Matrix Holdings Limited — M&A Activity 2000

Sep 8, 2000

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.

Matrix Holdings Limited	SUNCORP INVESTMENTS GROUP LIMITED
(Incorporated in Bermuda with limited liability)	(Incorporated in the British Virgin Islands with limited liability)

JOINT ANNOUNCEMENT

Unconditional cash offer by

Celestial Capital Limited

on behalf of Suncorp Investments Group Limited

for all the issued Shares of Matrix Holdings Limited

(other than those already owned or

agreed to be acquired by Suncorp Investments Group Limited

or parties acting in concert with it)

DESPATCH OF THE COMPOSITE OFFER DOCUMENT

The Composite Offer Document together with the form of acceptance and transfer will be despatched to the shareholders of the Company on 8th September, 2000.

The Composite Offer Document contains certain financial information on the Group which has not been previously announced and is included in this announcement.

Suncorp has nominated three persons to the board of directors of the Company. The appointment will be effective upon the despatch of the Composite Offer Document, being 8th September, 2000.

Unless otherwise stated, terms used in this announcement shall have the same meanings as those defined in the joint announcement of the Company and Suncorp dated 3rd July, 2000 (the "Joint Announcement") relating to the possible unconditional cash offer by Deloitte & Touche on behalf of Suncorp for all the issued Shares other than Shares already owned or agreed to be acquired by Suncorp or parties acting in concert with it. It was further announced on 1st September, 2000 that Celestial Capital Limited has been appointed by Suncorp as its financial advisor to replace Deloitte & Touche. Accordingly, Celestial Capital Limited is now making the Offer for and on behalf of Suncorp.

DESPATCH OF COMPOSITE OFFER DOCUMENT

The document ("Composite Offer Document") containing details of the Offer, the letter of advice from Kim Eng Capital (Hong Kong) Limited as the independent financial adviser to the Independent Board Committee and the letter of recommendation from the Independent Board Committee, together with the form of acceptance and transfer, will be despatched to the shareholders of the Company on 8th September, 2000. The Offer will close at 9:30 a.m. on 30th September, 2000. Acceptances received after 4:00 p.m. on 29th September, 2000 will only be valid if the Offer is revised or extended before 30th September, 2000.

Shareholders are advised to read the Composite Offer Document carefully before making a decision in respect of the Offer. The latest time for acceptances of the Offer is 4:00 p.m. on Friday, 29th September, 2000.

FINANCIAL INFORMATION ON THE GROUP NOT PREVIOUSLY ANNOUNCED

The Composite Offer Document contains the following information on the Group which has not been previously announced.

1. SUMMARY OF THE UNAUDITED CONSOLIDATED RESULTS OF THE GROUP FOR THE FIVE MONTHS ENDED 31st MAY, 2000

Unaudited consolidated profit and loss account

For the five months ended 31st May, 2000

	HK$'000
Turnover	4,087
Cost of sales	(2,653)
Gross profit	1,434
Write back of inventories previously written off which
has been consumed for production during the period	2,517
Other revenue	154
Distribution costs	(20)
Administrative expenses	(3,371)
Profit from operations	714
Restructuring costs	(4,136)
Waiver of indebtedness due to creditors	189,441
Finance costs	(183)
Profit before taxation	185,836
Taxation
Profit for the period	185,836

1. PRO FORMA UNAUDITED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

The following statement of pro forma unaudited consolidated net tangible assets of the Group is based on the audited consolidated net liabilities of the Group as at 31st December, 1999, adjusted to reflect the effect of the issue of new Shares to MRL, the unaudited consolidated profit of the Group for the five months ended 31st May, 2000 and revaluation surplus of property, plant and equipment as at 30th June, 2000.

	HK$'000
Audited consolidated net liabilities of the Group
as at 31st December, 1999	(164,610)
Proceeds from issue of 100,000,000 new Shares
at HK$0.10 per Share in May 2000	10,000
Unaudited profit for the five months ended 31st May, 2000	185,836
Revaluation surplus of property, plant
and equipment as at 30th June, 2000 (Note 1)	2,049
Pro forma unaudited consolidated net assets of the Group	33,275
Proceeds from issue of Conversion Shares upon full
conversion of the Convertible Loan Stock	44,000
Pro forma unaudited consolidated net tangible assets of
the Group upon issuance of the Conversion Shares	77,275
Pro forma audited consolidated net liabilities per Share
as at 31st December, 1999 (Note 2)	(368) cents
Pro forma unaudited consolidated net tangible assets
per Share (Note 3)	23 cents
Pro forma unaudited consolidated net tangible assets per
Share upon issuance of the Conversion Shares (Note 4)	13 cents

Notes:

1. In accordance with the Group's accounting policy in the notes to the financial statements contained in appendix II to the Composite Offer Document, property, plant and equipment are stated at the revalued amount, being the fair value on the basis of their existing use at the date of revaluation less any subsequent depreciation. Any surplus arising on revaluation of land and buildings, plant and machinery is credited to other assets revaluation reserve except to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense, in which case, this surplus is credited to income statement to the extent of the deficit previously charged. Accordingly, the surplus arising from the revaluation of this land and buildings, plant and machinery will not be incorporated in its financial statements for the six months period ended 30th June, 2000.

2. Based on the issued share capital of 44,720,000 Shares after completion of the capital reorganisation pursuant to the Restructuring.

3. Based on the enlarged issued share capital of 144,720,000 Shares after the issue of 100,000,000 new Shares to MRL.

4. Based on the enlarged share capital of 584,720,000 Shares after the issue of 100,000,000 new Shares to MRL and upon issuance of the 440,000,000 Conversion Shares on or after the third anniversary of the issuance of the Convertible Loan Stock.

Proposed change of board composition

It is intended that Mr. Wong, Mr. Low Nyap Heng, Dr. Yap Set and Mr. Teoh Beng Leong will resign as directors of the Company upon the closing of the Offer which will be on 30th September, 2000.

Suncorp has nominated Mr. Cheng, Mr. Yu Sui Chuen and Ms. Cheng Wing See, Nathalie as executive directors of the Company. The appointment will be effective upon the despatch of the Composite Offer Document, being 8th September, 2000.

By the Order of the Board	By the Order of the Board
Matrix Holdings Limited	Suncorp Investments Group Limited
Wong Chak Hung, James	Cheng Yung Pun
Chairman	Director

Hong Kong, 7th September, 2000

The directors of the Company jointly and severally accept full responsibility for the accuracy of information (other than that relating to Suncorp) contained in this announcement and confirm, having made all reasonable inquiries, that to the best of their knowledge, the opinions expressed in this announcement (other than those expressed by Suncorp) have been arrived at after due and careful consideration and that there are no other facts not contained in this announcement (other than those relating to Suncorp), the omission of which would make any statement in this announcement misleading.

The sole director of Suncorp accepts full responsibility for the accuracy of information contained in this announcement (other than that relating to the Group) and confirms, having made all reasonable inquiries, that to the best of his knowledge, the opinions expressed in this announcement (other than those expressed by the Group) have been arrived at after due and careful consideration and that there are no other facts not contained in this announcement (other than those relating to the Group), the omission of which would make any statement in this announcement misleading.

Please also refer to the published version of this announcement in the i Mail dated 8/9/2000.