Risecomm Group Holdings Limited — M&A Activity 2002

Nov 4, 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 disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Singamas Container Holdings LImited

(Incorporated in Hong Kong with limited liability)

DISCLOSEABLE TRANSACTION

The board of directors is pleased to announce that on 4th November, 2002 Singamas Container Holdings Limited entered into a Share Transfer Agreement with SSCMC Transportation Company Limited under which Singamas agreed to purchase from SSCMC Transportation Company Limited an additional 20% equity interest in Shunde Shun An Da Pacific Container Co., Ltd. Upon completion of the Agreement, Singamas and SSCMC Transportation Company Limited will hold 60% and 40% equity interest in Shunde Shun An Da Pacific Container Co., Ltd. respectively.

The total consideration for the purchase is US$3,600,000 (equivalent to approximately HK$28,080,000) and will be satisfied in cash funded by internal resources of the Group and bank financing.

The Share Transfer Agreement constitutes a discloseable transaction of Singamas under Chapter 14 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. A circular containing further details of the above transaction will be sent to the shareholders as soon as practicable.

THE SHARE TRANSFER AGREEMENT

Date:

4th November, 2002

Parties:

(a) Singamas

(b) SSCMC Transportation Company Limited

An independent third party not connected with the Directors, chief executive and substantial shareholders of Singamas and its subsidiaries and their respective associates (as defined under the Listing Rules).

Transaction

Pursuant to the Agreement, Singamas agreed to purchase and SSCMC agreed to sell the Equity Interest.

Singamas and SSCMC currently holds 40% and 60% respectively equity interest in SSPC. Upon completion of the Agreement, Singamas and SSCMC will hold 60% and 40% equity interest in SSPC respectively.

The board of directors of SSPC currently consists of seven directors, of which four were appointed by SSCMC and three were appointed by Singamas. Upon completion of the Agreement, one of the directors appointed by SSCMC will resign and Singamas will be entitled to appoint one additional director. Thus, upon completion of the Agreement, the board of directors of SSPC will consist of four directors appointed by Singamas and three directors appointed by SSCMC.

Consideration

Pursuant to the Agreement, Singamas agreed to pay US$3,600,000 (equivalent to approximately HK$28,080,000) for the Equity Interest in cash on the Completion Date. The cash consideration will be funded by internal resources of the Group and bank financing.

Completion

Completion shall take place on any day up to the 7th day following the date on which all approvals from the relevant PRC authorities approving the Agreement and the transactions contemplated therein have been obtained or such other time the parties mutually agree in writing.

Basis of Determination of the Consideration

The Consideration has been calculated by reference to the total paid up registered capital of SSPC in the sum of US$18,000,000.

Based on its audited results, the audited net tangible asset value of SSPC as at 31st December, 2001 was RMB165,294,000 (equivalent to approximately HK$155,937,736). SSPC reported a net profit (both before and after taxation and extraordinary items) of RMB1,529,000 (equivalent to approximately HK$1,442,453) for the year ended 31st December, 2000 and a net profit before taxation and extraordinary items of RMB8,493,000 (equivalent to approximately HK$8,012,264) and a net profit after taxation and extraordinary items of RMB6,200,000 (equivalent to approximately HK$5,849,057) for the year ended 31st December, 2001.

The terms of the Agreement have been negotiated on an arm's length basis and are on normal commercial terms.

Reasons for the Acquisition

The Group is one of the world's leading container manufacturers and logistics service providers. Its container manufacturing business captioned 16% of the world market and 20% of the PRC market in 2001.

SSPC is principally engaged in the manufacturing of dry freight and specialized containers, specializing in the production of ISO dry freight containers and 45-foot/48-foot specialized containers.

Upon completion of the Agreement, SSPC will become a non-wholly owned subsidiary of Singamas.

The Directors believe that the entering into the Agreement is in the interest of Singamas and in line with the Group's business objectives and enables Singamas to expand its network and market coverage in the PRC and therefore enhances its Group's overall profitability.

Discloseable Transaction

As the audited net tangible asset value of SSPC represents more than 15% of the audited consolidated net tangible asset value of Singamas as at 31st December, 2001, the Agreement constitutes a discloseable transaction under the Listing Rules.

Singamas will send a circular containing further details of the above transaction to the shareholders as soon as practicable.

General

Singamas is an investment holding company incorporated in Hong Kong and the activities of the Group include manufacturing dry freight containers, collapsible flatrack containers, open top containers, bitutainers, CFC free refrigerated containers, other specialized containers and container parts; provision of logistic services, including operating container depots, container terminal, mid-stream and container logistics services.

Definitions

"Agreement"	the share transfer agreement dated 4th November, 2002 made between Singamas and the SSCMC
"Board"	the board of Directors
"CFC"	an abbreviation for Chlorofluorocarbon
"Completion Date"	any day up to and including the 7th day following the date of obtaining the relevant PRC approvals or such other time the parties mutually agree in writing
"Consideration"	the total sum of US$3,600,000 (equivalent to approximately HK$28,080,000) to be paid by Singamas for the acquisition of 20% equity interest in SSPC
"Director(s)"	the director(s) of Singamas
"Equity Interest"	the 20% equity interest in SSPC
"Group"	Singamas together with its subsidiaries
"Listing Rules"	Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited
"PRC"	the People's Republic of China and for the purpose of this announcement, excluding Hong Kong, the Macau Special Administrative Region of the People's Republic of China and Taiwan
"RMB"	Reminbi, the lawful currency of PRC
"Singamas"	Singamas Container Holdings Limited, the shares of which are listed and traded on the Stock Exchange
"Stock Exchange"	the Stock Exchange of Hong Kong Limited
"SSCMC"	SSCMC Transportation Company Limited, a company incorporated in Hong Kong
"SSPC"	Shunde Shun An Da Pacific Container Co., Ltd., a wholly foreign owned joint venture established on 12th July, 1991 in the PRC and is currently owned as to 40% by Singamas and 60% by SSCMC
"HK$"	Hong Kong dollars, the lawful currency of the Hong Kong Special Administrative Region of the PRC
"US$"	U.S. dollars, the lawful currency of United State of America

On Behalf of the Board

Chang Yun Chung

Chairman

Hong Kong, 4th November, 2002

Unless otherwise specified, conversion of US Dollars into Hong Kong Dollars is based on the exchange rate of US$1.00 = HK$7.80 and conversion of RMB into Hong Kong Dollars is based on the exchange rate of HK$1.00 = RMB1.06.

Please also refer to the published version of this announcement in The Standard dated 5 November 2002.