Richly Field China Development Limited — M&A Activity 2009

Jan 21, 2009

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make 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.

==> picture [42 x 41] intentionally omitted <==

==> picture [130 x 84] intentionally omitted <==

DISCLOSEABLE TRANSACTION ACQUISITION OF ALFORD INDUSTRIES LIMITED

Financial Adviser to United Pacific Industries Limited

Quam Capital Limited

The Board is pleased to announce that on 18 January 2009, the Company and the Sellers entered into the Agreement pursuant to which the Company conditionally agreed to acquire and the Sellers conditionally agreed to sell the entire issued share capital of Alford for a consideration of HK$39.5 million. The Consideration will be satisfied by HK$15.0 million in cash and HK$24.5 million in stocks by the allotment and issue of 100,000,000 Consideration Shares at an issue price of HK$0.245 per Share upon Closing.

The Consideration Shares represent approximately 13.89% of the existing issued share capital of the Company and approximately 12.20% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares.

— 1 —

GENERAL

The Alford Group is an OEM/ODM manufacturer engaged in the design and manufacture of sophisticated consumer electronic and wireless products marketed by brand names with a global reach. Its main product lines include infrared/radio frequency cordless headphones and speakers, hearing enhancers, baby monitors and OEM/ODM products.

The Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Acquisition is only subject to the announcement requirement under the Listing Rules.

Reference is made to the announcement of the Company dated 23 July 2008 regarding the possible acquisition of the Alford Group. The Directors are pleased to announce that the Company and the Sellers entered into the Agreement on 18 January 2009.

THE AGREEMENT

Date 18 January 2009

Parties

Purchaser: The Company Sellers: Mr. Lam Wui Wai Alex, Mr. Tsui Rix Chun Cheong and Mr. Thong Kin Choong

As at the date of this announcement, Mr. Lam, Mr. Tsui and Mr. Thong own 40%, 35% and 25% interests in Alford respectively.

To the Directors’ best knowledge, information and belief and having made all reasonable enquiries, the Sellers are third parties independent of the Company and its connected persons.

Subject matter

Pursuant to the Agreement, the Company agreed to acquire and the Sellers agreed to sell the entire issued share capital of Alford at a consideration of HK$39.5 million.

— 2 —

Consideration

The Consideration of HK$39,500,000 will be satisfied by HK$15,000,000 in cash and HK$24,500,000 in stocks by the allotment and issue of 100,000,000 Consideration Shares at an issue price of HK$0.245 per Share at Closing.

As at the date of this announcement, 111,411,680 Shares are available for issue under the General Mandate. The Consideration Shares will be issued under the General Mandate and distributed to each of the Sellers proportional to his shareholding in Alford. The cash consideration will be financed by internal resources of the Group.

The Consideration was arrived at after arm’s length negotiations between the Company and the Sellers taking into consideration (i) the historical financial results of the Alford Group; and (ii) the synergies and strategic value offered by the Alford Group to the future development of the Group, details of which are set out in the section headed “Reasons for and Benefits of the Acquisition” below.

The issue price of the Consideration Shares of HK$0.245 per Share is equivalent to the average closing price of the Shares over the five business days prior to the signing of the Agreement. The issue price represents:

• (i) the closing price of HK$0.245 per Share as quoted on the Stock Exchange on 16 January 2009, being the last business day prior to the signing of the Agreement;

• (ii) the average closing price of HK$0.245 per Share for the five business days up to and including 16 January 2009; and

• (iii) a discount of approximately 52.0% to the audited consolidated net asset value per Share attributable to the equity holders of the Company of approximately HK$0.51 as at 30 September 2008, being the end of the last financial year.

The Consideration Shares represent approximately 13.9% of the existing issued share capital of the Company and approximately 12.2% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares.

The Consideration Shares, when issued, will rank pari passu with all existing Shares except that (i) they are subject to restrictions on transfer (see “Lock-up of Consideration Shares” below), and (ii) they are not entitled to the final dividend declared in respect of the Company’s financial year ended 30 September 2008.

— 3 —

Lock-up of Consideration Shares

Pursuant to the Agreement, the Consideration Shares are subject to restrictions on transfer of approximately 23 months (the “Lock-up Period”), except that as security for certain indemnities, the Lock-up Period is extended to 3 years in respect of 16 million Consideration Shares which will be held by Mr. Alex Lam (“Secured Shares”). During the Lock-up Period commencing from Closing and for the first nine months immediately following, the Sellers are subject to an absolute prohibition against the sale, transfer or other disposal of any of the Consideration Shares except with the prior approval in writing of the Company.

Commencing from the tenth month following Closing, the Sellers are permitted to sell, transfer or otherwise dispose of, in aggregate, not more than 7% of the Consideration Shares per month for the next 14 months. Within this aggregate monthly disposable limit, each of the Sellers is only permitted to sell, transfer or otherwise dispose of his proportionate share. Individual Sellers may seek the consent of the other Sellers to utilize the disposable quota of the consenting Sellers, provided that the overall limit on disposable quota is not breached.

Save as provided, the Sellers are free to dispose of the Consideration Shares.

The Lock-up Period terminates forthwith on a change of control of the Company, but this does not affect the Secured Shares which remain subject to an absolute prohibition against transfer for 3 years.

An application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

Conditions Precedent

Closing is conditional upon the following considerations which may be waived by the party entitled to the benefit thereof:

• (i) each of the representations and warranties of the Company and the Sellers contained in the Agreement being true and correct in all material respects when made and as of the date of Closing, with the same effect as though such representations and warranties are made on and as of the date of Closing;

• (ii) each of the Company and the Sellers shall have performed and complied in all material respects with their respective agreements, covenants and obligations required by the Agreement at or prior to the date of Closing;

— 4 —

• (iii) all consents and approvals from the relevant governmental or regulatory authorities or other third parties which are necessary in connection with the Agreement and the transactions contemplated thereby must have been obtained;

• (iv) the Company and the Sellers shall have delivered a certificate to each other confirming the satisfaction of conditions (i) to (iii) above as it applies to them respectively;

• (v) no order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the transactions contemplated by the Agreement shall be in effect;

• (vi) no proceeding initiated by any governmental authorities seeking an injunction shall be pending and that no statute, rule, regulation, order, injunction or decree shall be enacted, entered, promulgated or enforced by any governmental authorities which prohibits, restricts or makes illegal consummation of the transactions contemplated hereby;

• (vii) Shunde Alford must have the security of a minimum 2-year tenancy agreement in relation to the factory it presently occupies on terms and conditions satisfactory to the Company and the Sellers;

• (viii) the current listing of the Shares shall not have been withdrawn and the Shares shall continue to be traded on the Stock Exchange (save for any temporary suspension), and no indication shall have been received from the Stock Exchange or the Securities and Futures Commission of Hong Kong to the effect that the listing of the Shares may be withdrawn or objected to for any reason, and no other event shall have arisen which may adversely affect the listing status of the Company on the Stock Exchange; and

• (ix) the Listing Committee of the Stock Exchange shall have granted the listing of, and permission to deal in, the Consideration Shares.

The Company and the Sellers may waive any of the above conditions, in whole or in part, if they are entitled to the benefit thereof. If the conditions precedent are not fulfilled or waived by the party entitled thereto on or before the Long Stop Date, the Agreement will lapse. In such event, save for certain clauses in relation to confidentiality, survival and indemnification, effect of termination, expenses and governing law, all further obligations of the Sellers and the Company under the Agreement shall cease except that the parties shall remain liable for any antecedent willful breaches of the terms thereof.

Closing shall take place on 30 January 2009 after all the above conditions precedent have been fulfilled or waived or such other date as the parties to the Agreement may mutually agree.

— 5 —

SHARE CAPITAL AND SHAREHOLDING STRUCTURE OF THE COMPANY

The table below provides details of the Company’s authorized and issued share capital as at 30 September 2008, the end of the latest financial year, and as at the Latest Practicable Date, as well as the change in the issued capital on the issue to the Sellers of 100,000,000 Consideration Shares.

Share Capital	Number of Shares	Amount
		HK$
Authorised
As at 30 Sept 2008 and as at the Latest
Practicable Date	1,500,000,000	150,000,000
Issued and fully paid up
As at 30 Sept 2008 and as at the Latest
Practicable Date	720,000,000	72,000,000
Consideration Shares	100,000,000	10,000,000
After issue of Consideration Shares	820,000,000	82,000,000

The table below discloses the shareholdings of directors and substantial shareholders, and illustrates the changes in shareholding that will result after the issue of the Consideration Shares, and also the shareholdings on a fully diluted basis if outstanding options granted to directors and employees of the Company are exercised to subscribe for Shares. As at the Latest Practicable Date, there are no other convertible securities of the Company.

Shareholders Brian C Beazer(1) David H Clarke(2) Simon Hsu(3) William Fletcher(4) Patrick Dyson(5) Investor AB(6) Alex Lam Rix Tsui KC Thong Other Shareholders(7) TOTAL	Before issue of Consideration Shares Shares Approximate % 164,193,330 22.80% 152,927,667 21.24% 4,544,590 0.63% 1,205,130 0.17% 955,113 0.13% 89,803,200 12.47% — — — — — — 306,370,970 42.56% 720,000,000 100.00%	After issue of Consideration Shares Shares Approximate % 164,193,330 20.02% 152,927,667 18.65% 4,544,590 0.55% 1,205,130 0.15% 955,113 0.12% 89,803,200 10.95% 40,000,000 4.88% 35,000,000 4.27% 25,000,000 3.05% 306,370,970 37.36% 820,000,000 100.00%	After issue of Consideration Shares and options Options Total Approximate % 6,037,263 170,230,593 20.21% 1,818,633 154,746,300 18.37% 10,874,527 15,419,117 1.83% — 1,205,130 0.14% — 955,113 0.11% — 89,803,200 10.66% — 40,000,000 4.75% — 35,000,000 4.15% — 25,000,000 2.97% 3,637,260 310,008,230 36.81% 22,367,683 842,367,683 100.00%	After issue of Consideration Shares and options Options Total Approximate % 6,037,263 170,230,593 20.21% 1,818,633 154,746,300 18.37% 10,874,527 15,419,117 1.83% — 1,205,130 0.14% — 955,113 0.11% — 89,803,200 10.66% — 40,000,000 4.75% — 35,000,000 4.15% — 25,000,000 2.97% 3,637,260 310,008,230 36.81% 22,367,683 842,367,683 100.00%
				100.00%

— 6 —

Notes:

1. Mr. Brian C. Beazer, the Executive Chairman, is the beneficial owner of 480,000 Shares held through a nominee bank, and 163,713,330 Shares are held by B C Beazer Asia Pte. Ltd., a company in which Mr. Beazer has a 50% equity interest.

2. These shares are held by GSB Holdings, Inc. Mr. David H. Clarke, an Executive Vice-Chairman, has a 61.4% equity interest in Great South Beach Improvement Co., which has a beneficial interest in the entire issued share capital of GSB Holdings, Inc.

3. Mr Simon N Hsu, an Executive Vice-Chairman, holds these shares through Strategic Planning Assets Limited, a company in which he has a 100% equity interest.

4. Mr William Fletcher, an Executive Director, is the beneficial owner of these Shares.

5. Mr Patrick Dyson, an Executive Director, is the beneficial owner of these Shares.

6. These Shares are held indirectly by Investor AB through its beneficial interest of the entire issued capital of Investor (Guernsey) II Ltd.

7. These options are held by employees of the Company.

INFORMATION ON THE ALFORD GROUP

Alford is a company incorporated in Hong Kong with limited liability, which beneficially owns approximately 98.28% interest in Shunde Alford. Alford is in the process of acquiring the remaining 1.72% in Shunde Alford not held by it, and expects to complete this acquisition before the Closing or shortly thereafter. Shunde Alford is incorporated in the PRC with limited liability.

The Alford Group is an OEM/ODM manufacturer engaged in the design and manufacture of sophisticated consumer electronic and wireless products marketed by brand names with a global reach. Its main products include infrared/radio frequency cordless headphones and speakers, hearing enhancers, baby monitors and OEM/ODM products.

For the two years ended 31 March 2007 and 2008, the audited consolidated profit before taxation of Alford was approximately HK$7.61 million and HK$2.70 million respectively; the audited consolidated profit after taxation was approximately HK$4.46 million and HK$1.23 million respectively.

As at 31 March 2008, the audited consolidated net asset value of the Alford Group was approximately HK$54.28 million.

— 7 —

Upon Completion, Alford will become a wholly-owned subsidiary of the Company and results of the Alford Group will be consolidated into the financial statements of the Group.

INFORMATION ON THE UPI GROUP

The Company is a diversified investment holding company. Its principal subsidiaries are engaged in a diverse range of business operations broadly categorised as follows:

Contract Manufacturing Division

This division is principally engaged in the design, production and sale of electronic and electrical products to serve consumer, business and industrial needs, and also provides OEM services. Its core product range includes voltage converters, cables, coils and components for electronic/electrical/mechanical products, chargers and rechargeable battery products.

Tools Division

The Tools division procures, manufactures, distributes and sells hand hacksaws, hacksaws blades, hacksaw frames, builders’ tools, riveter guns, wood saws and lawn, garden and agricultural tools.

Metrology/Measurement Division

This division is engaged in the design, manufacturing and distribution of precision measuring instruments for the automotive, aerospace and defence markets.

Magnetics Division

The Magnetics division is involved in the manufacture, procurement and sales of a wide range of magnetic products including permanent magnets (cast alloy), magnetic tools, magnetic chucks. It also designs and supplies bespoke separation, handling and filtration and turnkey magnetic systems.

Leadframe Division

This division makes high precision etched, stamped and plated leadframes for the semiconductor industry.

— 8 —

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Alford Group is a well-established manufacturer of wireless electronic products for consumer use and an OEM/ODM manufacturer for various famous brand names. The Acquisition will augment the Group’s current electronics product offering by penetration into the wireless electronic products sector and therefore raise the level of technological sophistication and excellence to a higher level, increase the range of product offering, and broaden the Group’s revenue base. The Directors believe that the Acquisition will create synergies within the enlarged Group in terms of enhanced product range, widening of customer base, access to new markets and the effective control of production and research and development costs.

In light of the foregoing, the Directors consider that the Acquisition is in the interests of the Group and the Shareholders as a whole. The Directors also consider that the terms of the Agreement are on normal commercial terms; and fair and reasonable.

GENERAL

The Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Acquisition is only subject to the announcement requirement under the Listing Rules.

There is no prior transaction which is required to be aggregated with the Acquisition under Rule 14.22 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

• “Acquisition” acquisition of the entire issued share capital of Alford by the Company under the Agreement

• “Agreement” the conditional agreement dated 18 January 2009 entered into among the Company and the Sellers in respect of the Acquisition

“Alford” Alford Industries Limited, a company incorporated in Hong Kong with limited liability, the target company “Alford Group” Alford and Shunde Alford

• “associates” has the meaning ascribed thereto in the Listing Rules

— 9 —

“Board” the board of Directors of the Company for the time being

• “Company”

• United Pacific Industries Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 176)

• “Closing”

Closing of the Acquisition

• “connected person”

• “Consideration”

• has the meaning ascribed thereto in the Listing Rules and the word “connected” shall be construed accordingly the consideration of $39.5 million payable by the Company for the Acquisition, comprising a cash component and a stock component

• “Consideration Shares” 100,000,000 new Shares to be allotted and issued by the Company as the stock component of the Consideration pursuant to the Agreement

• “Directors” the directors of the Company for the time being

• “General Mandate”

• a general mandate granted to the Directors at a special general meeting of the Company dated 5 August 2008, to allot, issue and deal with Shares up to a maximum of 111,411,680 Shares

• “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollar(s), the lawful currency of Hong Kong

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Long Stop Date” 28 February 2009 or such other date as the parties to the Agreement may agree in writing

• “PRC” the People’s Republic of China

• “Sellers” Mr. Lam Wui Wai Alex, Mr. Tsui Rix Chun Cheong and Mr. Thong Kin Choong

— 10 —

“Shares” ordinary shares of HK$0.10 each in the share capital of the Company “Shareholders” holders of the Shares “Shunde Alford” Foshan Shunde Alford Electronics Co. Ltd. (佛山市順德 區雅富電子有限公司), a company incorporated in the PRC and a subsidiary of Alford

“Stock Exchange” “%”

The Stock Exchange of Hong Kong Limited

per cent

By Order of the Board United Pacific Industries Limited Mr. Brian C. Beazer Executive Chairman

Hong Kong, 18 January 2009

As at the date of this announcement, the executive Directors are: Mr. Brian C. Beazer, Mr. David H. Clarke, Mr. Simon N. Hsu, Mr. William Fletcher and Mr. Patrick J. Dyson; the non-executive Director is: Mr. Teo Ek Tor; and the independent non-executive Directors are: Dr. Wong Ho Ching, Chris, Mr. Henry W. Lim, Mr. Ramon Sy Pascual and Mr. Robert Machinist.

— 11 —