Hongxing Coldchain (Hunan) Co., Ltd. — Proxy Solicitation & Information Statement 2002

Apr 11, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares and warrants in GeoMaxima (Hong Kong) Holdings Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular.

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(incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION

Financial adviser to GeoMaxima (Hong Kong) Holdings Limited

Somerley Limited

11th April, 2002

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

DEFINITIONS

In this circular, unless the context otherwise requires, the following words and expressions have the following meanings:

• “Acquisition”

the proposed acquisition of 50% of the issued share capital of Oriental Energy and 50% of the Shareholders’ Loan pursuant to the Agreement

• “Agreement”

the conditional sale and purchase agreement dated 21st March, 2002 entered into between Excellent Century and Mr. Shi relating to the Acquisition

• “associates”

has the meaning given to it in the Listing Rules

• “Board” the board of Directors

• “Business Day”

• a day (other than a Saturday) on which licensed banks in Hong Kong are open for business throughout their usual business hours

• “Company”

• GeoMaxima (Hong Kong) Holdings Limited, a company incorporated in Bermuda with limited liability with its issued Shares listed on the Stock Exchange

• “Completion”

• the completion of the Agreement which is expected to be on 7th May, 2002 or any other day that may be agreed by Excellent Century

• “Director(s)”

• the director(s) of the Company

• “Excellent Century”

• Excellent Century Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company

• “Group”

the Company and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Latest Practicable Date”

• 9th April, 2002, being the latest practicable date for the purpose of ascertaining certain information contained in this circular

• “Lejion”

• Lejion Gas Company Limited, a Sino-foreign equity joint venture established in the PRC

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

• “LPG”

liquefied petroleum gas

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DEFINITIONS

“Mr. Shi” Mr. Shi Jian Hua, the vendor named in the Agreement, who owns 50% of the issued share capital of Oriental Energy and 50% of the Shareholders’ Loan “Oriental Energy” Oriental Energy Ltd., a company incorporated in the British Virgin Islands with limited liability “PRC” the People’s Republic of China which for the purpose of this circular, excludes Hong Kong “SDI Ordinance” Securities (Disclosure of Interests) Ordinance, Chapter 396 of the Laws of Hong Kong “Share(s)” share(s) of HK$0.01 each in the capital of the Company “Shareholder(s)” holder(s) of Share(s) “Shareholders’ Loan” the shareholders’ loan (which amounted to approximately RMB139.87 million (or approximately HK$131.95 million) as at 31st December, 2001) owed by Oriental Energy to its shareholders “Stock Exchange” The Stock Exchange of Hong Kong Limited “Warrants” 548,000,000 non-listed warrants issued by the Company at an issue price of HK$0.01 each. Each warrant entitles the holder thereof to subscribe for one new Share at an initial subscription price of HK$0.38 each (subject to adjustment) at any time for a period of 12 months commencing from 19th November, 2001 “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the official currency of the PRC “%” per cent.

For the purpose of this circular, the exchange rate of HK$1 to RMB1.06 has been used for reference only.

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LETTER FROM THE BOARD

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(incorporated in Bermuda with limited liability)

Directors:

Mr. Zhu Jia Zhen (Chairman) Mr. Sun Tian Gang Mr. Guo Ting Mr. Wong Nam Ling Mr. Zhao Xin Xian Mr. Yu En Guang Mr. Zhang Xue Min

* Independent non-executive Directors

Head office and principal place of business: Room 2301, Office Tower Convention Plaza 1 Harbour Road Wanchai Hong Kong

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

11th April, 2002

To the Shareholders

and for information only, holders of Warrants

Dear Sir and Madam,

DISCLOSEABLE TRANSACTION

INTRODUCTION

The Board announced on 9th November, 2001 that Excellent Century, a wholly owned subsidiary of the Company, entered into a sale and purchase agreement with Mr. Ou-Yang Rong Tai to acquire from him 40% equity interest in Oriental Energy and 40% interest in the Shareholders’ Loan for an aggregate consideration of approximately RMB55.95 million (or approximately HK$52.78 million). A circular dated 28th November, 2001 containing details of the aforesaid acquisition was despatched to the Shareholders and holders of Warrants. The aforesaid acquisition was completed on 28th November, 2001.

On 21st March, 2002, Excellent Century entered into the Agreement with Mr. Shi to acquire from him a further 50% equity interest in Oriental Energy and 50% interest in the Shareholders’ Loan for a total cash consideration of approximately RMB69.94 million (or approximately HK$65.98 million).

The Acquisition constitutes a discloseable transaction of the Company under the Listing Rules. The purpose of this circular is to provide you with further details of the Agreement.

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LETTER FROM THE BOARD

THE AGREEMENT DATED 21ST MARCH, 2002

Parties to the Agreement

• Purchaser: Excellent Century, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company. Excellent Century owns 40% of the issued share capital of Oriental Energy and 40% of the Shareholders’ Loan.

• Vendor: Mr. Shi owns 50% of the issued share capital of Oriental Energy and 50% of the Shareholders’ Loan. At as the Latest Practicable Date, Mr. Shi did not have any shareholding interest in the Company nor did he have any shareholding interest in the Company at any time prior to the date of the Agreement. Mr. Shi is independent of and not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates.

The remaining 10% of the issued share capital of Oriental Energy and 10% of the Shareholders’ Loan is owned by Mr. Ou-Yang Rong Tai, an independent third party not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates.

Following Completion, Excellent Century will own 90% of the issued share capital of Oriental Energy and 90% of the Shareholders’ Loan. Mr. Ou-Yang Rong Tai will continue to own 10% of the issued share capital of Oriental Energy and 10% of the Shareholders’ Loan. The Company has no immediate intention to acquire that from Mr. Ou-Yang Rong Tai.

Assets acquired

50% of the issued share capital of Oriental Energy and 50% of the Shareholders’ Loan.

Consideration

Excellent Century will pay approximately RMB69.94 million (or approximately HK$65.98 million) as the aggregate consideration for 50% of the issued share capital of the Oriental Energy and 50% of the Shareholders’ Loan.

The consideration was arrived at after arm’s length negotiations between Mr. Shi and Excellent Century with reference to the aggregate of the 50% interest in the Shareholders’ Loan and 50% of the unaudited consolidated net asset value of Oriental Energy as at 31st December, 2001. As at that date the Shareholders’ Loan was approximately RMB139.87 million (or approximately HK$131.95 million) and the unaudited consolidated net asset value of Oriental Energy was approximately RMB10.74 million (or approximately HK$10.13 million). The consideration represents a discount of approximately 7.12% to the sum representing 50% of the aggregate of the unaudited consolidated net asset value of Oriental Energy and face value of the Shareholders’ Loan.

The cash consideration will be funded by internal resources of the Group and will be settled in full upon Completion.

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LETTER FROM THE BOARD

Conditions

The Agreement is subject to the following conditions:

• (i) Excellent Century being satisfied with the result of a due diligence review carried out by it in respect of the assets, liabilities, operation and affairs of Lejion and Oriental Energy; and

• (ii) Excellent Century having received a PRC legal opinion in the form and substance satisfactory to Excellent Century, in relation to the terms and conditions of the Agreement.

Completion

Completion shall take place on the fifth Business Day after all the conditions of the Agreement have been fulfilled. If the conditions are not satisfied or waived, as the case may be, on or before 12:00 noon on 30th April, 2002 or such later date as may be agreed by Excellent Century, the Agreement shall cease and determine and none of the parties thereto shall have any obligations or liabilities under the Agreement, save for any antecedent breaches of the terms of the Agreement.

INFORMATION ON ORIENTAL ENERGY AND LEJION

Oriental Energy is an investment holding company incorporated in the British Virgin Islands on 22nd June, 2000. The sole asset of Oriental Energy is the holding of 80% equity interest in Lejion. Lejion has a registered capital of RMB50 million (or approximately HK$47.17 million). The unaudited consolidated net profit of Oriental Energy for the year ended 31st December, 2001 was approximately RMB0.59 million (or approximately HK$0.56 million). The unaudited consolidated net asset value of Oriental Energy as at 31st December, 2001 was approximately RMB10.74 million (or approximately HK$10.13 million). The accounts of Oriental Energy for the year ended 31st December, 2001 have been prepared in accordance with generally accepted accounting principles of Hong Kong.

The board of directors of Oriental Energy comprises Mr. Shi and Mr. Sun Tian Gang, being the board representative of the Company, prior to Completion. Upon Completion, Mr. Shi will resign as director of Oriental Energy and the Company will appoint one more director to the board of Oriental Energy.

Lejion is a Sino-foreign equity joint venture established on 11th October, 2000 under the PRC joint venture laws for a term of 20 years from its date of establishment. It is owned as to 80% and 20% by Oriental Energy and an independent PRC company, Xinjiang Korla Natural Gas Company respectively. Lejion is principally engaged in the distribution and supply of natural gas in Korla and LPG in the surrounding cities and towns. Lejion is the sole supplier of natural gas in Korla.

The board of directors of Lejion comprises five directors, of which three were appointed by Oriental Energy and two were appointed by the Xinjiang Korla Natural Gas Company. At present, all the directors of Lejion are independent of and not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries and their respective associates. Subsequent to Completion, the three existing directors appointed by Oriental Energy will resign and Oriental Energy will appoint three new board representatives to the board of directors of Lejion.

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LETTER FROM THE BOARD

The natural gas network now operated by Lejion has covered more than 50,000 households in Korla, of which approximately 39,000 households have registered to use natural gas for domestic purpose. Lejion also supplies LPG to approximately 40,000 households in towns and cities surrounding Korla.

Lejion is also engaged in the construction and operation of a refilling station supplying natural gas, LPG and petroleum for vehicle use. The refilling station commenced operation in July 2001. The Directors envisages that the demand for the relatively cheap source of energy for vehicle has great potential in Korla and the surrounding area and has the intention to build two more refilling stations in future subject to further review of the operating results of the first refilling station.

As both the natural gas pipeline network and the refilling station are now fully operational, the Board believes that no further capital commitment is required on the part of the Group in the foreseeable future.

REASONS FOR THE ACQUISITION

As disclosed in the announcement of the Company dated 9th November, 2001, the Directors believe that the PRC government is determined to develop the north-western provinces. The Directors are the view that as the economic activities in the region increase, the demand for energy will continue to escalate.

The Group is principally engaged in operations of natural gas pipeline networks and oil pipeline transportation in the PRC. The Directors also consider the Acquisition is a good opportunity for the Group to consolidate its controlling interest in Oriental Energy at a reasonable price. By consolidating its controlling interest in Oriental Energy, the Group would be able to plan and manage its natural gas pipeline operations in the PRC more cost efficiently. The Acquisition will also enable the Group to participate in planning the future development of Oriental Energy and Lejion to better suit the corporate strategies of the Group.

As the Company, after the Acquisition, will hold 90% of the issued share capital of Oriental Energy, the accounts of Oriental Energy will be consolidated into that of the Group and thus strengthen the Group’s asset base.

FURTHER INFORMATION

Your attention is drawn to the information set out in the appendix to this circular.

Yours faithfully For and on behalf of

GeoMaxima (Hong Kong) Holdings Limited Sun Tian Gang

Director

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests of the Directors in the share capital of the Company and its associated corporations (within the meaning of the SDI Ordinance) which were required to be notified to the Company and the Stock Exchange pursuant to section 28 of the SDI Ordinance (including the interests which they were deemed or taken to have under section 31 or Part I of the Schedule to, the SDI Ordinance) or which were required pursuant to section 29 of the SDI Ordinance, to be entered in the register referred to therein or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

		Nature of
Name of Director	Number of Shares	interests	Name of company
Sun Tian Gang	1,662,795,650 Shares	Corporate_(Note)_	The Company
	60,000,000 Shares	Personal	The Company
Guo Ting	3,000,000 Shares	Personal	The Company
Wong Nam Ling	50,000,000 Shares	Personal	The Company

Note: 1,662,795,650 Shares were owned by China GeoMaxima Co. Ltd., a company wholly owned by Mr. Sun Tian Gang.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had any interest in the share capital of the Company or any associated corporations (within the meaning of the SDI Ordinance) which were required to be notified to the Company and the Stock Exchange pursuant to section 28 of the SDI Ordinance (including the interests which they were deemed or taken to have under section 31 of or Part I of the Schedule to, the SDI Ordinance) or pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules or which are required, pursuant to section 29 of the SDI Ordinance, to be entered in the register referred to therein.

3. SUBSTANTIAL SHAREHOLDERS

Save as disclosed above under the heading “Disclosure of Interests” (other than a Director or chief executive of the Company), so far as is known to any Director or chief executive of the Company, the following person is, directly or indirectly, interested in 10% or more of the nominal value of any class of

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GENERAL INFORMATION

APPENDIX

share capital, or options in respect of such capital, carrying rights to vote in all circumstances at general meetings of any member of the Group:

		Approximate percentage
Name	Number of Shares	of interests
China GeoMaxima Co. Ltd.	1,662,795,650	55.66%

Save as disclosed above, the Company is not aware of any other parties holding 10% or more in the issued share capital of the Company as at the Latest Practicable Date.

4. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

5. MISCELLANEOUS

The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

The company secretary of the Company is Mr. Terence Wan, who is an associate member of the Hong Kong Society of Accountants.

The branch share registrar of the Company in Hong Kong is Central Registration Hong Kong Limited at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

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