Beijing Enterprises Water Group Limited — Proxy Solicitation & Information Statement 2008

Feb 17, 2008

SHANG HUA HOLDINGS

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SHANG HUA HOLDINGS LIMITED 上華控股有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock code: 371)

NOTICE OF THE SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “SGM”) of Shang Hua Holdings Limited (the “Company”) will be held at Room 1601, 16/F., Cosco Tower, No. 183 Queen’s Road Central, Sheung Wan, Hong Kong on Tuesday, 4 March 2008, at 3:00 p.m. for the purpose of considering and, if thought fit, passing the following resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT the entry by the Company into the subscription agreement dated 21 January 2008 (the “ Subscription Agreement ”) with Lucky Crown Management Limited (the “ Subscriber ”) and Beijing Enterprises Holdings Limited (a copy of which has been produced at the meeting and signed by the chairman of the meeting for identification purposes), the terms and conditions thereof and transactions contemplated thereunder, including (but not limited to) (a) the allotment and issue of 247,000,000 shares of the Company (the “ Subscription Shares ”); (b) the issue of zero coupon convertible bonds due 2011 in the aggregate principal amount of HK$200,000,000 (the “ Firm Bonds ”); (c) the grant of an option (the “ First Option ”) to require the Company to issue the zero coupon convertible bonds in the aggregate principal amount of HK$300,000,000 (the “ First Option Bonds ”); (d) the grant of an option (the “ Second Option ”) to require the Company to issue the zero coupon convertible bonds in the aggregate principal amount of HK$200,000,000 (the “ Second Option Bonds ”); (e) the issue of the First Option Bonds upon the exercise of the First Option; (f) the issue of the Second Option Bonds upon the exercise of the Second Option; and (g) the allotment and issue of shares of the Company upon exercise of the conversion rights attaching to the Firm Bonds, the First Option Bonds and Second Option Bonds, in accordance with the terms of the Subscription Agreement to the Subscriber pursuant thereto, be and are hereby approved, ratified and confirmed and that the directors of the Company (the “ Directors ”) be and are generally and unconditionally authorised to prepare and execute all documents and to do all things as they consider necessary, expedient and appropriate to effect and implement the Subscription Agreement and transactions contemplated thereunder or incidental thereto.”

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1. “ THAT the waiver (the “ Whitewash Waiver ”) granted or to be granted by the Executive Director of the Corporate Finance Division of the Securities and Futures Commission of Hong Kong (or any delegate of the Executive Director) pursuant to Note 1 on dispensations from Rule 26 of the Hong Kong Code on Takeovers and Mergers in respect of the obligation on the part of the Subscriber and any parties acting in concert with it, to make a mandatory general offer to shareholders of Company for all the issued shares of the Company not already owned or agreed to be acquired by them upon completion of the subscription of the Subscription Shares be and is hereby approved and that the Directors be and are generally and unconditionally authorised to prepare and execute all documents and to do all such other things as they consider necessary, expedient and appropriate to give effect to any matters relating to, or incidental to, the Whitewash Waiver.”

2. “ THAT conditional upon passing of resolutions numbered 1 and 2 above, the authorised share capital of the Company be increased from HK$150,000,000 to HK$1,500,000,000 divided into 15,000,000,000 shares of HK$0.10 each (the “ Shares ”) by the creation of an additional 13,500,000,000 Shares and that the Directors be and are hereby generally and unconditionally authorised to prepare and execute all documents and to do all things as they consider necessary, expedient and appropriate to effect and implement the same.”

SPECIAL RESOLUTION

1. “ THAT conditional upon passing of resolution numbered 1 and 2 above and subject to the approval of the Registrar of Companies in Bermuda, the English name of the Company be changed from “Shang Hua Holdings Limited” to “Beijing Enterprises Water Group Limited” and, subject to the new English name of the Company becoming effective, “北控水務集團有限公司” be adopted as the Chinese name of the Company for identification purposes, and the Directors be and are hereby generally and unconditionally authorised to prepare and execute all documents and to do all things as they consider necessary, expedient and appropriate to effect the change of name of the Company.”

By Order of the Board Shang Hua Holdings Limited Flynn Xuxian Huang Chairman

Hong Kong, 18 February 2008

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Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Principal place of business in Hong Kong: Room 1601, 16/F Cosco Tower No.183 Queen’s Road Central Sheung Wan Hong Kong

Notes:

1. A member entitled to attend and vote at the SGM is entitled to appoint not more than two proxies to attend and vote instead of him. In the case of a recognized clearing house, it may authorize such person(s) as it thinks fit to act as its representative(s) at the SGM and vote in its stead. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited at the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited, of 26/F, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time fixed for holding the SGM or any adjournment thereof.

As at the date of this announcement, the Board comprises three executive Directors, namely, Mr. Huang Flynn Xuxian (Chairman), Ms. Guan Mei and Mr. Chase J Wong and three independent non-executive Directors, namely, Mr. Shea Chun Lok Quadrant, Mr. Chan Wai Kwong Peter and Mr. So Kwok Keung.

• For identification purpose only

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