Computer And Technologies Holdings Limited — Capital/Financing Update 2004

Dec 8, 2004

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representations 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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CHINA AEROSPACE INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 31)

DEBT RESTRUCTURING

The Board announced that on 7 December 2004, a Debt Restructuring Deed was entered into between Bank of China (Hong Kong) Limited as the lender, CASIL Clearing Limited and CASIL Properties Limited as the borrowers and the Company as the guarantor.

The Company and the Borrowers have not repaid the Previous Debt, totaling HK$642,280,420.89 as at 16 January 2004. At the request of the Company and the Borrowers, the Lender agreed to restructure the repayment of the Previous Debt and enter into the Debt Restructuring Deed.

Pursuant to the terms of the Debt Restructuring Deed, the Company and the Borrowers agreed to repay to the Lender the Restructured Loan totaling HK$435,192,987.48 and interest thereon and waived the Previous Debt. The Previous Debt will be deemed to be repaid in full and the Company and the Borrowers shall be released from their repayment obligations under the Previous Debt.

The Restructuring constitutes price sensitive information relating to the Company and is disclosed under Chapter 13.09 of the Listing Rules.

At the request of the Company, trading in the shares on the Stock Exchange had been suspended from 9:30 a.m. on 8 December 2004. Application has been made by the Company to the Stock Exchange for the resumption of trading in the shares on the Stock Exchange with effect from 9:30 a.m. on 9 December 2004.

On 7 December 2004, Bank of China (Hong Kong) Limited, the Company, CASIL Clearing Limited and CASIL Properties Limited, both wholly-owned subsidiaries of the Company, entered into a Debt Restructuring Deed.

In consideration of the Company and the Borrowers complying with their obligations under the Debt Restructuring Deed, the Lender has agreed to waive the Company’s and the Borrowers’ obligations to repay the Previous Debt totaling HK$642,280,420.89 as at 16 January 2004. The Previous Debt owed by the Company and the Borrowers will be deemed to be repaid in full and the Company and the Borrowers shall be released from their repayment obligations under the Previous Debt. The Previous Debt comprised of loans advanced by the Lender’s predecessor banks to the Borrowers for working capital purposes on various dates prior to 1 October 2001.

The Company and the Borrowers will, according to the terms of the Debt Restructuring Deed, repay the Restructured Loan in the sum of HK$435,192,987.48 together with interest, in the following manner:

• (i) a sum of HK$1,240,906.97 will be repaid to the Lender within 3 months from the date of the Debt Restructuring Deed;

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• (ii) a binding agreement for the sale of the Charged Property will be entered into within 3 months from the date of the Debt Restructuring Deed, and the Company will forward the sale proceeds arising from the sale of the Charged Property to the Lender in order to repay a portion of the Restructured Loan;

• (iii)the Company will procure Sure Full to enter into negotiations with Independent Third Parties for the sale of the Sure Full Properties within 3 months from the date of the Debt Restructuring Deed and the Company will forward the sale proceeds arising from the sale of the Sure Full Properties to the Lender in order to repay a portion of the Restructured Loan;

• (iv) the Company and the Borrowers will repay the remaining sum of the Restructured Loan in 10 installments. The first repayment date for the Restructured Loan will be the same calendar day 18 months from the date of the Debt Restructuring Deed and thereafter repayment of the Restructured Loan will be every 6 months.

The sale of the Charged Property and the Sure Full Properties will not have any material adverse effect on the operations of the Company.

If the Company and any of the Borrowers do not pay any of the amounts that should be paid according to the Debt Restructuring Deed, (a) unless the Company and/or the Borrowers pay that outstanding amount together with the interest and default interest within 3 months from the date payment should be made, the Lender has the right to request the Company and each of the Borrowers to repay a portion of the Previous Debt after deducting all payments made to the Lender under the Restructured Loan and interests and expenses payable to the Lender in relation thereto; (b) each of the Company and the Borrowers needs to pay default interest on the amount that should be payable, calculated from the date payable up to the date of actual payment at the rate of HIBOR + 5%.

If there is still a balance (the “Balance”) due to the Lender under the Restructured Loan after payments of all sums referred to above, the Lender will, after taking into account the financial situation of the Group, propose repayment terms and shall notify each of the Company and the Borrowers in writing no later than 8 December 2010. The Company and each of the Borrowers shall repay the Balance and the relevant interest thereon in accordance with the Lender’s request.

CASIL Properties Limited had entered into a provisional sale and purchase agreement with an Independent Third Party to sell the Charged Property for a consideration of HK$180,000,000. Completion of the sale of the Charged Property is scheduled to take place on or before 31 March 2005. Detail of the aforementioned transaction has been disclosed in the Company’s announcement dated 10 November 2004 and further details have been disclosed in the Company’s shareholders’ circular dated 30 November 2004.

As further assurance of the repayment obligation by the Company and the Borrowers, the Company and the Borrowers have, upon the signing of the Debt Restructuring Deed, procured Chee Yuen to execute a first legal charge to charge the Newly Charged Property in favour of the Lender in order to guarantee the repayment of a portion of the Restructured Loan.

Sure Full has executed an undertaking at the time of signing of the Debt Restructuring Deed in favour of the Lender to sell the Sure Full Properties within a period of 3 months from the date of the Debt Restructuring Deed and the Company shall forward the sale proceeds to the Lender in order to repay a portion of the Restructured Loan.

The Directors believe that financial position of the Company requires the Restructuring for the benefit of the shareholders of the Company.

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At the request of the Company, trading in the shares on the Stock Exchange had been suspended from 9:30 a.m. on 8 December 2004. Application has been made by the Company to the Stock Exchange for the resumption of trading in the shares on the Stock Exchange with effect from 9:30 a.m. on 9 December 2004.

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

DEFINITIONS

“Board”	means the board of Directors of the Company for the time being;
“Borrowers”	means CASIL Clearing Limited and CASIL Properties Limited;
“Charged Property”	means all those Units 1-8, 21st Floor, Greenfield Tower and Units 9-17,
	21st Floor, Seapower Tower and Car Parking Spaces Nos. LB015, 016,
	017, 047 and 048 on the Lower Basement of Private Garage, Concordia
	Plaza, 1 Science Museum Road, Tsim Sha Tsui East, Kowloon, Hong
	Kong;
“Chee Yuen”	means Chee Yuen Industrial Company Limited, a limited liability
	company incorporated under the laws of Hong Kong and a wholly-
	owned subsidiary of the Company;
“Company”	means China Aerospace International Holdings Limited, a company
	incorporated under the laws of Hong Kong with limited liability;
“Debt Restructuring Deed”	means the Debt Restructuring Deed dated 7 December 2004 entered
	into between the Lender, the Borrowers and the Company as Guarantor;
“Directors”	means the directors of the Company for the time being;
“HIBOR Rate”	means the Hong Kong Interbank Offered Rate for a six month period as
	quoted by Reuters DataScope at 11:00 a.m. (Hong Kong time) on the
	date of payment of the interest;
“Group”	means the Company and all its subsidiaries;
“Guarantor”	Means the Company;
“HK$”	means Hong Kong Dollars, the lawful currency of Hong Kong;
“Hong Kong”	means the Hong Kong Special Administrative Region of the People’s
	Republic of China;
“Independent Third Party(ies)”	means persons who are not connected persons (as defined in the Listing
	Rules) of the Company and are third parties independent of and not
	connected with the Company or its connected persons (as defined in the
	Listing Rules);
“Lender”	means Bank of China (Hong Kong) Limited;

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• “Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

• “Newly Charged Property” means Units A-D, 2nd Floor, and Car Parking Spaces L1, L2, L3, L4 and L5 on the Ground Floor, Tsun Win Factory Building, 60 Chun Yip Street, Kwun Tong owned by Chee Yuen Industrial Company Limited, a wholly-owned subsidiary of the Company;

• “Previous Debt” means the aggregate debt owed by the Borrowers to the Lender prior to the Restructuring, totaling HK$642,280,420.89 as at 16 January 2004;

• “Restructuring” means the restructuring of the Previous Debt into the Restructured Loan pursuant to the terms and subject to the conditions contained in the Debt Restructuring Deed;

• “Restructured Loan” means the aggregate loan after the Restructuring which will be paid by the Company and the Borrowers jointly pursuant to the terms and conditions of the Debt Restructuring Deed totaling HK$435,192,987.48;

• “Sure Full” means Sure Full Investments Limited, a company incorporated under the laws of Hong Kong and a wholly-owned subsidiary of the Company; and

• “Sure Full Properties” means the properties presently owned by Sure Full, details of which have been disclosed in the Company’s 2003 annual report.

By order of the Board Rui Xiaowu Chairman

Made by the order of the Board, the Directors of which individually and jointly accept responsibility for the accuracy of this statement.

Hong Kong, 9 December 2004

As at the date of this announcement, the Board comprises Mr. Rui Xiaowu (Chairman), Mr. Zhao Liqiang, Mr. Zhou Qingquan, Mr. Zhao Yuanchang, Mr. Wu Hongju and Mr. Guo Xianpeng as Executive Directors, Mr. Li Jinsheng, Mr. Xu Shilong and Mr. Chen Dingyi as Non-Executive Directors, Mr. Lee Hung Sang, Ms. Chan Ching Har, Eliza and Mr. Chow Chan Lum, Charles as Independent Non-Executive Directors.

“Please also refer to the published version of this announcement in China Daily”

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