Zindart Sells Hua Yang Printing Unit for $24 Million; Cash to Be Used to Support Corgi Growth

Business Wire, May 25, 2004

Business Editors

HONG KONG--(BUSINESS WIRE)--May 25, 2004

Zindart Limited (Nasdaq:ZNDT) today announced that the company has sold its printing operation, Hua Yang Holdings Company Limited, for gross consideration of US$24 million, indebtedness of US$10 million, resulting in net cash consideration of approximately US$14 million.

Peter Gardiner, Chairman, Zindart, said the cash generated by the sale will be used to support the growth of Corgi Classics in the U.S.

"The sale of Hua Yang initiates the third phase of the strategic direction we announced in mid-2002," Gardiner said. "The disposal allows us to concentrate on the synergies between our branded and OEM die-cast divisions where, as reported earlier, we have implemented major marketing and operating improvements. The sale of our printing operation also generates significant cash, which reduces our reliance on short-term debt, dramatically improves our balance sheet and provides the working capital necessary to support Corgi's expansion in the U.S."

Corgi Classics is Zindart's brand name operating unit. Corgi vehicles and icons sell worldwide to collectors of miniature die-cast cars, trucks, airplanes and military vehicles through specialty stores. The company's newer lower-priced lines sell through mass-market chains in both the U.K. and U.S.

Zindart recently hired George Volanakis, a toy industry veteran, as president of the Corgi division. Before joining Corgi, Volanakis held senior level executive positions with Hasbro, Inc., the Ertl Company, Mattel, Inc., MatchBox and the Milton Bradley Co.

"The new executive team at Corgi is already making significant inroads into chains in the U.S. market where there is huge potential and order volume can be substantially higher," Gardiner said. "George has also reviewed and revitalized Corgi's entire sales and marketing organization, both in the U.S. and the U.K., and has implemented company-wide improvements that are starting to produce favorable results."

Latitude Capital Group, a Hong Kong based investment banking firm, acted as advisor to Zindart on the Hua Yang transaction.

About Zindart

Founded in 1978, Zindart is a Hong Kong-based manufacturer, supplying a wide range of plastic and die-cast products, both under its own brands and for large consumer products companies.

Zindart's operating divisions now include Corgi and Zindart Manufacturing, a Hong Kong division that provides both product design and quality turnkey plastic, die-cast and metal manufacturing for well-known multi-national companies with branded products requiring rapid, high-volume delivery.

Certain statements in this release are forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated and include, in addition to those discussed above and without limitation, changes in market demand for Zindart products, changes in economic conditions, dependence on certain customers and other risks described in the company's annual report on Form 20-F for the fiscal year ended March 31, 2003. The company undertakes no obligation to revise these forward-looking statements to reflect subsequent events or circumstances.