CHINA STATE CONSTRUCTION DEVELOPMENT HOLDINGS LIMITED — Share Issue/Capital Change 2000

Feb 17, 2000

Listed Company Information

UNIVERSAL APPLI<0419> - Announcement UNIVERSAL APPLIANCES LIMITED (Incorporated in Hong Kong with limited liability) Placing of existing shares and subscription for new shares Techral has sold 390 million Shares at HK$0.60 per Share to independent investors through Vickers Ballas Hong Kong Limited and Worldsec International Limited as placing agents. Techral has agreed to subscribe for 390 million new Shares at HK$0.60 per Share. The net proceeds of approximately HK$228 million to be received from the Subscription are intended to be used for financing the balance of the consideration payable for the DVB Preference Shares, for research and development on the Company's second generation digital video broadcasting set-top boxes and for general working capital purposes. The Subscription is conditional upon: (i) completion of the Placing; (ii) the Stock Exchange granting listing of and permission to deal in the Subscription Shares; and (iii) the grant of the Waiver. The Placing Shares represent approximately 16.39% of the existing issued ordinary share capital of the Company. The Subscription Shares represent approximately 16.39% of the existing issued ordinary share capital of the Company and approximately 14.09% of the issued ordinary share capital of the Company as enlarged by the Subscription. Techral is currently beneficially interested in approximately 26.91% of the existing issued ordinary share capital of the Company. Techral is a subsidiary of Kwan Wing. Kwan Wing is itself currently beneficially interested in approximately 15.15% of the existing issued ordinary share capital of the Company. Mr. Johnson Ko, the Chairman of the Company, is the sole owner of Kwan Wing and is himself currently beneficially interested in approximately 0.78% of the issued ordinary share capital of the Company. Techral, Kwan Wing and Mr. Johnson Ko are together currently beneficially interested in an aggregate of approximately 42.84% of the existing issued ordinary share capital of the Company. The Placing will reduce the aggregate holding of Techral, Kwan Wing and Mr. Johnson Ko to approximately 26.44% of the Company's existing issued ordinary share capital and the Subscription will then increase such holding to approximately 36.81% of the Company's enlarged issued ordinary share capital. Placing Vendor : Techral The shareholding interests of Techral are described below Placees : more than six private and professional investors independent of, not acting in concert and not associated with the directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates (as defined in the Listing Rules) Placing Agents : Vickers Ballas Hong Kong Limited and Worldsec International Limited, each of which is independent of, not acting in concert and not associated with the directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates (as defined in the Listing Rules) 290 million Shares were placed through Vickers Ballas Hong Kong Limited and 100 million Shares were placed through Worldsec International Limited Placing Shares : 390 million Shares held by Techral representing approximately 16.39% of the existing issued ordinary share capital of the Company Placing price : HK$0.60 per Share, representing a discount of approximately 9.09% to the closing price of HK$0.66 per Share quoted on the Stock Exchange on 16th February, 2000 and a discount of approximately 1.32% to the average closing price of approximately HK$0.608 per Share for the 10 trading days up to and including 16th February, 2000 Rights : the Placing Shares are sold free of any third party rights and shall be entitled to receive all dividends and distributions which may be declared, made or paid after the date of completion of the Placing Condition : the Placing is unconditional and completion took place today Conditional Subscription Agreement dated 16th February, 2000 Subscribers : Techral Subscription Shares : 390 million new Shares to be issued to Techral representing approximately 16.39% of the existing issued ordinary share capital of the Company and approximately 14.09% of the issued ordinary share capital of the Company as enlarged by the Subscription respectively Subscription price : HK$0.60 per Share, same as the Placing price Expenses of approximately HK$6 million relating to the Placing and the Subscription will be borne by the Company Conditions :* completion of the Placing; * the Stock Exchange granting listing of and permission to deal in the Subscription Shares; and * the grant of the Waiver An application will be made by the Company to the Stock Exchange for the listing of and permission to deal in the Subscription Shares. An application will be made by Techral to the Executive for the grant of the Waiver. Expected completion date : on or before 1st March, 2000, being the fourteenth day after the date of the Placing (or such later date as the Company and Techral may agree) Mandate to issue new Shares : the Subscription Shares will be issued under the general mandate granted to the directors of the Company at the annual general meeting held on 28th June, 1999. Ranking : the Subscription Shares, when fully paid, will rank pari passu in all respects with the existing Shares in issue Effects on shareholding The effects of the Placing and the Subscription on the shareholding structure of the Company are as follows: Before Placing and After Placing but After Placing and Subscription before Subscription Subscription Techral 26.91% 10.51% 23.12% Kwan Wing 15.15% 15.15% 13.02% Mr. Johnson Ko 0.78% 0.78% 0.67% 42.84% 26.44% 36.81% Directors 3.48% 3.48% 2.98% Public 53.68% 70.08% 60.21% 100.00% 100.00% 100.00% Mr. Johnson Ko has a 100% direct interest in Kwan Wing and Kwan Wing has a 96% beneficial interest in Techral. Reasons for the Placing and the Subscription and the intended use of proceeds The Company is principally engaged in the business of manufacturing and distribution of consumer electronic, household electrical and telecommunications products. The Company also holds a controlling interest in DVB (Holdings) Limited, a company listed on the Stock Exchange, which is engaged in the provision of a digital platform for value-added services through satellite, terrestrial fibre optic networks or other forms of telecommunication and cable networks, video and other digital image and sound transmission, related software and the management of subscriber base business in the PRC. The directors of the Company consider that the Placing and the Subscription will broaden the shareholders' base and the capital base of the Company. The net proceeds of approximately HK$228 million to be received from the Subscription are intended to be used for financing the balance (US$16,471,233, approximatley HK$127,652,056) of the consideration payable for the DVB Preference Shares (details of which were set out in the Company's announcement dated 28th January, 2000), approximately HK$20 million for research and development on the Company's second generation digital video broadcasting set-top boxes and the balance for general working capital purposes. It was stated in the announcement dated 28th January, 2000 that the consideration for the acquisition of the DVB Preference Shares would be funded by internal resources and borrowings. In view of the subsequent favourable market conditions, the Directors reconsidered the matter and decided to raise funds by means of the Subscription with a view to using part of the proceeds therefrom to pay for the balance of the consideration payable for the DVB Preference Shares. The Directors believe that this will enable the Company to avoid incurring interest charges in funding payment of the balance of the consideration and will be in the best interests of the Company. Definitions "Code" Hong Kong Code on Takeovers and Mergers "Company" Universal Appliances Limited "DVB Preference Shares" 15 million non-voting cumulative preference shares of US$1.00 each in the capital of DVB (Group) Limited which are exchangeable into ordinary shares of DVB (Holdings) Limited, a subsidiary of the Company the shares of which are listed on the Stock Exchange "Executive" the Executive Director of the Corporate Finance Division of the Securities and Futures Commission (or any delegate of the Executive Director) "Group" the Company and its subsidiaries "Kwan Wing" Kwan Wing Holdings Limited, a company incorporated in the British Virgin Islands "Listing Rules" Rules Governing The Listing of Securities on the Stock Exchange "Placing" the placing of the Placing Shares "Placing Shares" 390 million existing Shares "Shares" ordinary shares of HK$0.18 each in the capital of the Company "Stock Exchange" The Stock Exchange of Hong Kong Limited "Subscription" the subscription by Techral of the Subscription Shares "Subscription Shares" 390 million new Shares "Techral" Techral Holdings Limited, a company incorporated in the British Virgin Islands "Waiver" the waiver by the Executive of any obligation arising as a result of the Subscription on the part of Techral and parties acting in concert with Techral to make a general offer for all the issued securities of the Company other than those already owned or agreed to be acquired or subscribed by them under Rule 26 of the Code By Order of the Board UNIVERSAL APPLIANCES LIMITED Johnson Ko Chairman Hong Kong, 16th February, 2000 (An exchange rate of US$1 = HK$7.75 has been used in this announcement.) The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.