Multifield International Holdings Limited

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 securities.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 898)

Announcement

DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUANCE OF SHARES

The board of directors is pleased to announce that on 27 July 2004 Multifield through Lucky Business, its wholly owned subsidiary, entered into a conditional Agreement with Ponting under which Lucky Business agreed to purchase from Ponting the Equity Interest in Triple Luck.

The consideration for the purchase is HK$40,914,685.00 was determined according to the management accounts of Triple Luck and will be satisfied by Lucky Business procuring Multifield to allot and issue of 179,844,769 fully paid Shares to Ponting on Completion Date at HK$0.2275 per Share which represents (i) a premium of approximately 82% over the closing price of HK$0.125 per Share quoted on the Stock Exchange prior to the suspension of trading in the Shares on 28 July 2004; and (ii) a premium of approximately 75.80% over the average closing price of HK$0.1294 per Share for the five trading days up to and including 27 July 2004. The transaction contemplated under the Agreement constitutes a discloseable transaction and a connected transaction and under Rules 14.06(2) and 14A.18 of the Listing Rules respectively and is therefore subject to independent shareholders’ approval by poll at the SGM. The consideration for the acquisition of the Equity Interest is based on arm’s length negotiation between Lucky Business and Ponting with reference to the audited net asset value of HK$40,914,685.00 as at 31 December 2003 of Equity Interest. Based on the last trading price of HK$0.125 per share, the aggregate consideration would be HK$22,480,596.00.

Application will be made to the Stock Exchange for the listing of and permission to deal in the Consideration Shares.

As Ponting holds more than 10% equity interest in Triple Luck, the above transaction constitutes a connected transaction of Multifield under Chapter 14A of the Rules Governing the Listing of Securities on the Stock Exchange. The above transaction also constitutes a discloseable transaction of Multifield under Rule 14.06(2) of the Listing Rules.

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The above transaction is therefore subject to independent shareholders’ approval at the SGM under Rule 14A.18 and any vote for such approval must be taken by poll. An independent financial adviser will be appointed to advise the independent board committee and independent shareholders of Multifield on the above transaction.

The above transaction is also subject to reporting requirements as set out in Rule 14A.45.

At the request of Multifield, trading in the Shares has been suspended at 9:30 a.m. on 28 July 2004 pending the release of this announcement. Application has been made by Multifield in respect of the resumption of trading of the Shares on the Stock Exchange at 9:30 a.m. on 5 August 2004.

Multifield will send a circular containing, among others, the letters from the independent financial adviser to be appointed and the independent board committee respectively and further details on the above transaction to the shareholders as soon as practicable and in any event within 21 days after publication of this announcement.

THE AGREEMENT

Date:

27 July 2004

Parties:

Lucky Business
Ponting

The Directors confirm that, to the best of their knowledge, information and belief and having made all reasonable enquiries, save for Ponting’s holding in Triple Luck, Ponting and its ultimate beneficial owners, Mr. Wit Viriyaprapaikit, are not connected with the Directors, chief executive and substantial shareholders of Multifield and its subsidiaries and their respective associates (as defined under the Listing Rules).

Transaction

Pursuant to the Agreement, Lucky Business agreed to purchase and Ponting, a company incorporated in the British Virgin Islands, agreed to sell the Equity Interest.

Lucky Business and Ponting are currently holding 57.50% and 42.50% respectively equity interest in Triple Luck, an investment holding company holding principally Multifield Plaza.

Upon completion of the Agreement, Triple Luck will become an indirect wholly owned subsidiary of Multifield.

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Consideration

Pursuant to the Agreement, Lucky Business agreed to satisfy the consideration of HK$40,914,685 for the Equity Interest by procuring Multifield to allot and issue 179,844,769 fully paid Shares to Ponting, as Ponting may direct, at the value of HK$0.2275 per Share on Completion Date as mutually agreed by parties to the Agreement on arm’s length negotiation with reference to the audited net asset value of the Triple Luck group of HK$96,269,849.00 as at 31 December 2003. There is no restriction on any subsequent sale of the Consideration Shares.

The directors of Multifield consider that the satisfaction of the consideration for the acquisition of the Equity Interest by allotment of shares of Multifield facilitates its maintenance of its cashflow position.

Neither Ponting nor its ultimate beneficial owner currently beneficially holds any interest in the Company. The Consideration Shares represent approximately 4.50% of the existing issued share capital of Multifield and approximately 4.30% of the issued share capital of Multifield as enlarged by the issue and allotment of the Consideration Shares. Ponting shall on completion of the Agreement own approximately 4.30% of the enlarged issued share capital of Multifield. The Consideration Shares upon issue and allotment will rank pari passu in all respect with the issued Shares including as to dividends and voting rights.

The effect of the issue of the Consideration Shares on the shareholding structure of Multifield is as follows:

Power Resources (Note 1) Lucky Speculator (Note 1) Tsang Pak Chung Eddy (Note 2) Ponting Public Total	As at the date of this announcement Shares % 2,327,424,000 58.18% 2,195,424,000 54.88% 6,842,880 0.17% 0 0% 1,666,259,443 41.65% 4,000,526,323 100%	Upon Completion Shares % 2,327,424,000 55.68% 2,195,424,000 52.52% 6,842,880 0.16% 179,844,769 4.30% 1,666,259,443 39.86% 4,180,371,092 100%	Upon Completion Shares % 2,327,424,000 55.68% 2,195,424,000 52.52% 6,842,880 0.16% 179,844,769 4.30% 1,666,259,443 39.86% 4,180,371,092 100%
			100%

Note 1: Power Resources is beneficially owned by Mr. Lau Chi Yung Kenneth, executive director and Chairman of the Company. Power Resources was deemed to have a beneficial interest in 2,327,424,000 ordinary shares of Multifield by virtue of its indirect interests through Lucky Speculator and a wholly-owned subsidiary which held shares in Multifield.

Note 2: Mr. Tsang Pak Chung Eddy is a non executive director of the Multifield

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A simplified shareholding chart illustrating the shareholding of Multifield before and after the issue of the Consideration Shares is as follows:

Before the issue of the Consideration Shares

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----- Start of picture text -----

Tsang Pak
Power Resources Public
Chung Eddy
100%
Lucky Speculator 3.3% 0.17% 41.65%
54.88%
Multifield
100%
Lucky Business Ponting
57.5% 42.5%
Triple Luck
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After the issue of the Consideration Shares

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Tsang Pak
Power Resources Public Ponting
Chung Eddy
100%
Lucky Speculator 3.16% 0.16% 39.86% 4.3%
52.52%
Multifield
100%
Lucky Business
100%
Triple Luck
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Application will be made to the Stock Exchange for the listing of and premission to deal in the Consideration Shares.

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Completion

The obligation of Lucky Business to purchase the Equity Interest under the Agreement is conditional upon the fulfillment of the following conditions precedent:

(a) the passing by the independent shareholders of Multifield in general meeting of an ordinary resolution approving by poll approving the Agreement and the transactions contemplated therein (including issue of the Consideration Shares); or the obtaining of approval to be given in lieu of a resolution passed at a general meeting; and
(b) the Stock Exchange granting the listing of and permission to deal in the Consideration Shares, subject only to the allotment and issue of the Consideration Shares.

Completion shall take place on the business day (other than Saturday) following the date on which the last condition precedent to the Agreement is fulfilled or such other time determined by Lucky Business.

Basis of Determination of the Consideration

The Consideration has been arrived at after arm’s length negotiation and on normal commercial terms by reference to the audited net asset value of Triple Luck group for the year ended 31 December 2003 in the sum of HK$96,269,849.00.

The audited net profit of the Triple Luck group for the financial year ended 31 December 2002 before and after tax amounted to HK$2,332,625.00 and HK$659,846.00 respectively and for the financial year ended 31 December 2003 before and after tax amounted to HK$4,008,219.00 and HK$3,219,200.00 respectively whilst the audited net asset value for the financial years ended 31 December 2002 and 2003 of the Triple Luck group amounted to HK$93,050,641.00 and HK$96,269,849.00 respectively. The rental income received by the Triple Luck group for the years 2002 and 2003 amounted to HK$12,344,756.00 and HK$11,671,338 respectively.

The Board (including the independent non-executive Directors) of Multifield considers the terms and conditions of the Agreement are fair and reasonable and are in the interests of Multifield insofar as the independent shareholders of Multifield are concerned and are on normal commercial terms.

Information on Lucky Business

Lucky Business is a limited liability company incorporated under the laws of the British Virgin Islands and is a wholly owned subsidiary of Multifield. It is an investment holding company and its only asset is the 57.50% interests in Triple Luck.

Information on Ponting

Ponting is a limited liability company incorporated under the laws of the British Virgin Islands. It engages in the business of investment holding of the 42.50% interests in Triple Luck the original cost of which is HK$119,786,675.00.

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Information on Triple Luck

Triple Luck is a company incorporated in the British Virgin Island with limited liability and is currently owned as to 57.50% by Lucky Business and 42.50% by Ponting. It is an investment holding company holding 8 floors and unit 701 in Multifield Plaza and unit 7B in Rose Mansion.

Reasons for entering into the Agreement

The principal activity of Multifield is investment holding while its subsidiaries are engaged in the business of investment holding, provision of property management services, property investment, property lending, metal trading, vessel holding, provision of property agency services, provision of consultancy services, trading of electronic products and manufacture of electronic components. Prior to the completion of Agreement, the Group holds 57.50% interests in Triple Luck, a company formed on 13 August 1996 by Multifield by subscribing 28,750 shares of US$1.00 each at the price of US$28,750.00 and Ponting at that same time subscribing 21,250 shares of US$1.00 each (representing 42.50% interest in Triple Luck) at the price of US$21,250.00. Triple Luck through its wholly owned subsidiaries owns 8 floors and unit 701 in Multifield Plaza, a block of commercial building located in Tsimshatsui, Kowloon and unit 7B in Rose Mansion, a block of residential building located in Tsimshatsui, Kowloon being its only assets. The valuation of those interests held by Triple Luck in Multifield Plaza and Rose Mansion are reflected in the consolidated audited accounts of Multifield made up to 31 December 2003 at HK$288,000,000.00 and HK$1,400,000.00 respectively. Upon completion of the Agreement, Triple Luck will become a wholly owned subsidiary of Multifield and thereby enhancing the completeness of ownership by Multifield of Multifield Plaza.

The Directors of Multifield believe that with full control over Triple Luck, the asset base of Multifield would be enhanced and will further enhance the core business of Multifield. It would also enhance Multifield’s overall management control of Multifield Plaza.

Connected and Discloseable Transaction

Ponting is currently holding 42.50% equity interest in Triple Luck while the remaining interest of 57.50% is held by Lucky Business. Accordingly, Ponting is a substantial shareholder of Triple Luck, currently a non-wholly owned subsidiary of Multifield. The transaction contemplated by the Agreement therefore constitutes a connected transaction of Multifield under the Listing Rules.

Based on the five size tests performed, the percentage ratios under the market capitalisation and total assets tests exceeded 5% but less than 25% as disclosed in the Multifield’s latest published audited accounts for the year ended 31 December 2003. Accordingly, the Agreement constitutes a discloseable transaction under the Listing Rules.

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As each of the percentage ratios under the equity capital, market capitalisation and asset tests performed exceeded 2.5% and the total consideration exceeded HK$10,000,000.00, the transaction contemplated by the Agreement would also subject to independent shareholders’ approval by poll at the SGM under the Listing Rules. An independent adviser will be appointed to advise the independent board committee and independent shareholders of Multifield on the transaction contemplated by the Agreement.

Power Resources is the controlling shareholder of Multifield currently holding 58.18% of issued share capital of Multifield. Save as the shareholder of Multifield, Power Resources is not interested in the Agreement or any transactions as contemplated under the Agreement. No shareholder, including Power Resources, is required to abstain from voting.

The transaction contemplated by the Agreement is also subject to reporting requirements as set out in Rule 14A.45.

General

Multifield is an investment holding company incorporated in Bermuda and the activities of its subsidiaries include the business of investment holding, provision of property management services, property investment, property lending, metal trading, vessel holding, provision of property agency services, provision of consultancy services, trading of electronic products and manufacture of electronic components.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:-

“Agreement”	the agreement dated 27 July 2004 made between Lucky
	Business and Ponting
“Completion”	completion of the Agreement in accordance with its terms
	and conditions
“Consideration”	the consideration of HK$40,914,685.00 to be satisfied by the
	allotment and issue of the Consideration Shares pursuant to
	the Agreement

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“Consideration Shares”

179,844,769 Shares to be allotted and issued by Multifield as the Consideration
“Equity Interest” the 42.50% equity interest currently held by Ponting in Triple Luck
“Group” Multifield together with its subsidiaries
“HK$” Hong Kong dollars, the lawful currency of the Hong Kong Special Administrative Region of the PRC
“Listing Rules” Rules Governing the Listing of Securities on the Stock Exchange
“Lucky Business” Lucky Business International Limited, a company incorporated in the British Virgin Islands and is in the business of investment holding
“Multifield” Multifield International Holdings Limited, the shares of which are listed and traded on the Stock Exchange
“Ponting” Ponting Limited, a company incorporated with limited liability under the law of the British Virgin Islands
“Power Resources” Power Resources Holdings Limited, a company incorporated with limited liability under the law of the British Virgin Islands
“SGM” the special general meeting of Multifield to be convened for the purpose of approving the Agreement and the transactions contemplated therein
“Shares” the shares in the capital of Multifield of HK$0.01 each
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Triple Luck” Triple Luck Investments Ltd, a company incorporated in the British Virgin Island with limited liability and is currently owned as to 57.50% by Lucky Business and 42.50% by Ponting

On behalf of the Board of Directors Lau Chi Yung, Kenneth Chairman

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Executive Directors: Lau Chi Yung, Kenneth (Chairman) Lau Michael Kei Chi Cho Po Hong, Jimmy

Non-executive Director: Tong Wui Tung, Ronald Tsang Pak Chung, Eddy

Independent Non-executive Directors: Choy Tak Ho Lee Siu Man, Ervin

Company Secretary: Poon Chun Shing Edwin

Hong Kong, 4 August 2004

Please also refer to the published version of this announcement in China Daily.

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AI assistant

Multifield International Holdings Limited Capital/Financing Update 2004

49548_rns_2004-08-05_703a9566-1f0e-4534-8aa4-d0f2fc2727cc.pdf