Television Broadcasts Limited — Capital/Financing Update 2005

Mar 23, 2005

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.

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(Incorporated in Cayman Islands with limited liability) (Stock Code: 290)

PLACING OF NEW SHARES UNDER GENERAL MANDATE AND RESUMPTION OF TRADING

PLACING AGENT

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Kingston Securities Limited

PLACING OF NEW SHARES

The Company has conditionally agreed to place, through the Placing Agent on a fully underwritten basis, 77,344,000 Placing Shares to independent investors at a price of HK$0.40 per Placing Share.

The Placing Shares represent about 20% of the existing issued share capital of the Company of 386,726,000 Shares and about 16.67% of the Company’s issued share capital of 464,070,000 Shares as enlarged by the Placing.

The gross proceeds from the Placing will be HK$30.9 million. The net proceeds of about HK$30 million from the Placing will apply to satisfy the consideration and related expenses for the Proposed Acquisition. In the event, the Proposed Acquisition does not proceed or the net proceeds is not fully utilized to finance the Proposed Acquisition, the whole of the net proceeds or such unutilized portion will be retained for general working capital purpose to strengthen the capital base of the Group. Details of the Proposed Acquisition are set out in the announcements made by the Company dated 22 November 2004, 6 December 2004 and 3 February 2005, respectively. As at the date of this announcement, due diligence exercise has commenced. Shareholders and investors should note that the terms and conditions of the Proposed Acquisition have yet to be finalized and the Proposed Acquisition may or may not be consummated.

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CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement

22 March, 2005

The Placing Price of HK$0.40 represents (i) a discount of about 11.11% to the closing price of HK$0.45 per Share as quoted on the Stock Exchange on 21 March 2005, being the last trading day before this announcement; (ii) a discount of about 16.14% to the average closing price per Share of HK$0.477 as quoted on the Stock Exchange for the last five trading days ended 21 March 2005, being the last trading day before this announcement, and (iii) a discount of about 16.14% to the average closing price in the 5 trading days immediately prior to the date of the Placing Agreement.

The Placing Price was negotiated on an arm’s length basis between the Company and the Placing Agent with reference to the closing prices of Shares as quoted on the Stock Exchange as referred to above. The Directors consider that the terms of the Placing are fair and reasonable based on the current market condition and in the interests of the Company and its Shareholders as a whole.

The Placing is conditional upon, among other things, the Stock Exchange granting listing of and permission to deal in the Placing Shares.

The Placing is subject to termination on the occurrence of, amongst other things, any event of force majeure (which include events set out in greater detail below) at or before 10:00 a.m. on the completion date of the Placing.

SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. on Tuesday, 22 March 2005 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on Wednesday, 23 March 2005.

THE PLACING AGREEMENT DATED 22 MARCH 2005

Issuer

China Conversational Power Holdings Limited

Placing Agent

The Placing Agent has conditionally agreed to place in aggregate 77,344,000 Placing Shares on a fully underwritten basis and will receive a placing commission of 2.5% on the gross proceeds of the Placing.

The Placing Agent and its ultimate beneficial owners are not connected persons of the Company and are third parties independent of the Company and its connected persons.

Placees

The Placing Agent will place the Placing Shares to not fewer than six Placees, each of whom (i) will not be a connected person of the Company; and (ii) is independent of the other Placees of the Company and its connected persons.

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CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement

22 March, 2005

Placing Shares

The Placing Shares represent (i) about 20% of the existing issued share capital of the Company of 386,726,000 Shares as at the date of this announcement; and (ii) about 16.67% of the issued share capital of the Company of 464,070,000 as enlarged by the Placing.

The Placing Shares will rank, upon issue, pari passu in all respect with the Shares in issue on the date of allotment and issue of the Placing Shares.

Placing Price

The Placing Place was fixed on the day of which the Company and the Placing Agent entered into the Placing Agreement, i.e. 22 March 2005. The Placing Price of HK$0.40 represents (i) a discount of about 11.11% to the closing price of HK$0.45 per Share as quoted on the Stock Exchange on 21 March 2005, being the last trading day before this announcement; (ii) a discount of about 16.14% to the average closing price per Share of HK$0.477 as quoted on the Stock Exchange for the last five trading days ended 21 March 2005, being the last trading day before this announcement; and (iii) a discount of about 16.14% to the average closing price in the 5 trading days immediately prior to the date of the Placing Agreement.

The Placing Price was negotiated on an arm’s length basis between the Company and the Placing Agent with reference to the closing prices of Shares as quoted on the Stock Exchange as referred to above. The Directors consider that the terms of the Placing are fair and reasonable based on the current favourable capital market environment and will be more attractive for the potential investors and in the interests of the Company and its Shareholders as a whole.

General Mandate

The Placing Shares will be issued under the general mandate (“General Mandate”) to allot, issue and deal with Shares granted to the Directors by resolution of the Shareholders passed at the extraordinary general meeting (the “EGM”) of the Company held on 18 March 2005 subject to the limit up to 20% of the issued share capital of the Company as at the date of passing the resolution at the EGM (i.e. 77,345,200 Shares). As at the date of this announcement, none of the new Shares has been issued under the General Mandate.

Conditions Of The Placing

Completion of the Placing is conditional upon, among other things:

• (i) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, the Placing Shares; and

• (ii) the obligation of the Placing Agent becoming unconditional and not being terminated in accordance with the terms of the Placing Agreement, including provisions regarding force majeure event.

None of the above conditions can be waived by the Company and the Placing Agent.

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CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement

22 March, 2005

Termination And Force Majeure

The Placing Agreement may be terminated by the Placing Agent if at any time at or before 10:00 a.m. on the date for completion of the Placing Agreement, there occurs:

• (i) the introduction of any new law or regulation or any change in existing laws or regulations (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (ii) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before and/or after the date hereof) of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national, international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which may, in the reasonable opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or adversely prejudices the success of the Placing of the Shares by potential investor(s) or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the Placing; or

• (iii) any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction on trading in securities) occurs which affect the success of the Placing (such success being the placing of the Shares to potential investor(s)) or otherwise in the sole and absolute opinion of the Placing Agent make it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the Placing; or

• (iv) any change in the circumstances of the Company or any members of the Group which may adversely affect the prospect of the Group; or

• (v) any incidence which, in the absolute opinion of the Placing Agent, may cause the Placing unadvisable to process.

The Directors are not aware of the occurrence of any of such events as at the date of this announcement.

Completion Of The Placing

The conditions set out in the Placing Agreement is expected to be fulfilled on or before 18 April 2005, or such later date as may be agreed by the Company and the Placing Agent and the completion of the Placing will be take place on or before the third Business Day after the Placing Agreement become unconditional.

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CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement

22 March, 2005

Reasons For The Placing

The Directors considered various ways of raising funds and consider that the Placing represents an opportunity to raise capital for the Company while broadening the shareholder base and the capital base of the Company.

In addition, according to the financial position as shown in the latest audited financial statements for the year ended 31 March 2004 included in the Company’s 2004 annual report and the unaudited interim results for the six months ended 30 September 2004, the Directors consider that the Group’s liquidity will be enhanced by the Placing as a result of the broadening of capital base of the Company and that the Placing is therefore in the interests of the Company and its Shareholders as a whole.

Use Of Net Proceeds

The net proceeds of about HK$30 million from the Placing will apply to satisfy the consideration and related expenses for the Proposed Acquisition. In the event, the Proposed Acquisition does not proceed or the net proceeds is not fully utilized to finance the Proposed Acquisition, the whole of the net proceeds or such unutilized portion will be retained for general working capital purpose to strengthen the capital base of the Group. Details of the Proposed Acquisition are set out in the announcements made by the Company dated 22 November 2004, 6 December 2004 and 3 February 2005, respectively. As at the date of this announcement, due diligence exercise has commenced. Shareholders and investors should note that the terms and conditions of the Proposed Acquisition have yet to be finalized and the Proposed Acquisition may or may not be consummated. The net proceeds raised per Share upon the completion of the Placing will be about HK$0.388 per Share.

Further announcement will be made by the Company in respect of any further material development of the Proposed Acquisition.

Effect On Shareholding Structure

The existing shareholding structure of the Company and the shareholding structure of the Company upon issue of the Placing Shares are set out as below:

			Shareholding
			immediately
	Existing		after the
Name of Shareholders	shareholding	Per cent.	Placing	Per cent.
	(Shares)	(%)	(Shares)	(%)
Highworth Venture Limited (Note_1)_	54,900,000	14.20%	54,900,000	11.83%
Mr. Chen Jun Nong_(Note 2)_	120,000	0.03%	120,000	0.03%
Mr. Tsoi Wai Kwong_(Note 3)_	174,000	0.04%	174,000	0.04%

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CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement

22 March, 2005

Public Shareholders – the Placees – other public Shareholders Total	– 331,532,000 386,726,000	– 85.73% 100.00%	77,344,000 331,532,000 464,070,000	16.67% 71.43%
				100.00%

Note:

1. Highworth Venture Limited is a company beneficially owned by Mr. Hon Ming Kong, an executive Director of the Company.

2. Mr. Chen Jun Nong is an executive Director.

3. Mr. Tsoi Wai Kwong is an independent non-executive Director.

Application for Listing

Application will be made by the Company to the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

General

The Group is principally engaged in electrical engineering contracting business, trading in electrical equipment and material, internet travel booking services, investment holding, securities brokerage and finance business, company secretarial services and sea freight forwarding services. The Directors consider the terms of the Placing Agreement to be fair and reasonable and in the interests of the Company and the Shareholders as a whole. In addition, given the existing favourable market conditions in Hong Kong and the general economic environment, the Directors also consider that the timing of the Placing is appropriate and is also in the interests of the Company and its Shareholders as a whole.

The following table summaries the capital raising activities of the Group for the 12 months immediately before the date of this announcement:

				Actual use
				of net
				proceeds as at the
Date of			Intended use of	date of this
announcement	Event	Net proceeds	net proceeds	announcement
5 November 2004	Placing of	HK$14.4 million	General working	HK$1 million has
	64,454,000 new		capital	been used for
	Shares at a price of			operating expenses
	HK$0.23 per Share			and the remaining
				balance has been
				used as
				general working
				capital for Group’s
				finance business

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CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement

22 March, 2005

Suspension and Resumption of Trading

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. on Tuesday, 22 March 2005 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on Wednesday, 23 March 2005.

Terms and Definitions

“Board”	the board of Directors
“Business Day”	any day (excluding a Saturday) on which banks generally are open for
	business in Hong Kong
“Company”	China Conservational Power Holdings Limited, a company incorporated
	in Cayman Islands with limited liability and the shares of which are
	listed on the Stock Exchange
“connected person(s)”	has the meaning ascribed thereto in the Listing Rules
“Director(s)”	director(s) of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	Hong Kong Special Administrative Region of the People’s Republic of
	China
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Placees”	any institutional, corporate or individual investor(s) or any of their
	respective subsidiaries or associates procured by the Placing Agent to
	subscribe for any of the Placing Shares pursuant to the Placing Agent’s
	obligation hereunder
“Placing”	the placing of 77,344,000 new Shares pursuant to the terms of the Placing
	Agreement
“Placing Agent”	Kingston Securities Limited, a licensed corporation to carry on business
	in type 1 regulated activity (dealing in securities) under the Securities
	and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Placing Agreement”	a conditional placing agreement entered into between the Company and
	the Placing Agent dated 22 March 2005 in relation to the Placing
“Placing Price”	HK$0.40 per Placing Share
“Placing Share(s)”	an aggregate of 77,344,000 Shares to be placed pursuant to the terms of
	the Placing Agreement

7 CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement 22 March, 2005

“Proposed Acquisition” the proposed acquisition of up to 49% of the equity interest of the PRC Company by Country Super Limited, an indirect wholly owned subsidiary of the Company. For details of the Proposed Acquisition, please refer to the announcement of the Company published on 3 February 2005 “Shares” ordinary shares of HK$0.10 each in the share capital of the Company “Shareholder(s)” holders of the Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “HK$” Hong Kong dollars, the lawful currency of Hong Kong

“%” per cent.

By order of the Board

CHINA CONSERVATIONAL POWER HOLDINGS LIMITED Chan Tat Chee Chairman

Hong Kong, 22 March 2005

As at the date hereof, the Board comprises ten directors of which Messrs. Chan Tat Chee, Hon Ming Kong, Lee Yu Leung, Chen Jun Nong, Pascal Ting and Lin Hoi Kwong are executive directors; and Mr. Li Yong, Alfa as non-executive director and Messrs. Fork Siu Lun, Tommy, Tsoi Wai Kwong, Loo Chung Keung, Steve as independent non-executive directors.

Please also refer to the published version of this announcement in The Standard.

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CHINA CONSERVATIONAL POWER HOLDINGS LIMITED – Announcement

22 March, 2005