KIN DON HOLD<0208> - 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.
Kin Don Holdings Limited
(Incorporated in the Cayman Islands with limited liability)
Placing of new shares
Kin Don Holdings Limited has entered into two agreements both dated 14
January, 2000 for the placing of a total of 150 million new shares of
HK$0.10 each in the capital of the Company at the placing price of HK$
0.28 per share to independent investors.
The placing price represents a discount of approximately 18.84% to the
closing price of HK$0.345 of the shares of HK$0.10 each in the capital of
the Company as quoted on the Stock Exchange on 14 January 2000 and a
discount of approximately 17.40 % to the average closing price of HK$0.339
of the shares as quoted on the Stock Exchange for the ten consecutive
trading days ending on 14 January 2000.
The placing shares represent 24.13% of the entire issued share capital of
the Company and approximately 19.44% of the entire issued share capital of
the Company as enlarged by the placing.
Placing Agreements dated 14 January 2000:
Kin Don Holdings Limited ("Company") has entered into two placing
agreements ("Placing Agreements") dated 14 January 2000 with Hantec
Securities Co., Ltd ("Hantec") and Ever-Long Securities Co., Ltd.
("Ever-Long") in respect of the placing ("Placings") of 80 million shares
("Shares") of HK$0.10 each in the capital of the Company and 70 million
Shares (collectively, the "Placing Shares") respectively to independent
investors. Hantec and Ever-Long are registered dealers under the
Securities Ordinance.
Hantec has agreed to underwrite the placing of 65 million Placing Shares
and to use its best endeavours to place the remaining 15 million Placing
Shares. Ever-Long has also agreed to underwrite the placing of 35 million
Placing Shares and to use its best endeavours to place the remaining 35
million Placing Shares. The Company will pay to each of Hantec and
Ever-Long a fee of 2.5% of the aggregate placing price of the underwritten
shares and any further shares placed by them.
Total number of Placing Shares:
150 million Shares, representing approximately 24.13% of the entire issued
share capital of the Company and approximately 19.44% of the entire issued
share capital of the Company as enlarged by the Placing. The existing
issued share capital of the Company comprises 621,564,705 Shares.
Placement to:
More than six independent investors.
Placing Price:
HK$0.28 per Placing Share, representing a discount of approximately 18.84
% to the closing price of HK$0.345 of the Shares as quoted on The Stock
Exchange of Hong Kong Limited ("Stock Exchange") on 14 January 2000 and a
discount of approximately 17.40% to the average closing price of HK$0.339
of the Shares as quoted on the Stock Exchange for the ten consecutive
trading days ending on 14 January 2000. The Placing Price was arrived at
after arm's length negotiation between the Company and the placing agents
respectively.
Independence of placees:
The placees are to be independent third parties not connected with any of
the directors, chief executive, substantial shareholders of the Company or
any of its subsidiaries or their respective associates (as defined in the
Rules Governing the Listing of Securities on the Stock Exchange). The
directors of the Company will ensure that there will be a minimum 25%
public float of the Shares after the Placings and the issue of new shares
to Silver Galaxy Investment Limited ("Silver Galaxy") as mentioned in the
2nd Announcement (as defined below).
Conditions of the Placings:
The Placings are subject to :
(1) the shareholders of the Company approving the issue and allotment
of the Placing Shares at an extraordinary general meeting; and
(2) the Listing Committee of the Stock Exchange granting listing of
and permission to deal in the Placing Shares.
Completion of Placings:
Completion of the Placings are expected to take place within one business
day after the conditions of Placings are satisfied.
Controlling Shareholders:
At the date hereof, Keen Intelligence Corporation ("Keen Intelligence") ,
Glowing Bless Corporation ("Glowing Bless") and Mr Au Tung Chi ("Mr Au") ,
the controlling shareholders of the Company, hold approximately 40.30 %,
2.21% and 1.89% respectively of the entire issued share capital of the
Company. Assuming that all the 150 million Placing Shares are successfully
placed, immediately after completion of the Placings, and the new issue of
Shares to Silver Galaxy as mentioned in the 2nd Announcement, the
shareholdings of Keen Intelligence, Glowing Bless and Mr Au would be
reduced as follows:
Approximate percentage of the enlarged issued
share capital of the Company
Existing After completion After the issue
of the Placings to Silver Galaxy
Keen Intelligence 40.30% 32.47% 30.15%
Glowing Bless 2.21% 1.78% 1.66%
Mr Au 1.89% 1.52% 1.42%
Ranking:
The Placing Shares, when fully paid, will rank pari passu in all respects
with the existing issued Shares.
Use of proceeds:
The net proceeds of the Placings, estimated to be HK$40,700,000 if all the
Placing Shares are successfully placed, will be used for the purpose of
paying the remaining subscription price and the shareholder's loan in the
aggregate sum of HK$40,000,000 under the shareholders' agreement ("JV
Agreement") dated 20 December 1999 entered into between the Company, Li
Yang Advertising Public Relations (HK) Limited ("Li Yang") and City Power
Services Limited and the remaining sum as working capital.
As mentioned in the 1st Announcement (as defined below), the Company's
group has to pay the HK$40,000,000 pursuant to the JV Agreement by 31
January 2000. The Company has commenced negotiation with Li Yang for an
extension of time to make payments under the JV Agreement. The Company
will make a further announcement if there is any development in this
regard.
Reasons for the Placings:
Reference is made to the Company's announcement ("1st Announcement") dated
20 December 1999 which was published on 24 December 1999, and the
Company's announcement ("2nd Announcement") dated 3 January 2000 which was
published on 4 January 2000.
The Placings will enable the Company to raise capital to meet its
obligations under the JV Agreement. The Directors had considered other
means of raising capital such as a rights issue, but concluded that the
Placings would save more time and costs. To cater for the possibility that
Hantec and Ever-Long fail to place those Placing Shares which they agreed
to use their best endeavours to place respectively, the Company has been
considering (1) the use of loans; (2) the issue of convertible bonds; and
(3) further placing of Shares to meet the payment obligations under the JV
Agreement.
General:
The Company will apply to the Listing Committee of the Stock Exchange for
the listing of and permission to deal in the Placing Shares.
An extraordinary general meeting ("EGM") of the Company will be convened
for the purpose of, inter alia, approving the issue and allotment of the
Placing Shares.
A circular containing, inter alia, details of the Placing Agreements and
the transactions mentioned in the 1st Announcement and 2nd Announcement of
the Company and the notice of EGM will be despatched to shareholders of
the Company on or before 28 January 2000.
The directors of the Company have noted the recent increases in the price
and turnover of the shares of the Company and wish to state that, save as
mentioned above, they are not aware of any reasons for such increases.
The directors also confirm that, save as mentioned above, there are no
negotiations or agreements relating to intended acquisitions or
realisations which are discloseable under paragraph 3 of the Listing
Agreement, neither is the board of directors aware of any matter which is
discloseable under the general obligation imposed by paragraph 2 of the
Listing Agreement which is or may be of a price-sensitive nature.
By Order of the Board
Kin Don Holdings Limited
Wei Cheng Wen
Director
Hong Kong, 15 January 2000
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