Weiye Holdings Limited — M&A Activity 2003

Mar 17, 2003

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.

WORLD POSSESSION ASSETS LIMITED (Incorporated in the British Virgin Islands with limited liability)	UNITED POWER INVESTMENT LIMITED (Incorporated in Bermuda with limited liability)

JOINT ANNOUNCEMENT

Conditional mandatory general offer by

Get Nice Capital Limited and Asia Investment Capital Limited

on behalf of

World Possession Assets Limited

for all the issued Shares of HK$0.05 each at a price of

HK$0.06 per Share in United Power Investment Limited

(other than those Shares already owned or agreed to be acquired

by World Possession Assets Limited or parties acting in concert with it)

and to cancel all outstanding Options

On 13 March, 2003, Mr. Yeung and Ms. Yeung (son and daughter of Ms. Ma respectively), have purchased 2 World Possession Shares, representing 2/3 of the issued share capital of World Possession, from Mr. Sy and Mr. Kwan for a total consideration of US$2 (equivalent to approximately HK$15.6) in cash pursuant to the Share Purchase. Mr. Yeung also acquired from Mr. Sy the benefit of a loan of HK$50 million due from World Possession to Mr. Sy at a consideration of HK$8,999,992 in cash pursuant to the Loan Assignment. Immediately prior to the Share Purchase, each of Ms. Ma, Mr. Kwan and Mr. Sy owned 1/3 interest in the issued share capital of World Possession. Immediately after the Share Purchase, Ms. Ma, Mr. Yeung and Ms. Yeung together own the entire issued share capital of World Possession, which in turn holds approximately 41.06% of the issued share capital of the Company. As a result of the change in the shareholding structure of World Possession following the Share Purchase, World Possession will make a mandatory conditional general offer for all the issued Shares (other than those Shares already owned or agreed to be acquired by World Possession or parties acting in concert with it) and to cancel all Options as required under Rule 26.1 of the Takeovers Code. The terms of the Offers are set out under the section headed "Mandatory Conditional General Offer" below. Get Nice and Asia Investment are satisfied that there are sufficient financial resources available to World Possession to meet the full acceptance of the Offers at an offer price of HK$0.06 per Share under the Share Offer and at an offer price of HK$0.001 for cancellation of each Option to subscribe for a Share. World Possession and the Company will despatch a composite document to the Shareholders and the Optionholders setting out, inter alia, the conditions and terms of the Offers, information on the Company and the recommendations of the independent board committee, together with forms of acceptance and transfer/cancellation as soon as possible pursuant to the Takeovers Code. Altus Capital Limited has been appointed as the independent financial adviser to the independent board committee in respect of the Offers. At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. on 14 March, 2003 pending the issue of this announcement. Application has been made by the Company for the resumption of trading in Shares on the Stock Exchange with effect from 9:30 a.m. on 18 March, 2003. Shareholders and investors are advised to exercise extreme caution in dealing in the Shares as the Offers may or may not become unconditional (see "Condition of the Offers" below). Further announcement will be made by the Company regarding the Offers when appropriate.

THE SHARE PURCHASE AND LOAN ASSIGNMENT

Date: 13 March, 2003

Purchasers: Mr. Yeung and Ms. Yeung

Vendors: Mr. Sy and Mr. Kwan

Number of shares: 2 World Possession Shares, representing 2/3 of the issued share capital of World Possession. The 2 World Possession Shares have been acquired by Mr. Yeung and Ms. Yeung free from all claims, charges, liens, encumbrances, equities and third parties rights together with all rights attached thereto and all dividends and distributions declared, paid or made in respect thereof after the date of the Share Purchase.

Loan Assignment: Mr. Yeung acquired from Mr. Sy the benefit of a loan of HK$50 million due from World Possession to Mr. Sy.

Consideration: US$1 (equivalent to approximately HK$7.8) for each World Possession Share and HK$8,999,992 for the assignment of the benefit of the Loan, which were negotiated and determined on arm's length basis between the Vendors and the Purchasers and have been paid in full by cash on the date of Share Purchase and Loan Assignment on 13 March, 2003.

As at 28 February, 2003, World Possession had a negative net asset value of about HK$1,382,382. Its only asset (apart from a small cash balance representing approximately 0.09% of the total assets of World Possession as at 28 February, 2003) is 450,000,000 Shares, which were acquired through shareholders loans advanced by Ms. Ma and Mr. Sy in the sums of HK$104,823,000 and HK$50,000,000 respectively. Mr. Kwan did not advance any sum to World Possession. The funds required to be contributed by Mr. Kwan to World Possession by way of shareholder's loan for the acquisition of 450,000,000 Shares were advanced to World Possession by Ms. Ma instead. Accordingly, this was not a loan transaction between Ms. Ma and Mr. Kwan. As such, Ms. Yeung acquired the 1 World Possession Share at a consideration of US$1.

The total consideration of about HK$9 million paid by Mr. Yeung to Mr. Sy for the acquisition of 1/3 of the issued share capital of World Possession and the benefit of the Loan was arrived at by valuing 150,000,000 Shares (being 1/3 of the 450,000,000 Shares held by World Possession) at HK$0.06 per Share (the "Effective Price").

Before the Share Purchase, each of Ms. Ma, Mr. Kwan and Mr. Sy owned 1/3 interest in the issued share capital of World Possession. After the Share Purchase, Ms. Ma, Mr. Yeung and Ms. Yeung together own the entire issued share capital of World Possession. Ms. Ma and Mr. Yeung also own all the shareholders' loans advanced to World Possession after the Loan Assignment.

MANDATORY CONDITIONAL GENERAL OFFER

World Possession owns 450,000,000 Shares, representing approximately 41.06% of the entire issued share capital of the Company as at the date of this announcement. Save for the 450,000,000 Shares held by World Possession and the outstanding Options held by Ms. Ma and Mr. Kwan, entitling each of them to subscribe for 15,000,000 new Shares respectively, World Possession and parties acting in concert with it neither have any shareholding interest in the Company nor have any outstanding warrants or share options or securities convertible into Shares. As a result of the change in the shareholding structure of World Possession following the Share Purchase, World Possession will make a mandatory conditional general offer for all the issued Shares (other than those Shares already owned or agreed to be acquired by World Possession or parties acting in concert with it) and to cancel all Options pursuant to Rule 26.1 of the Takeovers Code. Currently, there are 1,095,884,000 Shares in issue and outstanding Options to subscribe for a total of 38,456,000 Shares. As (i) World Possession owns 450,000,000 Shares; (ii) Ms. Ma, Mr. Kwan and Mr. Liu Yu Mo have undertaken not to accept the Option Offer in respect of Options to subscribe for a total of 34,000,000 Shares; and (iii) Mr. Liu Yu Mo has undertaken not to accept the Share Offer relating to the 24,000 Shares beneficially held by him, the number of Shares subject to the Share Offer is 645,860,000 Shares and the number of Options subject to the Option Offer is Options to subscribe for a total of 4,456,000 Shares. Save as disclosed, there are no outstanding warrants or share options or securities convertible into Shares as at the date of this announcement.

Save for the Share Purchase, there has been no dealing in the Shares by any of Mr. Yeung, Ms. Yeung and World Possession and parties acting in concert with any of them during the six-month period prior to 20 February, 2003, the date of announcement of negotiations relating to the Offers. The Executive is of the view that Ms. Ma, World Possession, Mr. Kwan and Mr. Sy are parties acting in concert with each other. Ms. Ma, Mr. Yeung, Ms. Yeung and World Possession will make an application for the rebuttal of the assumption that they are still acting in concert with Mr. Kwan and Mr. Sy.

The Offers will be made on the terms set out below.

Principal terms of the Offers

Get Nice and Asia Investment, on behalf of World Possession will make a mandatory conditional general offer on the following basis:

for each Share . HK$0.06 in cash

for cancellation of each Option

to subscribe for a Share . HK$0.001 in cash

Condition of the Offers

The Offers are conditional upon World Possession having received acceptances of the Share Offer which, together with the Shares already owned or agreed to be acquired by World Possession or parties acting in concert with it before or during the offer period, will result in World Possession holding more than 50% of the voting rights of the Company.

Comparison of value

The price of HK$0.06 for each Offer Share is the same as the Effective Price and such price represents:

(a) a discount of 25% to the closing price of HK$0.08 per Share recorded on the Stock Exchange on 13 March, 2003, the trading day immediately prior to the suspension of trading in the Shares on 14 March, 2003;

(b) a discount of approximately 32.2% to the average closing price of HK$0.0885 per Share for the 10 trading days up to and including 13 March, 2003;

(c) a discount of approximately 52.94% to the audited consolidated net asset value per Share of approximately HK$0.1275 per Share as at 31 March, 2002 based on the audited accounts of the Company for the financial year ended 31 March, 2002; and

(d) a discount of approximately 53.74% to the unaudited consolidated net asset value per Share of approximately HK$0.1297 per Share as at 30 September, 2002 based on the unaudited accounts of the Company for the six months ended 30 September, 2002.

As at the date of this announcement, there are outstanding Options to subscribe for a total of 38,456,000 Shares, consisting of Options entitling holders thereof to subscribe for (i) 24,500,000 new Shares at an exercise price of HK$0.58 per Share at any time from 1 August, 2000 to 31 July, 2005 and (ii) 13,956,000 new Shares at an exercise price of HK$0.26 per Share at any time from 29 December, 2000 to 31 July, 2005. As at the date of this announcement, Ms. Ma, Mr. Kwan and Mr. Liu Yu Mo, all of whom are executive Directors, hold outstanding Options respectively entitling them to subscribe for 15,000,000, 15,000,000 and 4,000,000 new Shares. Mr. Liu Yu Mo has undertaken to World Possession that he will not accept the Share Offer relating to the 24,000 Shares which he is holding. Ms. Ma, Mr. Kwan and Mr. Liu Yu Mo have undertaken to World Possession that they will not in any way deal in any Options during the period of the Offers or accept the Option Offer relating to their Options. Mr. Liu Yu Mo is not a party in concert with Ms. Ma and World Possession respectively. Mr. Kwan and Mr. Sy have ceased to have any interest in World Possession after the Share Purchase and the Loan Assignment. Mr. Kwan was not a director of World Possession. Mr. Liu Yu Mo is a salaried employee of the Company.

The remaining Options to subscribe for a total of 4,456,000 Shares are held by employees of the Group. These Options are exercisable at a price of HK$0.58 per Share (in respect of 2,500,000 Shares) and HK$0.26 per Share (in respect of 1,956,000 Shares) and are therefore currently out of money. Get Nice and Asia Investment, on behalf of World Possession, will make an offer to pay the Optionholders a nominal consideration of HK$0.001 in cash in respect of every Option to subscribe for one Share in consideration of the surrender to the Company by the relevant holders of all the existing rights attaching to their Options, following which such Options will be cancelled and extinguished.

Pursuant to the share option scheme of the Company, any Option outstanding upon the expiry of six months after the Option Offer becomes unconditional, to the extent it has not been exercised, shall cease and determine.

Total consideration

As at the date of this announcement, there are 1,095,884,000 Shares in issue. Based on the offer price of HK$0.06 per Share, the Share Offer values the entire issued share capital of the Company at approximately HK$65.75 million and all the Offer Shares at approximately HK$38.75 million. The total consideration payable under the Option Offer for cancellation of the Options is HK$4,456. Get Nice and Asia Investment are satisfied that there are sufficient financial resources available to World Possession to meet the full acceptance of the Offers.

Effect of accepting the Offers

By accepting the Share Offer, Shareholders will sell their Shares and all rights attached to them, and all dividends and distribution recommended, declared, made or paid on or after 13 March, 2003, being the date of the Share Purchase. By accepting the Option Offer, the Optionholders will surrender to the Company their Options for cancellation by the Company.

Settlement of the consideration

Stamp duty at a rate of HK$1 for every HK$1,000 or part thereof of the amount payable in respect of relevant acceptances will be deducted from the amount payable to the Shareholders who accept the Share Offer. World Possession will then pay such stamp duty to the stamp office.

The amounts due to the Shareholders or the Optionholders (as the case may be) who accept the Offers will be posted by World Possession within 10 days after the date of receipt by the Hong Kong share registrar of the Company of the valid requisite documents from such Shareholders or Optionholders (as the case may be) in accordance with the Takeovers Code.

INFORMATION ON THE COMPANY

The Company was incorporated in Bermuda with limited liability and its Shares are listed on the Stock Exchange. The Company is an investment holding company. The Group is principally engaged in restaurant operation and property investment. Based on the interim financial statements of the Company, the unaudited consolidated net profit of the Group for the six months ended 30 September, 2002 was approximately HK$2.43 million and the unaudited consolidated net asset value of the Group as at 30 September, 2002 was approximately HK$142.12 million. The audited consolidated net loss attributable to Shareholders for the year ended 31 March, 2002 was approximately HK$3.2 million and for the year ended 31 March, 2001, the audited consolidated net loss of the Group was approximately HK$83.25 million. As at 31 March, 2002, the audited consolidated net tangible asset value of the Group was approximately HK$139.68 million.

INFORMATION ON MR. YEUNG, MS. YEUNG AND WORLD POSSESSION

World Possession is a private investment holding company incorporated in the British Virgin Islands. Apart from the investment in the Company, World Possession has not been engaged in any other business since its incorporation. Before the Share Purchase, each of Ms. Ma, Mr. Kwan (an executive Director) and Mr. Sy owned 1/3 interest in the issued share capital of World Possession. Immediately after the Share Purchase, Ms. Ma, Mr. Yeung and Ms. Yeung together own the entire interests in the issued share capital of World Possession. The directors of World Possession before the Share Purchase were Ms. Ma, Mr. Yeung and Mr. Sy. After the Share Purchase, the directors of World Possession are Ms. Ma and Mr. Yeung. Ms. Ma is the Chairperson of the Company and Mr. Yeung is an executive Director. The biographical details of Mr. Yeung and Ms. Yeung are as follows:

Mr. Yeung Chi Hang, aged 24, first joined the Group as Assistant General Manager of Golden Island (Management) Limited, a subsidiary of the Company, in 2001. Mr. Yeung was appointed as Director on 1 May, 2002. Mr. Yeung worked in property investment and wedding services companies in Hong Kong prior to joining the Company. He is the son of Ms. Ma.

Ms. Yeung Kit Yu, aged 21, holds a bachelor degree in Asian Studies from University of British Columbia, major in Putonghua and minor in Japanese. She is the daughter of Ms. Ma.

INTENTION OF WORLD POSSESSION REGARDING THE COMPANY

It is the intention of World Possession that the existing principal activities of the Group will remain unchanged and World Possession has no intention of injecting any material assets or businesses into the Group or disposing of any of its major assets.

Mr. Kwan will resign as Director on the first closing date of the Offers or the date the Offers become unconditional, whichever is later. Save as aforesaid, there will not be any appointment of Directors or material changes in the management or employees of the Group by reason only of the Offers.

MAINTAINING THE LISTING STATUS OF THE COMPANY

World Possession intends to maintain the listing of the Shares on the Stock Exchange. The Company, the Directors, World Possession and the directors of World Possession will undertake to the Stock Exchange to take appropriate steps as soon as possible following closing of the Offers to ensure not less than 25% of the Shares will be held by the public.

The Stock Exchange has indicated that if, upon closing of the Offers, less than 25% of the issued share capital of the Company is held in the hands of public or if the Stock Exchange believes that (i) a false market exists or may exist in the Shares; or (ii) there are too few Shares in public hands to maintain an orderly market, then it will consider exercising its discretion to suspend trading in the Shares. In this connection, it should be noted that upon the close of the Offers, there may be insufficient public float for the Shares and therefore trading in the Shares may be suspended until a sufficient level of public float is attained.

The Stock Exchange will also closely monitor all future acquisitions or disposals of assets by the Company. The Stock Exchange has indicated that it has the discretion to require the Company to issue a circular to the shareholders of the Company irrespective of the size of any proposed transactions, particularly when such proposed transactions represent a departure from the principal activities of the Company. The Stock Exchange also has the power to aggregate a series of transactions of the Company and any such transactions may result in the Company being treated as if it were a new listing applicant.

GENERAL INFORMATION

An independent board committee will be formed to advise the minority Shareholders and the Optionholders in respect of the Offers. World Possession and the Company will despatch a composite document to the Shareholders and the Optionholders setting out, inter alia, the conditions and terms of the Offers, information on the Company and the recommendations of the independent board committee, together with forms of acceptance and transfer/cancellation as soon as possible pursuant to the Takeovers Code. Altus Capital Limited has been appointed as the independent financial adviser to the independent board committee in respect of the Offers.

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. on 14 March, 2003 pending publication of this joint announcement. Application has been made by the Company for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 18 March, 2003.

Shareholders and investors are advised to exercise extreme caution in dealing in the Shares as the Offers may or may not become unconditional. Further announcement will be made by the Company regarding the Offers when appropriate.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise.

"Asia Investment"

Asia Investment Capital Limited, an investment adviser and a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong) and the joint financial adviser to World Possession in relation to the Offers

"Company" United Power Investment Limited, a company incorporated in Bermuda with limited liability and the Shares of which are listed on the main board of the Stock Exchange

"Director(s)" the director(s) of the Company

"Executive" the Executive Director of the Corporate Finance Division of the SFC or any of his delegates

"Get Nice" Get Nice Capital Limited, an investment adviser and a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong) and the joint financial adviser to World Possession in relation to the Offers

"Group" the Company and its subsidiaries

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

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

"Loan" the loan of HK$50 million due from World Possession to Mr. Sy

"Loan Assignment" the assignment of the benefit of the Loan by Mr. Sy to Mr. Yeung for a cash consideration of HK$8,999,992 on 13 March, 2003

"Mr. Kwan" Mr. Kwan Ming Kau, Cary, an executive Director who owned 1/3 of the issued share capital of World Possession prior to the Share Purchase

"Mr. Sy" Mr. Sy Ching Tang, Timothy, who owned 1/3 of the issued share capital of World Possession and was a director of World Possession prior to the Share Purchase

"Mr. Yeung" Mr. Yeung Chi Hang, an executive Director and the son of Ms. Ma who owns 1/3 of the issued share capital of World Possession immediately after the Share Purchase. He is also a director of World Possession

"Ms. Ma" Ms. Ma Shuk Kam, the chairperson of the Company and mother of both Mr. Yeung and Ms. Yeung. She owns 1/3 of the issued share capital of World Possession prior to and immediately after the Share Purchase and is a director of World Possession

"Ms. Yeung" Ms. Yeung Kit Yu, the daughter of Ms. Ma who owns 1/3 of the issued share capital of World Possession immediately after the Share Purchase

"Offers" the Share Offer and the Option Offer

"Offer Share(s)" issued Share(s) other than those already owned by World Possession and parties acting in concert with it

"Option(s)" outstanding option(s) which have been granted under the Company's share option scheme adopted on 30 August, 2002, entitling the holder(s) thereof to subscribe for new shares of the Company

"Option Offer" the conditional mandatory cash offer being made by Get Nice and Asia Investment, on behalf of World Possession, to cancel all outstanding Options

"Optionholders" holders of Options

"Purchasers" Mr. Yeung and Ms. Yeung, the purchasers under the Share Purchase

"PRC" the People's Republic of China

"SFC" the Securities and Futures Commission

"Share(s)" share(s) of HK$0.05 each in the share capital of the Company

"Shareholders" holders of Shares

"Share Offer" the conditional mandatory cash offer to be made by Get Nice and Asia Investment, on behalf of World Possession, to acquire all the issued Shares (other than those Shares already owned or agreed to be acquired by World Possession or parties acting in concert with it)

"Share Purchase" the purchase of 2 World Possession Shares, representing 2/3 of the issued share capital of World Possession, for a total cash consideration of US$2 on 13 March, 2003

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"Takeovers Code" the Hong Kong Code on Takeovers and Mergers

"US" the United States of America

"Vendors" Mr. Kwan and Mr. Sy

"World Possession" World Possession Assets Limited, a company incorporated in the British Virgin Islands with limited liability, the entire issued share capital of which was owned by Ms. Ma, Mr. Kwan and Mr. Sy in equal shares prior to the Share Purchase and is beneficially owned by Ms. Ma, Mr. Yeung and Ms. Yeung in equal shares immediately after the Share Purchase

"World Possession

Share(s)" share(s) of US$1 each in the share capital of World Possession

"HK$" and "cents" Hong Kong Dollars and cents respectively, the lawful currency of Hong Kong

"US$" US dollars, the lawful currency of the US

"%" per cent.

By Order of the Board of WORLD POSSESSION ASSETS LIMITED Ma Shuk Kam Director	By Order of the Board of UNITED POWER INVESTMENT LIMITED Liu Yu Mo Director

Hong Kong, 17 March, 2003

The directors of World Possession jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that in relation to the Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, their opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any of their statements in this announcement misleading.

The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that in relation to Mr. Yeung, Ms. Yeung and World Possession) and confirm, having made all reasonable enquiries, that to the best of their knowledge, their opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement the omission of which would make any of their statements in this announcement misleading.

Please also refer to the published version of this announcement in the The Standard.