Youzan Technology Limited — Capital/Financing Update 2001

Apr 10, 2001

This announcement is for information purpose only and does not constitute an invitation or offer to acquire or subscribe for securities.

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.

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**SYSCAN Technology Holdings Limited ***

(Incorporated in Bermuda with limited liability)

ANNOUNCEMENT PLACING OF 132,000,000 NEW SHARES

Summary

On 9th April, 2001, the Company entered into the Placing Agreements, whereby it has conditionally agreed to place 132,000,000 new Shares to independent investors at the Placing Price, HK$0.122 per Placing Share.

The Placing Shares represent approximately 14.85% of the existing issued share capital of the Company, and approximately 12.93% of the share capital of the Company as enlarged by the Placing. The Placing Price represents a discount of approximately 14.69% to the closing price of HK$0.143 per Share as quoted on the Stock Exchange on 9th April, 2001, being the last trading day of the Shares immediately prior to its suspension pending the release of this announcement and a premium of approximately 2.35% to the average closing price of approximately HK$0.1192 per Share as quoted on the Stock Exchange for the last five trading days up to and including 9th April, 2001.

The Placing Shares will be allotted and issued pursuant to the general mandate granted to the Directors by sole shareholder’s written resolutions passed on 2nd March, 2000.

The net proceeds of approximately HK$16 million from the Placing will be used as equity capital for financing the construction of SYSCAN Hi-Tech Park in Shenzhen where the Group’s new factories, R & D testing center, product exhibition hall and accommodation buildings for workers will be located.

At the request of the Company, trading in the Shares on GEM has been suspended in the afternoon on 9th April, 2001. The Company has applied for resumption in the Shares on GEM with effect from 10:00 a.m. on 11th April, 2001.

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THE PLACING AGREEMENTS

Date of Placing Agreements

9th April, 2001

Independence of placees

There will be eight placees who are independent of and not connected with the directors, chief executive, substantial shareholders or management shareholders of the Company or any of its subsidiaries and any of their respective associates (as defined under the GEM Listing Rules). It is expected that the placees will be: (i) professional and institutional investors which generally include brokers, dealers and companies (including fund managers), whose ordinary business involves dealing in shares and other securities; (ii) corporate entities which regularly invest in shares and other securities; and (iii) individuals.

Placing Shares

A total of 132,000,000 new Shares, representing 14.85% of the existing issued share capital of the Company, and approximately 12.93% of the share capital of the Company as enlarged by the Placing, are to be placed to and to be subscribed by independent investors. The Placing Shares will be issued pursuant to the general mandate granted to the Directors by sole shareholder’s written resolutions passed on 2nd March, 2000.

Placing Price

The Placing Price of HK$0.122 per Placing Share was arrived at after arm’s length negotiations between the Company and the placees. It represents a discount of approximately 14.69% to the closing price of HK$0.143 per Share as quoted on the Stock Exchange on 9th April, 2001, being the last trading day of the Shares immediately prior to its suspension pending the release of this announcement and a premium of approximately 2.35% to the average closing price of approximately HK$0.1192 per Share as quoted on the Stock Exchange for the last five trading days up to and including 9th April, 2001.

Ranking of new Shares

The new Shares, when allotted and issued, will rank pari passu in all respects with the Shares in issue, including the right to receive all dividends, bonuses or distributions declared or proposed to be declared or paid by the Company as from the date of such allotment and issue.

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Condition of the Placing

The Placing is conditional upon, inter alia, the Stock Exchange granting listing of and permission to deal in all the new Shares to be issued pursuant to the Placing Agreements.

The Company has applied to the Stock Exchange for the listing of, and permission to deal in, all the Placing Shares to be subscribed by the placees.

Completion of the Placing

Completion of the Placing will take place before 4:00 p.m. on a day not later than three business days after the fulfillment of the condition set out under the paragraph headed “Condition of the Placing” above. If the condition of the Placing are not fulfilled on or before 19th April, 2001 or such later date as the parties to the Placing Agreements may agree, the Placing will lapse.

DILUTION EFFECT PURSUANT TO THE PLACING

Upon completion of the Placing, the dilution effect on the shareholding of the Company shall be as follows:

(a) Initial Management Shareholders

ShareholdersHaing Assets Limited (Note 1)Cheung Wai (Note 1)Wong Wai Keung, Gordon(Note 2)Darwin Hu (Note 3)Sonya Hsiu-Yu Hu (Note 3)Joseph Liu (Note 4)Emmy Liu (Note 4)Shirley S. Liu (Note 4)Hui Chuan Liu & Hsau Su Liu(Note 4)	Before completionof the PlacingNo. ofshares% of issuedsharecapital48,000,0005.40%7,200,0000.81%9,760,0001.10%38,400,0004.32%3,360,0000.38%19,200,0002.16%1,600,0000.18%6,400,0000.72%44,800,0005.04%178,720,00020.11%	Immediately aftercompletion of thePlacingNo. ofshares% of issuedsharecapital48,000,0004.70%7,200,0000.71%9,760,0000.96%38,400,0003.76%3,360,0000.33%19,200,0001.88%1,600,0000.15%6,400,0000.62%44,800,0004.39% 178,720,00017.50%	Immediately aftercompletion of thePlacingNo. ofshares% of issuedsharecapital48,000,0004.70%7,200,0000.71%9,760,0000.96%38,400,0003.76%3,360,0000.33%19,200,0001.88%1,600,0000.15%6,400,0000.62%44,800,0004.39% 178,720,00017.50%
			17.50%

Notes:

1. Haing Assets Limited, a company incorporated in the British Virgin Islands, is beneficially owned by Mr Cheung Wai, director of the Company.

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2. Dr Wong Wai Keung, Gordon resigned as an executive director of the Company with effect from 22nd August, 2000.

3. Mrs Sonya Hsiu-Yu Hu is the spouse of Mr Darwin Hu, director of the Company.

4. Messrs Emmy Liu, Shirley S. Liu, Hui Chuan Liu and Hsau Su Liu are the family associates of Mr Joseph Liu, director of the Company.

(b) Substantial Shareholders (Note 3)

Before completion ofthe PlacingShareholdersNo. ofshares% of issuedsharecapitalHotung Venture Capital Corp.(Note 1)1,904,0000.21%Daitung Development andInvestment Co. Ltd. (Note 1)4,000,0000.45%Wantung Venture Capital Corp.(Note 2)8,000,0000.90%Baotung Venture Capital Corp.(Note 2)16,000,0001.80%Litung Venture Capital Corp.(Note 1)24,000,0002.70%Maton Fund I L.P. (Note 1)40,000,0004.50%93,904,00010.56%	ImmcomNs1,904,008,0016,0024,0040,00	ediately afterpletion of thePlacingo. ofhares% of issuedsharecapital4,0000.19%0,0000.39%0,0000.78%0,0001.57%0,0002.35%0,0003.92%4,0009.20%	ediately afterpletion of thePlacingo. ofhares% of issuedsharecapital4,0000.19%0,0000.39%0,0000.78%0,0001.57%0,0002.35%0,0003.92%4,0009.20%
	93,90		9.20%

Notes:

1. Hotung Venture Capital Corp., Daitung Development and Investment Co. Ltd. and Litung Venture Capital Corp. are subsidiaries of Hotung Investment Holdings Limited (“Hotung Investment”), a company incorporated in Taiwan and listed on the Singapore Stock Exchange, and have beneficial interests in Maton Fund I L.P.

2. Wantung Venture Capital Corp. and Baotung Venture Capital Corp. are wholly owned by Hotung International Company Limited, a company incorporated in Taiwan, which owns 40% interests in Hotung Investment.

3. They will no longer be substantial shareholders after the Placing, as their collectively shareholding will fall below 10%.

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(c) Public

ShareholdersPublic shareholders	Before completion ofthe PlacingNo. ofshares% ofissuedsharecapital616,241,28069.33%616,241,28069.33%	Immediately aftercompletionof the PlacingNo. ofshares% ofissuedsharecapital748,241,28073.30%748,241,28073.30%	Immediately aftercompletionof the PlacingNo. ofshares% ofissuedsharecapital748,241,28073.30%748,241,28073.30%
			73.30%

REASONS FOR THE PLACING AND THE USE OF PROCEEDS

The Directors consider that it is in the best interest of the Company to raise further equity capital by way of Placing for financing the construction of SYSCAN Hi-Tech Park in Shenzhen where the Group’s new factories, R & D testing centre, product exhibition hall and accommodation buildings for workers will be located so that the Group’s gearing ratio will not be as high as it would be without additional equity capital to be raised from the Placing.

The net proceeds of the Placing are approximately HK$16 million. The Company presently intends to apply all the net proceeds for the construction of the Group’s new, upgraded and expanded factories in SYSCAN Hi-Tech Park.

RESUMPTION OF TRADING IN THE SHARES

At the request of the Company, trading in the Shares on GEM has been suspended in the afternoon on 9th April, 2001. The Company has applied for resumption of trading in the Shares on GEM with effect from 10:00 a.m. on 11th April, 2001.

DEFINITIONS

“Company” SYSCAN Technology Holdings Limited, an exempted company incorporated in Bermuda with limited liability, the securities of which are listed on GEM

“Directors” the directors of the Company from time to time

“GEM” the Growth Enterprise Market of the Stock Exchange

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“GEM Listing Rules”	the Rules Governing the Listing of Securities on
	GEM
“Group”	the Company and its subsidiaries
“Placing”	placing of the Placing Shares pursuant to the
	Placing Agreements
“Placing Agreements”	the conditional placing letters all dated 9th April,
	2001 issued by the Company to all placees which
	record the placing agreements reached between the
	Company and such placees orally
“Placing Price”	HK$0.122 per Placing Share
“Placing Shares”	132,000,000 Shares of HK$0.10 each in the share
	capital of the Company
“Shares”	ordinary shares of HK$0.10 each in the share
	capital of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
	By Order of the Board
	Zhang Hongru
	Executive Director

Hong Kong, 10th April, 2001

This announcement, for which the directors of SYSCAN Technology Holdings Limited collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to SYSCAN Technology Holdings Limited. The directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: 1. the information contained in this announcement is accurate and complete in all material respects and not misleading; 2. there are no other matters the omission of which would make any statement in this announcement misleading; and 3. all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

This announcement will remain on the GEM website on the “Latest Company Announcements” page for 7 days from the date of its posting and on the Company’s website.

* For identification purposes only

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