Pacific Basin Shipping Limited — Proxy Solicitation & Information Statement 2007

Jun 11, 2007

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or otherwise transferred all your shares in Pacific Basin Shipping Limited, you should at once hand this circular to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

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.

(incorporated in Bermuda with limited liability) (Stock Code: 2343)

DISCLOSEABLE TRANSACTIONS: SALE OF THREE VESSELS AND TIME CHARTER BACK OF THOSE THREE VESSELS

11 June 2007

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD OF DIRECTORS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
BACKGROUND OF THE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
THE MOAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
THE TIME CHARTERPARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
REASONS FOR THE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
THE FLEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
FURTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
APPENDIX – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13

– i –

DEFINITIONS

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

• “Board”

• means the board of directors of the Company;

• “Classification Society”

• means an independent society which certifies that a vessel has been built and maintained in accordance with the rules of such society and complies with the applicable rules and regulations of the flag state of such vessel and the international conventions of which that flag state is a member;

• “Company” or “Pacific Basin”

• means Pacific Basin Shipping Limited, a limited company incorporated in Bermuda with limited liability, whose shares are listed on the main board of the Stock Exchange;

• “Directors” means the directors of the Company;

• “dwt”

• means deadweight tonnes, the unit of measurement of weight capacity of vessels, which is the total weight (usually in metric tonnes) the ship can carry, including cargo, bunkers, water, stores, spares, crew etc. at a specified draft;

• “First MOA”

• means the legally binding unconditional Memorandum of Agreement dated 21 May 2007 entered into between Pacific Basin Chartering (No.16) Limited and the First MOA Purchaser for the sale of Vessel A to the First MOA Purchaser;

• “First MOA Purchaser”

• means a subsidiary of Tsangaris to be nominated as the purchaser of Vessel A;

• “Group”

• means the Company and its subsidiaries, which are principally engaged in the provision of marine transportation and logistical support services;

• “Hong Kong”

• means the Hong Kong Special Administrative Region of the People’s Republic of China;

• “HK Dollars” or “HK$”

• means Hong Kong dollars, the lawful currency of Hong Kong;

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DEFINITIONS

• “IHC Pool” the International Handybulk Carriers Pool, established in October 2001, which is a contractual arrangement for the sharing of revenue earned by vessels entered into by its members. The IHC Pool is operated by International Handybulk Carriers Limited, a wholly-owned subsidiary of the Company;

• “IHX Pool” the International Handymax Carriers Pool, established in July 2006, which is a contractual arrangement for the sharing of revenue earned by vessels entered into by its members. The IHX Pool is operated by International Handymax Carriers Limited, a wholly-owned subsidiary of the Company;

• “Latest Practicable Date” means 6 June 2007, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;

• “Listing Rules”

• means The Rules Governing the Listing of Securities on the Stock Exchange;

• “Long Term Incentive Scheme”

• means the share option scheme adopted by the Company on 17 June 2004 and amended and re-named the long term incentive scheme pursuant to a resolution passed by Shareholders at a special general meeting on 8 June 2005;

• “MOAs”

• means the First MOA, the Second MOA and the Third MOA;

• “MOA Purchasers” means the First MOA Purchaser, the Second MOA Purchaser and the Third MOA Purchaser;

• “Second MOA”

• means the legally binding unconditional Memorandum of Agreement dated 21 May 2007 entered into between Ocean Falls Limited and the Second MOA Purchaser for the sale of Vessel B to the Second MOA Purchaser;

• “Second MOA Purchaser” means a subsidiary of Tsangaris to be nominated as the purchaser of Vessel B;

• “Shareholders” means the shareholders of the Company;

• “Stock Exchange”

means The Stock Exchange of Hong Kong Limited;

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DEFINITIONS

• “Third MOA” means the legally binding unconditional Memorandum of Agreement dated 21 May 2007 entered into between Hawk Inlet Limited and the Third MOA Purchaser for the sale of Vessel C to the Third MOA Purchaser;

• “Third MOA Purchaser” means a subsidiary of Tsangaris to be nominated as the purchaser of Vessel C;

• “Tsangaris” Tsangaris Bros. Ltd., a company with a principal place of business in Greece;

• “US Dollars” or “US$” means United States dollars, the lawful currency of the United States;

• “Vessel A” or “Port Pirie”

• means a handysize dry bulk carrier of 28,585dwt built in 1997 named “Port Pirie”. The present flag of the vessel is Hong Kong and the place of registration is Hong Kong. The Classification Society of the vessel is Lloyd’s Register of Shipping;

• “Vessel B” or “Ocean Falls”

• means a handysize dry bulk carrier of 27,827dwt built in 1997 named “Ocean Falls”. The present flag of the vessel is Hong Kong and the place of registration is Hong Kong. The Classification Society of the vessel is Lloyd’s Register of Shipping;

• “Vessel C” or “Hawk Inlet”

means a handysize dry bulk carrier of 27,802dwt built in 1997 named “Hawk Inlet”. The present flag of the vessel is Hong Kong and the place of registration is Hong Kong. The Classification Society of the vessel is Lloyd’s Register of Shipping; and

• “Vessels”

• means Vessel A, Vessel B and Vessel C.

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LETTER FROM THE BOARD OF DIRECTORS

(incorporated in Bermuda with limited liability) (Stock Code: 2343)

Executive Directors: Christopher Richard Buttery Richard Maurice Hext Klaus Nyborg Wang Chunlin Jan Rindbo

Non-Executive Directors: Daniel Rochfort Bradshaw Dr. Lee Kwok Yin, Simon

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Hong Kong Principal Office: 7th Floor, Hutchison House 10 Harcourt Road Central Hong Kong

Independent Non-Executive Directors: Robert Charles Nicholson Patrick Blackwell Paul The Earl of Cromer David Muir Turnbull

11 June 2007

To the Shareholders

Dear Sir or Madam

DISCLOSEABLE TRANSACTIONS: SALE OF THREE VESSELS AND TIME CHARTER BACK OF THOSE THREE VESSELS

INTRODUCTION

On 21 May 2007, the Directors announced that three indirect wholly-owned subsidiaries of the Company entered into the MOAs with the MOA Purchasers to sell to them three handysize vessels, namely “Port Pirie” (Vessel A), “Ocean Falls” (Vessel B) and “Hawk Inlet” (Vessel C) (collectively the “Vessels”), for a consideration of US$24,000,000 (approximately HK$187,200,000) each. The total consideration for the Vessels is US$72,000,000 (approximately HK$561,600,000). The total disposal gains for the Vessels are estimated to be about US$22,185,000 (approximately HK$173,043,000).

Principal terms of the MOAs are set out below in this circular.

In addition, subsequent to the signing of the MOAs, an indirect wholly-owned subsidiary of the Company, being the charterer, will enter into three time charterparties with respective MOA Purchasers to charter Vessel A, Vessel B and Vessel C respectively, back

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LETTER FROM THE BOARD OF DIRECTORS

into the Company’s chartered fleet at agreed charter rates for a fixed period of three years commencing immediately upon the respective delivery of the Vessels. The Company currently expects that all three charterparties will be finalised and signed by June 2007.

None of the three time charterparties constitutes a discloseable transaction of the Company under the Listing Rules.

The sale of the Vessels will enable the Company to release three of the older vessels from its fleet. The simultaneous time charter of the Vessels back into the Company’s chartered fleet for three years allows the Company to retain commercial control and hence the earnings over the Vessels during the charter period. These transactions are also consistent with the Company’s strategy of maintaining a modern handysize fleet.

The sale will generate cash which is intended to be used for general working capital and for funding any investment projects that the Company may enter into in the future should suitable opportunities arise. The dividend policy of the Board remains to pay out at least 50% of the Company’s earnings each year, which includes earnings derived from disposal gains.

The transaction contemplated under each of the MOAs, if not aggregated with each other, does not constitute a discloseable transaction of the Company under the Listing Rules. However, as the ultimate beneficial owner of the MOA Purchasers is the same, the three transactions, when aggregated, constitute discloseable transactions of the Company under the Listing Rules.

This document constitutes the circular which the Company is required to send to you pursuant to the Listing Rules in relation to the transactions contemplated under the MOAs.

BACKGROUND OF THE TRANSACTIONS

On 21 May 2007, three indirect wholly-owned subsidiaries of the Company entered into the MOAs with three different subsidiaries of Tsangaris Bros. Ltd., to sell to them three 1997 built handysize vessels, namely “Port Pirie” (Vessel A), “Ocean Falls” (Vessel B) and “Hawk Inlet” (Vessel C) (collectively the “Vessels”) respectively, for a consideration of US$24,000,000 (approximately HK$187,200,000) each. The total consideration for the Vessels is US$72,000,000 (approximately HK$561,600,000).

In addition, subsequent to the signing of the MOAs, an indirect wholly-owned subsidiary of the Company, being the charterer, will enter into three time charterparties with respective MOA Purchasers to charter Vessel A, Vessel B and Vessel C respectively, back into the Company’s chartered fleet at agreed charter rates for a fixed period of three years commencing immediately upon the respective delivery of the Vessels.

As previously disclosed in our circular dated 23 December 2005, “Port Pirie” (Vessel A) has been in our chartered fleet pursuant to the terms of the bareboat charterparty dated 7 December 2005. Under the bareboat charterparty, our indirect wholly-owned subsidiary, Pacific Basin Chartering (No.16) Limited has been granted an option to re-purchase Vessel A at any time during the 10-year charter period. In order to resume ownership over Vessel A

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LETTER FROM THE BOARD OF DIRECTORS

for subsequent sale under the First MOA, Pacific Basin Chartering (No.16) Limited will exercise the option to repurchase Vessel A on or around the date of the First MOA, resulting in a repayment of the associated finance lease liabilities of approximately US$15,200,000 (approximately HK$118,560,000). The exercise of the option to repurchase Vessel A will not constitute a discloseable transaction of the Company under the Listing Rules.

Principal terms of the MOAs and the time charterparties are set out below.

THE MOAs

The MOAs are legally binding, of broadly similar terms and conditions and are described below:

Date : 21 May 2007 Parties : Purchasers: Three different subsidiaries of Tsangaris Bros. Ltd. to be nominated as the respective purchaser for the First MOA (as the “First MOA Purchaser”), for the Second MOA (as the “Second MOA Purchaser”), and for the Third MOA (as the “Third MOA Purchaser”) (collectively the “MOA Purchasers”), all of which, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, together with Tsangaris and the ultimate beneficial owner of the MOA Purchasers, are not connected persons (as defined in the Listing Rules) of the Company and are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company. As far as the Directors are aware, having made all reasonable enquiry, the principal business activity of the MOA Purchasers will be the owning and operating of the Vessels and the principal business activity of Tsangaris is the owning and operating of shipping vessels.

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LETTER FROM THE BOARD OF DIRECTORS

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, save for the transactions disclosed in this circular, the Company has not entered into any transaction with each of the MOA Purchasers or Tsangaris or with parties connected or otherwise associated with one another and there are no other relationships amongst the MOA Purchasers or Tsangaris or their ultimate beneficial owner with whom the Company has entered into transactions to acquire, dispose of, or charter in vessels during the 12 months prior to the date of the MOAs.

Sellers: Pacific Basin Chartering (No.16) Limited, for the First MOA;

Ocean Falls Limited, for the Second MOA; and

Hawk Inlet Limited, for the Third MOA,

each being an indirect wholly-owned subsidiary of the Company.

• Assets to be : First MOA: A 1997 built handysize dry bulk carrier of sold 28,585dwt, named “Port Pirie” (“Vessel A”). Second MOA: A 1997 built handysize dry bulk carrier of 27,827dwt, named “Ocean Falls” (“Vessel B”).

• Third MOA: A 1997 built handysize dry bulk carrier of 27,802dwt, named “Hawk Inlet” (“Vessel C”). The flag of the Vessels is presently Hong Kong and the place of registration is Hong Kong. The Classification Society of the Vessels is Lloyd’s Register of Shipping.

Net profits : Vessel A: US$2,501,000 (approximately HK$19,507,800) attributable and US$799,000 (approximately HK$6,232,200) to the Vessels for the years ended 31 December 2005 and 31 December 2006, respectively (audited figures).

Vessel B: US$1,598,000 (approximately HK$12,464,400) for the period from 22 May 2006 (being the date of delivery of Vessel B to the Company) to 31 December 2006 (audited figures).

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LETTER FROM THE BOARD OF DIRECTORS

Vessel C: US$1,444,000 (approximately HK$11,263,200) for the period from 9 June 2006 (being the date of delivery of Vessel C to the Company) to 31 December 2006 (audited figures).

There is no taxation on the net profits attributable to the Vessels.

• Carrying : In the Company’s unaudited accounts, the carrying values of the values of Vessel A, Vessel B and Vessel C were approximately the Vessels US$16,052,000 (approximately HK$125,205,600), approximately US$16,843,000 (approximately HK$131,375,400) and approximately US$16,920,000 (approximately HK$131,976,000), respectively, as at 21 May 2007.

• Consideration : Vessel A: US$24,000,000 (approximately HK$187,200,000); Vessel B: US$24,000,000 (approximately HK$187,200,000); and

• Vessel C: US$24,000,000 (approximately HK$187,200,000).

The total consideration for the Vessels is US$72,000,000 (approximately HK$561,600,000). Such consideration was determined by reference to market intelligence the Company has gathered from shipbrokers and its own analysis of recently concluded sale and purchase transactions of vessels of comparable size and year of build in the market, and after arm’s length negotiation between the parties. However, as is commonly the case in the dry bulk carrier market, there have not been any recently published sales by third party vendors of vessels of the exact age and size of the Vessels from which to make a direct comparison. In addition, no third party valuation has been performed on the Vessels.

The Directors believe that such consideration, which was determined after arm’s length negotiation, on normal commercial terms, is fair and reasonable so far as the Company and the Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole. Payment : Under the MOAs, the consideration for the sale of the Vessels terms shall be receivable in the following manner:

• 10% of the consideration (being the deposit) shall be received at the time of signing the MOAs; and

• The balance of the consideration shall be received in full upon the respective delivery of the Vessels.

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LETTER FROM THE BOARD OF DIRECTORS

• Completion : Pursuant to the First MOA, the latest date of completion for and Vessel A is 15 August 2007 unless the parties otherwise agree. delivery The Directors currently expect that the completion and delivery of Vessel A will take place within the third quarter of 2007 and prior to 15 August 2007.

• Pursuant to the Second MOA and the Third MOA, the latest date of completion for Vessel B and Vessel C is 31 July 2007 and 15 July 2007, respectively, unless the parties otherwise agree. The Directors currently expect that the completion and delivery of Vessel B and Vessel C will take place during June and July 2007.

• Expected : The estimated gains that are expected to accrue to the disposal consolidated income statement of the Company in the financial gains year ending 31 December 2007 in respect of Vessel A, Vessel B and Vessel C are US$7,948,000 (approximately HK$61,994,400), US$7,157,000 (approximately HK$55,824,600) and US$7,080,000 (approximately HK$55,224,000), respectively. The estimated gains are calculated as the difference between the sale consideration of the Vessels and their respective approximate carrying values in the Company’s unaudited accounts as at 21 May 2007.

• Application of : The Company intends to retain the sale proceeds of the Vessels for sale general working capital and for funding investment projects that proceeds the Company may enter into in the future should suitable opportunities arise. The dividend policy of the Board remains to pay out at least 50% of the Company’s earnings each year, which includes earnings derived from disposal gains.

• As of the Latest Practicable Date, the Company has not entered into any negotiations or agreements in relation to the above investment initiatives. In the event that the Company enters into any such agreements, it will comply with the relevant requirements under the Listing Rules.

THE TIME CHARTERPARTIES

In addition, subsequent to the signing of the MOAs, an indirect wholly-owned subsidiary of the Company, being the charterer, will enter into three time charterparties with the First MOA Purchaser, the Second MOA Purchaser and the Third MOA Purchaser to respectively charter Vessel A, Vessel B and Vessel C back into the Company’s chartered fleet at agreed charter rates for a fixed period of three years commencing immediately upon the respective delivery of the Vessels. The Company does not have the option to re-purchase the Vessels during or at the end of the charter period. The Company currently expects that the three charterparties will be finalised and signed by June 2007.

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LETTER FROM THE BOARD OF DIRECTORS

The time charter rates of the Vessels were determined after arm’s length negotiation, on normal commercial terms and by reference to the type of Vessels. These time charter rates are considered to be competitive as compared with the current market time charter rates.

The time charterparties are separate agreements to the MOAs and they are not interconditional. The transactions to time charter the Vessels back will be classified as operating leases in accordance with the Hong Kong Accounting Standard No. 17 “Leases”. As the entering into of these operating leases do not represent a 200% or more increase in the scale of the Company’s existing operations conducted through lease arrangements of such kind, the time charterparties do not constitute discloseable transactions of the Company under Rule 14.04(1)(d) of the Listing Rules.

Financial Effects of the Sale and Time Charter Back of the Vessels

Following the disposal and delivery of the Vessels, the Group’s fixed assets (owned vessels) will decrease by the carrying values of the Vessels of approximately US$49,815,000 (approximately HK$388,557,000). Current liabilities and long-term liabilities are expected to decrease by approximately US$970,000 (approximately HK$7,566,000) and approximately US$14,230,000 (approximately HK$110,994,000) respectively, representing the associated finance lease liabilities to be repaid upon exercising the option to repurchase Vessel A. Current assets are expected to increase by approximately US$56,800,000 (approximately HK$443,040,000), representing the net sale proceeds receivable by the Company after repaying the finance lease liabilities in respect of Vessel A. The sale of the Vessels will also result in disposal gains of approximately US$22,185,000 (approximately HK$173,043,000) in the consolidated income statement of the Company for the financial year ending 31 December 2007. The transactions to time charter the Vessels back will be classified as operating leases with the charter-hire payments to be accounted for as operating lease expenses during the three-year charter period in accordance with the Hong Kong Accounting Standard No. 17 “Leases”.

The sale and time charter back of the Vessels will not have any effect upon the number of handysize revenue days nor have a significant effect upon the earnings of the Group during the three-year charter period.

REASONS FOR THE TRANSACTIONS

The Company is one of the world’s leading dry bulk shipping companies operating principally in the Asia Pacific region. It has been seeking opportunities to acquire additional handysize and handymax vessels to expand its fleet to meet growing customer demand and to deliver sustainable growth and long-term shareholder value. With a large fleet of modern vessels, Pacific Basin seeks to offer its customers a reliable service with a high degree of scheduling flexibility whilst maintaining the Company’s operational efficiency.

The sale of the Vessels will enable the Company to release three of the older vessels from its fleet. The simultaneous time charter of the Vessels back into the Company’s chartered fleet for three years allows the Company to retain commercial control and hence the earnings over the Vessels during the charter period. The transactions contemplated under the MOAs are also consistent with the Company’s strategy of maintaining a modern handysize fleet.

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LETTER FROM THE BOARD OF DIRECTORS

The sale will generate cash which is intended to be used for general working capital and for funding any investment projects that the Company may enter into in the future should suitable opportunities arise. The dividend policy of the Board remains to pay out at least 50% of the Company’s earnings each year, which includes earnings derived from disposal gains.

The Directors believe that the terms of the MOAs, which were determined after arm’s length negotiation, on normal commercial terms, are fair and reasonable so far as the Company and the Shareholders are concerned, and the sale and time charter back of the Vessels are in the interests of the Company and the Shareholders as a whole.

THE FLEET

Handysize Fleet

Following the completion and delivery of the Vessels from the owned fleet to the chartered fleet and the completion of the vessel sale and purchase transactions as announced in our trading activities update dated 26 April 2007, the Company’s core handysize fleet will comprise 60 vessels (1,746,792dwt), including 19 owned vessels (568,743dwt), 37 chartered-in vessels (1,075,869dwt) and four managed vessels (102,180dwt). All handysize vessels, except one (28,730dwt), are employed in a mixture of voyage charters and time charters through the IHC Pool. Outside the core handysize fleet, the IHC Pool also operates a number of short-term chartered-in vessels, amounting to six vessels as at the Latest Practicable Date.

In addition, the Company has 13 newbuilding vessels on order (approximately 407,100dwt in aggregate), three of which are scheduled to deliver in 2007, four in 2008 and six in 2009. Out of these newbuilding vessels, 12 vessels will enter into the Company’s owned fleet and one vessel will enter into the Company’s chartered fleet upon their respective deliveries.

Handymax Fleet

Following the delivery of two vessels within 2007 which we have entered into agreements to charter in them on long-term basis, the Company’s core handymax fleet comprises nine vessels (454,409dwt), including two owned vessels (97,972dwt) and seven long-term chartered-in vessels (356,437dwt). All handymax vessels, with the exception of two vessels (107,194dwt) which are employed on long-term time charters, are employed in a mixture of time charters and voyage charters through the IHX Pool. Outside the core handymax fleet, the IHX Pool also operates a number of short-term chartered-in vessels, amounting to 20 vessels as at the Latest Practicable Date.

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LETTER FROM THE BOARD OF DIRECTORS

In addition, the Company has two newbuilding vessels on order (approximately 107,500dwt in aggregate), one of which will enter into the Company’s chartered fleet within 2007 and the other will enter into the Company’s owned fleet in 2008 upon their deliveries.

There is no distinction between the use of owned, chartered-in and managed vessels, save to the extent that the Company generates freight and charter-hire income for the owned and chartered-in vessels, but generates ship management income for the operations of the managed vessels.

As the ultimate beneficial owner of the MOA Purchasers is the same, the transactions contemplated under the MOAs, only when aggregated, constitute discloseable transactions of the Company under the Listing Rules. This document constitutes the circular which the Company is required to send to you pursuant to the Listing Rules in relation to the transactions contemplated under the MOAs.

FURTHER INFORMATION

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

Yours faithfully, By Order of the Board Andrew T. Broomhead Company Secretary

Note: An exchange rate of US$1.00 to HK$7.80 has been used for the conversion of US Dollars into HK Dollars for the purpose of this circular.

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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, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts the omission of which would make any statement herein misleading.

2. SHARE CAPITAL

Authorised and issued share capital

The authorised and issued share capital of the Company as at the Latest Practicable Date:

Authorised:						US$
3,600,000,000	shares	(Shares	of	US$0.10	each)	360,000,000
Issued:
1,569,130,109	shares	(Shares	of	US$0.10	each)	156,913,010

All the existing issued Shares rank pari passu in all respects including all rights as to dividends, voting and interests in capital.

No part of the share capital or debt securities of the Company are listed on or dealt in any stock exchange other than the Stock Exchange and no application is being made or is currently proposed to be sought for the Shares or debt securities of the Company to be listed on or dealt in any other stock exchange.

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GENERAL INFORMATION

APPENDIX

3. DISCLOSURE OF INTERESTS

(i) Interests of Directors and Chief Executive

As at the Latest Practicable Date, the interests and short positions of each Director and the Chief Executive of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“SFO”)) which: (a) 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 are taken or deemed to have under such provisions of the SFO), or (b) were required to be entered in the register kept by the Company pursuant to Section 352 of the SFO, or (c) 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 the Shares and underlying Shares and debentures of the Company

					Number of
					underlying
					Shares under		Approximate
					equity		percentage of
				Trust &	derivatives	Total	issued share
	Corporate	Personal	Family	similar	(share	Share	capital of the
Name of Director	interests	interests	interests	interests	options)	interests	Company
Christopher R. Buttery	–	2,813,308	–	9,193,4533	1,600,0001	13,606,761	0.87%
Richard M. Hext	–	3,483,7412	–	–	–	3,483,741	0.22%
Dr. Lee Kwok Yin, Simon	–	–	–	113,835,8474	18,243,4224	132,079,269	8.42%
Patrick B. Paul	–	20,000	–	–	–	20,000	0.001%
Daniel R. Bradshaw	869,4175	–	–	–	–	869,417	0.055%
Wang Chunlin	–	1,280,0006	–	–	–	1,280,000	0.082%
Klaus Nyborg	–	2,900,0007	–	–	–	2,900,000	0.18%
Jan Rindbo	–	4,056,3708	–	–	1,200,0008	5,256,370	0.33%

Notes:

• (1) On 14 July 2004, Mr. Buttery was granted options to subscribe for 4,800,000 Shares pursuant to the Long Term Incentive Scheme. The subscription price is HK$2.50 per Share. In relation to the grant of 4,800,000 share options, (i) 1,600,000 share options are exercisable from 14 July 2005 to 14 July 2014, (ii) another 1,600,000 share options are exercisable from 14 July 2006 to 14 July 2014 and (iii) the remaining 1,600,000 share options are exercisable from 14 July 2007 to 14 July 2014.

Mr. Buttery has exercised his options to subscribe for 1,600,000 Shares in September 2005 and 1,600,000 Shares in August 2006 at the price of HK$2.50 per Share.

• (2) On 8 June 2005, 3,333,333 Shares in the form of restricted share awards were granted to Mr. Hext pursuant to the Long Term Incentive Scheme. In relation to the 3,333,333 restricted share awards, (i) 666,667 Shares have vested on 5 April 2006, (ii) 666,667 Shares have vested on 5 April 2007, (iii) 666,667 Shares will vest on 5 April 2008, (iv) 666,666 Shares will vest on 5 April 2009 and (v) 666,666 Shares will vest on 5 April 2010.

By a Restricted Share Award Agreement dated 20 March 2006, the 5 million share options granted to Mr. Hext when he joined the Company as an executive Director on 5 April 2005 were cancelled and in their place he was granted 1,020,408 Shares on 28 March 2006 in the

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GENERAL INFORMATION

APPENDIX

form of restricted share awards, of which (i) 204,080 Shares have vested on 5 April 2006, (ii) 204,080 Shares have vested on 5 April 2007, (iii) 204,080 Shares will vest on 5 April 2008, (iv) 204,080 Shares will vest on 5 April 2009 and (v) 204,088 Shares will vest on 5 April 2010.

• (3) 9,193,453 Shares are owned by Turnwell Limited. Mr. Buttery is deemed to be interested in the entire share capital of Turnwell Limited under the SFO as its shares are held by a discretionary trust set up by him and the discretionary objects of which include himself and his family members.

• (4) Out of the 113,835,847 Shares, 19,935,122 Shares, 1,059,725 Shares, 36,370,000 Shares, 49,438,500 Shares and 7,032,500 Shares are beneficially owned by Asia Distribution Limited, Firelight Investments Limited, Wellex Investment Limited, Fortress Eagle Investment Limited and Invest Paradise International Limited respectively. These companies are controlled by discretionary trusts established by Dr. Lee, the discretionary objects of which include his family members.

For the 18,243,422 underlying Shares under equity derivatives, they are being held equally by Fortress Eagle Investment Limited and Invest Paradise International Limited (each holding 9,121,711 underlying Shares under equity derivatives) which, as disclosed above, are companies controlled by discretionary trusts established by Dr. Lee, the discretionary objects of which include his family members.

• (5) Mr. Bradshaw is a shareholder holding 100% and 50% of the issued share capital, respectively, in Cormorant Shipping Limited and Goldeneye Shipping Limited. He beneficially owns 353,241 Shares via Cormorant Shipping Limited and is taken to be interested in the 516,176 Shares held by Goldeneye Shipping Limited.

• (6) By a Restricted Share Award Agreement dated 9 March 2006, 550,000 Shares in the form of restricted share awards were granted to Mr. Wang on 24 March 2006 pursuant to the Long Term Incentive Scheme and an equal amount of 110,000 Shares will vest on each of 1 March 2007, 2008, 2009, 2010 and 2011 respectively.

A further 730,000 Shares in the form of restricted share awards were granted to Mr. Wang under a Restricted Share Award Agreement dated 11 May 2007, of which (i) 240,000 Shares will vest on 14 July 2008, (ii) 240,000 Shares will vest on 14 July 2009, and (iii) 250,000 Shares will vest on 14 July 2010.

• (7) Out of the 2,900,000 Shares held by Mr. Nyborg as personal Interests, 2,500,000 Shares are in the form of restricted shares granted to him on 19 September 2006 pursuant to the Long Term Incentive Scheme. 500,000 Shares have vested on 19 September 2006, and an equal amount of 500,000 Shares will vest on each of 4 September 2008, 2009, 2010 and 2011 respectively.

• (8) Mr. Rindbo was granted options to subscribe for 1,200,000 Shares pursuant to the Long Term Incentive Scheme which are exercisable from 14 July 2007 to 14 July 2014. The subscription price is HK$2.50 per Share.

By a Restricted Share Award Agreement dated 11 May 2007, 1,030,000 Shares in the form of restricted share awards were granted to Mr. Rindbo pursuant to the Long Term Incentive Scheme, of which (i) 340,000 Shares will vest on 14 July 2008, (ii) 340,000 Shares will vest on 14 July 2009, and (iii) 350,000 Shares will vest on 14 July 2010.

(ii) Interests of Shareholders discloseable pursuant to the SFO

As at the Latest Practicable Date, so far as is known to the Directors, each of the following parties had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under Divisions 2

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GENERAL INFORMATION

APPENDIX

and 3 of Part XV of the SFO, or, who is, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company:

			Approximate
			percentage of
			issued share
	Capacity/	Number	capital of the
Name	Nature of interest	of Shares	Company
Dr. Lee Kwok Yin, Simon	Founder of a	132,079,269	8.42%
	discretionary trust
BNP Paribas Jersey Trust	Trustee	132,079,269	8.42%
Corporation Limited1
JP Morgan Chase & Co.	Beneficial owner,	111,632,455	7.11%
	Investment
	manager and
	approved lending
	agent

Note:

• (1) The shares held by BNP Paribas Jersey Trust Corporation Limited are held in the capacity of a trustee for discretionary trusts established by Dr. Lee Kwok Yin, Simon.

Saved as disclosed, the Directors are not aware that there is any party who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO, or, who is, directly or indirectly, interested in 10% 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.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any service contract with the Company or any of its subsidiaries which is not expiring or determinable by the Group within one year without payment of compensation, other than statutory compensation.

5. LITIGATION

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

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GENERAL INFORMATION

APPENDIX

6. COMPETING INTERESTS

None of the Directors or their respective associates have a controlling interest in a business which competes either directly or indirectly with the business of the Company.

7. MISCELLANEOUS

• (i) The company secretary and the qualified accountant of the Company is Andrew Thomas Broomhead. He is a Fellow of both the Hong Kong Institute of Certified Public Accountants and the Institute of Chartered Accountants in England and Wales.

• (ii) The registered office of the Company is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. The head office and principal place of business of the Company is at 7th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong.

• (iii) The principal share registrar and transfer office is Butterfield Fund Services (Bermuda) Limited, Rosebank Centre, 11 Bermudiana Road, Pembroke, HM08, Bermuda.

• (iv) The English text of this circular shall prevail over the Chinese text in case of any inconsistency.

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