PegBio Co., Ltd. — Share Issue/Capital Change 1999

Jul 13, 1999

Listed Company Information

HUNG FUNG GROUP<1141> - 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. HUNG FUNG GROUP HOLDINGS LIMITED (incorporated in Bermuda with limited liability) PLACING OF NEW SHARES The board of directors (the "Board") of Hung Fung Group Holdings Limited (the "Company") wish to announce that the Company will, under a subscription agreement, conditionally issued 25,000,000 new shares of HK$0.10 each in the capital of the Company ("Shares") at a price of HK$0.52 per Share. The 25,000,000 new Shares will be issued (the "Placing") directly to Sino Asia Investments Limited and Entrust Limited (collectively the "Subscriber") or their nominee(s) in the proportions of 19,000,000 new Shares to Sino Asia Investments Limited and 6,000,000 new Shares to Entrust Limited. The Subscriber and its associates are independent of, and not connected with and not acting in concert with, the directors, chief executives, substantial shareholders of the Company or its subsidiaries, or any of their respective associates (as defined in the Rules (the "Listing Rules") Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange")). The beneficial owner of Sino Asia Investments Limited is Mr. Michael Lee and the beneficial owner of Entrust Limited is Mr. Arnold Chan. Sino Asia Investments Limited and Entrust Limited are independent to each other as defined in the Listing Rules. As at the date of this announcement, Baxter Resources S.A. ("Baxter"), the controlling shareholder of the Company is interested in 150,000,000 Shares, representing about 75 per cent. of the Company's existing issued share capital of 200,000,000 Shares. The Placing will reduce the shareholding of Baxter in the Company to about 66.67 per cent. of the Company's issued share capital of 225,000,000 Shares as enlarged by the Placing. If the conditions as stated below are not fulfilled on or before 31st August 1999, or such later date as may be agreed by the Company and the Subscriber, the subscription agreement for the Placing will lapse. Upon completion of the Placing, the Company will pay Times Securities Company Limited (the "Placing Agent") a placing commission of HK$130,000. The net proceeds to the Company under the Placing will be about HK$12,770,000 and will be used as general working capital of the Company and for further developing the "die cast" series. PLACING UNDER THE SUBSCRIPTION AGREEMENT DATED 12th July 1999 Number of Shares to be placed and subscribed for: 25,000,000 new Shares, representing about 12.5 per cent. of the Company's existing issued share capital of 200,000,000 Shares and 11.1 per cent. of the Company's enlarged issued share capital of 225,000,000 Shares. Placement to: (i) Sino Asia Investments Limited, a company incorporated in the British Virgin Islands with limited liability, or its nominee(s); and (ii) Entrust Limited, a company incorporated in the British Virgin Islands with limited liability, or its nominee(s). The beneficial owner of Sino Asia Investments Limited is Mr. Michael Lee and the beneficial owner of Entrust Limited is Mr. Arnold Chan. Placing Agent: Times Securities Company Limited, a registered securities dealer and a company incorporated in Hong Kong with limited liability. Independence of the Subscriber and its associates: The Subscriber and its associates are independent third parties not connected with and not acting in concert with the substantial shareholders, directors and chief executives of the Company, its subsidiaries or their respective associates (as defined in the Listing Rules). Sino Asia Investments Limited and Entrust Limited are independent to each other as defined in the Listing Rules. Placing Price: HK$0.52 per Share, representing a discount of about 11.86 per cent. to the closing price of HK$0.59 per Share on 12th July 1999 and a discounts of about 11.26 per cent. and 8.12 per cent. to the average closing prices of the five and ten trading days respectively up to and including 12th July 1999 as quoted on the Stock Exchange. The Board considers that the terms of the subscription agreement, including the placing price, which were arrived at after arm's length negotiation between the Company and the Subscriber, are fair and reasonable and are in the best interests of the Company. Placing Proportions: Sino Asia Investments Limited 19,000,000 new Shares Entrust Limited 6,000,000 new Shares Mandate to issue new Shares: The new Shares will be issued under the general mandate granted to the directors of the Company at the annual general meeting of the Company held on 25th September 1998. Ranking: The new Shares, when fully paid, will rank equally in all respects with the existing issued Shares on the date of issue. Rights: The Subscriber is entitled to receive all dividends and distributions declared (if any), made or paid after date of issue. Conditions of the Placing: Completion of the Placing is conditional upon the Listing Committee of the Stock Exchange granting listing of and permission to deal in the new Shares to be issued under the Placing and if required, the Bermuda Monetary Authority granting permission for the issue of the new Shares. If the above conditions are not fulfilled on or before 31st August 1999, or such later date as may be agreed by the Company and the Subscriber, the subscription agreement for the Placing will lapse. Payment of the placing price: The aggregate placing price for the new Shares is expected to be paid by the Subscriber on the date of completion of the subscription agreement which is expected to take place on the 2nd business day (excluding Saturday) after all the conditions referred above are satisfied or 30th July 1999 (whichever is earlier), unless the Company and the Subscriber agree a later date. Placing Commission: The Company will pay the Placing Agent a placing commission of HK$130,000 upon completion of the Placing. Use of proceeds under the Placing: The gross proceeds under the Placing will amount to about HK$12,770,000 and will be used as general working capital of the Company and for further developing the "die cast" series. Reasons for the Placing: The principal activity of the Company is investment holding. The principal activities of its subsidiaries consist of the design, manufacture and sale of a wide range of toys. The Company and its subsidiaries (the "Group") is constantly seeking new business opportunities which are complementary to the Group's existing businesses. The Placing will strengthen the Group's capital base and enable the Group to capture such new business opportunities, as and when they arise. Application for listing: The Company will apply to the Listing Committee of the Stock Exchange for listing of and permission to deal in the new Shares to be issued under the Placing. Change in shareholding of Baxter after the Placing: As at the date of this announcement, Baxter, the controlling shareholder of the Company, is interested in 150,000,000 Shares, representing about 75 per cent. of the Company's existing issued share capital. The Placing will reduce the shareholding of Baxter in the Company to about 66.67 per cent. of the Company's issued share capital as enlarged by the Placing. By order of the board Hung Fung Group Holdings Limited Chan Chun Hung Chairman Hong Kong, 12th July 1999