Matrix Holdings Limited — Capital/Financing Update 2000

Apr 10, 2000

Listed Company Information

MATRIX HOLDINGS<1005> - Announcement 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. MATRIX HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) MENTAL RESOURCES LIMITED (Incorporated in the British Virgin Islands with limited liability) RESTRUCTURING PROPOSAL INVOLVING CAPITAL REORGANISATION, ISSUE OF NEW SHARES AND CONVERTIBLE LOAN STOCK, BANK COMPROMISE, MIL COMPROMISE AND GRANT OF THE WHITEWASH WAIVER AND CONNECTED TRANSACTION Financial adviser to Mental Resources Limited Deloitte & Touche Corporation Finance Ltd The Company reproduces in this announcement certain financial information of the Group which has not been previously disclosed. The Circular was despatched to the shareholders of the Company on Friday, 7 April 2000. The timetable for the Restructuring Proposal has been revised and is reproduced in this announcement. The Directors refer to the Announcement regarding the Restructuring Proposal of the Company, the grant of the Whitewash Waiver by the SFC pursuant to the Code and the advances from and the security granted to Mr. James Wong. Unless defined herein, terms defined in the Announcement shall bear the same meanings when used in this announcement. Despatch of the Circular and Convening of the Special General Meeting The Circular was despatched to the shareholders of the Company on 7 April 2000 and a special general meeting to consider the matters mentioned in the Circular will be held at 10:00 a.m. on Sunday, 30 April 2000 at Ballroom East, 2/F, Hotel Nikko Hong Kong, No. 72 Mody Road, Tsimshatsui East, Kowloon. The Directors would like to remind the shareholders of the Company to read the Circular before attending and voting at the special general meeting which will be held on Sunday, 30 April 2000. PROFORMA UNAUDITED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP The following statement of proforma unaudited consolidated net tangible assets of the Group upon completion of the Restructuring Proposal is based on the audited consolidated net liabilities of the Group as at 31 December 1999 of which there are no known material changes since the audited consolidated accounts as at 31 December 1999 have been made and adjusted to reflect the financial effect of the Restructuring Proposal. HK$'000 HK$'000 Audited consolidated net liabilities of the Group as at 31 December 1999 (164,610) Adjustments relating to the Restructuring Proposal Issue of Subscription Shares 10,000 Financial Indebtedness waived 127,564 MIL Indebtedness waived 61,877 Estimated restructuring costs (5,000) -------- Total adjustments 194,441 ------- Proforma unaudited consolidated net assets of the Group upon completion of the Restructuring Proposal 29,831 Issue of Conversion Shares 44,000 ------ 73,831 ====== Proforma unaudited consolidated net liabilities per New Share before completion of the Restructuring Proposal (Note 1) (368) cents Proforma unaudited consolidated net assets per New Share upon completion of the Restructuring Proposal (Note 2) 21 cents Proforma unaudited consolidated net assets per New Share upon issuance of the Conversion Shares (Note 3) 13 cents Notes: 1. Based on the issued share capital of 44,720,000 New Shares after completion of the Capital Reorganisation 2. Based on the enlarged issued share capital of 144,720,000 New Shares after completion of Restructuring Proposal 3. Based on the enlarged share capital of 584,720,000 New Shares after completion of the Restructuring Proposal and upon issuance of the Conversion Shares. As a result of the implementation of the Restructuring Proposal, the audited consolidated net liabilities of the Group of approximately HK$165 million as at 31 December 1999 will become proforma unaudited consolidated net tangible assets of approximately HK$30 million upon completion of the Restructuring Proposal. PROFORMA UNAUDITED CONSOLIDATED BALANCE SHEET OF THE GROUP The following proforma unaudited consolidated balance sheet of the Group upon completion of the Restructuring Proposal is based on the audited consolidated balance sheet of the Group as at 31 December 1999 and adjusted to reflect the financial effect of the Restructuring Proposal. Proforma Adjustments balance arising from the sheet (after implementation completion Audited balance of the of the sheet as at Restructuring Restructuring 31/12/1999 Proposal Proposal) HK$'000 HK$'000 HK$'000 Fixed assets 77,420 77,420 Current assets Bank balances and cash 164 10,455 (i) 10,619 164 10,619 Current liabilities Creditors, accrual and other payables 14,208 14,208 Amount due to director 4,200 (4,200) (ii) - Financial Indebtedness 155,564 (155,564) (iii) - MIL Indebtedness 68,222 (68,222) (iv) - 242,194 14,208 Net current liabilities (242,030) (3,589) Convertible Loan Stock - 44,000 (v) 44,000 Net (liabilities)/assets (164,610) 29,831 Share capital 44,720 (30,248) (vi) 14,472 Capital reserve 55,708 55,708 Retained losses (281,179) 224,689 (vii) (56,490) Other reserve 16,141 16,141 (164,610) 29,831 (i) Bank balances and cash The movement in bank balances and cash comprises the financial effect of the following upon implementation of the Restructuring Proposal: HK$'000 Proceeds from issue of Subscription Shares to MRL 10,000 Proceeds from issue of irredeemable convertible loan stock to MRL 30,000 Cash settlement to MIL (6,345) Cash settlement to Financial Creditors (14,000) Repayment of advance from Mr. Wong (4,200) Estimated restructuring costs (5,000) 10,455 (ii) Amount due to a director The amount represents the repayment of the advance from Mr. Wong as at 31 December 1999. (iii) Financial Indebtedness The amount represents the financial effect of the Restructuring Proposal to the Financial Indebtedness. (iv) MIL Indebtedness The amount represents the financial effect of the Restructuring Proposal to the MIL Indebtedness. (v) Convertible Loan Stock The amount comprises the irredeemable convertible loan stock of an aggregate face value of HK$44,000,000 to be issued to MRL and the Financial Creditors. (vi) Share capital The movement in share capital represents the financial effect of: HK$'000 Capital reduction (40,248 ) Issue of Subscription Shares 10,000 (30,248 ) (vii) Retained losses The movement in retained losses represents the financial effect of: HK$'000 Capital reduction 40,248 Financial Indebtedness waived 127,564 MIL Indebtedness waived 61,877 Estimated restructuring costs (5,000 ) 224,689 Revised EXPECTED TIMETABLE Due to the delay in the bulk printing of the circulars and annual reports to shareholders, the timetable for the Restructuring Proposal has been revised as follows: Original expected Revised expected Events timeframe timeframe Despatching circulars and annual reports 6 April 2000 7 April 2000 Convening special general meeting 29 April 2000 30 April 2000 Announcement of the results of the special general meeting and the completion of the Restructuring Proposal 29 April 2000 3 May 2000 Resumption of the trading of the New Shares on the Stock Exchange 2 May 2000 3 May 2000 The above dates are tentative. Further announcement will be made if there is any change in the timetable. DEFINITIONS "Announcement" joint announcement of the Company and Mental Resources Limited dated 30 March 2000 "Capital Reorganisation" capital reduction by reducing the par value of the issued shares in the capital of the Company from HK$0.10 to HK$0.01 each, and consolidation of every 10 issued shares of HK$0.01 each resulting from the capital reduction into one New Share of HK$0.10 each "Circular" circular issued by the Company dated 7 April 2000 in connection with the Restructuring Proposal of the Company, the grant of the Whitewash Waiver by the SFC pursuant to the Code, the advances from and the security given to Mr. James Wong and the proposed general mandates to issue and repurchase New Shares "Code" Hong Kong Code on Takeovers and Mergers "Conversion Shares" a total of 440,000,000 New Shares which may be issued upon conversion of the HK$30,000,000 and HK$14,000,000 convertible loan stock to be issued to MRL and the financial creditors at a conversion price of HK$0.10 per New Share "Directors" the directors of the Company "Financial Indebtedness" the aggregate amount of HK$155,564,218 outstanding as at 13 April 1999 as agreed amongst the Financial Creditors as the final amount owed by the Group and to be settled in accordance with the terms of the settlement deed dated 21 December 1999 between the Company, the Financial Creditors, Oilpro and MRL "MIL Indebtedness" the aggregate amount of HK$68,222,440 owed by other members of the Group to MIL as at 13 April 1999 as claimed by the liquidators of MIL "Subscription Shares" 100,000,000 New Shares to be issued at HK$0.10 per share to MRL pursuant to the proposed subscription by MRL By Order of the Board By Order of the Board MATRIX HOLDINGS LIMITED Mental Resources Limited Mr. Wong Chak Hung, James Mr. Low Nyap Heng Chairman Director Hong Kong, 7 April 2000 The directors of Matrix Holdings Limited jointly and severally accept full responsibility for the accuracy of the information contained in this announcement, other than for information relating to MRL, Oilpro and Mr. Low, and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading. The directors of Mental Resources Limited jointly and severally accept full responsibility for the accuracy of the information contained in this announcement, other than for information relating to the Group, and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.