PROPOSED ISSUE OF ZERO COUPON CONVERTIBLE BONDS DUE 2012 AND RESUMPTION OF TRADING

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1 The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares. (formerly known as Chun Wo Holdings Limited) (Incorporated in Bermuda with limited liability) (Stock Code: 711) (Warrant Code: 654) PROPOSED ISSUE OF ZERO COUPON CONVERTIBLE BONDS DUE 2012 AND RESUMPTION OF TRADING The Company has entered into the Subscription Agreement with the Subscribers pursuant to which the Subscribers have agreed, subject to the provisions therein, to subscribe for the Convertible Bonds with an aggregate principal amount of HK$372.3 million. The Convertible Bonds are convertible into the Shares. The estimated net proceeds of the Convertible Bonds issue, after deduction of fees and expenses, are expected to amount to approximately HK$360.8 million and are currently intended to be used by the Company for acquiring new land for development in the PRC and for other general working capital purposes. Trading in the Shares and warrants of the Company (stock code: 711 and warrant code: 654) have been suspended with effect from 9:34 a.m. on Monday, 26 November 2007 pending the release of this announcement. Application has been made for the resumption of trading in the Shares and warrants of the Company on the Stock Exchange at 9:30 a.m. on Tuesday, 27 November Shareholders and potential investors should exercise caution when dealing in the securities of the Company. - -

2 SUBSCRIPTION AGREEMENT Date: 26 November 2007 Issuer: The Company Subscribers: (1) DKR Soundshore Oasis Holding Fund Ltd. (2) GLG Market Neutral Fund (3) HSBC Bank Plc To the best knowledge, information and belief of the Directors having made all reasonable enquiry, the Subscribers and their ultimate beneficial owners are independent of and not connected with the directors, chief executives and substantial shareholders of the Company and its subsidiaries and their respective associates (as defined under the Listing Rules), and they are not parties acting in concert with the Major Shareholders. The Directors confirm that there is no prior transaction between each of the Subscribers (and their ultimate beneficial owners) and the Group. Subscription The Subscribers have agreed to severally subscribe for such amount of the Convertible Bonds as set out in the Subscription Agreement. The aggregate principal amount of the Convertible Bonds proposed to be issued is HK$372.3 million. Undertakings The Company has undertaken, among other things, that neither it nor any of its subsidiaries or other affiliates over which it exercises management or voting control, nor any person acting on its or their behalf will, for a period of 90 days after the Closing Date, without the prior written consent of all the Subscribers or their respective assignees, issue, offer, sell, contract to sell, pledge or otherwise dispose of (or publicly announce any such issuance, offer, sale or disposal) securities issued by the Company and having a maturity of more than one year from the date of issue, any Shares or securities convertible or exchangeable into or exercisable for Shares or warrants or other rights to purchase Shares or any security or financial product whose value is determined directly or indirectly by reference to the price of the Shares, including equity swaps, forward sales and options representing the right to receive any Shares save for Shares that may be issued pursuant to (a) the options granted or to be granted pursuant to the share option scheme of the Company adopted on 28 August 2002, (b) exercise of the bonus warrants of the Company listed on 1 March 2007 or (c) the conversion provisions of the Convertible Bonds

3 Conditions of the Subscription Agreement Completion of the Subscription Agreement is conditional upon, among other things, the satisfaction of the following: 1. delivery of the legal opinions to the Subscribers dated the Closing Date and addressed to the Subscribers and the trustee of the Convertible Bonds from Bermudian lawyers, Hong Kong lawyers and English lawyers relating to the issue of the Convertible Bonds; 2. the trust deed and the agency agreement are executed on or before the Closing Date by or on behalf of all parties thereto; 3. the Listing Committee of the Stock Exchange shall have agreed to list the new Shares that will be issued pursuant to the General Mandate upon conversion of the Convertible Bonds; 4. on or prior to the Closing Date, Mr. Pang Kam Chun shall have executed a lock-up agreement whereby he undertakes that neither he nor any person acting on his behalf nor any person controlled by him will sell any Shares or enter into other transactions with a similar effect for a period of 90 days from the Closing Date; 5. since the date of the Subscription Agreement, there has been no adverse change, or any development reasonably likely to result in an adverse change, in the condition (financial or otherwise), prospects or general affairs of the Group that is material in the context of the issue of the Convertible Bonds; and 6. the representations and warranties by the Company in the Subscription Agreement are true and correct on the date of Subscription Agreement and on the Closing Date with reference to the facts and circumstances then subsisting. Closing Subject to the fulfilment of the conditions set out in the Subscription Agreement, closing of the Subscription Agreement shall take place on 6 December 2007 (or such later date as the parties shall agree provided that such date shall not be later than 20 December 2007). Termination Each of the Subscribers may severally give a termination notice to the Company at any time prior to the payment of the net proceeds of the issue of the Convertible Bonds to the Company on the Closing Date if: i. any representation and warranty by the Company in the Subscription Agreement is or proves to be untrue or incorrect on the date of the Subscription Agreement or on the Closing Date; - 3 -

4 ii. iii. iv. the Company fails to perform any of its obligations under the Subscription Agreement; any of the conditions set out in the Subscription Agreement is not satisfied or waived by the Subscriber on the Closing Date; since the date of the Subscription Agreement there has been, in the opinion of the Subscriber, such a change in national or international financial, political or economic conditions or currency exchange rates or exchange controls as would in its view be likely to prejudice materially the success of the offering and distribution of the Convertible Bonds or dealings in the Convertible Bonds in the secondary market; or v. there shall have occurred general moratorium on commercial banking activities in Hong Kong by any Hong Kong authorities, a suspension or material limitation of trading in securities generally on the Stock Exchange, or an outbreak or escalation of hostilities or act of terrorism which the Subscribers (acting jointly) would consider to be likely to prejudice materially in the success of the distribution of the Convertible Bonds. Upon termination, the Issuer shall be discharged from performance of its obligations to issue the Convertible Bonds to the relevant Subscriber, and the relevant Subscriber shall be discharged from performance of its obligations to subscribe for the Convertible Bonds. PRINCIPAL TERMS OF THE CONVERTIBLE BONDS Issuer The Company Principal Amount The aggregate principal amount of the Convertible Bonds will be HK$372.3 million. Issue Price 100% of the principal amount of the Convertible Bonds. Denomination HK$100,000 Redemption Price 143.6% of the principal amount of the Convertible Bonds at maturity

5 Interest The Convertible Bonds will carry no interest. Conversion Rights Holders of the Convertible Bonds will have the right at any time on or after 6 June 2008 up to, and including, the close of business on the Maturity Date to convert the Convertible Bonds into Shares at the Conversion Price, subject to adjustment and reset. Shares issued on conversion will rank pari passu in all respects with the Shares in issue as at the conversion date in all respects and will entitle the holders thereof to receive all future dividends and distributions which are declared, made or paid after the date of allotment of such Shares. Conversion Price The Convertible Bonds will be convertible into Shares at an initial conversion price of HK$2.18 per Share. The Conversion Price will be subject to adjustment for subdivision, consolidation or reclassification of Shares, capitalisation of profits or reserves, capital distribution, bonus issues, rights issues, other issues at less than current market price, modification of rights of conversion, other offers to Shareholders and other dilutive events. The initial Conversion Price of HK$2.18 represents: (i) (ii) a premium of approximately 29.76% to the closing price of HK$1.68 per Share as quoted on the Stock Exchange on 23 November 2007, being the last trading day prior to the date of this announcement; a premium of approximately 23.86% to the average closing price of the Shares of approximately HK$1.76 per Share as quoted on the Stock Exchange over the last five trading days up to and including 23 November 2007; and (iii) a premium of approximately 19.78% to the average closing price of the Shares of approximately HK$1.82 per Share as quoted on the Stock Exchange over the last ten trading days up to and including 23 November The Conversion Price was set after arms length negotiations between the Company and the Subscribers having regard to the prevailing market price of the Shares prior to the date of this announcement and the business performance of the Group under the prevailing market conditions

6 For illustrative purposes only and on the basis of the initial conversion price of HK$2.18 per Share, the aggregate principal amount of the Convertible Bonds of HK$372.3 million will be convertible into 170,779,816 new Shares, representing approximately 19.92% of the existing issued share capital and 16.61% of the issued share capital as enlarged by the Shares to be issued upon conversion of the Convertible Bonds. These Shares will be allotted and issued by the Company pursuant to the General Mandate which permits the Company to issue and allot up to 170,795,978 Shares. Conversion Price Reset If the Volume Weighted Average Price for each day during the 30 consecutive trading days ending on the 30th day prior to before 6 December 2008, 6 June 2009 or 6 December 2009 is less than the Conversion Price in effect on such date, the Conversion Price will automatically be adjusted downwards to the arithmetic average of the Volume Weighted Average Price during such 30 trading day period, save that the adjusted Conversion Price shall not be lower than the Reset Price Floor. In the event that the Conversion Price is reset, the total number of Shares to be issued after such adjustment will be more than the number of Shares permissible under the General Mandate, and the maximum number of Shares that may be issued after such adjustment will be 243,333,333 Shares. In such case, the Company shall satisfy such remaining obligation to issue Shares under the Convertible Bonds by exercising the cash settlement option afforded to the Company under the terms and conditions of the Convertible Bonds. Any such adjustment to the Conversion Price shall only be a downward adjustment and an announcement will be made in the event of any adjustment to the Conversion Price. Cash settlement option The obligation of the Company to issue Shares on the exercise of any conversion rights attaching to the Convertible Bonds may, at the sole discretion of the Company, be settled, in whole or in part, by cash payment. The cash settlement payment shall be the product of (i) the number of Shares otherwise deliverable under the Convertible Bond and in respect of which the Company has elected such cash settlement option and (ii) the average of the Volume Weighted Average Price for the 10 trading days immediately after the date the Company elects to exercise its cash settlement option in respect of the relevant Convertible Bond. Term of Convertible Bonds Five years. The Maturity Date is 6 December Transfer The Convertible Bonds are freely transferable. The Company undertakes to the Stock Exchange that it will notify the Stock Exchange immediately upon it becoming aware of any dealings in the Convertible Bonds by any connected person of the Company

7 Redemption Unless previously redeemed, converted or purchased and cancelled, the Convertible Bonds will be redeemed at 143.6% of their principal amount in Hong Kong dollars on the Maturity Date, which is expected to give a yield to maturity of 7.375% per annum, calculated on a semi-annual basis, from the Closing Date of the Convertible Bond Issue to the Maturity Date. Redemption at the Option of the Company At any time the Company may redeem the Convertible Bonds, in whole but not in part, at a redemption price equal to the Early Redemption Amount if: (i) (ii) on or at any time after 6 December 2010 but not less than 14 business days prior to the Maturity Date, if the Volume Weighted Average Price of the Shares for any 20 trading days out of the 30 consecutive trading days prior to the date upon which notice of such redemption is given was at least 130% of the applicable Early Redemption Amount divided by the Conversion Ratio in effect on such trading day; less than 10% of aggregate principal amount of the Convertible Bonds originally issued is outstanding; or (iii) the Company certifies to the trustee of the Convertible Bonds that immediately prior to the giving of such notice the Company has or will become obliged to pay additional amounts under the tax grossup obligation as a result of any change in, or amendment to, the laws or regulations of Bermuda or Hong Kong or any political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 26 November 2007, and (ii) such obligation cannot be avoided by the Company taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obliged to pay such additional amounts were a payment in respect of the Bonds then due. Redemption at the option of the holders of the Convertible Bonds On 6 December 2010, the Company will, at the option of the holders of the Convertible Bonds, redeem in whole or in part their Convertible Bonds at 124.3% of the principal amount of the Convertible Bonds. Redemption for change of control and delisting The Convertible Bonds may be redeemed at the option of the holders of the Convertible Bonds at the Early Redemption Amount when there is a change in control of the Company or if the Shares cease to be listed on the Stock Exchange or any alternative stock exchange

8 Listing The Convertible Bonds will not be listed on the Stock Exchange or any other stock exchange. An application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in the Shares to be issued pursuant to the General Mandate upon the exercise of the conversion rights attached to the Convertible Bonds. SHAREHOLDING STRUCTURE OF THE COMPANY To the best knowledge of the Directors and the Company, the shareholding structure of the Company as at the date of this announcement is as follows: Assuming full conversion of the Convertible Bonds at the Existing (as at the date of initial Conversion Shareholder this announcement) Price of HK$2.18 % of issued % of issued share capital of share capital of No. of Shares the Company No. of Shares the Company Mr. Pang Kam Chun (Note) 276,116, ,116, GT Winners Limited (Note) 29,348, ,348, Madam Li Wai Hang, Christina (Note) 0,148, ,148, Sub-total 415,613, ,613, Mr. Kwok Yuk Chiu, Clement,000, ,000, Mr. Au Son Yiu 301, , Other public shareholders 440,485, ,485, Bondholders 70,779, Sub-total 441,787, ,567, Total 857,400, ,028,180,

9 Note: Mr. Pang Kam Chun is deemed to have a corporate interest in those Shares of the Company by virtue of his 100% interest in GT Winners Limited. He is also deemed to be interested in 10,148,875 Shares in which Madam Li Wai Hang, Christina, his spouse, has an interest. CHANGES TO THE SHAREHOLDING IN THE COMPANY AS A RESULT OF CONVERSION Assuming that no other issue of Shares and no repurchase of Shares is made by the Company before conversion of the Convertible Bonds and that there is no adjustment or reset in the Conversion Price, the holding of the Major Shareholders after full conversion of the Convertible Bonds will be 415,613,509 Shares (approximately 40.42%). Assuming that all outstanding options granted under the share option scheme adopted by the Company on 28 August 2002 and all outstanding bonus warrants of the Company listed on 1 March 2007 as at the date of this announcement are also exercised but no other Shares are issued or repurchased before then and that there is no adjustment or reset in the Conversion Price, a total number of 30,816,604 Shares and 50,596,807 Shares will be issued pursuant to such share option scheme and bonus warrants respectively, and the aggregate shareholding of the Major Shareholders in the Company after full conversion of the Convertible Bonds will be 436,318,942 Shares (approximately 42.42%). Based on the subscription amount under the Subscription Agreement, none of the Subscribers of the Convertible Bonds will become a substantial shareholder of the Company. USE OF PROCEEDS The estimated net proceeds of the Convertible Bonds issue, after deduction of expenses, are expected to amount to approximately HK$360.8 million and are currently intended to be used by the Company as to 90% for acquiring new land for development in the PRC and as to 10% for other general working capital purposes. REASONS FOR AND BENEFITS OF THE CONVERTIBLE BOND ISSUE The Convertible Bond Issue will, upon completion, raise funds for the Company in an aggregate net sum of approximately HK$360.8 million. It is currently intended that the funds will be used by the Company as mentioned above. This will also improve the liquidity position of the Group as well as potentially enhance the equity base and reduce the financing costs of the Group. The Directors (including the independent non-executive Directors) consider that the Subscription Agreement and the Convertible Bonds were agreed on normal commercial terms and were fair and reasonable and in the interests of the Company and the Shareholders as a whole

10 FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS There was no fund raising activities of the Company in the past 12 months other than the bonus warrants issue by the Company as set out in its circular dated 23 January As at the date of this announcement, proceeds of approximately HK$83.57 million were raised pursuant to the exercise of such bonus warrants and such proceeds were fully utilised as general working capital of the Company. INFORMATION ON THE GROUP The Group is engaged principally in property development and property investment, construction and professional services. TRADING Trading in the Shares and warrants of the Company (stock code: 711 and warrant code: 654) have been suspended with effect from 9:34 a.m. on Monday, 26 November 2007 pending the release of this announcement. Application has been made for the resumption of trading in the Shares and warrants of the Company on the Stock Exchange at 9:30 a.m. on Tuesday, 27 November Shareholders and potential investors should exercise caution when dealing in the securities of the Company. DEFINITIONS Closing Date Company Conversion Price Convertible Bond Issue Convertible Bonds Conversion Ratio 6 December 2007, being the date on which the Convertible Bonds will be issued Chun Wo Development Holdings Limited (formerly known as Chun Wo Holdings Limited), a company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange means the price per Share at which the Convertible Bonds may be converted into Shares, subject to adjustment and reset the subscription and issue of the Convertible Bonds with an aggregate principal amount of HK$372.3 million, under the Subscription Agreement the convertible bonds of an aggregate principal amount of HK$372.3 million in accordance with the provisions of the Subscription Agreement the principal amount of the Convertible Bonds divided by the then Conversion Price

11 Directors Early Redemption Amount General Mandate Group HK$ Hong Kong Listing Rules Major Shareholders directors of the Company the principal amount of the Convertible Bonds plus a gross yield of 7.375% per annum, calculated on a semi-annual basis the general mandate granted to the Directors to issue Shares at the annual general meeting of the Company held on 22 August 2007 the Company and its subsidiaries Hong Kong dollars the Hong Kong Special Administrative Region of the People s Republic of China the Rules Governing the Listing of Securities on the Stock Exchange collectively Mr. Pang Kam Chun, GT Winners Limited and Madam Li Wai Hang, Christina, being the major shareholders of the Company and interested in aggregate in approximately 48.47% of the existing issued share capital of the Company as at the date of this announcement Maturity Date 6 December 2012 PRC Reset Price Floor Share(s) Shareholder(s) Stock Exchange Subscribers People s Republic of China (i) in respect of the first reset date on 6 December 2008, 80% of the initial Conversion Price of HK$2.18; (ii) in respect of the second reset date on 6 June 2009, 75% of the initial Conversion Price and (iii) in respect of the third reset date on 6 December 2009, 70% of the initial Conversion Price ordinary shares of HK$0.10 each in the share capital of the Company holder(s) of Shares The Stock Exchange of Hong Kong Limited collectively DKR Soundshore Oasis Holding Fund Ltd., GLG Market Neutral Fund and HSBC Bank Plc

12 Subscription Agreement Volume Weighted Average Price a conditional subscription agreement entered into between the Company and the Subscribers on 26 November 2007 in connection with the issue by the Company of the Convertible Bonds in respect of a Share the daily volume weighted average sale price (rounded to the nearest cent) of Shares sold on the Stock Exchange % per cent. By Order of the Board Chun Wo Development Holdings Limited Pang Kam Chun Chairman Hong Kong, 26 November 2007 As at the date of this announcement, the executive directors of the Company are Mr. Pang Kam Chun, Madam Li Wai Hang, Christina and Mr. Kwok Yuk Chiu, Clement and the independent non-executive directors of the Company are Mr. Au Son Yiu, Mr. Chan Chiu Ying, Mr. Hui Chiu Chung JP and Mr. Lee Shing See GBS, OBE, JP