Leeport (Holdings) Limited — Proxy Solicitation & Information Statement 2007

Mar 2, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in National Electronics Holdings Limited, you should at once hand this circular to the purchaser or transferee or the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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.

_____________

NATIONAL ELECTRONICS HOLDINGS LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 213)

DISCLOSEABLE TRANSACTION

ACQUISITION OF PROPERTY

_____________

2 March 2007

CONTENTS
Page
DEFINITIONS…………....…………………………………...…...……..…..………………....…….. ii
LETTER FROM THE BOARD
Introduction ………...……………………………………………….….....….………..….……….. 1
Agreement dated 12 February 2007…….......………………..…..…..……………………….……. 1
Reason for the Acquisition …….……….....................................…….……………......................... 2
Additional Information ………………………..……………………..……….……...……………. 3
APPENDIX – GENERAL INFORMATION...……….……………………………….…….………. 4

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DEFINITIONS

In this circular, the following expressions have the following meaning unless the context requires otherwise:

“Acquisition”	the acquisition of the Property by the Purchaser pursuant to the
	Agreement
“Agreement”	the preliminary agreement dated 12 February 2007 entered into
	between the Vendor and the Purchaser for the sale and purchase
	of the Property
“Company”	National Electronics Holdings Limited, a company incorporated
	in Bermuda with limited liability and the shares of which are
	listed on the Stock Exchange
“Directors”	the directors of the Company
“Group”	the Company and its subsidiaries
“Independent Third Party(ies)”	(an) independent third party(ies) not connected with the
	Directors, chief executive or substantial shareholders of the
	Company or any of its subsidiaries or their respective associates
	as defined in the Listing Rules
“Latest Practical Date”	27 February 2007 being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contain in this circular
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“Property”	No. 87 and No. 89, Jervois Street, Hong Kong
“Purchaser”	Batilone Limited, a company incorporated in Hong Kong and a
	wholly-owned subsidiary of the Company
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Shares”	ordinary share(s) of HK$0.1 each in the share capital of the
	Company
“Shareholder(s) ”	the shareholders of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Vendor”	Luckico Development Limited, a company incorporated in Hong
	Kong and the ultimate beneficial owners of which are
	Independent Third Parties

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LETTER FROM THE BOARD

NATIONAL ELECTRONICS HOLDINGS LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 213)

Executive Directors

Mr. Lee Yuen Ching, Jimmy (Chairman) Mr. Lee Yuen Kui, James (Managing Director) Mr. Lee Yuen Wong, Peter Mr. Lee Yuen Cheor, Edward Mr. Wai Kwong Yuen, Ricky

Non-executive Director Miss Lee Yuen Yu, Dorathy

Independent Non-executive Directors Dr. Samson Sun, M.B.E., J.P. Mr. Chan Chak Cheung, William Mr. Chan Kwok Wai

Registered Office Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head Office and Principal Place of Business: Suite 3201 Gloucester Tower The Landmark 11 Pedder Street Central, Hong Kong

2 March 2007

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION  ACQUISITION OF PROPERTY

INTRODUCTION

On 13 February 2007, the Company announced that the Purchaser, a wholly-owned subsidiary of the Company, entered into the Agreement with the Vendor on 12 February 2007, to acquire the Property at a consideration of HK$90,000,000. The Property was introduced by an estate agent which is an Independent Third Party.

The Acquisition constitutes a disclosable transaction of the Company under Chapter 14 of the Listing Rules. The purpose of this circular is to provide you with further information on the Acquisition.

AGREEMENT DATED 12 FEBRUARY 2007

Parties

Vendor: Luckico Development Limited, an Independent Third Party

Purchaser: Batilone Limited

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LETTER FROM THE BOARD

Information of the Property

The Property is located at No. 87 and 89, Jervois Street, Hong Kong. The Property will be delivered to the Purchaser upon completion of the Agreement. The Property is a commercial development site with a site area of about 2,105 square feet which is currently not in use.

Consideration and payment terms

The consideration for the Acquisition of HK$90,000,000 has been determined after arm’s length negotiations between the parties by reference to the market value of the Property of HK$95,000,000 as at 12 February 2007, being a value indication by an independent valuer, DTZ Debenham Tie Leung Limited. Subject to obtaining the relevant banking facilities, the Group currently intends to finance the consideration of the Acquisition by a combination of internal resources of the Group and bank financing in a ratio to be determined by the Company.

The consideration for the Acquisition shall be payable to the Vendor in cash in the following manner:

• (a) an initial deposit in the sum of HK$9,000,000 has been paid by the Purchaser upon signing of the Agreement;

• (b) a further deposit of HK$9,000,000 shall be paid by the Purchaser on or before 5 March 2007; and

• (c) the remaining balance of HK$72,000,000 shall be paid by the Purchaser upon completion on or before 15 May 2007.

Completion

Pursuant to the Agreement, the parties are required to enter into a formal agreement for the sale and purchase of the Property on or before 5 March 2007. Completion of the sale and purchase of the Property shall take place on or before 15 May 2007. Upon completion, the Vendor shall deliver vacant possession of the Property to the Purchaser.

REASON FOR THE ACQUISITION

The Company is an investment holding company and its subsidiaries are principally engaged in the manufacture, assembly and sale of electronic watches and watch parts, trading of watch movements and watch parts, property development and investment. The acquisition of the Property allows the Group to enlarge its properties portfolio with high quality assets. Based on the future market conditions, the Company will determine whether the Property will be re-developed or resold. The Directors consider that the acquisition of the Property is in the interest of the Company and the terms of the Agreement are fair and reasonable as far as the Shareholders are concerned.

The Directors consider that the Acquisition will not have any effect on the earnings and net asset value of the Group. The Property will bring an increase in the Group's assets but such increase will be offset by a decrease in cash balance and an increase in bank borrowings representing the consideration paid and payable.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the Appendix to this circular.

By Order of the Board National Electronics Holdings Limited Lee Yuen Ching Jimmy

Chairman

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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 Company. 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

(a) Interests of Directors

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company in the Shares, underlying Shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, 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 to be notified to the Company and the Stock Exchange were as follows:

Long positions in Shares

					Percentage of
					the issued
	Personal	Corporate	Other	Total	share capital of
Name of Director	interests	interests	interests	interests	the Company
Mr. Jimmy Lee	-	-	253,106,873	253,106,873	24.46%
Yuen Ching			(note a)
Mr. James Lee	5,940	-	252,102,979	252,108,919	24.36%
Yuen Kui			(note b)
Mr. Peter Lee	-	-	252,102,979	252,102,979	24.36%
Yuen Wong			(note b)
Mr. Edward Lee	-	-	252,102,979	252,102,979	24.36%
Yuen Cheor			(note b)
Mr. Ricky Wai	-	37,267,767	-	37,267,767	3.60%
Kwong Yuen		(note d)
Dr. Samson Sun,	-	4,988,968	-	4,988,968	0.48%
M.B.E., J.P.		(note c)

Notes:

(a) The 253,106,873 Shares are part of the property of a discretionary trust of which Mr. Jimmy Lee Yuen Ching and his family members are named beneficiaries.

• (b) The 252,102,979 Shares are part of the property of a discretionary trust of which each of Messrs. James Lee Yuen Kui, Peter Lee YuenWong and Edward Lee Yuen Cheor are named beneficiaries.

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GENERAL INFORMATION

APPENDIX

• (c) The 4,988,968 Shares are held by a company controlled by Dr. Samson Sun, M.B.E., J.P.

• (d) The 37,267,767 Shares are held by two companies controlled by Mr. Ricky Wai Kwong Yuen.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company had any interests and short positions in the Shares, underlying Shares and debentures of the Company or any associated corporation(s) (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange.

(b) Interests of Shareholders

As at the Latest Practicable Date, so far as is known to the Directors and the chief executives of the Company, no person (other than a Director or chief executive of the Company) had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group which will not expire or may not be terminated by the Company within one year without payment of compensation (other than statutory compensation).

4. LITIGATION

As at the Latest Practicable Date, there was no litigation or claims of material importance known to the Directors pending or threatened against any member of the Group.

5. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or any of their associates (as such term is defined in the Listing Rules) had an interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

6. GENERAL

• (i) The qualified accountant and company secretary of the Company is Ms. Yue Man Ying, who is a member of the Hong Kong Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants. Ms. Yue holds a Master Degree in Business Administration.

• (ii) The branch registrar and transfer office of the Company in Hong Kong is Standard Registrars Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (iii) The English version of this circular shall prevail over the Chinese text.

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