Kingwell Group Limited — M&A Activity 2000

Feb 10, 2000

Listed Company Information

FT HOLDINGS<0559> - Announcement FT HOLDINGS INTERNATIONAL LIMITED ANNOUNCEMENT The subsidiaries of the Company have entered into an agreement to acquire the entire issued share capital of Youth Wind and True Colour for the total consideration of HK$10,000,000 to be satisfied as to HK$7,000,000 by cash payment and as to HK$3,000,000 by issuing 40% of the shares in FT Multimedia, the subsidiary used by the Company to acquire the shares of Youth Wind and True Colour. Further to the announcement of the Company dated 31st January, 2000, the board of directors of the Company announces as follows:- 1. An agreement dated 9th February, 2000 ("Agreement") was entered into between the following parties:- i. FT Multimedia ii. Nobleman iii. FT Strategic iv. Youth Wind v. True Colour 2. FT Strategic is an indirect wholly owned subsidiary of the Company and FT Multimedia is a wholly owned subsidiary of FT Strategic. 3. Youth Wind and True Colour are the wholly owned subsidiaries of Nobleman which is beneficially owned by Mr. Eric Todd. Nobleman is a mere holding company and holds no shares in the Company. Both Youth Wind and True Colour are newly incorporated and no accounts have yet been prepared. Each of Nobleman, Youth Wind and True Colour is an independent third party not connected with the directors, chief executive and substantial shareholder of the Company or 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 ("Listing Rules"). 4. Under the Agreement, FT Multimedia agrees to acquire the entire issued share capital of Youth Wind and True Colour for the consideration of HK$10,000,000 to be satisfied as to (a) HK$7,000,000 by cash payment and (b) as to the remaining HK$3,000,000 by issue of shares of FT Multimedia representing 40% of the enlarged entire issued share capital of FT Multimedia after the said issue. The said consideration of HK$10,000,000 is calculated by reference to the profit estimates prepared by Nobleman. 5. FT Strategic will, under the Agreement, advance loan(s) from time to time in the aggregate amount of HK$10,000,000 to FT Multimedia bearing interest at the rate of 10% per annum to finance the operation of FT Multimedia, Youth Wind and True Colour following completion of the Agreement which shall take place on or before 29th February, 2000. The said loans to the aggregate extent of HK$10,000,000 shall be repaid within 3 years time following completion of the Agreement and disclosure of the particulars of the loan(s) will be made in compliance with Rule 14.25(2)(a) of the Listing Rules. 6. Youth Wind is engaged in the business of production, acquisition and distribution of children programmes and any other related multi-media businesses and True Colour is engaged in the business of production, acquisition and distribution of films and TV programmes and any other related multi-media businesses and Youth Wind and True Colour have at present no operating profit. Youth Wind and True Colour intend to carry on business in the People's Republic of China. These two companies will produce its own films and TV programmes and source other supplies from Taiwan and Japan. 7. Under the Agreement, Nobleman has the option to purchase from FT Strategic 3,000 shares of FT Multimedia (representing 30% of the enlarged issued share capital of FT Multimedia following completion of the Agreement) within the period from 2nd anniversary following completion of the Agreement and ending on the 5th anniversary following the said completion. 8. Following completion of the Agreement and before exercise of the option, Nobleman will hold 40% shareholdings in FT Multimedia and Nobleman will become holder of 70% of the issued share capital of FT Multimedia upon full exercise of the option. 9. The option price per share for the option mentioned in paragraph 7 above shall be equalled to the sum of (x) + (y). Whereas:- (x) = the amount arrived at by dividing the sum of HK$10,000,000 by 6,000; (y) = the amount arrived at by dividing the accumulated profits of FT Multimedia, Youth Wind and True Colour (net of tax and inter-company transactional profits, if any, inclusive of extraordinary items but before write-off of intangible assets (including but not limited to goodwill, if any) and before dividend declared or paid) for the financial periods following completion of the Agreement but up to the date of receipt of the option notice by FT Strategic by 10,000. 10. In this announcement:- "Company" means FT Holdings International Limited "FT Multimedia" means FT Multi-Media Limited "FT Strategic" means FT Strategic Investments Limited "Nobleman" means Nobleman Holdings Limited "True Colour" means True Colour Associates Limited "Youth Wind" means Youth Wind Company Limited 11. (For the group charts both before and after completion of the Agreement, please refer to the press announcement today.) By Order of the Board FT Holdings International Limited Lai Kam Wing, Jimmy Chairman and Managing Director Hong Kong, 9th February, 2000