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 appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company. ADDCHANCE HOLDINGS LIMITED 互益集團有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 3344) PLACING OF EXISTING SHARES AND SUBSCRIPTION OF NEW SHARES Placing Agent KGI Asia Limited THE PLACING AGREEMENT AND SUBSCRIPTION AGREEMENT On 24 December 2014 (after trading hours of the Stock Exchange), Powerlink Industries entered into the Placing Agreement with the Placing Agent, pursuant to which the Placing Agent agreed to place, on a best efforts basis, the Placing Shares comprising in aggregate up to 88,000,000 existing Shares at the Placing Price of HK$1.05 per Placing Share on behalf of Powerlink Industries to not fewer than six Placees. On the same date (after trading hours of the Stock Exchange), the Company and Powerlink Industries entered into the Subscription Agreement for the subscription of up to 88,000,000 new Subscription Shares at the Subscription Price of HK$1.05 per Subscription Share. 1 The 88,000,000 Placing Shares, in aggregate, represent (i) approximately 19.94% of the existing issued share capital of the Company; and (ii) approximately 16.62% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares. The gross proceeds and the net proceeds from the Subscription, after deduction of the Placing commission and other related expenses, will be approximately HK$92.4 million and HK$90.6 million respectively. The Directors intend to use the net proceeds as general working capital of the Group and for any potential investment opportunities in the future. THE PLACING AGREEMENT Date: 24 December 2014 (after trading hours of the Stock Exchange) Parties: (1) Vendor: Powerlink Industries (2) Placing agent: the Placing Agent Vendor As at the date of this announcement, Powerlink Industries is the beneficial owner of 257,000,000 Shares, representing approximately 58.24% of the entire issued share capital of the Company, and is a substantial Shareholder. The entire issued share capital of Powerlink Industries is beneficially owned by Dr. Sung Chung Kwun, the former chairman of the Board and a former executive Director. Placing Agent KGI Asia Limited, an Independent Third Party. Placees The Placing Shares will be placed to not fewer than six Placees which are professional, institutional and other investors and are Independent Third Parties. 2 Upon Completion, it is expected that none of the Placees will become a substantial Shareholder. If any of the Placees will become a substantial Shareholder upon Completion, further announcement will be made by the Company. Placing Shares The 88,000,000 Placing Shares, in aggregate, represent (i) approximately 19.94% of the existing issued share capital of the Company; and (ii) approximately 16.62% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares. The Placing Shares will be sold free from all liens, charges and encumbrances and together with the rights attaching to them, including the right to receive all dividends declared, made or paid after the date of Completion. Placing Price The Placing Price of HK$1.05: (i) represents a discount of approximately 11.76% to the closing price of HK$1.19 per Share as quoted on the Stock Exchange on the Last Trading Day; (ii) represents a discount of approximately 9.48% to the average of the closing prices per Share of approximately HK$1.16 as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the Last Trading Day; and (iii) is equal to the Subscription Price. The Placing Price was arrived at after arm’s length negotiations among the Company, Powerlink Industries and the Placing Agent with reference to the prevailing market prices of the Shares. The Directors consider that the Placing Price and the terms and conditions of the Placing Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. The net Placing Price, after deduction of the relevant expenses, is approximately HK$1.029 per Placing Share. 3 The net proceeds of the Placing shall be payable to Powerlink Industries by direct transfer to a bank account of the Company in Hong Kong. Placing commission The Placing Agent will charge a placing commission of 2% of the gross proceeds from the Placing. The placing commission was arrived at after arm’s length negotiations between the Company, Powerlink Industries and the Placing Agent. Completion The Placing is unconditional and Completion shall take place on or before 30 December 2014 or such other date as Powerlink Industries and the Placing Agent may mutually agree in writing. Rescission The Placing Agent shall be entitled by notice to Powerlink Industries given prior to 6:00 p.m. on the day immediately preceding the date of Completion to terminate the Placing Agreement if any Specified Event comes to the notice of the Placing Agent. THE SUBSCRIPTION AGREEMENT Date: 24 December 2014 (after trading hours of the Stock Exchange) Parties: (1) Issuer: the Company (2) Subscriber: Powerlink Industries The subscriber As at the date of this announcement, Powerlink Industries is the beneficial owner of 257,000,000 Shares, representing approximately 58.24% of the entire issued share capital of the Company, and is a substantial Shareholder. 4 Dispensation from Rule 26 of the Takeovers Code Immediately after Completion, assuming the entire number of the Placing Shares have been placed, the percentage shareholdings of Powerlink Industries will be reduced to approximately 38.30% of the existing issued share capital of the Company. The Subscription will then increase the percentage shareholdings of Powerlink Industries to approximately 48.56% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares. Pursuant to Note 6 on dispensations from Rule 26 of the Takeovers Code, a waiver under Rule 26 of the Takeovers Code is not required where a shareholder, together with persons acting in concert with it has continuously held more than 50% of the voting rights of a company for at least 12 months immediately preceding the relevant placing and top-up transaction. As Powerlink Industries and parties acting in connect with it have continuously held more than 50% of the voting rights of the Company for the 12 months immediately preceding the Placing and the Subscription, a waiver under Rule 26 of the Takeovers Code is not required. Subscription Shares Up to 88,000,000 Subscription Shares, which is equivalent to the number of Placing Shares to be placed under the Placing, will be subscribed by Powerlink Industries under the Subscription Agreement and represent, in aggregate, (i) approximately 19.94% of the existing issued share capital of the Company; and (ii) approximately 16.62% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares. The Subscription Shares, when allotted and issued, will rank equally in all respects among themselves and with the Shares in issue on the date of allotment and issue of the Subscription Shares. 5 General Mandate to issue the Subscription Shares The Subscription Shares will be allotted and issued pursuant to the General Mandate. The maximum number of Shares that can be issued under the General Mandate is 88,250,000 Shares. As at the date of this announcement, (i) no portion of the General Mandate was utilised; (ii) the Company has not allotted and issued any Shares under the General Mandate; and (iii) the General Mandate is sufficient for the allotment and issue of the Subscription Shares. The Company has not repurchased any Shares within the last 30 days prior to the date of this announcement. Accordingly, the issue of the Subscription Shares is not subject to Shareholders’ approval. Subscription Price The Subscription Price of HK$1.05: (i) represents a discount of approximately 11.76% to the closing price of HK$1.19 per Share as quoted on the Stock Exchange on the Last Trading Day; (ii) represents a discount of approximately 9.48% to the average of the closing prices per Share of approximately HK$1.16 as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the Last Trading Day; and (iii) is equal to the Placing Price. The Subscription Price was arrived at after arm’s length negotiations among the Company, Powerlink Industries and the Placing Agent with reference to the prevailing market prices. The Directors consider that the Subscription Price and the terms and conditions of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. The net Subscription Price, after deduction of relevant expenses, is approximately HK$1.029 per Subscription Share. 6 The net proceeds from the Placing to be paid to the Company shall constitute a deposit (the “Deposit”) payable by Powerlink Industries to the Company for the subscription of the Subscription Shares. If completion of the Subscription takes place, the Company shall apply the Deposit as payment of the Subscription Price of the Subscription Shares. If completion of the Subscription Shares does not take place, the Company shall forfeit 10% of the total amount of the Deposit as liquidated damages and shall refund 90% of the total amount of the Deposit to Powerlink Industries (without interest), and neither party shall have any obligations and liabilities towards each other hereunder save for any antecedent breaches of the terms thereof. Conditions of the Subscription The Subscription is conditional upon: (a) the Listing Committee of the Stock Exchange granting listing of and permission to deal in the Subscription Shares (and such permission and listing not subsequently being revoked prior to the allotment and issue of the Subscription Shares); and (b) Completion in accordance with the terms of the Placing Agreement. In the event of the conditions above not having been fulfilled on or before 6 January 2015 (or such later date as may be agreed by the Company and Powerlink Industries), all rights, obligations and liabilities of the parties hereunder in relation to the Subscription shall cease and determine and none of the parties shall have any claim against any other in respect of the Subscription. Completion of the Subscription Completion of the Subscription will take place on the Business Day next following the fulfillment of all the conditions of the Subscription. The Subscription shall be completed on or before 7 January 2015, which is within 14 days from the date of the Placing Agreement and the Subscription Agreement. If the Subscription is to be completed thereafter, it will constitute a connected transaction under the Listing Rules and require compliance with all the relevant requirements under Chapter 14A of the Listing Rules, including but not limited to the issue of a separate announcement and approval by the independent Shareholders. 7 Application for listing The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares. REASONS FOR THE PLACING AND THE SUBSCRIPTION The Group is principally engaged in production and sale of dyed yarns, knitted sweaters, cotton yarns, provision of dyeing and knitting services, and trading of cotton and yarns. In view of the market conditions, the Directors consider that the Placing and the Subscription represents a good opportunity for the Company to strengthen its cash resources and working capital position and to broaden its shareholders base. The Placing and the Subscription will also allow the Group to make acquisitions or strategic investments when opportunities arise. The Directors are of the view that the terms of the Placing Agreement and the Subscription Agreement, including but not limited to the Placing Price, the Subscription Price and the placing commission of 2%, are fair and reasonable and in the interests of the Shareholders as a whole. USE OF PROCEEDS The gross proceeds and the net proceeds from the Subscription, after deduction of the placing commission and other related expenses, will be approximately HK$92.4 million and HK$90.6 million respectively. The Directors intend to use the net proceeds as general working capital of the Group and for any potential investment opportunities in the future. The Company is exploring different acquisition and/or investment opportunities and will make further announcement(s) in this regard as and when required under the Listing Rules. FUND RAISING EXERCISE BY THE COMPANY IN THE PAST TWELVE MONTHS The Company has not conducted any equity fund raising activity in the past 12 months immediately preceding the date of this announcement. 8 CHANGES IN SHAREHOLDING STRUCTURE OF THE COMPANY The changes of the shareholding structure of the Company as a result of the Placing and the Subscription are as follows: Immediately after Completion but prior Shareholders At the date of to the completion of Immediately after completion this announcement the Subscription of the Subscription No. of Approximate No. of Approximate No. of Approximate Shares % Shares % Shares % 257,000,000 58.24 169,000,000 38.30 257,000,000 48.56 19,150,000 4.34 19,150,000 4.34 19,150,000 3.62 374,000 0.09 374,000 0.09 374,000 0.07 2,686,000 0.61 2,686,000 0.61 2,686,000 0.51 – – 88,000,000 19.94 88,000,000 16.62 Other public Shareholders 162,040,000 36.72 162,040,000 36.72 162,040,000 30.62 Total 441,250,000 100.00 441,250,000 100.00 529,250,000 100.00 Powerlink Industries (Note) Dr. Sung Chung Kwun Mr. Sung Kim Wa Ms. Sung Kit Ching Public Shareholders The Placees Note: These Shares are held by Powerlink Industries, a company incorporated in the British Virgin Islands, and the entire issued share capital of which is beneficially owned by Dr. Sung Chung Kwun, the former chairman of the Board and a former executive Director. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings when used herein: “acting in concert” has the meaning ascribed to this term under the Takeovers Code “Board” the board of Directors 9 “Business Day” any day (not being a Saturday, a Sunday or a public holiday) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours “Company” Addchance Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the issued Shares of which are listed on the main board of the Stock Exchange “Completion” completion of the placing of the Placing Shares in accordance with the terms and conditions as set out in the Placing Agreement “connected persons” has the meaning ascribed to this term under the Listing Rules “Director(s)” director(s) of the Company “General Mandate” the general mandate granted to the Directors by the Shareholders pursuant to an ordinary resolution passed at the annual general meeting of the Company held on 30 May 2014 “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “Independent Third Party(ies)” any person(s) or company(ies) and their respective ultimate beneficial owner(s) which, to the best of the Directors ’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of the Company and its connected persons of the Company in accordance with the Listing Rules 10 “Last Trading Day” 24 December 2014, being the last trading day for the Shares before the date of this announcement “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Placees” any professional, institutional and other investors procured by the Placing Agent to purchase any of the Placing Shares pursuant to the Placing Agreement “Placing” the placing, on a best efforts basis, of up to 88,000,000 Shares in aggregate owned by Powerlink Industries pursuant to the terms of the Placing Agreement “Placing Agent” KGI Asia Limited, a corporation licensed to carry on type 1 (dealing in securities) and type 4 (advising on securities) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Placing Agreement” the conditional placing agreement dated 24 December 2014 and entered into between Powerlink Industries and the Placing Agent in relation to the Placing “Placing Price” HK$1.05 per Placing Share “Placing Share(s)” up to 88,000,000 Shares in aggregate to be placed under the Placing “Powerlink Industries” Powerlink Industries Limited, a company incorporated in the British Virgin Islands and a substantial Shareholder “Share(s)” ordinary issued share(s) of HK$0.01 each in the share capital of the Company “Shareholder(s)” holder(s) of the Shares 11 “Specified Event” means an event occurring or matter arising on or after the date of the Placing Agreement and prior to the date of Completion which if it had occurred or arisen before the date of the Placing Agreement would have rendered any of the undertakings, warranties and representations given by Powerlink Industries in the Placing Agreement untrue or incorrect in any material respects and such would have a material and adverse impact or effect on the Placing “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subscription” the subscription for the Subscription Shares by Powerlink Industries pursuant to the Subscription Agreement “Subscription Agreement” the conditional subscription agreement dated 24 December 2014 and entered into between the Company and Powerlink Industries in respect of the Subscription “Subscription Price” HK$1.05 per Subscription Share “Subscription Shares” up to 88,000,000 Shares in aggregate for which Powerlink Industries has conditionally agreed to subscribe pursuant to the Subscription Agreement “substantial shareholder” has the meaning ascribed to this term under the Listing Rules “Takeovers Code” the Hong Kong Code on Takeovers and Mergers 12 “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent. By order of the Board Addchance Holdings Limited Wong Chiu Hong Executive Director Hong Kong, 24 December 2014 As at the date of this announcement, (i) the executive Directors are Mr. Sung Kim Wa (Chairman), Mr. Sung Kim Ping, Mr. Wong Chiu Hong, Ms. Sung Kit Ching, Mr. Tsang Fai and Mr. Lo Ping; (ii) the non-executive Director is Mr. Chui Chi Yun, Robert; and (iii) the independent non-executive Directors are Mr. Chan Tsz Fu, Jacky, Mr. Zhuang Zhongxi and Ms. Huang Yunjie. 13
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