Suncorp Technologies Limited — M&A Activity 2000

Jan 3, 2000

Listed Company Information

DVB (HOLDINGS)<0500> - Announcement DVB (HOLDINGS) LIMITED DISCLOSEABLE TRANSACTION DISPOSAL OF AN AGGREGATE OF 15.9% INTEREST IN AN ASSOCIATED COMPANY SUMMARY On 25th November, 1999, a sale and purchase agreement was entered into by DVB (Holdings) Limited (the "Company") and Krittika International (Holdings) Limited ("Krittika") pursuant to which the Company agreed to sell (the "First Disposal") and Krittika agreed to purchase an equity interest of approximately 14.5% in Capetronic International (Thailand) Public Company Limited ("Capetronic Thailand") for a cash consideration of Baht199.68 million (equivalent to HK$40 million). Subsequent to the First Disposal, the Company further disposed of (the "Subsequent Disposal") an aggregate equity interest of approximately 1.4% in Capetronic Thailand during the period from 28th December, 1999 to 30th December, 1999 through the open market on the Stock Exchange of Thailand (together with the First Disposal, the "Transactions"). The directors (the "Directors"") of the Company, including the independent non-executive Directors, consider that the terms of the Transactions are fair and reasonable and that the Transactions are in the interest of the Company and its shareholders. In aggregate, the Transactions constitute a discloseable transaction for the Company under the Rules (the "Listing Rules") Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The Company will despatch a circular containing further details of the Transactions to its shareholders for their information as soon as practicable. THE FIRST DISPOSAL Vendor : the Company Purchaser : Krittika, a company incorporated in Belize which is not connected with the directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates as defined in the Listing Rules. Date of agreement : 25th November, 1999 Shares disposed of : 48 million shares ("CT Shares") of Capetronic Thailand, representing approximately 14.5% in its issued share capital. Consideration : Baht199.68 million (equivalent to HK$40 million), representing Baht4.16 (approximately HK$0.83) per CT Share, which in turn (i) represents a premium of approximately 4.0% over the closing price of CT Shares of Baht4.00 (approximately HK$0.80) quoted on the Stock Exchange of Thailand on 25th November, 1999; (ii) represents a premium of approximately 2.5% over the average closing price of CT Shares of Baht4.06 (approximately HK$0.81) for the five trading days up to and including 25th November, 1999; and (iii) is equal to the average closing price of CT Shares of Baht4.16 (approximately HK$0.83) for the ten trading days up to and including 25th November, 1999. The consideration for the First Disposal was agreed after arm's length negotiations and by reference to the market prices of CT Shares quoted on the Stock Exchange of Thailand. Completion date : 16th December, 1999 THE SUBSEQUENT DISPOSAL Subsequent to the First Disposal, the Company further disposed of an aggregate of 4.4 million CT Shares during the period from 28th December, 1999 to 30th December, 1999 through the open market on the Stock Exchange of Thailand. The aggregate consideration for the Subsequent Disposal amounted to approximately Baht18.5 million (approximately HK$3.7 million) and the average price for each CT Share disposed of was approximately Baht4.20 (approximately HK$0.84), which (i) is equal to the closing price of CT Shares of Baht4.20 (approximately HK$0.84) quoted on the Stock Exchange of Thailand on 30th December, 1999; (ii) represents a discount of approximately 2.3% to the average closing price of CT Shares of Baht4.30 (approximately HK$0.86) for the five trading days up to and including 30th December, 1999; and (iii) represents a discount of approximately 0.2% to the average closing price of CT Shares of Baht4.21 (approximately HK$0.84) for the ten trading days up to and including 30th December, 1999. INFORMATION ON CAPETRONIC THAILAND Capetronic Thailand is a company listed on the Stock Exchange of Thailand. The principal business of Capetronic Thailand and its subsidiaries (together the "Capetronic Thailand Group") is the manufacture and sale of computer monitors. The audited consolidated operating profit before and after taxation of Capetronic Thailand for the year ended 31st December, 1997 were both approximately HK$159.1 million. The audited consolidated operating loss before and after taxation of Capetronic Thailand for the year ended 31st December, 1998 were both approximately HK$11.2 million. The audited consolidated net assets of Capetronic Thailand as at 31st December, 1997 and 1998 were approximately HK$358.8 million and approximately HK$399.8 million respectively. REASONS FOR THE TRANSACTIONS AND USE OF PROCEEDS The Company and its subsidiaries (together the "Group") are principally engaged in the electronic and digital data transmission business and in the sale of computer monitors and related products. Immediately prior to the Transactions, the Company owned approximately 33.5% of the issued share capital of Capetronic Thailand. Owing to the effects of the Asian financial turmoil, the excess world-wide computer monitor capacity and the appreciation of Thai Baht, the selling prices and profit margins of the computer monitor business of the Capetronic Thailand Group have been continuously under pressure. As stated above, Capetronic Thailand reported an audited consolidated operating loss of approximately HK$11.2 million for the year ended 31st, December, 1998. Capetronic Thailand reported further unaudited consolidated net losses of approximately Baht32 million (approximately HK$6.4 million) and approximately Baht123 million (approximately HK$24.7 million) for the two quarters ended 31st March, 1999 and 30th June, 1999 respectively. In view of the deteriorating results of the Capetronic Thailand Group and in line with the Group's continued efforts to contain costs and curtail losses, the Directors decided to divest from the investment in Capetronic Thailand and consider that the Transactions represent a good opportunity for the Company to reduce its equity interests in Capetronic Thailand. Following completion of the Transactions, the Company will continue to own approximately 17.6% of the issued share capital of Capetronic Thailand. It is the intention of the Directors to hold such remaining interests in Capetronic Thailand as short term investment and/or to further dispose of part or all of such interests if any such disposal is considered to be in the interest of the Company and its shareholders. The proceeds from the Transactions, which amount to approximately Baht218.18 million (approximately HK$43.7 million) in aggregate, are intended to be used by the Group as general working capital. GENERAL The Directors, including the independent non-executive Directors, consider that the terms of the Transactions are fair and reasonable and that the Transactions are in the interest of the Company and its shareholders. In aggregate, the Transactions constitute a discloseable transaction for the Company under the Listing Rules. A circular containing further information on the Transactions will be despatched to shareholders of the Company as soon as practicable. By Order of the Board Wu Zheng, Bruno Executive Director Hong Kong, 30th December, 1999 An exchange rate of HK$1=Baht4.992 has been used in this announcement.