RNS Number:6679T

Yangtze China Investment Limited06 May 2008

Press Release 6 May 2008 Yangtze China Investment Limited ("Yangtze" or "the Group") Intention to Float on AIM

Yangtze China Investment Limited, a provider of expansion capital to China-basedenterprises, today announces its intention to seek admission of its sharecapital to trading on AIM, a market operated by the London Stock Exchange plc.

Dealings are expected to commence during May 2008.

Yangtze China Investment Limited is a newly incorporated closed-end investmentcompany established to make minority equity and equity-related investments insmall to medium-sized growth businesses that operate in China with a focus onthe consumer sector. The Group will only invest in unlisted companies that areexpected to benefit from the growing Chinese middle class and increase indisposable incomes. Accordingly, Yangtze will focus primarily on growingcompanies operating in consumer sectors, such as technology, media andadvertising, entertainment, distribution and retailing of consumer goods andservices, and health goods and services. Yangtze's target investment size willbe 10-45% of the investee company and the Group does not intend to invest morethan 20% of the Group's NAV invested in any single investee company.

Yangtze will typically focus on investment opportunities in companies seekingexpansion capital which are revenue-generating, profitable or profitable in thenear term, and which have strong management teams. Although Yangtze will notget involved in the day-to-day operations of portfolio companies, the Group willseek Board representation, shareholder protection rights and existing managementlock-ins.

The Group will aim to realise investments within 3-5 years of the date ofinvestment. Possible exit strategies include a follow-on equity placement, atrade sale or a listing on a stock exchange.

Yangtze has appointed Yangtze Capital Advisory Limited as its Investment

Adviser. The Investment Adviser is a new investment advisory business led bythe Key Professionals, comprising Wilfred Wong and Richard Zhao. The Yangtze

Capital Advisory team has a proven track record within the Chinese privateequity marketplace. From 2001 to 2007, the team successfully investedapproximately US$44 million in a total of 12 investments in Chinese businessesgenerating an aggregate portfolio value of approximately US$159 million. Basedon the amounts invested, this return represents an average gross internal rateof return in excess of 75 per cent. Yangtze's proprietary deal-flow will besourced by the Investment Adviser.

On admission to AIM, Yangtze will acquire, for a consideration of US$9.39million, a portfolio of investments that have already been secured. Thisportfolio comprises three companies: IGO, an exclusive supplier of goods to ahome shopping business that broadcasts on local television channels in China;

Creative Picture, a technology company focused on developing a glasses-free 3-Dvisualisation product, 3-D flat-screen displays and 3-D software contentproduction; and Onbest, a company that is seeking to develop technology to meetthe testing standards of the Chinese Government for implementing a tax-recordingsystem. Yangtze also has a pipeline of investment opportunities, withnon-binding MOUs in place over a total investable amount of approximately US$45million.

The Chinese economy has performed strongly in recent years, with average GDP of9.7% over the past 14 years and 11.4% in 2007. By the end of 2008, China isexpected to overtake Germany as the world's third largest economy. Acceleratingthis transformation of the economy, the Chinese Government has implementedreforms focused on domestic consumption, infrastructure spending andenvironmental issues. This strong economic growth and rapid urbanisation hasresulted in a larger labour force earning higher wages and boosting disposableincome levels.

As the Chinese economy has grown, the private equity environment in China hasalso advanced. Consolidation and restructuring of enterprises in both theprivate and state-owned sectors have provided new investment opportunities andthe Chinese Government encourages foreign investment. Chinese companies haverecently been involved in significant liquidity activity, raising funds inglobal markets. According to ZerotoIPO Research, in the first 11 months of2007, private equity investment in China grew 114% to US$30.4 billion whencompared to 2006.

Commenting on the decision to join the AIM market, Wilfred Wong, Chairman of

Yangtze China Investment Limited, said:"Our planned admission to AIM is a significant step in Yangtze's development.

Our strong track record, generating an average gross internal rate of return inexcess of 75 per cent from 2001 to 2007, places the Company in an excellentposition to generate substantial returns for our shareholders."The landscape for the private equity investing in China remains buoyant, andwith our significant experience in the Chinese market, we are confident ofexposing the Company to the excellent growth prospects that are currentlyavailable."

Collins Stewart Europe Limited is acting as Nominated Adviser and Broker to

Yangtze China Investment Limited. - Ends -

For further information:

Yangtze China Investment Limited

Wilfred Wong Tel: +852 2522 8537

Collins Stewart Europe Limited

Adrian Hadden / Oliver Quarmby Tel: +44 (0) 20 7523 8350 www.collins-stewart.com

Media enquiries:

Abchurch

Henry Harrison-Topham / Chris Lane Tel: +44 (0) 20 7398 7708chris.lane@abchurch-group.com www.abchurch-group.com This information is provided by RNS The company news service from the London Stock Exchange

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