CITIC Limited — Capital/Financing Update 2006

Oct 5, 2006

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.

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 267)

CONNECTED TRANSACTION

ACQUISITION OF 10% OF CITIC SQUARE CO, SHANGHAI

The Directors announce that on 5 October 2006, Eldwin (a wholly owned subsidiary of CITIC Pacific) agreed to purchase 10% of 上海中信泰富廣場有限公司 (CITIC Square Co) (which in turn holds 100% of 上海中信 泰富廣場 (CITIC Square)) from JingAn for RMB245 million (approximately HK$241 million).

JingAn is a substantial shareholder of CITIC Square Co, a subsidiary of the Company. Accordingly, JingAn is a connected person of the Company and the Share Transfer Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules.

1. DETAILS OF THE SHARE TRANSFER AGREEMENT

Date 5 October 2006

Parties

(1) Eldwin, a wholly owned subsidiary of the Company, as purchaser

(2) JingAn, a holder of a 10% equity interest in CITIC Square Co, as seller

Assets

10% equity interest in CITIC Square Co.

Consideration

The consideration for the 10% equity interest in CITIC Square Co is RMB245 million (approximately HK$241 million), to be paid within five working days from getting the approval of transfer by Shanghai Foreign Investment Commission.

As at 31 December, 2005, the audited net asset value before deducting deferred taxation (adjusted to comply with Hong Kong accounting standards) attributable to the 10% interest in CITIC Square Co was HK$239 million.

The consideration was determined after arm’s length negotiation with reference to the aforesaid adjusted audited net asset value before deducting deferred taxation, which reflected the valuation of CITIC Square Co’s asset as at 31 December 2005.

The original investment amount of JingAn in respect of 10% interest in CITIC Square Co i.e. its registered capital contribution in 1994 was US$6 million (approximately HK$46.8 million).

The consideration will be funded from internal resources of the Company.

Conditions

Completion is conditional upon, Shanghai Foreign Investment Commission’s approvals being obtained for the transfer of 10% equity interest of CITIC Square Co. If the aforesaid approval cannot be obtained within 12 months from the date of the Share Transfer Agreement, the Share Transfer Agreement will be terminated.

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Assets and ownership structure

CITIC Square Co’s asset is 100% of CITIC Square. CITIC Square is situated at 1168 Nanjing Xi Lu, JingAn District, Shanghai (上海市靜安區南京西路 1168號 ).

For the year ended 31 December 2004 , the audited net profits before and after taxation and extraordinary items (adjusted to comply with Hong Kong accounting standards) of CITIC Square Co were HK$155 million and HK$102 million respectively.

For the year ended 31 December 2005 , the audited net profits before and after taxation and extraordinary items (adjusted to comply with Hong Kong accounting standards) of CITIC Square Co were HK$336 million and HK$238 million respectively.

The Group now has an attributable equity interest of 79.998% in CITIC Square Co and this will be increased to 89.998% upon the completion of the acquisition.

The charts below show the structure of the ownership of CITIC Square Co prior to and after the acquisition.

Prior to the acquisition

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----- Start of picture text ----- The Company100%Eldwin(BVI)SwireProperties Limited(HK)16.67% 83.33%Join ResourcesLimited JingAn(HK) (PRC)60% 30% 10%CITIC Square Co(PRC)100%CITIC Square----- End of picture text -----

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----- Start of picture text ----- After the acquisition----- End of picture text -----

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----- Start of picture text ----- The Company100%Eldwin(BVI)SwireProperties Limited(HK)16.67% 83.33%Join ResourcesLimited(HK)60% 40%CITIC Square Co(PRC)100%CITIC Square----- End of picture text -----

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2. REASONS FOR AND BENEFITS OF THE SHARE TRANSFER AGREEMENT

The Company has the view that the PRC property market will maintain a strong growth in the medium and long term. CITIC Square is situated at Nanjing Xi Lu which is the prime location of commercial and business hub in Shanghai and the acquisition can enhance the value of the Company as a whole. Moreover, after the acquisition, Eldwin and Join Resources Limited will have full control of the board of directors of CITIC Square Co which can maximize our autonomy to manage and enhance the return of this investment.

The Directors (including the independent non-executive Directors) consider that the Share Transfer Agreement is on normal commercial terms and fair and reasonable and in the interests of the shareholders of the Company.

3. GENERAL

The Group is engaged in a diversified range of businesses, including manufacturing of special steel, property development and investment, basic infrastructure (such as power generation, aviation, tunnels and communications) and distribution of motor vehicles and consumer products.

JingAn is a substantial (10%) shareholder of CITIC Square Co, a subsidiary of the Company.

JingAn is engaged in the business of selling various merchandise including electrical equipment, construction materials, chemical materials (excluding dangerous materials), computers and software.

The Share Transfer Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules. Details of the Share Transfer Agreement will also be set out in the published annual report and accounts of the Company.

4. DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings:

“CITIC Square”	上海中信泰富廣場CITIC Square, situated at 1168 Nanjing Xi Lu,
	Jingan District, Shanghai, PRC;
“CITIC Square Co”	上海中信泰富廣場有限公司(Shanghai CITIC Square Co., Ltd.),
	a subsidiary of the Company;
“CITIC Pacific” or the “Company”	CITIC Pacific Limited;
“connected person”	has the meaning given to it by the Listing Rules;
“Directors”	the directors of the Company;
“Eldwin”	Eldwin Corporation, a company incorporated in the British Virgin
	Islands and a wholly owned subsidiary of the Company;
“Group”	CITIC Pacific and its subsidiaries or, where the context so requires,
	any of them (as defined under the Listing Rules);
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China;
“HK$”	Hong Kong dollars;
“JingAn”	上海靜安城商貿有限公司(Shanghai Jingan City Trading Co.,
	Ltd.), a holder of a 10% equity interest in CITIC Square Co and a
	connected person of CITIC Pacific;
“Listing Rules”	Rules Governing the Listing of Securities on The Stock Exchange of
	Hong Kong Limited;
“PRC”	the People’s Republic of China;
“RMB”	Renminbi;

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“Share Transfer Agreement”

the sale and purchase agreement together with a supplemental agreement both dated 5 October 2006 entered into between Eldwin and JingAn for the purchase and sale of a 10% equity interest in CITIC Square Co;

“Stock Exchange”

The Stock Exchange of Hong Kong Limited; and

“US$” US dollars.

For illustration purpose, conversion of RMB to HK$ is based on the exchange rate of RMB1= HK$0.985; conversion of US$ to HK$ is based on the exchange rate of US$1= HK$7.8.

By Order of the Board CITIC PACIFIC LIMITED Alice Tso Mun Wai Company Secretary

Hong Kong, 5 October 2006

As at the date of this announcement, the executive directors of the Company are Messrs Larry Yung Chi Kin (Chairman), Henry Fan Hung Ling, Peter Lee Chung Hing, Norman Yuen Kee Tong, Vernon Francis Moore, Li Shilin, Carl Yung Ming Jie, Liu Jifu, Leslie Chang Li Hsien, Chau Chi Yin, Milton Law Ming To and Wang Ande; the non-executive directors of the Company are Messrs Willie Chang, André Desmarais, Chang Zhenming and Peter Kruyt (alternate director to Mr. André Desmarais); and the independent non-executive directors of the Company are Messrs Hamilton Ho Hau Hay, Alexander Reid Hamilton, Hansen Loh Chung Hon and Norman Ho Hau Chong.

“Please also refer to the published version of this announcement in The Standard and Hong Kong Economic Times.”

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