and issued by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to (i) any rights issue (as defined below); (ii) any issue of Shares in the Company under any option scheme or similar arrangement for the time being adopted for the grant or issue to employees of the Company and/or any of its subsidiaries of Shares or rights to acquire for Shares in the Company; (iii) any issue of Shares in the Company upon the exercise of the subscription rights attaching to any warrants of the Company or any securities which are convertible into Shares of the Company or (iv) any issue of Shares in the Company as scrip dividends pursuant to the Bye-laws of the Company from time to time, shall not exceed 20% of the aggregate of the nominal amount of the issued share capital of the Company in issue as at the date of this resolution and the said approval shall be limited accordingly; and

• (d) for the purpose of this resolution:

“Relevant Period” means the period from the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by law or the Company’s Byelaws to be held; or

• (iii) the date upon which the authority set out in this resolution is revoked or varied by an ordinary resolution in any general meeting of the Company; and

“rights issue” means an offer of Shares of the Company open for a period fixed by the Directors to holders of Shares of the Company whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such Shares as at that date (subject to such exclusion or other arrangements as the Directors may deem necessary

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NOTICE OF SPECIAL GENERAL MEETING

or expedient in relation to fractional entitlements or overseas Shareholders having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company).”

By order of the Board of CAPITAL AUTOMATION HOLDINGS LIMITED Wong Kwong Yu Chairman

Hong Kong, 25th May 2002

Registered office: Cedar House 41 Cedar Street Hamilton HM 12 Bermuda

Head office and principal place of

business in Hong Kong Room 6110, 61st Floor The Center 99 Queen’s Road, Central Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at the Special General Meeting shall be entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. Where there are joint registered holders of any share, any one of such persons may vote at the Special General Meeting either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holders be present at the Special General Meeting personally or by proxy, that one of the said persons so present whose names stands first on the register of members in respect of such share shall alone be entitled to vote in respect thereof.

3. To be valid, a form of proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of the power of attorney or authority must be deposited at the Company’s Hong Kong branch share registrar Abacus Limited, at 5th Floor, Wing On Centre, 111 Connaught Road, Central, Hong Kong not less than 48 hours before the appointed time for holding the Special General Meeting or any adjournment hereof. Completion and return of the form of proxy will not preclude you from attending the Special General Meeting and voting in person.

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