Central Development Holdings Limited — Share Issue/Capital Change 2001

Aug 2, 2001

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.

Seapower Resources International Limited

(Incorporated in the Cayman Islands with limited liability)

Proposal for Reduction of Capital and Adjustment of

Nominal Value of Shares

The Board of Directors (“Directors”) of Seapower Resources International Limited (the “Company”) intends to put forward a proposal to the shareholders (the “Shareholders”) of the Company for the reduction of the Company’s capital by cancelling paid up capital to the extent of HK$0.04 on each of the issued shares of the Company by reducing the nominal value of all the issued and unissued shares of the Company from HK$0.05 each to HK$0.01 each (the “Reduction of Capital”). The credit arising from the Reduction of Capital of HK$61,881,713.16 and a transfer from the share premium account of the Company of HK$276,033,973.30 will be applied towards the elimination of the accumulated losses of the Company of HK$337,915,686.46 as at 31st March, 2001. Upon effectiveness of the Reduction of Capital, there will be a remaining balance of HK$156,687,605.44 in the share premium account. All the unissued share capital of the Company will be cancelled and subsequently increased to the original authorised amount of HK$1,000,000,000.

The Reduction of Capital is subject to the conditions contained in the section headed “Conditions” below.

A circular of the Company containing details of the Reduction of Capital and a notice convening an extraordinary general meeting (the “Extraordinary General Meeting”) to approve the Reduction of Capital will be posted to the Shareholders of the Company as soon as practicable.

REDUCTION OF CAPITAL

The Company is an investment holding company with its subsidiaries principally engaged in cold storage warehousing, provision of logistics services, property and investment holding.

As at 31st March, 2001, the Company recorded an accumulated loss of HK$337,915,686.46. The proposed Reduction of Capital will allow the Company to eliminate the accumulated losses and as a result, will provide greater flexibility for the Company’s dividend policy when the Company returns a profitable operation in the future.

Recently, the shares of the Company (the “Shares”) had traded at prices near their nominal value of HK$0.05 each, ranging from HK$0.06 to HK$0.079 per Share. The closing price on 31st July, 2001 was HK$0.069 per Share. The Directors believe that if the Company decides to issue new Shares in the future, in order to attract support from the Shareholders and/or public investors to the new issue, reference has to be made to the market price such that the issue price may fall below the nominal value of the Shares, subject to market conditions. Under the Companies Law of the Cayman Islands (the “Companies Law”), a company may not issue shares at a discount to the nominal value of such shares unless, inter alia, the issue is authorised by a resolution of the Shareholders of the Company and is sanctioned by the Grand Court of the Cayman Islands (the “Court”). With the Reduction of Capital, the reduction of the nominal value of the Shares of the Company from HK$0.05 to HK$0.01 will provide the Company with greater flexibility in pricing any new issue of shares in the future, if the Company considers this appropriate. At present, the Directors have no intention to issue new Shares.

The Directors propose the Reduction of Capital will be effected in the following manner:

(i) the paid up capital and nominal value of the Shares be reduced by HK$0.04 per Share by cancelling an equivalent amount of paid up capital per Share so that the nominal value of each such share will be reduced from HK$0.05 to HK$0.01. At present, the authorised capital of the Company is HK$1,000,000,000 comprising 20,000,000,000 shares of HK$0.05 each, of which 1,547,042,829 Shares have been issued and are fully paid. Such issued share capital will be reduced by HK$61,881,713.16 to HK$15,470,428.29 consisting of 1,547,042,829 Shares of HK$0.01 each;

(ii) on the basis of 1,547,042,829 Shares presently in issue, a credit of HK$61,881,713.16 will arise as a result of the Reduction of Capital. Such credit will be applied towards the elimination of same amount of accumulated losses standing in the accumulated profit and loss account of the Company as at 31st March, 2001 from HK$337,915,686.46 to HK$276,033,973.30;

(iii) the share premium account of the Company, which as at 31st March, 2001 had a balance of HK$432,721,578.74 will be applied to eliminate the balance of the audited accumulated losses of the Company as at 31st March, 2001 of HK$276,033,973.30 after the elimination of HK$61,881,713.16 arising from the Reduction of Capital. On the basis that the balance of the share premium account of the Company remains unchanged as at the effective date of the Reduction of Capital, there will be a remaining balance of HK$156,687,605.44 standing to the credit of the share premium account of the Company upon the Reduction of Capital becoming effective and the offsetting of HK$276,033,973.30 of share premium account against the audited accumulated losses of the Company as at 31st March, 2001; and

(iv) all of the authorised but unissued share capital of the Company of HK$922,647,858.55 divided into 18,452,957,171 Shares of HK$0.05 each will be cancelled and subsequently increased to the original authorised share capital of HK$1,000,000,000 by the creation of such number of new shares of HK$0.01 each so that the aggregate value of shares issued or issuable will be equal to the original authorised share capital of HK$1,000,000,000 (depending on the number of issued shares as at the effective date of the Reduction of Capital). On the basis of 1,547,042,829 Shares presently in issue, 98,452,957,171 new shares of HK$0.01 each will be created. Upon the Reduction of Capital becoming effective and on the basis of 1,547,042,829 Shares presently in issue, the authorised share capital of the Company will be HK$1,000,000,000 comprising 100 billion new Shares of HK$0.01 each, of which 1,547,042,829 Shares have been issued and fully paid.

Implementation of the Reduction of Capital will not, of itself, alter the underlying assets, business operations, management or financial position of the Company or the proportional interests of the Shareholders in the Company, other than the payment of related expenses of approximately HK$200,000. The Directors believe that the Reduction of Capital will not have an adverse effect on the financial position of the Company or the Group. The Shares after the Reduction of Capital will rank pari passu in all respects with each other and the Reduction of Capital will not result in any change in the relative rights of the Shareholders.

CONDITIONS

The Reduction of Capital is conditional on the following conditions being fulfilled:

(a) the passing at the Extraordinary General Meeting of a special resolution to approve the Reduction of Capital;

(b) the confirmation by the Court and the registration by the Registrar of Companies of an office copy of the Court order and the minute containing the particulars required under the Companies Law; and

(c) the Listing Committee of The Stock Exchange of Hong Kong Limited (“Stock Exchange”) granting the listing of, and permission to deal in the new ordinary shares in the capital of the Company upon the Reduction of Capital becoming effective (“New Shares”).

FREE EXCHANGE OF CERTIFICATES FOR NEW SHARES AND TRADING ARRANGEMENT

As the Court hearing dates have yet been confirmed, the effective date of the Reduction of Capital is not ascertainable at present. Should the Reduction of Capital be effective, Shareholders may submit existing certificates for the Shares to the registrar of the Company, Progressive Registration Limited, 5/F., Wing On Centre, 111 Connaught Road Central, Hong Kong for exchange, at the expense of the Company up to one month from the effective date, for certificates for the New Shares. Details of such free exchange of share certificates and the relevant trading arrangement will be announced as soon as the effective date of the Reduction of Capital is ascertainable.

GENERAL

Application will be made to the Listing Committee of the Stock Exchange for granting the listing of, and permission to deal in the New Shares.

A circular containing details of the Reduction of Capital together with a notice convening the Extraordinary General Meeting to consider, and if thought fit, to approve the Reduction of Capital will be despatched to the Shareholders as soon as practicable.

A further announcement will be made to inform the Shareholders of the effective date of the Reduction of Capital.

By order of the Board

Annie Yuen Wing Kwan

Company Secretary

Hong Kong, 1st August, 2001

Please also refer to the published version of this announcement in the i Mail dated 2/8/2001.