Persistence Gold Group Ltd — M&A Activity 2002

Jan 28, 2002

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.

Angel Field Limited	Ying Wing Holdings Limited
(incorporated in the British Virgin Islands with limited liability)	(incorporated in Bermuda with limited liability)

Conditional Agreement for Feng Lin Holdings Ltd.

as controlling Shareholder to sell Shares in

Ying Wing Holdings Limited

to Angel Field Limited

and

Possible mandatory general offer by

Kingsway SW Securities Limited

on behalf of

Angel Field Limited

to acquire all the issued Shares of

Ying Wing Holdings Limited

at a price of HK$0.418 per Share

(other than those Shares already agreed to be acquired by

Angel Field Limited

or parties acting in concert with it)

Financial Adviser to Angel Field Limited

Kingsway Capital Limited

Discloseable and connected transaction, and special deal of

Ying Wing Holdings Limited

Involving

Proposed disposal of the Snack Food Business Companies

Joint Financial Advisers to Ying Wing Holdings Limited

Kim Eng Capital (Hong Kong) Limited	Boomwell Investments Limited

Acquisition and possible mandatory general offer

It is announced that the S&P Agreement was entered into on 22nd January, 2002 between, amongst others, the Purchaser and Feng Lin, under which the Purchaser will purchase the Sale Shares, representing 74.00% of the issued Shares, from Feng Lin at a consideration of HK$61,800,000, equivalent to approximately HK$0.418 per Sale Share. Feng Lin has undertaken to the Purchaser that it will dispose of its remaining 964,000 Shares representing 0.48% of the issued Shares through the Stock Exchange prior to the close of the Offer or it will tender the remaining Shares held by it for acceptance under the Offer.

The S&P Agreement is expected to become unconditional on or before 15th March, 2002 (unless otherwise agreed by the parties to the S&P Agreement). Upon completion of the Shares S&P Agreement, the Purchaser will hold 74.00% of the total issued Shares and will be therefore obliged under Rule 26 of the Takeovers Code to make a mandatory unconditional cash offer for all the issued Shares other than those Shares already owned by the Purchaser and parties acting in concert with it. In this event, Kingsway Securities will make the Offer, on behalf of the Purchaser, to acquire all the Offer Shares at HK$0.418 per Offer Share upon completion of the S&P Agreement pursuant to the Takeovers Code.

The price of HK$0.418 per Offer Share represents a discount of 62% to the closing price of HK$1.10 per Share as quoted on the Stock Exchange on 21st January, 2002, being the last full trading day before suspension of trading of the Shares on the Stock Exchange as from 10:00 a.m. on 22nd January, 2002.

Disposal

One of the conditions precedent for the completion of the S&P Agreement is the disposal, pursuant to the Disposal Agreement, by Park Well of its entire interest in the Snack Food Business Companies to Feng Lin for a consideration of HK$24.6 million which will be satisfied by Feng Lin assuming and repaying certain liabilities and obligations of the Fabric Group.

The Disposal constitutes a discloseable and connected transaction for the Company under the Listing Rules and a special deal under Rule 25 of the Takeovers Code. The Disposal is, therefore, conditional upon the approval of the Independent Shareholders at a special general meeting of the Company voting by way of a poll. An application will be made to the Executive for a consent to the Disposal. The Offer will not be made unless these approvals and consent are obtained.

Following the completion of the Disposal Agreement, it is intended that the Company will continue to be engaged in the business of processing and trading of fabric.

General

Trading in the Shares was suspended at the request of the Company as from 10:00 a.m. on Tuesday, 22nd January, 2002 pending the publication of this announcement. An application has been made to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 10:00 a.m. on Monday, 28th January, 2002.

Warning : The Offer is subject to the completion of the S&P Agreement and may or may not be made. Shareholders and other potential investors should therefore exercise extreme caution when dealing in the Shares.

ACQUISITION OF A CONTROLLING INTEREST IN THE COMPANY BY THE PURCHASER

S&P Agreement

Date:	22nd January, 2002
Vendor:	Feng Lin, whose entire issued capital is beneficially owned as to 80%, 5%, 5%, 5% and 5% respectively by Mr. Tsoi Hon Chung (the Company's chairman), Mr. Tsoi Chun Bun (a Director), Mr. Tsoi Chun Hung (a Director), Ms. Lin Feng Qing (the spouse of Mr. Tsoi Hon Chung) and Mr. Tsoi Chun Yau
Purchaser:	Angel Field Limited, a company wholly and beneficially owned by Mr. Chau Ching Ngai who is an Independent Third Party.
Guarantors:	Mr. Tsoi Hon Chung, Mr. Tsoi Chun Bun, Mr. Tsoi Chun Hung, Ms. Lin Feng Qing and Mr. Tsoi Chun Yau

Sale Shares to be acquired

148,000,000 Shares

As at the date of this announcement, the Sale Shares represent 74.00% of the total issued share capital of the Company.

Purchase price

The total consideration for the Sale Shares is HK$61,800,000 (equivalent to approximately HK$0.418 per Sale Share) which was determined by Feng Lin and the Purchaser after arm's length negotiations taking into considerations the net tangible asset of the Company, the loss of the Group since end of year 2000, the disposal of the Snack Food Business Companies and the lack of trading volume of the Shares on the Stock Exchange.

The consideration of approximately HK$0.418 per Sale Share represents:

1.	a discount of 62% to the closing price of HK$1.10 per Share as quoted on the Stock Exchange on 21st January, 2002, being the last full trading day before the suspension of trading of the Shares on the Stock Exchange as from 10:00 a.m. on 22nd January, 2002;
2.	a discount of 62% to the average closing price of HK$1.10 per Share as quoted on the Stock Exchange for the ten consecutive full trading days before the suspension of trading of the Shares on the Stock Exchange as from 10:00 a.m. on 22nd January, 2002;
3.	a discount of approximately 24.7% to the net asset value per Share of approximately HK$0.555 (based on the Company's latest audited consolidated net asset value of HK$111,073,000 as at 31st December, 2000 as contained in the Company's 2000 annual report); and
4.	a discount of approximately 15.6% to the net asset value per Share of approximately HK$0.495 (based on the Company's latest unaudited consolidated net asset value of HK$99,021,000 as at 30th June, 2001 as contained in the Company's 2001 interim report)

Payment terms

The aggregate purchase price of HK$61,800,000 shall be payable as follows:

(a)	the Deposit of HK$6,000,000 which has been paid by the Purchaser to Feng Lin and an escrow agent after the signing of the S&P Agreement; and
(b)	the balance of HK$55,800,000 will be payable on the completion of the S&P Agreement, i.e. on or before 15th March, 2002 (unless otherwise agreed by the parties to the S&P Agreement).

Conditions of the S&P Agreement

Completion of the S&P Agreement is conditional upon:

(a)	the approval of the Disposal Agreement and the transactions contemplated thereunder by Independent Shareholders by way of a poll;
(b)	the consent from the Executive to the Disposal which transaction constitutes a special deal under Rule 25 of the Takeovers Code;
(c)	no material breach of representations, warranties and guarantees under the S&P Agreement in respect of the Company and the Group;
(d)	the Shares remaining listed and traded on the Stock Exchange at all times from the date of the S&P Agreement to the completion of the S&P Agreement save and except for any temporary suspension as a result of the SFC and/or the Stock Exchange approving the S&P Agreement and/or the Disposal Agreement and that the SFC or the Stock Exchange not making any indication that the listing of the Shares on the Stock Exchange will or may be withdrawn or objected to;
(e)	the obtaining of a PRC legal opinion confirming that Chaoyang Hua Long Textiles and Dying Limited., a wholly-owned subsidiary of the Company, has legally obtained the relevant land use rights and property title certificate for its factory in the PRC and that all necessary procedures have been completed and the relevant payments have been made; and
(f)	neither the SFC nor the Executive at any time before the completion of the S&P Agreement has raised as an issue with the Purchaser that the price for each Offer Share will have to be higher than HK$0.418.

Under the S&P Agreement, all the above conditions can be waived by the Purchaser. The above conditions must have been fulfilled or waived by the Purchaser on or before the completion of the S&P Agreement. If any condition precedent cannot be fulfilled or is not waived by the Purchaser on or before 15th March, 2002 (or such other date as may be agreed between the parties to the S&P Agreement), the S&P Agreement shall lapse and neither Feng Lin nor the Purchaser shall have any claim against each other (save in respect of any antecedent breaches or otherwise provided in the S&P Agreement) and Feng Lin and the escrow agent shall repay the Deposit to the Purchaser in accordance with the terms of the S&P Agreement.

Unless agreed by the Purchaser, if the Disposal Agreement cannot be completed in accordance with the terms thereof, the S&P Agreement shall lapse and neither Feng Lin nor the Purchaser shall have any claim against each other (save in respect of any antecedent breaches or otherwise provided in the S&P Agreement) and Feng Lin and the escrow agent shall repay the Deposit to the Purchaser in accordance with the terms of the S&P Agreement.

Undertaking from Feng Lin

Under the S&P Agreement, Feng Lin has undertaken to the Purchaser that it will dispose of its remaining 964,000 Shares representing 0.48% of the issued Shares through the Stock Exchange prior to close of the Offer or it will tender the remaining Shares held by it for acceptance under the Offer.

THE DISPOSAL

Major Terms of the Disposal Agreement

Date	:	22nd January, 2002
Vendor	:	Park Well
Purchaser	:	Feng Lin
Assets sold	:	The entire interest of Park Well in the Snack Food Business Companies
Consideration	:	HK$24,600,000
Payment	:	Feng Lin will assume and repay the following liabilities and obligations for settlement of the consideration:
		(i)	trade payable of the Fabric Group of approximately HK$13.0 million;
		(ii)	accrued charges of the Fabric Group of approximately HK$5.6 million; and
		(iii)	short term bank loans of the Fabric Group of approximately HK$6.0 million.
		In order for the completion of the Disposal Agreement to take place, Feng Lin should have paid Park Well for the settlement of the above short term bank loans. Feng Lin should also present to Park Well the relevant confirmations or receipts from the relevant creditors of the Fabric Group that the aforementioned trade payable and accrued charges have been fully repaid.
Conditions precedent	:	The completion of the Disposal Agreement is conditional upon the following:
		(i)	the passing of the necessary resolutions by the Independent Shareholders approving the terms and conditions of the S&P Agreement and the Disposal Agreement and the transactions contemplated under the Disposal Agreement at a special general meeting of the Company ,voting by way of a poll; and
		(ii)	all the conditions precedent to which the completion of the S&P Agreement is subject being fulfilled, satisfied or waived by the Purchaser, details of which are set out in the paragraph headed "Conditions of the S&P Agreement" above.
		In the event of the conditions referred to above not having been fulfilled by 15th March, 2002 or such later date may be agreed between Feng Lin and Park Well in writing, all rights and obligations of the parties hereunder in relation to the Disposal Agreement shall cease and terminate and none of the parties shall have any claim against any other in respect of the Disposal Agreement, save for any antecedent breaches of the Disposal Agreement.
		Unless agreed by Feng Lin, if the S&P Agreement cannot be completed in accordance with the terms thereof, the Disposal Agreement shall lapse and neither Park Well nor Feng Lin shall have any claim against each other (save in respect of antecedent breaches).
Completion of the	:	The completion of the Disposal Agreement shall take place on the 5th
Disposal Agreement		business day falling on the date when all conditions mentioned above are fulfilled.

Basis of consideration

The consideration as set out in the Disposal Agreement was arrived at through arm's length negotiations between Feng Lin and Park Well with reference to the proforma unaudited adjusted combined net tangible asset value of the Snack Food Business Companies of approximately HK$24,600,000 as at 30th November, 2001.

Information on the Snack Food Business Companies

The Snack Food Business Companies are principally engaged in the manufacturing and sale of stackable fabricated potato chips in the PRC market. Commercial production of the stackable fabricated potato chips, which are packed in paper tubes under the name of "Kolorful", commenced in November 2000. The proforma net loss before taxation and minority interests for the Snack Food Business Companies were approximately HK$8,088,000 and HK$2,224,000 respectively for the year ended 31st December, 2000 and the six months ended 30th June, 2001.

Reason for the Disposal

It should be noted that the Purchaser may not be prepared to acquire a controlling interest in the Company if it retains the Snack Food Business Companies which the Purchaser is not interested in as the snack food business is not considered as the core business of the Group and has been incurring substantial losses. As a result, the Disposal Agreement was entered into between Park Well and Feng Lin simultaneously with the entering into of the S&P Agreement between the Purchaser and Feng Lin.

Implications under the Listing Rules and the Takeovers Code

Pursuant to the Listing Rules, the Disposal constitutes a discloseable transaction of the Company. As Feng Lin is the controlling shareholder of the Company and also its ultimate beneficial owners, Messrs. Tsoi Hon Chung, Tsoi Chun Bun and Tsoi Chun Hung, are the Directors, the Disposal also constitutes a connected transaction of the Company under the Listing Rules and is subject to, among other things, the approval of the Independent Shareholders at a special general meeting of the Company. A circular containing further details regarding the Disposal Agreement will be sent to all Shareholders as soon as practicable.

The Disposal constitutes a special deal under Rule 25 of the Takeovers Code and hence requires consent from the Executive. An application will be made to the Executive for the special deal consent which, if given, will be subject to the independent financial adviser to the Company stating that in its opinion the terms of the Disposal Agreement are fair and reasonable and the Disposal Agreement being approved by the Independent Shareholders at a special general meeting of the Company voting by way of a poll. Feng Lin and its associates (as defined in the Listing Rules) and their respective concert parties will abstain from voting in respect of the Disposal at the special general meeting.

POSSIBLE mandatory general OFFER FOR THE SHARES

The Offer

When the S&P Agreement is completed, the Purchaser and parties acting in concert with it will be interested in 74.00% of the issued share capital of the Company and the Purchaser will be obliged under Rule 26 of the Takeovers Code to extend a mandatory unconditional general offer to the other Shareholders. In this event, in compliance with the Purchaser's obligations under the Takeovers Code, Kingsway Securities, on behalf of the Purchaser, will make an offer to acquire all the outstanding Shares other than those Shares already held or agreed to be acquired by the Purchaser or parties acting in concert with it at the following offer price:

For each Offer Share	HK$0.418 in cash

The offer price for each Offer Share equals to the approximate effective price of HK$0.418 as will be paid for each Sale Share under the S&P Agreement.

The Offer, if and when made, will be unconditional in all respects.

The Purchaser has confirmed that neither it nor any of the parties acting in concert with it has dealt in any Shares and owned any Shares during the six months preceding the date of this announcement.

By accepting the Offer, the Shareholders will sell their Shares and all rights attached to them to the Purchaser, including their rights to receive all dividends and distributions declared, made or paid on or after the date of the completion of the S&P Agreement.

The Company has no outstanding convertible securities, warrants or options in issue as at the date of this announcement.

Based on the 52,000,000 Shares, representing 26.00% of the entire issued Shares of the Company of 200,000,000 Shares, which are subject to the possible Offer, the Offer is valued at HK$21,736,000. Kingsway Securities and Kingsway Capital are satisfied that there are sufficient financial resources available to the Purchaser to satisfy full acceptance of the possible Offer.

Stamp duty

Sellers' ad valorem stamp duty at the rate of HK$1.00 per every HK$1,000 or part thereof of the consideration arising on acceptance of the Offer and the transfer of the Shares will be payable by accepting Shareholders and such amounts will be deducted from the consideration paid to accepting Shareholders.

SHAREHOLDING AND GROUP STRUCTURE OF THE COMPANY

The following charts summarise the shareholding and group structure of the Company immediately before and after the completion of the S&P Agreement and the Disposal Agreement but before the making of the Offer (assuming Feng Lin has not disposed of its remaining 964,000 Shares):

Immediately before the completion of the S&P Agreement and the Disposal Agreement

Immediately after the completion of the S&P Agreement and the Disposal Agreement

INFORMATION ON THE PURCHASER

The Purchaser is a private investment holding company incorporated in the British Virgin Islands with limited liability. Since its incorporation on 16th August, 2001, the Purchaser has not carried on any business other than entering into the S&P Agreement.

The Purchaser is directly and wholly-owned by Mr. Chau. Mr. Chau, aged 40, is a Hong Kong resident and has since 1997 been principally engaged in property investment in Hong Kong and the PRC. Mr. Chau has also invested in agriculture and high technology projects in the PRC, as well as engaging in trading of various industrial and consumer products including fabrics.

INTENTION OF THE PURCHASER REGARDING THE FUTURE OF THE COMPANY AFTER THE COMPLETION OF THE DISPOSAL AGREEMENT

The Company's principal business has for many years been the processing of raw fabric and trading of fabric. Following the completion of the Disposal Agreement, it is the intention of the Purchaser that the Company will continue to be engaged in such business. In addition, the new Directors to be nominated by the Purchaser will review in detail the financial position and operation of the Group and will formulate long-term business plans and management strategy for the business of the Group. The directors of the Purchaser may consider expanding the capital base of the Company, if necessary, to enable the Company to capitalise on suitable investment opportunities as they may arise in the future. In this connection, the new Directors will explore other business opportunities and consider whether any asset disposals, asset acquisitions, business rationalisation, divestment and/or diversification will be appropriate in order to enhance the long term growth potential of the Group.

There is no plan for the Purchaser to inject any of its existing assets or businesses into the Company or its subsidiaries.

DIRECTORS OF THE COMPANY

It has been agreed that following the closing of the Offer, all the current Directors will resign. It is expected that such persons as may be nominated by the Purchaser will be appointed as executive Directors to the Board no sooner than the date of despatch of the offer document. The new Directors, including two independent non-executive Directors, whom the Purchaser intends to nominate to the Board have not yet been determined. Further details of the new Directors to be nominated by the Purchaser will be disclosed at a later stage. Save as disclosed above, it is the intention of the Purchaser that there will be no change in the existing management and employees of the Group by reason only of the Offer.

MAINTENANCE OF THE LISTING STATUS OF THE COMPANY

It is the intention of the Purchaser to maintain the listing of the Company on the Stock Exchange after the closing of the Offer. The Purchaser has undertaken and the new Directors to be appointed to the Board will undertake to the Stock Exchange that appropriate steps following the close of the Offer will be taken to ensure that not less than 25% of the Shares will be held by the public. When the Offer closes, should there be less than 25% of the Shares in public hands, the directors of the Purchaser presently intend to take appropriate steps, which may include placing down its shareholding interest in the Company to members of the public within one month after the closing of the Offer. The Stock Exchange has stated that it will closely monitor trading in the Shares if, at the close of the Offer, less than 25% of the Shares are held by the general public. If the Stock Exchange believes that

‧ a false market exists or may exist in the Shares;

‧ there are too few Shares in public hands to maintain an orderly market,

then it will consider exercising its discretion to suspend trading in the Shares. In this connection, it should be noted that upon completion of the Offer, there may be insufficient public float for the Shares and, therefore, trading in the Shares may be suspended until a sufficient level of public float is attained. The Stock Exchange will also closely monitor all future acquisitions or disposals of assets by the Company. The Stock Exchange has indicated that it has the discretion to require the Company to issue a circular to its shareholders irrespective of the size of any proposed transactions, particularly when such proposed transactions represent a departure from the principal activities of the Company. The Stock Exchange also has the power to aggregate a series of transactions of the Company and any such transactions may result in the Company being treated as if it were a new listing applicant.

GENERAL

The Disposal Agreement constitutes a discloseable and connected transaction for the Company under the Listing Rules and a special deal under the Takeovers Code. Under both regulations Shareholders are required to be independently advised, and as such an Independent Board Committee will be formed for this purpose. An independent financial adviser will be appointed to advise the Independent Board Committee regarding the Disposal and the Offer. A circular containing, among other things, details of the Disposal, the opinions of the Independent Board Committee and the independent financial adviser in relation to the Disposal, and a notice of a special general meeting of the Company to be convened to consider and, if thought fit, approve the Disposal, will be despatched to the Shareholders as soon as practicable.

Immediately following the completion of the S&P Agreement, an offer document containing, among other things, detailed terms of the Offer and procedures for acceptance of the Offer, will be sent to the Shareholders by Kingsway Securities on behalf of the Purchaser. In addition, in accordance with the Takeovers Code, an offeree document containing, among other things, the opinions of the Independent Board Committee and the independent financial adviser in relation to the Offer will be despatched by the Company to the Shareholders as soon as practicable after the despatch of the offer document.

Kingsway Capital is advising the Purchaser and, if required, Kingsway Securities will make the Offer on behalf of the Purchaser.

Kim Eng Capital (Hong Kong) Limited and Boomwell Investments Limited are the joint financial advisers to the Company.

Trading in the Shares was suspended at the request of the Company at 10:00 a.m. on Tuesday, 22nd January, 2002 pending the publication of this announcement. An application has been made to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 10:00 a.m. on Monday, 28th January, 2002.

Warning: The Offer is subject to the completion of the S&P Agreement and may or may not be made. Shareholders and other potential investors should therefore exercise extreme caution when dealing in the Shares.

DEFINITIONS

"Board"	the board of Directors
"Company"	Ying Wing Holdings Limited, a company incorporated in Bermuda with limited liability, the securities of which are listed on the Stock Exchange
"Deposit"	the deposit of HK$6,000,000 which has been paid by the Purchaser to Feng Lin and an escrow agent after the signing of the S&P Agreement
"Directors"	directors of the Company
"Disposal"	the disposal of the Snack Food Business Companies by Park Well pursuant to the Disposal Agreement
"Disposal Agreement "	the conditional agreement dated 22nd January, 2002 entered into between Feng Lin and Park Well relating to the disposal by Park Well of its entire interest in the Snack Food Business Companies to Feng Lin
"Executive"	the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
"Fabric Group"	the Group excluding the Snack Food Business Companies
"Feng Lin"	Feng Lin Holdings Ltd., a company incorporated in the British Virgin Islands with limited liability and which holds the Sale Shares
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Independent Board Committee"	an independent board committee comprising the independent non-executive Directors to be formed to give advice in respect of the Disposal and the Offer
"Independent Shareholders"	Shareholders who are not involved in, or interested in, the S&P Agreement and the Disposal Agreement, being Shareholders other than Feng Lin and its associates (as defined in the Listing Rules) and parties acting in concert with any of them
"Independent Third Party"	a party not connected nor acting in concert with the directors, chief executives or substantial shareholders of the Company or any of its subsidiaries or an associate of any of them
"Kingsway Capital"	Kingsway Capital Limited, an investment adviser registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong), a fellow subsidiary of Kingsway Securities and the financial adviser to the Purchaser in relation to the Offer
"Kingsway Securities"	Kingsway SW Securities Limited, a fellow subsidiary of Kingsway Capital and a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange
"Mr. Chau"	Mr. Chau Ching Ngai, the sole beneficial owner of the Purchaser
"Offer"	the possible unconditional cash offer to be made by Kingsway Securities, on behalf of the Purchaser, to acquire all the issued Shares not already agreed to be acquired by the Purchaser or parties acting in concert with it
"Offer Share(s)"	all the issued Share(s) (other than the Sale Shares)
"Park Well"	Park Well International Group Ltd., a company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company
"PRC"	People's Republic of China, and for the purpose of this announcement, excluding Hong Kong and the Macau Special Administrative Region of the People's Republic of China
"Purchaser"	Angel Field Limited, a company incorporated in the British Virgin Islands with limited liability on 16th August, 2001, which is wholly and beneficially owned by Mr. Chau
"S&P Agreement"	the sale and purchase agreement dated 22nd January, 2002 entered into between, among others, Feng Lin and the Purchaser, relating to the sale and purchase of the Sale Shares
"Sale Shares"	a total of 148,000,000 Shares, representing 74.00% of the existing issued share capital of the Company, sold to the Purchaser pursuant to the S&P Agreement
"SFC"	Securities and Futures Commission
"Share(s)"	share(s) of HK$0.10 each in the share capital of the Company
"Shareholder(s)"	holder(s) of Share(s)
"Snack Food Business Companies"	Cai Yi Feng Trading Limited, Hanover VCL Trading Limited, Transfit Garments Limited, Vastco (H.K.) Limited, VCL Business Development (USA) Inc. and Vastco (Shantou F.T.Z.) Industrial Limited, all of which are indirect subsidiaries of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Takeovers Code"	the Hong Kong Codes on Takeovers and Mergers
"HK$"	Hong Kong dollars

By order of the board	By order of the board
Angel Field Limited	Ying Wing Holdings Limited
Chau Ching Ngai	Tsoi Hon Chung
Director	Chairman

Hong Kong, 25th January, 2002

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

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

Please also refer to the published version of this announcement in the Hong Kong iMail Post dated 28/1/2002