Hung Hing Printing Group Limited — M&A Activity 2000

Apr 7, 2000

Listed Company Information

NOBLE LINK HOLD<0254> - Announcement This announcement is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities. 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. NOBLE LINK HOLDINGS LIMITED (to be renamed as "eCyberChina.net Limited") (Incorporated in Hong Kong with limited liability) DISCLOSEABLE AND SHARE TRANSACTION The Directors of the Company announce that on 6th April, 2000, the Purchaser, a wholly-owned subsidiary of the Company, entered into a Deed of Option with Wuhan XH whereby an Option was granted to the Purchaser by Wuhan XH to acquire the Sale Shares which represent its existing entire 51% holding in Nanhai Company. The aggregate consideration of the Deed of Option is RMB50,000,000 (approximately HKD46,700,000). The consideration will be settled as to RMB30,000,000 (approximately HKD28,000,000) in cash and as to RMB20,000,000 (approximately HKD18,700,000) by the issuance and allotment of the Consideration Shares. The Consideration Shares will be issued and allotted at a price of HKD1.75 each. The Company shall issue 10,680,000 shares at a price of HKD1.75 each to Wuhan XH or its nominee as Consideration Shares which will represent 5.1% and 4.8% of the existing and enlarged share capital of the Company respectively. The Consideration Shares shall rank pari passu in all aspects with the then existing share capital of the Company. The issue of the Consideration Shares shall be subject to the approval of shareholders of the Company at an extraordinary general meeting. The Company will apply to the Stock Exchange for the granting of the listing of and permission to deal in the Consideration Shares. The underlying transaction with regard to the Deed of Option constitutes a discloseable and share transaction for the Company. A circular containing further details of the Deed of Option and a notice of extraordinary general meeting will be despatched to the shareholders of the Company as soon as practicable. DEFINITIONS "Company" Noble Link Holdings Limited "Consideration Shares" being 10,680,000 ordinary shares of HKD1.00 each of the Company to be issued and allotted to Wuhan XH or its nominee "Deed of Option" a Chinese deed of option entered into between the Purchaser and Wuhan XH whereby an Option was granted to the Purchaser to acquire the Sale Shares "Group" the Company and its subsidiaries "Listing Rules" Rules Governing the Listing of Securities on the Stock Exchange "Nanhai Company" * a limited liability company incorporated under the laws of the PRC which owns a licence with operation right of broad band services in Nanhai, the PRC for 10 years, is 51% owned by Wuhan HX and 49% owned by an independent third party in the PRC "Option" the option granted by Wuhan XH to the Purchaser to acquire the Sale Shares under the Deed of Option "PRC" the People's Republic of China "Purchaser" Uplift Technology Limited, a company incorporated in the British Virgin Islands and is a wholly-owned subsidiary of the Company "RMB" means Renminbi, the lawful currency of the PRC "Sale Shares" being the entire 51% shareholding held by Wuhan XH in Nanhai Company "Shengguang Group" (Shengguang Group), a company incorporated under the laws of the PRC and engages in electronic device technology, development of internet-related products, research, technological advisory and services, cable equipment, cable manufacturing and sales "Stock Exchange" The Stock Exchange of Hong Kong Limited "Wuhan XH" *, a company incorporated under the laws of the PRC on 21st October, 1999 and is controlled by Shengguang Group and currently it has three directors who are not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates as defined under the Listing Rules. Its principal business is the development of broad band and internet-related businesses in the PRC. BACKGROUND The Company announced on 22nd March, 2000 that it has entered into a letter of intent with Wuhan XH to develop broad band data transmission business in Nanhai, the PRC. DEED OF OPTION On 6th April, 2000, the Purchaser and Wuhan XH entered into the Deed of Option under which the Option shall be granted to the Purchaser by Wuhan XH to purchase the Sale Shares, being the entire 51% equity interest of Wuhan XH in Nanhai Company, if and when permitted under the laws and regulations of the PRC. The Option shall be valid for a period of 10 years from the date of the Deed of Option, i.e. from 6th April, 2000 to 5th April, 2010 (both days inclusive). If the Option is not exercised by the Purchaser within 5 years from the date of the Deed of Option, the Purchaser can ask for refund of all the consideration paid to Wuhan XH (including Consideration Shares which will be valued at RMB20 million (approximately HKD18,700,000)) in cash with interest at a rate to be agreed upon completion. INFORMATION ABOUT WUHAN XH Wuhan XH is a company incorporated in the PRC on 21st October, 1999 and is controlled by Shengguang Group. Wuhan XH is principally engaged in the development of broad band and internet-related businesses in the PRC. All of Wuhan XH and its beneficial owners and directors are independent third parties not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates as defined under the Listing Rules. Wuhan XH owns 51% of the issued/registered share capital of Nanhai Company and the remaining 49% is held by an independent third party in the PRC. INFORMATION ABOUT NANHAI COMPANY Nanhai Company is a company incorporated in the PRC which engages in the development of broad band and internet- related businesses in Nanhai, the PRC. Nanhai Company, its beneficial owners and directors are independent third parties not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates as defined under the Listing Rules. Nanhai Company has a registered capital and unaudited net assets value both of RMB29,410,000 (approximately HKD27,500,000). Nanhai Company owns a licence with operation right of broad band services in Nanhai, the PRC for 10 years. It is newly incorporated and does not have any audited financial statements in the past. It is expected that the major source of income for Nanhai Company in future will be derived from its operations of broad band businesses in Nanhai, the PRC. INFORMATION ABOUT SHENGGUANG GROUP Shengguang Group is a PRC company which engages in electronic device technology, development of internet- related products, research, technological advisory and services, cable equipment, cable manufacturing and sales. Shengguang Group, its beneficial owners and directors are independent third parties not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates as defined under the Listing Rules. CONSIDERATION The aggregate consideration of the Deed of Option is RMB50,000,000 (approximately HKD46,700,000). The consideration will be settled as to RMB30,000,000 (approximately HKD28,000,000) in cash and as to RMB20,000,000 (approximately HKD18,700,000) by the issue and allotment of the Consideration Shares. The consideration will be paid by the Purchaser to Wuhan XH in the following manner:- (1) The Purchaser shall pay a refundable deposit of RMB10,000,000 (approximately HKD9,300,000) to Wuhan XH immediately after the signing of the Deed of Option. (2) Within a period of 14 days after the date of signing of the Deed of Option or such later date as agreed between the parties, the Purchaser shall complete a due diligence exercise in respect of the legal and financial aspects and all necessary information of Nanhai Company. The Purchaser shall pay a further refundable deposit of RMB10,000,000 (approximately HKD9,300,000) upon the satisfaction of the due diligence exercise. (3) On or before 30th June, 2000, the Purchaser shall pay the balance of RMB10,000,000 (approximately HKD9,300,000) and deliver the Consideration Shares to Wuhan XH upon the satisfaction of all conditions precedent or as waived by the parties. The Consideration Shares shall be issued at a price of HKD1.75 each, being the closing price of the shares of the Company as at 6th April, 2000 and representing a discount of 6% to the average closing price of HKD1.866 of the shares of the Company for the ten days immediately prior to the date of signing of the Deed of Option. The Company shall issue 10,680,000 shares of the Company at a price of HKD1.75 each to Wuhan XH or its nominee as Consideration Shares which will represent 5.1% and 4.8% of the existing and enlarged share capital of the Company respectively. The Consideration Shares shall rank pari passu in all aspects with the then existing share capital of the Company. The issue and allotment of the Consideration Shares is subject to shareholders' approval at an extraordinary general meeting of the Company. The Company will apply to the Stock Exchange for the granting of the listing of and permission to deal in the Consideration Shares. No further consideration is required at the time of exercising the Option. The consideration will be financed by internal resources and general banking facilities. CONDITIONS PRECEDENT The Deed of Option is conditional on the satisfaction of certain conditions precedent, including but not limited to the following, on or before 29th June, 2000:* (a) legal and financial due diligence on Nanhai Company to the satisfaction of the Purchaser; (b) legal opinion issued by an acceptable PRC lawyer firm confirming the enforceability and validity of the Deed of Option and the underlying transaction; (c) the approval of shareholders of the Company at an extraordinary general meeting to issue and allot the Consideration Shares; (d) the granting by the Stock Exchange the listing of and permission to deal in the Consideration Shares; (e) provision of security including but not limited to the execution of a charge document for the pledging of 51% registered share capital of Nanhai Company by Wuhan XH to the Purchaser or its nominee until the Purchaser has successfully exercised the Option; (f) provision of capital verification report on Nanhai Company; and (g) all necessary approvals, permits, licences, consents or approvals of all governmental authorities in the PRC, Hong Kong and elsewhere for all transactions contemplated in the Deed of Option have been obtained, if necessary. OTHER TERMS Wuhan XH and Nanhai Company undertook to the Purchaser that during the period after the completion of the Deed of Option but before the exercise of the Option, the Purchaser shall be entitled to receive 40% of the monthly revenue of Wuhan XH as allowed under the PRC laws. The Purchaser shall have the right to nominate directors to the board of Nanhai Company and the number of appointees is to be agreed upon completion. At present, the existing board of Nanhai Company comprises seven persons. REASONS FOR THE OPTION The principal activity of the Company is investment holding. The principal activities of its subsidiaries are property investment, development and related businesses. The Company is continuing to seek investment opportunities which will broaden the asset bases and strengthen the income stream of the Group. The management is strategically planning to widen the Company's businesses to broad band related business as a way of increasing the competitiveness and diversification of the Company. The Deed of Option will enable the Company to participate in broad band services and internet-related businesses in Nanhai, the PRC. If foreign investors are permitted to operate cable services and internet-related businesses in the PRC as and when permitted under the PRC laws and regulations in future, the Purchaser shall exercise the Option pursuant to the Deed of Option and acquire the 51% equity interests in Nanhai Company. The Directors considered the terms of the Deed of Option are fair and reasonable with reference to the unaudited net assets value, registered capital and projected earnings of Nanhai Company and arrived at after arm's length negotiation and the transaction is in the best interest of the Company and the shareholders as a whole. GENERAL The underlying transaction with regard to the Deed of Option constitutes a discloseable and share transaction for the Company and requires shareholders' approval at an extraordinary general meeting. A circular containing further details of the Deed of Option and a notice of extraordinary general meeting will be despatched to the shareholders as soon as practicable. By Order of the Board Noble Link Holdings Limited Li Zhao Director Hong Kong, 6th April, 2000 (* for the Chinese name, please refer to the press announcement today.)