HK FERRY (HOLD)<0050> & NEW WORLD DEV<0017>- Joint Announcement
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.
Hong Kong Ferry (Holdings) Company Limited
(Incorporated in Hong Kong under the Companies Ordinance)
New World Development Company Limited
(Incorporated in Hong Kong under the Companies Ordinance)
JOINT ANNOUNCEMENT
SUMMARY
HKF and NWD announced jointly that on 2 November 1999, HKF and HYF
(a wholly-owned subsidiary of HKF) entered into an agreement with NWFF
(a 76% subsidiary of New World Services Limited) and New World Services
Limited (a 51.2% subsidiary of NWD) for the sale by HKF/HYF of a fleet of
14 ferry vessels with a total capacity of approximately 12,000 seats, a
depot at Cheung Sha Wan, and other ancillary assets to NWFF at a total
consideration of approximately HK$155 million, along with the transfer of
ferry licences in respect of 8 ferry routes from HYF to NWFF. The
transfer has been approved by the Commissioner for Transport on 2 November
1999.
Description of the interest to be transferred:
Under the Agreement for the Sale and Purchase of Assets (the
`Agreement') and at a total consideration of approximately HK$155
million, Hong Kong Ferry (Holdings) Company Limited (`HKF') and The
Hongkong and Yaumati Ferry Company Limited (`HYF') agreed to sell and
New Word First Ferry Services Limited (`NWFF') agreed to purchase a
fleet of 14 ferry vessels with a total capacity of approximately
12,000 seats, a depot at Cheung Sha Wan, and other ancillary assets
(the `Assets') of HKF/HYF so as to equip NWFF with the ability to
operate the ferry routes under licenses to be transferred in
accordance with the Ferry Services Ordinance (Cap. 104).
Ferry licences to operate 8 ferry routes as set out hereunder will
be transferred by HYF to NWFF on 15 January 2000, subject to
satisfaction of certain conditions set out in the Agreement,
including the obtaining of all necessary consents and approvals for
the transfer of the Assets. Approval has been granted by the
Commissioner for Transport on the transfer of licences:-
(a)Cheung Chau - Central
(b)Cheung Chau - Kowloon Point
(c)Mui Wo - Central
(d)Mui Wo - Kowloon Point
(e)Peng Chau - Central
(f)Inter-Islands
(g)North Point - Hung Hom
(h)North Point - Kowloon City
Consideration and terms of payment:
The total consideration in the sum of approximately HK$155 million
under the Agreement shall be payable by NWFF to HKF/HYF in the
following manner:-
(a)NWFF has paid approximately HK$77.5 million, being 50% of the total
purchase price of the Assets to be sold, to HKF/HYF as deposits and
part payment of the purchase price upon signing of the Agreement; and
(b)the balance of approximately HK$77.5 million shall be payable by
NWFF on completion.
Completion date:
15 January 2000 (or such other date as may be agreed by the parties
in writing).
Staff arrangement:
NWFF has agreed to offer employment to about 400 frontline staff of
HKF and HYF. The terms and conditions of employment for the frontline
staff would be devised having due consideration to their current
terms and conditions together with those prevailing in the ferry
industry in Hong Kong. The terms and conditions to be offered would
be no less favourable than those prevailing in the industry. HKF and
HYF have also agreed to second management staff to NWFF to assist in
the start-up of NWFF's operation.
Source of funding:
The investment to be made by NWFF in connection with the acquisition
of the Assets will be funded by internal resources of New World
Development Company Limited (`NWD') and its subsidiaries (the `NWD
Group') and/or third party loans and there will be no material
adverse effect on the NWD Group's cash flow or gearing.
Reasons for the transactions:
The Directors of HKF believe that the disposal of the Assets to NWFF
will give HKF an opportunity to focus on investment opportunities
with better returns. After the cessation of the licensed passenger
ferry services, HKF will focus on property development and
investment, such as the redevelopment at 201 Tai Kok Tsui Road, as
well as its Tsing Yi shipyard operation, of which no change in
ownership is involved.
The Directors of NWD believe that the transfer of the licences of
the ferry routes and the Assets to NWFF is consistent with the policy
of the NWD Group to look for new business and expansion opportunities
in respect of reliable service industry investments with the ultimate
objectives of ensuring profitability and sustaining long-term
growth.
By Order of the Board
Hong Kong Ferry (Holdings) Co. Ltd.
Law Cho Wa, Richard
Company Secretary
By Order of the Board
New World Development Co. Ltd.
Leung Chi Kin, Stewart
Company Secretary
Hong Kong, 2 November 1999.
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