SOUNDWILL HOLD<0878>-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.
SOUNDWILL HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
CONNECTED TRANSACTIONS
PLACING OF 135,000,000 EXISTING SHARES
AND
SUBSCRIPTION OF 135,000,000 NEW SHARES
On 9 March 2000, Soundwill Technology, a wholly owned subsidiary
of the Company, agreed with Vision to subscribe for 200,000 new
shares, representing 20% of the enlarged issued share capital,
of Vision at a total consideration of HK$82,113,500. Vision is
currently 100% beneficially owned by Mrs. Chan. The principal
asset of Vision will be a 70% interest in Optilink which is
principally engaged in the design, manufacturing and sale of
dense wavelength division multiplexing systems in the PRC. On
the same day, Mrs. Chan agreed with the placing agent to place,
on an underwritten basis, 135,000,000 existing Shares at the
placing price of HK$0.63 per Share. On the same day, Mrs. Chan
also agreed with the Company to subscribe for 135,000,000 new
Shares at the subscription price of HK$0.63 per Share.
The Subscriptions constitute connected transactions for the
Company under the Listing Rules and therefore require
independent shareholders' approval at a special general meeting
to be convened at which Mrs. Chan and her associates, being the
connected persons, will have to abstain from voting.
At the request of the Company, trading in its shares and warrants
on the Stock Exchange was suspended with effect from 10:57 a.m.
on 9 March 2000 pending release of this announcement.
Application has been made to the Stock Exchange for trading in
the shares and warrants of the Company on the Stock Exchange to
resume trading at 10:00 a.m. on 13 March 2000.
(A) VISION SUBSCRIPTION AGREEMENT
Parties
1. Soundwill Technology as subscriber;
2. the Company as guarantor for the obligation of Soundwill
Technology under the agreement;
3. Vision as the company in which shares to be subscribed for
by Soundwill Technology; and
4. Mrs. Chan as warrantor for obligations of Vision under the
agreement.
Connected Transaction
Soundwill Technology agreed with Vision to subscribe for 200,000
shares, representing 20 % of the enlarged issued share capital,
of Vision at a total consideration of HK$82,113,500. Vision is
currently 100% beneficially owned by Mrs. Chan who and her
associates own 1,278,880,000 Shares representing approximately
54.34% of the existing issued share capital of the Company. Under
the Listing Rules, the Vision Subscription constitutes a
connected transaction for the Company and requires independent
shareholders' approval at a special general meeting to be
convened (the "SGM") at which Mrs. Chan and her associates, being
the connected persons, will have to abstain from voting.
Subscription Price
The total subscription price for the Vision Subscription is
HK$82,113,500 representing a discount of approximately 27.3% to
14% (being the effective interest of Soundwill Technology in
Optilink) of a valuation of approximately HK$806,600,000 on 100%
interest in Optilink prepared by an independent valuer,
Sallmanns (Far East) Limited. The total subscription price will
be financed by the subscription monies received from the
Soundwill Subscription.
Conditions
Completion of the Vision Subscription is conditional upon, inter alia:
1. the approval of the Vision Subscription by
shareholders of the Company other than Mrs. Chan and
her associates in the SGM;
2. if required, all necessary consents and
approvals have been obtained by each of the parties
for the entry into and performance of the Vision
Subscription Agreement;
3. receipt by Soundwill Technology to its absolute
satisfaction of a PRC legal opinion confirming that
all PRC laws and regulations and other relevant
requirements and/or approvals in connection with the
transaction contemplated under the Vision
Subscription Agreement and/or the coporate
structure or establishment of Optilink have been
complied with or obtained;
4. completion of the Soundwill Subscription; and
5. completion of the reorganisation of the Vision
group structure to the reasonable satisfaction of
the subscriber.
In the event that the above conditions are not
fulfilled and/or waived by Soundwill Technology on
or before 30 April 2000 (or such other date as the
parties may agree), all rights and obligations under
the Vision Subscription Agreement will lapse.
Information about Vision
Vision was incorporated in the British Virgin
Islands in February 2000. After a group
reorganisation before completion of the Vision
Subscription, the principal asset of Vision will be
a 70% interest in Optilink which is principally
engaged in the design, manufacturing and sale of
dense wavelength division multiplexing ("DWDM")
systems in the PRC and has a production base in
Shenzhen. DWDM system is deployed in optical fibre
networks to increase the capability of the networks.
The other 30% interest of Optilink is owned by Peking
University. Optilink was established in September
1996 and installed the first DWDM system in the PRC
from Shenzhen to Guangzhou in the PRC in 1997.The
proforma loss of Vision and Optilink for the two
years ended 31 December 1998 and 1999 are
approximately HK$935,000 and HK$2,067,000
respectively. The proforma net asset value of Vision
and Optilink as at 31 December 1999 is a net
deficiency of approximately HK$2,718,000.
(B) PLACING AND SUBSCRIPTION AGREEMENT
Parties
1. Mrs. Chan as the seller and subscriber;
2. Prudential as the placing agent to place the
Shares on an underwritten basis subject to certain
force majeure clauses; and
3. the Company
Number of Placing Shares
135,000,000 existing Shares, representing
approximately 5.74% of the 2,353,532,568 existing
issued shares of the Company.
Placing Price
HK$0.63 per Placing Share, which is negotiated on an
arm's length basis, represents a discount of
approximately 7.35 % to the closing price of HK$0.68
per Share as quoted on the Stock Exchange at 10:57
a.m. on 9 March 2000 prior to the suspension of
trading of the Shares and a premium of approximately
8.62% to the average closing price of approximately
HK$0.58 per Share as quoted on the Stock Exchange for
the last ten trading days up to and including 9 March 2000.
Rights of the Placing Shares
The Placing Shares rank pari passu in all respects
with the existing Shares in issue.
Independence of Placees and Placing Agent
The placing agent, which is independent of and not
connected with the directors, chief executive and
substantial shareholders of the Company or any of its
subsidiaries or any of their respective associates,
has agreed to use its reasonable endeavors to procure
that the placees, which are more than six in numbers,
are independent of, and not connected with, and not
acting in concert with the directors, chief
executive and substantial shareholders of the
Company or any of its subsidiaries or any of their
respective associates.
Number of new Shares to be subscribed for by Mrs. Chan
through her wholly owned company, KBL
135,000,000 new Shares representing approximately
5.74% of the existing issued share capital of the
Company and approximately 5.42% of the issued share
capital as enlarged by the Soundwill Subscription.
Subscription price
HK$0.63 per new Share less expenses of approximately
HK$2,850,000 associated with the Placing which will
be reimbursed by the Company.
Rights of the new Shares
The new Shares will rank pari passu in all respects
among themselves and with the existing Shares in
issue on the date of allotment and issue of the new
Shares.
Conditions for completion of the Placing and the
Soundwill Subscription
Completion of the Placing and the Soundwill
Subscription is conditional upon, inter alia:
(1) the Listing Committee of the Stock Exchange
granting listing of, and permission to deal in, all
of the new Shares to be subscribed by Mrs. Chan
through her wholly owned company;
(2) if required by the Stock Exchange, the approval
of the Placing and Subscription Agreement and the
transactions contemplated thereunder by the
shareholders of the Company other than Mrs. Chan and
her associates at the SGM;
(3) the approval of the Subscriptions by the
shareholders of the Company other than Mrs. Chan and
her associates at the SGM;
(4) if required, the Company securing all relevant
regulatory approval in relation to the Vision
Subscription;
(5) in the case of the Soundwill Subscription,
completion of the Placing in accordance with the
provisions of the Placing and Subscription
Agreement.
In the event that the above conditions are not
satisfied on or before 30 April 2000 or such later
date as may be agreed between the parties, the
obligations under the Placing and Subscription
Agreement will cease and terminate.
(C) GENERAL
The Group is principally engaged in property
development and investment in Hong Kong. The
directors consider that the Vision Subscription
allows the Group to diversify into other business and
its source of revenue. It is the intention of the
Company to hold the shares in Vision as a long term
investment. The directors, including independent
non-executive directors, of the Company consider
that the Placing and the Subscriptions and their
respective terms to be in the best interests and to
the benefit of the Company and its shareholders as a whole.
An independent financial advisor will be appointed
to advise the independent board which will advise the
the shareholders on the terms of the Subscriptions.
A circular setting out, inter alia, the particulars
of the Subscriptions, advice from the independent
financial advisor, valuation report prepared by
Sallmanns (Far East) Limited and notice of the SGM
will be sent to the shareholders as soon as possible.
Use of proceeds
The aggregate net cash proceeds from the Soundwill
Subscription will be approximately HK$82,200,000 of
which not less than HK$80,000,000 will be used by the
Company to subscribe for 200,000 shares in Vision.
Shareholding of Mrs Chan and her associates and other
substantial shareholders before and after the
Placing and Soundwill Subscription
Before the Placing and Soundwill Subscription take
place, Mrs Chan, through KBL, own 1,278,880,000
Shares, representing approximately 54.34% of the
existing issued share capital of the Company. After
the Placing but before Soundwill Subscription takes
place, Mrs Chan, through KBL, own 1,143,880,000
Shares, representing approximately 48.60% of the
then issued share capital of the Company. After the
Placing and Soundwill Subscription, Mrs Chan,
through KBL, will own 1,278,880,000 Shares,
representing approximately 51.39% of the then issued
share capital of the Company as enlarged by the
Soundwill Subscription.
Before the Placing and Soundwill Subscription take
place, China Ocean Shipping (Group) Company
("COSCO"), through its subsidiaries, owns
approximately 13.02% of the existing issued share
capital of the Company. After the Placing and
Soundwill Subscription take place, COSCO, through
its subsidiaries, owns approximately 12.32% of the
then enlarged issued share capital of the Company.
Application for listing
Application will be made to the Stock Exchange for
the listing of, and permission to deal in, the
135,000,000 new Shares.
Resumption of trading
At the request of the Company, trading in its shares
and warrants on the Stock Exchange was suspended with
effect from 10:57 a.m. on 9 March 2000 pending
release of this announcement. Application has been
made to the Stock Exchange for trading in the shares
and warrants of the Company on the Stock Exchange to
resume trading at 10:00 a.m. on 13 March 2000.
Definitions
The following definitions apply throughout this
announcement unless the context requires otherwise:
"associates" as defined in the Listing Rules
"Company" Soundwill Holdings Limited, the shares
of which are listed on the Stock Exchange
"Group" the Company and its subsidiaries
"KBL" Ko Bee Limited, a company wholly owned by Mrs.
Chan and holding 1,278,880,000 Shares representing
approximately 54.34% of the existing issued share
capital of the Company
"Listing Rules" Rules governing the listing of
securities on the Stock Exchange
"Mrs. Chan" Foo Kam Chu, Grace, the chairman and
controlling shareholder of the Company.
"Optilink" Optilink Technologies Company Limited,
a sino-foreign equity joint venture enterprise
established in the PRC
"Placing" the placing of 135,000,000 existing
Shares by Mrs. Chan through KBL pursuant to the
Placing and Subscription Agreement
"Placing and placing and subscription agreement
Subscription entered into between Mrs. Chan,
Agreement" Prudential and the Company dated 10
March 2000 (which takes
effect from 9 March 2000)
"Placing Shares" 135,000,000 existing Shares to
be placed pursuant to the Placing and Subscription
Agreement
"PRC" the People's Republic of China
"Prudential" Prudential-Bache Securities (Hong Kong) Limited.
"Shares" shares of HK$0.10 each in the capital of the Company
"Soundwill the subscription for 135,000,000 new
Subscription" Shares by Mrs. Chan through
KBL pursuant to the Placing and
Subscription Agreement
"Soundwill Soundwill Technology Company Limited,
Technology" an indirect wholly owned
subsidiary of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Subscriptions" Soundwill Subscription and Vision Subscription
"Vision" Vision Telecommunications Holdings
Limited, a limited company incorporated in the
British Virgin Islands
"Vision Subscription" the subscription for
200,000 shares of US$1.00 each in the capital of
Vision pursuant to the Vision Subscription Agreement
"Vision Subscription subscription agreement entered into between the
Agreement" Company, Soundwill Technology and Vision to
subscribe for 200,000 shares, representing 20 % of
the enlarged issued share capital, of Vision for
HK$82,113,500 dated 10 March 2000 (which takes
effect from 9 March 2000).
By order of the Board
Yip Kwai Cheung
Executive Director
Hong Kong, 11 March 2000
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