CENTRAL CHINA<0351> - 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 part of the contents of this announcement.
CENTRAL CHINA ENTERPRISES LIMITED
(incorporated in Hong Kong with limited liability)
Placing of 170,000,000 Existing Shares
And
Subscription for 170,000,000 New Shares
SUMMARY
Fulham, a substantial shareholder of the Company who is beneficially
interested in approximately 22.9% of the issued share capital of
the Company, had on 17 January, 2000 agreed to sell 170,000,000
Placing Shares through SW Capital as the placing manager to more
than six independent professional investors at the Placing Price
of HK$0.41 per Placing Share and to subscribe for 170,000,000
Subscription Shares at the Subscription Price of HK$0.41 per
Subscription Share less all costs and expenses incurred under the
Placing.
The Placing Shares represent approximately 10.6% of the existing
issued share capital of the Company as at the date of this
announcement. As of the date of this announcement, Fulham has a
beneficial holding of 366,150,000 Shares representing
approximately 22.9% of the existing issued share capital of the
Company, and Fulham will be interested in approximately 12.2% of
the then issued share capital of the Company upon the completion
of the Placing. The Placing is unconditional. The Subscription
Shares represent approximately 10.6% of the existing issued share
capital of the Company as at the date of this announcement and
approximately 9.6% of the issued share capital of the Company as
enlarged by the Subscription. Upon the completion of the
Subscription, Fulham will be interested in approximately 20.7% of
the issued share capital of the Company as enlarged by the
Subscription. The Subscription is conditional upon the fulfillment
of certain conditions as described below.
The net proceeds of the Subscription is approximately HK$68 million
and will be used for the purposes as set out in the section headed
``Use of net proceeds'' below.
THE PLACING AGREEMENT DATED 17 JANUARY 2000
Vendor:
Fulham, a company incorporated in British Virgin Islands with
limited liability. As of the date of this announcement, Fulham has
a beneficial holding of 366,150,000 Shares representing
approximately 22.9% of the issued share capital of the Company.
Placees:
The Placing Shares were sold to more than six independent
professional investors who are not connected with any of the
Directors, chief executive or substantial shareholders of the
Company or its subsidiaries or any of their respective associates
(as defined in the Listing Rules) (the ``Independent Placees'').
Placing Manager:
SW Capital, which is independent of and not connected with any of
the Directors, chief executive or substantial shareholders of the
Company or its subsidiaries or any of their respective associates
(as defined in the Listing Rules).
Number of Placing Shares:
170,000,0000 Placing Shares, representing approximately 10.6% of
the Company's existing issued share capital as at the date of this
announcement. Immediately following the Placing, Fulham will be
interested in approximately 12.2% of the then issued share capital
of the Company.
Placing Price and Subscription Price:
The Placing Price is HK$0.41 per Placing Share, which was agreed
after arm's length negotiations and represents a discount of
approximately 10.9% to the closing price of HK$0.46 per Share as
quoted on the Stock Exchange on 17 January, 2000 (being the date
of this announcement), and a discount of approximately 15.1% to the
average closing price of the Shares for the last 10 trading days
up to and including the date of this announcement.
All costs and expenses to be incurred in relation to the Placing
in the amount of approximately HK$1.8 million will be borne by the
Company under the Subscription.
Rights:
The Placing Shares were sold free of all liens, charges and
encumbrances, claims, options and third party rights together with
all rights attaching thereto as at the date of the Placing Agreement.
Holders of the Placing Shares will be entitled to receive all
dividends and other distributions which may be declared, made or
paid by the Company in respect thereof on or after the date of the
Placing Agreement.
Condition of the Placing:
The Placing is unconditional.
Completion of the Placing:
The completion of the Placing will take place on the second business
day immediately following the day on which the Placing Shares were
sold to the Independent Placees pursuant to the Placing Agreement,
which is expected to be on 19 January, 2000.
THE SUBSCRIPTION AGREEMENT DATED 17 JANUARY 2000
Subscriber:
Fulham
Number of Subscription Shares:
170,000,000 Subscription Shares, representing approximately 10.6%
of the Company's existing issued share capital as at the date of
this announcement and approximately 9.6% of the issued share capital
of the Company as enlarged by the Subscription. Fulham (or its
nominees) will be interested in approximately 12.2% of the issued
share capital of the Company immediately after the Placing but before
the Subscription and 20.7% of the then issued share capital of the
Company immediately after the Placing and the Subscription.
Subscription Price:
The Subscription Price is HK$0.41 per Subscription Share less all
costs and expenses incurred under the Placing.
Ranking and rights of the Subscription Shares:
The Subscription Shares, when fully paid, will rank pari passu in
all respects with the Shares then in issue, including the right to
receive all dividends and other distributions which may be declared,
made or paid by the Company on or after the date of completion of
the Subscription Agreement.
Mandate to issue Subscription Shares:
The Subscription Shares will be issued pursuant to the general
mandate granted to the Directors by a resolution of the Company's
shareholders passed at the Company's annual general meeting held
on 28 June, 1999.
Conditions of the Subscription:
The Subscription is conditional on:
(i) the Placement being completed;
(ii) its completion taking place on the date which is the later
of (i) the date falling within 14 days after the date on which the
Placement is completed in accordance with its terms; and (ii) the
date on which the approval is obtained by the Company from the Listing
Committee of the Stock Exchange in respect of listing of, and
permission to deal in, the New Shares, or such longer period as may
be agreed between the Company and Fulham (subject to full compliance
of the requirements on connected transactions as set out in the
Listing Rules) but in any event not later than 15 February, 2000.
If all of the above conditions are not fulfilled, the Subscription
Agreement will lapse and cease to be of any effect.
Completion of the Subscription:
The Subscription will take place on the business day immediately
following the day on which all the conditions in respect of the
Subscription referred to above are fulfilled.
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
Subscription Shares.
Substantial Shareholders:
Fulham is wholly owned by Henan Hongkong Enterprises Limited
(``Henan HK'') which also owns directly 1,644,000 shares in the
Company and holds the entire interests in Henan Hongkong Finance
Limited which in turn owns 5,570,000 Shares. Accordingly, Henan HK
beneficially owns 373,364,000 Shares (or approximately 23.4%
interest in the Company). The percentage shareholding of Henan HK
in the Company will be approximately 12.7% immediately following
the completion of the Placing but before the Subsciption and will
be approximately 21.1% immediately after the completion of the
Placing and the Subscription.
Sufficiency of Public Shareholding
The Directors confirm that after the completion of both the Placing
and the Subscription, not less than 25% of the issued share capital
of the Company as enlarged by the issue of the Subscription Shares
will be in public hands.
Reason for the Placing and the Subscription:
The Directors have considered various means of obtaining funding
for the Company and are of the view that financing by way of an issue
of the Subscription Shares through the Subscription under the
present market sentiment is the most appropriate and effective way
which also broadens the capital and shareholder bases of the Company
for the Company's future growth and development.
Use of net proceeds:
The net proceeds of the Subscription, after deduction of costs and
expenses in relation to the Subscription, is estimated to be
approximately HK$68 million and intended to be used as to
approximately HK$40 million for the further expansion of the optic
fibre cable broadcasting and television network in Henan Province,
the PRC, which is owned and operated exclusively by an equity joint
venture (the ``Joint Venture'') established in the PRC between a
wholly owned subsidiary of the Henan Radio & TV Bureau and the Group
in which the Group owns 49% interest. The Joint Venture, which was
approved by all relevant PRC authorities of its establishment on
4 August 1998, plans to extend its existing optic fibre cable network
from the present total length of approximately 1,900 km to
approximately 2,700 km covering other locations within the Henan
Province. The total investment for the expansion as aforementioned
is estimated at approximately HK$80 million which will be
contributed by each of the parties to the Joint Venture in accordance
with their respective interests in the Joint Venture. Hence, the
contribution from each of the Company and the subsidiary of Henan
Radio & TV Bureau will both in the amount of approximately HK$40
million. Henan Radio & TV Bureau is under the supervision of the
People's Government of Henan Province. The balance of the net
proceeds which is approximately HK$28 million will be placed as bank
deposits which will be used as general working capital of the Group.
Terms used in this announcement:
``Company'' means Central China Enterprises Limited
``Director(s)'' means director(s) of the Company
``Fulham'' means Fulham Associates Limited, a substantial
shareholder of the Company which holds
366,150,000 shares (or approximately 22.9%)
in the issued share capital of the
Company
``Group'' means the Company and its subsidiaries
``km'' means kilometers
``Listing Rules'' means the Rules Governing the Listing
of Securities on The Stock Exchange of Hong
Kong Limited
``Placing'' means the placing of 170,000,000
Placing Shares by Fulham at the Placing
Price to the Independent Placees pursuant
to the terms of the Placing Agreement
``Placing Agreement'' means an agreement entered into between Fulham
and SW Capital on 17 January 2000 pursuant
to which SW Capital agreed to place, on
behalf of Fulham, the Placing Shares to
Independent Placees pursuant to the
Placing
``Placing Price'' means HK$0.41 per Placing Share
``Placing Shares'' means the 170,000,000 existing Shares agreed
to be placed by SW Capital on behalf of
Fulham to the Independent Placees pursuant
to the Placing
``SW Capital'' means Shenyin Wanguo Capital (H.K.) Limited, an
investment adviser and dealer registered
under the Securities Ordinance (Chapter
333 of the laws of Hong Kong), being the
placing manager for Fulham in relation to
the Placing
``Share(s)'' means ordinary share(s) of HK$0.20 each in the
capital of the Company
``Stock Exchange'' means The Stock Exchange of Hong Kong Limited
``Subscription'' means the conditional subscription of the
Subscription Shares by Fulham at the
Subscription Price pursuant to the terms
of the Subscription Agreement
``Subscription means a conditional agreement entered into
Agreement'' between the Company and Fulham on
17 January 2000 pursuant to which Fulham
agreed to subscribe for the Subscription
shares pursuant to the Subscription
``Subscription Price'' means HK$0.41 per Subscription Share less all
costs and expenses incurred under the
Placing
``Subscription Shares'' means the 170,000,000 new Shares conditionally
agreed to be subscribed by Fulham pursuant
to the Subscription
By order of the Board
Central China Enterprises Limited
Lam Kong Yin, Patrick
Director
Hong Kong, 17 January, 2000
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