+++++++++++++++++++++++++ Further to the announcement on 22 August 2002 regarding the status of EnviroStar's Dalian Project the Company wishes to announce that it has now received formal notification from the Multilateral Investment Guarantee Agency ("MIGA") which is part of the World Bank Group, in response to EnviroStar's application for a MIGA Guarantee. MIGA states in the Notice of Registration that the Dalian investment "appears to be eligible for MIGA's guarantee".
MIGA further states in its letter that "registration does not represent a commitment by MIGA to issue a guarantee or by the applicant to accept, if offered and does not imply a judgment of the investment project. A final underwriting decision can only be made by MIGA on the basis of complete information to be provided in the Definitive Application for Guarantee."
Notwithstanding the MIGA qualification the acceptance by MIGA to issue a Notice of Registration is a very important milestone for the Dalian project as it represents the first step towards making the process of dealing on EnviroStar's project easier and it clears the way for EnviroStar to begin negotiations with Chinese banks for debt funding for the project.
Funding for Dalian would be difficult to secure without a MIGA Guarantee which provides cover for political risks (for example, Currency, Expropriation, Civil Disturbance, Breach of Contract).
In addition, EnviroStar is encouraged by China's recent indications of its intention to join the Kyoto Protocol. Should China join the protocol, this will simplify the necessary re-structuring due to Australia's refusal to join and referred to in the 22nd August 2002 announcement.
These encouraging developments will be taken into account in the review and renegotiation of the agreement dated 23 July 2001 with the Asian Environmental Rehabilitation Pty Limited ("AERC"), which covered the sale of 85% of the project, which was discussed in our 22nd August announcement.
For further information, see our website (http://www.envirostar.com.au) or contact Malcolm Carson, via the communication points shown below.
