Guoxia Technology Co., Ltd. — Share Issue/Capital Change 1999

Nov 15, 1999

Listed Company Information

ANANDA WING ON<1189> - Announcement & Resumption of Trading 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. ANANDA WING ON TRAVEL (HOLDINGS) LIMITED (Incorporated in Bermuda with limited liability) Issue of New Shares Subscription of Shares in Star East Holdings Limited and Memorandum of Understanding for the Setting up of a Joint Venture On 13th November, 1999, the Company entered into the Agreement with SEH. Pursuant to the Agreement: 1. the Company has agreed to issue, and SEH has agreed to subscribe for, by itself or through a wholly-owned subsidiary, 73,333,333 new Shares at a price of HK$1.575 per Share; and 2. SEH has agreed to issue, and the Company has agreed to subscribe for, by itself or through a wholly-owned subsidiary, 55,000,000 new SEH Shares at a price of HK$2.10 per SEH Share. Completion of the Agreement is subject to certain conditions and is scheduled to take place on the second business day following the satisfaction of such conditions. Following completion of the Agreement, SEH will hold an approximately 9.5 per cent. interest in the Company. In addition, it is expected that the Company will not be a substantial shareholder of SEH. On 13th November, 1999, the Company entered into a legally binding MOU with the MOU Investors pursuant to which it is intended that the JV Company will be established to carry on the JV Business. The shares of the Company were suspended with effect from 10:00am on 12th November, 1999. The Company has made a request to the Stock Exchange for resumption of trading in the shares of the Company with effect from 10:00am on 15th November, 1999. On 13th November, 1999, Ananda Wing On Travel (Holdings) Limited (the "Company", and together with its subsidiaries, the "Group") entered into a conditional agreement (the "Agreement") with Star East Holdings Limited ("SEH"). On the same date, the Group entered into a legally binding memorandum of understanding ("MOU") with certain investors (the "MOU Investors", including SEH), pursuant to which a joint venture company ("JV Company") will be established to carry on the JV Business (as defined below). THE AGREEMENT 1. Date of the Agreement: 13th November, 1999 2. Parties: * the Company * SEH, a company incorporated in Bermuda with limited liability, the shares of which are listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). 3. New Shares to be issued by the Company 73,333,333 shares in the Company ("Shares"), representing approximately 10.5 per cent. of the existing issued share capital of the Company and approximately 9.5 per cent. of the issued share capital of the Company as enlarged by such issue of new Shares. Total consideration receivable in respect of the issue of the Shares amounts to approximately HK$115.5 million. The new Shares will be issued pursuant to the authority granted to the directors of the Company ("Directors") at its annual general meeting held on 27th September, 1999. The 73,333,333 Shares will be issued free of any third party rights and will rank pari passu in all respects with the existing Shares, together with all rights attached thereto upon completion of the Agreement. There is no lock-up provision in respect of the new Shares under the Agreement. 4. Price of the new Shares to be issuedHK$1.575 per Share (the "Issue Price") which was arrived at after arm's length negotiation. The Issue Price represents a discount of approximately 11.5 per cent. to the 10-day average closing price for the period from 29th October, 1999 to 11th November, 1999 of approximately HK$1.78 per Share as quoted on the Stock Exchange and a discount of approximately 17.1 per cent. to the closing price of HK$1.90 per Share on 11th November, 1999. 5. SEH Shares to be subscribed by the Company 55,000,000 shares in SEH (the "SEH Shares"), representing approximately 16.6 per cent. of the existing issued share capital of SEH. It is expected that the Company will not be a substantial shareholder of SEH. The 55,000,000 SEH Shares will be issued free of any third party rights and will rank pari passu in all respects with the existing SEH Shares, together with all rights attached thereto upon completion of the Agreement. There is no lock-up provision in respect of the new SEH Shares under the Agreement. The Company does not have a right to appoint directors to the board of SEH under the Agreement. 6. Subscription Price of SEH Shares HK$2.10 per SEH Share (the "Subscription Price") which was arrived at after arm's length negotiation. The Subscription Price represents a discount of approximately 6.9 per cent. to the 10-day average closing price for the period from 29th October, 1999 to 11th November, 1999 of approximately HK$2.26 per SEH Share as quoted on the Stock Exchange and a discount of approximately 9.7 per cent. to the closing price of HK$2.325 per SEH Share on 11th November, 1999. Total consideration payable in respect of the subscription of the SEH Shares amounts to approximately HK$115.5 million. 7. Conditions and completion of the Agreement Completion of the Agreement will take place on the second business day following the satisfaction, or waiver, of the conditions to which completion of the Agreement is subject on or before 15th January, 2000, or such later date as may be agreed by the parties to the Agreement, including:* (a) approval from the Stock Exchange for the granting of listing of, and permission to deal in, the Shares and the SEH Shares; (b) if necessary, the Bermuda Monetary Authority consenting to the issue of the SEH Shares; (c) the approval of the issue of SEH Shares by SEH's shareholders who are permitted under the Rules Governing the Listing of Securities on the Stock Exchange and the Hong Kong Codes on Takeovers and Mergers to vote at a special general meeting of SEH; (d) the shares of SEH and the Company, respectively, remaining listed on the Stock Exchange at all times until completion of the Agreement (save for temporary suspension not exceeding five consecutive trading days) and the listing of the shares of SEH and the Company, respectively, not having been withdrawn or objected to as a result of the Agreement; and (e) all necessary consents or approvals of governmental or regulatory authorities or relevant third parties, if required, which are required or appropriate for the entering into or the implementation or completion of the Agreement having been obtained. 8. Effect on the Company The 73,333,333 new Shares represent approximately 10.5 per cent. of the Company's existing issued share capital and approximately 9.5 per cent. of the Company's issued share capital as enlarged by the issue of such new Shares. Prior to completion of the Agreement, Messrs. Chan Yeuk Wai and Chan Yeuk Pun ("Messrs. Chan") are beneficially interested in 427,220,444 Shares representing approximately 61.4 per cent. of the issued share capital of the Company. Following completion of the Agreement, Messrs. Chan will be beneficially interested in approximately 55.5 per cent. of the enlarged share capital of the Company. The interests of Messrs. Chan and SEH in the Company immediately before and immediately after completion of the Agreement are set out below: Immediately before Immediately after Substantial completion completion shareholders of the Agreement of the Agreement Messrs. Chan 427,220,444 427,220,444 (approximately (approximately 61.4 per cent.) 55.5 per cent.) SEH 0 73,333,333 (approximately 9.5 per cent.) 9. Information on SEH SEH is a public company incorporated in Bermuda, the shares of which are listed on the Stock Exchange. The company is principally engaged in entertainment related businesses in the Asia Pacific region, mortgage financing, property investment and development. The company has recently expanded into the franchising of entertainment complexes and theme restaurants and the provision of global Chinese content for entertainment and lifestyle information through the Internet. According to SEH's 1999 annual report, the audited consolidated net asset value of SEH as at 31st March, 1999 was approximately HK$279 million and its audited net loss for the fifteen months ended 31st March, 1999 was approximately HK$990 million. SEH is independent of any of the directors, chief executives or substantial shareholders of the Company, any of its subsidiaries or any of their respective associates (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited). THE MEMORANDUM OF UNDERSTANDING Pursuant to the MOU, the parties thereto, being the Company, SEH and other MOU Investors, have agreed to use their respective best endeavours to establish the JV Company. The MOU Investors are third parties independent of the Company. The principal business of the JV Company will be the establishment and operation of a web site which will offer general information related to travel and leisure for various countries and cities worldwide, packaged tour information and on-line booking services related to travel and leisure (the "JV Business"). It is intended that the Group will be the single largest shareholder of the JV Company and will hold a 50 per cent. interest in the JV Company with the right to appoint three out of the six directors of the JV Company. SEH will hold 20 per cent. interest in the JV Company with the other MOU Investors holding 10 per cent. interest and 20 per cent. interest in the JV Company. The MOU Investors and the Company have agreed to use their respective best endeavours to enter into definitive agreements to establish and capitalise the JV Company on or before 31st January, 2000. Investment amount in respect of the JV Company is yet to be agreed. A further announcement in relation to the JV Company will be made, as appropriate. REASONS FOR ENTERING INTO THE AGREEMENT AND THE MOU The Group is principally engaged in the business of providing package tours, travel, transportation and other related services. The Directors believe that the reciprocal investment made by SEH and the Company will strengthen the existing relationship between the two businesses, which is especially important given the mutual intention to establish the JV Company, as evidenced by the MOU. The Directors have entered into the MOU since they believe that both SEH and the Company offer singular strengths which will assist in the establishment and operation of the JV Business. RECENT PRESS ARTICLE The Board has noted the contents of certain articles which appeared in recent newspapers (the "Articles") making certain erroneous assertion concerning, inter alia, a possible sale of a property by SEH to the Company for convertible notes of the Company. In light of the Articles, the Board would like to clarify that such assertion is erroneous and the Board is not currently negotiating with SEH in respect of such property sale. The shares of the Company were suspended with effect from 10:00am on Friday, 12th November, 1999 at the request of the Company pending an announcement. The Company has made a request to the Stock Exchange for resumption of trading in the shares of the Company with effect from 10:00am on Monday, 15th November, 1999. By Order of the Board of Ananda Wing On Travel (Holdings) Limited Chan Yeuk Wai Chairman Hong Kong, 13th November, 1999