Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
PAX Global Technology Limited
百富環球科技有限公 司 *
(Incorporated in Bermuda with limited liability)
(Stock Code: 327)
ACQUISITION AND SUBSCRIPTION OF AN AGGREGATE OF 60% CORPORATE CAPITAL OF CSC ITALIA S.R.L.
ACQUISITION AND SUBSCRIPTION AGREEMENT
The Board is pleased to announce that on 28 December 2016, the Subscriber, a wholly- owned subsidiary of the Company, entered into the Acquisition and Subscription Agreement with the Existing Company and the Existing Company Quotaholders in respect of the Acquisition and Subscription, pursuant to which the Transformation shall be one of the Conditions Precedent to Completion. Immediately after Completion, the Subscriber shall hold a total of 60% of the entire corporate capital in the Target Company.
The Acquisition and Subscription does not constitute a transaction required to be disclosed under Rule 13.09, Chapter 14 and Chapter 14A of the Listing Rules, or pursuant to the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the SFO.
This is a voluntary announcement made by the Company for the purpose of keeping the potential investors and Shareholders informed of the latest business development of the Group.
THE ACQUISITION AND SUBSCRIPTION
On 28 December 2016, the Subscriber, the Existing Company and the Existing Company Quotaholders entered into the Acquisition and Subscription Agreement, pursuant to which:
the Subscriber has agreed to acquire and the Existing Company Quotaholders have agreed to sell the Acquisition Quota for a consideration of EUR2,500,000.00 (subject to conditions provided thereunder); and (ii) the Subscriber has agreed to acquire by way of subscription the New Quota for a consideration of EUR500,000.00. The details of the Acquisition and Subscription Agreement are summarized as follows:
* For identification purposes only
THE ACQUISITION AND SUBSCRIPTION AGREEMENT
Date: 28 December 2016
Parties: (i) the Subscriber;
the Existing Company; and
the Existing Company Quotaholders. (collectively the "Parties")
The Existing Company is a consortium company incorporated in Italy with limited liability and is principally engaged in the businesses of installation and technical assistance on E-Terminals, personal computers, systems cash-in or cash-out and Automatic Teller Machines in Italy. As at the date of the Acquisition and Subscription Agreement, the entire capital stock of the Existing Company are owned by the Existing Company Quotaholders and the Existing Company will be transformed into the Target Company as one of the Conditions Precedent of Completion.
To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, the Existing Company, each of the Existing Company Quotaholders and their respective ultimate beneficial owners, if any, are Independent Third Parties.
Subject of the Acquisition and Subscription
Immediately after Completion, the Subscriber shall hold a total of 60% of the enlarged corporate capital in the Target Company. The Acquisition Quota and the New Quota will be transferred and issued respectively to the Subscriber free from all liens, charges, encumbrances, equities and third party rights and together with all rights attached.
For the Acquisition
The consideration of the Acquisition is arrived at between the Parties at EUR2,500,000.00 at arm's length and shall be payable to the Existing Company Quotaholders by way of cash in 3 installments as follows:-
EUR1,750,000.00 payable upon Completion;
EUR250,000.00 payable within 10 (ten) Business Days from the date of issuance of the audited financial statements of the Target Company of the financial year ending 31 December 2017 (the "Second Payment"); and
EUR500,000.00 payable within 10 (ten) Business Days from the date of issuance of the audited financial statements of the Target Company of the financial year ending 31 December 2018 (the "Final Payment");
provided that the Second Payment and the Final Payment will be subject to the following conditions.
Conditions for the Second Payment and the Final Payment
Should the audited net profit of the Target Company for the period from Completion to the expiry of 1 (one) calendar month from Completion be negative, the Subscriber shall have no obligation to effect both the Second Payment and Final Payment, which shall no longer be part of the consideration for the Acquisition.
Subject to paragraph (a) hereinabove, should the audited net profit of the Target Company for the financial year ending 31 December 2017 be less than EUR80,000.00, the Subscriber shall have no obligation to effect the Second Payment, which shall no longer be part of the consideration for the Acquisition.
Also subject to paragraph (a) hereinabove, should the audited net profit of the Target Company for the financial year ending 31 December 2018 be less than EUR140,000.00, the Subscriber shall have no obligation to effect the Final Payment, which shall no longer be part of the consideration for the Acquisition.
For the Subscription
The consideration for the Subscription is EUR500,000.00 and shall be payable to the Target Company upon Completion. Out of the EUR500,000.00, a nominal amount of EUR47,812.50 shall be capital contribution and the remaining EUR452,187.50 shall be premium on the subscribed quota to be accounted amongst the reserve of the Target Company.
Other major terms
Transformation of the Existing Company to the Target Company
As one of the Conditions Precedent of Completion, the Existing Company shall be transformed from a consortium company with limited liability, a business entity previously set up for non-profit purpose under the laws of Italy, to a company with limited liability to be duly incorporated and registered under the laws of Italy (the "Transformation").
As soon as practicable following Completion, the Existing Company Quotaholders and the Subscriber shall convene general meetings of the Target Company to cause the Target Company to increase its corporate capital by a total of EUR527,812.50 (the "Capital Increase"), out of which the Subscriber shall contribute EUR500,000.00 by way of Subscription and the Existing Company Quotaholders shall in aggregate contribute the remaining EUR27,812.50 by way of direct contribution to the share capital of the Target Company.
Immediately after to the Capital Increase, the Subscriber's final quotaholding of the Target Company shall remain to be 60% of the Target Company's enlarged corporate capital.
Shareholder Loan to the Target Company
The Subscriber has also agreed to grant to the Target Company a non-interest bearing and unsecured shareholder loan in the amount of EUR500,000.00 (the "Shareholder Loan") within 30 days of the closing of the Capital Increase to facilitate the business development of the Target Company. The Shareholder Loan shall have an initial term of 3 years, which may be further extended by mutual agreement of the Subscriber and the Target Company.
Completion shall take place on a date after execution of the Acquisition and Subscription Agreement and fulfilment of all Conditions Precedent (or waiver thereof where applicable) as provided therein to the reasonable satisfaction of the Subscriber.
In the event not all the Conditions Precedent are satisfied or otherwise expressly waived by the Subscriber by 31 January 2017 or on such other date as may, at the sole discretion of the Subscriber, be extended by the Subscriber, the Acquisition and Subscription Agreement shall lapse and cease to have effect and none of the Parties shall have any claim against the other(s), save for antecedent breaches.
REASONS FOR AND BENEFITS OF THE ACQUISITION AND SUBSCRIPTION
The Existing Company is one of the largest service providers of installation and maintenance of E-payment Terminals and other electronic devices in Italy and operates with a network of associated companies and also through certified partners and the Group is a global E-payment Terminal solutions provider engaged in the development and sale of E-payment Terminal products and provision of related supporting services.
While the Group aims at strengthening its market position in Italy by carrying out further vertical integration in the E-payment value chain, through integrating the Target Company's capabilities of the provision of installation and maintenance services to E-payment Terminals, the Group will be able to provide one-stop service in turn-key projects of electronic payment solutions, so as to keep in-line with the trend of market demand and capture the potential business opportunities arisen. The Directors believe that the Acquisition and Subscription is in line with the Group's investment strategy and the Shareholder Loan will provide more funds for expansion of the Target Company's business to capture more business opportunities and benefit the Group in the long run.
Immediately after Completion, the Target Company will become an indirect subsidiary of the Company and the accounts of the Target Company will be consolidated to the accounts of the Company. As such, the recurring service income generated from the Target Company will also enhance the Company's financial profile through diversification of revenue streams.
The terms of the Acquisition and Subscription Agreement were determined after arm's length negotiations between the parties thereto and the Directors consider that the terms and conditions therein are fair and reasonable and on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.
PAX Global Technology Ltd. published this content on 28 December 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 28 December 2016 12:57:05 UTC.