YUGANG INT'L<0613> - Announcement & Reusmption 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.
YUGANG INTERNATIONAL LIMITED
(Incorporated in Bermuda with limited liability)
PLACING OF EXISTING SHARES
AND
SUBSCRIPTION FOR NEW SHARES
Chongqing Industrial Limited (the `Vendor') has agreed to
place, through its placing agent, Tai Fook Securities Company Limited
(`Tai Fook'), 509,000,000 existing ordinary shares (`Placing Shares')
of HK$0.10 each in the share capital of the Company (`Shares') to
independent investors at a price of HK$0.45 per Share (`Placing') and
the Vendor will subscribe for 509,000,000 new Shares (`Subscription
Shares') at the price of HK$0.45 per Share (`Subscription').
The Placing is fully underwritten by Tai Fook.
The Placing Shares represent approximately 19.99% of the existing
issued share capital of the Company of 2,546,820,160 Shares and
approximately 16.66% of the Company's issued share capital as
enlarged by the Subscription of 509,000,000 new Shares. The net
proceeds from the Subscription of approximately HK$224 million will
be used as general working capital for the Company and its
subsidiaries (the `Group') (as set out in greater detail below).
The Vendor, the controlling shareholder of the Company, has
approximately a 51.37% interest in the Company as at the date of this
announcement.
The shareholding of the Vendor in the Company will be reduced from
approximately 51.37% to approximately 31.39% immediately upon
completion of the Placing and will be increased from approximately
31.39% to approximately 42.81% immediately upon completion of the
Subscription.
Trading in the securities of the Company was suspended from 2:30
p.m. on 3rd January, 2000 (`Suspension Date') at the request of the
Company pending the issue of this announcement and application has
been made to The Stock Exchange of Hong Kong Limited (the `Stock
Exchange') for the resumption of trading of the securities of the
Company from 10:00 a.m. on 5th January, 2000.
A. PLACING OF 509,000,000 EXISTING SHARES
A placing agreement dated 3rd January, 2000 (the `Placing
Agreement') was entered into between the Vendor and Tai Fook
containing the following terms:-
Vendor:
The Vendor, the controlling shareholder of the Company.
Placing agent and Underwriter:
Tai Fook, who is independent of, not connected with the directors,
chief executive or substantial shareholders of the Company, and any
of its subsidiaries or any of their respective associates (as defined
under the Rules the `Listing Rules') Governing the Listing of
Securities on the Stock Exchange). Tai Fook would receive placement
commission of 2% on the gross proceeds of the Placing.
Placees:
The placees (which will be six or more individual, corporate and/or
institutional investors) will be independent of, not connected with
the directors, chief executive or substantial shareholders of the
Company, and any of its subsidiaries or any of their respective
associates. It is expected that no placee will become a substantial
shareholder of the Company as a result of the Placing.
Placing price:
HK$0.45 per Placing Share. This price was agreed after arm's length
negotiations and represents (i) a discount of approximately 19.64% to
the closing price of HK$0.56 per Share quoted on the Stock Exchange
on 30th December, 1999, being the last trading day of the Shares
immediately before the Suspension Date; and (ii) a premium of
approximately 4.65 over the average closing price of approximately
HK$0.43 per Share as quoted on the Stock Exchange from 16th December,
1999 to 30th December, 1999, both dates inclusive, being the last ten
trading days of the Shares immediately before the Suspension Date.
Rights
The Placing Shares will rank equally with the existing Shares.
Number of existing Shares to be placed
509,000,000 Shares to be placed, representing approximately 19.99%
of the existing issued share capital of the Company of 2,546,820,160
Shares and approximately 16.66% of the issued capital of the Company
as enlarged by the Subscription of 509,000,000 new Shares. The
Placing is fully underwritten by Tai Fook.
Completion of the Placing
The Placing is unconditional. Completion will take place on or
before 6th January, 2000.
B.
SUBSCRIPTION OF 509,000,000 NEW SHARES
A Subscription Agreement dated 3rd January, 2000 between the Vendor
and the Company containing the following terms:-
Subscriber:
The Vendor
Number of new Shares to be subscribed for:
The Company will issue 509,000,000 new Shares and the Vendor will
subscribe for them, representing approximately 19.99% of the existing
issued share capital of the Company and approximately 16.66% of the
issued share capital of the Company as enlarged by the Subscription.
Subscription Price:
HK$0.45 per Subscription Share. The Company will bear the costs and
expenses in connection with the Placing and the Subscription. The
estimated expenses for the Placing and the Subscription will be
approximately HK$4.7 million.
General Mandate to issue Subscription Shares:
The Subscription Shares will be issued pursuant to the general
mandate to allot, issue and deal with Shares granted to the directors
of the Company by resolution of its shareholders passed at the
Company's special general meeting held on 21st October, 1999.
Ranking of the Subscription Shares
The Subscription Shares will rank equally with Shares of the Company
in issue at the time of issue and allotment of the Subscription
Shares.
Use of Proceeds
The net proceeds from the Subscription of approximately HK$224
million will be used as additional working capital and for investment
to fulfil the Group's diversification plan into technology related
fields. At present, the Company has no concrete plans for the
apportionment of the net proceeds from the subscription. The
principal activity of the Company is investment holding whilst the
principal activities of its subsidiaries are general trading,
property holding and investment holding. The trading business of the
Company's subsidiaries is mainly in the PRC and includes but not
limited to trading in audio-visual products and components, trading
in industrial equipment, trading in automobile parts, trading in
agricultural products and trading in metal and plastic materials.
Condition of the Subscription
The Subscription is conditional upon:
a) completion of the Placing; and
b) the Listing Committee of the Stock Exchange granting listing of, and
permission to deal in, the Subscription Shares to be issued under the
Subscription.
Completion
Under the Listing Rules, the Subscription must be completed within
14 days from the date of the Placing and Subscription Agreement, that
is, on or before 17th January, 2000 (or such later date as the
Company, the Vendor and the Placing Agent may agree such agreement
not to unreasonably withheld or delayed and subject to compliance
with the Listing Rules), failing which the Subscription shall cease
and terminate.
Application for listing
Application will be made by the Company to the Stock Exchange to
grant the listing of and permission to deal in the Subscription
Shares.
C.
Effects of the Placing and the Subscription
The shareholding of the Vendor in the Company immediately before
completion of the Placing, immediately after completion of the
Placing but before completion of the Subscription, and immediately
after completion of both the Placing and the Subscription are and
will be as follows:-
Shareholding in the No. of Shares in
Company held by the the Company held by
Vendor (Note) the Vendor (Note)
Immediately before 51.37% 1,308,323,360
the Placing and the
Subscription
Immediately after 31.39% 799,323,360
the Placing but
before the
Subscription
Immediately after 42.81% 1,308,323,360
the Placing and the
Subscription
Note: Assumes that other than the Subscription Shares, no new Shares
are issued or purchased by the Company and other than the Placing
Shares no Shares are sold or purchased by the Vendor, in each case
after the date of this announcement up to the date of the completion
of the Subscription.
Completion of the Placing and Subscription will not affect the cash
offer made by Tai Fook Securities Company Limited on behalf of
Regulator Holdings Limited (a wholly-owned subsidiary of the Company)
for acquiring all the issued shares and canceling all the outstanding
options in Qualipak International Holdings Limited, which has become
unconditional as announced by the Company on 28th December, 1999.
D.
Reason for the Placing and Subscription
In view of the current market conditions and the directors of the
Company consider that the Placing and Subscription represents a good
opportunity to raise capital for the Company while broadening the
shareholders base and the capital base of the Company and also
enables the Group to have a higher level of working capital to
further diversify its business.
E.
Adjustment of subscription price of Warrants
As at the date of this announcement, the Company has outstanding
warrants carrying rights to subscribe up to HK$117,070,000 for Shares
at a subscription price of HK$0.23 per Share (subject to adjustment)
for at any time up to 15th September, 2001.
The issue of the Subscription Shares will result in an adjustment to
the subscription price of the warrants, further announcement in
respect of which will be made by the Company upon such adjustment
taking effect.
F.
General
Trading in the securities of the Company was suspended from 2:30
p.m. on 3rd January, 2000 at the request of the Company pending the
issue of this announcement and application has been made to Stock
Exchange for the resumption of trading of the securities of the
Company from 10:00 a.m. on 5th January, 2000.
By order of the board of directors of
Yugang International Limited
Cheung Chung Kiu
Chairman
Hong Kong, 4th January, 2000
The directors of the Company jointly and severally accept full
responsibility for the accuracy of the information contained in this
announcement and confirm, having made all reasonable enquiries, that
to the best of their knowledge, opinions expressed in this
announcement, have been arrived at after due and careful
consideration and there are no other facts not contained in this
announcement the omission of which would make any statement in this
announcement misleading.
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