WH Group Limited — Capital/Financing Update 2002

Aug 1, 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.

==> picture [54 x 53] intentionally omitted <==

PREMIUM LAND LIMITED

(Incorporated in Bermuda with limited liability)

PLACING OF EXISTING SHARES AND SUBSCRIPTION OF NEW SHARES UNDER GENERAL MANDATE

PLACING AGENTS

KINGSTON SECURITIES LIMITED TingKong – RexCapital Securities International Limited

On 31 July 2002, United Jumbo entered into the Placing Agreement with Placing Agents and the Subscription Agreement with the Company respectively. Pursuant to the Placing Agreement, United Jumbo have agreed to place, through the Placing Agents, 395,620,000 Placing Shares to more than six independent investors at a price of HK$0.218 per Share. The Placing Shares are placed by the Placing Agents on a fully underwritten basis. According to the Subscription Agreement, United Jumbo conditionally agreed to subscribe for 539,870,000 Subscription Shares at a price of HK$0.218 per Share.

The Placing Shares represent approximately 14.66% and the Subscription Shares represent 20% of the Company’s existing issued share capital of 2,699,365,970 Shares. The Placing Shares represent approximately 12.21% and the Subscription Shares represent approximately 16.67% of the Company’s issued share capital of 3,239,235,970 Shares as enlarged by the Subscription of 539,870,000 Shares. The net proceeds from the Subscription of approximately HK$116 million of which approximately HK$58 million will be used for the repayment of the Group’s bank loan if the Directors think necessary, HK$35 million will be used for investment and/or development projects in the PRC and the remaining of approximately HK$23 million will be used as general working capital of the Group.

As at the date of this announcement, the Directors have not identified any potential investment and/or development projects in the PRC. Should the Company proceeds with such investments, the Directors will ensure that all relevant requirements of the Listing Rules will be strictly adhered to.

The Subscription is conditional upon the Stock Exchange granting listing of, and permission to deal in, the Subscription Shares.

At the request of the Company, dealings in the Shares on the Stock Exchange were suspended with effect from 9:30 a.m. on 31 July 2002 pending the release of this announcement. Application has been made for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 1 August 2002.

– 1 –

THE PLACING AGREEMENT

Placing Agreement

The Placing Agreement was entered into between United Jumbo and the Placing Agents on 31 July 2002. Pursuant to this agreement, United Jumbo agreed to place, through the Placing Agents, 395,620,000 Placing Shares to more than six independent investors at a price of HK$0.218. The Placing Shares are to be placed by the Placing Agents on a fully underwritten basis.

Placing Agents

Kingston Securities Limited and TingKong – RexCapital Securities International Limited are the Placing Agents and will receive a placing commission of 1.5% on the gross proceeds of the Placing. The Placing Agents are independent of and not connected with the Directors, chief executive or substantial Shareholders of the Company or any of its subsidiaries, or any of their respective associates (as defined in the Listing Rules).

Placees

Not fewer than six placees (which are required to be independent individual, corporate and/or institutional investors) and their ultimate beneficial owners who will be independent of and not connected with the Company nor with the Directors, chief executive or substantial Shareholders of the Company, and any of their subsidiaries or any of their respective associates (as defined in the Listing Rules). None of the placee will become a substantial Shareholder of the Company immediately following the completion of the Placing.

Placing price

The price of the Placing Shares of HK$0.218 was determined after arm’s length negotiation and on usual commercial terms and (i) represents a discount of 9.9% to the closing price of HK$0.242 per Share as quoted on the Stock Exchange on 30 July 2002, being the last trading date before the date of the Placing Agreement; and (ii) also represents a discount of 1.2% to the average closing price of approximately HK$0.2206 per Share as quoted on the Stock Exchange for the last ten trading days ended 30 July 2002, being the last trading date before the date of the Placing Agreement.

The Placing Shares

395,620,000 Shares are to be placed, representing approximately 14.66% of the Company’s existing issued share capital of 2,699,365,970 Shares and approximately 12.21% of the Company’s issued share capital of 3,239,235,970 Shares as enlarged by the Subscription.

Completion

Completion shall take place on the second business day after the resumption of trading of the Shares on the Stock Exchange.

– 2 –

THE SUBSCRIPTION AGREEMENT

Subscription Agreement

On 31 July 2002, the Company and United Jumbo entered into the Subscription Agreement in which the Company conditionally agreed to allot and issue, and United Jumbo conditionally agreed to subscribe for 539,870,000 Subscription Shares at a price of HK$0.218 per Share.

The Vendor

United Jumbo holds 721,270,350 Shares in the Company as at the date of the Placing Agreement, representing about 26.72% of the Company’s issued share capital. Upon completion of the Placing and the Subscription, United Jumbo will hold about 26.72% of the then issued share capital of the Company.

Price of the Subscription Shares

The price of the Subscription Shares of HK$0.218 per Share, being equivalent to the price of the Placing Shares, was determined after arm’s length negotiation and on usual commercial terms.

The Subscription Shares

539,870,000 new Shares are to be subscribed, representing 20% of the Company’s existing issued share capital of 2,699,365,970 Shares and approximately 16.67% of the Company’s issued share capital of 3,239,235,970 Shares as enlarged by the Subscription.

Conditions

Completion of the Subscription Agreement is conditional upon the completion of the Placing and the listing of, and permission to deal in, all the Subscription Shares being granted by the Stock Exchange and if required, the Bermuda Monetary Authority granting or agreeing to grant permission to allot, issue and subsequent transfer of the Subscription Shares.

Completion

The Subscription is to be completed within 14 days after the date of entering of the Placing Agreement, i.e. on or before 14 August 2002.

APPLICATION FOR LISTING

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

GENERAL MANDATE

The Subscription Shares will be issued pursuant to the general mandate to allot, issue and deal with Shares granted to the Directors of the Company by resolution of its Shareholders passed at the Company’s special general meeting held on 7 June 2002.

– 3 –

EFFECTS ON SHAREHOLDING STRUCTURE

	Before Placing	After Placing but	After Placing
	and Subscription	before Subscription	and Subscription
United Jumbo Limited_(note 1)_	26.72%	12.06%	26.72%
Great Huge Investment Corp.(note 2)	13.89%	13.89%	11.57%
Placees	–	14.66%	12.21%
Public	59.39%	59.39%	49.50%
	100%	100%	100%

Notes:

1. United Jumbo Limited is beneficially wholly-owned by Mr. Dong Bo, the chairman and executive director of the Company.

2. Great Huge Investment Corp. is beneficially wholly-owned by Mr. Chen Long, a PRC citizen and a substantial shareholder of the Company.

USE OF PROCEEDS

The Company will bear all costs and expenses in connection with the Placing and the Subscription. The net proceeds of about HK$116 million from the Subscription, of which approximately HK$58 million will be used for repayment of the Group’s bank loan if the Directors think necessary, HK$35 million will be used for investment and/or development projects in the PRC and the remaining of approximately HK$23 million will be used as general working capital of the Group.

As at the date of this announcement, the Directors have not identified any potential investment and/or development projects in the PRC. Should the Company proceed with such investment, the Directors will ensure that all relevant requirements of the Listing Rule will be strictly adhere to.

REASONS FOR THE PLACING AND THE SUBSCRIPTION

The Directors consider that the Placing and the Subscription represent an opportunity to raise capital for the repayment of the Group’s bank loan, investment and/ or development projects in the PRC (as at the date of this announcement, the Directors have not identified any potential investment and/or development projects in the PRC) and working capital of the Group while broadening the shareholder base and the capital base of the Company.

GENERAL

The Group is principally engaged in the business of property investment and development, securities trading and investment holdings in Hong Kong and PRC. The Group also engages in trading of building materials and provision of renovation and decoration services to both commercial and residential properties.

The Directors consider the terms of the Placing Agreement and the Subscription Agreement to be fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Subscription Shares will rank, upon issue, equally with the existing Shares.

– 4 –

The following table summaries the capital raising activities of the Group for the 12 months immediately before the date of this announcement:

				Actual use of
				proceeds as at
Date of			Intended use	the date of this
announcement	Event	Net proceeds	of proceeds	announcement
10 April 2002	Placing of 65,900,000	HK$71 million	HK$51 million for	HK$5 million for
	existing shares and		working capital and	working capital and
	subscription of 89,946,000		HK$20 million for	HK$10 million for
	new shares		repayment of loan	repayment of bank loan
8 May 2002	Private placing of	HK$26 million	General working capital	Proceeds currently
	up to 539,840,000		or reduction of the	held as short term
	warrants		Group’s liabilities or	interest bearing deposits
			other suitable projects	with a licensed bank
			when opportunities are	in Hong Kong
			identified as the Directors
			think appropriate

RESUMPTION OF TRADING

At the request of the Company, dealings in the Shares on the Stock Exchange were suspended with effect from 9:30 a.m. on 31 July 2002 pending the release of this announcement. Application has been made for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 1 August 2002.

TERMS AND DEFINITION

“Board”	the board of Directors
“Company”	Premium Land Limited, a company incorporated in Bermuda with limited
	liability and the shares of which are listed on the Stock Exchange
“Director(s)”	director(s) of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	Hong Kong Special Administration Region of the People’s Republic of
	China
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Placing”	the placing of 395,620,000 Shares which are beneficially owned by
	United Jumbo pursuant to the Placing Agreement

– 5 –

“Placing Agents”	Kingston Securities Limited, a dealer registered under the Securities
	Ordinance (Chapter 333 of the Laws of Hong Kong) and TingKong–
	Rexcapital Securities International Limited, a dealer registered under
	the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)
“Placing Agreement”	a placing agreement entered into between United Jumbo and the Placing
	Agents dated 31 July 2002 in relation to the Placing
“Placing Shares”	a total of 395,620,000 Shares which are beneficially owned by United
	Jumbo, to be placed pursuant to the Placing Agreement
“Shares”	ordinary shares of HK$0.01 in the share capital of the Company
“Shareholder(s)”	holders of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscription”	the subscription for the Subscription Shares pursuant to the Subscription
	Agreement
“Subscription Agreement”	a conditional subscription agreement entered into between the Company
	and United Jumbo dated 31 July 2002 in relation to the Subscription
“Subscription Shares”	a total of 539,870,000 new Shares which are to be subscribed by United
	Jumbo pursuant to the Subscription Agreement
“United Jumbo”	United Jumbo Limited, a company incorporated in the British Virgin
	Islands with limited liability, holding about 26.72% of the issued share
	capital of the Company as at the date of this announcement
“Vendor”	United Jumbo
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.
	By Order of the Board
	Premium Land Limited
	Dong Bo
	Chairman
Hong Kong, 31 July 2002

* for identification purpose only

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

– 6 –