CHINA UNITED<0273> - Announcement & Resumption of Trading
The Stock Exchange of Hong Kong Limited takes no
responsibilities of the contents of this announcement, makes
no representation to its accuracy of 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.
China United Holdings Limited
(incorporated in Bermuda with limited liability)
("China United")
DISCLOSEABLE TRANSACTION
Summary
1. The Previous Acquisition:
The directors announced on 6th March, 2000 that China United
acquired 4,400,000 shares representing approximately
17.086% of the issued share capital of and in TCM-Online
Incorporated ("TCM") at the consideration of
US$6,600,000.00 which was equivalent of HK$51,348,000.00
completed on 25th February, 2000 (the "Previous
Acquisition").
2. This Acquisition:
The directors are pleased to announce that China United has
entered into two conditional sale and purchase agreements
on 8th March, 2000 (the "Agreements") with Mr. Jim Wang ("Mr.
Wang") and Tung Developments Limited ("Tung Developments")
(collectively be referred to as the "Vendors") to acquire
from the Vendors up to an aggregate of 3,200,000 shares (the
"Sale Shares") representing approximately 12.426% of the
issued share capital of TCM (the "This Acquisition") at par
value of US$0.01 each at the total consideration of
US$6,400,000.00 which is equivalent to HK$49,792,000.00
(the "Consideration").
Completion of This Acquisition is conditional upon other
shareholders of TCM not having exercised their first rights
of refusal to acquire the Sale Shares.
3. On Completion of This Acquisition:
Upon completion of This Acquisition which is expected to take
place in about two to three weeks' time, and together with
the Previous Acquisition, China United shall have acquired
a total of 7,600,000 shares representing 29.512% of the
entire issued share capital of TCM at the total consideration
of US$13,000,000.00 which is equivalent to
HK$101,140,000.00 (the "Aggregate Consideration"). China
United will also become the largest single shareholder of
TCM.
At China United's request, an application was made by China
United to the Stock Exchange requesting a suspension in the
trading of its shares from 10:00 a.m. on 6th March, 2000.
An application has been made by China United to the Stock
Exchange for the resumption of trading in its shares from
10:00 a.m. on 9th March, 2000.
The Previous Acquisition
As announced in the press on 6th March, 2000, China United
completed the Previous Acquisition as the purchaser with Mr.
Jim Wang and Lucky Delight Investments Limited as the vendors
for 4,400,000 shares representing approximately 17.086% of
the issued share capital of TCM of par value of US$0.01 each
at the total consideration of US$6,600,000.00 which was
equivalent to HK$51,348,000.00.
This Acquisition:
1. The Sale and Purchase Agreements:
China United has entered into two conditional sale and
purchase agreements on 8th March, 2000 (the "Agreements")
with Mr. Jim Wang ("Mr. Wang") and Tung Developments Limited
("Tung Developments") (collectively be referred to as the
"Vendors") to acquire from the Vendors up to an aggregate
of 3,200,000 shares (the "Sale Shares") representing
approximately 12.426% of the issued share capital of TCM (the
"This Acquisition") at par value of US$0.01 each at the total
consideration of US$6,400,000.00 which is equivalent to
HK$49,792,000.00 (the "Total Consideration"). Mr. Wang has
agreed to sell up to 1,000,000 shares and Tung Developments
has agreed to sell up to 2,200,000 shares of and in TCM to
China United respectively.
2. The Total Consideration:
The Total Consideration was determined based on arm's length
negotiations between the Vendors and China United. The
directors considered the Total Consideration as fair and
reasonable having reviewed carefully the quality of TCM; its
PRC joint venture partners; its shareholders and TCM's
business abilities etc. It is also the director's belief that
the prospects of TCM's business on the Internet and its
development of Chinese medicines in a high-tech manner are
all promising.
On completion of This Acquisition, China United will become
the largest single shareholder of TCM holding about 29.512%
beneficial interest in TCM. As a result, TCM will become an
associate company of China United and China United can equity
account the profit and loss of TCM.
3. Conditions Precedent:
Completion of This Acquisition is conditional upon other
shareholders of TCM not having exercised their first rights
of refusal to acquire the Sale Shares. The first right of
refusal shall lapse after 14 days from serving of the notice
of sale in writing by the Vendors to each of the shareholders
to TCM.
4. TCM:
TCM was incorporated under the laws of British Virgin Islands
on 9th March, 1999 and does not have its profit and loss nor
net asset value ascertained as at 8th March, 2000. The
registered and issued share capital of TCM is US$257,521.30
which is equivalent to HK$2,003,515.71.
5. The Vendors:
Tung Developments Limited which was incorporated under the
laws of British Virgin Islands on 18th February, 1997 and
is owned by one individual who and Mr. Jim Wang are
independent third parties not connected with any of the
directors, chief executive or substantial shareholders of
China United and its subsidiaries or associates (as defined
in the Rules Governing the Listing on the Stock Exchange of
Hong Kong Limited) or any of them.
6. The Consideration and Source of Funding:
A total deposit of US$3,200,000.00 (the "Deposit") which is
equivalent of HK$24,896,000.00 has been paid on the
execution date of the Agreements with 50% of the Deposit
payable to the Vendors directly and the other 50% of the
Deposit payable to the solicitors of the Vendors as
stakeholders which will be released on completion of the
transaction. The funding for This Acquisition will come from
the proceeds of the right issues of new shares in China United
as announced on 9th March, 2000.
Information relating to TCM:
TCM will provide through it own websites on the internet
traditional Chinese medicine and health care content;
consultation with medical professionals; a conduit for
interaction between communities; and also a forum for
exchange of information and for trading of products like
hospital administration software; rehabilitation courses;
health products and related equipment. One of the websites
of TCM in the name of "CINTCM.AC.CN" has been in operation
since January this year; and the second website is targeted
to be launched around April, 2000 and the third website is
also targeted to be launched at the end of this year. TCM
has established a joint venture company i.e. Beijing
TCM-Online Company Limited (*) which was established on 22nd September,
1999 and of which TCM owns 48.45% interest. TCM has also entered into
a contract with * on 13th January, 2000 to establish another joint venture
company i.e. TCM-Online Mall Limited of which TCM will own 90% interest
and * will own 10%.
Shareholdings in TCM
Prior to the completion of This Acquisition, the
shareholders and their respective shareholding in TCM are
as follows:
Percentage of
Name: Shareholding:
Dr. Ch'ien Kuo Fung, Raymond 20.19%
Mr. Chung Kong Fei, Stephen 13.98%
Mr. Jim Wang 3.88%
Tung Developments Limited (1) 8.54%
HerbalTech Limited (2) 15.53%
Dr. Hu Le Qun 2.33%
Cyber Media Limited (3) 9.06%
China United 17.09%
American Pacific Ventures, Inc (4) 4.85%
Other minority shareholders 4.54%
Note:
(1) Tung Developments Limited is beneficially owned by
Kiang Kwok Ching, Grace.
(2) HerbalTech Limited is beneficially owned by Dr. Ch'ien
Kuo Fung Raymond; Mr. Chung Kong Fei Stephen; Mr. Jim Wang;
Tung Developments Limited and Lucky Delight Investments
Limited.
(3) Cyber Media Limited is wholly owned by Pacific Century
Cyberworks Limited.
(4) American Pacific Ventures, Inc. is beneficially owned
by Mr. Danny Lui.
On the completion of This Acquisition, the shareholders and
their respective shareholding in TCM will be as follows:
Percentage of
Name: Shareholding:
Dr. Ch'ien Kuo Fung, Raymond 20.19%
Mr. Chung Kong Fei, Stephen 13.98%
HerbalTech Limited 15.53%
Dr. Hu Le Qun 2.33%
Cyber Media Limited 9.06%
China United 29.51%
American Pacific Ventures, Inc 4.85%
Other minority shareholders 4.54%
Reason for This Acquisition:
After This Acquisition has been completed, China United will
become the largest single shareholder of TCM. It is the
intention of the directors that the shareholding of China
United in TCM will shortly be transferred to a wholly-owned
subsidiary of China United i.e. China United Cyberworks One
Limited which was incorporated under the laws of British
Virgin Islands on 25th January, 2000 and is an investment
vehicle specializing in the high-tech sector.
The Acquisitions are a strategic investment of China United
which, in the directors' belief, will be of long term benefit
to China United. The fast growing international recognition
of traditional Chinese medicine provides a very good
platform for serious investment in the proper development
and promotion of services relating to Chinese medicinal
methods. The directors are of the opinion that promotion of
Chinese medicine and related activities through the internet
will provide the basis for the advancement and development
of the Chinese medicinal profession which will bring
extensive business opportunities.
Through the Acquisitions, China United will have the
opportunity also of working with good partners in Hong Kong
and elsewhere in the PRC. The directors also believe that
This Acquisition shall give China United a major
shareholding in TCM and as a result, China United will be
better positioned to diversify from its existing business
of property investments in Hong Kong and the PRC.
At China United's request, an application was made by China
United to the Stock Exchange requesting a suspension in the
trading of its shares from 10:00 a.m. on 6th March, 2000.
An application has been made by China United to the Stock
Exchange for the resumption of trading in its shares from
10:00 a.m. on 9th March, 2000.
By Order of the Board of Directors of
China United Holdings Limited
Mr. Wilson Chung
Managing Director
Hong Kong, 8th March, 2000
([*] For the Chinese name, please refer to the press announcement today.)
|