CHINA FIRE SAFETY ANNOUNCES COMPLETION OF SECOND TRANCHE OF by MichaelChoate

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									                                                                                   [For Immediate Release]




      CHINA FIRE SAFETY ANNOUNCES COMPLETION OF SECOND TRANCHE OF
     SUBSCRIPTION AGREEMENT SIGNED WITH US-LISTED CONGLOMERATE UTC
                              *       *     *
                  UTC BECOMES SUBSTANTIAL SHAREHOLDER
                         RAISES ITS STAKE TO 29%

     (Hong Kong, 3 April 2006) – Leading PRC fire prevention and fire fighting system total solutions
provider, China Fire Safety Enterprise Group Holdings Limited (“China Fire Safety” or “the Group”) (Stock
Code: 8201), announced that United Technologies Far East Limited (“UTFE”), a wholly-owned subsidiary of
United Technologies Corporation (“UTC”)(NYSE:UTX), has completed the second tranche of the
subscription agreement it signed with the Group on 2 February 2005. UTFE increased its stake to 29% and
became the second largest shareholder of the Group.


     According to the agreement, China Fire Safety issued a total of 825,000,000 new shares, representing
29% of the enlarged issued share capital of the Group, to UTFE at a total consideration of HK$476,025,000
through two tranches of subscription. The subscription price was HK$0.577 per share and was settled by cash
by UTFE.


     Mr. Jiang Xiong, Chairman of China Fire Safety, who (before completion of the second tranche
subscription) beneficially owns approximately 41.31% of the Company’s issued ordinary shares, has also
entered into an agreement with UTFE, where in Mr. Jiang agreed to grant an option to UTFE that when
exercised would enable UTFE to beneficially hold up to 51% of China Fire Safety’s voting rights in total. The
option period begins in April 2008 and expires in April 2013.


     Mr. Jiang said, “We are excited that UTC, a world leading conglomerate, has become a substantial
shareholder of the Group. Their reputation and expertise will facilitate our strive to become China’s largest
one-stop solutions provider in the fire prevention and fighting industry.”



                                                      -more-
China Fire Safety Enterprise Group Holdings Limited
3 April 2006 / P.2


     UTC is listed on the New York Stock Exchange and had a market value of more than US$58.9 billion (as
at 31 Mar 2006). It moved into the fire and security systems business through the acquisition and privatization
of Chubb in 2003 and Kidde at the end of 2004. Chubb is a leading provider of a wide range of electronic
security and fire prevention products and services while Kidde is one of the world’s largest providers of fire
safety detection, prevention and protection products. The investment of UTC in the Group is expected to
benefit both parties and enable the Group to further expand its share in the fire safety market in China. The
Group sees abundant opportunities in the booming property market in China and the Chinese Government
tightening fire safety regulations.


     UTC has appointed two non-executive directors to the Board of China Fire Safety after it signed the
Subscription Agreement.


     Mr. Jiang concluded, “The Group plans to use RMB300 million in the next two years for further
acquisitions of targeting well-established companies that specialize in installation of fire prevention and
fighting systems. Our hope is to expand our geographical coverage in the domestic market and deepen market
penetration at the same time to gain still wider customer recognition.”


                                                      – End –
About China Fire Safety Enterprise Group Holdings Limited

China Fire Safety Enterprise Group Holdings Limited is a leading one-stop total solutions provider of fire
prevention and fighting systems in the PRC. Its business operations cover system and product development,
design, manufacturing, sales, installation and maintenance. The Group’s manufacturing bases are located in
Fuzhou, Fujian Province, Chengdu, Sichuan Province and in Beijing. It has extensive market coverage
throughout the PRC, Hong Kong, Macau and Taiwan. It has an international shareholder base with strategic
investors including US-listed United Technologies Corporation (NYSE: UTX), a Fortune 500 company, and
Morita Corporation, one of the world’s largest fire engine manufacturers. China Fire Safety was listed on the
GEM Board of The Stock Exchange of Hong Kong Limited in September 2002.

About United Technologies Corporation (UTC)
UTC is listed on the New York Stock Exchange and recorded revenues of US$42.7 billion in 2005. UTC is a
global corporation with a long history of pioneering innovation in jet engines, helicopter designs, climate
control, elevator designs and hydrogen fuel cells. Apart from Chubb’s and Kidde’s fire and security systems and
products, UTC’s products include Carrier heating and cooling (HVAC) appliances, Otis elevators and escalators,
Hamilton Sundstrand aerospace systems and industrial products, Pratt & Whitney aircraft engines, Sikorsky
helicopters and UTC Power fuel cells. UTC has an increasingly strong presence in Asia. Otis, for example, has
been in China since 1984 and is a partner in over six joint ventures now.


For press enquiries:
Strategic Financial Relations (China) Limited
Olive To / Cherry Mok / Winnie Lau
Tel:         2864 4894 / 2864 4839 / 2864 4876
Fax:         2527 1271
Email:       olive@strategic.com.hk/ cherry@strategic.com.hk / winnie@strategic.com.hk
Tel:         2864 4894 / 2864 4839 / 2864 4876

								
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