Eminence Enterprise Limited — Share Issue/Capital Change 2000

Feb 2, 2000

Listed Company Information

ACME LANDIS<0616> - Announcement & Resumption of Trading ACME LANDIS HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) H&Q ASIA PACIFIC, LTD. (Incorporated in British Virgin Islands with Island liability) as Manager of the Asia Pacific Growth Fund III, L.P. i100 CORPORATION (Incorporated in the Cayman Islands with limited liability) i100 HOLDINGS CORPORATION (Incorporated in the Cayman llsands with limited liability) Joint announcement Agreement for the subscription for New Shares, possible white-wash waiver, proposed increase in authorised share capital and proposed change of name of the Company to i100 Limited The Company has entered into a subscription agreement with the Subscribers in relation to the subscription of 800,000,000 new Shares at an issue price of HK$0.25 per Share on 31st January, 2000. The aggregate consideration for the Subscription Shares is HK$200 million and will be paid in cash by the Subscribers at Completion. Completion is conditional upon a number of conditions as set out below under the section headed "Conditions of the Subscription Agreement" and the Subscription may or may not proceed. At present, the Subscribers and parties acting in concert with each of them do not own any interest in the Company. Upon Completion, the Subscribers and parties acting in concert with them will be interested in an aggregate of 800,000,000 Shares, representing approximately 500 per cent. of the existing share capital of the Company and 83.3 per cent. of such capital as enlarged by the Subscription Shares. The Chiu Family own 116,216,000 Shares, which represent 72.6 per cent. of the existing share capital of the Company. On Completion, the Chiu Family's percentage shareholding will decrease to 12.1 per cent. of the enlarged issued share capital of the Company. Under Rule 26 of the Takeovers Code, upon Completion, i100 will be required to make an unconditional general offer for all the issued Shares not already owned or agreed to be acquired by i100 or parties acting in concert with it. An application will be made by i100 to the Executive for a White-wash Waiver, which, if granted, would normally be subject to the approval of the Shareholders who are not involved in or interested in the Subscription on a vote taken by way of a poll. The Executive may or may not grant the White-wash Waiver. Completion of the Subscription Agreement is conditional upon, inter alia, the granting of the White-wash Waiver by the Executive. Under the Subscription Agreement, the White-wash Waiver condition can be waived by i100 . If the White-wash Waiver is not obtained, i100 may consider making an unconditional general offer to acquire all Shares other than those already owned by i100 or parties acting in concert with it. The Subscribers have jointly and severally undertaken to Jardine Fleming Securities Limited that they will not waive the White-wash Waiver condition and extend the general offer unless Jardine Fleming Securities Limited is satisfied that the Subscribers have sufficient resources to satisfy full acceptance of the general offer. The proceeds of the Subscription will be HK$200 million before expenses and will be used principally to expand the business of the Group and conduct and develop internet and internet-related activities. It is intended that after Completion and subject to the approval of the Shareholders, the name of the Company will be changed to i100 Limited. The Directors proposed to increase the authorised share capital of the Company to HK$300 million by the creation of 2,700 million Shares. Trading in the Shares was suspended at the request of the Company with effect from 10:00 a.m. on 26th January, 2000. An application has been made to the Stock Exchange for resumption of trading in the Shares with effect from 10:00 a.m. on 2nd February, 2000. THE SUBSCRIPTION AGREEMENT Date 31st January, 2000 Parties Issuer: The Company Subscribers: i100 i100 Holdings H&Q AP Fund Each of the Subscribers is independent of the directors, chief executive and substantial shareholders of the Company, any of its subsidiaries or their respective Associates. Shares to be issued An aggregate of 800,000,000 new Shares, representing approximately 500 per cent. of the existing issued share capital of the Company and approximately 83.3 per cent. of the issued share capital of the Company as enlarged by the issue of the Subscription Shares, will be issued to the Subscribers or their respective nominees pursuant to the Subscription Agreement. Of the Subscription Shares, 600,000,000 new Shares will be subscribed for by i100, representing approximately 62.5 per cent. of the enlarged issued share capital of the Company, 155,000,000 new Shares will be subscribed for by H&Q AP Fund, representing approximately 16.1 per cent. of the enlarged issued share capital of the Company and 45,000,000 new Shares will be subscribed for by i100 Holdings, representing approximately 4.7 per cent. of the enlarged issued share capital of the Company. The Subscription Shares will rank pari passu in all respects with all existing Shares, including the right to receive all future dividends and distributions declared, made or paid by the Company on or after the date of the Subscription Agreement (except for the second interim dividend of HK$0.035 per Share to be paid by the Company in respect of the year ended 31st December, 1999). Issue price The issue price per Subscription Share of HK$0.25 was determined after arm's length negotiations with reference to the average closing price of HK$0.34 per Share over the 10 trading days up to and including 25th January, 2000, the last day of trading in the Shares prior to the suspension of trading of the Shares pending the issue of this announcement. The issue price of HK$0.25 per Subscription Share represents a discount of approximately 35.9 per cent. to the closing price of HK$0.39 per Share on 25th January, 2000, and a discount of approximately 26.5 per cent. to the average closing price of HK$0.34 per Share over the 10 trading days up to and including 25th January, 2000. Such issue price of HK$0.25 per Subscription Share also represents a discount of approximately 72.5 per cent. of the audited NAV per Share of approximately HK$0.91. Conditions of the Subscription Agreement Completion of the Subscription Agreement is conditional upon the following conditions being fulfilled or waived by the Subscribers: (a) neither the Stock Exchange nor the SFC indicating, on or before the date on which all conditions (other than this condition(a)) have been satisfied or waived by the Subscribers, that the listing of the Shares on the Stock Exchange will be or may be withdrawn or objected to; (b) the Executive granting the White-wash Waiver to i100 and persons acting in concert with it (as defined in the Takeovers Code) in respect of any obligation for any of them to extend a mandatory general offer under Rule 26 of the Takeovers Code to acquire all the Shares in issue other than those already held by i100 and persons acting in concert with it upon completion of the Subscription Agreement, subject to the approval of the Independent Shareholders in accordance with the Takeovers Code; (c) listing of and permission to deal in all the Subscription Shares being granted by the Listing Committee of the Stock Exchange (with no conditions (other than conditions expressly stipulated in the Listing Rules and except on terms which are acceptable to the Subscribers in their reasonable opinion) being imposed thereon by the Stock Exchange or the SFC), and such permission and listing not subsequently being revoked prior to the delivery of definitive Share certificate(s) representing the Subscription Shares; (d) approval by the Independent Shareholders for the transactions contemplated by Subscription Agreement and such other matters as may be contemplated in any circular to be sent to shareholders of the Company in this regard; (e) all relevant consents and approvals including approval by the Independent Shareholders and the Stock Exchange (as appropriate), in respect of the increase in the authorised and issued share capital of the Company and the allotment and issue of the Subscription Shares to the Subscribers or otherwise as may be required for the transactions contemplated by the Subscription Agreement and the Placing (as defined in the Subscription Agreement), in accordance with Listing Rules and the Bye-laws of the Company; (f) approval by the Shareholders for the change of name of the Company to i100 Limited subject to regulatory approval; and (g) completion of due diligence by the Subscribers or their advisers on the Group without identification of any matters which would have a material adverse effect on the financial standing of the Group such that the consolidated net asset value of the Group at the time immediately preceding the date of the extraordinary general meeting of the Company expected to be held in this regard on or before 31st March, 2000 shall be below HK$116 million. Mr. Peter Chiu, the chairman of the Company, and Messrs. John Chiu and David Chiu, executive directors of the Company, have been involved in negotiations and discussions in relation to the Subscription. Details of their shareholdings are set out in the paragraph below headed "Shareholding Structure". Accordingly, they and parties acting in concert with them who in aggregate hold 116,216,000 Shares (representing 72.6 per cent. of the existing issued share capital of the Company) will not cast any votes in respect of conditions (b), (d) and (e) above in relation to their respective shareholding interests in the Company at the extraordinary general meeting of the Company to be convened in this regard. The Subscribers have the right to waive any of the above conditions. If the White-wash Waiver is not granted and the Subscribers waive condition (b) above, the Subscribers would be required to extend a cash offer for the Shares at a price of HK$0.25 per Share (or, if higher, the highest price paid by the Subscribers and their concert parties during the offer period and within six months prior to its commencement). The Subscribers have jointly and severally undertaken to Jardine Fleming Securities Limited that they will not waive the White-wash Waiver condition unless Jardine Fleming Securities Limited is satisfied that the Subscribers have sufficient resources to satisfy full acceptance of the general offer. Completion The aggregate consideration for the Subscription Shares of HK$200 million will be paid in cash upon Completion. Completion will take place on the second Business Day after all conditions of the Subscription Agreement have been fulfilled or waived. In the event that the above conditions of the Subscription Agreement are not fulfilled or waived by 30th June, 2000, the Subscription Agreement will lapse. Use of proceeds The Directors and the Subscribers intend that the proceeds from the Subscription of HK$200 million before expenses will be used principally to expand the business of the Group, and conduct and develop internet and internet-related activities. The proportions will depend on the opportunities to be identified. At present, there is no specific project for which any commitment has been made and no negotiation has taken place in this regard. SHAREHOLDING STRUCTURE Set out below is a table showing the Company's existing shareholding structure and the structure immediately after Completion: Existing shareholding structure Immediately upon Completion Number of Shares Approximate Number of Shares Approximate percentage percentage Chiu Family 116,216,000 72.6% 116,216,000 12.1% i100 * * 600,000,000 62.5% H&Q AP Fund * * 155,000,000 16.1% i100 Holdings * * 45,000,000 4.7% Public 43,784,000 27.4% 43,784,000 4.6% Total issued share capital of the Company 160,000,000 100.0% 960,000,000 100.0% The interest in the Company held by the Chiu Family includes 200,000 Shares indirectly held by Mr. Chiu Chit Ho, Peter and 100,000 Shares held directly by Mr. Chiu Chun Leong, David and interests held indirectly through Shiny Future Inc. ("Shiny Future") and Echopoint Limited ("Echopoint") (Shiny Future and Echopoint together, the "Controlling Shareholders"). As at the date of this announcement, Shiny Future and Echopoint own 81,624,000 Shares and 34,292,000 Shares respectively, representing 51.0 per cent. and 21.4 per cent. of the issued capital in the Company respectively. Echopoint is 48 per cent. owned by Mr. Chiu Chit Ho, Peter and 0.01 per cent. owned by Mr. Chiu Chun Leong, David with the remaining ownership spread between 10 other holders that are not related to the Chiu Family. The Chiu Family are interested in approximately 43.8 per cent. of the issued capital of Shiny Future, the balance of which is owned by over 20 other shareholders, most of which are relatives of members of the Chiu Family. The Controlling Shareholders have signed an undertaking (separate from the Subscription Agreement) not to dispose more than 25 per cent. of the 116,216,000 Shares controlled in aggregate by them in the six months period commencing on the date of Completion. There is no restriction on the disposal of Shares by the Controlling Shareholders on the expiry of this period. Although the Controlling Shareholders are allowed to dispose of their Shares in different proportions as set out above, they have not yet decided whether or not to sell or hold their Shares during such period. For the shareholding structure of the Company immediately upon Completion, please refer to the press announcement today. INFORMATION ON THE GROUP The Group is principally engaged in the import, marketing, retailing and distribution of sanitary fixtures and fittings and a range of hardware, tyres, industrial and consumer products. In addition, the Group is a specialist contractor in the design and installation of plumbing and drainage systems and provides related engineering services in Hong Kong. As at 31st December, 1998, the audited NAV is approximately HK$145.5 million. The Subscribers and parties acting in concert are independent of the directors, chief executive and substantial shareholders of the Company, any of its subsidiaries or their respective Associates. INFORMATION ON H&Q AP H&Q AP opened its first office in Asia in 1986 and it is today one of the largest and oldest private equity firms in the Asia Pacific Region, focusing on the internet, software and telecommunications sectors. H&Q AP is the independent corporate successor to the Asian private equity operation originally formed by Hambrecht and Quist and Dr. Ta-Lin Hsu in 1986. Dr. Hsu, the Chairman of H&Q AP, is a pioneer in the Asian venture capital market, and was selected by Business Week as one of the "50 Asia Business Leaders" in 1998. H&Q AP has developed an extensive network of private equity operations in Asia with offices and funds in each of the principal markets in the region. H&Q AP currently employs 90 people, including 50 investment professionals, who operate from eleven offices in Bangkok, Beijing, Hong Kong, Jakarta, Kuala Lumpur, Manila, Seoul, Singapore, Taipei, Tokyo and San Francisco. The 30 senior investment professionals, led by Dr. Hsu, share a cumulative 165 years of private equity investing and an average of 10 years of operating experience. H&Q AP has managed an aggregate of approximately US$1.6 billion (approximately HK$12.4 billion) in committed capital, including US$750 million (approximately HK$5.8 billion) in H&Q AP Fund. Throughout its history, H&Q AP's managed funds have invested in over 250 companies. H&Q AP has developed significant experience and knowledge in the internet, semi-conductor, software, personal computer peripheral and telecommunications industries. H&Q AP pioneered the success of companies such as Winbond Electronics Corporation (semi-conductor manufacturer) and Acer (computer manufacturer) in Taiwan, Access Company Limited in Japan (designer of software code for the wireless telephone for NTT DoCoMo Japan) and Good Morning Securities in Korea (a securities brokerage group with internet trading operations). Recently, H&Q AP has also completed investments in the internet industry investing in companies such as, amongst others, HelloAsia.com, Inc. (web based ISP incorporated in the U.S. which has linked with some exclusive companies in Asia to provide on-line rewards to its members), AsiaContent.com. Ltd. (a company incorporated in the U.S. which brings a variety of US content based sites to Asian markets catering to a wide spectrum of internet users with diverse interests) and GRIC Communications, Inc. (a company incorporated in the U.S. and listed on Nasdaq that formed international ISP partnerships under which customers of its partner ISP's enjoy internet roaming, faxing and telephony services). H&Q AP is committed to working closely with i100 and the Company and contributing to the Company's future business through H&Q AP's direct participation in the Company's management. INFORMATION ON H&Q AP FUND H&Q AP Fund, with committed capital of US$750 million (approximately HK$5.8 billion), makes equity investments in companies with significant operations in the Asia Pacific Region. H&Q AP Fund is managed by H&Q AP and builds on the successful investment model developed by H&Q AP. H&Q AP Fund's strategy is to deploy significant capital in large controlled transactions primarily in the high-tech, semiconductor and internet related industries. The fund will invest through the Asia Pacific Region as well as in US companies which have significant operations in Asia. Investors in H&Q AP Fund include prestigious government institutions and corporations, such as the Government of British Columbia, Metropolitan Life, New York Life, Bellsouth, Caisse de Depot of Quebec, pension plans for employees of General Motors, the States of Pennsylvannia and Colorado, and many others. INFORMATION ON J. H. WHITNEY & Co. J. H. Whitney was founded in 1946 and is one of the oldest venture capital firms in the U.S. It manages over US$5.0 billion (approximately HK$38.8 billion) out of its offices in Stanford, San Francisco, Boston, New York, Hong Kong, Tokyo and London. J. H. Whitney has been an active investor in the Asian technology sector, having made over 10 investments in companies around the region. Its investments include, amongst others, Renren.com Limited (a virtual community for Greater China incorporated in the Cayman Islands) and EachNet.com Limited (a person-to-person auction company in Greater China incorporated in the Cayman Islands). J. H. Whitney IV, L.P. is a US$950 million (approximately HK$7.4 billion) private equity fund managed by J. H. Whitney. The fund was closed in January 2000. INFORMATION ON i100 i100 is an investment holding company incorporated in the Cayman Islands. Its shareholders include i100 Holdings, H&Q AP Fund and J. H. Whitney. Their shareholdings in i100 are approximately 32.3 per cent, 36.7 per cent and 16.7 per cent respectively. The remaining shareholdings in i100 are held by 5 other independent minority investors each holding less than 10 per cent. in i100. The ultimate beneficial shareholders of i100 Holdings are Mr. Kan Siu Kei, Laurie, Mr. David Vong and Mr. Gerald Cheuk. Their shareholdings in i100 Holdings are 50 per cent., 40 per cent. and 10 per cent. respectively and their beneficial interest in the Company immediately following Completion will be approximately 12.4 per cent., 10.0 per cent. and 2.5 per cent. respectively. All of the three shareholders of i100 Holdings will actively participate in the operations of the Company after Completion. Mr. Kan Siu Kei, Laurie will be appointed as the President and Chief Executive Officer of the Company, Mr. David Vong will be appointed as the Executive Vice President and Chief Operating Officer of the Company and Mr. Gerald Cheuk will be appointed as the Chief Financial Offer of the Company. FUTURE INTENTIONS H&Q AP, i100 and i100 Holdings will conduct a review of the financial position and operations of the Group with a view to broadening and expanding the businesses and operations of the Group. The Directors and the Subscribers intend that the Group will maintain its existing businesses and there is no plan to redeploy any fixed assets of the Group. In addition, although new employees may need to be employed to help strengthen the operations in internet-related businesses of the Group, there is no plan to materially change the existing management structure and employees of the Group by reason only of the Subscription. H&Q AP, i100 and i100 Holdings intend that the Subscription is a long-term investment for the Subscribers who intend to work closely with existing management and those existing Directors who will remain as Directors after Completion. They intend to evaluate the potential of conducting a portion of the existing businesses of the Group using internet and that the businesses of the Group will also be diversified into other internet related businesses including investments in internet related companies and management of internet businesses. The Company is currently considering the possibility of investing in internet related businesses and will discuss with the Subscribers the suitability, timing and financing of any such investments before making any commitment in this regard. However, there is no specific plan or target to which the Company is committed at present and no negotiation has taken place in this regard. H&Q AP, i100, i100 Holdings and J. H. Whitney also confirm that there is no plan in the future for H&Q AP managed funds (including H&Q AP Fund), J. H. Whitney's managed funds (including J. H. Whitney IV), i100 or i100 Holdings to inject any of their existing assets or businesses into the Group. PROPOSED CHANGE OF BOARD COMPOSITION Upon Completion, two of the existing executive Directors will remain as Directors while the other Directors will resign. It is not currently known which Director will resign or remain. Dr. Ta-Lin Hsu, Messrs. Kan Siu Kei, Laurie, David Vong, Dr. Heiner Sussner and Mr. Peter P.J. Ko will be nominated to join the board of Directors. Two new independent non-executive Directors will also be appointed upon Completion. Dr. Ta-Lin Hsu will be appointed as non-executive Chairman, Mr. Kan Siu Kei, Laurie will be appointed as President and Chief Executive Officer, Mr. David Vong will be appointed as Executive Vice President and Chief Operating Officer and Dr. Heiner Sussner and Mr. Peter P.J. Ko will be appointed as non executive Directors of the Company. As such, the board of Directors would comprise nine Directors, including two independent non-executive Directors. Particulars of the proposed new Directors are set out below: Dr. Ta-Lin Hsu is the founder, Chairman and President of H&Q AP. Prior to starting H&Q AP in 1986, Dr. Hsu spent all his career in technology research and application in IBM Corporation in the United States. Dr. Hsu grew H&Q AP as the premier private equity firm in the Asia-Pacific region, with 11 offices and US$1.6 billion (approximately HK$12.4 billion) under management, focusing on technology sectors such as personal computers, semi-conductors, software solutions, and internet-related. Dr. Hsu holds a B.S. in Physics from the National Taiwan University and a Ph.D. in electrical engineering from the University of California, Berkeley. Mr. Kan Siu Kei, Laurie is an equity investor and a director of Timeless Software Limited (a company incorporated in Hong Kong and listed on the Stock Exchange) since 1998. Mr. Kan has created, built and invested in cutting-edge information technology businesses in Asia for the past 18 years. He was the co-founder of Sina.com Hong Kong, the top Chinese website in 1999 as surveyed by the China Internet Network Information Centre in January 2000, and formerly the founder of PointCast Asia Limited (incorporated in Hong Kong) and chief operating officer of China Internet Corporation (now known as China.com). Before his entrepreneurial career, Mr. Kan founded Microsoft Hong Kong and spent 7 years as the managing director for its operation in Hong Kong and the southern China region. Mr. David Vong has been the chief executive officer of Pollon Infrastructure Corporation (incorporated in the Cayman Islands) since 1997, and is an expert in structuring and managing control investments. During this time, he spearheaded the group's initiatives in strategic planning and development of its internet and telecommunications divisions, and in managing the acquisition and build-up of its power generation business in China. He is a graduate of Yale Law School and The London School of Economics and Political Science. Dr. Heiner Sussner is the Senior Managing Director of H&Q AP, mainly responsible for technology sector investments. Dr. Sussner's 20 year career has revolved around technology research and venture investments in the United States, Europe and Asia. At H& Q AP, Dr. Sussner has been the impetus behind the internet related investments such as HelloAsia, AsiaContent and others. Dr. Sussner is a graduate of the Technical University of Munich and received his Ph.D. in Physics in 1976 at the Centre Nationale de la Recherche Scientifique in Grenoble, France. Mr. Peter P.J. Ko is the Managing Director of H&Q AP Korea with responsibility for both regional and Korea-specific private equity transactions. Mr. Ko spent the past ten years working on Asia regional private equity transactions. Recently, he has completed investments in companies such as G&G Telecom Inc. (an internet infrastructure/fibre optic backbone operator incorporated in Korea), QRIO.com Inc. (a unified messaging service provider incorporated in the United States), Good Morning Securities Co., Ltd. (a securities brokerage/internet trading company incorporated in Korea). Mr. Ko graduated from Columbia University, and gained his MBA at Harvard Business School. The incoming executive Directors, i.e. Messrs. Kan Siu Kei, Laurie and David Vong, are expected to sign three year service contracts with the Company, undertaking that, inter alia, they will devote the substantial majority of their time to the affairs of the Company and will not engage in projects which might involve them in a conflict of interest without the consent of the Board of the Company. The terms of service of the other Directors have not yet been decided. The Subscribers intend that other executive Directors to be nominated by the Subscribers in the future will sign service contracts; the terms of service of which have not yet been decided. PROPOSED CHANGE OF NAME It is a condition of the Subscription that the name of the Company will be changed to i100 Limited to reflect the introduction of new management and the diversification of the Company's business to include internet and internet-related activities in future. The change of name is subject to approval by the Shareholders at a special general meeting. INCREASE IN AUTHORISED SHARE CAPITAL The authorised share capital of the Company consists of 300,000,000 Shares, of which 160,000,000 Shares are in issue as at the date of this announcement. The Directors propose to increase the authorised share capital of the Company from HK$30 million to HK$300 million by the creation of an additional 2,700 million Shares. The proposed increase in authorised share capital of the Company is subject to approval by the Shareholders at a special general meeting. TAKEOVERS CODE IMPLICATIONS During the six-month period immediately preceding the date of this announcement, there were no dealings in the Shares by the Subscribers and parties acting in concert with any of them. At present, none of the Subscribers and parties acting in concert with any of them holds any Shares. Upon issuance of the Subscription Shares, i100 and parties acting in concert with it will be interested in approximately 83.3 per cent. of the then issued share capital of the Company. Under the Takeovers Code, i100or parties acting in concert with it would be obliged to make an unconditional general offer to acquire all the Shares other than those already owned by i100 and parties acting in concert with it. An application will be made by i100 to the Executive for a White-wash Waiver, which, if granted, would normally be subject to the approval of the Independent Shareholders on a vote taken by way of a poll. The Executive may or may not grant the White-wash Waiver. Completion is conditional upon, inter alia, the granting of the White-wash Waiver by the Executive. Under the Subscription Agreement, the White-wash Waiver condition can be waived by i100 . If the White-wash Waiver is not obtained, i100 may consider making an unconditional general offer to acquire all the Shares other than those already owned by i100 and parties acting in concert with it. The Subscribers have jointly and severally undertaken to Jardine Fleming Securities Limited that they will not waive the White-wash Waiver condition and extend the general offer unless Jardine Fleming Securities Limited is satisfied that the Subscribers have sufficient resources to satisfy full acceptance of the general offer. If the White-wash Waiver is approved by the Independent Shareholders, the shareholding of i100 and parties acting in concert with it in the Company will be approximately 83.3 per cent. immediately after Completion. MAINTAINING THE LISTING OF THE COMPANY It is the intention of the future directors of the Company to maintain the listing of the Shares on the Stock Exchange after Completion. Accordingly, the present and future Directors and the Company will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists for the Shares. The Stock Exchange has stated that it will closely monitor trading in the Shares if less than 25 per cent. of the Shares are held by the public. The Stock Exchange will also closely monitor all future acquisitions or disposals of assets by the Company. The future directors of the Company are aware of the possibility of the Company's public float falling below 25 per cent. immediately after Completion and will address this issue accordingly, including by means of the potential Placing. However no negotiation has taken place and no agreement has been reached on the potential Placing. The Stock Exchange has the discretion to require the Company to issue a circular to its shareholders irrespective of the size of the proposed transaction, particularly when such proposed transaction represents a departure from the principal activities of the Company. The Stock Exchange also has the power to aggregate a series of transactions and any such transaction may result in the Company being treated as if it were a new listing applicant. If the Stock Exchange believes that: * a false market exists or may exist in the Shares; or * there are too few Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares. SUSPENSION AND RESUMPTION OF TRADING IN THE SECURITIES Trading in the Shares was suspended at the request of the Company with effect from 10:00 a.m. on 26th January, 2000. An application has been made to the Stock Exchange for resumption of trading of the Shares with effect from 10:00 a.m. on 2nd February, 2000. GENERAL An independent board committee of the board of directors of the Company will be appointed to consider the White-wash Waiver. An independent financial adviser will be appointed to advise the independent board committee regarding the White-wash Waiver. Jardine Fleming Securities Limited has been appointed to advise i100 in connection with the Subscription. Somerley Limited has been appointed to advise the Company in connection with the Subscription. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the new Shares to be issued under the Subscription. A composite document, containing, inter alia, details of the Subscription, the White-wash Waiver and notice of the special general meeting, will be sent to the Shareholders as soon as practicable. DEFINITIONS In this announcement, the following expressions have the meanings set out below unless the context requires otherwise. "Associate(s)" has the meaning ascribed thereto under the Listing Rules "Business Day" means any day (including a Saturday) on which banks are generally open for business in Hong Kong "Chiu Family" Messrs. Chiu Chit Ho, Peter, Chiu Chung Kwong, John, Chiu Chun Leong, David and their respective Associates "Company" Acme Landis Holdings Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Stock Exchange "Completion" completion of the Subscription Agreement "Directors" Directors of the Company from time to time "Executive" the Executive Director of the Corporate Finance Division of the SFC (or any delegate of the Executive Director) "Group" the Company and its subsidiaries "H&Q AP" H&Q Asia Pacific, Ltd., a company incorporated in the British Virgin Islands whose main business is the management of private equity funds in the Asia Pacific region "H&Q AP Fund" Asia Pacific Growth Fund III, L.P., a limited partnership incorporated in the Cayman Islands, is a private equity fund with committed capital of US$750 million (approximately HK$5,850 million) "HK$" Hong Kong dollar(s), the lawful currency in Hong Kong "Hong Kong" Hong Kong Special Administrative Region of the People's Republic of China "i100" i100 Corporation, a company incorporated on 19th January, 2000 in the Cayman Islands with limited liability whose shareholders include H&Q AP Fund, J.H. Whitney IV, i100 Holdings and other minority shareholders "i100 Holdings" i100 Holdings Corporation, a company incorporated on 19th January, 2000 in the Cayman Islands with limited liability whose shareholders are Mr. Kan Siu Kei, Laurie, Mr. David Vong and Mr. Gerald Cheuk "Independent Shareholders" Shareholders who are not involved in or interested in the Subscription "J.H. Whitney" J.H. Whitney & Co., a company incorporated in Delaware, L.L.C. whose main business is in the management of venture capital funds around the world "J.H. Whitney IV" J.H. Whitney IV, L.P., a limited partnership incorporated in Delaware L.L.C., is managed by J.H. Whitney which is a venture capital fund "Listing Rules" Rules Governing the Listing of Securities on the Stock Exchange "NAV" the audited consolidated net asset value of the Company as at 31st December, 1998 "Placing" the placing of Shares on or after Completion in order to ensure that as of Completion and the issue and allotment of the Subscription Shares (or such later period as may be agreed to by the Stock Exchange and the Executive) the Company maintains the requisite percentage of Shares in issue held by members of the public in order to comply with the requirements of the Listing Rules. "SFC" Securities and Futures Commission "Share(s)" share(s) of HK$0.10 each in the capital of the Company "Shareholder(s)" the holder(s) of the Share(s) "Stock Exchange" The Stock Exchange of Hong Kong Limited "Subscribers" i100, i100 Holdings and H&Q AP Fund and "Subscriber" shall mean any one of them "Subscription" the subscription by the Subscribers for the Subscription Shares on the terms and subject to the conditions under the Subscription Agreement "Subscription Agreement" the subscription agreement dated 31st January, 2000 between i100 Holdings, H&Q AP Fund and i100 and the Company relating to the Subscription for 800,000,000 new Shares in aggregate "Subscription Share(s)" 800,000,000 new Shares to be issued pursuant to the Subscription "Takeovers Code" The Hong Kong Code on Takeovers and Mergers "US$" United States dollar(s), the lawful currency in the United States of America "White-wash Waiver" A waiver from the obligation to extend a mandatory general offer under the Takeovers Code pursuant to Note 1 of the Notes on dispensations from Rule 26 of the Takeovers Code to be sought from the Executive By Order of the Board of By Order of the Board of ACME LANDIS HOLDINGS LIMITED H&Q ASIA PACIFIC, LTD. Mr. Chiu Chun Leong, David as Managers of the Asia Pacific Director Growth Fund III, L.P. Dr. Ta-Lin Hsu Chairman By Order of the Board of By Order of the Board of i100 CORPORATION i100 HOLDINGS CORPORATION Dr. Ta-Lin Hsu Mr. Kan Siu Kei, Laurie Chairman Chairman Hong Kong, 1st February, 2000 The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement relating to the Group and confirm, having made all reasonable enquiries, that to the best of their knowledge, their opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts (other than relating to the Subscribers and the proposed new Directors) not contained in this announcement, the omission of which would make any of their statements in this announcement misleading. The directors of the Subscribers jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, their opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts (other than that relating to the Group) not contained in this announcement, the omission of which would make any of their statements in this announcement misleading.