Persistence Gold Group Ltd — Share Issue/Capital Change 2002

Apr 17, 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.

Ying Wing Holdings Limited

(Incorporated in Bermuda with limited liability)

PLACING OF 33,800,000 EXISTING SHARES

AND

SUBSCRIPTION FOR 33,800,000 NEW SHARES

Placing Agent

Kingsway SW Securities Limited

On 16 April, 2002, the Placing Agent agreed with Angel Field to place, on a fully underwritten basis, 33,800,000 existing Shares at the price of HK$0.53 per Placing Share on behalf of Angel Field, and Angel Field entered into a conditional agreement with the Company for the subscription of 33,800,000 new Shares at the same price of HK$0.53 per Subscription Share. The 33,800,000 existing Shares represent (i) 16.9% of the Company's existing issued share capital; and (ii) approximately 14.46% of the Company's issued share capital as enlarged by the Subscription.

The Directors are of the view that the Placing and the Subscription will enlarge the shareholder base and the capital base of the Company and will strengthen the financial position of the Group. The Company intends to use the estimated net proceeds of the Subscription of approximately HK$17.53 million as to approximately HK$5 million for its fabric trading business and as to the remaining balance for the Group's general working capital, including, but not limited to, administrative expenses for its Hong Kong operations and expenses for the relocation of its Hong Kong office.

Trading in the Shares was suspended with effect from 9:30 a.m. on 16 April, 2002 pending publication of this announcement. Application has been made to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 17 April, 2002.

PLACING AGREEMENT DATED 16 APRIL, 2002

Pursuant to a placing agreement dated 16 April, 2002 entered into between the Company, the Placing Agent, and Angel Field, the Placing Agent agreed with Angel Field to place 33,800,000 existing Shares at a price of HK$0.53 per Placing Share on behalf of Angel Field. Details of the Placing are set out below.

Vendor:

Angel Field

Angel Field is interested in 133,986,000 Shares (Taking into account (i) the valid acceptances of the mandatory unconditional cash offer (as initially announced by the Company on 25 January, 2002) in respect of 5,104,000 Shares; (ii) the placing agreement entered into between Angel Field and the Placing Agent for the placing of 3,104,000 existing Shares at a price of HK$0.418 per Share (as announced by the Company on 12 April, 2002); and (iii) the open market disposal of Shares by Angel Field in the amounts of 4,286,000 Shares and 11,728,000 Shares (as announced by the Company on 12 April, 2002 and 15 April, 2002 respectively)), representing approximately 66.99% of the existing issued share capital of the Company, which comprises 200,000,000 Shares.

Basis of Placing:

The Placing Agent will place the Placing Shares on a fully underwritten basis.

Number of Shares to be placed:

33,800,000 existing Shares held by Angel Field.

The Placing Shares represent (i) 16.9% of the Company's existing issued share capital; and (ii) approximately 14.46% of the Company's issued share capital as enlarged by the Subscription.

Placees:

Not less than six independent professional, institutional and/or individual investors to be procured by the Placing Agent for the Placing.

Placing Price:

HK$0.53 per Placing Share

The Placing Price represents a discount of approximately 18.46% to the closing price of HK$0.65 per Share as quoted on the Stock Exchange on 15 April, 2002 (being the last day of trading in the Shares on the Stock Exchange prior to the release of this announcement). The Placing Price also represents a premium of approximately 14.22% to the average closing price of HK$0.464 per Share as quoted on the Stock Exchange for the last 10 trading days up to and including 15 April, 2002.

Condition of the Placing:

The Placing is unconditional.

Completion of the Placing:

On or before 23 April, 2002 (or such later date as the parties may otherwise agree)

SUBSCRIPTION AGREEMENT DATED 16 APRIL, 2002

Subscriber:

Angel Field

Number of new Shares to be subscribed for:

33,800,000 new Shares, representing (i) 16.9% of the Company's existing issued share capital; and (ii) approximately 14.46% of the Company's issued share capital as enlarged by the Subscription.

Subscription price:

HK$0.53 per Share (being the same as the Placing Price)

Conditions of the Subscription:

The Subscription is conditional upon:

(1) the completion of the Placing;

(2) the Listing Committee granting the listing of, and permission to deal in, the Subscription Shares; and

(3) the filing of relevant documents or obtaining the necessary waiver relating to the Placing as required by law in Bermuda, if necessary.

Completion of the Subscription:

Completion of the Subscription will take place upon the fulfillment of all conditions of the Subscription listed above. The Subscription must be completed on or before 30 April, 2002, being 14 days from the date of the Placing Agreement (if the Subscription were to be completed thereafter, it would constitute a connected transaction under the Listing Rules and would require the approval of the independent shareholders of the Company).

INDEPENDENCE OF THE PLACING AGENT AND PLACEES

The Placing Agent is, and the placees to be procured by it under the Placing Agreement will be, independent of and not connected with the directors, chief executive, substantial shareholders of the Company or any of its subsidiaries or their respective associates.

MANDATE TO ISSUE NEW SHARES

The Subscription Shares are to be issued by the Company under the general mandate granted to the Directors at the annual general meeting of the Company held on 15 May, 2001. The Directors confirm that there is sufficient mandate for the Subscription Shares.

RANKING OF SUBSCRIPTION SHARES

The Subscription Shares, when issued and fully paid, will rank pari passu in all respects with the Shares in issue on the date of allotment and issue of the Subscription Shares including the right to any dividends or distributions.

CHANGE OF SHAREHOLDING

The change of the shareholding of Angel Field in the Company as a result of the Placing and the Subscription are detailed as follows:

	Number of		Immediately after		Immediately	% of the issued
	Shares		the completion of		after the	share capital
	interested	% of the	the Placing before	% of the	completion of	as enlarged
	as at the date of	existing issued	but the completion	existing issued	the Placing and	by the
Name	this announcement	share capital	of the Subscription	share capital	the Subscription	Subscription
Angel Field	133,986,000 (Note)	66.99%	100,186,000	50.09%	133,986,000	57.31%

Note: Taking into account (i) the valid acceptances of the mandatory unconditional cash offer (as initially announced by the Company on 25 January, 2002) in respect of 5,104,000 Shares; (ii) the placing agreement dated 12 April, 2002 entered into between Angel Field and the Placing Agent for the placing of 3,104,000 existing Shares at a price of HK$0.418 per Share (as announced by the Company on 12 April, 2002); and (iii) the open market disposal of Shares by Angel Field in the amounts of 4,286,000 Shares and 11,728,000 Shares (as announced by the Company on 12 April, 2002 and 15 April, 2002 respectively).

As advised by Angel Field, it may or may not dispose of further Shares in the open market but it is the intention of Angel Field to remain as the controlling shareholder of the Company.

REASONS FOR THE PLACING AND THE SUBSCRIPTION AND USE OF PROCEEDS

The Group is principally engaged in the processing of raw fabric and trading of fabric. The Directors are of the view that the Placing and the Subscription will enlarge the shareholder base and the capital base of the Company and will strengthen the financial position of the Group.

The Placing Price and the Subscription Price were determined after arm's length negotiations between Angel Field, the Company and the Placing Agent and the Directors consider that the terms of the Placing Price and the Subscription Price are fair and reasonable and believe that the Placing and the Subscription are in the best interests of the Company and its shareholders as a whole.

As disclosed in the Company's circular dated 22 February, 2002, following the disposal of its snack food business, the Group's total liabilities were reduced to approximately HK$10.1 million (based on the unaudited accounts as at 30 November, 2001), comprising mainly PRC taxation payable. As disclosed in the Company's 2001 annual report, the Group's current assets as at 31 December, 2001 amounted to approximately HK$25.8 million, of which approximately HK$74,000 was bank balances and cash. In view of the recent increase in the trading price of the Shares, the Directors consider that it is in the interest of the Company to effect the Placing. The Company intends to use the estimated net proceeds from the Subscription of approximately HK$17.53 million as to approximately HK$5 million for its fabric trading business and as to the remaining balance for the Group's general working capital, including, but not limited to, administrative expenses for its Hong Kong operations and expenses for the relocation of its Hong Kong office.

EXPENSES

The Company will bear all the costs and expenses of approximately HK$0.37 million incurred and to be incurred in relation to the Placing and the Subscription and will reimburse Angel Field for all the costs and expenses incurred and to be incurred by it in relation to the Placing and the Subscription.

APPLICATION FOR LISTING

The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Subscription Shares.

Trading in the Shares was suspended with effect from 9:30 a.m. on 16 April, 2002 pending publication of this announcement. Application has been made to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 17 April, 2002.

By order of the board of

Ying Wing Holdings Limited

Mo Yuk Ping

Chairman

DEFINITIONS

In this announcement, unless the content otherwise requires, the following expressions have the following meanings:

"Angel Field"	Angel Field Limited, a company incorporated in the British Virgin Islands with limited liability and is beneficially and solely owned by Mr. Chau Ching Ngai
"associate"	has the meaning as defined in the Listing Rules
"Company"	Ying Wing Holdings Limited, a company incorporated in Bermuda with limited liability and its Shares are listed on the Stock Exchange
"Directors"	the directors, including the independent non-executive directors, of the Company
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Listing Committee"	the listing committee of the Stock Exchange
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange
"Placing"	the placement of 33,800,000 existing Shares to independent investors at the Placing Price
"Placing Agent"	Kingsway SW Securities Limited, a securities dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)
"Placing Agreement"	the placing agreement dated 16 April, 2002 entered into between the Company, the Placing Agent and Angel Field in respect of the Placing
"Placing Price"	the placing price of HK$0.53 per Placing Share under the Placing
"Placing Share(s)"	33,800,000 existing Shares held by Angel Field
"PRC"	the People's Republic of China, but excluding Hong Kong
"Share(s)"	share(s) of a nominal value of HK$0.10 each in the capital of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subscription"	the subscription of 33,800,000 new Shares by Angel Field
"Subscription Agreement"	the subscription agreement dated 16 April, 2002 between the Company and Angel Field in respect of the Subscription
"Subscription Price"	the subscription price of HK$0.53 per Subscription Share under the Subscription, which is the same as the Placing Price
"Subscription Share(s)"	33,800,000 new Shares
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"%"	per cent.

Hong Kong, 16th April, 2002

Please also refer to the published version of this announcement in the Hong Kong iMail Post dated 17/4/2002