PAC CHALLENGE<0166> - 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.
PACIFIC CHALLENGE
Pacific Challenge Holdings Limited
(incorporated in Bermuda with limited liability)
DISPOSAL OF THREE WHOLLY OWNED SUBSIDIARIES OF THE COMPANY
The Board wishes to announce that the Company has entered into the
Agreement on 28th March, 2000 with Steppington, an independent
third party, for the Disposal of the entire share capital of three
of its wholly owned subsidiaries: PCN, PCF and PCS.
The board of directors (the ``Board'') of Pacific Challenge
Holdings Limited (the ``Company'') wishes to announce that on 28th
March, 2000, the Company has entered into an agreement (the
``Agreement'') with Steppington Holdings Limited (``Steppington'')
for the disposal (the ``Disposal'') of the entire share capital
of three of its wholly owned subsidiaries, namely, Pacific
Challenge Nominees Limited (``PCN''), Pacific Challenge Futures
Hong Kong Limited (``PCF'') and Pacific Challenge Securities
Limited (``PCS''). Steppington and its beneficiaries are
independent third parties not connected with any of the directors,
chief executive and substantial shareholders of the Company or its
subsidiaries or an associate (as defined in the Rules Governing the
Listing of Securities (``Listing Rules'') on the Stock Exchange of
Hong Kong Limited (the ``Stock Exchange'')) of any of them.
Steppington is not a company or a subsidiary of a company listed
on the Stock Exchange.
Consideration
Pursuant to the Agreement, the cash consideration of HK$29,300,000
(``Consideration'') will be payable by Steppington to the Company
as to 10% upon signing of the Agreement and the balance will be paid
in cash upon completion of the Agreement, which is expected to be
on or before 28th August, 2000. The Consideration was arrived at
after arm's length negotiations between the Company and Steppington,
and with reference to the aggregate net asset value of PCN, PCF and
PCS plus a premium.
Condition of the Agreement
The Agreement is conditional upon the granting of:
1. the approval of the Stock Exchange on the transfer of the shares
of PCS and, where applicable, the consequential changes (if any)
in the directorate of PCS and the maintenance of the two Stock
Exchange Trading Rights by PCS after the transfer;
2. the approval of the Securities and Futures Commission (the
``SFC'') on the transfer of the shares of PCF and, where applicable,
the consequential changes (if any) in the directorate of PCF and
the maintenance of the one Futures Exchange trading Rights by PCF
after the transfer; and
3. the approval of the SFC on the transfers of the shares of PFS
and the shares of PCF and the consequential changes (if any) in the
directorate of PCS and PCF.
Reasons for the Disposal and future plans of the Company
PCN is principally engaged in the provision of limited nominee
services, while PCF and PCS are principally engaged in futures and
stock broking respectively. The Board considers the Disposal to
be in line with the Company's press announcements dated 18th
February, 2000 and 15th March, 2000 as PCN, PCF and PCS, operating
the traditional brokerage business, are expected to face increasing
competition and reduced commission levels in the brokerage industry
in the coming years. The net profits before tax of PCN, PCF and
PCS for the year ended 31st March, 1999 were approximately HK$0.005
million, HK$0.284 million and HK$3.334 million respectively. The
aggregate net tangible asset value of PCN, PCF and PCS after
distribution of all their retained earnings as dividends to the
Company upon completion of the Agreement will be approximately
HK$17.3 million, which represents approximately 8.4% of the
consolidated net tangible asset value of the Company as at 31st
March, 1999.
The Company continues to carry on its fee-based corporate finance
and investment advisory activities, loan arranging, and debt
financing through its remaining subsidiaries. The Company also
intends to increase its focus on the Internet business in alliance
with E1 Technology Limited, the single largest shareholder of the
Company.
The Board considers the terms of the Agreement to be fair and
reasonable and are in the interests of the Company.
Use of proceeds
The net proceeds from the Disposal will be used as general working
capital for the Group. Currently, the Company has not allocated
the net proceeds for any specific use.
Appointment of executive director of the Company
Further to the announcement dated 15th March, 2000, Mr. Shah Tahir
Hussain was appointed as an executive director of the Company
effective from 27th March, 2000.
General
This announcement is being made by the Company to keep the market
and the Shareholders informed of the Company's developments
pursuant to the general obligation imposed by paragraph 2 of the
Listing Rules.
By Order of the Board
Pacific Challenge Holdings Limited
Dr. Lily Chiang
Chairman
29th March, 2000
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