Guoco Group Limited — Capital/Financing Update 2010

Oct 11, 2010

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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FAR EAST HOTELS AND ENTERTAINMENT LIMITED 遠東酒店實業有限公司

(Incorporated in Hong Kong with limited liability) (Stock Code: 00037)

DISCLOSEABLE TRANSACTION

DISPOSAL OF PROPERTY

The Board announces that on 9 October 2010, Brighten Heart (a wholly-owned subsidiary of the Company) entered into the Provisional Contract with the Purchaser under which Brighten Heart provisionally agreed to sell the Property for a purchase price of HK$33,990,000.

The Provisional Contract is a provisional agreement for the sale by Brighten Heart of the Property being a unit in Mount Beacon in Kowloon Tong, Kowloon. The Provisional Contract is subject to the entering into of the formal agreement for sale and purchase of the Property on or before 21 October 2010. According to the Provisional Contract, the completion date of the sale and purchase of the Property shall be on or before 1 December 2010.

As the applicable percentage ratios calculated under Chapter 14 of the Listing Rules in respect of the Disposal exceed 5% but are less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

The Board announces that on 9 October 2010, Brighten Heart (being a wholly-owned subsidiary of the Company) entered into the Provisional Contract with the Purchaser for the Disposal. The Provisional Contract is a provisional agreement for the sale by Brighten Heart of the Property being a unit in Mount Beacon in Kowloon Tong, Kowloon which is owned by Brighten Heart. The Provisional Contract is subject to the entering into of the formal agreement for sale and purchase of the Property on or before 21 October 2010. According to the Provisional Contract, the completion date of the sale and purchase of the Property is on or before 1 December 2010.

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Provisional Contract

Date : 9 October 2010

Parties : (a) Vendor: Brighten Heart, a wholly-owned subsidiary of the Company (b) Purchaser: Xu Huazhen

• (c) the sales agent in respect of the Disposal

The Subject Property:

The Property comprises a residential property known as Flat B, 7/F, Tower 1, Mount Beacon, Kowloon Tong, Kowloon, which was acquired by Brighten Heart on 17 September 2005.

The net loss (without adjusting an increase in fair value of investment property amounting to HK$7,200,000) attributable to the Property was approximately HK$188,000 for the year ended 31 March 2010. The net profit (before deduction of a decrease in fair value of investment property amounting to HK$11,700,000) attributable to the Property was approximately HK$293,000 for the year ended 31 March 2009. The book value and the valuation of the Property as at 31 March 2010 was HK$32,000,000. The Disposal is expected to enable the Company to recognize a profit of HK$1,990,000 (before expenses), being the premium of the purchase price of the Property (see below) over the carrying value of the Property in the accounts of the Group.

Purchase Price:

The purchase price of the Property is HK$33,990,000, and has been determined after arm’s length negotiations between the Vendor and the Purchaser with reference to the prices of nearby properties .

Terms of Payment of the Purchase Price:

• (a) an initial deposit of HK$1,600,000 was paid by the Purchaser upon signing of Provisional Contract;

• (b) HK$1,799,000 being part payment of the purchase price shall be paid by the Purchaser on or before 21 October 2010 upon the signing of the formal sale and purchase agreement for the Disposal;

• (c) the balance of the purchase price of HK$30,591,000 shall be paid by the Purchaser upon completion of the Disposal on or before 1 December 2010.

The initial deposit of HK$1,600,000 has been received by Brighten Heart.

All the stamp duty on the Disposal shall be borne by the Purchaser (except in the case of default by the Vendor to complete the Disposal).

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Sale and Purchase:

The Purchaser and Brighten Heart shall enter into the formal agreement for sale and purchase in respect of the Property on or before 21 October 2010.

Should Brighten Heart fail to complete the sale in the manner set out in the Provisional Contract, Brighten Heart shall immediately compensate the Purchaser with a refund of the initial deposit together with a sum equivalent to the amount of the initial deposit as liquidated damages plus the stamp duty payable on the Provisional Contract.

Should the Purchaser fail to complete the purchase in the manner set out in the Provisional Contract, the initial deposit paid shall be forfeited to Brighten Heart and Brighten Heart may sell the Property to any other party as it thinks fit. The Purchaser shall then be liable to pay the stamp duty on the Provisional Contract.

Commission:

The estate agent for the Disposal shall be entitled to receive a sum of HK$339,900 from Brighten Heart and HK$160,000 from the Purchaser as commission.

If either side fails to complete the sale or purchase in the manner set out in the Provisional Contract, the defaulting party shall compensate the sales agent for HK$499,900 as liquidated damages. Should the Purchaser and Brighten Heart agree to cancel the Provisional Agreement without the consent of the estate agent, they shall still liable for payment to the estate agent of their own commission for the Disposal.

REASONS FOR THE DISPOSAL

With the recent active Hong Kong property market conditions, the Directors consider that it is now a good opportunity for the Group to dispose of the Property and thus realize cash for the provision of working capital for the Group. The Directors are of the view that the Disposal is on normal commercial terms which are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

USE OF PROCEEDS FROM THE DISPOSAL

The estimated net proceeds from the Disposal of approximately HK$17,200,000 are intended to be used for working capital purpose of the Group.

GENERAL

The principal business activities of the Group are hotel operation, property letting, securities investment and trading and investment holding.

To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, the Purchaser is a third party individual independent of the Company and its connected persons.

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As the applicable percentage ratios calculated under Chapter 14 of the Listing Rules in respect of the Disposal exceed 5% but are less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

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

“Board”	the board of Directors
“Company”	Far East Hotels and Entertainment Limited, a company incorporated
	in Hong Kong whose shares are listed on the main board of the Stock
	Exchange
“connected person”	has the meaning ascribed to it under the Listing Rules
“Directors”	the directors of the Company
“Disposal”	the disposal of the Property by Brighten Heart
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Brighten Heart”	Brighten Heart Limited, a company incorporated in Hong Kong and a
	wholly-owned subsidiary of the Company
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“PRC”	the People’s Republic of China
“Property”	Flat B, 7/F, Tower 1, Mount Beacon, Kowloon Tong, Kowloon
“Provisional Contract”	the provisional sale and purchase agreement dated 9 October 2010
	entered into between Brighten Heart and the Purchaser in respect of
	the Property
“Purchaser”	the purchaser of the Property pursuant to the Provisional Contract,
	namely Xu Huazhen
“Shareholders”	the shareholders of the Company
“Stock Exchange”	the Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

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By Order of the Board Far East Hotels and Entertainment Limited Derek Chiu Managing Director and Chief Executive

Hong Kong, 11 October 2010

As at the date of this announcement, the executive Directors are Mr. Deacon Te Ken Chiu, Mr. Derek Chiu, Mr. Desmond Chiu, Ms. Margaret Chiu; the non-executive Directors are Mrs. Chiu Ju Ching Lan, Mr. Dick Tat Sang Chiu, Mr. David Chiu, Mr. Dennis Chiu, Mr. Duncan Chiu; the independent non-executive Directors are Mr. Ip Shing Hing, Mr. Ng Wing Hang Patrick, Mr. Choy Wai Shek Raymond; and alternate Director is Mr. Chan Chi Hing (alternate Director to Mr. Deacon Te Ken Chiu).

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