Guoco Group Limited — Capital/Financing Update 2011

Feb 28, 2011

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 25 February 2011, Cankon (a wholly-owned subsidiary of the Company) entered into the Provisional Contract with the Purchaser under which Cankon provisionally agreed to sell the Property, being a residential unit and a car parking space in Village Gardens in Kowloon Tong, Hong Kong, at a consideration of HK$20,500,000.

The Provisional Contract is a provisional agreement for the sale by Cankon of the Property being a unit and a car parking space in Village Gardens in Kowloon Tong, Kowloon. According to the Provisional Contract, the formal agreement for sale and purchase of the Property shall be entered into on or before 11 March 2011, and the completion date of the sale and purchase of the Property shall be on or before 26 April 2011.

As the consideration ratio in respect of the Disposal exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

The Board announces that on 25 February 2011, Cankon (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 Cankon of the Property being a residential unit and a car parking space in Village Gardens in Kowloon Tong, Hong Kong which is owned by Cankon. According to the Provisional Contract, the formal agreement for sale and purchase of the Property shall be entered into on or before 11 March 2011, and the completion date of the sale and purchase of the Property shall be on or before 26 April 2011.

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Provisional Contract

Date : 25 February 2011

• Parties : (a) Vendor: Cankon, a wholly-owned subsidiary of the Company (b) Purchaser: Superb Harvest Limited

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

The Subject Property:

The Property comprises a residential property known as Flat A on 8th Floor of Block B10 and Car Park No. 157 on Basement Floor, Village Gardens (Phase A), No. 49 – 67 Fa Po Street, Kowloon Tong, Kowloon. The gross floor area of the Property is 1,793 square feet.

The net loss (without adjusting an increase in fair value of investment property amounting to HK$1,300,000) attributable to the Property was approximately HK$221,000 for the year ended 31 March 2010. The net loss (without adjusting a decrease in fair value of investment property amounting to HK$3,400,000) attributable to the Property was approximately HK$226,000 for the year ended 31 March 2009. The audited book value and the valuation of the Property as at 31 March 2010 were HK$15,900,000. The Disposal is expected to enable the Company to recognize a profit of HK$4,600,000 (before expenses), being the premium of the consideration for the Disposal (see below) over the carrying value of the Property in the accounts of the Group.

Consideration:

The consideration for the Disposal of the Property is HK$20,500,000, 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 Consideration:

• (a) an initial deposit of HK$800,000 was paid by the Purchaser upon signing of Provisional Contract;

• (b) HK$1,250,000 being part payment of the consideration shall be paid by the Purchaser on or before 11 March 2011 upon the signing of the formal sale and purchase agreement for the Disposal;

• (c) the balance of the consideration of HK$18,450,000 shall be paid by the Purchaser upon completion of the Disposal on or before 26 April 2011.

The initial deposit of HK$800,000 has been paid by the Purchaser to the solicitors acting for Cankon in the Disposal as stakeholder.

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Sale and Purchase:

The Purchaser and Cankon shall enter into the formal agreement for sale and purchase in respect of the Property on or before 11 March 2011.

The Provisional Contract is stated to be a specific performance contract.

Commission:

The sales agent for the Disposal shall be entitled to receive a sum of HK$102,500 from Cankon and HK$102,500 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$205,000 as liquidated damages. Should the Purchaser and Cankon agree to cancel the Provisional Agreement without the consent of the sales agent, they shall jointly and separately become defaulting parties of the Provisional Contract and will still be liable for payment to the sales 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, and the terms of the Disposal 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$14,200,000 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 and its ultimate beneficial owners are third parties independent of the Company and its connected persons, and the Purchaser’s principal business activity is property investment.

As the consideration ratio in respect of the Disposal exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

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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 Cankon pursuant to the Provisional
	Contract
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Cankon”	Cankon Properties 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 A on 8th Floor of Block B10 of Phase A of Village Gardens and
	Car Park No. 157 on Basement Floor, Village Gardens (Phases A &
	B), No. 49 – 67 Fa Po Street, No. 48 - 68 Tat Chee Avenue, Kowloon
	Tong, Kowloon, Hong Kong
“Provisional Contract”	the provisional sale and purchase agreement dated 25 February 2011
	entered into between Cankon and the Purchaser in respect of the
	Property
“Purchaser”	the purchaser of the Property under the Provisional Contract, namely
	Superb Harvest Limited
“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, 28 February 2011

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.

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