MAE HOLDINGS<0851> - Announcement & Resumption of Trading

The Stock Exchange of Hong Kong Limited takes no 
responsibility for the contents of this announcement, makes 
no representation as to its accuracy 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.

MAE HOLDINGS LIMITED
(incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION
ACQUISITION OF FURTHER INTEREST IN AN INTERNET PROJECT

*       The Company and its wholly-owned subsidiary as 
purchaser entered into a conditional sale and purchase 
agreement on 30th November, 1999 (as supplemented by a 
supplemental agreement dated 2nd December, 1999) with 
Sunstar Technology Limited as vendor in respect of the 
acquisition of 12.5 per cent. interest in Skynet for a 
consideration of HK$31,750,000. Prior to the Acquisition, 
the Company has already acquired 2 per cent. indirect 
interest in Skynet (as disclosed in the announcement of the 
Company dated 11th October, 1999).

*       The consideration will be satisfied by way of allotment 
and issue of a total of 250,000,000 new Shares at HK$0.127 
per Share by the Company to the Vendor. The Consideration 
Shares represent approximately 13.51 per cent. of the 
existing issued share capital of the Company and 
approximately 11.90 per cent. of the issued share capital 
of the Company as enlarged by the issue of the Consideration 
Shares. The Board (excluding the non-executive Directors) 
considers that the terms of the Agreement are fair and 
reasonable so far as the Shareholders are concerned.

*       The Acquisition constitutes a discloseable transaction 
for the Company under the Listing Rules. A circular 
containing, among other things, further details on the 
Acquisition will be despatched to the Shareholders as soon 
as practicable.

*       The Board has noted the recent increase in the trading 
volume of the Shares and wish to inform the Shareholders that 
it is not aware of any reason for such increase.

*       Trading in the Shares on the Stock Exchange was 
suspended at the request of the Company with effect from 
10:00 a.m. on 1st December, 1999 pending the release by the 
Company of this announcement. The Company has applied for 
the resumption of trading in the Shares with effect from 
10:00 a.m. on 3rd December, 1999.

The conditional sale and purchase agreement dated 30th 
November, 1999 (as supplemented by a supplemental agreement 
dated 2nd December, 1999) (the "Agreement")

Parties
Purchaser:      Star Technology Incorporated (the 
"Purchaser"), a company incorporated in the British Virgin 
Islands with limited liability and a wholly-owned subsidiary 
of MAE Holdings Limited (the "Company")

Vendor: Sunstar Technology Limited (the "Vendor"), a 
company incorporated in Hong Kong with limited liability. 
The Vendor is an investment holding company and is held as 
to 76 per cent. by Concept Kingdom Ltd., 8 per cent. by 
Starcom Investment Ltd., 8 per cent. by Foundation Asset Ltd., 
and the balance of 8 per cent. by the Purchaser. The 
beneficial controlling shareholder of Starcom Investment 
Ltd. is Starlight International Holdings Limited, a company 
listed on the Stock Exchange of Hong Kong Limited (the "Stock 
Exchange"). The beneficial controlling shareholder of 
Concept Kingdom Ltd. and Foundation Asset Ltd. is the same 
individual person (the "Independent Person") who is a 
businessman in Hong Kong. The board (the "Board") of 
directors (the "Directors") of the Company confirms to the 
best of its knowldege that, apart from the Purchaser, all 
beneficial owners of the Vendor and the Independent Person 
are independent of and not connected with the Company, 
directors, chief executives, substantial shareholders of 
the Company, its subsidiaries or their respective associates 
(as defined under the Rules Governing the Listing of 
Securities on the Stock Exchange (the "Listing Rules")).

The Company:    the holding company of the Purchaser

Asset to be acquired:

1,250 shares of HK$1.00 each, representing 12.5 per cent. 
in the existing issued share capital of Skynet Limited 
("Skynet").

Consideration and payment terms

Consideration

The consideration of HK$31,750,000 was arrived at after 
arm's length negotiations between the Purchaser and the 
Vendor, and based on normal commercial terms with reference 
to the discounted cashflow projection of Skynet as estimated 
by the management of Skynet.

Based on the cash consideration of HK$4,000,000 paid for the 
acquisition of an effective interest of 2 per cent. in Skynet 
by the Company on 11th October, 1999, Skynet was valued at 
HK$200 million for the purpose of the said acquisition. On 
the other hand, based on the consideration of HK$31,750,000 
payable for the acquisition of 12.5 per cent. interest in 
Skynet (the "Acquisition"), Skynet was valued at HK$254 
million for the purpose of the Acquisition which was based 
on the issue price of HK$0.127 per share of HK$0.01 each in 
the share capital of the Company (the "Share") representing 
a substantial discount to the closing price of HK$0.169 per 
Share on 30th November, 1999, being the date of the Agreement. 
Taking into account that various websites of Skynet have been 
gradually launched and promoted as scheduled and the market 
presence of Skynet has also been established, the Board 
considers that the increase in the value of Skynet for the 
purpose of the Acquisition is justifiable.

Payment terms

The consideration will be settled in full by way of issue 
and allotment of a total of 250,000,000 new Shares (the 
"Consideration Shares") at HK$0.127 per Consideration Share 
upon completion of the Agreement. The issue price of HK$0.127 
per Consideration Share represents (i) a discount of 
approximately 24.85 per cent. to the closing price of 
HK$0.169 per Share on 30th November, 1999, being the date 
of the Agreement; (ii) a discount of approximately 40.93 per 
cent. to the average closing price of HK$0.215 per Share for 
the ten trading days up to and including 30th November, 1999; 
and (iii) a premium of 71.6 per cent. over the latest proforma 
consolidated net tangible asset per Share of HK$0.074. The 
Board (excluding the non-executive Directors) is of the view 
that the issue price of HK$0.127 per Share is fair and 
reasonable given (i) the bulk size of the Consideration 
Shares to be issued and (ii) the level of the premium it 
represents over the aforesaid net tangible asset per Share. 
The Board (excluding the non-executive Directors) further 
considers that the issue of the Consideration Shares as 
consideration to the Acquisition can serve to avoid cash 
outflow from the Company.

The Consideration Shares represent approximately 13.51 per 
cent. of the existing issued share capital of the Company 
and approximately 11.90 per cent. of its issued share capital 
as enlarged by the issue of the Consideration Shares. The 
Consideration Shares will be issued pursuant to the general 
mandate granted by the shareholders of the Company (the 
"Shareholders") at the annual general meeting of the Company 
held on 20th September, 1999. The Consideration Shares, upon 
issued, will rank equally in all respects with the existing 
issued Shares. Application will be made to the Stock Exchange 
for the listing of, and permission to deal in, the 
Consideration Shares.

Conditions of the Agreement

Completion of the Agreement is conditional upon, inter alia, 
the conditions set out below:-

(i)     the granting by the Listing Committee of the Stock 
Exchange of the listing of, and permission to deal in, all 
of the Consideration Shares to be issued by the Company upon 
completion of the Agreement; and

(ii)    the granting of the requisite consent by the Bermuda 
Monetary Authority for the issue of the Consideration Shares, 
if necessary.

Completion of the Agreement

Completion of the Agreement will take place on the third 
business day following the date on which all of the 
conditions of the Agreement are fulfilled, but in any event 
by not later than 15th January, 2000 (or such other date as 
may be agreed between the parties to the Agreement).

(For the shareholding structure before completion of the Agreement & after 
completion of the Agreement, please refer to the press announcement 
today.)

Immediately after completion of the Agreement, the Vendor 
would be interested in approximately 11.90 per cent. of the 
issued share capital of the Company as enlarged by the issue 
of the Consideration Shares. To the best knowledge of the 
Board, the Vendor has no present intention to appoint any 
directors into the board of the Company upon completion of 
the Agreement. To the best knowledge of the Board, the Vendor 
intends to hold the Consideration Shares as a long-term 
strategic investment in view of the growth potential of the 
Company. 

INFORMATION ON SKYNET

Skynet is a company incorporated in Hong Kong with limited 
liability. To the best knowledge of the Board, Skynet is held 
as to 50 per cent. by Gold Cloud Agents Limited (an associate 
of Companion Dynamic (Holdings) Limited, being a company 
listed on the Stock Exchange), 25 per cent. by Royal Fair 
Investment Limited (the beneficial controlling shareholder 
of which is the Independent Person) and the balance of 25 
per cent. by the Vendor prior to the Acquisition. Skynet and 
its group companies are principally engaged in the 
development and operation of Chinese-text based websites 
covering a wide spectrum of subjects ranging from news, 
on-line stock trading, entertainment, and trendy issues of 
society. Skynet has substantial interests in a number of 
websites, including "hkstock.com.hk", "hkcyber.com.hk" and 
"gameplayers.com".

The website "hkstock.com.hk" is an integrated forum with 
direct links to participating brokers from which investors 
can execute their trades and monitor their portfolios 
simultaneously. Apart from serving as a platform for 
securities dealing through the internet, the website 
"hkstock.com.hk" provides a wide variety of financial 
services over the internet, including real-time stock quote 
system, live broadcasts of financial news (the commentators 
of which include Mr. Stephen Shiu Yeuk Yuen, a reputable 
figure in the field of mass media in Hong Kong), daily e-mail 
newspaper containing financial headlines and editorials and 
huge electronic database of listed companies on the Stock 
Exchange. Further, the website "hkcyber.com.hk" serves to 
provide a set of comprehensive news coverage encompassing 
on-line news events, commentaries and horse racing news, the 
commentators of which include Mr. Wong Yuk Man, one of the 
popular critics in town. In addition, the website 
"gameplayers.com" serves to provide detailed information on 
playing tactics and hints on 6,500 video games available in 
the market.

Skynet was incorporated on 11th August, 1999 and certain 
websites of which were soft launched in late November 1999. 
The unaudited net loss incurred by Skynet for the period from 
its incorporation date up to and including 11th November, 
1999 was approximately HK$2,509,000. As at 11th November, 
1999, the unaudited net assets of Skynet amounted to 
approximately HK$2,491,000.

Upon completion of the Agreement, the Company is entitled 
to appoint one (out of a total of 9) directors into the board 
of Skynet. 

REASONS FOR THE ACQUISITION

The Group is principally engaged in the manufacture and sale 
of toroidal transformers, adaptors and EI transformers which 
are used as components for low voltage consumption 
electronic products.

Further to the acquisition by the Company of 2 per cent. 
effective interest in Skynet from Howay Technology Limited, 
an independent third party of the Company, on 11th October, 
1999, the Board considers that the Acquisition represents 
a further step of the Group to increase its business exposure 
in the internet industry in Hong Kong which is expected to 
have high growth potential, particularly in view of Hong Kong 
government's long-term dedicated efforts in establishing 
Hong Kong as a high-tech hub. In addition, the Board 
considers that the Acquisition represents a strategic step 
for the Group to invest directly in Skynet. Further, the 
Board (excluding the non-executive Directors) considers 
that the issue of the Consideration Shares as consideration 
to the Acquisition serves to avoid cash outflow from the 
Company.

As the Acquisition represents a passive investment of the 
Group, it is not the intention of the Group to involve in 
the daily operation of Skynet. The Board confirms that the 
Group will continue to engage principally in the manufacture 
and sale of toroidal transformers, adaptors and EI 
transformers. Currently, the Company does not intend to 
acquire further interest in Skynet.

The Stock Exchange has indicated that it has the power to 
aggregate further acquisitions of interest in Skynet and any 
such acquisitions may be treated as a very substantial 
acquisition and may result in the Company being treated as 
if it were a new listing applicant.

The Board (excluding the non-executive Directors) considers 
that the Acquisition is in the interests of the Company and 
that the terms of the Agreement are fair and reasonable as 
far as the Shareholders are concerned.

GENERAL

Pursuant to the Listing Rules, the Acquisition constitutes 
a discloseable transaction of the Company. A circular 
containing, inter alia, details of the Acquisition will be 
despatched to the Shareholders as soon as practicable.

The Board has noted the recent increase in the trading of 
the Shares and wishes to inform Shareholders that it is not 
aware of any reason for such increase and, save as disclosed 
in this announcement, the Board confirms that there are no 
negotiation or agreements relating to intended acquisitions 
of realisations which are discloseable under paragraph 3 of 
the Listing Agreement. Neither is the Board aware of any 
matter discloseable under the general obligation imposed by 
paragraph 2 of the Listing Agreement, which is or may be of 
a price sensitive nature.

Trading in the Shares on the Stock Exchange was suspended 
at the request of the Company with effect from 10:00 a.m. 
on 1st December, 1999 pending the release by the Company of 
this announcement. The Company has applied for the 
resumption of trading in the Shares with effect from 10:00 
a.m. on 3rd December, 1999.

The Directors individually and jointly accepts 
responsibility for the accuracy of this announcement.

By Order of the Board
So Hin Wah
Chairman

Hong Kong, 2nd December, 1999