AGP.L Regulatory News (AGP)

19 Sep 2006 07:03

Asian Growth Properties Limited19 September 2006 This announcement is not for release, publication or distribution in or intoAustralia, Canada, Hong Kong, Japan, The Republic of Ireland, South Africa orthe United States of America. 19 September 2006 ASIAN GROWTH PROPERTIES LIMITED AGP ACQUIRES PROPERTY PORTFOLIO IN HONG KONG AND CHINA FOR HK$4,430 MILLION(£302 MILLION) Asian Growth Properties Limited (AIM stock code: AGP), the Hong Kong basedproperty development and investment company has conditionally agreed to acquirea portfolio of six properties in Hong Kong and China from its major shareholderS E A Holdings Limited ("SEA") for approximately HK$4,430 million (£302million). These properties are currently held by the Target Group.Accordingly, it is proposed that the Company will acquire the Target Companyfrom SEA. The consideration will be satisfied by the issue to SEA of668,653,817 Ordinary Shares and the payment of approximately HK$500 million (£34million) in cash from AGP's existing cash reserves. The property portfolio isvalued at approximately HK$6,425 million (£437 million) and represents themajority of SEA's portfolio of Hong Kong and China property interests. Due to the size of the transaction relative to the size of AGP and SEA'sshareholding in AGP, the proposed transaction constitutes a related partytransaction and a reverse takeover for AGP under the AIM Rules. Highlights: * AGP currently has a property portfolio consisting of three development properties and one investment property, all located in Hong Kong. AGP's total asset value and net asset value were, as at 30 June 2006, HK$2,221 million (£151 million) and HK$1,575 million (£107 million) respectively. * AGP has negotiated a unique opportunity to purchase the property portfolio from SEA at market value, determined by Savills, an independent, internationally recognised professional valuer. The total asset value and net asset value of the Target Group as at 30 June 2006 were HK$7,742 million (£527 million) and HK$4,403 million (£302 million) respectively. * SEA is the major shareholder of AGP holding approximately 85.42% of the Existing Ordinary Shares. The portfolio of properties in the Target Company comprises the majority of SEA's real property investment and development assets in Hong Kong and China. Upon Completion of the Acquisition, the Target Company will become a wholly-owned subsidiary of AGP and SEA will increase its shareholding interest in AGP to approximately 96.42%. * The combined portfolios (after deducting approximately HK$500 million (£34 million) cash consideration) will increase AGP's total asset value and net asset value to HK$9,463 million (£644 million) and HK$5,505 million (£375 million) respectively and the proposed Acquisition will, in one transaction, facilitate AGP's entry into the China property market. * The consideration for the proposed transaction is expected to be in the region of HK$4,430 million (£302 million) (subject to a cash adjustment upon Completion). This figure is based on the net asset value of the Target Group adjusted to take account of property valuations and minority interests. * The consideration will be paid partly by the issue by AGP to SEA of 668,653,817 Consideration Shares at a price of 40 pence per share (and based on an exchange rate of £1.00 = HK$14.693). The balance of HK$500 million (£34 million) will be settled in cash from AGP's existing cash balances. * The deemed issue price of 40 pence per share represents a premium of 19.74% over the average trading price of the AGP shares on AIM over the last three months ended 15 September 2006 and a discount of 18.78% to the net asset value per AGP share as at 30 June 2006. The Board considers this transaction to be fair and reasonable and that the 14.17% dilution in net asset value per Existing Ordinary Share on completion of the transaction impacting Shareholders is, in the opinion of the Board, more than compensated by the quality, value and potential of the property portfolio being purchased from SEA. * The transaction is subject to the approval of AGP Shareholders at an EGM to be held at 5:00 p.m. (Hong Kong time) on 4 October 2006. AGP expects the Enlarged Share Capital of AGP to be admitted to trading on AIM on 5 October 2006. * As part of the Proposals, a Management Agreement between the Company and SEA has been negotiated, pursuant to which SEAIA will undertake to manage AGP's investment and development assets. The Company is particularly pleased with the terms and conditions of the management agreement given SEAIA's management team have been operating in Hong Kong and China for 50 years and have wide experience in property development and investment. Commenting on the proposed transaction, Don Fletcher, Chief Executive Officer ofAGP said: "The Board of AGP unanimously endorses this transaction and see it as anexciting expansion of AGP's activities in China and Hong Kong. We recommendthat Shareholders vote in favour of the Resolution. It is not often that anopportunity to purchase a portfolio of assets presents itself in the Hong Kongand China market". This summary should be read in conjunction with the full text of thisannouncement. ENQUIRIES Don Fletcher Tel: +61 414693968 Asian Growth Properties Limited David Mathewson Tel: +44 (0) 7730 074777 Asian Growth Properties Limited Richard Gray Andrew Potts Tel: +44 (0) 20 7459 3600 Panmure Gordon (Broking) Limited Abigail Singleton Leesa Peters Tel: +44 (0) 20 7429 6666 Conduit PR abigail@conduitpr.com / leesa@conduitpr.com The Admission Document will be available on AGP's website www.asiangrowth.comand at the offices of Stephenson Harwood, One St. Paul's Churchyard, London EC4M8SH. This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to purchase or subscribe for,any securities or any offer or invitation to sell or issue, or any solicitationof any offer to purchase or subscribe for, such securities by any person in anycircumstances, and in any jurisdiction, in which such offer or solicitation isunlawful. Accordingly, copies of this announcement are not being and must notbe mailed or otherwise distributed or sent in or into or from the United States,Canada, Australia, the Republic of Ireland, South Africa or Japan and any personreceiving this announcement (including, without limitation, custodians, nomineesand trustees) must not distribute or send it in or into or from the UnitedStates, Canada, Australia, the Republic of Ireland or Japan. The Ordinary Shares have not been, and will not be registered under the UnitedStates Securities Act of 1933, as amended (the 'Securities Act') or under thesecurities legislation of any state of the United States, and may not be offeredor sold in the United States. The relevant clearances have not been, and willnot be, obtained from the Securities Commission of any province or territory ofCanada; no document in relation to the Admission or the Offer has been, or willbe, lodged with, or registered by, The Australian Securities and InvestmentsCommission; no registration statement has been, or will be, filed with theJapanese Ministry of Finance in relation to the Admission or the Offer; and noregistration statement has been, or will be, filed with the Irish Stock Exchangein relation to the Admission or the Offer. Accordingly, subject to certainexceptions, the Common Shares the subject of the Offer may not, directly orindirectly, be offered or sold within the United States, Canada, Australia,Japan or the Republic of Ireland or offered or sold to a resident of the UnitedStates, Canada, Australia, Japan or the Republic of Ireland. This press release may contain forward-looking statements with respect to AGPand its operations, strategy, financial performance and condition. Thesestatements generally can be identified by use of forward looking words such as'may', 'will', 'expect', 'estimate', 'anticipate', 'intends', 'believe' or'continue' or the negative thereof or similar variations. The actual resultsand performance of AGP could differ materially from those expressed or impliedby such statements. Such statements are qualified in their entirety by theinherent risks and uncertainties surrounding future expectations, including thatthe transaction contemplated herein is completed. Important factors that couldcause actual results to differ materially from expectations include, among otherthings, general economic and market factors, competition, changes in governmentregulation. The cautionary statements qualify all forward-looking statementsattributable to AGP and persons acting on its behalf. Unless otherwise stated,all forward-looking statements speak only as of the date of this press releaseand the parties have no obligation to update such statements. This announcement has been issued by, and is the sole responsibility of, AGP.This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to acquire, purchase orsubscribe for any securities. This announcement has not been examined orapproved by the FSA or the London Stock Exchange or any other regulatoryauthority. Panmure Gordon (Broking) Limited is nominated adviser and broker to the Companyfor the purpose of the AIM Rules. Panmure Gordon (Broking) Limited, which isauthorised and regulated in the United Kingdom by the Financial ServicesAuthority and is a member of the London Stock Exchange, is acting exclusivelyfor the Company in relation to the Proposals. Panmure Gordon (Broking) Limitedis not acting for any other person in connection with the matters referred to inthis announcement and will not be responsible to anyone other than the Companyfor providing the protections afforded to clients of Panmure Gordon (Broking)Limited or for giving advice in relation to the matters referred to in thisannouncement. This announcement is not for release, publication or distribution in or intoAustralia, Canada, Hong Kong, Japan, The Republic of Ireland, South Africa orthe United States of America. 19 September 2006 ASIAN GROWTH PROPERTIES LIMITED AGP ACQUIRES PROPERTY PORTFOLIO IN HONG KONG AND CHINA FOR HK$4,430 MILLION(£302 MILLION) Introduction On 19 September 2006, the Board announced that it had conditionally agreed toacquire a portfolio of six investment and development properties in Hong Kongand China from SEA. These properties are currently held by the Target Group.Accordingly, it is proposed that the Company will acquire the Target Companyfrom SEA. The total consideration for the Acquisition is approximately HK$4,430 million(£302 million), subject to a cash adjustment to reflect the actual NAV of theTarget Group as at the Completion Date. The Company will pay approximatelyHK$3,930 million (£268 million) of the total consideration in the form of newOrdinary Shares to be issued by the Company to SEA at 40 pence per share withthe remainder of approximately HK$500 million (£34 million) to be paid in cash.The Company intends to finance the cash portion of the consideration using itsexisting internal cash reserves. On Completion, the Company will also enter into the Management Agreement withSEAIA (a wholly-owned subsidiary of SEA) pursuant to which SEAIA will providethe Company with corporate, property management and other related services. In view of the size of the Target Group relative to the Company, the Acquisitionwill constitute a reverse takeover of the Company under the AIM Rules and willrequire the prior approval of Shareholders at the EGM, notice of which is setout at the end of the Admission Document. In addition, as SEA is a significant shareholder in the Company, both enteringinto the Acquisition Agreement and the Management Agreement constitute relatedparty transactions under the AIM Rules. Pursuant to Rule 13 of the AIM Rules,the Independent Directors consider, having consulted with the Company'snominated adviser, Panmure Gordon, that the Proposals are fair and reasonableinsofar as the Shareholders are concerned. An irrevocable undertaking has been duly received from SEA to vote in favour ofthe Resolution, and subject to the other conditions set out in the AcquisitionAgreement being satisfied (and/or waived), trading of the Existing OrdinaryShares on AIM will be cancelled and the Enlarged Share Capital will be admittedto trading on AIM. Dealings on AIM in the Enlarged Share Capital are expected tocommence on 5 October 2006. If the Acquisition is not completed, dealings in theExisting Ordinary Shares will continue. SEA is the major Shareholder of the Company, holding approximately 85.42 percent. of the Existing Ordinary Shares. The Consideration Shares represent 75.44per cent. of the Enlarged Share Capital. Accordingly, on Completion of theAcquisition, SEA will hold 96.42 per cent. of the Enlarged Share Capital. The Company has today dispatched the Admission Document to its Shareholders. TheAdmission Document has been dispatched from Hong Kong. Included in theAdmission Document are further details of the Proposals. In addition, theDirectors have convened an Extraordinary General Meeting to be held at 5:00 p.m.(Hong Kong time) on 4 October 2006 at which Shareholders will be asked toconsider and, if thought fit, pass an ordinary resolution to implement theProposals. Details of the Extraordinary General Meeting and the Resolution arecontained in the Notice of EGM set out at the end of the Admission Document. BACKGROUND TO AND REASONS FOR THE PROPOSALS The Acquisition represents an exciting opportunity for the Group to increase thesize of its property portfolio at an attractive price. In addition, theDirectors are of the view that the Acquisition is consistent with the Company'sstated strategy of property investment and development in the Asia Pacificregion, with an initial focus on Hong Kong and China. In particular, theAcquisition enables the Company to make an entry into the China property market. Whilst the Company's principal focus will remain property development, theDirectors are of the view that maintaining a complementary portfolio ofInvestment Properties will provide the Company with a stable cash flow tocomplement its development activities. On Completion, the Enlarged Group will have six development properties and fourinvestment properties, which should enhance the Company's position in theinvestment market and enable it to seek a broader institutional shareholder baseover time. The Company is currently operating under an informal arrangement with SEA whichallows for the Company to utilise SEA's accounting, secretarial and projectmanagement resources on a cost sharing basis. This arrangement has made economicsense for the Company and has allowed the Company to commence operations withoutlarge set-up costs and an overhead structure disproportionate to its level ofassets, and at a cost significantly lower than would have been incurred inindependently providing these resources. At the time of its admission to AIM inJanuary 2006, the Board undertook to review these management arrangements. Nowthat the Company is proposing to significantly increase the size of itsportfolio, the Board is of the view that it is appropriate to put in placeformal arrangements to ensure the proper management of its portfolio. Given thatthe SEA Group has been active in property development and management in HongKong and the PRC for 50 years, the Board is of the view that the SEA Group iswell placed to provide the management services which the Company requires. As aresult, the Company intends to enter into the Management Agreement with SEAIA. INFORMATION ON AGP The Company is the holding company of a commercial, retail and residentialproperty investment and development Group, headquartered in Hong Kong. The Groupcurrently owns four key property assets in Hong Kong. The total asset value andthe net asset value of AGP were, as at 30 June 2006, HK$2,221 million (£151million) and HK$1,575 million (£107 million) respectively. The Group's objectiveis the profitable realisation of its development assets and the enhancement ofthe investment income and capital appreciation in respect of its investmentassets. It also seeks to identify and invest in further property opportunitieswithin Hong Kong, China and other high economic growth areas in the Asia Pacificregion. INFORMATION ON SEA SEA is a public company listed in Hong Kong (HKSE code: 251; marketcapitalisation as at 15 September 2006 HK$2,640 million (£180 million)) with abackground in the business community dating back almost half a century. The SEAGroup was founded in 1956 under the name South-East Asia Investment and AgencyCompany Limited and was listed on both the Far East and Kam Ngan Stock Exchangesin Hong Kong in 1973. In 1989, SEA became the holding company of the SEA Group.The SEA Group is headquartered in Hong Kong, and develops and invests in highquality office, retail, residential and resort properties in Asia Pacificcountries including Hong Kong, China, Indonesia, New Zealand and Australia. DESCRIPTION OF THE TARGET COMPANY AND THE PROPERTIES The Target Group currently owns six property assets in Hong Kong and China whichhave been independently valued by Savills at a total of HK$6,425 million (£437million) as at 30 June 2006. Details of these Properties are as follows: Dah Sing Financial Centre - No. 108 Gloucester Road, Wanchai, Hong Kong (the"DSFC") The DSFC comprises a 39-storey commercial building with ancillary car parkingfacilities completed in 1991. The ground and 1st floor of the building are usedfor retail purposes and the 6th to 38th floors are used for office purposes. Theproperty also comprises 137 covered car parking spaces and 27 open car parkingspaces located on the 2nd to 4th floors. The building is currently 88.3 percent. let and generates a monthly rent of approximately HK$6,900,000. Three floors of the DSFC are currently occupied by the SEA Group. It is intendedthat an arm's length lease to market will be negotiated between the Company andSEA. Wanchai is an area situated at the north of Hong Kong Island, stretching fromCanal Road in the east, to Arsenal Street in the west and Bowen Road in thesouth. It is one of the busiest commercial areas in Hong Kong and includes a mixof residential developments, hotels, shopping centres, entertainment facilitiesand restaurants. Wanchai North features office towers, parks, hotels and aworld-class conference centre. The locality includes a highly-populatedresidential zone (with approximately 170,000 inhabitants) in which theGovernment has led a major district regeneration program over recent years. 28/F, No. 9 Queen's Road Central, Hong Kong (the "Queen's Road Unit") The Queen's Road Unit is the entire floor of a Grade A commercial building inCentral, Hong Kong. It is currently let and generates a monthly rent ofHK$273,865. No. 9 Queen's Road Central is a 35-storey commercial building completed in 1991.The ground to 2nd floors are for retail use, while the remaining floors are usedas offices. Central is the seat of the Hong Kong government and the financial and bankinghub of Hong Kong. Nos. 6-20 Leighton Road, Hong Kong (the "Leighton Road Development") The Leighton Road Development comprises two adjoining lots, which are currentlyunder construction. It is intended that the Leighton Road Development will bedeveloped into a 30-storey hotel comprising 206 guest rooms with two car parkingspaces, one coach parking space, two lay-bys and one loading/unloading bay. Theproposed hotel is scheduled to be completed by the end of 2008. The Leighton Road Development is located at the junction of Causeway Bay andHappy Valley. Causeway Bay is popular for its nightlife and restaurants and alsohas shopping malls favoured by locals. Happy Valley is mainly a residentialarea. The Hong Kong Jockey Club's Hong Kong racecourse is situated in HappyValley. Royal Green - No. 18 Ching Hiu Road, Sheung Shui, New Territories, Hong Kong(the "Royal Green") The Royal Green is a private residential development comprising 922 residentialunits contained in three 40-storey residential towers with ancillaryrecreational and car parking facilities. The Target Group has a 55 per cent.interest in the development, which is divided into two phases: Phase I completedin 2005 and Phase II is scheduled to be completed in November 2006. As at 30August 2006, there were in aggregate 308 unsold residential units in bothphases. There are nine visitors' car parking spaces, 126 private car parkingspaces and 13 motorcycle parking spaces on the ground floor of the development.There is also a clubhouse exclusive to the residents. Sheung Shui is part of the North District in Hong Kong. The North District isone of Hong Kong's largest administrative districts and is separated fromShenzhen by a river and three of the checkpoints leading to China - Lo Wu, ManKam To and Sha Tau Kok - are located here. Historically, farm land, asurbanization continues, the rural areas of the North District are graduallygiving way to multi-storey residential blocks and various industrial andcommercial developments. Plaza Central - 8 Shunchengda Street, Yanshikou, Chengdu, Sichuan Province,China. ("Plaza Central") Plaza Central comprises two new 30-storey office blocks erected on a commonpodium having six commercial/retail floors and two car parking floors atbasement level. The Target Group has a 97 per cent. interest in the development.Leasing of the retail and office space has commenced and a majority of theretail space has been tenanted. Chengdu, with a population of 12 million, is the provincial capital of Sichuanprovince. Westmin Plaza Phase II, Nos 48 - 58 Zhong Shan 7th Road, Li Wan District,Guangzhou, Guangdong Province, China. ("Westmin Plaza") Westmin Plaza is a parcel of land with a site area of approximately 13,109.23sq.m. on which a mixed use development is under construction. The proposeddevelopment will comprise 4 residential blocks and an office block erected on asix-storey commercial/car parking podium. It is scheduled to be completed in thefirst quarter of 2007. There will be a total of 646 residential units, themajority of which have already been pre-sold. Guangzhou, with a population of 8 million, is the largest city in southernChina. INVESTMENT STRATEGY OF THE ENLARGED GROUP On Completion, the Group will become a significant property investment anddevelopment entity in Hong Kong and China with a total asset value ofapproximately HK$9,463 million (£644 million). The Acquisition represents an expansion of the Company's initial strategy ofderiving the majority of its revenues from the development and subsequent saleof developed property assets. Given the current size of the Group's propertyportfolio, the Board believes that a broader strategy of investing in a mix ofdevelopment and investment properties would mitigate some of the inherent risksof relying purely on property development which is more susceptible to shortterm market fluctuations. Going forward, the Board therefore intends to continueinvesting in a property portfolio consisting of a mix of development andinvestment assets. Geographically, the Group intends to continue investing in the property sectorin Hong Kong, China and the wider Asia Pacific region. In particular, theCompany intends to focus on those sectors of the Asian markets where theDirectors believe that the Company has a competitive advantage by virtue of theexperience of the Directors and SEA. FINANCIAL EFFECTS OF THE ACQUISITION ON THE GROUP The Acquisition will have no significant adverse impact on the working capitalof the Group. In addition, on Completion: * the number of properties in the Company's portfolio will increase from four to ten;* the market capitalisation of the Group on re-Admission will increase from HK$1,279 million (£87 million) to HK$5,209 million (£355 million) (based on 40 pence per Ordinary Share);* the Group's NAV will rise from HK$1,575 million (£107 million) as at 30 June 2006 to HK$5,505 million (£375 million); and * the Group will continue to be conservatively geared and will maintain substantial reserves. CURRENT TRADING AND PROSPECTS The Group The current trading of the Group is in line with the expectations of theDirectors. Target Group The current trading of the Target Group is in line with the expectations of thedirectors of SEA. Based on the Directors' review of the Target Group, the current trading of theTarget Group is also in line with the expectations of the Directors. The Enlarged Group The Directors intend to continue investing in a manner consistent with theGroup's investment strategy and, over the next twelve months, AGP's mainobjectives will be to: * progress the planning, construction and sale of the development properties of the Enlarged Group; * actively manage the investment properties of the Enlarged Group; and * source additional investment opportunities within the Asia Pacific region in order to enhance the overall net asset value of the Enlarged Group. TURNOVER Both the Group and the Target Group derive their turnover from propertyinvestment and development in Hong Kong and China. The table below shows thesource of this turnover: AGP 2004 2005 HK$'000 HK$'000Property development 4,126 9,840Property investment 1,323 1,860 5,449 11,700 Target Group 2003 2004 2005 HK$'000 HK$'000 HK$'000Gross rental income 94,475 62,623 64,988Lease surrender income 2,279 - 2,509Gross proceeds from sale of properties 9,399 - 431,695Other revenue - 1,536 1,221 106,153 64,159 500,413 PRINCIPAL TERMS OF THE ACQUISITION AGREEMENT SEA and the Company have entered into the Acquisition Agreement, pursuant towhich the Company will acquire the Target Group from SEA. The aggregateconsideration payable by the Company to SEA for the Acquisition will be theactual net asset value of the Target Group on the Completion Date as adjustedfor the property revaluation of the Properties as at 30 June 2006. Theconsideration for the Acquisition, based on Adjusted June 2006 NAV is expectedto be approximately HK$4,430 million (£302 million) and will be payable by theissue by the Company to SEA (or such company as it shall nominate) of theConsideration Shares at the Issue Price (based on an exchange rate of £1.00 =HK$14.693) with the balance of approximately HK$500 million (£34 million) to besatisfied in cash. The value of the Consideration Shares at the Issue Price isapproximately HK$3,930 million (£268 million). Following Completion, the ActualAdjusted NAV as at the Completion Date will be calculated and the differencebetween the Adjusted June 2006 NAV and the Actual Adjusted NAV as at theCompletion Date will be settled in cash. The Consideration Shares will be issued credited as fully paid and will, inaggregate, represent approximately 75.44 per cent. of the Enlarged ShareCapital. The cash portion of the Consideration is to be provided from theexisting cash resources of the Company. The Acquisition is conditional upon(inter alia) the Shareholders passing the Resolution and Admission becomingeffective. The Acquisition Agreement provides that, in the event that, the propertysituated at Nos 6-20 Leighton Road, Hong Kong is sold within six months ofCompletion, SEA is entitled to receive 80 per cent. of the net profit receivedby the Company in respect of the sale. This arrangement has been put in placedue to SEA's reluctance to sell the property to the Company, SEA having receivedan unsolicited offer for this Property in excess of its current valuation. The Acquisition Agreement has been negotiated by the Independent Directors onbehalf of the Company and entered into on an arm's length basis. PRINCIPAL TERMS OF THE MANAGEMENT AGREEMENT On Completion, the Company will enter into the Management Agreement with SEAIA(a wholly owned subsidiary of SEA) whereby the Company will appoint SEAIA toprovide certain corporate and property management services to the Company. Theservices will include investment property and development project managementservices in respect of the Enlarged Group's property portfolio. Pursuant to the Management Agreement, SEAIA shall, inter alia, manage the assetsof the Enlarged Group in accordance with the Group's investment policy,negotiate and supervise borrowings, advise the Enlarged Group generally inrelation to investment trends and market movements and perform all the functionsof a development project manager and managing agent. In consideration of the services to be provided to the Company by SEAIA pursuantto the terms of the Management Agreement, SEAIA shall receive the followingfees: (a) a sourcing fee equal to one per cent. (1%) of the total acquisition value of real property investments upon completion of the relevant acquisition;(b) a project management fee equal to five per cent. (5%) of the development costs in relation to properties held for development; and(c) an annual portfolio management fee payable at the rate of one per cent. (1%) per annum on the gross asset value of the Group subject to a minimum of HK$100 million per annum. The Management Agreement is terminable by either party giving 12 months' noticein writing provided that such notice shall expire on or after the 5thanniversary of the date of Admission. The Management Agreement has beennegotiated by the Independent Directors on behalf of the Company and enteredinto on an arm's length basis. RELATIONSHIP BETWEEN THE COMPANY AND SEA SEA has entered into a controlling shareholder agreement with the Company. Underthe terms of this agreement, the Company shall at all times be capable ofoperating its business independently of SEA and all transactions andrelationships between the Company and SEA (and their related parties) will be atarm's length and on normal commercial terms. POTENTIAL CONFLICT OF INTEREST The SEA Group has property and non-property related investments within HongKong, China, the wider Asian region and Australasia. The Enlarged Group willhave significant property investments in Hong Kong and China and intends toinvest in these areas and elsewhere in the Asia Pacific region. The Group is mindful that SEA is a substantial Shareholder of the Company andwishes to ensure that there is no conflict of interest, whether real orperceived, between the investing interests of the Group and the SEA Group.Accordingly, a potential conflict may arise in relation to property investmentopportunities. The Company and its nominated adviser, Panmure Gordon, havediscussed this openly with SEA and believe that the risk of conflicts ofinterest is low for the following reasons: (i) the markets in which the two companies invest, or intend to invest, are substantial. There are sufficient investment opportunities in those markets to quickly exhaust the financial resources of both the Group and SEA; (ii) following Completion, all of the SEA Group's material assets in Hong Kong and China will be owned by AGP and, accordingly, AGP will become a significantly larger player in these markets than SEA; and (iii) SEA has entered into a controlling shareholders agreement with the Company. Accordingly, the Board does not feel that there is any further need to restrictSEA's investment activities insofar as they may conflict with those of theEnlarged Group. DIRECTORS It is intended, following Admission, that the composition of the Board willremain the same. Brief biographies of the Directors are set out below: David Carr Mathewson: Non-Executive Chairman and Independent Non-ExecutiveDirector (aged 59) Mr. Mathewson joined the Board in January 2006. He is chairman of AmazingHoldings plc, Corsie Group plc and Talk 107 Edinburgh Limited and a nonexecutive director of Robertson Group Limited and Edinburgh UK Tracker Trustplc. Mr Mathewson is a Trustee of The Royal Botanic Garden Edinburgh and is achartered accountant. Donald Ian Fletcher: Chief Executive Officer and Executive Director (aged 52) Mr. Fletcher joined the Board in March 2004. He is the Chairman of TTP and wasuntil January 2006 the Chief Executive Officer of TTP. Mr. Fletcher also hasresponsibility for SEA Group operations in New Zealand and Australia. Mr.Fletcher joined the SEA Group in 1991 as an executive based in Hong Kong and hasextensive knowledge of the property markets in the Asia Pacific region. Prior tojoining the SEA Group in 1991, Mr. Fletcher worked within the property sector inHong Kong. Lu Wing Chi: Non-Executive Director (aged 60) Mr. Lu joined the Board in March 2004. He is the Chairman and Managing Directorof SEA and is a director of many of its subsidiary and associated companies. Mr.Lu has more than 40 years' experience in property investment and development inHong Kong and throughout the Asia-Pacific region. He is responsible forinternational investment planning strategies within the SEA Group. With effect from Admission, Mr. Lu will become an Executive Director. Furtherdetails of his terms of appointment are set out at paragraph 6.2.1 of Part VIIIof the Admission Document. David Andrew Runciman: Executive Director (aged 55) Mr. Runciman joined the Board in January 2006. He is a Fellow of the RoyalInstitution of Chartered Surveyors of the UK and has spent much of his workingcareer in Asia dealing with all aspects of residential and commercial realestate markets. He formerly served as Chairman for Asia Pacific for CBRE, theworld's largest property services company. Mr. Runciman worked with RichardEllis (subsequently CBRE) for 30 years and was responsible for growing thebusiness from a company comprising just four professionals in 1977 to a companywith over 2,000 staff operating out of 54 offices throughout Asia in 2002. Mr.Runciman is the Chief Executive Officer of Scottish and Oriental Estates whichis his own investment company and has been a resident of Hong Kong since 1977. Chan Ka Wing: Finance Director (aged 34) Mr. Chan joined the Board in June 2006 and is responsible for overseeing theaccounting and financial matters of the Group. He is a member of the AmericanInstitute of Certified Public Accountants and an associate of the Hong KongInstitute of Certified Public Accountants. Mr. Chan has experience in theproperty, audit and finance fields. Richard Other Prickett: Independent Non-Executive Director (aged 55) Mr. Prickett joined the Board in January 2006. He is a Chartered Accountant andhas many years' experience in corporate finance. He was Chairman of BrancoteHoldings Plc from 1995 until its merger with Meridian Gold Inc. in July 2002. Heis a non-executive director of Patagonia Gold Plc, having previously been theChairman, and he is also a non-executive director of the Capital Pub CompanyPlc. As the Company will be pre-dominantly operating under the Management Agreement,the Company shall have no other senior management members. LOCK-IN/ORDERLY MARKET ARRANGEMENTS Each of the Directors has undertaken to Panmure Gordon and as a separateundertaking to the Company that he will not and he will use his reasonableendeavours to procure so far as he is able that, prior to 16 January 2007, noconnected person of his will, without the prior written consent of PanmureGordon and save in certain circumstances, directly or indirectly, transfer,sell, dispose of or otherwise encumber the legal or beneficial ownership of orany interest in the Ordinary Shares held by him on the Original Admission Dateother than through Panmure Gordon and with a view to maintaining an orderlymarket in the Ordinary Shares. In respect of the Ordinary Shares held by them on the Original Admission Date,each of SEA and TTP has entered into an orderly market agreement with theCompany and Panmure Gordon pursuant to which each has agreed that it will not,prior to 16 January 2007, dispose of any interest of such Ordinary Shares heldby it at Admission, without the prior written consent of and other than throughPanmure Gordon and with a view to maintaining an orderly market in the OrdinaryShares. In respect of the Consideration Shares, SEA has entered into an orderly marketagreement with the Company and Panmure Gordon pursuant to which SEA has agreedthat it will not for a period of 12 months from Admission dispose of anyinterest in the Consideration Shares held by it at Admission, without the priorwritten consent of and other than through Panmure Gordon and with a view tomaintaining an orderly market in the Ordinary Shares. In respect of 29,905,818 Ordinary Shares acquired by SEA in the period betweenthe Original Admission Date and Admission there are no lock-in or orderly marketarrangements. RECOMMENDATIONS AND VOTING INTENTIONS The Independent Directors, having consulted with the Company's nominatedadviser, Panmure Gordon, believe that the Proposals are fair and reasonableinsofar as the Shareholders are concerned. In providing advice to theIndependent Directors, Panmure Gordon has taken into account the IndependentDirectors' commercial assessments. RECOMMENDATIONS OF THE BOARD The Board unanimously recommends that the Proposals are in the best interests ofthe Company and that Shareholders should vote in favour of the Resolution. EXPECTED TIMETABLE Last time and date for receipt of Forms of Proxy 5:00 p.m. (Hong Kong time) onfor the Extraordinary General Meeting 2 October 2006 Extraordinary General Meeting 5:00 p.m. (Hong Kong time) on Admission and commencement of dealings in 4 October 2006Enlarged Share Capital on AIM 5 October 2006 Settlement of Consideration Shares 5 October 2006 NOTES: The rate of exchange used for the purposes of this announcement is £1.00 =HK$14.693. In this announcement, the symbols "£ and "p" refer to pounds and pence sterlingrespectively. Unless otherwise stated, all references to legislation refer tothe laws of the UK ENQUIRIES Don Fletcher Tel: +61 (0) 414693968 Asian Growth Properties Limited David Mathewson Tel: +44 (0) 7730 074777 Asian Growth Properties Limited Richard Gray Andrew Potts Tel: +44 (0) 20 7459 3600 Panmure Gordon (Broking) Limited Abigail Singleton Leesa Peters Tel: +44 (0) 20 7429 6666 Conduit PR abigail@conduitpr.com / leesa@conduitpr.com The Admission Document will be available on AGP's website www.asiangrowth.comand at the offices of Stephenson Harwood, One St. Paul's Churchyard, London EC4M8SH. This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to purchase or subscribe for,any securities or any offer or invitation to sell or issue, or any solicitationof any offer to purchase or subscribe for, such securities by any person in anycircumstances, and in any jurisdiction, in which such offer or solicitation isunlawful. Accordingly, copies of this announcement are not being and must notbe mailed or otherwise distributed or sent in or into or from the United States,Canada, Australia, the Republic of Ireland. South Africa or Japan and any personreceiving this announcement (including, without limitation, custodians, nomineesand trustees) must not distribute or send it in or into or from the UnitedStates, Canada, Australia, the Republic of Ireland or Japan. The Ordinary Shares have not been, and will not be registered under the UnitedStates Securities Act of 1933, as amended (the 'Securities Act') or under thesecurities legislation of any state of the United States, and may not be offeredor sold in the United States. The relevant clearances have not been, and willnot be, obtained from the Securities Commission of any province or territory ofCanada; no document in relation to the Admission or the Offer has been, or willbe, lodged with, or registered by, The Australian Securities and InvestmentsCommission; no registration statement has been, or will be, filed with theJapanese Ministry of Finance in relation to the Admission or the Offer; and noregistration statement has been, or will be, filed with the Irish Stock Exchangein relation to the Admission or the Offer. Accordingly, subject to certainexceptions, the Common Shares the subject of the Offer may not, directly orindirectly, be offered or sold within the United States, Canada, Australia,Japan or the Republic of Ireland or offered or sold to a resident of the UnitedStates, Canada, Australia, Japan or the Republic of Ireland. This press release may contain forward-looking statements with respect to AGPand its operations, strategy, financial performance and condition. Thesestatements generally can be identified by use of forward looking words such as'may', 'will', 'expect', 'estimate', 'anticipate', 'intends', 'believe' or'continue' or the negative thereof or similar variations. The actual resultsand performance of AGP could differ materially from those expressed or impliedby such statements. Such statements are qualified in their entirety by theinherent risks and uncertainties surrounding future expectations, including thatthe transaction contemplated herein is completed. Important factors that couldcause actual results to differ materially from expectations include, among otherthings, general economic and market factors, competition, changes in governmentregulation. The cautionary statements qualify all forward-looking statementsattributable to AGP and persons acting on its behalf. Unless otherwise stated,all forward-looking statements speak only as of the date of this press releaseand the parties have no obligation to update such statements. This announcement has been issued by, and is the sole responsibility of, AGP.This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to acquire, purchase orsubscribe for any securities. This announcement has not been examined orapproved by the FSA or the London Stock Exchange or any other regulatoryauthority. Panmure Gordon (Broking) Limited is nominated adviser and broker to the Companyfor the purpose of the AIM Rules. Panmure Gordon (Broking) Limited, which isauthorised and regulated in the United Kingdom by the Financial ServicesAuthority and is a member of the London Stock Exchange, is acting exclusivelyfor the Company in relation to the Proposals. Panmure Gordon (Broking) Limitedis not acting for any other person in connection with the matters referred to inthis announcement and will not be responsible to anyone other than the Companyfor providing the protections afforded to clients of Panmure Gordon (Broking)Limited or for giving advice in relation to the matters referred to in thisannouncement. DEFINITIONS In this announcement, unless the context requires otherwise, the followingexpressions shall have the following meanings: "Acquisition" the proposed acquisition by the Company and/or its nominated adviser of the entire issued share capital of the Target Company; "Acquisition Agreement" the conditional share sale and purchase agreement for the entire issued share capital of the Target Company dated 18 September 2006 between: (1) SEA and (2) the Company; "Actual Adjusted NAV" the actual NAV of the Target Company as shown in the actual unaudited consolidated balance sheet of the Target Company made up as at the Completion Date (but immediately prior to Completion); "Adjusted June 2006 NAV" the NAV of the Target Company as shown in the unaudited consolidated balance sheet of the Target Company made up as at 30 June 2006; "Admission" or "re-Admission" the re-admission of the Existing AGP Shares and the admission of the Consideration Shares to trading on AIM becoming effective in accordance with the AIM Rules; "Admission Document" the document sent to Shareholders containing details of the Proposals, the Notice of EGM and other information related to the Admission; "AIM" AIM, the market of that name operated by London Stock Exchange plc; "AIM Rules" the AIM rules for companies published by London Stock Exchange plc from time to time, governing admission to, and the operation of, AIM; " Board" or "Directors" the directors of the Company, whose names are set out in this announcement; "China" or "PRC" the People's Republic of China (for the purposes of this announcement excluding Hong Kong, Macau and Taiwan); "Company" or "AGP" Asian Growth Properties Limited (AIM: AGP), an international business company incorporated and registered in the British Virgin Islands; "Completion" or "Completion of the the completion of the Acquisition in accordance with the terms of theAcquisition" Acquisition Agreement; "Completion Date" the date on which Completion of the Acquisition takes place; "Consideration Shares" the 668,653,817 new Ordinary Shares to be allotted to SEA (or its nominated persons) on completion of the Acquisition in accordance with the terms of the Acquisition Agreement; "CREST" the computerised settlement system to facilitate the transfer of title to, or interests in, securities in uncertificated form, operated in the UK by CRESTCo Limited; "Enlarged Group" the Company and its subsidiaries as enlarged by the Acquisition; "Enlarged Share Capital" the issued share capital of the Company at Completion comprising the Existing Ordinary Shares and the Consideration Shares;"Existing Ordinary Shares" the existing 217,693,995 Ordinary Shares in issue as at the date of this announcement; "Extraordinary General Meeting" or the extraordinary meeting of the Company convened for 5:00 p.m. (Hong"EGM" Kong time) on 4 October 2006, or any adjournment thereof; "Government" the government of Hong Kong; "Group" AGP and its subsidiaries prior to the Acquisition; "HK$" Hong Kong dollars, the lawful currency of Hong Kong; "HKSAR", "HK" or "Hong Kong" Hong Kong Special Administrative Region of the PRC; "HKSE" The Stock Exchange of Hong Kong Limited; "Independent Directors" Messrs. David Carr Mathewson, David Andrew Runciman and Richard Other Prickett), being Directors who are not involved in the Acquisition or Management Agreement as related parties (as defined in the AIM Rules); "Independent Valuer" or "Savills" Savills Valuation and Professional Services Limited; "Investment Properties" the land, developments and premises and other assets owned by the Group from time to time for the purposes of sale and/or letting and which form part of the Group's assets invested in accordance with the investment policy of the Group unless otherwise directed by the Board; "Issue Price" the deemed issue price per Consideration Share, being 40p; "Management Agreement" the management agreement dated 18 September 2006 in respect of, inter alia, the management of the Group's property assets (1) SEAI and (2) the Company; "m(2)" or "sq.m" square metre(s); "NAV" or "net asset value" net asset value after deducting minority interests; "Nomad" or "Panmure Gordon" Panmure Gordon (Broking) Limited , the nominated adviser of the Company; "Notice of EGM" the notice of EGM set out in the Admission Document; "Ordinary Share(s)" ordinary share(s) in the capital of the Company with par value of US$0.05; "Original Admission Date" 16 January 2006; "Properties" the six properties in Hong Kong and China to be acquired by the Company pursuant to the Acquisition Agreement; "Proposals" the transactions contemplated by the Acquisition Agreement and the Management Agreement and the Admission; "Resolution" the resolution set out in the Notice of EGM; "SEA" S E A Holdings Limited, an exempted company incorporated in Bermuda and listed on the main board of the HKSE; "SEA Group" SEA and its subsidiaries (other than the Group); "SEAIA" South-East Asia Investment and Agency Company, Limited, a company incorporated in Hong Kong; "Shareholders" holders of Ordinary Shares; "sq.ft." square feet; "sq.m." square metres; "Target Company" Giant Well Enterprises Limited, a company incorporated in the British Virgin Islands; "Target Group" the Target Company and its subsidiaries to be acquired by the Company pursuant to the Acquisition Agreement; "TTP" Trans Tasman Properties Limited, a company incorporated in New Zealand and listed on the New Zealand Exchange Limited; "UK" the United Kingdom of Great Britain and Northern Ireland; "US" or "United States" the United States of America, each state thereof, its territories and possessions and the District of Columbia and all other areas subject to its jurisdiction; "US$" US dollars, the lawful currency of the US; "£" British pounds, the lawful currency of the UK; and "%" per cent.. 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