Lee & Man to form Vietnamese joint venture

April 11, 2007 (Press Release) - Lee & Man Paper Manufacturing Ltd. yesterday said that Top Honour, an indirect wholly owned subsidiary of the Company, has entered into the joint venture agreement with Wise Sense relating to the regulation of the joint venture company. The joint venture company will be the holding company for a company to be established in Vietnam to engage principally in the production of linerboard and corrugating medium.

Pursuant to the joint venture agreement, Top Honour will hold a 75% equity interests and Wise Sense will hold the remaining 25% equity interests in the joint venture company. Both parties agreed that they will advance the aggregate amount of $170 million (approximately HK$1,326 million) to the joint venture company (as to $127.5 million (approximately HK$994.5 million) by Top Honour and $42.5 million (approximately HK$331.5 million) by Wise Sense), by way of further subscription of shares or shareholder loan or a combination thereof, such amount to be advanced as and when requested by the board of directors of the joint venture company on a pro-rata basis according to their respective shareholding.

The Company also announced that the joint venture company has entered into the acquisition agreement with the vendor to purchase a main unit of paper machine for Paper Machine XV for EUR40,110,000 (approximately HK$418,147,000) for the purpose of establishing a production line in Vietnam.

SOURCE: Lee & Man Paper Manufacturing Ltd.

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