GoFintech Quantum Innovation Limited — Merger & Acquisition 2003

Sep 26, 2003

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.

VICTORY RIDER LIMITED NEW TIMES GROUP HOLDINGS LIMITED (Incorporated in the British Virgin Islands ( 新時代集團控股有限公司 )[*] with limited liability) (Incorporated in Bermuda with limited liability)

JOINT ANNOUNCEMENT RELATING TO AN UNCONDITIONAL VOLUNTARY CASH OFFER BY KINGSTON SECURITIES LIMITED

ON BEHALF OF VICTORY RIDER LIMITED TO ACQUIRE ALL THE ISSUED SHARE CAPITAL OF NEW TIMES GROUP HOLDINGS LIMITED (OTHER THAN THOSE SHARES ALREADY OWNED BY VICTORY RIDER LIMITED OR PARTIES ACTING IN CONCERT WITH IT)

FINANCIAL ADVISER TO VICTORY RIDER LIMITED

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KINGSTON CORPORATE FINANCE LIMITED

The Board has been notified by the Offeror that, on behalf of the Offeror, Kingston Securities is making an unconditional voluntary cash offer to acquire all the issued share capital of the Company not already owned by the Offeror (or parties acting in concert with it including Kandy Profits). Kandy Profits, who owns in aggregate 120,700,000 Shares upon disposing of 121,666,000 Shares at HK$0.30 per Share to the Offeror on 1 September 2003, is a party presumed to be acting in concert with the Offeror pursuant to the Code.

The consideration under the Offer will be:

For each Share . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$ 0.30 in cash

The Offer will close at 4:00 p.m. on the 21st day after despatch of the Composite Offer Document.

The Offeror intends that the Company should continue to be a company listed on the Stock Exchange.

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 2:30 p.m. on 1 September 2003 pending release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 29 September 2003.

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Introduction

The Offeror and the Board, upon notification by the Offeror, announce an unconditional voluntary cash offer to be made, on behalf of the Offeror, by Kingston Securities for all the issued share capital of the Company, not already owned by the Offeror (or parties acting in concert with it including Kandy Profits). Kandy Profits who owns 120,700,000 Shares, representing approximately 27.9 per cent of the issued share capital, is a party presumed to be acting in concert with the Offeror pursuant to the Code.

The Offer is made following the acquisition by the Offeror of 121,666,000 Shares, representing approximately 28.1 per cent of the issued share capital of the Company, from Kandy Profits on 1 September 2003 at HK$0.30 per Share. Accordingly, the Offer is being made for 190,936,000 Shares, representing approximately 44.1 per cent of the entire issued share capital of the Company, without taking into account the 120,700,000 Shares held by Kandy Profits.

The Offer

The Offer will be made in compliance with the Code by Kingston Securities on behalf of Victory Rider on the following terms:

For each Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$ 0.30 in cash

The determination of the Offer Price is based on the price per Share which the Offeror paid to Kandy Profits for its 121,666,000 Shares on 1 September 2003. The Offer Price represents (i) a discount of 33.33 per cent. to the closing price of HK$0.45 as quoted by the Stock Exchange of the Shares on 1 September 2003, being the last trading day before this announcement; (ii) a discount of 33.33 per cent. to the average of closing prices of the Shares of HK$0.45 over the last 10 trading days before the release of this announcement; (iii) a discount of 35.48 per cent. to the average of closing prices of the Shares of HK$0.465 over the last 20 trading days before the release of this announcement; and (iv) a discount of 30.23 per cent. to the pro forma net tangible assets per Share of HK$0.43 after taking into account the effect of the rights issue of Shares which became unconditional on 7 May 2003.

The highest and lowest closing prices of the Shares as quoted by the Stock Exchange during the sixmonth period preceding the date of this announcement were HK$0.48 per Share between 30 May 2003 and 15 August 2003, and HK$0.327 per Share on 27 March 2003 respectively.

The Offeror confirms that there have been no dealings in the Shares by the Offeror or parties acting in concert with it in the past six months from 2 March 2003 to 1 September 2003 other than (i) the acquisition of 121,666,000 Shares by the Offeror from Kandy Profits on 1 September 2003 and; (ii) the subscription of 88,122,000 new Shares at HK$0.30 each of Kandy Profits under the rights issue of Shares completed in May 2003, details of which are set out in the announcement of the Company dated 7 May 2003.

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As at the date of this announcement, the Company had also granted Options for the subscriptions of an aggregate of 28,886,800 Shares under the share option scheme of the Company adopted by the Company on 30 August 2002. Holders of all outstanding Options have undertaken to the Offeror that they will not exercise any part of the Options into Shares during the period from the date of this announcement up to and including the final closing date of the Offer nor accept any offer that the Offeror may make under Rule 13 of the Code for the Options held by them while the Offer remains open for acceptance. All the holders of the Options have confirmed that the Offeror does not have to extend the Offer or make any comparable offer arising out of or in relation to the Offer to them for the Options. Details of the Options are as follows:

	Exercise price	Number of
Exercise period	of each Option	outstanding Options
1 February 2003 to 31 January 2008	HK$0.67	28,886,800

Save as aforesaid, there are no outstanding warrants, options, subscription rights in respect of any class of equity share capital of the Company or securities convertible into Shares as at the date of this announcement.

Total consideration

As at the date of this announcement, there are 433,302,000 Shares in issue. On the basis of the Offer Price of HK$0.30 per Share, the entire issued share capital of the Company is valued at approximately HK$129.99 million under the Offer. In the event that holders of all the Shares accept the Offer (except those already owned by the Offeror and the parties acting in concert with it including Kandy Profits), the total consideration of the Offer will be approximately HK$57.3 million based on the Offer Price. Kingston has been engaged by the Offeror as its financial adviser in respect of the Offer and Kingston Securities will make the Offer on behalf of the Offeror. Kingston Securities has provided the Offeror with a loan facility for the purpose of financing the Offer. Kingston confirms that it is satisfied that there are sufficient financial resources available to the Offeror for meeting full acceptance of the Offer.

Payment of the consideration

The consideration due to accepting Shareholders will be paid as soon as possible but in any event within ten days of the date of receipt of duly completed valid acceptances.

Stamp duty at a rate of HK$1.00 for every HK$1,000 (or part thereof) of the amount payable in respect of relevant acceptance will be deducted from the amount payable to Shareholders who accept the Offer.

Maintaining the listing status of the Company

The Offeror intends that the Company should maintain the listing of the Shares on the Stock Exchange, and the Offeror, the Company, all existing members of the Board and any new directors to be appointed to the Board will undertake to the Stock Exchange to take appropriate steps following the close of the Offer to ensure that such number of Shares as may be required by the Stock Exchange are held by the public.

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The Stock Exchange has stated that it will closely monitor trading in the Shares following the close of the Offer. If the Stock Exchange believes that a false market exists or may exist in the Shares and that there are insufficient Shares in public hands to maintain an orderly market, that it will consider exercising its discretion to suspend trading in the Shares.

The Stock Exchange has also stated that, if the Company remains a company listed the Stock Exchange, any future injections of assets into or disposals of assets of the Company will be subject to the provisions of the Listing Rules. Pursuant to the Listing Rules, the Stock Exchange has discretion to require the Company to issue a circular to its shareholders where any acquisition or disposal by the Company is proposed, irrespective of the size of such acquisition or disposal and in particular where such acquisition or disposal represents a departure from the principal activities of Company. The Stock Exchange also has the power pursuant to the Listing Rules, to aggregate a series of acquisitions or disposals by the Company and any such acquisitions or disposals may, in any event, result in the Company being treated as a new applicant for listing and subject to the requirements for new applicants as set out in the Listing Rules.

Information on the Offeror

The Offeror is a company which was incorporated in the British Virgin Islands on 5 February 2003 and is wholly owned by Ms. Huang Ning. The Offeror is an investment holding company and was used by Ms. Huang Ning for the purpose of purchasing the 121,666,000 Shares from Kandy Profits and making the Offer. Ms. Huang Ning is the sole director of the Offeror.

Ms. Huang Ning, aged 35, graduated from 華南理工大學 (Hua Nam Polytechnic University). Ms. Huang has been the managing director of 中盛偉僑國際投資控股有限公司 (China Waywide International Holding Co. Ltd.) since 2001 which has participated in direct investments in battery materials production project, PRC property investments project and water treatment project. Before joining 中盛偉僑國際投資控股有限公司 (China Waywide International Holding Co. Ltd.), Ms. Huang had about 8 years of experience in trading of hair-care products and 7 years of experience in export of alcoholic drinks.

Information on the Company

The Group is principally engaged in trading of precision components processing equipment, PRC property investments and other investment activities.

The audited consolidated net loss of the Company for the year ended 31 March 2003 and 31 March 2002 was approximately HK$76.1 million and HK$39.9 million respectively. The latest unaudited pro forma consolidated net tangible assets of the Company as at 31 March 2003 (after taking into account the effect of the rights issue of Shares which became unconditional on 7 May 2003) was approximately HK$186.3 million equivalent to net tangible asset per Share of approximately HK$0.43. The audited consolidated net tangible assets of the Company as at 31 March 2003 and 31 March 2002 were HK$145.2 million and HK$220.3 million respectively.

Reason for the Offer

Following the acquisition of 121,666,000 Shares from Kandy Profits, the Offeror wishes to increase its (together with parties acting in concert with it) shareholding in the Company.

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The Offeror’s intention in relation to Company

The Offeror is proposing to continue the existing business of the Company in the short term but will review its current business activities and assets in due course. In addition, it is proposing to identify suitable new investment opportunities to develop the Company further, although no specific targets have been identified. The Offeror confirms that it will procure that, following the close of the Offer, any asset injections or disposals will be implemented in accordance with all applicable laws, regulations and relevant provisions of the Listing Rules.

The Offeror has no intention to privatise the Company. As stated in the above, the Offeror intends that the Company should maintain its listing status and that it will undertake to the Stock Exchange to take appropriate steps following the close of the Offer to ensure that such number of Shares as may be required by the Stock Exchange are held by the public.

Directors and management

The Offeror intends to invite all existing members of the Board to remain as directors of the Company. At the same time, the Offeror intends to appoint approximately 3 additional directors with experience in the Group’s existing business to the Board. Any appointment of new Directors by the Offeror will be in full compliance with the requirements pursuant to the Code.

The Offeror does not expect that there will be any material changes to the continued employment of the employees of the Group or to the employment terms or conditions of the employees of the Group as a result of the Offer.

Save as disclosed above, there is no agreement between the Offeror and the existing directors of the Company with regard to their directorships in the Company.

General

The Shares will be acquired free from all liens, charges, encumbrances, rights of preemption and any other third party rights of any nature and together with all rights attaching to them, including the right to receive in full all dividends and other distributions, if any, declared, made or paid on or after the date of this announcement.

Acceptances of the Offer will not be permitted to be withdrawn.

Pursuant to the Code, the Company is required to (i) form an independent board committee to consider the Offer and report to the Shareholders on the Offer; and (ii) appoint an independent financial adviser to advise the independent board committee regarding the Offer.

A separate announcement will be made by the Company regarding the appointment of an independent financial adviser as soon as practicable.

The Composite Offer Document shall be despatched as soon as practicable after the date of this announcement and further details of the procedure of acceptance of the Offer and the settlement shall be described in the Composite Offer Document.

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Suspension and resumption of trading in Shares

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 2:30 a.m. on 1 September 2003 pending release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 29 September 2003.

Definitions

“Board”	the board of directors of the Company
“Code”	The Hong Kong Code on Takeovers and Mergers
“Company”	New Times Group Holdings Limited, a company incorporated in
	Bermuda with limited liability, the securities of which are listed in
	the Stock Exchange
“Composite Offer Document”	the document to be jointly issued by and on behalf of the Offeror
	and the Company to all holders of Shares and Options (for
	information only in respect of the latter) in accordance with the
	Code containing, inter alia, details of the Offer and the terms and
	conditions of the Offer and including the forms of acceptance and
	transfer in respect of the Offer
“Group”	the Company and its subsidiaries
“Kandy Profits”	Kandy Profits Limited, an investment holding company incorporated
	in the British Virgin Islands with limited liability which is
	wholly-owned by Mr. Cheong Tin Yau
“Kingston”	Kingston Corporate Finance Limited, a corporation licensed under
	the transitional arrangements to carry on business in types 4 and 6
	regulated activities (advising on securities and corporate finance)
	under the SFO
“Kingston Securities”	Kingston Securities Limited, a corporation licensed under the
	transitional arrangements to carry on business in types 1, 4, 6 and
	9 regulated activities (dealing in securities, advising on securities
	and corporate finance and asset management) under the SFO
“Ms. Huang”	Ms. Huang Ning
“Offer”	an unconditional voluntary cash offer made by Kingston Securities
	on behalf of the Offeror to acquire all the Shares (except those
	already owned by the Offeror (or parties acting in concert with it
	including Kandy Profits) at the Offer Price

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“Offer Price”

HK$0.30 per Share

“Offeror” or “Victory Rider” Victory Rider Limited, an investment holding company incorporated in the British Virgin Islands with limited liability which is whollyowned Ms. Huang

“Option(s)”

Share option(s) granted under the share option scheme of the Company adopted by the Company on 30 August 2002

“PRC”

The People’s Republic of China

“SFC” Securities and Futures Commission of Hong Kong

“SFO”

The Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Shareholders” holders of Shares

“Shares” ordinary shares of HK$0.10 each in the issued share capital of the Company

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

By order of the board of By order of the board of Victory Rider Limited New Times Group Holdings Limited Huang Ning Cheong Tin Yau Director Chairman

Hong Kong, 26 September 2003

• For identification purpose only

The sole director of the Offeror accepts full responsibility for the accuracy of the information contained in this announcement, other than that relating to the Group, and confirms, having made all reasonable enquiries, that to the best of her knowledge, opinions expressed in this announcement, other than those relating to the Group, have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any statements in this announcement misleading.

The directors of New Times Group Holdings Limited jointly and severally accept full responsibility for the accuracy of the information contained in this announcement, other than that relating to the Offeror, and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed by them in this announcement, other than that relating to the Offeror, have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statements in this announcement misleading.

“Please also refer to the published version of this announcement in China Daily”.

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