Chai-Na-Ta Announces Re-Structuring of the Company's Debt.

LANGLEY, British Columbia--(BUSINESS WIRE)--Oct. 22, 1998-- Chai-Na-Ta Corp. President and CEO, Gerry Gill announced today the successful conclusion of negotiations resulting in the extension of a US$4,589,670 loan with HSBC China Fund Limited.

This loan would otherwise have matured on October 16th, 1998.

The loan is to be extended for an additional three years and requires principal payments of US$500,000 in the 1998/9 fiscal year, plus additional principal payments over the remainder of the loan with a final payment of US$2,089,670 on October 16, 2001. The interest rate on the loan will increase from 3% to 8% per annum, paid half yearly. The formal documents are being prepared for execution.

In recognition of the loan extension, the Company will issue to HSBC warrants to purchase 16,000 common shares of the Company for any period of six months during which any part of the loan is outstanding. The exercise price of the warrants is $3.50 CDN. The Company will have the right to require HSBC to exercise these warrants if its stock price, as quoted on the TSE, is at 200% of the exercise price for a minimum of 20 consecutive trading days. If the loan is outstanding for the full three year term, warrants to purchase, a total of 96,000 shares, will have been issued.

In conjunction with the HSBC loan extension, the Company is also negotiating with John Hancock Mutual Life Insurance Co. to restructure its loan to Chai-Na-Ta Farms Ltd.

"We are grateful for the support of both John Hancock and HSBC Private Equity Management," said Mr. Gill. "It demonstrates confidence in our programs going forward and will provide us with the necessary time to re-build in a positive environment of escalating ginseng prices and expansion of sales of value-added products."

In addition to the financial re-structuring, Chai-Na-Ta recently secured two agreements which have further strengthened its position. The Company announced its success in securing an exclusive manufacturing agreement for the supply of quintozene-free whole ginseng extract powder, and a supply contract with Leiner Health Products Inc. of Carson, California. The Company is in the middle of its 1998 harvest and early indications are that quality and yields are expected to be good.

Chai-Na-Ta Corp., based in Langley, British Columbia, is the world's largest supplier of North American ginseng. The Company farms, processes and distributes North American ginseng products and supplies processed extract powder to manufacturers of value-added ginseng-based products worldwide.

Except for historical information contained herein, the matters discussed in this press release are forward looking statements that involve risks and uncertainties, including but not limited to general business conditions, the successful introduction of new processed products, bulk root prices, general harvest quality, and other risks detailed from time to time in the Company's public filings, annual report, and Form 20-F.