Envirostar Announcement - MIGA Registration re: Da

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    Further to the announcement on 22 August 2002 regarding the status of
    EnviroStar's Dalian Project the Company wishes to announce that it
    has now received formal notification from the Multilateral Investment
    Guarantee Agency ("MIGA") which is part of the World Bank Group, in
    response to EnviroStar's application for a MIGA Guarantee. MIGA
    states in the Notice of Registration that the Dalian investment
    "appears to be eligible for MIGA's guarantee".

    MIGA further states in its letter that "registration does not
    represent a commitment by MIGA to issue a guarantee or by the
    applicant to accept, if offered and does not imply a judgment of the
    investment project. A final underwriting decision can only be made by
    MIGA on the basis of complete information to be provided in the
    Definitive Application for Guarantee."

    Notwithstanding the MIGA qualification the acceptance by MIGA to
    issue a Notice of Registration is a very important milestone for the
    Dalian project as it represents the first step towards making the
    process of dealing on EnviroStar's project easier and it clears the
    way for EnviroStar to begin negotiations with Chinese banks for debt
    funding for the project.

    Funding for Dalian would be difficult to secure without a MIGA
    Guarantee which provides cover for political risks (for example,
    Currency, Expropriation, Civil Disturbance, Breach of Contract).

    In addition, EnviroStar is encouraged by China's recent indications
    of its intention to join the Kyoto Protocol. Should China join the
    protocol, this will simplify the necessary re-structuring due to
    Australia's refusal to join and referred to in the 22nd August 2002

    These encouraging developments will be taken into account in the
    review and renegotiation of the agreement dated 23 July 2001 with the
    Asian Environmental Rehabilitation Pty Limited ("AERC"), which
    covered the sale of 85% of the project, which was discussed in our
    22nd August announcement.

    For further information, see our website
    (http://www.envirostar.com.au) or contact Malcolm Carson, via the
    communication points shown below.

    Telephone Number: (02) 9232 0788
    Facsimile Number: (02) 9232 0799
    Email address: [email protected]

    M Carson

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