CHINA RESOURCES<0291>LOGIC INT'L<1193>-Joint Announcement & LOGIC Resumption of Trading
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.
CHINA RESOURCES (HOLDINGS) COMPANY LIMITED
(Incorporated in Hong Kong with limited liability)
CHINA RESOURCES ENTERPRISE, LIMITED
(Incorporated in Hong Kong with limited liability)
LOGIC INTERNATIONAL HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
ANNOUNCEMENT
CONNECTED TRANSACTION FOR THE COMPANY
SUBSCRIPTION OF NEW SHARES IN THE COMPANY BY CRE AND CRH
SUMMARY
A conditional subscription agreement dated 23rd February, 2000
was entered into between the Company, Waterside, CRE and CRH,
pursuant to which the Company has conditionally agreed to issue,
and the Subscribers, i.e. Waterside and CRH, have
conditionally agreed to subscribe for a total of 884 million
new Shares.
The Subscription Shares represent about 143.4% of the existing
issued share capital of the Company as at 21st February, 2000
and about 58.9% of the enlarged issued share capital of the
Company immediately after Completion.
The price payable by the Subscribers will be HK$0.40 per Share
in cash which was determined after arm's length negotiations
between the Company, CRE and CRH. The net proceeds of the
Subscription will be applied to repay loans and as working
capital for future business development.
CRE and its controlling shareholder CRH are connected persons
of the Company as Waterside, a wholly owned subsidiary of CRE,
is a substantial shareholder of the Company. The subscription
of new shares in the share capital of the Company by Waterside
and CRH constitutes a connected transaction for the Company
under the Listing Rules and is subject to approval by the
Independent Shareholders. At present, CRE and CRH and their
respective associates and concert parties together hold
approximately 38.7% of the existing issued share capital of
the Company respectively and will abstain from voting at the
SGM to approve the Subscription.
Upon Completion of the Subscription, the interests of CRE and
CRH, and their respective associates and concert parties
together, in the issued share capital of the Company will be
increased from about 38.7% to about 55.0% and 74.8%
respectively.
In the absence of the Whitewash Waiver, upon completion of the
Subscription, CRE and CRH would be obliged to make a mandatory
general offer to acquire all issued shares in the Company not
held by CRE and CRH and any parties acting in concert with them
under the Code. Application will be made to the Executive for
the Whitewash Waiver pursuant to Note 1 of the Notes on
Dispensation from Rule 26 of the Code, and the grant of such
waiver was made a condition for Completion.
SUBSCRIPTION AGREEMENT (Agreement date: 23rd February, 2000)
Subscribers
Waterside for 586,770,396 new Shares
CRH for 297,229,604 new Shares
Number of Subscription Shares
A total of 884 million new Shares representing approximately
143.4% of the existing issued share capital of the Company or
about 58.9% of the enlarged issued share capital of the Company
immediately after Completion. Pursuant to the Subscription
Agreement, Waterside will subscribe for 586,770,396 new Shares,
representing 95.2% of the existing issued share capital of the
Company and 39.1% of the enlarged issued share capital of the
Company respectively and CRH will subscribe for 297,229,604
new Shares, representing 48.2% of the existing issued share
capital of the Company and 19.8% of the enlarged issued capital
of the Company respectively.
Subscription price
HK$0.40 per Subscription Share representing (i) a discount of
approximately 36.5% to the closing price of HK$0.63 per Share
as quoted on the Stock Exchange on 21st February, 2000 (the
last trading day prior to the suspension of trading of the
Shares on 22nd February, 2000); (ii) a discount of
approximately 41.9% to the average closing price of
approximately HK$0.689 per Share as quoted on the Stock
Exchange for the last 10 trading days up to 21st February, 2000
and (iii) a premium of 185.7% to the net asset value per Share,
being approximately HK$0.14, based on the audited accounts of
the Company as at 31st March, 1999. The subscription price was
determined based on arm's length negotiations between the
Company, CRE and CRH with reference to the prevailing market
price of the Shares, the net asset value per Share and having
considered the current operating results and financial
situations of the Company. The Directors believe the
subscription price is fair and reasonable as far as the
shareholders of the Company are concerned.
Costs and expenses
The Company, CRE and CRH will bear their own costs and expenses
incurred in relation to the preparation of the Subscription
Agreement and the Subscription.
Ranking
The Subscription Shares will rank pari passu in all respects
with the existing Shares in issue, including ranking for
payment of any dividend declared on and after the date of the
Subscription Agreement.
Whitewash Waiver
Upon Completion, CRE and CRH will be interested in 825,347,743
Shares and 1,122,577,347 Shares (825,347,743 Shares held via
CRE) of the Company respectively, representing 55.0% and 74.8%
respectively of the enlarged issued share capital of the
Company upon Completion. In the absence of the Whitewash Waiver,
CRE and CRH should be obliged to make a mandatory general offer
to acquire all issued shares in the Company not held by CRH
and CRE or parties acting in concert with them under the Code.
Application will be made to the Executive for the Whitewash
Waiver pursuant to Note 1 of the Notes on Dispensation from
Rule 26 of the Code and the grant of such waiver was made a
condition for Completion. CRH and CRE do not intend to make
a general offer in respect of the Shares should the Whitewash
Waiver not being granted by the Executive.
Conditions of the Subscription
Completion of the Subscription is conditional on:
(i) the approval of the Subscription and the Whitewash
Waiver by the Independent Shareholders at the SGM;
(ii) the Executive granting the Whitewash Waiver;
(iii) the Bermuda Monetary Authority granting or agreeing
to grant permission, prior to the date upon which the
Subscription Shares are allotted and/or issued; and
(iv) the representations and warranties from the Company in
the Subscription Agreement having been true and accurate in
all material respects and the undertakings having been duly
performed.
(v) the Listing Committee of the Stock Exchange granting
listing of or agreeing to grant listing and permission to deal
in the Subscription Shares.
Completion of the Subscription
In the event that the conditions, which are not waivable, are
not fulfilled on or before 30th April, 2000 (or such later date
as may be agreed between the parties) then the Subscription
Agreement and all rights and obligations thereunder will cease
and terminate.
REASONS FOR THE SUBSCRIPTION
The Directors (including the independent non-executive
directors of the Company) believe that the cash subscription
by CRE and CRH of shares in the Company will not only improve
the Group's financial position but is also important to the
Group's future business development. The Group recorded a net
loss for the fiscal year ended 31st March, 1999 of
approximately HK$109.2 million and has a total borrowings of
approximately HK$236.6 million as at 17th February, 2000. The
Directors believe that Subscription will increase the capital
base of the Company and provide a solid financial foundation
for the Group's existing business. Given the well-established
business networks of CRE and CRH in the region and their strong
financial backings, the Directors believe that the
Subscription will enable the Group to better explore various
business opportunities, and is thus the most favourable fund
raising method. The Directors further believe that given the
better PRC business connection and resources of CRH, a direct
subscription of 297,229,604 new shares in the share capital
of the Company by CRH may benefit the Company's future business
development in the PRC.
The Directors intend that the Company will continue to develop
its existing businesses of manufacturing, importing,
marketing and distribution of office furniture products. In
addition, the Company will actively study the opportunity of
further diversifying into other businesses, including
exploring business opportunities in E-commerce.
There are currently eight directors (including three non-
executive directors and two independent non-executive
directors) on the board of directors of the Company, of which
four are nominated by CRE. It is intended that all of them will
remain on the board of directors immediately after completion
of the Subscription. It is also intended that there will be
no material change in the existing senior management and
employees of the Company. Depending on future business
development of the Company, CRH and CRE may nominate additional
suitable candidates to the Board.
CLARIFICATION ON RECENT PRESS ARTICLES
The Directors note the recent press comments about the future
business development of the Company, including possible assets
injection including but not limited to CRE's or CRH's interests
in Peoples Telephone Company Limited and China Unicom, into
the Company by CRE and CRH. The Directors are not aware of any
plans of assets injection by CRE and CRH into the Company or
any reorganisation plan. The Company is studying various
business opportunities, including the development of E-
commerce business. Announcements would be made in compliance
with the requirements of the Listing Rules when necessary.
USE OF PROCEEDS FROM THE SUBSCRIPTION
The net proceeds of the Subscription are expected to amount
to about HK$350 million and will be used to repay all
interest-bearing loans and as working capital. The proceeds
will be applied as follows: about HK$163 million for repaying
bank loans; about HK$76 million for repaying interest-bearing
shareholders' loan due to a wholly owned subsidiary of CRE;
and the remaining balance as working capital for future
business development in accordance with the future business
plans and strategies of the Company. However, the Group has
not identified any project or specific plan at present.
SPECIAL GENERAL MEETING
A special general meeting of the shareholders of the Company
will be convened to seek the approvals necessary for the
Subscription and the Whitewash Waiver. The Subscribers, who
are connected persons of the Company and are interested in the
Subscription, together with their associates and concert
parties will abstain from voting on the resolution to approve
the Subscription and Whitewash Waiver at the SGM.
INFORMATION ON THE COMPANY
The Company, through its operating subsidiaries, is
principally engaged in the businesses of manufacturing,
importing, marketing and distribution of office furniture
products to customers mainly in Hong Kong and the PRC. For the
year ended 31st March, 1998, the audited net loss for the Group
was approximately HK$77.0 million. For the year ended 31st
March, 1999, the audited net loss for the Group was
approximately HK$109.2 million. The audited consolidated net
asset value of the Company as at 31st March, 1999 was
approximately HK$84.7 million. Based on the latest management
accounts as at 31st December, 1999, the total borrowings of
the Group were approximately HK$247.6 million. The Company
currently has 616,632,261 Shares in issue and approximately
5.4 million options outstanding and will have 1,500,632,261
Shares in issue and approximately 5.4 million options
outstanding upon Completion.
CHANGES IN THE SHAREHOLDING OF THE COMPANY AS A RESULT OF
THE SUBSCRIPTION
(For the Shareholding structure before and upon Completion,
please refer to the press announcement today.)
The beneficial shareholdings of CRE and CRH and their
respective associates in the Company immediately before the
completion of the Subscription and immediately after the
Subscription are as follows:
Immediately before Immediately after
Completion Completion
CRE (held via Waterside) 238,577,347 Shares 825,347,743 Shares
(about 38.7 per cent.) (about 55.0 per cent.)
CRH 238,577,347 Shares 1,122,577,347 Shares
(via CRE and Waterside) (825,347,743 Shares
(about 38.7 per cent.) via CRE and Waterside)
(about 74.8 per cent.)
INFORMATION ON THE SUBSCRIBERS
Waterside
Waterside is a company incorporated in British Virgin Islands
with limited liability and is a wholly owned subsidiary of CRE.
CRE is a company incorporated in Hong Kong under the Companies
Ordinance. Its shares are listed on the Stock Exchange. CRE
and its subsidiaries are engaged in a wide range of businesses
including property investment and development, food and
beverages, infrastructure and other investments. For the year
ended 31st December, 1998, the consolidated net profit
attributable to shareholders of CRE was approximately
HK$1,268.4 million
CRH
CRH is a private limited company incorporated in Hong Kong and
is the controlling shareholder of CRE with approximately
55.46% equity interests in CRE.
CRH holds, apart from its interests in CRE, investments in a
variety of industries and business sectors including
telecommunication, infrastructure, power and petrochemical in
the PRC and Hong Kong.
GENERAL
The Company will apply to the Stock Exchange for listing of
and permission to deal in the Subscription Shares. Application
will be made to the SFC for the Whitewash Waiver. There are
no dealings in the Shares in the past six months by CRH, CRE
and their respective associates and concert parties. The
Independent Board Committee of the Company comprising Mr. Wong
Tak Shing, and Mr. Ong Kim Toh, Patrick, both being independent
non-executive Directors will be established to consider the
Subscription and the Whitewash Waiver. A circular containing
details of the Subscription, the Whitewash Waiver, a letter
from the Independent Board Committee, a letter from the
independent financial adviser to the Independent Board
Committee, the notice of the SGM of the Company will be sent
to the shareholders of the Company as soon as practicable. In
addition, an announcement of the result of the aforesaid SGM
will be made by the Company.
BNP Prime Peregrine Capital Limited has been appointed as the
financial advisor of CRE. An independent financial adviser
will be appointed to advise the Independent Board Committee
in relation to the Subscription.
SUSPENSION AND RESUMPTION OF TRADING
At the request of the Company, trading in the Shares on the
Stock Exchange was suspended at 10:00 a.m. on 22nd February,
2000. Application will be made to resume trading at 10:00 a.m.
on Thursday, 24th February, 2000.
DEFINITIONS
``associates'' as defined in the Listing Rules
``Board'' the board of Directors
``Code'' the Hong Kong Code on Takeovers and Mergers
``Company'' Logic International Holdings Limited, a company
incorporated in Bermuda with limited liability, the shares of
which are listed on the Stock Exchange
``Completion'' completion of the allotment and issue of the
Subscription Shares under the Subscription Agreement
``CRE'' China Resources Enterprise, Limited, a company
incorporated in Hong Kong with limited liability, the shares
of which are listed on the Stock Exchange
``CRH'' China Resources (Holdings) Company Limited, a
company incorporated in Hong Kong with limited liability, the
holding company of CRE with approximately 55.46% equity
interest in CRE
``Directors'' the directors of the Company
``Executive'' the Executive Director of the Corporate
Finance Division of SFC or any delegate of the Executive Director
``Group'' the Company and its subsidiaries
``Hong Kong'' the Hong Kong Special Administrative Region
of the People's Republic of China
``Independent Board Committee'' a committee of the
independent board of directors of the Company
``Independent Shareholder(s)'' the shareholders of the
Company other than CRE, CRH and their associates and concert parties
``Listing Rules'' the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited
``PRC'' the People's Republic of China excluding, for the
purpose of this announcement Hong Kong, Macau and Taiwan
``SFC'' the Securities and Futures Commission of Hong Kong
``SGM'' the special general meeting of the Company to be
convened for approving, inter alia, the Subscription and the
Whitewash Waiver
``Share(s)'' ordinary share(s) of HK$0.10 each in the share
capital of the Company
``Stock Exchange'' The Stock Exchange of Hong Kong Limited
``Subscribers'' together CRH (or its nominees) and Waterside
``Subscription'' the subscription by CRH and Waterside of
an aggregate of 884 million new Shares pursuant to the
Subscription Agreement
``Subscription Agreement'' the agreement dated 23rd
February, 2000, between the Subscribers, the Company and CRE
for the Subscribers to subscribe for 884 million new Shares
``Subscription Shares'' the 884 million new Shares to be
subscribed by he Subscribers under the Subscription Agreement
``Waterside'' Waterside Holdings Limited, a company
incorporated in the British Virgin Islands with limited
liability, and a wholly owned subsidiary of CRE
``Whitewash Waiver'' the granting by the Executive of a
waiver pursuant to Note 1 of the Notes on Dispensations from
Rule 26 of the Code waiving the obligation on the part of
Waterside, CRE and CRH and parties acting in concert with them
to make a general offer as a result of the Subscription
``HK$'' Hong Kong dollars, the lawful currency of Hong Kong
Special Administrative Region
By Order of the Board
China Resources (Holdings)
Company Limited
Song Lin
Director
By Order of the Board
China Resources Enterprise, Limited
Xu Zhiming
Executive Director
By Order of the Board
Logic International Holdings Limited
Kwok Siu Kai, Dennis
Chief Executive Officer
Hong Kong, 23rd February, 2000
The directors of the Company jointly and severally accept full
responsibility for the accuracy of the information contained
in this announcement other than those relating to Waterside,
CRE and CRH and confirm, having made all reasonable enquiries
that, to the best of their knowledge, the 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
statement in this announcement misleading.
The directors of CRE and CRH jointly and severally accept full
responsibility for the accuracy of the information contained
in this announcement other than those relating to the Company
or the Group, and confirm, having made all reasonable enquiries
that, to the best of their knowledge, the 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
statement in this announcement misleading.
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