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First Pacific Company Limited M&A Activity 2000
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Download source fileThe 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 however arising from or in reliance upon the whole or any part of the contents of this announcement.
(Incorporated in Hong Kong with limited liability)
CONNECTED TRANSACTION
AND ACQUISITION OF MILICONCEPT
The Board announces that Upper Selection, a wholly-owned subsidiary of Ranbridge, a licensed money lender, which is an indirect wholly-owned subsidiary of the Company, has entered into the Shareholders' Agreement with Easy Capital, a wholly-owned subsidiary of UAF, pursuant to which a joint venture company is incorporated for the acquisition of Top Progress, an investment holding company, and its wholly-owned subsidiary, Miliconcept, which are the only assets to be acquired in the transaction, at the consideration of HK$130,000,000.00.
The terms of the Shareholders' Agreement were determined after arm's length negotiations and were on normal commercial terms.
AGL, a deemed substantial shareholder of the Company under the SDI Ordinance, is currently, through a wholly-owned subsidiary, holding 70% of the issued share capital of UAFG which in turn holds 72.73% of the issued share capital of UAF. The transaction contemplated under the Shareholders' Agreement constitutes a connected transaction under the Listing Rules. Pursuant to Rule 14.25 (1) of the Listing Rules, details of the transaction will be included in the next published annual report and accounts of the Company.
SHAREHOLDERS' AGREEMENT
Dated: 17th June, 2000
Parties:
Upper Selection Investments Limited
Easy Capital Investments Limited
MAIN TERMS
Under the terms of the Shareholders' Agreement, the parties thereto have agreed to establish a joint venture company which will be indirectly owned as to 50% by the Company and 50% by UAF. The total initial investment amount of the joint venture company of approximately HK$130,000,000.00 will be financed by a cash contribution equivalent to approximately HK$65,000,000.00 by the Company and approximately HK$65,000,000.00 by UAF. Further capital commitment, which is not anticipated in the near future, to the joint venture company will be funded by the Company and UAF in equal shares.
The profits and losses of the joint venture company will be shared by the parties in their respective proportion of equity interests in the joint venture company. The board of directors of the joint venture company will consist of not more than eight directors and Upper Selection has the right to nominate up to four directors who will not have any casting vote.
THE ASSETS TO BE ACQUIRED
The joint venture company will acquire 50,000 shares of US$1.00 each being the entire issued capital of Top Progress for a consideration of HK$130,000,000.00. Top Progress is an investment holding company which owns the entire issued share capital of Miliconcept, a licensed money lender under the Money Lenders Ordinance. Miliconcept carries on the personal loan business through a network of ten branches.
As Top Progress is an investment holding company incorporated in the British Virgin Islands, no audited consolidated profit and loss account is available.
Based on the unaudited consolidated management accounts of the Top Progress Group for the year ended 31st December, 1999, the net profits before and after taxation amounted to HK$28,355,182.00 and HK$24,242,893.00 respectively. The unaudited net profits before and after taxation of the Top Progress Group amounted to HK$18,617,547.00 and HK$15,988,280.00 for the period from 1st April, 1998 to 31st December, 1998. Top Progress has changed its financial year end date from 31st March to 31st December in the year 1998.
Based on the unaudited consolidated management accounts of the Top Progress Group for the 5 months ended 31st May, 2000, the net profits before and after taxation of the Top Progress Group were estimated to amount to HK$9,801,205.00 and HK$8,233,012.00.
Based on the unaudited consolidated management accounts of the Top Progress Group for the 5 months ended 31st May, 2000, the net assets value of Top Progress amounted to HK$77,834,410.00.
Based on the audited profit and loss account of Miliconcept for the year ended 31st December, 1999, the net profits before and after taxation of Miliconcept amounted to HK$28,360,564.00 and HK$24,248,275.00 respectively. The audited net profit of Miliconcept before and after taxation for the period from 1st April, 1998 to 31st December, 1998 amounted to HK$18,624,702.00 and HK$15,995,435.00 respectively.
Based on the unaudited management accounts of Miliconcept for the 5 months ended 31st May, 2000, the net assets value of Miliconcept amounted to approximately HK$107.5 million.
After completion of the acquisition of Top Progress by the joint venture company of Upper Selection and Easy Capital, Top Progress will not be a subsidiary of the Company and its accounts will not be consolidated in the accounts of the Company.
REASON FOR THE ACQUISITION OF MILICONCEPT AND
THE SHAREHOLDERS' AGREEMENT
Ranbridge, an indirect wholly-owned subsidiary of the Company, is principally engaged in the business of a licensed money lender under the Money Lenders Ordinance. The principal business of Ranbridge is the provision of term loan to customers in Hong Kong. It does not provide margin finance. The acquisition of the interest in Miliconcept will enhance the business of Ranbridge by allowing it to diversify its money lending business and to acquire branch network and expand its customer base and its loan book in association with UAF which company has skills in retail money lending.
The Board considers that the terms of the Shareholders' Agreement, and the consideration of HK$130,000,000.00 payable for the acquisition of Top Propress, which is based on approximately 20.9% premium above the unaudited net asset value of Miliconcept of approximately HK$107.5 million for the 5 months ended on 31st May, 2000, which were determined after arm's length negotiations, are fair and reasonable.
GENERAL
The principal activities of the Company and its subsidiaries are securities, forex, bullion, commodities and future broking, provision of online financial services and online financial information distribution, the provision of term loans, share margin financing, corporate finance, property investment and insurance consultancy. The principal business of Ranbridge is a licensed money lender providing term loan to customers in Hong Kong.
AGL, a deemed substantial shareholder of the Company under the SDI Ordinance, is currently, through a wholly-owned subsidiary, holding 70% of the issued share capital of UAFG which in turn holds 72.73% of the issued share capital of UAF. The transaction contemplated under the Shareholders' Agreement constitutes a connected transaction under the Listing Rules. Pursuant to Rule 14.25 (1) of the Listing Rules, details of the transaction will be included in the next published annual report and accounts of the Company.
DEFINITIONS
| "AGL" | Allied Group Limited |
| "Board" | the board of Directors |
| "Company" | Sun Hung Kai & Co. Limited |
| "Directors" directors including the independent non | executive directors of the Company |
| "Easy Capital" | Easy Capital Investments Limited, a company incorporated under the laws of the British Virgin Islands with limited liability and a wholly owned subsidiary of UAF |
| "HK$" | the lawful currency of Hong Kong |
| "Hong Kong" | Hong Kong Special Administrative Region of the People's Republic of China |
| "Listing Rules" | Rules Governing the Listing of Securities on the Stock Exchange |
| "Miliconcept" | Miliconcept Credit Limited, a company incorporated under the laws of Hong Kong with limited liability and a wholly owned subsidiary of Top Progress and a licensed money lender under the Money Lenders Ordinance |
| "Money Lenders Ordinance" | Money Lenders Ordinance, Chapter 163 of the Laws of Hong Kong |
| "Ranbridge" | Ranbridge Finance Limited, a company incorporated under the laws of Hong Kong with limited liability and an indirect wholly owned subsidiary of the Company |
| "SDI Ordinance" | Securities (Disclosure of Interests) Ordinance, Chapter 396 of the Laws of Hong Kong |
| "Shareholders' Agreement" | the shareholders' agreement dated 17th June, 2000 entered into between Upper Selection and Easy Capital |
| "Stock Exchange" | The Stock Exchange of Hong Kong Limited |
| "Top Progress" | Top Progress Investments Limited, a company incorporated under the laws of the British Virgin Islands |
| "Top Progress Group" | Top Progress and Miliconcept |
| "UAF" | United Asia Finance Limited, a company incorporated under the laws of Hong Kong with limited liability |
| "UAFG" | United Asia Finance (Group) Limited, a company incorporated under the laws of Hong Kong with limited liability |
| "Upper Selection" | Upper Selection Investments Limited, a company incorporated under the laws of the British Virgin Islands and a wholly owned subsidiary of Ranbridge |
| "US$" | the lawful currency of the United States of America |
By Order of the Board of
Sun Hung Kai & Co. Limited
Hester Wong Lam Chun
Company Secretary
Hong Kong, 17th June, 2000