EGANA INT'L<0048> - 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.
EGANA INTERNATIONAL (HOLDINGS) LIMITED
(Incorporated in the Cayman Islands with limited liability)
ISSUE OF US$15,000,000
UNSECURED CONVERTIBLE DEBENTURES DUE 2002
SUMMARY
On 15th December 1999, Egana International
(Holdings) Limited (the `Company') and Credit Suisse First Boston
(Hong Kong) Limited (`CSFB') entered into a subscription agreement
(the `Subscription Agreement') pursuant to which the Company issued
and CSFB purchased an aggregate principle amount of US$15,000,000
4.5% unsecured convertible debentures due 2002 (the `Debentures').
The Debentures are convertible into ordinary shares of HK$0.10 each
of the Company (the `Shares') at a conversion price equal to the
lesser of (i) HK$0.28 per Share (the `Fixed Conversion Price'),
subject to adjustment; and (ii) 90% of the 5 lowest closing prices of
one Share during the 20 business days immediately prior to conversion
(the `Floating Conversion Price'). Unless converted or redeemed
earlier, all outstanding Debentures will be automatically converted
into Shares on maturity.
The Subscription Agreement was negotiated on an arm's length basis
and the directors of the Company believe that its terms are fair and
reasonable so far as the Company is concerned.
Subscription Agreement:
Date: 15th December 1999
Issuer: the Company
Purchaser: CSFB, an independent third
party not connected with the
Company or any of the
directors, chief executive
and substantial shareholders
of the Company or its
subsidiaries or their
respective associates (as
defined in the Rules
Governing the Listing of
Securities on The Stock
Exchange of Hong Kong Limited
(the `Stock Exchange') (the
`Listing Rules'))
Principal amount of US$15,000,000 (equivalent to
Debentures: approximately HK$116,550,000,
calculated based on an
exchange rate of US$1 =
HK$7.77), payable in cash on
the Closing Date
Interest: 4.5% per annum, payable
semi-annually
Closing Date: 15th December 1999
Transferability: CSFB will not assign or
transfer any of the
Debentures to any third party
other than a subsidiary or
holding company or subsidiary
of such a holding company of
it without the prior written
consent of the Company
The Company undertakes to the
Stock Exchange that it will
disclose to the Stock
Exchange any dealings by the
substantial shareholders and
directors of the Company or
their respective associates
(as defined in the Listing
Rules) in the Debentures from
time to time immediately upon
the Company becoming aware of
it.
Conversion Period: at any time after 47 days
from the Closing Date upto
maturity provided that:
(i) no more than one sixth
of the principal amount of
the Debentures at the Closing
Date shall be converted into
Shares at the Floating
Conversion Price during each
of the successive six
thirty-day periods (each a
`Thirty Day Period')
commencing 47 days after
Closing Date up to and
including 226 days from
Closing Date (the `Restricted
Period');
(ii) paragraph (i) above shall not apply if
the Debentures are converted
at the Fixed Conversion Price
in any Thirty Day Period
during the Restricted Period
Conversion Price: the lesser of (i) HK$0.28 per
Share, the Fixed Conversion
Price, subject to adjustment
as set out in the
Subscription Agreement; and
(ii) the Floating Conversion
Price (which would be
HK$0.178 if conversion took
place on Closing Date, for
information only)
The Fixed Conversion Price
represents a premium of
approximately 14.8% of the
closing price of one Share on
the Stock Exchange on 15th
December 1999 and a premium
of approximately 15.8% of the
average of the closing prices
of one Share on the Stock
Exchange for 10 trading days
immediately prior to Closing
Date.
Conversion Shares: Debentures are convertible
into new Shares of the
Company at the lower of (i)
the Fixed Conversion Price,
subject to adjustment and
(ii) the Floating Conversion
Price at any time during the
Conversion Period, such
Shares shall rank pari passu
in all respects with the
Shares then in issue;
provided that no Shares shall
be issued at a price below
the par value of the Shares
(currently at HK$0.10),
unless permitted by law and
in compliance with all
applicable rules and
regulations
Assuming full exercise of the
conversion rights under the
Debentures at the current
Fixed Conversion Price of
HK$0.28 per Share,
approximately 416,250,000 new
Shares, representing
approximately 4.3% of the
existing issued share capital
or approximately 4.1% of the
enlarged share capital of the
Company, will be issued
pursuant to the terms of the
Debentures.
Maturity: 15th December 2002
Mandatory Conversion: On maturity, the Debentures
will automatically be
converted into Shares at the
lower of (i) the Fixed
Conversion Price and (ii) the
Floating Conversion Price
Anti-dilutive Provision: the Company shall be free to
issue any securities
convertible into Shares of
the Company (the `Equity
Linked Securities') so long
as any such securities are
not issued with terms that
are more favorable than the
terms set out in the
Debentures and, in the event
that the terms of the Equity
Linked Securities are, in the
opinion of the Company, more
favorable than the terms set
out in the Debentures,
holders of the outstanding
Debentures are given the
right to exchange the
outstanding Debentures for
the new Equity Linked
Securities on the same terms
and the right to participate
in the new issue of the
Equity Linked Securities up
to an aggregate amount of
US$10,000,000
Redemption: the Company is required to
redeem the Debentures at
their principal amount plus
accrued interest to date of
redemption upon, inter alia,
the Company not obtaining the
Stock Exchange's approval to
the listing of the Conversion
Shares within 30 days after
Closing Date
Use of Proceeds:
The net proceeds derived from the issue of the Debentures will be
used for developing e-commerce by the application of information
technology into the Company's business activities as part of the
Company's extension of its distribution network and brand building,
for applying information technology to timepiece, and for general
working capital purpose. The main focus of the current development on
e-commerce is on the Extranet/Intranet/Telecommunications areas to
enhance, inter alia, cost efficiency, accuracy and distribution
coverage.
Listing:
No application will be made for the listing of, or permission to
deal in, the Debentures on the Stock Exchange or any other stock
exchange. Application has been made to the Listing Committee of the
Stock Exchange for the listing of, and permission to deal in, the
Shares to be issued upon conversion of the Debentures.
General Mandate:
The Shares to be issued on any exercise of the conversion rights
under the Debentures will be issued pursuant to the general mandate
granted to the directors of the Company at the Company's last annual
general meeting on 22nd June 1999.
By Order of the Board
Hans-Joerg SEEBERGER
Chairman and Chief Executive
Hong Kong, 15th December 1999
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