GOODWILL INV<0378>-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. This
announcement is for information purposes only and does not constitute
an invitation or offer to acquire, purchase or subscribe for
securities.
GOODWILL INVESTMENT (HOLDINGS) LIMITED
(Incorporated in Bermuda with limited liability)
ACQUISITION OF e2-CAPITAL LIMITED
(MAJOR AND CONNECTED TRANSACTION)
ACQUISITION OF INTEREST IN PACIFIC CONNECTIONS LIMITED
(SHARE TRANSACTION)
GRANTING OF OPTION TO GOODWILL INTERNATIONAL (HOLDINGS) LIMITED
TO ACQUIRE AN INTEREST IN BOXMORE LIMITED
(CONNECTED TRANSACTION)
ACQUISITION OF INTEREST IN
KEITH STATHAM ASSOCIATES LIMITED
POSSIBLE ACQUISITION OF GOODWILL
FINANCIAL SERVICES (HOLDINGS) LIMITED
PLACING OF NEW SHARES
PROPOSED CHANGE OF NAME OF THE COMPANY
PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL
Financial Adviser to
GOODWILL INVESTMENT (HOLDINGS) LIMITED
JARDINE FLEMING SECURITIES LIMITED
The directors of the Company announce that in connection with
the transactions contemplated under the Proposal, the following
conditional agreements were entered into on 26th February, 2000:
-e2-Capital Acquisition Agreement: Pursuant to this agreement, the
Company conditionally agreed to acquire the entire issued share
capital of e2-Capital from ECI. The consideration amounts to
HK348,000,000 and is to be satisfied by the issue of 290,000,000 new
Shares at the issue price of HK$1.20 per Share. The e2-Capital
Acquisition constitutes a major and connected transaction of the
Company under the Listing Rules.
-PCL Acquisition Agreement: Pursuant to this agreement, the Company
conditionally agreed to acquire 20% of the issued share capital of
PCL from CDC. The consideration amounts to HK$35,004,000 and is to be
satisfied by the issue of 29,170,000 new Shares at the issue price of
HK$1.20 per Share. The PCL Acquisition constitutes a share
transaction of the Company under the Listing Rules.
- KSA Acquisition Agreement: Pursuant to this agreement, the Company
conditionally agreed to acquire the entire issued share capital of
KSA from Keith Arthur Statham, Chan Nim Wo, Anthony Nedderman and Siu
Wan Tak, Lisa. The consideration amounts to HK$50,000,000 and is to
be satisfied in cash.
-Boxmore Option Agreement: Pursuant to this agreement, Goodwill
International (BVI) Limited and Crebox Limited, wholly-owned
subsidiaries of the Company, have conditionally granted an option to
Goodwill International, the Company's controlling shareholder holding
approximately 51.9% of the issued share capital of the Company, to
acquire up to 88% of the issued share capital of Boxmore, which is a
subsidiary of the Company, exercisable within one year from the
completion of the e2-Capital Acquisition at the total exercise price
of HK$88,000,000 for such 88% interest (or part thereof on a pro rata
basis). The granting of the Boxmore Option by the Company to Goodwill
International constitutes a connected transaction of the Company
under the Listing Rules.
-Share Placing Agreement: Pursuant to this agreement, Jardine Fleming
has conditionally agreed to procure subscriber(s) to subscribe for up
to 230,000,000 Shares on a best-efforts basis.
Completions of the above agreements are conditional upon certain
conditions as set out below under the various sections headed
`Conditions of the acquisition'.
The Company and Goodwill Investment (BVI) Limited, a wholly-owned
subsidiary of the Company, have entered into a non-legally binding
memorandum of understanding with the other shareholders of GFS, a
company indirectly owned as to 40% by the Company, in connection with
the possible acquisition by Goodwill Investment (BVI) Limited of the
other shareholders' interests in GFS. The proposed consideration
amounts to HK$57,000,000 and is to be satisfied as to HK$28,500,000
by the issue of 23,750,000 new Shares at the issue price of HK$1.20
per Share and as to the balance in cash. The entry into a binding
agreement to effect the GFS Acquisition and the fulfilment or waiver
of any conditions precedent thereto are conditions precedent to the
e2-Capital Acquisition.
The directors of the Company propose to increase the authorised
share capital of the Company to US$200,000,000 by the creation of
1,000,000,000 additional Shares.
Upon completion of the e2-Capital Acquisition Agreement and subject
to approval of the Shareholders, the English name of the Company will
be changed to `e2-Capital (Holdings) Limited'.
The Shareholders are urged to note that the transactions set out in
the Proposal may or may not proceed. Shareholders and public
investors are therefore reminded to exercise all due caution when
dealing in the Shares of the Company.
Trading in the Shares was suspended at the request of the Company
with effect from 10:00 a.m. on 14th February, 2000. An application
has been made to the Stock Exchange for the resumption of trading in
the Shares with effect from 10:00 a.m. on 28th February, 2000.
ACQUISITION AGREEMENTS
e2-Capital Acquisition Agreement
Date
26th February, 2000
Parties
Vendor: ECI
Purchaser: The Company
Warrantors: Wong Sin Just, Tam Yuk Ching, Jenny
Wong Sin Just and Tam Yuk Ching, Jenny are the co-founders of
e2-Capital and the substantial shareholders in ECI. Under the terms
of the e2-Capital Acquisition Agreement, it is proposed that Wong Sin
Just become a director of the Company on completion of the e2-Capital
Acquisition.
ECI is independent of the current directors, chief executive and
substantial Shareholders of the Company, any of its subsidiaries or
their respective Associates. ECI and e2-Capital are independent of
the other parties to the transactions (other than the e2-Capital
Acquisition) set out in this announcement.
Assets to be acquired
The e2-Capital Shares, representing the entire issued share capital
of e2-Capital, will be acquired by the Company pursuant to the
e2-Capital Acquisition Agreement. The business of e2-Capital is
summarised in the section headed `Information on e2-Capital' below.
Consideration
The agreed consideration for the e2-Capital Shares of HK$348,000,000
is payable by the Company by the issue and allotment to ECI of the
e2-Capital Consideration Shares at the issue price of HK$1.20 per
Share. The e2-Capital Consideration Shares will rank pari passu in
all respects with all existing Shares, including the right to receive
all future dividends and distributions declared, made or paid by the
Company on or after the date of completion of the e2-Capital
Acquisition Agreement.
The agreed consideration for the e2-Capital Shares was determined on
the basis of arm's length negotiations with reference to the
independent valuation by Chesterton Petty Limited, an independent
firm of professional valuers, of e2-Capital of HK$490,000,000 as at
26th February, 2000. The agreed consideration represents a discount
of approximately 29.0% to Chesterton Petty Limited's independent
valuation. On this basis, the directors of the Company consider the
consideration for the e2-Capital Acquisition of HK$348,000,000 to be
fair and reasonable.
The e2-Capital Consideration Shares represent: (i) approximately
50.0% of the existing issued share capital of the Company; (ii)
approximately 33.4% of the issued share capital of the Company as
enlarged by the e2-Capital Acquisition; (iii) approximately 32.5% of
the issued share capital of the Company as enlarged by the e2-Capital
Acquisition and the possible GFS Acquisition; and (iv) approximately
25.2% of the issued share capital of the Company as enlarged by the
e2-Capital Acquisition, the possible GFS Acquisition, the PCL
Acquisition and the Share Placing (assuming the maximum number of
Placing Shares are issued pursuant to the Share Placing Agreement).
Issue price
The issue price of HK$1.20 per Share was determined on the basis of
arm's length negotiation with reference to the average closing price
of HK$1.19 per Share over the 10 trading days up to and including
11th February, 2000, the last day of trading in the Shares prior to
suspension of trading in the Shares pending issue of this
announcement. The issue price of HK$1.20 represents: (i) a discount
of approximately 46.7% to the closing price of HK$2.25 per Share on
11th February, 2000; and (ii) a premium of approximately 0.8% over
the average closing price of HK$1.19 per Share over the 10 trading
days up to and including 11th February, 2000. Such issue price of
HK$1.20 per Share also represents a premium of approximately 1.7%
over the Company's audited consolidated net asset value per Share of
approximately HK$1.18 as at 31st December, 1998.
Conditions of the acquisition
Completion of the e2-Capital Acquisition Agreement is conditional
upon, among other conditions, the following conditions having been
fulfilled or waived:
(a) the passing of a resolution by the Shareholders at a special general
meeting approving the e2-Capital Acquisition Agreement;
(b) the passing of all necessary resolutions by the Shareholders at a
special general meeting approving: (i) the increase in the authorised
share capital of the Company; (ii) the issue and allotment of the
e2-Capital Consideration Shares to ECI; and (iii) the change of the
English name of the Company to `e2-Capital (Holdings) Limited';
(c) the granting by the Stock Exchange of a listing of, and permission
to deal in, the e2-Capital Consideration Shares;
(d) the completion of due diligence on e2-Capital and the Company to the
reasonable satisfaction of the Company and ECI respectively;
(e) the execution of service agreements between the Company and Wong Sin
Just and Tam Yuk Ching Jenny respectively;
(f) the entry into an agreement to effect the GFS Acquisition and the
fulfillment or waiver of any conditions precedent thereto;
(g) all necessary consents, licenses, authorisations, waivers, orders,
grants, confirmations, permission, registration and other approvals
in connection with the e2-Capital Acquisition having been obtained
from the relevant governmental or regulatory authorities or third
parties and remaining in full force and effect (including approval
from the SFC to the change of control of e2-Capital); and
(h) the warranties in the e2-Capital Acquisition Agreement remaining
true and correct and not misleading at completion of the e2-Capital
Acquisition Agreement.
Completion of the acquisition
Completion is expected to take place on the third business day once
the last of the conditions to the e2-Capital Acquisition Agreement
has been fulfilled or waived. It is expected that the date of
completion will be in mid-April. In the event that the above
conditions of the e2-Capital Acquisition Agreement are not fulfilled
or waived by 1st June, 2000, the e2-Capital Acquisition Agreement
will lapse.
PCL Acquisition Agreement
Date
26th February, 2000
Parties
Vendor: CDC
Purchaser: The Company
CDC and PCL are independent of the directors, chief executive and
substantial Shareholders of the Company, any of its subsidiaries or
their respective Associates. CDC is the beneficial owner of the
entire issued share capital of PCL. CDC and PCL are independent of
the other parties to the transactions (other than the PCL
Acquisition) set out in this announcement.
Assets to be acquired
The PCL Shares, representing 20% of the existing issued share
capital of PCL, will be acquired by the Company pursuant to the PCL
Acquisition Agreement. The business of PCL is summarised in the
section headed `Information on PCL' below.
Consideration
The agreed consideration for the PCL Shares of HK$35,004,000 is
payable by the Company by the issue and allotment to CDC of the PCL
Consideration Shares at the issue price of HK$1.20 per Share (which
is equal to the issue price of the e2-Capital Consideration Shares).
The PCL Consideration Shares will rank pari passu in all respects
with all existing Shares, including the right to receive all future
dividends and distributions declared, made or paid by the Company on
or after the date of completion of the PCL Acquisition Agreement.
The agreed consideration for the PCL Shares was determined on the
basis of arm's length negotiations with particular reference to the
revenue prospects of PCL's specialised Internet consultancy business
and the potential benefit that can be achieved from the acquisition
of PCL by the Company. An independent firm of professional valuers is
in the process of being appointed by CDC to undertake an independent
valuation of PCL.
The PCL Consideration Shares represent: (i) approximately 5.0% of
the of the existing issued share capital of the Company; and (ii)
approximately 4.8% of the issued share capital of the Company as
enlarged by the PCL Acquisition.
Conditions of the acquisition
Completion of the PCL Acquisition under the PCL Acquisition
Agreement is conditional upon, among other conditions, the following
conditions having been fulfilled or waived:
(a)
the passing of all necessary resolutions by the Shareholders at a
special general meeting approving the issue and allotment of the PCL
Consideration Shares;
(b)
the passing of all relevant resolutions by the board of directors of
PCL and CDC;
(c)
the granting by the Stock Exchange of a listing of, and permission
to deal in, the PCL Consideration Shares;
(d)
completion of due diligence on PCL to the reasonable satisfaction of
the Company; and
(e)
production of an independent valuation report on PCL provided by an
independent valuer appointed by CDC confirming a valuation of PCL of
no less than HK$175,020,000.
Completion of the acquisition
Completion is expected to take place on the third business day once
the last of the conditions to the PCL Acquisition Agreement has been
fulfilled or waived. It is expected that the date of completion of
the PCL Acquisition Agreement will be in mid-April. In the event that
the above conditions of the PCL Acquisition Agreement are not
fulfilled or waived by 1st June, 2000, the PCL Acquisition Agreement
will lapse.
KSA Acquisition Agreement
Date
26th February, 2000
Parties
Vendors: Keith Arthur Statham, Chan
Nim Wo, Anthony Nedderman and
Siu Wan Tak Lisa
Purchaser: The Company
Each of the KSA Vendors is independent of the directors, chief
executive and substantial Shareholders of the Company, any of its
subsidiaries or their respective Associates. Each of the KSA Vendors
is independent of the other parties to the transactions (other than
the KSA Acquisition) set out in this announcement.
Assets to be acquired
The KSA Shares, representing the entire issued share capital of KSA,
will be acquired by the Company pursuant to the KSA Acquisition
Agreement. The business of KSA is summarised in the section headed
`Information on KSA'.
Consideration
The agreed consideration for the KSA Shares of HK$50,000,000 was
determined on the basis of arm's length negotiations. Such agreed
consideration is payable by the Company in cash.
Conditions of the acquisition
Completion of the KSA Acquisition Agreement is conditional upon,
among other conditions, the following conditions having been
fulfilled or waived:
(a)
completion of the placing of a minimum of 100,000,000 Shares
pursuant to the Share Placing Agreement;
(b)
completion of due diligence on KSA in good faith to the reasonable
satisfaction of the Company;
(c)
the production of audited financial statements of KSA for the nine
months ending 31st December, 1999 prepared by an accounting firm to
the satisfaction of the Company showing a net asset value of KSA as
at 31st December, 1999 of not less than HK$1,400,000; and
(d)
the execution of service agreements between KSA and each of Keith
Arthur Statham, Chan Nim Wo and Siu Wan Tak Lisa.
Completion of the acquisition
Subject to all the other conditions to completion being fulfilled or
waived, completion of the KSA Acquisition Agreement is expected to
take place on or before the seventh business day after completion of
the Share Placing. It is expected that the date of completion of the
KSA Acquisition Agreement will be in mid-April. In the event that the
above conditions of the KSA Acquisition Agreement are not fulfilled
or waived by 1st June, 2000, the KSA Acquisition Agreement will
lapse.
POSSIBLE GFS ACQUISITION
On 26th February, 2000, the Company, which indirectly holds 40% of
the issued share capital of GFS through its wholly-owned subsidiary
Goodwill Investment (BVI) Limited, together with Goodwill Investment
(BVI) Limited, entered into a non-legally binding memorandum of
understanding with the other two shareholders of GFS, namely, Jardine
Fleming (B.V.I.) Investment Limited and Great Mark Investments
Limited, regarding the acquisition by Goodwill Investment (BVI)
Limited of the remaining 60% interest in GFS, which is currently held
equally between them. Jardine Fleming (B.V.I.) Investment Limited is
a wholly-owned subsidiary of Jardine Fleming Holdings Limited which
holds the entire issued capital of Jardine Fleming. The proposed
total consideration payable by Goodwill Investment (BVI) Limited to
Jardine Fleming (B.V.I.) Investment Limited and Great Mark
Investments Limited for the GFS Acquisition of HK$57,000,000 is
expected to be satisfied as to HK$28,500,000 by the issue of the GFS
Consideration Shares at the issue price of HK$1.20 per Share and as
to the balance in cash. The GFS Consideration Shares represent: (i)
approximately 4.1% of the existing issued share capital of the
Company; and (ii) approximately 3.9% of the issued share capital of
the Company as enlarged by the GFS Acquisition. The issue price of
HK$1.20 per Share would be equal to the issue price of the e2-Capital
Consideration Shares and the PCL Consideration Shares.
It is expected that the GFS Acquisition will be conditional on,
among other conditions, the following conditions having been
fulfilled or waived;
(a)
necessary approvals of the change of control of the relevant member
of GFS and its subsidiaries from the Stock Exchange, the Hong Kong
Futures Exchange Limited and the SFC;
(b)
the passing of resolutions by the Shareholders at a special general
meeting to approve the increase in authorised share capital of the
Company and the issue and allotment of the GFS Consideration Shares;
(c)
the granting by the Stock Exchange of a listing of, and permission
to deal in, the GFS Consideration Shares;
(d)
the e-2 Capital Acquisition Agreement becoming unconditional;
(e)
the Share Placing Agreement becoming unconditional;
(f)
all necessary consents, licences, authorisations, waivers, orders,
grants, confirmations, permissions, registrations and other approvals
in connection with the GFS Acquisition having been obtained from the
relevant governmental or regulatory authorities; and
(g)
the warranties given in connection with the GFS Acquisition
remaining true and correct and not misleading at completion.
GFS and its subsidiaries are engaged in the provision of financial
services including securities brokerage, margin financing and
corporate finance services. For the year ended 31st December, 1998,
the audited consolidated net loss of GFS and its subsidiaries was
approximately HK$56,894,000. The audited consolidated net assets of
GFS and its subsidiaries were approximately HK$65,802,000 as at 31st
December, 1998.
The directors of the Company note that the entry into an agreement
to effect the GFS Acquisition and the fulfilment or waiver of any
conditions precedent thereto are conditions precedent to completion
of the e2-Capital Acquisition Agreement. Since no final agreement has
been reached as to the terms of the GFS Acquisition, Shareholders and
investors in the Company should note that the GFS Acquisition may or
may not proceed.
Boxmore Option
Date
26th February, 2000
Parties
Grantors: Goodwill International (BVI)
Limited and Crebox Limited
Grantee: Goodwill International
Warrantor: the Company
Goodwill International is the controlling shareholder of the Company
currently holding approximately 51.9% of the existing issued share
capital of the Company. Boxmore is indirectly held by the Company as
to an aggregate of 88% of its issued share capital through its
subsidiaries, Goodwill International (BVI) Limited and Crebox
Limited.
Terms of the Boxmore Option Agreement
Goodwill International (BVI) Limited and Crebox Limited have
together granted to Goodwill International an option to acquire up to
an aggregate of 6,502,672 shares in the issued share capital of
Boxmore, representing 88% of its issued share capital. Such option
shall become exercisable upon the completion of the e2-Capital
Acquisition for a period of one year thereafter at the total price of
HK$88,000,000 to be settled in cash for the 88% interest in Boxmore
(or part thereof on a pro rata basis). The remaining 12% interest in
Boxmore is indirectly held by Yue Xiu Enterprises (Holdings) Limited.
Boxmore owns the entire issued share capital of Winbox, which has a
number of subsidiaries forming the Winbox Group. The net assets of
the Winbox Group are Boxmore's sole asset. The business of Boxmore
and its subsidiaries is summarised in the section headed `Information
on Boxmore' below.
Exercise price
The total exercise price of HK$88,000,000 (or part thereof on a pro
rata basis) was reached following arm's length negotiations between
the Company and Goodwill International with reference to the audited
consolidated net asset value of the Winbox Group as at 31 March, 1999
of approximately HK$8.93 per Boxmore share (being the consolidated
net asset value of the Winbox Group as at 31st March, 1999 of
HK$65,947,251 divided by the total number of issued shares of Boxmore
of 7,389,400 shares as at the date of this announcement). The maximum
exercise price of HK$88,000,000, which is equivalent to HK$13.53 per
Boxmore share (being HK$88,000,000 divided by the number of issued
Boxmore shares representing 88% of the issued share capital of
Boxmore as at the date of this announcement of 6,502,672 shares),
represents a premium of approximately 51.5% over the audited
consolidated net asset value of the Winbox Group as at 31st March,
1999. On this basis, the directors of the Company consider the
exercise price to be fair and reasonable so far as the Shareholders
are concerned.
Condition
The granting of the Boxmore Option is conditional upon the passing
of an ordinary resolution by Shareholders other than Goodwill
International and Mr. Fung Ka Pun at a special general meeting of the
Company.
Share Placing
Date
26th February, 2000
Parties
Company: The Company
Agent: Jardine Fleming
Jardine Fleming is not connected with the Company and its existing
directors, chief executives or substantial shareholders of the
Company, or any of its subsidiaries, or an Associate of any of them.
Jardine Fleming is a wholly-owned subsidiary of Jardine Fleming
Holdings Limited, which through Jardine Fleming (B.V.I.) Investment
Limited, also its wholly-owned subsidiary, holds a 30% interest in
GFS. As noted above, the Company, which indirectly owns 40% of the
issued share capital of GFS, has, together with Goodwill Investment
(BVI) Limited, entered into a non-legally binding memorandum of
understanding with Jardine Fleming (B.V.I.) Investment Limited and
the other shareholder of GFS in relation to the proposed acquisition
by Goodwill Investment (BVI) Limited of the remaining 60% interest in
GFS, which includes the 30% interest held by Jardine Fleming (B.V.I.)
Investment Limited.
Number of new Shares issued under the Share Placing and the issue
price
Jardine Fleming has agreed under the Share Placing Agreement, to
serve as the agent of the Company to seek to procure subscribers for
up to 230,000,000 new Shares on a best-efforts basis. 230,000,000
Shares represent: (i) approximately 39.7% of the existing of the
existing issued capital of the Company; (ii) approximately 20.5% of
the issued share capital of the company as enlarged by the Share
Placing, the e2-Capital Acquisition and the possible GFS Acquisition
(assuming all Placing Shares are issued); (iii) approximately 20.0%
of the issued share capital of the Company as enlarged by the Share
Placing, the e2-Capital Acquisition, the possible GFS Acquisition and
the PCL Acquisition (assuming all Placing Shares are issued). The
issue price of HK$1.20 per Share is equal to the issue price of the
e2-Capital Consideration Shares and the PCL Consideration Shares.
Placees
Third parties independent of the directors, chief executive or
substantial Shareholders of the Company, and not acting in concert
with any of the Company, ECI, CDC or their respective subsidiaries
and Associates.
Completion of the Share Placing
Completion of the Share Placing Agreement is conditional upon:
(a) the passing of shareholder resolutions of the Company approving the
increase in its authorised share capital and the issue of new Shares
in connection with the Share Placing;
(b) the Listing Committee of the Stock Exchange granting or agreeing to
grant (subject to allotment and matters ancillary thereto) listing of
and permission to deal in the new Shares to be issued under the Share
Placing; and
(c) the e2-Capital Acquisition Agreement becoming unconditional.
Completion of the Share Placing will take place on the date of
completion of the e2-Capital Acquisition which is expected to be in
mid-April. In the event that the above conditions are not fulfilled
or waived by 1st June, 2000, it will lapse.
Use of proceeds from the Share Placing
The net proceeds from the Share Placing will be used for the KSA
Acquisition, the possible GFS Acquisition and as general working
capital of the Group.
SHAREHOLDING STRUCTURE PRIOR TO AND UPON IMPLEMENTATION OF THE
PROPOSAL
Set out below is a table showing the shareholding structure of the
Company as at the date of this announcement and immediately after
completion of the Proposal (assuming that all the transactions under
the Proposal are completed):
Existing Immediately Immediately
after after
completion completion
of the of the
Proposal Proposal
(assuming (assuming
no all
Placing Placing
Shares Shares
issued issued
and all and
employee exercise
stock of all
options employee
are not stock
exercised) options
in full)
(1)
Number % Number % Number %
of of of
Shares Shares Shares
Goodwill 300,697,091 51.9 300,697,091 32.6 300,697,091 25.8
Inter-
national (3)
Mr. Fung 5,220,866 0.9 5,220,866 0.6 15,095,866 1.3
Ka Pun
(3)(4)
Other 60,732,000 10.5 - - - -
directors
of the
Company
and its
subsidiaries (2)
ECI - - 290,000,000 31.4 290,000,000 24.8
Existing 212,622,379 36.7 212,622,379 23.1 212,622,379 18.2
public
Shareholders (2)
New - - 113,652,000 12.3 348,426,000 29.9
public (5) (6)(7)
Shareholders
Total 579,272,336 100.0 922,192,336 100.0 1,166,841,336 100.0
Notes:
(1)
The number of Shares issuable pursuant to the exercise of the
outstanding employee stock options is calculated by adopting the
existing exercise prices applicable to such options.
(2)
As at the date of this announcement, Mr. Kua Phek Long, an existing
non-executive director of the Company, is personally interested in
60,732,000 Shares, representing: (i) approximately 10.5% of the
existing issued share capital of the Company; (ii) approximately 6.6%
of the issued share capital of the Company upon completion of the
Proposal (assuming no Placing Shares are issued and all employee
stock options are not exercised); (iii) approximately 5.2% of the
issued share capital of the Company upon completion of the Proposal
(assuming all Placing Shares are issued and exercise of all employee
stock options in full). Mr. Kua will resign as director of the
Company upon completion of the Proposal. Accordingly, his
shareholding will be counted towards public float upon completion of
the Proposal.
(3)
As at the date of this announcement, Mr. Fung Ka Pun is beneficially
interested in approximately 26.5% of the issued share capital of
Goodwill International. As such, Mr. Fung is the single largest
shareholder of Goodwill International.
(4)
Mr. Fung Ka Pun and his spouse are interested in 9,875,000 Share
options which had been granted to them pursuant to the Company's
Share option scheme.
(5)
Including Shares held by Mr. Kua Phek Long, the PCL Consideration
Shares and the Shares issuable purauant to the possible GFS
Acquisition, but excluding the Shares to be issued to Jardine Fleming
in consideration for the financial advisory services provided by
Jardine Fleming.
(6)
The shareholding as set out in note (5) plus all the Placing Shares
(assuming all Placing Shares are issued) and Shares to be issued
pursuant to options granted to employees to acquire 4,774,000 Shares
(including options to acquire 3,874,000 Shares granted to existing
directors of the Company but excluding Mr. Fung Ka Pun and his
spouse).
(7)
Including the 230,000,000 new Shares that are issuable pursuant to
the Share Placing, which represent approximately 19.7% of the issued
shares capital of the Company upon completion of the Proposal
(assuming all Placing Shares are issued and exercise of all employee
stock options in full).
(For the charts show the simplified shareholding structure of
the Group immediately prior to and upon completion of the Proposal
(assuming that all Placing Shares are issued and no employee stock
options are exercised, please refer to the press announcement today.)
INFORMATION ON e2-CAPITAL
e2-Capital is a registered investment adviser and securities dealer
registered under the Securities Ordinance in Hong Kong. e2-Capital is
principally engaged in corporate finance advisory, investment
advisory, equity capital raising and Internet business consulting
services.
In light of the globally emerging Internet economy, e2-Capital's
business objective is to provide specialist financial and business
advisory services to corporations in the Internet and technology
sector. e2-Capital's strategy is to provide its clients with
technology consulting services together with specialist corporate
finance advice, thereby helping its clients to strategically position
their e-Business and to raise equity capital to finance business
growth.
Corporate Finance Advisory
As a registered investment adviser, e2-Capital acts as financial
adviser to public and private corporations on corporate finance
matters. The major aspects of corporate finance advisory services
that e2-Capital provides include mergers and acquisitions,
divestiture, restructuring and capital raising.
Investment Advisory
As a registered investment adviser and securities dealer, e2-Capital
advises its clients, the majority of which are professional and
institutional investors, on buying and selling securities. However,
e2-Capital does not handle clients' money, but rather, plays a pure
investment advisory role in providing investment recommendations to
its clients.
Equity Capital Raising
A major focus of e2-Capital's business is to assist Internet and
technology companies to raise equity capital. In the area of private
equity raising, e2-Capital acts as agent of private companies to
raise equity capital from private equity investors. e2-Capital's
strategy is to act for private companies that, in the opinion of
e2-Capital, possess sound business plans and the potential to become
candidates for public listings in the short to medium term.
e2-Capital will utilise its co-founders' experience and contacts
with a network of brokers and dealers in Hong Kong to assist in
raising equity capital for publicly listed companies. e2-Capital's
strategy is to act as financial adviser to publicly listed companies
in the arrangement of share placements. Through such network of
brokers and dealers, e2-Capital will arrange for syndicates of
brokers and dealers to execute share placements and raise equity
capital for public companies.
To facilitate the arrangement and execution of equity capital
raising for public companies, e2-Capital is in the process of
developing the `OpenIBN' platform, which is an Internet
business-to-business platform that links up a network of brokers and
dealers on the Internet cyberspace. Through the OpenIBN, the brokers
and dealers within the network would be informed about the
commencement of share placements and will be allowed to place orders
for shares through the Internet. Leveraging on the power of the
Internet, the OpenIBN is being designed to enhance the efficiency of
the execution of equity capital raising transactions and to
facilitate information flow within the brokers and dealers network.
e2-Capital's ability to execute share placements for public companies
is expected to be enhanced by the OpenIBN platform which is intended
to be launched in the first half of this year.
Internet Business Consulting
e2-Capital provides specialised business consulting services to
Internet and technology companies. In particular, e2-Capital's
intention is to specialize in the following areas of technology
consulting:
- Digital Strategy - helping clients to develop Internet strategies
and business plans;
- e-Business Conversion - advising offline business clients on how to
leverage existing strengths to take their businesses online;
- e-Commerce Solutions - advising Internet commerce clients on how to
construct their business models and how to build out enabling
technologies and processes to enable payment and fulfillment;
- Partnerships and Alliances - identifying and forging partnerships
and alliances, and advising on post-merger technology integration;
and
- eTeams@Speed - providing specialist consultants to act as interim
senior management or in-house specialist for technology clients.
e2-Capital was incorporated in September 1999. Since incorporation
and until 31st December, 1999, the unaudited revenue and net loss
before taxation of e2-Capital were approximately HK$1,077,000 and
approximately HK$881,000 respectively. The unaudited consolidated net
assets of e2-Capital were approximately HK$3,919,000 as at 31st
December, 1999.
INFORMATION ON PCL
PCL is a full service Internet consulting company providing web
consultancy and Intranet evaluation, implementation and management
services to large and medium corporate customers in Hong Kong. PCL
focuses on using Internet technologies to solve the critical problems
of improving communications and increasing productivity both within
the firm and with external constituents. PCL was incorporated in
December 1996 and is currently a wholly- owned subsidiary of CDC. For
the nine months ended 31st December, 1999, the unaudited net loss of
PCL was approximately HK$1,340,000. The net assets of PCL were
approximately HK$152,000 as at 31st December, 1999.
INFORMATION ON KSA
KSA is engaged in the provision of strategic counseling and
communications solutions, brand marketing and consultancy services to
corporate clients. KSA is also involved in advising listed companies
on their investor relations and financial communications and has
recently added information technology and new media marketing to its
range of services. KSA's client base includes listed companies,
financial institutions and multinational corporations. KSA, which was
incorporated in January 1987, is currently majority owned and
controlled by Mr. Keith Arthur Statham and Ms. Chan Nim Wo. For the
year ended 31st March, 1999, the audited revenue and net loss of KSA
were approximately HK$19,212,000 and approximately HK$612,000
respectively. The audited net assets of KSA were approximately
HK$881,000 as at 31st March, 1999.
INFORMATION ON BOXMORE
Boxmore is an investment holding company. The Winbox Group is
Boxmore's only asset. Winbox is Boxmore's only directly owned
subsidiary and Boxmore is interested in the entire issued share
capital of Winbox. The Winbox Group is engaged in the production of
packaging boxes, the production base of which is in Shenzhen, PRC and
its customers are mainly distributors in Europe. Boxmore is a 88%
indirectly owned subsidiary of the Company. Yue Xiu Enterprises
(Holdings) Limited indirectly holds the remaining 12% interest in
Boxmore. For the year ended 31st March, 1999, the audited
consolidated net profit of the Winbox Group was approximately
HK$23,192,000. The audited consolidated net assets of the Winbox
Group were approximately HK$65,947,000 as at 31st March, 1999. In the
event that the transactions contemplated under the Proposal (other
than the granting of the Boxmore Option to Goodwill International)
are not completed, following the possible disposal of Boxmore by the
Company, the Group will continue to focus on the provision of
financial services, direct investment and property development and
investment as its main lines of business.
INFORMATION ON THE GROUP
The Group is principally engaged in the provision of financial
services, direct investments and property development and investment
in Hong Kong. For the year ended 31st December, 1998, the audited
consolidated net loss of the Group was approximately HK$291,994,000.
For the six months ended 30th June, 1999, the unaudited consolidated
net profit of the Group was approximately HK$10,787,000. As at 31st
December, 1998, the audited consolidated net assets of the Group were
approximately HK$674,941,000.
REASONS FOR THE PROPOSAL
Provision of traditional brokerage services has been the major focus
of the Group's financial services business. With the advent of modern
technologies, the introduction of on-line Internet equity trading and
the contracting margin of traditional secondary equity trading
business, the directors believe that such focus is inadequate. The
directors of the Company further believe that the manufacturing
business of the Winbox Group does not fit harmoniously into the
Company's future business strategy framework. The directors of the
Company consider that it would be in the best interest of the Company
to take appropriate steps to streamline the existing businesses of
the Group and to re-focus the Company's business strategy to become a
provider of comprehensive financial and related technology advisory
services to Internet and high technology-related companies. The
directors of the Company believe that the Proposal will allow the
Company to achieve such objectives, reinforce the Company's capital
base and provide the Company with a distinctive identity. The
directors of the Company further believe that the e2-Capital
Acquisition would serve to enhance the existing financial services
and direct investment businesses of the Company in the technology
sector.
FUTURE INTENTIONS
The existing and future directors of the Company will conduct a
review of the financial position and operations of the Group with a
view to strengthening the operations of the Group. Currently, the
directors have no plan for any redeployment of the fixed assets of
the Group and they envisage that the Group will continue its existing
business while re-focusing the Company on providing financial and
consulting services to technology companies. In addition, save as
described below, the directors of the Company intend that there will
be no material changes to the existing management and employees of
the Company and its subsidiaries by reason only of the Proposal.
The existing and future directors of the Company will aim to
position the Group strategically to benefit from the growth of the
Internet sector. The Company's aim is to provide a range of financial
and consulting services to Internet and technology companies as a
total solution provider. In particular, the Company will assist
Internet companies, as well as offline companies with the potential
to convert into online companies, on e-Business and technology
development. The Company will also help these clients to re-brand
their online businesses through an `iBranding' consulting business
arm, which will be established by the Company after completion of the
Proposal. It is anticipated that the KSA business will be utilised as
the platform for the Group's future `iBranding' business. The Company
will also provide specialised corporate finance advisory services to
Internet and technology companies and will assist them to raise
private and public equity capital. In future, the Company may also
diversify into investment in companies that conduct Internet and
technology related businesses. However, the existing and future
directors of the Company have no specific plan or targets identified
at present.
PROPOSED CHANGE OF BOARD COMPOSITION
It is expected that upon completion of the e2-Capital Acquisition,
all of the existing eight directors of the Company, other than
Mr.Fung Ka Pun, will resign and Mr. Wong Sin Just will join the board
of directors of the Company as an executive director. Ms. Tam Yuk
Ching, Jenny will serve as the alternate director to Mr. Wong Sin
Just. Two new independent non-executive directors will also be
appointed upon completion of the e2-Capital Acquisition. It is
presently intended that Mr.Fung Ka Pun will be re-appointed as
Chairman. Mr. Wong Sin Just will be appointed as Chief Executive
Officer. As such, the board of directors of the Company would
comprise four directors, including two independent non-executive
directors.
Particulars of the proposed new executive director of the Company
and his alternate are set out below:
- Mr. Wong Sin Just is the Chairman, Chief Executive Officer and
co-founder of e2-Capital. Mr. Wong possesses over 10 years of
investment banking experience with a number of premier international
investment banks including BNP Prime Peregrine Securities Limited,
ABN Amro Asia Corporate Finance Limited, Nomura International (Hong
Kong) Limited and Standard Chartered Asia Limited. Prior to
establishing e2-Capital, Mr. Wong was the Head of Equity Capital
Markets at BNP Prime Peregrine Securities Limited.
- Ms. Tam Yuk Ching, Jenny is the Managing Director and co-founder of
e2-Capital. Ms. Tam has over 11 years of investment banking
experience with a number of premier investment banks. Ms. Tam's
experience includes being Sales Director of Kim Eng Securities (HK)
Limited and HG Asia Limited and research analyst for Asian equities
at Morgan Stanley Asia Limited.
PROPOSED CHANGE OF NAME
It is intended that the English name of the Company will be changed
to `e2-Capital (Holdings) Limited' as soon as practicable after
completion of the e-2 Capital Acquisition to reflect the
diversification of the Company's business to include Internet and
technology-related activities in future. The proposed change of name
is subject to approval by the Shareholders at a special general
meeting.
INCREASE IN AUTHORISED SHARE CAPITAL
The authorised share capital of the Company consists of
1,000,000,000 Shares, of which 579,272,336 Shares are in issue as at
the date of this announcement. The directors of the Company propose
to increase the authorised share capital of the Company from
US$100,000,000 (approximately HK$775,000,000) to US$200,000,000
(approximately HK$1,550,000,000) by the creation of an additional
1,000,000,000 Shares. The proposed increase in the authorised share
capital of the Company is subject to approval by the Shareholders at
a special general meeting.
MAINTAINING THE LISTING OF THE COMPANY
It is the intention of the future directors of the Company to
maintain the listing of the Shares on the Stock Exchange after
completion of the e2-Capital Acquisition. Accordingly, the existing
directors who will not resign at completion of the e2-Capital
Acquisition and future directors of the Company and the Company will
jointly and severally undertake to the Stock Exchange to take
appropriate steps to ensure that sufficient public float exists for
the Shares.
The Stock Exchange has stated that it will closely monitor trading
in the Shares if less than 25% of the Shares are held by the public.
If the Stock Exchange believes that: (i) a false market exists or may
exist in the Shares; or (ii) there are too few Shares in public hands
to maintain an orderly market; it will consider exercising its
discretion to suspend trading in the Shares. The Stock Exchange will
also closely monitor all future acquisitions or disposals of assets
by the Company. The Stock Exchange has the discretion to require the
Company to issue a circular to its Shareholders irrespective of the
size of the proposed transaction, particularly when such proposed
transaction represents a departure from the principal activities of
the Company. The Stock Exchange also has the power to aggregate a
series of transactions and any such transaction may result in the
Company being treated as if it were a new listing applicant.
SUSPENSION AND RESUMPTION OF TRADING IN THE SHARES
Trading in the Shares was suspended at the request of the Company
with effect from 10:00 a.m. on 14th February, 2000. An application
has been made to the Stock Exchange for resumption of trading of the
Shares with effect from 10:00 a.m. on 28th February, 2000.
GENERAL
The e2-Capital Acquisition constitutes a major and connected
transaction of the Company under the Listing Rules. The granting of
the Boxmore Option by the Company to Goodwill International
constitutes a connected transaction under the Listing Rules. An
independent board committee of the board of directors of the Company
will be appointed to consider the e2-Capital Acquisition and the
Boxmore Option. An independent financial adviser will be appointed to
advise the independent board committee regarding the e2-Capital
Acquisition and the Boxmore Option. Goodwill International, the
controlling Shareholder of the Company holding approximately
300,600,000 Shares, representing approximately 51.9% of the existing
share capital of the Company, and Mr. Fung Ka Pun, the single largest
shareholder of Goodwill International, will (i) vote on the
resolutions to approve the e2-Capital Acquisition, the proposed
increase in authorised share capital of the Company, the proposed
change of name of the Company and the issue of Shares in connection
with the Acquisitions and the Share Placing; and (ii) abstain from
voting on the resolution to approve the granting of the Boxmore
Option to Goodwill International, at a special general meeting of the
Company to be convened by the directors of the Company.
A circular, containing details of the Proposal and notice of special
general meeting, will be sent to the Shareholders as soon as
practicable.
Jardine Fleming has been appointed to advise the Company in
connection with the Proposal. In settlement of part of the fee for
acting in such advisory capacity, the Company will issue 1,000,000
Shares to Jardine Fleming based on an issue price of HK$1.20. The
directors of the Company intend to issue such Shares, pursuant to the
general unconditional mandate to issue additional Shares granted to
them by the Shareholders of the Company at the last annual general
meeting of Company, upon issuance of the circular to the Shareholders
referred to above.
An application will be made to the Stock Exchange for the listing
of, and permission to deal in, the new Shares of the Company to be
issued under the Acquisitions and the Share Placing and the new
Shares to be issued to Jardine Fleming.
The Shareholders are urged to note that the transactions described
in this Announcement may or may not proceed. Shareholders and public
investors are therefore reminded to exercise all due caution when
dealing in the Shares.
DEFINITIONS
In this announcement, the following expressions have the meanings
set out below unless the context requires otherwise.
`Acquisitions' e2-Capital Acquisition, PCL
Acquisition, KSA Acquisition
and GFS Acquisition
`Associate(s)' Has the meaning ascribed
thereto under the Listing
Rules
`Boxmore' Boxmore Limited, a company
incorporated in the British
Virgin Islands with limited
liability
`Boxmore Option' The granting of an option by
Goodwill International (BVI)
Limited and Crebox Limited to
Goodwill International to
acquire up to an 88% interest
in Boxmore
`CDC' China.com Corporation, a
company incorporated in the
Cayman Islands with limited
liability, the shares of
which are listed on NASDAQ
`Company' Goodwill Investment
(Holdings) Limited, a company
incorporated in Bermuda with
limited liability, the Shares
of which are listed on the
Stock Exchange
`ECI' e2-Capital Inc., a company
incorporated in September
1999 in the British Virgin
Islands
`e2-Capital' e2-Capital Limited, a company
incorporated in September
1999 in Hong Kong with
limited liability which is a
directly wholly-owned
subsidiary of ECI
`e2-Capital Acquisition' Proposed acquisition of
e2-Capital by the Company
pursuant to the e2-Capital
Acquisition Agreement
`e2-Capital Acquisition Sale and purchase agreement
Agreement' dated 26th February, 2000
between e2-Capital Inc., Wong
Sin Just, Tam Yuk Ching,
Jenny and the Company
relating to the e2-Capital
Acquisition
`e2-Capital Consideration 290,000,000 Shares to be
Shares' issued and allotted by the
Company to ECI upon
completion of the e2-Capital
Acquisition
`e2-Capital Shares' 4,800,000 ordinary shares of
HK$1.00 each in the share
capital of e2-Capital to be
acquired by the Company
pursuant to the e2-Capital
Acquisition Agreement
`GFS' Goodwill Financial Services
(Holdings) Limited, a company
incorporated in the Cayman
Islands with limited
liability
`GFS Acquisition' Proposed acquisition of 60%
interest in GFS by Goodwill
Investment (BVI) Limited, a
wholly-owned subsidiary of
the Company
`GFS Consideration Shares' 23,750,000 Shares proposed to
be issued and allotted by the
Company to Jardine Fleming
(B.V.I.) Investment Limited
and Great Mark Investments
Limited upon completion of
the GFS
Acquisition
`Goodwill International' Goodwill International
(Holdings) Limited, a company
incorporated in Hong Kong
with limited liability
`Group' The Company and its
subsidiaries
`HK$' Hong Kong dollar(s), the
lawful currency in Hong Kong
`Hong Kong' Hong Kong Special
Administrative Region of the
People's Republic of China
`Jardine Fleming' Jardine Fleming Securities
Limited, a company
incorporated in Hong Kong
with limited liability
`KSA' Keith Statham Associates
Limited a company
incorporated in January, 1987
in Hong Kong with limited
liability
`KSA Acquisition' Proposed acquisition of KSA
by the Company pursuant to
the KSA Acquisition Agreement
`KSA Acquisition Agreement' Sale and purchase agreement
dated 26th February, 2000
among Keith Arthur Statham,
Chan Nim Wo, Anthony
Nedderman, Siu Wan Tak Lisa
and the Company relating to
the KSA Acquisition
`KSA Share(s)' 50,000 share(s) of HK$1.00
each in the share capital of
KSA
`KSA Vendors' Keith Arthur Statham, Chan
Nim Wo, Anthony Nedderman and
Siu Wan Tak Lisa
`Listing Rules' Rules Governing the Listing
of Securities on The Stock
Exchange of Hong Kong Limited
`PCL' Pacific Connections Limited,
a company incorporated in
December 1996 in Hong Kong
with limited liability, which
is a wholly-owned subsidiary
of CDC
`PCL Acquisition' Proposed acquisition of 20%
interest in PCL by the
Company pursuant to the PCL
Acquisition Agreement
`PCL Acquisition Agreement' Sale and purchase agreement
dated 26th February, 2000
between CDC and the Company
relating to the PCL
Acquisition
`PCL Consideration Shares' 29,170,000 Shares to be
issued and allotted by the
Company to CDC pursuant to
the PCL Acquisition Agreement
`PCL Shares' 2,142,858 ordinary shares of
HK$0.001 each in the issued
share capital of PCL to be
acquired by the Company
pursuant to the PCL
Acquisition Agreement
`Placing Shares' Up to 230,000,000 new Shares
to be issued by the Company
at an issued price of HK$1.20
per Share pursuant to the
Share Placing
`PRC' People's Republic of China
`Proposal' The Acquisitions, the
granting of the Boxmore
Option and the Share Placing
`SFC' Securities and Futures
Commission
`Share(s)' Share(s) of US$0.10 each in
the share capital of the
Company
`Share Placing' The placing of up to
230,000,000 new Shares on a
best-efforts basis under the
Share Placing Agreement
`Share Placing Agreement' The placing agreement dated
26th February, 2000 entered
into between the Company and
Jardine Fleming relating to
the Share Placing
`Shareholder(s)' The holder(s) of the Share(s)
`Stock Exchange' The Stock Exchange of Hong
Kong Limited
`US$' United States dollar(s), the
lawful currency in the United
States of America
`Winbox' Winbox (BVI) Limited, a
company incorporated in the
British Virgin Islands
`Winbox Group' Winbox and its subsidiaries
In this announcement, for reference only and unless otherwise
specified, the translation of US$ into HK$ is based on the exchange
rate of US$1 to HK$7.75.
For and on behalf of the Board
GOODWILL INVESTMENT (HOLDINGS) LIMITED
Fung Ka Pun
Chairman and Managing Director
Hong Kong, 26th February, 2000
The directors of the Company jointly and severally accept full
responsibility for the accuracy of the information contained in this
announcement and confirm, having made all reasonable enquiries, that
to the best of their knowledge, their opinions expressed in this
announcement have been arrived at after due and careful consideration
and there are no other facts not contained in this announcement, the
omission of which would make any of their statements in this
announcement misleading.
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