GoFintech Quantum Innovation Limited — M&A Activity 2000

Mar 30, 2000

Listed Company Information

PAC CHALLENGE<0166> - 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. PACIFIC CHALLENGE Pacific Challenge Holdings Limited (incorporated in Bermuda with limited liability) DISPOSAL OF THREE WHOLLY OWNED SUBSIDIARIES OF THE COMPANY The Board wishes to announce that the Company has entered into the Agreement on 28th March, 2000 with Steppington, an independent third party, for the Disposal of the entire share capital of three of its wholly owned subsidiaries: PCN, PCF and PCS. The board of directors (the ``Board'') of Pacific Challenge Holdings Limited (the ``Company'') wishes to announce that on 28th March, 2000, the Company has entered into an agreement (the ``Agreement'') with Steppington Holdings Limited (``Steppington'') for the disposal (the ``Disposal'') of the entire share capital of three of its wholly owned subsidiaries, namely, Pacific Challenge Nominees Limited (``PCN''), Pacific Challenge Futures Hong Kong Limited (``PCF'') and Pacific Challenge Securities Limited (``PCS''). Steppington and its beneficiaries are independent third parties not connected with any of the directors, chief executive and substantial shareholders of the Company or its subsidiaries or an associate (as defined in the Rules Governing the Listing of Securities (``Listing Rules'') on the Stock Exchange of Hong Kong Limited (the ``Stock Exchange'')) of any of them. Steppington is not a company or a subsidiary of a company listed on the Stock Exchange. Consideration Pursuant to the Agreement, the cash consideration of HK$29,300,000 (``Consideration'') will be payable by Steppington to the Company as to 10% upon signing of the Agreement and the balance will be paid in cash upon completion of the Agreement, which is expected to be on or before 28th August, 2000. The Consideration was arrived at after arm's length negotiations between the Company and Steppington, and with reference to the aggregate net asset value of PCN, PCF and PCS plus a premium. Condition of the Agreement The Agreement is conditional upon the granting of: 1. the approval of the Stock Exchange on the transfer of the shares of PCS and, where applicable, the consequential changes (if any) in the directorate of PCS and the maintenance of the two Stock Exchange Trading Rights by PCS after the transfer; 2. the approval of the Securities and Futures Commission (the ``SFC'') on the transfer of the shares of PCF and, where applicable, the consequential changes (if any) in the directorate of PCF and the maintenance of the one Futures Exchange trading Rights by PCF after the transfer; and 3. the approval of the SFC on the transfers of the shares of PFS and the shares of PCF and the consequential changes (if any) in the directorate of PCS and PCF. Reasons for the Disposal and future plans of the Company PCN is principally engaged in the provision of limited nominee services, while PCF and PCS are principally engaged in futures and stock broking respectively. The Board considers the Disposal to be in line with the Company's press announcements dated 18th February, 2000 and 15th March, 2000 as PCN, PCF and PCS, operating the traditional brokerage business, are expected to face increasing competition and reduced commission levels in the brokerage industry in the coming years. The net profits before tax of PCN, PCF and PCS for the year ended 31st March, 1999 were approximately HK$0.005 million, HK$0.284 million and HK$3.334 million respectively. The aggregate net tangible asset value of PCN, PCF and PCS after distribution of all their retained earnings as dividends to the Company upon completion of the Agreement will be approximately HK$17.3 million, which represents approximately 8.4% of the consolidated net tangible asset value of the Company as at 31st March, 1999. The Company continues to carry on its fee-based corporate finance and investment advisory activities, loan arranging, and debt financing through its remaining subsidiaries. The Company also intends to increase its focus on the Internet business in alliance with E1 Technology Limited, the single largest shareholder of the Company. The Board considers the terms of the Agreement to be fair and reasonable and are in the interests of the Company. Use of proceeds The net proceeds from the Disposal will be used as general working capital for the Group. Currently, the Company has not allocated the net proceeds for any specific use. Appointment of executive director of the Company Further to the announcement dated 15th March, 2000, Mr. Shah Tahir Hussain was appointed as an executive director of the Company effective from 27th March, 2000. General This announcement is being made by the Company to keep the market and the Shareholders informed of the Company's developments pursuant to the general obligation imposed by paragraph 2 of the Listing Rules. By Order of the Board Pacific Challenge Holdings Limited Dr. Lily Chiang Chairman 29th March, 2000