Asia Tele Net and Technology : Discloseable transaction in relation to acquisition of q property

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ASIA TELE-NET AND TECHNOLOGY CORPORATION LIMITED

亞 洲 聯 網 科 技 有 限 公 司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 679)

DISCLOSEABLE TRANSACTION

IN RELATION TO ACQUISITION OF A PROPERTY

The Board is pleased to announce that on 7 May 2021 (after trading hours), the Purchaser, an indirect wholly-owned subsidiary of the Company, the Vendor and the Guarantor entered into the Provisional Agreement, pursuant to which the Purchaser has agreed to acquire and the Vendor has agreed to sell the entire issued share capital and the Director Loan of the Target Company at a total Consideration of HK$35,500,000. Target Company, which is principally engaged in property investment in Hong Kong, is the sole legal and beneficial owner of the Property.

As one or more of the applicable percentage ratios calculated in respect of the Acquisition exceeds 5% but the highest applicable percentage is less than 25%,, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the notification and announcement requirements but is exempt from Shareholders' approval.

The Board is pleased to announce that on 7 May 2021 (after trading hours), the Purchaser, , the Vendor and the Guarantor entered into the Provisional Agreement, pursuant to which the Purchaser has agreed to acquire and the Vendor has agreed to sell the entire issued share capital and the Director Loan of the Target Company at a total Consideration of HK$35,500,000.

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THE PROVISIONAL AGREEMENT

Date

7 May 2021

Parties

1. The Vendor
2. The Purchaser
3. The Guarantor

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Vendor and the Guarantor are independent third parties.

Asset to be acquired

Pursuant to the Provisional Agreement, the Purchaser has agreed to acquire, and the Vendor has agreed to sell the Sale Share, representing the entire issued share capital of the Target Company and the Director Loan owing by the Target Company to its director(s) on Completion. Target Company, which is principally engaged in property investment in Hong Kong, is the sole legal and beneficial owner of the Property.

Consideration

The Consideration for the acquisition of the Sale Share and the Director Loan is HK$35,500,000, of which the consideration for the Director's Loan shall be a sum equal to the principal amount of the Director Loan on Completion and the balance shall be the consideration for the Sale Share. The Consideration shall be payable by the Purchaser to the Vendor in the following manner:

1. HK$1,500,000 upon signing of the Provisional Agreement as an initial deposit;
2. HK$2,050,000 as a further deposit upon signing of the Formal Agreement on or before 11 June 2021; and
3. the balance of the total Consideration of HK$31,950,000 to be paid on the Completion Date as at Completion.

The Consideration was determined after arm's length negotiations between the Purchaser and the Vendor on normal commercial terms with reference to the prevailing market prices of properties of similar nature available in the localities. The Consideration will be funded by the Group's internal resources.

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Conditions

Completion of the Acquisition is conditional upon the following Conditions being fulfilled or waived by the Purchaser on or before the Completion Date:

1. the result of the due diligence exercise carried out by the Purchaser on the respective financial, corporate, taxation and title to the Property, being reasonably satisfactory to the Purchaser;
2. all necessary approval, permits, consents and authorizations having been obtained and maintained by the parties for the Acquisition pursuant to applicable rules and regulations;
3. there will not be any material adverse change in the financial position of the Target Company from the date of the Provisional Agreement up to the Completion Date; and
4. the Vendor's warranties set out in the Provisional Agreement having remained true and accurate in all material respects at all times from the date of the Provisional Agreement up to and including the Completion Date.

Formal Agreement

The Vendor, the Guarantor and the Purchaser shall negotiate in good faith and enter into the Formal Agreement reflecting the terms and conditions of the Provisional Agreement; and prior to entering into the Formal Agreement, the Provisional Agreement shall remain valid and in full force and effect.

Completion

Completion shall take place on the Completion Date after the Conditions have been fulfilled or waived or such later day as the Purchaser may agree to postpone.

INFORMATION ON THE VENDOR, THE TARGET COMPANY AND GUARANTOR

The Vendor is a company incorporated in British Virgin Islands with limited liability and its principal activity is property investment holding. To the best of the Directors' knowledge, information and belief having made all reasonable enquires, the Vendor is an independent third party.

The Guarantor is a director of the Target Company and one of the shareholders of the Vendor. The Guarantor unconditionally and irrevocably guarantees to the Purchaser the due observance and performance by the Vendor of all the agreements, obligations and undertakings contained in the Provisional Agreement. To the best of the Directors' knowledge, information and belief having made all reasonable enquires, the Vendor is an independent third party.

The Target Company is a company incorporated in Hong Kong with limited liability. The Property is the Target Company's only asset.

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FINANCIAL INFORMATION OF THE TARGET COMPANY

Based on the audited financial statements of the Target Company for each of the financial years ended 31 March 2019 and 2020, the audited net losses after taxation of Target Company were approximately HK$578,000 and HK$548,000 respectively.

The audited net liabilities of the Target Company as at 31 March 2020 was approximately HK$6,767,000. According to the records of Land Registry, the original acquisition cost of the Property was approximately HK$19,180,000 and the Property was acquired by the Target Company in year 2007.

Upon Completion, the Target Company will become an direct wholly-owned subsidiary of the Purchaser and an indirect wholly-owned subsidiary of the Company.

INFORMATION ON THE GROUP AND THE PURCHASER

The Company is a company incorporated in the Bermuda with limited liability, whose shares are listed on the main board of the Stock Exchange. The Company is an investment holding company and its principal subsidiaries are mainly engaged in electroplating equipment business, providing advanced technologies to its customers worldwide, with various disciplines with particular strength in electroplating technologies for applications in different applications or business segments.

The Purchaser is a company incorporated in British Virgin Islands with limited liability and is an indirect wholly-owned subsidiary of the Company. The Purchaser is an investment holding company holding various lands and properties in Hong Kong.

REASONS FOR THE ACQUISITION

The Company has been constantly sourcing for suitable investment opportunities to increase the return on equity for the Shareholders of the Company as a whole. If the Property is leased out, it is expected that a monthly rental income between $65,000 and $80,000 will be generated. The expected annual return to the Company is between 2.2% p.a. to 2.7% p.a. approximately. Current average time deposit rate for 12 months is between 0.2% p.a. to 0.5% p.a.. By entering into the Provisional Agreement, the Company will be able to generate a better return on investment with relatively low risk involved.

Having considered that the Provisional Agreement was entered into on normal commercial terms with the purchase price being determined with reference to the market value of similar properties in adjacent locations, the Directors are of the view that the terms of the Provisional Agreement are fair and reasonable and the Acquisition in the interests of the Company and its Shareholders as a whole.

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LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios calculated in respect of the Acquisition exceeds 5% but the highest applicable percentage is less than 25%, the entering into of the Provisional Agreement constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements but is exempt from Shareholders' approval under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

"Acquisition''	the acquisition of the Sale Share, representing the entire
	issued share capital of the Target Company and the
	Director Loan pursuant to the terms of the Provisional
	Agreement
"Board''	the board of Directors
"Company''	Asia Tele-Net and Technology Corporation Limited, a
	company incorporated under the laws of Bermuda and
	whose shares are listed on the Stock Exchange
"Completion''	completion of the Acquisition
"Completion Date"	11 August 2021 or such other date as the Purchaser may
	agree to postpone
"Conditions"	the conditions precedent to the Acquisition as set out in the
	Provisional Agreement, which are described in the section
	headed "Conditions" in this announcement
"Consideration''	the total consideration in the amount of HK$35,500,000
	for the Acquisition
"Director(s)''	director(s) of the Company
"Director Loan''	the loan owed by the Target Company to its director(s) as
	at the Completion Date which is unsecured, interest-free
	and free from all encumbrances and third party rights
"Formal Agreement''	the formal sale and purchase agreement to be entered into
	between the Purchaser, the Vendor and the Guarantor
	regarding the Acquisition
"Group''	the Company and its subsidiaries
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