Bloks Group Limited — Capital/Financing Update 2000

Feb 10, 2000

Listed Company Information

N P H INT'L<0182> - Announcement & Resumption of Trading 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) Update on financial position of the Company This announcement reports that the Board is not aware of the reasons for the recent increase in the price and trading volume of shares in the Company. The Company is in discussions with the Bank with respect to a possible restructuring of debts. No definitive agreement has been entered into between the Company and the Bank and other creditors of the Company and the restructuring may or may not proceed. If an agreement cannot be reached, it is possible that the Company may not be able to operate as a going concern. Investors are reminded to take extra caution when trading in the shares of the Company. Trading in the shares of the Company on The Stock Exchange of Hong Kong Limited was suspended at 10 a.m. on 8th February 2000 pending publication of this announcement. An application has been made to The Stock Exchange of Hong Kong Limited to resume trading in the shares of the Company from 10 a.m. on 10th February 2000. Recent Increase in Share Price This statement is made at the request of The Stock Exchange of Hong Kong Limited. The Board of the Company has noted the recent increase in the price and trading volume of the Company's shares and is not aware of any reasons for such increase. Financial Position of the Company As stated in the announcements of 23rd July 1999 and 6th September 1999, the Group had cash flow problems in relation to payment to bank, trade and other creditors. Based on information currently available to the Board, the total outstanding debts of the Group as at 31st December 1999 amount to approximately HK$155.8 million, all such debts being overdue. Of this amount, a sum of approximately HK$19 million represents judgement debts, approximately HK$82.3 million represents bank loans and approximately HK$54.5 million represents amounts due to trade and other creditors. As at 31st March 1999, the audited net liabilities of the Group amounted to approximately HK$95 million. Possible Debt Restructuring The Company has been in discussions with the Bank to which the Company owes HK$80 million with respect to a possible restructuring of debts. The restructuring proposals include a possible deferred payment of the debts due to the Bank and the Subscription by Hong Tau. The Subscription is still subject to negotiations and agreement to be made between the Company, the Bank and Hong Tau and the legal opinion from legal advisers in the PRC that it is not contradictory to PRC regulatory requirements. If the Subscription proceeds and its structure triggers general offer obligations under the Takeovers Code, Hong Tau will comply with all the requirements of the Takeovers Code and will make an application to the SFC for a waiver to make a general offer for the shares in the Company not already owned by Hong Tau and its concert parties. Such waiver may or may not be granted by the SFC. The Company and the Bank are in the course of negotiating on the detail terms of the restructuring proposals and have not yet entered into any definitive agreement. The Board anticipates that, if agreement can be reached, a formal agreement will be signed between the Company and the Bank within the next 2 to 3 weeks. If the Company and the Bank cannot agree on the terms of the restructuring, the restructuring proposals may not proceed. The Board will make further announcement(s) if there is any significant development on the proposals. The Company is also discussing with the other creditors with a view to agreeing on repayment schedules for the debt. No writ has been served on the Company in respect of its debts. So far no definitive agreement has been made between the Company and any of its creditors. The Board is also considering different means of raising funds for the Company. The Board will make such further announcement in due course as and when appropriate. Update on the Group'S Operations Notwithstanding the financial difficulties of the Group, the business of the Group is still in operation. The Company is currently able to maintain a balance of the operational expenses with its income. The cash flow requirements of the Company are supported by credit facilities granted by a bank and the suppliers of the Company continue to maintain business relationships with the Company and have agreed to supply goods on credit terms. If the restructuring proposals proceed, the cash flow problems of the Company may be resolved. If an agreement cannot be reached with the Bank, it is possible that the Company may not be able to continue its operations as a going concern. Save as disclosed above, the Board confirms that there is no other negotiation or agreement relating to any acquisition or realisation which is discloseable under paragraph 3 of the Listing Agreement, nor is the Board aware of any matter discloseable under the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a price-sensitive nature. Trading in the shares of the Company on The Stock Exchange of Hong Kong Limited was suspended at 10:00 a.m. on 8th February 2000 pending publication of this announcement. An application has been made to The Stock Exchange of Hong Kong Limited to resume trading in the shares of the Company from 10:00 a.m. on 10th February 2000. Investors are reminded to take extra caution when trading in the shares of the Company as there is no formal agreement with its bankers and creditors and the Company may or may not be able to reach agreements with its bankers and creditors in respect of debt restructuring. Definitions "Bank" the largest bank creditor of the Company "Board" the board of directors of the Company "Company" N P H International Holdings Limited "Group" the Company and its subsidiaries "Hong Tau" Hong Tau Investment Limited, which is the legal and beneficial owner of the entire issued share capital in Victory Hunter Holdings Limited, the single largest shareholder of the Company holding approximately 19.6% of the issued shares in the Company "PRC" the People's Republic of China "SFC" the Securities & Futures Commission "Subscription" the possible subscription of shares in the Company by Hong Tau By order of the Board N P H International Holdings Limited Huang Shuyun Deputy Chairman Hong Kong, 9th February 2000 The directors of the Company jointly and severally accept the full responsibility for the accuracy of the information contained herein and confirm, having made all reasonable enquiries that, to the best of their knowledge, opinions expressed herein have been arrived at after due and careful consideration and there are no other facts not contained herein, the omission of which would make any statement herein misleading.