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Monday, 1 March, 2010 Easyknit Enterprises Holdings Limited EASYKNIT ENTERPRISES (SEHK: 616) ANNOUNCED SALE OF INDUSTRIAL LAND IN HUZHOU REVENUE APPROXIMATELY HK$15,262,000 (Hong Kong, 1 March, 2010) – Easyknit Enterprises Holdings Limited (SEHK Code: 616) (“Easyknit Enterprises”/ “The Company”) announced the Company’s subsidiaries Easyknit Weaving (Huzhou) and Easyknit Dyeingand Printing (Huzhou) sell all industrial lands to Zhili Town Government, Huzhou. The total consideration is HK$54,010,000 which is to be settled by installments with final full settlement to be made within six months of signing of the Sale and Purchase Agreement and the Finance Bureau of Wuxing District as guarantor. The Sale is in response to the increasing concerns about the pollution of the Taihu Lake caused by the discharge of industrial waste and that the plans for the Huzhou Project had to be changed in a way that Easyknit Enterprises rendered the Huzhou Project unviable. The Disposal provides the Group with an opportunity to dispose of the Repurchased Lands and to use the proceeds from the Disposal for general working capital of the Group and to fund possible future investments. In addition, the Zhili Town Government has agreed to pay a sum of approximately HK$17,968,000 to the Vendors in reimbursement of sums paid to the Zhili Town Government by the Vendors to construct a sewage treatment system. The approximately HK$17,968,000 had been utilized by the Zhili Town Government at all times, and the construction of the sewage treatment system has not yet commenced. The Zhili Town Government has agreed to pay interest of approximately HK$8,584,000 at the rate of 10% per annum on this sum. The total amount payable by the Zhili Town Government in connection with this reimbursement is approximately HK$26,552,000. This sum is also to be paid within six months of signing of the Sale and Purchase Agreement. The Zhili Town Government has agreed to pay a deposit of approximately HK$3,410,000 to the Vendors within 3 working days of signing the Sale and Purchase Agreement. The value attributable to the Repurchased Lands in the books of the Company as at 30 September 2009 was approximately HK$36,893,660.Upon completion of the Disposal, other than the interest income of approximately HK$8,584,000and compensation of approximately HK$6,365,000, the Directors expect that the Company will recognize a disposal gain of approximately HK$15,262,000 in the consolidated income statements of the Group, calculated by reference to [the difference between the net proceeds of the transfer of the Repurchased Lands after taking into account estimated transaction costs of approximately HK$1,500,000 and the net book value of the Repurchased Lands as at 31 January 2010. ~end~ About Easyknit Enterprises Holdings Limited (Stock Code: 616) The Group’s principal businesses are in knitting, bleaching and dyeing.
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