1. business and industrial
2. company
3. merger and acquisition

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited
take no responsibility for the contents of this announcement, makes 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 purposes only and does not constitute an
invitation or offer to acquire, purchase or subscribe for any securities of the Company.
CONVOY FINANCIAL HOLDINGS LIMITED
康宏金融控股有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 1019)
OPEN OFFER OF NOT LESS THAN 1,844,172,000 AND
NOT MORE THAN 2,084,172,000 OFFER SHARES
AT A SUBSCRIPTION PRICE OF HK$0.25 PER OFFER SHARE
ON THE BASIS OF THREE OFFER SHARES
FOR EVERY ONE EXISTING SHARE
HELD ON THE RECORD DATE
AND
INCREASED IN AUTHORIZED SHARE CAPITAL
Financial Adviser
Convoy Capital Hong Kong Limited
Underwriter
PROPOSED OPEN OFFER
The Company proposes to raise not less than HK$461,043,000 and not more than
HK$521,043,000 before expenses by issuing not less than 1,844,172,000 Offer Shares and
not more than 2,084,172,000 Offer Shares at the Subscription Price of HK$0.25 per Offer
Share on the basis of three Offer Shares for every one existing Share held on Record Date
and payable in full on application. Qualifying Shareholders are not entitled to apply for
excess Offer Shares not taken up in excess of their respective entitlements under the Open
Offer. The Open Offer is only available to the Qualifying Shareholders and will not be
extended to the Non-Qualifying Shareholders.
1
As at the date of this announcement, the Company has 40,000,000 outstanding Warrants (I)
and 40,000,000 outstanding Warrants (II) which, in aggregate, entitle the holders thereof to
subscribe for 80,000,000 new Shares upon exercise the subscription rights attached thereto.
Save for 40,000,000 Warrants (I) and 40,000,000 Warrants (II), the Company has no other
outstanding warrants, options or convertible or exchangeable securities as at the date of this
announcement.
The estimate net proceeds of the Open Offer (after deducting the costs and expenses in
relation to the Open Offer) are expected to be not less than approximately HK$441,013,000
and not more than approximately HK$501,013,000. The Company intends to apply the net
proceeds of the Open Offer in the following manner:
(i)
as to approximately HK$86,000,000 for the payment of the balance of consideration
for the acquisition of real property as disclosed in the announcement of the Company
dated 7 January 2015;
(ii)
as to approximately HK$164,000,000 to fund future acquisition of other real property
as when the opportunity arises; and
(iii) as to the balance of approximately HK$191,013,000 to HK$251,013,000 be used as
general working capital.
As disclosed in the interim results announcement of the Company dated 27 August 2014,
with the Guidance Note published by the Office of the Commissioner of Insurance in July
2014, Investment-Linked Assurance Schemes (“ILAS”) market, a major product type of
independent financial adviser business in Hong Kong, will go through a big change of
commission payment mode which may have adverse effect on commission income. The
Company has set up diversification objectives years ago and continued to drive the growth
of non-linked insurance, general insurance and mandatory provident fund business to
counter the change in ILAS business and its stringent regulatory environment. In preparing
for the change in ILAS regulations under an adverse market environment and uncertainty,
the Directors consider that the Company shall increase its general working capital level
through the fund raised from the Open Offer.
As at the date of this announcement, save and except for the real property referred to in the
announcement of the Company dated 7 January 2015, the Company has not identified any
other real property for future acquisition.
2
UNDERWRITING ARRANGEMENT
Pursuant to the Underwriting Agreement, the Underwriter has undertaken to the Company
that, subject to the Open Offer not being terminated, the Underwriter has agreed to fully
underwrite the Underwritten Shares on the terms and subject to the conditions set out in the
Underwriting Agreement.
If the Underwriter terminates the Underwriting Agreement (please refer to the sub-section
headed “Termination of the Underwriting Agreement” in the section headed “Underwriting
Arrangement” below) or the conditions of the Open Offer (please refer the sub-section
headed “Conditions of the Open Offer” in the section headed “Underwriting Arrangement”
below) are not fulfilled in whole by the Company and the Underwriter, the Open Offer will
not proceed.
WARNING OF THE RISKS OF DEALINGS IN THE SHARES
If the Underwriter terminates the Underwriting Agreement (details are set out in
the sub-section headed “Termination of the Underwriting Agreement” in the section
headed “Underwriting Arrangement” in this announcement) or the conditions of the
Open Offer (details are set out in the sub-section headed “Conditions of the Open
Offer” in the section headed “Underwriting Agreement” in this announcement) are not
fulfilled, the Open Offer will not proceed. Accordingly, the Open Offer may or may not
proceed and the Shareholders and potential investors are advised to exercise caution
when dealing in the Shares and consult their professional advisers if they are in any
doubt about their positions. Any Shareholder or other person contemplating selling or
purchasing Shares, who is in any doubt about his/her/its position, is recommended to
consult his/her/its own professional adviser.
LISTING RULES IMPLICATIONS
As the Open Offer will increase the issued share capital of the Company by more than
50% within the 12 month period immediately preceding the date of this announcement, the
Open Offer is subject to approval by the Independent Shareholders at the EGM by poll in
accordance with the requirements of the Listing Rules.
Pursuant to Rule 7.26A(2) of the Listing Rules, since no excess application for the Offer
Shares is available, approval shall be obtained from the Independent Shareholders by way of
poll at the EGM in respect of the absence of such arrangement.
3
As at the date of this announcement, since there is no controlling Shareholder, the Directors
(excluding the independent non-executive Directors) and the chief executive of the
Company and their respective associates, shall abstain from voting at the EGM in respect of
the resolution to approve the Open Offer pursuant to the Listing Rules. As at the date of this
announcement, Mr. Wong Lee Man and Mr. Mak Kwong Yiu, being the executive Directors,
holding 34,054,398 Shares and 32,308,916 Shares, representing approximately 5.54%
and 5.26% of the entire issued share capital of the Company respectively, will abstain
from voting in favour of the resolution(s) relating to the Open Offer at the EGM. Save as
aforesaid, there is no other Director or chief executive of the Company holding any Share.
THE INDEPENDENT BOARD COMMITTEE
The Company will establish an independent board committee, which comprises all
independent non-executive Directors in compliance with the Listing Rules, to advise the
Independent Shareholders as to whether the terms of the Open Offer (including the absence
of excess application arrangement under the Open Offer) are fair and reasonable and in the
interests of its Shareholders as a whole, and to advise the Independent Shareholders on how
to vote, taking into account the recommendations of the independent financial adviser which
will be appointed by the Company. Further announcement will be made by the Company
when the independent financial adviser is appointed.
INCREASE IN AUTHORISED SHARE CAPITAL
As at the date of this announcement, the authorised share capital of the Company is
HK$100,000,000 divided into 1,000,000,000 Shares of which 614,724,000 Shares have
been allotted and issued and fully paid or credited as fully paid. In order to accommodate
the allotment and issue of the Offer Shares and future expansion and growth of the Group,
the Directors propose to increase the authorised share capital of the Company from
HK$100,000,000 divided into 1,000,000,000 Shares to HK$400,000,000 divided into
4,000,000,000 Shares.
4
GENERAL
The Circular including, among other things, details of (i) the Open Offer (including the
absence of excess application arrangement under the Open Offer), and the Underwriting
Agreement; (ii) the recommendation of the independent board committee in relation to
the Open Offer (including the absence of excess application arrangement under the Open
Offer) and the Underwriting Agreement; (iii) a letter of advice from the independent
financial adviser to the independent board committee of the Company and the Independent
Shareholders in relation to the Open Offer (including the absence of excess application
arrangement under the Open Offer) and the Underwriting Agreement; (iv) the Increase in
Authorised Share Capital; and (v) a notice convening the EGM will be despatched to the
Shareholders on or before 3 March 2015.
The Prospectus Documents setting out details of the Open Offer will be despatched to the
Qualifying Shareholders as soon as practicable, subject to the conditions of the Open Offer
being satisfied.
The expected timetable for the implementation of the Open Offer and the associated trading
arrangements, and date of despatch of the share certificates in respect of the Open Offer will
be further announced by the Company in due course.
OPEN OFFER
Issue statistics
Basis of the Open Offer:
three Offer Shares for every one existing Share held on
the Record Date
Number of existing Shares in issue:
614,724,000 Shares as at the date of this announcement
5
Number of Open Offer
Shares to be issued:
Not less than 1,844,172,000 Offer Shares (assuming no
Shares have been allotted and issued pursuant to the
subscription rights attaching to 40,000,000 Warrants
(I) and 40,000,000 Warrants (II) on or before the
Record Date) and not more than 2,084,172,000 Offer
Shares (assuming a total of 80,000,000 new Shares
have been allotted and issued upon full exercise of the
subscription rights attaching to 40,000,000 Warrants (I)
and 40,000,000 Warrants (II) on or before the Record
Date)
Aggregate nominal value
of the Offer Shares:
Not less than HK$184,417,200 (assuming no Shares
have been allotted and issued pursuant to the
subscription rights attaching to 40,000,000 Warrants (I)
and 40,000,000 Warrants (II) on or before the Record
Date) and not more than HK$208,417,200, (assuming
a total of 80,000,000 new Shares have been allotted
and issued upon full exercise of the subscription rights
attaching to 40,000,000 Warrants (I) and 40,000,000
Warrants (II) on or before the Record Date)
Subscription Price:
HK$0.25 per Offer Share payable in full on application
Minimum enlarged issued share
capital upon completion of Open
Offer (assuming no Shares (other
than the Offer Shares) are allotted
and issued before completion of
the Open Offer)
2,458,896,000 Shares
6
Maximum enlarged issued
2,778,896,000 Shares
share capital upon completion of
Open Offer (assuming 80,000,000
new Shares are allotted and issued
pursuant to the full exercise of
the subscription rights attaching
to the Warrants on or before the
Record Date)
As at the date of this announcement, the Company has 40,000,000 outstanding Warrants (I)
and 40,000,000 outstanding Warrants (II) which, in aggregate, entitle the holders thereof to
subscribe for 80,000,000 new Shares upon exercise of the subscription rights attached thereto.
Save for 40,000,000 Warrants (I) and 40,000,000 Warrants (II), the Company has no other
outstanding warrants, options or convertible or exchangeable securities as at the date of this
announcement.
Subscription Price
The Subscription Price of HK$0.25 per Offer Share will be payable in full upon application
for the Offer Shares under the Open Offer. The Subscription Price represents:
(1)
a discount of approximately 71.26% to the closing price of HK$0.870 per Share as
quoted on the Stock Exchange on the Last Trading Day;
(2)
a discount of approximately 71.53% to the average of the closing prices of HK$0.878
per Share as quoted on the Stock Exchange for the five trading days up to and including
the Last Trading Day;
(3)
a discount of approximately 69.77% to the average of the closing prices of HK$0.827
per Share quoted on the Stock Exchange for the ten trading days up to and including the
Last Trading Day; and
(4)
a discount of approximately 38.27% to the theoretical ex-rights price of HK$0.405
based on the closing price of HK$0.870 per Share as quoted on the Stock Exchange on
the Last Trading Day.
7
The Subscription Price was determined after arm’s length negotiations between the Company
and the Underwriter with reference to, among other factors, the market price and trading
liquidity of the Shares under the prevailing market conditions. The Directors consider the
terms of the Open Offer to be fair and reasonable and in the interests of the Company and the
Shareholders as a whole. The net price per Offer Share will be approximately HK$0.24.
Qualifying Shareholders
The Open Offer is only available to the Qualifying Shareholders. The Company will send (i)
the Prospectus Documents to the Qualifying Shareholders; and (ii) the Prospectus with the
Non-Qualifying Letter, for information only, to the Non-Qualifying Shareholders.
To qualify for the Open Offer, a Shareholder must be registered as a member of the Company
as at the close of business on the Record Date, and not be a Non-Qualifying Shareholder.
In order to be registered as members on the Record Date, Shareholders must lodge any
transfers of Shares (together with the relevant share certificates) with the Company’s branch
share registrars and transfer office in Hong Kong, Tricor Investor Services Limited at
Level 22, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong for registration
not later than 4:30 p.m. on the Latest Lodging Date. The expected timetable in respect of the
Open Offer, including but not limited to, the dates of the Latest Lodging Date and the Record
Date, and the period during which the register of members of the Company will be closed for
the purpose of establishing entitlements to the Open Offer, will be published in a separate
announcement as soon as practicable.
The invitation to apply for the Offer Shares to be made to the Qualifying Shareholders will not
be transferable or capable of renunciation and there will not be any trading of entitlements of
the Offer Shares on the Stock Exchange.
8
Rights of the Non-Qualifying Shareholders
The Prospectus Documents to be issued in connection with the Open Offer will not be
registered under the applicable securities legislation of any jurisdictions other than Hong
Kong. The Board will make enquiries as to whether the issue of Offer Shares to the NonQualifying Shareholders may contravene the applicable securities legislation of the relevant
overseas places or the requirements of the relevant regulatory body or stock exchange and
details and results of such enquiries will be included in the Prospectus. If, after making such
enquiry, the Board is of the opinion that it would be necessary or expedient, on account
either of the legal restrictions under the laws of the relevant place or any requirement of the
relevant regulatory body or stock exchange in that place, not to offer the Offer Shares to such
Non-Qualifying Shareholders, the Open Offer will not be extended such Non-Qualifying
Shareholders. Accordingly, the Open Offer will not be extended to the Non-Qualifying
Shareholders. The Company will send the Prospectus to the Non-Qualifying Shareholders
for their information only but will not send the Application Form to the Non-Qualifying
Shareholders.
Status of the Offer Shares
The Offer Shares when allotted, issued and fully paid, shall rank pari passu in all respects
with the Shares in issue on the date of allotment and issue of the Offer Shares, including the
right to receive all future dividends and distributions which are declared, made or paid on or
after the date of allotment and issue of the Offer Shares.
Share Certificates for Offer Shares
Subject to the fulfillment of the conditions of the Open Offer as set out in the section headed
“Conditions of the Open Offer” below, certificates for all fully-paid Offer Shares shall be
despatched by ordinary post to those who have accepted, and (where applicable) applied for,
and paid for the Offer Shares and which applications have been accepted by the Company
in accordance with the terms and conditions of the Open Offer, at their own risk. Further
announcement will be made on the expected timetable for such despatch in this regard.
9
No application for excess Offer Shares
Considering that the Open Offer will give the Qualifying Shareholders an equal and fair
opportunity to maintain their respective pro rata shareholding interests in the Company and
is negotiated on an arm’s length basis with the Underwriter, if application for excess Offer
Shares is arranged, the Company will be required to put in additional effort and costs to
administer the excess application procedures. Accordingly, no excess Offer Shares will be
offered to the Qualifying Shareholders and any Offer Shares not taken up by the Qualifying
Shareholders will be underwritten by the Underwriter.
Odd lots arrangements
The Company will not procure an agent to arrange for odd lots matching service.
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 Offer Shares. The Offer Shares are expected to continue to be
traded in existing board lot of 2,000 Shares.
Subject to the granting of the listing of, and permission to deal in, the Offer Shares on the
Stock Exchange, the Offer Shares will be accepted as eligible securities by HKSCC for
deposit, clearance and settlement in CCASS with effect from the commencement date of
dealings in the Offer Shares on the Stock Exchange or such other date as determined by
HKSCC. Settlement of transactions between participants of the Stock Exchange on any
trading day is required to take place in CCASS on the second settlement day thereafter. All
activities under CCASS are subject to the General Rules of CCASS and CCASS Operational
Procedures in effect from time to time. Dealings in the Offer Shares on the Stock Exchange
may be settled through CCASS.
10
UNDERWRITING ARRANGEMENT
Underwriting Agreement
Date:
6 February 2015
Underwriter:
RHB OSK Securities Hong Kong Limited
To the best of the Directors’ knowledge, information
and belief having made all reasonable enquiries,
each of the Underwriter and their respective ultimate
beneficial owners are Independent Third Parties
Number of Offer Shares:
Not less than 1,844,172,000 Offer Shares (assuming no
Shares have been allotted and issued pursuant to the
subscription rights attaching to 40,000,000 Warrants
(I) and 40,000,000 Warrants (II) on or before the
Record Date) and not more than 2,084,172,000 Offer
Shares (assuming a total of 80,000,000 new Shares
have been allotted and issued upon full exercise of the
subscription rights attaching to 40,000,000 Warrants (I)
and 40,000,000 Warrants (II) on or before the Record
Date)
Number of Underwritten Shares:
Not less than 1,844,172,000 Offer Shares (assuming no
Shares have been allotted and issued pursuant to the
subscription rights attaching to 40,000,000 Warrants
(I) and 40,000,000 Warrants (II) on or before the
Record Date) and not more than 2,084,172,000 Offer
Shares (assuming a total of 80,000,000 new Shares
have been allotted and issued upon full exercise of the
subscription rights attaching to 40,000,000 Warrants (I)
and 40,000,000 Warrants (II) on or before the Record
Date)
Commission:
3.5% of the aggregate Subscription Price in respect of
the maximum Underwritten Shares of 2,084,172,000
Offer Shares
11
The commission rate was determined between the Company and the Underwriter by reference
to the market rate. The Directors (including the independent non-executive Directors)
considers the terms of the Underwriting Agreement including the commission rate to be fair
and reasonable and in the interests of the Company and the Shareholders as a whole.
Termination of the Underwriting Agreement
If, prior to the Latest Time for Termination (provided that for the purposes of the
Underwriting Agreement if the date of the Latest Time for Termination shall be a business day
on which a Storm Warning is or remains hoisted between 9.00 a.m. and 4.00 p.m. on that day,
the date of the Latest Time for Termination shall be the next business day on which no Storm
Warning is or remains hoisted between 9:00 a.m. and 4:00 p.m. on that day):
(1)
in the reasonable opinion of the Underwriter, the success of the Open Offer would be
materially and adversely affected by:
(a)
the introduction of any new law or regulation or any change in existing law or
regulation (or the judicial interpretation thereof) or other occurrence of any nature
whatsoever which may in the reasonable opinion of the Underwriter materially and
adversely affect the business or the financial or trading position or prospects of the
Group as a whole or is materially adverse in the context of the Open Offer; or
(b)
the occurrence of any local, national or international event or change (whether or
not forming part of a series of events or changes occurring or continuing before,
and/or after the date hereof) of a political, military, financial, economic or other
nature (whether or not ejusdem generis with any of the foregoing), or in the nature
of any local, national or international outbreak or escalation of hostilities or armed
conflict, or affecting local securities markets which may, in the reasonable opinion
of the Underwriter materially and adversely affect the business or the financial or
trading position or prospects of the Group as a whole or materially and adversely
prejudice the success of the Open Offer or otherwise makes it inexpedient or
inadvisable to proceed with the Open Offer; or
12
(2)
any adverse change in market conditions (including without limitation, any change
in fiscal or monetary policy, or foreign exchange or currency markets, suspension or
material restriction or trading in securities) occurs which in the reasonable opinion of
the Underwriter is likely to materially or adversely affect the success of the Open Offer
or otherwise makes it inexpedient or inadvisable to proceed with the Open Offer; or
(3)
there is any change in the circumstances of the Company or any member of the Group
which in the reasonable opinion of the Underwriter will adversely affect the prospects of
the Company, including without limiting the generality of the foregoing the presentation
of a petition or the passing of a resolution for the liquidation or winding up or similar
event occurring in respect of any of member of the Group or the destruction of any
material asset of the Group; or
(4)
any event of force majeure including, without limiting the generality thereof, any act
of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic,
terrorism, strike or lock-out; or
(5)
any other material adverse change in relation to the business or the financial or trading
position or prospects of the Group as a whole whether or not ejusdem generis with any
of the foregoing; or
(6)
any matter which, had it arisen or been discovered immediately before the date of the
Prospectus and not having been disclosed in the Prospectus, would have constituted, in
the reasonable opinion of any of the Underwriter, a material omission in the context of
the Open Offer; or
(7)
any suspension in the trading of securities generally or the Company’s securities
on the Stock Exchange for a period of more than ten consecutive business days,
excluding any suspension in connection with the clearance of this announcement, the
Circular Documents, the Prospectus Documents or other announcements or circulars in
connection with the Open Offer,
The Underwriter shall be entitled by notice in writing to the Company, served prior to the
Latest Time for Termination, to terminate the Underwriting Agreement.
If the Underwriter terminate the Underwriting Agreement, the Open Offer will not
proceed.
13
CONDITIONS OF THE OPEN OFFER
The Open Offer is conditional upon:
(1)
the delivery to the Stock Exchange for authorisation and the registration with the
Registrar of Companies in Hong Kong respectively one copy of each of the Prospectus
Documents duly signed by two Directors (or by their agents duly authorised in writing)
as having been approved by resolution of the Directors (and all other documents required
to be attached thereto) and otherwise in compliance with the Listing Rules and the
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the
Laws of Hong Kong) (as amended from time to time) not later than the Prospectus
Posting Date;
(2)
the posting of the Prospectus Documents to the Qualifying Shareholders and the posting
of the Prospectus and a letter in the agreed form to the Non-Qualifying Shareholders,
if any, for information purpose only explaining the circumstances in which they are not
permitted to participate in the Open Offer on or before the Prospectus Posting Date;
(3)
the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to
allotment) and not having withdrawn or revoked listing of and permission to deal in the
Offer Shares by no later than the first day of their dealings;
(4)
the obligations of the Underwriter becoming unconditional and that the Underwriting
Agreement is not terminated in accordance with its terms;
(5)
the passing by no later than the Prospectus Posting Date by the Shareholders (or, where
appropriate, Independent Shareholders) at the EGM, among other things, the following
resolutions:
(i)
an ordinary resolution to approve the Increase in Authorised Share Capital; and
(ii)
an ordinary resolution to approve the Open Offer.
14
(6)
all necessary consents and approvals required to be obtained on the part of the Company
in respect of the Underwriting Agreement and the transactions contemplated hereunder
having been obtained and remaining in full force and effect; and
(7)
all necessary consents and approvals required to be obtained on the part of the
Underwriter in respect of the Underwriting Agreement and the transactions contemplated
hereunder having been obtained and remaining in full force and effect.
The Company shall use all reasonable endeavours to procure the fulfillment of all the
conditions precedent (save for condition (7) which shall be fulfilled by the Underwriter) by
the Latest Time for Termination or such other date as the Company and the Underwriter may
agree and in particular shall furnish such information, supply such documents, pay such fees,
give such undertakings and do all such acts and things as may be reasonably be required by
the Underwriter and the Stock Exchange in connection with the listing of the Offer Shares.
WARNING OF THE RISKS OF DEALING IN THE SHARES
If the Underwriter terminates the Underwriting Agreement (details are set out in the
sub-section headed “Termination of the Underwriting Agreement” in the section headed
“Underwriting Arrangement” in this announcement) or the conditions of the Open Offer
(details are set out in the sub-section headed “Conditions of the Open Offer” in the
section headed “Underwriting Agreement” in this announcement) are not fulfilled, the
Open Offer will not proceed. Accordingly, the Open Offer may or may not proceed and
the Shareholders and potential investors are advised to exercise caution when dealing in
the Shares and consult their professional advisers if they are in any doubt about their
positions. Any Shareholder or other person contemplating selling or purchasing Shares,
who is in any doubt about his/her/its position, is recommended to consult his/her/its own
professional adviser.
15
CHANGES IN THE SHAREHOLDING STRUCTURE OF THE COMPANY
ARISING FROM THE OPEN OFFER
The shareholding structure of the Company immediately before and after completion of the
Open Offer is set out below:
Immediately following
completion of the Open
Offer assuming all
Qualifying Shareholders
fully take up their respective
entitlement and none of the
Warrants
As at the date of this
have been exercised
announcement
or converted
Number of
Number of
Shares Approx. %
Shares Approx. %
Immediately following
completion of the Open
Offer assuming none of the
Qualifying Shareholders
take up their respective
entitlement and none of
the Warrants have been
exercised
Number of
Shares Approx. %
Immediately following
completion of the Open
Offer assuming all the
Qualifying Shareholders
take up their respective
entitlement and all the
Warrants have been
exercised and the holders of
the Warrants fully taken up
their respective entitlement
Number of
Shares Approx. %
Immediately following
completion of the Open
Offer assuming none of the
Qualifying Shareholders
take up their respective
entitlement and all the
Warrants have been
exercised and the holders of
the Warrants fully taken up
their respective entitlement
Number of
Shares Approx. %
Town Health Corporate Advisory
and Investments Limited
Wong Lee Man (note 1)
Mak Kwong Yiu (note 1)
The Underwriter (note 2))
130,106,000
34,054,398
32,308,916
–
21.16
5.54
5.26
–
520,424,000
136,217,592
129,235,664
–
21.16
5.54
5.26
–
130,106,000
34,054,398
32,308,916
1,844,172,000
5.29
1.39
1.31
75.00
520,424,000
136,217,592
129,235,664
–
18.73
4.90
4.65
–
130,106,000
34,054,398
32,308,916
2,084,172,000
4.68
1.23
1.16
75.00
Other Public Shareholders
Holders of Warrants (Note 3)
Other Pubic Shareholders
–
418,254,686
–
68.04
–
1,673,018,744
–
68.04
–
418,254,686
–
17.01
320,000,000
1,673,018,744
11.52
60.20
80,000,000
418,254,686
2.88
15.05
Total:
614,724,000
100.00
2,458,896,000
100.00
2,458,896,000
100.00
2,778,896,000
100.00
2,778,896,000
100.00
Notes:
1.
As at the date of this announcement, each of Mr. Wong Lee Man and Mr. Mak Kwong Yiu is the executive
Director.
2.
In circumstances where the Open Offer were to become unconditional and the Underwriter was obliged
to take up Underwritten Shares in their entirety, the underwriting commitment would extend to a stake of
approximately 75.00% in the share capital of the Company as enlarged by the issue of the Offer Shares.
The Underwriter undertakes to the Company in the Underwriting Agreement that it will sub-underwrite
its underwriting obligations under the Underwriting Agreement to sub-underwriters such that each of
the Underwriter and/or the sub-underwriters will be a third party independent of and not connected
or acting in concert with the Directors, chief executive or substantial shareholders of the Company or
their respective associates. The Underwriter further undertakes in the Underwriting Agreement that the
Underwriter should procure that each of the ultimate subscribers or purchasers procured by it or the
sub-underwriters will not (together with each of the respective parties acting in concert or any of their
respective connected persons or associates) hold in aggregate 10% or more of the voting rights of the
Company immediately after the Open Offer.
3.
As at the date of this announcement, the Company has 40,000,000 outstanding Warrants (I) and
40,000,000 outstanding Warrants (II) which, in aggregate, entitle the holders thereof to subscribe for
80,000,000 new Shares upon exercise the subscription rights attached thereto. Save for 40,000,000
Warrants (I) and 40,000,000 Warrants (II), the Company has no other outstanding warrants, options or
convertible or exchangeable securities at the date of this announcement.
16
FUND RAISING ACTIVITIES BY THE COMPANY DURING THE PAST
12 MONTHS IMMEDIATELY PRECEDING THE ANNOUNCEMENT
The following are fund raising activities of the Company during the past 12 months
immediately preceding the date of this announcement:
Date of
announcement
Event
Estimated net
proceeds
Intended use of proceeds
Actual use of proceeds
as at the date of this
announcement
21 January 2015
Placing of bonds in an
aggregate principal
amount of up to
HK$500,000,000
Approximately
HK$50.00 million
(Note)
used for money lending business
and business development of
the Group and to finance
any potential investment opportunities of
the Group
that may arise from time to time
The net proceeds would be utilized in
line with the intended use
30 September 2014
Placing of 95,820,000 new
Shares under general
mandate
Approximately
HK$92.20 million
The net proceeds was partially
as to around 25% of the net proceeds for
utilized, as to about HK$15 million
brand building and marketing campaign,
was utilized to brand building and
as to around 20% of the net proceeds
marketing campaign; about HK$12
for enhancement of the Group’s online
million was utilized to enhancement
operating platform, as to around 30% of
of the Group’s online platform;
the net proceeds for the development of the
about HK$1 million was utilized to
Group’s newly acquired corporate finance
development of corporate finance
business and as to around 25% of the net
business and about HK$23 million
proceeds for the general working capital of
was utilized to fund the general
the Group
working capital of the Group
16 September 2014
Placing of bonds in an
aggregate principal
amount of up to
HK$300,000,000
Approximately
HK$275.00 million
used for money lending business and business The net proceeds was fully utilized
(which were in line with the
development of the Group and to finance
intended use)
any potential investment opportunities of
the Group that may arise from time to time
8 May 2014
Placing of 39,800,000
new Shares under general
mandate
Approximately
HK$44.50 million
For the general working capital and for
business development of the Group
The net proceeds was fully utilized
(which were in line with the
intended use)
Note: As at the date of this announcement, placing of bonds in an aggregate principal amount of up to HK$54.00
million
17
Save for the disclosure of the issue of the above bonds, in the past 12 months immediate
preceding the date of this announcement, the Company also issued other bonds (the “Other
Bonds”) on 8 July 2014 and 14 November 2014 for the principal amount of HK$50,000,000
and HK$16,000,000 respectively, both of which were not required to be announced under the
Listing Rules. The funds raised pursuant to the issue of the Other Bonds together with the
above bonds were used for money lending business of the Group.
Save as disclosed above, the Company did not conduct any fund raising exercise during the 12
months immediately preceding the date of this announcement.
REASONS FOR THE OPEN OFFER AND USE OF PROCEEDS
The Group is principally engaged in independent financial advisory business, money lending
business, proprietary investment business and asset management business. As disclosed in
the announcement of the Company dated 7 January 2015, the Group has been exploring
appropriate investment opportunities and is optimistic about the prospect of the property
market in Hong Kong.
The Company is seeking to undertake an open offer to strengthen its capital base and provide
sufficient surplus capital to support future investment in the real property market and any
potential asset acquisitions or growth opportunities and as well as to strength its working
capital.
The Board is of the view that it is in the interest of the Company and the Shareholders as a
whole to raise the capital through the Open Offer since it allows the Qualifying Shareholders
to maintain their pro rata shareholding interests in the Company and continue to participate in
the future growth and development of the Group should they wish to do so.
The estimated net proceeds of the Open Offer (after deducting the costs and expenses in
relation to the Open Offer) are expected to be not less than approximately HK$441,013,000
and not more than approximately HK$501,013,000. The Company intends to apply the net
proceeds of the Open Offer in the following manner:
(i)
as to approximately HK$86,000,000 for the payment of the balance of consideration for
the acquisition of real property as disclosed in the announcement of the Company dated
7 January 2015;
18
(ii)
as to approximately HK$164,000,000 to fund future acquisition of other real property as
when the opportunity arises; and
(iii) as to the balance of approximately HK$191,013,000 to HK$251,013,000 be used as
general working capital.
As at the date of this announcement, save and except for the real property referred to in the
announcement of the Company dated 7 January 2015, the Company has not identified any
other real property for future acquisition.
As disclosed in the interim results announcement of the Company dated 27 August 2014, with
the Guidance Note published by the Office of the Commissioner of Insurance in July 2014,
Investment-Linked Assurance Schemes (“ILAS”) market, a major product type of independent
financial adviser business in Hong Kong, will go through a big change of commission
payment mode which may have adverse effect on commission income. The Company has
set up diversification objectives years ago and continued to drive the growth of non-linked
insurance, general insurance and mandatory provident fund business to counter the change in
ILAS business and its stringent regulatory environment. In preparing for the change in ILAS
regulations under an adverse market environment and uncertainty, the Directors consider that
the Company shall increase its general working capital level through the fund raised from the
Open Offer.
ADJUSTMENTS IN RELATION TO THE WARRANTS
Pursuant to the Warrant Instrument, the subscription price of the Warrants will be adjusted in
accordance with the Warrant Instrument upon the Open Offer becoming unconditional. Such
adjustments will be verified by the auditor/independent financial adviser of the Company. The
Company, in accordance with the Warrant Instrument, will notify the holders of the Warrant
the required adjustment(s) as soon as practicable and details of adjustments will be set out in
the Prospectus in respect of the Open Offer to be dispatched to the Shareholders.
LISTING RULES IMPLICATIONS
As the Open Offer will increase the issued share capital of the Company by more than
50% within the 12 month period immediately preceding the date of this announcement, the
Open Offer is subject to approval by the Independent Shareholders at the EGM by poll in
accordance with the requirements of the Listing Rules.
19
Pursuant to Rule 7.26A(2) of the Listing Rules, since no excess application for the Offer
Shares is available, approval shall be obtained from the Independent Shareholders by way of
poll at the EGM in respect of the absence of such arrangement.
As at the date of this announcement, since there is no controlling Shareholder, the Directors
(excluding the independent non-executive Directors) and the chief executive of the Company
and their respective associates, shall abstain from voting at the EGM in respect of the
resolution to approve the Open Offer pursuant to the Listing Rules. As at the date of this
announcement, Mr. Wong Lee Man and Mr. Mak Kwong Yiu, being the executive Directors,
holding 34,054,398 Shares and 32,308,916 Shares, representing approximately 5.54% and
5.26% of the entire issued share capital of the Company respectively, will abstain from voting
in favour of the resolution(s) relating to the Open Offer at the EGM. Save as aforesaid, there
is no other Director or chief executive of the Company holding any Share.
THE INDEPENDENT BOARD COMMITTEE
The Company will establish an independent board committee, which comprises all
independent non-executive Directors in compliance with the Listing Rules, to advise the
Independent Shareholders as to whether the terms of the Open Offer (including the absence
of excess application arrangement under the Open Offer) are fair and reasonable and in the
interests of its Shareholders as a whole, and to advise the Independent Shareholders on how to
vote, taking into account the recommendations of the independent financial adviser which will
be appointed by the Company. Further announcement will be made by the Company when the
independent financial adviser is appointed.
INCREASE IN AUTHORISED SHARE CAPITAL
As at the date of this announcement, the authorised share capital of the Company is
HK$100,000,000 divided into 1,000,000,000 Shares of HK$0.1 each of which 614,724,000
Shares have been allotted and issued and fully paid or credited as fully paid. In order to
accommodate the allotment and issue of the Offer Shares and future expansion and growth
of the Group, the Directors propose to increase the authorised share capital of the Company
from HK$100,000,000 divided into 1,000,000,000 Shares to HK$400,000,000 divided into
4,000,000,000 Shares.
20
GENERAL
The Circular including, among other things, details of (i) the Open Offer (including the
absence of excess application arrangement under the Open Offer) and the Underwriting
Agreement; (ii) the recommendation of the independent board committee in relation to the
Open Offer (including the absence of excess application arrangement under the Open Offer)
and the Underwriting Agreement; (iii) a letter of advice from the independent financial adviser
to the independent board committee of the Company and the Independent Shareholders in
relation to the Open Offer (including the absence of excess application arrangement under the
Open Offer), the Underwriting Agreement; (iv) the Increase in Authorised Share Capital; and
(v) a notice convening the EGM will be despatched to the Shareholders on or before 3 March
2015.
The Prospectus Documents setting out details of the Open Offer will be despatched to the
Qualifying Shareholders as soon as practicable, subject to the conditions of the Open Offer
being satisfied.
The expected timetable for the implementation of the Open Offer and the associated trading
arrangements, and date of despatch of the share certificates in respect of the Open Offer will
be further announced by the Company in due course.
DEFINITION
In this announcement, unless the content otherwise requires, words and expressions used
herein shall have the meanings ascribed to each of them below:
“Application Form”
the form of application for use by the Qualifying
Shareholders to apply for the Offer Shares
“associates”
has the meaning ascribed thereto in the Listing Rules
“Board”
the board of Directors
“business day”
any day (other than a Saturday or Sunday or public holiday)
on which licensed banks in Hong Kong are generally open
for business throughout their normal business hours
21
“CCASS”
the Central Clearing and Settlement System established
and operated by Hong Kong Securities Clearing Company
Limited
“Circular”
the circular to the Shareholders, which will have annexed
thereto the notice of EGM, proposed to be despatched to the
Shareholders on or before 3 March 2015 (or such other date
as the Company may reasonably decide) in the agreed form
“Circular Documents”
the Circular and the proxy form for use at the EGM in the
agreed form
“Company”
Convoy Financial 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
“Director(s)”
director(s) of the Company
“EGM”
the extraordinary general meeting of the Company to be
convened and held to consider and approve the Open Offer
“Group”
the Company and its subsidiaries
“HKSCC”
Hong Kong Securities Clearing Company Limited
“Hong Kong”
the Hong Kong Special Administrative Region of the
People’s Republic of China
“Increase in Authorised
Share Capital”
the increase of the authorised share capital of the Company
from HK$100,000,000 divided into 1,000,000,000 Shares
to HK$400,000,000 divided into 4,000,000,000 Shares by
creating an additional 3,000,000,000 unissued Shares
22
“Independent
Shareholders”
Shareholders, save and except the executive Directors and
their associates, who are not required under the Listing
Rules to abstain from voting on the resolution(s) to approve
the Open Offer at the EGM
“Independent Third
Party(ies)”
independent third party(ies) who is/are not connected
person(s) (as defined in the Listing Rules) of the Company
and is/are independent of and not connected with the
Company and directors, chief executive, controlling
shareholders and substantial shareholders of the Company or
any of its subsidiaries or their respective associates
“Last Trading Day”
5 February 2015, being the last trading day of the Shares on
the Stock Exchange immediately preceding the date of the
Underwriting Agreement
“Latest Lodging Date”
4:30 p.m. on a date to be announced or such other date and/
or time as may be agreed between the Company and the
Underwriter, being the latest time for lodging transfer of the
Shares and/or exercising the Warrants in order to qualify for
the Open Offer
“Latest Time for
Acceptance”
4:00 p.m. on the tenth Business Day immediately following
the date of the Prospectus or such other date and/or time as
may be agreed between the Company and the Underwriter,
being the latest time for acceptance of, and payment for, the
Offer Shares as described in the Prospectus
“Latest Time for
Termination”
4:00 p.m. on the third business day after the Latest Time
for Acceptance or such later time or date as may be agreed
between the Company and the Underwriter, being the latest
time to terminate the Underwriting Agreement
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock
Exchange
23
“Non-Qualifying
Shareholder(s)”
the Overseas Shareholder(s) whom the Board, after making
enquiries regarding the legal restrictions under the laws
of the relevant places and the requirements of the relevant
overseas regulatory bodies or stock exchanges, consider it
necessary or expedient to exclude them from the Open Offer
“Offer Share(s)”
the new Share(s) to be allotted and issued under the Open
Offer, which will be a total of not less than 1,844,172,000
Offer Shares and not more than 2,084,172,000 Offer Shares
“Open Offer”
the proposed offer for subscription by the Qualifying
Shareholders for the Offer Shares at the Subscription Price
on the terms and subject to the conditions set out in the
Underwriting Agreement and the Prospectus Documents
“Overseas Shareholder(s)”
the Shareholders with addresses in the register of members
of the Company as at the close of business on the Record
Date which are outside Hong Kong
“Prospectus”
a prospectus containing details of the Open Offer to be
issued by the Company in relation to the Open Offer
“Prospectus Documents”
collectively, the Prospectus and the Application Form
“Prospectus Posting Date”
the date for the despatch of the Prospectus Documents as the
Underwriter may agree in writing with the Company
“Prospectus Qualifying
Shareholders”
Shareholders, other than the Overseas Shareholders, whose
names appear on the register of members of the Company as
at the close of business on the Record Date
“Record Date”
the date by reference to which entitlements to the Open
Offer will be determined
24
“Share(s)”
existing share(s) of HK$0.1 each in the share capital of the
Company
“Shareholder(s)”
holder(s) of the issued Shares
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Subscription Price”
the issue price of HK$0.25 per Offer Share
“Underwriter”
RHB OSK Securities Hong Kong Limited, a licensed
corporation to carry out business in type 1 (dealing in
securities) regulated activity under the Securities and Futures
Ordinance, being the underwriter to the Open Offer
“Underwriting Agreement”
the underwriting agreement dated 6 February 2015 and
entered into among the Company and the Underwriter in
relation to the Open Offer
“Underwritten Shares”
the number of Offer Shares to be underwritten by the
Underwriter, which in maximum up to 2,084,172,000 Offer
Shares
“Warrant Instrument(s)”
the instrument(s) of the Company dated 11 March 2013
constituting the Warrants
“Warrant(s) (I)”
40,000,000 non-listed warrants issued by the Company, each
entitles the holder thereof to subscribe for one new Share at
the HK$1.41 per new Shares at any time during the period
commencing from 1 January 2015 and up to 10 March 2018
“Warrant(s) (II)”
40,000,000 non-listed warrants issued by the Company, each
entitles the holder thereof to subscribe for one new Share at
the HK$1.41 per new Shares at any time during the period
commencing from 1 January 2016 and up to 10 March 2018
“Warrants”
together, Warrants (I) and Warrants (II)
25
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong
“%”
per cent.
By order of the Board
CONVOY FINANCIAL HOLDINGS LIMITED
Wong Lee Man
Chairman
Hong Kong, 6 February 2015
As at the date of this announcement, the executive Directors are Mr. Wong Lee Man
(Chairman), Ms. Fong Sut Sam, Mr. Mak Kwong Yiu and Dr. Hui Ka Wah, Ronnie, JP; and the
independent non-executive Directors are Dr. Wu Ka Chee, Davy, Mr. Ma Yiu Ho, Peter and
Mr. Lam Chi Keung.
26