Imperium Financial Group Limited — M&A Activity 2007

Oct 5, 2007

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.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

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WING HONG (HOLDINGS) LIMITED 榮康（控股）有限公司[*]

(Incorporated in the Cayman Islands with limited liability) (Stock code: 745)

VERY SUBSTANTIAL ACQUISITION AND RESUMPTION OF TRADING

Financial adviser

Grand Vinco Capital Limited

The Agreement

On 24 September 2007, the Investor, being a wholly-owned subsidiary of the Company, entered into the Agreement with the Vendors and the Target, pursuant to which, the Investor conditionally agreed to invest an aggregate of RMB312 million (equivalent to approximately HK$321.4 million) by ways of (i) subscribing for the new registered capital of the Target in the amount of RMB88.5 million (equivalent to approximately HK$91.2 million); (ii) providing a shareholders’ loan to the Target in the amount of RMB175.5 million (equivalent to approximately HK$180.8 million); and (iii) the Investor will acquire an additional 10% shareholding interest in the Target at a consideration of RMB48 million (equivalent to approximately HK$49.4 million) from the Vendors within a period of 2 years commencing from the date of the signing of the Agreement. The Vendors will not invest further capital into the Target in proportion to their shareholdings. The RMB264 million (equivalent to approximately HK$271.9 million) of capital injection and shareholders’ loan from the Company to the Target will be used for (1) acquiring the LCD display system; (2) expanding the business operation; (3) general administration expenses; and (4) general working capital.

The Acquisition constitutes a very substantial acquisition on the part of the Company under the Listing Rules and is required to be made conditional on Shareholders’ approval pursuant to Rule 14.49 of the Listing Rules. The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Agreement and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, no Shareholder has a material interest in the Acquisition and therefore no Shareholder is required to abstain from voting on the resolution to approve the Acquisition at the EGM.

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A circular containing, amongst other things, further details of the Agreement and the Acquisition, other disclosures in connection with the Agreement and the Acquisition required pursuant to the Listing Rules, the valuation report on the Target prepared by BMI and the notice of the EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

Resumption of Trading

Trading in the Shares was suspended from 9:30 a.m. on 25 September 2007 at the request of the Company pending the issue of this announcement and an application has been made to the Stock Exchange for the resumption of trading in the Shares from 9:30 a.m. on 8 October 2007.

THE AGREEMENT

Date : 24 September 2007 Vendors : Mr. Wang Xue Qin and Mr. Wu Qi (as Vendors), to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Vendors are third parties independent of the Company and connected persons of the Company and the Vendors are not connected with each other Investor : Top Asian Limited, a limited company incorporated in British Virgin Islands, a wholly-owned subsidiary of the Company (as Investor)

Summary of the Acquisition

There is no prior transaction and relationship between the Vendors and the Company, and each of their respective associates and ultimate beneficial owners which require aggregation under Rule 14.22 of the Listing Rules.

Pursuant to the Agreement, the Investor conditionally agreed to (i) subscribe for the new registered capital of the Target of RMB88.5 million (equivalent to approximately HK$91.2 million); (ii) provide a shareholders’ loan to the Target of amount RMB175.5 million (equivalent to approximately HK$180.8 million); and (iii) the Investor will acquire an additional 10% shareholding interest in the Target at a consideration of RMB48 million (equivalent to approximately HK$49.4 million) from the Vendors within a period of 2 years commencing from the date of the signing of the Agreement. The Vendors will not invest further capital into the Target in proportion to their shareholdings. The RMB264 million (equivalent to approximately HK$271.9 million) of capital injection and shareholders’ loan from the Company to the Target will be used for (1) acquiring the LCD display system; (2) expanding the business operation; (3) general administration expenses; and (4) general working capital.

Upon the completion of the Acquisition, the Target will be owned as to 65% (including the additional acquisition of 10% shareholding interest in the Target) by the Investor and as to 35% by the Vendors (in which Mr. Wang Xue Qin and Mr. Wu Qi will be interested in 17.85% and 17.15% equity interest in the Target respectively). Upon Completion and subject to the approval of the relevant PRC regulatory authorities of the Agreement and the articles of association of the Target, the Target will become a sino-foreign joint venture company under the laws of the PRC.

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The investment plan into the Target

Pursuant to the Agreement, an initial investment amount of RMB264 million (equivalent to approximately HK$271.9 million) is to be injected into the Target by cash in the following manner:

1. RMB10 million (equivalent to approximately HK$10.3 million) payable by the Investor to the Vendors within 5 Business Days upon the signing of the Agreement. Such amount together with interest shall be refunded to the Investor if the Vendors do not hold 100% of the shareholding interests of the Target as at 30 November 2007; however, if the Investor fails to complete the payment for the increase in the registered capital of the Target, such amount will not be refunded to the Investor;

2. RMB20 million (equivalent to approximately HK$20.6 million) payable by the Investor to the Target within 5 Business Days upon the completion of legal and financial due diligence by the Investor;

3. RMB17.6 million (equivalent to approximately HK$18.1 million) payable by the Investor to the Target within 10 Business Days upon the issue of the investment approval for foreign investors from the relevant PRC regulatory authority and the opening of the foreign currency account; and RMB70.4 million (equivalent to approximately HK$72.5 million) payable by the Investor to the Target in accordance with the terms of the new articles of association of the Target within 1 year upon the issue of the new business license of the Target. Pursuant to the Agreement, a minimum of RMB50 million (equivalent to approximately HK$51.5 million) shall be paid to the registered capital of the Target by the Investor before January 2008 if the Target has obtained the relevant government regulatory authority for its conversion into a sino-foreign joint venture;

4. a minimum of RMB150 million (equivalent to approximately HK$154.5 million) shall be payable by the Investor to the Target (including the payments in stage 1, 2 and 3 abovementioned), by the end of September 2008; and

5. the remaining balance shall be payable by the Investor to the Target by the end of September 2009.

Pursuant to the Agreement, the Company will acquire an additional 10% shareholding interest in the Target at a consideration of RMB48 million (equivalent to approximately HK$49.4 million) from the Vendors within a period of 2 years commencing from the date of the signing of the Agreement. Therefore, the maximum investment amount made towards the Target will be RMB312 million (equivalent to approximately HK$321.4 million) and the Target will be owned as to 65% (including the additional acquisition of 10% shareholding interest in the Target) by the Company and as to 35% by the Vendors.

Basis of determining the investment amount

The investment amount of RMB312 million (equivalent to approximately HK$321.4 million) will be satisfied by a combination of internal cash resources, bank borrowings and other possible means of financing. The Company will include a detailed plan of funding for the Acquisition in the circular. The investment amount was determined after arm’s length negotiations between the Company and the Vendors with reference to the current market valuation of the Target estimated by BMI, an independent valuer. The market approach has

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been adopted as the valuation method to determine the market value of the 100% equity interest in the Target as at 31 August 2007. The estimated market value by BMI is in the range of RMB480 million and RMB500 million.

Conditions

Completion of the acquisition is subject to the following conditions precedent having been met:

1. the Investor has been satisfied with the results of the financial, legal and business due diligence review exercise conducted on the Target on or before 31 October 2007, including but not limited to (i) the Target is entitled to the absolute exclusivity for media advertising broadcasting in the LCD display placed in front of tickets selling counters in the transit rail stations in the PRC; (ii) the Target is a valid legal entity with all necessary power and authority to own, lease and operate its business; (iii) information provided by the Vendors in relation to the Target remains true, accurate and complete; and (iv) there are no material adverse events which may affect the completion of the Acquisition;

2. the registration of the Vendors as holder of 100% shareholding interest in the Target on or before 30 November 2007;

3. all parties having signed the relevant agreements and documents in relation to the Acquisition on or before 30 November 2007;

4. the Target has obtained the relevant government regulatory authority for its conversion into a sino-foreign joint venture and the registration of the Investor’s investment on the Target’s equity record;

5. no representation or warranties have been breached as at the date of the Agreement that may have material impact to the value of the Target; and

6. the Shareholders’ approval at the EGM has been obtained.

The Directors (including independent non-executive Directors) consider that the terms of the Agreement are fair and reasonable and the entering into of the Agreement is in the interests of the Company and the Shareholders as a whole.

Composite of board of directors of the Target

The board of directors of the Target will comprise seven directors, of which four will be appointed by the Investor and three will be appointed by the Vendors. The managing director and the authorized representative of the Target will be appointed by the Investor.

INFORMATION ON THE TARGET

The Target was established and commenced business on 16 December 2005 under the PRC laws to engage in media sales and management services for the multi-media business and the operation of media advertising spaces together with the provision of rail transit value-added services through LCD displays located at the ticketing offices of each station in the PRC. As at the date of this announcement, the Target is owned as to 27.5% by Mr. Wang Xue Qin, as to 23.5% by Mr. Wu Qi, as to 24.5% by Mr. Yin Can Qiang and 24.5% by Mr. Huang Han Wen

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with a registered capital of RMB500,000 (equivalent to approximately HK$515,000). To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendors, Mr. Yin Can Qiang and Mr. Huang Han Wen are independent of the Company and its connected persons (as defined under the Listing Rules).

As at the date of this announcement, the Target has obtained absolute nationwide exclusive rights for media advertising broadcasting in the LCD display placed in front of tickets selling counters in the transit rail stations in the PRC for 5 years and such rights will be automatically renewed every 5 years and up to a period of 15 years. The Target is entitled to entire amount of advertising profit under such right. However, the Target is obliged to, including but not limited to, use a specific LCD display system for RMB10,000 per display system under the said right and to share a quarter of the LCD screen for displaying details of ticket sale. e.g. origin, destination and price of each ticket etc.

Upon Completion and subject to the approval of the relevant PRC regulatory authorities of the Agreement and the articles of association of the Target, the Target will become a sino-foreign joint venture company under the laws of the PRC.

The Directors are aware that the Vendors do not hold 100% of shareholding interest in the Target as at the date of this announcement; however, it is one of the conditions to the Agreement that the Vendors have to become the holder of 100% shareholding interest in the Target on or before 30 November 2007 and the Acquisition will not proceed if the Vendors fail to become the holder of 100% shareholding interest in the Target as well as if the Company is not satisfied with the financial, legal and business due diligence performed by them on the Target.

The Target was established on 16 December 2005 and is located in Beijing, the PRC. Upon Completion, the Target will become an indirectly 65% (including the additional acquisition of 10% shareholding interest in the Target) owned subsidiary of the Company and the financial results will be consolidated into the Company’s financial statements. As far as the Company is aware, the principal assets of the Target are the advertising rights in the rail transit stations in the PRC. The total investment in the Target is RMB312 million (equivalent to approximately HK$321.4 million) and will be satisfied in cash.

The Target’s financial statements were prepared under the PRC GAAP. The aggregate net profits/loss attributable to the Target for the year ended 31 December 2006 is as follows:

	2006
	RMB
Unaudited net profit/(loss) before taxation and extraordinary items	(1,100,029.49)
Unaudited net profit/(loss) after taxation and extraordinary items	(1,100,029.49)
Net assets/(liabilities) of the Target	(599,799.49)

The Group and the Vendors will share all profit and loss, costs and risk in proportion to their respective interest in the registered capital of the Target.

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INFORMATION ON THE INVESTOR

The Investor is an investment holding company incorporated on 27 August 2007 in British Virgin Islands with limited liability, and is a wholly-owned subsidiary of the Company.

REASONS FOR THE ACQUISITION

The Group is principally engaged in a broad spectrum of construction works, including building construction, renovation and fitting out works for both public and private sectors in Hong Kong.

The Directors have been seeking investment opportunities to broaden the Group’s income base and to expand the Group’s business operation. The Board have considered the following factors, including but not limited to (i) according to National Bureau of Statistics of China, in the first 6 months of 2007, the per capita disposable income of urban households in China reached RMB7,052, representing an increase of 14.2% from the same period in 2006; (ii) for the year ended 31 December 2006, the total railway in the PRC covered approximately 77,000 kilometers and the total passengers turnover in the PRC reached 1.3 billion, representing an increase of 8.7% when compared to 2005; and (iii) for the year ended 31 December 2006, the total revenue generated by the advertising industry reached RMB157.3 billion, representing an increase of 11.1% when compared to 2005.

Based on the foregoing, the Directors are of the view that the consumer market is growing in the PRC. Given the strong turnover in railway and the growing revenue in the PRC advertising industry, the Directors are of the view that the prospect of the advertising market in the PRC is positive. As such, the Directors (including independent non-executive Directors) are of the view the Acquisition and the entering to the Agreement is fair and reasonable and is in the interests of the Company and the Shareholders as a whole. The Directors will also look into the possibility for the Group to expand the media sales business in the PRC if the management is convinced that the investment will provide a reasonable return to the Group.

Upon Completion, the Target will become an indirectly 65% (including the additional acquisition of 10% shareholding interest in the Target) owned subsidiary of the Company and the financial results will be consolidated into the Company’s financial statements.

GENERAL

The Acquisition constitutes a very substantial acquisition on the part of the Company under the Listing Rules and is required to be made conditional on Shareholders’ approval pursuant to Rule 14.49 of the Listing Rules. The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Agreement and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, no Shareholder has a material interest in the Acquisition and therefore no Shareholder is required to abstain from voting on the resolution to approve the Acquisition at the EGM.

A circular containing, amongst other things, further details of the Agreement, other disclosures in connection with the Agreement required pursuant to the Listing Rules, a valuation report on the Target prepared by BMI and the notice of the EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

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UNUSUAL PRICE MOVEMENT

At the request of the Stock Exchange, the Directors wish to address that they have noted the recent increases in the price of the Shares on 24 September 2007.

The Directors also wish to confirm that, save for the Acquisition, there are no negotiations or agreements relating to intended acquisitions or realizations which are discloseable under rule 13.23 under the Listing Rules, neither is the Board aware of any matter discloseable under the general obligation imposed by rule 13.09 under the Listing Rules, which is or may be of a price-sensitive nature.

RESUMPTION OF TRADING

Trading in the Shares was suspended from 9:30 a.m. on 25 September 2007 at the request of the Company pending the issue of this announcement and an application has been made to the Stock Exchange for the resumption of trading in the Shares from 9:30 a.m. on 8 October 2007.

DEFINITIONS

• “Acquisition” the proposed investment of RMB 312 million by the Investor to the Target. Upon the Completion, the Target will be 65% owned by the Investor

• “Agreement” an agreement dated 24 September 2007 made between the Investor and the Vendors in relation to the Acquisition

• “Board” the board of Directors

• “BMI” BMI Appraisals Limited, an independent valuer “Business Day” a day (excluding Saturday and other general holidays in Hong Kong and any day on which a tropical cyclone warning number 8 or above is issued or remains issued between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon or on which a “Black” rainstorm warning is issued or remains in effect between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon) on which licensed banks in Hong Kong are generally open for business

• “Company” Wing Hong (Holdings) Limited, a company incorporated in the Cayman Islands with limited liability and the issued ordinary shares of which are listed on the main board of the Stock Exchange

• “Completion” completion of the transaction pursuant to the Agreement “connected person” has the same meaning ascribed to it under the Listing Rules “Directors” the directors of the Company

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“EGM”	extraordinary general meeting of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Third Party(ies)”	an independent third party(ies), to the best of the Directors’
	knowledge, information and belief having made all reasonable
	enquiry, who is not connected with the Company and its
	connected persons (as defined under the Listing Rules)
“Investor”	Top Asian Limited, being a wholly-owned subsidiary of the
	Company, is an investment holding company incorporated
	on 27 August 2007 in British Virgin Islands with limited
	liability
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	The People’s Republic of China, excluding Hong Kong, the
	Macau SAR and Taiwan for the purpose of this announcement
“PRC GAAP”	the generally accepted accounting principles of the PRC
“Shareholders”	the shareholders of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Target”	北京鐵聯通達廣告傳媒有限公司, a company incorporated
	in the PRC with limited liability
“Vendors”	Mr. Wang Xue Qin and Mr. Wu Qi, both being Independent
	Third Parties
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	per cent

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For the purpose of this announcement,

• (i) the English translation of the Chinese name is for identification only; and

• (ii) conversion of Renminbi into Hong Kong dollars is based on the approximate exchange rate of RMB1 to HK$1.03. No representation is made that any amounts in RMB or HK$ have been, could have been or could be converted at the above rate or at any other rates or at all.

By Order of the Board Wing Hong (Holdings) Limited Hui Chi Yung Chairman

• for identification purposes only

Hong Kong, 5 October 2007

As at the date of this announcement, the board of Directors comprises Mr. Hui Chi Yung, Mr. Yiu Kai Yeuk, Raphael and Mr. Hui Kau Mo as executive Directors and Mr. Liu Kwong Sang, Mr. Sit Hing Wah and Dr. Hu Chung Kuen, David as independent non-executive Directors.

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