Computer And Technologies Holdings Limited — Share Issue/Capital Change 2001

May 22, 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.

CHINA AEROSPACE INTERNATIONAL CASIL TELECOMMUNICATIONS

HOLDINGS LIMITED HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability) (Incorporated in the Cayman Islands with limited liability)

("CASIL") ("Castel")

JOINT ANNOUNCEMENT

PLACING OF EXISTING SHARES AND SUBSCRIPTION OF NEW SHARES

On 21st May, 2001, arrangements were made by Astrotech Group Limited for the private placement of an aggregate of 50,000,000 shares in Castel to independent investors. On 21st May, 2001, Astrotech Group Limited also entered into an agreement with Castel to, subject to certain conditions, subscribe for 100,000,000 shares in Castel. It is expected that the Subscription will raise approximately HK$50,000,000 for Castel before expenses. Astrotech Group Limited presently holds approximately 51.37% of the total issued shares of Castel. The Placing will reduce their holding to approximately 44.94% of Castel's existing issued share capital. The Subscription will then increase their holding to approximately 51.22% of Castel's enlarged issued share capital. Trading of Castel's shares was suspended from 10:00 a.m. on 21st May, 2001. An application has been made for the resumption of trading of Castel's shares with effect from 10:00 a.m. on 22nd May, 2001.

Placing agreement dated 21st May, 2001

Vendor:

Astrotech Group Limited which is a wholly owned subsidiary of CASIL and presently holds approximately 51.37% of Castel's issued share capital.

Number of shares to be placed:

50,000,000 existing ordinary shares of HK$0.10 each ("Shares") in Castel (the "Placed Shares").

The aggregate number of the Placed Shares represents about 6.43% of Castel's existing issued share capital of 777,139,763 Shares.

The Placed Shares rank pari passu with all other existing issued shares of Castel in all respects and are sold free from any claims, charges, liens, encumbrances or any other third party rights.

Placing agent:

APC Securities Company Limited (the "Placing Agent"). The Placing Agent is independent of and not connected with the directors, chief executive or substantial shareholders of Castel or any of its subsidiaries or their respective associates (as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange")).

Subject to completion of the Placing, a commission of 2.5% of the total aggregate consideration for all of the Placing Shares will be payable to the Placing Agent.

Placees:

Investors to be procured by the Placing Agent who are independent of and not connected with the directors, chief executive or substantial shareholders of Castel or any of its subsidiaries or their respective associates (as defined under the Rules Governing the Listing of Securities on the Stock Exchange). There are more than six private individuals or institutional investors.

Placing price:

HK$0.50 per Placed Share.

This was arrived at after arm's length negotiations between Castel, Astrotech Group Limited and the Placing Agent and represents a discount of about 9.10% to the closing price of HK$0.55 per share quoted on the Stock Exchange on 18th May 2001, being the trading day on which Shares of Castel were traded prior to the entering into of agreements for the Placing and Subscription, and a discount of approximately 1.96% over the average closing price of HK$0.51 per share on the Stock Exchange over the last 10 trading days up to and including 18th May 2001. The directors of Astrotech Group Limited are of the view that the placing price is fair and reasonable.

Conditions of the Placing:

The Placing is unconditional and fully underwritten by the Placing Agent.

Completion of Placing:

Expected on or before 25th May, 2001.

Subscription agreement dated 21st May, 2001

Subscriber:

Astrotech Group Limited

Number of new shares subscribed for:

100,000,000 new Shares (together the "Subscription Shares") by Astrotech Group Limited.

The aggregate number of the Subscription Shares represents about 12.87% of Castel's existing issued share capital, and about 11.40% of its issued share capital as enlarged by the Subscription of 100,000,000 shares.

Subscription price:

HK$0.50 per Subscription Share (which is same as the Placing Price) totaling approximately HK$50 million, of which HK$25 million to be funded from the net proceeds of the Placing and the balance from internal sources of CASIL.

Mandate to issue new shares:

The Subscription Shares will be issued and allotted under the general mandate granted to the directors of Castel at the annual general meeting held on 26th June, 2000. As at the date of this announcement, approximately all of this general mandate remains available to the directors of Castel.

Ranking:

The Subscription Shares will upon issue rank pari passu in all respects with the existing shares of Castel in issue including the right to receive all dividends and distributions declared, paid or made with reference to a record date on or after the date of completion of the Subscription.

Completion of the Subscription:

Expected to be the second business day after the day on which the last of the conditions referred to under "Conditions of the Subscription" below has been satisfied, which shall not be later than 4th June, 2001.

Conditions of the Subscription:

Completion of the Subscription is conditional upon the following taking place on or before 4th June, 2001 or such later date as may be agreed between the parties:

(a) the completion of the Placing; and

(b) the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the Subscription Shares.

Should the completion of the Subscription fail to take place on or before 4th June, 2001, the Subscription will be subject to connected transaction requirements including approval from independent shareholders of Castel as set out in Chapter 14 of the Listing Rules.

If any of the conditions of the Subscription is not fulfilled by 4th June, 2001 or such later date as may be agreed between the parties to the Subscription Agreement, the liabilities of the parties thereunder will cease and determine.

Changes in shareholding structure:

Astrotech Group Limited is currently holding 399,244,000 Shares, representing approximately 51.37% of the existing issued share capital of Castel. Following the completion of the Placing and Subscription, Astrotech Group Limited will hold 449,244,000 shares representing approximately 51.22% of Castel's enlarged share capital.

Reasons for the Placing and the Subscription and the intended use of proceeds:

Castel and its subsidiaries (the "Castel Group") are principally engaged in development of telecommunications network engineering in the PRC; development, manufacture and marketing of telecommunications products and GPS applications; and design, installation, maintenance and after-sales service of telecommunications infrastructure and network systems. The Placing and the Subscription will enlarge the shareholder base and the capital base of Castel and will strengthen the financial position of the Castel Group. The net proceeds receivable by Castel under the Subscription are estimated to be approximately HK$48.9 million. Castel intends to use the net proceeds of the subscription for working capital and has no other specific purposes. The directors of Castel consider the terms and conditions of the Subscription to be fair and reasonable and believe that the Placing and the Subscription are in the best interest of Castel and its shareholders.

Application for listing

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

General

Trading of Castel's Shares was suspended with effect from 10:00 a.m. on 21st May, 2001. An application has been made for the resumption of trading of Castel's Shares with effect from 10:00 a.m. on 22nd May, 2001.

Increase in trading volume of the shares of CASIL

The board of directors of CASIL has noted the recent increase in the trading volume of the shares of CASIL. Save as above mentioned, the board of directors of CASIL would like to clarify that there are no formal negotiations or agreements relating to any acquisitions or realisation by CASIL which are discloseable under paragraph 3 of the Listing Agreement. Neither is the Board of CASIL aware of any matter discloseable under general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a price-sensitive nature.

The statement in respect of the increase in trading volume of the shares of CASIL is made by the order of the Board of CASIL, the directors (save as Mr. Jin Xuesheng, executive director, Messrs. Rui Xiaowu and Li Jinsheng, the non-executive directors, and Miss Chan Ching Har, Eliza, independent non-executive director, are either out of town or not contactable prior to the completion of this statement) individually and jointly accept responsibility for the accuracy of this statement.

By Order of the Board of By Order of the Board of

China Aerospace International Holdings Limited CASIL Telecommunications Holdings Limited

Ken Chan Lau Chung Kwok Robert

Secretary Secretary

Hong Kong, 21st May, 2001

"Please also refer to the published version of this announcement in the Hong Kong i-mail"