KIN DON HOLD<0208> - Announcement

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.

Kin Don Holdings Limited
(Incorporated in the Cayman Islands with limited liability)

Issue of New Shares pursuant
to the Silver Galaxy Agreement

Pursuant to the terms of the Silver Galaxy Agreement, Silver Galaxy has 
advanced a loan of HK$42,000,000 to the Company and has made the Election, 
conditionally, to convert half of the principal amount of the Loan and 
accruing interest into new KD Shares. Assuming that the interest rate for 
the Loan remains at 10.875% per annum for the entire period from 31 
December 1999 to 31 March 2000, Silver Galaxy will be entitled to be 
issued 59,192,400 KD Shares, representing approximately 9.56% of the 
existing issued share capital of the Company and 8.72% of the issued share 
capital of the Company as enlarged by the issue of such KD Shares, at 
HK$0.3645 per KD Share. The existing issued share capital of the Company 
comprises 619,414,705 KD Shares.

Silver Galaxy Agreement

Reference is made to the announcement ("Announcement") of the Company 
dated 20 December 1999. Terms defined in the Announcement bear the same 
meanings in this announcement, unless the context otherwise requires.

Pursuant to the terms of the Silver Galaxy Agreement, on 30 December 1999, 
Silver Galaxy advanced an unsecured loan in the sum of HK$42,000,000 to 
the Company and elected for the repayment of half of the principal amount 
of the Loan and accruing interest, subject to the conditions precedent 
mentioned below, by the issue of new KD Shares at the price HK$0.3645 per 
KD Share ("Share Price"). Assuming that the interest rate for the Loan 
remains at 10.875% per annum for the entire period from 31 December 1999 
to 31 March 2000, Silver Galaxy will be entitled to be issued 59,192,400 
KD Shares, representing approximately 9.56% of the existing issued share 
capital of the Company and 8.72% of the issued share capital of the 
Company as enlarged by the issue of such KD Shares. Silver Galaxy has 
indicated that it may dispose of the KD Shares after their issue. At 
present, there is no agreement between the Company and Silver Galaxy as to 
any appointment of Directors nominated by Silver Galaxy. 

Silver Galaxy has also notified the Company that it will not exercise the 
Option to subscribe a further sum of HK$40,000,000 for new KD Shares 
and/or Convertible Bonds. 

Silver Galaxy

Silver Galaxy is wholly and beneficially owned by a private investment 
fund ("Fund") established in the Cayman Islands which is advised by an 
investment advisor registered under the Securities Ordinance of the Laws 
of Hong Kong. Substantially all the profits of the Fund is indirectly 
owned by a Japanese company which is principally engaged in securities 
business, and is an independent third party not connected with any of the 
directors, chief executive or substantial shareholders of the Company or 
their respective associates (as defined in the Listing Rules).

Conditions Precedent

The issue of the new KD Shares to Silver Galaxy is subject to:

(1)     approval by shareholders of the Company at an extraordinary 
general meeting; and 

(2)     the Stock Exchange granting the approval to the listing of and 
permission to deal in the KD Shares.

Subject to the fulfilment of the conditions precedent, the KD Shares are 
expected to be issued to Silver Galaxy on or before 31 March 2000. The 
Company is required to repay the remaining HK$21,000,000 of the Loan and 
accruing interest in cash on or before 31 March 2000. 

Intention of Company to raise further fund

The Company will consider funding the repayment of the balance of the Loan 
and accruing interest and the payment of the balance of subscription price 
of the Shares and the shareholder's loan under the shareholders' agreement 
entered into between Li Yang, the Company and City Power by means such as 
placing of KD Shares and/or issue of convertible notes. Further 
announcement will be made by the Company when such placing or issue is 
proceeded with. If the aforesaid conditions precedent are not fulfilled on 
or before 31 March 2000, the Company will be required to repay the entire 
Loan and accruing interest in cash on that day. 

Conversion Price

The Share Price is the simple average of the daily closing price of KD 
Shares as quoted by the Stock Exchange for the period from 30 November 
1999 to 29 December 1999. The Board wish to clarify that pursuant to the 
Silver Galaxy Agreement, the Conversion Price is the lower of HK$0.72 and 
the simple average of the daily last traded share price of KD Shares as 
quoted by the Stock Exchange over the one month period ending on the 
banking day immediately preceding the date of Election, not the day ending 
on the date of Election as stated in the Announcement.

The Share Price represents a premium of approximately 7.21% over the 
closing price of HK$0.34 of the KD Shares as quoted by the Stock Exchange 
on 30 December 1999 and a discount of approximately 6.77% over the average 
closing price of HK$0.391 of the KD Shares as quoted by the Stock Exchange 
for the last ten trading days ended on 30 December 1999. The Share Price 
also represents a premium of approximately 21.51% to the net tangible 
asset value per KD Share of approximately HK$0.30 as shown in the audited 
accounts of the Company for the year ended 30 November 1998 as adjusted by 
the interim results of the Company for the six-month ended 31 May 1999.

The Share Price will be subject to adjustment to be determined by the 
auditors of the Company upon the happening of certain events including new 
issue of KD Shares or securities or bonds convertible into KD Shares at 
below 85% of the current market price of KD Shares.

Shareholdings 

Assuming the issue of 59,192,400 KD Shares to Silver Galaxy, the 
shareholdings of the existing controlling shareholders of the Company, 
Keen Intelligence, Glowing Bless and Mr. Au Tung Chi, would be reduced 
from approximately 40.44%, 2.22% and 1.90% respectively to approximately 
36.91%, 2.03% and 1.73% respectively of the enlarged issued share capital 
of the Company and 59.33% of the KD Shares would be held by the public.

General

A circular of the Company setting out, inter alia, the details of the 
Shareholders' Agreement and the Silver Galaxy Agreement and a notice of an 
extraordinary general meeting of the Company convened for the purpose of 
approving the issue of the KD Shares, will be sent to shareholders of the 
Company as soon as practicable and in any event within 21 days from the 
date of the Announcement. 

The Company will make an application to the Stock Exchange for the listing 
of and permission to deal in the KD Shares which will be issued to Silver 
Galaxy.

        By Order of the Board
        Kin Don Holdings Limited
        Wei Cheng Wen
        Director

Hong Kong, 3 January 2000