TIDMRCG
RNS Number : 2361C
RCG Holdings Limited
13 March 2014
13 March 2014
RCG Holdings Limited
("RCG" or the "Company" and together with its subsidiaries, the
"Group")
Acquisition of 74% Equity Interest in Easy Ideas Limited
The Board of the Company is pleased to announce that on 13 March
2014, the Company's wholly owned subsidiary, Bio Tag International
Limited ("BTIL") and the Vendor entered into the Agreement,
pursuant to which BTIL has conditionally agreed to acquire and the
Vendor has conditionally agreed to sell, the Sale Shares,
representing 74% of the issued share capital of Easy Ideas Limited
for a total Consideration of HK$69,560,000 (approximately GBP5.4
million). Easy Ideas Limited is an investment holding company and
the holding company of its wholly owned subsidiary, Techno Vision
Limited ("Techno Vision").
Techno Vision is a mobile application developer and web base
solutions services provider. It provides online services enabling
users to make restaurant reservations and social networking on both
iOS and android platforms. In the year ended 30 September 2013,
Techno Vision reported turnover of HK$5.05 million and profit
before taxation of HK$3.67 million. Net liabilities as at 30
September 2013 were HK$0.67 million.
The Consideration has been arrived at after arm's length
negotiations between the Company and the Vendor and was determined
with reference to, including but not limited to, a preliminary
valuation of Easy Ideas Limited prepared by an independent
professional valuer. This preliminary valuation placed a market
value of approximately HK$94.7 million (approximately GBP7.3
million) on a 100% equity interest in Easy Ideas Limited as at 7
February 2014.
THE SALE AND PURCHASE AGREEMENT
Date of the Agreement
13 March 2014
Parties
(1) Vendor: Wealthy Zone Limited
(2) Purchaser: Bio Tag International Limited, a wholly-owned
sub-subsidiary of the Company and is principally engaged in
investment holding.
The Vendor is an investment holding company. To the best of the
Directors' knowledge, information and belief after having made all
reasonable enquiries, as at the date of this announcement, the
Vendor and its ultimate beneficial owners are third parties
independent of the Company and its connected persons.
Interests acquired - the Sale Shares
The Sale Shares, representing 74% of the issued share capital of
the Target. As at the date of this announcement, the Target is
wholly-owned by the Vendor. Upon completion, the Target will become
an indirect 74% owned subsidiary of the Company, and 26% by Wealthy
Zone Limited. To the best of the Directors' knowledge, information
and belief and having made all reasonable enquiries, Wealthy Zone
Limited is a third party independent of the Company and its
connected persons.
Consideration
Pursuant to the terms of the Agreement, the Consideration
payable to the Vendor in the aggregate amount of HK$69,560,000
(approximately GBP5.4 million) will be satisfied by :-
(i) HK$9,560,000 (approximately GBP0.7 million) in form of cash
consideration in favour of the Vendor or its designated nominee(s)
as refundable deposit upon execution of this Agreement;
(ii) HK$20,000,000 (approximately GBP1.6 million) in form of
Promissory Notesin favour of the Vendor or its designated
nominee(s) within three months after completion; and
(iii) HK$40,000,000 (approximately GBP3.1 million) in form of
Promissory Notes in favour of the Vendor or its designated
nominee(s) within six months after the completion.
Completion
Completion shall take place at a place to be agreed by the
parties immediately following the date of the satisfaction of the
conditions precedent set out in in the Agreement.
Upon completion, the Target will become an indirect 74% owned
subsidiary by the Company and 26% by Wealthy Zone Limited.
REASONS FOR ANDBENEFITS OF THE ACQUISITION
The Company is an investment holding company and the Group is
principally engaged in developing, sourcing and selling biometric
and radio frequency identification (RFID) products and solutions
services in the Asia Pacific region. The Group's business is
divided generally into four categories; "Trading of Security of
Biometrics Products", "Solutions, Projects and Services", "Internet
and Mobile Applications & Related Accessories" and "Commodities
Trading".
It is the corporate strategy of the Group to strengthen its
existing businesses while concurrently identifying and capitalizing
new opportunities to achieve financial growth for the Group and to
maximize Shareholders' value.
In view of growing internet penetration and the explosion of the
smartphone market, the Directors consider that there will be a
growing popularity of mobile marketing together with a surge in
demand for various mobile applications. Having considered the
Target Group specialization in providing advertising solutions and
entertainment applications on mobile platforms, the Directors
consider the Acquisition an opportunity which has strategic
importance for the Group to expand and diversify its business
portfolio.
GENERAL INFORMATION
The Group's business is divided generally into four categories;
"Trading of Security of Biometrics Products", "Solutions, Projects
and Services", "Internet and Mobile Applications & Related
Accessories" and "Commodities Trading".
The Target is an investment holding company and its major asset
is the investment in its wholly owned subsidiary, namely Techno
Vision Limited, which is a mobile application developer and web
base solutions services provider. It provides all round online
services for enabling users to make restaurant reservations and
social networking on both iOS and android platforms.
LISTING RULES IMPLICATION
As the highest applicable percentage ratios in respect of the
Acquisition (which are aggregated pursuant to Rule 14.22 of the
Hong Kong Listing Rules) exceed 5% but are less than 25%, the
Acquisition constitute a discloseable transaction for the Company
and accordingly, is subject to the reporting and announcement
requirements under Chapter 14 of the Hong Kong Listing Rules.
Note: Sterling equivalent values above are based on an exchange
rate of HK$12.95/GBP1.
Enquiries:
RCG Holdings Limited Tel: +852 2637 2800
Wang Zhongling, Chief Executive Officer
ir@rcg.tv
Smith & Williamson Corporate Finance Limited Tel: +44 (0) 20 7131 4000
(Nominated adviser and broker)
Dr. Azhic Basirov / David Jones / Ben Jeynes
DEFINITIONS
In this announcement, unless the context otherwise requires, the
following expressions shall have the following meaning:
"Acquisition" the purchase of 74% equity interest of Easy Ideas
Limited by the Purchaser from the Vendor pursuant
to Agreement;
-------------------- --------------------------------------------------------
"Agreement" the sale and purchase agreement dated 13 March
2014 entered into between the Vendor and the Purchaser
in respect of the Acquisition;
-------------------- --------------------------------------------------------
"AIM" AIM, a market operated by the London Stock Exchange;
-------------------- --------------------------------------------------------
"Board" the board of Directors of the Company;
-------------------- --------------------------------------------------------
"Company" RCG Holdings Limited (AIM: RCG, HKSE: 802), a
company incorporated in Bermuda with limited liability
and the shares of which are listed on The Stock
Exchange of Hong Kong Limited and admitted to
trading on AIM and are traded on the ISDX Secondary
Market;
-------------------- --------------------------------------------------------
"Consideration" the consideration payable by the Purchaser to
the Vendor for the Acquisition pursuant to the
Agreement;
-------------------- --------------------------------------------------------
"Director(s)" the director(s) of the Company;
-------------------- --------------------------------------------------------
"Group" the Company and its subsidiaries;
-------------------- --------------------------------------------------------
"HK$" Hong Kong dollars;
-------------------- --------------------------------------------------------
"Hong Kong Listing the Rules Governing the Listing of Securities
Rules" on The Stock Exchange of Hong Kong Limited;
-------------------- --------------------------------------------------------
"Promissory Notes" promissory notes in total principal amount of
HK$60,000,000 to be issued by the Purchaser to
the Vendor;
-------------------- --------------------------------------------------------
"Purchaser" Bio Tag International Limited, a wholly owned
subsidiary of the Company;
-------------------- --------------------------------------------------------
"Sale Shares" 37,000 ordinary shares of US$1.00 each in the
Target representing 74% of the issued share capital
of the Target;
-------------------- --------------------------------------------------------
"Target" Easy Ideas Limited, a company incorporated in
British Virgin Islands with limited liabilities;
-------------------- --------------------------------------------------------
"Target Group" The Target and its subsidiaries
-------------------- --------------------------------------------------------
"Vendor" Wealthy Zone Limited, a company incorporated in
British Virgin Islands with limited liability;
and
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"%" per cent.
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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