HUNG FUNG GROUP<1141>-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.
HUNG FUNG GROUP HOLDINGS LIMITED
(the "Company")
(Incorporated in Bermuda with limited liability)
PLACING OF EXISTING SHARES
AND
SUBSCRIPTION FOR NEW SHARES
Baxter Resources S.A. (the "Vendor") has agreed to place,
through its placing agent, Kingston Securities Limited
("Kingston"), 20,000,000 existing ordinary shares ("Placing
Shares") of HK$0.10 each in the share capital of the Company
("Shares") to independent investors at a price of HK$1.23
per Share ("Placing") and the Vendor will subscribe for
10,000,000 new Shares ("Subscription Shares") at the price
of HK$1.23 per Share ("Subscription").
The Placing is fully underwritten by Kingston.
The Placing Shares represent approximately 8.63% of the
existing issued share capital of the Company of 231,709,600
Shares and approximately 8.27% of the Company's issued share
capital as enlarged by the Subscription of 10,000,000 new
Shares. The net proceeds from the Subscription of
approximately HK$11.5 million will be used by the Company
and its subsidiaries (the "Group") for developing a
business-to-business e-commerce platform for their
products.
The Vendor, the controlling shareholder of the Company, has
approximately a 67.47% interest in the Company as at the date
of this announcement.
The shareholding of the Vendor in the Company will be reduced
from approximately 67.47% to approximately 58.84%
immediately upon completion of the Placing and will be
increased from approximately 58.84% to approximately 60.54%
immediately upon completion of the Subscription.
Trading in the securities of the Company was suspended from
2:30 p.m. on 8th February, 2000 ("Suspension Date") at the
request of the Company pending the issue of this announcement
and application has been made to The Stock Exchange of Hong
Kong Limited (the "Stock Exchange") for the resumption of
trading of the securities of the Company from 10:00 a.m. on
9th February, 2000.
A. PLACING OF 20,000,000 EXISTING SHARES
A placing agreement dated 8th February, 2000 (the "Placing
Agreement") was entered into between the Vendor and Kingston
containing the following terms:-
Vendor:
The Vendor, the controlling shareholder of the Company.
Placing agent and Underwriter:
Kingston, who is independent of, not connected with the
directors, chief executive or substantial shareholders of
the Company and any of its subsidiaries or any of their
respective associates (as defined under the Rules (the
"Listing Rules") Governing the Listing of Securities on the
Stock Exchange). Kingston would receive placement
commission of 3% on the gross proceeds of the Placing.
Placees:
The placees (which will be six or more individual, corporate
and/or institutional investors) will be independent of, not
connected with the directors, chief executive or substantial
shareholders of the Company and any of its subsidiaries or
any of their respective associates. It is expected that no
placee will become a substantial shareholder of the Company
as a result of the Placing.
Placing price:
HK$1.23 per Placing Share. This price was agreed after arm's
length negotiations and represents (i) a discount of
approximately 0.81% to the closing price of HK$1.24 per Share
quoted on the Stock Exchange on 3rd February, 1999, being
the last trading day of the Shares immediately before the
Suspension Date; and (ii) a premium of approximately 8.95%
over the average closing price of approximately HK$1.129 per
Share as quoted on the Stock Exchange from 21st January, 2000
to 3rd February, 2000, both dates inclusive, being the last
ten trading days of the Shares immediately before the
Suspension Date.
Rights
The Placing Shares will rank equally with the existing
Shares.
Number of existing Shares to be placed
20,000,000 Shares to be placed, representing approximately
8.63% of the existing issued share capital of the Company
of 231,709,600 Shares and approximately 8.27% of the issued
capital of the Company as enlarged by the issue of 10,000,000
new Shares under the Subscription. The Placing is fully
underwritten by Kingston.
Completion of the Placing
The Placing is unconditional. Completion will take place on
or before 11th February, 2000.
B. SUBSCRIPTION OF 10,000,000 NEW SHARES
A Subscription Agreement dated 8th February, 2000 between
the Vendor and the Company containing the following terms:-
Subscriber:
The Vendor
Number of new Shares to be subscribed for:
The Company will issue 10,000,000 new Shares and the Vendor
will subscribe for them, representing approximately 4.32%
of the existing issued share capital of the Company and
approximately 4.14% of the issued share capital of the
Company as enlarged by the issue of the Subscription Shares
under Subscription.
Subscription price:
HK$1.23 per Subscription Share. The Company shall reimburse
to the Vendor 50% the aggregate amount of the expenses
properly incurred by the Vendor in connection with the
Placing and the aggregate amount of expenses properly
incurred by the Vendor in connection with the Subscription.
The estimated expenses for the Placing and the Subscription
will be approximately HK$800,000.
General mandate to issue Subscription Shares:
The Subscription Shares will be issued pursuant to the
general mandate to allot, issue and deal with Shares granted
to the directors of the Company by resolution of its
shareholders passed at the Company's special general meeting
held on 28th September, 1999.
Ranking of the Subscription Shares
The Subscription Shares will rank equally with Shares of the
Company in issue at the time of issue and allotment of the
Subscription Shares.
Use of proceeds
The net proceeds from the Subscription of approximately
HK$11.5 million will be used by the Group for the purpose
of developing a business-to-business e-commerce platform
for toys, the Group's products.
Condition of the Subscription
The Subscription is conditional upon:
a) completion of the Placing; and
b) the Listing Committee of the Stock Exchange granting
listing of, and permission to deal in, the Subscription
Shares to be issued under the Subscription.
Completion
Under the Listing Rules, the Subscription must be completed
within 14 days from the date of the Subscription Agreement,
that is, on or before 21st February, 2000 (or such later date
as the Company, the Vendor and the Placing Agent may agree
such agreement not to unreasonably withheld or delayed and
subject to compliance with the Listing Rules), failing which
the Subscription shall cease and terminate.
Application for listing
Application will be made by the Company to the Stock Exchange
to grant the listing of and permission to deal in the
Subscription Shares.
C. Effects of the Placing and the Subscription
The shareholding of the Vendor in the Company immediately
before completion of the Placing, immediately after
completion of the Placing but before completion of the
Subscription, and immediately after completion of both the
Placing and the Subscription are and will be as follows:-
Shareholding in the No. of Shares in the
Company held by Company held by
the Vendor the Vendor
(Note) (Note)
Immediately before the
Placing and the Subscription 67.47% 156,342,000
Immediately after the
Placing but before the
Subscription 58.84% 136,342,000
Immediately after the
Placing and the Subscription 60.54% 146,342,000
Note: Assumes that other than the Subscription Shares,
no new Shares are issued or purchased by the Company and other
than the Placing Shares no Shares are sold or purchased by
the Vendor, in each case after the date of this announcement
up to the date of the completion of the Subscription.
D. Reason for the Placing and Subscription
In view of the current market conditions and the directors
of the Company consider that the Placing and Subscription
represents a good opportunity to raise capital for the
Company while broadening the shareholders base and the
capital base of the Company and also enables the Group to
have a higher level of working capital to further diversify
its business.
E. Adjustment of subscription price of Warrants
As at the date of this announcement, the Company has
outstanding warrants carrying rights to subscribe up to
HK$19,989,664 for Shares at a subscription price of HK$0.47
per Share (subject to adjustment) for at any time up to 28th
September, 2001.
The issue of the Subscription Shares will result in an
adjustment to the subscription price of the warrants,
further announcement in respect of which will be made by the
Company upon such adjustment taking effect.
F. General
Trading in the securities of the Company was suspended from
2:30 p.m. on 8th February, 2000 at the request of the Company
pending the issue of this announcement and application has
been made to Stock Exchange for the resumption of trading
of the securities of the Company from 10:00 a.m. on 9th
February, 2000.
By order of the board of directors of
Hung Fung Group Holdings Limited
Chan Chun Hung
Chairman
Hong Kong, 8th February, 2000
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