TIDMACHL
RNS Number : 1698I
Asian Citrus Holdings Ltd
25 August 2016
For immediate release 25 August 2016
Asian Citrus Holdings Limited
Major Transaction - Acquisition of 100% of Eagleton Global
Investments Limited and their Intended Acquisition of 60% Interest
in the Property
Issue of Consideration Shares and Placing of New Shares Under
Specific Mandate
And
Potential Continuing Connected / Related Party Transaction
THE SPA
The Board wishes to announce that after trading
hours in Hong Kong on 25 August 2016, the Purchaser
(being a wholly-owned subsidiary of the Company),
the Company and the Vendor entered into the SPA
in respect of the Acquisition, pursuant to which
the Purchaser has conditionally agreed to acquire,
and the Vendor has conditionally agreed to sell,
the Sale Shares, representing 100% of the issued
share capital of the Target at Completion. The
total consideration for the Acquisition is HK$600
million (equivalent to approximately GBP58.82
million) (subject to adjustment).
The Consideration for the Acquisition shall be
payable by the Purchaser (i) in cash of HK$300
million (equivalent to approximately GBP29.41
million) to the Vendor (or its designated nominee);
and (ii) by procuring the Company to issue 600,000,000
Consideration Shares at the Issue Price of HK$0.50
per Share (equivalent to approximately GBP0.049
per Share) to the Vendor (or its designated nominee)
on Completion Date.
Completion is conditional upon the fulfillment
or waiver (as the case may be) of a number of
conditions including but not limited to the completion
of the Placing, as set out under the sub-section
headed "The SPA - Conditions precedent" of this
announcement. Therefore, the Acquisition may
or may not proceed. Shareholders and potential
investors are reminded to exercise caution when
dealing in the Shares of the Company.
Subject to the fulfillment of the respective
conditions precedent under the SPA and the Placing
Agreement, Completion will take place simultaneously
with the completion of the Placing on the same
date or at such other time as may be agreed by
the Purchaser and the Vendor.
The Target is an investment holding company.
Pursuant to the SPA, the Vendor will acquire
the entire issued share capital of the Target
(which will indirectly own 60% interest of the
PRC Target Subsidiary, being the owner of the
Property) prior to Completion.
THE PLACING
After trading hours in Hong Kong on 25 August
2016, the Company and the Placing Agent entered
into the Placing Agreement pursuant to which
the Company has conditionally agreed to offer
for subscription and the Placing Agent has agreed
to procure, on a best-effort basis, as placing
agent of the Company, not less than six Placee(s)
to subscribe, up to 610,000,000 Placing Shares,
at a price of HK$0.50 per Placing Share (equivalent
to approximately GBP0.049 per Placing Share).
The Placee(s) and its ultimate beneficial owners
shall be Independent Third Parties. The Placing
Shares will be allotted and issued pursuant to
the Specific Mandate to be obtained from the
Shareholders at the SGM.
The maximum number of 610,000,000 Placing Shares
represent:-
(i) approximately 48.81% of the existing issued
share capital of the Company as at the date of
this announcement;
(ii) approximately 24.80% of the issued share
capital of the Company as enlarged by the Placing
and the issue of Consideration Shares (assuming
there will not be any other change in the issued
share capital from the date of this announcement
to the date of completion of the Placing). The
aggregate nominal value of the Placing Shares
will be HK$6.1 million (equivalent to approximately
GBP598,039).
The gross proceeds from the Placing will be approximately
HK$305 million (equivalent to approximately GBP29.90
million) and the net proceeds from the Placing
are estimated to be approximately HK$300 million
(equivalent to approximately GBP29.41 million).
It is expected that the entire net proceeds from
the Placing will be applied as the Cash Consideration
for the Acquisition under the SPA.
The Placing Price of HK$0.50 per Placing Share
(equivalent to approximately GBP0.049 per Placing
Share) was determined after arm's length negotiations
between the Company and the Placing Agent and
represents:-
(i) a discount of approximately 19.35% to the
closing price of HK$0.62 per Share (equivalent
to approximately GBP0.061 per Share) as quoted
on the Stock Exchange on the date of the Placing
Agreement; and
(ii) a discount of approximately 21.14% to the
average closing price of HK$0.634 per Share (equivalent
to approximately GBP0.062 per Share) as quoted
on the Stock Exchange for the five consecutive
trading days of the Shares immediately prior
to the date of the Placing Agreement.
The Placing is subject to termination by the
Placing Agent under certain circumstances as
set out in the paragraph headed "The Placing
Agreement - Termination" in this announcement.
In the event that the Placing Agent exercises
its right to terminate the Placing Agreement
in accordance with the terms therein, the Placing
will not proceed. Should the placing not proceed,
the Acquisition will not complete.
Since completion of the Placing is subject to
the fulfilment of the condition(s) as set out
in the Placing Agreement, the Placing may or
may not proceed. Shareholders and potential investors
are reminded to exercise caution when dealing
in the Shares of the Company.
POTENTIAL CONTINUING CONNECTED / RELATED PARTY
TRANSACTION
Mr. Kung or companies held by him are currently
occupying certain parts of the Property and will
enter into a lease agreement with the PRC Target
Subsidiary in respect of certain part of the
Property on or about Completion. Given Mr. Justin
Kung will become a substantial shareholder of
the Company upon Completion, Mr. Kung (being
the father of Mr. Justin Kung) will become a
connected person / related party of the Company.
Accordingly, the transactions contemplated under
such lease agreement (if proceeded with) may
become continuing connected transaction(s) of
the Company under Chapter 14A of the Listing
Rules and related party transaction(s) in accordance
with the AIM Rules.
The Company will comply with applicable requirements
under Chapter 14A of the Listing Rules and Rule
13 of the AIM Rules as and when appropriate should
any such continuing connected / related party
transaction take place.
IMPLICATIONS UNDER THE LISTING RULES AND AIM
RULES
As certain percentage ratios in respect of the
Acquisition are more than 25% but all percentage
ratios are less than 100%, the Acquisition constitutes
a major transaction for the Company under the
Listing Rules and is subject to notification,
announcement and Shareholders' approval requirements
under Chapter 14 of the Listing Rules and a "Substantial
Transaction" pursuant to the AIM Rules.
Both the Acquisition and the Placing are subject
to the Shareholders' approval. The SGM will be
convened for the purpose of, among other things,
considering, and if thought fit, approving (i)
the SPA and the transactions contemplated thereunder;
and (ii) the grant of the Specific Mandate to
allot and issue the Consideration Shares and
the Placing Shares under the Placing.
A circular containing, among other things, (i)
details of the Acquisition, the SPA and the transactions
contemplated thereunder; (ii) details of the
Placing; and (iii) the notice of the SGM are
expected to be despatched to the Shareholders
on or before 14 October 2016 as more time is
required to prepare the required information
for inclusion in the circular, including but
not limited to the audited financial results
of the Group for the year ended 30 June 2016.
----------------------------------------------------------------------
THE SPA
The Board wishes to announce that after trading hours in Hong
Kong on 25 August 2016, the Purchaser (being a wholly-owned
subsidiary of the Company), the Company and the Vendor entered into
the conditional SPA in respect of the Acquisition.
The principal terms of the SPA are set out below:
Date
25 August 2016
Parties
(1) Greater Lead Limited, a company incorporated
in the BVI (as the Vendor), which will
become the 100% owner of the Target
prior to Completion
(2) In-Season Limited, a wholly-owned subsidiary
of the Company (as the Purchaser)
(3) The Company (as the guarantor for the
Purchaser in respect of its obligations
and performance under the SPA)
To the best of the Directors' knowledge, information and belief
after having made all reasonable enquiries, each of the Vendor and
its ultimate beneficial owner is an Independent Third Party as at
the date of this announcement.
Subject Matter
The Vendor has conditionally agreed to sell, and the Purchaser
has conditionally agreed to acquire, the Sale Shares, representing
100% of the issued share capital of the Target at Completion, free
from all encumbrances and together with all rights and benefits
attaching thereto at any time on or after the Completion Date.
The Company guarantees to the Vendor the due and punctual
performance by the Purchaser of its obligations under the SPA.
Consideration
The Consideration for the Acquisition payable by the Company to
the Vendor is HK$600 million (equivalent to approximately GBP58.82
million) (subject to adjustment) and shall be payable by the
Company to the Vendor in the following manner on Completion
Date:
(1) the Purchaser shall pay HK$300 million (i.e. the Cash
Consideration) (equivalent to approximately GBP29.41 million) in
cash to the Vendor (or its designated nominee); and
(2) the Purchaser shall procure the allotment and issue of the
Consideration Shares to the Vendor (or its designated nominee).
The Consideration was arrived at after arm's length negotiations
between the Vendor and the Purchaser on normal commercial terms
with reference to (amongst other things) the expected Appraisal
Value of the Property at not less than approximately HK$1 billion
(equivalent to approximately GBP98.04 million) which will be
finally determined by an independent professional valuer, and that
the Consideration represents 60% of the Group's interest in the
Target Group upon Completion. Pursuant to the SPA, the Target will
acquire 60% interest in the PRC Target Subsidiary (being the owner
of the Property) prior to Completion. Please refer to the paragraph
headed "Information on the Target Group" for details.
The Cash Consideration will be funded by the net proceeds from
the Placing.
Consideration Shares
The Consideration Shares will be allotted and at the Issue Price
of HK$0.50 per Consideration Share (equivalent to approximately
GBP0.049 per Consideration Share), credited as fully paid, in the
manner as set out in the sub-section headed "Consideration" of this
announcement. The Consideration Shares, when allotted and issued,
shall rank pari passu in all respects with the Shares in issue on
the date of allotment and issue of the Consideration Shares.
The 600,000,000 Consideration Shares represent:
(i) approximately 48.01% of the existing issued share capital of
the Company as at the date of this announcement; and
(ii) approximately 24.39% of the issued share capital of the
Company as enlarged by the allotment and issue of the Consideration
Shares and Placing Shares (assuming no further change in the share
capital of the Company from the date of this announcement to the
completion of Acquisition and Placing).
The aggregate nominal value of the Consideration Shares is HK$6
million (equivalent to approximately GBP588,235).
Details of the Issue Price are set out in the paragraph headed
"Specific Mandate" in this announcement.
Conditions precedent
Completion shall be conditional upon:-
(a) the Purchaser having been satisfied with the results of its
legal, business and financial due diligence conducted against the
Target, its subsidiaries and the Property;
(b) the Company having obtained the approval from the Stock
Exchange for the listing of, and permission to deal in, the
Consideration Shares;
(c) the Purchaser having received a valuation report in respect
of the Property to be issued by an independent qualified valuer
engaged by the Purchaser, according to which the Appraisal Value of
the Property is not less than HK$1 billion (equivalent to
approximately GBP98.04 million);
(d) the completion of the Target Group Reorganisation and the
Vendor having acquired the legal and beneficial ownership of all
issued shares of the Target;
(e) the Purchaser having received a legal opinion from its PRC
legal adviser addressing to the Purchaser as to PRC laws in
relation to the title of the Property and the due completion of the
Target Group Reorganisation to the satisfaction of the
Purchaser;
(f) (if required) all necessary authorisations, consents, and
approvals of any third parties (including the Stock Exchange, any
governmental or regulatory body, where applicable) in relation to
the transactions contemplated herein having been obtained and
remaining in full force and effect;
(g) the Company having obtained the approval of the Shareholders
in respect of the transactions contemplated under the SPA at the
SGM;
(h) the completion of the Placing;
(i) the warranties given by the Purchaser and the Company under
the SPA remaining true and accurate and not misleading as of
Completion; and
(j) the warranties given by the Vendor under the SPA remaining
true and accurate and not misleading as of Completion.
The Purchaser may at its sole discretion waive the conditions
precedent referred to in paragraphs (a), (c), (d), (e) and/or (j)
above, and the Vendor may at its sole discretion waive the
condition precedent referred to in paragraph (i) above. Save as
disclosed above, none of the other conditions precedent above may
be waived by any party.
If any of the conditions precedent above has not been fulfilled
or waived (where applicable) on or before 31 December 2016 (or such
later date as the parties may agree in writing), the SPA shall
lapse immediately thereafter and be of no further effect (save for
certain provisions relating to confidentiality, costs and expenses
and certain miscellaneous matters shall remain in full force and
effect), and no party to the SPA shall have any claim against or
liability or obligation to any other party under the SPA save for
antecedent breaches.
Completion
Subject to the fulfillment or waiver (where applicable) of all
of the above conditions precedent, other than the condition
precedent referred to in paragraph (h) above which shall only be
capable of being fulfilled simultaneously with the Completion,
Completion shall take place within ten business days after all of
the above conditions precedent have been fulfilled or waived (where
applicable) and simultaneously with the Placing, or such other date
as the Vendor and the Company may agree in writing.
Immediately after the Completion,
(i) the Company will (through the Purchaser) own the entire
equity interest in the Target, which in turn will indirectly own
60% interest of the PRC Target Subsidiary, and the financial
results of the Target Group will be consolidated with the results
of the Group. The remaining 40% interest of the PRC Target
Subsidiary will be beneficially owned by Mr. Kung, who will become
a connected person of the Company upon Completion; and
(ii) the Vendor (or its designated nominee) will become a
substantial shareholder of the Company holding the Consideration
Shares, representing approximately 24.39% of the entire issued
share capital of the Company as enlarged by the issue of the
Consideration Shares and the Placing Shares (assuming no other
changes to the issued share capital of the Company prior to
Completion).
Completion Adjustment
After Completion, the Purchaser shall verify the completion
accounts of the Target Group as at the Completion Date to be
provided by the Vendor and determine the adjusted asset value (the
"Adjusted Asset Value") of the Target Group (being the consolidated
total current asset less consolidated total liabilities of the
Target Group). There will be no adjustment to the Consideration if
the Adjusted Asset Value is a positive number. In the event the
Adjusted Asset Value is negative, the cash portion of the
Consideration will be reduced by an amount equal to the absolute
value of 60% of the Adjusted Asset Value and the Vendor shall pay
such adjustment in cash to the Purchaser within three business days
from the date when the final Adjusted Asset Value is
determined.
INFORMATION ON THE TARGET GROUP
The Target is a company incorporated in the BVI with limited
liability on 11 March 2016. The principal business of the Target is
investment holding and it has not conducted any business since its
incorporation. Pursuant to the SPA, the Vendor will acquire the
entire issued share capital of the Target (which in turn will
indirectly own 60% interest of the PRC Target Subsidiary, being the
owner of the Property) prior to Completion. The Property comprises
two buildings of 8 storeys each, with a total gross floor area of
28,327.24 sq.m., which are located at Nanshan Avenue, Nanshan
District, Shenzhen, the PRC.
The unaudited financial information of the PRC Target Subsidiary
(assuming the completion of the Target Group Reorganisation) for
the years ended 31 December 2014 and 31 December 2015 is set out
below:-
For the year ended For the year
31 December 2015 ended
31 December
2014
RMB'million RMB'million
Approximately Approximately
Net profit (before
and after taxation) 16.39 4.22
The unaudited total asset of the PRC Target Subsidiary (assuming
the completion of the Target Group Reorganisation) as at 31 July
2016 was approximately RMB46.34 million (equivalent to
approximately HK$54.22 million and GBP5.32 million).
Reasons for acquiring the Target are set out later in this
announcement in the paragraph "Reasons For and Benefits of the
Acquisition and the Placing".
THE PLACING AGREEMENT
Date
25 August 2016
Issuer
The Company
Placing Agent
RHB Securities Hong Kong Limited
The Placing Agent has conditionally agreed to procure, on a
best-effort basis, as placing agent of the Company, the Placee(s)
to subscribe up to 610,000,000 Placing Shares. The Placing Agent
will receive a placing commission of 1% of the aggregate Placing
Price for the Placing Shares actually placed by or on behalf of the
Placing Agent on behalf of the Company in pursuance of its
obligations under the Placing Agreement. Such placing commission
was arrived at after arm's length negotiations between the Company
and the Placing Agent under normal commercial terms and with
reference to the prevailing market conditions.
To the best of the Directors' knowledge, information and belief
after having made all reasonable enquiries, as at the date of this
announcement, each of the Placing Agent and its ultimate beneficial
owners is an Independent Third Party.
Placees
The Placing Shares are to be placed to not less than six
Placees, who and whose ultimate beneficial owners, shall be
Independent Third Parties. The Placing Agent has undertaken to the
Company that except with the consent of the Company, none of the
Placees would, immediately upon completion of the Placing, become a
substantial shareholder of the Company.
Placing Price
Details of the Placing Price are set out in the paragraph headed
"Specific Mandate" in this announcement.
The Directors consider that the terms of the Placing Agreement
(including the Placing Price and the Placing commission) are fair
and reasonable, based on current market conditions and in the
interests of the Company and the Shareholders as a whole.
The gross proceeds from the Placing are expected to be
approximately HK$305 million (equivalent to approximately GBP29.90
million) and the net proceeds from the Placing are estimated to be
approximately HK$300 million (equivalent to approximately GBP29.41
million). On such basis, the net issue price will be approximately
HK$0.492 per Placing Share (equivalent to approximately GBP0.048
Placing Share).
Placing Shares
The maximum number of 610,000,000 Placing Shares represent:-
(i) approximately 48.81% of the existing issued share capital of
the Company as at the date of this announcement;
(ii) approximately 24.80% of the issued share capital of the
Company as enlarged by the Placing and the issue of Consideration
Shares (assuming there will not be any other change in the issued
share capital from the date of this announcement to the date of
completion of the Placing). The aggregate nominal value of the
Placing Shares will be HK$6.1 million (equivalent to approximately
GBP598,039).
Ranking
The Placing Shares will rank, upon issue, pari passu in all
respects with the Shares in issue as at the date of allotment and
issue of the Placing Shares.
Conditions of the Placing
Completion of the Placing is conditional upon:-
(i) the Stock Exchange granting the listing of, and permission
to deal in, the Placing Shares to be placed pursuant to the Placing
Agreement;
(ii) the grant of Specific Mandate to allot and issue the
Placing Shares under the Placing being approved by the Shareholders
at the SGM; and
(iii) all of the conditions precedent under the SPA being
fulfilled or waived (as the case may be), other than the condition
precedent in relation to the completion of the Placing.
None of the conditions above may be waived by any party.
If the above conditions are not satisfied or waived (as the case
may be) on or before 31 December 2016, the obligations of the
Placing Agent and of the Company under the Placing Agreement shall
cease and neither the Placing Agent nor the Company shall have any
claim against the other in relation to the Placing Agreement (save
in respect of any antecedent breaches of any obligations
thereunder, breach of warranties and representations, or
obligations in relation to expenses incurred).
Completion
Completion of the Placing shall take place on a date within ten
business days after the fulfillment of the above conditions (other
than the condition precedent referred to in paragraph (iii) above
which shall only be capable of being fulfilled simultaneously with
the completion of the Placing) and simultaneously with the
Completion, or on such other date as the Company and the Placing
Agent may agree in writing.
Termination
The Placing Agent reserves its right to terminate the Placing
Agreement by notice in writing to the Company at any time up to
9:30 a.m. on the date of completion of the Placing if, in the
reasonable opinion of the Placing Agent, after consultation with
the Company:
(A) there develops, occurs or comes into force:
(i) any event, development or change (whether or not local,
national or international or forming part of a series of events,
developments or changes occurring or continuing before, on and/or
after the date hereof) and including an event or change in relation
to or a development of an existing state of affairs of a political,
military, industrial, financial, economic, fiscal, regulatory or
other nature, resulting in a change in, or which may result in a
change in, political, economic, fiscal, financial, regulatory or
stock market conditions; or
(ii) the imposition of any moratorium, suspension or restriction
on trading in securities generally on the Stock Exchange occurring
due to exceptional financial circumstances or otherwise; or
(iii) any change in conditions of local, national or international securities markets; or
(iv) any new law or regulation or change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority in Hong Kong or any other jurisdiction relevant to the Group; or
(v) a change or development involving a prospective change of
taxation or exchange control (or the implementation of exchange
control) in Hong Kong or elsewhere; or
(vi) any litigation or claim being instigated against any member
of the Group which would have a material adverse effect on the
Group; or
(vii) any suspension in the trading of Shares on the Stock
Exchange for a continuous period of fifteen Business Days; or
(B) any material breach of any of the representations and
warranties set out in the Placing Agreement comes to the knowledge
of the Placing Agent or any event occurs or any matter arises on or
after the date hereof and prior to the date of completion of the
Placing which if it had occurred or arisen before the date hereof
would have rendered any of such representations and warranties
untrue or incorrect in any material respect or there has been a
material breach by the Company of any other provision of the
Placing Agreement; or
(C) there is any material adverse change in the financial or
business or trading position of the Group as a whole on or after
the date of the Placing Agreement but before completion of the
Placing.
The Directors are not aware of the occurrence of any of such
events as at the date of this announcement.
Mandate to issue the Placing Shares
The Placing Shares proposed to be issued under the Placing
Agreement will be issued pursuant to the Specific Mandate to be
obtained from the Shareholders at the SGM.
Use of Proceeds
The maximum net proceeds from the Placing are estimated to be
approximately HK$300 million (equivalent to approximately GBP29.41
million). It is expected that the entire net proceeds from the
Placing will be applied as the Cash Consideration for the
Acquisition under the SPA.
The Placing is subject to termination by the Placing Agent under
certain circumstances as set out in the above paragraph headed "The
Placing Agreement - Termination". In the event that the Placing
Agent exercises its right to terminate the Placing Agreement in
accordance with the terms therein, the Placing will not proceed.
Should the placing not proceed, the Acquisition will not
complete.
Since completion of the Placing is subject to the fulfilment of
the condition(s) as set out in the Placing Agreement, the Placing
may or may not proceed. Shareholders and potential investors are
reminded to exercise caution when dealing in the Shares of the
Company.
SPECIFIC MANDATE
The total of 1,210,000,000 Consideration Shares and the Placing
Shares proposed to be issued under the SPA and the Placing
Agreement, respectively, will be issued pursuant to the Specific
Mandate to be obtained from the Shareholders at the SGM. An
application will be made to the Listing Committee of the Stock
Exchange for the listing of and permission to deal in the
Consideration Shares and the Placing Shares.
The Issue Price and Placing Price of HK$0.50 per Share
(equivalent to approximately GBP0.049 per Share) represent:
(i) a discount of approximately 19.35% to the latest closing
price of HK$0.62 per Share (equivalent to approximately GBP0.061
per Share) as quoted on the Stock Exchange on the date of the SPA
and the Placing Agreement; and
(ii) a discount of approximately 21.14% to the average closing
price of HK$0.634 per Share (equivalent to approximately GBP0.062
per Share) as quoted on the Stock Exchange for the last five
consecutive trading days immediately preceding the date of the SPA
and the Placing Agreement.
Both the Issue Price and the Placing Price were determined by
the Board after arm's length negotiation between the parties with
reference to the prevailing market price of the Shares and the
current market conditions. The Directors consider both the Issue
Price and the Placing Price are fair and reasonable and in the
interest of the Company and the Shareholders as a whole.
POTENTIAL CONTINUING CONNECTED / RELATED PARTY TRANSACTION
Mr. Kung or companies held by him are currently occupying
certain parts of the Property and will enter into a lease agreement
with the PRC Target Subsidiary in respect of certain part of the
Property on or about Completion. Given Mr. Justin Kung will become
a substantial shareholder of the Company upon Completion, Mr. Kung
(being the father of Mr. Justin Kung) will become a connected
person / related party of the Company. Accordingly, the
transactions contemplated under such lease agreement (if proceeded
with) may become continuing connected transaction(s) of the Company
under Chapter 14A of the Listing Rules and related party
transactions in accordance with Rule 13 of the AIM Rules.
The Company will comply with applicable requirements under
Chapter 14A of the Listing Rules and Rule 13 of the AIM Rules as
and when appropriate should any such continuing connected / related
party transaction take place.
REASONS FOR AND BENEFITS OF THE ACQUISITION AND THE PLACING
The Group is principally engaged in planting, cultivation and
sale of agricultural produce, manufacture and sale of fruit juice
concentrates, fruit purees and frozen fruit and vegetables. The
Group has three plantations in the PRC occupying a total area of
approximately 103 square kilometers, namely Hepu Plantation in
Guangxi Zhuang Autonomous Region, Xinfeng Plantation in Jiangxi
Province and Hunan Plantation in Hunan Province.
As disclosed in the interim report of the Company for the six
months ended 31 December 2015 and the market update announcements
of the Company dated 18 May 2016 and 11 August 2016, the operating
environment of the Group has been difficult in the past few years
with adverse weather conditions and the devastating effects of
Huanglongbing disease posing significant challenges to the business
and financial operations of the Group. The Group suffered
significant losses resulting from decreasing production yields and
increasing margin pressures in Hepu Plantation and the cessation of
operation of Xinfeng Plantation and Hunan Plantation in December
2015 and May 2016 respectively.
In view of the weak business sentiments relating to the Group's
fruit business, the Directors have been exploring different
business opportunities in other sectors in order to broaden the
sources of income and to boost the business performance of the
Group. Pursuant to the SPA, the Vendor will acquire the entire
issued share capital of the Target (which in turn will indirectly
own 60% interest of the PRC Subsidiary, being the owner of the
Property) prior to Completion. The Property comprises two buildings
of 8 storeys each, which are located at Nanshan Avenue, Nanshan
District, Shenzhen, the PRC, and over 90% of the units have been
leased out as at the date of this announcement, which generated
rental income of approximately RMB41.33 million (equivalent to
approximately HK$48.36 million and GBP4.74 million) and RMB44.37
million (equivalent to approximately HK$51.91 million and GBP5.09
million) for the year ended 31 December 2014 and 2015 respectively.
The Property is located near Qianhai special economic zone,
Shenzhen, the PRC and has been enjoying and is expected to continue
to enjoy high occupancy and rental growth for office/commercial
space. The Board considers that in light of its strategic location
and its close proximity to Qianhai special economic zone, the
occupancy rate is expected to remain relatively high with well
diversified tenant profile. The Board considers that the
Acquisition would enable the Group to generate steady rental income
which would strengthen the asset and/or income base of the Group
and provide capital appreciation potential to the Group.
In addition, the Directors consider that it is in the interest
of the Company and its Shareholders as a whole to retain more cash
for general working capital requirements and the future business
development of the Group after the completion of the Acquisition.
The settlement of the Consideration in full by the issue of
Consideration Shares and proceeds of the Placing Shares allows the
Group to (i) minimise immediate cash outflow; (ii) avoid increasing
its liabilities; (iii) complete the Acquisition without significant
cash outlay; and (iv) maintain its liquidity position and financial
leverage with readily available and accessible cash resources for
its daily operations and future development demands for
capital.
The terms of the SPA were determined after arm's length
negotiations between the parties thereto and the Directors are of
the view that the terms of the SPA and the Placing are on normal
commercial terms and are fair and reasonable and in the interests
of the Company and the Shareholders as a whole.
FUND RAISING ACTIVITIES OF THE COMPANY DURING THE PAST 12
MONTHS
The Company had not conducted any fund raising activities in the
past 12 months immediately preceding the date of this
announcement.
EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY
To the best of the Directors' knowledge, information and belief
after having made all reasonable enquiries, the existing
shareholding structure of the Company and the effect on the
shareholding structure of the Company, upon completion of the
Placing and the issue of Consideration Shares (assuming there is no
other change in the shareholding structure of the Company before
the issue of the Placing Shares and the Consideration Shares) are
set out as below:
Shareholders As at the date of Upon completion
this announcement of the Placing and
the issue of the
Consideration Shares
No. of Shares Approximate No. of Shares Approximate
% %
Director
Mr. Ng Ong
Nee
(Note 1) 179,252,394 14.34 179,252,394 7.29
Others
Vendor
(Note 2) - - 600,000,000 24.39
The Placees
of the Placing - - 610,000,000 24.80
Other public
Shareholders 1,070,385,490 85.66 1,070,385,490 43.52
------------------ -------------- ------------ -------------- ------------
Total 1,249,637,884 100.00 2,459,637,884 100.00
================== ============== ============ ============== ============
Notes:
1. As at the date of this announcement, Mr. Ng Ong Nee, the
Company's Chairman, an executive Director and Chief Executive
Officer of the Company, indirectly held 179,252,394 Shares through
Changjiang Tyling Management Company Limited, a company owned by
him as to 50%.
2. The Vendor is a company wholly-owned by Mr. Justin Kung.
Subject to and upon issue of the Consideration Shares to the Vendor
at Completion, Mr. Justin Kung and his associates will become
connected persons of the Company.
IMPLICATIONS UNDER THE LISTING RULES AND AIM RULES
As certain percentage ratios in respect of the Acquisition are
more than 25% but all percentage ratios are less than 100%, the
Acquisition constitutes a major transaction for the Company under
the Listing Rules and is subject to notification, announcement and
Shareholders' approval requirements under Chapter 14 of the Listing
Rules and a "Substantial Transaction" under Rule 12 of the AIM
Rules.
The SGM will be convened for the purpose of, among other things,
considering, and if thought fit, approving (i) the SPA and the
transactions contemplated thereunder; and (ii) the grant of the
Specific Mandate to allot and issue the Placing Shares and the
Consideration Shares. To the best knowledge of the Directors, no
Shareholder has a material interest in the Acquisition and/or the
Placing. Accordingly, no Shareholder will be required to abstain
from voting at the SGM in respect of the resolutions to be proposed
at the SGM.
Applications will be made to the Stock Exchange for the listing
of, and permission to deal in, the Placing Shares and the
Consideration Shares, respectively.
A circular containing, among other things, (i) details of the
Acquisition, the SPA and the transactions contemplated thereunder;
(ii) details of the Placing; and (iii) the notice of the SGM are
expected to be despatched to the Shareholders on or before 14
October 2016 as more time is required to prepare the information
for inclusion in the circular, including but not limited to the
audited financial results of the Group for the year ended 30 June
2016.
DEFINITIONS
Unless otherwise specified, the following terms have the
following meanings in this announcement:
"Acquisition" the acquisition of the Sale Shares
"AIM" AIM, a market operated by the LSE
"AIM Rules" the AIM Rules for Companies published
by the LSE from time to time (including,
without limitation, any guidance
notes or statements of practice)
which govern the rules and responsibilities
of companies whose shares are admitted
to trading on AIM
"Appraisal Value" the appraisal value of the Property
to be stated in the valuation report
to be issued by an independent
qualified valuer in Hong Kong
"associate(s)" has the meaning as ascribed to
it in the Listing Rules
"Board" the board of Directors
"BVI" British Virgin Islands
"Cash Consideration" HK$300 million (equivalent to approximately
GBP29.41 million) payable by the
Purchaser to the Vendor (or such
other nominee(s) as directed by
the Vendor) in cash at Completion
pursuant to the SPA
"Company" Asian Citrus Holdings Limited,
a company incorporated in Bermuda
with limited liability, the issued
shares of which are listed and
traded on the Main Board of the
Stock Exchange and AIM
"Completion" completion of the Acquisition in
accordance the terms and conditions
of the SPA
"Completion the date of Completion, being a
Date" date within ten business
days after all of the conditions
precedent as set out in sub-paragraph
headed "The SPA - Conditions Precedent"
above (other than the condition
precedent which shall only be capable
of being fulfilled simultaneously
with the Completion) have been
fulfilled or waived (or such other
date as the Vendor and the Company
may agree in writing) on which
Completion is to take place
"connected person(s)" has the meaning as ascribed to
it in the Listing Rules
"Consideration" the aggregate sum of HK$600 million
(equivalent to approximately GBP58.82
million) (subject to adjustment),
being the aggregate of the Cash
Consideration and the Consideration
Shares
"Consideration 600,000,000 new Shares to be allotted
Shares" and issued by the Company at HK$0.50
(equivalent to approximately GBP0.049)
each to the Vendor (or such other
nominee(s) as directed by the Vendor)
at Completion pursuant to the SPA
"Director(s)" the director(s) of the Company
"Group" the Company and its subsidiaries
"HK$" Hong Kong dollars, the lawful currency
of Hong Kong
"Hong Kong" the Hong Kong Special Administrative
Region of the PRC
"Independent third party(ies) independent of
Third Party(ies)" the Company and its connected persons
"Issue Price" HK$0.50 per Consideration Share
(equivalent to approximately GBP0.049
per Consideration Share)
"Listing Rules" the Rules Governing the Listing
of Securities on the Stock Exchange
"LSE" London Stock Exchange plc
"Mr. Justin Mr. Kung Chak Ming, an Independent
Kung" Third Party as at the date of this
announcement and the son of Mr.
Kung
"Mr. Kung" Mr. Kung Chun Lung, an Independent
Third Party as at the date of this
announcement and the father of
Mr. Justin Kung
"Placee(s)" any person or entity to be procured
by or on behalf of the Placing
Agent under the Placing
"Placing" the proposed placing of the Placing
Shares by the Placing Agent to
the Placee(s), on a best-effort
basis, on the terms and subject
to the conditions set out in the
Placing Agreement
"Placing Agent" RHB Securities Hong Kong Limited,
a licensed corporation to carry
out business in Type 1 (dealing
in securities) and Type 4 (advising
on securities) regulated activities
under the Securities and Futures
Ordinance (Chapter 571 of the Laws
of Hong Kong)
"Placing Agreement" the proposed conditional placing
agreement entered into between
the Company and the Placing Agent
dated 25 August 2016 in relation
to the Placing under the Specific
Mandate
"Placing Price" HK$0.50 per Placing Share (equivalent
to approximately GBP0.049 per Placing
Share)
"Placing Shares" a maximum of 610,000,000 new Shares
proposed to be placed pursuant
to the Placing Agreement and each
a "Placing Share"
"PRC" the People's Republic of China
"PRC Target Long Jia Investment Management
Subsidiary" (Shenzhen) Co., Ltd.* ( ), a wholly
foreign enterprise established
in the PRC and the owner of the
Property as at the date of this
announcement
"Property" two buildings of 8 storeys each,
located at Nanshan Avenue, Nanshan
District, Shenzhen, the PRC
"Purchaser" In-Season Limited, a company incorporated
in the BVI with limited liability
and is wholly-owned by the Company
"Sale Shares" 10,000 issued shares of US$1.00
(equivalent to approximately HK$7.76
and GBP0.76) each in the share
capital of the Target, which represent
100% of the issued share capital
of the Target at Completion
"SGM" a special general meeting of the
Company to be convened for the
purpose of considering, and if
thought fit, approving the SPA
and the transactions contemplated
thereunder, and the grant of the
Specific Mandate
"Share(s)" ordinary share(s) of HK$0.01 (equivalent
to approximately GBP0.001) each
in the capital of the Company
"Shareholder(s)" holder(s) of the Share(s)
"SPA" the sale and purchase agreement
dated 25 August 2016 entered into
between the Purchaser, the Company
and the Vendor in relation to the
Acquisition
"Specific Mandate" the special mandate to be granted
by the Shareholders to the Board
at the SGM for the allotment and
issue of the Placing Shares and
the Consideration Shares
"sq. m." square meter(s)
"Stock Exchange" The Stock Exchange of Hong Kong
Limited
"substantial has the meaning as ascribed to
shareholder(s)" it in the Listing Rules
"Target" Eagleton Global Investments Limited,
a company incorporated in the BVI
with limited liability and will
be wholly-owned by the Vendor at
Completion, being the subject matter
of the Acquisition
"Target Group" the Target and its subsidiaries
"Target Group the reorganisation of the subsidiaries
Reorganisation" and fellow subsidiaries of the
Target, pursuant to which 60% interest
of the PRC Target Subsidiary will
be transferred to the Target Group
prior to Completion
"Vendor" Greater Lead Limited, a company
incorporated in the BVI with limited
liability and is wholly-owned by
Mr. Justin Kung
"%" per cent.
For the purposes of this announcement, the exchange rates of (i)
RMB1.00 = HK$1.17, (ii) US$1 to HK$7.76 and (iii) GBP1 to HK$10.2
have been used, where applicable, for illustration purposes only
and do not constitute representations that any amount has been,
could have been or may be exchanged at such rates or any other
rates or at all on the date or dates in question or any other
date.
This announcement contains inside information for the purpose of
Article 7 of Regulation (EU) No 596/2014.
For further enquiries please contact:
Asian Citrus +852 3951 0000
Emma Ng (Chief Financial Officer and Company
Secretary)
Cantor Fitzgerald Europe (NOMAD +44 (0) 20 7894
and Broker) 7000
Rick Thompson/David Foreman/Michael Reynolds
(Corporate Finance)
+44 (0) 20 7067
Weber Shandwick Financial 0700
Nick Oborne, Stephanie Badjonat, Tom Jenkins
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUVUORNOAWUAR
(END) Dow Jones Newswires
August 25, 2016 09:29 ET (13:29 GMT)
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