Wang On Group Limited — Capital/Financing Update 2002

Jun 25, 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 for any securities of the Company.

WANG ON GROUP LIMITED

(Incorporated in Bermuda with limited liability)

Private Placing of Warrants

Placing Manager

Kingsway SW Securities Limited

The Directors are pleased to announce that on 24th June, 2002, the Warrant Placing Agreement was entered into between the Company and the Placing Manager in relation to a private placing of the Warrants at an issue price of HK$0.001 per unit of Warrant on a fully underwritten basis.

The Warrants will entitle the Placees to subscribe for New Shares at an initial subscription price of HK$0.017 per New Share at any time during the period from the date of issue of the Warrants to 31st July, 2003 (both dates inclusive). Each unit of Warrant carries the right to subscribe for one New Share. Completion is subject to fulfillment of the condition stated below. It is intended that the net proceeds from the Warrant Placing of approximately HK$1.7 million will be applied as general working capital of the Group. The New Shares will be issued under the general mandate granted to the Directors at the special general meeting of the Company held on 14th June, 2002.

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the New Shares which may fall to be issued upon exercise of the subscription rights attaching to the Warrants. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges.

WARRANT PLACING AGREEMENT

Date

24th June, 2002

Warrant Placing

Issuer	:	The Company
Placing Manager	:	Kingsway SW Securities Limited
Number of Warrants	:	2,000,000,000 units
Warrant Issue Price	:	HK$0.001
Subscription Price	:	HK$0.017
Basis of Placing	:	Fully underwritten

The Warrant Issue Price and the Subscription Price were negotiated on an arm's length basis between the Company and the Placing Manager. The Subscription Price represents: (i) a premium of approximately 21.43% over the closing price of HK$0.014 per Share as quoted on the Stock Exchange on 24th June, 2002; and (ii) a premium of approximately 9.68% over the average closing price of HK$0.0155 per Share as quoted on the Stock Exchange for the last 10 trading days up to and including 24th June, 2002. The aggregate of the Warrant Issue Price and the Subscription Price represents: (i) a premium of approximately 28.57% over the closing price of HK$0.014 per Share as quoted on the Stock Exchange on 24th June, 2002; and (ii) a premium of approximately 16.13% over the average closing price of HK$0.0155 per Share as quoted on the Stock Exchange for the last 10 trading days up to and including 24th June, 2002.

Independence

The Placing Manager is, and the Placees to be procured by it and their respective beneficial owners will be, independent of and not connected with any of the directors, chief executive or substantial shareholders of the Company and any of its subsidiaries, or any of their respective associates (as defined in the Listing Rules). It is expected that the subscription of the Warrant arising from the Warrant Placing will not result in an introduction of any substantial shareholders to the Company.

Transferability

The Warrants are freely transferable. In the event that the Company is aware of any transfer of the Warrants to any connected person(s) (as defined in the Listing Rules), it will notify the Stock Exchange details of such transfers as soon as possible.

Completion date

It is expected that the Warrant Placing Agreement will be completed on or before 5th July, 2002 (or such later date as the Placing Manager and the Company may agree in writing), after the fulfillment of the conditions referred to in the section headed "Condition of the Warrant Placing" below.

Terms of the Warrants

The Warrants will rank pari passu in all respects among themselves. Each unit of Warrant carries the right to subscribe for one New Share at the Subscription Price and is issued at the Warrant Issue Price. The Warrants can be exercised at any time during the period from the date of issue of the Warrants to 31st July, 2003 (both dates inclusive). The New Shares, when issued and fully paid, will rank pari passu in all respects with the then existing issued Shares. The Warrants can be exercised in multiples of 1,000,000 units.

Upon full exercise of the subscription rights attaching to the Warrants, a total of 2,000,000,000 New Shares will fall to be issued, representing approximately 16.93% of the existing issued share capital of the Company of 11,814,365,596 Shares and approximately 14.48% of the issued share capital of the Company of 13,814,365,596 Shares as enlarged by the issue of New Shares upon the full exercise of the subscription rights attaching to the Warrants.

The New Shares will be issued under the general mandate granted to the Directors at the special general meeting of the Company held on 14th June, 2002.

Condition of the Warrant Placing

Completion shall be subject to and conditional upon the Listing Committee of the Stock Exchange granting the listing of, and the permission to deal in, the New Shares.

Voting rights for the holders of the Warrants

The holders of the Warrants will not have any right to attend or vote at any meeting of the Company by virtue of their being the holders of the Warrants. In the event that a notice is given by the Company to the shareholders of the Company to convene a shareholders' meeting of the Company for the purpose of considering and approving a resolution to voluntarily wind up the Company, the Company shall forthwith give notice thereof to each holder of the Warrant and thereupon, every holder of the Warrant shall be entitled to exercise the subscription right represented by the corresponding Warrant. The holders of the Warrant shall not have the right to participate in any distribtutions and/or offers of further securities made by the Company.

REASON FOR THE WARRANT PLACING

The Board believes that the Warrant Placing is an appropriate means of fund raising for the Company. The issue of the Warrants under the Warrant Placing should not have any immediate dilutive effect on the shareholding of the existing Shareholders. In addition to the net proceeds that will be raised upon Completion, further share capital will be raised upon the exercise of the subscription rights attaching to the Warrants by the holders of the Warrants during the subscription period.

The Board considers that the terms of the Warrant Placing, which have been arrived at after arm's length negotiations between the Company and the Placing Manager, are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

EFFECT ON SHAREHOLDING STRUCTURE

	Number of Shares				Number of Shares
	held immediately				held immediately
	after Completion				after the
	but before the				full exercise of
	exercise of any				the subscription
	subscription rights				rights attaching
	attaching to the Warrants		%		to the Warrants		%
Caister Limited (Note 1)	217,884,000		1.84		217,884,000		1.58
Tang Ching Ho (Note 2)	59,565,870		0.50		59,565,870		0.43
Yau Yuk Yin (Note 3)	59,565,870		0.50		59,565,870		0.43
Tang Mui Fong (Note 4)	468,424,570		3.96		468,424,570		3.39
Tang Mui Fun (Note 5)	1,184,391,859		10.03		1,184,391,859		8.57
Yau Yuk Tong (Note 6)	298,040,950		2.52		298,040,950		2.16
Placees	-		-		2,000,000,000		14.48
Public	9,526,492,477		80.65		9,526,492,477		68.96
	11,814,365,596		100.00		13,814,365,596		100.00

Notes:

1. Caister Limited is wholly and beneficially owned by Tang Ching Ho.

2. Tang Ching Ho is the chairman of the Company.

3. Yau Yuk Yin is the wife of Tang Ching Ho.

4. Tang Mui Fong is a sister of Tang Ching Ho.

5. Tang Mui Fun is a sister of Tang Ching Ho.

6. Yau Yuk Tong is a brother-in-law of Tang Ching Ho.

USE OF PROCEEDS

The gross proceeds from the Warrant Placing are expected to be approximately HK$2 million. The net proceeds from the Warrant Placing would be approximately HK$1.7 million. The Company intends to use the net proceeds for the Group's general working capital.

INFORMATION ON THE GROUP

The Group is principally engaged in the commercial management of Chinese wet markets, shopping centers, car parks, manufacturing and sale of Chinese medicine, herbs and other medicinal products and property investment.

GENERAL

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the New Shares which may fall to be issued upon exercise of the subscription rights attaching to the Warrants. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges.

DEFINITIONS

"Board"	the board of Directors
"Company"	Wang On Group Limited
"Completion"	completion of the Warrant Placing
"Directors"	the directors of the Company
"Group"	the Company and its subsidiaries
"Hong Kong"	the 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
"New Share(s)"	new Share(s) which may fall to be issued upon the exercise of the subscription rights attaching to the Warrant(s)
"Placees"	not less than six selected independent professional, institutional and other investors
"Placing Manager"	Kingsway SW Securities Limited, a securities dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)
"Share(s)"	share(s) of HK$0.01 each in the capital of the Company
"Shareholders"	holders of Shares
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subscription Price"	an initial subscription price of HK$0.017 per New Share (subject to adjustment) at which holders of the Warrants may subscribe for New Shares
"Warrant(s)"	2,000,000,000 unlisted warrants to be issued by the Company at the Warrant Issue Price, each entitling the holder thereof to subscribe for, initially one New Share (subject to adjustment) at the Subscription Price at any time during the period from the date of issue of the Warrants to 31st July, 2003 (both dates inclusive)
"Warrant Issue Price"	HK$0.001 per unit of Warrant to be issued pursuant to the Warrant Placing
"Warrant Placing"	a private placing of the Warrants at the Warrant Issue Price pursuant to the Warrant Placing Agreement on a fully underwritten basis
"Warrant Placing Agreement"	a conditional placing agreement dated 24th June, 2002 made between the Company and the Placing Manager in relation to the Warrant Placing
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"%"	per cent.

By Order of the Board

Wang On Group Limited

Tang Ching Ho

Chairman and Managing Director

Hong Kong, 24th June 2002

Please also refer to the published version of this announcement in The Standard dated 25 June 2002.