PROGRESS OF THE SCHEMES OF ARRANGEMENT AND EXTENSION OF TIME FOR COMPLIANCE WITH RESUMPTION CONDITIONS

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim 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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(Incorporated in Bermuda with limited liability)

(stock code: 875) PROGRESS OF THE SCHEMES OF ARRANGEMENT AND EXTENSION OF TIME FOR COMPLIANCE WITH RESUMPTION CONDITIONS

Reference is made to the circular dated 30 November 2011 in relation to the Resumption Proposal issued by the Company and the Investor (the "Circular"). Unless otherwise stated, capitalised terms used herein shall have the same meanings as those defined in the Circular.

PROGRESS OF THE SCHEMES OF ARRANGEMENT

The Board is pleased to announce that the Company's applications made to (i) the High Court and (ii) the Supreme Court of Bermuda for respective order to convene a Scheme Meeting for the purpose of considering and, if thought fit, approving the Hong Kong Scheme and the Bermuda Scheme have been granted on 13 January 2012 and 3 January 2012 respectively.
The Scheme Meeting convened at the directions of the High Court and the Supreme Court of Bermuda is scheduled to be held on 9 February 2012. Documents of the Schemes will be despatched to the Creditors on 17 January 2012.
Set out below is the major terms of the Schemes proposed to the Creditors:-
(a) The Company shall issue and allot the Creditor Share Allocation to the Scheme Administrators consisting of 1,380,000,000 Class A Preference Shares which are convertible into New Shares at a ratio of one to one.
(b) The Company shall procure the Investor to grant each Scheme Creditor a Put Option so that each Scheme Creditor, if it elects to exercise the Put Option, is entitled to sell to the Investor its Class A Preference Shares on the basis set out in (d) below.
(c) The Company shall procure each Scheme Creditor to grant the Investor a Call Option so that the Investor, if it elects to exercise the Call Option, is entitled to buy from the Scheme Creditor the Class A Preference Shares on the basis set out in (d) below.
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(d) The total number of Class A Preference Shares that are subject to Call Options or Put Options (as the case may be) shall be equaled to the total number of Class A Preference Shares issued to the Scheme Administrators who will transfer the same to the Scheme Creditors. The total consideration payable under the Call Options or Put Options (as the case may be) shall be HK$30,000,000. The options are exercisable at any time within one year from the date of the Scheme Administrators transferring the Class A Preference Shares to the Scheme Creditors.
(e) The Scheme Companies directly or indirectly held by the Company will be transferred to a company held by the Scheme Administrators in trust for the Scheme Creditors upon Closing in accordance with the Schemes for a cash consideration of HK$1. Upon completion of the Disposal, the Scheme Companies will cease to be subsidiaries of the Company and their results will not be consolidated in the financial statements of the Restructured Group after Closing.
Subject to the granting of the Call Options by the Scheme Creditors or the Put Options by the Investor (as the case may be), the Scheme Administrators shall distribute the Creditor Share Allocation to the Scheme Creditors in consideration of each Scheme Creditor discharging and waiving all of its Claims in full against the Company in accordance with the Schemes.
Upon the Schemes becoming effective, a Claim will be proved and determined in accordance with the Schemes. The Claim of a Scheme Creditor under the Schemes will be settled on a pari passu basis with other Scheme Creditors. Any Claim which is not admitted by the Scheme Administrators in accordance with the Schemes will be treated (and if rejected in part, as to that part only) for all purposes as being wholly and irrevocably discharged and released. Other accruals and payables (arising from normal daily operations being built up and settled periodically in a routine manner through operating cash flows) will not be discharged pursuant to the Schemes.
Under Hong Kong law, the Hong Kong Scheme will become effective and binding on the Company and all the Creditors under the Hong Kong Scheme if the following conditions are satisfied:-
(a) more than 50% in number representing not less than 75% in value of the indebtedness of all the Creditors who attend either in person or by proxy and vote in favour of the Hong Kong Scheme at the relevant Scheme Meeting;
(b) the Hong Kong Scheme is sanctioned by the High Court and a copy of the order of the High Court sanctioning the Hong Kong Scheme is delivered to the Registrar of Companies in Hong Kong for registration; and
(c) all conditions precedent to the Restructuring Agreement are satisfied or waived (as the case may be). The actual date of the hearing by the High Court for the sanction of the Hong Kong Scheme depends on
the availability of the High Court. The Hong Kong Scheme shall become effective and legally binding
when the order of the High Court sanctioning it is filed with the Registrar of Companies in Hong Kong.

The release of this announcement does not necessarily mean that the Schemes will be successfully implemented and completed.

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The Company will make further announcement if and when there is material development in relation to the progress of the Schemes.

RESTRUCTURING AGREEMENT

As of the date of this announcement, the following Conditions have been fulfilled:- (a) the approval from the Shareholders' resolutions approving:
(i) the Investor Share Allocation and the Creditor Share Allocation; (ii) the Capital Restructuring;
(iii) the Capital Change;
(iv) the appointment of new Directors and the removal of such current Directors, specified by the
Investor;
(v) the Whitewash Waiver to be granted by the SFC; and
(vi) all transactions contemplated under the Restructuring Agreement;
(b) the receipt of the confirmation that the Executive has granted the Whitewash Waiver (either unconditionally or subject to conditions to which the Investor does not object); and
(c) the resignation of the existing Directors (the resignation of which to take effect after the appointment of new Directors).
The Company and the Investor may agree to amend or waive by notice in writing to all parties to the Restructuring Agreement any of the Conditions either unconditionally or subject to any further terms and conditions at any time prior to Closing. In the event that the Conditions are not fulfilled or waived by the Investor in its absolute discretion on or before 14 February 2012 (or such later date as may be agreed in writing between the Investor and the Company), the Restructuring Agreement shall terminate.

EXTENSION OF TIME FOR COMPLIANCE WITH RESUMPTION CONDITIONS

On 11 November 2011, the Stock Exchange further allowed to extend the deadline for fulfillment of the resumption conditions to 14 February 2012. However, since additional time is required for the compliance with the resumption conditions, the Company shall make an application to the Stock Exchange for an extension of time for compliance. Further announcement will be made by the Company in respect of the revised tentative timetable for the Resumption, the Capital Restructuring and the change in board lot size.
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GENERAL Completion of the Resumption Proposal and the Resumption are subject to the satisfaction and/or waiver of the Conditions. The release of this announcement is not an indication that the Resumption Proposal will be completed or trading of the Shares will be resumed. Trading of the Shares has been suspended at the request of the Company since 28 April 2005 and will remain suspended until further notice. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

For and on behalf of

Ever Fortune International Holdings Limited Dr. Hui Ho Ming, Herbert, J.P.

Chairman

Hong Kong, 16 January 2012

As at the date of this announcement, the Board comprises eight Directors, including five executive Directors, namely Dr. Hui Ho Ming, Herbert, J.P. (Chairman), Mr. Shi Lanjiang (Chief Executive Officer), Mr. Chu Yuet Chung and Mr. Yang Jianzun; one non-executive Director being Mr. Ji Kewei; and three independent non-executive Directors, namely Mr. Tommy Yu Yan Cheung, J.P., Ms. Estella Yi Kum Ng and Professor Japhet Sebastian Law.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any statements in this announcement misleading.

* For identification purposes only

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