YUGANG INT'L<0613> - 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.
This announcement is for information purposes only and does not
constitute an invitation or offer to acquire, purchase or subscribe
for the Warrants described below.
Yugang International Limited
(the `Company')
(incorporated in Bermuda with limited liability)
PROPOSED PRIVATE PLACING OF WARRANTS TO SUBSCRIBE FOR
NEW SHARES IN YUGANG INTERNATIONAL LIMITED
The Company has entered into the Agreement (as defined below)
with the Placing Agents (as defined below) in connection with a
private placing of 509,000,000 Warrants (as defined below) with
independent investors at a placing price of HK$0.05 per Warrant.
The Placing (as defined below) is conditional (see the paragraph
headed `Conditions of the Placing' below). If the Placing is
completed, the net proceeds of the Placing of approximately HK$23.5
million will be used as general working capital of the Company and
for the expansion of the Group's business and other strategic
investments, if opportunity arises.
Tai Fook on behalf of the Placing Agents has the right to terminate
the obligations of the Placing Agents under the Agreement if certain
events, including force majeure, occur prior to 9:00 a.m. on the date
of allotment of the Warrants. If Tai Fook on behalf of the Placing
Agents terminates the Agreement, the Placing will not proceed.
PLACING and underwriting AGREEMENT (THE `AGREEMENT')
1.
Date
18th August, 1999
2.
Parties
The issuer :
Yugang International Limited (the `Company', and together with its
subsidiaries, the `Group').
The Placing Agents :
Tai Fook Securities Company Limited (`Tai Fook');
OSK Asia Securities Limited (together with Tai Fook, the `Placing
Agents').
3.
Terms of the Warrants
The Company has agreed to place, through the Placing Agents, a total
of 509,000,000 warrants of the Company (`Warrants') to be issued by
the Company (the `Placing') at a placing price of HK$0.05 per Warrant
(the `Placing Price'). The Placing Price was arrived at through arm's
length negotiations between the Company and the Placing Agents.
The Warrants will be issued in registered form in units of HK$0.23
of subscription rights, which in aggregate entitles their holders to
subscribe up to HK$117.07 million for shares of HK$0.10 each in the
capital of the Company (`Shares') at an initial subscription price of
HK$0.23 per Share (subject to adjustments) (the `Subscription Price')
at any time on or after the date of issue thereof, which is expected
to be on or around 16th September, 1999, up to and including 15th
September, 2001.
The Warrants will be issued by the Company pursuant to the general
mandate granted to the board of directors of the Company at the
annual general meeting of the Company held on 25th June, 1999.
509,000,000 new Shares will fall to be issued upon full exercise of
the subscription rights attaching to the Warrants at the Subscription
Price, representing approximately 19.99 per cent. of the existing
issued share capital of the Company of 2,546,820,160 Shares and
approximately 16.66 per cent. of the total issued Shares as enlarged
by the allotment and issue of such new Shares (assuming the
subscription rights attaching to the Warrants will be fully
exercised). The new Shares will rank pari passu in all respects with
the existing issued Shares save for any rights or entitlements to
dividends or other rights or distributions, the record date for which
precedes the date of allotment and issue of such new Shares.
The Subscription Price represents a premium of approximately 4.55
per cent. to the closing price of HK$0.22 per Share quoted on The
Stock Exchange of Hong Kong Limited (the `Stock Exchange') on 18th
August, 1999 and a premium of approximately 4.55 per cent. to the
average of the closing price of HK$0.22 per Share quoted on the Stock
Exchange for the ten trading days up to and including 18th August,
1999. The aggregate of the Placing Price and the Subscription Price
of HK$0.28 per Share represents a premium of approximately 27.27 per
cent. over the closing price of HK$0.22 per Share quoted on the Stock
Exchange on 18th August, 1999.
The proposed board lot for trading of the Warrants is 40,000 units,
carrying the rights to subscribe for 40,000 Shares. Brokerage of 1
per cent. and Stock Exchange transaction levy of 0.011 per cent. of
the Subscription Price are payable by the placees in respect of each
Warrant allotted.
4.
Placees
The Placing Agents shall procure not less than 100 independent
investors as placees to subscribe for the Warrants. The Placing will
comply with the requirements set out in Chapter 15 of and Appendix 6
to the Rules Governing the Listing of Securities on the Stock
Exchange (the `Listing Rules').
5.
Independence of the Placing Agents and placees
The Placing Agents are, and the placees will be, independent of and
not connected with the directors, chief executive and substantial
shareholders of the Company and its subsidiaries or their respective
associates (as defined in the Listing Rules).
The Placing Agents have agreed to place the Warrants, as agents for
the Company, by way of private placement, and to underwrite the
Placing in full.
6.
Conditions of the Placing
Completion of the Placing is conditional on the fulfilment or
waiver, if appropriate, of the following conditions:
(a)
trading in the Shares on the Stock Exchange not being suspended for
any single period of more than 5 trading days prior to the date of
allotment (other than suspension for the purpose of clearance by the
Stock Exchange and/or the Securities and Futures Commission of any
announcement or the prospectus relating to the Placing);
(b)
the Listing Committee of the Stock Exchange granting or agreeing to
grant (subject to allotment and matters ancillary thereto) approval
for the listing of, and permission to deal in, all the Warrants and
any Shares falling to be issued on the exercise of the subscription
rights attached to the Warrants either unconditionally or subject to
conditions to which Tai Fook on behalf of the Placing Agents
reasonably accepts;
(c)
the delivery to and registration by the Registrar of Companies in
Hong Kong of a copy of each of the prospectus and the application
form, each duly certified by two directors (the `Directors') of the
Company (or by their agents duly authorised in writing) as having
been approved by resolution of the board of Directors and having
annexed to it all documents required to be annexed thereto, in
accordance with Section 342C of the Companies Ordinance, Chapter 32
of the laws of Hong Kong;
(d)
the delivery to and filing with the Registrar of Companies in
Bermuda of a copy of each of the prospectus and the application form
in accordance with the Companies Act 1981 of Bermuda; and
(e)
the Bermuda Monetary Authority granting its consent to the issue of
the Warrants and any Shares falling to be issued upon exercise of
subscription rights attached to the Warrants.
If the conditions are not fulfilled or waived by Tai Fook on behalf
of the Placing Agents on or before 5:00 p.m., 30th September, 1999
(or such later date as Tai Fook on behalf of the Placing Agents may
determine) the Agreement will lapse.
7.
Termination of the Agreement
Tai Fook on behalf of the Placing Agents has the right to terminate
the Agreement if certain events, including force majeure, occur prior
to 9:00 a.m. on the date of allotment of the Warrants. For this
purpose, force majeure includes (but is not limited to) any event or
change in local, national, international, financial, political,
economic or stock market conditions or the introduction of any new
law or regulation or change in existing laws or regulations or
taxation or any material litigation against the Group which will or
may, in the opinion of Tai Fook on behalf of the Placing Agents,
materially prejudice the success of the Placing.
Further, if any matter or event showing any of the representations
and warranties of the Company in the Agreement to be untrue or
inaccurate in any material respects comes to the notices of Tai Fook
on behalf of the Placing Agents, the Agreement may also be
terminated.
If Tai Fook on behalf of the Placing Agents terminates the
Agreement, the Placing will not proceed.
8.
Application for listing
Application will be made to the Listing Committee of the Stock
Exchange for the listing of, and permission to deal in, the Warrants
and any Shares falling to be issued upon the exercise of the
subscription rights attached to the Warrants.
9.
Listing and dealings
Dealings in the Warrants on the Stock Exchange are expected to
commence on 21st September, 1999.
10.
Reasons for the Placing and Use of Proceeds
The Directors consider that the Placing enables the Company to (i)
raise funds immediately upon completion of the Placing; (ii) raise
further funds upon exercise of the subscription rights attaching to
the Warrants and enlarge the shareholder base of the Company; and
(iii) provide investors with an alternative means to invest in the
Company.
The net proceeds of the Placing of approximately HK$23.5 million
will be used as general working capital of the Company and for the
expansion of the Group's business and other strategic investments, if
opportunity arises. The Company does not have any immediate plans to
utilize the net proceeds of the Placing.
11.
Shareholding of the existing substantial shareholder
As at the date of this announcement, Chongqing Industrial Limited
(the `Controlling Shareholder'), is directly interested in
approximately 51.37 per cent. of the existing issued share capital of
the Company. Upon exercise in full of the subscription rights
attached to the Warrants at the Subscription Price, 509,000,000 new
Shares will be allotted and issued and the shareholding of the
Controlling Shareholder would be reduced to approximately 42.81 per
cent. of the issued share capital of the Company as enlarged by the
allotment and issue of such new Shares.
12.
General
The Company will send a prospectus to the shareholders of the
Company to give further details of the Placing for their information
only as soon as possible.
By Order of the Board of
Yugang International Limited
Cheung Chung Kiu
Chairman
Hong Kong, 18th August, 1999
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