KWONG HING INTL<1131> - 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.
Kwong Hing International Holdings (Bermuda) Limited
(Incorporated in Bermuda with limited liability)
PROPOSED PLACEMENT OF 138,000,000 NEW SHARES
AND
GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SECURITIES
Joint Manager of the Placement
Kingsway Capital Limited Polaris Securities (Hong Kong) Limited
Underwriter
Kingsway SW Securities Limited
The board of directors of the Company is pleased to announce that the
Company has entered into a conditional Placing Agreement on 8 January,
2000 to place 138,000,000 Placing Shares at the Placing Price of HK$0.20
per Placing Share.
The net proceeds from the Placing is approximately HK$27 million. It is
intended that approximately HK$11 million of the net proceeds will be used
to upgrade existing production facilities including the purchase of
additional machinery, approximately HK$5 million will be used to repay
bank debt due in February 2000 and the remaining balance for general
working capital purposes.
1. BACKGROUND
On 16 November, 1999 and on 13 December, 1999, Kwong Hing International
Holdings (Bermuda) Limited (the "Company") announced private placements of
90,000,000 new shares of the Company of HK$0.10 each ("Shares") and
118,000,000 new Shares, respectively which raised approximately HK$15.0
million and HK$19.8 million respectively. Approximately, HK$10 million of
the net proceeds from the private placement announced in November 1999
(the "November Placement") had been used to repay bank debt and
approximately HK$5 million was for working capital purposes. Approximately
HK$10 million of the net proceeds from the private placement announced in
December 1999 (the "December Placement") was used to repay bank debt, of
which HK$2 million had been repaid and HK$8 million will be repaid in the
month of January 2000 and approximately HK$10 million was for working
capital purposes.
2. PLACING AGREEMENT: dated 8 January, 2000 ("Placing Agreement")
regarding the placement of 138,000,000 Shares ("Placing Shares") at a
price of HK$0.20 per Placing Share ("Placing Price", together the
"Placing")
Issuer: the Company
Placing agent and underwriter: Kingsway SW Securities Limited (the
"Underwriter")
Number of shares to be placed: 138,000,000 Placing Shares
The Placing Shares represents approximately 9.89% of the Company's
existing issued share capital of 1,396,000,000 Shares and approximately
9.00% of the enlarged issued shares of the Company of 1,534,000,000
Shares.
Placee: more than six independent professional investors, institutional
investors or other investors ("Placees")
Independence of Placees and Underwriter
The Underwriter is and the Placees will be independent of and not
connected with the directors, chief executive, substantial shareholder of
the Company or any of its subsidiaries or any associates of any of them
(as defined in the Rules ("Listing Rules") Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited ("the Stock
Exchange")).
Placing Price: HK$0.20 per Placing Share
The Placing Price represents a discount of approximately 12.28% to the
closing price of HK$0.228 per Share as quoted on the Stock Exchange on 8
January, 2000 and represents a discount of approximately 7.41% to the
average closing prices of HK$0.216 per Share as quoted on the Stock
Exchange for the 10 trading days ended 8 January, 2000. The Placing Price
was agreed after arm's length negotiations and the board of directors of
the Company considers the terms of the Placing Agreement are fair and
reasonable.
3. RANKING OF THE PLACING SHARES
The Placing Shares, when fully-paid and issued, will rank pari passu in
all respects with the existing issued Shares of the Company and will
receive all dividends and distributions declared, made or paid on or after
completion of the Placing.
4. CONDITIONS OF THE PLACING
Completion of the Placing is conditional upon the following conditions
being fulfilled on or before 18 February, 2000:
(i) the passing of an ordinary resolution by shareholders of the
Company at a special general meeting of the Company ("SGM") to approve the
allotment and issue of the Placing Shares;
(ii) the Listing Committee of the Stock Exchange granting the listing
of and permission to deal in the Placing Shares; and
(iii) filing of relevant circulars or obtaining the necessary waiver
relating to the Placing as required by Bermuda law, if necessary.
Currently, no Placee has been identified and should any Placee who are
existing shareholders of the Company on the date of the SGM, it has to
abstain from voting at the SGM on the resolution to approve the allotment
and issue of the Placing Shares.
5. COMPLETION OF THE PLACING
Completion of the Placing is expected to take place within 1 business day
after the conditions have been fulfilled.
6. REASONS FOR PLACING AND THE USE OF PROCEEDS
Although the Company is financially sound, the directors of the Company
are of the view that the Placing will further strengthen the capital base
of the Company and the directors of the Company consider the Placing to be
in the best interest of the Company. The net proceeds from the Placing is
approximately HK$27 million. In view of the competitive and increasingly
sophisticated textile industry, it is intended that approximately HK$11
million of the net proceeds will be used to upgrade existing production
facilities including the purchase of additional machinery which the
directors of the Company believe will maintain the Company's
competitiveness. Furthermore, approximately HK$5 million of the net
proceeds will be used to repay bank indebtedness in February 2000 and the
remaining balance will be for general working capital.
7. SHAREHOLDING OF THE SUBSTANTIAL SHAREHOLDER AND ITS ASSOCIATES
Before the November Placement, the December Placement and the Placing, the
substantial shareholder of the Company, Rayten Limited ("Rayten"),
together with its associates as defined in the Listing Rules own
641,430,000 Shares, representing approximately 53.99% of the issued share
capital of the Company before the November Placement of 1,188,000,000
Shares, approximately 50.19% of the issued share capital of the Company
before the December Placement of 1,278,000,000 Shares and approximately
45.95% of the issued share capital of the Company before the Placing of
1,396,000,000 Shares, respectively.
After the November Placement, the December Placement and the Placing,
Rayten together with its associates as defined in the Listing Rules own
approximately 50.19%, 45.95% and 41.81% of the share capital of the
Company as enlarged by the November Placement, December Placement and the
Placing. After the allotment and issue of the Placing Shares, the then
issued share capital of the Company will be 1,534,000,000 Shares.
8. APPLICATION FOR LISTING
Application will be made to the Stock Exchange for listing of, and
permission to deal in, the Subscription Shares.
9. GRANT OF GENERAL MANDATES
The directors of the Company will also seek the approval of shareholders
of the Company for a general mandate to the directors of the Company to
repurchase securities of the Company and to issue further Shares not
exceeding 10% and 20% respectively, of the share capital of the Company.
10. GENERAL
A circular containing, among other things, further details of the Placing,
the notice to special general meeting of the Company will be despatched to
shareholders of the Company as soon as practicable.
By Order of the Board of
Kwong Hing International Holdings (Bermuda) Limited
Li Mei Lin
Deputy Chairman
Hong Kong SAR, 8 January, 2000
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