Ulferts International Limited — Proxy Solicitation & Information Statement 2004

Aug 20, 2004

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shougang Concord Grand (Group) Limited , you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular.

SHOUGANG CONCORD GRAND (GROUP) LIMITED

(incorporated in Bermuda with limited liability) (Stock Code: 730)

DISCLOSEABLE TRANSACTION

DISPOSAL OF PREMISES

9 August 2004

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1-2
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
The Provisional Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4-5
Formal Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Reasons for the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5-6
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7-9

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DEFINITIONS

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

“Board”

the board of Directors

• “Company”

Shougang Concord Grand (Group) Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Stock Exchange

• “Directors”

the directors of the Company

• “Disposal”

the proposed disposal of the Premises

• “Formal Agreement”

the agreement that is expected to be entered into between the Vendor and the Purchaser pursuant to the Provisional Agreement on or about 9 August 2004

• “Group”

the Company and its subsidiaries

• “Independent Third Party”

• any person who is not connected to any director, chief executive or substantial shareholder of the Company or any of its subsidiaries or any of their respective associates (as defined in the Listing Rules) and is not a connected person of the Company (as defined in the Listing Rules)

• “Latest Practicable Date”

• 5 August 2004, being the latest practicable date prior to printing of this circular for ascertaining certain information contained herein

• “Listing Rules”

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

• “Purchaser” Sky Rich Enterprises Limited, a company incorporated in Hong Kong and a subsidiary of one of the tenants of the Premises

• “Premises”

• Unit A on 1st Floor and car parking space no. 30 on Lower Ground Floor and car parking space no. 38, Phase I and Units J, K, L & K2 on Ground Floor, Unit G on 1st Floor and car parking space nos. G4, G23, G24, B4, B17, lorry parking space nos. L1, L2 and Exterior Wall, Phase II and lorry parking space nos. L6, L7, L8, L11 and Exterior Wall, Phase III, Kaiser Estate located on Man Yue Street, Man Lok Street and Hok Yuen Street, Hunghom, Kowloon, Hong Kong

• “Provisional Agreement”

the provisional sale and purchase agreement dated 20 July 2004, entered into between the Vendor and the Purchaser in relation to the Disposal

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DEFINITIONS

“Shareholders” the holders of the Shares “Share(s)” the ordinary share(s) of HK$0.01 each in the share capital of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Vendor” Eldex Investment Company Limited, a company incorporated in Hong Kong and a wholly-owned subsidiary of the Company “HK$” Hong Kong Dollar, the lawful currency of Hong Kong

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LETTER FROM THE BOARD

SHOUGANG CONCORD GRAND (GROUP) LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 730)

Executive Directors: Wang Qinghai (Chairman) Cao Zhong (Vice Chairman) Chen Zheng Wang Tian Cheng Xiaoyu Non-executive Director: Leung Shun Sang, Tony Independent non-executive Directors: Tam King Ching, Kenny Choy Hok Man, Constance

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda Principal office in Hong Kong 6th Floor Bank of East Asia Harbour View Centre 56 Gloucester Road, Wanchai, Hong Kong

9 August 2004

To Shareholders

Dear Sir/Madam

DISCLOSEABLE TRANSACTION DISPOSAL OF PREMISES

INTRODUCTION

The Company announced on 22 July 2004 that the Vendor and the Purchaser have entered into the Provisional Agreement, pursuant to which the Vendor will dispose the Premises to the Purchaser for a total consideration of HK$40,000,000 in cash.

The Disposal constitutes a discloseable transaction for the Company under the Listing Rules.

The purpose of this circular is to provide Shareholders with further information in relation to the Disposal and other information in compliance with the requirements of the Listing Rules.

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LETTER FROM THE BOARD

THE PROVISIONAL AGREEMENT

Date:

20 July 2004

Parties:

Vendor:

Eldex Investment Company Limited, a wholly-owned subsidiary of the Company.

Purchaser:

Sky Rich Enterprises Limited, a subsidiary of one of the tenants of the Premises. To the best of the Directors’ knowledge and belief, having made all reasonable enquiry, the Purchaser and the ultimate beneficial owner of the Purchaser are Independent Third Parties.

Consideration and Financial Effects:

The purchase price for the Premises is HK$40,000,000, which has been determined after arm’s length negotiation between the parties involved, and was based on normal commercial term and with reference to the market value. The book value of the Premises as shown in the audited accounts of the Company for the year ended 31 December 2003 (“Book Value”), which also represent the open market value as at 31 December 2003 obtained from AA Property Services Limited, a professional valuer and an Independent Third Party, is HK$33,350,000. The Book Value of the Premises represents approximately 5.5% of the audited net tangible assets of the Group as at 31 December 2003. The total gross rental income earned from the Premises for the year ended 31 December 2003 amounted to approximately HK$3,240,000, representing approximately 21% of the turnover of the Group for the year ended 31 December 2003. The net profits earned from the Premises for the year ended 31 December 2003 amounted to approximately HK$3,170,000, representing approximately 12% of the net profits of the Group for the year ended 31 December 2003. The consideration for the disposal of the Premises represents a premium of approximately HK$6,650,000, i.e. 20% above the Book Value. Upon completion of the Disposal, the Company will realize a gain of approximately HK$6,630,000, net of expenses, in its profits and loss accounts and net assets of the Group will be increased by the same amount, representing approximately 20% and 1% of Book Value and audited net tangible assets of the Group as at 31 December 2003 respectively. The Directors, including the independent non-executive directors, consider that the terms of the transaction, including the consideration, are fair and reasonable and in the interest of the Company and the Shareholders as a whole. The purchase price shall be paid by the Purchaser to the Vendor in the following manner:

• (a) a non-refundable initial deposit of HK$1,000,000 which was paid on the date of the Provisional Agreement;

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LETTER FROM THE BOARD

• (b) a further non-refundable deposit of HK$3,000,000 payable upon signing of the Formal Agreement which is expected to be entered on or about 9 August 2004; and

• (c) the balance of the purchase price of HK$36,000,000 to be payable upon completion of the Formal Agreement, which is expected to take place on or before 27 August 2004. The completion is not subject to any condition.

Completion Date:

The sale and purchase pursuant to the Provisional Agreement is expected to be completed on or before 27 August 2004. The Vendor shall, upon completion, transfer to the Purchaser the rental deposits held by the Vendor pursuant to the existing tenancy agreements/licence agreements of the Premises (without deduction at completion).

Others:

The Vendor does not warrant or represent that the Vendor has good and marketable title to (i) Car Parking Space No. 38 on the Ground Floor of Kaiser Estate 1st Phase; (ii) the Exterior Wall of Kaiser Estate 2nd Phase; and (iii) the Exterior Wall of Kaiser Estate 3rd Phase (collectively, the “said Premises”) which form part of the Premises. The Purchaser undertakes and agrees not to raise any requisitions or objections in respect of the title or otherwise of the said Premises. The Purchaser hereby declares that it accepts the Vendor’s title to the said Premises without further enquiry or requisition.

FORMAL AGREEMENT

Pursuant to the terms of the Provisional Agreement, the Formal Agreement for the Disposal is expected to be entered into between the Vendor and the Purchaser on or about 9 August 2004.

REASONS FOR THE DISPOSAL

The principal activity of the Company is investment holding. The principal activities of its subsidiaries consisted of property investment and management.

As the Premises are over 20 years old, the maintenance costs of the Premises are high. The Directors, including the independent non-executive directors, consider that the terms of the transaction, including the consideration, are fair and reasonable and the Disposal is in the interest of the Company and the Shareholders as a whole. The Board intends to deploy the net proceeds generated from the Disposal of approximately HK$39,980,000 to better opportunities with higher returns. As at the Latest Practicable Date, the Company has not entered into any binding agreement to that effect. The Board is constantly reviewing the Company’s business strategy in maximizing shareholders’ value. It will continue

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LETTER FROM THE BOARD

to explore and identify attractive business opportunities as it has done so in the past. The Company will make the necessary announcement in compliance with the Listing Rules, if the appropriate investment opportunity arises.

GENERAL

The Disposal constitutes a discloseable transaction for the Company under the Listing Rules and the Company has issued this circular to the Shareholders in the connection.

Your attention is drawn to the information set out in the appendix to this circular.

Yours faithfully, For and on behalf of

Shougang Concord Grand (Group) Limited Cao Zhong

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made full reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

2. DIRECTORS’ INTERESTS IN SECURITIES

As at the Latest Practicable Date, the directors or chief executive of the Company had the following interests or short positions in shares, underlying shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the Securities and Future Ordinance (“SFO”)) as recorded in the register required to be kept under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (“Model Code”), were as follows:

Name of corporation	Name of corporation		Number of
	in which interests	Number of	Shares		Nature of
Name of director	are held	Shares	under options		interests
Wang Qinghai	Company	8,278,679	–		Personal
Cao Zhong	Company	8,278,679	21,447,000	(Note 1)	Personal
Chen Zheng	Company	–	18,015,000	(Note 1)	Personal
Wang Tian	Company	–	16,299,000	(Note 1)	Personal
Cheng Xiaoyu	Company	8,278,679	15,441,000	(Note 1)	Personal
Leung Shun Sang, Tony	Company	8,278,000	75	(Note 2)	Personal
			604	(Note 3)	Personal
Choy Hok Man, Constance	Company	400,000	–		Personal

Notes:

1. Under the share option scheme of the Company adopted on 7 June 2002 on the terms and conditions as set out in the circular of the Company dated 10 May 2004, the options to subscribe for the Shares are exercisable at any time from 8 June 2004 to 7 June 2014 at a subscription price of HK$0.82 per Share, subject to adjustment. The options were granted on 8 June 2004 to each grantee at a consideration of HK$1.00.

2. Under the share option scheme of the Company adopted on 7 June 2002, the options to subscribe for the Shares are exercisable at any time from 23 August 2002 to 6 June 2012 at a subscription price of HK$0.73 per Share, subject to adjustment. The options were granted on 23 August 2002 to each grantee at a consideration of HK$1.00.

3. Under the share option scheme of the Company adopted on 7 June 2002, the options to subscribe for the Shares are exercisable at any time from 6 March 2003 to 5 March 2013 at a subscription price of HK$0.76 per Share, subject to adjustment. The options were granted on 6 March 2003 to each grantee at a consideration of HK$1.00.

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GENERAL INFORMATION

APPENDIX

Save as disclosed above, none of the directors or chief executive of the Company had any interests or short positions in any shares, underlying shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) as recorded in the register to be kept under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code as at the Latest Practicable Date.

Apart from as disclosed under the paragraphs headed “DIRECTORS’ INTERESTS IN SECURITIES” above, at no time were rights to acquire benefits by means of the acquisition of shares in or debentures of the Company granted to any director or their respective spouse or children under 18 years of age, or were any such rights exercised by them; or was the Company or any of its holding companies, subsidiaries or fellow subsidiaries a party to any arrangement to enable the directors or their respective spouse or children under 18 years of age to acquire such rights in any other body corporate as at the Latest Practicable Date.

3. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, the following persons (other than a director or chief executive of the Company) had interests or short positions in the shares and underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO:

		Number of
Name	Notes	Shares held	%
Shougang Holding (Hong Kong) Limited	1	445,731,315	47.45
(“Shougang Holding”)
Wheeling Holdings Limited	1	430,491,315	45.83
Cheung Kong (Holdings) Limited (“CKH”)	2, 3	133,048,717	14.16
Max Same Investment Limited	3	91,491,193	9.74

Notes:

1. Wheeling Holdings Limited is a wholly-owned subsidiary of Shougang Holding and its interests above are in respect of the same interests held by Shougang Holding. Shougang Holding is a wholly-owned subsidiary of Shougang Corporation, a state-owned enterprise in Mainland China.

2. By virtue of their interests in CKH, the following person and companies are each deemed to be interested in the 133,048,717 shares held by CKH:

Mr. Li Ka-Shing Li Ka-Shing Unity Trustcorp Ltd. Li Ka-Shing Unity Trustee Company Ltd. Li Ka-Shing Unity Trustee Corporation Ltd.

1. Max Same Investment Limited is a wholly-owned subsidiary of CKH and its interests above are included in the interests held by CKH.

Save as disclosed above, no other person (other than a director or chief executive of the Company) had an interest or short position in the shares and underlying shares of the Company as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX

4. SERVICES CONTRACT

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

5. LITIGATION

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

6. GENERAL

• (i) The Company Secretary of the Company is Chan Yuet Kwai, FCCA, FHKSA.

• (ii) The branch share registrar of the Company in Hong Kong is Tengis Limited, G/F., Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (iii) The registered office of the Company is Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.

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