Vision Values Holdings Ltd. — Capital/Financing Update 2002

Sep 6, 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.

This announcement appears for information only and does not constitute an invitation or offer to acquire, purchase or subscribe any securities.

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**Asia Logistics Technologies Limited 亞 洲 物 流 科 技 有 限 公 司 ***

(Incorporated in the Cayman Islands with limited liability)

CONNECTED, DISCLOSEABLE AND SHARE TRANSACTION

The Directors announce that on 5th September, 2002, the Company has entered into the Sale and Purchase Agreement pursuant to which the Company has agreed to purchase or procure its nominee to purchase the Sale Shares upon the terms and conditions contained in the Sale and Purchase Agreement.

The Consideration will be satisfied (i) as to HK$400,000.00 in cash and (ii) as to the balance of HK$45,000,000.00 by way of issue and allotment of the Consideration Shares by the Company, subject to the approval of the Independent ALT Shareholders at the Extraordinary General Meeting of a specific mandate to be granted to the Directors, at an issue price of HK$0.15 per Consideration Share on Completion. The value of the Consideration Shares (based on the latest closing price of HK$0.089 per ALT Share as quoted on the Stock Exchange on 5th September, 2002) is HK$26,700,000.00.

The transaction contemplated under the Sale and Purchase Agreement constitutes a connected, discloseable and share transaction for the Company pursuant to Chapter 14 of the Listing Rules. An Independent Board Committee will be formed to advise the Independent ALT Shareholders in respect of the Sale and Purchase Agreement and the transactions contemplated therein. An independent financial adviser will be appointed to advise the Independent Board Committee on the terms of the Sale and Purchase Agreement and the transactions contemplated therein. A circular containing, amongst other things, a notice convening the Extraordinary General Meeting, further details of the Sale and Purchase Agreement, a letter from the Independent Board Committee and a letter from the independent financial adviser will be dispatched to the ALT Shareholders as soon as practicable.

THE SALE AND PURCHASE AGREEMENT

Date

5th September, 2002

Parties

Vendor : Southern Victory Developments Limited Purchaser : the Company Asset to be acquired : the Sale Shares

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Consideration and payment terms

The Consideration will be satisfied by the Company in the following manners:

• (a) as to HK$400,000.00 in cash payable by the Company to the Vendor on Completion which shall be financed by the Company from its internal resources; and

• (b) as to the balance (equivalent to HK$45,000,000.00) of the Consideration shall be payable by way of issue and allotment of the Consideration Shares to the Vendor (or its nominee) at an issue price of HK$0.15 per Consideration Share on Completion.

Upon Completion, the Vendor and the Company have agreed that 30,000,000 Consideration Shares shall be delivered to the Vendor and the balance of 270,000,000 Consideration Shares shall be held in escrow and shall be released to the Vendor in the relevant portion and time as set out below:

	Total number of Consideration	Portion of
Date	Shares to be released to the Vendor	Consideration Shares
6 months from Completion	150,000,000	50%
12 months from Completion	120,000,000	40%
Total	270,000,000	90%

The Consideration Shares will be issued and allotted subject to the approval of Independent ALT Shareholders at the Extraordinary General Meeting of a specific mandate to be granted to the Directors. The Consideration Shares will rank pari passu in all respects with the existing issued ALT Shares and will represent approximately 8.98% of the existing issued share capital of the Company and approximately 8.24% of the enlarged issued share capital of the Company.

The issue price of the Consideration Shares represents a premium of approximately 69% over the closing price of HK$0.0890 per ALT Share as quoted on the Stock Exchange on 5th September, 2002 and a premium of approximately 68% over the average closing price of HK$0.0892 per ALT Share for the ten consecutive trading days up to and including 5th September, 2002 as quoted on the Stock Exchange. The value of the Consideration Shares (based on the latest closing price of HK$0.0890 per ALT Share as quoted on the Stock Exchange on 5th September, 2002) is HK$26,700,000.00.

Conditions Precedent

Completion of the Sale and Purchase Agreement is conditional upon the fulfilment of the following Conditions Precedent (unless otherwise waived by the Company in its absolute discretion):

• (a) all the warranties, representations, indemnities and undertakings given or made by the Vendor under the Sale and Purchase Agreement remain true and correct at all times as from the signing of the Sale and Purchase Agreement up to the Completion Date;

• (b) the passing by the Independent ALT Shareholders at the Extraordinary General Meeting of an ordinary resolution to approve the Sale and Purchase Agreement and the transactions contemplated in the Sale and Purchase Agreement;

• (c) the listing of, and permission to deal in, all the Consideration Shares being granted by the Listing Committee of the Stock Exchange (and such permission and listing not subsequently being revoked prior to the delivery of definitive share certificate(s) representing the Consideration Shares);

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• (d) the entering into of a service agreement between Mr. Zhao Rui and the Company or its subsidiary (in a form to be agreed between Mr. Zhao Rui and the Company);

• (e) the entering into of the Termination Agreement by the parties thereto; and

• (f) all necessary approvals and consents from all relevant governmental, regulatory or other authorities and third parties in respect of the transactions contemplated in the Sale and Purchase Agreement having been obtained and not having been revoked.

Completion of the Sale and Purchase Agreement

Completion shall take place on the 5th business day after the fulfillment or satisfaction or waiver by the Company of all the Conditions Precedent.

If any of the Conditions Precedent has not been fulfilled or waived by the Company in its absolute discretion by 30th November, 2002 (or such later date as may be agreed in writing between the parties thereto), the Sale and Purchase Agreement shall from such date have no effect and no party shall have any liability under them (without prejudice to the rights of any party in respect of antecedent breaches).

Basis on which the Consideration was determined

The Consideration was determined after arm’s length negotiations between the parties thereto after taking into account, amongst other things, an analysis prepared by the management of the Company with reference to the underlying businesses and future prospects of Fusion Tech, the possible benefits from the synergetic effect between the businesses of the Company and Fusion Tech and a valuation report prepared by VC Partners (Asia) Limited, an independent valuation consulting firm in Hong Kong, dated 2nd January, 2002 valuing the entire equity interest in Xinganxian at HK$164,000,000.00 as at 31st December, 2001.

The Directors consider that the Sale and Purchase Agreement was entered into on normal commercial terms and the terms of the Sale and Purchase Agreement are fair and reasonable so far as the Group and the Independent ALT Shareholders are concerned.

Reasons for and benefit of the Sale and Purchase Agreement

The principal activity of the Company is investment holding and its subsidiaries are principally engaged in the provision of supply chain and logistics related solutions and services, including research and development, consultancy, offering of software solutions, implementation, and turnkey solutions.

The Directors consider that, by entering into the Sale and Purchase Agreement, Fusion Tech will become an indirect wholly-owned subsidiary of the Company which can capture the most benefits for the Group from the synergies arising from the increased cooperation between the Group and Fusion Tech in providing the total integrated logistics solutions and services to the customers. The logistics management technologies and solutions of the Group could most effectively be complemented and applied with the logistics consultancy and services of Fusion Tech in the marketplace securing every competitive edge to the Group as a one-stop supply chain and logistics solution provider in the Greater China Region.

Following the accession of the PRC into WTO, it is apparent that the logistics services will be one of the blooming industries in the PRC. Accordingly, the Directors believe that the increase in shareholding interest in Fusion Tech will enhance business cooperation between the Group and Fusion Tech and result in a synergetic effect that would be in the best interest of the Group and to the benefit of the ALT Shareholders as a whole.

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Information on Fusion Tech

Fusion Tech is a company incorporated under the laws of the British Virgin Islands and is an indirect 54.298% owned subsidiary of the Company as at the announcement date. Fusion Tech is an investment holding company which indirectly holds 100% equity interest in Xinganxian and another wholly foreignowned enterprise established under the laws of the PRC which were established on 23rd October, 2000 and 13th June, 2002 respectively. Both companies are principally engaged in the provision of the fourth parties logistics services, logistics management, development and implementation of supply chain technologies and the related consultancy services in the PRC.

After Completion, Fusion Tech will become an indirect wholly-owned subsidiary of the Company.

The unaudited consolidated loss before and after tax of Fusion Tech for the period from 5th July, 2000 (being the date of incorporation of Fusion Tech) to 31st December, 2001 were approximately HK$286,000.00 and HK$286,000.00 respectively; whereas the unaudited consolidated loss before and after tax of Fusion Tech for the 6 months ended 30th June, 2002 were approximately HK$384,000.00 and HK$384,000.00 respectively. The unaudited consolidated net tangible assets of Fusion Tech was approximately HK$110,000.00 as at 30th June, 2002.

Since Fusion Tech was incorporated in July 2000 and actually commenced its operation in 2001, thus the business of the Fusion Tech’s group of companies is currently in the development stage and operating under negative profitability. Nevertheless, the Company is of the view that, through Fusion Tech, it will be able to enter into the Chinese logistics service market and penetrate into major cities via 150 service points immediately, which creates a crucial value for the Company as the leading logistics services provider in the PRC. As such, the Directors consider that the acquisition of the remaining interest in Fusion Tech will bring along with favourable contribution to the Group.

On 4th September, 2000, Cyber Pilot has granted a shareholder’s loan to Fusion Tech in the sum of HK$10,000,000 which is still outstanding as at the date of the Sale and Purchase Agreement. Cyber Pilot only became an indirect wholly-owned subsidiary of the Company on 3rd January, 2002 upon exercise by the Company of the exchangeable notes, details of which was disclosed in the announcement of the Company dated 8th June, 2001. The shareholder’s loan was granted by the previous sole shareholder of Cyber Pilot and it was pre-existing before Cyber Pilot became a subsidiary of the Company. The amount and terms of the shareholder’s loan remain unchanged since Cyber Pilot became a subsidiary of the Company.

Reasons for entering into a service agreement with Mr. Zhao Rui

Mr. Zhao Rui is a director and the key management of Fusion Tech. In order to secure Mr. Zhao Rui’s dedication and long-term service to the Group, the Directors believe that the entering into of a service agreement with Mr. Zhao Rui would be in the best interest of the Group and to the benefit of the ALT Shareholders as a whole.

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Mr. Zhao Rui, a director of Fusion Tech, owns 20% equity interest in Jinganxian which is principally engaged in the business of logistics services and technology provider in the PRC. The balance of the 80% equity interest in Jinganxian is owned by Mr. Zhao Zhi, the brother of Mr. Zhao Rui. Jinganxian and Xinganxian entered into exclusive services agreements both on 10th November, 2000 that Xinganxian would provide logistics technology and marketing services to Jinganxian, in return, Jinganxian would pay to Xinganxian 90% of its profit before tax, if any. Up to the date of this announcement, no services has been provided by Xinganxian to Jinganxian. Moreover, Jinganxian has been a loss-making company and accordingly, no consideration has been ever paid to Xinganxian under the exclusive services agreements. The unaudited loss before and after taxation of Jinganxian for the year ended 31st December, 2001 were approximately RMB1.9 million and RMB1.9 million respectively. The unaudited loss before and after taxation of Jinganxian for the six months ended 30th June, 2002 were approximately RMB0.65 million and RMB0.65 million respectively. The Directors are of the view that the exclusive services agreements entered into between Xinganxian and Jinganxian are on normal commercial terms. The Company will ensure that any services to be provided by Xinganxian to Jinganxian pursuant to the exclusive services agreements will comply with the requirements of the Listing Rules. Each of Mr. Zhao Zhi and Mr. Zhao Rui has also undertaken, amongst other things, to procure the transfer of his equity interests in Jinganxian to Fusion Tech or its nominees at nominal value when the relevant laws in the PRC permit. Upon the Completion and the transfer of such equity interests from Mr. Zhao Zhi and Mr. Zhao Rui, Jinganxian would be an indirectly wholly-owned subsidiary of the Company. The Company will also ensure that such transfer will comply with the requirements of the Listing Rules.

SHAREHOLDING STRUCTURE OF THE COMPANY IMMEDIATELY BEFORE AND AFTER COMPLETION

Immediately before Completion

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----- Start of picture text -----

Mr. Lo Lin Mr. Chan Ki, Public
Shing, Simon a Director
33.81% 8.19% 58%
Asia Logistics
Technologies Limited
Mr. Lo Lin Mr. Chan Ki, The Vendor Public
Shing, Simon a Director
31.02% 7.52% 8.24% 53.22%
Asia Logistics
Technologies Limited
----- End of picture text -----

Immediately after Completion

GENERAL

The Vendor is a substantial shareholder of Fusion Tech and is therefore considered to be a connected person for the Company under the Listing Rules. Hence, the entering into of the Sale and Purchase Agreement by the Company constitutes a connected, discloseable and share transaction under the Listing Rules.

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As at the date of the Sale and Purchase Agreement, Mr. Lam Yan Chit, Humfry, the Vendor and any of their respective associates (as defined in the Listing Rules) do not have any shareholding interest in the Company. In the event that Mr. Lam Yan Chit, Humfry, the Vendor and/or any of their respective associates shall hold any interest in the Company after the date of the Sale and Purchase Agreement, they shall abstain from voting in the Extraordinary General Meeting.

An Independent Board Committee will be formed to advise the Independent ALT Shareholders in respect of the Sale and Purchase Agreement and the transactions contemplated therein. An independent financial adviser will be appointed to advise the Independent Board Committee on the terms of the Sale and Purchase Agreement and the transactions contemplated therein.

A circular containing, amongst other things, a notice convening the Extraordinary General Meeting, further details of the Sale and Purchase Agreement, a letter from the Independent Board Committee and a letter from the independent financial adviser will be dispatched to the ALT Shareholders as soon as practicable.

An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

TERMS USED IN THE ANNOUNCEMENT

“ALT Share(s)”	ordinary share(s) with par value HK$0.01 each in the issued share capital of
	the Company
“ALT Shareholder(s)”	holder(s) of ALT Shares
“Associate(s)”	has the meaning ascribed to it under the Listing Rules
“Company”	Asia Logistics Technologies Limited, the shares of which are listed on the
	Stock Exchange
“Completion”	completion of the sale and purchase of the Sale Shares under the Sale and
	Purchase Agreement
“Completion Date”	the date of which Completion takes place
“Conditions Precedent”	the conditions precedent under the Sale and Purchase Agreement
“Consideration”	HK$45,400,000.00, being the aggregate consideration for the Sale Shares
“Consideration Share(s)”	300,000,000 ALT Shares, being part of the Consideration
“Cyber Pilot”	Cyber Pilot Limited, a company incorporated under the laws of British Virgin
	Islands and an indirectly wholly-owned subsidiary of the Company
“Directors”	the directors of the Company
“Extraordinary General	an extraordinary general meeting of the Company to be convened to approve
Meeting”	the Sale and Purchase Agreement and the transactions contemplated therein,
	and any adjournment thereof
“Fusion Tech”	Fusion Tech Holding Limited, a company incorporated under the laws of the
	British Virgin Islands and currently owned as to 45.702% by the Vendor and
	as to 54.298% by Cyber Pilot

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the Company and its subsidiaries

“Group”

• “Hong Kong”

Hong Kong Special Administrative Region of the PRC

• “Independent ALT ALT Shareholders other than Mr. Lam Yan Chit, Humfry, the Vendor and any Shareholders” of their respective associates

• “Independent Board the committee of the board of Directors comprising the independent Committee” non-executive Directors which will be formed to advise the Independent ALT Shareholders in respect of the Sale and Purchase Agreement and the transactions contemplated therein

• “Jinganxian” 北京金幹線運輸科技有限公司 , a company incorporated under the laws of the PRC with no English name being registered and owned as to 20% by Mr. Zhao Rui and 80% by Mr. Zhao Zhi

• “Listing Rules”

The Rules Governing the Listing of Securities on the Stock Exchange

• “PRC” the People’s Republic of China

• “Sale and Purchase the conditional sale and purchase agreement dated 5th September, 2002 entered Agreement” into between the Vendor and the Company

• “Sale Shares” 45,702 shares of US$1.00 each representing 45.702% of the issued share capital of Fusion Tech which are currently beneficially owned by the Vendor

• “Shareholders the existing shareholders agreement dated 10th November, 2000 entered into Agreement” between the Vendor, Cyber Pilot, Fusion Tech, Mr. Zhao Rui and Mr. Zhao Zhi

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Termination the termination agreement to be entered into between the Vendor, Cyber Pilot, Agreement” Fusion Tech, Mr. Zhao Rui and Mr. Zhao Zhi for the termination of the Shareholders Agreement upon Completion

• “Vendor” Southern Victory Developments Limited, a company incorporated under the laws of the British Virgin Islands and wholly-owned by Mr. Lam Yan Chit, Humfry, a director of Fusion Tech

• “WTO”

the World Trade Organisation

• “Xinganxian” 北京金柏新幹線信息科技有限公司 , a wholly foreign-owned enterprise established under the laws of the PRC with no English name being registered and an indirect wholly-owned subsidiary of Fusion Tech

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“HK$”

Hong Kong dollar(s), the lawful currency of Hong Kong

“RMB”

Reminbi, the lawful currency of the PRC

By Order of the Board Lo Lin Shing, Simon Chairman

Hong Kong, 5th September, 2002

• For identification only

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

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