Deewin Tianxia Co., Ltd — Capital/Financing Update 2000

May 16, 2000

Listed Company Information

ING BEIJING<1062> - Announcement ING BEIJING INVESTMENT COMPANY LIMITED SHARE TRANSACTION The Board of Directors of ING Beijing Investment Company Limited announces that on 15th May, 2000, a subsidiary of the Company entered into a conditional agreement for the subscription of a 2.28% interest in the capital of Skynet Limited, a Hong Kong company engaged in the Internet business. Out of the total consideration of US$5 million (equivalent to HK$38,822,000), US$1,000,000 (equivalent to HK$7,750,000) is to be settled in cash and US$4 million (equivalent to HK$31,072,000) is to be settled by the issuance of 38,840,000 new shares of HK$ 0.10 each of the Company at an issue price of HK$0.80 per Share. In connection with the said agreement, the Company's subsidiary has been granted an option to require Skynet International (Group Holdings) Limited to acquire from it the shares of Skynet Limited in exchange for new shares in the capital of Skynet International (Group Holdings) Limited. Furthermore, the Company's subsidiary has an option to require Skynet Limited to sell to it such number of shares and/or securities held by Skynet Limited in its subsidiaries as shall be equivalent to the attributable indirect interest held by the Company's subsidiary in the subsidiaries of Skynet Limited. Date of the agreement (the "Agreement") 15th May, 2000 Parties to the Agreement The issuer - Skynet Limited ("Skynet"), a company incorporated in Hong Kong and a 57.5% subsidiary of Skynet Holdings (as defined below). The warrantor - Skynet International (Group Holdings) Limited ("Skynet Holdings"), a company incorporated in Bermuda, the securities of which are listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). The subscriber - Hidden Advantage Investments Limited (the "Company's Subsidiary"), a company incorporated in the British Virgin Islands, and a wholly owned subsidiary of ING Beijing Investment Company Limited (the "Company"). Neither Skynet nor Skynet Holdings is connected with the directors, the chief executive officer and the substantial shareholders of the Company, its subsidiaries and/or its associates (as defined in the Rules Governing the Listing of Securities (the "Listing Rules") on the Stock Exchange). At present, the Company's Subsidiary holds a 3.05% interest in Skynet, but does not hold any interest in Skynet Holdings. At completion of the Agreement, the Company's Subsidiary will hold a 5.33% interest in Skynet, all of which are subject to the Call Option and the Put Option (as defined below). Asset to be purchased Such ordinary shares of HK$1.00 each in the capital of Skynet (the "Skynet Shares") as representing 2.33% of the existing issued share capital of Skynet and 2.28% of the enlarged issued share capital of Skynet at completion of the Agreement. Consideration The total consideration for the Skynet Shares is US$5,000,000 to be settled in the following manner: (a) US$1 million in cash to be paid upon completion of the Agreement; and (b) US$4 million to be settled upon completion by the issue of 38,840,000 Shares (the "Consideration Shares") by the Company to Skynet at an issue price of HK$0.80 per Share. The Consideration Shares represent 7.768% of the existing issued share capital of the Company and 7.208% of the issued share capital of the Company as enlarged by the Consideration Shares. The issue price of HK$0.80 per Share represents a premium of approximately 191.23% against the average closing price of HK$0.2747 per Share from 28th April, 2000 to 15th May, 2000 (both days inclusive), being the last ten trading days immediately prior to the date of this announcement and a premium of 221.29% against the closing price of HK$0.249 per Share on 15th May, 2000. The cash element of the consideration is to be satisfied by the internal resources of the Company. Conditions precedent Completion of the Agreement is subject to the satisfaction of certain conditions precedent which include the granting by the Listing Committee of the Stock Exchange of listing of, and permission to deal in, the Consideration Shares. Such conditions are to be fulfilled on or before 15th June, 2000, and completion will take place within three (3) business days following the satisfaction of such conditions. If such conditions are not fulfilled on or before 15th June, 2000, the Company's Subsidiary will be entitled to terminate the Agreement. General mandate The Consideration Shares to be issued upon completion of the Agreement will be issued pursuant to the general mandate granted to the directors of the Company at the annual general meeting held on 21st June, 1999. Such mandate is valid and subsisting and has not been revoked. Ranking of the Consideration Shares The Consideration Shares will rank pari passu in all respects with the issued Shares of the Company. Application for listing Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares. Option In connection with the Agreement, Skynet Holdings has granted to the Company's Subsidiary, under a separate deed, an option (the "Option") to require Skynet Holdings to acquire from it the Skynet Shares in exchange for new shares of HK$0.02 each in the capital of Skynet Holdings. The grantor - Skynet Holdings The grantee - the Company's Subsidiary The Option - the right to require Skynet Holdings to acquire the Skynet Shares held by the Company's Subsidiary. Exercise period of the Option - subject to completion of the Agreement, a two-year period commencing on the first anniversary of the completion date of the Agreement. Number of shares in Skynet Holdings to be issued - the number of shares in Skynet Holdings (the "Option Shares") to be issued in exchange for the Skynet Shares held by the Company's Subsidiary in respect of which the Option has been exercised will be determined in the following manner: A ------- B where A = (i) the fair market value of the Skynet Shares held by the Company's Subsidiary or (ii) US$4 million if the shares in Skynet are listed on any stock exchange within 12 months from the completion date of the Agreement, in which case the Option is exercisable only in respect of the Skynet Shares acquired under the Agreement B = the fair market value of each share in Skynet Holdings which will be equal to C + D -------- E C = the net tangible asset value of the non-Internet related businesses of Skynet Holdings D = the fair value of the Internet-related businesses of Skynet Holdings (including the 56.19% interest in Skynet held by Skynet Holdings after the dilution from the issue of the Skynet Shares) E = the number of shares in Skynet Holdings in issue Provided that if A = US$4 million, the Company's Subsidiary will also be paid an additional US$1 million in cash. The fair market value of Skynet is to be appraised at the time of the exercise of the Option by a professional valuer appointed by Skynet and reasonably accepted by Skynet Holdings. The fair value of D is to be appraised at the time of the exercise of the Option by a professional valuer appointed by Skynet Holdings and reasonably accepted by the Company's Subsidiary. The call and put options In connection with the Agreement, the Company's Subsidiary has been granted by Skynet, under a separate deed, an option (the "Call Option") to require Skynet to sell to the Company's Subsidiary such number of shares and/or securities held by Skynet in each and all of its subsidiaries as shall be equivalent to the attributable indirect interest held by the Company's Subsidiary in each of such subsidiaries of Skynet. Furthermore, the Company's Subsidiary has been granted by certain shareholders of Skynet (as referred to below) an option (the "Put Option") to require each of them to purchase from the Company's Subsidiary all of the Skynet Shares held by the Company's Subsidiary. The grantor of Call Option - Skynet The grantee of Call Option - the Company's Subsidiary The Call Option - the right to require Skynet to sell to the Company's Subsidiary, at par value, such number of shares and/or security held by Skynet (directly or indirectly) in each and all of its subsidiaries as shall be equivalent to the attributable interest held by the Company's Subsidiary in each of such subsidiaries through Skynet (the "Attributable Interest"). Exercise of the Call Option - The Company' Subsidiary may exercise the Call Option at any time during the period commencing from the notification by Skynet to the Company's Subsidiary of any Trigger Event (as defined below) or the listing of any of the subsidiaries of Skynet and ending on the earlier of (i) the date following the expiry of one hundred and eighty (180) days period therefrom; or (ii) the seventh business day immediately prior to the completion of Trigger Event in relation to or the listing of any subsidiary of Skynet. Trigger Event - in relation to any subsidiary of Skynet, either the sale or disposal by all of its shareholders of all of their shareholding in the capital thereof to a third party or sale or disposal by Skynet of all or substantially all of its assets to a third party. Grantors of the Put Option - (i) Gold Cloud Agents Limited, a company established in the British Virgin Islands ("Gold Cloud"); (ii) Saxophone Enterprises Limited, a company establised in the British Virgin Islands ("Saxophone") and (iii) Icon Enterprises Limited, a company established in the British Virgin Islands ("Icon"). Gold Cloud, Saxophone and Icon are shareholders of Skynet. None of Gold Cloud, Saxophone and Icon is connected with the directors, the chief executive officer and the substantial shareholders of the Company, its subsidiaries and/or its associates (as defined in the Listing Rules). The Put Option - the option to require each of Gold Cloud, Saxophone and Icon to purchase from the Company's Subsidiary all of the Skynet Shares held by the Company's Subsidiary. The consideration of such purchase will comprise payment in cash equal to the par value of the Skynet Shares held by the Company's Subsidiary, and the assumption by Gold Cloud, Saxophone and Icon of the liability of the Company's Subsidiary relating to the purchase price of the Attributable Interest. Skynet Skynet engages in Internet-related business and has substantial interest in three Chinese-language web sites, namely hkstock.com, hkcyber.com and gameplayers.com.hk, with interactive features covering a wide spectrum of subjects ranging from news and entertainment to fashion and on-line trading facilities. Reasons for the transactions The Board believes that the Company's investment in Skynet will enhance the Company's portfolio of investments in technology companies. The directors of the Company consider that the terms of the Agreement, together with the Option and the Call and Put Options, after arm's-length negotiation between the parties thereto, to be fair and reasonable, and in the interest of the Company and its shareholders as a whole. By Order of the Board Jan Bosma Director Hong Kong, 15th May, 2000 Note: In this announcement, the exchange ratio of US$1.00 to HK$7.75 is used.