TIDMAGP
RNS Number : 2782B
Asian Growth Properties Limited
02 April 2017
31 March 2017
Asian Growth Properties Limited
("AGP" or the "Company")
Proposed disposal of assets
Fundamental change of business
Related party transactions
Special dividend
and
Notice of special general meeting
The Company is pleased to announce today the proposed AGP
Reorganisation, which includes:
-- the entry into a conditional sale agreement with its majority
shareholder SEA in relation to the sale of the Company's Non-PRC
Assets to SEA at an aggregate price of HK$8,913,354,000
(GBP913,637,286); and
-- the AGP Special Dividend Payment to its Shareholders in the
amount of HK$10.35 (GBP1.06) per AGP Share.
In addition, SEA has conditionally agreed to the SEA
Distribution in Specie of SEA's shareholding in the Company to SEA
Shareholders.
A circular to AGP Shareholders will shortly be available on the
Company's website at www.asiangrowth.com and posted to AGP
Shareholders in due course.
Extracts from the circular to AGP Shareholders are set out
below.
The capitalised terms used in this announcement have the meaning
set out in Appendix VI to this announcement.
Sterling and Hong Kong Dollar conversions throughout this
announcement are based on the exchange rate of GBP1: HK$9.7559.
This announcement contains inside information.
For more information, please contact:
Lu Wing Chi Tel: +852 2828 6363
Executive Director
Asian Growth Properties Limited
Richard Gray / Andrew Potts / Atholl Tel: +44 207 886 2500
Tweedie
Panmure Gordon (UK) Limited
(Nominated Adviser)
APPIX I
PROPOSED REORGANISATION OF THE AGP GROUP INVOLVING
THE DISPOSAL OF CERTAIN ASSETS TO S E A HOLDINGS LIMITED
AND AGP SPECIAL DIVID PAYMENT TO AGP SHAREHOLDERS
AND
NOTICE OF SPECIAL GENERAL MEETING
1. Introduction
The Company has today announced the proposed AGP Reorganisation
pursuant to which the Company will, conditional upon the fulfilment
of certain conditions and approval by Shareholders:
-- sell the entire issued share capital of BSGL to SEA (AGP's
97.17 per cent. Shareholder) pursuant to the SP Agreement at an
aggregate price of HK$8,913,354,000 (GBP913,637,286), subject to
adjustments. BSGL is currently a wholly-owned subsidiary of the
Company and holds, through the BSGL Group, all the Non-PRC Assets;
and
-- make the AGP Special Dividend Payment to its Shareholders in
the amount of HK$10.35 (GBP1.06) per AGP Share.
The Sale is conditional on, inter alia, (i) the passing by
Shareholders of the Resolutions at the SGM and (ii) in order to
increase the number of shareholders and the free float in the AGP
Shares, the SEA Independent Shareholders passing an ordinary
resolution of SEA to approve the SEA Distribution in Specie.
The AGP Special Dividend is conditional on (i) the passing by
Shareholders of the Resolutions at the SGM; (ii) completion of the
Sale; and (iii) the SEA Independent Shareholders passing an
ordinary resolution of SEA to approve the SEA Distribution in
Specie.
Pursuant to the terms of the SP Agreement, the consideration
payable by SEA (being HK$8,913,354,000 (GBP913,637,286) shall be
paid by SEA to AGP within five business days following completion
of the Sale. On the AGP Special Dividend becoming unconditional and
payable, SEA will be entitled (as the holder of 97.17 per cent. of
the issued share capital of AGP) to receive an amount of
approximately HK$8,914,236,000 (GBP913,727,693) from the Company.
In practice, SEA's entitlement to HK$8,913,354,000 (GBP913,637,286)
of the AGP Special Dividend will be applied by SEA in discharging
SEA's obligation to pay the whole amount of the consideration due
in respect of the acquisition of BSGL.
The Non-PRC Assets are held by the BSGL Group and constitute all
of the assets and liabilities owned by AGP other than the PRC
Assets and comprise (i) a commercial property at 20 Moorgate,
London, EC2R 6DA; (ii) the Crowne Plaza Hong Kong Causeway Bay in
Hong Kong; (iii) bank balances and cash; and (iv) certain
short-term treasury investments. Further details of the Non-PRC
Assets are set out in Appendix III of this announcement.
Simultaneous with the AGP Reorganisation and conditional upon
the fulfilment of certain conditions:
-- SEA proposes to make the SEA Distribution in Specie such that
all the AGP Shares currently held by SEA will be distributed to the
SEA Shareholders; and
-- subject to completion of the SEA Distribution in Specie, NLI
has agreed to make the NLI Share Exchange Offer such that
qualifying Shareholders of AGP will be offered the opportunity to
exchange their AGP Shares for SEA Shares.
The SEA Distribution in Specie is conditional on (i) the passing
of the ordinary resolution to approve the SEA Distribution in
Specie by the SEA Independent Shareholders at the special general
meeting of SEA; (ii) completion of the Sale; and (iii) the board of
directors of SEA being satisfied that there are no reasonable
grounds for believing that the SEA Distribution in Specie would
render SEA unable to pay its liabilities as they become due.
The NLI Share Exchange Offer is conditional on completion of the
SEA Distribution in Specie.
Assuming completion of the AGP Reorganisation, the SEA
Distribution in Specie and the NLI Share Exchange Offer:
-- the AGP Group will hold the PRC Assets. As such, following
completion of the AGP Reorganisation, the AGP Group's property
assets will be solely located within the PRC. Further details of
the PRC Assets are set out in Appendix IV of this announcement and
Part V of the Circular;
-- the SEA Group will hold the Non-PRC Assets. As such,
following completion of the SEA Distribution in Specie, the SEA
Group's property assets will be solely located outside the PRC;
and
-- NLI will be a majority shareholder of both the AGP Group and the SEA Group.
As SEA is a related party of AGP, the Sale is treated under Rule
13 of the AIM Rules as a related party transaction. The AGP
Independent Directors consider, having consulted with Panmure
Gordon, that the terms of the Sale are fair and reasonable insofar
as AGP's Shareholders are concerned. Further details of the Sale
are set out in paragraphs 3 and 4 below.
In addition, given the size of the Sale, the Sale is treated
under Rule 15 of the AIM Rules as a fundamental change of business
of the Company. The Sale is therefore conditional upon, inter alia,
the passing by Shareholders of Resolution 1 of the SGM convened for
on Friday, 21 April 2017, the notice of which is set out in Part VI
of the Circular.
The purpose of the Circular is to provide Shareholders with
information in relation to the AGP Reorganisation, the SEA
Distribution in Specie and the NLI Share Exchange Offer, to explain
why the AGP Independent Directors consider the Resolutions to be in
the best interests of the Company and the Shareholders as a whole
and to explain why the AGP Independent Directors recommend that you
vote in favour of the Resolutions, as each AGP Independent Director
who holds AGP Shares intends to do in respect of his own beneficial
holdings of AGP Shares amounting in aggregate to 0.06 per cent. of
the AGP Shares of the Company as at 30 March 2017, being the last
practicable date prior to the date of this announcement. In
addition, it is also noted that SEA, the controlling shareholder of
AGP, intends to vote in favour of the Resolutions.
2. Background to, reasons for and the effect of the AGP Reorganisation
Prior to its admission to trading on AIM, AGP was a wholly-owned
subsidiary of Trans-Tasman Properties Limited, a New Zealand
company listed on the New Zealand Stock Exchange in which SEA was a
major shareholder. In January 2006, AGP was admitted to trading on
AIM and, at the same time as its admission, the AGP Shares held by
Trans-Tasman Properties Limited were distributed to its then
existing shareholders (including SEA).
In September 2006, a reorganisation of the SEA Group was carried
out whereby SEA injected certain real property businesses into AGP
in exchange for shares in AGP; the result of which SEA became
holder of 96.42 per cent. of the AGP Shares.
The original intention was that the enlarged AGP Group would be
positioned as a real estate group focused on the Asian market and
in particular on Hong Kong and PRC and additional equity funding
would be raised through the issuance of AGP Shares on AIM in order
to grow AGP. However, the AGP Share price fell sharply during the
2008 financial crisis such that AGP Shares traded at levels
significantly below AGP's NAV per AGP Share. Effectively, this
prevented the AGP Group from carrying out an equity fund raising
without being prejudicial to the interests of its existing
Shareholders.
Since its admission to trading on AIM, the AGP Group's business
has performed well and the NAV per AGP Share has increased
significantly over such period. However, this is not reflected in
its share price.
AGP recognises that it needs to increase its free float and
liquidity in order to seek to narrow the discount between the NAV
per AGP Share and the AGP Share price. Given the discount of the
AGP Share price to its NAV per AGP Share, it would be highly
dilutive to AGP's Shareholders interests if AGP were to issue new
Shares at the market price in circumstances in which the
Shareholders were not able to invest their proportionate share in
any such equity fundraising.
The AGP Board believes that it would be in the best interests of
AGP and its Shareholders if it were to:
-- focus on AGP as a property investment and development company
whose principal operations are in the PRC;
-- distribute back to its Shareholders cash excess to its requirements; and
-- procure SEA to distribute AGP Shares to the SEA Shareholders
so as to increase AGP's free float and broaden its shareholder
base.
Towards achieving these goals and assuming completion of the AGP
Reorganisation and the SEA Distribution in Specie:
-- AGP's Shares in public hands will initially move from 2.77
per cent. to approximately 28.65 per cent. immediately following
completion of the SEA Distribution in Specie but prior to the NLI
Share Exchange Offer. The exact amount of free float of AGP will
only be known after the completion of the NLI Share Exchange
Offer;
-- AGP's property assets and operations will, upon completion of
the AGP Reorganisation, initially consist of mainly the PRC Assets
and operations in the PRC;
-- AGP will in due course be largely independently managed from
SEA after the AGP Reorganisation. Currently, the AGP Group has its
own administrative and operational staff (mainly PRC staff)
separate from those of SEA Group to operate and manage its own
business. AGP Group also shares the office premises of the SEA
Group and pursuant to the old cost sharing agreement, SEA also
provided services, such as finance, compliance and secretarial
staff support to AGP Group. As it is not feasible to segregate
certain staff at corporate level, for an interim period of time
immediately following the completion of the AGP Reorganisation and
SEA Distribution in Specie, AGP and SEAI will enter into a New Cost
Sharing Agreement (see paragraph 16 below) pursuant to which SEAI
will continue to provide AGP with certain services (namely finance,
compliance and company secretarial staff support at corporate
level) at the request of the Service Recipients for a period not
exceeding one calendar year following the completion of the AGP
Reorganisation, and it is expected that AGP will commence
recruiting personnel (from SEA or third parties) shortly after
completion of the AGP Reorganisation. It is also AGP's intention
that it will enter into a lease agreement directly with the third
party landlord for its own office premises following completion of
the AGP Reorganisation; and
-- AGP and SEA will continue to have four common directors,
being Mr. Lu Wing Chi, Mr. Lambert Lu, Mr. Lincoln Lu and Mr. Lam
Sing Tai.
In order to ensure that the strategic leaderships of AGP and SEA
are segregated, AGP and SEA will be led by different persons
following completion of the AGP Reorganisation. In particular:
-- AGP's chief executive officer will be Mr. Lincoln Lu;
-- SEA's chief executive officer will be Mr. Lambert Lu; and
-- Mr. Lincoln Lu will relinquish his executive role in SEA and
Mr. Lambert Lu will relinquish his executive role in AGP.
It should be noted however that, while it is the AGP Board's
current intention to focus on operations in the PRC, and its
property assets following the AGP Reorganisation will be located
solely in the PRC, the AGP Board does not believe that AGP should
be restricted in its sphere of activities. Hence, the AGP Board has
not committed to limit its sphere of activities solely to the PRC
or to property related development and investments. The strategy of
AGP will be determined by the AGP Board itself taking into
consideration market opportunities, AGP's financial resources and
its core competencies.
By the same token, SEA has not committed to limit its sphere of
activities solely to outside the PRC.
Given the size of the PRC real property market vis-à-vis the
financial resources of AGP or SEA, following completion of the AGP
Reorganisation and SEA Distribution in Specie, the common directors
in AGP and SEA shall abstain from voting on board resolutions
approving such investment opportunities or potential transactions
when any potential conflicts of interest arise. Further, it is
noted that potential conflicts (if any) arising between AGP and NLI
(and its close associates) would be effectively managed pursuant to
the terms of the Non-Competition Deed. Further details of the
Non-Competition Deed are set out in paragraph 17 below.
3. The Sale and the AGP Special Dividend Payment
Under the SP Agreement, the consideration for the sale of BSGL
is HK$8,913,354,000 (GBP913,637,286) which was calculated by
reference to the NAV at 31 December 2016 of the Non-PRC Assets as
extracted from the audited consolidated financial statements of AGP
Group as at 31 December 2016, and taking into account (i) the
estimated increase in the net profit of Non-PRC Assets from 1
January 2017 until Completion; and (ii) the market value adjustment
on Crowne Plaza Hong Kong Causeway Bay. The value of the property
assets included in the NAV of the Non-PRC Assets has already been
adjusted to take into consideration their market values of HK$3,500
million (GBP358.8 million) (Crowne Plaza Hong Kong Causeway Bay) as
at 28 February 2017 as valued by an independent third party valuer
jointly engaged by SEA and AGP. A revaluation adjustment of
HK$2,607.8 million (GBP267.3 million) is required for Crowne Plaza
Hong Kong Causeway Bay as it, being classified as property, plant
and equipment rather than investment properties, was not currently
stated at market value in the Company's statement of financial
position. The value of HK$1,532 million (GBP157.0 million) (20
Moorgate, London) as at 28 February 2017 was valued by an
independent third party valuer jointly engaged by SEA and AGP.
There was no change in the valuation of the property between 31
December 2016 and 28 February 2017 in Pounds Sterling and as such
no revaluation adjustment is required for 20 Moorgate, London other
than in respect of foreign exchange movements. The actual
consideration will be adjusted to take into consideration the
actual NAV of BSGL as at the date of completion of the Sale,
including the effect of any foreign exchange movements (save that
there will not be any further property valuation after the
valuations as at 28 February 2017).
The amount of the AGP Special Dividend Payment will be
approximately HK$10.35 (GBP1.06 per AGP Share), amounting to
HK$9,173,700,000 (GBP940,323,292) in aggregate. Based on this
allocation:
-- SEA will be entitled to receive a dividend payment of
approximately HK$8,914,236,000 (GBP913,727,693), of which
HK$8,913,354,000 will be offset against the amount due to AGP under
the SP Agreement; and
-- the other shareholders of AGP will receive approximately
HK$259,464,000 (GBP26,595,599) in cash.
The AGP Special Dividend Payment is conditional on (i) the
passing by Shareholders of the Resolutions at the SGM; (ii)
completion of the Sale; and (iii) the SEA Independent Shareholders
passing an ordinary resolution of SEA to approve the SEA
Distribution in Specie. If such conditions are not satisfied, the
AGP Special Dividend Payment will not be made.
The AGP Shares will go ex-dividend on Thursday, 27 April 2017
and the AGP Special Dividend will be paid on Wednesday, 10 May
2017.
4. Other terms of the SP Agreement
The SP Agreement contains usual warranties on good and
marketable title to the Non-PRC Assets free from encumbrances.
Completion of the SP Agreement is conditional on:
(a) AGP Shareholders passing the Resolutions at the SGM;
(b) AGP declaring the conditional AGP Special Dividend Payment
to its Shareholders, such dividend to be paid following completion
of the Sale;
(c) the SEA Independent Shareholders passing an ordinary
resolution to approve the SEA Distribution in Specie; and
(d) SEA declaring the conditional SEA Distribution in Specie
whereby SEA shall distribute to its shareholders all its equity
interests in AGP.
If the conditions precedents are not fulfilled by 30 June 2017,
or such later date as AGP and SEA may agree, the SP Agreement shall
terminate.
If the SP Agreement terminates, the AGP Reorganisation and the
SEA Distribution in Specie will not occur.
5. Use of proceeds
The consideration payable in relation to the Sale will be
satisfied by AGP offsetting an amount equal to the consideration
against the proportion of the AGP Special Dividend Payment that is
due to SEA (as the holder of 97.17 per cent. of the issued share
capital of AGP), and as such the AGP Group will not, on a net
basis, receive monies from SEA.
6. Information about the BSGL Group and the Non-PRC Assets
BSGL is incorporated in the BVI with limited liability. Save for
being the holding company of the Non-PRC Assets, BSGL does not have
any other major assets or business.
The BSGL Group comprises over 30 entities the principal assets
of which, as at 31 December 2016, comprise (i) bank balances and
cash, including pledged bank deposits (approximately HK$5,800
million as at 31 December 2016 for illustrative purposes), (ii) a
commercial property in the United Kingdom and a hotel in Hong Kong,
and (iii) certain short term treasury investments (approximately
HK$1,400 million as at 31 December 2016 for illustrative
purposes).
The net assets of the Non-PRC Assets as extracted from the
audited financial statements of AGP as at 31 December 2016 was
approximately HK$6,271 million (GBP642.8 million), representing
approximately 60 per cent. of the total net book value of the AGP
Group's total consolidated net assets as of 31 December 2016 (after
deducting the special dividend of HK$1,994 million declared on 17
March 2017).
Adjusting for the market value of Crowne Plaza Hong Kong
Causeway Bay of HK$3,500 million (which is stated at cost less
depreciation in the audited financial statements of AGP as at 31
December 2016 with a carrying value of HK$892 million), the
consolidated carrying value of the net assets of Non-PRC Assets as
at 31 December 2016 was HK$8,879 million (GBP910.1 million).
The revenue generated by Non-PRC Assets for the year ended 31
December 2016 was approximately HK$304 million (GBP31.2 million).
The net profits before taxation and after taxation (including the
fair value gain of investment properties) of Non-PRC Assets for the
year ended 31 December 2016 were approximately HK$58 million
(GBP5.9 million) and HK$12 million (GBP1.2 million)
respectively.
7. Information about the PRC Assets following completion of the AGP Reorganisation
Following the AGP Reorganisation, the Company will continue to
hold the PRC Assets comprising the properties known as (i) Plaza
Central; (ii) Commercial podium in Zone B and car parking spaces on
Basements 2 and 3, New Century Plaza; (iii) Office Tower, Westmin
Plaza Phase II; and (iv) Commercial podium, Westmin Plaza Phase II.
Particulars of such properties (including their third party
property valuation reports) are set out in Appendix IV of this
announcement and Part V of the Circular.
An unaudited pro forma AGP Group balance sheet, based on the
statement of financial position for the Company as at 31 December
2016 is set out in Appendix II of this announcement, showing the
position as if the Sale, the AGP Special Dividend Payment and the
HK$2.25 dividend per AGP Share declared on 17 March 2017
(equivalent to HK$2 billion (GBP205 million)) and the revaluation
of Crowne Plaza Hong Kong Causeway Bay had occurred on 31 December
2016. This pro forma information is unaudited and has been prepared
for illustrative purposes only.
The unaudited pro forma net asset position as at 31 December
2016 would have been HK$4.18 billion (GBP428 million), with a net
cash balance of HK$1.6 billion (GBP164 million) and investment
properties with a carrying value of HK$1.95 billion (GBP199
million) (assuming the events referred to above had occurred). In
2016, the PRC Assets generated gross rental income of HK$125
million (GBP12.8 million).
Macro-economic outlook
The global economy and political environment continue to be
clouded with uncertainties and rapid changes, as a result of, inter
alia, the decision by the United Kingdom to leave the European
Union (Brexit), the new government of the United States of America,
the recovery pace of the Eurozone economies, the strengthening of
the US dollar and the upward pressure on US interest rates. The AGP
Group is closely monitoring the evolving market developments and
intends to adopt a prudent and effective policy in managing risks
associated with the various challenges ahead.
The PRC was able to achieve 6.7 per cent. GDP growth rate in
2016 by implementing a proactive fiscal policy and prudent monetary
policy, which was within the PRC Central Government's targeted
range. Moreover, the "Belt and Road" initiative has continued to
promote development and business co-operation among the
participating regions and nations, which the Directors believe
should benefit Hong Kong and the PRC.
Future business strategy
The AGP Group will continue to focus on property development and
property investment projects. During the year ended 31 December
2016, the rental income from investment properties situated in the
PRC continued to provide stable returns to the AGP Group. It is the
AGP Group's approach to review and optimise its property portfolio
from time to time. The AGP Group's office properties in the PRC are
facing a challenging environment arising from increasing supply and
depreciation of RMB. Having said that, AGP's office properties in
the PRC have been maintaining a relatively high occupancy rate and
rent as compared with the market, and provide stable cash flows to
the AGP Group. AGP intends to continue to build on the strong
foundation of its leasing portfolio, execute an effective leasing
strategy and seek to add value to its properties through asset
enhancement initiatives.
The AGP Group has significant funds for future investments after
the disposal of Dah Sing Financial Centre and the various PRC
property development projects as detailed below, and will still do
so following the completion of the AGP Reorganisation. With the
increasing levels of urbanisation and levels of disposable income
in the PRC, the property investment levels and property prices have
continued to grow in the PRC. According to the National Bureau of
Statistics of the PRC, (i) the total investment in the PRC real
estate market increased from RMB9,597.9 billion in 2015 to
RMB10,258.1 billion in 2016, representing approximately a
year-to-year increase of 6.9 per cent.; and (ii) the total
investment in the PRC real estate market increased from RMB 905.2
billion for the two months ended 28 February 2016 to 985.4 billion
for the two months ended 28 February 2017, representing a
period-to-period increase of approximately 8.9 per cent.. The AGP
Group will continue to monitor the property markets of the PRC and
other markets closely, in order to identify potential acquisition
targets at opportune times.
Recent disposals of PRC property projects
During the year ended 31 December 2016, the AGP Group disposed
of various PRC property projects, the background to and reasons for
which are detailed below:
(a) Chengdu Nova City Project, Chengdu, Sichuan Province: On 22
August 2016, the AGP Group entered into a sale and purchase
agreement in relation to the disposal of the Chengdu Nova City
Project for a consideration of HK$890 million (GBP87.7 million) in
cash of which HK$445 million (GBP45.6 million) has been received to
date with the balance due in August 2017. Completion of the
disposal took place on 29 August 2016. The reason for the disposal
was, given that the development cycle of this project was
relatively long, and having regard to the increasingly challenging
business environment and the uncertainties of the prospects of the
property market in the PRC (except for some cities like Shenzhen,
Beijing and Shanghai), the AGP Board considered that the disposal
would enable the AGP Group to realise its investment in the land at
fair value as part of the AGP Group's strategic plan for its
property portfolio, reduce its operational risk, and for better
utilization of the AGP Group's resources.
(b) Kaifeng Nova City Project, Kaifeng, Henan Province: On 19
April 2016, the AGP Group entered into a sale and purchase
agreement in relation to the disposal of the Kaifeng Nova City
Project for a consideration of HK$900 million (GBP81.4 million) in
cash. Completion of the disposal took place on 26 April 2016. The
reason for the disposal was that the development cycle of the
Kaifeng project was relatively long; having regard to the
increasingly challenging business environment and the uncertainties
of the prospects of the property market in the PRC (except for some
cities like Shenzhen, Beijing and Shanghai), the AGP Board
considered that the disposal would enable the AGP Group to realise
its investment in the properties at fair value as part of the AGP
Group's strategic plan for its property portfolio, reduce its
operational risk, and for better utilization of the AGP Group's
resources.
(c) Certain properties under development in Huangshan City,
Anhui Province: On 3 August 2016, the AGP Group entered into a sale
and purchase agreement with an independent third party to sell the
entire interest in companies which beneficially own the properties
under development in Huangshan City, Anhui Province, the PRC, for a
consideration of HK$2 million (GBP0.2 million). The disposal was
completed on the same date.
For further details of such projects, please see the results
announcement of AGP for the year ended 31 December 2016 and the
announcements of AGP dated 19 April 2016 and 22 August 2016.
Note: Amounts which appear in Pounds Sterling in paragraphs (a)
- (c) above do not use the exchange rate as set forth in the
"Definitions" section of this document and are stated at the Pounds
Sterling level in which the amount was previously disclosed by the
Company in the relevant announcements.
8. Strategy of the AGP Group following the AGP Reorganisation
As set out above, it is the AGP Board's current intention to
focus on property developments and investments in the PRC. However,
while it is the AGP Board's current intention to do so, the AGP
Board does not believe that AGP should be restricted in its sphere
of activities.
Hence, the AGP Board has not committed to limit its sphere of
activities solely to the PRC or to property related development and
investments. The AGP Board will determine AGP's sphere of
activities taking into consideration market opportunities, AGP's
financial resources and its core competence.
9. Company name and registered office
The Company's name and registered office will remain unchanged
following completion
of the AGP Reorganisation.
10. Directors and management of the Company following the AGP
Reorganisation
The AGP Board will remain unchanged following the AGP
Reorganisation save that:
-- Mr. Lincoln Lu will be appointed as the chief executive officer of AGP.
-- Mr. Lambert Lu will be re-designated as a non-executive director of AGP.
Brief biographies of the AGP directors are set out below:
Richard Öther Prickett: Non-executive Chairman and Independent
Non-executive Director
Mr. Prickett joined the AGP Board in January 2006 and became the
Non-executive Chairman of the Company in March 2010. Mr. Prickett
is also the chairman of the Audit, Nomination and Remuneration
Committees of the Company. He is a Chartered Accountant in England
and Wales and has many years' experience in corporate finance.
Mr. Prickett is a director of another company listed on the AIM
Market and a director of a listed investment trust.
Lincoln Lu: Chief Executive Officer
Mr. Lu joined the AGP Board in March 2014. He is also a director
of various members of the AGP Group.
Mr. Lu is a member of the Sichuan Committee of Chinese People's
Political Consultative Conference and an executive member of
All-China Federation of Industry and Commerce. Mr. Lu holds a
Bachelor of Arts degree from the University of British Columbia in
Canada. He was primarily responsible for the AGP Group's hotel and
project management operations.
Following the AGP Reorganisation, Mr. Lu will also be
responsible for leading the overall strategic direction and
management of the AGP Group.
Mr. Lu will also revert to be a non-executive director of
SEA.
Lu Wing Chi: Executive Director
Mr. Lu joined the AGP Board in March 2004. He is also a director
of various members of the AGP Group.
Mr. Lu has valuable experience in property investment and
development in Hong Kong and throughout the Asia-Pacific
region.
Mr. Lu is the chairman of SEA.
David Andrew Runciman: Executive Director
Mr. Runciman joined the AGP Board in January 2006. He is a
Fellow of the Royal Institution of Chartered Surveyors of the
United Kingdom and has spent much of his working career in Asia
dealing with all aspects of residential and commercial real estate
markets.
Mr. Runciman formerly served as the chairman for Asia Pacific
for CBRE, the world's largest property services company and had
worked with Richard Ellis (subsequently CBRE) for many years. In
addition, Mr. Runciman is the chief executive officer of Scottish
and Oriental Estates which is his own investment company and has
been a Hong Kong resident since 1977.
Lambert Lu: Non-Executive Director
Mr. Lu joined the AGP Board in September 2008. He is also a
director of various members of the AGP Group.
Mr. Lu is a member of the Henan Committee of Chinese People's
Political Consultative Conference and was previously the vice
chairman of The Chamber of Hong Kong Listed Companies. Mr. Lu holds
a Bachelor's degree from the University of British Columbia in
Canada.
Mr. Lu is a director of SEA. Following the completion of the SEA
Distribution in Specie, he will also be appointed as the chief
executive officer of SEA.
Lam Sing Tai: Non-executive Director
Mr. Lam joined the AGP Board in March 2014 and is a member of
the Audit and Remuneration Committees of the Company. He is also a
director of various members of the AGP Group.
Mr. Lam is primarily responsible for the sales and marketing
matters of the AGP Group's properties in Hong Kong and Mainland
China and has valuable and solid experience in property development
and investment.
Mr. Lam is a non-executive director of SEA.
John David Orchard Fulton: Independent Non-executive
Director
Mr. Fulton joined the AGP Board in July 2014 and is a member of
the Audit and Remuneration Committees of the Company. He is a
consultant to law firm Anderson Strathern LLP and has been doing
business in the Far East since 1996. He is well experience in
property and as an adviser to major landowners and also as a
secretary and trustee of registered charities.
Mr. Fulton, a Notary Public and an accredited mediator, is the
Chair of the Clark Foundation for Legal Education, and served as
treasurer of the Society of Writers to Her Majesty's Signet. He
holds a LL.B. degree from the University of Edinburgh in the United
Kingdom.
11. Corporate governance
There will be no change to the composition of the Audit
Committee, the Remuneration Committee and the Nomination Committee
of the Company following completion of the AGP Reorganisation.
12. Constitutional documents
The Company's memorandum of association and bye-laws will remain
the same following completion of the AGP Reorganisation.
13. Share capital
The Company's share capital will remain the same following
completion of the AGP Reorganisation.
14. Directors and other Significant Shareholdings
The following are the interests of the Directors and the
interests of other Shareholders which represent, directly or
indirectly, 3 per cent. or more of the issued share capital of the
Company (i) on 30 March 2017, being the last practicable date prior
to the date of this announcement; and (ii) immediately following
completion of the SEA Distribution in Specie but prior to
completion of the NLI Share Exchange Offer:
(ii)
Immediately following
(i) the SEA Distribution
As at 30 March 2017 in Specie(4)
Number Percentage Number of Percentage
of AGP Shares
AGP Shares
Significant
Shareholders
SEA Holdings 861,278,857 97.17% - -
NLI - - 562,860,412 63.50%
Total 861,278,857 97.17% 562,860,412 63.50%
Director
Shareholdings
Richard Prickett - - - -
Lu Wing Chi(1) - - 13,805,146 1.56%
Lincoln Lu(2) - - 23,454,302 2.65%
Lambert Lu(3) - - 22,411,043 2.53%
David Runciman 520,000 0.06% 520,000 0.06%
Lam Sing Tai - - 4,096,225 0.46%
John Fulton - - - -
Total 520,000 0.06% 64,286,716 7.26%
1. Immediately following the SEA Distribution in Specie, Mr. Lu
Wing Chi, executive director of the Company, will be deemed to have
an indirect beneficial shareholding interest in 349,455,477 AGP
Shares, representing approximately 39.43 per cent. of the existing
issued share capital of the Company, by virtue of his following
interests:
(a) 30 per cent. direct shareholding interest in NLI;
(b) 49 per cent. direct shareholding interest in JCS Limited; and
(c) 100 per cent. direct shareholding interest in NYH Limited
(NYH Limited will own 5,242,696 AGP Shares (0.59 per cent.)).
2. Immediately following the SEA Distribution in Specie, Mr.
Lincoln Lu, executive director of the Company, will be deemed to
have an indirect beneficial shareholding interest in 109,323,814
AGP Shares, representing approximately 12.33 per cent. of the
existing issued share capital of the Company, by virtue of his
following interests:
(a) 3.21 per cent. direct shareholding interest in NLI; and
(b) 25.5 per cent. direct shareholding interest in JCS Limited.
3. Immediately following the SEA Distribution in Specie, Mr.
Lambert Lu, executive director of the Company, will be deemed to
have an indirect beneficial shareholding interest in 109,323,814
AGP Shares, representing approximately 12.33 per cent. of the
existing issued share capital of the Company, by virtue of his
following interests:
(a) 3.21 per cent. direct shareholding interest in NLI; and
(b) 25.5 per cent. direct shareholding interest in JCS Limited.
4. All numbers are based on the share register of SEA and AGP as
at the date of this announcement.
15. Relationship Agreement
At the time of the Company's admission to trading on AIM in
2006, SEA entered into a controlling shareholder agreement with the
Company pursuant to which SEA agreed, for as long as it held 30 per
cent. of the share capital of the Company, not to undertake any
activity which would result in AGP or any member of the AGP Group
ceasing to be capable of carrying on their businesses independently
of the SEA Group and that all transactions entered into between
such parties will be carried out at arm's length. Accordingly, upon
completion of the SEA Distribution in Specie, such agreement will
cease to have effect. Since NLI will, pursuant to and upon
completion of, the SEA Distribution in Specie but prior to
completion of the NLI Share Exchange Offer, hold at least 63.50 per
cent. of the share capital of the Company (assuming there will be
no change in the issued share capital of the Company from the date
of this announcement to completion of the SEA Distribution in
Specie), it has entered into a new relationship agreement with the
Company dated 31 March 2017 on similar terms to the existing
agreement with SEA, conditional upon completion of the SEA
Distribution in Specie.
16. New Cost Sharing Agreement
As set out above, AGP will in due course be largely
independently managed from SEA after the AGP Reorganisation.
Currently, the AGP Group has its own administrative and operational
staff (mainly PRC staff) separate from those of SEA Group to
operate and manage its own business. AGP Group also shares the
office premises of the SEA Group and pursuant to the old cost
sharing agreement, SEA Group also provided services, such as
finance, compliance and secretarial staff support to AGP Group.
However, as it is not feasible to segregate certain staff at
corporate level of AGP from SEA immediately following completion of
the AGP Reorganisation and the SEA Distribution in Specie,
accordingly on 31 March 2017, AGP and SEAI, a wholly-owned
subsidiary of SEA, have entered into the New Cost Sharing Agreement
pursuant to which SEAI will continue to provide AGP with certain
services (namely finance, compliance and company secretarial staff
support) for an interim period. This period will not exceed one
calendar year, and it is expected that AGP will commence recruiting
personnel (from SEA or third parties) shortly after completion of
the AGP Reorganisation. It is also AGP's intention that it will
enter into a lease agreement directly with the third party landlord
for its own office premises following completion of the AGP
Reorganisation.
The New Cost Sharing Agreement will take effect upon completion
of the AGP Reorganisation and the SEA Distribution in Specie.
Details of the New Cost Sharing Agreement are set out below:
-- SEAI has agreed to provide to AGP and its subsidiaries and
associates, at the request of the Service Recipients, SEAI's
employees and facilities of SEAI on a cost-sharing arrangement for
the purposes of their corporate, project and property management
activities.
-- In consideration of SEAI making available its personnel and
facilities to AGP and its subsidiaries and associates, AGP agrees
to bear and to pay for itself and on behalf the Service Recipients
their proportionate share of the costs incurred by SEAI for the use
of SEAI's employees and facilities. The costs will be determined on
an arm's-length basis for all activities rendered for each quarter
(the "Net Costs").
-- The Net Costs payable are on the same basis as the previous cost sharing agreement.
-- The Net Costs are the proportion of staff costs and indirect
costs to be borne by AGP and its Service Recipients and will be
calculated by reference to the total time spent by SEAI's personnel
on the services to each of AGP and its Service Recipients (with a
mark-up of 5 per cent.), plus the reimbursable costs incurred by
SEAI on behalf of AGP and its Service Recipients (on a
dollar-for-dollar basis). Each of AGP and its Service Recipients
should bear and pay its proportion of the Net Costs.
The New Cost Sharing Agreement replaces a previous cost sharing
agreement between the parties dated 29 July 2014 which will be
terminated upon the completion of the AGP Reorganisation at no cost
to AGP.
The New Cost Sharing Agreement is intended to provide a
transitional arrangement in order to ensure a smooth transition of
the operations of the AGP Group.
The New Cost Sharing Agreement does not restrict the Company
from hiring staff, whether from the SEA Group or externally.
The New Cost Sharing Agreement is for a period not exceeding one
calendar year following the completion of the AGP Reorganisation.
However, the termination provisions are such that AGP can terminate
the New Cost Sharing Agreement by giving SEAI three months' notice.
AGP can also terminate the participation of any of its Service
Recipients by giving a notice stating when the service will be
terminated. SEAI can terminate their participation in the New Cost
Sharing Agreement on three months' notice but AGP can request SEAI
to extend the notice period by up to a further three months to
facilitate an orderly handover.
The New Cost Sharing Agreement constitutes a related party
transaction for the Company under AIM Rule 13. The AGP Independent
Directors consider, having consulted with Panmure Gordon, that the
terms of the New Cost Sharing Agreement are fair and reasonable
insofar as the AGP Shareholders are concerned.
17. The Non-Competition Deed
On 31 March 2017, AGP and NLI entered into the Non-Competition
Deed pursuant to which NLI undertook to AGP that:
(i) it will not, and will use its reasonable endeavours to
procure that its close associates do not, acquire any Material
Restricted Asset (as defined below); and
(ii) it will use its voting rights to vote against any of its
close associates acquiring any Material Restricted Asset (as
defined below).
For this purpose "Material Restricted Asset" is any business or
asset (other than financial instruments) which relates to real
estate development or investment in the PRC, the consideration for
fair value of which would exceed HK$200 million (GBP20.5
million).
Such restrictions do not apply to any acquisition which NLI or
its close associates have received prior written confirmation of
no-objection from AGP (acting through its independent directors).
If NLI does not receive any response from AGP within 30 days of
being so notified by NLI, AGP is deemed not to have objected.
The Non-Competition Deed will take effect upon completion of the
AGP Reorganisation and the SEA Distribution in Specie. If this
condition is not satisfied on or before 30 June 2017, the
Non-Competition Deed shall become null and void and cease to have
any effect.
The Non-Competition Deed shall terminate upon the earlier
of:
(a) NLI and its close associates in aggregate holding less than
30 per cent. of the issued shares of AGP;
(b) AGP ceasing to be a publicly traded company; or
(c) the expiry of five years from the date of the
Non-Competition Deed.
18. Independence of the AGP Group from SEA
Following completion of the AGP Reorganisation and the SEA
Distribution in Specie, the AGP Group will be capable of carrying
on its business independent of the SEA Group (other than in
relation to the limited matters covered in the New Cost Sharing
Agreement). In particular:
(a) the AGP Group's management and operational decisions are
made by its executive directors. The chief executive officer of AGP
has no executive function in SEA (although he is also a director of
SEA);
(b) the AGP Group has three directors who are independent of SEA
and who will bring independent judgment to the decision-making
process of the AGP Board;
(c) the AGP Group has its own independent operational
capabilities and independent access to customers and suppliers;
(d) the AGP Group is in possession of all relevant permits and
licenses necessary to carry on and operate its business;
(e) the AGP Group has sufficient operational capacity in term of
capital and employees to operate independently;
(f) the AGP Group will continue to be financially independent of the SEA Group;
(g) the AGP Group has its own accounting system, accounting and
finance function and independent treasury function for cash
receipts and payments, and operational staff for each of its PRC
Assets based in the relevant location;
(h) the AGP Group has to date, and will continue to have,
independent access to external financing; and
(i) save in relation to certain finance, compliance and company
secretarial services (which are subject of the New Cost Sharing
Agreement), the AGP Group has its own capabilities and personnel to
perform all essential administrative functions, including financial
and accounting management, business management and development.
19. Current trading and prospects
Since the end of the Company's last financial year, there has
been no material change in the level of occupancy in the Company's
properties and no new leases have been signed. The management
continue to work on leasing the current vacant property.
On 17 March 2017, the Company announced that it has declared a
special cash dividend of HK$2.25 per AGP Share to the AGP
Shareholders, payable on Thursday, 13 April 2017, on the share
register on Friday, 31 March 2017.
20. Hong Kong Codes on Takeovers and Mergers and Share
Buybacks
Following the completion of the SEA Distribution in Specie, the
Securities and Futures Commission of Hong Kong has indicated that
the Company will be treated as a public company in Hong Kong in
accordance with the Hong Kong Codes on Takeovers and Mergers and
Share Buy-backs due to the expected number of AGP Shareholders who
will be based in Hong Kong.
If the Company ceases to be a public company in Hong Kong, The
Hong Kong Codes on Takeovers and Mergers and Share Buy-backs will
cease to apply.
In order to determine whether a company is a public company in
Hong Kong, The Takeovers Executive of the Securities and Futures
Commission of Hong Kong (the "Executive") will consider all the
circumstances and will apply an economic or commercial test, taking
into account primarily the number of Hong Kong shareholders and the
extent of share trading in Hong Kong and other factors
including:
(a) the location of its head office and place of central
management;
(b) the location of its business and assets, including such
factors as registration under companies legislation and tax status;
and
(c) the existence or absence of protection available to Hong
Kong shareholders given by any statute or code regulating
takeovers, mergers and share repurchases outside Hong Kong.
A company which is in any doubt about its status as a public
company in Hong Kong should consult the Executive at an early
stage.
21. Proposed NLI Share Exchange Offer
Your attention is also drawn to the SEA Announcement in respect
of the NLI Share Exchange Offer.
Pursuant to the SEA Distribution in Specie, the AGP Shares held
by SEA would be distributed to the SEA Shareholders by way of a
special dividend in specie. The Directors note that the SEA
Announcement states that in view of the fact that the AGP Shares
are admitted to trading on AIM, and recognising that some SEA
Shareholders who receive AGP Shares pursuant to the SEA
Distribution in Specie may not wish to hold AGP Shares (given that
they may not wish to hold/trade AIM shares) NLI, as a means to
provide AGP Shareholders (both existing and arising as a result of
the SEA Distribution in Specie) with a liquidity option for the AGP
Shares (apart from selling those AGP Shares either on-market or
off-market) intends to make a voluntary NLI Share Exchange Offer to
qualifying AGP Shareholders to exchange their AGP Shares for SEA
Shares held by NLI, subject to satisfaction of the conditions to
the NLI Share Exchange Offer.
While the offer will be extended to all AGP Shareholders, only
AGP Shareholders who reside in jurisdictions in which NLI is
entitled to make the NLI Share Exchange Offer without additional
regulatory compliance or costs (other than The Hong Kong Codes on
Takeovers and Mergers) will be permitted to participate in the
offer.
The AGP independent board committee comprising the independent
non-executive Directors will be formed to consider and, if
appropriate, give a recommendation to the AGP independent
Shareholders (being AGP Shareholders other than NLI and parties
acting in concert with it) in connection with the NLI Share
Exchange Offer. An independent financial adviser will be appointed
to advise the AGP independent board committee and the AGP
independent Shareholders (being the Shareholders other than NLI and
parties acting in concert with it), in particular, as to whether
the NLI Share Exchange Offer is, or is not, fair and reasonable and
to make a recommendation to the AGP Independent Shareholders as to
acceptance in respect of the NLI Share Exchange Offer. A further
announcement will be made upon the appointment of the independent
financial adviser. The advice and recommendations of the
independent financial adviser in respect of the NLI Share Exchange
Offer will be included in the composite document to be issued
pursuant to The Hong Kong Codes on Takeovers and Mergers and Share
Buy-backs by or on behalf of NLI (as the offeror) and AGP (as the
offeree company) to all Shareholders.
Further details of the NLI Share Exchange Offer are set out in
the SEA Announcement and will be in the composite offer and
response document to be issued by NLI and AGP in accordance with
The Hong Kong Codes on Takeovers and Mergers following completion
of the SEA Distribution in Specie.
The AGP Board and Panmure Gordon note that if the take up under
the NLI Share Exchange Offer is significant, it may not improve
AGP's Shares in public hands position, which may impact AGP's
ability to remain admitted to trading on AIM, in particular if the
Shares in public hands following completion of the NLI Share
Exchange Offer was below 10 per cent.
APPIX II
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited consolidated pro forma statement of net assets set
out below has been prepared by the AGP Board to illustrate the
effect of the HK$2.25 dividend declared by the AGP Group on 17
March 2017, the Sale and AGP Special Dividend Payment of HK$10.35
per AGP Share, on the net assets statement of the AGP Group, as if
they had all taken place on 31 December 2016. The pro forma
financial information has been prepared in a manner consistent with
the accounting policies adopted by the AGP Group.
The unaudited consolidated pro forma financial information,
which has been produced for illustrative purposes only, by its
nature addresses a hypothetical situation and, therefore, does not
represent the AGP Group's actual financial position or results
either prior to, or after, completion of the Sale, the payment of
the HK$2.25 per AGP Share dividend declared by the AGP Group on 17
March 2017 and the AGP Special Dividend Payment of HK$10.35 per AGP
Share. It may not, therefore, give a true picture of the AGP
Group's financial position or results nor is it indicative of the
results that may, or may not, be expected to be achieved in the
future.
Pro forma adjustments for the Proposed AGP Reorganisation
Adjustment Adjustment Adjustment Adjustment
1 2 3 4
Special
Audited dividend
consolidated HK$2.25 Consideration
statement per AGP payable AGP Special Unaudited
of financial Share by SEA Dividend pro forma
position declared to the Payment consolidated
of the by the Fair Company of statement
AGP Group Company value Disposal for disposal following of financial
as at on 17 adjustment of Non-PRC of the completion position
31 December March on Non-PRC Assets Non-PRC of the of the
2016 2017 Assets to SEA Assets Sale AGP Group
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
Note 1 Note Note Note 4 Note 5 Note
2 3 6
Non-current
assets
Investment
properties 3,445,337 - - (1,494,100) - - 1,951,237
Property,
plant and
equipment 951,687 - 2,607,825 (3,518,151) - - 41,361
Properties
for development - - - - - - -
Loan receivables 3,160 - - (3,160) - - -
Note receivables 38,773 - - (38,773) - - -
Other receivables - - - - - - -
Available-for-sale
investments 1,253,243 - - (1,245,487) - - 7,756
Restricted
bank deposits 5,589 - - - - - 5,589
5,697,789 - 2,607,825 (6,299,671) - - 2,005,943
Current
assets
Properties
held for
sale
Completed
properties 423,061 - - - - - 423,061
Inventories 1,196 - - (1,196) - - -
Loan receivables 376 - - (376) - - -
Note receivables 15,509 - - (15,509) - - -
Available-for-sale
investments 137,204 - - (133,327) - - 3,877
Receivables,
deposits
and prepayments 585,379 - - (63,940) 8,913,354 (8,913,354) 521,439
Tax recoverable 3,088 - - (3,088) - - -
Amounts
due from
non-controlling
interests 38 - - (38) - - -
Pledged
bank deposits 533,105 - - (533,105) - - -
Bank balances
and cash 9,240,168 (1,994,283) - (5,235,708) - (260,346) 1,749,831
10,939,124 (1,994,283) - (5,986,287) 8,913,354 (9,173,700) 2,698,208
Current
liabilities
Payables,
rental
deposits
and accrued
charges 157,629 - - (72,815) - - 84,814
Tax liabilities 7,424 - - (4,910) - - 2,514
Amounts
due to
non-controlling
interests 87,754 - - - - - 87,754
Bank borrowings
- due within
one year 1,464,928 - - (1,419,582) - - 45,346
1,717,735 - - (1,497,307) - - 220,428
Net current
assets 9,221,389 (1,994,283) - (4,488,980) 8,913,354 (9,173,700) 2,477,780
Total assets
less current
liabilities 14,919,178 (1,994,283) 2,607,825 (10,788,651) 8,913,354 (9,173,700) 4,483,723
Pro forma adjustments for the Proposed AGP Reorganisation
Adjustment Adjustment Adjustment Adjustment
1 2 3 4
Special
Audited dividend
consolidated HK$2.25 Consideration
statement per AGP payable AGP Special Unaudited
of financial Share by SEA Dividend pro forma
position declared to the Payment consolidated
of the by the Fair Company of statement
AGP Group Company value Disposal for disposal following of financial
as at on 17 adjustment of Non-PRC of the completion position
31 December March on Non-PRC Assets Non-PRC of the of the
2016 2017 Assets to SEA Assets Sale AGP Group
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
Note 1 Note Note Note 4 Note 5 Note
2 3 6
Capital
and reserves
Share capital 345,204 - - - - - 345,204
Reserves 12,444,309 (1,994,283) 2,607,825 (8,879,194) 8,913,354 (9,173,700) 3,918,311
Equity
attributable
to the
Company's
shareholders 12,789,513 (1,994,283) 2,607,825 (8,879,194) 8,913,354 (9,173,700) 4,263,515
Non-controlling
interests (80,244) - - (3,674) - - (83,918)
Total equity 12,709,269 (1,994,283) 2,607,825 (8,882,868) 8,913,354 (9,173,700) 4,179,597
Non-current
liabilities
Bank borrowings
- due after
one year 1,993,705 - - (1,902,803) - - 90,902
Deferred
taxation 216,204 - - (2,980) - - 213,224
2,209,909 - - (1,905,783) - - 304,126
14,919,178 (1,994,283) 2,607,825 (10,788,651) 8,913,354 (9,173,700) 4,483,723
1. The net asset figures of the AGP Group have been extracted,
without adjustment, from the audited consolidated statement of
financial position of the AGP Group as at 31 December 2016 prepared
in accordance with International Financial Reporting Standards, as
announced on 17 March 2017.
2. A special dividend of HK$2.25 per AGP Share was declared on
17 March 2017 on the issued share capital of 886,347,812 AGP
Shares, totalling HK$1,994,283,000 and payable in cash.
3. The adjustment to the carrying value of the AGP Group's
property, plant and equipment is as a result of the assessment of
the market value of the AGP Group's Crowne Plaza Hong Kong Causeway
Bay, adjusted by HK$2,607,825,000 (being the fair value of Crowne
Plaza Hong Kong Causeway Bay as at 28 February 2017 of
HK$3,500,000,000 less its carrying value of HK$892,175,000 as
extracted from the audited financial statements of the AGP Group as
at 31 December 2016). There is no adjustment to the carrying value
of 20 Moorgate, London.
4. The financial information relating to the BSGL Group has been
extracted, without adjustment, from the audited consolidated
statement of financial position of the AGP Group as at 31 December
2016.
5. The consideration has been determined on the basis of the
value of the net assets of the BSGL Group as at 31 December 2016,
being HK$8,879,194,000, adjusted by HK$2,607,825,000 as set out in
note 3 above.
6. AGP Special Dividend Payment (being a special dividend of
HK$9,173,700,000) has been declared conditionally on 29 March 2017
as part of the AGP Reorganisation, of which HK$8,913,354,000 is to
be settled by offsetting the receivable from SEA on the Sale and
the remaining HK$260,346,000 to be settled in cash.
7. No adjustment to the balance sheet has been made to reflect
the trading results of the AGP Group since 31 December 2016.
APPIX III
DETAILS OF NON-PRC ASSETS
Details of the Non-PRC Assets are set out below.
Properties
Approx. Occupancy
gross floor % as at
Name of area (square 31 December
Property Location Lease expiry Usage meters) 2016
20 Moorgate, 20 Moorgate, Leasehold Office 14,386.3 100%
London London term of approximately (Major tenant:
EC2R 6DA EC2R 6DA 138 years Prudential
(Note 1) United Kingdom unexpired Regulatory
Authority
(a regulatory
body of
the Bank
of England))
with remaining
lease term
until 30
June 2027)
Crowne Plaza
Hong Kong, 8 Leighton Hotel (managed
Causeway Road, Causeway by the
Bay Bay, Hong 6 November InterContinental
(Note 2) Kong 2049 Hotels Group) 14,945 100%
Notes:
1. Investment properties
2. Property, plant and equipment
Others
- bank balances and cash, including pledged bank deposits
(approximately HK$5,800 million as at 31 December 2016 for
illustrative purpose);
- certain short-term treasury investments, mainly listed and
unlisted debt securities (approximately HK$1,400 million as at 31
December 2016 for illustrative purpose); and
- bank borrowings (approximately HK$3,300 million as at 31
December 2016 for illustrative purpose).
APPIX IV
DETAILS OF PRC ASSETS
Details of the PRC Assets that will continue to be held by the
Company following completion of the Sale are set out below.
Occupancy
% as at
31 December Market Carrying
Approximate 2016 and value value as
gross floor Weighted as at 31 at 31
Name of area (square Average December December
property Location Lease expiry Usage meters) Lease Length 2016 2016
Plaza Central 8 Shunchengda 6 October Commercial/Office 91,455 79%, RMB1,382.0 Investment
Street, 2063 million properties
Yanshikou, HK$1,513.0
Jinjiang million
District,
Chengdu,
Sichuan
Province,
the PRC
(Note 1) (leasehold) (including 10.8 years
car parking (Major tenant
floors) of commercial
usage: Chengdu
New World
Department
Store
Property,
plant and
equipment
HK$35.9
million
Major tenant
of office
usage: Fortune
500 companies
and governmental
bodies)
Office with
gross floor
area of
1,704.04
square meters
was occupied
by the owner
Commercial No. 6 Xi 18 May 2063 Commercial 19,261 100%, RMB135.9 Investment
podium in Yu Long million properties
Zone B and Street, HK$151.9
car parking Qingyang million
spaces on District,
Basements Chengdu,
2 and 3, Sichuan
New Century Province,
Plaza the PRC
(Note 1) (leasehold) (including 12.5 years
car parking (Major tenant:
spaces) A hotel
operator)
Office Tower, 50 Zhong 23 May 2050 Office 16,112 95%, RMB259.0 Investment
Westmin Shan 7(th) (leasehold) 4.3 years million properties
Plaza Phase Road, Li (Major tenant: HK$286.4
II Wan District, AIA) million
(Note 1) Guangzhou,
Guangdong Office with Property,
Province, gross floor plant and
the PRC area of equipment
170.00 square HK$2.9
meters was million
occupied
by the owner
Commercial 48-58 Zhong 23 May 2050 Commercial 45,984 Portion RMB440.0 Properties
podium, Shan 7(th) of property million held for
Westmin Road, Li with as sale HK$423.1
Plaza Phase Wan District, gross floor million
II Guangzhou, area of
Guangdong 217.53 square
Province, meters was
the PRC leased out
(Note 2) (leasehold) (including
car parking
floors)
The car
parking
spaces were
let on either
monthly
or hourly
basis
The remaining
portion
was vacant
Notes:
1. Investment properties
2. Properties held for sale
APPIX V
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Events Expected date
Publication of the Circular 31 March 2017
Latest time and date for receipt no later than 9.00 a.m. (Hong
of Forms of Instruction for the Kong time 4.00 p.m.) on Tuesday,
SGM 18 April 2017
Latest time and date for receipt no later than 9.00 a.m. (Hong
of Forms of Proxy for the SGM Kong time 4.00 p.m.) on Wednesday,
19 April 2017
Date and time of the SGM 4.00 p.m. (Hong Kong time) on
Friday, 21 April 2017
AGP Shares marked ex-dividend Thursday, 27 April 2017
Record date for the AGP Special Friday, 28 April 2017
Dividend Payment
Proposed date of completion of Thursday, 4 May 2017
SP Agreement
AGP Special Dividend payment Wednesday, 10 May 2017
date
Notes
1 Each of the times and dates in the above timetable is subject
to change. If any of the above times and/or dates change, the
revised times and/or dates will be notified to holders of AGP
Shares by announcement on a Regulatory Information Service.
2 All of the above times refer to Hong Kong time unless otherwise expressly indicated.
3 The events in the above timetable following the SGM are
conditional upon, inter alia, approval by the Shareholders of the
Resolutions at the SGM.
APPIX VI
DEFINITIONS
The following definitions apply throughout this announcement
unless otherwise stated or the context requires otherwise:
"AGP" or the "Company" means Asian Growth Properties Limited,
an exempted company registered in Bermuda
with limited liability, whose registered
office is at Clarendon House, 2 Church
Street, Hamilton HM 11, Bermuda;
------------------------------- -------------------------------------------------
"AGP Board" means the board of directors of AGP;
------------------------------- -------------------------------------------------
"AGP Group" means (i) prior to the completion of
the Sale, AGP and its subsidiaries (including
the BSGL Group), and (ii) after the completion
of the Sale, AGP and its subsidiaries
(excluding the BSGL Group);
------------------------------- -------------------------------------------------
"AGP Independent Directors" means Richard Prickett, David Runciman
and John Fulton;
------------------------------- -------------------------------------------------
"AGP Reorganisation" means the reorganisation of the AGP Group
comprising the Sale and the AGP Special
Dividend Payment;
------------------------------- -------------------------------------------------
"AGP Shares" means common shares of US$0.05 each in
the capital of the Company;
------------------------------- -------------------------------------------------
"AGP Special Dividend means the proposed conditional special
Payment" dividend declared by the Company further
details of which are set out in paragraph
3 of Appendix I of this announcement;
------------------------------- -------------------------------------------------
"AIM" means the AIM Market of the London Stock
Exchange;
------------------------------- -------------------------------------------------
"AIM Rules" means the AIM Rules for Companies published
by the London Stock Exchange;
------------------------------- -------------------------------------------------
"BSGL" means Benefit Strong Group Limited, a
company incorporated in the BVI and,
as at the date of this announcement,
a direct wholly owned subsidiary of the
Company;
------------------------------- -------------------------------------------------
"BSGL Group" means BSGL and its subsidiaries, which
hold the Non-PRC Assets;
------------------------------- -------------------------------------------------
"BVI" means the British Virgin Islands;
------------------------------- -------------------------------------------------
"Circular" means the circular of the Company giving
(amongst other things) details of the
Sale and incorporating the Notice of
SGM, which is to be published on or around
31 March 2017;
------------------------------- -------------------------------------------------
"close associate" having the meaning ascribed to it under
the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited;
------------------------------- -------------------------------------------------
"Companies Act" means the Companies Act 1981 of Bermuda;
------------------------------- -------------------------------------------------
"Depositary Interests" means depositary interests representing
AGP Shares;
------------------------------- -------------------------------------------------
"Director(s)" means the director(s) of the Company;
------------------------------- -------------------------------------------------
"FCA" means the UK Financial Conduct Authority;
------------------------------- -------------------------------------------------
"Form of Instruction" means the form of instruction for use
by Depositary Interest holders in connection
with the SGM;
------------------------------- -------------------------------------------------
"Form of Proxy" means the form of instruction for use
by holders of the AGP Shares;
------------------------------- -------------------------------------------------
"Hong Kong" means the Hong Kong Special Administrative
Region of the PRC;
------------------------------- -------------------------------------------------
"London Stock Exchange" means London Stock Exchange plc;
------------------------------- -------------------------------------------------
"NAV" means net asset value;
------------------------------- -------------------------------------------------
"New Cost Sharing Agreement" means the new cost sharing agreement
entered into between the Company and
SEAI dated 31 March 2017;
------------------------------- -------------------------------------------------
"NLI" means Nan Luen International Limited,
an exempted company registered in Bermuda
with limited liability and a controlling
shareholder of SEA;
------------------------------- -------------------------------------------------
"NLI Share Exchange means the voluntary NLI Share Exchange
Offer" Offer proposed to be made by NLI to qualifying
Shareholders as referred to in paragraph
21 of Appendix I of this announcement,
further details of which are set out
in the SEA Announcement;
------------------------------- -------------------------------------------------
"Non-Competition Deed" means the deed dated 31 March 2017 entered
into between AGP and NLI setting out
how the parties will deal with business
opportunities arising following completion
of the AGP Reorganisation;
------------------------------- -------------------------------------------------
"Non-PRC Assets" means the assets and liabilities owned
by the BSGL Group described in Appendix
III of this announcement;
------------------------------- -------------------------------------------------
"Notice of SGM" means the notice of SGM set out at Part
VI of the Circular;
------------------------------- -------------------------------------------------
"Panmure Gordon" means Panmure Gordon (UK) Limited, a
company incorporated in England and Wales
with company number 04915201 and the
Company's nominated adviser and broker
for the purposes of the AIM Rules, a
member of the London Stock Exchange and
regulated by the FCA;
------------------------------- -------------------------------------------------
"PRC" means the People's Republic of China,
which for the purpose of this announcement,
excludes Hong Kong, the Macau Special
Administrative Region of the People's
Republic of China and Taiwan;
------------------------------- -------------------------------------------------
"PRC Assets" means all the assets and liabilities
of the AGP Group that are located within
the PRC as more fully described in Appendix
IV of this announcement;
------------------------------- -------------------------------------------------
"Related Party" includes any person who is a director
of AGP or of any company which is its
subsidiary or parent undertaking, other
subsidiary undertaking of its parent
undertaking, and any of their associates
(as defined in the AIM Rules for Companies),
and a substantial shareholder (as defined
in the AIM Rules for Companies) including
any person who holds any legal or beneficial
interest in 10% or more of AGP's share
capital and their associates;
------------------------------- -------------------------------------------------
"Resolutions" means the ordinary resolutions to be
proposed at the SGM and set out in the
Notice of SGM at Part VI of the Circular;
------------------------------- -------------------------------------------------
"Sale" the proposed disposal of the Non-PRC
Assets by way of the sale of the entire
issued share capital of BSGL by the Company
to SEA pursuant to the SP Agreement;
------------------------------- -------------------------------------------------
"SEA" means S E A Holdings Limited, an exempted
company registered in Bermuda with limited
liability and a controlling shareholder
of AGP, the shares of which are listed
and traded on the Main Board of The Stock
Exchange of Hong Kong Limited (stock
code: 251);
------------------------------- -------------------------------------------------
"SEAI" means South-East Asia Investment and
Agency Company, Limited, a limited liability
incorporated in Hong Kong and a wholly-owned
subsidiary of SEA;
------------------------------- -------------------------------------------------
"SEA Announcement" means the announcement by SEA to be published
on or around 2 April 2017 on The Stock
Exchange of Hong Kong Limited, a copy
of which is available on SEA's website
and The Stock Exchange of Hong Kong Limited;
------------------------------- -------------------------------------------------
"SEA Distribution in means the proposed distribution by SEA
Specie" of the 861,278,857 AGP Shares held by
SEA to the qualifying SEA Shareholders
in proportion to their respective shareholdings
in SEA as at the close of business on
the SEA Record Date;
------------------------------- -------------------------------------------------
"SEA Group" means (i) prior to the completion of
the SEA Distribution in Specie, SEA and
its subsidiaries (including the AGP Group),
and (ii) after the completion of the
SEA Distribution in Specie, SEA and its
subsidiaries (excluding the AGP Group);
------------------------------- -------------------------------------------------
"SEA Record Date" means the record date for the purpose
of ascertaining the
entitlements of the SEA Shareholders
to participate in the
SEA Distribution in Specie, being a date
no later than 4 May 2017;
------------------------------- -------------------------------------------------
"SEA Share(s)" means ordinary share(s) of HK$0.10 each
in the share capital of SEA;
------------------------------- -------------------------------------------------
"SEA Independent Shareholders" means the SEA Shareholders other than
NLI and its close associates;
------------------------------- -------------------------------------------------
"SEA Shareholder(s)" means holder(s) of the SEA Share(s);
------------------------------- -------------------------------------------------
"Service Recipients" means AGP and its subsidiaries and, at
the request of AGP, its associates;
------------------------------- -------------------------------------------------
"SGM" means the special general meeting of
the Company to be convened at the Board
Room, 26th Floor, Dah Sing Financial
Centre, 108 Gloucester Road, Wanchai,
Hong Kong at 4.00 p.m. (Hong Kong time)
(9.00 a.m. London time) on Friday, 21
April 2017, notice of which is set out
in Part VI of the Circular;
------------------------------- -------------------------------------------------
"Shareholders" means holders of the AGP Shares and/or
holders of the Depositary Interests;
------------------------------- -------------------------------------------------
"Shares in Public Hands" means AGP's issued share capital less
shares held by (i) a related party; (ii)
the trustees of an employee share scheme;
(iii) any person who has right to nominate
a person to AGP's Board; (iv) any person
who is subject to a lock-in agreement
pursuant to rule 7 (as defined in the
AIM Rules for Companies); and (v) AGP
treasury shares. "Shares in public hands"
and "free float" are used interchangeably
throughout this document; and
------------------------------- -------------------------------------------------
"SP Agreement" means the sale and purchase agreement
entered into between
AGP and SEA dated 31 March 2017 in relation
to the sale
and purchase of the entire issued share
capital of BSGL.
------------------------------- -------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
DISLLLLBDZFBBBV
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April 03, 2017 02:00 ET (06:00 GMT)
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