PROPOSED ISSUE OF SENIOR NOTES IN THE PROPOSED PRINCIPAL AMOUNT OF APPROXIMATELY US$200 MILLION BY CFG INVESTMENT S.A.C., A WHOLLY OWNED SUBSIDIARY OF CHINA FISHERY GROUP LIMITED

Use of Proceeds

The Issuer intends to use the net proceeds as follows:-

1. (a) Approximately US$103.6 million will be used to repay a loan facility drawn down on 20 October, 2006. The loan facility was used to finance the acquisition of certain Peruvian companies on 26 October 2006, namely Alexandra S.A.C., Pesquera Victor S.A.C. and Pesquera Flor de Ilo S.R.L.("Peruvian Companies"), which have merged with the Issuer and ceased to exist on their own since 1 November 2006. Please refer to the announcements of the Company on 14 June 2006, 8 September 2006, 18 October 2006 and 27 October 2006 in relation to the acquisition of the Peruvian Companies. Approximately US$5.0 million will be used for the repayment of a term loan facility which was used to pay a portion of the purchase price for the acquisition of a corporate entity and fishing vessels in Peru; and
   
   

   (b) The remainder will be used for the acquisition of additional fishing vessels and processing plants in Peru; and in the event suitable opportunities are identified, other acquisitions outside of Peru, which may include the execution of new vessel operating agreements and the prepayment of charter hires under vessel operating agreements; and for working capital and general corporate purposes.