CPM Group Limited — M&A Activity 2000

Mar 6, 2000

Listed Company Information

UBA INVESTMENTS<0768> - Announcement The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. UBA INVESTMENTS LIMITED (Incorporated in the Cayman Islands with limited liability) CONNECTED TRANSACTION The Directors of the Company announces that the Group has entered into the Agreement with the Vendor whereby the Group has agreed to purchase from the Vendor the entire interest of Luen Wing, representing 1 share at a consideration of HK$9,900,000. The major asset of Luen Wing is the Bond with a principal amount of HK$9,900,000 issued by IT Star, a wholly-owned subsidiary of Harmony which holds a portfolio of technology driven business. The terms of the Bond is set out below. The Investment constitutes a connected transaction for the Company by virtue of the fact that the two executive directors of the Investment Manager together hold 33.32 per cent. beneficial interests in Harmony. The directors of the Investment Manager are regarded as connected persons of the Company under Chapter 21 of the Listing Rules. Dr. Chow, a director of the Company and Harmony and one of the directors of the Investment Manager, is also a director of IT Star. Pursuant to Rule 14.25(1) of the Listing Rules, the Investment is not subject to the Company's independent shareholders' approval. The Directors consider that the terms of the Agreement are fair and reasonable so far as the shareholders of the Company are concerned and that the Investment is in the interests of the Company. The Company will include details of the Investment in its next published annual report and accounts. THE AGREEMENT (Dated 3rd March, 2000) PARTIES PURCHASER: UBA Technologies Holdings Limited, a private company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company VENDOR: Mr. Chin Kee Siong, an independent third party not connected with any directors, chief executives, substantial shareholders of the Company and Harmony or any of their subsidiaries or any of their respective associates (as defined in the Listing Rules) CONSIDERATION: HK$9,900,000 paid upon signing of the Agreement INTEREST TO BE ACQUIRED: 1 share of Luen Wing MAJOR ASSET OF LUEN WING: The major asset of Luen Wing is the Bond with a principal amount of HK$9,900,000 issued by IT Star, a wholly-owned subsidiary of Harmony. MAJOR TERMS OF THE BOND: Issuer: IT Star, a company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of Harmony Subscriber: Luen Wing, a wholly-owned subsidiary of the Company upon completion of the Agreement Issue Date: 12th January, 2000 Principal amount: HK$9,900,000 Interest: fixed at 6 per cent per annum payable by IT Star on the first anniversary of the date of the issue of the Bond provided that the conversion rights are not exercised by the holder of the Bond Maturity: first anniversary of the date of the issue of the Bond Conversion period: the holder of the Bond may convert the whole of the principal amount into the shares of IT Star in accordance with the conversion terms (as set out below) at any time during the period from the date of the issue of the Bond and up to the first anniversary of the date of the issue of the Bond Conversion terms: the holder of the Bond shall upon conversion be allotted equivalent to 6.6 per cent. of the enlarged issued share capital of IT Star upon conversion and no additional amount of capital is required upon conversion INFORMATION ON IT STAR IT Star is a wholly-owned subsidiary of Harmony. Harmony is an investment company listed under the requirements of Chapter 21 of the Listing Rules. IT Star is an investment holding company which holds a portfolio of technology-driven businesses including application of technology in areas of financial services, educational content and software, ISP and web hosting, e-commerce solutions and network integration. REASONS FOR THE INVESTMENT The Directors consider that the Investment provides an opportunity for the Company to invest into a portfolio of technology-driven businesses with earnings potential. The Directors consider the terms of the Agreement are fair and reasonable so far as the shareholders of the Company are concerned and the Investment is in the interests of the Company. The Company is an investment company listed under the requirements of Chapter 21 of the Listing Rules. The Group is principally engaged in investment in listed securities and unlisted investments with potentials in earnings growth and capital appreciation. GENERAL The Investment constitutes a connected transaction for the Company by virtue of the fact that the two executive directors of the Investment Manager together hold 33.32 per cent. beneficial interests in Harmony. The directors of the Investment Manager are regarded as connected persons under Chapter 21 of the Listing Rules. Dr. Chow, a director of the Company and Harmony and one of the directors of the Investment Manager, is also a director of IT Star. Pursuant to Rule 14.25(1) of the Listing Rules, the Investment is not subject to the Company's independent shareholders' approval. The consideration of HK$9,900,000 has been determined after arm's length negotiation between the parties involved with reference to the principal amount of the Bond. The Investment Manager has identified and analysed the Investment. After studying the investment analysis and consulting with the Investment Manager, the Directors have approved the Investment. The Directors consider that the terms of the Agreement are fair and reasonable so far as the shareholders of the Company are concerned and the Investment is in the interests of the Company. The Company will include details of the Investment in its next published annual report and accounts. DEFINITIONS "Agreement" the sale and purchase agreement entered into between the Company and the Vendor on 3rd March, 2000 "Bond" the convertible bond with a principal amount of HK$9,900,000 issued by IT Star "Company" UBA Investments Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange "Directors" board of directors of the Company "Dr Chow" Dr. Chow Pok Yu, Augustine "Harmony" Harmony Asset Limited, an investment company listed on the Stock Exchange "Investment" the purchase of the entire interest of Luen Wing by the Company "Investment Manager" Harmony Asset Management Limited, the investment manger of the Company and Harmony "IT Star" IT Star Limited, a wholly-owned subsidiary of Harmony "Listing Rules" Rules Governing the Listing of Securities on the Stock Exchange "Luen Wing" Luen Wing Group Limited, a private company incorporated in the British Virgin Islands with limited liability "Stock Exchange" The Stock Exchange of Hong Kong Limited "Vendor" Mr. Chin Kee Siong By order of the board of UBA Investments Limited Li Kwok Cheung, George Director Hong Kong, 3rd March, 2000