CK Asset Holdings Limited — Proxy Solicitation & Information Statement 2002

Mar 8, 2002

IMPORTANT

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Guangshen Railway Company Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this document, 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 document.

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(a joint stock limited company incorporated in the People’s Republic of China)
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PROPOSED ISSUE OF A SHARES IN

THE PEOPLE’S REPUBLIC OF CHINA

The notice convening an extraordinary general meeting of Guangshen Railway Company Limited to be held at the Meeting Room, 3rd Floor, 1052 Heping Road, Shenzhen, Guangdong Province, the People’s Republic of China on Tuesday, 23rd April, 2002 at 2:00 p.m. is set out on pages 6 to 7 of this circular.

7th March, 2002

CONTENTS

	Page
Definitions .................................................................................................................................	1
Letter from the Chairman
Introduction ............................................................................................................................	2
A Share Issue .........................................................................................................................	3
Structure of A Share Issue ....................................................................................................	3
Reasons for and benefit of the A Share Issue ....................................................................	4
Effects of the A Share Issue on the Company’s capital structure....................................	4
Extraordinary General Meeting ...........................................................................................	5
General....................................................................................................................................	5
Notice of Extraordinary General Meeting .........................................................................	6

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DEFINITIONS

In this circular, the following expressions have the meanings set out below unless the context requires otherwise:

• “ADSs” American depositary shares, each representing 50 H Shares

• “A Share(s)” the domestic ordinary share(s) of the Company with a nominal value of RMB1.00, each proposed to be issued to institutional and public investors in the PRC by the Company

• “A Share Issue” the proposed issue of not more than 700 million A Shares to institutional and public investors in the PRC by the Company, in which such A Shares are proposed to be listed on the Shanghai Stock Exchange

• “Board” the board of directors of the Company “Company” Guangshen Railway Company Limited, a joint stock limited company incorporated in the PRC on 6th March 1996, the H Shares of which are listed on the HKSE and the ADSs of which are listed on the NYSE

• “Company Register” the register of members of the Company “CSRC” China Securities Regulatory Commission “EGM” the Extraordinary General Meeting of the Company to be held on 23rd April 2002 at 2:00 p.m.

• “H Shares” the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each and listed on the HKSE

• “HKSE” The Stock Exchange of Hong Kong Limited “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “NYSE” The New York Stock Exchange, Inc. “PRC” the People’s Republic of China excluding, for the purpose of this circular, Hong Kong, Macau and Taiwan

• “RMB” Renminbi yuan, the lawful currency of the PRC

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LETTER FROM THE CHAIRMAN

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(a joint stock limited company incorporated in the People’s Republic of China)

Executive Directors: Zhang Zhengqing (Chairman) Li Daihua Wu Yiquan Li Qingyun Li Peng

Registered Address: No. 1052 Heping Road Shenzhen Guangdong Province The People’s Republic of China

Non-executive Directors

Shen Jun Wu Houhui

Independent Non-executive Directors

Chang Loong Cheong Deborah Kong

7th March, 2002

To the Shareholders

Dear Sir/Madam,

PROPOSED ISSUE OF A SHARES IN

THE PEOPLE’S REPULBIC OF CHINA

INTRODUCTION

The Company refers to its previous announcement dated 8th February 2001 regarding the proposed allotment and issue of not more than 550 million new A Shares to finance its proposed construction of the fourth track of Guangshen Railway. The proposed issue has not proceeded as scheduled and the mandate authorising the Board to handle all relevant matters in connection with the proposed issue at the extraordinary general meeting held on 8th February 2001 has expired. In the circumstances, the Company intends to seek from the shareholders a new mandate authorising the Board to proceed with the A Share Issue and to handle all relevant matters in connection therewith.

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LETTER FROM THE CHAIRMAN

A SHARE ISSUE

In order to increase the Company’s transportation capacity and competitiveness in the future, the Company intends to invest in the following projects:—

• (i) construction of suburb passenger railway tracks in Guangzhou - Xintang;

• (ii) construction of technical support and maintenance units for passenger vehicles and ancillary construction works in the northern part of Shenzhen; and

• (iii) purchase of locomotives.

The Company intends to finance the aforesaid projects from the proceeds of the A Share Issue. Such A Shares are proposed to be listed on the Shanghai Stock Exchange. At present, the H Shares are listed on the HKSE and the ADSs are listed on the NYSE. This circular contains further information relating to the A Share Issue and a notice of the EGM.

STRUCTURE OF A SHARE ISSUE

The proposed structure of the A Share Issue is set out below:

Type of Securities: RMB denominated ordinary shares;

• Number of A Shares Not more than 700 million shares representing 24.1% of the existing to be issued: aggregate issued state-owned domestic shares;

• Par value: RMB1.00 per share;

• Target subscribers:

Natural persons and institutional investors within the PRC (except otherwise restricted by the applicable PRC laws or regulations). A Shares will not be offered outside of the PRC;

• Issue price and pricing process:

• A “book-building” process will be conducted to determine an appropriate issue price for the A Share Issue.

Use of proceeds:

It is intended that approximately RMB1,560 million will be raised from the A Share Issue. The net proceeds of the A Share Issue are intended to be used to finance (i) construction of suburb passenger railway tracks in Guangzhou - Xintang; (ii) construction of technical support and maintenance units for passenger vehicles and ancillary construction works in the northern part of Shenzhen; and (iii) purchase of locomotives. The total costs of the three projects are estimated to be around RMB2,800 million. The balance of the fund required for the projects will be funded by internal resources of the Company or borrowings from financial institutions.

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LETTER FROM THE CHAIRMAN

REASONS FOR AND BENEFITS OF THE A SHARE ISSUE

The A Share Issue will facilitate the financing of (i) construction of suburb passenger railway tracks in Guangzhou - Xintang; (ii) construction of technical support and maintenance units for passenger vehicles and ancillary construction works in the northern part of Shenzhen; and (iii) purchase of locomotives. These projects are desirable infrastructure projects in terms of their expected favourable economic results and stable returns.

The Board expects that, upon completion of these projects,

• (i) the number of commuters from Guangzhou, Shenzhen and Zhujing Delta area will be increased and the inter-city express train transport service between Guangzhou and Shenzhen can be further promoted and intensified effectively and the income of the Company will accordingly increase;

• (ii) the number of long distance passengers trains and fright transportation will be increased, hence bringing extra profits to the Company; and

• (iii) the Company’s transportation ability and capacity will be increased.

Completion of the aforesaid three projects is subject to approval by the relevant authorities in the PRC. There is no assurance that such approval will be forthcoming.

EFFECTS OF THE A SHARE ISSUE ON THE COMPANY’S CAPITAL STRUCTURE

Set out below is a summary of the changes in the shareholding percentage of the Company prior to and immediately upon the completion of the A Share Issue based on the assumption that the entire 700 million A Shares will be issued:

that the entire 700 million	A Shares will be issued:
Type of shares 1. Unlisted Shares State-owned domestic shares 2. Listed Shares A Shares H Shares Total	Shareholding Prior to the A percentage (%) Share Issue (Approximate) 2,904,250,000 66.99 — — 1,431,300,000 33.01 4,335,550,000 100.00	Immediately upon the completion of Shareholding the A Share Percentage (%) Issue (Approximate) 2,904,250,000 57.68 700,000,000 13.90 1,431,300,000 28.42 5,035,550,000 100.00
			100.00

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LETTER FROM THE CHAIRMAN

EXTRAORDINARY GENERAL MEETING

The EGM is scheduled to take place at 2:00 p.m. on 23rd April 2002 at which special resolutions will be proposed to consider and, if thought fit, to approve, inter alia, the A Share Issue and authorising the Board to make such amendments to articles 20, 21 and 24 of the articles of association of the Company as it shall deem proper or desirable to reflect the revised share capital of the Company. The Company Register will be closed from 22nd March 2002 to 23rd April 2002 (both days inclusive). In order to qualify for attendance and voting at the EGM, transfer documents accompanied by share certificates and other appropriate documents must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Hong Kong Registrars Limited at 2nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong by 4:00 p.m. on 21st March 2002. Shareholders whose names appear on the Company Register at the close of business on 22nd March 2002, or their proxies, will be entitled to attend and vote at the EGM. It should be noted that the A Share Issue, upon the approval from the shareholders of the Company at the EGM, is still subject to the approval of CSRC and approval of the Shanghai Stock Exchange to the listing and trading of the A Shares on the Shanghai Stock Exchange.

At the EGM, special resolutions will be tabled to authorise the Board to make such amendments to the articles of association of the Company as it thinks fit, so as to, inter alia, increase the registered share capital of the Company and to reflect the new capital structure of the Company.

The approval to make the A Share Issue and mandate authorising the Board to do all relevant matters in connection therewith shall be valid (i) for one year from the date of passing of such resolutions at the EGM; or (ii) until the date on which the authority set out in the resolutions is revoked or varied by the requisite special resolutions of the members in general meeting in accordance with the Company Law of the PRC and the articles of association of the Company, whichever is the earlier.

GENERAL

There is no assurance that the A Share Issue will proceed or that the terms of the A Share Issue will be as set out herein. Investors are advised to exercise caution in dealing in the shares of the Company. Further details about the A Share Issue will be disclosed in newspapers in the PRC at the time of the A Share Issue, an extract of which will be published in newspapers in Hong Kong.

Yours faithfully, Zhang Zhengqing

Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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(a joint stock limited company incorporated in the People’s Republic of China)

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting (the “ EGM ”) of Guangshen Railway Company Limited (the “ Company ”) will be held at the Meeting Room at 3/F, No. 1052 Heping Road, Shenzhen, Guangdong Province, the People’s Republic of China, on 23rd April 2002 (Tuesday) at 2:00 p.m., for the following purposes:

To consider and, if thought fit, to pass each of the following resolutions as a special resolution:

1. To consider and approve the proposal for compliance of the subject new issue of A Shares with “Administrative Measures on Issuance of New Shares of Listed Companies”;

2. To consider and approve the proposal for the application and implementation by way of public issue (“ A Share Issue ”) of Renminbi-denominated ordinary shares up to a maximum of 700 million A Shares of the Company (“ A Shares ”);

3. To consider and approve the feasibility of the investment projects which are to be financed with the net proceeds to be received from the A Share Issue;

4. To consider and approve the statement relating to the use of proceeds received from the previous capital raising by the Company and the report of Pan-China (Schinda) Certified Public Accountants on the use of proceeds from such issue;

5. To consider and approve, upon the completion of the A Share Issue, that the existing and new shareholders of the Company will all be entitled to the undistributed profits of the Company;

6. To consider and authorize the Board of Directors (“ Board ”) to handle for and on behalf of the Company all relevant matters in connection with the A Share Issue; and

7. To authorize the Board to make such amendments to articles 20, 21, and 24 of the articles of association of the Company as it shall deem proper or desirable to reflect the revised share capital of the Company.

By Order of the Board Yao Xiaocong

Company Secretary

Shenzhen, the PRC 7th March, 2002

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. Eligibility for attending the EGM

Shareholders and their proxies of the Company whose names appear on the registers of shareholders of the Company at the close of business on 22nd March 2002 shall have the right to attend the EGM.

2. Registration procedures for attending the EGM

• i. Each shareholder entitled to attend and vote at the EGM may appoint one or more proxies (whether a shareholder of the Company or not) to attend and vote on his/her behalf. Each shareholder or his/ her proxy should produce proof of identity when attending the EGM.

• ii. A proxy should be appointed by written instrument signed by the appointor or his/her attorney. If the written instrument is signed by the attorney of the appointor, the written authorization or other authorization documents of such attorney should be notarized. In order to be valid, the written authorization or other authorization documents which have been notarized (if any) together with the completed proxy form must be delivered to the registered address of the Company 24 hours before the time of the holding of the EGM.

• iii. The register of H Shareholders of the Company will be closed from 22nd March 2002 to 23rd April 2002 (both days inclusive), during which period no transfer of H Shares will be registered.

• iv. Shareholders of the Company who intend to attend the EGM must complete the attendance confirmation reply form and return the same to the registered address of the Company on or before 3rd April, 2002.

3. Other business

• i. The duration of the EGM is expected not to exceed one day. Shareholders who attend the EGM shall arrange for food and accommodation at their own cost.

• ii. Address of the Company: No. 1052, Heping Road Shenzhen Guangdong Province The People’s Republic of China

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