CTF Services Limited — M&A Activity 1999

May 24, 1999

Listed Company Information

CENTRAL CHINA<0351> - Announcement 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. Central China Enterprises Limited (Incorporated in Hong Kong with limited liability) Announcement Summary Pursuant to the terms of the Deed of Undertaking between Central China Enterprises Limited and Sincere Bonus Investment Limited in respect of the Group's disposal of its interest in Oriental Union Holdings Limited ("Oriental Union"), a cash deposit of the Company of HK$20,000,000 pledged to secure a mortgage loan for Oriental Union will be used to set off the shortfall due under the mortgage loan upon sale of certain properties of Oriental Union. The impact of the forfeiture of the cash deposit has been fully provided for in the Group's accounts for the year ended 31 December 1998. The directors of Central China Enterprises Limited ("the Company") announce that further to the circular dated 11 February 1999 in respect of the Group's disposal of its entire interest in Oriental Union Holdings Limited (Oriental Union) to Sincere Bonus Investment Limited ("SBI") in January 1999, for which SBI entered into a Deed of Undertaking with the Company to procure the Oriental Union Group to sell the property located at Units 1411--1418 14/F, Nan Fung Commercial Centre, 19 Lam Lok Street, Kowloon Bay, Kowloon ("the Property") and to receive the sale proceeds on or before 31 August 1999, the Company has been informed by Oriental Union today that the Oriental Union Group has entered into a sale and purchase agreement dated 20 May 1999 to dispose of the Property at a consideration of HK$14,652,495. Since the sale proceeds after deducting all fees, costs and expenses incurred for such sale do not exceed the amount of approximately HK$40,993,464 due to the mortgagee bank, no part of the sale proceed will be paid to the Company. As the net proceed is approximately HK$26,340,969 less than the mortgage loan, the Company is obliged to use its cash deposit of HK$20,000,000 pledged to the mortgagee bank to offset part of the shortfall. Apart from the set off arrangement, the Group has no other obligations to the mortgagee bank. The impact of the forfeiture of the Company's pledged deposit has been provided for in its accounts for the year ended 31 December 1998. By Order of the Board Lam Kong Yin Patrick Executive Director Hong Kong, 21 May 1999