IDT INT'L<0167> - Announcement
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.
IDT International Limited
(Incorporated in Bermuda with limited liability)
PROPOSED SPIN-OFF AND SEPARATE LISTING OF
I-COMM TECHNOLOGY LIMITED ON
THE SINGAPORE EXCHANGE SECURITIES TRADING LIMITED
SUMMARY
Further to the announcement dated 12th November, 1999,
the Directors announce that the Singapore Exchange has
granted an approval-in-principle for the separate
listing of I-Comm Shares on the Singapore Exchange.
The Public Offering is dependent to a large extent on
market conditions and there is no certainty that the
Public Offering will be completed successfully.
The Spin-off, the waiver of assured entitlements to the
Shareholders and the Management Services Agreement are
subject to, inter alia, the approval of the
Shareholders at the Special General Meeting, a notice
of which was sent to Shareholders on 24th December, 1999.
A circular containing information of the proposed
Spin-off, the Public Offering, the waiver of assured
entitlements and the Management Services Agreement was
despatched to Shareholders on 30th December, 1999.
It is expected that the Public Offering will occur by
the first quarter of 2000. Further announcement on the
Public Offering will be made if and when appropriate.
INTRODUCTION
On 12th November, 1999, the Directors announced that
they were considering a possible spin-off and separate
listing on the Singapore Exchange of the Group's
wholly-owned telecommunication products business. It
was also announced that on the same date, I-Comm had
made a confidential submission to the Singapore
Exchange in connection with the Public Offering. On
22nd December, 1999, the Singapore Exchange had granted
approval in-principle for the listing of I-Comm. The
Directors consider that IDT and the Shareholders should
benefit from the Public Offering. However, it should
be noted that the Public Offering is dependent to a
large extent on market conditions at the time of the
launch of the Public Offering and there is no certainty
that the Public Offering will be completed successfully
or at all. The Company will remain its listing status
on the Stock Exchange.
Upon completion of the Public Offering and the listing
of I-Comm on the Singapore Exchange, IDT will continue
to hold approximately 75 per cent. of the enlarged total
issued share capital of I-Comm. The Spin-off will
constitute a material dilution of a major subsidiary
pursuant to Practice Note 13 of the Listing Rules and
is accordingly, subject to the approval of Shareholders.
In addition, as the Shareholders are not being offered
assured entitlements to subscribe for I-Comm Shares,
the waiver of such assured entitlements is subject to
the approval of minority Shareholders, being those
Shareholders other than Mr. Raymond Chan and his
Associates. Mr. Raymond Chan, the Chairman of the Group,
together with his Associates are interested in
approximately 52 per cent. shareholding in the Company.
PUBLIC OFFERING OF I-Comm SHARES
Number of I-Comm Shares
It is contemplated that I-Comm, ICT Enterprises and the
Underwriter will enter into an underwriting agreement
pursuant to which the Underwriter will agree, subject
to the terms and conditions thereof, to underwrite the
issue by I-Comm of up to 38,718,000 new I-Comm Shares
and the sale by ICT Enterprises of up to 38,718,000
I-Comm Shares that will be held by ICT Enterprises after
the Internal Reorganisation, at an offer price to be
agreed by the parties to the underwriting agreement.
The number of new I-Comm Shares and existing I-Comm
Shares that will be held by ICT Enterprises to be
offered each represent approximately 12.5 per cent. of
the issued share capital of I-Comm, as enlarged by the
Public Offering.
Offer Price
It should be noted that the Public Offering has not yet
been priced. The Offer Price contained in this
announcement, being an anticipated offer price range,
has been used to calculate the possible financial
impact of the Public Offering on IDT only. The Offer
Price is a wide range of prices with a lower limit of
S$0.6847 per I-Comm Share, equivalent to approximately
HK$3.18 per I-Comm Share, and an upper limit of S$0.8851
per I-Comm Share, equivalent to approximately HK$4.11
per I-Comm Share. It is anticipated, but there can be
no guarantee, that the actual pricing of the Public
Offering will be within this range.
Based on the Offer Price of HK$3.18 to HK$4.11 per
I-Comm Share, pro forma I-Comm earnings of
approximately HK$70 million for the year ended 31st
March, 1999 and 271,020,000 I-Comm Shares in issue
after the Internal Reorganisation, the Public Offering
will be priced at I-Comm's historic earnings multiple
of I-Comm earnings of between 12.2 times and 15.8 times.
Use of proceeds
The estimated gross proceeds of the issue of the
38,718,000 new I-Comm Shares, before expenses, would
be between approximately S$26.5 million and S$34.3
million, equivalent to between approximately HK$123.0
million and HK$159.2 million, and will be used to
finance the continued growth of the businesses of the
I-Comm Group. In particular, the I-Comm Group intends
to use such proceeds, after expenses, of approximately
S$24.9 million to S$32.6 million, equivalent to
approximately HK$115.5 million to HK$151.3 million, as to:
* approximately S$13.4 million, equivalent to
approximately HK$62.2 million, for the expansion of the
I-Comm Group's production facilities, which will
include the purchase of additional machineries to
increase the production capacity by 2000. This is to
support the increase of additional assembly lines;
* approximately S$2.5 million, equivalent to
approximately HK$11.6 million, for the establishment
of a remote engineering centre to support the I-Comm
Group's on-going product and technology developments;
and
* approximately S$9.0 million to S$16.7 million,
equivalent to approximately HK$41.7 million to HK$77.5
million, to increase the I-Comm Group's available
working capital to fund the growth of its businesses.
The estimated gross proceeds of the sale of the
38,718,000 I-Comm Shares by ICT Enterprises, before
expenses, would be between approximately S$26.5
million and S$34.3 million, equivalent to between
approximately HK$123.0 million and HK$159.2 million,
and will be used to support the development of the IDT
Group. The IDT Group intends to use such proceeds, after
expenses, of approximately S$24.9 million to S$32.6
million, equivalent to approximately HK$115.5 million
to HK$151.3 million, as to:
* approximately HK$40.0 million to reduce bank debts;
* approximately HK$31.0 million for marketing
expansion plans in Europe, the U.S., Latin America and
Asia Pacific for the business of the IDT Group;
* approximately HK$15.5 million for further
investments in the electronic learning aids business;
* approximately HK$23.25 million for increasing the
IDT Group's research and development capabilities in
Hong Kong; and
* approximately HK$5.75 million to HK$41.55 million
to increase available working capital.
Apart from the approval of the Shareholders, whether
the Public Offering occurs is subject to a number of
conditions, including market conditions, final
approval of the listing application by the Singapore
Exchange and the willingness of the Underwriter to
proceed with the Public Offering in certain
circumstances. No underwriting agreement has yet been
entered into. It is currently expected that the Public
Offering will occur by the first quarter of calendar
year 2000, following which I-Comm Shares will commence
trading on the Singapore Exchange. However, there can
be no assurance that the Public Offering will take place
in such time frame or at the indicative pricing range
above, or that it will take place at all.
Following the Public Offering, the IDT Group will
continue to hold approximately 232,302,000 I-Comm
Shares and 77,436,000 I-Comm Shares will be held by the
public. ICT Enterprises, which will own 232,302,000
I-Comm Shares, representing approximately 75 per cent.
of the enlarged issued share capital of I-Comm after
the Public Offering, has given an undertaking not to
dispose of, or transfer, any part of its interest in
I-Comm for a period of six months from the listing date
of I-Comm. ICT Enterprises has also undertaken that for
the next six months thereafter, it will not reduce its
shareholding to below 51 per cent. of the issued and
paid up share capital of I-Comm.
The I-Comm Shares will rank pari passu with each other
in all respects including the right to any distribution
of profits by way of dividend.
Following completion of the Internal Reorganisation,
the IDT Group will consist of the following principal
operations:
* the IDT Singapore Group which designs and
manufactures a range of liquid crystal display-based
consumer electronics products, including electronic
measuring and timing devices, health care and other
products; and
* OSI Enterprises Limited, a wholly-owned subsidiary
of the Company, holding the electronic personal
information and games products division of the Group
which designs and manufactures a range of electronic
stationery products including electronic organisers,
databanks, personal digital assistants, translators,
etc. and hand-held electronic games products including
electronic learning aids.
BUSINESS OF THE I-Comm GROUP
The I-Comm Group designs, develops, manufactures and
distributes consumer telecommunication products.
Currently, the I-Comm Group's main consumer
telecommunication business lines are:
(i) the ODM of mainly cordless and corded telephones,
Caller-ID products and pagers; and
(ii) the ODM of radio frequency transceivers and
family radio products.
The I-Comm Group's products are low frequency 46/49
Megahertz cordless telephones, high-frequency 900
Megahertz and digital spread spectrum cordless
telephones, corded telephone, pagers, Caller-ID
adjunct boxes, radio frequency transceivers and family
radio products.
The I-Comm Group operates a management and design
centre in Hong Kong and currently bases its
manufacturing facilities in Xixian, Shenzhen, PRC. The
I-Comm Group has its own customer base separate from
the IDT Group, and supplies most of its products to its
external customers.
INTERNAL REORGANISATION OF THE GROUP
Conditional upon the approval by the Shareholders on
the Spin-off, the Internal Reorganisation will be
carried out to rationalise the structure of the Group.
The simplified group structure of the Group and its
telecommunication products business before the
Internal Reorganisation is as follows:
The simplified group structure immediately after the
Internal Reorganisation and Public Offering is shown
below:
RELATIONSHIP BETWEEN THE IDT GROUP AND THE I-Comm GROUP
FOLLOWING THE LISTING OF I-Comm and connected transactions
After the Public Offering, I-Comm will continue to be
managed by the IDT Group and there will continue to be
a number of recurring transactions between the two
groups. Recurrent transactions between the I-Comm
Group and the IDT Group will be regulated by two
agreements between I-Comm and IDT Limited and between
I-Comm and IDT Singapore Group respectively. The
following is a brief description of each of these
connected transactions.
Existing management services agreement
Pursuant to the existing management services agreement
dated 1st September, 1997 between IDT Communication and
IDT Limited, IDT Limited provides certain sales and
marketing, personnel and administrative, corporate,
financial and accounting services as well as data
processing services to IDT Communication.
IDT Limited provides management services to IDT
Communication to achieve cost effectiveness in
performing common functions and facilities which have
already been established within the Group, thus
avoiding unnecessary duplication of effort and costs.
Pursuant to the existing management services agreement,
the Group pays the remuneration of all the directors
of IDT Communication which is charged back to IDT
Communication as management fees. Their remuneration
is based on IDT Communication's turnover as a
percentage of the Group's turnover.
IDT Communication also shares in the payment of the
remuneration of staff of the Group who have provided
management services to IDT Communication. Their
remuneration in this respect is based on the head count
of these staff, who are based in Hong Kong serving IDT
Communication, as a percentage of the total head count
of the Group in Hong Kong. The fees payable by IDT
Communication for the above management services,
including remuneration of directors and staff of IDT
Communication, in respect of the year ended 31st March,
1999 was approximately HK$21 million. This represents
approximately 3.17 per cent. of the Group's net
tangible asset as at 31st March, 1999 and approximately
1.17 per cent. of the Group's turnover for the year
ended 31st March, 1999. Three common directors of IDT
Communication who are also Directors of IDT are Mr.
Raymond Chan, Mr. Barry John Buttifant and Mrs. Chan
Pau Shiu Yeng, Shirley.
The Management Services Agreement
In connection with the Public Offering, the Management
Services Agreement will be entered into between IDT
Limited and I-Comm prior to the Public Offering,
pursuant to which management services will be provided
to all members of the I-Comm Group with the exception
that there will not be any further sales, finance and
accounting services. The Management Services Agreement
will also include the provision of the office space and
staff quarters in Hong Kong, and factory and dormitory
space in the PRC used by the I-Comm Group which is
previously not included in the existing management
services agreement. The Management Services Agreement
will accordingly supersede the existing management
services agreement dated 1st September, 1997. There
will be no change in the allocation basis between the
Management Services Agreement and the existing
management services agreement dated 1st September, 1997.
The principal terms of the Management Services
Agreement will be as follows:
i. IDT Limited or its related corporations as the
manager will provide to I-Comm and/or its subsidiaries
certain management services in respect of:
* corporate - secretarial and legal documentation
services;
* marketing - the use of IDT Limited's overseas
liaison offices, including the use of its staff and premises;
* electronic data processing - information
technology support and maintenance services; and
* personnel and administrative functions.
The fees payable by I-Comm to IDT Limited in respect
of the I-Comm Group executive directors' remuneration
will be based on the I-Comm Group's turnover as a
percentage of the Group's turnover. The fees payable
in respect of the other services above will be based
on the head count serving I-Comm in Hong Kong only, as
a percentage of the total Hong Kong head count of the
Group. The fees payable by I-Comm to IDT Limited in
respect of other common expenses, for example water and
electricity, will be calculated on a cost recovery
basis and charged on a turnover allocation basis.
Common premises-related expenses, for example in areas
relating to electronic data processing and personnel
and administrative functions, will be charged on a head
count basis;
ii. IDT Limited or its related corporations will also
provide certain premises for the I-Comm Group's
business operations, including staff quarters. The
fees payable by I-Comm to IDT Limited in respect of
direct premises-related expenses attributable to the
I-Comm Group, will be calculated on a cost recovery
basis and will be charged on an area allocation basis;
iii. The Management Services Agreement will be for
an initial fixed period from 1st April, 1999 to 31st
March, 2001 and shall continue automatically
thereafter, subject to termination by either party
giving to the other three months' notice in writing;
iv. The Management Services Agreement may also be
terminated if I-Comm ceases to be able to continue the
appointment of IDT Limited, or if either party goes into
liquidation, becomes bankrupt or insolvent, has a
receiver appointed or is unable to meet its debts as
they fall due;
v. A fee shall be paid by I-Comm to IDT Limited,
quarterly in advance, for the provision of the
management services as mentioned above, subject to
annual adjustment as agreed by the parties starting
from the financial year commencing 1st April, 1999.
The Management Services Agreement aims to regularise
the existing operational relationship between the IDT
Group and the I-Comm Group. Under the Listing Rules,
the Management Services Agreement will constitute a
connected transaction in relation to the Company, which
requires independent Shareholders' approval. To this
end, Anglo Chinese has been appointed as the
independent financial adviser to provide its opinion
as to the fairness and reasonableness of the Management
Services Agreement so far as the independent
Shareholders are concerned.
The Directors are of the view that the transactions
contemplated by the Management Services Agreement will
not have any adverse effect on the current financial
and trading position of the Group.
The Directors expect that the aggregate consideration
receivable by IDT Limited under the Management Services
Agreement in any financial year will not exceed 10 per
cent. of the consolidated turnover of the I-Comm Group
for such financial year. Hence, the independent
Shareholders' approval will be sought in the Special
General Meeting subject to the 10 per cent. limit in
this respect. A separate independent Shareholders'
approval will be sought if the aggregate consideration
exceeds the Cap or if the Management Services Agreement
remains in force after three years from the date the
Management Services Agreement becomes effective. The
Cap is subject to be reviewed by the independent
Shareholders after three years from the date of the
Management Services Agreement. The Directors,
including the independent non-executive Directors, are
of the opinion that the Management Services Agreement
is fair and reasonable so far as the independent
Shareholders are concerned having regard to the
circumstances in which it is being entered into. As the
Management Services Agreement will be subject to
independent Shareholders' approval at the Special
General Meeting and the transactions contemplated by
the Management Services Agreement will be effected on
a continuous basis, the Company will apply to the Stock
Exchange for a waiver from the disclosure requirements
of the details of such transactions contemplated by the
Management Services Agreement by way of a press
announcement. Mr. Raymond Chan and his Associates will
not vote on the resolution to approve the Management
Services Agreement at the Special General Meeting.
Purchase of components and moulds from, and payment of
processing fees for SMT and bonding services to, the
IDT Singapore Group.
In the year ended 31st March, 1999, the purchase of
components and of moulds from, and processing fees paid
to, the IDT Singapore Group by I-Comm Group amounted
to approximately HK$19.4 million, HK$1.5 million and
HK$5.1 million respectively, totaling HK$26 million,
and represents approximately 1.45 per cent. of the
Group's turnover as at 31st March, 1999. This also
represents approximately 8.01 per cent. and
approximately 3.93 per cent. of the Group's profit
before tax and net asset value respectively. The I-
Comm Group purchases plastic casings for its
telecommunication products from the IDT Singapore
Group. In addition to plastic casings, the I-Comm Group
also purchases from the IDT Singapore Group the moulds
produced specifically for the manufacture of such
plastic casings. The IDT Singapore Group also provides
SMT and bonding services to I-Comm Group. The estimated
amount of the above purchases and processing fee
payable by I-Comm Group to IDT Singapore Group for the
year ending 31st March, 2000 is HK$38 million,
representing approximately 3.3 per cent. of the
turnover of IDT Group and approximately 5.9 per cent.
of I-Comm Group's turnover for the year ended 31st March,
1999.
The I-Comm Group, on occasion, uses the IDT Singapore
Group for such supplies and services because the
quotations provided for such supplies and services are
price competitive compared to third party quotations
for similar volumes and quantities and the IDT
Singapore Group has sufficient capacity to fulfil the
volumes ordered by the I-Comm Group.
The purchases of such plastic casings, moulds, SMT and
bonding services are based on normal commercial terms
and on an arm's-length basis.
A supply agreement will be entered into prior to the
Public Offering between I-Comm and IDT Singapore to
formalise the aforesaid arrangements. The principal
terms of the agreement will be as follows:-
i. the IDT Singapore Group will sell such quantities
of the products as may be ordered by the relevant I-Comm
Group member, subject to availability;
ii. payment for the products will be made within 45 days
from the date of the relevant invoices; and
iii. the agreement may be terminated by either party
giving to the other party not less than three months'
notice in writing.
Sale of products to the IDT Group
The I-Comm Group, on occasion, sells telecommunication
products, including transceivers, on an arm's-length
basis to certain companies within the IDT Group. In the
financial year ended 31st March, 1999, such sales
amounted to approximately HK$1.6 million, representing
approximately 0.09 per cent. of the Group's turnover
for the year ended 31st March, 1999 and approximately
0.24 per cent. of the Group's net tangible assets as
at 31st March, 1999. The estimated amount of the above
sale of products by I-Comm Group to IDT Group for the
year ending 31st March, 2000 is HK$2 million,
representing approximately 0.17 per cent. and
approximately 0.31 per cent. of the turnover of IDT
Group and I-Comm Group respectively for the year ended
31st March, 1999.
The IDT Group has overseas marketing offices in the US,
France, Germany, Italy, United Kingdom, Spain,
Switzerland and Japan, where some of the I-Comm Group's
products are also marketed. The customers of the IDT
Group may place orders for I-Comm Group's products
through these overseas marketing offices. In such
instances, I-Comm Group then sells the I-Comm Group's
products to the IDT Group at the normal market price,
and on normal commercial terms, for on-sale by IDT Group
to its customers.
All the transactions in relation to the sale and supply
of products and components and moulds and payment of
processing fees among members of the IDT Group and the
I-Comm Group are on normal commercial terms and in the
ordinary and usual course of business, being terms
similar to those charged to (or by) other independent
third parties. No connected persons of the Company have
any direct substantial shareholding in the I-Comm Group
or members of the IDT Singapore Group concerned.
Accordingly, under the Listing Rules, such
transactions fall within the exemption under rule
14.24(4) of the Listing Rules and are not subject to
Shareholders' approval, or any disclosure as connected
transactions. The Directors, including the independent
non-executive Directors, consider that the terms of the
above transactions are fair and reasonable so far as
the Shareholders are concerned.
Executive Directors of I-Comm
Currently, all the executive directors of I-Comm are
Directors of the Company. To ensure the independence
of I-Comm, the Company intends to appoint the current
general manager of the I-Comm Group as a non-common
executive director of I-Comm within twelve months after
the Public Offering.
REASONS FOR AND BENEFITS OF THE LISTING OF I-Comm
The Public Offering will enable I-Comm Group and the
IDT Group to raise proceeds for the expansion of their
respective operations, in a highly cost-effective
manner. Based on the indicative Offer Price, the
Company would not be able to raise an equivalent amount
of equity capital from the issue of new Shares without
incurring significantly higher dilution of the
interests of Shareholders.
The Public Offering will not cause a dilution of
earnings per Share as the return on the funds raised
by the Company through the Public Offering and the
return earned by I-Comm from the proceeds of the Public
Offering are expected to more than compensate the
Company for the reduction in its holding in I-Comm. It
is also expected that the Public Offering will on
completion give rise to an exceptional profit for the
Group of between HK$174 million and HK$236 million.
In addition, the Directors consider the listing of
I-Comm in Singapore as a long term strategy which will
be beneficial to the IDT Group and the I-Comm Group for
the following reasons:
(i) the listing will stimulate greater management
focus on the telecommunication business and promote a
greater public awareness of its products and services
in Singapore and the Asian region, which is expected
to be particularly beneficial in the areas of
additional resource capability for research and
development and accessing the markets of the Asian
region;
(ii) being listed separately as an independent
business entity will enable the telecommunication
business to develop its own capability to raise funds
independently for its expansion, thereby releasing the
capital of the Company for expansion in other
operations;
(iii) a separate listing will allow investors to
invest directly in the telecommunication business and
assess the value of the telecommunication business
separately from other business that the Company
currently operates; and
(iv) the Company will continue to hold
approximately 75 per cent. interest in the enlarged
issued capital of I-Comm as a long term investment and
therefore will be able to benefit from any future growth
of I-Comm's business, facilitated by, and arising from,
the separate listing of I-Comm.
Overall, the Directors consider that the Spin-off will
bring considerable benefits to both the Company and the
Shareholders.
Based on the financial data which will be published by
I-Comm in the prospectus with respect of the Public
Offering, at the minimum Offer Price, the I-Comm Shares
are to be priced at a historic earnings multiple of
approximately 12.2 times. This compares with a historic
earnings multiple of 7.3 times for the Shares of IDT.
The Public Offering, therefore, enables IDT to raise
permanent equity capital at a more favourable price
than it could if it were to issue its own Shares at the
current market price. The Public Offering will result
in an increase in the Company's net asset value per
Share of at least HK$0.089 based on the pro forma net
assets at 31st March, 1999. Furthermore, based on the
Offer Price, the Public Offering will result in I-Comm
having a market capitalisation of between HK$984.1
million and HK$1,271.8 million, as compared with the
market capitalisation of the Company of HK$1,790
million based on HK$0.91 per Share as at the Latest
Practicable Date.
ASSURED ENTITLEMENTS
Under the Listing Rules, a listed issuer which is
spinning-off a subsidiary by obtaining a listing for
such subsidiary, whether in Hong Kong or overseas, is
required to offer its shareholders a proportion of any
shares issued or sold under assured entitlements,
unless minority shareholders agree in general meeting
to waive such entitlement. The Directors do not
consider that the Company's largely Hong Kong minority
Shareholders would respond in any numbers to assured
entitlements because the shares of I-Comm would only
be listed in Singapore and it would thus be an
investment which would be difficult for them to follow
and trade. In any event, they can participate in the
future of I-Comm Group indirectly by investing in IDT
on relatively advantageous terms. For these reasons,
the Directors do not consider that the effort and
expense of preparing a prospectus of I-Comm for
registration in Hong Kong is worthwhile. Without
registering a prospectus in Hong Kong, it would not be
lawful for the Company to offer the Shareholders
assured entitlements in the Public Offering.
Under the Listing Rules, only minority Shareholders are
permitted to vote on the resolution to waive assured
entitlements, set out as resolution numbered 2 in the
notice of the Special General Meeting. As Mr. Raymond
Chan and his Associates hold approximately 52 per cent.
of the issued share capital of IDT as at the Latest
Practicable Date, they will not vote on this resolution.
Anglo Chinese has been appointed as the independent
financial adviser to recommend the minority
Shareholders in relation to the waiver of the assured
entitlements.
FINANCIAL EFFECTS on THE GROUP
The following pro forma net assets of the I-Comm Group
and the Group are based on the pro forma net assets of
the I-Comm Group and the Group as at 31st March, 1999
and adjusted as follows:
Pro forma Consolidated Balance Sheets
(a) Pro forma net assets of the I-Comm Group:
As at 31st March, 1999
Minimum Maximum
Offer Price Offer Price
HK$ million HK$ million
Net current assets
- Before the Public Offering 69 69
- Estimated net proceeds
from the Public Offering 116 151
185 220
Fixed assets 44 44
Other assets 9 9
Advances from the IDT Group (20) (20)
Deferred taxation (2) (2)
Minority interests (6) (6)
Pro forma net assets 210 245
Capitalisation of advances
from the IDT Group (Note 1) 20 20
Adjusted net assets 230 265
(b) Pro forma net assets of the Group:
As at 31st March, 1999
Minimum Maximum
Offer Price Offer Price
HK$ million HK$ million
Audited net tangible assets
of the Group as at 31st
March, 1999 before the
Public Offering 661 661
Equivalent to HK$ per Share
(Note 2) 0.336 0.336
Add: Estimated net proceeds
from issue of 38,718,000
new I-Comm Shares 116 151
Add: Estimated net proceeds
from sale of 38,718,000
existing I-Comm Shares 116 151
Less: Minority interest of
the public investors in
I-Comm (Note 3) (58) (66)
Pro forma net tangible assets
of the Group after the
Public Offering 835 897
Pro forma net asset value
per Share (Note 2) (HK$) 0.425 0.456
Notes:
(1) The advances from the IDT Group will be capitalised
in accordance with the Internal Reorganisation,
details of which are set out on pages 9 to 12 of the
circular dated 30th December, 1999.
(2) Based on 1,966,991,372 Shares in issue as at the
Latest Practicable Date.
(3) Based on 25% of the adjusted net asset value of the
I-Comm Group as at 31st March, 1999 as calculated under
(a) above.
CONDITIONS OF THE SPIN-OFF
The Spin-off will be conditional, inter alia, upon the
following:
1. the Shareholders approving the Spin-off at the
Special General Meeting; and
2. the minority Shareholders approving the non-
provision of assured entitlements under the Public
Offering to Shareholders at the Special General
Meeting.
SPECIAL GENERAL MEETING
The Special General Meeting will be held at the Garden
Room, 2nd Floor, Hotel Nikko Hongkong, 72 Mody Road,
Tsim Sha Tsui East, Kowloon, Hong Kong on 10th January,
2000 at 10:00 a.m.. A notice convening the Special
General Meeting and a form of proxy in connection
therewith were despatched to Shareholders on 24th
December, 1999.
DESPATCH OF CIRCULAR
The Directors wish to announce that a circular dated
30th December, 1999 containing, inter alia,
information on the Spin-off, the waiver of assured
entitlements to the Shareholders and the Management
Services Agreement was despatched to Shareholders on
30th December, 1999. The notice convening the Special
General Meeting refers to a circular to Shareholders
dated 24th December, 1999. However, the circular was
not ready for despatch to Shareholders on 24th December,
1999 and the circular was now dated and issued on 30th
December, 1999 instead of 24th December, 1999.
Shareholders should take note that the Company has not
issued any circular dated 24th December, 1999 and the
date of the circular as referred to in the ordinary
resolutions set out in the notice convening the Special
General Meeting shall be amended to read 30th December,
1999 instead of 24th December, 1999.
Further announcement on the Public Offering will be
made if and when appropriate.
Definitions
In this announcement, unless the context requires
otherwise, the following expressions have the
following meanings:
"Anglo Chinese" Anglo Chinese Corporate Finance,
Limited, an investment adviser and securities dealer
registered under the Securities Ordinance (Chapter 333
of the Laws of Hong Kong)
"Associates" has the same meaning ascribed to such
expression by the Listing Rules
"Caller-ID" caller identification, a feature which
displays the caller's phone number
"Cap" the aggregate consideration payable by I-Comm
Group to IDT Limited under the Management Services
Agreement shall not exceed 10 per cent. of the
consolidated turnover of the I-Comm Group in such
financial year
"Director(s)" the director(s) of IDT
"Group" IDT and its subsidiaries including the I-Comm
Group and the IDT Singapore Group
"HK$" and "HK cents" Hong Kong dollars and cents
respectively, the lawful currency of Hong Kong
"Hong Kong" the Hong Kong Special Administrative
Region of the PRC
"I-Comm" I-Comm Technology Limited, a company
incorporated in Bermuda, the shares of which are
proposed to be listed on the Singapore Exchange
"I-Comm Group" I-Comm and IDT Holdings (BVI) Limited,
IDT Communication, Auto System Technology Limited,
Integrated Display Technology Telecommunications
(Shenzhen) Co., Ltd., Super Win Electronics Limited,
Tekcom Industries Limited, and Tekcom
Telecommunication (Shenzhen) Co., Ltd., which will
become wholly-owned subsidiaries of I-Comm after the
Internal Reorganisation
"I-Comm Share(s)" existing share(s) of US$0.01 each
in the share capital of I-Comm which shall be
consolidated into share(s) of US$0.05 each as part of
the Internal Reorganisation
"ICT Enterprises" Integrated Communication
Technology Enterprises Ltd., a wholly-owned subsidiary
of IDT currently holding a 100 per cent. interest in
I-Comm, and the vendor of the 38,718,000 I-Comm Shares
"IDT" or "the Company" IDT International Limited, a
company incorporated in Bermuda, the Shares of which
are listed on the Stock Exchange
"IDT Communication" IDT Communication Technology
Limited, a wholly-owned subsidiary of the Company,
which will become a wholly-owned subsidiary of I-Comm
after the Internal Reorganisation
"IDT Group" IDT and its subsidiaries, excluding the
I-Comm Group
"IDT Limited" Integrated Display Technology Limited,
a wholly-owned subsidiary of IDT
"IDT Singapore Group" IDT Singapore and its
subsidiaries
"IDT Singapore" IDT Holdings (Singapore) Limited, a
company incorporated in the Republic of Singapore, the
shares of which are listed on the Singapore Exchange,
and is currently 65 per cent. owned by IDT
"Internal Reorganisation" a restructuring exercise
to rationalise the structure of the Group in relation
to the Spin-off (as more particularly described on p.9
of the circular despatched to Shareholders on 30th
December, 1999), which is expected to be completed
after the Special General Meeting but before the Public
Offering
"Latest Practicable Date" 20th December, 1999,
being the latest practicable date prior to the printing
of this announcement for ascertaining certain
information contained herein
"LCD" liquid crystal display
"Listing Rules" the Rules Governing the Listing of
Securities on the Stock Exchange
"Management Services Agreement" a management
services agreement to be entered into between IDT
Limited and I-Comm after the Internal Reorganisation
but before the Public Offering
"ODM" original design manufacture
"Offer Price" an anticipated price range of S$0.6847
to S$0.8851 per I-Comm Share, equivalent to
approximately HK$3.18 to HK$4.11 per I-Comm Share
"PRC" the People's Republic of China which for the
purpose of this announcement, excludes Hong Kong
"Public Offering" the proposed invitation in the
Republic of Singapore of up to 38,718,000 new I-Comm
Shares offered at the Offer Price and a sale of up to
38,718,000 I-Comm Shares that will be held by ICT
Enterprises after the Internal Reorganisation at the
Offer Price, within twelve months from the date of the
approval of the initial public offer by the
Shareholders
"S$" Singapore dollars, the lawful currency of the
Republic of Singapore
"Share(s)" share(s) of HK$0.10 each in the capital of
IDT
"Shareholder(s)" holder(s) of the Share(s)
"Singapore Exchange" Singapore Exchange
Securities Trading Limited
"SMT" surface mount technology
"Special General Meeting" special general meeting
of IDT to be held at the Garden Room, 2nd Floor, Hotel
Nikko Hongkong, 72 Mody Road, Tsim Sha Tsui East,
Kowloon, Hong Kong on 10th January, 2000 at 10:00 a.m.,
notice of which was sent to Shareholders on 24th
December, 1999
"Spin-off" the proposed separate listing of I-Comm on
the Singapore Exchange and the Public Offering
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Underwriter" BNP Prime Peregrine (Singapore)
Limited, a wholly-owned subsidiary of Banque Nationale
de Paris
"U.S." United States of America
Unless otherwise stated, translations of Singapore
dollars into Hong Kong dollars have been calculated
using an exchange rate of HK$4.64 : S$1.
By order of the board of Directors
IDT International Limited
Raymond Chan
Chairman
Hong Kong, 30th December, 1999
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