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       T R O U B L E D   C O M P A N Y   R E P O R T E R

                   A S I A   P A C I F I C

           Tuesday, August 21, 2001, Vol. 4, No. 163


                         Headlines



A U S T R A L I A

BABY'S STUFF: PwC Posts Case Profile
CABLE & WIRELESS: Settles Dispute with Telstra
DAVNET LIMITED: Non Executive Directors, Chairman Appointed
ENERGY EQUITY: EWI Offers Convertible Loan Facility
GOLDEN WEST: Administrators' Appointment Resolution Reached
MTM ENTERTAINMENT: Babcock & Brown Increases Stake
NATURAL GAS: Books Net Loss Of $301.6M


C H I N A   &   H O N G  K O N G

CIL HOLDINGS: Suspends Shares Pending Hearing Results
HIH CASUALTY: Winding Up Petition Set For Hearing
HIH INSURANCE: Faces Winding Up Petition
KIN DON HOLDINGS: Discloses Restructuring Proposal
NICE HO: Winding Up Petition Slated For Hearing
PACIFIC CENTURY: Denies Staff Layoff Rumors
SOUND STRENGTH: Winding Up Petition To Be Heard


J A P A N

FUJITSU LTD: Cuts 10% Staff, Pulls Out Losing Businesses
PENSION WELFARE: Government Officials Drop Transactions


K O R E A

DAEWOO ELECTRONICS: Shuts Down Mexico Operation
DAEWOO MOTOR: GM Unsure Of Conclusion of Sale Date
DAEWOO SHIPBUILDING: Likely To End Debt Workout Before August 25
HYNIX SEMICONDUCTOR: State Ceases Support
HYUNDAI MERCHANT: Posts W150B Loss From N.K. Tour
SSANGYONG INFORMATION: Bid Proposal Extended To August 25


M A L A Y S I A


ARTWRIGHT HOLDINGS: Revises Proposed Debt Restructuring
ISUTA HOLDINGS: Revises Agreements With Vendors
PERDANA INDUSTRI: SC Extends Scheme Implementation Deadline
PSC INDUSTRIES: SC OKs Proposal
SJA BERHAD: Faces Winding-Up Petition



P H I L I P P I N E S

NATIONAL POWER: P1.92B Net Losses In First Five Months


S I N G A P O R E

ASIA PULP: Faces Class Action Suit Re False Information
OAKWELL ENGINEERING: Appeals Creditor's Winding-Up Petition


T H A I L A N D

B.GRIMM ENGINEERING: Changes Name, Retains Symbol
MDX PUBLIC: SET Lifts 'NP' Sign; Net Loss Of Bt115,817
POWER-P PUBLIC: Explains Q2 Operation Results
THAI AMARIT: Reorganization Petition Filed In Bankruptcy Court
THAI TELEPHONE: To Issue Restructuring Plan Warrants
QUALITY HOUSES: Resignation of Director

     -  -  -  -  -  -  -  -

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A U S T R A L I A
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BABY'S STUFF: PwC Posts Case Profile
------------------------------------
PricewaterhouseCoopers (PwC) posted Baby's Stuff Pty Ltd's case profile:

Territory:  Australia
Company Name:  Baby's Stuff Pty Ltd
Lead Partner:  Phil Carter
Case Manager:  Veni Chorafitis
Date of Appointment:  25 May 2001
Normal Contact:  William Beaurepaire
Contact Phone No:  (02) 8266 3190

PwC Office

Location:        Sydney
PO Box:          GPO Box 2650
Street Address:  Darling Park Tower 2, 201 Sussex Street
City:            SYDNEY
State:           NSW
Postcode:        1171
DX:              DX 77 Sydney
Phone:           (02) 8266 0000
Fax:             (02) 8266 5820
Appointor:       in writing under the common seal of the company
Registered Office of company:  305 Parramatta Road
                               Leichhardt NSW 2040
Company No / ACN: 003 056 175
Type of Appointment: Deed Administrator
Lead Partner - Full Name: Philip Patrick Carter
Second Partner - Full Name: Gregory Winfield Hall

Case Information

First Creditors' Meeting
Date: 31/5/01
Time: 2.00 PM
Address: PricewaterhouseCoopers, Level 10, Tower 2
        201 Sussex Street, Sydney
Proxy return date: 31/5/01
Return time: 12.30 PM Refer minutes in published documents

Second Creditors' Meeting (or adjournment)

Date: 2/7/01
Time: 2:30 PM
Address: PricewaterhouseCoopers, Level 10, Tower 2
         201 Sussex Street, Sydney
Proxy return date: 29/6/01
Return time: 5.00 PM Rrefer minutes in published documents
Time: 12:00 PM

Other Key Information

Report as to Affairs received from directors: 28 May 2001
Dates of trading by insolvency practitioner: 25 May 2001 to 6 July 2001
Business sold/ceased trading: 19 June 2001
Job closure: Execution of Deed of Company Arrangement on 6 July 2001.

Background Information

Philip Patrick Carter and Gregory Winfield Hall were appointed
Administrators of Baby's Stuff on 25 May 2001. Their duties include
investigating the company's affairs and forming an opinion as to the
company's future.
Creditors have the opportunity to decide the company's future at a meeting
of creditors, normally convened within 21 days of the Administrators'
appointment. In this case, we applied to the Supreme Court of New South
Wales on 14 June 2001 and were granted an extension of the convening period
to 28 June 2001. This step was taken to allow time for the conclusion of the
sale of the business to take place.
The Baby's Stuff business and undertakings were sold by the Administrators
on a going concern basis for consideration of just over $120,000 on 19 June
2001. The net proceeds from the sale will be available to creditors.
A Report to Creditors was sent out on Friday 22, June 2001. The report
detailed the administration of Baby's Stuff, and included a notice, which
convened a meeting of creditors for Monday 2 July 2001. At that meeting of
creditors, the options for the future of Baby's Stuff were considered.
Creditors at that meeting resolved that the company execute a Deed of
Company Arrangement ("DCA")
Under the DCA, the Deed funds will be distributed to creditors whose claims
are admitted to proof by the Deed Administrators. A notice inviting formal
proofs of debt will be sent to creditors before 18 July 2001.

Current status of assignment and actions required by creditors

Company is now under a Deed of Company Arrangement. Creditors will receive a
notice inviting formal proofs of debt shortly and should submit their claims
and supporting documentation without delay.

Next milestone and estimated timetable

Creditors are required to prove their debts on or before 15 August 2001 in
order to participate in the distribution of Deed Funds.

Likely outcome for creditors and timetable

Employees will be paid in full. The scale of the distribution to unsecured
creditors will depend on the level of creditors' claims admitted. We expect
the likely outcome for unsecured creditors to be in the order of 30 to 40
cents. We anticipate paying a first and final distribution in September
2001.


CABLE & WIRELESS: Settles Dispute with Telstra
----------------------------------------------
Cable & Wireless Optus Limited & Telstra agreed to settlement terms for the
claim brought by Optus against Telstra in September 1997.

The Optus claim alleged the arrangements for the supply of Pay TV carriage
services from Telstra to FOXTEL, and the construction of Telstra's broadband
network, breached section 46 of the Trade Practices Act.

The settlement terms are confidential.


DAVNET LIMITED: Non Executive Directors, Chairman Appointed
-----------------------------------------------------------
The directors of the Davnet Limited appointed Alexander Adamovich and
William Kocass as new non-executive directors to the board Friday. Kocass
was also appointed as chairman of the board, replacing Hal Turner who will
continue as a director.

Adamovich has overseen many successful investments particularly with large
multinationals and has been involved in major Asian corporate
restructurings. Adamovich was an early investor in several successful major
telecommunications, infrastructure, energy and food and beverage investments
in the Asia region.

In Australia, he sits on the board of Australia's leading managed Internet
hosting company, Hostworks Group Ltd, and the publicly listed Ambition
Group, a specialized accounting, finance and IT recruiting group operating
in Australia and Hong Kong. In South East Asia he also represents the
interests of the de Benedetti family of Milan.

Kocass has had a long career in the construction industry, his most recent
appointment being as group managing director of Gammon Constructions Ltd,
the largest construction group in the South East Asian region, where he was
responsible for turning around the company's results from an annual loss of
$50 million to a profit of $300 million.

The board also received the resignation from the board of Mr Bob Henson and
thanked him for his period of service.

The board of directors of the company's Singapore subsidiary appointed a
provisional liquidator of that subsidiary.

The company is continuing to work with the Investment Company of
China in relation to a further funding proposal for the company.


ENERGY EQUITY: EWI Offers Convertible Loan Facility
---------------------------------------------------
The Directors of Energy Equity Corporation Ltd (EEC) wish to advise that the
Company's largest shareholder, Energy World International Ltd (EWI) have
provided a Convertible Loan Facility of A$10 million. Advances under the
loan can be made up to 15 December 2001. The loan, which will rank behind
the Company's banking facilities and is subject to Shareholder approval,
will be used to meet working capital, capital commitments and debt reduction
to 15 December 2001.

The loan is convertible into shares, at the option of EWI and subject to
Shareholder approval, at 6.65 cents per share on or before 15 December 2001
with the balance of the loan, if any, repayable on 15 December 2001.

The Convertible Loan forms part of the proposed $25 million equity raising
approved by Shareholders on 29 November 2000. The Directors are preparing a
revised Business and Funding Plan to finalize the balance of further funding
required and will advise Shareholders of the Company's plans when completed.

The Convertible Loan Facility of $10 million by EWI is in addition to the
Convertible Note and Subscription Facility of $35 million that was concluded
on 30 June 2001, with $34.450 million being converted into shares and the
balance of issued notes, $550,000 fully repaid. The conversion of the notes
into shares increased the number of shares on issue as at 30 June 2001 to
681,620,532 million.

The Company's financial results for the 2001 financial year and
Corporate Update will be released prior to 14 September 2001.


GOLDEN WEST: Administrators' Appointment Resolution Reached
-----------------------------------------------------------
The Directors of Golden West Refining Corporation Limited resolved that the
Company appoint Garry Trevor and Martin Jones of Ferrier Hodgson as Joint
and Several Administrators pursuant to Section 463A of the Corporations Act
2001.

GWRC received a demand note from Credit Suisse First Boston International
("CSFB") for the amount of US$2,174,259.71. The Directors of GWRC have held
discussions with  CSFB and the Company's secured creditor, NM Rothschild and
Sons (Australia) Limited to determine whether there was any immediate
prospect for concessions by either creditor that might restore the Company's
capacity to continue as a going concern. Unfortunately, no such concessions
have been forthcoming.

Accordingly and after considering a range of issues presently
critical to the future direction of the Company, the Directors have resolved
that GWRC is or may shortly become insolvent.

In parallel with the creditor discussions referred to above, the
Company also consulted with those parties involved in the proposed sale of
GWRC subsidiary Golden West Australasia Pty Limited's ("GWA") 50% interest
in the AGR Joint Venture. These parties are Australian  Gold Alliance Pty
Ltd ("AGA") and Western Australian Mint ("WAM"). Both AGA and WAM have
confirmed their continuing commitment to complete the transfer of this joint
venture interest to AGA.

This proposed sale of the 50% AGR Joint Venture interest is the
subject of an Extraordinary General Meeting of shareholders convened for
Monday, 20 August 2001. Shareholders are advised that this meeting will
continue to be held and will be attended by the Administrator.


MTM ENTERTAINMENT: Babcock & Brown Increases Stake
--------------------------------------------------
Babcock & Brown Group increased its relevant interest in MTM
Entertainment Trust on 17/August/2001, from 60,250,010 ordinary units (75.31
percent) to 62,325,567 ordinary units (77.91 percent).


NATURAL GAS: Books Net Loss Of $301.6M
--------------------------------------
Natural Gas Corporation Holdings Limited (NGC), is a 66% owned subsidiary of
The Australian Gas Light Company (AGL),  recorded a net loss of $301.6 for
the year ended 30 June 2001.

The loss was made up of a trading profit of $9.9 million combined with
abnormal losses of $311.5 million. The abnormal losses, which arise from the
direct effects of high wholesale electricity prices and NGC's related
decisions to write down its electricity retailing assets, were crystallized
by NGC's decision to exit the electricity retailing business.

NGC Managing Director, John Barton, said Monday that the loss was extremely
disappointing. The result compares with net earnings in the 2000 financial
year of $43.5 million. The result was within the range forecast by NGC in
its profit downgrade announcement on 22 June.

In view of the year's outcome, the Directors decided not to pay a final
dividend.

Barton said the cause of the losses was the electricity retailing business
and that all other aspects of NGC's business had performed satisfactorily.
When electricity wholesale prices increased to five and six times their
usual levels, this created substantial losses and placed strains on
financing the business. Under these conditions NGC had decided not to
continue in electricity retailing for three main reasons:

   * the risks for a net retailer are unacceptable due to the way the hedge
and spot markets are functioning

   * the market was set up to encourage retail competition, but NGC did not
believe that a net retailer could compete effectively

   * returns to shareholders would be substantially improved.

In addition NGC decided it could not be competitive and manage its retail
risk when it had to buy electricity hedge contracts from its retail
competitors.

The write down of $311.5 million is comprised of $255.1 million for goodwill
and customer bases, $48.7 million arising from the
abnormally high wholesale electricity costs in June, and $15.0
million associated with NGC's exit from the retail business,
including write down of systems and restructuring costs. A slight offset
occurred with a $7.3 million gain, primarily from liquidated damages and
insurance proceeds from the Taranaki Combined Cycle and Southdown Power
Stations.

NGC's withdrawal from electricity retailing was not completed until I August
and the 2001/02 financial year results will be affected by high wholesale
electricity prices which were in excess of $200 a megawatt hour during July.
NGC's net exposure in July would result in losses from the electricity
business in the region of $40 million after tax.

However, since July NGC had eliminated it retail electricity exposure and
the losses for that month were expected to be more than offset by earnings
from NGC's electricity generation
business.

"It is now very important that NGC looks towards the future," said Barton.
"Putting aside electricity retailing, we are heartened by the strengths of
our continuing business activities in natural gas and LPG sales, electricity
generation, and gas transmission and distribution. Excluding electricity
retailing, these activities produced net earnings for the year of $55.6
million. They provide us with a sound financial footing with good prospects
for improved cashflows and profitability."

Natural gas sales increased by 41 percent to 60.1 petajoules,
reflecting the first year of major supply contracts to electricity and
petrochemical customers. LPG production and sales had reached record levels
and electricity generation capacity had increased following an upgrading of
NGC's Taranaki Combined Cycle Power Station. Gas transmission volumes had
increased by 8 percent.

In addition, NGC for the first time had moved into take-or-pay surplus with
its Maui gas purchases and was now accessing the value of its prepaid Maui
gas assets.

NGC has a set of first class assets, growing markets, a reduced level of
risk and now more certain profitability and cash flow in the future, said
Barton. "In the next few months we will also be focusing on managing the
transition of customers to Meridian and Genesis and the consequent reduction
of the operations we have retained. We are in touch with Meridian, Genesis
and other customer management operations regarding future employment for our
staff.

"In the meantime, we are reviewing NGC's strategy for the future, with an
emphasis on strengthening NGC's financial base, improving returns to
shareholders and reducing debt. We will seek opportunities to take advantage
of our core competencies in gas and infrastructure-related businesses," said
Barton


================================
C H I N A   &   H O N G  K O N G
================================


CIL HOLDINGS: Suspends Shares Pending Hearing Results
-----------------------------------------------------
Trading in the shares of CIL Holdings Limited was suspended from 10:00 a.m.
on August 17, 2001 at the request of the Company pending the release of the
announcement of interim results for the six months ended December 31, 2000.

The Board meeting was held on August 16, 2001 during which the Interim
Results are approved. The Interim Results are published in a separate
announcement in newspapers on August 20, 2001 because the directors need to
re-consider on August 17, 2001 the alternative accounting treatments for the
de-consolidation of the winding-up subsidiaries.

The company also requested to continue suspension of the trading in shares
on August 20 pending the release of announcement of the results of the High
Court hearing in relation to the winding-up petition against the company by
Sin Hua Bank Limited.


HIH CASUALTY: Winding Up Petition Set For Hearing
-------------------------------------------------
The petition to wind up HIH Casualty and General Insurance (Asia) Limited is
scheduled for hearing before the High Court of Hong Kong on the 27th day of
August 2001 at 2:30 am.  The petition was filed with the court on April 9,
2001 by the company of 22nd Floor, Dah Sing Financial Centre, 108 Gloucester
Road, Wanchai, Hong Kong.


HIH INSURANCE: Faces Winding Up Petition
----------------------------------------
The petition to wind up HIH Insurance (Asia) Limited is set for hearing
before the High Court of Hong Kong on August 27, 2001 at 2:30 am. The
petition was filed with the court on April 9, 2001 by the company of 22nd
Floor, Dah Sing Financial Centre, 108 Gloucester Road, Wanchai, Hong Kong.


KIN DON HOLDINGS: Discloses Restructuring Proposal
--------------------------------------------------
Kin Don Holdings and Marble King International Limited announced the
Proposed Restructuring involving Subscription of New Shares and Convertible
Preference Shares, Compromise Agreements, Whitewash Waiver, Creeper
Authorization Proposed Rights Issue, Connected Transactions and Share
Premium Cancellation.

THE RESTRUCTURING PROPOSAL

The Restructuring Proposal involves, among other things:

(i) the Subscription Agreement relating to the subscription of 1,300,000,000
new Ordinary Shares and 4,000,000,000 Convertible Preference Shares by
Marble King;

(ii) the Stone Church Compromise Agreement; and

(iii) the Principal Creditors Compromise Agreement.

SUBSCRIPTION AGREEMENT DATED 31 JULY 2001

Parties

Issuer: The Company
Subscriber: Marble King, the single largest Shareholder

Shares to be issued

Subscription Shares

Under the Subscription Agreement, 1,300,000,000 new Ordinary Shares will be
issued and subscribed by Marble King or its nominees, representing
approximately 138.2 percent of the existing issued share capital of the
Company and approximately 43.7 percent of the issued ordinary share capital
of the Company as enlarged by the issue of the Subscription Shares and
Compromise Shares.

Marble King, and parties acting in concert with it, currently hold
245,328,000 Existing Shares, representing approximately 26.1 percent of the
existing issued share capital of the Company. Upon Completion, Marble King
and parties acting in concert with it will be interested in an aggregate of
1,545,328,000 Ordinary Shares, representing approximately 51.9 percent of
the issued ordinary share capital of the Company as enlarged by the issue of
Subscription Shares and the Compromise Shares.

Convertible Preference Shares

4,000,000,000 Convertible Preference Shares will be issued and subscribed by
Marble King or its nominees. The underlying Ordinary Shares to be converted
upon full conversion of 4,000,000,000 Convertible Preference Shares
represent approximately 425.2 percent of the existing issued share capital
of the Company and approximately 57.3 percent of the issued ordinary share
capital of the Company as enlarged by the issue of the Subscription Shares,
the Compromise Shares and the full conversion of the Convertible Preference
Shares.

The Convertible Preference Shares can and shall be issued partly paid on
completion of the Subscription Agreement as to 10 percent of their
subscription price (i.e. HK$0.002 per Convertible Preference Share).
Currently, no Convertible Preference Share is in issue. Under the terms of
the Convertible Preference Shares, there is no time restriction for the
Convertible Preference Shares to be fully paid up. The partly paid nature is
a commercial term negotiated between Marble King and the Company. It is
aimed to enable the flexibility on the timing and the provision of
additional funding as required by the Company.

The Convertible Preference Shares will not be listed on the Stock Exchange
or any other stock exchange. Any subsequent transfer of the Convertible
Preference Shares between Marble King and other bona fide buyer is a private
transaction whereby the Company is not responsible for. The Company's duty
is to issue the Ordinary Shares to the holders of the Convertible Preference
Shares upon receipt of conversion notice and subscription monies or to repay
any paid up capital upon the receipt of redemption notice before the expiry
date of the Convertible Preference Shares.

Upon full conversion of the Convertible Preference Shares, Marble King will
own approximately 5,545,328,000 Ordinary Shares, representing approximately
79.5 percent of the issued ordinary share capital of the Company as enlarged
by the issue of the Subscription Shares and the Compromise Shares and the
full conversion of the Convertible Preference Shares. This will result in
less than 25 percent of the Company's issued ordinary share capital being
held by the public and hence will be in breach of Rule 8.08 of the Listing
Rules. The Company and directors of Marble King have jointly and severally
undertaken to the Stock Exchange that they will not convert or cause Marble
King to convert, as the case may be, any Convertible Preference Shares which
will result in less than 25 percent of the Company's issued ordinary share
capital being held by the public.

Other terms of the Convertible Preference Shares

Partly paid:

Any holder of partly paid Convertible Preference Shares may elect to advance
to the Company part of moneys uncalled or unpaid on any of such Convertible
Preference Shares. The Company is not permitted to make calls with respect
to amounts unpaid on any partly paid Convertible Preference Shares.

Conversion:

Convertible into new Ordinary Shares upon fully paid and for the period
commencing on the date of Completion and ending on the date being five years
thereafter inclusive at the rate of one Ordinary Share for every one fully
paid Convertible Preference Share (subject to adjustments such as alteration
to the nominal value of the Ordinary Shares and capitalization of profits or
reserves or capital reduction). The right to convert may be exercised in
whole or in part (not involving a fraction of an Ordinary Share) only at the
discretion of the holders.

Redemption:

For the period commencing on the date of completion of the Subscription
Agreement and ending on the date being five years thereafter inclusive at
any time, the holders of the Convertible Preference Shares may require the
Company to redeem, to the extent conversion has not been elected by the
holders of the Convertible Preference Shares, the outstanding Convertible
Preference Shares for the amount paid up. The Company does not have the
right to redeem the Convertible Preference Shares.

If the Convertible Preference Shares were still in issue after the date of
expiry (i.e. 5 years after the date of completion of the Subscription
Agreement), the holders of the Convertible Preference Shares would
automatically forfeit all their redemption/conversion rights under the
Convertible Preference Shares and  such Convertible Preference Shares will
become preference shares without carrying any conversion or redemption
feature thereafter. However, any paid up capital of the Convertible
Preference Shares would continue to be retained in the accounts of the
Company.

Dividend:

Any Convertible Preference Shares fully paid up at par shall rank for
dividend in pari passu with Ordinary Shares from time to time in issue.
Partly paid Convertible Preference Shares are not entitled to dividend
before or even after the expiry of the Convertible Preference Shares.

Voting:

The holders of the Convertible Preference Shares shall be entitled to
receive notices of general meetings but not to attend or vote thereat unless
(i) the Company shall have defaulted in payment of redemption monies; or
(ii) there is a resolution proposed to wind up the Company or affect, alter,
abrogate the rights or privileges or restrictions attaching to the
Convertible Preference Shares, in which event the holders of the Convertible
Preference Shares shall be entitled to vote on such resolution only.

Liquidation:

The holders of the Convertible Preference Shares (including partly paid
Convertible Preference Shares) have priority over the holders of the
Ordinary Shares to participate in the assets available in the liquidation of
the Company. Such participation will be in accordance with the amount paid
up.

Transferability:

There is no restriction on the transfer of the Convertible Preference
Shares. The directors of Marble King have undertaken to the Company and the
Stock Exchange that they will disclose to the Company and the Stock Exchange
if the Convertible Preference Shares are transferred to any connected person
as defined under the Listing Rules. The Company has also undertaken to the
Stock Exchange of the same disclosure requirement.

Subscription Price

HK$0.02 per Subscription Share and per Convertible Preference Share, which
was determined after arm's length negotiations.

The Subscription Price of HK$0.02 represents a discount of approximately 67
percent to the closing price of HK$0.06 per Existing Share as quoted on the
Stock Exchange on 31 July 2001, the last trading day prior to the suspension
of trading in the Existing Shares pending the issue of this announcement,
and a discount of approximately 67 percent to the average closing price of
approximately HK$0.06 per Existing Share of the respective 5 and 10 trading
days up to and including 31 July 2001.

The terms of the Subscription Agreement were negotiated on an arm's length
basis. In negotiating the Subscription Price, the Directors and Marble King
have taken into account, among other things, the following factors:

ú the Group's audited consolidated loss of approximately HK$155.8 million
for the year ended 30 November 2000;

ú the total audited Indebtedness of the Group of approximately HK$117.5
million as at 30 November 2000; and

ú the audited consolidated net liabilities of the Group as at 30 November
2000 of approximately HK$153.2 million (representing approximately HK$0.16
per Share based on the Existing Shares in issue).

Status of Ordinary Shares

The new Ordinary Shares to be issued under the Subscription Agreement will
rank pari passu in all respects with the Existing Shares (save for the
change in the par value as a result of the Capital Reduction), including the
right to receive all future dividends and distributions to be declared, made
or paid by the Company on or after completion of the Subscription Agreement.

Conditions precedent

Completion of the Subscription Agreement is conditional upon, among other
things, the following conditions being fulfilled:

(i) the Subscription Agreement being approved by the Independent
Shareholders on a poll in the EGM (to the extent prohibited under the
Listing Rules, the Code or otherwise by the Stock Exchange or the SFC,
Marble King and its associates shall abstain from voting);

(ii) a copy of the Grand Court of the Cayman Islands order confirming the
Capital Reorganization having been delivered to and registered by the
Registrar of Companies in the Cayman Islands and the Company having complied
with all the terms and conditions imposed by the Grand Court of the Cayman
Islands in connection to the Capital Reorganization;

(iii) the Compromise Agreements having been duly passed and adopted by the
Independent Shareholders in the EGM;

(iv) the Compromise having been completed to the effect that all the
Indebtedness referred to in the Compromise Agreements have been fully and
finally discharged and released;

(v) the issue of the Convertible Preference Shares being approved by the
Independent Shareholders on a poll in the EGM;

(vi) all requirements imposed by the Stock Exchange under the Listing Rules
or otherwise in connection with the transactions contemplated by, among
other things, the Subscription Agreement having been fully complied with;

(vii) all necessary consents from the relevant authorities in the Cayman
Islands in relation to the allotment and issue of the Convertible Preference
Shares pursuant to the Subscription Agreement and the allotment and issue of
the new Ordinary Shares which fall to be issued upon conversion of the
Convertible Preference Shares having been obtained;

(viii) the Listing Committee of the Stock Exchange having granted and not
having revoked listing of and permission to deal in the new Ordinary Shares
resulting from the Capital Reorganization, the Subscription Shares and any
new Ordinary Shares which may be issued pursuant to the exercise of
conversion rights attaching to the Convertible Preference Shares;

(ix) the listing of the Existing Shares or new Shares, as the case may be,
not having been withdrawn, the Shares, as the case may be, continuing to be
traded on the Stock Exchange (save for any temporary suspensions pending any
announcement in connection with the execution of the Subscription Agreement
or the transactions contemplated under the Subscription Agreement) and no
indication being received on or before completion of the Subscription
Agreement from the Stock Exchange or the SFC to the effect that the listing
of the Existing Shares or Ordinary Shares, as the case may be, on the Stock
Exchange will or may be withdrawn or objected to (or conditions will or may
be attached thereto) as a result of completion of the Subscription Agreement
or completion of other transactions as contemplated under the Compromise,
the Rights Issue or the terms of the Subscription Agreement;

(x) no member of the Group (including the Company itself) having before
completion of the Subscription Agreement and without the prior written
consent of Marble King (such consent not to be unreasonably withheld or
delayed) passed any resolution in general meeting (except the resolutions,
among other things, approving the Subscription Agreement, the Compromise
Agreements, the Rights Issue and the allotment and issue of Convertible
Preference Shares) or changed the memorandum and articles of association of
the Company (except pursuant to the resolutions contemplated under the
Subscription Agreement);

(xi) the warranties remaining true and accurate and not misleading in any
material respect at completion of the Subscription Agreement as it repeated
at completion of the Subscription Agreement and at all times between the
date of the Subscription Agreement and completion of the Subscription
Agreement;

(xii) all requisite consents for the transactions contemplated under the
Subscription Agreement having been obtained from financial institutions who
have entered into financing agreements with the Group;

(xiii) the Company having complied fully with the obligations and otherwise
having performed in all material respects of all the covenants and
agreements required to be performed by it under the Subscription Agreement;

(xiv) the passing of an ordinary resolution by way of a poll to approve the
Whitewash Waiver by the Independent Shareholders voting at the EGM;

(xv) the granting by the Executive of the Whitewash Waiver;

(xvi) Stone Church and the Principal Creditors having given their consents
to the Company in entering into all the transactions, and performing all the
Company's obligations, contemplated under the Subscription Agreement and
written notice to that effect having been given by each of them to the
Company; and

(xvii) Marble King having obtained a legal opinion from Cayman Islands
lawyers in respect of the validity, legality and enforceability of the
provisions in the Subscription Agreement under the laws of the Cayman
Islands in form and substance to the satisfaction of Marble King.

Completion

The aggregate consideration for the subscription of the Subscription Shares
and the Convertible Preference Shares (on a partly paid basis) of
approximately HK$34,000,000 will be paid in cash by Marble King upon
completion of the Subscription Agreement. Completion of the Subscription
Agreement shall take place within five business day after all conditions of
the Subscription Agreement have been fulfilled or any of the conditions
being waived, as the case may be. It is expected that the date of
fulfillment of all the conditions of the Subscription Agreement will be on
or before 15 September 2001 or such later date as may be agreed in writing
between the Company and Marble King. In the event that the above conditions
of the Subscription Agreement are not fulfilled or waived by Marble King on
or before 15 September 2001 or such other date as may be agreed in writing
between the Company and Marble King, the party not in default may, without
prejudice to its other rights:

(i) defer completion of the Subscription Agreement to a date not more than
fourteen days after the said date:

(ii) proceed to completion of the Subscription Agreement so far as
practicable; and

(iii) rescind the Subscription Agreement.

COMPROMISE AGREEMENTS

I.  Stone Church Compromise Agreement dated 6 May 2001

Parties

(i) The Company
(ii) Stone Church

Indebtedness to be waived

On 6 May 2001, the Company entered into the Stone Church Compromise
Agreement with Stone Church whereby Stone Church agreed to waive the
Indebtedness owed by the Group to it of US$4,418,125 (approximately
HK$34,417,000) together with interests subject to and on terms and
conditions stated therein. The Indebtedness owed to Stone Church will be
released and discharged upon:

(i) cash payment by the Company of HK$3,020,063 to Stone Church,
representing approximately 8 percent of the Group's Indebtedness owed to it;
and

(ii) issue of 271,471,023 new Ordinary Shares to Stone Church at an issue
price of approximately HK$0.12 per Share with an aggregate value of
approximately HK$31,396,937 equivalent to approximately 92 percent of the
Group's Indebtedness owed to it. The issue price of approximately HK$0.12
represents a premium of approximately 100 percent over the closing price of
HK$0.06 per Existing Share as quoted on the Stock Exchange on 31 July 2001,
the last trading day prior to the suspension of trading in the Existing
Shares pending the issue of this announcement, and a premium of
approximately 100 percent over the average closing price of approximately
HK$0.06 per Existing Share of the respective 5 and 10 trading days up to and
including 31 July 2001.

Conditions precedent

The Stone Church Compromise Agreement is conditional upon, among other
things, the following conditions:

(i) the Company entering into the Principal Creditors Compromise Agreement
with the Principal Creditors in relation to the Group's Indebtedness due to
the Principal Creditors in terms no more favorable to the Principal
Creditors than those of the Stone Church Compromise. The following two
options shall not be treated as being more favorable than those of the Stone
Church Compromise:

(a) in respect of the unsecured creditors including the convertible
debenture holder and other creditors, and unsecured portion of the secured
creditors (in respect of which the fair values of the pledged assets are to
be determined by an independent firm of professional valuers for offsetting
their outstanding debts as repayment), Marble King shall offer to pay via
the Company to the Principal Creditors HK$0.10 for every HK$1.00. The
remaining balance  of HK$0.90 for every HK$1.00 shall be settled by the
issuance of Ordinary Shares at a price of HK$0.18 per Ordinary Share; and

(b) in respect of the unsecured creditors including the convertible
debenture holder and other creditors, and unsecured portion of the secured
creditors (in respect of which the fair values of the pledged assets are to
be determined by an independent firm of professional valuers for offsetting
with their outstanding debts as repayment), Marble King shall offer to pay
via the Company to the Principal Creditors HK$0.15 for every HK$1.00 as full
settlement;

(ii) the Company having compromised with the Other Creditors in relation to
the Group's Indebtedness to the Other Creditors in cash only and not more
than HK$5,000,000, in aggregate, in all cases upon closing of the Stone
Church Compromise Agreement (or such later dates as may be approved by Stone
Church in writing);

(iii) Marble King having entered into the Subscription Agreement and the
Subscription Agreement becoming unconditional upon closing of the Stone
Church Compromise Agreement;

(iv) the convening of EGM and such meeting having passed unconditional
resolutions to approve, among other things, the Stone Church Compromise
Agreement, Stone Church Compromise, the Principal Creditors Compromise, the
Other Creditors Compromise and the Subscription Agreement;

(v) the Listing Committee of the Stock Exchange granting or agreeing to
grant and not revoking approval for the Listing of 271,471,023 new Ordinary
Shares to be allotted and issued to Stone Church under the Stone Church
Compromise Agreement;

(vi) where necessary, all regulatory authorities granting approvals in
respect of the Stone Church Compromise, the Principal Creditors Compromise,
the compromise with the Other Creditors and the Subscription Agreement;

(vii) Stone Church receiving evidence reasonably satisfactory to it of the
satisfaction of conditions (i) to (vi) above;

(viii) the reduction of par value of the Ordinary Shares having been
deducted from HK$0.10 to HK$0.01 pursuant to the Capital Reduction;

(ix) the Company delivering to Stone Church, in form and substance
satisfactory to Stone Church:

(a) minutes of meetings of the Company and any other documents that Stone
Church may require to evidence that all necessary action was taken to
authorize the execution and delivery of the Stone Church Compromise
Agreement and the documents referred to in conditions (i) to (vii) above all
certified by a director or secretary of the Company as being true and
correct copies of the original documents; and

(b) any other documents or information which Stone Church may reasonably
require;

(x) there being no potential event of default as defined in the Stone Church
Compromise Agreement;

(xi) no event of default as defined in the Stone Church Compromise Agreement
has occurred or is occurring; and

(xii) the representations and warranties by the Company in the Stone Church
Compromise Agreement are true and accurate and not misleading at all times
from the execution of the Stone Church Compromise Agreement up to and
including closing of the Stone Church Compromise Agreement.

Completion

Completion of the Stone Church Compromise Agreement shall take place on a
date which is five banking days after all the conditions of the Stone Church
Compromise Agreement have been fulfilled, or waived in part or in whole, as
the case may be, upon which liabilities of, and claims against, the Company
in respect of all of Stone Church's Indebtedness will be settled. It was
expected that the date of fulfillment of all the conditions of the Stone
Church Compromise Agreement would be on 31 August 2001 or such later date as
is agreed between the Company and Stone Church. On 27 July 2001, the Company
and Stone Church mutually agreed to extend such longstop date to 15
September 2001.

II. Principal Creditors Compromise Agreement dated 31 July 2001

Parties

(i) The Company
(ii) KDGL, an operating subsidiary of the Company who borrowed from certain
Principal Creditors
(iii) The Principal Creditors

Indebtedness to be waived

On 31 July 2001, the Company entered into the Principal Creditors Compromise
Agreement with the Principal Creditors in which the Principal Creditors
agreed to waive the Indebtedness owed by the Group to each of them in an
aggregate amount of HK$110,002,784 together with interests subject to and on
terms and conditions stated therein. The Indebtedness owed to the Principal
Creditors will be released and discharged upon:

(i) cash payment by the Company of HK$12,272,538 in aggregate to the
Principal Creditors (including the non-wholly owned subsidiaries of the
Company as stated in the Principal Creditors Compromise Agreement),
representing approximately 11 percent of the Group's Indebtedness owed to
them; and

(ii) issue of 463,053,218 new Ordinary Shares to the Principal Creditors
(excluding the non-wholly owned subsidiaries of the Company as stated in the
Principal Creditors Compromise Agreement) at an issue price of approximately
HK$0.12 per Share with an aggregate value of approximately HK$55,566,389
equivalent to approximately 51 percent of the Group's Indebtedness owed to
them, with the remaining balance waived.

Conditions precedent

The Principal Creditors Compromise Agreement is conditional upon, among
other things, the following conditions:

(i) the Company having compromised with the Other Creditors in relation to
the Group's Indebtedness to the Other Creditors in cash only and not more
than HK$5,000,000 in aggregate, in all cases upon closing of the Principal
Creditors Compromise Agreement (or such later dates as may be approved by
the Principal Creditors in writing);

(ii) Marble King having entered into the Subscription Agreement and the
Subscription Agreement becoming unconditional upon closing of the Principal
Creditors Compromise Agreement;

(iii) the Stone Church Compromise Agreement continuing in full force and
effect, no event of default or potential event of default has occurred and
all conditions thereto and other provisions given for the benefit of the
Company having satisfied or becoming unconditional upon closing of the
Principal Creditors Compromise Agreement;

(iv) the convening of the EGM and such meeting having passed unconditional
resolutions to approve, among other things, the Principal Creditors
Compromise Agreement, the Stone Church Compromise, the Other Creditors
Compromise and the Subscription Agreement;

(v) the Listing Committee of the Stock Exchange granting or agreeing to
grant (without subject to any condition) and not revoking approval for the
listing of the new Ordinary Shares allotted to the Principal Creditors
pursuant to the Principal Creditors Compromise Agreement;

(vi) where necessary, all regulatory authorities granting approvals in
respect of the Principal Creditors Compromise, the Stone Church Compromise,
the Other Creditors Compromise and the Subscription Agreement;

(vii) each of the Principal Creditors receiving evidence reasonably
satisfactory to the Principal Creditors of the satisfaction of conditions
(i) to (vi) above;

(viii) the reduction of par value of the Ordinary Shares having been
deducted from HK$0.10 to HK$0.01 pursuant to the Capital Reduction;

(ix) the Company delivering to each Principal Creditor, in form and
substance satisfactory to the Principal Creditors:

(a) minutes of meetings of the Company and KDGL and any other documents that
the Principal Creditors may require to evidence that all necessary action
was taken to authorize the execution and delivery of the Principal Creditors
Compromise Agreement and the documents referred to in conditions (i) to
(vii) above all certified by a director or secretary of the Company as being
true and correct copies of the original documents;

(b) legal opinion issued by Cayman Islands' lawyer confirming the validity
and enforceability of the Principal Creditors Compromise Agreement against
the Company in form and substance satisfactory to the Principal Creditors;
and

(c) any other documents or information which the Principal Creditors may
reasonably require;

(x) there being no potential event of default as defined in the Principal
Creditors Compromise Agreement;

(xi) no event of default as defined in the Principal Creditors Compromise
Agreement has occurred or is occurring; and

(xii) the representations and warranties by the Company in the Principal
Creditors Compromise Agreement are true and accurate and not misleading in
all material respects at all times from the execution of the Principal
Creditors Compromise Agreement up to and including closing of the Principal
Creditors Compromise Agreement.

Completion

Completion of the Principal Creditors Compromise Agreement shall take place
within five banking days after all the conditions of the Principal Creditors
Compromise Agreement have been fulfilled, or waived in part or in whole, as
the case may be, upon which liabilities of and claims against the Company in
respect of all of the Principal Creditors' Indebtedness will be settled. It
is expected that the date of fulfillment of all the conditions of the
Principal Creditors Compromise Agreement will be on 15 September 2001 or
such later date as is agreed between the Company, KDGL and the Principal
Creditors.

III. Other Creditors Compromise

Pursuant to the Compromise Agreements, the Company is required to make
compromises with the Other Creditors in which the Indebtedness owed by the
Group to each of them in an aggregate amount of HK$12,970,871 will be
released and discharged in cash only not more than HK$5,000,000, in
aggregate, in all cases at the closing of the Principal Creditors Compromise
Agreement. Such Indebtedness represents indebtedness owed to (i) certain
Directors and ex-Directors of approximately HK$9,739,359 (being directors'
remuneration and advances); and (ii) independent third parties of
approximately HK$3,231,512 (being professional fees). The Company is in
negotiations with each of the Other Creditor. As at the date of this
announcement, the Company has obtained written consent from those Other
Creditors who are existing executive Directors to waive the amount of
Indebtedness due by the Group to each of them to the extent that the
HK$5,000,000 is able to fully settle the remaining balance of Other
Creditors Compromise in accordance with the Compromise Agreements.

WHITEWASH WAIVER AND CREEPER AUTHORIZATION

Upon Completion, Marble King and parties acting in concert with it will hold
approximately 51.9 percent of the issued ordinary share capital of the
Company as enlarged by the issue of the Subscription Shares and the
Compromise Shares. Accordingly, Marble King will be required under Rule 26
of the Code to make a general offer for the Ordinary Shares other than those
already owned by Marble King and parties acting in concert with it. Marble
King will apply to the Executive for the Whitewash Waiver from compliance
with such requirement pursuant to Note 1 of the Notes on Dispensations from
Rule 26 of the Code. If the Whitewash Waiver is granted, it will be subject
to, among other things, the approval by the Independent Shareholders by way
of a poll at the EGM. Marble King and parties acting in concert with it will
abstain from voting on the resolutions approving the Restructuring Proposal
and the transactions contemplated thereunder and the Whitewash Waiver
respectively at the EGM.

In the event that the Whitewash Waiver is not obtained, Marble King will
consider waiving this condition precedent in order to proceed with the
Subscription Agreement as well as to facilitate the Company to proceed with
the Compromise Agreements. Should Marble King decide to waive the Whitewash
Waiver condition upon Completion, Marble King will be required under Rule 26
of the Code to make an unconditional general offer at HK$0.02 per Ordinary
Share in cash to acquire Ordinary Shares not already owned by Marble King
and parties acting in concert with it. Vickers Ballas is satisfied that
sufficient financial resources are available to Marble King and parties
acting in concert with it to meet the full acceptance of a possible
unconditional cash offer upon Completion. Further announcement will be made
by the Company and Marble King as to the outcome of the EGM and Marble
King's intention in this regard.

In accordance with Note 15 to Rule 26.1 of the Code, following the obtaining
of the Whitewash Waiver, Marble King and parties acting in concert with it
will be deemed for the purposes of the Code to have a lowest percentage
holding of Ordinary Shares which is equal to the greater of (i) 35 percent;
and (ii) the percentage holding that is 5 percent less than the percentage
holding of Marble King and parties acting in concert with it immediately
following the date of Completion.  In this circumstance, Marble King and
parties acting in concert with it are precluded from acquiring additional
voting rights in the Company for the 12-month period immediately following
the date of obtaining the Whitewash Waiver including the taking up of Rights
Shares entitlements and the underwriting of the Rights Shares and the
conversion of the Convertible Preference Shares without triggering a
mandatory offer under the Code. Thus the Creeper Authorization will be
sought from the Independent Shareholders by way of a poll at the EGM with
Marble King and parties acting in concert with it abstaining from voting at
such resolution. As the Creeper Authorization is a condition precedent (not
waivable) in the Underwriting Agreement and that the Rights Issue is
conditional upon the completion of the Underwriting Agreement, if the
Creeper Authorization is not obtained, the Rights Issue cannot be proceeded.

Marble King and parties acting in concert with it have not dealt in any
shares of the Company during the period commencing from the date falling six
months prior to the date of this announcement.

Vickers Ballas does not have any beneficial interest in the Shares and has
not dealt in any Existing Shares as principal agent or as agent during the
period commencing from the date falling six months prior to the date of this
announcement.

SIMULTANEOUS COMPLETION

Completion of the Subscription Agreement and the Compromise Agreements are
conditional upon each of such events occurring simultaneously.

The longstop date for the fulfillment of or waiving, as the case may be, all
the conditions of the Subscription Agreement and the Compromise Agreements
is 15 September 2001 or such later date as is agreed between the relevant
parties to those agreements. If the fulfillment of or waiving, as the case
may be, all the conditions of such agreements has not occurred by then, all
relevant agreements in relation to the Restructuring Proposal will terminate
and the parties to such agreements will be released from their obligations
thereunder, save for any antecedent breaches.

RIGHTS ISSUE

The Company proposed to effect the Rights Issue immediately after Completion
so as to strengthen the Group's capital base and to raise funding for future
business development.

Basis

One Rights Share for every Ordinary Share held on the date immediately upon
the Restructuring Proposal becoming effective (with the Subscription Shares
and the Compromise Shares being issued)

Number of Rights Shares

2,975,186,217 Rights Shares

Rights Price

HK$0.02 per Rights Share

Status of the Rights Shares

When fully paid, the Rights Shares will rank pari passu in all respects with
the Ordinary Shares then in issue.

Rights of overseas Shareholders

Document to be issued in connection with the Rights Issue will not be
registered under the applicable securities legislation of any other
jurisdiction other than Hong Kong. Accordingly, no provisional allotment of
Rights Shares will be made to the Overseas Shareholders. The Company will
send the Rights Issue prospectus to the Overseas Shareholders for their
information only. The Company will not send a provisional allotment letter
or excess application form to the Overseas Shareholders.

Arrangements will be made for the Rights Shares which would otherwise have
been provisionally allotted to the Overseas Shareholders to be sold in the
market in their nil-paid form as soon as practicable after dealings in the
Rights Shares commence, if a premium (net of expenses) can be obtained. The
proceeds of each sale, less expenses, of HK$100 or more will be paid to the
Overseas Shareholders in Hong Kong dollars. The Company will keep for its
own benefit individual amounts of less than HK$100.

Application for excess shares

Qualifying Shareholders may apply for any unsold entitlements of the
Overseas Shareholders and any Rights Shares provisionally allotted but not
accepted. Application can be made by completing the excess application form.
The Directors will allocate the excess Rights Shares at their discretion and
on a fair and equitable basis. Preference will be given to excess
applications calculated to "top-up" odd lots of Shares.

Fractions of Rights Shares

The Company will not allot any fractions of Rights Shares. The Company will
sell any such Rights Shares created by adding together fractions of Rights
Shares and will keep the proceeds.

Application for listing

The Company will apply to the Listing Committee of the Stock Exchange for
the listing of and permission to deal in the Rights Shares in both nil-paid
and fully-paid forms when the Rights Issue has become unconditional.

Underwriting Agreement dated 31 July 2001

Underwriter

Hantec, an associate of Marble King

Number of Rights Shares underwritten

1,429,858,217 Rights Shares (net of 1,545,328,000 Rights Shares undertaken
to be taken up by Marble King)

Commission

2.5 percent of the total subscription price of the Rights Shares
underwritten

Irrevocable undertaking

As at the date of this announcement. Marble King and parties acting in
concert with it were interested in 245,328,000 Shares, representing
approximately 26.1 percent of the existing issued share capital of the
Company. Marble King has irrevocably undertaken to the Company and the
Underwriter to subscribe for 1,545,328,000 Rights Shares, representing
Marble King's full entitlements under the Rights Issue.

Termination and force majeure

The Underwriter reserves the right to terminate the arrangements set out in
the Underwriting Agreement by notice in writing given by it to the Company
at any time prior to 4:00 p.m. on the third business day following  27
September 2001 or such other date as may be agreed between the Company and
the Underwriter and described as the latest time for acceptance of the
Rights Shares in the Rights Issue prospectus, if in the sole and absolute
opinion of the Underwriter:

(i) the success of the Rights Issue or the taking up of the Rights Shares by
the Shareholders would be adversely affected by:

(a) the introduction of any new law or regulation or any change in existing
law or regulation (or the judicial interpretation thereof) or other
occurrence of any nature whatsoever which may adversely affect the business
or the financial or trading position or prospects of the Group as a whole;
or

(b) the occurrence, development or coming into effect of any local, national
or international event or change (whether or not forming part of a series of
events or changes occurring or continuing before, and/ or after the date
hereof) of a political, military, financial, economic, currency or other
nature (whether or not sui generis with any of the foregoing), or in the
nature of any local, national or international outbreak or escalation of
hostilities or armed conflict; or affecting local securities market or any
local, national or international events or series of events, beyond the
reasonable control of the Underwriter (including, without limitation,
strikes, lockouts, fire, explosion, flooding, acts of God, accident; or the
occurrence of any combination of circumstances which adversely affects the
business or the financial or trading position or prospects of the Group as a
whole or adversely prejudices the success of the Rights Issue or the taking
up of the Rights Shares by the members of the Company or otherwise makes it
inexpedient or inadvisable for the Company or the Underwriter to proceed
with the Rights Issue; or

(ii) any change in market conditions or combination of circumstances in Hong
Kong or elsewhere (including without limitation suspension or material
restriction or trading in securities) occurs which may adversely affect the
success of the Rights Issue (such success being the taking up of the Rights
Shares by members of the Company) or otherwise in the sole and absolute
opinion of the Underwriter makes it inexpedient or inadvisable or
inappropriate for the Company or the Underwriter to proceed with the Rights
Issue; or

(iii) any change in the circumstances of the Company or any members of the
Group which may adversely affect the prospects of the Company.

If, at or prior to 4:00 p.m. on the third business day following 27
September 2001 or such other date as may be agreed between the Company and
the Underwriter and described as the latest time for acceptance of the
Rights Shares in the Rights Issue prospectus:

(i) the Company commits any breach of or omits to observe any of the
obligations or undertakings expressed to be assumed by it under the
Underwriting Agreement; or

(ii) the Underwriter shall receive notification pursuant to the terms of the
Underwriting Agreement, or shall otherwise become aware of, the fact that
any of the representations or warranties contained in the Underwriting
Agreement was, when given, untrue or inaccurate or would be untrue or
inaccurate if repeated as provided in the Underwriting Agreement, and the
Underwriter shall determine that any such untrue representation and warranty
represents or is likely to represent an adverse change in the financial or
trading position or prospects of the Group taken as a whole or is otherwise
likely to have a prejudicial effect on the Rights Issue; or

(iii) the Company shall, after any matter or event referred to in the
Underwriting Agreement has occurred or come to the Underwriter attention,
fail promptly to send out any announcement or circular (after the dispatch
of the Rights Issue documents), in such manner (and as appropriate with such
contents) as the Underwriter may request for the purpose of preventing the
creation of a false market in the securities of the Company; or

(iv) Marble King commits a breach of or omit to observe any of the
obligations or undertakings contained in the Underwriting Agreement,

The Underwriter shall be entitled (but not bound) by notice in writing to
the Company to elect to treat such matter or event as releasing and
discharging the Underwriter from its obligations under the Underwriting
Agreement.

Upon the giving of notice pursuant to the Underwriting Agreement, all
obligations of the Underwriter thereunder shall cease and determine and no
party shall have any claim against any other parties in respect of any
matter or thing arising out of or in connection with the Underwriting
Agreement, provided however that the Company shall remain liable to pay to
the Underwriter as specified in the Underwriting Agreement and that the
Underwriting Agreement shall remain in full force and effect.

Conditions precedent

The Underwriting Agreement is conditional upon, among other things, the
following:

(i) the passing of a resolution of the board of Directors at a meeting duly
convened to approve and implement the Rights Issue;

(ii) the due posting of the circulars and proxy forms to the Shareholders
for the purpose of, among other things, convening the EGM;

(iii) the passing by Independent Shareholders at the duly convened EGM of
the resolutions approving the Subscription Agreement, the Compromise
Agreements, the Rights Issue and the Creeper Authorization (to the extent
prohibited under the Listing Rules, the Code or otherwise by the Stock
Exchange or the SFC, Marble King and parties acting in concert with it shall
abstain from voting);

(iv) the delivery to the Stock Exchange and registration with the Registrar
of Companies in Hong Kong respectively one copy of each of the Rights Issue
documents duly signed by two Directors (or by their agents duly authorized
in writing) after having been approved by resolution of the board of
Directors (and all other documents required to be attached thereto) in
compliance with the Listing Rules and the Companies Ordinance;

(v) the posting of the Rights Issue documents to Qualifying Shareholders on
and the posting of the overseas letter to the Overseas Shareholders
accompanied by a copy of the Rights Issue prospectus stamped "For
Information Only";

(vi) the completion of the Capital Reorganization, the Compromise
Agreements, the Subscription Agreement;

(vii) all requirements imposed by the Stock Exchange under the Listing Rules
or otherwise in connection with the transactions contemplated by the
Underwriting Agreement have been fully complied with;

(viii) all necessary consents from the relevant authorities in the Cayman
Islands in relation to the allotment and issue of the Rights Shares having
been obtained;

(ix) the Listing Committee of the Stock Exchange granting or agreeing to
grant (subject to allotment), and not having revoked, listings of, and
permission to deal in the Rights Shares, in nil-paid and fully-paid forms;

(x) the listing of the Existing Shares or new Ordinary Shares as pursuant to
the Restructuring Proposal, as the case may be, not having been withdrawn,
the Existing Shares or Ordinary Shares, as the case may be, continuing to be
traded on the Stock Exchange (save for any temporary suspensions pending any
announcement in connection with the transactions contemplated under this
Agreement) and no indication being received from the Stock Exchange or the
SFC to the effect that the listing of the Existing Shares or new Ordinary
Shares as pursuant to the Restructuring Proposal, as the case may be, on the
Stock Exchange will or may be withdrawn or objected to (or conditions will
or may be attached thereto) as a result of the completion of any
transactions contemplated under the Compromise Agreements, the Subscription
Agreement or the terms of the Underwriting Agreement;

(xi) the compliance with and performance of all the undertakings and
obligations of Marble King in accordance with the terms of the undertakings
of Marble King;

(xii) the compliance with and performance of all the undertakings and
obligations of the Company under the Underwriting Agreement; and

(xiii) the Underwriter having obtained a legal opinion from Cayman Islands
lawyers in respect of the validity, legality and enforceability of the
provisions of the Underwriting Agreement under the laws of the Cayman
Islands in form and substance to the satisfaction of the Underwriter.

The Underwriter may from time to time waive any of the above conditions
(save for condition (iii) with regard to the obtaining of the Creeper
Authorization) by notice to the Company.


Completion

The Rights Issue is conditional upon (i) the completion of the Subscription
Agreement and the Compromise Agreements; (ii) the approval by the
Independent Shareholders of the resolutions to be proposed at the EGM; and
(iii) the completion of the Underwriting Agreement.

Expected timetable

The expected timetable for the Rights Issue is set out below:

                                                    2001
Dispatch the circular with notice of
the EGM                                    Monday,  20 August

Last day of dealings in shares
cum-entitlements to the Rights Issue       Monday, 3 September

Commence dealings in shares on an
ex-entitlements basis                     Tuesday, 4 September

Latest time for lodging transfers of
shares for entitlements to the
Rights Issue              4:00p.m. Wednesday, 5 September

Register of members closed
(both dates inclusive)                    Thursday, 6 September
                                       to Tuesday, 11 September

Latest time for lodging the form
of proxy for the EGM         10:00a.m. Sunday, 9 September

Record date for determining
entitlements to the Rights Issue     Tuesday, 11 September

Expected date of EGM           10:00a.m. Tuesday, 11 September

Dispatch Rights Issue Prospectus       Tuesday, 11 September

Announcement on dispatch of
Rights Issue Prospectus                  Tuesday, 11 September

First day of dealings in nil-paid
Rights Shares                           Friday, 14 September

Latest time for splitting nil-paid
Rights Shares             4:00p.m. Wednesday, 19 September

Last day of dealings in nil-paid
Rights Shares                       Monday, 24 September

Latest time for acceptance of the
Rights Shares and payment     4:00p.m. Thursday, 27 September

Latest time for force majeure    4:00p.m. Thursday, 4 October
Rights Issue expected to become
unconditional                         Saturday, 6 October

Refund checks in respect of wholly
or partly unsuccessful excess
applications for Rights Shares posted Monday, 8 October

Issue and dispatch of fully-paid
Rights Share certificates              Monday, 8 October

Announcement of result of acceptance Monday, 8 October

Dealings in Rights Shares commence      Thursday, 11 October

Dates or deadlines specified in this announcement for events in the
timetable for (or otherwise in relation to) the Rights Issue are indicative
only and may be exercised or varied by agreement between the Company and the
Underwriter. Any consequential changes to the above timetable will be
notified to the public and the Shareholders accordingly.

SHAREHOLDING STRUCTURE

The following table sets out the shareholding structure of the Company
immediately before and after Completion, the Right Issue and the full
conversion of the Convertible Preference Shares. The table depicts the
structure of holdings of Ordinary Shares under the two scenarios to reflect
the level of acceptance under the Rights Issue as follows:

Scenario I: Assuming full acceptance by the Shareholders of the Rights
Shares pro rata to their interests in the Company

Upon      Upon         Upon
Completion   Completion    Completion,
     Existing but before    & the Rights  the Rights Issue,
     Shareholding Rights Issue  Issue but     and assuming full
            and the       before the    assuming full
     structure      conversion of the Convertible
                            Preference Shares

No. of No. of         No. of      No. of
Existing Ordinary    Ordinary      Ordinary
Shares Shares    Shares      Shares
    (%)    (%)        (%)          (%)

Marble King and its associates

  245,328,000 1,545,328,000 3,090,656,000 7,090,656,000
  (26.1%)      (51.9%)        (51.9%)      (71.3%)

Director (Note 2)

13,750,000 13,750,000 27,500,000 27,500,000
(1.5%)      (0.5%)       (0.5%)       (0.3%)

Stone Church

- 271,471,023 542,942,046 542,942,046
(9.1%)     (9.1%)   (5.5%)

Principal Creditors (note 3)

  -    463,053,218 926,106,436  926,106,436
     (15.6%) (15.6%) (9.3%)
Public

681,583,976 681,583,976 1,363,167,952 1,363,167,952
(72.4%) (22.9%) (22.9%) (13.6%)

    940,661,976 2,975,186,217 5,950,372,434 9,950,372,434
(100%) (100%) (100%) (100%)

Scenario II: Assuming nil acceptance by the Independent Shareholders of the
Rights Shares

Upon      Upon         Upon
Completion   Completion    Completion,
     Existing but before    & the Rights  the Rights Issue,
     Shareholding Rights Issue  Issue but     and assuming full
            and the       before the    assuming full
     structure      conversion of the Convertible
                            Preference Shares

No. of No. of         No. of      No. of
Existing Ordinary    Ordinary      Ordinary
Shares Shares    Shares      Shares
    (%)    (%)        (%)          (%)

Marble King  and its associates

245,328,000 1,545,328,000 4,520,514,217 8,520,514,217
(26.1%) (51.9%)       (76.0%) (Note) (85.6%)(Note 1)

Director (Note 2)

13,750,000 13,750,000 13,750,000 13,750,000
(1.5%) (0.5%) (0.2%) (0.1%)

Stone Church

- 271,471,023 271,471,023 271,471,023
   (9.1%) (4.6%) (2.7%)

Principal Creditors (note 3)

- 463,053,218 463,053,218 463,053,218
(15.6%) (7.8%) (4.7%)

Public 681,583,976 681,583,976 681,583,976 681,583,976
(72.4%) (22.9%) (11.4%) (6.9%)

      940,661,976   2,975,186,217 5,950,372,434 9,950,372,434 (100%)
(100%)    (100%)      (100%)

Note:

(1) The number of Ordinary Shares includes Rights Shares to be taken up by
the Underwriter under the Rights Issue.

(2) 13,750,000 Existing Shares are held by Glowing Bless Corporation, a
company incorporated in the British Virgin Islands, which is beneficially
owned by Mr. Au Tung Chi.

(3) 463,053,218 Ordinary Shares are to be issued to the Principal Creditors
other than the non-wholly owned subsidiaries of the Company.

The Company and the directors of Marble King have jointly and severally
undertaken to the Stock Exchange that if less than 25 percent of the
Ordinary Shares in issue are held by the public upon Completion and the
Rights Issue, they will take appropriate steps to ensure that the Ordinary
Shares held by the public will not be less than 25 percent.

The Stock Exchange has stated that it will closely monitor trading in the
Ordinary Shares if, upon Completion, less than 25 percent of the Ordinary
Shares in issue are held by the public. If the Stock Exchange believes that
a false market exists or may exist in the Shares; or there are too few
Ordinary Shares in public hands to maintain an orderly market, then it will
consider exercising its discretion to suspend trading in the Ordinary
Shares.

REASONS FOR THE RESTRUCTURING PROPOSAL AND THE RIGHTS ISSUE

The Group is principally engaged in the manufacturing, marketing and
distribution of men's apparel, including leather goods and accessories,
under the Group's brand name in the PRC. As announced by the board of
Directors previously, the Group is experiencing liquidity problems and has
suffered erosion in its net assets. Since then, the Company has been seeking
a capital injection from potential investors to resolve its financial
difficulties. After extensive negotiations, the Company, Marble King, Stone
Church and the Principal Creditors have reached agreements to the
arrangements as provided in the Restructuring Proposal. The Restructuring
Proposal is considered by the Directors as the best rescue plan offered to
the Company. In the absence of the Restructuring Proposal, the Group will
remain in financial difficulties. In addition, the Directors consider that
the Rights Issue provides an equitable opportunity for all the Qualifying
Shareholders to participate in the immediate recapitalization of the Company
at the time of the Restructuring Proposal whilst strengthening the Group's
capital base and financial position.

INFORMATION ON MARBLE KING

Marble King is an investment holding company incorporated in the British
Virgin Islands on 31 March 2000 with limited liability and currently
wholly-owned by Mr. Or. It is the intention of Mr. Or that Marble King will
be settled in a discretionary trust, the discretionary objects of which are
Mr. Or and his family members. The existing directors of Marble King are Mr.
Or and Ms. Ng Chi Man.

Mr. Or, aged 50, is the chairman of Polytec Holdings International Limited,
which, together with its subsidiaries, is a private group of companies
principally engaged in garments business (from manufacturing of fabric to
finished garments for export to Europe and the United States of America) and
property development and investment in Hong Kong and Macau. Mr. Or has over
20 years' experience in garment business, property development and
investment in Hong Kong and Macau. Mr. Or also owns 100% shareholding
interest in Hantec, a registered broker in Hong Kong. Mr. Or is also a
director of Hantec. Mr. Or beneficially owns approximately 10 percent
shareholding interest in and is a director of Campanhia de Electricidada de
Macau S.A.R.L., the electricity generation and supply company in Macau.

Ms. Ng Chi Man, aged 49, is the wife of Mr. Or. Ms. Ng is also a director of
Polytec Holdings International Limited and she is responsible for the
general management of Polytec Holdings International Limited.

FUTURE INTENTION

The Group is principally engaged in manufacturing, marketing and
distribution of apparel and accessories in the PRC. It is the intention of
Marble King that following Completion, the principal activities of the Group
will continue. Marble King believes that given the Group's established
distribution network in the PRC and existing business expertise in the
industry, and together with the connection of Marble King's shareholders,
the Group can explore more business opportunities to restore its
profitability and strengthen the Shareholder's value. Marble King intends
that the Company would increase its efforts and resources in obtaining
distributorship of new products whilst diversifying into other business with
growth potential. In this regard, the Company has commenced preliminary
discussions and negotiations with some independent third parties with a view
to acquiring distribution rights for apparel and accessories under several
international brand names in the PRC market. Albeit the progress of such
discussions is encouraging, no agreement has been reached or finalized with
the independent third parties as at the date of this announcement. Marble
King has no present intention to inject assets into the Company.

In such circumstances, should the internal financial resources of the Group
be insufficient to satisfy its funding requirement at any particular time,
the Group may be required to undertake other fund raising activities,
including equity financing, debt financing and/ or bank borrowings as the
circumstances necessitate.

The Stock Exchange has stated that, if the Company remains a listed company,
any future injections into or disposals by the Company will be subject to
the provisions of the Listing Rules. Pursuant to the Listing Rules, the
Stock Exchange has the discretion to require the Company to issue a circular
to the Shareholders irrespective of the size of the proposed transactions.
The Stock Exchange also has the power, pursuant to the Listing Rules, to
aggregate a series of transactions and any such transactions may, in any
event, result in the Company being treated as a new applicant for listing.

USE OF PROCEEDS OF THE SUBSCRIPTION AND THE RIGHTS ISSUE

The total gross proceeds of the Subscription and the Rights Issue amount to
approximately HK$93,503,724 and will be utilized as follows:

(i) HK$15,292,601 will be paid to Stone Church and the Principal Creditors
as required by the Compromise Agreements;

(ii) not more than HK$5,000,000 will be paid to the Other Creditors as full
and final settlement of the Indebtedness owed to them by the Group; and

(iii) the remaining balance will be used to meet the Group's future working
capital requirements.

The Directors believe that the Group will substantially settle the
Indebtedness owed to its creditors upon Completion and the Rights Issue and
the financial position and capital base of the Group can be enhanced
accordingly thereafter.

MANAGEMENT

The board of Directors now comprises Mr. Yeung Kwok Kwong, Rodney, Mr. Au
Tung Chi, Mr. Wei Cheng Wen, Mr. Au-Yeung Chi Hung, Alex, Mr. Lai Ka Fai,
Mr. Ho Ping, Mr. Conway Anthony Francis Martin, Mr. Siu Leung Yau and Mr.
Liu Kwong Sang. Marble King intends to nominate one to two executive
directors to the board of the Company. Save as aforesaid, no decision as to
the timing of the appointment of directors has been made and no designated
persons has been identified yet. No decision has been made in relation to
the resignation of existing Directors. In order to strengthen the management
and financial control of the Group, the Company may appoint additional
professional staff with appropriate qualifications and practical experience.

SHARE PREMIUM CANCELLATION

In addition to the Capital Reorganization previously announced by the
Company in December 2000, the Company proposes to apply the credit arising
from the Share Premium Cancellation of approximately HK$134.6 million as at
30 November 2000 to further set off part of the accumulated losses of the
Company (which amounted to approximately HK$488.6 million as at 30 November
2000). The Share Premium Cancellation is subject to the approval by the
Shareholders of the relevant resolution to be proposed at the EGM.

SUSPENSION AND RESUMPTION OF TRADING IN SECURITIES

Trading in the Existing Shares was suspended with effect from 10:00 a.m. on
1 August 2001 at the request of the Company. Application has been made to
the Stock Exchange for resumption in trading in the Existing Shares with
effect from 10:00 a.m. on 6 August 2001.

GENERAL

As Marble King is a substantial Shareholder, the entering into of the
Subscription Agreement constitutes a connected transaction for the Company
under the Listing Rules. In addition, some of the Principal Creditors are
non wholly-owned subsidiaries of the Company and accordingly, the entering
into of the Principal Creditors Compromise Agreement constitutes a connected
transaction for the Company under the Listing Rules. The Subscription
Agreement, the Compromise Agreements, the Whitewash Waiver, the Creeper
Authorization and the Rights Issue are subject to the approval by the
Independent Shareholders at the EGM with Marble King and parties acting in
concert with it abstaining from voting. The Share Premium Cancellation is
subject to the approval by the Shareholders of the resolution to be proposed
at the EGM.

Vickers Ballas has been appointed as the financial adviser to Marble King.
An independent board committee of the Company will be established to
consider the Restructuring Proposal, the Whitewash Waiver, the Creeper
Authorization and the Rights Issue. An independent financial adviser will be
appointed to advise the Independent Shareholders on the terms of the
Restructuring Proposal, the Whitewash Waiver, the Creeper Authorization and
the Rights Issue.

A circular containing, among other things, the details of the Restructuring
Proposal, the Whitewash Wavier, the Creeper Authorization the Rights Issue
and the Share Premium Cancellation, the financial information of the Group,
the advice of the independent financial adviser and the notice of the EGM
will be dispatched to the Shareholders as soon as practicable.


Reference is made to the announcement of the Company dated 9 May 2001
regarding the Stone Church Compromise Agreement entered into between the
Company and Stone Church on 6 May 2001. The board of Directors announces
that subsequent to the entering into of the Stone Church Compromise
Agreement, on 31 July 2001, the Company, entered into the Subscription
Agreement with Marble King and the Principal Creditors Compromise Agreement
with the Principal Creditors all in relation to the Restructuring Proposal.

SUBSCRIPTION AGREEMENTú

On 31 July 2001, the Company entered into the Subscription Agreement with
Marble King in relation to the subscription of 1,300,000,000 new Ordinary
Shares and 4,000,000,000 Convertible Preference Shares by Marble King at a
subscription price of HK$0.02 per Subscription Share and per Convertible
Preference Share.

STONE CHURCH COMPROMISE AGREEMENTú

On 6 May 2001, the Company entered into the Stone Church Compromise
Agreement with Stone Church whereby Stone Church agreed to waive the
Indebtedness owed by the Group to it of US$4,418,125 (approximately
HK$34,417,000) together with interests subject to and on terms and
conditions stated therein.

PRINCIPAL CREDITORS COMPROMISE AGREEMENTú

The Company also, on 31 July 2001, entered into the Principal Creditors
Compromise Agreement with the Principal Creditors in which the Principal
Creditors agreed to waive the Indebtedness owed by the Group to each of them
in an aggregate amount of HK$110,002,784 together with interests subject to
and on terms and conditions stated therein.

WHITEWASH WAIVER AND CREEPER AUTHORIZATIONú

Upon Completion, Marble King and parties acting in concert with it will hold
approximately 51.9 percent of the issued ordinary share capital of the
Company as enlarged by the issue of the Subscription Shares and the
Compromise Shares. Accordingly, Marble King will be required under Rule 26
of the Code to make a general offer for the Ordinary Shares other than those
already owned by Marble King and parties acting in concert with it. Marble
King will apply to the Executive for the Whitewash Waiver from compliance
with such requirement pursuant to Note 1 of the Notes on Dispensations from
Rule 26 of the Code.

Marble King and parties acting in concert with it will also seek the Creeper
Authorization from the Independent Shareholders at the EGM.

RIGHTS ISSUEú

The Company proposes to effect the Rights Issue of 2,975,186,217 Rights
Shares on the basis of one Rights Share for every Ordinary Share held on the
date immediately upon the Restructuring Proposal becoming effective (with
the Subscription Shares and the Compromise Shares being issued) at an issue
price of HK$0.02 per Rights Share.

SHARE PREMIUM CANCELLATIONú

The Company proposes to apply the credit arising from the Share Premium
Cancellation as at 30 November 2000 to further set off the accumulated
losses of the Company as at 30 November 2000.GENERALú As Marble King is a
substantial Shareholder, the entering into of the Subscription Agreement
constitutes a connected transaction for the Company under the Listing Rules.
In addition, some of the Principal Creditors are non wholly-owned
subsidiaries of the Company and accordingly, the entering into of the
Principal Creditors Compromise Agreement constitutes a connected transaction
for the Company under the Listing Rules. The Subscription Agreement, the
Compromise Agreements, the Whitewash Waiver, the Creeper Authorization and
the Rights Issue are subject to the approval by the Independent Shareholders
at the EGM with Marble King and parties acting in concert with it abstaining
from voting. The Share Premium Cancellation is subject to the approval by
the Shareholders of the resolution to be proposed at the EGM.

DEFINITIONS

"Capital Reduction" the capital reduction in the nominal value of the issued
Existing Shares from HK$0.10 to HK$0.01

"Capital Reorganization" the capital reorganization of the Company
including, among other things, (i) the Capital Reduction, (ii) the proposed
subdivision of shares of HK$0.10 each in authorized but unissued ordinary
share capital of the Company into 10 new Ordinary Shares of HK$0.01 each and
(iii) the proposed utilization of the credit arising from the Capital
Reduction to eliminate part of the accumulated losses of the Company as at
30 November 2000, which is expected to be completed before Completion

"Code" the Hong Kong Code on Takeovers and Merger

"Company" Kin Don Holdings Limited, a company incorporated in the Cayman
Islands with limited liability, and the shares of which are listed on the
Stock Exchange

"Companies Ordinance" the Companies Ordinance, Chapter 32 of the Laws of
Hong Kong

"Completion" completion of the Restructuring Proposal

"Compromise Agreements" the Stone Church Compromise Agreement and the
Principal Creditors Compromise Agreement

"Compromise Shares"  the aggregate of 271,471,023 new Ordinary Shares issued
to Stone Church pursuant to the Stone Church Compromise Agreement and
463,053,218 new Ordinary Shares issued to the Principal Creditors pursuant
to the Principal Creditors Compromise Agreement

"Convertible Preference Share(s)" the convertible redeemable non-voting
preference shares of HK$0.01 in the capital of the Company after the Capital
Reorganization to be allotted and issued pursuant to the Subscription
Agreement

"Creeper Authorization" an authorization to allow Marble King and parties
acting in concert with it to acquire additional Ordinary Shares during
12-month period following Completion in the event that the Whitewash Waiver
is granted, to be proposed at the EGM for approval by the Independent
Shareholders by a separate resolution by way of a poll, pursuant to Note 15
to Rule 26.1 of the Code

"Directors" directors of the Company

"Executive" the Executive Director of the Corporate Finance Division of the
SFC or any of his delegates

"Existing Share(s)" the existing share(s) of HK$0.10 each in the capital the
Company prior to the Capital Reorganization

"EGM"  an extraordinary general meeting of the Company be convened to
consider and, if thought fit, approve, among other things, the Subscription
Agreement, the Compromise Agreements, the Rights Issue, the Whitewash
Waiver, the Creeper Authorization, Share Premium Cancellation and any other
transactions contemplated under the Restructuring Proposal (or any
adjournment thereof)

"Group" the Company and its subsidiaries

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

"Hantec" or "Underwriter" Hantec Securities Co., Limited, a company
incorporated under the Companies Ordinance, a registered broker in Hong Kong
and wholly and beneficially owned by Mr. Or

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"Indebtedness" any obligation for the payment or repayment of money, whether
as principal or as surety or in any other capacity and whether present or
future, actual or contingent

"Independent Shareholders" Shareholders other than Marble King and parties
acting in concert with it and their respective associates

"KDGL" Kin Don (Group) Limited, a wholly-owned subsidiary of the Company

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

"Macau" the Macau Special Administrative Region of the PRC

"Marble King" Marble King International Limited, a company incorporated in
the British Virgin Islands and currently beneficially and wholly-owned by
Mr. Or

"Mr. Or" Mr. Johnny Or Wai Sheun

"Ordinary Share(s)" the ordinary share(s) of HK$0.01 each in the capital of
the Company after the Capital Reorganization

"Other Creditors" creditors other than Stone Church and the Principal
Creditors whose Indebtedness owed by the Group to them in an aggregate
amount of HK$12,970,871 as at 31 December 2000.

"Other Creditors Compromise" the compromise of all the Indebtedness due from
the Group to the Other Creditors for cash not more than HK$5,000,000

"Overseas Shareholders" Shareholders whose registered addresses are outside
Hong Kong as at the record date for the Rights Issue, 11 September 2001,
subject to changes


"Principal Creditors" being Asian Growth Fund Limited, Broadway Industries
Limited, The China State Bank, Limited, Hong Kong Branch , Sin Hua Bank
Limited, Hong Kong Branch.

"Principal Creditors Compromise" the compromise of all the Indebtedness due
from the Group to the Principal Creditors under and pursuant to the terms of
the Principal Creditors Compromise Agreement

"Principal Creditors Compromise Agreement" the compromise agreement dated 31
July 2001 entered into between the Company, KDGL and the Principal Creditors
relating to the compromise of the Indebtedness owed by the Group to the
Principal Creditors in an aggregate amount of HK$110,002,784 together with
interests as at 31 December 2000.

"PRC" the People's Republic of China, excluding Hong Kong and Macau for the
purpose of this announcement

"Qualifying Shareholders" Shareholders whose names appear on the register of
members of the Company on 11 September 2001 or such other date as the Compan
y and the Underwriter may agree

"Restructuring Proposal" proposed financial restructuring of the Group
comprising, among other things, the Subscription Agreement and the
Compromise Agreements

"Rights Issue" the issue by way of rights to Qualifying Shareholders of
2,975,186,217 Rights Shares

"Rights Shares" new Ordinary Shares to be issue pursuant to the Rights Issue

"SFC" The Securities and Futures Commission

"Shareholders" shareholders of the Company

"Share Premium Cancellation" the proposed cancellation of the Company's
share premium account of approximately HK$134.6 million as at 30 November
2000

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"Stone Church" Stone Church LLC, a company incorporated in the Cayman
Islands with limited liability

"Stone Church Compromise" the compromise of the Indebtedness due from the
Group to Stone Church under and pursuant to the terms of the Stone Church
Compromise Agreement

"Stone Church Compromise Agreement" the compromise agreement dated 6 May
2001 entered into between the Company and Stone Church relating to the
compromise of the Indebtedness owed by the Group to Stone Church of
US$4,418,125 together with interest as at 31 December 2000.

"Subscription" the subscription of the Subscription Shares and the
Convertible Preference Shares

"Subscription Agreement" the subscription agreement dated 31 July 2001
entered into between the Company and Marble King relating to the
subscription of the Subscription Shares and Convertible Preference Shares

"Subscription Price" the subscription price of HK$0.02 per Subscription
Share and/or per new Ordinary Shares to be issued under the Convertible
Preference Shares as the case may be

"Subscription Shares" 1,300,000,000 new Ordinary Shares to be allotted and
issued to Marble King pursuant to the Subscription Agreement

"US$" United States dollars, the lawful currency of the United States of
America

"Underwriting Agreement" the underwriting agreement dated 31 July 2001
entered into between the Company, Marble King and the Underwriter relating
to the Rights Issue

"Vickers Ballas" Vickers Ballas Capital Limited, an investment adviser
registered under the Securities Ordinance (Chapter 333 of the Laws of Hong
Kong) and the financial adviser to Marble King

"Whitewash Waiver" a waiver to be applied by Marble King from compliance
with the requirements to make a mandatory general offer in cash under Rule
26 of the Code pursuant to Note 1 of the Notes on Dispensation from Rule 26
of the Code.


NICE HO: Winding Up Petition Slated For Hearing
-----------------------------------------------
The petition to wind up Nice Ho Garment Trading Company Limited is scheduled
to be heard before the High Court of Hong Kong on September 26, 2001 at 9:30
am. The petition was filed with the court on the 5th day of July 2001 by The
Kwangtung Provincial Bank of 1st to 3rd Floors, Euro Trade Centre, Nos.
13-14 Connaught Road Central, Hong Kong.


PACIFIC CENTURY: Denies Staff Layoff Rumors
-------------------------------------------
In a statement dated August 14, 2001, Pacific Century Cyberworks Limited
announced it had noted with disappointment that unfounded rumors continue to
persist about planned staff layoffs.

"We do not know the source of these rumors, but any employee found to be
spreading false and malicious rumors about the Company may be subject to
disciplinary action. The Company's Group Chief Operating Officer, William
Cheung, wishes to make it clear once and for all that the Company has no
intention or plan to lay off staff at this time," the statement said.

Cheung also noted these malicious rumors are damaging to staff morale and
the Company is investigating its legal options in the event the source of
these rumors is identified.


SOUND STRENGTH: Winding Up Petition To Be Heard
-----------------------------------------------
The petition to wind up Sound Strength Limited will be heard before the High
Court of Hong Kong on November 7, 2001 at 9:30 am. The petition was filed
with the court on the 3rd day of August 2001 by Kincheng Banking
Corporation, a banking corporation duly incorporated in The People's
Republic of China and having a branch office at No. 55 Des Voeux Road
Central, Hong Kong.


=========
J A P A N
=========


FUJITSU LTD: Cuts 10% Staff, Pulls Out Losing Businesses
--------------------------------------------------------
Fujitsu Ltd., a major player in the chip and computer sector,  plans to
slash about 10 percent of its group workforce, or more than 10,000 jobs,
according to an August 20, 2001 report of Japan Times Online.

The staff reduction is the main part of a restructuring plan designed to
counter a slowdown in the information technology market, company officials
said.

Withdrawal from unprofitable businesses and the closure and merger of
domestic and overseas plants by the end of March 2004 are also part of the
restructuring move.

Job relocation and cuts will be mainly conducted in North America and Asia,
where plants will be sold, and some 5,000 employees will be transferred or
let go in Japan, including part-timers and workers on loan, the officials
said.

The company also hopes to make part of the cuts through an early retirement
program introduced last month.


PENSION WELFARE: Government Officials Drop Transactions
------------------------------------------------------
The attempt to sell large-scale health resorts to repay huge debts incurred
by the now-defunct Pension Welfare Service Public Corp. is hitting a rough
spot, Kyodo News reported Monday.

Local governments, who were asked to buy the resorts, are rejecting the
deals.

The corporation chalked up a loss of Y2.3 trillion.


=========
K O R E A
=========

DAEWOO ELECTRONICS: Shuts Down Mexico Operation
-----------------------------------------------
Daewoo Electronics Co Ltd will close monitor production lines at its Mexican
operation, AFX-Asia reported Sunday, and instead focus on TVs and VCRs.

A company source said that the move is part of its restructuring efforts to
hasten the sale of the company, the Dong-a Ilbo reported.

Suspension of production of small-sized TVs, producing only large-sized and
digital at its French plant will also be implemented, the source added.


DAEWOO MOTOR: GM Unsure Of Conclusion of Sale Date
--------------------------------------------------
Richard Wagoner, CEO of General Motors (GM), said his group won't be able to
come up with a firm timetable for the ongoing negotiations for the
acquisition of Daewoo Motor, according to an August 19, 2001 report of the
Digital Chosun citing a report from the Bloomberg Financial News.

At the same time, South Korea's Deputy Prime Minister Jin Nyum said the
Korean government will not wait on the negotiations indefinitely, adding
that he will urge creditor banks, which have been in charge for the
negotiations, to wrap up by the end of the month.

Wagoner said not even the Korean government could be sure when the sales
talks will end, stating sales negotiations have been very difficult.


DAEWOO SHIPBUILDING: Likely To End Debt Workout Before August 25
----------------------------------------------------------------
Daewoo Shipbuilding and Marine Engineering (DSME) is likely to be released
from its debt-workout program by August 25 at the latest, Korea Herald
reported Monday.

Korea Development Bank, the company's main creditor, will decide to end the
workout program and ask for written endorsements from other creditors.

There was no objection to terminating the debt-workout program for Daewoo
Shipbuilding, KDB confirmed at the creditors meeting held on August 13.

The company's impressive first-half performance prompted the creditors to
free it from the workout constraints early.

Its W100 billion net profit and W150 billion in ordinary profit during the
first half impressed the creditors and prompted them  to free the company
from the workout constraints early.

If the workout program comes to an end, the company will see some of the
concessions made by the creditors withdrawn, such as, maturity of W500-600
billion in workout loans might be shortened from 20 years. Creditors might
also raise the low interest rates they had granted back to market levels.

"Daewoo's cash flow has improved to meet all its debt repayment requirements
by the end of the year without issuing bonds," a company official said.


HYNIX SEMICONDUCTOR: State Ceases Support
-----------------------------------------
The government will not step in to help the cash-strapped chipmaker Hynix
Semiconductor, The Digital Chosun reported Sunday, citing Deputy Prime
Minister Jin Nyum.

"The issue of providing fresh loans to Hynix Semiconductor is solely up to
creditor banks and foreign investors," Jin Nyum said on a KBS television
program.

He explained that as the chipmaker has already separated from the Hyundai
group, the whole Korean economy will cope with whatever happens at Hynix.


HYUNDAI MERCHANT: Posts W150B Loss From N.K. Tour
-------------------------------------------------
Hyundai Merchant Marine's (HMM) losses from the troubled Mt. Kumgang cruiser
operation went to around W150 billion in the two and a half years since its
launch in November 1998, Korea Herald reported Monday.

The company incurred W46 billion losses in its first full year of cruiser
tourism operation. It then lost W58 billion last year. Its losses this year,
up until it left the venture in June, came to W52 billion.


SSANGYONG INFORMATION: Bid Proposal Extended To August 25
---------------------------------------------------------
Ssangyong Cement extended the deadline for takeover proposal submissions to
August 25 for Ssangyong Information and Communications (SSIC) to Aug. 25,
Korea Herald reported Monday.

The extension made other potential investors delay tendering their bid
proposals until the new deadline.

The extension was requested by one of the potential investors who needed to
complete preparations, an unidentified company official said.

The company originally planned to receive takeover proposals by last Friday.


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M A L A Y S I A
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ARTWRIGHT HOLDINGS: Revises Proposed Debt Restructuring
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Artwright Holdings Berhad and four (4) of its subsidiary companies, namely,
Artwright Technology Sdn Bhd ("ATSB"), Artwright Marketing Sdn Bhd,
Artwright Industries Sdn Bhd and Artwright Manufacturing Sdn Bhd ("AMfSB")
("Borrowers") had reached an agreement in principle with certain financial
institutions and non-financial institutions ("Scheme Creditors") to a
proposed voluntary debt restructuring scheme, subject to the signing of a
Debt Restructuring Agreement. The Debt Restructuring Agreement was executed
on 6 September 2000.

The Borrowers have renegotiated with the Scheme Creditors and have reached
an agreement with the Scheme Creditors to a revised proposed voluntary debt
restructuring scheme ("Revised Proposed Debt Restructuring").

Consequently, on 17 August 2001, the Borrowers and the Scheme Creditors have
entered into a Supplementary Debt Restructuring Agreement ("SDRA") to
formalize the agreement reached.

The Revised Proposed Debt Restructuring, inter-alia, will involve the
following:

(i) proposed settlement of the following amounts outstanding through the
proceeds arising from the Proposed Disposals (as defined below) amounting to
RM66,500,000, of which RM58,000,000 will be utilized as repayment to Scheme
Creditors while the remaining RM8,500,000 will be utilized for the estimated
expenses relating to the proposals, as announced by Alliance on behalf of
AHB on 5 June 2001:

   (a) payment to the secured creditors for the amounts outstanding of
approximately RM36.159 million as at 31 August 1999 in connection with the
facilities granted by the secured creditors to the Borrowers;

   (b) payment to the hire purchase/leasing creditors for the amounts
outstanding of approximately RM14.001 million, as at 1 October 2000 in
connection with the hire purchase leasing facilities and the overdue hire
purchase and leasing installments and all other charges accrued and accruing
up to 30 June 1999; and

   (c) payment to the unsecured creditors for the part settlement of amounts
outstanding of approximately RM7.840 million as at 31 August 1999 to the
unsecured creditors in connection with the unsecured facilities granted to
the Borrowers.

(ii) proposed issuance of 1,908,994 new ordinary shares of RM1.00 each in
AHB ("AHB Shares") at an issue price of RM1.89 per share credited as fully
paid-up to secured creditors and unsecured creditors of the Borrowers as
full settlement of the interest on the capitalized secured debts and
capitalized unsecured debts totaling RM3,608,000 ("Proposed Debt to Equity
Conversion");

(iii) proposed issuance of RM14,410,000 nominal value of new 5-Year 5.5%
irredeemable convertible unsecured loan stocks ("ICULS") as part settlement
of the unsecured debts amounting to RM29,089,910 to the unsecured creditors
on the basis of RM1.00 nominal value of new ICULS for every RM1.00 owing to
the unsecured creditors ("Proposed ICULS Issue"); and

(iv) proposed terming out of RM6,839,500 over twelve (12) quarterly
installments commencing two (2) years after the date of the completion of
the Assets Sale Agreement (as defined below).

In addition, Alliance, on behalf of the Board wishes to announce that the
Company also proposes to undertake an employees' share option scheme of up
to ten per cent (10%) of the issued and paid-up share capital of the Company
at any point in time ("Proposed ESOS").

The Proposed Revised Debt Restructuring and the Proposed ESOS are
hereinafter collectively referred to as the "Proposals".

Alliance, on behalf of the Board, had also announced, on 5 June 2001, the
Company's proposed strategic joint venture with Steelcase Inc., by
participation as shareholders in a joint venture company, Rengard Industries
Sdn Bhd ("Rengard"), to carry on the business of manufacturing, selling,
distributing and marketing office equipment, furniture and furnishings
("Proposed Strategic Alliance"). Pursuant to the Proposed Strategic
Alliance, the Company had, on 31 May 2001, entered into an Agreement for the
Sale and Purchase of Assets ("Assets Sale Agreement") with Rengard to
dispose the manufacturing assets and a piece of land with buildings thereon
belonging to the AHB Group to Rengard for US$17,500,000 (RM66,500,000)
("Proposed Disposals").

The Revised Proposed Debt Restructuring and the Proposed Strategic Alliance
form a comprehensive measure to regularize the financial position and place
the AHB Group on a stronger financial footing.

Details of the Proposals

Revised Proposed Debt Restructuring

   Details of the Revised Proposed Debt Restructuring

The Borrowers have renegotiated with the Scheme Creditors to restructure
their debts amounting to approximately RM80,511,700. The Borrowers and the
Scheme Creditors entered into the SDRA on 17 August 2001.

Under the Revised Proposed Debt Restructuring, the Borrowers propose to
restructure their debts amounting to RM80,511,700 as follows:

   (i) Secured Debts

The secured debts (excluding default interest) outstanding as at 31 August
1999 to the Borrowers' secured creditors in connection with the secured
facilities granted by the secured creditors will be capitalized as at 31
August 1999 ("Capitalized Secured Debts"). The Capitalized Secured Debts
amounts to RM37,421,187.

     (a) Full payment of Capitalized Secured Debts

The Capitalized Secured Debts shall be settled in full as follows:

   (i) an amount of RM1,262,200 utilizing net proceeds arising from the
disposal of two (2) shoplots by Artwright Industries Sdn Bhd ("AISB"), a
wholly-owned subsidiary company of AHB.

AISB entered into the following agreements in relation to the disposal of
the two (2) shoplots:

   (i) a Sale and Purchase Agreement dated 7 September 2000 with Segar Wangi
Sdn Bhd to dispose a four (4) storey shoplot built on a piece of land
measuring approximately 1,680 sq. ft. held under title H.S.(M) 9392, P.T.
No. 20141, Tempat Batu 7, Jalan Kuchai Lama, Mukim and District of Petaling,
State of Wilayah Persekutuan, for a purchase consideration of RM650,000; and

   (ii) a Sale and Purchase Agreement dated 7 September 2000 with Binnang
EII Holdings Sdn Bhd to dispose a four (4) storey shoplot built on a piece
of land measuring approximately 1,680 sq. ft. held under title H.S.(M) 1841,
P.T. No. 20140, Tempat Batu 7, Jalan Kuchai Lama, Mukim and District of
Petaling, State of Wilayah Persekutuan, for a cash consideration of
RM650,000.

The disposal of the two (2) shoplots was completed on 6 December 2000. The
amounts were fully paid on 2 January 2001.

(ii) an amount of RM36,158,987 from the proceeds from the Proposed Disposals
on the date of completion of the Assets Sale Agreement.

     (b) Settlement of Interest on the Capitalized Secured Debts

Interest is payable on the Capitalized Secured Debts for the period from 31
August 1999 to 30 September 2000, calculated at 5% per annum on a straight
line basis. The interest payable thereto amounts to RM2,029,972. The
aforesaid interest shall be satisfied by AHB through the issuance of
1,074,059 new AHB Shares at an issue price of RM1.89 per share.

Further details on the Proposed Debt To Equity Conversion are set out in
Section 2.1.2 below.

     (c) Waiver of Interest and Default Interest

Save and except for the default interest as shall have been actually paid to
the respective secured creditors prior to the date of the Debt Restructuring
Agreement, no default interest whatsoever shall be payable or paid in
respect of the secured debts or the Capitalized Secured Debts.

Accordingly, the secured creditors shall waive all interest chargeable on or
after 1 October 2000 on the secured debts owing to the secured creditors.
The secured creditors shall also waive all default interest chargeable on
the secured debts owing to the secured creditors.

(ii) Hire Purchase/Leasing Debts

The amounts (excluding default interest) outstanding as at 1 October 2000 to
the hire purchase/leasing creditors under or in connection with the hire
purchase/leasing facilities granted by the hire purchase/leasing creditors
will be capitalized as at 1 October 2000 ("Capitalized Hire Purchase/Leasing
Debts"). The Capitalized Hire Purchase/Leasing Debts amount to RM12,221,972.

The overdue hire purchase and leasing installments outstanding and all other
charges accrued and accruing up to and outstanding as at 30 June 1999 totals
RM1,778,631
("Hire Purchase/Leasing Arrears").

The aggregate of the Capitalized Hire Purchase/Leasing Debt and Hire
Purchase/Leasing Arrears totals RM14,000,603 ("Hire Purchase/Leasing
Settlement Amounts").

   (a) Payment of Capitalized Hire Purchase/Leasing Debts

The Hire Purchase/Leasing Settlements Amounts shall be settled in full
utilizing proceeds from the Proposed Disposals on the date of completion of
the Assets Sale Agreement.

   (b) Waiver of Interest and Default Interest

Save and except for the interest included or comprised in or forming part of
the Hire Purchase/Leasing Settlement Amounts, no default interest whatsoever
shall be payable or paid on the Hire Purchase/Leasing Debt or the Hire
Purchase/Leasing Settlement Amounts.
Further, save and except for the default interest as shall have been
actually paid to the respective hire purchase/leasing creditors prior to the
date of the Debt Restructuring Agreement, no default interest shall be
chargeable on or payable in respect of the Hire Purchase/Leasing Debts or
the Hire Purchase/Leasing Settlement Amounts.

Accordingly, the hire purchase/leasing creditors shall waive all interest
chargeable on the Hire Purchase/Leasing Debt owing to the hire
purchase/leasing debt creditors. The hire purchase/leasing creditors shall
also waive all default interest chargeable on the Hire Purchase/Leasing Debt
owing to the hire purchase/leasing creditors.

(iii) Unsecured Debts

The amounts (excluding default interest) outstanding as at 31 August 1999 to
the Borrowers' unsecured creditors in connection with the unsecured
facilities granted by the unsecured creditors will be capitalized as at 31
August 1999 ("Capitalized Unsecured Debt"). The Capitalized Unsecured Debt
amounts to RM29,089,910.

(a) Proposed ICULS Issue

AHB shall issue RM14,410,000 nominal value of new ICULS to the unsecured
creditors in part satisfaction of the Capitalized Unsecured Debt on the
basis of RM1.00 nominal value of new ICULS for every RM1.00 of the
Capitalized Unsecured Debt.

Further details on the Proposed ICULS Issue is set out in Section 2.1.3
below.

(b) Part Payment of the Capitalized Unsecured Debt

The balance of the Capitalized Unsecured Debt after the Proposed ICULS Issue
would amount to RM14,679,910 ("Balance Capitalized Unsecured Debt"). Of this
amount, RM7,840,410 ("Unsecured Part Payment Amount") will be settled by
utilizing proceeds from the Proposed Disposals on the date of completion of
the Assets Sale Agreement. The difference between the Balance Capitalized
Unsecured Debt and the Unsecured Part Payment Amount amounting to
RM6,839,500 is the Termed-Out Portion.

The amount after deducting all the Capitalized Secured Debts and the Hire
Purchase/Leasing Settlements Amounts payable to the secured creditors and
the hire purchase/leasing creditors from the proceeds from the Proposed
Disposals is the Disposal Remaining Balance.

The proceeds from the Proposed Disposals to be utilized for the proposed
settlement is based on the exchange rate of US$1.00:RM3.80. In the event the
US$:RM exchange rate is subsequently varied, the Unsecured Part Payment
Amount shall be the unsecured creditors' proportionate amount of the
Disposal Remaining Balance .

(c) Repayment of the Termed-Out Portion

The difference between the Balance Capitalized Unsecured Debt and the
Unsecured Part Payment Amount is the Termed-Out Portion. The Termed-Out
Portion amounts to RM6,839,500. The Termed-Out Portion shall be repaid by
the Borrowers to the unsecured creditors over twelve (12) quarterly
installments. The quarterly installments will commence two (2) years after
the date of the completion of the Assets Sale Agreement.

The repayment of the Termed-Out Portion is based on the exchange rate of
US$1.00:RM3.80. In the event the US$:RM exchange rate is subsequently
varied:

   (1) the Termed-Out Portion shall be the balance of the Balance
Capitalized Unsecured Debt outstanding after payment of the Unsecured Part
Payment Amount. The Termed-Out Portion to each unsecured creditor shall be
proportionate to each of the unsecured creditor's portion of the Disposal
Remaining Balance.

   (2) the amount of each installment in respect of each Termed-Out Portion
shall be correspondingly or proportionately adjusted but the installment
payment dates in respect of the Termed-Out Portion shall remain unchanged.

(d) Settlement of Interest on the Capitalized Unsecured Debts

Interest is payable on the Capitalized Unsecured Debt for the period from 1
September 1999 to 30 September 2000, calculated at 5% per annum on a
straight-line basis. The interest payable thereto amounts to RM1,578,028.
The aforesaid interest shall be satisfied by AHB through the issuance of
834,935 new AHB Shares at an issue price of RM1.89 per share.

Proposed Debt To Equity Conversion

Details of the Proposed Debt To Equity Conversion

As part of the Revised Proposed Debt Restructuring and as settlement of the
interest on the Capitalized Secured Debts and Capitalized Unsecured Debts
totaling RM3,608,000, AHB proposes to issue 1,908,994 new AHB Shares at an
issue price of RM1.89 per share.

The new AHB Shares shall be issued and credited as fully paid-up.

Basis of the Issue Price

The issue price of the new AHB Shares to be issued pursuant to the Proposed
Debt To Equity Conversion of RM1.89 per share was determined based on the
weighted average market price of AHB Shares for the five (5) market days up
to 16 August 2001, being the date prior to the date of the SDRA.

Ranking of the New AHB Share

The new AHB Shares shall, upon allotment and issue, rank pari passu in all
respects with the existing AHB Shares in issue except that they will not be
entitled to any dividends, rights and/or distributions, the entitlement date
of which is prior to the date of allotment of the new AHB Shares.

Proposed ICULS Issue

As part of the Revised Proposed Debt Restructuring, AHB proposes to issue
RM14,410,000 nominal value of new ICULS as part settlement of the unsecured
debts amounting to RM29,089,910 to the unsecured creditors on the basis of
RM1.00 nominal value of new ICULS for every RM1.00 owing to the unsecured
creditors.

Proposed Listing of the ICULS

Section 6.34 of the Listing Requirements of the Kuala Lumpur Stock Exchange
requires a listed issuer seeking a listing of its debt securities to have
not less than 100 holders of such debt securities holding not less than one
board lot of the debt securities each. The unsecured creditors would place
out the ICULS to a sufficient number of places to meet the minimum 100 ICULS
holders as required by the Kuala Lumpur Stock Exchange ("KLSE") for listing
purposes.

Salient Terms of the ICULS

The salient terms of the ICULS are as follows:

Issue : RM14,410,000 nominal value.

Issue Price : 100% of the nominal value of RM1.00.

Form and Denomination : The ICULS will be issued in registered form in
denominations of RM1.00 or multiples thereof.

Coupon Rate : 5.5% per annum and payable semi-annually in arrears on 30 June
and 31 December each year during the five (5) year period the ICULS remain
outstanding, except that the last interest payment shall be made on the
Maturity Date of the ICULS calculated for the period commencing from the day
following the previous interest payment date to the Maturity Date (inclusive
of both dates of commencement and expiry).

Conversion Mode : The conversion price may only be satisfied by surrendering
such number of ICULS equivalent to the conversion price of the ICULS for
cancellation by AHB.

Conversion Price : The conversion price of the ICULS will be determined by
the Directors of AHB at a price-fixing date. Further, it is intended that
the conversion price be fixed neither at a premium nor at a discount over
the theoretical ex-all price.

For illustrative purposes, based on the weighted average market price of AHB
Shares for the five (5) market days up to 16 August 2001 (being the date
prior to the date of the SDRA) of RM1.89 per share, the conversion price of
the ICULS would be RM1.89 for each new AHB Share.

Conversion Right : Each registered holder of ICULS shall have the right to
convert such ICULS held into fully paid AHB Shares. Based on the
illustrative conversion price of RM1.89, the proposed rate of conversion is
RM1.89 nominal value of ICULS for every one (1) new AHB Share.

Conversion Period : ICULS shall be convertible into new AHB Shares at any
time throughout the remaining tenure during which they are outstanding.

Taxation : All payments of interest by the Company shall be made without
withholding or deduction for, or on account of, any present or future taxes,
duties, assessments or governmental charges of whatever nature imposed or
levied by or on behalf of any authority therein or thereof having power to
tax, unless the withholding or deduction of such taxes, duties, assessments
or governmental charges is required by law.

Tenure : The ICULS shall be for a period of five (5) years from the date of
issue and shall mature upon the expiry of the five (5) year period.

Maturity Date : Date falling five (5) years from the date of issue of the
ICULS.

Redemption : The ICULS will be non-redeemable for cash. All outstanding
ICULS will be mandatorily converted into new AHB Shares on the Maturity Date
at the Conversion Price.

Rank : New AHB Shares allotted upon conversion of the ICULS shall rank pari
passu in all respects with the AHB Shares already in issue except that they
shall not be entitled to dividends, rights, allotments and/or distributions
if conversion is exercised after the entitlement date for such dividends,
rights, allotments and/or distributions.

Status : The ICULS shall be unsecured obligations of the Company and between
the holders of the ICULS shall rank pari passu in all respects without
discrimination or preference as an unsecured obligation of the Company. The
ICULS shall rank pari passu with any other obligations (other than
subordinated obligations, if any) of the Company.

Transfer : The ICULS will be registered and are transferable in multiples of
RM1.00 nominal value by instruments in writing in the usual or common form
or such other form as the Directors and the KLSE may approve.

Trustee : Malaysian Trustees Berhad.

Trust Deed : The ICULS will be constituted by a trust deed to be executed by
AHB and the Trustee, who will act for the benefit of the ICULS holders.

Listing : Listing of the ICULS on the KLSE will be sought, subject to the
unsecured creditors placing out the ICULS to a sufficient number of places
to meet the minimum number of ICULS holders as required by the KLSE for
listing purposes.

Governing Law : The ICULS and the terms and conditions contained in the
Trust Deed thereof will be governed by and construed in accordance with the
Law of Malaysia.

Salient Terms of the SDRA

(i) In addition to the payments of the installments to the unsecured
creditors as mentioned in Section 2.1.1 above, the whole or any part of the
Term-Out Portion may be prepaid to the unsecured creditors.

(ii) In addition to the above and as stated in Section 2.1.1, if the AHB
Group's audited profit after taxation ("PAT") for each of the financial year
exceeds the projected PAT for the financial year, a sum equal to 40% of such
excess ("Distributable Excess PAT") shall be utilized for the purpose of the
acceleration in the repayment of the Term-Out Portion. The Distributable
Excess PAT shall be adjusted by excluding the amount attributable to the AHB
Group's share of Rengard's audited PAT for the financial year and all
accounting results/adjustments arising from the settlement of the Borrowers'
debts under the SDRA and the Debt Restructuring Agreement, the Proposed Debt
to Equity Conversion, the Proposed ICULS Issue and waiver of interest and
default interest payable pursuant to the SDRA and the Debt Restructuring
Agreement.

(iii) AMfSB and ATSB shall not utilize the balance of RM8.5 million (after
deducting the amounts payable to the Scheme Creditors from the proceeds from
the Proposed Disposals) in any manner or for any purpose whatsoever which is
or may be inconsistent with, or in breach of the SDRA.

Details of the Proposed ESOS

The Proposed ESOS will involve the granting of options to Executive
Directors and eligible employees of the AHB Group giving them the right to
subscribe for new AHB Shares.

The principal features of the Proposed ESOS are as follows:

(a) The total number of AHB Shares which may be available under the Proposed
ESOS shall not exceed ten per cent (10%) of the total issued and paid-up
share of the Company at any one time during the existence of the Proposed
ESOS.

(b) Subject to the discretion of the ESOS committee, any employee who is a
citizen or resident of Malaysia of a member of the AHB Group shall be
eligible to participate in the Proposed ESOS if, as at the offer date, the
employee:

(i) has attained the age of at least eighteen (18) years;

(ii) is employed by a member of the AHB Group (provided that the member is
not dormant) and has served such member of the AHB Group for a continuous
period of at least one (1) year and whose service of employment has been
confirmed in writing. In the case of an Executive Director, he must be
involved in the day-to-day management and be on the payroll of a member of
the AHB Group (provided the member is not dormant); and

(iii) is not a participant of or has not been offered option(s) under any
other employees' share option scheme implemented by any other member of the
AHB Group which is in force for the time being.

(c) The Proposed ESOS shall be in force for a period of five (5) years with
an option for an extension of a further five (5) years, unless terminated
earlier in accordance with the terms of the Bye-Laws of the Proposed ESOS.

(d) The price payable upon the exercise of the options under the Proposed
ESOS shall be based on the weighted average market price of the shares as
traded on the KLSE for the five (5) market days immediately preceding the
date of the options are granted with a discount of not more than ten per
cent (10%) or the par value of AHB Shares, whichever is higher.

(e) The AHB Shares to be allotted upon any exercise of any options granted
shall, upon allotment and issue, rank pari passu in all respects with the
existing AHB Shares provided always that the AHB Shares so allotted will not
be entitled to any dividends, rights, allotments and/or other distributions
unless such AHB Shares are specified as being credited to the securities
account of the grantee in the Record of Depositors maintained by the Company
with the Malaysian Central Depository Sdn Bhd ("MCD") and requested by the
Company from the MCD for the purpose of determining persons entitled to such
dividends, rights allotments, and/or distributions in accordance with the
Company's Articles of Association.

Rationale for the Proposals

Revised Proposed Debt Restructuring

The Revised Proposed Debt Restructuring will substantially ease the
burdensome obligation of debt and interest servicing of the AHB Group due to
the cash settlement, terming out and rescheduling of loans and conversion of
debt to equity. Further, the lower interest rates agreed under the SDRA and
the non-redemption feature and proposed annual coupon rate of 5.5% for the
Proposed ICULS Issue would enable the Group to alleviate liquidity
constraints plaguing the Group and allow the management to concentrate on
pursuing business opportunities.

In addition, the Proposed ICULS Issue would enable the AHB Group to reduce
its exposure to volatility of floating rate borrowings.

The Revised Proposed Debt Restructuring together with the Proposed Joint
Venture will place the AHB Group on a stronger financial footing.

Rationale for the Proposed ESOS

The rationale for the Proposed ESOS are as follows:

   (i) to recognize and reward the contribution of employees of the AHB
Group whose services are valued and considered vital To Whom It May Concern:
the operations and continued growth of the AHB Group;

   (ii) to motivate employees of the AHB Group towards better performance
through greater productivity and loyalty;

   (iii) to stimulate a greater sense of belonging and dedication since
employees are given the opportunity to participate directly in the equity of
the Company; and

   (iv) to encourage employees to remain loyal to the AHB Group thus
ensuring that loss of key personnel is kept to a minimum.

Financial Effects of the Proposals

The financial effects of the Proposals are as follows:

Issued and Paid-up Share Capital

The Proposed ESOS will not have an immediate effect on the issued and
paid-up share capital of the Company as it will increase progressively
depending on the number of new AHB Shares to be issued pursuant to the
exercise of the options.

For illustrative purposes, assuming all the ICULS to be issued under the
Proposed ICULS Issue are converted and all the options granted under the
Proposed ESOS are exercised, the issued and paid-up share capital of the AHB
Group after the Proposed Debt To Equity Conversion, the Proposed ICULS Issue
and the Proposed ESOS will be RM32,453,666 as set out in Table 1.

Net Tangible Assets ("NTA")

The NTA of the AHB Group is expected to increase to RM1.89 per share upon
completion of the Proposed Joint Venture and the Revised Proposed Debt
Restructuring as set out in Table 2.

Earnings

The Revised Proposed Debt Restructuring is expected to enhance the earnings
as well as interest write back of the AHB Group for the financial year
ending 30 June 2002 due to the resulting interest savings.

The Proposed ESOS is not expected to have any material effect on the
earnings of the AHB Group for the financial year ending 30 June 2002.

Substantial Shareholdings

The effect of the Proposed Debt To Equity Conversion, assuming full
conversion of the ICULS to be issued pursuant to the Proposed ICULS Issue
and full exercise of the options to be granted under the Proposed ESOS, on
the shareholding structure of AHB is set out in Table 3.

Approvals Required

The Proposals are subject to the requisite approvals being obtained from the
following:

(i) the Securities Commission for the following:

(a) Proposed Disposals, as the sale of the assets tantamount to a
"substantial change in business direction";

(b) Proposed Debt To Equity Conversion, the Proposed ICULS Issue and the
Proposed ESOS; and

(c) the listing of and quotation for the new AHB Shares to be issued
pursuant to the Proposed Debt To Equity Conversion, the conversion of the
ICULS and the exercise of the options granted under the Proposed ESOS and
the listing of and quotation for the ICULS;

(ii) the KLSE for the listing of and quotation for the new AHB Shares to be
issued pursuant to the Proposed Debt To Equity Conversion, the conversion of
the ICULS and exercise of the options granted under the Proposed ESOS, and
the listing of and quotation for the ICULS;

(iii) the Foreign Investment Committee ("FIC"), for the Proposed Debt to
Equity Conversion. The approval of the FIC for the Proposed ICULS Issue was
obtained vide its letter dated 21 November 2000;

(iv) the Ministry of International Trade and Industry ("MITI") for the
Proposed Debt to Equity Conversion. The approval of the MITI for the
Proposed ICULS Issue was obtained vide its letter dated 12 January 2001;

(v) the shareholders of AHB at an Extraordinary General Meeting ("EGM") to
be convened for the Proposed Debt To Equity Conversion and Proposed ESOS.
The approval of the shareholders for the Proposed ICULS Issue was obtained
at an EGM on 22 December 2001; and

(vi) any other relevant authorities.

Directors' and Substantial Shareholders' Interests

Save as disclosed below, the Directors and substantial shareholders of the
Company and parties connected to the Directors and substantial shareholders
of the Company, pursuant to Section 122A of the Companies Act, 1965 do not
have any interest, directly or indirectly, in the Proposals.

Mirzan Mahathir, a Director of AHB and the full-time Executive Chairman of
Persistem Sdn Bhd, a subsidiary company of Artwright Manufacturing Sdn Bhd,
which is a wholly-owned subsidiary company of AHB and indirectly holds
2,196,480 AHB Shares representing 11.00% of the issued and paid-up share
capital of AHB as at 25 July 2001, by virtue of his interest in Iskandar
Holdings Sdn Bhd which is a substantial shareholder of AHB.

Yong Yoke Keong is the Managing Director of AHB and holds directly 6,787,846
AHB Shares representing 33.99% of the issued and paid-up share capital of
AHB as at 25 July 2001.

Yong Chew Keat is a Director of AHB and a full-time Executive Director of
Artwright Technology Sdn Bhd, and holds 1,923,180 AHB Shares representing
9.63% of the issued and paid-up share capital of AHB as at 25 July 2001.

As executive directors, Mirzan Mahathir, Yong Yoke Keong and Yong Chew Keat
are entitled to participate in the Proposed ESOS and therefore are deemed
interested in the Proposed ESOS and accordingly, they have abstained and
will continue to abstain from participating in any deliberations of the
Board in respect of the Proposed ESOS. Accordingly, they shall also abstain
from voting in respect of their direct and indirect interest on the
resolutions pertaining to their entitlements in respect of the Proposed
ESOS, at the forthcoming EGM.

Statement by the Board

The Board, after due consideration of all aspects of the Proposals and the
advice of Alliance, is of the opinion that the Proposals are in the long
term interests of AHB. The Board is of the opinion that the Revised Proposed
Debt Restructuring together with the Proposed Joint Venture will place the
AHB Group on a stronger financial foundation.

Compliance with the Policies and Guidelines on Issue/Offer of Securities
("SC Guidelines") issued by the SC

Save as disclosed below, the SC Guidelines will be fully complied with:

   (i) Section 21.01 of the SC Guidelines states that in considering a
proposal to undertake an issue of debt securities, the following
circumstances would be taken into account:

      (a) the company is in need of funds for the expansion of business
activities including expansion by way of acquisition, thereby improving its
productive capacity and enhancing its profitability;

      (b) the company is in need of funds for the diversification of
business to achieve synergies; and

      (c) the company is in need of funds to refinance its existing
borrowings, thus reducing interest cost and thereby improving its
profitability.

   (ii) Section 21.02 of the SC Guidelines states that funds raised pursuant
to an issue of debt securities could be utilized for the repayment of
borrowings, but the proportion of proceeds for this purpose should not be
too large, preferably not more than 50% of total proceeds.

The Proposed ICULS Issue forms part of the Revised Proposed Debt
Restructuring voluntarily undertaken by AHB. Under the Revised Proposed Debt
Restructuring, the unsecured creditors will receive ICULS as part settlement
of the Unsecured Debts.

A waiver will be sought from the requirement to comply with Section 21.01
and 21.02 of the SC Guidelines as no cash proceeds will be raised through
the Proposed ICULS Issue.

Application to the Relevant Authorities

The relevant application to the authorities pertaining to the Proposals will
be made by 21 August 2001.

Adviser

The Company has appointed Alliance as the adviser for the Proposals.

Documents for Inspection

The Debt Restructuring Agreement and SDRA may be inspected at the registered
office of AHB at Suite 11.1A, Level 11, Menara Weld, 76, Jalan Raja Chulan,
50200 Kuala Lumpur, from Mondays to Fridays (except public holidays) during
business hours up to and including the date of the EGM.

ISUTA HOLDINGS: Revises Agreements With Vendors
-----------------------------------------------
Commerce International Merchant Bankers Berhad on behalf of Isuta Holdings
Berhad (IHB) announced that IHB has on 17 August 2001, entered into various
supplemental agreements with the vendors of the Target Companies, namely
Yapidmas Plantation Sdn. Bhd., Sri Kehuma Sdn. Bhd., Siangyi Plantation Sdn.
Bhd., Tanah Emas Telupid Sdn. Bhd., Tanah Emas Oil Palm Processing Sdn. Bhd.
and Ladang Tunas Hijau Sdn. Bhd., and the vendors of the various oil palm
estates, namely Usaga Sdn. Bhd. Estate, Sri Mosta Sdn. Bhd. Estate, Ladang
Melian Sdn. Bhd. Estate and Yap Kiew Estate, to revise the respective
purchase considerations and/or issue price of IHB shares to that approved by
the Securities Commission as announced on 13 December 2000 and 26 February
2001.

Summaries of the Proposed Acquisitions as reflected in the supplemental
agreements are set out in Tables 1 and 2.

TABLE 1

Proposed acquisition of the following companies:

Name
          Vendors      Purchase        No. of new ordinary
                   Consideration  ordinary shares in IHB to
                       RM              be issued at an issue
                                       price of RM1.03 per share

Yapidmas Plantation Sdn. Bhd.

     Yap Kiew and Yap Phing Cern     42,407,283 41,172,119

Sri Kehuma Sdn. Bhd.

    Yap Kiew and Lee Foot Yin        19,631,714 19,059,917

Siangyi Plantation Sdn. Bhd.

    Goh Poh Teen, Yap Fwee Yi
      and Yap Phing Siang             7,577,909 7,357,193

Tanah Emas Telupid Sdn. Bhd.

    Yap Phing Cern, Yap Kiew
     and Yap Phing Kuang              31,932,000 31,001,942

Tanah Emas Oil Palm Processing Sdn. Bhd.

    Yap Kiew and Yap Phing Cern       28,382,187 27,555,521

Ladang Tunas Hijau Sdn. Bhd.

    Yap Kiew and Yap Phing Cern 278,044 269,946

  130,209,137 126,416,638

TABLE 2

Proposed acquisition of the following oil palm estates:

Name of Estate              Vendors
             Area Hectares     Purchase      No. of new
                               consideration ordinary shares in
              RM            IHB to be issued at
       an issue price of
       RM1.03 per share

Usaga Sdn. Bhd. Estate Usaga Sdn. Bhd.

     202.2 2,576,331 2,501,292

Sri Mosta Sdn. Bhd. Estate Sri Mosta Sdn. Bhd.

815.6 9,930,677 9,641,434

Ladang Melian Sdn. Bhd. Estate Ladang Melian Sdn. Bhd.

152.8 2,039,792 1,980,381

Yap Kiew Estate  Yap Kiew

67.44 1,482,558 1,439,377

1,238.04 16,029,358           15,562,484


PERDANA INDUSTRI: SC Extends Scheme Implementation Deadline
-----------------------------------------------------------


On behalf of Perdana Industri Holdings Berhad, Arab-Malaysian Merchant Bank
Berhad announced that the Securities Commission has on 13 August 2001
approved the Company's application to extend the deadline for the full
implementation of the Proposed Debt Restructuring from 15 August 2001 to 30
June 2002.
Background
The Company (PIHB) did not commence operations until 1991 when it undertook
a restructuring scheme en-route to KLSE. The scheme included the acquisition
of a footwear manufacturing business. With the completion of the scheme on
18.7.91, PIHB functioned as an investment holding company. Thereafter the
Company undertook a vertical integration exercise in 1997, concentrating on
direct retailing in Malaysia.
Subsequently, on 28 July 1999, Pengurusan Danaharta Nasional Bhd appointed
Special Administrators (SA) for the Group. On 18 January 2000, a
restructuring scheme was proposed which received the relevant approvals by
November 2000. The SA is presently finalizing implementation of the proposed
scheme.
The proposal involves a capital reduction and consolidation; share swap for
shares in Wah Seong Corporation Bhd (WSC, a company formed to facilitate the
scheme and which is proposed to become the new listed vehicle); acquisition
of the Wah Seong Industrial Holdings Sdn Bhd (WSIH) Group of Companies; debt
restructuring; and transfer of listing status to WSC in consideration of WSC
settling PIHB's debts. Upon completion of the proposed scheme, WSC would be
listed on the Main Board of KLSE and PIHB would be delisted.


PSC INDUSTRIES: SC OKs Proposal
-------------------------------
Aseambankers Malaysia Berhad (Aseambankers) on behalf of the Board of
Directors of PSC Industries Berhad (PSCI) announced that the Securities
Commission (SC) has vide its letter dated 15 August 2001 approved the
Proposals as follows:

   (i) Bonus issue of 79,129,174 new ordinary shares of RM1.00 each in PSCI
on the basis of one (1) new ordinary share for every one (1) existing
ordinary share, via the capitalization of RM79,129,174 from its share
premium account as proposed ("Proposed Bonus Issue");

   (ii) Proposed private placement of up to 15,825,000 new ordinary shares
of RM1.00 each in PSCI at an issue price to be determined later representing
not more than ten percent (10%) of the enlarged issued and paid-up share
capital pursuant to the Proposed Bonus Issue as proposed ("Proposed Private
Placement");

   (iii) Issuance of up to 4,082,000 new ordinary shares in PSCI of RM1.00
each, at an issue price of RM8.50, for the settlement of debt amounting to
RM34,692,000 to Bank Islam Malaysia Berhad ("BIMB") as proposed;

   (iv) Issuance of up to 50,196,000 Redeemable Convertible Loan Stocks
("RCLS") 8% 5-year Type A ("RCLS A") and up to 5,452,000 RCLS 8% 5-year Type
B ("RCLS B"), at an indicative conversion rate of RM8.50 debt into RM1.00
RCLS A and RCLS B, respectively to the secured and unsecured creditor banks,
for the proposed conversion of debt amounting to RM473,006,000 as proposed;

   (v) Issuance of 2,619,000 (approximate) new ordinary shares in PSCI of
RM1.00 each, pursuant to the payment of RCLS coupon, as proposed;

   (vi) Restricted offer for sale of the rights to the allotment of
4,082,000 ordinary shares of RM1.00 each in PSCI by BIMB at an offer price
of RM8.50 per ordinary share to the existing shareholders of PSCI as
proposed;

   (vii) Restricted offer for sale of the rights to the allotment of
RM50,196,000 RCLS A and 5,452,000 RCLS B, offer price of RM8.50 per RCLS A
and RCLS B, respectively;

   (viii) Listing and quotation for:-

     a. 79,129,174 new ordinary shares in PSCI to be issued pursuant to the
Proposed Bonus Issue;

     b. up to 15,825,000 new ordinary shares in PSCI to be issued pursuant
to the Proposed Private Placement;

     c. 4,082,000 new ordinary shares in PSCI to be issued pursuant to the
proposed settlement of debt with BIMB;

     d. 2,619,000 (approximate) new ordinary shares in PSCI to be issued
pursuant to the payment of coupon on RCLS; and

     e. 55,648,000 new ordinary shares in PSCI to be issued pursuant to the
conversion of RCLS A and RCLS B;
on the Kuala Lumpur Stock Exchange ("KLSE").

The number of ordinary shares pursuant to paragraphs 2(iii), (v) and
(viii)(c) will be updated based on the confirmation of debt balances from
BIMB, subject to the approval of SC.

The above approvals are subject to the following conditions:

   (i) The placement price for the shares to be issued under the Proposed
Private Placement be fixed based on the five (5) days weighted average
market price of the shares of PSCI prior to the price-fixing date at a
discount of not more than ten (10) percent, if necessary;

   (ii) The conversion price of the RCLS into ordinary shares of PSCI be
fixed at RM1.00 for each RM1.00 nominal value RCLS;

   (iii) Aseambankers/PSCI furnish the final draft of the Circular to
Shareholders in relation to the abovementioned Proposals to the SC for
approval;

   (iv) Aseambankers/PSCI furnish the final draft of the abridged prospectus
in relation to the Proposed Offer For Sale to the SC for approval and
registration;

   (v) Aseambankers/PSCI furnish the final draft trust deed to the SC for
approval; and

   (vi) Aseambankers/PSCI comply with all the requirements contained in the
SC's Policies and Guidelines on the Issue/Offer of Securities.

In addition, the approvals in relation to the RCLS are also subject to the
following conditions:

   (i) The approvals from the SC must be obtained in relation to any
revisions made on the terms and conditions of its issue;

   (ii) Prior to the issuance of the RCLS:

     (a) Aseambankers is to furnish a Facility Maintenance File ("Borang
FMF/JPB") to the SC and Bank Negara Malaysia ("BNM"); and

     (b) Aseambankers is to furnish a copy of the executed trust deed to the
SC.

In relation to the utilization of proceeds arising from the Proposed Private
Placement, the SC has acknowledged that the proceeds will be utilized for
the core business of PSCI in the following manner:

Refer to the table below

Notwithstanding the above, the utilization of the above proceeds must adhere
to the following conditions:

   (i) That the approval from the SC must be obtained for any variation from
the original purpose of the utilization of the proceeds if involving
utilization other than for the core business of PSCI;

   (ii) That the approval from shareholders of PSCI must be obtained for the
utilization of proceeds as stated above as well as for any variation of
twenty-five per centum (25%) or more from the original purpose of the
utilization. In the event of a variation of less than twenty-five per centum
(25%), the appropriate disclosure must be made to the shareholders of PSCI;

   (iii) That any extension of the period for the utilization of the
proceeds from that specified by PSCI must be approved by the Board of
Directors of PSCI through a resolution and a full disclosure must be made to
the KLSE; and

   (iv) That the appropriate disclosures on the status of the utilization of
the proceeds must be made in the Quarterly Report and the Annual Report of
PSCI until all the proceeds have been utilized.

In relation to the application for the waiver from the obligation to extend
a mandatory general offer on the remaining shares in PSCI not already owned,
made on behalf of Business Focus Sdn Bhd and Y. Bhg. Tan Sri Dato'Amin Shah
Haji Omar Shah (to be collectively referred to as "First Applicants"), SC is
unable to consider the waiver at this point of time. Aseambankers has been
advised to resubmit a proposal for the waiver after the shareholding
threshold and mode of acquisition to return control to the First Applicants,
has been finalized.

In relation to the application for the waiver from the obligation to extend
a mandatory general offer on the remaining shares in PSCI not already owned,
made on behalf of Lembaga Tabung Angkatan Tentera, Boustead Holdings Berhad,
Affin Holdings Berhad, Affin Bank Berhad (formerly known as Perwira Affin
Bank Berhad) ("ABB"), ACF Holdings Berhad and Affin-ACF Finance Berhad
(formerly known as Asia Commercial Finance (M) Berhad)("ACFB") (to be
collectively referred to as "Second Applicants"), the SC has taken note of
the following matters:

   (i) Under the proposed debt restructuring exercise of PSCI, ABB would be
receiving 44,090,000 RCLS A convertible to 44,090,000 new ordinary shares of
RM1.00 par value each in PSCI and a yield on RCLS A amounting to
RM17,636,000 payable by an issuance of 2,075,000 new ordinary shares of
PSCI. Under the same proposal, ACFB will receive 845,000 RCLS A convertible
to 845,000 new ordinary shares of RM1.00 par value each in PSCI and a yield
on RCLS A amounting to RM338,000 payable by an issuance of 40,000 new
ordinary shares of PSCI;

   (ii) Following the issuance of the RCLS to ABB and ACFB, the Second
Applicants will have a collective shareholding of 34.87% in PSCI; and

   (iii) Pursuant to Section 6 of the Malaysian Code On Take-overs and
Mergers, the Second Applicants must extend a mandatory general offer on the
remaining shares in PSCI not already owned by them.

The application for waiver in respect of the Second Applicants have been
approved, subject to the following conditions:

   (i) That the Second Applicants obtain the approval of the shareholders of
PSCI by poll at an Extraordinary General Meeting for the application for the
waiver, where all interested parties must abstain from voting. The approval
obtained from the shareholders of PSCI is valid throughout the tenure of the
RCLS;

   (ii) Competent independent advice must be given to the shareholders of
PSCI; whereby the appointment of the Independent Adviser and the contents of
the related Independent Advice Circular to be circulated to the shareholders
of PSCI must obtain the prior approval of the SC;

   (iii) The Second Applicants must make Statutory Declarations that they
are not involved in any non-qualifying transactions and that they have not
obtained any voting shares in PSCI and that ABB and ACFB should not be
involved in any trading transactions in relation to the RCLS held by them
during the tenure of the RCLS. Notwithstanding the above, however, ABB and
ACFB are allowed to sell or convert the RCLS held by them;

   (iv) In this respect, in the event that ABB and ACFB convert their RCLS
within the conversion period, which causes the shareholdings of the Second
Applicants in PSCI to exceed the thirty three per centum (33%) threshold,
Aseambankers and the Second Applicants must inform the SC of the transaction
and confirm that all the conditions as highlighted herein has been satisfied
by the Second Applicants; and

   (v) If ABB and ACFB were to dispose off all RCLS held by them and hence
the waiver for the mandatory general offer is no longer needed, the Second
Applicants must make the appropriate announcements to the shareholders of
PSCI.
RM'000
Working capital 130,500
Estimated cost for the corporate exercise 4,000
134,500

Note: Proceeds are based on the indicative placement price of RM8.50,
subject to the actual number of new ordinary shares of PSCI to be issued in
relation to the proposed private placement and the actual placement price.


SJA BERHAD: Faces Winding-Up Petition
-------------------------------------
SJA Berhad received a winding-up petition on August 13 2001 pursuant to the
provisions of Section 218 of the Companies Act,1965, presented by Reginald
Vallipuram & Co., on behalf of Shell Malaysia Trading Sendirian Berhad on
19th July, 2001.

The petitioner, Shell Malaysia Trading Sendirian Berhad, had claimed against
the Company, as guarantor, for the sum of RM1,000,000 with interests at 8%
p.a. daily rests commencing 4th December,2000, until full settlement.

The winding-up petition arose due to default in payment by a subsidiary
company, namely, Alec Bus Company Sdn Berhad for goods supplied in 1999 and
the Company had acted as guarantor.

The financial impact of the winding-up proceedings on SJA Group would be the
guaranteed sum of RM1,000,000 with interests at 8% p.a. daily rests from 4th
December,2000 until full settlement.
The proceedings would have no operational impact on the SJA Group.

The Company intends to negotiate and settle with the petitioner so as to
strike off the case before the matter is brought to the Court on 15th
October,2001.



=====================
P H I L I P P I N E S
=====================


NATIONAL POWER: P1.92B Net Losses In First Five Months
------------------------------------------------------
National Power Corp. (Napocor) incurred a P1.92-billion net loss for the
period January to May 2001 despite a P3.4 million increase in its net
operating income, ABS-CBN News reported on August 19, 2001.

The net loss, which was due to the 12.6 percent increase
in operating expenses (opex) and the 8.4 percent increase in interest
expense, is 70 percent lower than the actual net loss of P6.29 billion in
the same period last year, and 76.6 percent lower than the projected loss of
P8.2 billion for the same period.

The company's opex reached P42.622 billion due to a 29 percent increase in
fuel expenses, 13.7 percent increase in power supply, 2.2 percent increase
in depreciation of transmission facilities and 8.1 percent increase in
amortization.

Fuel expense reached P13.962 billion because of the increase in the price of
bunker, diesel oil, steam and coal coupled with increased utilization of
coal and oil plants. The cost of power supply, meanwhile, reached P12.692
million due to increased cost of purchased power and entry of new
independent power producers.

The P6.36-billion interest expense rose by PhP496 million because of high
foreign exchange rate levels during the period. The peso-dollar exchange
rate reached a high of PhP49.66 to a US dollar in May compared to P40 to a
US dollar in the same period last year.

Napocor's financial condition for the first five months of the year,
however, improved by 70 percent compared with last year due to the
realization of higher sales volume and improved ratio.

A Napocor memorandum stated, "Operating ratio was 90 percent only compared
with 96 percent last year. A lower operating ratio would mean bigger
residual revenue to cover interest and other expenses. The improvement in
operating ratio was, however, offset by the P496-million increase in
interest expense."


=================
S I N G A P O R E
=================


ASIA PULP: Faces Class Action Suit Re False Information
-------------------------------------------------------
Asia Pulp & Paper Co., its directors and its auditor, Arthur Andersen LLP
are facing class-action lawsuits filed this month by APP shareholder James
Harris in the U.S. District Court for the Southern District of New York for
purportedly releasing misleading information that in turn inflated APP's
share price, ASWJ reported Monday.

APP's directors include Chief Financial Officer Hendrik Tee and three
members of the Widjaja family, which founded and controls the company --
Teguh Widjaja, Franky Widjaja and Muktar Widjaja.

The complaint alleges that APP, its directors and Arthur Andersen "knew or
recklessly disregarded, that the company's financial statements did not
reflect two derivative hedge contracts with Deutsche Bank," and that as a
result, "the financial statements for 1997 through 1999 were false and
materially misleading."

The complaint further alleges that as a result of these materially false and
materially misleading statements and failures to disclose, the company's
stock traded at artificially inflated prices, and that the plaintiff and
other members of the class have "suffered damages as a result of the
defendants' fraudulent conduct alleged herein."

"It wouldn't be appropriate to comment on the cases," an APP  spokesman
said. A representative for Arthur Andersen in Singapore couldn't be reached
for comment.


OAKWELL ENGINEERING: Appeals Creditor's Winding-Up Petition
-----------------------------------------------------------
Oakwell Engineering, faced with a winding-up petition by Fleet National Bank
over debts of about $5 million (15 percent of its total liabilities to bank
creditors), is appealing for a grace period in order to propose a
restructuring plan to its creditors. Oakwell also wants to shore up an
agreement with its investor PT Tranaco Utama, Business Times Singapore
reported August 17.

HSBC, ABN Amro and DBS company, the other creditors of Oakwell, are
reviewing their position in light of the winding-up petition.

The troubled company released a statement saying losses incurred by its
investment in its Dutch subsidiary, Oakwell Compressor Packages, were the
primary reason for its debts.

Oakwell chalked up an FY2000 net loss attributable to shareholders of about
$7.5 million and a working capital deficit of $2.6 million.


===============
T H A I L A N D
===============


B.GRIMM ENGINEERING: Changes Name, Retains Symbol
-------------------------------------------------
B. Grimm Engineering Systems Public Company Limited has changed its name to
"BGES Engineering Systems Public Company Limited" It has now completed the
legal process for changing its name. Its symbol "BGES" is retained.

BGES has been transferred to the category of Companies Under
Rehabilitation (REHABCO) by The Stock Exchange of Thailand.


MDX PUBLIC: SET Lifts 'NP' Sign; Net Loss Of Bt115,817
------------------------------------------------------
The Stock Exchange of Thailand has lifted the "NP" (Notice Pending) sign on
the securities of MDX Public Company Limited (MDX) and replaced it with the
"NR" (Notice Received) sign effective from 20 August 2001.

The SET first posted an "NP" sign on the securities of MDX from 15 August
2001 while waiting for the firm to send its financial
statements via ELCID.

The company reports reviewed quarterly financial statements as follows:

       MDX PUBLIC COMPANY LIMITED

Reviewed           Ending  June 30,        (In thousands)
                    Quarter 2               For 6 Months

         Year      2001        2000          2001        2000

Net profit (loss) (115,817) (297,518)   (456,779)  (2,828,124)
EPS (baht)      (0.70)      (1.80)        (2.76)     (17.07)


As of December 31, the company's assets stood at Bt5.124 billion, and
Bt7.156 billion in liabilities, TCR-AP noted.


POWER-P PUBLIC: Explains Q2 Operation Results
---------------------------------------------
Pursuant to Power-P Public Company Limited's financial statements for the
2nd quarter and for the period of 6 months of the year 2001, with net loss
of Bt94.027 million or in other words the decrease of net profit by
Bt294.462 million, the Company enumerates causes of such changes:

(1) Gross profit rose up by Bt94.956 million due to increase of sales and
increase of gross profit ratio from 18.3% in the year 2000 to 23.0% in the
year 2001.

   (2) Decrease of exchange loss by Bt18.061 million as compared to that of
last year due to restructuring of foreign currency-denominated debts in
April  2000.  Under the approved Business Rehabilitation Plan, foreign
currency-denominated debts comprised loans from banks and financial
institutions and accrued interest expenses were partially converted into
newly issued and fully paid-up common shares, and the remainders into
secured floating rate notes.

       As a result of the conversion, capital base of the Company was
significantly improved. Even though foreign borrowing was sharply reduced,
the Company still suffered loss due to weakness of Baht currency.

   (3) Interest income rose up by Bt7.166 million as compared to that of the
same period of last year, because the Company earned interest income from
loan to one new subsidiary company set up under the approved Business
Rehabilitation Plan. The Company had earned no interest income from the
subsidiary during the first quarter of last year.

   (4) Other income decreased by Bt21.445 million because the Company gained
Bt 18.913 million on sale of unit trust and higher sale of scraps last year.

   (5) Operating expenses rose up by Bt3.524 million over that of last year
due to higher advertising and sales promotional expenses which resulted into
higher sales .

    (6) Interest expenses decreased by Bt98.720 million from that of last
year due to the same reason described in explanation number 2) as well as
from the scheduled repayments and prepayments of loan under the approved
Business
Rehabilitation Plan, resulting in lower interest burden.

   (7) Gain on sale of land decreased by Bt471.259 million because there was
no disposition of land this year.  According to the approved Business
Rehabilitation Plan, in the year 2000 the Company sold many parcels of land
to a subsidiary company, which was set up to hold certain assets of the
Company.

   (8) Share of income ( loss ) from associates and subsidiaries decreased
by Bt17.137 million because one subsidiary suffered from impairment of
asset.


THAI AMARIT: Reorganization Petition Filed In Bankruptcy Court
--------------------------------------------------------------
Thai Brewery Company Limited (DEBTOR), engaged in the production of beer,
Petition for Business Reorganization was filed to the Central Bankruptcy
Court:

Black Case Number Phor. 1/2543

Red Case Number Phor. 5/2543

Petitioner: Bangkok Bank Public Company Limited

Interim Executive : Effective Planners Company Limited

Debts Owed to the Petitioning Creditor : 3,269,012,396.50 Baht

Date of Court Acceptance of the Petition : January 11, 2000

Date of Examining the Petition: February 7, 2000 at 9.00 A.M.

Court Order for Business Reorganization : February 7, 2000

The creditors are called for a meeting in order to elect the planner on
February 28, 2000 at 9.30 a.m. at the meeting room, 17th floor of the
Bangkok-Insurance building.

Announcement of Court Order for Business Reorganization and Appointment of
the Planner : in Government Gazette on April 4, 2000

Number of creditors filing Applications for Debt Repayment : 159

Amount of debts: Bt3,971,637,319.40

Deadline for the Planner to submit the Plan to the official receiver :
August 23, 2000

Appointment Date for the Creditors' meeting to consider the Plan # 1st :
September 28, 2000 at 9.30 am. Y.M.C.A. Building, South Sathorn

Appointment Date for the Creditors' meeting to consider the Plan # 2sd :
October 5, 2000 at 9.30 am. Y.M.C.A. Building, South Sathorn

Court issued an order accepting the Plan : October 20, 2000 and Appointed
DHARMNITI & TRUTH COMPANY LIMITED as the Administrative Planner

Announcement of Court Order for accepting the Business Reorganization Plan :
in Matichon Public Company Limited and Siam Rath Company Limited: October
30, 2000

Announcement of Court Order for accepting the Business Reorganization Plan :
in Government Gazette : November 23, 2000

Contact : Mr. Chalermkiat , Tel : 6792513


THAI TELEPHONE: To Issue Restructuring Plan Warrants
----------------------------------------------------
Thai Telephone & Telecommunication Public Company Limited's Restructuring
Plan Warrants, Pursuant to the Company's Business Reorganization Plan, shall
be issued in the amount equaling to 10 percent of total issued and
outstanding shares after debt conversion at the Closing Date, September 7,
2001 until the close of business hours of such day.

Half of these Restructuring Plan Warrants (5 percent of total shares after
the Closing Date) shall be allocated to the existing shareholders whose
names appear in the Share Register at the closing of the Company's Share
Register.

Therefore, the ratio in which a shareholder is entitled to receive the
Restructuring Plan Warrants will be 20
existing shares for 1 unit of the Restructuring Plan Warrants.

However, the above closing of the Company's Share Register is subject
principally to the occurrence of the Closing Date, which has to be further
agreed upon with the creditors.

The Company expects the Closing Date to be within August 2001 since the
conditions precedent for the closing has not yet fulfilled for the time
being.

If there is any postponement for the Closing Date, the closing of the
Company's Share Register may be postponed accordingly.


QUALITY HOUSES: Resignation of Director
---------------------------------------
Director Khun Visit Tantisunthorn of Quality Houses Public Company Limited
resigned from the post of Director and Audit Committee.

The resignation was effective August 15, 2001.


S U B S C R I P T I O N  I N F O R M A T I O N

Troubled Company Reporter -- Asia Pacific is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group,
Inc., Washington, DC USA. Lyndsey Resnick, Maria Vyrna Nineza, Editors.

Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

This material is copyrighted and any commercial use, resale or publication
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