Weichai Power Co., Ltd. — M&A Activity 2006

Dec 15, 2006

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WEICHAI POWER CO., LTD.

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 2338)

VERY SUBSTANTIAL ACQUISITION INVOLVING A MERGER BY ABSORPTION OF TAGC

AND

CONTINUING CONNECTED TRANSACTIONS

SUMMARY

The Board is pleased to announce that the TAGC Debt Restructuring Framework Agreement has become effective on 22 November 2006, and that (CITIC Trust & Investment Co., Ltd.) has undertaken to act as a Cash Alternative Provider in respect of the Cash Alternative Amount in an aggregate of RMB3,022,977,700.

The Board refers to the circular (the ‘‘Circular’’) dated 12 November 2006 of Weichai Power Co., Ltd. (the ‘‘Company’’) in respect of, inter alia, a very substantial acquisition involving a merger by absorption of TAGC. Terms and expressions defined in the Circular shall have the same meanings when used herein.

APPROVAL OF THE TAGC DEBT RESTRUCTURING FRAMEWORK AGREEMENT

The Board refers to the section headed ‘‘I. The Merger Proposal — 3. Merger Agreement — Conditions precedent’’ in the ‘‘Letter from the Board’’ in the Circular, which states that the Merger Proposal is conditional upon, inter alia, the approval of the TAGC Debt Restructuring Framework Agreement by the State Council.

The Board is pleased to announce that according to (‘‘Notice in relation to the Debt Restructuring of Torch Automobile Group Co., Ltd.’’) issued by the creditors’ committee in respect of the TAGC Debts (the ‘‘Creditors’ Committee’’) to TAGC, (China Banking Regulatory Commission) had informed the Creditors’ Committee on 22 November 2006 that the State Council had approved the ( [2006]1 ) (‘‘Request for Instruction on the Issues regarding the Debt Restructuring of Torch Automobile Group Co., Ltd.’’ (De Zhai Wei [2006] No. 1)) in respect of the TAGC Debt Restructuring Framework Agreement jointly submitted by (China Banking Regulatory Commission), (Finance Department of the PRC) and (People’s Bank of China), and the TAGC Debt Restructuring Framework Agreement has become effective on 22 November 2006.

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DETAILS OF CASH ALTERNATIVE ARRANGEMENTS

The Board refers to the section headed ‘‘I. The Merger Proposal — 5. Cash Alternative’’ in the ‘‘Letter from the Board’’ in the Circular, which states that the cash alternative under the Merger will be made available by one or more third parties (who may (or may not) be securities underwriter or investment funds) to be arranged by the listing sponsors to the Weichai A Share listing on the Shenzhen Stock Exchange.

The Board is pleased to announce that (CITIC Trust & Investment Co., Ltd.) (‘‘CITIC Trust’’) has undertaken to act as a Cash Alternative Provider in respect of the Cash Alternative Amount in an aggregate of RMB3,022,977,700. CITIC Trust is a PRC enterprise with a registered capital of RMB800 million. It is principally engaged in integrated financial services and trust business.

Hong Kong, 18 December 2006

By order of the Board Tan Xuguang Chairman and CEO

As at the date of this announcement, the executive Directors of the Company are Mr. Tan Xuguang, Mr. Xu Xinyu, Mr. Sun Shaojun and Mr. Zhang Quan; the non-executive Directors of the Company are Mr. Yeung Sai Hong, Mr. Yao Yu, Mr. Li San Yim, Mr. Liu Huisheng, Ms. Zhang Fusheng, Mr. Julius G. Kiss and Ms. Han Xiaoqun and Mr. Chen Xue Jian; and the independent non-executive Directors of the Company are Mr. Zhang Xiaoyu, Mr. Koo Fook Sun, Louis and Mr. Fang Zhong Chang.

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

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