The Directors are pleased to announce that on 12th October 2000, the Company has entered into an agreement with CRH in relation to the acquisition of CRH’s entire interest in the oil distribution operation which is principally engaged in (i) the transportation, storage, marketing, import and export of petroleum products, (ii) distribution of chemicals in Hong Kong and the Chinese Mainland; (iii) distribution of LPG gas in Hong Kong and the Chinese Mainland; and (iv) the ownership and operation of three oil tankers, one LPG gas tanker and 13 small to medium size vessels, which are employed exclusively by the oil distribution operation.

The consideration from the acquisition shall be satisfied in the following manner:

The transfer to CRH from CRE of the entire issued share capital of Finetex, the sole asset of which is 661,500,000 shares in CRBL representing 44.2% of CRBL’s issued share capital;

The transfer to CRH from CRE of the entire issued share capital of Waterside, the sole asset of which is 825,347,743 shares in Logic representing 54.7% of Logic’s issued share capital; and a lump sum cash payment of HK$796.0 million which will be funded by the Group’s internal resources.

The total consideration of HK$2,649.0 million has been arrived at after arm’s length negotiations between the parties thereto. The consideration is determined with reference to the net profits of the oil distribution operation as at 31st December 1999 of approximately HK$319.0 million and the shareholding interests in CRBL and Logic forming part of the consideration, being valued at their book value in CRE’s consolidated accounts. The historic price earnings multiple of this Acquisition would be approximately 8.3. However, if the shareholding interests in CRBL and Logic forming part of the consideration, are valued at their current market value, the effective price earnings multiple of this Acquisition would be approximately 7.5 times. The Directors consider that the terms of the Agreements are fair and reasonable and that the Acquisition is in the best interest of the Company.

The directors would like to refer to the announcement by CRH made on 19th June 2000 by CRH on its proposed restructuring plan. Under the plan, CRH intends to transform its principal listed subsidiary, CRE, into a premier distribution company in Asia of consumer and industrial products. CRE’s mission will be to facilitate international trade between China and the rest of the world by combining CRH long established expertise in distribution with advance information and internet technology.

The passing of a resolution at the Extraordinary General Meeting approving the Acquisition by the independent shareholders, being those shareholders of CRE other than CRH and its Associates, as defined in the Listing Rules; and

The receipt of a confirmation by the Executive Director of the Corporate Finance Division of the Securities and Futures Commission that neither CRH nor any member of its group is required to make a general offer for all the shares in the company under rule 26 of the Hong Kong Code on Takeovers and Mergers.