Speedy Global Holdings Limited — Proxy Solicitation & Information Statement 2015

Aug 24, 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Speedy Global Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 540)

MAJOR TRANSACTION

IN RELATION TO THE CONSTRUCTION CONTRACT

24 August 2015

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
APPENDIX I	— FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . .	7
APPENDIX II	— GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• ‘‘Board’’ the board of Directors

• ‘‘close associates’’ has the meaning ascribed to it in the Listing Rules

• ‘‘Company’’ Speedy Global Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Stock Exchange

• ‘‘connected persons’’ has the meaning ascribed to it in the Listing Rules

• ‘‘Construction Contract’’ The construction contract dated 27 July 2015 made between the PRC Subsidiary and the Contractor relating to the Construction Work

• ‘‘Construction Work’’ The engineering, construction and installation works relating to the construction of factory buildings at Xinmi City pursuant to the Construction Contract

• ‘‘Contract Price’’ The total contract price for the Construction Work of approximately RMB130.84 million under the Construction Contract

• ‘‘Contractor’’ 河南七建工程集團有限公司 (Henan Qijian Construction Group Co. Ltd.)

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

• ‘‘Latest Practicable Date’’ 19 August 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘PRC’’ The People’s Republic of China

• ‘‘PRC Subsidiary’’ 鄭州迅宏置業有限公司 (Zhengzhou Xunhong Property Co. Ltd.)

• ‘‘RMB’’ Renminbi, the lawful currency of the PRC

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DEFINITIONS

‘‘Shareholder(s)’’

the holder(s) of the Shares

‘‘Share(s)’’ ordinary share(s) of HK$0.10 each in the capital of the Company

‘‘Sky Halo’’ Sky Halo Holdings Limited, the controlling Shareholder of the Company

‘‘sq.m.’’ square meters

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘%’’

per cent.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 540)

Executive Directors: Mr. Huang Chih Shen (Chairman and chief executive officer) Mr. Chan Hung Kwong, Patrick Ms. Tang Wai Shan Mr. Au Wai Shing

Independent non-executive Directors: Mr. Wong Ting Kon Ms. Pang Yuen Shan, Christina Mr. Chang Cheuk Cheung, Terence Dr. Chan Chung Bun, Bunny

Registered office: Scotia Centre, 4th Floor P.O. Box 2804, George Town Grand Cayman KY1-1112 Cayman Islands

Head office and principal place of business in the PRC: Nanmian Industrial District Xiagang Village, Changan Town Dongguan PRC

24 August 2015

To the Shareholders

Dear Sir/Madam,

MAJOR TRANSACTION IN RELATION TO THE CONSTRUCTION CONTRACT

INTRODUCTION

Reference is made to the Company’s announcement dated 28 July 2015 in relation to the Construction Contract pursuant to which the Contractor has agreed to undertake the Construction Work relating to the construction of factory buildings at Xinmi City, Zhengzhou, Henan Province, PRC at the Contract Price of approximately RMB130.84 million.

The purpose of this circular is to provide you with further information on the Construction Contract and other information as required under the Listing Rules.

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LETTER FROM THE BOARD

CONSTRUCTION CONTRACT

Date

27 July 2015

Parties

1. PRC Subsidiary

2. Contractor

To the best knowledge, information and belief of the Directors after having made all reasonable enquiries, the Contractor is principally engaged in the provision of construction services in the PRC and is a third party independent of the Company and its connected persons.

Scope of Construction Work

Pursuant to the Construction Contract, the Contractor will be responsible for all engineering, construction and installation work within the scope of the construction drawings relating to the construction of 19 blocks of standardized factory buildings of 3–5 storeys at Xinmi City with a total construction area of 87,400 sq.m. Each factory building shall have separate foundation and framework together with installations for electricity, water supply, drainage and ventilation.

Contract Price

The total Contract Price under the Construction Contract is approximately RMB130.84 million which is determined based on the amount and nature of works to be undertaken and the prevailing market prices for such works. The Contract Price is subject to adjustment arising from change of construction work or fluctuations in published price of labour and materials in Zhengzhou. In the event of any change in the construction works resulting in change of the price involved, the Contract Price shall be adjusted according to such change. In the event of any change in the published price of labour or the published price of materials in Zhengzhou for more than 15%, the Contract Price shall be adjusted by the excess over the 15%. There is no maximum contract price after adjustments. However the Company does not expect that the Contract Price will be adjusted upwards for more than 5%. All details of the Construction Work are contained in the construction drawings and the Company does not expect any major change thereto involving substantial additional expenditure. The Company would expect that any change to the Construction Work will be of a minor nature such as matters relating to interior equipment and installation. The Company is not aware of any indication of significant rise in the price for labour and materials in Zhengzhou for the coming months.

The Contract Price shall be paid by installments according to the progress of the Construction Work. The construction progress will be assessed monthly and payments based on 80% of the assessed progress shall be made monthly. Up to 80% of the Contract Price shall be paid after completion of the Construction Work and acceptance by the Group. Up to 97% of

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LETTER FROM THE BOARD

the Contract Price shall be paid after all relevant government approvals for the Construction Work have been obtained. The remaining 3% shall be paid after one year from completion of the Construction Work. Advance payment of approximately RMB13.1 million is required and was settled by the PRC Subsidiary on 30 July 2015.

Duration of Construction Work

The Construction Work shall be completed within 140 days from the commencement date.

REASONS FOR AND BENEFIT OF THE CONSTRUCTION CONTRACT

The Group is principally engaged in (i) the apparel supply chain servicing business which offers a wide range of woven wear and cut-and-sewn knitwear products to a number of owners or agents of global reputable brands, (ii) the apparel retail business operating in the PRC and (iii) the property development and investment.

Reference is made to the Company’s circular dated 30 April 2015 relating to the acquisition of three pieces of land at Xinmi City. The PRC Subsidiary entered into the Construction Contract as its first phase of developing the said land into industrial premises. It is intended that up to 20% of the factory buildings will be for the Group’s own use and the rest for investment and development purposes.

The Directors consider that the terms of the Construction Contract are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECTS OF THE CONSTRUCTION CONTRACT ON THE GROUP

The Contract Price for the Construction Contract will be funded by the Group’s internal resources and available bank borrowing. As at the Latest Practicable Date, a sum of approximately RMB30 million has been paid as part payment of the Contract Price according to the assessed progress of the Construction Work. As at 30 June 2015, the Group has cash and cash equivalents of approximately HK$367 million. The Directors consider that the Construction Contract will not have any immediate material effect on the total assets, earnings and liabilities of the Group.

LISTING RULES IMPLICATIONS

Based on the relevant percentage ratios calculations under the Listing Rules, the Construction Contract constitutes a major transaction of the Company and is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

Since no Shareholder is required to abstain from voting if a general meeting was convened to approve the Construction Contract, a written shareholders’ approval may be accepted in lieu of holding a general meeting pursuant to Chapter 14 of the Listing Rules. Sky Halo, being the controlling shareholder of the Company holding 327,242,688 Shares,

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LETTER FROM THE BOARD

representing approximately 54.54% of the total issued share capital of the Company, has given a written approval to the Construction Contract. Accordingly, no general meeting of the Company will be convened for the purpose of approving the Construction Contract.

Yours faithfully By Order of the Board Speedy Global Holdings Limited Huang Chih Shen Chairman and chief executive officer

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for the three years ended 31 December 2012 and 31 December 2013 and 31 December 2014 are disclosed in the Company’s annual reports for the years ended 31 December 2012, 31 December 2013 and 31 December 2014 respectively, which are incorporated by reference into this circular. The said annual reports of the Company are available on the Company’s website at www.speedy-global.com and the website of the Stock Exchange at www.hkexnews.hk.

The following is a quick link to the 2012 annual report of the Company published on 24 April 2013 with its audited consolidated financial statements for the year ended 31 December 2012 on pages 55 to 140:

http://www.hkexnews.hk/listedco/listconews/SEHK/2013/0424/LTN20130424453.pdf

The following is a quick link to the 2013 annual report of the Company published on 11 April 2014 with its audited consolidated financial statements for the year ended 31 December 2013 on pages 54 to 132:

http://www.hkexnews.hk/listedco/listconews/SEHK/2014/0411/LTN201404111042.pdf

The following is a quick link to the 2014 annual report of the Company published on 15 April 2015 with its audited consolidated financial statements for the year ended 31 December 2014 on pages 55 to 128:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0415/LTN20150415560.pdf

INDEBTEDNESS

As at the close of business on 30 June 2015, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had the following bank borrowings and finance lease liabilities:

Unsecured Bank borrowings Finance lease liabilities Total borrowings	HK$’000 288,453 719
	289,172

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The amounts of bank borrowings are repayable as follows:

Within one year Bank borrowings due for repayment after one year (*) More than 1 year but not exceeding 2 years	287,592 861
	288,453

• The amounts due are based on the scheduled repayment dates set out in the loan agreements without taking into account any repayment on demand clause.

As at 30 June 2015, the total unutilised amount of facilities available to us amounted to approximately HK$677.0 million. On the same date, our total borrowings of approximately HK$288.5 million was guaranteed by companies within the Group.

As confirmed by the Directors, there are no material defaults in payment of bank borrowings up to the Latest Practicable Date.

Save as otherwise disclosed above, and apart from intra-group liabilities and normal trade payables and bills payable, the Group did not have, at the close of business on 30 June 2015, any other debt securities issued and outstanding, or authorised or otherwise created but unissued, any other term loans, any other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptance (other than normal trade bills) or acceptance credits or hire purchase commitments, any other mortgages and charges or any guarantees or any finance lease commitments or material contingent liabilities.

WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that taking into account the Construction Contract and the present financial resources available to the Group including but not limited to its internally generated revenue and funds, cash and cash equivalents on hand, banking facilities available to the Group, and in the absence of unforeseen circumstances, the Group has sufficient working capital for its present requirements, that is for at least the next twelve months from the date of this circular.

MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2014, the date to which the latest published audited financial statements of the Group were made up.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

FINANCIAL AND TRADING PROSPECT OF THE GROUP

As disclosed in the Company’s annual report for the year ended 31 December 2014, the Directors expect the business environment of the Group’s apparel supply chain servicing business in 2015 remains challenging due to the keen competition. In order to maintain the competitiveness, the Group will enhance product innovation and creativity to meet fashion trends and maintain premium quality. For production management, the Group will continue to enhance the operating efficiency by simplifying the production processes which results a shorter product delivery time. In addition, the Group will work closely with our customers to consolidate the fabrication in order to obtain better material prices with mass volume which will enhance our cost competitiveness. The Group is offering a competitive price with higher flexibility arrangements to our existing customers in order to secure more long term and committed orders and is also actively looking for new customers for further growth opportunities.

Due to the unsatisfactory sales performance of the Unisex and Promod brands, their operations were ceased by the end of May 2015. Instead, the Group will retain capital and is looking for other retail business opportunity with a better profitability. Approximately HK$4.9 million and HK$8.5 million of the unutilized IPO proceeds originally intended for setting up Promod outlets and brand promotional and marketing activities will be reserved for garment manufacturing plants and related development including but not limited to the development of the land at Xinmi City. The Company announced on 6 August 2015 that the Company has entered into a memorandum of understanding with a third party relating to a possible acquisition of a target group principally engaged in wholesale and retail of apparel products in the PRC. The Company is currently in the course of negotiation with the vendor and will make further announcement in accordance with the Listing Rules as and when appropriate.

The Group is progressing diligently with the development of the three pieces of land at Xinmi City, all of which are for industrial use. The construction work represents the first phase development comprising of industrial premises for self-use and investment and development purposes. The Directors are of the view that the property investment and development segment helps to diversify the Group’s business in order to magnify the Group’s development potential and Shareholder’s return. Currently the Company has no concrete plan for further development of the land. The Company will closely monitor the property market in the PRC and determine the appropriate development strategy. The Company will consider the second phase development after completion or pre-sale of the first phase.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm to the best of their knowledge and belief that the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests in the Company

At the Latest Practicable Date, the interests and short positions of the Directors or the chief executives of the Company in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Division 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) or were required, pursuant to Section 352 of the SFO, to be entered on the register maintained by the Company referred to therein, or which were required, pursuant to Part XV of the SFO or the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

			Approximate
			percentage of
			the issued
			share capital
			of the
			Company as
			at the Latest
		Number of	Practicable
Name	Capacity	shares held	Date
Mr. Huang Chih Shen	Interest of a	327,242,688	54.54%
	controlled
	corporation (Note)
Mr. Chan Hung Kwong	Beneficial owner	33,031,758	5.51%
Patrick
Mr. Au Wai Shing	Beneficial owner	26,847,366	4.47%
Ms. Tang Wai Shan	Beneficial owner	15,428,853	2.57%

Note: Mr. Huang Chih Shen’s interest in 327,242,688 Shares is held through Sky Halo which is wholly-owned by Mr. Huang Chih Shen.

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GENERAL INFORMATION

APPENDIX II

The following is a list of the Directors who, as at the Latest Practicable Date, were also directors or employees of a company which has an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO:

					Approximate
					percentage of
					the issued
				share capital of
					the Company
		Capacity of	Number of	as at the Latest
Name of	Name of	Director in	shares held by		Practicable
Director	Shareholder	Shareholder	the Shareholder		Date
Mr. Huang Chih	Sky Halo	Director	327,242,688		54.54%
Shen

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered or proposed to enter into any service agreements with any member of the Group, excluding contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation).

4. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware of, none of the Directors nor their respective close associates had any interest in any business which competes or is likely to compete, or is in conflict or is likely to be in conflict, either directly or indirectly, with the business of Group.

5. OTHER INTERESTS OF THE DIRECTORS

As at the Latest Practicable Date:

• (a) none of the Directors had any interest, either direct or indirect, in any assets which have, since 31 December 2014 (being the date to which the latest published audited accounts of the Group were made up), been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group; and

• (b) none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which is subsisting as at the date of this circular and is significant in relation to the business of the Group.

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GENERAL INFORMATION

APPENDIX II

6. LITIGATION

As at the Latest Practicable Date, there was no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Group.

7. MATERIAL CONTRACTS

As at the Latest Practicable Date, the following material contracts (not being contracts entered into in the ordinary course of business) have been entered into by the members of the Group within the two years immediately preceding the issue of this circular:

• (a) the sale and purchase agreement dated 28 October 2013 between Ma Hung Yeh and Speedy Global Commercial Limited relating to the acquisition of 100% equity interest in Bright Master International Holdings Co., Limited at the consideration of HK$1,286,000;

• (b) the confirmations of successful bidding at the listing-for-sale dated 25 March 2015 made between Xinmi Real Estate Service Centre and Speedy Global Development Limited in respect of three pieces of land at Xinmi City for total consideration of RMB75,682,350;

• (c) the state construction land use rights grant contracts dated 1 April 2015 in respect of the three pieces of land at Xinmi City; and

• (d) the Construction Contract.

8. GENERAL

• (a) The company secretary of the Company is Mr. Cheung Kai Yiu. He is a member of the Hong Kong Institute of Certified Public Accountants.

• (b) The registered office of the Company is located at Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112, Cayman Islands.

• (c) The principal place of business of the Company is Nanmian Industrial District, Xiagang Village, Changan Town, Dongguan, PRC.

• (d) The Hong Kong branch share registrar and transfer of the Company is Tricor Investor Services Limited of Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (e) The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

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GENERAL INFORMATION

APPENDIX II

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours (i.e. from 9:30 a.m. to 5:00 p.m. on Monday to Friday except public holidays) on any Business Day at the place of business in Hong Kong of the Company at Flat B, 13/F, Wing Chai Industrial Building, 27-29 Ng Fong Street, San Po Kong, Kowloon, Hong Kong for 14 days from the date of this circular:

• (a) the memorandum and articles of association of the Company;

• (b) the material contracts referred to in the paragraph headed ‘‘Material Contracts’’ in this appendix;

• (c) the annual reports of the Company for the year ended 31 December 2012, 31 December 2013 and 31 December 2014 respectively; and

• (d) the Company’s circular dated 30 April 2015 relating to a major transaction.

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