Bloks Group Limited — Board/Management Information 1999

Jun 1, 1999

Listed Company Information

N P H INT'L<0182> - Announcement 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. N P H International Holdings Limited (incorporated in Bermuda with limited liability) Change of single largest Shareholder Summary The board of directors (the "Board") of N P H International Holdings Limited (the "Company") announce that it has been notified by the single largest shareholder and the chairman of the Company, Mr. Yau Wai Ming, that he signed an agreement with Hong Tau Investment Limited ("Hong Tau") on 31 May 1999 pursuant to which Mr. Yau as the beneficial owner agreed to sell to Hong Tau the only issued share in Victory Hunter Holdings Limited ("Victory Hunter") for HK$1.00 and that the sale was completed on 31 May 1999 immediately after the agreement was signed. Victory Hunter holds approximately 24% of the shares in the Company. Date of Agreement: 31 May 1999 Parties: Seller: Mr. Yau Wai Ming, the chairman of the Company, as the beneficial owner Purchaser: Hong Tau, which is a company incorporated in the British Virgin Islands and is owned as to 51% by Welcome Success Worldwide Ltd (which is owned equally as to 50% by each of two directors of the Company, Mr. Sun Hiu Lu and Mr. Chu Kwan), and as to 49% by H.H.K. Finance Company Limited ("H.HK"). Neither Mr. Sun Hiu Lu nor Mr. Chu Kuan has a casting vote or control of Welcome Success Worldwide Ltd. Each of Ms. Huang Shuyun and Mr. Zhao Dake, a director of the Company and several of its subsidiaries respectively, is a director of HHK and Ms. Huang Shuyun is also a director of the parent company of HHK. HHK is a private company incorporated in Hong Kong with limited liability. Save as disclosed herein, Hong Tau was independent of the Company and did not hold any shares in the Company prior to the transaction. HHK is owned as to 80% by Heilongjiang Economic Development Corp. and as to 20% by Heilongjiang International Trust Investment Corp. Both of Heilongjiang Economic Development Corp. and Heilongjian International Trust Investment Corp. are PRC state-owned enterprises. Heilongjiang Economic Development Corp. is under the administration of the Heilongjiang Provincial Finance Department whereas Heilongjiang International Trust Investment Corp. is under the administration of the Heilongjiang Provincial Government. As a creditor to and shareholder of Profit Might (please see below), HHK had procured the appointment of Ms. Huang Shuyun and Mr. Zhao Dake as director of the Company and several of its subsidiaries respectively in order to be able to monitor the financial position of Profit Might. Reasons for the transaction: The one share in Victory Hunter, which is the subject of sale under the agreement, was registered in the name of Profit Might International Limited ("Profit Might"), which held the share as nominee in trust for Mr. Yau. Profit Might is owned as to 40% by Mr. Yau, as to 30% by HHK and as to 30% by a company which is owned as to 20% by Mr. Sun Hiu Lu, as to 33% by Mr. Chu Kwan and as to the rest by independent third parties ("Company X"). In May 1997, Profit Might borrowed an amount of approximately US$5,000,000 from HHK, an amount of US$3,000,000 from Company X and an amount of US$2,000,000 from another unrelated party. Since incorporation, Victory Hunter has been incurring losses and owes a bank in Hong Kong an amount of HK$70,000,000, secured by all the shares in the Company registered in the name of Victory Hunter, being approximately 24% of the shares in the Company. Victory Hunter currently has a negative asset value. The transaction will have no effect on the abovementioned loans outstanding and owing by Profit Might and the shares in the Company registered in the name of Victory Hunter will remain pledged to the bank. In view of the financial positions of Profit Might and Victory Hunter, Mr. Yau agreed to transfer the only issued share in Victory Hunter to Hong Tau. It is expected that Hong Tau will be in a better position to procure new funds to be injected into Victory Hunter and thereby improve its financial position. Purchase Price: The purchase price, being HK$1.00, has been determined by the parties after arm's length negotiations and taking into account the net deficit of Victory Hunter as reflected in its unaudited accounts for the year ended 31 March 1999. Completion: Completion took place on 31 May 1999 immediately after the agreement was signed. Change of directors: Mr. Yau resigned from the Board with effect from 31 May, 1999 and Hong Tau will appoint Mr. Sun Hiu Lu, Ms. Huang Shuyun, Mr. Chu Kwan and Mr. Zhao Dake as new directors of Victory Hunter and Mr. Zhao Dake as new director of the Company. Mr. Sun Hiu Lu and Ms. Huang Shuyun will be the Chairman and Deputy Chairman of the Company respectively. Impact on the Company: It is expected that a change in the single largest shareholder of the Company will not have negative impact on the Company. Hong Tau's intentions with respect to the Company and its subsidiaries: Hong Tau will review the financial and trading positions of the Company and its subsidiaries and will then determine the business plans for the Company and its subsidiaries and as to whether the shares in the Company registered in the name of Victory Hunter shall be redeemed from the bank. Hong Tau intends to hold its interest in the Company as long-term investment. General Information: Save as disclosed herein, the directors of the Company are not otherwise interested in the Company or Hong Tau. By order of the Board N P H International Holdings Limited Sun Hiu Lu Deputy Chairman Hong Kong, 31 May, 1999