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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this announcement, make no representation as to its accuracy or completeness
and expressly disclaim 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 any securities of the Company.
ZHUGUANG HOLDINGS GROUP COMPANY LIMITED
珠光控股集團有限公司*
(incorporated in Bermuda with limited liability)
(stock code: 1176)
CONNECTED AND MAJOR TRANSACTION:
PROPOSED EXERCISE OF OPTIONS INVOLVING ACQUISITION OF
FURTHER INTEREST IN THE TARGET COMPANY
Reference is made to the announcement of the Company dated 12 September 2013 in relation to the entering
into of the SP Agreement in respect of the Initial Acquisition and the Option Agreement in respect of the
grant of the Options to the Group.
EXERCISE OF THE OPTIONS
After trading hours on 13 November 2014, South Trend, a wholly-owned subsidiary of the Company, issued
the Exercise Notice to the Grantor for the exercise of the Options to acquire a total of 50% interest in the
Target Company at the total exercise price of RMB1,000,000,000 (equivalent to approximately
HK$1,262,466,860), which will be settled as to RMB800,000,000 (equivalent to approximately
HK$1,009,973,488) by allotment and issue of 580,444,533 Consideration Shares at the issue price of HK$1.74
per Consideration Shares and as to RMB200,000,000 (equivalent to approximately HK$252,493,372) in
cash, in accordance with the terms and conditions of the Option Agreement.
The Consideration Shares will be issued under the General Mandate.
The Company (through South Trend) is, as at the date of this announcement, the holder of 50% of the issued
share capital of the Target Company. Upon the Option Completion, the Company’s shareholding in the
Target Company will increase to 100%.
* For identification purposes only
—1—
LISTING RULES IMPLICATIONS
As at the date of this announcement, the Grantor is a substantial shareholder of the Target Company (an
indirect non wholly-owned subsidiary of the Company) and thus a connected person (as defined in the
Listing Rules) of the Company. Therefore, the exercise of the Options constitutes a connected transaction for
the Company under Chapter 14A of the Listing Rules.
Pursuant to Rule 14A.101 of the Listing Rules, a connected transaction between the listed issuer’s group and
a connected person at the subsidiary level on normal commercial terms or better is exempt from the circular,
independent financial advice and shareholders’ approval requirements if: (1) the listed issuer’s board of
directors have approved the transactions; and (2) the independent non-executive directors have confirmed
that the terms of the transaction are fair and reasonable, the transaction is on normal commercial terms or
better and in the interests of the listed issuer and its shareholders as a whole.
The Company has obtained the approval from the Board regarding the exercise of the Options and the
independent non-executive Directors have confirmed that the terms of the transaction in relation to the exercise
of the Options are fair and reasonable, such transaction is on normal commercial terms or better and in the
interests of the Company and the Shareholders as a whole. As such, the exercise of the Options is exempted
from the circular, independent financial advice and Shareholders’ approval requirements by virtue of Rule
14A.101 of the Listing Rules.
Further, as the applicable percentage ratios (as defined under the Listing Rules) in respect of the exercise of
the Options, when aggregated with the Initial Acquisition, would be more than 25% but less than 100%, the
exercise of the Options also constitutes a major transaction for the Company under Chapter 14 of the Listing
Rules.
Pursuant to Rule 14.44 of the Listing Rules, Shareholders’ approval may be obtained by way of written
Shareholders’ approval in lieu of holding a general meeting if (1) no Shareholder is required to abstain from
voting if the Company were to convene a general meeting for the approval of the exercise of the Options; and
(2) written Shareholder’s approval has been obtained from a Shareholder or a closely allied group of
Shareholders who together hold more than 50% in nominal value of the issued share capital of the Company
giving the right to attend and vote at that general meeting to approve such transaction.
So far as the Company is aware having made all reasonable enquiries, no Shareholders is required to abstain
from voting in the general meeting of the Company for approving the exercise of the Options, as the connected
person in the transaction concerned, namely the Grantor and the Grantor’s Guarantor are connected persons
solely by virtue of the Grantor’s interest in the Target Company and not in the Company itself. The Company
has obtained an approval in writing from Rong De Investments Limited, which holds 2,562,518,000 Shares,
representing approximately 60.47% of the issued share capital of the Company as at the date of this
announcement, in lieu of an approval from the Shareholders at the general meeting of the Company pursuant
to Rule 14.44 of the Listing Rules.
A circular containing, among other things, further details of the exercise of the Options and information
required under the Listing Rules will be despatched to the Shareholders on or before 31 December 2014 as
more time is required for preparing the information to be included in the circular.
—2—
INTRODUCTION
Reference is made to the announcement of the Company dated 12 September 2013, pursuant to which the
Company announced that the SP Agreement has been entered into in respect of the Initial Acquisition and the
Option Agreement has been entered into in respect of the grant of the Options to the Group.
Following the completion of the Initial Acquisition in accordance with the SP Agreement, as at the date of this
announcement, the Company (through its wholly-owned subsidiary, South Trend) owns 50% of the issued
share capital of the Target Company.
In accordance with the Option Agreement, the Options were granted by the Grantor to South Trend upon
exercise of which in full the Grantor shall transfer the First Tranche Shares and the Second Tranche Shares,
representing 50% of the issued share capital of the Target Company in aggregate, to South Trend at an aggregate
exercise price of RMB1,000,000,000 (equivalent to approximately HK$1,262,466,860).
EXERCISE OF THE OPTIONS
After trading hours on 13 November 2014, South Trend issued the Exercise Notice to the Grantor (which is a
limited liability company incorporated in the BVI and is an investment holding company) for the exercise of
the Options in accordance with the terms and conditions of the Option Agreement. The principal terms of the
Exercise Notice are set out below.
Subject matter and exercise price of the Options:
Pursuant to the Exercise Notice, South Trend has exercised the following Options:
(i)
the First Option to require the Grantor to sell to it (or its nominee) the First Tranche Shares at the price of
RMB500,000,000 (equivalent to approximately HK$631,233,430); and
(ii)
the Second Option to require the Grantor to sell to it (or its nominee) the Second Tranche Shares at the
price of RMB500,000,000 (equivalent to approximately HK$631,233,430).
Both the First Tranche Shares and the Second Tranche Shares shall be free from all encumbrances and shall be
entitled to all existing rights or subsequent attached/additional rights, including but not limited to all declared,
distributed or paid dividends from the respective Option Completion Date.
The exercise price of the Options shall be satisfied in the following manners:
(i)
as to RMB800,000,000 (equivalent to approximately HK$1,009,973,488) by the allotment and issue of
580,444,533 Consideration Shares, credited as fully paid, at the issue price of HK$1.74 per Consideration
Share by the Company to the Grantor (or its nominee) at the Option Completion; and
(ii)
as to RMB200,000,000 (equivalent to approximately HK$252,493,372) in cash in payable by the Company
to the Grantor (or its nominee) on or before 31 January 2016.
The Group intends to finance the cash consideration by internal resources.
—3—
The exercise price was determined after arm’s length commercial negotiations between the Group and the
Grantor with reference to the total consideration for the 50% interest in the Target Company pursuant to the SP
Agreement which was determined by reference to the then preliminary valuation of the value of the Land of
approximately RMB2,100,000,000 (equivalent to approximately HK$2,651,180,407) provided by an independent
qualified valuer. In deciding to exercise the Options (at the above exercise price), the Group has considered the
latest preliminary valuation from an independent qualified valuer amounting to RMB2,200,000,000 (equivalent
to HK$2,777,427,093).
Consideration Shares
The 580,444,533 Consideration Shares represent (i) approximately 13.70% of the issued share capital of the
Company as at the date of this announcement; and (ii) approximately 12.05% of the issued share capital of the
Company as enlarged by the allotment and issue of the Consideration Shares (assuming that there is no other
change to the issued share capital of the Company from the date of this announcement to the Option Completion
Date).
The issue price of HK$1.74 per Consideration Share was arrived at by the Group and the Vendor after arm’s
length negotiation with reference to the recent market price of the Shares. The issue price of the Consideration
Shares also represents:
(i)
a premium of approximately 1.75% to HK$1.71, being the closing price of the Shares on the date of the
Exercise Notice; and
(ii)
a premium of approximately 1.99% to HK$1.706, being the average closing price of the Shares as quoted
on the Stock Exchange in the 5 trading days immediately prior to the date of the Exercise Notice.
The Consideration Shares will be allotted and issued by the Company pursuant to the General Mandate which
confers the Directors an authority to allot and issue up to 847,573,680 Shares. Up to the date of this
announcement, save that the Company has issued warrants representing an aggregate amount of exercise moneys
of US$20,000,000 (if exercised in full, entitling the holders thereof to subscribe up to 65,606,863 Shares at the
initial strike price of HK$2.3778 per warrant share) and may issue warrants representing exercise moneys of
US$50,000,000 (if exercised in full, entitling the holders thereof to subscribe up to 164,017,159 Shares at the
initial strike price of HK$2.3778 per warrant share) under the General Mandate (details of which are set out in
the Company’s announcements dated 22 June 2014, 26 June 2014, 17 July 2014 and 18 July 2014), the General
Mandate has not been utilised.
Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Consideration
Shares. The Consideration Shares to be allotted and issued shall rank pari passu among themselves and with all
Shares in issue on the Option Completion Date.
Conditions precedent to the Option Completion:
The Option Completion shall be conditional upon and subject to:
(a)
(if applicable) the Grantor having obtained all necessary recognitions, consents and approvals regarded
for effecting the Option Completion, and such recognitions, consents and approvals shall remain fully
effective until the Option Completion Date;
—4—
(b)
(if applicable) South Trend having obtained all necessary recognitions, consents and approvals regarded
for effecting the Option Completion, and such recognitions, consents and approvals shall remain fully
effective until the Option Completion Date; and
(c)
all representations, warranties and undertakings made by the Grantor and the Grantor’s Guarantor under
the Option Agreement being true, accurate and not misleading in all respects.
South Trend may at any time waive in writing any of the above conditions precedent to the Option Completion
(save and except for conditions (a) and (b) set out above) which may be subject to additional conditions to be
imposed by South Trend. Conditions (a) and (b) set out above are incapable of being waived.
If the conditions precedent to the Option Completion cannot be fully fulfilled or waived on or before the
Option Long Stop Date, the Exercise Notice shall be void and the rights and obligations of all parties under the
Option Agreement shall cease.
Option Completion
Subject to the fulfillment or waiver of the conditions precedent to the Option Completion, the Option Completion
will take place on the Option Completion Date.
INFORMATION ON THE TARGET GROUP
The Target Company is a company incorporated in the BVI on 3 July 2013 which was owned as to 50% by
South Trend and 50% by the Grantor as at the date of this announcement. The Target Company is an investment
holding company and its principal asset is 100% interest in Ocean Leader.
Ocean Leader is a company incorporated in Hong Kong on 18 March 2013 and is wholly owned by the Target
Company. Ocean Leader is an investment holding company and its principal asset is 100% equity interest in
Guangzhou Yifa.
Guangzhou Yifa is a company incorporated in 1995 in the PRC and its principal authorised business activity is
property development. The Land, of 94,274 square metres, is situated at Guangzhou City, the PRC. As at the
date of this announcement, Guangzhou Yifa has acquired the whole Land and has obtained the land use right
certificate in respect of 94,274 square metres of the Land. The Land is located at the east side of Baiyun
Mountain, a traditional high-end residential and scenic area. It is currently proposed that the Land will be
developed into high-end villas and apartments, and public facilities.
The net loss (before and after tax) of Guangzhou Yifa for the years ended 31 December 2012 and 2013 were
approximately RMB60,000 (equivalent to approximately HK$75,748) and approximately RMB112,350,800
(equivalent to approximately HK$141,839,162) respectively.
As at 30 September 2014, the unaudited combined total assets and net assets of the Target Group amounted to
approximately HK$4,920,000,000 and HK$1,046,000,000 respectively.
The original total cost by the Grantor for the acquisition of the 50% interest in the Target Group was
approximately RMB65,000,000 (equivalent to approximately HK$82,060,346).
—5—
Each of the Target Company, Ocean Leader and Guangzhou Yifa did not carry on any business nor generated
any revenue since their respective incorporation.
As at the date of this announcement, the Target Company is an indirect non wholly-owned subsidiary of the
Company. Upon the Option Completion, the Target Company will become an indirect wholly-owned subsidiary
of the Company, and the financial results of the Target Group will be consolidated with the results of the
Group.
REASONS FOR AND BENEFITS OF THE EXERCISE OF THE OPTIONS
The Group is principally engaged in property development, property investment and property rental activities
in the PRC.
As disclosed above, the Company (through South Trend) is, as at the date of this announcement, the holder of
50% of the issued share capital of the Target Company. Upon the Option Completion, the Company’s
shareholding in the Target Company would increase to 100%.
The Directors are of the view that the exercise of the Options will enable the Group to own the entire interest
in the Land through its 100% holding in the Target Group, which is consistent with the Company’s strategy of
long term development. The exercise of the Options will further strengthen the Group’s business development
in Guangzhou City, the PRC.
The Directors (including the independent non-executive Directors) consider that the terms of the exercise of
the Options are fair and reasonable and in the interest of the Company and the Shareholders as a whole.
LISTING RULES IMPLICATIONS
As at the date of this announcement, the Grantor is a substantial shareholder of the Target Company (an indirect
non wholly-owned subsidiary of the Company) and thus a connected person (as defined in the Listing Rules) of
the Company. Therefore, the exercise of the Options constitutes a connected transaction for the Company
under Chapter 14A of the Listing Rules.
Pursuant to Rule 14A.101 of the Listing Rules, a connected transaction between the listed issuer’s group and a
connected person at the subsidiary level on normal commercial terms or better is exempt from the circular,
independent financial advice and shareholders’ approval requirements if: (1) the listed issuer’s board of directors
have approved the transactions; and (2) the independent non-executive directors have confirmed that the terms
of the transaction are fair and reasonable, the transaction is on normal commercial terms or better and in the
interests of the listed issuer and its shareholders as a whole.
The Company has obtained the approval from the Board regarding the exercise of the Options and the independent
non-executive Directors have confirmed that the terms of the transaction in relation to the exercise of the
Options are fair and reasonable, such transaction is on normal commercial terms or better and in the interests
of the Company and the Shareholders as a whole. As such, the exercise of the Options is exempted from the
circular, independent financial advice and Shareholders’ approval requirements by virtue of Rule 14A.101 of
the Listing Rules.
—6—
Further, as the applicable percentage ratios (as defined under the Listing Rules) in respect of the exercise of the
Options, when aggregated with the Initial Acquisition, would be more than 25% but less than 100%, the exercise
of the Options also constitutes a major transaction for the Company under Chapter 14 of the Listing Rules.
Pursuant to Rule 14.44 of the Listing Rules, Shareholders’ approval may be obtained by way of written
Shareholders’ approval in lieu of holding a general meeting if (1) no Shareholder is required to abstain from
voting if the Company were to convene a general meeting for the approval of the exercise of the Options; and
(2) written Shareholder’s approval has been obtained from a Shareholder or a closely allied group of Shareholders
who together hold more than 50% in nominal value of the issued share capital of the Company giving the right
to attend and vote at that general meeting to approve such transaction.
So far as the Company is aware having made all reasonable enquiries, no Shareholders is required to abstain
from voting in the general meeting of the Company for approving the exercise of the Options, as the connected
person in the transaction concerned, namely the Grantor and the Grantor’s Guarantor are connected persons
solely by virtue of the Grantor’s interest in the Target Company and not in the Company itself. The Company
has obtained an approval in writing from Rong De Investments Limited, which holds 2,562,518,000 Shares,
representing approximately 60.47% of the issued share capital of the Company as at the date of this
announcement, in lieu of an approval from the Shareholders at the general meeting of the Company pursuant to
Rule 14.44 of the Listing Rules.
A circular containing, among other things, further details of the exercise of the Options and information required
under the Listing Rules will be despatched to the Shareholders on or before 31 December 2014 as more time is
required for preparing the information to be included in the circular.
DEFINITIONS
In this announcement, the following expressions have the meanings set out below unless the context otherwise
requires:
“Board”
the board of Directors
“Business Day”
a day (excluding Saturday, Sunday, public holiday) on which licensed banks
in Hong Kong are open for business
“BVI”
the British Virgin Islands
“Company”
Zhuguang Holdings Group Company Limited, a company incorporated in
Bermuda with limited liability and the shares of which are listed on the
Main Board of the Stock Exchange
“Consideration Shares”
580,444,533 new Shares of HK$0.10 each in the share capital of the Company
to be allotted and issued, credited as fully paid, by the Company
“Director(s)”
the director(s) of the Company
—7—
“Dispose of”
sell, assign, exchange, compromise, discharge, waive, or grant any option,
right of first refusal or other right or interest whatsoever including any
agreement so to do
“Exercise Notice”
the exercise notice issued by South Trend to the Grantor dated 13 November
2014 for the exercise of the Options in accordance with the terms and
conditions of the Option Agreement
“First Option”
the call option granted by the Grantor to South Trend for the latter to acquire
the First Tranche Shares, subject to the terms and conditions of the Option
Agreement
“First Tranche Shares”
a total of 25% equity interest of the Target Company held by the Grantor
“General Mandate”
the general mandate granted by the Shareholders to the Directors at the special
general meeting of the Company held on 7 March 2014 to authorise the
Directors to allot, issue and deal with Shares representing 20% of the issued
share capital of the Company as at date of passing the relevant resolution
(i.e. 847,573,680 Shares)
“Grantor”
Wai Lee Holding Limited, a company incorporated in the BVI with limited
liability
“Grantor’s Guarantor”
Mr. Ng Pak Wong, being the beneficial owner of the Grantor
“Group”
the Company and its subsidiaries
“Guangzhou Yifa”
廣州怡發實業發展有限公司 (in English, for identification purpose only,
Guangzhou Yifa Development Company Limited), a limited liability
company established in the PRC and a wholly-owned subsidiary of Ocean
Leader
“HK$”
Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“Initial Acquisition”
the acquisition by South Trend of 50% equity interest of the Target Company
pursuant to the SP Agreement as announced in the Company’s announcement
dated 12 September 2013
“Initial Acquisition
Completion Date”
the date on which the completion of the Initial Acquisition took place
“Land”
a piece of land located within 157 Clinical Department of the General
Hospital of Guangzhou Military Command of PLA, Bai Hui Chang, Tong
He Road, Baiyun District, Guangzhou City, the PRC with a gross area of
94,274 square metres
—8—
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“Ocean Leader”
Ocean Leader Investments Limited, a company incorporated in Hong Kong
with limited liability and a wholly-owned subsidiary of the Target Company
“Option(s)”
the First Option and/or the Second Option
“Option Agreement”
the option agreement dated 12 September 2013 entered into between the
Grantor, the Grantor’s Guarantor and South Trend
“Option Completion”
the completion of transfer of First Tranche Shares and/or Second Tranche
Shares upon exercise of the relevant Option
“Option Completion Date”
the date on which the Option Completion is to take place, being the fifth
Business Day following the date on which the conditions mentioned in the
paragraph headed “Conditions precedent to the Option Completion” in this
announcement have been fulfilled or waived by the Group
“Option Long Stop Date”
the 90th day after the issue of the Exercise Notice by South Trend to exercise
the Options (i.e. 11 February 2015) (or a later date to be agreed by the Grantor
and South Trend)
“PRC”
the People’s Republic of China excluding, for the purpose of this
announcement, Hong Kong, the Macau Special Administrative Region of
the PRC and Taiwan
“RMB”
Renminbi, the lawful currency of the PRC
“Second Option”
the call option granted by the Grantor to South Trend for the latter to acquire
the Second Tranche Shares, subject to the terms and conditions of the Option
Agreement
“Second Tranche Shares”
a total of 25% equity interest of the Target Company held by the Grantor
“Share(s)”
the ordinary share(s) of HK$0.10 each in the existing issued share capital of
the Company
“Shareholder(s)”
shareholder(s) of the Company
“South Trend”
South Trend Holdings Limited, a company incorporated in the BVI with
limited liability and a wholly-owned subsidiary of the Company
“SP Agreement”
the sale and purchase agreement dated 12 September 2013 entered into
between Quan Xing Holdings Limited as vendor, Mr. Cheung Fong Wing as
vendor’s guarantor and South Trend in relation to the Initial Acquisition
—9—
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Target Company”
Joygain Holdings Limited, a company incorporated in the BVI with limited
liability which was owned as to 50% by South Trend and 50% by the Grantor
as at the date of this announcement
“Target Group”
the Target Company, Ocean Leader and Guangzhou Yifa
“%”
per cent.
In this announcement, for the purpose of illustration only, amounts quoted in RMB have been converted into
HK$ at the rate of HK$1.00 to RMB0.7921. Such exchange rate has been used, where applicable, for the
purpose of illustration only and does not constitute a representation that any amounts were or may have been
exchanged at this or any other rates or at all.
On behalf of the Board
Zhuguang Holdings Group Company Limited
Chu Hing Tsung
Chairman
13 November 2014
As at the date of this announcement, the Board comprises Mr. Chu Hing Tsung (alias Mr. Zhu Qing Yi) (Chairman
and Chief Executive Officer), Mr. Chu Muk Chi (alias Mr. Zhu La Yi), Mr. Liao Tengjia and Mr. Huang Jia Jue
as executive Directors and Mr. Leung Wo Ping JP, Mr. Law Shu Sang Joseph and Mr. Wong Chi Keung as
independent non-executive Directors.
— 10 —