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Guoco Group Limited Capital/Financing Update 2004
48904_rns_2004-10-13_68255daf-9d04-4713-a9e9-44fbb9e3e632.pdf
Capital/Financing Update
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FAR EAST HOTELS AND ENTERTAINMENT LIMITED 13-10-2004
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
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.
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
遠東酒店實業有限公司
(Incorporated in Hong Kong with limited liability)
(Stock Code: 0037)
DISCLOSABLE TRANSACTION
DISPOSAL OF PROPERTY
The Directors announce that on 6 October 2004, the Vendor, a wholly-owned subsidiary of the Company, entered into a Provisional Sale and Purchase Agreement with the Purchaser, to dispose of the Property at a consideration of HK$34,500,000.00. The consideration was determined after arm's length negotiation and was based on normal commercial terms.
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FAR EAST HOTELS AND ENTERTAINMENT LIMITED
As the consideration involved in the Disposal represents approximately 18.28% of the total market capitalisation of the Company, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.
A circular containing, amongst other things, details of the Provisional Sale and Purchase Agreement and the Disposal will be sent to the shareholders of the Company in accordance with the requirements of the Listing Rules as soon as practicable.
Provisional Sale and Purchase Agreement
Date: 6 October 2004
Parties: (a) Vendor: Jenago Limited, a wholly-owned subsidiary of the Company (b) Purchaser: Wonderful Scenery Properties Limited or its nominees. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are independent third parties and not connected persons of the Company
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
13-10-2004
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
Sale and purchase :
Pursuant to the Provisional Sale and Purchase Agreement, the Vendor shall sell and the Purchaser shall purchase the Property upon the terms contained therein. The Vendor and the Purchaser shall enter into the Formal Agreement on or before 22 October 2004. The Formal Agreement, which shall set out the terms of the Disposal in more detail, shall supersede the Provisional Sale and Purchase Agreement.
Conditions:
The Property will be sold with the underlying lease described under the paragraph headed "Property" below. The Disposal is subject to the Vendor, prior to completion of the Disposal, having entered into a new lease with the existing tenant of the Property for a term of 2 years commencing from 1 March 2005 at a monthly rental of HK$250,000.00 (exclusive of management fees, rates and other expenses). If the Vendor does not enter into such new lease with the existing tenant, then the Purchaser can choose to demand a return of all consideration paid to the Vendor in respect of the Disposal thereby terminating the subject transaction or require the date of completion of the Disposal to be extended until such new lease is entered into between the Vendor and the existing tenant.
FAR EAST HOTELS AND ENTERTAINMENT LIMITED 13-10-2004
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
Property :
The property is 3rd Floor to 6th Floor, Lisa House, No.33-37 Nelson Street, Kowloon, Hong Kong, including the car-lift shaft and car-lift installed, which is held by the Group for leasing purpose. The lease for the Property shall expire on 28 February 2005 and the current rental of the Property payable under the lease is HK$210,000.00 per calendar month.
Consideration :
The total consideration is HK$34,500,000.00 and was determined after arm's length negotiation by reference to the valuation of the Property as at 31 March 2004 mentioned in the paragraph headed "Financial effects of the Disposal" below but taking into account the improved property market conditions in Hong Kong since that date. No professional valuation of the Property has been made by the Group for the purpose of the Disposal.
Terms of Payment :
(a) an initial deposit of HK$1,000,000.00 was paid by the Purchaser to the Vendor upon the signing of the Provisional Sale and Purchase Agreement;
(b) a further deposit of HK$2,450,000.00 will be paid by the Purchaser to the Vendor upon the signing of the Formal Agreement, which is expected to be on or before 22 October 2004;
(c) the balance of the consideration of HK$31,050,000.00 will be paid by the Purchaser on or before completion of the Disposal.
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
13-10-2004
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
Completion :
Completion of the sale and purchase of the Property is expected to take place on or before 23 December 2004.
Financial effects of the Disposal
Based on the audited consolidated balance sheet of the Group as at 31 March 2004, the carrying value of the Property as at 31 March 2004 as valued by an independent firm of valuers was HK$26,000,000.00, being the latest valuation carried out on the Property. The Property was acquired in September 2002 at the total purchasing cost of approximately HK$32,200,000.00. Based on the carrying value of the Property of HK$26,000,000.00 as mentioned above and after deducting all relevant expenses, the Company expects to recognise in its income statement a gain of approximately HK$8,000,000.00, subject to audit.
According to the financial statements of the Vendor, the net profit both before and after taxation and extraordinary items attributable to the Property for the financial years ended 31 March 2003 and 31 March 2004 were HK$1,385,000.00 and HK$2,064,000.00 respectively.
Reason for the Disposal
The Disposal is made in view of the improved property market conditions in Hong Kong. The sale proceeds from the Disposal will be used for general working capital purposes of the Group only.
General
The principal business activities of the Group are hotel operation, property rental, securities trading, loan financing and investment holding.
FAR EAST HOTELS AND ENTERTAINMENT LIMITED 13-10-2004
FAR EAST HOTELS AND ENTERTAINMENT LIMITED 13-10-2004
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, the principal business activity of the Purchaser is property investment.
The Directors (including the independent non-executive Directors) are of the view that the Disposal is on normal commercial terms which are fair and reasonable and is in the interest of the Company and its shareholders as a whole.
As the consideration involved in the Disposal represents approximately 18.28% of the total market capitalisation of the Company, the Disposal constitutes a discloseable transaction for the Company under the Listing Rules. A circular containing, amongst other things, details of the Provisional Sale and Purchase Agreement and the Disposal will be sent to the shareholders of the Company in accordance with the requirements of the Listing Rules as soon as practicable.
DEFINITIONS
In this announcement, the following expressions have the following meanings, unless the context otherwise requires :
"Company" Far East Hotels and Entertainment Limited, a company incorporated in Hong Kong with limited liability whose shares are listed on the main board of the Stock Exchange
"connected person" has the meaning ascribed to it under the Listing Rules
"Director(s)" the director(s) of the Company
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
FAR EAST HOTELS AND ENTERTAINMENT LIMITED 13-10-2004
FAR EAST HOTELS AND ENTERTAINMENT LIMITED
"Disposal" the disposal of the Property pursuant to the Provisional Sale and Purchase Agreement
"Formal Agreement" the formal sale and purchase agreement to be entered into between the Vendor and the Purchaser in relation to the sale and purchase of the Property
"Group" the Company and its subsidiaries
"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange
"Property" 3rd Floor to 6th Floor, Lisa House, No.33-37 Nelson Street, Kowloon, Hong Kong, including the car-lift shaft and car-lift installed
"Provisional Sale and Purchase Agreement" the provisional sale and purchase agreement dated 6 October 2004 entered into between the Vendor and the Purchaser in relation to the sale and purchase of the Property
"Purchaser" Wonderful Scenery Properties Limited or its nominees, being independent third party and not a connected person of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
FAR EAST HOTELS AND ENTERTAINMENT LIMITED 13-10-2004
"Vendor"
Jenago Limited, a wholly-owned subsidiary of the Company
On behalf of the Board
Derek Chiu
Managing Director and Chief Executive
Hong Kong, 12 October 2004
As at the date of this announcement, the executive Directors are Mr. Deacon Te-ken Chiu, Mr. Derek Chiu, Mr. Desmond Chiu, Ms. Margaret Chiu; the non-executive Directors are Mrs. Chiu Ju Ching-lan, Mr. Dick Tat-sang Chiu, Mr. David Tat-cheong Chiu, Mr. Dennis Tat-shing Chiu, Mr. Duncan Chiu; the independent non-executive Directors are Mr. Ip Shing-hing, Mr. Ng Wing Hang Patrick, Mr. Choy Wai Shek Raymond; and the alternate Directors are Mr. Chan Chi-hing (alternate Director to Mr. Deacon Te-ken Chiu) and Mr. Tang Sung-ki (alternate Director to Mr. Desmond Chiu).
Please also refer to the published version of this announcement in The Standard dated 13 October 2004.
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