Pacrim International Capital Inc. announces settlement of litigation relating to Wah Sang Paper Products



    HONG KONG, Jan. 8 /CNW/ - On November 15, 2008 PACRIM INTERNATIONAL
CAPITAL INC. (PCN: TSX) ("Pacrim") announced it had acquired 46% of the
outstanding common shares of Pacrim International Capital Holdings Inc.
("PICH"), a holding company with business interests in the People's Republic
of China consisting of an indirect 87.81% interest in Wah Sang Paper Products
(Shenzhen) Co. Ltd. ("Wah Sang"), a corrugated packaging company. PICH holds
its interest in Wah Sang through PRC Realty Inc. ("PRC Realty").
    The corrugated packaging operations of Wah Sang are located in Shenzhen,
in the Pearl River Delta of southern China which houses one of the world's
largest concentrations of manufacturing of consumer electronics, office and
telecommunication equipment. Wah Sang sells its high-end packaging products
almost exclusively to multinational corporations which export from China. Wah
Sang has annual production capacity of 63,000 tonnes of containerboard, 50,000
tonnes of flexo containers and 18,000 tonnes of off-set colour containers. The
bulk of the containerboard produced is used internally for further processing
into flexo containers or off-set colour containers. A detailed description of
Wah Sang and a description of PICH were contained in Schedule "A" to Pacrim's
press release of November 15, 2008 (the "Earlier Press Release").
    The Earlier Press Release described litigation in Hong Kong with respect
to PICH's indirect ownership interest in Wah Sang. Guy Lam, who is the
Chairman and Chief Executive Officer of Pacrim, PICH, PRC Realty and others
were named as defendants in a civil action (the "Action") brought by Lam Pak
Cheung (the "Plaintiff"), the father of Guy Lam, in November 2007 in the High
Court of the Hong Kong Special Administrative Region. The dispute concerned
the ownership of PRC Realty and thus its 87.81% equity interest in Wah Sang.
The Plaintiff claimed that he, not PICH, was the owner of PRC Realty.
    Guy Lam has indemnified Pacrim from any claim, demand, action, cause of
action, direct or indirect loss (excluding loss of profits or consequential
loss), damage, liability, cost or expense (including reasonable legal fees)
which Pacrim and/or PICH (in the case of PICH, pro rata in accordance with the
parties' respective share ownership in PICH) suffers as a direct or indirect
consequence of the Action or any other claim, demand or action brought by the
Plaintiff or Christine Lam with respect to the ownership of PRC Realty or Wah
Sang, provided that in no event would Mr. Lam be obligated to indemnify Pacrim
in an amount exceeding $26,619,000 (the "Indemnity"). As security for his
obligations under the Indemnity, Mr. Lam pledged in favour of Pacrim a total
of 26,566,763 common shares of Pacrim and all of the 5,400 common shares of
PICH held directly or indirectly by Mr. Lam (representing 54% of the shares of
PICH).
    Pacrim has now been informed that the litigation has been settled with
the Plaintiff withdrawing any and all claims that he is the owner of PRC
Realty. As part of the settlement, PICH agreed to pay the Plaintiff Hong Kong
$13 million (approximately Cdn. $1,988,000 at current exchange rates) over
three years. As a result of the Indemnity, these payments will however be made
by Guy Lam personally. Under the settlement, Mr. Lam, PICH, PRC Realty and Wah
Sang have jointly and severally indemnified the Plaintiff and certain other
parties with respect to any claims made by third parties with respect to the
conduct of the business of Wah Sang or PRC Realty. Any obligations of PICH,
PRC Realty and Wah Sang under this indemnity would be covered by the Indemnity
from Mr. Lam.

    Early Warning

    In connection with the settlement of the litigation, Guy Lam agreed not
to contest the Plaintiff's ownership of a particular company operating in
China (in which Pacrim has no interest). Also pursuant to the settlement,
10,170,000 common shares of Pacrim are being transferred to Mr. Lam, which
will result in Mr. Lam owning or controlling 50,703,554 common shares, being
approximately 80% of the outstanding common shares of Pacrim. The share
transfer is part of the comprehensive settlement of litigation with the shares
being acquired by Mr. Lam for investment purposes. Mr. Lam may in future
increase or decrease his ownership in shares of Pacrim depending on the
business and prospects of Pacrim as well as market conditions.

    Caution concerning forward-looking statements

    Statements made in this news release, other than those concerning
historical financial information, should be considered forward-looking and
subject to various risks and uncertainties. Some forward-looking statements
may be identified by words like "may", "will", "anticipate", "estimate",
"expect", "intend" or "continue" or the negative thereof or similar
variations. Readers are cautioned not to place undue reliance on such
statements, as actual results may differ materially from those expressed or
implied in such statements. Factors that could cause results to vary include,
but are not limited to: risks associated with China including state ownership,
government sector intervention, foreign investment, repatriation of profit and
currency conversion, tax, the developing legal system, protection of
intellectual property rights, shareholder rights and enforcement of judgments,
permits and business licenses, appropriation, political stability
considerations, the central planned economy, fluctuations in foreign exchange
rates and Chinese accounting and auditing standards; litigation risk with
respect to the ownership of Wah Sang; risks in business and operations
including risks associated with expansion, future capital requirements,
dependence on key personnel, environmental regulation, competition, risk in
purchasing abroad, risk of change in the price of raw materials, product price
volatility, insurance and operating plant risk; customer risk including risk
of a single market and risk depending on major customers; technical risk
including risk in the advance of technology and risk of relying on technology
abroad; financial risk including foreign exchange risk, credit risk, liquidity
risk, cash flow and fair value interest rate risk; investment strategy risk;
and short term management transition risk.
    We caution that the foregoing list of factors is not exhaustive and that
when reviewing our forward-looking statements, investors and others should
refer to the "Risk Factors" section of Pacrim's Annual Information Form, the
"Risks and Uncertainties" and other sections of our Management's Discussion
and Analysis, the "Risk Factors" section of Schedule "A" to the Earlier Press
Release and our other periodic filings with Canadian securities regulatory
authorities. All forward-looking statements presented herein should be
considered in conjunction with such filings. Except as required by Canadian
securities law, we do not undertake to update any forward-looking statements,
whether written or oral, that may be made from time-to-time by us or on our
behalf; such statements speak only as of the date made.




For further information:

For further information: Cindy Fung, Acting Chief Financial Officer,
Pacrim International Capital Inc., Tel. 852.2526.0767; Guy Lam, Tel.
852.2526.1554

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PACRIM INTERNATIONAL CAPITAL INC.

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