COMPUTER & TECH<0046>-Announcement & Resumption of Trading
The Stock Exchange of Hong Kong Limited takes no
responsibility for the contents of this announcement, makes
no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any
part of the contents of this announcement.
COMPUTER AND TECHNOLOGIES HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
PROPOSED ISSUE OF CONVERTIBLE BOND AND GRANT OF OPTION
The Agreement
The Directors announce that the Company entered into a
conditional agreement with Hutchison (a third party
independent of the Company and its subsidiaries) and Mr. Ng
(a director, the chairman and substantial shareholder of the
Company) on 17 January 2000 under which, among other things,
(i) the Company has agreed to issue a convertible bond to
Hutchison or its subsidiaries in the principal sum of
HK$230,276,610.20; (ii) the Company has agreed to grant an
option to Hutchison to subscribe for shares representing up
to a total of 7.5 per cent. of the total issued share capital
of the Company as at the date of the Agreement; (iii) Mr.
Ng has agreed to give certain undertakings. The issue of the
Bond and the exercise of the Option are subject to certain
conditions specified below.
The Bond
The Bond bears interest at a rate of 6 per cent. per annum
payable every six months in arrears. The outstanding
principal amount of the Bond is repayable by the Company upon
the maturity of the Bond on the second anniversary of its
date of issue, if not previously converted by the Bondholder.
The Bond is convertible into Shares at any time after its
date of issue (provided that conversions up to a maximum of
4 times may be made during the term of the Bond) at an initial
conversion price of HK$7.90 per Share, subject to adjustment.
The Bond must be converted into Shares in certain
circumstances specified below.
The issue of the Bond and the Conversion Shares will be
subject to approval of the shareholders of the Company. Upon
full conversion of the Bond and assuming that there will be
no adjustment to the initial conversion price, a total of
29,148,938 new Shares will be issued, representing
approximately 12.5 per cent. and 11.1 per cent. of the
current and enlarged issued share capital of the Company,
respectively.
The Option
Subject to completion of the issue of the Bond, the Option
is exercisable by Hutchison at any time within two years from
the date of completion of the issue of the Bond and may be
exercised in whole or in part. The exercise price per Share
is equal to the conversion price under the Bond. Assuming
that the Option is fully exercised at the initial exercise
price, a total of 17,489,362 new Shares will be issued upon
exercise of the Option representing approximately 7.5 per
cent. and 7.0 per cent. of the current and enlarged issued
share capital of the Company, respectively.
Assuming that the Bond is fully converted at the initial
conversion price and the Option is fully exercised at the
initial exercise price, a total of 46,638,300 new Shares will
be issued representing approximately 20 per cent. and 16.7
per cent. of the current and enlarged issued share capital
of the Company, respectively.
The issue of the Bond, the Conversion Shares, the Option and
the Option Shares are subject to approval of the shareholders
of the Company at a special general meeting to be convened
by the Company. The Company will send a notice of special
general meeting to all shareholders of the Company as soon
as practicable.
The Company and Hutchison have agreed to use their best
endeavours to procure that a joint venture agreement be
entered into by the date of issue of the Bond relating to
the formation of a joint venture in which the Company and
Hutchison will each hold a 50% interest. Details of certain
of the proposed terms of the joint venture agreement are
specified below.
The Shares were suspended from trading on the Stock Exchange
from 10 a.m. on 17 January 2000 at the request of the Company.
The Company has made an application to the Stock Exchange
to resume trading of the Shares on the Stock Exchange from
10:00 a.m. on 18 January 2000.
AGREEMENT DATED 17 JANUARY 2000
A. THE BOND
1. The Bondholder
Subject to the satisfaction of the conditions referred to
in paragraph A.3 below, the Bond will be issued in the name
of Hutchison or its subsidiary(ies). Hutchison is an
independent third party and is not a connected person (as
defined under the Listing Rules) of the Company. Hutchison
is a wholly-owned subsidiary of Hutchison Whampoa Limited,
a company whose securities are listed on the Stock Exchange
and which operates five core businesses in 26 countries:
ports and related services; telecommunications; property
development and holdings; hotel development and management,
retail, manufacturing and other services; and energy and
infrastructure.
2. Principal Terms of the Bond
The principal terms of the Bond are summarised below:
(a) Issuer
The Company
(b) Principal Amount
HK$230,276,610.20 payable in full by Hutchison to the
Company upon issue of the Bond
(c) Maturity Date and Redemption
Unless previously converted, the outstanding principal
amount of the Bond (together with all unpaid and accrued
interest) will be repaid by the Company upon its maturity
on the second anniversary of the date of issue of the Bond
together with accrued interest.
(d) Interest
The Bond will bear interest from its date of issue at the
rate of six per cent. per annum, which will be payable once
every six months in arrears on the principal amount of the
Bond outstanding from time to time.
(e) Conversion Rights
The outstanding principal amount of the Bond or any part
thereof may be converted into Shares at any time (provided
that conversion up to a maximum of 4 times may be made during
the term of the Bond) prior to the maturity date at the
relevant conversion price (which is initially HK$7.90 per
Share, subject to adjustment). No fraction of a Share will
be issued on conversion but (except in cases where any such
cash payment would amount to less than HK$10) a cash payment
will be made to the Bondholder in respect of such fraction.
The Bondholder must convert the whole of the outstanding
amount under the Bond into Shares if the closing price of
the Shares on the Stock Exchange in each of any 20 consecutive
trading days during the period commencing on the date of
issue of the Bond and ending on the maturity date of the Bond
is not less than 165 per cent. of the prevailing conversion price.
Assuming that the entire principal amount of
HK$230,276,610.20 of the Bond is converted at the initial
conversion price, a total of 29,148,938 new Shares will be
issued, which represents approximately 12.5 per cent. and
11.1 per cent. of the current and enlarged issued share
capital of the Company, respectively.
(f) Ranking of Shares to be Issued Upon Conversion
Conversion Shares will rank pari passu in all respects with
all other Shares in issue on the date of the conversion notice
and will be entitled to all dividends, bonuses and other
distributions the record date of which falls on a date on
or after the date of the conversion notice.
(g) Conversion Price
The initial conversion price of HK$7.90 per Share, subject
to adjustment in accordance with the terms of the Bond, was
determined after arm's length negotiations.
The initial conversion price of HK$7.90 represents a
discount of 16.40 per cent. to the closing price of the Shares
of HK$9.45 on the Stock Exchange on 14 January 2000, the last
trading day preceding the suspension in trading of the Shares
and a premium of 6 per cent. to the average closing price
of the Shares of HK$7.44 on the Stock Exchange in the thirty
consecutive trading days ending on 14 January 2000.
(h) Voting
The Bondholder will not be entitled to receive notice of,
attend or vote at general meetings of the Company by reason
only of it being the Bondholder.
(i) Transferability
Subject to the relevant rules, laws, regulations,
requirements and consents, the Bond may not be transferred
except with the prior approval of the Company and (if
required) the Stock Exchange except where the Bond is
transferred to a holding company of the Bondholder, a
subsidiary of such holding company or a subsidiary of the
Bondholder. The outstanding principal amount of the Bond may
be transferred in full or in part. The Bond may not be
transferred to a connected person (as defined in the Listing
Rules) of the Company or any of its subsidiaries except with
the prior approval of the Company and (if required) by the
Stock Exchange.
If the Bond or any part thereof is transferred to a transferee
who is a direct or indirect holding company of the Bondholder,
a direct or indirect subsidiary of such holding company or
a direct or indirect subsidiary of the Bondholder, and the
transferee ceases to have the same relationship with the
Bondholder, the transferee is required to transfer the Bond
and the Bondholder must procure that the Bond is transferred
to a party who has one of the aforesaid relationships with
the original Bondholder.
3. Conditions to the Issue of the Bond
Completion of the issue of the Bond are conditional upon the
following having taken place on or before 28 February 2000
or such later date as may be agreed between the Company and
Hutchison:
(a) the Listing Committee of the Stock Exchange granting the
listing of, and permission to deal in, the Conversion Shares
and the Option Shares;
(b) if required, the Bermuda Monetary Authority having
approved the issue of the Bond, the Conversion Shares, the
Option and the Option Shares;
(c) any other conditions as may be required under the
Listing Rules and/or by the Stock Exchange;
(d) the approval of the issue of the Bond and the issue and
allotment of the Conversion Shares in accordance with the
applicable terms of the Agreement and the conditions of the
Bond by shareholders of the Company at a special general
meeting of such shareholders; and
(e) the approval of the granting of the Option and the issue
and allotment of the Option Shares in accordance with the
applicable terms of the Agreement by the shareholders of the
Company at a special general meeting of such shareholders.
If the conditions are not fulfilled on or before 28 February
2000 or such later date as may be agreed between the Company
and Hutchison, failing which the Agreement will be
immediately terminated subject to antecedent claims.
4. Completion of Issue of the Bond
Subject to fulfillment of the conditions described in
paragraph A.3 above, completion of the issue of the Bond will
take place on the 5th banking day following the date on which
the last of such conditions are fulfilled or such other date
as the Company and Hutchison may agree.
5. Listing of the Bond
The Company does not currently intend to make any application
for listing of, or permission to deal in, the Bond on the
Stock Exchange or any other stock exchange.
The Company will make an application to the Listing Committee
of the Stock Exchange for the listing of, and permission to
deal in, the Conversion Shares.
6. Use of Proceeds
The net proceeds from the issue of the Bond are estimated
to be approximately HK$230 million. It is intended that the
net proceeds will be used to help the Company accelerate its
development and expansion, particularly in the e-business
enabling technology and electronic procurement portal
business.
7. Reasons for the Issue of the Bond
The purpose of issuing the Bond is to facilitate the
engagement of a strategic partner which would enable and
facilitate further expansion of the Group.
B. THE OPTION
1. The Optionholder
In consideration of Hutchison agreeing to enter into the
Agreement, the Company has conditionally agreed to grant the
Option to Hutchison.
2. Principal Terms of the Option
The principal terms of the Option are summarised below:
(a) Option Shares
Hutchison has the right to exercise the Option in whole or
in part to subscribe for up to a total number of Option Shares
representing 7.5 per cent. of the total issued share capital
of the Company as at the date of the Agreement. However, on
the date of the relevant notice given by Hutchison to
exercise the Option, if the Bondholder has not fully
exercised the conversion rights under the Bond, the Option
may only be exercised in the same proportion as the
proportion in which the conversion rights under the Bond have
been exercised.
Assuming that the Option is fully exercised at the initial
exercise price, a total of 17,489,362 new Shares will be
issued upon exercise of the Option representing
approximately 7.5 per cent. and 7.0 per cent. of the current
and enlarged issued share capital of the Company,
respectively.
(b) Option Consideration
The exercise price per Share payable by Hutchison upon
exercise of the Option is equal to the conversion price
(which is initially HK$7.90 per Share, subject to
adjustment). The basis of determining the initial conversion
price is set out in paragraph A.2(g) above.
(c) Exercise Period
Hutchison may exercise the Option at any time during the
period commencing from the date of completion of the issue
of the Bond and expiring on the second anniversary of that
date or if such date is not a banking day, the banking day
immediately preceding such date.
(d) Transferability
The rights under the Option are not transferable.
3. Conditions to the Exercise of the Option
The exercise of the Option or any part thereof is conditional
upon the completion of issue of the Bond and the fulfillment
of the conditions set out in paragraph A.3 above.
4. Completion of the Exercise of the Option
Subject to fulfillment of the conditions referred to in
paragraph B.3 above, completion of the exercise of the Option
will take place on a date to be specified by Hutchison in
the notice of exercise of the Option, being a banking day
falling at least 3 banking days after the date of the option
notice.
5. Use of Proceeds
The net proceeds from the exercise of the Option are
estimated to be approximately HK$138 million. It is intended
that the net proceeds will be used for general working
capital purposes.
6. Reasons for the Grant of the Option
The purpose of issuing the Option is to strengthen the
long-term working relationship with the strategic partner.
C. TOP-UP SUBSCRIPTION
Subject to the requirements of the Listing Rules and other
applicable rules, laws and regulations, and provided that
the Bond has not been transferred to any person other than
Hutchison's subsidiaries, if the Company allots and issues
any new Shares to any third parties (except pursuant to an
exercise of any option granted under the Company's
employees' share option scheme), the Company shall offer
Hutchison the right to subscribe for up to 20 per cent. of
such new Shares to be allotted and issued on (in so far as
reasonably practicable and appropriate) the same terms as
such Shares are offered to such third parties. Such offer
will be open for a period of 3 banking days from the date
of notice of the offer given by the Company and to the extent
that Hutchison shall not subscribe for any such Shares
offered, the Company will be free to issue and allot such
Shares to other parties on terms no less favourable to the
Company than those offered to Hutchison.
D. BOARD REPRESENTATION
Subject to the issue of the Bond and the conditions set out
below, Hutchison may at any time from the date of the issue
of the Bond appoint a nominee as a director of the Company.
Hutchison must procure that its nominee director shall
resign as director of the Company as soon as practicable if
(i) during the term of the Bond, Hutchison disposes of the
Bond or any part thereof other than to its subsidiaries, and
Hutchison and its subsidiaries together hold Conversion
Shares or Option Shares representing less than 7.5 per cent.
of the then issued share capital of the Company; or (ii) after
the expiry of the Bond, Hutchison and its subsidiaries
together hold less than 7.5 per cent. of the then issued share
capital of the Company.
E. UNDERTAKINGS BY MR. NG
Provided that Mr. Ng has the right to vote at the relevant
special general meeting to be held to consider the
resolutions referred to in paragraph A.3(d) and (e) above,
Mr. Ng has undertaken to exercise all his voting rights as
a shareholder of 47.7 per cent. of the issued share capital
of the company in favour of such resolutions. Mr. Ng has no
interests in Hutchison.
F. JOINT VENTURE AGREEMENT
The Company and Hutchison have agreed to use their respective
best endeavours to procure that a joint venture agreement
containing the following terms be signed by the date of issue
of the Bond:
(a) the Company and Hutchison (or their respective
subsidiaries) will each hold 50 per cent. of the share
capital of the joint venture;
(b) the purpose of the joint venture is to build a resource
team for the implementation of information technology
related solutions and services and E-commerce related
application development; and
(c) the main activities of the joint venture are to provide
services to the group companies of both the Company and
Hutchison.
A further announcement on the details of the joint venture
agreement will be published upon its signing, if so required
under the Listing Rules.
GENERAL
The Company is principally engaged in the business of systems
integration, the provision of related technical services,
and the distribution of computer hardware and software and
related accessories.
The Company will convene a special general meeting as soon
as practicable to consider, among other things, the
resolutions referred to in paragraph A.3(d) and (e) above.
The Company will send a notice of special general meeting
to all shareholders of the Company as soon as practicable.
The Shares were suspended from trading on the Stock Exchange
from 10 a.m. on 17 January 2000 at the request of the Company.
The Company has made an application to the Stock Exchange
to resume trading of the Shares on the Stock Exchange from
10 a.m. on 18 January 2000.
In this announcement, unless the context otherwise requires,
the following terms shall have the following meanings:
"Agreement" the agreement in respect of the
issue of convertible bond and
option between the Company,
Hutchison and Mr. Ng dated 17
January 2000;
"Directors" the directors of the Company;
"Bond" the convertible bond in the
principal sum of
HK$230,276,610.20 to be issued by
the Company to Hutchison or its
subsidiary(ies);
"Bondholder" the person who is for the time
being the registered holder of the Bond;
"Company" Computer And Technologies Holdings Limited;
"Conversion Shares" the Shares to be issued by the
Company upon exercise by the
Bondholder of the conversion
rights under the Bond;
"Hutchison" Hutchison International Limited,
a wholly-owned subsidiary of
Hutchison Whampoa Limited, whose
securities are listed on the Stock Exchange;
"Mr. Ng" Mr. Ng Cheung Shing, a director
and the chairman of the Company
and the beneficial owner of 47.7
per cent. of the existing issued Shares;
"Option" the option granted by the Company
to Hutchison to subscribe for the
Option Shares;
"Option Shares" means the Shares to be issued by
the Company upon exercise of the
Option or part(s) thereof, such
number of Shares representing 7.5
per cent. of the total issued
share capital of the Company as at
the date of the Agreement; and
"Shares" issued shares of HK$0.10 each in
the share capital of the Company.
By Order of the Board
Ng Cheung Shing
Chairman
Hong Kong SAR, 17 January 2000
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