Shanghai Able Digital Science&Tech Co., Ltd. — Share Issue/Capital Change 2000

Oct 12, 2000

The Stock Exchange 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.

SOUTH EAST ASIA WOOD INDUSTRIES HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

PLACING OF EXISTING SHARES

TO RESTORE MINIMUM PUBLIC FLOAT

AND EXERCISE OF THE CALL OPTION

The Board wishes to announce that it has been informed by United Star that on 11th October, 2000,

(i) United Star entered into the Placing Agreement with the Placing Agent pursuant to which the Placing Agent agreed to place on behalf of United Star an aggregate of 1,800,000,000 Placing Shares (representing 18.75 per cent. of the existing issued share capital of the Company) to the Placees who are independent of, and not acting in concert with, United Star or any parties acting in concert with it, or the directors, chief executive or substantial shareholders of the Company or its subsidiaries or their respective associates (as defined in the Listing Rules); and

(ii) United Star exercised the Call Option to purchase from the Subscription Creditors all of the 820,053,333 Bank Shares (representing approximately 8.5 per cent. of the existing issued share capital of the Company).

After completion of the Placing Agreement and the exercise of the Call Option, the public float of the existing Shares will be restored to 25 per cent. of the existing issued share capital of the Company.

Reference is made to the joint announcements made by the respective boards of directors of the Company and United Star International Inc. ("United Star"), the controlling shareholder of the Company, dated 5th July, 2000, 2nd August, 2000 and 25th August, 2000 (the "Joint Announcements") and the circular issued by the Company dated 2nd August, 2000 and the supplemental circular of the Company dated 21st August, 2000. Unless defined otherwise, terms in this announcement have the same meanings as those defined in the Joint Announcements.

THE PLACING AGREEMENT

Parties

Vendor : United Star

Placing Agent : Core Pacific-Yamaichi International (H.K.) Limited which is independent of, and not acting in concert with, United Star or any parties acting in concert with it, or the directors, chief executive or substantial sharehlders of the Company or its subsidiaries or their respective associates (as defined in the Listing Rules)

Placees : The Placees are independent of, and not acting in concert with, United Star or any parties acting in concert with it, or the directors, chief executive or substantial shareholders of the Company or its subsidiaries or their respective associates (as defined in the Listing Rules)

Number of Placing Shares : 1,800,000,000 Placing Shares, representing 18.75 per cent. of the existing issued share captial of the Company

Date of Placing Agreement : 11th October, 2000

The CALL OPTION

Pursuant to the Compromise Agreement, the two Bank Creditors who subscribed for the Bank Shares (the "Subscription Creditors") granted to United Star a call option (the "Call Option") for United Star to purchase from any or both of them all of the Bank Shares within 365 days from the date of completion of the Compromise Agreement. The total price payable by United Star in cash to each of the Subscription Creditors for the Bank Shares would comprise (i) the exercise price which equals to the respective amount of their Secured Indebtedness and Unsecured Indebtedness (less the actual cash received by each of them under the Compromise Agreement) plus interest accrued thereon from 1st April, 2000 until exercise of the Call Option and (ii) the associated transaction costs. On 11th October, 2000, United Star exercised the Call Option in full.

Parties

Call Option holder : United Star

Call Option writers : Subscription Creditors

Number of Bank Shares : 820,053,333 Bank Shares, representing approximately 8.5 per cent. of the exisiting issued share capital of the Company

Exercise price of the Call Option : HK$0.0517 per Bank Share, representing a discount of approximately 38.45 per cent. to the closing price of HK$0.084 per Share quoted on the Stock Exchange on 11th October, 2000 and a discount of approximately 39.95 per cent. to the ten days average closing price of approximately HK$0.0861 per Share immediately before and including 11th October, 2000

SHAREHOLDING STRUCTURE

Immediately before completion of the Placing Agreement and exercise of the Call Option, the shareholding interest of the United Star and parties acting in concert with it (the "United Star Concert Parties") in the Company was approximately 85.2 per cent. of the existing issued share capital of the Company. After completion of the Placing Agreement and the exercise of the Call Option, the shareholding interest of the United Star Concert Parties in the Company will be reduced to 75 per cent. and the public float of the existing Shares will be restored to 25 per cent.

By order of the Board

SOUTH EAST ASIA WOOD INDUSTRIES HOLDINGS LIMITED

Peter Kwok Viem

Chairman

Hong Kong, 11th October, 2000

Please also refer to the published version of this announcement in the i Mail dated 11/10/2000.