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Put and Call Option Agreement dated 5th December, 1997 ("Option Agreement")

Parties

Seller	:	GSB
Purchaser	:	ABN AMRO
Option	:	Under the Option Agreement dated 5th December, 1997, a put option ("Put Option") is granted to GSB by ABN AMRO over the 3,581,670 ordinary shares ("Shares"), representing the entire interest of GSB in AAAH and approximately 29.83% of the issued share capital of AAAH, exercisable at any time after 28th April, 1998 and a call option is granted by GSB to ABN AMRO over the Shares in AAAH owned by GSB.

Exercise of Put Option

Exercise Date
On 23rd December, 1998, GSB gave notice to exercise the Put Option granted by ABN AMRO in respect of the Shares subject to the conditions set out below.
Option Price
The estimated total consideration for the Shares amounts to approximately US$220 million. However, the final determination of the price payable in respect of the option ("the Option Price") will be ascertained pursuant to a formula set out in the Option Agreement that is based on an earlier agreed valuation, as adjusted to the date of exercise. The directors consider the estimated Option Price to be fair and reasonable.
Conditions
Completion is conditional upon the receipt of the approvals from all relevant regulatory authorities required in relation to the sale of shares in AAAH from GSB to ABN AMRO.
Completion of the sale of Shares
Subject to the fulfilment of the conditions described above, completion of the exercise of the Option is due to occur within ten business days after the final determination of the Option Price. It is expected that Completion will take place not later than 31st January, 1999.
Consideration
The consideration is to be paid in full in cash by ABN AMRO at Completion. It is intended that the net proceeds of the disposal will be used by the Guoco Group to reduce external bank borrowings and to provide additional working capital.
Profit on exercise of Put Option
The exercise of the Put Option is expected to contribute approximately US$172 million as an exceptional gain in Guoco's consolidated profit and loss account for the year ending 30th June, 1999.
Information on AAAH
AAAH is a joint venture company incorporated in Jersey in which GSB and ABN AMRO respectively hold approximately 29.83% and 70.17% interest in the issued share capital. Its principal businesses are stockbroking and merchant banking.
Reasons for the Exercise of the Put Option
Notwithstanding the negative impact of the current economic downturn, the Group's financial position continues to be sound. Nonetheless, the Group's management team has conducted an appraisal of each of its investment assets. As a result, the Group has resolved to exercise the Put Option to enhance the financial position of the Group and to strengthen its resolve to concentrate on those core businesses with synergistic potential.
Discloseable Transaction
The consideration under the Agreement represents more than 15% but less than 50% of the latest audited net tangible asset value of Guoco as at 30th June, 1998. Pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the exercise of the Put Option by GSB of the sale of the Shares to ABN AMRO constitutes a discloseable transaction for Guoco. A circular containing details of the exercise of the Put Option will be sent to the shareholders of Guoco as soon as practicable.

Hong Kong, 23rd December, 1998