Pacific Online Limited — M&A Activity 2001

Oct 19, 2001

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.

GR INVESTMENT HOLDINGS LIMITED

金 源 創 展 有 限 公 司

(incorporated in Hong Kong with limited liability)

to become a wholly-owned subsidiary of

GR INVESTMENT INTERNATIONAL LIMITED

金 源 投 資 國 際 有 限 公 司 *

(a new holding company incorporated in Bermuda with limited liability and the shares of

which will be listed on The Stock Exchange of Hong Kong Limited by way of introduction)

by way of a

SCHEME OF ARRANGEMENT

(under Section 166 of the Companies Ordinance, Chapter 32 of the Laws of Hong Kong)

DESPATCH OF THE SCHEME DOCUMENT

A scheme document containing, among other things, the Proposal, the Explanatory Statement together with the expected timetable and notices convening the Court Meeing and the Extraordinary General Meeting to approve the Proposal and the proxy forms for the Court Meeting and the Extraordinary General Meeting, will be despatched to the Shareholders on 19th October, 2001.

The Scheme Document contains certain financial information of the Group which has not been previously released to the public. Such information is reproduced in this announcement.

Reference is made to the announcement of the Company dated 10th May, 2001 relating to the reorganisation proposal of the Company by way of a scheme of arrangement under Section 166 of the Companies Ordinance, Chapter 32 of the Laws of Hong Kong.

DESPATCH OF THE SCHEME DOCUMENT

A scheme document containing, among other things, the Proposal, the Explanatory Statement together with the expected timetable and notices convening the Court Meeing and the Explanatory General Meeting to approve the Proposal and the proxy forms for the Court Meeting and the Extraordinary General Meeting, will be despatched to the Shareholders on 19th October, 2001 (the "Scheme Document").

The expected timetable for the Proposal is set out as follows:

2001

Announcement Thursday, 10th May

Latest time for lodging forms of proxy in respect

of: the Court Meeting (Notes 1 and 3) 10:00 a.m., Wednesday, 14th November

the Extraordinary General Meeting

(Notes 2 and 3) 10:15 a.m., Wednesday, 14th November

Court Meeting 10:00 a.m., Friday, 16th November

Extraordinary General Meeting 10:15 a.m., Friday, 16th November

Court hearing of petition to sanction

the Scheme (Note 4) Tuesday, 11th December

Last day of dealings in the Shares Tuesday, 11th December

Record Time 4:00 p.m., Tuesday, 11th December

Effective Date (Note 5) Wednesday, 12th December

Withdrawal of listing of the Shares 10:00 a.m., Wednesday, 12th December

Dealings in the New Shares to commence 10:00 a.m., Wednesday, 12th December

First day for exchange of existing certificates

for the Shares for new certificates for

the New Shares, free of charge Wednesday, 12th December

2002

Last day for exchange of existing certificates

for the Shares for new certificates for

the New Shares, free of charge Wednesday, 9th January

Notes:

1. The white form of proxy for the Court Meeting should be deposited with the registrar of the Company, Secretaries Limited at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong, by the time stated above. Alternatively, it may be handed to the chairman of the Court Meeting at that meeting.

2. In order to be valid, the yellow form of proxy for the Extraordinary General Meeting must be deposited with the registrar of the Company, Secretaries Limited at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong, by the time stated above.

3. Completion and return of the forms of proxy will not preclude the Shareholders from attending the meetings and voting in person. In the event that a Shareholder who has lodged a form of proxy for a meeting attends that meeting, such form of proxy will be deemed to have been revoked.

4. The date for Court hearing of petition to sanction the Scheme is to be scheduled by the Court. If there is any change in the above timetable, a separate announcement will be made by the Company.

5. The Scheme will become effective when it is sanctioned, with or without modification, by the Court and an office copy of the Court order and the minute containing the particulars required by Section 61 of the Companies Ordinance are delivered to and registered by the Registrars of Companies in Hong Kong, which is expected to take place by 10:00 a.m. (Hong Kong time) on 12th December, 2001.

FINANCIAL INFORMATION OF THE GROUP

The Scheme Document contains certain financial information of the Group which has not been previously released to the public. Such information is reproduced in this announcement as follows:

Set out below is a statement of the pro forma unaudited consolidated net tangible asset value of the Group based on the unaudited consolidated net asset value of the Group as at 30th September, 2001:

HK$'000

Unaudited consolidated net tangible assets

of the Group as at 30th September, 2001 245,609

Less: Expenses in relation to the Proposal incurred or to be

incurred by the Company after 30th September, 2001 (1,220 )

Pro forma unaudited consolidated net tangible assets of the

Group prior to and upon the Effective Date 244,389

Pro forma unaudited consolidated net tangible asset value

per Share prior to the Effective Date (Note 1) HK$0.273

Pro forma unaudited consolidated net tangible asset value

per New Share upon the Effective Date (Note 2) HK$0.272

Notes:

1. Pro forma unaudited adjusted consolidated net tangible asset value per Share prior to the Effective Date is based on 899,900,000 Shares in issue as at the Latest Practicable Date.

2. Pro forma unaudited adjusted consolidated net tangible asset value per New Share upon the Effective Date is based on 899,900,000 New Shares expected to be in issue upon completion of the Scheme.

definitions

"Company" GR Investment Holdings Limited, a company incorporated in Hong Kong under the Companies Ordinance with limited liability

"Court" the High Court of Hong Kong

"Court Meeting" the meeting of the holders of Scheme Shares to be held on 16th November, 2001 which is convened at the direction of the Court and any adjournment thereof

"Directors" the directors of the Company

"Effective Date" the date, expected to be 12th December, 2001, upon which the Scheme, if approved, becomes effective

"Explanatory Statement" the explanatory statement required to be furnished pursuant to section 166A of the Companies Ordinance

"Extraordinary General Meeting" the extraordinary general meeting of the Company to be held on 16th November, 2001 and any adjournment thereof

"Group" the Company and its subsidiaries and upon the Scheme becoming effective, the New Company and its subsidiaries

"Latest Practicable Date" 16th October, 2001, being the latest practicable date prior to the printing of the Scheme Document for ascertaining certain information contained in the Scheme Document

"New Company" GR Investment International Limited, an exempted company incorporated in Bermuda under the Companies Act with limited liability and whose New Shares are proposed to be listed on the Stock Exchange by way of introduction upon the Scheme becoming effective

"New Share(s)" share(s) of HK$0.01 each in the share capital of the New Company

"Proposal" the reorganisation proposal so that the Company will become an indirect wholly-owned subsidiary of the New Company by way of the Scheme

"Record Time" 4:00 p.m. (Hong Kong time) on the business day immediately preceding the Effective Date

"Scheme" the scheme of arrangement under Section 166 of the Companies Ordinance between the Company and holders of Scheme Shares with or subject to any modification thereof or addition thereto or conditions approved or imposed by the Court

"Scheme Share(s)" the 899,900,000 Shares in issue as at the Latest Practicable Date together with any further Shares which may be issued prior to the Effective Date

"Share(s)" share(s) of HK$0.10 each in the share capital of the Company

"Shareholder(s)" registered holder(s) of Shares and any person entitled by transmission to be registered as such and includes joint holders

"HK$" Hong Kong dollars, the lawful currency of Hong Kong

By Order of the Board

GR Investment Holdings Limited

LAM Sai Ho, Anthony

Chairman

Hong Kong, 18th October, 2001

* For identification purpose only

Please also refer to the published version of this announcement in the South China Morning Post.