Parkson Retail Group Limited — M&A Activity 2007

Apr 24, 2007

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.

PARKSON RETAIL GROUP LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3368)

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION OF 49% INTEREST IN ANSHAN PARKSON AND 100% INTEREST IN THE ANSHAN PROPERTIES RESUMPTION OF TRADING

The Board is pleased to announce that the Company has through a wholly-owned subsidiary agreed to acquire, indirectly, the 49% Interest in Anshan Parkson (the remaining 51% of which is currently owned indirectly by the Company) and the 100% interest in the Anshan Properties. Specifically, the Company through its wholly-owned subsidiary has entered into a Sale and Purchase Agreement in which the Vendor has agreed to sell and the Purchaser has agreed to purchase the entire issued share capital in Creation International and Lung Shing International. Creation International is the sole legal and beneficial owner of all the equity interest in Creation (Hong Kong), which in turn is the sole legal and beneficial owner of the 49% Interest in Anshan Parkson. Lung Shing International will be the sole legal and beneficial owner of the equity interest in Lung Shing Property which in turn will be the sole legal and beneficial owner of the Anshan Properties on or before the date of the Sale Property Completion.

Since the relevant percentage ratio calculation for the Acquisitions exceeds 2.5% pursuant to Chapters 14 and 14A of the Listing Rules, the Acquisitions constitute a discloseable and connected transaction for the Company which is subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules. As no Shareholders are required to abstain from voting if the Company were to convene a general meeting for the approval of the Acquisitions, the Company has applied to the Stock Exchange for a waiver pursuant to Rule 14A.43 of the Listing Rules under which written Independent Shareholders’ approval may be accepted in lieu of holding a general meeting. As at the date of this announcement, a written approval of the Acquisitions from PRG Corporation Limited, which holds 306,360,000 Shares representing approximately 55.46% of the issued share capital of the Company, has been obtained.

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Relevant details of the Acquisitions will also be included in the next published annual report and accounts of the Company in accordance with Rule 14A.45 of the Listing Rules.

A circular containing, among other things, details of the Acquisitions, the recommendation from the Independent Board Committee and the opinion from an independent financial advisor will be dispatched to Shareholders as soon as practicable.

Trading on the Shares of the Company was suspended at the request of the Company from 9:30a.m. on 23 April 2007 pending the release of this announcement. The Company has applied for the resumption of trading in the shares of the Company with effect from 9:30 a.m. on 24 April 2007.

The Board is pleased to announce that the Company has through a wholly-owned subsidiary agreed to acquire, indirectly, the 49% Interest in Anshan Parkson (the remaining 51% of which is currently owned indirectly by the Company) and the 100% interest in the Anshan Properties. The transactions contemplated in the Acquisitions will be accounted for in the accounts of the Company immediately following the completion of the respective transactions.

THE SALE AND PURCHASE AGREEMENT

Date

20 April 2007

Parties

Vendors: Li Zhong Yong Purchaser: Grand Parkson Retail Group Limited

Assets to be acquired

1. 49% Interest in Anshan Parkson

2. The Anshan Properties

CONSIDERATION AND CONDITIONS FOR THE 49% INTEREST IN ANSHAN PARKSON

Consideration

The consideration for the 49% Interest in Anshan Parkson is RMB280,000,000 which shall be paid as follows:

• (a) The Purchaser shall pay the Vendor in cash as a deposit, amounting to the sum of RMB21,330,000 within 1 Business Day from the date of signing of the Sale and

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Purchase Agreement by telegraphic transfer pursuant to the terms of the Sale and Purchase Agreement in exchange for the Vendor’s delivery of the Creation Completion Documents for the 49% Interest in Anshan Parkson and the Share Mortgage Documents to the Purchaser on the same day;

• (b) Within 7 Business Days from the date of the Vendor producing the Equity Transfer Certificate for the 49% Interest in Anshan Parkson, the Purchaser shall procure Beijing Parkson to release the Entrusted Loan to Anshan Tianxing. The Entrusted Loan amount shall be utilised by Anshan Tianxing for the full settlement of the Anshan Parkson Debts and the full settlement of the Anshan Commercial Bank Debts to discharge the Anshan Commercial Bank Mortgage, which is a condition to the Sale Equity Completion.;

• (c) On the same day when the Entrusted Loan is released in favour of Anshan Tianxing, the Purchaser shall deposit the Escrow Amount into the Escrow Account as the second instalment payment of the consideration.

• (d) Within 3 Business Days from the fulfilment of the conditions to completion, the Purchaser will release to the Vendor in cash by way of telegraphic transfer the final instalment of the consideration, in the amount of RMB132,770,000 for the Sale Equity Completion.

Within 30 days from the date of Sale Equity Completion, the Vendor shall procure the full settlement of the Entrusted Loan and the Purchaser shall within 3 Business Days after the full settlement of the Entrusted Loan procure the release of the Escrow Amount in the Escrow Account in favour of the Vendor.

The Directors considered that the consideration for the 49% Interest in Anshan Parkson reflects normal commercial terms which were arrived at after arm’s-length negotiations between the Vendor and the Purchaser, with reference to the valuation carried out by the Valuer appointed by the Purchaser which value the 49% Interest in Anshan Parkson at RMB300,000,000 based on the direct comparison valuation method. The total consideration shall be paid in HKD equivalent of RMB based on the middle rate published by the People’s Bank of China for the conversion of RMB to HKD, on the respective dates of payment.

Conditions

The Sale Equity Completion is subject to the satisfaction of the following conditions:

• (a) the obtaining by the Company of the Company Approvals;

• (b) the obtaining by the Vendor the Equity Transfer Certificate for the 49% Interest in Anshan Parkson;

• (c) the discharge of the Anshan Commercial Bank’s Mortgage procured by the Vendor;

• (d) the full repayment of the Anshan Parkson’s Debts procured by the Vendor; and

• (e) each of the warranties provided by the Vendor in the Sale and Purchase Agreement remaining true and accurate in all material respects.

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TERMINATION RIGHTS

If any or all of the abovementioned conditions cannot be fulfilled prior to the expiry of 60 days from the date of the Sale and Purchase Agreement, the Purchaser is entitled to either:

• (a) extend the aforesaid 60-days period; or

• (b) waive any or all of the aforesaid conditions and proceed to complete the acquisition of the 49% Interest in Anshan Parkson; or

• (c) terminate the Sale and Purchase Agreement. In this respect, the Vendor shall return the deposit to the Purchaser. If the Entrusted Loan has been released and has yet to be repaid in full, the Share Mortgage Documents shall take effect and the Purchaser is entitled to enforce the security created therewith.

CONSIDERATION AND CONDITIONS FOR THE 100% INTEREST IN ANSHAN PROPERTIES

Consideration

The consideration for the Anshan Properties is RMB450,000,000 which shall be paid on Sale Property Completion as follow:

• (a) Lung Shing Property shall take over from Anshan Tianxing the entire RMB66,000,000 Anshan BOC Bank Debts of which in this respect, the said RMB66,000,000 shall form part of the consideration for the Anshan Properties and shall be deducted therefrom; and

• (b) the Purchaser will release to the Vendor by way of telegraphic transfer in HKD equivalent of the balance of the consideration amounting to RMB384,000,000. The exchange rate to be used will be the middle rate published by the People’s Bank of China for the conversion of RMB to HKD on the date of payment.

Anshan Properties consist of the entire land use right and property use right for a total gross floor area of approximately 42,574 square meter located at No. 88 Er Dao Street, Tie Dong District, Anshan City, Liaoning Province, PRC. Anshan Tianxing is the current owner of the Anshan Properties. Subject to the completion of the reorganisation of Anshan Tianxing, Lung Shing Property which is solely owned by Lung Shing International, will be the sole legal and beneficial owner of the Anshan Properties and the Vendor will be the sole legal and beneficial owner of Lung Shing Property through his direct interest in Lung Shing International.

The Directors consider that the consideration for the Anshan Properties reflects normal commercial terms which were arrived at after arm’s-length negotiations between the Vendor and the Purchaser, with reference to the valuation carried out by the Valuer appointed by the Purchaser which value the Anshan Properties at RMB452,000,000 based on the direct comparison valuation method.

The Anshan Properties was purchased by the Vendor in the year 2000 at an original purchase cost of approximately RMB240,000,000.

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Conditions

The Sale Property Completion is subject to the satisfaction of the following conditions:

• (a) the completion of due diligence review on Lung Shing International, Lung Shing Property and the Anshan Properties to the satisfaction of the Purchaser within 10 Business Days upon the fulfilment of conditions (b) to (f), (h) and (i) stated below;

• (b) the obtaining by the Company of the Company Approvals;

• (c) the completion of the transfer of all property use rights, land use rights and the legal ownership of the Anshan Properties from Anshan Tianxing to Lung Shing Property;

• (d) the completion of the transfer of the entire registered capital of Lung Shing Property to Lung Shing International including but not limited to:

• 1) obtaining the certificates of approval issued by the Ministry of Commence and other local authorities for the transfer of 100% equity interest in Lung Shing Property to Lung Shing International;

• 2) obtaining the certificate from the State Administration of Foreign Exchange of the PRC or its local subordinate bodies evidencing the completion of the registration process for the transfer of 100% equity interest in Lung Shing Property to Lung Shing International with endorsement stating that Lung Shing International is the sole legal owner of the shares in Lung Shing Property

• (e) Lung Shing International has fully settled all consideration payable in respect of the transfer of the entire equity interest in Lung Shing Property;

• (f) the completion of the takeover of the RMB66,000,000 Anshan BOC Bank Debts by Lung Shing Property evidenced by the execution of the relevant novation agreement between Lung Shing Property, Anshan Tianxing and Bank of China (Anshan branch);

• (g) each of the warranties provided by the Vendor in the Sale and Purchase Agreement remaining true and accurate in all material respects;

• (h) the entering into of a novation agreement by all tenants of Anshan Properties approving the substitution of Lung Shing Property as the new landlord of Anshan Properties; and

• (i) the Sale Share Completion and the full settlement of the Entrusted Loan.

TERMINATION RIGHTS

If any or all of the abovementioned conditions cannot be fulfilled prior to the expiry of 120 days from the date of the Sale and Purchase Agreement, the Purchaser is entitled to either:

• (a) extend the aforesaid 120-days period; or

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• (b) waive any or all of the aforesaid conditions and proceed to complete the acquisition of the Anshan Properties; or

• (c) terminate the Sale and Purchase Agreement.

INFORMATION ON THE VENDOR

The Vendor, Li Zhong Yong is the legal and beneficial owner of the entire issued share capital of Creation International and Lung Shing International. Creation International is the sole legal and beneficial owner of the equity interest in Creation (Hong Kong), which in turn is the sole legal and beneficial owner of the 49% Interest in Anshan Parkson. Lung Shing International will be the sole legal and beneficial owner of the equity interest in Lung Shing Property which in turn will be the sole legal and beneficial owner of the Anshan Properties on or before the date of Sale Property Completion. The Vendor is also the sole legal and beneficial owner of Anshan Tianxing, the existing owner of the Anshan Properties and the landlord to Anshan Parkson. The Vendor is principally engaged in the business of property development and investment.

Pursuant to the terms of the Sale and Purchase Agreement, the Vendor undertakes to the Purchaser that he will not and procure that none of his associates will, for a period of 2 years from the date of completion of the Acquisitions, engage directly or indirectly in or carry out the business of department store and retail within the Anshan City of the PRC.

The Company and its subsidiaries have not entered into any transaction with the Vendor or his related parties in the 12 months period preceding the date of the Sale and Purchase Agreement.

INFORMATION ON THE COMPANY, THE PURCHASER AND BEIJING PARKSON

The Company and its subsidiaries are principally engaged in the operation of 38 department stores and two supercentres situated in prime locations in 27 cities in the PRC. The Group offers a wide range of merchandise in those department stores and supercentres, including fashion and apparel, cosmetics and accessories, household, electrical goods and groceries.

The Purchaser, Grand Parkson Retail Group Limited, is a 100% direct subsidiary of the Company primary acting as an investment holding company to invest in the department store business in the PRC.

HISTORICAL FINANCIAL INFORMATION ABOUT ANSHAN PARKSON

Anshan Parkson, a 51% indirect subsidiary of the Company, is the owner and operator of the Parkson department store located at the entire basement level, part of the level 1 and level 2 and the entire level 3 to level 6 of the Anshan Properties, No.88 Er Dao Street, Tie Dong District of Anshan city in Liaoning province.

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Set out below is the historical financial information about Anshan Parkson for each of the 3 years ended 31 December 2004, 2005 and 2006 prepared and audited under PRC generally accepted accounting principles:

	Year ended	Year ended	Year ended
	31 December	31 December	31 December
(in RMB ’000)	2004	2005	2006
	(in RMB ’000)	(in RMB ’000)	(in RMB ’000)
Gross sales proceeds (1)	273,513	389,136	507,530
Operating revenues (2)	94,836	130,560	163,495
Net profit before tax	12,186	30,684	48,180
Net profit after tax	8,143	20,741	32,221
Total assets	126,034	167,396	179,865
Net asset value	18,631	31,985	23,328

• (1) “Gross sales proceeds includes the direct sales, gross sales proceeds from concessionaire sales, rental income and other operating revenues

• (2) “Operating revenues” includes the direct sales, commission from concessionaire sales, rental income and other operating revenues. Gross sales proceeds from concessionaire sales are not recognised. Operating revenues need not be included in the audit report issued under the PRC generally accepted accounting principles, the numbers were extracted from the management accounts prepared under the PRC generally accepted accounting principles

HISTORICAL FINANCIAL INFORMATION OF THE ANSHAN PROPERTIES

As both Lung Shing International and Lung Shing Property are special purpose vehicle set up by the Vendor to purchase the Anshan Properties from Anshan Tianxing, no historical financial information of the companies are available as at the date of this announcement. However, based on the information provided by Anshan Tianxing, the Anshan Properties generated total rental income of approximately RMB25,000,000 for the financial year ended 31 December 2006 of which approximately RMB16,800,000 was paid by Anshan Parkson and the balance was paid by other tenants of Anshan Properties.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Anshan Parkson store is the flagship store for the Company in the North East region of the PRC market and one of the major contributors in terms of revenues and profits to the Group. The Anshan Parkson store is strategically located in the Anshan city, the capital city of the Liaoning Province. Accordingly, the Board considered that Anshan Parkson, as a wholly-owned subsidiary of the Company, would immediately enhance the growth and profitability of the Group and allow for greater efficiency and speed in the implementation of its business expansion plan. Moreover, as a flagship store in the North East region, the Company intend to use the Anshan Parkson store as the platform to further expand the Group’s businesses in this region of the PRC market. Accordingly, the Board considered that owning the Anshan Properties will provide the Group more certainty on the continuity of the business and provide the Group more flexibility in renovating and reinventing the Anshan Parkson store. The Board considered that the above would be in line with the Group’s expansion plans and would complement its long-term growth strategy.

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The Directors (including the independent non-executive Directors) believe that the terms of the Acquisitions are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

DISCLOSEABLE AND CONNECTED TRANSACTION

As the Vendor, is a substantial shareholder of Anshan Parkson, which is a 51% indirect subsidiary of the Company, the Vendor is a Connected Person of the Company for the purposes of Chapter 14A of the Listing Rules. Accordingly, the Acquisitions constitute a connected transaction for the Company under the Listing Rules. As the applicable percentage ratios under Rule 14.07 of the Listing Rules calculated in respect of the aggregated value of the Acquisitions exceeded the threshold for exemption under Rule 14A.32, the Acquisitions are subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, none of the Vendor or his associates, hold any Share(s) in the Company. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, none of the Shareholders or their respective associates has any interest in the transactions which is different from other Shareholders. Accordingly, there are no Shareholders who are required to abstain from voting if the Company were to convene a general meeting for the approval of the Acquisitions. As such, the Company has applied to the Stock Exchange for a waiver pursuant to Rule 14A.43 of the Listing Rules under which a written Independent Shareholders’ approval may be accepted in lieu of holding a general meeting. As at the date of this announcement, written approval of the Acquisitions from PRG Corporation Limited, an Independent Shareholder which holds 306,360,000 Shares representing approximately 55.46% of the issued share capital of the Company, has been obtained.

The Vendor and his associates have no relationship with the Company or its connected persons other than as set out above.

Relevant details of the Acquisitions will also be included in the next published annual report and accounts of the Company in accordance with Rule 14A.45 of the Listing Rules.

According to the Listing Rules, the Acquisitions also constitute a discloseable transaction of the Company which is subject to the notification and publication requirements as set out in Rules 14.34 to 14.36 and 14.38 to 14.39 of the Listing Rules.

A circular containing, among other things, details of the Acquisitions, the recommendation from the Independent Board Committee and the opinion from an independent financial advisor will be dispatched to Shareholders in due course.

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DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:

• “49% Interest in Anshan the 49% equity interest in Anshan Parkson held indirectly by Parkson” Creation International through its 100% subsidiary, Creation (Hong Kong)

• “Acquisitions”

the transactions contemplated under the Sale and Purchase Agreement, including but not limited to the 49% Interest in Anshan Parkson and the 100% interest in Anshan Properties

• “Anshan BOC Bank Debts”

• the outstanding debts of approximately RMB66,000,000 payable by Anshan Tianxing to the Bank of China, Anshan branch

• “Anshan Commercial the outstanding debts of approximately RMB60,000,000 Bank Debts” payable by Anshan Tianxing to Anshan City Commercial Bank Shares Co. Ltd

• “Anshan Commercial Bank Mortgage”

• the existing mortgage of the first and second floor of Anshan Properties against the Anshan Commercial Bank Debts

• “Anshan Parkson” Anshan Tianxing Parkson Shopping Centre Company Limited, a Sino Foreign Equity Joint Venture cooperation established in accordance with the laws of the PRC, and are being held as to 49% by Creation (Hong Kong) and as to 51% indirectly by the Company. Anshan Parkson currently leases the entire basement level, part of level 1 and level 2 and the entire level 3 to level 6 of the Anshan Properties for a department store operation

• “Anshan Parkson Debts” the outstanding debts of approximately RMB65,900,000 owing by Anshan Tianxing to Anshan Parkson

• “Anshan Properties” the land use right and property use right in respect of the property located at No. 88 Er Dao Street, Tie Dong District, Anshan City, Liaoning Province, PRC

• “Anshan Tianxing”

• Anshan Tianxing International Properties Development Co., Ltd, a sino-foreign equity joint venture enterprise established under the law of the PRC on 8 November 1999, Anshan Tianxing is the existing owner of the Anshan Properties and the landlord to Anshan Parkson

• “associate(s)”

• has the meaning ascribed to it in the Listing Rules

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• “Beijing Parkson”

Parkson Retail Development Co., Ltd., a sino-foreign equity joint venture enterprise established under the laws of the PRC, and a wholly owned indirect subsidiary of the Company, which is owned as to 42% by Parkson Investment, as to 14% by Rosenblum and 44% by Parkson Investment Holding

• “Board”

the board of Directors of the Company

• “Business Day”

• means a day (other than a Saturday) when banks are open for business in Hong Kong

• “Creation (Hong Kong)”

• Creation (Hong Kong) Investment & Development Limited, a company incorporated under the laws of Hong Kong with limited liability on 3 May 2006

• “Creation International”

• Creation International Investment & Development Limited, a company incorporated under the laws of the British Virgin Island with limited liability on 8 August 2006

• “Company”

• Parkson Retail Group Limited, a company incorporated under the laws of the Cayman Islands with limited liability on 3 August 2005

• “Company Approvals”

• All relevant approvals required under the Listing Rules (including but not limited to the shareholders’ approval or other equivalent approvals) with respect to the Acquisitions

• “Creation Completion Documents needed for vesting the legal and beneficial Documents” interest of the entire issued share capital of Creation International in favour of the Purchaser

• “Connected Person(s)”

• has the meaning ascribed to it in the Listing Rules

• “Director(s)” the director(s) of the Company

• “Escrow Account”

• the bank account designated in writing by the Vendor, the Purchaser and the Escrow Agent for the safe keeping of the Escrow Amount

• “Escrow Agent” BNP Paribas (Hong Kong Branch)

• “Escrow Amount”

• the equivalent in HKD of RMB125,900,000 to be held in escrow by the Escrow Agent pursuant to an escrow agreement to be entered into among the Vendor, the Purchaser and the Escrow Agent pursuant to the terms of the Acquisitions

• “Entrusted Loan Bank”

• China Merchant Bank (Beijing Wanda Plaza branch)

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• “Entrusted Loan”

• the principal amount of RMB125,900,000 to be made available to Anshan Tianxing by Beijing Parkson pursuant to the Entrusted Loan Agreement for the sole purpose of repayment of the Anshan Parkson Debts, the Anshan Commercial Bank Debts and the subsequent discharge of the Anshan Commercial Bank Mortgage

• “Entrusted Loan Agreement”

• the loan agreements to be entered into between the Entrusted Loan Bank, Beijing Parkson and Anshan Tianxing, whereby Beijing Parkson will procure that the Entrusted Loan Bank shall grant and Anshan Tianxing shall accept the Entrusted Loan

• “Equity Transfer Certificate”

• Certificate issued by the local Foreign Exchange Control Department where Anshan Tianxing is situated confirming the receipt in full by Anshan Tianxing from Creation (Hong Kong) of the consideration for the 49% Interest in Anshan Parkson.

• “Group”

• the Company, its subsidiaries, jointly controlled entities and associated company

• “HKD”

• the lawful currency of Hong Kong

• “Hong Kong”

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

• “Independent Board Committee”

• a board committee comprising independent non-executive Directors who are not interested in the Acquisition

• “Independent Shareholder(s)”

• Shareholders other than persons who are required to abstain from voting on the resolution to approve the Acquisition as defined under the listing rules

• “Listing Rules”

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “Lung Shing International”

• Lung Shing International Investment & Development Company Limited, a private limited company established under the law of British Virgin Island on the 1 August 2006

• “Lung Shing Investment” Lung Shing Investment & Development Company Limited, a private limited company duly incorporated in Hong Kong

• “Lung Shing Property”

• Anshan Lung Shing Property Services Limited, a company with limited liabilities duly established on 11 January 2007 under the laws of the PRC as a wholly foreign owned enterprise

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“Parkson Investment”

Parkson Investment Pte. Ltd., a private company limited by shares incorporated under the Companies Act (Chapter 50 of the Statutes of the Republic of Singapore) and an indirect wholly-owned subsidiary of the Company

• “Parkson Investment Holdings”

• Parkson Investment Holdings Co. Ltd., a wholly foreignowned enterprise established under the laws of the PRC and an indirect wholly-owned subsidiary of the Company

• “PRC”

• the People’s Republic of China

• “Purchaser” Grand Parkson Retail Group Limited, a 100% direct subsidiary of the Company

• “RMB”

Renminbi, the lawful currency of the PRC

• “Rosenblum” Rosenblum Investments Pte. Ltd., a private company limited by shares incorporated under the Companies Act (Chapter 50 of the Statutes of the Republic of Singapore) and an indirect wholly-owned subsidiary of the Company

• “Sale and Purchase Agreement”

• the sale and purchase agreements dated 20 April 2007 entered into between the Purchaser and the Vendor

• “Sale Property Completion”

• Completion on the acquisition of the Anshan Properties, being part of the Acquisitions

• “Sale Equity Completion” Completion on the acquisition of the 49% Interest in Anshan Parkson, being part of the Acquisitions

• “Share(s)”

• the ordinary share(s) of the Company with a nominal value of HK$0.10 each

• “Shareholder(s)” the holder(s) of the Share(s)

• “Share Mortgage Documents”

• Documents pertaining to the mortgage of the entire Creation International’s shares executed by the Vendor in favour of the Purchaser

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “subsidiary” has the meaning ascribed to it in section 2 of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong)

• “Valuer”

• Vigers Appraisal & Consulting Limited, 10th Floor, The Grande Building, 398 Kwun Tong Road, Kowloon, Hong Kong, an International Assets Appraisal Consultants

• “Vendor”

• Li Zhong Yong

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“%”

per cent

By order of the Board PARKSON RETAIL GROUP LIMITED Cheng Yoong Choong Managing Director

As at the date of this announcement, Mr CHENG Yoong Choong and Mr CHEW Fook Seng are executive directors of the Company, Tan Sri CHENG Heng Jem is a non-executive director of the Company and, Mr STUDER Werner Josef, Mr KO Tak Fai, Desmond and Mr Yau Ming Kim, Robert are the independent non-executive directors of the Company.

Hong Kong, 23 April 2007

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

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