G-Resources Group Limited — Capital/Financing Update 2004

Nov 26, 2004

PALADIN LIMITED

(Incorporated in Bermuda with limited liability)

(Stock code: 495)

ANNOUNCEMENT

LAUNCH OF PRE-SALE OF THE PROPERTY AT NOS. 8,10 AND 12 PEAK ROAD AND UPDATE ON THE FINANCING OF THE GROUP

The Company wishes to provide shareholders with further information on the HK$ Term Loan, the Other Loan, the US$ Term Loan and the Additional Amount, and an update on the progress of the development and financing of the Company’s property project at Nos. 8, 10 and 12 Peak Road, Hong Kong.

In view of the improved market sentiment for luxury properties in Hong Kong, the Company is pleased to announce that the Company commenced the pre-sale of the Peak Road Project on 22 November 2004.

It was previously stated in the Company’s results announcement dated 19 October 2004 that (a) the Group had obtained a commitment letter from certain banks for a new term loan to refinance the HK$ Term Loan and the Other Loan; and (b) the Group was in the process of soliciting new lenders to refinance the US$ Term Loan and the Additional Amount. The negotiations with prospective lenders on the refinancing arrangements in relation to the HK$ Term Loan and the Other Loan have terminated.

Based on the valuation of the Peak Road Project given by an independent valuer, a firm of registered professional surveyors in Hong Kong not connected with the Company or the substantial shareholders, directors or chief executive of the Company or its subsidiaries, or any of their respective associates, the fair value of the Peak Road Project on an open market value basis as at 17 July 2004 amounted to approximately HK$2,000 million, which substantially exceeds all the existing financial obligations, borrowings and indebtedness of the Group (which amounted to approximately HK$1,318 million as at 30 June 2004).

Based on the valuation of the Peak Road Project, the Company is confident that the sale proceeds derived from the pre-sale of the Peak Road Project would be sufficient to cover the HK$ Term Loan, the Other Loan, the US$ Term Loan and the Additional Amount, and to finance the completion of the Peak Road Project. Accordingly, the termination of the negotiations is not expected to have any material adverse impact on the financing and completion of the Peak Road Project and the Group’s financial position.

At the request of the Company, trading in the shares of the Company was suspended on the Stock Exchange from 9:30 a.m. on 25 November 2004 pending the release of this announcement. Application has been made to the Stock Exchange for resumption of trading in the shares of the Company on the Stock Exchange with effect from 9:30 a.m. on 26 November 2004.

INTRODUCTION

Reference is made to the Company’s results announcement dated 19 October 2004. The Company wishes to provide shareholders with further information on the HK$ Term Loan, the Other Loan, the US$ Term Loan and the Additional Amount, and an update on the progress of the development and financing of the Company’s property project at Nos. 8, 10 and 12 Peak Road, Hong Kong.

LAUNCH OF PRE-SALE OF THE PEAK ROAD PROJECT

In view of the improved market sentiment for luxury properties in Hong Kong, the Company is pleased to announce that the Company commenced the pre-sale of the Peak Road Project on 22 November 2004.

The Peak Road Project is a property development for residential use. The Peak Road Project consists of two 10-storey blocks of apartment (Block A-1 and Block A-2) and a 3-storey private house (Block B). Block A-1 consists of 2 duplexes and 16 apartment units. Block A-2 consists of 4 duplexes and 12 apartment units. The gross floor areas of Blocks A-1, A-2 and B are approximately 57,706, 52,348 and 9,215 square feet, respectively.

The Peak Road Project is approximately 80% completed and is at its final stage of completion. Following the launch of the pre-sale of the Peak Road Project, the Company currently expects that the Peak Road Project will be completed and be ready for delivery not later than 31 August 2005.

FINANCING OF THE GROUP

It was previously stated in the Company’s results announcement dated 19 October 2004 that (a) the Group had obtained a commitment letter for a term loan facility from certain banks to refinance the HK$ Term Loan and the Other Loan; and (b) the Group was in the process of soliciting new lenders to refinance the US$ Term Loan and the Additional Amount. The negotiations with prospective lenders on the refinancing arrangements in relation to the HK$ Term Loan and the Other Loan have terminated.

Based on the valuation of the Peak Road Project given by an independent valuer, a firm of registered professional surveyors in Hong Kong not connected with the Company or the substantial shareholders, directors or chief executive of the Company or its subsidiaries, or any of their respective associates, the fair value of the Peak Road Project on an open market value basis as at 17 July 2004 amounted to approximately HK$2,000 million, which substantially exceeds all the existing financial obligations, borrowings and indebtedness of the Group (which amounted to approximately HK$1,318 million as at 30 June 2004).

Based on the valuation of the Peak Road Project, the Company is confident that the sale proceeds derived from the pre-sale of the Peak Road Project would be sufficient to cover the HK$ Term Loan, the Other Loan, the US$ Term Loan and the Additional Amount, and to finance the completion of the Peak Road Project. Accordingly, the termination of the negotiations is not expected to have any material adverse impact on the financing and completion of the Peak Road Project and the Group’s financial position.

OTHER DETAILS

The HK$ Term Loan, the Other Loan and the Additional Amount were incurred for the Peak Road Project. The Peak Road Project is subject to a mortgage in favour of the lenders of the HK$ Term Loan.

The Additional Amount is claimed to be payable by the Group to the lender of the Other Loan under the loan agreement in relation to the Other Loan. The Additional Amount claimed is equivalent to 10% of the excess of the value of the Peak Road Project (as of 30 September 2004 performed by an independent professional valuer on an open market value basis) over HK$660 million. Based on the estimated valuation of the Peak Road Project of approximately HK$2,000 million, the Additional Amount claimed is presently estimated to be approximately HK$134 million.

The US$ Term Loan is secured by the office property of the Group located at 45th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong. Based on the valuation of the Office Property given by an independent valuer, a firm of registered professional surveyors in Hong Kong not connected with the Company or the substantial shareholders, directors or chief executive of the Company or its subsidiaries, or any of their respective associates, the fair value of the Office Property on an open market value basis as at 31 July 2004 amounted to HK$125 million, which substantially exceeds the US$ Term Loan.

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In the absence of any acceleration or earlier demand pursuant to the loan agreement in relation to the HK$ Term Loan, the HK$ Term Loan is due on 31 December 2004, and the Other Loan and the Additional Amount are, pursuant to the loan agreement in relation to the Other Loan, due on the date of repayment of the HK$ Term Loan. The US$ Term Loan was due in May 2003 but has since been extended by the lenders in writing until 30 December 2004.

CLARIFICATION ON A PRESS ARTICLE

The Company noted a press article in The Sun on 25 November 2004 regarding the receivership of the Peak Road Project. The Company wishes to state that certain of the contents of that press article are inaccurate, and wishes to clarify that as disclosed in the Company's announcement dated 27 November 2003, the Group has redeemed the Peak Road Project from BOC on 25 November 2003 and, since then, the receivers appointed by BOC have ceased to act as the receivers and managers in respect of the Peak Road Project. The Peak Road Project is no longer subject to any receivership.

GENERAL

The Company has also noted the recent increases in the price of the shares of the Company and wishes to state that apart from the matters disclosed in this announcement, the Company is not aware of any reasons for such increases. Save as disclosed in this announcement, the Company confirms that there are no negotiations or agreements relating to intended acquisitions or realizations which are discloseable under Rule 13.23 of the Listing Rules, nor is the Company aware of any matter discloseable under the general obligation imposed by Rule 13.09 of the Listing Rules, which is or may be of a price-sensitive nature.

A further announcement will be made by the Company as soon as possible if and when a disclosure obligation arises as to further developments in this matter.

At the request of the Company, trading in the shares of the Company was suspended on the Stock Exchange from 9:30 a.m. on 25 November 2004 pending the release of this announcement. Application has been made to the Stock Exchange for resumption of trading in the shares of the Company on the Stock Exchange with effect from 9:30 a.m. on 26 November 2004.

As at the date of this announcement, the board of directors of the Company comprises Mr. LAW Fong and Mr. CHEN Te Kuang Mike as executive directors, Mr. OUNG Shih Hua James as non-executive director and Mr. ZHU Pei Qing, Ms. LU Ti Fen and Mr. KWOK Wai Chi as independent non-executive directors.

DEFINITIONS

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

DEFINITIONSIn this announcement, the	following expressions shall have the following meanings unless the context requires otherwise:
“Additional Amount”	another amount claimed to be payable by the Group to the lender of the Other Loan under the loan agreement
	in relation to the Other Loan, presently estimated to be approximately HK$134 million;
“Board”	the Board of Directors of the Company;
"BOC"	Bank of China (Hong Kong) Limited;
“Company”	Paladin Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on the
	Main Board of the Stock Exchange;
“Group”	the Company and its subsidiaries;
“HK$”	Hong Kong dollars;
“HK$ Term Loan”	a HK$ term loan of HK$623 million incurred by the Group for the Peak Road Project;
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock Exchange;
“Office Property”	the property of the Group located at 45th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai,
	Hong Kong, which is used as the office premises of the Group;
“Other Loan”	another loan of HK$155 million incurred by the Group for the Peak Road Project;
“Peak Road Project”	the Company’s property project at Nos. 8, 10 and 12 Peak Road, Hong Kong;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“US$”	United States dollars; and
“US$ Term Loan”	a US$ term loan of US$10 million (approximately HK$78 million) secured by the Office Property.

By order of the Board Paladin Limited Law Fong Acting Chairman

Hong Kong, 25 November 2004

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

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