Offer for Et-china.com International Holdings Ltd

 

TIDMETC 
 
RNS Number : 9793M 
Kuoni Travel Holding Limited 
02 June 2010 
 

FOR IMMEDIATE RELEASE 
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR 
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE 
RELEVANT LAWS IN THAT JURISDICTION 
2 June 2010 
RECOMMENDED CASH ACQUISITION OF ET-CHINA.COM INTERNATIONAL 
 HOLDINGS LIMITED 
                          BY KUONI TRAVEL HOLDING LTD 
 
Summary 
·     The board of Kuoni Travel Holding Ltd. ("Kuoni") and the Independent 
Directors of Et-china.com International Holdings Limited ("Et-china" or the 
"Company") are pleased to announce that they have reached agreement on the terms 
of a recommended proposal whereby Kuoni will acquire, for cash, all the issued 
and to be issued ordinary shares in Et-china not already owned by Kuoni (the 
"Proposal"). It is intended that the Proposal will be implemented by way of a 
scheme of arrangement under Part 18A of the Jersey Law. 
·      Under the terms of the Proposal, Scheme Shareholders will receive 115 
pence in cash for each Et-china Share valuing the entire issued ordinary share 
capital of Et-china at approximately GBP40 million and the entire issued and to 
be issued ordinary share capital at approximately GBP56 million. The Offer Price 
represents a premium of approximately 219.4 per cent. to the Closing Price of 
36.0 pence per Et-china Share on 1 June 2010, being the latest practicable 
Business Day prior to the date of this announcement. 
·      Kuoni currently holds just under 33.0 per cent. of Et-china's entire 
issued share capital and GBP500,000 in aggregate principal amount of the 
Et-china Convertible Bonds. 
·      As Maria Ng is an employee of the Kuoni Group as well as being an 
Et-china Director, she has absented herself from all deliberations of the board 
of Et-china in connection with the Proposal. Accordingly, the Proposal has been 
considered only by the Independent Directors. 
·      The Independent Directors of Et-china, who have been advised by Macquarie 
(in its capacity as financial adviser to Et-china), consider the terms of the 
Proposal to be fair from a financial point of view to the Et-china Shareholders. 
In providing its advice to the Independent Directors, Macquarie has taken into 
account the commercial assessments of the Independent Directors. 
·      Accordingly, the Independent Directors of Et-china intend unanimously to 
recommend that Et-china Shareholders vote in favour of the Scheme to be proposed 
at the Court Meeting and to vote in favour of the Resolutions to be proposed at 
the Extraordinary General Meeting (or, in the event that the Proposal is 
implemented by way of a Takeover Offer, to accept or procure acceptance of such 
offer) as the Independent Directors have irrevocably undertaken to do in respect 
of their own beneficial holdings (and, where applicable, those of their 
connected persons) totalling 5,465,680 Et-china Shares, representing, in 
aggregate, approximately 15.6 per cent. of the entire issued ordinary share 
capital of Et-china. These undertakings remain binding in the event of a 
Competing Proposal being made for Et-china. 
·      In addition, Kuoni has received an irrevocable undertaking from one other 
Et-china Shareholder (Mintpine, an Australian company which holds Et-china 
Shares on trust for certain individuals and other entities), to vote in favour 
of the Scheme to be proposed at the Court Meeting and to vote in favour of the 
Resolutions to be proposed at the Extraordinary General Meeting (or, in the 
event that the Proposal is implemented by way of a Takeover Offer, to accept or 
procure acceptance of such offer). Mintpine's irrevocable undertaking relates to 
10,177,983 Et-china Shares, representing, in aggregate, approximately 29.1 per 
cent. of the entire issued ordinary share capital of Et-china (of which 
4,638,836 Et-china Shares in aggregate are held by Mintpine on trust for 
Independent Directors of Et-china (and/or their family trusts), all of which are 
also covered by the directors' irrevocable undertakings). This undertaking 
remains binding in the event of a Competing Proposal being made for Et-china. 
·      Accordingly, Kuoni has received, in aggregate, irrevocable undertakings 
from certain Et-china Shareholders to vote in favour of the Scheme to be 
proposed at the Court Meeting and to vote in favour of the Resolutions to be 
proposed at the Extraordinary General Meeting (or, in the event that the 
Proposal is implemented by way of a Takeover Offer, to accept or procure 
acceptance of such offer) in respect of 11,004,827 Et-china Shares, 
representing, in aggregate, approximately 31.5 per cent. of the entire issued 
ordinary share capital of Et-china. Further details of these irrevocable 
undertakings are set out in Appendix 3 to this announcement. 
·      Et-china was listed on AIM in August 2007, and is primarily engaged in 
the provision of travel related services including air-ticketing, train 
ticketing, hotel reservation, provision of package tour services, conference 
services and other related services as well as property development in the PRC. 
Since 2006, Et-china subscribed for or acquired or contracted to acquire a total 
of 54.43 per cent. of GZL, one of the largest group leisure travel companies in 
South China. 
·      Since its listing on AIM, Et-china has consistently applied its strategy 
set out at that time which has resulted in growth in market share and revenue. 
·      Kuoni is one of the world's leading globally-active leisure travel 
organisations. The group is headquartered in Zurich, Switzerland and has branch 
operations in over 40 countries in Europe, Asia, Africa, Australia and North 
America with a worldwide workforce in excess of 9,070 employees. Kuoni is listed 
on the Swiss Stock Exchange with a market capitalisation as at 1 June 2010 of 
approximately CHF 933 million. 
Commenting on the Proposal, Peter Rothwell, CEO of Kuoni, said: 
"In acquiring our equity holding in Et-china in 2009, we began writing a new 
chapter in Kuoni's corporate history and took our first step into this key 
market of tomorrow. We are convinced that our activities in one of the fastest 
growing travel and tourism regions have vast potential; and we are equally 
convinced that Et-china can make a substantial contribution to the further 
development of the Kuoni Group and in our positioning as a key player in China. 
That's why this proposed acquisition is a major strategic step forward in the 
international development of our company and for this long-term partnership with 
one of China's leading travel corporations." 
Commenting on the Proposal, Matthew Ng, CEO of Et-china, said: 
"I am delighted that we have come to an agreement for Et-china to become part of 
Kuoni's global operations. This transaction will mark another significant 
milestone for the company since its inception some 10 years ago. Under Kuoni's 
ownership, the company will be in a much stronger position to take advantage of 
China's growing tourism market by leveraging Kuoni's 100 plus years of 
experience and expertise in the global travel industry, especially in the 
premium travel sector. This is particularly important as unlike other parts of 
the world, the Chinese travel sector has registered growth over the last 12 
months, inline with the increasing likelihood of the affluent population 
travelling abroad. 
I am confident that the company will develop faster and stronger under Kuoni's 
ownership, which should give us real advantages against our domestic competitors 
in branding, product knowledge and product offering as a result of being part of 
a global travel powerhouse. The management team is looking forward to learning 
from and becoming an integral part of one of the world's leading tour operators. 
As the founding CEO of the company, I would like to take this opportunity to 
thank all of the shareholders and bondholders for their past and continued 
support of the company, particularly through some of the more challenging years. 
We are pleased to deliver this result to our shareholders as the offer price 
represents a significant premium to the current share price." 
 
+--------------------------------------------+---------------------+ 
| Enquiries:                                 |                     | 
+--------------------------------------------+---------------------+ 
| Kuoni Travel Holding Ltd.                  |                     | 
| Max Katz, Chief Financial Officer          | Tel:     +41 (0)44  | 
| Laurence Bienz, Head Investor Relations    | 277 4444            | 
+--------------------------------------------+---------------------+ 
| Credit Suisse (financial adviser to Kuoni  |                     | 
| Travel Holding Ltd.)                       |                     | 
| Jens Haas                                  | Tel:     +44 (0)20  | 
| Angus Dickson                              | 7888 8888           | 
+--------------------------------------------+---------------------+ 
| Et-china.com International Holdings        |                     | 
| Limited                                    | Tel:     +86 (0)20  | 
| Matthew Ng                                 | 3879 5531           | 
+--------------------------------------------+---------------------+ 
| Seymour Pierce (Nominated adviser and      |                     | 
| corporate broker to Et-china)              |                     | 
| Mark Percy                                 | Tel:     +44 (0)20  | 
| Catherine Leftley                          | 7107 8000           | 
+--------------------------------------------+---------------------+ 
 
As Et-china's place of central management and control is outside the UK and 
Et-china's shares are not traded on a UK regulated market, the Takeover Panel 
has ruled that it does not have jurisdiction over the Proposal and, accordingly, 
the Takeover Code does not apply to the Proposal. 
This summary should be read in conjunction with the full text of the following 
announcement and the Appendices. The Proposal will be subject to the Conditions 
and further terms set out in Appendix 1 to this announcement and to the full 
terms and Conditions to be set out in the Scheme Document and the Forms of 
Proxy, when issued. Appendix 2 to this announcement contains source notes 
relating to certain information contained in this announcement. Appendix 3 to 
this announcement provides the details of the irrevocable undertakings received 
by Kuoni. Certain terms used in this announcement are defined in Appendix 4 to 
this announcement. 
This announcement is not intended to and does not constitute or form part of any 
offer to sell or subscribe for or any invitation to purchase or subscribe for 
any securities or the solicitation of any vote or approval in any jurisdiction 
pursuant to the Proposal or otherwise. The Proposal will be made solely by means 
of the Scheme Document, which will contain the full terms and conditions of the 
Proposal, including details of how to vote in favour of the Scheme. Any response 
in relation to the Proposal should be made only on the basis of the information 
in the Scheme Document or any document by which the Proposal is made. Et-china 
will prepare the Scheme Document to be distributed to the Et-china Shareholders. 
Et-china and Kuoni urge Et-china Shareholders to read the Scheme Document when 
it becomes available because it will contain important information relating to 
the Proposal. 
 
Macquarie Capital (Hong Kong) Limited and Macquarie Capital (Europe) Limited 
(together, "Macquarie") are members of the Macquarie Capital Group Limited group 
of companies. Macquarie is acting exclusively as financial advisor to Et-china 
and no-one else in connection with the Proposal and will not be responsible to 
anyone other than Et-china for providing the protections afforded to clients of 
Macquarie or for providing advice in relation to the Proposal. Macquarie Capital 
(Europe) Limited is authorised and regulated by the UK Financial Services 
Authority. Neither Macquarie Capital (Europe) Limited nor Macquarie Capital 
(Hong Kong) Limited is an authorised deposit-taking institution for the purposes 
of the Banking Act 1959 (Commonwealth of Australia), and neither of their 
obligations represent deposits or other liabilities of Macquarie Bank Limited 
ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise 
provide assurance in respect of the obligations of Macquarie Capital (Europe) 
Limited or Macquarie Capital (Hong Kong) Limited. 
 
Credit Suisse, which is authorised and regulated by the Financial Services 
Authority, is acting for Kuoni and for no one else in connection with the 
matters referred to in this announcement and will not be responsible to anyone 
other than Kuoni for providing the protections afforded to clients of Credit 
Suisse or for providing advice in relation to this matter, the content of this 
announcement or any matter referred to herein. Neither Credit Suisse nor any of 
its subsidiaries, branches or affiliates owes or accepts any duty, liability or 
responsibility whatsoever (whether direct or indirect, whether in contract, in 
tort, under statute or otherwise) to any person who is not a client of Credit 
Suisse in connection with this announcement, any statement contained herein or 
otherwise. 
 
The availability of the Proposal to Et-china Shareholders who are not resident 
in and citizens of the United Kingdom or Jersey may be affected by the laws of 
the relevant jurisdictions in which they are located or of which they are 
citizens. Such persons should inform themselves of, and observe, any applicable 
legal or regulatory requirements of their jurisdictions. Further details in 
relation to overseas shareholders will be contained in the Scheme Document. 
 
The distribution of this announcement in jurisdictions other than in the United 
Kingdom or Jersey may be restricted by law and therefore any persons who are 
subject to the laws of any jurisdiction other than the United Kingdom or Jersey 
should inform themselves about, and observe, any applicable requirements. This 
announcement has been prepared for the purposes of complying with Jersey law and 
the AIM Rules and information disclosed may not be the same as that which would 
have been disclosed if this announcement had been prepared in accordance with 
the laws of any jurisdiction outside the United Kingdom or Jersey. 
 
If Kuoni exercises its right to implement the Proposal by way of a Takeover 
Offer, the Proposal will not be made, directly or indirectly, in, into or from 
any jurisdiction where to do so would violate the laws in that jurisdiction. 
Accordingly, copies of this announcement and formal documentation relating to 
the Proposal will not be and must not be, mailed or otherwise forwarded, 
distributed or sent in, into or from any jurisdiction where to do so would 
violate the laws in that jurisdiction. 
 
The Proposal relates to the shares of a Jersey company and is proposed to be 
effected by means of a scheme of arrangement under Jersey law. The Proposal will 
not be sent to Et-china Shareholders who are resident in, or citizens of, or are 
organised or incorporated in, the United States. Accordingly, neither this 
announcement nor any other document in connection with the Proposal shall be 
released, published or distributed in whole or in part in, into or from the 
United States or any other jurisdiction where to do so would constitute a 
violation of the relevant laws in that jurisdiction. Neither this announcement 
nor any other document in connection with the Proposal shall be forwarded by any 
nominee, custodian, broker or other intermediary in, into or from the United 
States. 
 
Hong Kong 
 
WARNING 
 
The contents of this announcement and the Scheme Document have not been reviewed 
by any regulatory authority in Hong Kong. You are advised to exercise caution in 
relation to the offer. If you are in doubt about any of the contents of this 
announcement or the Scheme Document, you should obtain independent professional 
advice. 
 
This announcement and the Scheme Document do not constitute an offer or 
invitation to the public in Hong Kong to subscribe for or dispose of the Scheme 
Shares. Accordingly, unless permitted by the securities laws of Hong Kong, no 
person may issue or have in its possession for the purposes of issue, this 
announcement or any invitation or document relating to the Scheme Shares, 
whether in Hong Kong or elsewhere, which is directed at, or the contents of 
which are likely to be accessed or read by, the public in Hong Kong other than 
in circumstances which do not constitute an offer or an invitation to the public 
for the purposes of the SFO. However, numbered copies of the Scheme Document may 
be issued to a limited number of shareholders in Hong Kong in a manner which 
does not constitute an issue, circulation or distribution of this document, or 
any offer or invitation in respect of the Scheme Shares, to the public in Hong 
Kong. Only the person to whom a numbered copy of the Scheme Document has been 
issued may take action in response to the Scheme Document. No person to whom a 
numbered copy of the Scheme Document is issued may issue, circulate or 
distribute this document in Hong Kong or make or give a copy of this document to 
any other person. 
 
Forward-Looking Statements 
 
This announcement, oral statements made regarding the Proposal, and other 
information published by Kuoni and Et-china may contain "forward-looking 
statements". These statements are based on the current expectations of the 
management of Kuoni and Et-china and are naturally subject to uncertainty and 
changes in circumstances. The forward-looking statements contained herein 
include statements about the expected effects of the Proposal on Et-china and 
Kuoni, the expected timing and scope of the Proposal, enhanced customer support, 
access to greater resources and other synergies, other strategic options and all 
other statements in this announcement other than historical facts. 
Forward-looking statements include, without limitation, statements typically 
containing words such as "intends", "expects", "anticipates", "believes", 
"estimates", "will" "may" and "should" and words of similar import. By their 
nature, forward-looking statements involve risk and uncertainty because they 
relate to events and depend on circumstances that will occur in the future. 
There are a number of factors that could cause actual results and developments 
to differ materially from those expressed or implied by such forward-looking 
statements. These factors include, but are not limited to, the satisfaction of 
the Conditions to the Proposal, as well as additional factors, such as changes 
in economic conditions, changes in the level of capital investment, success of 
business and operating initiatives and restructuring objectives, customers' 
strategies and stability, changes in the regulatory environment, fluctuations in 
interest and exchange rates, the outcome of litigation, government actions and 
natural phenomena such as floods, earthquakes and hurricanes. Other unknown or 
unpredictable factors could cause actual results to differ materially from those 
in the forward-looking statements. Given these risks and uncertainties, 
investors should not place undue reliance on forward-looking statements as a 
prediction of actual results. Neither Kuoni, nor Et-china undertakes any 
obligation to update publicly or revise forward-looking statements, whether as a 
result of new information, future events or otherwise, except to the extent 
legally required. 
 
 
FOR IMMEDIATE RELEASE 
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR 
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE 
RELEVANT LAWS IN THAT JURISDICTION 
2 June 2010 
 
    RECOMMENDED ACQUISITION OF ET-CHINA.COM INTERNATIONAL HOLDINGS LIMITED 
                          BY KUONI TRAVEL HOLDING LTD 
 
 
1.           Introduction 
The board of Kuoni Travel Holding Ltd. ("Kuoni") and the Independent Directors 
of Et-china.com International Holdings Limited ("Et-china" or the "Company") are 
pleased to announce that they have reached agreement on the terms of a 
recommended proposal whereby Kuoni will acquire, for cash, all the issued and to 
be issued ordinary shares in Et-china not owned by Kuoni (the "Proposal"). It is 
intended that the Proposal will be implemented by way of a scheme of arrangement 
under Part 18A of the Jersey Law. The Scheme will require the approval of the 
Scheme Shareholders and the sanction of the Court. The associated Reduction of 
Capital will require the approval of the shareholders by special resolution and 
confirmation of the Court. 
As Maria Ng is an employee of the Kuoni Group as well as being an Et-china 
Director, she has absented herself from all deliberations of the board of 
Et-china in connection with the Proposal. Accordingly, the Proposal has been 
considered and recommended by the Independent Directors. 
2.         The Proposal 
Under the terms of the Proposal, which will be subject to the Conditions and 
further terms set out in Appendix 1 to this announcement and to the full terms 
and Conditions to be set out in the Scheme Document and the Forms of Proxy, when 
issued, Scheme Shareholders will be entitled to receive: 
+-----------------------------------+--------------------+ 
| for each Et-china Share           | 115 pence in cash  | 
+-----------------------------------+--------------------+ 
 
The Proposal values the entire issued ordinary share capital of Et-china at 
approximately GBP40 million and the entire issued and to be issued ordinary 
share capital at approximately GBP56 million. The Offer Price represents a 
premium of approximately 219.4 per cent. to the Closing Price of 36.0 pence per 
Et-china Share on 1 June 2010, being the latest practicable Business Day prior 
to the date of this announcement. 
In addition to the Et-china Shares, Et-china has in issue 547,501 Et-china A 
Ordinary Shares. The Et-china A Ordinary Shares were issued pursuant to a number 
of share sale and subscription agreements dated on or about 6 March 2008 between 
certain individuals and Et-china for the acquisition of shares in GZL. The 
consideration payable under these arrangements was cash and Et-china A Ordinary 
Shares which at a later date would convert into Et-china Shares on the 
occurrence of certain conditions. The current Et-china A Ordinary Shares in 
issue will not form part of the Scheme. The Et-china A Ordinary Shares have no 
rights to dividends, capital or voting. 
3.           Recommendation 
The Independent Directors of Et-china, who have been advised by Macquarie (in 
its capacity as financial adviser to Et-china), consider the terms of the 
Proposal to be fair from a financial point of view to the Et-china Shareholders. 
In providing its advice to the Independent Directors, Macquarie has taken into 
account the commercial assessments of the Independent Directors. In addition, 
the Independent Directors of Et-china consider the terms of the Proposal to be 
in the best interests of Et-china Shareholders as a whole. Accordingly, the 
Independent Directors of Et-china intend unanimously to recommend that Et-china 
Shareholders vote in favour of the Scheme to be proposed at the Court Meeting 
and to vote in favour of the Resolutions to be proposed at the Extraordinary 
General Meeting (or, in the event that the Proposal is implemented by way of a 
Takeover Offer, to accept or procure acceptance of such offer) as the 
Independent Directors have irrevocably undertaken to do in respect of their own 
beneficial shareholdings (and, where applicable, those of their connected 
persons) totalling 5,465,680 Et-china Shares, representing, in aggregate, 
approximately 15.6 per cent. of the entire issued ordinary share capital of 
Et-china. 
4.           Background to, and reasons for, recommending the Proposal 
Et-china was listed on AIM in August 2007, and is primarily engaged in the 
provision of travel related services including air-ticketing, train ticketing, 
hotel reservation, provision of package tour services, conference services and 
other related services as well as property development in the PRC. Since 2006, 
Et-china has subscribed for or acquired or contracted to acquire a total of 
54.43 per cent. of GZL, one of the largest group leisure travel companies in 
South China. 
Since its listing on AIM, Et-china has consistently applied its strategy set out 
at that time which has resulted in growth both in its market share and its 
revenue. 
However, since the time of its listing, until 1 June 2010 (being the latest 
practicable Business Day prior to this announcement), Et-china's share price has 
underperformed the FTSE AIM All Share Index and Et-china has received little 
attention from UK investment analysts, institutional investors or investment 
publications. 
Whilst pursuing its strategy to create a strong business and to develop Et-china 
into a leading integrated travel operator in South China, Et-china has been 
approached by several parties from time to time with a view to acquiring some or 
all of Et-china's businesses, none of which led to a formal offer being made for 
the Company. 
In June 2009, Kuoni acquired 31.8 per cent. of Et-china's issued ordinary share 
capital, forming a key long-term strategic partnership between Et-china and 
Kuoni. In February 2010, Kuoni increased its shareholding in Et-china to just 
under 33.0 per cent. of Et-china's issued ordinary share capital and purchased 
GBP500,000 in aggregate principal amount of the Et-china Convertible Bonds. The 
boards of Et-china and Kuoni have now reached agreement on the terms of a 
recommended cash proposal for all the issued and to be issued ordinary shares in 
Et-china not owned by Kuoni. The Proposal provides Et-china Shareholders with 
the opportunity to realise significant value in cash, substantially above the 
recent trading price, giving certainty to Et-china Shareholders. 
The Independent Et-china Directors believe the terms of the Proposal fairly 
reflect the current strengths and future prospects of the business and that 
under Kuoni's ownership, Et-china would be better assisted with funding and 
strategic direction than as a standalone business and that ownership by Kuoni 
should offer the benefits of being part of an established global operator. 
5.           Background to and reasons for the Proposal 
Kuoni Group believes a combination of its Asian business with Et-china has 
significant strategic merit in terms of geographic footprint, local business 
know-how, customer base and e-platform and that Et-china's strong foothold in 
South China, the country's fastest growing region, is highly complementary to 
Kuoni Group's existing business in Asia that is operated from Hong Kong. Kuoni 
Group believes that it will be able to secure a highly skilled local management 
team together with experienced employees in a highly competitive and rapidly 
developing market. 
6.           Information on Et-china 
Et-china is primarily engaged in the provision of travel related services 
including air-ticketing, train ticketing, hotel reservation, provision of 
package tour services, conference services and other related services as well as 
property development in the PRC. In addition, Et-china, through a joint-venture 
with China Southern Airlines, provides the e-ticketing service and back office 
support for China Southern Airlines. 
Et-china principally operates under two brands, being Et-china and GZL. Et-china 
is focused on corporate travel accounts and on the emerging frequent independent 
travellers ("FIT") market whilst GZL primarily focuses on the packaged group 
tours market. Through these two brands, the Group is now considered one of the 
market leaders for the provision of travel services in South China. The Group 
operates through more than 160 retail outlets, a call centre and an internet 
booking website. 
Et-china was founded in 2000 and began operating from its Guangzhou base as an 
online travel company in January 2000 after securing a strategic partnership 
with China Southern Airlines, now the largest airline in China. Due to the 
immaturity of online travel at that stage, Et-china initially focused on the 
managed corporate travel segment and secured a number of major corporate 
accounts from leading multinational companies. 
In October 2002, Et-china established e-JV, a joint venture with China Southern 
Airlines to be the exclusive provider of sales and services for all China 
Southern Airlines e-ticketing. This contract was initially for five years to 
October 2007 but in June 2007 was extended for an additional ten years to April 
2018. 
From March 2006 to mid 2008, Et-china Group subscribed for or acquired or 
contracted to acquire a total 54.43 per cent. of GZL. GZL was reincorporated 
from Guangzhou Travel Company which was established in 1980 by the Government of 
Guangzhou and has become one of the largest travel companies in South China for 
both outbound and domestic travel. It specialises in leisure tour services and 
is one of the largest leisure tour operators in China. 
As part of its intention to strengthen its online platform, Et-china acquired 
Yoee.com, a Beijing-based online travel company specialising in the sale of air 
tickets, in March 2009. 
For the year ended 31 December 2009, Et-china reported revenue of approximately 
RMB 1,909 million (2008: approximately RMB 1,741 million) and loss after income 
tax of approximately RMB 31 million (2008: approximately RMB 84 million). As at 
31 December 2009, Et-china had net assets of approximately RMB 129 million 
(2008: approximately RMB 164 million). 
7.           Information on Kuoni Group 
Kuoni is one of the world's leading globally-active leisure travel 
organisations. The group is headquartered in Zurich, Switzerland and has branch 
operations in over 40 countries in Europe, Asia, Africa, Australia and North 
America with a worldwide workforce in excess of 9,070 employees. Kuoni Group is 
listed on the Swiss Stock Exchange with a market capitalisation as at 1 June 
2010 of approximately CHF 933 million. Leisure travel accounted for 
approximately 78 per cent. of the group's total turnover while its destination 
management activities generated approximately 22 per cent. 
For the year ended 31 December 2009, Kuoni Group reported revenues of CHF 3,894 
million (2008: CHF 4,855 million) and net profit of CHF 2 million (2008: CHF 151 
million). As at 31 December 2009, Kuoni Group had net assets of CHF 592 million 
(2008: CHF 606 million). 
Kuoni has an interest in 11,540,110 Et-china Shares, representing just under 
33.0 per cent. of the entire issued ordinary share capital of Et-china. 
Kuoni holds GBP500,000 in aggregate principal amount of the Et-china Convertible 
Bonds. 
Based on the terms of the Proposal, Kuoni Group's total investment in Et-china 
would be approximately GBP49 million in aggregate (including prior investments 
in Et-china). 
Further information on the Kuoni Group is available on its web site at 
www.kuoni-group.com. 
8.           Irrevocable Undertakings 
Kuoni has received irrevocable undertakings from each of the Independent 
Directors to vote in favour of the Scheme to be proposed at the Court Meeting 
and to vote in favour of the Resolutions to be proposed at the Extraordinary 
General Meeting (or, in the event that the Proposal is implemented by way of a 
Takeover Offer, to accept or procure acceptance of such offer) in respect of 
their own beneficial shareholdings (and, where applicable, those of their 
connected persons) totalling 5,465,680 Et-china Shares, representing, in 
aggregate, approximately 15.6 per cent. of the entire issued ordinary share 
capital of Et-china. These undertakings remain binding in the event of a 
Competing Proposal being made for Et-china. These undertakings also include a 
warranty from each of the Independent Directors as to Et-china's fully diluted 
share capital. 
In addition, Kuoni has received an irrevocable undertaking from one other 
Et-china Shareholder (Mintpine, an Australian company which holds Et-china 
shares on trust for certain individuals and other entities), to vote in favour 
of the Scheme to be proposed at the Court Meeting and to vote in favour of the 
Resolutions to be proposed at the Extraordinary General Meeting (or, in the 
event that the Proposal is implemented by way of a Takeover Offer, to accept or 
procure acceptance of such offer). Mintpine's irrevocable undertaking relates to 
10,177,983 Et-china Shares, representing, in aggregate, approximately 29.1 per 
cent. of the entire issued ordinary share capital of Et-china (of which 
4,638,836 Et-china Shares in aggregate are held by Mintpine on trust for 
Independent Directors of Et-china (and/or their family trusts), all of which are 
also covered by the directors' irrevocable undertakings). This undertaking 
remains binding in the event of a Competing Proposal being made for Et-china. 
Accordingly, Kuoni has received, in aggregate, irrevocable undertakings from 
certain Et-china Shareholders to vote in favour of the Scheme to be proposed at 
the Court Meeting and to vote in favour of the Resolutions to be proposed at the 
Extraordinary General Meeting (or, in the event that the Proposal is implemented 
by way of a Takeover Offer, to accept or procure acceptance of such offer) in 
respect of 11,004,827 Et-china Shares, representing, in aggregate, approximately 
31.5 per cent. of the entire issued ordinary share capital of Et-china. 
Further details of these irrevocable undertakings are set out in Appendix 3 to 
this announcement. 
9.           Structure of the Proposal 
The Proposal is intended to be effected by means of a court-sanctioned scheme of 
arrangement between Et-china and the Scheme Shareholders under Part 18A of the 
Jersey Law. 
The objective of the Proposal is for Kuoni to become the owner of the whole of 
the issued and to be issued ordinary share capital of Et-china. This is to be 
achieved, on the Scheme becoming effective, by the cancellation of the Scheme 
Shares by the Reduction of Capital and the issue of new Et-china Shares to Kuoni 
so that Et-china will become wholly owned by Kuoni. In consideration for the 
cancellation of the Scheme Shares, each Scheme Shareholder will receive 115 
pence in cash from Kuoni for each Scheme Share that they hold. 
To become effective, the Scheme requires, amongst other things, the approval of 
a majority in number of the Scheme Shareholders (which excludes Kuoni) present 
and voting in person or by proxy at the Court Meeting, representing not less 
than three-fourths of the voting rights of the Scheme Shares held by such Scheme 
Shareholders (that is excluding the Excluded Shares), together with the sanction 
of the Court and the passing of the Resolutions necessary to implement the 
Scheme at the Extraordinary General Meeting (including a special resolution 
approving the Reduction of Capital). Kuoni will not be entitled to attend or 
vote at the Court Meeting. Kuoni will undertake to the Court to be bound by the 
Scheme. Following the Meetings, the Scheme must be sanctioned and the Reduction 
of Capital confirmed by the Court, and the Scheme will only become effective on 
delivery to the Registrar of Companies of the Scheme Court Order and the 
Reduction Court Order, and, in the case of the Reduction Court Order (and the 
minute attached to that order), being registered by the Registrar of Companies 
together with the minute of the Reduction of Capital attached thereto. Upon the 
Scheme becoming effective, it will be binding on all Scheme Shareholders, 
irrespective of whether or not they attended or voted at the Court Meeting or 
the Extraordinary General Meeting. 
The Proposal will be governed by Jersey law and will be subject to the 
jurisdiction of the Jersey courts and to the Conditions and further terms set 
out in Appendix 1 to this announcement and to the full terms and Conditions to 
be set out in the Scheme Document and the Forms of Proxy, when issued. 
It is intended that, prior to the Scheme becoming effective, Et-china will make 
an application to the London Stock Exchange to cancel the admission of Et-china 
Shares to trading on AIM. It is also intended that as soon as possible following 
the Acquisition Effective Date, and after the admission to trading of Et-china 
Shares on AIM has been cancelled, Et-china will be re-registered as a private 
limited company. 
Kuoni reserves the right to implement the Proposal by way of a Takeover Offer, 
in which case additional documents will be despatched to Et-china Shareholders. 
In such event, the Proposal will be implemented on the same terms (subject to 
appropriate amendments, including (without limitation) an acceptance condition 
set at 90 per cent. of the shares to which the acquisition relates or such 
lesser percentage, being more than 50 per cent. (when taken together with the 
Kuoni Interests), as Kuoni may decide). Further if sufficient acceptances of 
such offer are received and/or sufficient Et-china Shares are otherwise 
acquired, it is the intention of Kuoni to compulsorily acquire any outstanding 
Et-china Shares to which such offer relates under the relevant provisions of the 
Jersey Law. 
10.        Scheme Document 
It is intended that the Scheme Document containing further details of the Scheme 
will shortly be despatched to Et-china Shareholders and, for information only, 
to participants in the Et-china Share Scheme, holders of Et-china Convertible 
Bonds, holders of Et-china A Ordinary Shares and the holder of Et-china 
Warrants. The Scheme Document will include the notices of the Meetings and full 
details of the Scheme together with the expected timetable, and will specify the 
necessary actions to be taken by Et-china Shareholders. 
11.        Et-china Share Scheme 
Et-china Optionholders will be contacted regarding the effect of the Proposal on 
their rights under this scheme and appropriate proposals will be made to such 
participants in due course. 
12.        Holders of Et-china Convertible Bonds 
In accordance with the terms of the Et-china Convertible Bonds, holders of the 
Et-china Convertible Bonds will be contacted immediately following the date of 
this announcement regarding the effect of the Proposal on their rights under the 
bonds. 
13.        Et-china Warrant Holders 
No proposals will be made to the Et-china Warrant Holders as all the Et-china 
Warrants are exercisable at an exercise price that is higher than the Offer 
Price. 
14.        Financing 
The cash consideration payable by Kuoni to Scheme Shareholders under the terms 
of the Proposal will be funded using Kuoni's existing cash resources. 
15.        Implementation Agreement and Escrow Agreement 
(a)     Implementation Agreement 
Kuoni and Et-china have entered into an Implementation Agreement (the 
"Implementation Agreement") on 2 June 2010 which provides, inter alia, for the 
implementation of the Scheme and related matters in accordance with an agreed 
indicative timetable. It contains certain assurances and confirmations between 
the parties, including provisions to implement the Scheme and to achieve 
satisfaction of the Conditions on a timely basis and undertakings regarding the 
conduct of the Et-china Group prior to the Acquisition Effective Date. 
The Implementation Agreement terminates in certain circumstances including: 
(a)        if at any time Kuoni and Et-china should so agree; 
(b)        if the Scheme is not sanctioned by the Scheme shareholders at the 
Court Meeting or any of the resolutions to be approved at the Extraordinary 
General Meeting are not so approved and Kuoni does not elect to implement the 
Proposal by way of Takeover Offer; 
(c)        an inducement fee becoming payable by Et-china pursuant to the 
Implementation Agreement; 
(d)        if the Acquisition Effective Date has not occurred by the Long Stop 
Date; or 
(e)        if the Proposal lapses or is withdrawn. 
The Implementation Agreement includes an inducement fee of GBP2 million which 
would be payable, by Et-china to Kuoni, if prior to the termination of the 
Implementation Agreement: 
(i)         the Independent Directors fail to recommend the Proposal unanimously 
on an unqualified basis in the Acquisition Document (except where only one of 
the Independent Directors, not being Matthew Ng, so fails to recommend the 
Acquisition and either (i) the Acquisition Effective Date nevertheless occurs 
prior to the Long Stop Date; or (ii) Kuoni becomes liable to pay its GBP2 
million break fee) or subsequently any of the Independent Directors withdraws or 
materially and adversely modifies his or her recommendation (except where only 
one of the Independent Directors, other than Matthew Ng, so withdraws or 
modifies his or her recommendation and either (i) the Acquisition Effective Date 
nevertheless occurs prior to the Long Stop Date or (ii) Kuoni becomes liable to 
pay its GBP2 million break fee); 
(ii)        an Et-china Trigger Event occurs and as a result the Acquisition 
Effective Date does not occur prior to the Long Stop Date; or 
(iii)        Et-china takes any action which would, were Et-china to be governed 
by the Takeover Code, constitute frustrating action in breach of Rule 21 of the 
Takeover Code which has a material adverse effect on Et-china or any member of 
the Et-china Group (and for these purposes an action shall be material if, when 
taken together with other frustrating actions, it amounts to or exceeds an 
aggregate amount of GBP100,000) and in addition the parties have agreed 
provisions governing how Rule 21 is to apply in the circumstances of the 
Proposal given that the Takeover Panel does not have jurisdiction, following 
which Kuoni has notified Et-china that it wishes to withdraw from the Proposal. 
Kuoni has agreed to pay Et-china a break fee of GBP2 million if prior to the 
termination of the Implementation Agreement: (i) a Kuoni Trigger Event occurs 
and as a result the Acquisition Effective Date does not occur prior to Long Stop 
Date or (ii) Kuoni invokes (or fails to waive non-satisfaction of) a Condition 
causing the Proposal to lapse or to be withdrawn other than as a result of one 
of the following circumstances: 
(i)         a revocation by the issuing authority in the PRC of either the 
International Travel Agency Services Operating Permit or the Domestic Travel 
Agency Services Operating Permit; or 
(ii)        either: 
(aa)     a transfer by any current holder of sufficient shares in any member of 
the Et-china Group, to a person outside the Et-china Group (other than where 
those shares are to be held by such other person on the same or similar terms as 
they are currently held); 
(bb)     a breach by any holder of shares in any member of the Et-china Group of 
any material obligation owned by that shareholder to any member of the Et-china 
Group, in connection with that shareholding; or 
(cc)     any relevant government body or authority making an order because of 
the Proposal or the announcement of the Proposal, 
in each case which has the effect that Et-china is no longer able to control its 
material businesses materially on the terms it does so at the date of this 
announcement; or 
(iii)        Et-china takes any action which would, were Et-china to be governed 
by the Takeover Code, constitute frustrating action in breach of Rule 21 of the 
Takeover Code which has a material adverse effect on Et-china or any member of 
the Et-china Group (and for these purposes an action shall be material if, when 
taken together with other frustrating actions, it amounts to or exceeds an 
aggregate amount of GBP100,000) and in addition the parties have agreed 
provisions governing how Rule 21 is to apply in the circumstances of the 
Proposal given that the Takeover Panel does not have jurisdiction, following 
which Kuoni has notified Et-china that it wishes to withdraw from the Proposal; 
or 
(iv)       would have allowed Kuoni to invoke a Condition so as to cause the 
Proposal not to proceed, to lapse or to be withdrawn under Rule 2.7 or, as 
appropriate, Rule 13.4 of the Takeover Code had the Takeover Code applied to the 
Proposal. 
Et-china has also agreed that it will procure that no members of the Et-china 
Group (or any of their connected persons) shall, either directly or indirectly, 
solicit, initiate, encourage, induce or respond to or knowingly facilitate the 
communication, making, submission or announcement of any Competing Proposal or 
enter into or conduct any discussions in respect of the foregoing during the 
period from the date of this announcement to the Acquisition Effective Date (the 
"Exclusivity Period"). Save that Et-china will not be prevented during the 
Exclusivity Period from responding or providing information to or negotiating or 
recommending any Competing Proposal where the Independent Directors determine, 
in good faith, after consultation with, and upon the advice of, external legal 
advisers that the failure to respond to or negotiate with such third party would 
be in breach of any of the statutory or common law duties of the Independent 
Directors and Et-china shall promptly inform Kuoni that it is engaging in any 
such communications or negotiations and it will notify Kuoni if it or any of its 
connected persons has received or become aware of an unsolicited Competing 
Proposal during the Exclusivity Period and it will then provide to Kuoni 
material details of that proposal (being the offer price, the nature of the 
consideration and the identity of the person making the Competing Proposal). 
The Independent Directors consider, having consulted with Seymour Pierce, 
Et-china's nominated adviser, that the terms of the Implementation Agreement are 
fair and reasonable in so far as its shareholders are concerned. 
(b)     Escrow Agreement 
Matthew Ng, Jianxu Lu, Shaodong Zhu and Weixing Zhang have entered into an 
escrow agreement pursuant to which a total amount of US$1 million in aggregate 
of the consideration which they would otherwise receive under the Scheme (in the 
case of Matthew Ng) or pursuant to the proposal which is expected to be made to 
the Et-china Optionholders for their options granted under the Et-china Share 
Scheme (in the case of Jianxu Lu, Shaodong Zhu and Weixing Zhang) will be placed 
into escrow until 30 September 2011 to be payable to Kuoni if within that period 
certain business issues arise. 
16.        Directors, Management, Employees and Location of Head Office 
Kuoni has given assurances to the Independent Directors that, following the 
Scheme becoming effective, the existing contractual employment rights of all 
employees of the Et-china Group will be fully safeguarded. Kuoni has also 
confirmed that Et-china's management will continue to be based in Guangzhou with 
its registered office to remain in Jersey. 
On the Scheme becoming effective, it is intended that Matthew Ng will receive an 
incentive package, made up of a base salary of GBP140,000 per annum, benefits of 
GBP40,000 per annum and an annual bonus of GBP100,000. The bonus is divided into 
a short term cash portion and long term performance share bonus, all of which 
are in line with Kuoni's current compensation policy. In addition, Matthew Ng 
will be entitled to a long term one-off cash payment of between US$2 million and 
US$4 million at the end of the period of three years from the Scheme becoming 
effective based on achieving pre-determined business plan targets. A report 
commissioned by the Independent Directors excluding Matthew Ng of Et-china has 
been provided by an independent remuneration expert which concluded that the 
total remuneration package for Matthew Ng is within market ranges. 
Et-china's remuneration committee has agreed that Matthew Ng may, conditional on 
the Scheme, take his current accrued bonus by way of issue of Et-china Shares at 
an allotment price of GBP1.27 per share (being the Admission Price). Matthew Ng 
has therefore been allotted 1,118,014 Et-china Shares conditional on the Scheme 
being sanctioned by the Court at the Second Court Hearing. 
It is intended that the current two Executive Directors will remain at the 
Company and Matthew Ng will be appointed as Managing Director of Et-china and 
Kitty Yang will be appointed as the Finance Director of Et-china. The current 
Non-Executive Directors Christopher Rose and Robert Drummond have tendered their 
resignations conditional on the Scheme becoming effective and their appointments 
will terminate in accordance with their agreements on the Scheme becoming 
effective. It is intended that Maria Ng will remain a non-executive director of 
the Company. 
17.        Disclosure of interests in Et-china 
Save for the Kuoni Interests and the irrevocable undertakings referred to in 
paragraph 8 above (and detailed in Appendix 3 to this announcement), as at the 
close of business on 1 June 2010, the last Business Day prior to the date of 
this announcement: 
·      neither Kuoni nor any of the Kuoni Executive Board nor, so far as the 
Kuoni Executive Board are aware, any member of the Kuoni Group or any director 
of Kuoni or any person acting in concert with any of them for the purposes of 
the Proposal, has any interest in, or right to subscribe for, any Et-china 
Shares or securities convertible or exchangeable into Et-china Shares ("Et-china 
Securities"); and 
·      neither Kuoni nor any of the Kuoni Executive Board nor, so far as the 
Kuoni Executive Board are aware any member of the Kuoni Group or any director of 
Kuoni or any person acting in concert with any of them for the purposes of the 
Proposal, has any short position (whether conditional or absolute and whether in 
the money or otherwise) including short positions under derivatives or 
arrangement in relation to Et-china Securities. 
For these purposes, "arrangement" includes any indemnity or option arrangement 
or any agreement or understanding, formal or informal, of whatever nature, 
relating to Et-china Securities which may be an inducement to deal or refrain 
from dealing in such securities. 
18.        Cancellation of admission to trading 
It is intended that, prior to the Scheme becoming effective, Et-china will make 
an application to the London Stock Exchange to cancel the admission of Et-china 
Shares to trading on AIM. It is also intended that as soon as possible following 
the Acquisition Effective Date, and after the admission to trading of Et-china 
Shares on AIM has been cancelled, Et-china will be re-registered as a private 
limited company. 
19.        General 
The Proposal will be governed by Jersey law and will be subject to the 
jurisdiction of the Jersey courts and to the Conditions and further terms set 
out in Appendix 1 to this announcement and to the full terms and Conditions to 
be set out in the Scheme Document and the Forms of Proxy, when issued. 
The bases and sources of certain financial information contained in this 
announcement are set out in Appendix 2 to this announcement. 
Certain terms used in this announcement are defined in Appendix 4 to this 
announcement. 
This announcement is not intended to and does not constitute or form part of any 
offer to sell or subscribe for or any invitation to purchase or subscribe for 
any securities or the solicitation of any vote or approval in any jurisdiction 
pursuant to the Proposal or otherwise. The Proposal will be made solely by means 
of the Scheme Document, which will contain the full terms and conditions of the 
Proposal, including details of how to vote in favour of the Scheme. Any response 
in relation to the Proposal should be made only on the basis of the information 
in the Scheme Document or any document by which the Proposal is made. Et-china 
will prepare the Scheme Document to be distributed to Et-china Shareholders. 
Et-china and Kuoni urge Et-china Shareholders to read the Scheme Document when 
it becomes available because it will contain important information relating to 
the Proposal. 
 
Macquarie is acting exclusively as financial advisor to Et-china and no-one else 
in connection with the Proposal and will not be responsible to anyone other than 
Et-china for providing the protections afforded to clients of Macquarie or for 
providing advice in relation to the Proposal. Macquarie Capital (Europe) Limited 
is authorised and regulated by the UK Financial Services Authority. Neither 
Macquarie Capital (Europe) Limited nor Macquarie Capital (Hong Kong) Limited is 
an authorised deposit-taking institution for the purposes of the Banking Act 
1959 (Commonwealth of Australia), and neither of their obligations represent 
deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. 
Macquarie Bank Limited does not guarantee or otherwise provide assurance in 
respect of the obligations of Macquarie Capital (Europe) Limited or Macquarie 
Capital (Hong Kong) Limited. 
Credit Suisse, which is authorised and regulated by the Financial Services 
Authority, is acting for Kuoni and for no one else in connection with the 
matters referred to in this announcement and will not be responsible to anyone 
other than Kuoni for providing the protections afforded to clients of Credit 
Suisse or for providing advice in relation to this matter, the content of this 
announcement or any matter referred to herein. Neither Credit Suisse nor any of 
its subsidiaries, branches or affiliates owes or accepts any duty, liability or 
responsibility whatsoever (whether direct or indirect, whether in contract, in 
tort, under statute or otherwise) to any person who is not a client of Credit 
Suisse in connection with this announcement, any statement contained herein or 
otherwise. 
 
The availability of the Proposal to Et-china Shareholders who are not resident 
in and citizens of the United Kingdom or Jersey may be affected by the laws of 
the relevant jurisdictions in which they are located or of which they are 
citizens. Such persons should inform themselves of, and observe, any applicable 
legal or regulatory requirements of their jurisdictions. Further details in 
relation to overseas shareholders will be contained in the Scheme Document. 
 
The distribution of this announcement in jurisdictions other than in the United 
Kingdom or Jersey may be restricted by law and therefore any persons who are 
subject to the laws of any jurisdiction other than the United Kingdom or Jersey 
should inform themselves about, and observe, any applicable requirements. This 
announcement has been prepared for the purposes of complying with Jersey law and 
the AIM Rules and information disclosed may not be the same as that which would 
have been disclosed if this announcement had been prepared in accordance with 
the laws of any jurisdiction outside the United Kingdom or Jersey. 
 
If Kuoni exercises its right to implement the Proposal by way of a Takeover 
Offer, the Proposal will not be made, directly or indirectly, in, into or from 
any jurisdiction where to do so would violate the laws in that jurisdiction. 
Accordingly, copies of this announcement and formal documentation relating to 
the Proposal will not be and must not be, mailed or otherwise forwarded, 
distributed or sent in, into or from any jurisdiction where to do so would 
violate the laws in that jurisdiction. 
 
The Proposal relates to the shares of a Jersey company and is proposed to be 
effected by means of a scheme of arrangement under Jersey law. The Proposal will 
not be sent to Et-china Shareholders who are resident in, or citizens of, or are 
organised or incorporated in, the United States. Accordingly, neither this 
announcement nor any other document in connection with the Proposal shall be 
released, published or distributed in whole or in part in, into or from the 
United States or any other jurisdiction where to do so would constitute a 
violation of the relevant laws in that jurisdiction. Neither this announcement 
nor any other document in connection with the Proposal shall be forwarded by any 
nominee, custodian, broker or other intermediary in, into or from the United 
States. 
 
Hong Kong 
 
WARNING 
 
The contents of this announcement and the Scheme Document have not been reviewed 
by any regulatory authority in Hong Kong. You are advised to exercise caution in 
relation to the offer. If you are in doubt about any of the contents of this 
announcement or the Scheme Document, you should obtain independent professional 
advice. 
 
This announcement and the Scheme Document do not constitute an offer or 
invitation to the public in Hong Kong to subscribe for or dispose of the Scheme 
Shares. Accordingly, unless permitted by the securities laws of Hong Kong, no 
person may issue or have in its possession for the purposes of issue, this 
announcement or any invitation or document relating to the Scheme Shares, 
whether in Hong Kong or elsewhere, which is directed at, or the contents of 
which are likely to be accessed or read by, the public in Hong Kong other than 
in circumstances which do not constitute an offer or an invitation to the public 
for the purposes of the SFO. However, numbered copies of the Scheme Document may 
be issued to a limited number of shareholders in Hong Kong in a manner which 
does not constitute an issue, circulation or distribution of this document, or 
any offer or invitation in respect of the Scheme Shares, to the public in Hong 
Kong. Only the person to whom a numbered copy of the Scheme Document has been 
issued may take action in response to the Scheme Document. No person to whom a 
numbered copy of this document is issued may issue, circulate or distribute this 
document in Hong Kong or make or give a copy of this document to any other 
person. 
 
Forward-Looking Statements 
 
This announcement, oral statements made regarding the Proposal, and other 
information published by Kuoni and Et-china may contain "forward-looking 
statements". These statements are based on the current expectations of the 
management of Kuoni and Et-china and are naturally subject to uncertainty and 
changes in circumstances. The forward-looking statements contained herein 
include statements about the expected effects of the Proposal on Et-china and 
Kuoni, the expected timing and scope of the Proposal, enhanced customer support, 
access to greater resources and other synergies, other strategic options and all 
other statements in this announcement other than historical facts. 
Forward-looking statements include, without limitation, statements typically 
containing words such as "intends", "expects", "anticipates", "believes", 
"estimates", "will" "may" and "should" and words of similar import. By their 
nature, forward-looking statements involve risk and uncertainty because they 
relate to events and depend on circumstances that will occur in the future. 
There are a number of factors that could cause actual results and developments 
to differ materially from those expressed or implied by such forward-looking 
statements. These factors include, but are not limited to, the satisfaction of 
the Conditions to the Proposal, as well as additional factors, such as changes 
in economic conditions, changes in the level of capital investment, success of 
business and operating initiatives and restructuring objectives, customers' 
strategies and stability, changes in the regulatory environment, fluctuations in 
interest and exchange rates, the outcome of litigation, government actions and 
natural phenomena such as floods, earthquakes and hurricanes. Other unknown or 
unpredictable factors could cause actual results to differ materially from those 
in the forward-looking statements. Given these risks and uncertainties, 
investors should not place undue reliance on forward-looking statements as a 
prediction of actual results. Neither Kuoni, nor Et-china undertakes any 
obligation to update publicly or revise forward-looking statements, whether as a 
result of new information, future events or otherwise, except to the extent 
legally required. 
 
                                APPENDIX 1 
 
 
            CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE PROPOSAL 
 
Part A:  Conditions to the Proposal 
1.         The Proposal is conditional upon the Scheme becoming or being 
declared unconditional and becoming effective by the Long-Stop Date. 
2.         The Scheme will be subject to the following conditions: 
(a)        approval of the Scheme by a majority in number, representing at least 
three-fourths of the voting rights of Scheme Shareholders (or the relevant class 
or classes thereof) present, entitled to vote and voting, either in person or by 
proxy, at the Court Meeting and at any separate class meeting which may be 
required by the Court (or at any adjournment of that meeting); 
(b)        the Resolutions being duly passed by the requisite majorities of 
Et-china Shareholders at the EGM (or at any adjournment of that meeting); 
(c)        the sanction of the Scheme by the Court (with or without 
modification, but subject to any modification being on terms acceptable to Kuoni 
and Et-china) and the delivery of the Scheme Court Order to the Registrar of 
Companies; and 
(d)        the confirmation of the Reduction of Capital by the Court (with or 
without modification, but subject to any modifications being on terms acceptable 
to Kuoni and Et-china) and the Reduction Court Order and minute of such 
reduction attached thereto being filed with, and registered by, the Registrar of 
Companies. 
3.         In addition, Kuoni and Et-china have agreed that, subject to Clause 4 
below, the Scheme will be conditional upon the following matters and, 
accordingly, the Court's sanction of the Scheme will not be sought unless such 
conditions (as amended, if appropriate) have been satisfied (and continue to be 
satisfied pending commencement of the Second Court Hearing) or waived: 
(a)        no PRC Authority having received any complaint or reference or having 
taken, threatened to take or proposed any action or investigation or having 
decided or proposed to enact, amend or revoke any statute, regulation, decision, 
order or published practice which would or might reasonably be expected to: 
(i)         result in any member of the Et-china Group ceasing to hold or 
ceasing to be able to use in its business any Key Licence in all material 
respects on the same basis and terms as at present apply; 
(ii)         result in any material loss to any member of the Et-china Group of 
any of its existing rights to, or control over, any material part of the 
businesses of the Et-china Group as such businesses are presently operated; or 
(iii)        result in any material fines, penalties of other costs being 
imposed on any member of the Et-china Group by any PRC Authority; 
(b)        all necessary filings, applications and/or notifications (including 
any national anti-trust, competition or merger control filings) having been 
made, and all necessary waiting and other time periods (including extensions 
thereof) under any applicable legislation or regulation of any relevant 
jurisdiction having expired, lapsed or been terminated, and all statutory or 
regulatory obligations in any relevant jurisdiction having been complied with, 
in each case in respect of the Scheme or in connection with the Proposal or any 
part thereof or any matter arising therefrom or relating thereto, and all 
authorisations, orders, recognitions, grants, consents, licences, confirmations, 
certificates, clearances, permissions and approvals necessary or appropriate in 
any jurisdiction for, or in respect of, the Scheme or in connection with the 
Proposal or any part thereof or any matter arising therefrom or relating thereto 
and to carry on any material part of the business of any member of the Kuoni 
Group or any member of the Et-china Group ("Authorisations") having been 
obtained, in terms and in a form reasonably satisfactory to Kuoni, from all 
appropriate Relevant Authorities and from any persons or bodies with whom any 
member of the Kuoni Group or any member of the Et-china Group has entered into 
contractual arrangements, and any conditions or obligations attached to any such 
Authorisations being on terms and in a form reasonably satisfactory to Kuoni, 
and all such Authorisations remaining in full force and effect and no intimation 
of any intention to revoke, suspend, restrict, modify or not to renew any of the 
same having been made and all necessary statutory or regulatory obligations in 
any jurisdiction having been complied with; 
(c)        no Relevant Authority (including any national or supranational 
anti-trust, competition or merger control authority) having instituted, 
implemented or threatened any action, proceeding, suit, investigation, reference 
or enquiry, or made, proposed or enacted any statute, legislation, regulation, 
decision or order or change to published practice or taken or proposed to take 
any other steps and there not continuing to be outstanding any statute, 
legislation, regulation, decision or order or change to published practice which 
would or might reasonably be expected (in a manner or to an extent which would 
be reasonably likely to have a material adverse effect on the Et-china Group 
taken as a whole) to: 
(i)         make the Scheme, its implementation or the Proposal or the proposed 
acquisition by Kuoni of any shares or other securities in, or control or 
management of, Et-china or any member of the Et-china Group, void, 
unenforceable, prohibited and/or illegal in any jurisdiction or otherwise 
directly or indirectly restrain, restrict, prevent, prohibit, delay or otherwise 
interfere with the same, or impose additional conditions or obligations with 
respect thereto, or otherwise impede, challenge or interfere with the same; 
(ii)         require, prevent or materially delay the divestiture, or alter the 
terms of any proposed divestiture, by any member of the Kuoni Group or the 
Et-china Group of all or any material part of their respective businesses, 
assets or property (including without limitation any Scheme Shares) or impose 
any material limitation on the ability of any member of the Kuoni Group or the 
Et-china Group to conduct any of their respective businesses or own or dispose 
of any of their respective assets or property or any part thereof; 
(iii)        impose any material limitation on, or result in a material delay 
in, the ability of any member of the Kuoni Group or the Et-china Group to 
acquire or to hold or to exercise effectively, directly or indirectly, all or 
any rights of ownership in respect of shares or loans or securities convertible 
into shares or other securities (or the equivalent) in, or to exercise voting or 
management control over, any member of the Kuoni Group or the Et-china Group; 
(iv)        require any member of the Kuoni Group or the Et-china Group to 
acquire, or to offer to acquire, any shares or other securities (or their 
equivalent) or any interest in any member of the Et-china Group or any asset 
owned by any third party (other than in the implementation of the Proposal) or 
to sell or offer to sell any shares or other securities (or their equivalent) or 
any interest in any assets owned by any member of the Kuoni Group or the 
Et-china Group; 
(v)         impose any material limitation on the ability of any member of the 
Kuoni Group or the Et-china Group to integrate or co-ordinate its business, or 
any part of it, with all or any part of the business of any other member of the 
Kuoni Group or the Et-china Group; 
(vi)        impose any material limitation on the ability of any member of the 
Kuoni Group or of the Et-china Group to conduct any material part of its 
business as it is presently conducted; 
(vii)       result in any member of the Kuoni Group or the Et-china Group 
ceasing to be able to carry on business under any name under which it presently 
does so or ceasing to be able to use in its business any name, trademark or 
other material intellectual property right which it at present uses, in each 
case on the same basis and terms as at present apply; or 
(viii)       otherwise materially and adversely affect the business, assets, 
financial or trading position, profits or prospects of any member of the 
Et-china Group or of any member of the Kuoni Group; 
and all applicable waiting and other time periods during which any such Relevant 
Authority could institute or implement any such action, proceeding, suit, 
investigation, reference or enquiry or otherwise intervene under the laws of any 
relevant jurisdiction in respect of the Scheme or in connection with the 
Proposal or any part thereof or any matter arising therefrom or relating thereto 
having expired, lapsed or been terminated; 
(d)        save as Disclosed, there being no provision of any arrangement, 
agreement, licence, permit, lease, franchise, authorisation or other instrument 
to which any member of the Et-china Group is a party, or by or to which any such 
member or any of its material assets is or are or may be bound, entitled or 
subject and which, in consequence of the Scheme or the Proposal or any part 
thereof or any matter arising therefrom or relating thereto or the proposed 
acquisition of any shares or other securities in, or control or management of, 
Et-china or any member of the Et-china Group by Kuoni or because of a change in 
the control or management of Et-china or any member of the Et-china Group or 
otherwise, would or might reasonably be expected to result (to an extent which 
would have a material adverse effect on the Et-china Group taken as a whole) in: 
(i)         any monies borrowed by, or other indebtedness (actual or contingent) 
of, or any grant made or available to, any such member being or becoming 
repayable or capable of being declared repayable immediately or prior to their 
or its stated maturity or repayment date or the ability of any such member to 
borrow monies or to incur any material indebtedness being withdrawn or inhibited 
or becoming capable of being withdrawn or inhibited; 
(ii)         any such arrangement, agreement, licence, permit, lease, franchise, 
authorisation or other instrument or the rights, liabilities, obligations or 
interests of any such member thereunder being terminated or adversely modified 
or affected or any obligation or liability arising or any adverse action being 
taken or arising thereunder; 
(iii)        the creation of any mortgage, charge or other security interest 
over the whole or any part of the business, property or assets of any such 
member other than in the ordinary course of business or any such mortgage, 
charge or other security interest (whenever arising or having arisen) being 
enforced or becoming enforceable or being capable of being enforced; 
(iv)        the rights, liabilities, obligations or interests of any such member 
under any such arrangement, agreement, licence, permit, lease, franchise, 
authorisation or other instrument or the interests or business of any such 
member in or with any other firm or body or person (or any agreement or 
arrangement relating to such interests or business) being terminated or 
adversely modified or affected or any obligation or liability arising or any 
action being taken or arising thereunder; 
(v)         any material asset or interest of, or any material asset the use of 
which is enjoyed by, any such member being or falling to be disposed of or 
charged or any right arising under which any such asset or interest could be 
required to be disposed of or charged or could cease to be available to any such 
member in each case other than in the ordinary course of business; 
(vi)        any such member ceasing to be able to carry on business under any 
name under which it presently does so or ceasing to be able to use in its 
business any name, trademark or other intellectual property right which it at 
present uses, in each case on the same basis and terms as at present apply; or 
(vii)       the creation of any liabilities whether actual or contingent by any 
such member other than in the ordinary course of business; 
and no event having occurred which, under any provision of any arrangement, 
agreement, licence, permit, lease, franchise, authorisation or other instrument 
to which any member of the Et-china Group is a party or by or to which any such 
member or any of its assets may be bound, entitled or subject would reasonably 
be considered likely to result in any of the events or circumstances as are 
referred to in sub-paragraphs (i) to (vii) of this Condition (d); 
(e)        except as Disclosed, no member of the Et-china Group having since 31 
December 2009: 
(i)         issued or agreed to issue, or authorised or proposed the issue of, 
additional shares of any class, or securities convertible into or exchangeable 
for, or rights, bonds, warrants or options to subscribe for or acquire, any such 
shares or convertible securities or sold or transferred any shares out of 
treasury (save for options granted, and for any Scheme Shares allotted upon 
exercise of options granted, under the Et-china Share Scheme or the 1,118,014 
Shares to be issued to Matthew Ng in respect of his current accrued bonus 
entitlement or between Et-china and wholly-owned members of the Et-china Group 
before the date of the Announcement); 
(ii)         other than to another member of the Et-china Group which is a 
Wholly owned Et-china subsidiary, lawfully recommended, declared, paid or made 
or proposed lawfully to recommend, declare, pay or make any bonus in respect of 
shares, dividend or other distribution, whether payable in cash or otherwise; 
(iii)        save for any transaction which is not material in the context of 
the Et-china Group taken as a whole or transactions between Wholly owned 
Et-china subsidiaries, acquired or disposed of or transferred, mortgaged, 
charged or created any security interest (save arising through operation of law) 
over any asset or any right, title or interest in any asset (including shares 
and trade investments) or merged with, demerged or acquired any body corporate, 
partnership or business or authorised or proposed or announced any intention to 
propose any merger, demerger, acquisition, disposal, transfer, mortgage, charge 
or security interest; 
(iv)        issued, agreed to issue, authorised or proposed or announced an 
intention to propose the issue of, or made any change in or to, any debentures, 
become subject to any contingent liability or (save for transactions which are 
solely between Wholly owned Et-china subsidiaries) incurred or increased any 
indebtedness or liability (actual or contingent) otherwise than in the ordinary 
course of business and which is not material in the context of the Et-china 
Group taken as a whole; 
(v)         purchased, redeemed or repaid or announced any proposal to purchase, 
redeem or repay any of its own shares or other securities or reduced or made any 
other change to any part of its share capital; 
(vi)        entered into, varied, terminated or authorised or become bound by or 
proposed the entry into or variation or termination of, or announced its 
intention to enter into, vary or terminate, authorise or become bound by any 
contract, agreement, commitment, arrangement or transaction (whether in respect 
of capital expenditure or otherwise) which: (A) is other than in the ordinary 
course of business; (B) is of a long-term, onerous or unusual nature or 
magnitude; or (C) involves or could involve an obligation of such a nature or 
magnitude or which results or may result in any material restriction of the 
scope of business currently carried on by any member of the Kuoni Group or the 
Et-china Group and which is material in the context of the Et-china Group taken 
as a whole; 
(vii)       waived or compromised or settled any claim which is material in the 
context of the Et-china Group taken as a whole; 
(viii)       implemented, entered into or authorised, effected, proposed or 
announced its intention to implement or enter into any reconstruction, 
amalgamation, scheme, commitment, transaction or arrangement (otherwise than in 
the ordinary course of business); 
(ix)        taken any corporate action or had any order made or legal 
proceedings started or threatened against it or petition presented or order made 
for its winding-up (voluntary or otherwise), dissolution or reorganisation or 
for the appointment of any receiver, administrator, administrative receiver, 
trustee or similar officer of all or any of its material assets and material 
revenues or any analogous proceedings or similar event having occurred in any 
jurisdiction or any analogous person having been appointed in any jurisdiction; 
(x)        entered into or made an offer (which remains open for acceptance) to 
enter into, or changed the terms of, any agreement, contract, commitment, 
transaction or arrangement with any of the directors or senior executives of any 
member of the Et-china Group save for the 1,118,014 Shares to Matthew Ng in 
connection with his bonus arrangements; 
(xi)        amended the general terms of employment of its employees, other than 
in the ordinary course of business; 
(xii)       made, committed to make or announced an intention to propose any 
change in its loan capital; 
(xiii)      been unable, or admitted in writing that it is unable, to pay its 
debts or commenced negotiations with one or more of its creditors with a view to 
rescheduling or restructuring any of its indebtedness, or having stopped or 
suspended (or threatened to stop or suspend) payment of its debts generally or 
ceased or threatened to cease carrying on all or a substantial part of its 
business; 
(xiv)      made any alteration to its memorandum or articles of association (or 
any equivalent constitutional documents in any jurisdiction) or, except as 
Disclosed, entered into, amended or terminated any agreement or other 
arrangement with any legal or nominee holder of its shares in its capacity as 
such (other than Kuoni); 
(xv)       proposed, agreed to provide or modified the terms of the Et-china 
Share Scheme or any other scheme or benefit relating to the employment or 
termination of employment of any person employed by any member of the Et-china 
Group; 
(xvi)      entered into any arrangement, contract, agreement, transaction or 
commitment other than in the ordinary course of business or passed any 
resolution or made any offer (which remains open for acceptance) with respect 
to, or announced any intention to effect or propose, any of the transactions, 
matters or events referred to in this Condition (e); 
(f)        except as Disclosed, since 31 December 2009: 
(i)         there having been no adverse change or deterioration in the 
business, assets, financial or trading position or profits or prospects of any 
member of the Et-china Group in a manner or to an extent that is material in the 
context of the Et-china Group taken as a whole; 
(ii)         no litigation, arbitration proceedings, prosecution or other legal 
proceedings having been instituted, implemented, announced or threatened by or 
against or remaining outstanding against or in respect of any member of the 
Et-china Group which might reasonably be expected to materially and adversely 
affect the Et-china Group taken as a whole; 
(iii)        there having been no inquiry or investigation by or complaint or 
reference to any Relevant Authority or other investigative body against or in 
respect of any member of the Et-china Group and no such inquiry, investigation, 
complaint or reference having been threatened, announced or instituted or 
remaining outstanding which might reasonably be expected to materially and 
adversely affect the Et-china Group taken as a whole; 
(iv)        no contingent or other liability having arisen or become apparent or 
increased which has or might reasonably be expected to be material in the 
context of the Et-china Group taken as a whole; and 
(v)         no steps having been taken and no omissions having been made which 
are reasonably likely to result in the withdrawal, cancellation, termination or 
modification by any Relevant Authority of any licence, permit, consent or other 
authorisation held by any member of the Et-china Group which is necessary for 
the carrying on of its business as currently conducted in a manner that could 
reasonably be expected to be material in the context of the Et-china Group taken 
as a whole; 
(g)        Kuoni not having discovered, except as Disclosed: 
(i)         that any financial, business or other information as contained in 
the information disclosed to any member of the Kuoni Group or publicly disclosed 
at any time by or on behalf of any member of the Et-china Group is misleading, 
contains a misrepresentation of fact or omits to state a fact necessary to make 
that information not misleading which has not, prior to the date of the 
Announcement, has been corrected by public announcement by the delivery of an 
announcement to a Regulatory Information Service and which could reasonably be 
expected to be material and adverse in the context of the Et-china Group taken 
as a whole; 
(ii)         that any member of the Et-china Group or any partnership, company 
or other entity in which any member of the Et-china Group has a significant 
economic interest has any liability (contingent or otherwise) that has not been 
so publicly announced and which could reasonably be expected to be material and 
adverse in the context of the Et-china Group taken as a whole; 
(iii)        any information which materially affects the import of any 
information disclosed at any time by or on behalf of any member of the Et-china 
Group to an extent which is material and adverse in the context of the Et-china 
Group taken as a whole; 
(iv)        that any past or present member of the Et-china Group has failed to 
comply with any applicable legislation, directives, regulations, common laws, 
notices, orders, circulars, guidance notes or requirements of any applicable 
jurisdiction or Relevant Authority with regard to the use, presence, treatment, 
handling, storage, transport, disposal, discharge, spillage, leak, release or 
emission of any waste or hazardous or harmful substance or any substance capable 
of causing harm or damage to the environment, man, flora, fauna, biodiversity, 
ecology or otherwise relating to environmental matters, or that there has been 
any such use, presence, treatment, handling, storage, transport, disposal, 
discharge, spillage, leak, release or emission (whether or not the same 
constituted non-compliance by any person with any such legislation or 
regulation, and whenever the same may have taken place) any of which 
non-compliance would be reasonably likely to give rise to any liability (whether 
actual or contingent) or cost on the part of any member of the Et-china Group 
and which is material in the context of the Et-china Group taken as a whole; 
(v)         that there is, or is reasonably likely to be, any obligation or 
liability (whether contingent or otherwise) on the part of any member of the 
Et-china Group to improve or install new plant or equipment or to make good, 
repair, reinstate or clean up any property, land or any waters now or previously 
owned, occupied, operated, made use of or controlled by any past or present 
member of the Et-china Group, or in which any such member may now have or 
previously have had or be deemed to have or have had an interest, under any 
past, present or future environmental legislation, directives, regulations, 
common laws, notices, orders, circulars, guidance notes or requirements of any 
applicable jurisdiction or any Relevant Authority, or to contribute to the cost 
thereof or associated therewith or indemnify any person in relation thereto and 
which is material in the context of the Et-china Group taken as a whole; 
(vi)        that circumstances exist whereby a person or class of persons would 
be reasonably likely to have any material claim or claims in respect of any 
service or product previously supplied, sold or in any way dealt with or handled 
by any past or present member of the Et-china Group and could reasonably be 
expected to be material in the context of the Et-china Group taken as a whole; 
or 
(h)        Et-china not having taken any action which would, were Et-china to be 
governed by the Takeover Code, constitute frustrating action in breach of Rule 
21 of the Takeover Code and which has a material and adverse effect on Et-china 
or any member of the Et-china Group (and for these purposes: (i) an action shall 
be "material" if, when taken together with any other actions falling within this 
Condition 3(h), it amounts to or exceeds an aggregate amount of GBP100,000); 
(ii) Rule 21 shall be interpreted as though all references to consultation with 
and the consent of the Takeover Panel had been deleted and paragraphs (A) and 
(B) of Rule 21.1 shall not apply; and (iii) actions taken with the prior written 
consent of Kuoni (not to be unreasonably withheld or delayed) or any actions 
pursuant to any Pre-existing Obligation shall be deemed not to constitute 
frustrating action in breach of Rule 21). 
4.         For the purposes of these Conditions: 
"Disclosed" means: (i) fairly disclosed in writing prior to the date of the 
Announcement by Et-china or Et-china's advisers to Kuoni or to Kuoni's legal or 
financial or accounting advisers, or (ii) disclosed by being publicly announced 
through a Regulatory Information Service prior to the date of the Announcement 
and "Disclosure" shall be construed accordingly; 
"Domestic Travel Agency Services Operating Permit" means the Domestic Travel 
Agency Services Operating Permit, with the permitted business scope of inbound 
travel services and domestic travel services, issued on 18 November 2009 by the 
PRC National Tourism Administration in favour of Guangzhou GZL International 
Travel Services Limited; 
"International Travel Agency Services Operating Permit" means the International 
Travel Agency Services Operation Permit, with the permitted business scope of 
outbound travel services, issued on 18 November 2009 by the PRC National tourism 
Administration in favour of Guangzhou GZL International Travel Services Limited; 
"Key Licences" means the International Travel Agency Services Operating Permit 
and the Domestic Travel Agency Services Operating Permit; 
"PRC Authorities" means the central, provincial, and local governments of all 
levels in the PRC, including the PRC Licensing Authorities, all the ministries, 
departments, commissions, bureaus and branches of national, provincial, county 
or other administrative level; 
"PRC Licensing Authorities" means the Guangzhou Tourism Bureau, the Guangdong 
Province Tourism Bureau, the National Tourism Bureau, the China Air Travel 
Association, the South-China Regional Representative Office of the China Air 
Transport Association and the Guangdong Province Communication Administration; 
"Pre-existing Obligation" means any of the following: 
(a)        the payment of a dividend of approximately RMB4,200,000 which was 
declared and approved by the board of GZL on 7 May 2010; 
(b)        the capital expenditure of total of RMB5,000,000 approved by the 
board of GZL on 7 May 2010 in respect of the replacement of ten coaches in the 
vehicle division of GZL; 
(c)        the declaration by Guangdon CSN-ETC e-Commerce Limited of a dividend 
of RMB2,500,000 during 2010; 
(d)        the credit commitment by GZL of RMB30,000,000 to its associated 
company Guangzhou Lvzhiguang ("LZG") approved in 2009 of which RMB15,000,000 has 
already been extended to LZG; 
(e)        the acquisition by GZL of further shares in LZG (if it proceeds) in 
the amount of approximately RMB10,000,000 which will result in GZL holding more 
than 51% of shares in LZG; 
(f)        the payment of outstanding amount of up to RMB1,400,000 in respect of 
the acquisition of Yoee.com; and 
(g)        the payment of fees, expenses and bonuses of Et-china's professional 
advisers and transaction related fees in connection with the Proposal up to a 
maximum aggregate amount of US$4,000,000; 
"Wholly owned Et-china subsidiary" means any company which is directly or 
indirectly wholly owned by Et-china. 
Part B:  Certain Further Terms of the Proposal 
5.         Kuoni reserves the right to waive all or any of Conditions 3(a) to 
(h) inclusive, in whole or in part. Kuoni shall be under no obligation to waive 
or treat as satisfied any of Conditions 3(a) to (h) inclusive by a date earlier 
than the latest date for the satisfaction of that Condition, notwithstanding 
that other of Conditions 3(a) to (h) inclusive may at such earlier date have 
been waived or satisfied and that there are at such earlier date no 
circumstances indicating that any of such Conditions may not be capable of 
satisfaction. 
6.         Kuoni reserves the right to elect to implement the proposal by way of 
a Takeover Offer. In such event, the Takeover Offer will (unless otherwise 
agreed) be implemented on the same terms, so far as applicable, as those which 
would apply to the Scheme, subject to appropriate amendments to reflect the 
change in method of effecting the Proposal, including without limitation, an 
acceptance condition set at 90 per cent. (or such lesser percentage, being more 
than 50 per cent., as Kuoni may decide) of: (i) the shares to which the offer 
relates; and (ii) the voting rights normally exercisable at a general meeting of 
Et-china, including, for this purpose, any such voting rights attaching to 
Scheme Shares that are unconditionally allotted or issued before the Takeover 
Offer becomes or is declared unconditional as to acceptances, whether pursuant 
to the exercise of any outstanding subscription or conversion rights or 
otherwise. 
7.         The Takeover Code does not apply to this document, the Proposal or 
the Scheme. As such the rules of the Takeover Code, including in particular 
Rules 2.7 and 13.4, which would, if the Takeover Code applied, restrict the 
ability of Kuoni not to proceed with the Proposal or the Scheme or to invoke a 
Condition or fail to waive a Condition, do not apply. However, the parties have 
agreed in the Implementation Agreement that Kuoni will pay a break fee of GBP2 
million to Et-china if Kuoni invokes (or fails to waive non-satisfaction of) a 
Condition so as to cause the Proposal to lapse or to be withdrawn except where 
Kuoni invoked the Condition as a result of one of the following circumstances: 
(a)        a revocation by the issuing authority in the PRC of either the 
International Travel Agency Services Operating Permit or the Domestic Travel 
Agency Services Operating Permit; 
(b)      either: 
(i)         a transfer by any current holder of sufficient shares in any member 
of the Et-china Group, to a person outside the Et-china Group (other than where 
those shares are to be held by such other person in the same or similar terms as 
they are currently held); 
(ii)        a breach by any holder of shares in any member of the Et-china Group 
of any material obligation owed by that shareholder to any member of the 
Et-china Group in connection with that shareholding; or 
(iii)       any relevant government body or authority making an order because of 
the Proposal or the announcement of the Proposal; 
in each case which has the effect that Et-china is no longer able to control its 
material businesses materially on the terms it does so at the date of the 
Implementation Agreement; 
(c)        Et-china takes any action which would, were Et-china to be governed 
by the Takeover Code, constitute frustrating action in breach of Rule 21 of the 
Takeover Code and which has a material and adverse effect on Et-china or any 
member of the Et-china Group (and for these purposes an action shall be 
"material" if, when taken together with any other actions falling within 
Condition 3(h), it amounts to or exceeds an aggregate amount of GBP100,000), and 
in addition the parties have agreed provisions governing how Rule 21 is to apply 
in the circumstances of the Proposal given that the Takeover Panel does not have 
jurisdiction, following which Kuoni has notified Et-china that it wishes to 
withdraw from the Proposal; or 
(d)        would have allowed Kuoni to invoke a Condition so as to cause the 
Proposal not to proceed, to lapse or to be withdrawn under Rule 2.7 or, as 
appropriate, Rule 13.4 of the Takeover Code had the Takeover Code applied to the 
Proposal. 
The break fee is also payable to the Company if a Kuoni Trigger Event occurs and 
as a result the Acquisition Effective Date does not occur prior to the Long Stop 
Date. The Company has agreed with Kuoni in the Implementation Agreement to pay 
an inducement fee of GBP2 million to Kuoni if (1) the Independent Directors fail 
to recommend the Proposal unanimously on an unqualified basis in the Acquisition 
Document (except where only one of the Independent Directors, not being Matthew 
Ng, so fails to recommend the Proposal and either: (i) the Acquisition Effective 
Date nevertheless occurs prior to the Long Stop Date or (ii) Kuoni becomes 
liable to pay the GBP2 million break fee) or subsequently any of the Independent 
Directors withdraws or materially adversely modifies his or her recommendation 
(except where only one of the Independent Directors, other than Matthew Ng, so 
withdraws or modifies his or her recommendation and either (i) the Acquisition 
Effective Date nevertheless occurs prior to the Long Stop Date or (ii) Kuoni 
becomes liable to pay the GBP2 million break fee), (2) if an Et-china Trigger 
Event occurs and as a result the Acquisition Effective Date does not occur prior 
to the Long Stop Date, or (3) if Et-china, in breach of Condition 3(h), takes 
any action which would, were Et-china to be governed by the Takeover Code, 
constitute frustrating action in breach of Rule 21 of the Takeover Code and 
Kuoni notifies Et-china that it wishes to withdraw from the Proposal. The 
Implementation Agreement is further described in section 15 of this 
announcement. 
8.         The availability of the Proposal to persons resident in, or citizens 
or nationals of, jurisdictions outside of Jersey or the United Kingdom, or to 
persons who are custodians, nominees or trustees for citizens or nationals or 
residents of jurisdictions outside Jersey or the United Kingdom ("Overseas 
Persons") may be prohibited or affected by the laws of the relevant overseas 
jurisdictions. Such Overseas Persons should inform themselves about and observe 
any applicable requirements. 
9.         This document and the rights or liabilities arising hereunder, the 
Proposal, the Scheme and the Forms of Proxy will be governed by Jersey law and 
will be subject to the jurisdiction of the courts of Jersey. 
 
              APPENDIX 2 
BASES AND SOURCES AND OTHER INFORMATION 
1.         The value attributed to the entire issued ordinary share capital of 
Et-china is based upon 34,970,033 Et-china Shares in issue as at the close of 
business on 1 June 2010. The value attributed to the entire issued and to be 
issued ordinary share capital of Et-china is based upon the aggregate of: 
(a)       Et-china Shares in issue (as at close of business on 1 June 2010); 
(b)       547,501 Et-china Shares to be issued to certain GZL Executives upon 
conversion or re-designation of Et-china A Ordinary Shares; 
(c)       5,327,630 Et-china Shares to be issued on the exercise of all share 
options currently in issue under the Et-china Share Scheme; 
(d)       6,875,000 Et-china Shares to be issued upon conversion of the 
outstanding Et-china Convertible Bonds; and 
(e)       1,118,014 Et-china Shares to be issued to Matthew Ng in respect of his 
current accrued bonus. 
The calculation of the value of the entire issued and to be issued ordinary 
share capital of Et-china excludes any cash proceeds receivable from the 
exercise of options under the Et-china Share Scheme. 
2.         The financial information for Et-china is extracted from Et-china's 
reported accounts for the year ended 31 December 2009. 
3.         The financial information on Kuoni is extracted from Kuoni's annual 
report and accounts for the year ended 31 December 2009. 
4.         All prices for Et-china Shares have been derived from the AIM 
Appendix to the daily official list of the London Stock Exchange and represent 
the Closing Price on the relevant date. 
5.         The market capitalisation of Kuoni is based upon: 
(a)      2,868,603 Kuoni Registered Shares B equivalent, calculated as: 
(i)         952,000 Kuoni Registered Shares A in issue on 1 June 2010 (5 Kuoni 
Registered Shares A are equivalent to 1 Kuoni Registered Share B); plus 
(ii)        2,856,000 Kuoni Registered Shares B in issue on 1 June 2010; less 
(iii)       177,797 Kuoni Registered Shares B held in treasury; and 
(b)       the share price of Kuoni Registered Share B as derived from the Swiss 
Stock Exchange on the relevant date. 
6.         The calculation of Kuoni Group's total investment in Et-china 
excludes any cash proceeds receivable from the exercise of options under the 
Et-china Share Scheme. 
                APPENDIX 3 
DETAILS OF IRREVOCABLE UNDERTAKINGS 
A.  Directors' irrevocable undertakings 
The following directors of Et-china have given irrevocable undertakings as 
described in paragraph 8 of this announcement in respect of the number of 
Et-china Shares set out below: 
+---------------+---------------+---------------+---------------+ 
| Director      | No of  issued | Name of       | Name of       | 
|               | ordinary      | registered    | beneficial    | 
|               | shares held   | holder        | owner         | 
|               | in Offeree    |               |               | 
+---------------+---------------+---------------+---------------+ 
| Matthew       | 2,958,310     | Mintpine Pty  | Stallion      | 
| Chik-Hui Ng   |               | Limited       | China Limited | 
|               |               |               | (on trust for | 
|               |               |               | Matthew Ng    | 
|               |               |               | and family)   | 
+---------------+---------------+---------------+---------------+ 
| Matthew       | 582,885       | Matthew       | Matthew       | 
| Chik-Hui Ng   |               | Chik-Hui Ng   | Chik-Hui Ng   | 
+---------------+---------------+---------------+---------------+ 
| Matthew       | 30,728        | Fong Ping     | Fong Ping     | 
| Chik-Hui Ng   |               | Chow          | Chow          | 
+---------------+---------------+---------------+---------------+ 
| Christopher   | 1,590,526     | Mintpine Pty  | Christopher   | 
| Rose          |               | Limited       | Peter Rose    | 
|               |               |               | and on trust  | 
|               |               |               | for Peter     | 
|               |               |               | Francis Rose  | 
+---------------+---------------+---------------+---------------+ 
| Xiaoping Yang | 213,231       | Xiaoping Yang | Xiaoping Yang | 
+---------------+---------------+---------------+---------------+ 
| Xiaoping Yang | 90,000        | Mintpine Pty  | Xiaoping Yang | 
|               |               | Limited       |               | 
+---------------+---------------+---------------+---------------+ 
 
+--------------------+--------------------+--------------------+ 
| Director           | No of options over | Name of holder     | 
|                    | ordinary shares in |                    | 
|                    | Offeree            |                    | 
+--------------------+--------------------+--------------------+ 
| Matthew Chik-Hui   | 1,667,786          | Matthew Chik-Hui   | 
| Ng                 |                    | Ng                 | 
+--------------------+--------------------+--------------------+ 
| Xiaoping Yang      | 551,723            | Xiaoping Yang      | 
+--------------------+--------------------+--------------------+ 
| Robert Drummond    | 51,902             | Robert Drummond    | 
+--------------------+--------------------+--------------------+ 
B.  Shareholder irrevocable undertaking 
One other shareholder of Et-china has given an irrevocable undertaking in 
respect of Et-china Shares, namely Mintpine, an Australian company which holds 
Et-china Shares on trust for certain individuals and other entities. Mintpine's 
irrevocable undertaking relates to 10,177,983 Et-china Shares, representing, in 
aggregate, approximately 29.1 per cent. of the entire issued ordinary share 
capital of Et-china (of which 4,638,836 Et-china Shares in aggregate are held by 
Mintpine on trust for Independent Directors of Et-china (and/or their family 
trusts), all of which are also covered by the directors' irrevocable 
undertakings). 
 
 
                                   APPENDIX 4 
                                  DEFINITIONS 
 
The following definitions apply throughout this announcement unless the context 
requires otherwise. 
 
+------------------------+--------------------------------------------+ 
| Acquisition Document   | means (i) if the Scheme is (or is to be)   | 
|                        | implemented, the Scheme Document; or (ii)  | 
|                        | if the Takeover Offer is (or is to be)     | 
|                        | implemented, the Offer Document            | 
+------------------------+--------------------------------------------+ 
| Acquisition Effective  | means the date upon which (i) the Scheme   | 
| Date                   | becomes effective in accordance with its   | 
|                        | terms; or (ii) if Kuoni elects to          | 
|                        | implement the Proposal by way of a         | 
|                        | Takeover Offer, the date that the Takeover | 
|                        | Offer becomes or is declared unconditional | 
|                        | in all respects                            | 
+------------------------+--------------------------------------------+ 
| Admission Price        | means the placing price per Et-china Share | 
|                        | upon Admission of Et-china Shares to       | 
|                        | trading on AIM on 3 August 2007            | 
+------------------------+--------------------------------------------+ 
| AIM                    | means the AIM market operated by the       | 
|                        | London Stock Exchange                      | 
+------------------------+--------------------------------------------+ 
| AIM Rules              | means the AIM Rules for Companies          | 
|                        | published by the London Stock Exchange, as | 
|                        | amended and enforced from time to time     | 
+------------------------+--------------------------------------------+ 
| Business Day           | means any day, other than a Saturday or    | 
|                        | Sunday, on which banks in London,          | 
|                        | Switzerland and China are open for         | 
|                        | business (other than solely for trading    | 
|                        | and settlement in euros)                   | 
+------------------------+--------------------------------------------+ 
| CHF                    | means the lawful currency of Switzerland   | 
+------------------------+--------------------------------------------+ 
| Closing Price          | means the closing middle market price of   | 
|                        | an Et-china Share at the close of business | 
|                        | on a particular trading day as derived     | 
|                        | from the AIM Appendix to the daily         | 
|                        | official list of the London Stock Exchange | 
+------------------------+--------------------------------------------+ 
| Competing Proposal     | means (i) any proposal by a third party    | 
|                        | which is not acting in concert with Kuoni  | 
|                        | to announce or implement an offer, scheme  | 
|                        | of arrangement, merger or business         | 
|                        | combination, or similar transaction, the   | 
|                        | purpose of which is to enable that third   | 
|                        | party (or any other person not being Kuoni | 
|                        | or any member of the Kuoni Group and/or    | 
|                        | any person acting in concert with Kuoni)   | 
|                        | to acquire a majority of the entire issued | 
|                        | and to be issued ordinary share capital of | 
|                        | Et-china, or as the case may be any        | 
|                        | announcement thereof; (ii) any sale,       | 
|                        | merger, business combination, demerger or  | 
|                        | liquidation (or similar transaction or     | 
|                        | arrangement) in respect of the whole or a  | 
|                        | material part of the business of Et-china  | 
|                        | or the Et-china Group; or (iii) any other  | 
|                        | transaction that would preclude or         | 
|                        | materially restrict or delay the Proposal  | 
+------------------------+--------------------------------------------+ 
| Conditions             | means (i) if the Proposal is being         | 
|                        | implemented by the Scheme, the conditions  | 
|                        | comprising the Scheme Conditions; or (ii)  | 
|                        | if the Proposal is being implemented by    | 
|                        | way of the Takeover Offer, the conditions  | 
|                        | comprising the Takeover Offer Conditions.  | 
|                        | The conditions are set out in Appendix 1   | 
|                        | of this announcement and are to be set out | 
|                        | in the Acquisition Document                | 
+------------------------+--------------------------------------------+ 
| Court                  | means the Royal Court of Jersey            | 
+------------------------+--------------------------------------------+ 
| Court Hearing          | means either the First Court Hearing, the  | 
|                        | Second Court Hearing or the Third Court    | 
|                        | Hearing as the context requires            | 
+------------------------+--------------------------------------------+ 
| Court Meeting          | means the meeting of holders of Scheme     | 
|                        | Shares (and any adjournment thereof) to be | 
|                        | convened by order of the Court pursuant to | 
|                        | Article 125 of the Jersey Law to consider  | 
|                        | and vote on the Scheme (with or without    | 
|                        | amendment) and, if required, any meeting   | 
|                        | held as a result of an adjournment by      | 
|                        | Et-china or a reconvening by the Court     | 
|                        | thereof in accordance with the             | 
|                        | Implementation Agreement                   | 
+------------------------+--------------------------------------------+ 
| Court Orders           | means the orders of the Court sanctioning  | 
|                        | the Scheme under Article 125 of the Jersey | 
|                        | Law and confirming the Et-china Capital    | 
|                        | Reduction, and "Court Order" means either  | 
|                        | one of them                                | 
+------------------------+--------------------------------------------+ 
| Credit Suisse          | means Credit Suisse Securities (Europe)    | 
|                        | Limited                                    | 
+------------------------+--------------------------------------------+ 
| CREST                  | means the system for the paperless         | 
|                        | settlement of trades in securities and the | 
|                        | holding of uncertificated securities       | 
|                        | operated by Euroclear in accordance with   | 
|                        | the Companies (Uncertificated Securities)  | 
|                        | (Jersey) Order 1999                        | 
+------------------------+--------------------------------------------+ 
| Domestic Travel Agency | means the Domestic Travel Agency Services  | 
| Services Operating     | Operating Permit, with the permitted       | 
| Permit                 | business scope of inbound travel services  | 
|                        | and domestic travel services, issued on 18 | 
|                        | November 2009 by the PRC National Tourism  | 
|                        | Administration in favour of Guangzhou GZL  | 
|                        | International Travel Services Limited      | 
+------------------------+--------------------------------------------+ 
| Disclosed              | means: (i) fairly disclosed in writing     | 
|                        | prior to the date of the Announcement by   | 
|                        | Et-china or Et-china's advisers to Kuoni   | 
|                        | or to Kuoni's legal or financial or        | 
|                        | accounting advisers, or (ii) disclosed by  | 
|                        | being publicly announced through a         | 
|                        | Regulatory Information Service prior to    | 
|                        | the date of the Announcement and           | 
|                        | "Disclosure" shall be construed            | 
|                        | accordingly                                | 
+------------------------+--------------------------------------------+ 
| EGM or Extraordinary   | means the Extraordinary General Meeting of | 
| General Meeting        | the Et-china Shareholders to be convened   | 
|                        | for the purposes of considering and, if    | 
|                        | thought fit, approving certain resolutions | 
|                        | required to implement the Scheme and the   | 
|                        | Proposal                                   | 
+------------------------+--------------------------------------------+ 
| Et-china A Ordinary    | means the 547,501 A ordinary shares in the | 
| Shares                 | share capital of Et-china which were       | 
|                        | issued to certain individuals on 10 March  | 
|                        | 2008 and which are convertible into        | 
|                        | Et-china Shares on the occurrence of       | 
|                        | certain conditions                         | 
+------------------------+--------------------------------------------+ 
| Et-china Convertible   | means such of the GBP5,500,000 in          | 
| Bonds                  | aggregate principal amount of Zero Coupon  | 
|                        | Convertible Bonds due 2011 issued by       | 
|                        | Et-china pursuant to the board minutes,    | 
|                        | bond certificates, subscription agreements | 
|                        | and deed of covenant relating to the same  | 
|                        | dated on or about 2 May 2008 as are        | 
|                        | currently outstanding and currently        | 
|                        | convertible into Et-china Shares at a      | 
|                        | conversion price of 80 pence per Et-china  | 
|                        | Share                                      | 
+------------------------+--------------------------------------------+ 
| Et-china Directors     | means the Directors of Et-china            | 
+------------------------+--------------------------------------------+ 
| Et-china Group         | means Et-china, Guangzhou Et-china         | 
|                        | Commerce and Trade Development Co.         | 
|                        | Limited, Guangzhou Et-china Travel Agency  | 
|                        | Co. Limited, Guangzhou Et-china            | 
|                        | Investments and Consulting Limited,        | 
|                        | Guangzhou GZL International Travel         | 
|                        | Services Limited, Guangdong Sanli Air      | 
|                        | Service Co. Limited, Guangzhou Xinzhiye    | 
|                        | Commerce and Trade Development Co.         | 
|                        | Limited, Guangzhou Yinhailang Air Service  | 
|                        | Co. Limited, Guangzhou Yite Information    | 
|                        | Services Co. Limited Et-china Holdings     | 
|                        | Limited, Et-china.com Limited, Guangdong   | 
|                        | CSN-ETC e-commerce Limited, Beijing Yoee   | 
|                        | Tixania Air Service Co. Limited, Beijing   | 
|                        | Yoee Tixania Travel Agency Co. Limited and | 
|                        | any other body corporate, partnership,     | 
|                        | joint venture or person with which         | 
|                        | Et-china is associated                     | 
+------------------------+--------------------------------------------+ 
| Et-china Optionholders | means holders of options granted under the | 
|                        | Et-china Share Scheme                      | 
+------------------------+--------------------------------------------+ 
| Et-china or the        | means Et-china.com International Holdings  | 
| Company                | Limited                                    | 
+------------------------+--------------------------------------------+ 
| Et-china Share Scheme  | means the Et-china Discretionary Share     | 
|                        | Option Scheme adopted on 25 July 2007 and  | 
|                        | 1 July 2009                                | 
+------------------------+--------------------------------------------+ 
| Et-china Shareholders  | means the holders of Et-china Shares       | 
+------------------------+--------------------------------------------+ 
| Et-china Shares        | means Ordinary shares of no par value each | 
|                        | in the capital of Et-china (excluding for  | 
|                        | the avoidance of doubt any Et-china A      | 
|                        | Ordinary Shares)                           | 
+------------------------+--------------------------------------------+ 
| Et-china Trigger Event | means (i) Et-china failing to take all     | 
|                        | steps within its power which are           | 
|                        | reasonably appropriate and necessary to    | 
|                        | implement the Scheme, or Takeover Offer as | 
|                        | the case may be, so as to bring about the  | 
|                        | Acquisition Effective Date prior to the    | 
|                        | Long Stop Date (except for any steps that  | 
|                        | Kuoni has agreed Et-china need not take or | 
|                        | required Et-china not to take pursuant to  | 
|                        | the terms of the Implementation Agreement  | 
|                        | or otherwise) and/or (ii) Et-china causing | 
|                        | the Scheme, or Takeover Offer as the case  | 
|                        | may be, to lapse or be withdrawn;          | 
+------------------------+--------------------------------------------+ 
| Et-china Warrants      | means warrants issued pursuant to a        | 
|                        | warrant instrument dated 25 July 2007      | 
|                        | executed by Et-china as a deed poll        | 
|                        | granting Seymour Pierce a right to         | 
|                        | subscribe for 276,528 Et-china Shares      | 
+------------------------+--------------------------------------------+ 
| Excluded Shares        | means any Et-china Share beneficially      | 
|                        | owned by any member of the Kuoni Group or  | 
|                        | any Et-china Share held in treasury by     | 
|                        | Et-china                                   | 
+------------------------+--------------------------------------------+ 
| First Court Hearing    | means the hearing of the Court to, inter   | 
|                        | alia, order the convening of the Court     | 
|                        | Meeting                                    | 
+------------------------+--------------------------------------------+ 
| Forms of Proxy         | means the form of proxy for use at the     | 
|                        | Court Meeting and the form of proxy for    | 
|                        | use at the Extraordinary General Meeting,  | 
|                        | which will accompany the Scheme Document   | 
+------------------------+--------------------------------------------+ 
| GZL                    | means Guangzhou GZL International Travel   | 
|                        | Services Limited, a company incorporated   | 
|                        | in PRC (or its trade as appropriate)       | 
+------------------------+--------------------------------------------+ 
| GZL Executives         | means Hong Zheng, Jianxu Lu, Shaodong Zu   | 
|                        | and Xiaoang Zhang                          | 
+------------------------+--------------------------------------------+ 
| Independent Directors  | means the Et-china Directors save for      | 
|                        | Maria Ng                                   | 
+------------------------+--------------------------------------------+ 
| International Travel   | means the International Travel Agency      | 
| Agency Services        | Services Operation Permit, with the        | 
| Operating Permit       | permitted business scope of outbound       | 
|                        | travel services, issued on 18 November     | 
|                        | 2009 by the PRC National tourism           | 
|                        | Administration in favour of Guangzhou GZL  | 
|                        | International Travel Services Limited.     | 
+------------------------+--------------------------------------------+ 
| Jersey                 | means the Bailiwick of Jersey, Channel     | 
|                        | Islands                                    | 
+------------------------+--------------------------------------------+ 
| Jersey Law             | means the Companies (Jersey) Law 1991 as   | 
|                        | amended from time to time                  | 
+------------------------+--------------------------------------------+ 
| Key Licences           | means the International Travel Agency      | 
|                        | Services Operating Permit and the Domestic | 
|                        | Travel Agency Services Operating Permit    | 
+------------------------+--------------------------------------------+ 
| Kuoni                  | means Kuoni Travel Holding Ltd., a company | 
|                        | incorporated in Switzerland (registered    | 
|                        | company number CH-020.3.921.635-3)         | 
+------------------------+--------------------------------------------+ 
| Kuoni Executive Board  | means Peter Rothwell, Max E. Katz, Leif    | 
|                        | Vase Larsen, Stefan Leser and Rolf         | 
|                        | Schafroth                                  | 
+------------------------+--------------------------------------------+ 
| Kuoni Group            | means the wider corporate group of Kuoni   | 
|                        | Travel Holding Ltd. including the          | 
|                        | subsidiary undertakings and associated     | 
|                        | undertakings of Kuoni Travel Holding Ltd.  | 
|                        | and any other body corporate, partnership, | 
|                        | joint venture or person in which Kuoni     | 
|                        | Travel Holding Ltd. and such undertakings  | 
|                        | (aggregating their interests) have a       | 
|                        | direct or indirect interest of 20 per      | 
|                        | cent. or more of the voting or equity      | 
|                        | capital or the equivalent                  | 
+------------------------+--------------------------------------------+ 
| Kuoni Interests        | means interests of Kuoni in Et-china,      | 
|                        | consisting of:                             | 
|                        | (a)11,540,110 Et-china Shares; and         | 
|                        | (b)GBP500,000 in aggregate principal       | 
|                        | amount of the Et-china Convertible Bonds   | 
+------------------------+--------------------------------------------+ 
| Kuoni Registered Share | means registered shares, Category A, with  | 
| A                      | a par value of CHF 0.20 each in the        | 
|                        | capital of Kuoni                           | 
+------------------------+--------------------------------------------+ 
| Kuoni Registered Share | means registered shares, Category B, with  | 
| B                      | a par value of CHF 1.00 each in the        | 
|                        | capital of Kuoni                           | 
+------------------------+--------------------------------------------+ 
| Kuoni Trigger Event    | means (i) Kuoni failing to take all steps  | 
|                        | within its power which are reasonably      | 
|                        | appropriate and necessary to implement the | 
|                        | Scheme, or Takeover Offer as the case may  | 
|                        | be, so as to bring about the Acquisition   | 
|                        | Effective Date prior to the Long Stop Date | 
|                        | (except for any steps that Et-china has    | 
|                        | agreed Kuoni need not take or required     | 
|                        | Kuoni not to take pursuant to the terms of | 
|                        | the Implementation Agreement or otherwise) | 
|                        | and/or (ii) Kuoni causing the Scheme, or   | 
|                        | Takeover Offer as the case may be, to      | 
|                        | lapse or be withdrawn, provided that Kuoni | 
|                        | invoking (or failing to invoke             | 
|                        | non-satisfaction of) a Condition shall not | 
|                        | be a Kuoni Trigger Event;                  | 
+------------------------+--------------------------------------------+ 
| London Stock Exchange  | means London Stock Exchange PLC            | 
+------------------------+--------------------------------------------+ 
| Long Stop Date         | means 11.59 p.m. on 30 September 2010 or   | 
|                        | such later date as Et-china and Kuoni may  | 
|                        | agree                                      | 
+------------------------+--------------------------------------------+ 
| Macquarie              | means Macquarie Capital (Hong Kong)        | 
|                        | Limited and Macquarie Capital (Europe)     | 
|                        | Limited                                    | 
+------------------------+--------------------------------------------+ 
| Meetings               | means the Court Meeting and the            | 
|                        | Extraordinary General Meeting              | 
+------------------------+--------------------------------------------+ 
| Offer Document         | means, should Kuoni elects to implement    | 
|                        | the Proposal by way of a Takeover Offer,   | 
|                        | the document to be posted to Et-china      | 
|                        | shareholders and others pursuant to which  | 
|                        | the Takeover Offer is made by Kuoni (or    | 
|                        | such other entity as it may elect)         | 
+------------------------+--------------------------------------------+ 
| Offer Period           | means the period starting on the date of   | 
|                        | this announcement and ending on the        | 
|                        | Acquisition Effective Date                 | 
+------------------------+--------------------------------------------+ 
| Offer Price            | means 115 pence per Et-china Share         | 
+------------------------+--------------------------------------------+ 
| Pence or GBP           | means the lawful currency of the United    | 
|                        | Kingdom                                    | 
+------------------------+--------------------------------------------+ 
| PRC or China           | means the People's Republic of China       | 
+------------------------+--------------------------------------------+ 
| PRC Authorities        | means the central, provincial, and local   | 
|                        | governments of all levels in the PRC,      | 
|                        | including the PRC Licensing Authorities,   | 
|                        | all the ministries, departments,           | 
|                        | commissions, bureaus and branches of       | 
|                        | national, provincial, county or other      | 
|                        | administrative level                       | 
+------------------------+--------------------------------------------+ 
| PRC Licensing          | means the Guangzhou Tourism Bureau, the    | 
| Authorities            | Guangdong Province Tourism Bureau, the     | 
|                        | National Tourism Bureau, the China Air     | 
|                        | Travel Association, the South-China        | 
|                        | Regional Representative Office of the      | 
|                        | China Air Transport Association and the    | 
|                        | Guangdong Province Communication           | 
|                        | Administration                             | 
+------------------------+--------------------------------------------+ 
| Pre existing           | means certain existing arrangements and    | 
| Obligation             | proposals of the Et-china Group prior to   | 
|                        | the date of this Announcement as described | 
|                        | in the Implementation Agreement            | 
+------------------------+--------------------------------------------+ 
| Proposal               | means the proposed cash acquisition by     | 
|                        | Kuoni of the entire issued and to be       | 
|                        | issued ordinary share capital of the       | 
|                        | Company not already owned by Kuoni         | 
|                        | (excluding, for the avoidance of doubt,    | 
|                        | any Et-china A Ordinary Shares) proposed   | 
|                        | to be implemented by means of the Scheme   | 
|                        | (and other matters to be considered at the | 
|                        | Meetings) or, if Kuoni should so elect, by | 
|                        | means of a Takeover Offer                  | 
+------------------------+--------------------------------------------+ 
| Reduction Court Order  | means the order of the Court, granted at   | 
|                        | the Third Court Hearing, confirming the    | 
|                        | Reduction of Capital                       | 
+------------------------+--------------------------------------------+ 
| Reduction of Capital   | means the reduction of share capital of    | 
|                        | Et-china associated with the cancellation  | 
|                        | and extinguishing of the Scheme Shares     | 
|                        | provided for by the Scheme under Article   | 
|                        | 61 of the Jersey Law                       | 
+------------------------+--------------------------------------------+ 
| Registrar of Companies | means the Registrar of Companies for       | 
|                        | Jersey                                     | 
+------------------------+--------------------------------------------+ 
| Regulatory Information | means any of the services set out in       | 
| Service                | Appendix 3 to the Listing Rules            | 
+------------------------+--------------------------------------------+ 
| Relevant Authority     | means any central bank, ministry,          | 
|                        | governmental, quasi-governmental,          | 
|                        | supranational, statutory, regulatory,      | 
|                        | administrative or investigative body or    | 
|                        | authority (including any national or       | 
|                        | supranational antitrust, competition or    | 
|                        | merger control authority or similar        | 
|                        | authority), national, state, provincial,   | 
|                        | municipal, county or local government      | 
|                        | (including any subdivision, court,         | 
|                        | administrative agency, bureau or           | 
|                        | commission or other authority thereof),    | 
|                        | government department, private body        | 
|                        | exercising any regulatory, taxing,         | 
|                        | importing or other authority, court,       | 
|                        | agency (including trade agency),           | 
|                        | association, institution or professional   | 
|                        | or environmental body or (without          | 
|                        | prejudice to the generality of the         | 
|                        | foregoing) any other such person or body   | 
|                        | whatsoever in any jurisdiction             | 
+------------------------+--------------------------------------------+ 
| Resolutions            | means the resolutions proposed to be       | 
|                        | passed at the Extraordinary General        | 
|                        | Meeting                                    | 
+------------------------+--------------------------------------------+ 
| RMB                    | means the lawful currency of the People's  | 
|                        | Republic of China                          | 
+------------------------+--------------------------------------------+ 
| Scheme                 | means the scheme of arrangement proposed   | 
|                        | to be made under Part 18A of the Jersey    | 
|                        | Law between Et-china and the holders of    | 
|                        | the Scheme Shares in connection with the   | 
|                        | Proposal with or subject to any            | 
|                        | modification, addition or condition        | 
|                        | approved or imposed by the Court and       | 
|                        | agreed to by Et-china and Kuoni            | 
+------------------------+--------------------------------------------+ 
| Scheme Court Order     | means the order of the Court, granted at   | 
|                        | the Second Court Hearing, sanctioning the  | 
|                        | Scheme under Article 125 of the Jersey Law | 
+------------------------+--------------------------------------------+ 
| Scheme Document        | means, if the Proposal is implemented by   | 
|                        | way of the Scheme, the document to be      | 
|                        | dispatched to Et-china Shareholders and    | 
|                        | others by Et-china containing, amongst     | 
|                        | other things, the Scheme Conditions and    | 
|                        | other relevant terms and conditions, a     | 
|                        | description of the Scheme, certain         | 
|                        | information about Kuoni and Et-china and   | 
|                        | the notices of the Meetings and, where the | 
|                        | context so permits, includes any form of   | 
|                        | proxy, election, notice, court document,   | 
|                        | meeting advertisement or other document    | 
|                        | required in connection with the Scheme     | 
+------------------------+--------------------------------------------+ 
| Scheme Record Time     | 6.00 p.m. (Jersey time) on the Business    | 
|                        | Day immediately before the Third Court     | 
|                        | Hearing                                    | 
+------------------------+--------------------------------------------+ 
| Scheme Shareholder     | means a holder of Scheme Shares from time  | 
|                        | to time                                    | 
+------------------------+--------------------------------------------+ 
| Scheme Shares          | means Et-china Shares:                     | 
|                        | (a)       in issue at the date of the      | 
|                        | Scheme;                                    | 
|                        | (b)        issued after the date of the    | 
|                        | Scheme and prior to the voting record time | 
|                        | in respect of the Court Meeting, if any;   | 
|                        | and                                        | 
|                        | (c)        issued on or after the voting   | 
|                        | record time in respect of the Court        | 
|                        | Meeting and at or prior to the record time | 
|                        | for the Reduction of Capital in respect of | 
|                        | which the original or any subsequent       | 
|                        | holders thereof are bound by the Scheme or | 
|                        | in respect of which the holder thereof     | 
|                        | shall have agreed in writing to be bound   | 
|                        | by the Scheme, if any,                     | 
|                        | in each case other than the Excluded       | 
|                        | Shares, if any;                            | 
+------------------------+--------------------------------------------+ 
| Scheme Voting Record   | means 6.00 p.m. (Jersey time) on the day   | 
| Time                   | that is two days before the date of the    | 
|                        | Court Meeting or, if the Court Meeting is  | 
|                        | adjourned, 6.00 p.m. (Jersey time) on the  | 
|                        | second day before the day of such          | 
|                        | adjourned Court Meeting                    | 
+------------------------+--------------------------------------------+ 
| Second Court Hearing   | means the hearing of the Court to sanction | 
|                        | the Scheme                                 | 
+------------------------+--------------------------------------------+ 
| Seymour Pierce         | means Seymour Pierce Limited               | 
+------------------------+--------------------------------------------+ 
| Takeover Code          | means the UK City Code on Mergers and      | 
|                        | Takeovers as amended from time to time     | 
+------------------------+--------------------------------------------+ 
| Takeover Offer         | means, should Kuoni elect to effect the    | 
|                        | Proposal by way of a takeover offer, the   | 
|                        | takeover offer to be made by Kuoni for the | 
|                        | Et-china Shares on the terms and subject   | 
|                        | to the conditions to be set out in the     | 
|                        | related offer document and form of         | 
|                        | acceptance including, where the context    | 
|                        | requires, any subsequent revision,         | 
|                        | variation, extension or renewal thereof    | 
+------------------------+--------------------------------------------+ 
| Third Court Hearing    | means the hearing of the Court to confirm  | 
|                        | the Reduction of Capital                   | 
+------------------------+--------------------------------------------+ 
| UK or United Kingdom   | means the United Kingdom of Great Britain  | 
|                        | and Northern Ireland                       | 
+------------------------+--------------------------------------------+ 
| US$                    | means the lawful currency of the United    | 
|                        | States of America                          | 
+------------------------+--------------------------------------------+ 
| Wholly owned Et-china  | means any company which is directly or     | 
| subsidiary             | indirectly wholly owned by Et-china        | 
+------------------------+--------------------------------------------+ 
 
All references to time in this announcement are to London time unless otherwise 
stated. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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