By 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.
This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities.
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 8207)
(1) TERMINATION OF CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY A CONNECTED PERSON UNDER SPECIFIC MANDATE; AND (2) SUBSCRIPTION OF NEW SHARES UNDER SPECIFIC MANDATE (1) TERMINATION OF CONNECTED TRANSACTION IN REL ATION TO SUBSCRIPTION OF NEW SHARES BY A CONNECTED PERSON UNDER SPECIFIC MANDATE
Since the proceeds from the Grandaccum Subscription are the same as those from the First Subscription and the terms of the Grandaccum Subscription are similar to those of the First Subscription, the Board considered that fund raising by allotment and issue of the First Subscription Shares to the First Subscriber, being a connected person of the Company, was no longer necessary. On 14
February 2014 (after trading hours), the Company and the First Subscriber entered into the Deed of Termination to terminate the First Subscription Agreement with immediate effect after arm's length negotiations. Pursuant to the Deed of Termination, each of the Company and the First Subscriber agrees to release and discharge each other from their respective duties, obligations and liabilities as set out in the First Subscription Agreement.
The Board is of the view that the termination of the First Subscription Agreement will not have any material adverse impact on the business operation and current financial position of the Group.
1
(2) SUBSCRIPTION OF NEW SHARES UNDER SPECIFIC MANDATE
On 14 February 2014 (after trading hours), the Company entered into the Grandaccum Subscription Agreement with Grandaccum, pursuant to which Grandaccum has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue 100,000,000 Shares, being the Grandaccum Subscription Shares at the subscription price of HK$0.80 per Grandaccum Subscription Share.
The Grandaccum Subscriptions Shares represent (i) approximately 3.40% of the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 3.18% of the issued share capital of the Company as enlarged by the allotment and issue of the Grandaccum Subscription Shares and Second Subscription Shares.
The Grandaccum Subscription Shares will be allotted and issued pursuant to the Specific Mandate to be sought from the Shareholders at the EGM in accordance with the requirement under the GEM Listing Rules.
A circular containing, among other things, further information on (i) the Grandaccum Subscription Agreement and the transactions contemplated thereunder; (ii) the Second Subscription Agreement and the transactions contemplated thereunder; and (iii) the notice convening the EGM and a form of proxy are expected to be despatched to the Shareholders on or before 27 February 2014 in accordance with the GEM Listing Rules.
References are made to (i) the announcement of the Company dated 21 January 2014 in relation to, among others, the First Subscription and the Second Subscription (the "First Announcement"); and (ii) the announcement of the Company dated 13 February 2014 in relation to the delay in despatch of circular. Capitalised terms used herein shall have the same meanings as defined in the First Announcement unless the context requires otherwise.
2
(1) TERMINATION OF CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY A CONNECTED PERSON UNDER SPECIFIC MANDATE
Since the proceeds from the Grandaccum Subscription are the same as those from the First Subscription and the terms of the Grandaccum Subscription are similar to those of the First Subscription, the Board considered that fund raising by allotment and issue of the First Subscription Shares to the First Subscriber, being a connected person of the Company, was no longer necessary. On 14 February 2014 (after trading hours), the Company and the First Subscriber entered into the Deed of Termination to terminate the First Subscription Agreement with immediate effect after arm's length negotiations. Pursuant to the Deed of Termination, each of the Company and the First Subscriber agrees to release and discharge each other from their respective duties, obligations and liabilities as set out in the First Subscription Agreement.
The Board is of the view that the termination of the First Subscription Agreement will not have any material adverse impact on the business operation and current financial position of the Group.
On 14 February 2014 (after trading hours), the Company entered into the Grandaccum Subscription Agreement with Grandaccum, pursuant to which Grandaccum has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue the Grandaccum Subscription Shares at the subscription price of HK$0.80 per Grandaccum Subscription Share.
Grandaccum Subscription Agreement
Set out below is a summary of the principal terms of the Grandaccum Subscription
Agreement:
Date:
14 February 2014 (after trading hours)
Parties:
(i) the Company; and
(ii) Grandaccum.
3
Information of Grandaccum and its beneficial owner
Grandaccum is a company incorporated in Hong Kong with limited liability and is principally engaged in trading and investment activities. The ultimate beneficial owner of Grandaccum is Liu Puzhang. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, Grandaccum and its ultimate beneficial owner are Independent Third Parties.
Grandaccum Subscription Shares
Pursuant to the Grandaccum Subscription Agreement, Grandaccum has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue 100,000,000 Shares, being the Grandaccum Subscription Shares, at the subscription price of HK$0.80 per Grandaccum Subscription Share.
The Grandaccum Subscriptions Shares represent (i) approximately 3.40% of the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 3.18% of the issued share capital of the Company as enlarged by the allotment and issue of the Grandaccum Subscription Shares and the Second Subscription Shares.
The subscription price of the Grandaccum Subscription in the amount of HK$80 million shall be payable by Grandaccum to the Company in cash (or such other payment methods as may be agreed by the parties thereto) upon the completion of the Grandaccum Subscription.
Conditions precedent of the Grandaccum Subscription Agreement
The completion of the Grandaccum Subscription is conditional on, among others, the following conditions precedent:
(i) the GEM Listing Committee of the Stock Exchange granting the listing of and permission to deal in the Grandaccum Subscription Shares;
(ii) the passing of the necessary resolution by the Shareholders at the EGM to approve the Grandaccum Subscription Agreement and the transactions contemplated thereunder (including the allotment and issue of the Grandaccum Subscription Shares to Grandaccum pursuant to the Grandaccum Subscription); and
(iii) all necessary consents and approvals required to be obtained by Grandaccum and the Company in respect of the Grandaccum Subscription Agreement and the transactions contemplated thereby having been obtained.
4
None of the above conditions precedent will be waived by the Company or
Grandaccum.
In the event that any of the above conditions of the Grandaccum Subscription is not fulfilled on or before 30 April 2014 (or such other date and time as may be agreed by the Company), the Grandaccum Subscription Agreement shall cease and determine and neither the Company nor Grandaccum shall have any obligations and liabilities under the Grandaccum Subscription Agreement, save for any antecedent breaches of the terms thereof.
Completion of the Grandaccum Subscription
The completion of the Grandaccum Subscription will take place at 4:00 p.m. on the third Business Days (or such other date and time as may be agreed by the Company) after the conditions of the Grandaccum Subscription Agreement is fulfilled.
The Grandaccum Subscription Shares
The aggregate nominal value of the Grandaccum Subscription Shares (with a par value of HK$0.10 each) is HK$10 million. The Grandaccum Subscription Shares, when issued and fully paid up, shall rank pari passu in all respects among themselves and with all other Shares in issue on the date of allotment and issue of the Grandaccum Subscription Shares.
The subscription price of the Grandaccum Subscription Shares
The Grandaccum Subscription Shares will be issued at HK$0.80 per Grandaccum Subscription Share. The subscription price for the Grandaccum Subscription Shares represents:
(i) a discount of approximately 15.79% to the closing price of HK$0.95 per Share as quoted on the Stock Exchange on the date of the Grandaccum Subscription Agreement;
(ii) a discount of approximately 11.89% to the average closing price of HK$0.908 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Grandaccum Subscription Agreement;
(iii) a discount of approximately 7.73% to the average closing price of HK$0.867 per Share as quoted on the Stock Exchange for the last 10 consecutive trading days immediately preceding the date of the Grandaccum Subscription Agreement;
5
(iv) a discount of approximately 2.79% t o t h e average closing price of approximately HK$0.823 per Share as quoted on the Stock Exchange for the last 30 consecutive trading days immediately preceding the date of the Grandaccum Subscription Agreement; and
(v) a premium of approximately 45.45% to the net asset value of approximately RMB0.429 (equivalent to approximately HK$0.55) per Share based on the Company's unaudited consolidated net asset value as at 30 June 2013.
The subscription price of the Grandaccum Subscription Shares was negotiated on an arm's length basis between the Company and Grandaccum with reference to the recent market prices and performance of the Shares, the current market conditions and the business prospects of the Group. The Directors are of the opinion that the subscription price of the Grandaccum Subscription Shares is fair and reasonable, on normal commercial terms, and is in the interests of the Company and the Shareholders as a whole.
Application for listing
The Company will apply to the GEM Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Grandaccum Subscription Shares.
Reasons for and benefit of the Grandaccum Subscription and use of proceeds
The Group is principally engaged in the provision of financing services including entrusted loan service, real estate-backed loan service, micro loan service, pawn loan service and other collateral-backed loan service to small and medium enterprises and individuals in the PRC and Hong Kong.
Taking into account (i) the Group's business is capital intensive in nature and more available fund would allow the Group to generate more revenue by granting more loans and expanding its business scale; (ii) the Group recorded substantial increase in the interest expenses in the year ended 31 December 2012 and the six months ended 30 June 2013; (iii) the Group intends to further diversify its financing services by utilizing the newly acquired third-party payment business platform (which was newly acquired via the acquisition of the entire equity interest in UCF Huisheng Investment (HK) Co., Limited) and such diversification of financing services may need capital injection in the near future; and (iv) the Company intends to apply the net proceeds arising from the Subscriptions for diversification of its financing services, payment of corporate bond interest and bank loans interest, expansion of existing finance business and general working capital of the Company, the Directors consider that there is a need to raise capital and the Grandaccum Subscription, together with the Second Subscription, would allow the Group to strengthen its capital position and equip the Group with the financial flexibility to achieve the Group's business objectives.
6
Apart from the Grandaccum Subscription and the Second Subscription, the Group has considered other financing alternatives such as debt financing and rights issue or open offer before making decision. Having considered the financial burden imposed on the Group's future cash flows and the possible lengthy due diligence and negotiations which might be involved in the debt financing, the Directors consider that it is currently not the most appropriate method to the Group. Regarding the viability of a rights issue or an open offer, the Company found it would be difficult to conduct an open offer or a rights issue without offering considerable discount to the prevailing market price of the Shares in order to attract potential underwriters. In light of the above, the Directors are of the view that equity financing by way of the Grandaccum Subscription and the Second Subscription is, in the circumstance, the most appropriate mean of raising additional funds as (i) it is less costly and time consuming; and (ii) no interest burden will be imposed.
Assuming the Grandaccum Subscription and the Second Subscription are successfully completed, the gross proceeds of the Grandaccum Subscription and the Second Subscription will be HK$160 million. The net proceeds of the Grandaccum Subscription and the Second Subscription, after deducting professional fees and other related expenses, is estimated to be approximately H K $159 million, and the net issue price per Subscription Share will be approximately HK$0.795. The Company intends to apply the net proceeds arising from the Subscriptions in the following manner:
(i) as to approximately HK$40 million for diversification of financing services;
(ii) as to approximately HK$20 million for the payment of corporate bond interest and bank loans interest;
(iii) as to approximately HK$32 million for expansions of existing financing business; and
(iv) the remaining balance of approximately HK$67 million for general working capital of the Company.
The net proceeds will not be used to provide capital for the newly acquired third- party payment business but HK$40 million of the net proceeds will be used for diversification of financing services by utilizing the platform of such third-party payment business as indicated above.
7
The Directors are of the view that the Grandaccum Subscription (including the subscription price of the Grandaccum Subscription Shares) has been entered into on normal commercial terms that are fair and reasonable and is in the interests of the Company and the Shareholders as a whole. As the Directors are confident about the prevailing and future business development of the Group, the Directors believe that the Grandaccum Subscription will allow the Company to raise the much needed funds at a reasonable cost to support the Group's existing operations and further development of its existing and potential business and investment opportunities.
Equity fund raising activities in the past twelve-month periodSet out below is the fund raising activity conducted by the Company in the past 12 months immediately prior to the date of the First Announcement and the date of this announcement (other than the First Subscription and the Second Subscription):
Date of initial announcement Event Net proceeds (approximately) Intended use of net proceeds Actual use of net proceeds as at the date of this announcement18 January 2013 | Placing of 240,000,000 | HK$187.5 | To be used for the | (i) | as to approximately HK$144.7 |
Shares at HK$0.80 per Share under general mandate | million | Group's working capital and general corporate purposes | million for expansion of financing and related businesses; |
(ii) as to approximately HK$20.8 million for provision of money lending service; and
(iii) the remaining balance of approximately HK$22 million for general operation.
Save as disclosed above, the Company has not conducted any other equity fund raising activities in the past 12 months immediately prior to the date of the First Announcement and the date of this announcement (other than the First Subscription and the Second Subscription).
8
Effect on shareholding structureAs at the date of this announcement, the Company has 2,943,600,000 Shares in issue. The shareholding structure of the Company as at the date of this announcement and immediately after completion of the Grandaccum Subscription and the Second Subscription (assuming that there are no other changes to the shareholding structure of the Company from the date of this announcement to the date of completion of the Grandaccum Subscription and the Second Subscription) are as follows:
As at the date of this announcement Immediately after completion of the Grandaccum Subscription and the Second Subscription (assuming that there are no other changes to the shareholding structure of the Company from the date of this announcement to the date of completion of the Grandaccum Subscription and the Second Subscription)No. of Shares Approx. % No. of Shares Approx. %
Substantial ShareholdersFirst Pay Limited and its associates
(Note 1) 495,800,000 16.84% 495,800,000 15.77% Integrated Asset Management (Asia)
Limited and its associates (Note 2) 416,193,600 14.14% 416,193,600 13.24% Silver Paragon Limited (Note 3) 349,990,000 11.89% 349,990,000 11.13% Jiefang Media (UK) Co. Limited
(Note 4) 336,222,400 11.42% 336,222,400 10.70% Kaiser Capital Holdings Limited
(Note 5) 321,010,000 10.91% 321,010,000 10.21%
DirectorsMr. Shi Zhi Jun 9,600,000 0.33% 9,600,000 0.31% Mr. Ting Pang Wan, Raymond 6,000,000 0.20% 6,000,000 0.19% Mr. Sheng Jia (Note 6) 80,000 0.00% 80,000 0.00%
Public Shareholders
Second Subscriber - - 100,000,000 3.18% Grandaccum - - 100,000,000 3.18% Other public shareholders 1,008,704,000 34.27% 1,008,704,000 32.09%
2,943,600,000 100.00% 3,143,600,000 100.00%
9
Notes:
1. As at the date of this announcement, these 495,800,000 Shares are held as to (i) 477,800,000
Shares by First Pay Limited, the entire issued capital of which is wholly and beneficially owned by Mr. Zhang Zhenxin; and (ii) as to 18,000,000 Shares by Ms. Zhang Xiaomin, the spouse of Mr. Zhang Zhenxin.
2. Integrated Asset Management (Asia) Limited is wholly and beneficially owned by Mr. Yam
Tak Cheung.
3. Silver Paragon Limited is wholly and beneficially owned by Ms. So Naoko.
4. These Shares are held by Jiefang Media (UK) Co. Limited. Jiefang Media (UK) Co. Limited is wholly and beneficially owned by Shanghai Xinhua Publishing Group Limited, which is in turn owned by Jiefang Daily Group and its associates as to approximately 50.8% and Shanghai Greenland Group Limited as to approximately 39%. Therefore, under the SFO, Shanghai Xinhua Publishing Group Limited is deemed to be interested in all the shares held by Jiefang Media (UK) Co. Limited, and each of Jiefang Daily Group and Shanghai Greenland Group Limited is deemed to be interested in all the shares held by Jiefang Media (UK) Co. Limited through Shanghai Xinhua Publishing Group Limited.
5. Kaiser Capital Holdings Limited is wholly and beneficially owned by Mr. Shi Zhi Jun, an executive Director.
6. These Shares are held by Ms. Hu Haichen, the spouse of Mr. Sheng Jia, an executive
Director.
GENERAL
The Grandaccum Subscription Shares will be allotted and issued pursuant to the Specific Mandate to be sought from the Shareholders at the EGM in accordance with the requirement under the GEM Listing Rules.
A circular containing, among other things, further information on (i) the Grandaccum Subscription Agreement and the transactions contemplated thereunder; (ii) the Second Subscription Agreement and the transactions contemplated thereunder; and (iii) the notice convening the EGM and a form of proxy are expected to be despatched to the Shareholders on or before 27 February 2014 in accordance with the GEM Listing Rules.
10
DEFINITIONS
"Deed of Termination" the deed of termination dated 14 February 2014 and entered into between the Company and the First Subscriber to terminate the First Subscription Agreement with immediate effect
"Grandaccum" Grandaccum Limited, a company incorporated in Hong Kong with limited liability, being an Independent Third Party
"Grandaccum
Subscription"
the subscription by Grandaccum of the Grandaccum Subscription Shares under the Grandaccum Subscription Agreement
"Grandaccum Subscription
Agreement"
the conditional subscription agreement dated 14
February 2014 entered into between the Company and Grandaccum in relation to the Grandaccum Subscription
"Grandaccum Subscription
Share(s)"
100,000,000 Shares, representing approximately 3.18% of the enlarged issued share capital of the Company immediately after completion of the Grandaccum Subscription and the Second Subscription
For illustration purposes, figures in RMB in this announcement have been translated into HK$ at the exchange rate of RMB1 = HK$1.28. Such conversion shall not be construed as a representation that amounts in RMB were or may have been converted into HK$ using such exchange rate or any other exchange rate or at all.
By order of the Board
Credit China Holdings Limited Ting Pang Wan, RaymondChairman
Hong Kong, 14 February 2014
11
As at the date of this announcement, the directors of the Company are as follows:
Executive Directors:
Mr. Ting Pang Wan, Raymond (Chairman)
Mr. Phang Yew Kiat (Deputy Chairman)
Mr. Shi Zhi Jun
Mr. Ji Zu Guang
Ms. Shen Li (Chief Executive Officer)
Mr. Sheng Jia
Independent Non-executive Directors:
Mr. Neo Poh Kiat
Dr. Lau Reimer Mary Jean
Mr. Lee Sze Wai
This announcement, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The directors of the Company, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.
This announcement will remain on the "Latest Company Announcements" page of the GEM website (www.hkgem.com) for at least 7 days from the date of its publication and on the website of the Company (www.creditchina.hk).
12
|
distributed by
|
