S. MEGGA INT'L<0261> - Announcement & Resumption of Trading
The Stock Exchange of Hong Kong Limited takes no responsibility
for the contents of this announcement, makes no representation
as to its accuracy or completeness and expressly disclaims any
liability whatsoever for any loss howsoever arising from or in
reliance upon the whole or any part of the contents of this
announcement.
S. MEGGA International Holdings Limited
(Incorporated in Bermuda with limited liability)
VERY SUBSTANTIAL ACQUISITION
The Board wishes to announce that on 24th March, 2000 the
Company has entered into the Sale and Purchase Agreement with
the Vendors in relation to the Sale and Purchase of a 40% equity
interest in APE, an internet content provider. The aggregate
consideration of HK$50,000,000 for the Sale and Purchase will
be satisfied by the Company by the issuance and allotment of
125 million S. Megga Shares @ HK$0.4 per share at Completion.
Completion is conditional upon a number of conditions,
including the approval of shareholders of the Company, as set
out below under the section headed "Conditions of the Sale and
Purchase Agreement" and the Sale and Purchase may or may not
proceed. Shareholders should exercise extreme caution when
dealing in shares of the Company.
After Completion, there will be no significant change in the
Company's existing business, i.e. the manufacturing and sale
of DECT and 900 MHz telecommunications products and the Company
will continue such business after Completion.
The terms of the Sale and Purchase Agreement were determined
after arm's length negotiation and were on normal commercial
terms.
The Sale and Purchase Agreement constitutes a very substantial
acquisition and share transaction of the Company under the
Listing Rules.
At the request of the Company, trading of the Shares was
suspended at 10:00 a.m. on Tuesday, 21st March, 2000.
Application has been made to the Stock Exchange for resumption
of trading of the Shares from 10:00 a.m. on Tuesday, 28th March, 2000.
THE SALE AND PURCHASE AGREEMENT
Date : 24th March, 2000
Parties:
Company : S. Megga International Holdings Limited
Vendors : Asia Paging Company Limited as to 10,200 APE Shares
Well Master Group Limited as to 800 APE Shares
Wong Kin Chuen, Raymond as to 3,800 APE Shares
Ng Wai Keung as to 3,400 APE Shares
Lin Wing Hung as to 1,200 APE Shares
Lo Po Hong as to 600 APE Shares
Assets to be acquired:
The Sale Shares, being 20,000 APE Shares, representing 40 per
cent. of the issued share capital of APE.
Consideration
The consideration for the Sale Shares is HK$50,000,000 and
shall be satisfied by the Company by issuance and allotment of
S. Megga Shares at Completion. The price of each of the S. Megga
Share to be issued and allotted to APE is HK$0.40 which
represents a premium of approximately 225 per cent. to the
closing price of HK$0.123 per Share as quoted on the Stock
Exchange at 4:00 p.m. on Monday, 20th March, 2000 (being the
last time the Shares were traded immediately before the
suspension of trading of the Shares on 21st March, 2000). The
amount of the consideration was arrived at after arm's length
negotiation and is considered by the Directors of the Company
to be fair and reasonable. The consideration of the Sale Shares
is at a discount to the valuation of APE, which is on a revenue
projection basis, and at the date of this announcement is
approximately HK$150,000,000. The valuation was provided by
the management of APE based upon an independent valuation
prepared by an independent valuer which had been received by
the management of APE they had received and is subject to
satisfactory due diligence as set out under the section
"Conditions of Sale and Purchase Agreement".
The S. Megga Shares when issued and allotted represent
approximately 10.7 per cent. of the current issued share
capital of the Company and 9.66 per cent of the then enlarged
issued share capital of the Company.
However, it is the intention of the Company to complete the
Modified Debt Restructuring, as announced on 14th February 2000,
at the same time as the Sale and Purchase.
Although the Sale and Purchase is not subject to the approval
of SCB and other lenders (the "Lenders"), the Company had
notified the Lenders in respect of the Sale and Purchase.
Based upon the modified terms of the debt restructuring as
previously announced, the shareholding structure of the
Company upon completion of the Modified Debt Restructuring and
the Sale and Purchase can be summarised as follows:
Shareholding After New Issue to Lenders and Vendors
Existing New Percent-
Shares Shares Total age
(million) (million) (million)
Directors' interest (a) 204.0 204.0 4.3%
SCB 1,550.0 1,550.0 32.6%
Other Lenders 1,915.0 1,915.0 40.2%
Vendors: (b)
Asia Paging
Company 63.8 63.8 1.3%
Well Master Group 5.0 5.0 0.1%
Wong Kin Chuen,
Raymond 23.8 23.8 0.5%
Ng Wai Keung 21.3 21.3 0.4%
Lin Wing Hung 7.5 7.5 0.2%
Lo Po Hong 3.8 3.8 0.1%
Public 965.0 965.0 20.3%
---------------------------------------------
1,169.0 3,590.0 4,759.0 100%
(a) Directors' interests include the interests held in Kit Iu Limited.
(b) Vendors' interest total 2.6% of the then enlarged share
capital of the Company.
The single largest shareholder of the Company at the date of this
announcement is Kit Iu Limited, which holds 12.07 per cent. of the current
issued share capital of the Company. Kit Iu Limited is ultimately owned by
the trustee of a discretionary trust whose beneficiaries include Mr. Leung
Ho Man Paul and Mr. Leung Howard.
The Modified Debt Restructuring Proposal is conditional and is
subject to contract with the Financial Creditors. The terms of
the Modified Debt Restructuring Proposal are still subject to
negotiation until a contract is signed with the Financial
Creditors. Accordingly, Shareholders should note that the
issue of this announcement does not in any way imply that the
Modified Proposal, as announced on 14th February 2000, will
necessarily be accepted by the Financial Creditors and may or
may not proceed. Shareholders should exercise extreme caution
when dealing in the Shares of the Company. The Modified Proposal
will be subject to the approval of the Shareholders in a special
general meeting of the Company. A futher announcement in
respect of the Modified Proposal will be made by the Company shortly.
Conditions of the Sale and Purchase Agreement:
Completion of the Sale and Purchase Agreement is conditional
upon, among other things:
1. due diligence to be carried out by the Company and its
professional advisers in relation to the legal and financial
conditions of APE and its subsidiaries, being satisfactory to
the Company;
2. a valuation of APE to be provided by an independent valuer
acceptable to the Company showing that the valuation of APE will
not be less than HK$150,000,000;
3. the necessary resolutions of the shareholders of the
Company having been passed at the special general meeting to
approve the Sale and Purchase, the Sale and Purchase Agreement,
the issuance and allotment of the S. Megga Shares and related
matters for implementation of the same in accordance with the
Bye-laws of the Company, the Listing Rules and/or requirements
of other regulatory authorities;
4. the necessary resolutions of the board of the parties to
the Sale and Purchase Agreement (excluding the Company and such
party who is an individual) having been passed to approve the
Sale and Purchase Agreement and the transactions contemplated
in the Sale and Purchase Agreement;
5. the Listing Committee of the Stock Exchange granting or
agreeing to grant (subject to allotment), and not having
revoked, listing of, and permission to deal in the S. Megga
Shares, prior to Completion (or such other date as may be agreed
between the Company and APE);
6. if required, the permission of the Bermuda Monetary
Authority being obtained for the allotment and issue of the S.
Megga Shares; and
7. any other necessary waivers, consents and approval from the
Stock Exchange and any other relevant regulatory authorities
and relevant parties which are required for the Sale and
Purchase having been obtained.
COMPLETION
Completion will take place on the third business day after all
conditions of the Sale and Purchase Agreement have been
fulfilled or waived. In the event that the above conditions of
the Sale and Purchase Agreement are not fulfilled or waived by
30th June, 2000, the Sale and Purchase Agreement will lapse.
After Completion, the Vendors will not be entitled to
representation to the Board of Directors of the Company and
there will not be any change in control and the Board by virtue
of the Sale and Purchase.
REASON FOR THE SALE AND PURCHASE
The Board considers that the Sale and Purchase will be in the
interests of the Company and the shareholders as a whole since
the strategic investment in APE allows the Company to develop
and enhance its business by diversifying into areas of business
with high growth and earnings potential to the ultimate
commercial benefit of the Company and the shareholders as a
whole.
After the Completion, there will not be any no significant
change to in the Company's existing business, i.e. the
manufacturing and sale of DECT and 900 MHz telecommunications
products.
At present, the Company has no intention to acquire additional
shares in APE.
INFORMATION ON APE
APE is a private investment holding company incorporated in the
British Virgin Islands with limited liability focusing on the
business of being an internet content provider in sports
entertainment programmes and interactive information as well
as the sale of sports related merchandise. APE commenced its
business on 28th January, 2000 and acquired the total issued
share capital of Simplex on 20th March, 2000. APE through its
wholly-owned subsidiary, namely Simplex, operates one website.
Since incorporartion, APE has not prepared its profit and loss
records.
The business of APE is managed by its directors. After
Completion, the existing directors of APE, i.e. Mr. Chong Yue
Hun, Mr. Wong Kin Chuen, Raymond and Mr. Ng Wai Keung, Garrick,
together with two to three new directors to be appointed by the
Company will manage APE. There will not be a change in control of APE.
Simplex has registered the domain name "i4internet. com".
The Vendors include (a) Asia Paging Company Limited, owning as
to 51 per cent. of the shareholding; (b) Well Master Group
Limited, owning as to 4 per cent. of the shareholding; (c) Wong
Kin Chuen, Raymond, owning as to 19 per cent. of the
shareholding; (d) Ng Wai Keung, owning as to 17 per cent. of
the shareholding; (e) Lin Wing Hung, owning as to 6 per cent.
of the shareholding; and (f) Lo Po Hong, owing as to 3 per cent.
of the shareholding. The Vendors are independent of, and not
acting in concert with the directors, chief executives and
substantial shareholders of the Company and any of its
subsidiaries or any of their respective associates (as defined
in the Listing Rules). The valuation of APE as at the date of
this announcement is HK$150,000,000 which was provided by the
management of APE based upon an independent valuation they had
received and is subject to satisfactory due diligence as set
out under the section "Conditions of Sale and Purchase
Agreement". Neither the Vendors nor APE has any interest in the Company.
The beneficial owners of Asia Paging Company Limited are To Shu
Tong, Ng Cheong Lam (Holdings) Ltd. , Cheung Pui Pui, Mary, Wong
Yat Chee, Tse Ping Shan, Ng Wai Ling and Chui Shuk Tim. The
beneficial owner of Well Master Group Limited is Chong Yuen Wai.
The current intention of the Vendors regarding the holding of
the S. Megga shares is not known. The Vendors have no current
intention to acquire additional Shares in the Company.
According to the unaudited management account as at 31st
December, 1999 of Simplex, the net asset deficit of Simplex
amounted to HK$304,660.00.
NO INVITATION FOR SECURITIES
This announcement appears for information purposes only and
does not constitute an invitation or offer to acquire, purchase
or subscribe the Securities.
APPLICATION FOR LISTING
An application will be made to the Stock Exchange for the
listing of and permission to deal in the S. Megga Shares.
The Sale and Purchase Agreement constitutes a very substantial
acquisition of the Company under the Listing Rules.
SPECIAL GENERAL MEETING AND CIRCULAR
The SGM of the Company will be convened as soon as practicable
at which an ordinary resolution to approve the Sale and Purchase
Agreement will be proposed. No shareholders will be required
to abstain from voting at the SGM.
A circular containing, among other things, details of the Sale
and Purchase Agreement, an independent business valuation of
APE, and a notice of the SGM to be convened will be dispatched
to shareholders of the Company as soon as practicable.
GENERAL
At the request of the Company, trading of the Shares was
suspended at 10:00 a.m. on Tuesday, 21st March, 2000.
Application has been made to the Stock Exchange for resumption
of trading of the Shares from 10:00 a.m. on Tuesday, 28th March, 2000.
DEFINITIONS
"APE" Act Power Enterprises Limited, a company incorporated
under the laws of the British Virgin Islands with limited
liability
"APE Shares" share(s) of US$1.00 each in the share capital of APE
"Board" the board of Directors
"business day" a day (other than Saturday) on which banks are
generally open for business in Hong Kong
"Company" S. Megga International Holdings Limited
"Completion" completion of the sale and purchase of the Sale Shares
"Directors" directors of the Company
"Hong Kong" Hong Kong Special Administrative Region of the PRC
"Listing Rule" Rules Governing the Listing of Securities on
the Stock Exchange
"S. Megga Shares" means 125,000,000 Shares
"Sale and Purchase" the sale and purchase of the Sale Shares
pursuant to the Sale and Purchase Agreement
"Sale and Purchase the sale and purchase agreement dated 24th
Agreement" March, 2000 made between the Company and the
Vendors in respect of the Sale Purchase
"Sale Shares" 20,000 APE Shares in the share capital of the Vendors
"Securities" the securities of the Company
"SGM" special general meeting
"Share(s)" means the share(s) of HK$0.10 each (or if the
Company undergoes a capital reduction, the par value of each
of the shares of the Company at the relevant time,) in the share
capital of the Company
"Simplex" Simplex Technology Limited, a company
incorporated under the laws of Hong Kong with limited liability
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Vendors" the existing shareholders of APE, being Asia
Paging Company Limited, Well Master Group Limited, Wong Kin
Chuen, Ng Wai Keung, Garrick, Lin Wing Hung and Lo Po Hong
By Order of the Board of
S. Megga International Holdings Limited
Leung Ho Man, Paul
Chairman and Managing Director
Hong Kong, 27th March, 2000
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