Wang On Group Limited — Share Issue/Capital Change 2001

Sep 26, 2001

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)

TOP-UP PLACING OF EXISTING SHARES AND

PLACING OF NEW SHARES

Placing Agent

Kingsway SW Securities Limited

On 25th September, 2001, the Placing Agent agreed with Ms. Fong Tang, Mr. Yau and Ms. Fun Tang to place, on a best efforts basis, 105,000,000 existing Shares at the price of HK$0.08 per Top-up Placing Share on behalf of Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, and Ms. Fong Tang, Mr. Yau and Ms. Fun Tang entered into a conditional agreement with the Company for the subscription of 116,500,000 new Shares at the same price of HK$0.08 per Subscription Share. The 105,000,000 existing Shares represent approximately (i) 10.69% of the Company's existing issued share capital; (ii) 9.56% of the Company's issued share capital as enlarged by the Subscription; and (iii) 9.19% of the Company's issued share capital as enlarged by the Subscription and the Placing.

On 25th September, 2001, the Placing Agent also agreed with the Company to place, on a best efforts basis, 43,500,000 new Shares at the same price of HK$0.08 per Placing Share. The 43,500,000 new Shares represent approximately (i) 4.43% of the Company's existing issued share capital; (ii) 3.96% of the Company's issued share capital as enlarged by the Subscription; and (iii) 3.81% of the Company's issued share capital as enlarged by the Subscription and the Placing.

The Top-up Placing, the Subscription and the Placing will enlarge the shareholder base and the capital base of the Company and will strengthen the financial position of the Group. The Company intends to use the estimated aggregate net proceeds of the Subscription and the Placing of approximately HK$12.3 million as to approximately HK$7.0 million for the expansion of the pharmaceutical business of the Group and as to approximately HK$5.3 million for the Group's general working capital.

PLACING AGREEMENT DATED 25TH SEPTEMBER, 2001

Pursuant to a placing agreement dated 25th September, 2001 entered into between the Company, the Placing Agent, Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, (i) the Placing Agent agreed with Ms. Fong Tang, Mr. Yau and Ms. Fun Tang to place an aggregate of 105,000,000 existing Shares at a price of HK$0.08 per Top-up Placing Share on behalf of Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, and (ii) the Placing Agent agreed with the Company to place 43,500,000 new Shares at a price of HK$0.08 per Placing Share. Details of the Top-up Placing and the Placing are set out below.

A. TOP-UP PLACING

Vendors:

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

As at the date of this announcement, Ms. Fong Tang, Mr. Yau and Ms. Fun Tang in aggregate hold 106,347,827 Shares (as to 48,604,095, 30,506,825 and 27,236,907 Shares by Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, respectively), representing approximately 10.83% of the existing issued share capital of the Company, which comprises 982,060,933 Shares.

Basis of Placing:

The Placing Agent will place the Top-up Placing Shares on a best efforts basis.

Number of Shares to be placed:

48,200,000, 30,000,000 and 26,800,000 existing Shares held by Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, respectively.

The Top-up Placing Shares represent approximately (i) 10.69% (as to 4.91% being sold by Ms. Fong Tang, as to 3.05% being sold by Mr. Yau and as to 2.73% being sold by Ms. Fun Tang) of the Company's existing issued share capital; (ii) 9.56% of the Company's issued share capital as enlarged by the Subscription; and (iii) 9.19% of the Company's issued share capital as enlarged by the Subscription and the Placing.

Placees:

Not less than six independent professional, institutional and/or individual investors to be procured by the Placing Agent for the Top-up Placing and the Placing.

Top-up Placing Price:

HK$0.08 per Top-up Placing Share

The Top-up Placing Price represents a discount of approximately 10.11% to the closing price of HK$0.089 per Share as quoted on the Stock Exchange on 25th September, 2001 (being the last day of trading in the Shares on the Stock Exchange prior to the release of this announcement). The Top-up Placing Price also represents a discount of approximately 6.54% to the average closing price of HK$0.0856 per Share as quoted on the Stock Exchange for the last 10 trading days up to and including 25th September, 2001.

Condition of the Top-up Placing:

The Top-up Placing is unconditional.

Completion of the Top-up Placing:

On or before 3rd October, 2001 (or such later date as the parties may otherwise agree)

B. PLACING

Parties:

The Company and the Placing Agent

Basis of Placing:

The Placing Agent will place the Placing Shares on a best efforts basis.

Number of Shares to be placed:

43,500,000 new Shares, representing approximately (i) 4.43% of the Company's existing issued share capital; (ii) 3.96% of the Company's issued share capital as enlarged by the Subscription; and (iii) 3.81% of the Company's issued share capital as enlarged by the Subscription and the Placing.

Placees:

Not less than six independent professional, institutional and/or individual investors to be procured by the Placing Agent for the Top-up Placing and the Placing.

Placing price:

HK$0.08 per Placing Share (being the same as the Top-up Placing Price)

Conditions of the Placing:

The Placing is conditional upon:

(1) the completion of the Subscription; and

(2) the Listing Committee granting the listing of, and permission to deal in, the Placing Shares.

Completion of the Placing:

On or before 15th October, 2001 (or such later date as the parties may otherwise agree)

SUBSCRIPTION AGREEMENT DATED 25TH September, 2001

Subscribers:

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

Number of new Shares to be subscribed for:

116,500,000 new Shares (as to 53,300,000, 33,300,000 and 29,900,000 new Shares by Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, respectively), together representing approximately (i) 11.86% (as to 5.43%, 3.39% and 3.04% by Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, respectively) of the Company's existing issued share capital; (ii) 10.60% of the Company's issued share capital as enlarged by the Subscription; and (iii) 10.20% of the Company's issued share capital as enlarged by the Subscription and the Placing.

Subscription price:

HK$0.08 per Share (being the same as the Top-up Placing Price)

Conditions of the Subscription:

The Subscription is conditional upon:

(1) the completion of the Top-up Placing; and

(2) the Listing Committee granting the listing of, and permission to deal in, the Subscription Shares.

Completion of the Subscription:

Completion of the Subscription will take place upon the fulfillment of all conditions of the Subscription listed above. The Subscription must be completed on or before 8th October, 2001, being 14 days from the date of the Placing Agreement (if the Subscription were to be completed thereafter, it would constitute a connected transaction under the Listing Rules and would require the approval of the independent shareholders of the Company).

INDEPENDENCE OF THE PLACING AGENT AND PLACEES

The Placing Agent is, and the placees to be procured by it under the Placing Agreement will be, 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.

MANDATE TO ISSUE NEW SHARES

The Subscription Shares and the Placing Shares are to be issued by the Company under the general mandate granted to the Directors at the annual general meeting of the Company held on 13th August, 2001.

RANKING OF SUBSCRIPTION SHARES AND PLACING SHARES

The Subscription Shares and the Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Shares in issue on the date of allotment and issue of the Subscription Shares and the Placing Shares including the right to any dividends or distributions.

SUBSTANTIAL SHAREHOLDERS AND CHANGES OF SHAREHOLDING

As at the date of this announcement, the following interests of 10% or more in the issued share capital of the Company were recorded in the register of interests required to be kept by the Company pursuant to Section 16(1) of the Securities (Disclosure of Interests) Ordinance (Chapter 396 of the Laws of Hong Kong). The changes of the shareholding of Ms. Fong Tang, Mr. Yau and Ms. Fun Tang in the Company as a result of the Top-up Placing, the Subscription and the Placing are also detailed as follows:

Immediately Immediately after % of the Immediately

after the the completion issued share after the % of the

completion of the of the Top-up capital as completion issued share Number of Top-up Placing Placing and the enlarged by the of the Top-up capital as

Shares held % of the but before the % of the Subscription Subscription Placing, the enlarged by the

at the date existing completion of existing but before the but before the Subscription Subscription

of this issued share the Subscription issued completion completion and and

Name announcement capital and the Placing share capital of the Placing of the Placing the Placing the Placing

Caister Limited (Note) 36,314,000 3.70% 36,314,000 3.70% 36,314,000 3.31% 36,314,000 3.18%

Mr. Tang 9,927,645 1.01% 9,927,645 1.01% 9,927,645 0.90% 9,927,645 0.87%

Ms. Yau 9,927,645 1.01% 9,927,645 1.01% 9,927,645 0.90% 9,927,645 0.87%

Ms. Fong Tang 48,604,095 4.95% 404,095 0.04% 53,704,095 4.89% 53,704,095 4.70%

Mr. Yau 30,506,825 3.11% 506,825 0.05% 33,806,825 3.08% 33,806,825 2.96%

Ms. Fun Tang 27,236,907 2.77% 436,907 0.04% 30,336,907 2.76% 30,336,907 2.66%

162,517,117 16.55% 57,517,117 5.85% 174,017,117 15.84% 174,017,117 15.24%

Note:Mr. Tang is deemed to be interested in these Shares due to Caister Limited being wholly and beneficially owned by Mr. Tang.

REASONS FOR THE TOP-UP PLACING, THE SUBSCRIPTION AND THE PLACING AND USE OF PROCEEDS

The Group is principally engaged in the commercial management business in Chinese wet markets, car parks and shopping centres, contracting works and property investment in Hong Kong, and in the manufacture and sale of Chinese medicine, herbs and other medicinal products. The Top-up Placing, the Subscription and the Placing will enlarge the shareholder base and the capital base of the Company and will strengthen the financial position of the Group.

The Top-up Placing Price, the Subscription Price and the Placing Price were determined after arm's length negotiations between Ms. Fong Tang, Mr. Yau, Ms. Fun Tang, the Company and the Placing Agent and the Directors consider that the terms of the Top-up Placing Price, the Subscription Price and the Placing Price are fair and reasonable and believe that the Top-up Placing, the Subscription and the Placing are in the best interests of the Company and its shareholders as a whole.

The Company intends to use the estimated aggregate net proceeds from the Subscription and the Placing of approximately HK$12.3 million as to approximately HK$7.0 million for the expansion of the pharmaceutical business of the Group and as to approximately HK$5.3 million for the Group's general working capital.

EXPENSES

The Company will bear all the costs and expenses of approximately HK$0.5 million incurred and to be incurred in relation to the Top-up Placing, the Subscription and the Placing and will reimburse Ms. Fong Tang, Mr. Yau and Ms. Fun Tang for all the costs and expenses incurred and to be incurred by each of them in relation to the Top-up Placing and the Subscription.

APPLICATION FOR LISTING

The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Subscription Shares and the Placing Shares.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

"associate" has the meaning as defined in the Listing Rules

"Company" Wang On Group Limited, a company incorporated in Bermuda with limited liability and its Shares are listed on the Stock Exchange

"Directors" the directors, including the independent non-executive 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 Committee" the listing committee of the Stock Exchange

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange

"Mr. Yau" Mr. Yau Yuk Tong, a brother of Ms. Yau

"Ms. Fong Tang" Ms. Tang Mui Fong, a sister of Mr. Tang

"Ms. Fun Tang" Ms. Tang Mui Fun, a sister of Mr. Tang

"Ms. Yau" Ms. Yau Yuk Yin, the wife of Mr. Tang, and is the Deputy Chairman and Deputy Managing Director of the Company

"Mr. Tang Mr. Tang Ching Ho, the Chairman and Managing Director of the Company

"Placing" the placement of 43,500,000 new Shares to independent investors at the Placing Price

"Placing Agent" Kingsway SW Securities Limited, a securities dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)

"Placing Agreement" the placing agreement dated 25th September, 2001 entered into between the Company, the Placing Agent, Ms. Fong Tang, Mr. Yau and Ms. Fun Tang in respect of the Top-up Placing and the Placing

"Placing Price" the placing price of HK$0.08 per Placing Share under the Placing, which is the same as the Top-up Placing Price

"Placing Share(s)" 43,500,000 new Shares

"Share(s)" share(s) of a nominal value of HK$0.01 each in the capital of the Company

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"Subscription" the subscription of 116,500,000 new Shares by Ms. Fong Tang, Mr. Yau and Ms. Fun Tang

"Subscription Agreement" the subscription agreement dated 25th September, 2001 between the Company and Ms. Fong Tang, Mr. Yau and Ms. Fun Tang in respect of the Subscription

"Subscription Price" the subscription price of HK$0.08 per Subscription Share under the Subscription, which is the same as the Top-up Placing Price

"Subscription Share(s)" 116,500,000 new Shares

"Top-up Placing" the placement of 105,000,000 existing Shares to independent investors at the Top-up Placing Price

"Top-up Placing Price" the placing price of HK$0.08 per Top-up Placing Share under the Top-up Placing

"Top-up Placing Share(s)" 48,200,000, 30,000,000 and 26,800,000 existing Shares held by Ms. Fong Tang, Mr. Yau and Ms. Fun Tang, respectively

"HK$" Hong Kong dollars, the lawful currency of Hong Kong

"%" per cent.

By Order of the Board

Wang On Group Limited

Chan Chun Hong, Thomas

Director and Company Secretary

Hong Kong, 25th September, 2001

Please also refer to the published version of this announcement in the i-Mail.