Wang On Group Limited — Share Issue/Capital Change 2000

Jun 30, 2000

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.

WANG ON GROUP LIMITED

(Incorporated in Bermuda with limited liability)

(the "Company")

PLACING OF EXISTING SHARES

AND

SUBSCRIPTION OF NEW SHARES

KINGSWAY SW SECURITIES LIMITED

Underwriter and Placing Agent

On 29th June, 2000, arrangements were made by Mr. Yau Yuk Tong, Ms. Tang Mui Fong, Ms. Tang Mui Fun and Caister Limited for the private placement of an aggregate of 135,000,000 shares in the Company to independent investors.

On 29th June, 2000, Mr. Yau Yuk Tong, Ms. Tang Mui Fong, Ms. Tang Mui Fun and Caister Limited also entered into an agreement with the Company to, subject to certain conditions, subscribe for 25,348,000 shares, 47,000,000 shares, 26,338,000 shares and 36,314,000 shares in the Company respectively.

It is expected that the Subscription will raise approximately HK$39 million for the Company before expenses.

Mr. Yau Yuk Tong, Ms. Tang Mui Fong, Ms. Tang Mui Fun and Caister Limited together with parties acting in concert with them hold approximately 23.20 per cent. of the total issued shares of the Company. The Placing will reduce their shareholding to approximately 3.42 per cent. of the Company's existing issued share capital. The Subscription will then increase their shareholding to approximately 19.37 per cent. of the Company's enlarged issued share capital.

Placing agreement dated 29th June, 2000

Vendors:

Mr. Yau Yuk Tong ("Mr. Yau"), Ms. Tang Mui Fong ("Ms. Fong Tang"), Ms. Tang Mui Fun ("Ms. Fun Tang") and Caister Limited ("Caister"). Caister is wholly-owned by Mr. Tang Ching Ho ("Mr. Tang"), the brother of Ms. Fong Tang and Ms. Fun Tang and the chairman of the Company. Mr. Yau is a brother of Ms. Yau Yuk Yin ("Ms Yau"), the wife of Mr. Tang and the Deputy Chairman of the Company.

Mr. Yau, Ms. Fong Tang, Ms. Fun Tang and Caister's shareholding interests in the Company are shown further below.

Mr. Yau, Ms. Fong Tang, Ms. Fun Tang, Caister and parties acting in concert with them together hold approximately 23.20 per cent. of the total existing issued share capital of the Company.

Number of shares to be placed:

25,348,000, 47,000,000, 26,338,000 and 36,314,000 existing ordinary shares of HK$0.01 each ("Shares") in the Company (together the "Placing Shares") held by Mr. Yau, Ms. Fong Tang, Ms. Fun Tang and Caister, respectively.

The aggregate number of the Placing Shares represents approximately 19.78 per cent. (as to 3.71 per cent. being sold by Mr. Yau, as to 6.89 per cent. being sold by Ms. Fong Tang, as to 3.86 per cent. being sold by Ms. Fun Tang and as to 5.32 per cent. being sold by Caister) of the Company's existing issued share capital of 682,593,914 Shares.

The Placing Shares rank pari passu with all other existing issued shares of the Company in all respects and are sold free from any claims, charges, liens, encumbrances or any other third party rights.

Placing agent:

Kingsway SW Securities Limited (the "Placing Agent"). The Placing Agent is independent of and not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") (the "Listing Rules")).

Subject to completion of the Placing, a commission of 1.25 per cent. of the total aggregate consideration for all of the Placing Shares will be payable to the Placing Agent.

Placees:

Placees (which are more than six placees) to be procured by the Placing Agent who are independent of and not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined under the Listing Rules).

Placing price:

HK$0.29 per Placing Share ("Placing Price").

This was arrived at after arm's length negotiations between the Company, Mr. Yau, Ms. Fong Tang, Ms. Fun Tang, Caister and the Placing Agent and represents a discount of approximately 13.43% to the closing price of HK$0.335 per share quoted on the Stock Exchange on 29th June 2000, being the day on which agreements for the Placing and the Subscription were entered into, and a discount of approximately 19.44 per cent. over the average closing price of HK$0.36 per share on the Stock Exchange over the last 10 trading days up to and including 29th June 2000. The Placing Price also represents an approximately 0.81 multiple of the net asset value of HK$0.36 per share calculated on the basis of the audited consolidated net asset value of the Company at 31st March, 1999 of approximately HK$51.23 million (adjusted for the net proceeds received by the Company under the placing and subscription of 75,000,000 shares announced on 30th June, 1999 of approximately HK$13 million, the net proceeds received by the Company under the placing and subscription of 47,000,000 shares announced on 19th January, 2000 of approximately HK$63 million, the net proceeds received by the Company under the placing and subscription of 45,000,000 shares announced on 9 February, 2000 of approximately HK$51 million, the net proceeds received by the Company under the placing and subscription of 90,000,000 shares announced on 14 March, 2000 of approximately HK$62 million, a loss of approximately HK$2,000,000 resulting from the disposal of 280 car parking spaces by a wholly owned subsidiary of the Company as announced on 5 January 2000 and for the net profit attributable to shareholders for the six months ended 30th September, 1999 of approximately HK$6.76 million) and on the basis of 682,593,914 Shares comprising the existing issued share capital of the Company.

The Placing Price payable for the Placing Shares will be paid to Mr. Yau, Ms. Fong Tang, Ms. Fun Tang and Caister upon completion of the Placing, and the price payable for subscription for the Subscription Shares will be paid to the Company upon completion of the Subscription.

Conditions of the Placing:

The Placing is unconditional and fully underwritten by the Placing Agent.

Completion of Placing:

Expected on or before 5th July, 2000.

Subscription agreement dated 29th June, 2000

Subscribers:

Mr. Yau, Ms. Fong Tang, Mr. Fun Tang and Caister

Number of new shares subscribed for:

25,348,000 new Shares, 47,000,000 new Shares, 26,338,000 new Shares and 36,314,000 new Shares (together the "Subscription Shares") by Mr. Yau, Ms. Fong Tang, Ms. Fun Tang and Caister, respectively.

The aggregate number of the Subscription Shares represents approximately 19.78 per cent. of the Company's existing issued share capital, and approximately 16.51 per cent. (being as to 3.1 per cent. represented by the Subscription Shares to be issued to Mr. Yau, as to 5.75 per cent. represented by the Subscription Shares to be issued to Ms. Fong Tang, as to 3.22 per cent. represented by the Subscription Shares to be issued to Ms. Fun Tang and as to 4.44 per cent. represented by the Subscription Shares to be issued to Caister) of its issued share capital as enlarged by the Subscription of 817,593,914 shares.

Subscription price:

HK$0.29 per Subscription Share (equal to the Placing Price).

Mandate to issue new shares:

The Subscription Shares will be issued and allotted under the general mandate granted to the directors of the Company at the special general meeting held on 27th April, 2000 which has not previously been used.

Ranking:

The Subscription Shares will upon issue rank pari passu in all respects with the existing shares of the Company in issue including the right to receive all dividends and distributions declared, paid or made with reference to a record date on or after the date of completion of the Subscription.

Completion of the Subscription:

Expected to be the second business day after the day on which the last of the conditions referred to under "Conditions of the Subscription" below has been satisfied, which shall not be later than 13th July, 2000.

Conditions of the Subscription:

Completion of the Subscription is conditional upon the following taking place on or before 13th July, 2000 or such later date as may be agreed between the parties (which if later than 14 days from the date of the Placing Agreement, will be subject to applicable connected transaction requirements set out in the Listing Rules):

(a) the completion of the Placing;

(b) the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the Subscription Shares; and

(c) (if relevant) the obtaining of such approvals as may be required by the Bermuda Monetary Authority.

If any of the conditions of the Subscription is not fulfilled by 13th July, 2000 or such later date as may be agreed between the parties to the Subscription Agreement (which if later than 14 days from the date of the Placing Agreement, will be subject to applicable connected transaction requirements set out in the Listing Rules), the liabilities of the parties thereunder will cease and determine.

Changes in shareholding structure:

Mr. Yau, Ms. Fong Tang, Ms. Fun Tang and Caister are currently holding 29,500,000 Shares, 47,000,000 Shares, 26,338,000 Shares and 36,314,000 Shares, respectively, representing approximately 4.32 per cent., 6.88 per cent., 3.86 per cent. and 5.32 per cent. respectively of the existing issued share capital of the Company.

The changes in the shareholding structure of Mr. Yau, Ms. Fong Tang, Ms. Fun Tang, Caister and parties acting in concert with them and the public before and after the Placing and the Subscription are shown below:

Reasons for the Placing and the Subscription and the intended use of proceeds:

The Company and its subsidiaries (the "Group") are principally engaged in commercial management business in Chinese wet markets, car parks and shopping centres, contracting works and property investment in Hong Kong. The Placing and the Subscription will enlarge the shareholder base and the capital base of the Company and will strengthen the financial position of the Group. The net proceeds receivable by the Company under the Subscription are estimated to be approximately HK$38 million. The Company intends to apply (i) approximately HK$20 million of net proceeds for possible acquisition of, or investment into, new businesses if and when the Group indentified any suitable new businesses for acquisition and investment, (ii) HK$3 million for the expansion of the commercial management business of the Group in Chinese wet markets, car parks and shopping centres, (iii) HK$5 million for repayment of bank borrowings and (iv) the balance for general working capital purposes.

The Company will bear all costs and expenses incurred in connection with the Subscription and will reimburse each of Mr. Yau, Ms. Fong Tang, Ms. Fun Tang and Caister for all costs and expenses incurred by each of them in relation to the Placing and Subscription, which are estimated to be approximately HK$1.1 million.

On the basis of the price of HK$0.29 for each Subscription Share achieved by the Subscription (as compared to the adjusted net asset value per Share of HK$0.36 referred to above) and the total net proceeds expected to be received by the Company, the Directors consider the terms and conditions of the Subscription to be fair and reasonable and believe that the Placing and the Subscription are in the best interest of the Company and its shareholders.

No new director will be appointed to the board of the Company and no substantial shareholder is expected to be introduced to the Company as a result of the Placing.

The Company does not have any outstanding warrants to subscribe for Shares and therefore no adjustment to any warrant exercise price for Shares will be required.

Application for listing:

Application will be made to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Subscription Shares.

By Order of the Board of

Wang On Group Limited

Tang Ching Ho

Chairman and Managing Director

Hong Kong, 29th June, 2000