RoboSense Technology Co., Ltd — M&A Activity 1999

Jul 23, 1999

Listed Company Information

LUOYANG GLASS<1108> - 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. LUOYANG GLASS COMPANY LIMITED (A joint stock limited company incorporated in the Peoples* Republic of China with limited liability) Connected Transaction in relation to Acquisition in China Luoyang Float Glass Group Financial Company of Limited Liability and Clarification Summary The board of directors ("Directors") of Luoyang Glass Company Limited (the "Company") wishes to announce that on 22nd July, 1999, the Company entered into an agreement (the "Agreement") to acquire from its holding company, China Luoyang Float Glass Group Company of Limited Liability ("CLFG"), a 40% equity interests in China Luoyang Float Glass Group Financial Company of Limited Liability ("CLFC"), a non-wholly owned subsidiary of CLFG (the "A cquisition"). The consideration for the Acquisition will be satisfied by the Company in cash of RMB40 million (equivalent to approximately HK$37.4 million, which is calculated based on the exchange rate of HK$1.00 = RMB1.07 as quoted on South China Morning Post on 22nd July, 1999) which was arrived at after arm's length negotiations and based on the existing registered share capital of CLFC of RMB100 million. As CLFG, the holding company of CLFC, is also the controlling shareholder of the Company, the Acquisition therefore constitutes a connected transaction for the Company under Rule 14.23(1)(b) of the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited and Rule 7.3.2(3) of the Shanghai Stock Exchange Listing Rules (the "Shanghai Listing Rules"). In addition, the Directors have noted certain articles on newspapers in respect of the Disposal and would like to advise that the Disposal is at a very preliminary stage and might or might not materialise. A. Details of the Agreement 1. Date of the Agreement 22nd July, 1999 2. Parties Vendor : CLFG Acquirer : the Company 3. Share : 40% equity interests in CLFC 4. Consideration : RMB40 million (approximately HK$37.4 million) to be settled in cash by the Company in total within 7 days after the date of the Agreement. The consideration was arrived at after arm's length negotiations and based on the existing registered share capital of CLFC of RMB100 million. 5. Completion : CLFG currently holds a 90% equity interests in CLFC and the remaining 10% is held by Luoyang Guohao Holdings Limited ("LGHL"), an independent third party not connected to any of the existing directors, associates (as defined in the Listing Rules) or substantial shareholders of the Company. Upon the completion of the Acquisition, CLFG, the Company and LGHL will hold 50%, 40% and 10% respectively of the equity interests in CLFC. B. Information about the Company The Company is one of the largest manufacturers of float sheet glass in the PRC. It is principally engaged in the production and marketing of float sheet glass and processed vehicle glass of various thickness, size and colour. C. Information about CLFC CLFC is a limited liability company incorporated in the PRC on 27th October, 1993 with a registered share capital of RMB100 million, of which 90% of the equity interests is owned by CLFC and the remaining 10% is owned by LGHL. CLFC is principally engaged in the provision of financial/treasury services which include deposit taking, lending facilities; product leasing and financing; transportation insurance; letter of credit; and market research and consultation to CLFG and its subsidiaries. For the two years ended 31st December, 1998, CLFC recorded audited net profits of approximately RMB8.9 million (approximately HK$8.3 million) and RMB7.8 million (approximately HK$7.3 million) respectively. As at 31st December, 1998, CLFC has an audited net assets value of approximately RMB107.8 million (approximately HK$100.7 million). The Directors would like to advise that it is not provided in the Agreement whereby the Company is entitled to appoint any of its directors to the board of CLFC. The management of CLFC will not change as a result of the Acquisition. At this stage, the Directors do not envisage any connected transactions in the future with CLFC, save for the existing deposits of the Company with CLFC which are within the ordinary and usual course of businesses of the Company and CLFC and on normal commercial terms. Moreover, the Company will not involve in the daily business operations of CLFC. D. Reason for the transaction The Directors consider that it is in the interest of the Company to acquire a 40% equity interests in CLFC which has a profitable track record to broaden its income base. In addition, the Directors consider that the Acquisition will enable CLFC to closely monitor the financial and cash position of the Company and its subsidiaries (together the "Group") and provide depository services to the Group in order to facilitate effective use of its financial resources, and thus add value to the Group's operations. The Directors (including the independent non-executive directors) considered the Acquisition to be fair and reasonable so far as the shareholders of the Company are concerned and on normal commercial terms. E. Connected Transaction CLFG is the holding company of both the Company and CLFC. Therefore, the above Acquisition constitutes a connected transaction for the Company under Rule 14.23(1)(b) of the Listing Rules and Rule 7.3.2(3) of the Shanghai Listing Rules. The amount of the Company 's investment in CLFC is less than 3% of the book value of the consolidated net tangible assets of the Group as at 31st December, 1998. The Acquisition falls within the deminimis provisions under Rule 14.25(1) of the Listing Rules and Rule 7.3.5(1) of the Shanghai Listing Rules, and the Company is required to disclose by way of a press announcement the brief details of the transaction, of which will also be included in the Company's next published interim report, annual report and accounts. F. Clarification In addition, the Directors have noted that there have been articles on newspapers stating that the Company is proposing to dispose its interest in Qingdao Taiyang Glass Industry Company Limited, a sino-foreign equity joint venture in which the Company owns 55% of its equity interests, to CLFG (the "Disposal"). The Directors would like to advise that the Disposal is at a very preliminary stage and the Company is discussing with its financial advisers on the structures and terms of the Disposal and that the Disposal might or might not materialise and investors should exercise caution in dealing in the shares of the Company. By Order of the Board Wang Jie Secretary to the Board of Directors Hong Kong, 22nd July, 1999