Cafe De Coral Holdings Limited And Ken Fowler Enterprises Limited Announce Agreement

Mr. Michael Y.K. Chan, Chairman of CAFE de CORAL Holdings Limited ("CDC"), Hong Kong's largest Chinese fast food chain, and Mr. Ken Fowler, Chairman & CEO of KEN FOWLER ENTERPRISES LIMITED (KFE), are pleased to announce that they have reached an agreement, upon which KFE agreed to sell and CDC agreed to acquire all of the KFE interest in Manchu Wok (MW), making MW a majority owned subsidiary of CDC. The agreement covers all of MW's operations worldwide. With a total of 201 restaurants in operation in North America, 118 stores in the United States, 83 stores across Canada, Manchu Wok is currently the largest franchised Chinese Quick Service Restaurant chain (QSR) in North America. The business is comprised of approximately 23% corporate and 77% franchise stores. Total system-wide sales amounts to C$135m (approx. HK$810m).

Pursuant to the agreement, the pricing of the acquisition is based on an Enterprise Value of the entire business of C$42m, which upon completion, the cash payable by CDC to KFE would be approximately C$11.3m, together with the assumption of KFE's share of the outstanding bank loan at the time, approximately C$6.7m.

Following the acquisition, Cafe de Coral Group will have over 540 restaurant units under its management throughout the world, which includes Hong Kong, China, Canada, and the United States, making it by far the largest listed Chinese QSR operator in the world.

"Manchu Wok has developed to the stage where concentrating ownership in the hands of a single group will better position it to take advantage of the tremendous opportunities in the branded Asian food market." Observed Mr. Ken Fowler. "I am delighted that Manchu Wok's future is in CDC's hands. They are a leading international foodservice firm. The CDC organization has been a superb partner in this venture. I know that CDC has the capabilities that are critical to the continued growth and success of Manchu Wok. I am honoured that CDC has asked me to remain as a director of Manchu Wok." Mr. Michael Y.K. Chan remarked, "Manchu Wok has a sizable foundation and a time-tested operating system. We look forward to working with our management team and franchisee partners to develop the Manchu Wok concept to its next level of achievement. We are optimistic of the opportunities in the North American Asian food marketplace despite its very competitive nature. Given the depth of resources we had, the management calibre we have so far demonstrated, the Group is strongly positioned to add synergistic value to realizing Manchu Wok's full potential in the global market." Foodservice in North America is one of the largest and most sophisticated markets in the world. Within the QSR group, Chinese food continues to win market share by focusing on its real and perceived health image. Large regional players and national brands like Manchu Wok have been able to capitalize on this trend as customers continue to gravitate from the independent operators to the comfort and trust of branded offerings.

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