Galaxy Entertainment Group Limited — M&A Activity 1999

May 24, 1999

Listed Company Information

NEW WORLD DEV<0017>, PAUL Y-ITC<0498> & PAUL Y PPT<0276> - Joint 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. NEW WORLD DEVELOPMENT COMPANY LIMITED (Incorporated in Hong with limited liability) PAUL Y. - ITC CONSTRUCTION HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) DISCLOSEABLE TRANSACTION PAUL Y. PROPERTIES GROUP LIMITED (Incorporated in Bermuda with limited liability) MAJOR TRANSACTION JOINT ANNOUNCEMENT SIGNING OF SALE AND PURCHASE AGREEMENT IN RELATION TO ACQUISITION OF INTERACTIVE MULTIMEDIA COMMUNICATION OPERATION BY PAUL Y PROPERTIES FROM NEW WORLD, PROPOSED SUBDIVISION OF SHARES IN PAUL Y PROPERTIES AND PROPOSED CHANGE OF NAME OF PAUL Y PROPERTIES TO NEW WORLD CYBERBASE LIMITED Financial adviser to NEW WORLD DEVELOPMENT COMPANY LIMITED TAI FOOK CAPITAL LIMITED Financial adviser to PAUL Y. - ITC CONSTRUCTION HOLDINGS LIMITED and PAUL Y. PROPERTIES GROUP LIMITED BNP PRIME PEREGRINE CAPITAL LIMITED Further to the Announcement, the respective directors of New World, PYITC and Paul Y Properties are pleased to announce that the Sale and Purchase Agreement was entered into on 21st May, 1999. The company name of Paul Y Properties will be changed to New World CyberBase Limited and a chinese name of '*' (for identification purpose) will be adopted. The issued and unissued shares of HK$0.10 each in the capital of Paul Y Properties will be subdivided into five shares of HK$0.02 each. INTRODUCTION Further to the Announcement, the respective directors of New World, PYITC and Paul Y Properties are pleased to announce that the Sale and Purchase Agreement was entered into today. THE SALE AND PURCHASE AGREEMENT Date 21st May, 1999 Parties Vendor : NWT Purchaser : Paul Y Properties Assets to be acquired The entire issued share capital of New World CyberBase (B.V.I.) Limited which will be the holding company of Newco. Consideration HK$300 million, which will be satisfied as to HK$100 million by the issue of 100,000,000 Consideration Shares, calculated on an ex-Share Subdivision basis, at an issue price of HK$1.00 per Share and as to the balance of HK$200 million by the issue of the NW Convertible Note at face value. The principal terms of the NW Convertible Note are summarised below:- Issuer: Paul Y Properties Principal Amount: HK$200 million, which carry rights to convert into 200,000,000 new shares of Paul Y Properties upon the exercise of the conversion rights attached to the NW Convertible Note in full Voting: holder(s) of the NW Convertible Note will not be entitled to attend or vote at any general meeting of Paul Y Properties Interest: 5% per annum, payable every six months in arrears Term of the note: three years, with an option, subject to the holder(s) of the NW Convertible Note declining to exercise the conversion rights attached therein on the third anniversary from the date of issue, to extend for another two years. Paul Y Properties shall repay the principal amount outstanding under the relevant note to holder(s) of the note together with all interests accrued thereon from the date of the last interest payment up to and including the date of repayment upon such maturity date Conversion Price: HK$1.00 per Share, subject to adjustments Conversion Rights: the NW Convertible Note may not be converted during the first six months following the date of issue. Thereafter, the NW Convertible Note may be exercised in full or in part of the principal amount thereof, any new shares in Paul Y Properties issued as a result of the exercise of the conversion rights attached to the NW Convertible Note shall rank pari passu in all respects with the then existing shares in Paul Y Properties Transfer: the NW Convertible Note may be assigned or transferred in whole or in part (in an amount or integral multiple of HK$1,000,000) subject to compliance of all relevant laws, regulations and approvals (including the prior written consents from Paul Y Properties and the Stock Exchange; and in the case of an assignment to a connected person (as defined in the Listing Rules) prior approval of the independent shareholders of Paul Y Properties) Security: share charge in respect of the entire issued share capital of New World CyberBase (HK) Limited which will be released at maturity of the NW Convertible Note Listing: the NW Convertible Note will not be listed on any stock exchange. Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares Paul Y Properties has undertaken to the Stock Exchange that it will ensure and obtain confirmations from the directors and substantial shareholders of Paul Y Properties that they will disclose to Paul Y Properties and the Stock Exchange of any dealings by them or their respective Associates in the NW Convertible Note so long as they remain a director or, as the case may be, a substantial shareholder of Paul Y Properties. Other than the share charge in respect of the entire issued share capital of New World CyberBase (HK) Limited and the option to extend the term of the note for another two years, the terms of the NW Convertible Note is the same as the Placing Convertible Note. Conditions of the Acquisition Completion of the Acquisition will be conditional on:- (a) the Stock Exchange and/or the SFC not having notified Paul Y Properties that the listing of its securities on the Stock Exchange will or may be withdrawn; (b) NWT being satisfied, in its absolute discretion, with the results of a due diligence review of the Paul Y Properties Group; (c) Paul Y Properties being satisfied, in its absolute discretion, with the results of a due diligence review of the business of the interactive multimedia payphone operation, the assets comprised in the Interactive Multimedia Communication Operation, and New World CyberBase (B.V.I.) Limited and its subsidiaries; (d) trading of the Shares on the Stock Exchange not being suspended for any single period of more than three consecutive trading days prior to completion of the Acquisition (other than temporary suspension for the purpose of clearance by the Stock Exchange and/or the SFC of announcements or circulars relating to the Sale and Purchase Agreement, the Convertible Note Placing Agreement and the Share Placing Agreement); (e) all necessary approvals and consents in respect of the Sale and Purchase Agreement required by NWT (including, but not limited to, any approvals relating to broadcasting and telecommunication and relevant bank consents, if applicable) and by Paul Y Properties being obtained; (f) the passing of resolutions by shareholders of Paul Y Properties (PYITC and parties acting in concert with it will abstain from voting on resolution (ii) and (iii) as set out below) in a special general meeting to approve:- (i) the entry into and performance by Paul Y Properties of the Sale and Purchase Agreement, the issue of the Consideration Shares, the NW Convertible Note and the Conversion Shares to be issued upon exercise of the conversion rights attached to the NW Convertible Note in full pursuant thereto in accordance with the Listing Rules; (ii) the granting of the Whitewash Waiver to NWT in respect of NWT's obligations to extend a general offer to shareholders of Paul Y Properties as a result of the issue of the Consideration Shares and/or the issue of the NW Convertible Note and the exercise of NWT's conversion rights thereunder in accordance with Note 1 of the Notes on dispensations from Rule 26 of the Takeovers Code; (iii) the granting of authorisation to NWT to acquire further Shares (but not more than 5%) for the 12 month period immediately following the acquisition by NWT of more than 35% of the issued Shares and the granting of the Whitewash Waiver to NWT in respect of NWT's obligations to extend a general offer to shareholders of Paul Y Properties as a result of such further acquisition of Shares (i.e. the creeper authorisation); (g) the SFC granting the Whitewash Waiver (subject to the satisfaction of requirements set out under Note 1 of the Notes on dispensations from Rule 26 and the Whitewash Guidance Note of the Takeovers Code including independent shareholders vote by poll) to NWT in respect of NWT's obligations to extend a general offer to shareholders of Paul Y Properties in the circumstances set out in (f)(ii) and (iii) above; (h) the Listing Committee of the Stock Exchange granting or agreeing to grant listings of, and permission to deal in, the Consideration Shares and the Conversion Shares to be issued pursuant to the exercise of the conversion rights under the NW Convertible Note; (i) the simultaneous completion of the Share Placing Agreement and the Convertible Note Placing Agreement; and (j) completion of the reorganisation of the ownership structure of the business of the interactive multimedia payphone operation, the assets comprised in the Interactive Multimedia Communication Operation. It should be noted that if the directors of Paul Y Properties could not satisfy themselves with the results of the due diligence review of the Interactive Multimedia Communication Operation and New World CyberBase (B.V.I.) Limited and its subsidiaries and which would result in the related condition not being fulfilled, the Acquisition cannot become unconditional. If any of the above conditions has not been fulfilled or in respect of (c) and (e) (in respect of approvals and consents required by Paul Y Properties) waived by Paul Y Properties in its absolute discretion, or in respect of (a), (b), (d) and (e) (in respect of approvals and consents required by NWT), (f)(ii) and (iii), (g) and (h) waived by NWT in its absolute discretion by 30th June, 1999 (or such later date as may be agreed in writing between NWT and Paul Y Properties), the provisions of the Sale and Purchase Agreement shall have no effect and no party shall have any liability under them. Completion of the Acquisition Completion of the Sale and Purchase Agreement shall be on the third day (Saturdays and Sundays excepted) after the day on which the Sale and Purchase Agreement becomes wholly unconditional (or such other date as may be mutually agreed in writing between the parties hereto). The directors of Paul Y Properties and NWT expect the Sale and Purchase Agreement to be completed on or before 30th June, 1999. THE SHARE PLACING AND THE CONVERTIBLE NOTE PLACING Pursuant to the Share Placing Agreement, as refer to the Announcement, 100,000,000 new Shares, representing about 81.4% of the existing issued share capital of Paul Y Properties, or 31.0% of the issued share capital of Paul Y Properties as enlarged by the Share Placing and the Acquisition (without taking into account the Conversion Shares) have been placed with third parties (professional or institutional investors) not connected and not acting in concert with the directors, chief executives or substantial shareholders of Paul Y Properties, PYITC, and New World , any of their respective subsidiaries or Associates and concert parties at the issue price of HK$1.00 per Share, which is equal to the issue price of the Consideration Shares. Completion of the Share Placing Agreement is conditional on, inter alia, the simultaneous completion of the Sale and Purchase Agreement. As refered to in the Announcement, pursuant to the Convertible Note Placing Agreement Tai Fook Securities Company Limited has agreed to procure subscriber or, failing which, subscribe for the Placing Convertible Note. It is the intention of Tai Fook Securities Company Limited to place the Placing Convertible Note to strategic investor(s) (the number of which is expected to be less than six) which will not be connected and not acting in concert with the directors, chief executives or substantial shareholders of Paul Y Properties, New World and PYITC, any of their respective subsidiaries, Associates and concert parties. Paul Y Properties has undertaken to the Stock Exchange that it will ensure and obtain confirmations from the directors and substantial shareholders of Paul Y Properties that neither they nor their respective Associates have subscribed/will subscribe for the Placing Convertible Note under the Convertible Note Placing (other than Tai Fook Securities Company Limited, an Associate of the controlling shareholder of New World, fulfilling its underwriting obligations under the Convertible Note Placing Agreement (if suitable placee(s) cannot be located)) and that they will disclose to Paul Y Properties and the Stock Exchange on any dealings by them or their respective Associates of the Placing Convertible Note so long as they remain a director or, as the case may be, a substantial shareholder of Paul Y Properties. Completion of the Convertible Note Placing Agreement is conditional on, inter alia, the simultaneous completion of the Sale and Purchase Agreement. INFORMATION ON NEWCO Newco will be principally engaged in the operation of the PowerPhone network, and the provision and development of Internet access platform for Internet based services and applications. PowerPhone is a powerful, Internet-enabled multimedia, interactive public network which will provide consumers and businesses alike with convenient access to the Internet and its many applications. Other than the conventional local and IDD call services, PowerPhone provides a unique public access channel to the Internet and to the Internet emails for people on the move. PowerPhone also provides advertising services for multinational and local corporations. Such services include placement of TV commercials, static and dynamic banner advertisements, electronic listings, one-touch direct dial functions and electronic polling capabilities. PowerPhone can also support electronic commerce like purchasing of goods and services from designated merchants, with both visual and audio assistance and potential to have instant payment capabilities through credit cards and debit cards. PowerPhone has Internet-enabling functions to purchase products and services through the Internet. Furthermore, PowerPhone will provide for a `Mobile Internet Platform' as users will be able to access the Internet and Internet emails out in the public environment without the use of a computer. In the future, Newco will provide Internet based products and services like dial up and connection, web hosting and web management. Services like online securities trading, online booking, online ticketing and online shopping will also be provided. As referred to in the Announcement, the Interactive Multimedia Communication Operation commenced commercial operation in April 1998. For the three month period ended 30th June, 1998, the Interactive Multimedia Communication Operation achieved an unaudited revenue of approximately HK$2 million. Based on the unaudited management accounts, revenue from the Interactive Multimedia Communication Operation amounted to approximately HK$34.5 million for the 10 month period ended 30th April, 1999. As the Interactive Multimedia Communication Operation is currently part of the operations of NWT and by itself not a separate accounting entity, NWT cannot ascertain the operating results of the Interactive Multimedia Communication Operation for the year ended 30th June, 1998 at the present moment. However, as the Interactive Multimedia Communication Operation only commenced operation in early 1998, the directors of NWT believe that the operating results for the year ended 30th June, 1998 should be minimal and may even show a loss. The directors of NWT have engaged its auditors to prepare pro forma audited accounts of the Interactive Multimedia Communication Operation and such accountants' report will be included in the Composite Document. The directors of Paul Y Properties are satisfied with such arrangement and are currently continuing their due diligence exercise on the Interactive Multimedia Communication Operation. As at 31st March, 1999, based on the unaudited management account of NWT, the investment cost of the assets attached to the Interactive Multimedia Communication Operation was about HK$210 million while the net book value amounted to about HK$180 million. Save for the businesses mentioned above, the directors of New World have no plan to inject any of the other operations of the New World Group into Paul Y Properties. It is noted that any acquisitions or disposals of assets by the Paul Y Properties Group will be subject to the provisions of the Listing Rules. NOMINATION OF NEW DIRECTORS It is expected that upon completion of the Transaction, all existing directors of Paul Y Properties, other than Messrs. LAU Ko Yuen Tom and Peter PUN (an independent non-executive director), will resign and Dr. CHENG Kar Shun Henry, Messrs. DOO Wai Hoi William, LO Lin Shing Simon, Peter TSANG, Dr. CHAN Kwok Keung Charles, CHAN Wing Tak Douglas, Peter YIP, Albert WONG and TO Hin Tsun Gerald will be nominated to the board of directors of Paul Y Properties. Messrs. TO Hin Tsun Gerald and Peter PUN will be the independent non-executive directors of such board of directors of Paul Y Properties. Dr. CHAN Kwok Keung Charles and Mr. LAU Ko Yuen Tom are also directors of PYITC and/or its subsidiaries. Dr. CHENG Kar Shun Henry and Messrs. DOO Wai Hoi William, Peter TSANG and CHAN Wing Tak Douglas are also directors of New World and/or its subsidiaries. Particulars of the proposed directors will be set out in the Composite Document. CHANGE OF COMPANY NAME It is proposed that subject to the approval of the Registrar of Companies in Bermuda, the company name of Paul Y Properties will be changed to New World CyberBase Limited and a chinese name of (for identification purpose) will be adopted upon completion of the Transaction to reflect the anticipated future development of Paul Y Properties. The change of name will also be subject to the passing of a special resolution by the shareholders of Paul Y Properties at a special general meeting of Paul Y Properties approving such change. SHARE SUBDIVISION It is proposed that, subject to the conditions set out below, the issued and unissued shares of HK$0.10 each in the capital of Paul Y Properties will be subdivided into five shares of HK$0.02 each. Immediately prior to the date of this announcement, there were 122,840,544 Shares in issue. On the basis of such number of issued share, there will be 614,202,720 Subdivided Shares in issue following the Share Subdivision. Adjustments will be made to the conversion and subscription prices of the Placing Convertible Note, the NW Convertible Note and the Warrants to reflect the Share Subdivision. Further information of the Share Subdivision will be included in the Composite Document. The number of shares constituting a board lot after the Share Subdivision will remain at 2,000 shares in Paul Y Properties. The Subdivided Shares will rank pari passu in all respect with each other and the Share Subdivision will not result in any change in the relative rights of the shareholders of Paul Y Properties. The Share Subdivision will be conditional on:- (i) the passing of an ordinary resolution by shareholders of Paul Y Properties at a special general meeting of Paul Y Properties approving the Share Subdivision; and (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Subdivided Shares. The board of directors of Paul Y Properties believes that the Share Subdivision will improve the liquidity of the Shares in the market and is in the interest of Paul Y Properties and its shareholders. Application will be made by Paul Y Properties to the Listing Committee of the Stock Exchange for the granting of a listing of, and permission to deal in, the Subdivided Shares. Further information, including, inter alia, the relevant trading arrangements, exchange of share certificates and the relevant timetable, will be included in the Composite Document and a public announcement will be made accordingly. SHAREHOLDING STRUCTURE On 19th May, 1999, as a result of the full exercise of the share options held by certain directors and employees of the Paul Y Properties Group, at an exercise price of HK$1.0592 per Share, 10,950,000 new Shares were allotted and issued to the respective holders. Since the date of the Announcement, Warrants conferring rights to subscribe in aggregate of HK$57,936 for Shares have been exercised by third parties not connected with the directors, chief executives or substantial shareholders of Paul Y Properties or any of its respective subsidiaries or any of its respective Associates. Accordingly, 57,936 new Shares were issued to such respective parties. Save as disclosed herein, since the date of the Announcement, the directors of Paul Y Properties and parties acting in concert with them have not dealt in any Shares. As referred to in the announcement of Paul Y Properties dated 20th May, 1999, on the basis set out therein, as a result of the issue of the new Shares under the Share Placing and the issue of the Placing Convertible Note, the price per Share payable on exercise of the subscription rights attached to the Warrants will be adjusted from HK$1.00 per Share to HK$0.72 per Share with effect from the completion date of the Transaction. On the basis of such subscription price, an aggregate of up to 30,983,929 Shares will be issued on full exercise of the subscription rights attached to the Warrants. The expected shareholding structure of Paul Y Properties, calculated on an ex-Share Subdivision basis, is set out below. Existing Immediately Immediately Immediately after after the after the completion issue of issue of of the the the Transaction Conversion Conversion Shares Shares and the exercise of all outstanding Warrants in full (Note) Number of Number of Number of Number of Shares % Shares % Shares % Shares % NWT - 0.0 100,000,000 300,000,000 300,000,000 31.0 52.4 49.7 PYITC 83,042,606 83,042,606 83,042,606 106,109,994 67.6 25.7 14.5 17.6 Directors 8,250,000 8,250,000 8,250,000 8,250,000 of Paul Y 6.7 2.6 1.4 1.3 Properties or its subsidiaries Holders of - 0.0 - 0.0 50,000,000 50,000,000 the Placing 8.7 8.3 Convertible Note Other 31,547,938 131,547,938 131,547,938 139,464,478 public 25.7 40.7 23.0 23.1 shareholders Total 122,840,544 322,840,544 572,840,544 603,824,472 100.0 100.0 100.0 100.0 Note: If only the NW Convertible Note is fully exercised after completion of the Transaction, the shareholdings of NWT, PYITC, directors of Paul Y Properties or its subsidiaries and other public shareholders would be 57.4%, 15.9%, 1.6% and 25.1% respectively. If only the Placing Convertible Note is fully exercised after completion of the Transaction, the shareholdings of NWT, PYITC, directors of Paul Y Properties or its subsidiaries, holder(s) of the Placing Convertible Note and other public shareholders would be 26.8%, 22.3%, 2.2%, 13.4% and 35.3% respectively. It is the intention of the directors of PYITC that PYITC will hold its Shares for investment purposes after completion of the Transaction. The directors of PYITC will ensure that there will be sufficient public float as required under the Listing Rules at completion of the Transaction. GENERAL The Stock Exchange has stated that it will also closely monitor all future acquisitions or disposals of assets by Paul Y Properties. The Stock Exchange has the discretion to require Paul Y Properties to issue a circular to its shareholders irrespective of the size of the proposed transaction, particularly when such proposed transaction represents a departure from the principal activities of Paul Y Properties. The Stock Exchange also has the power to aggregate a series of transactions and any such transaction may result in Paul Y Properties being treated as if it were a new listing applicant. If the Stock Exchange believes that: - a false market exists or may exist in the Shares; or - there are too few Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares. The Acquisition constitutes a major transaction for Paul Y Properties and a discloseable transaction for PYITC. An independent committee of the board of directors of Paul Y Properties comprising Messrs. Peter PUN and TSUI Tack Kong, both of whom are existing independent non-executive directors of Paul Y Properties, has been established to consider the Whitewash Waiver. An independent financial adviser will be appointed to advise the independent committee of the board of directors of Paul Y Properties regarding the Whitewash Waiver. PYITC and its Associates, which are interested in 83,042,606 Shares, representing about 67.6% of the existing issued share capital of Paul Y Properties, will vote on the resolutions to approve the Acquisition, the Share Placing and the Convertible Note Placing (and the Shares to be issued upon conversion of the Placing Convertible Note). PYITC and parties acting in concert with it will abstain from voting on the resolution to approve the Whitewash Waiver at the special general meeting of Paul Y Properties. Copies of the Composite Document will be despatched to holders of Shares, and, for information only, to holders of Warrants, as soon as practicable. In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:- `Acquisition' the acquisition by Paul Y Properties from NWT of the entire issued share capital of New World CyberBase (B.V.I.) Limited, the holding company of Newco which will own the Interactive Multimedia Communication Operation `Announcement' the joint announcement of Paul Y Properties, New World and PYITC dated 11th May, 1999 in relation to the Transaction `Associates' has the meaning ascribed to it in the Listing Rules `Composite Document' the document to be despatched to holders of Shares and, for information only, to holders of Warrants, in relation to the Transaction `Consideration Shares' 100,000,000 new Shares to be issued at HK$1.00 per Share under the Acquisition `Conversion Shares' the new shares to be issued by Paul Y Properties from time to time upon exercise by the holders of the Placing Convertible Note and/or the NW Convertible Note of the conversion rights attaching to the Placing Convertible Note and/or the NW Convertible Note (an aggregate of 250,000,000 new Shares will be issued at the initial conversion price of HK$1.00) `Convertible Note Placing' the placing of the Placing Convertible Note under the Convertible Note Placing Agreement `Convertible Note Placing the convertible note placing Agreement' and underwriting agreement dated 7th May, 1999 entered into between Paul Y Properties and Tai Fook Securities Company Limited, pursuant to which, Tai Fook Securities Company Limited has agreed to place and underwrite the Placing Convertible Note `Executive' the Executive Director of the Corporate Finance Division of the SFC `Interactive Multimedia the assets and business Communication Operation' relating to the interactive multimedia communication services, details of which are set out in the schedule to the Sale and Purchase Agreement `Listing Rules' the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited `Name Change' the change of the company name of Paul Y Properties to New World CyberBase Limited and the adoption of a chinese name of '*' (for identification purpose) `New World' New World Development Company Limited, a company incorporated in Hong Kong with limited liability, and the securities of which are listed on the Stock Exchange `New World Group' New World and its subsidiaries `Newco' a company to be established or acquired by NWT, to which NWT will sell the entire right, title and interest of the Interactive Multimedia Communication Operation `NW Convertible Note' the HK$200,000,000 convertible note to be issued by Paul Y Properties under the Acquisition `NWT' New World Telephone Limited, which is owned as to 88% by New World and as to 7% by Mr. Peter Tsang, a director of NWT and his Associates, and as to 2.5% indirectly held by Mr. Lau Woon Kau and the balance of 2.5% indirectly held by Ms. Doo Lam Lun, both are third parties not connected with the directors, chief executives or substantial shareholders of Paul Y Properties or any of its respective subsidiaries or any of its respective Associates `Paul Y Properties' Paul Y. Properties Group Limited, a company incorporated in Bermuda with limited liability, and the securities of which are listed on the Stock Exchange `Paul Y Properties Group' Paul Y Properties and its subsidiaries `Placing Convertible Note' the HK$50,000,000 convertible note to be issued by Paul Y Properties under the Convertible Note Placing Agreement `PYITC' Paul Y. - ITC Construction Holdings Limited, a company incorporated in Bermuda with limited liability, and the securities of which are listed on the Stock Exchange `PYITC Group' PYITC and its subsidiaries `Sale and Purchase Agreement' the conditional sale and purchase agreement relating to the Acquisition executed by Paul Y Properties and NWT on 21st May, 1999 `SFC' the Securities & Futures Commission of Hong Kong `Share Placing' placing of 100,000,000 new Shares under the Share Placing Agreement `Share(s)' the share(s) of HK$0.10 each in the share capital of Paul Y Properties `Share Placing Agreement' the placing and underwriting agreement entered into between Paul Y Properties, Tai Fook Securities Company Limited and BNP Prime Peregrine Securities Limited on 7th May, 1999 relating to the placing and underwriting of 100,000,000 new Shares `Share Subdivision' the issued and unissued Shares be subdivided into five Subdivided Shares `Stock Exchange' The Stock Exchange of Hong Kong Limited `Subdivided Shares' shares of HK$0.02 each in the share capital of Paul Y Properties `Takeovers Code' The Codes on Takeovers and Mergers of Hong Kong `Transaction' the Acquisition, the Share Placing and the Convertible Note Placing `Warrants' warrants of Paul Y Properties carrying rights to subscribe in aggregate HK$22,366,495 for Shares at a subscription price of HK$1 per Share during the period between 18th January, 1999 and 17th January, 2000 (both dates inclusive). `Whitewash Waiver' waiver from general offer obligation under the Takeovers Code pursuant to Note 1 of the Notes on dispensations from Rule 26 of the Takeovers Code By Order of the Board of NEW WORLD DEVELOPMENT COMPANY LIMITED Dr. Cheng Kar Shun, Henry Managing Director By Order of the Board of PAUL Y. - ITC CONSTRUCTION HOLDINGS LIMITED Dr. Chan Kwok Keung, Charles Chairman By Order of the Board of PAUL Y. PROPERTIES GROUP LIMITED Lau Ko Yuen, Tom Chairman Hong Kong, 21st May, 1999 The directors of New World jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the PYITC Group or the Paul Y Properties Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading. The directors of PYITC jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the Paul Y Properties Group, the New World Group, Newco or the Interactive Multimedia Communication Operation) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading. The directors of Paul Y Properties jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the PYITC Group, the New World Group, Newco or the Interactive Multimedia Communication Operation) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.