YUE FUNG INT'L<0965> - 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.
YUE FUNG INTERNATIONAL GROUP HOLDING LIMITED
(incorporated in Bermuda with limited liability)
DISCLOSEABLE TRANSACTION
Yue Fung International Group Holding Limited (the
"Company" which together with its subsidiaries, the
"Group"), through its wholly owned subsidiary,
Hollyworld Group Limited (the "Purchaser"), has agreed
to acquire from Mr Ho Wing Cheong and Ms Chan Yuet Hing
(the "Vendors") 170 shares and 130 shares respectively
(together the "Sale Shares") of US$1.00 each in the
capital of Advanced Technology International Holdings
Limited ("Advanced Technology" which together with its
subsidiaries, the "Advanced Technology Group"), being
30 per cent. of the entire issued shares of Advanced
Technology.
The Company has also agreed to acquire from the Vendors
the shareholders' loan (the "Sale Loan") of
HK$3,000,000 owed by Advanced Technology Group to the
Vendors.
The consideration payable by the Company for the
acquisition (the "Acquisition") of the Sale Shares and
the Sale Loan is HK$57,330,000 and will be satisfied
partly by the allotment and issue of 80,000,000 new
ordinary shares (each a "Consideration Share") of
HK$0.10 each in the capital of the Company at an issue
price (the "Issue Price") of HK$0.60 per Consideration
Share, partly by way of cash of HK$3,000,000 and the
remaining by transfer of certain machinery and moulds
from the Group worth approximately HK$6,330,000 to the
Vendors.
The Acquisition is subject to the conditions as
detailed below.
The Acquisition constitutes a discloseable transaction
on the part of the Company under the Rules (the "Listing
Rules") Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (the "Stock
Exchange").
For the year ended 31 May 1999, products purchased by
the Group from the Advanced Technology Group amounted
to approximately HK$7,130,534. The purchases from the
Advanced Technology Group for the year ended 31 May 1999
accounted for approximately 7.13 per cent. of the total
purchases made by the Group for the year ended 31 May
1999. It is intended that, following the Acquisition,
the Group will continue to purchase from the Advanced
Technology Group.
A special general meeting (the "SGM") of the Company
will be convened as soon as possible to consider and
if thought fit, passing the resolutions to approve the
allotment and issue of the Consideration Shares.
A circular containing, among other matters, details of
the Agreement, the notice convening the SGM will be
dispatched to the Shareholders within 21 days after the
date of publication of this announcement.
The Sale and Purchase Agreement dated 18 February 2000
(the "Agreement")
Parties
(1) The Purchaser : Hollyworld Group Limited, a
wholly owned subsidiary of the Company
(2) The Vendors : The Vendors
Each of the Vendors is an independent third party not
connected with the directors, chief executive or
substantial shareholders of the Company or any of its
subsidiaries or any of their respective associates (as
defined in the Listing Rules). Immediately before the
entering into of the Agreement, none of the Vendors have
any interests in the shares of HK$0.10 each (each a
"Share") in the capital of the Company.
Assets acquired
Pursuant to the Agreement, the Vendors have agreed to
sell and the Purchaser has agreed to purchase the Sale
Shares, being 30 per cent. of the entire issued share
capital of Advanced Technology and the Sale Loan.
No audited financial statement have been prepared by
Advanced Technology since its incorporation. As at 30
September 1999, the net asset value of Advanced
Technology based on its unaudited consolidated
management accounts was approximately HK$21,421,362.
For the nine months ended 30 September 1999, Advanced
Technology recorded a profit of approximately
HK$21,413,562.
The consideration payable by the Company on the 30 per
cent. issued share capital of Advanced Technology is
based on the unaudited annual profit of Advanced
Technology Group of HK$27,300,000 for the year ended
31 December 1999, multiplying this with a profit
earning ratio of 7, which is based on companies in the
similar industry, thus estimating the net worth of
Advanced Technology Group at HK$191,100,000.
Advanced Technology Group are principally engaged in
the manufacture and sale of printed circuit boards (PCB)
for advanced telecommunication systems, scientific
calculators and audio visual equipment.
The Company has also agreed to acquire from the Vendors
the Sale Loan owed by Advanced Technology Group to the
Vendors in the sum of HK$3,000,000 payable on demand.
HK$3,000,000, the Sale Loan, is 30 per cent. of the
total shareholders loan of HK$10,000,000 of Advanced
Technology Group.
Consideration
The consideration for the Acquisition is HK$57,330,000
and will be satisfied partly by the allotment and issue
of the 80,000,000 Consideration Shares (each a
"Consideration Share") at the Issue Price, partly by
way of cash of HK$3,000,000 and the remaining by
transfer of certain machinery and moulds from the Group
worth approximately HK$6,330,000 to the Vendors.
The Issue Price represents a premium of approximately
0.67 per cent. over the average closing price of the
Shares of HK$0.596 for the last ten trading days up to
the date of the Agreement and a discount of
approximately 7.7 per cent. to the closing price of the
Shares of HK$0.65 as at the date of the Agreement.
The Consideration Shares represents:
(a) approximately 23.3 per cent. of the existing issued
share capital of the Company;
(b) approximately 19.8 per cent. of the issued share
capital of the Company as enlarged by the allotment and
issue of the 60,000,000 Shares to be allotted and issued
as part of the consideration for the acquisition by the
Company of 25 per cent. equity interest Richlink
International Holdings Limited, details of which were
disclosed in the announcement of the Company dated 28
January 2000; and
(c) approximately 16.6 per cent. of the issued share
capital of the Company as enlarged by the allotment and
issue of the 60,000,000 Shares referred to in paragraph
(b) above and the Consideration Shares; and
(d) approximately 18.9 per cent. of the issued share
capital of the Company as enlarged by the allotment and
issue of the Consideration Shares in the event the
allotment and issue of the 60,000,000 Shares referred
to in paragraph (b) above have not been approved.
A special general meeting of the Company will be
convened and held to approve the allotment and issue
of the Consideration Shares to the Vendors credited as
fully paid at the Issue Price.
The consideration was negotiated on an arm's length
basis between the Vendors and the Company.
The Directors, including the independent non-executive
Directors consider that the terms of the Agreement are
based on normal commercial terms and are fair and
reasonable so far as the shareholders of the Company
are concerned.
Completion
Completion will take place on the second business days
after all the conditions set out in the section headed
"Conditions" below have been fulfilled, which is
expected to be on or before 30 April 2000 or such later
date as the Vendors and the Company may agree.
Conditions
Completion of the Acquisition is conditional upon
fulfillment of the following conditions:
(1) the Listing Committee of the Stock Exchange
granting listing of and permission to deal in the
Consideration Shares; and
(2) the shareholders of the Company passing at SGM an
ordinary resolution approving the allotment and issue
of the Consideration Shares to the Vendors, credited
as fully paid.
If the conditions are not fulfilled on or before 30
April 2000 or such later date as the Vendors and the
Purchaser may agree, the Agreement shall cease and
determine and none of the parties shall have any claim
against the others.
For the year ended 31 May 1999, based on the Company's
consolidated audited accounts, purchases of circuit
boards and certain electronic components by the Group
from the Advanced Technology Group amounted to
approximately HK$7,130,534. The purchase from the
Advanced Technology Group for the year ended 31 May 1999,
based on the Company's consolidated audited accounts,
accounted for approximately 7.13 per cent. of the total
purchases made by the Group for the year ended 31 May
1999. It is intended that, following the Acquisition,
the Group will continue to purchase from the Advanced
Technology Group.
Reasons for the Acquisition
The Directors believe that the Acquisition would enable
the Group to secure a steady supply of circuit boards
and certain electronic components for the Group's
products, enable vertical integration of its
manufacturing process, enhance the Group's asset base
and improve its earnings which will ultimately benefit
the shareholders of the Company.
The Company will continue to diversify and develop the
internet business for education and the development of
internet content provider business in the PRC and Hong
Kong.
General
After the Acquisition, Advanced Technology will become
an associated company of the Company. The Company is
principally engaged in investment holding with its
subsidiaries principally engaged in the design,
development, maintenance and sale of a wide range of
electronic calculators, digital timers, clocks,
watches and databanks.
The SGM will be convened as soon as possible to consider
and if thought fit, passing the resolutions to approve
the allotment and issue of the Consideration Shares.
A circular containing, among other matters, further
details of the Agreement and the notice of the special
general meeting of the Company to approve the allotment
and issue of the Consideration Shares will be
despatched to the shareholders of the Company as soon
as practicable.
Application will be made to the Stock Exchange for the
listing of and permission to deal in the Consideration
Shares.
By order of the board
Yue Fung International Group Holding Limited
Lee Wing Kan
Chairman
Hong Kong, 18 February 2000
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