KING PACIFIC<0072> - Announcement
The Stock Exchange of Hong Kong Limited and the Securities and
Futures Commission 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.
KING PACIFIC INTERNATIONAL HOLDINGS LIMITED
(incorporated in Bermuda with limited liability)
CONNECTED TRANSACTION
YWC, STC and OPL, all being subsidiaries of the Company, had, on
8th July, 1999 entered into the Agreement with, inter alia, TL
Lee, SGD and QI regarding the settlement of certain litigation
cases held between them.
On the same day, SGD has agreed to sell and YWC has agreed to
purchase the Sale Shares for a cash consideration of HK$1,000,000.
Upon completion of the sale and purchase of the Sale Shares, STC
shall become a wholly owned subsidiary of the Company.
SGD, the registered and beneficial owner of the Sale Shares, is
a connected person of the Company by virtue of the fact that it
is a substantial shareholder of STC, a subsidiary of the Company.
As the consideration for the sale and purchase of the Sale Shares
is HK$1,000,000, the Company discloses the Agreement in pursuance
to the Listing Rules. The Company will include details of the sale
and purchase of the Sale Shares together with the settlement of
the litigation cases in the Company's next published reports and
accounts.
The Directors approving this announcement and the transactions
contemplated hereunder had confirmed that they were independent
of and not connected with SGD or its associates, and consider that
the sale and purchase of the Sale Shares from SGD were made on
normal commercial terms, that such terms are fair and reasonable
as regard to the Group and both the said transaction and the
settlement of the litigation cases are in the best interests of
the Company and its shareholders.
1. AGREEMENT
(i) Agreement to settle litigation cases
Parties: TL Lee, OPL, YW Cheung, CM Cheng, WH Cheung, WK Cheung,
WS Cheung, KC Lo, STC, YWC, SGD and QI.
Transaction: The parties to the Agreement have agreed to
dismiss their respective legal actions amicably without incurring
compensation on any parties in four different litigation cases
held between themselves, namely HCA 6467, HCA 6516, HCA 9095 and
HCCW 351. Upon execution of the consent orders by the parties to
the respective litigation cases, the parties shall have no further
liabilities to each other.
Date of Agreement: 8th July, 1999.
Reasons for the transaction
The Directors are of the opinion that the settlement of the
litigation cases between OPL, STC and YWC and the other parties
to the Agreement are in the best interests of the Company and its
shareholders. The Directors are of the opinion that the entering
into this transaction is beneficial to the Group on the following
basis:
(a) although OPL's legal advisers have opined that OPL has good
defence in HCA 6516 and HCCW 351, the existence of the litigation
cases have nevertheless adversely affected the business of OPL
and the Directors believe that upon settlement of the litigation
cases, the business and operation of OPL shall not be further
disturbed; and
(b) OPL's legal advisers have suggested to the Group that the
protracted procedures involved in the litigation cases may incur
substantial legal costs. The Directors are of the opinion that
the settlement of the litigation cases can avoid incurring huge
amount of further legal costs.
(ii) Agreement of sale and purchase
Vendor: SGD, save as being a connected person to the Company
by virtue of the fact that it is a substantial shareholder of STC,
it is not otherwise connected with the substantial shareholders,
chief executive or directors of the Company or any of its
subsidiaries or any of their associates.
Purchaser: YWC, a wholly owned subsidiary of the Company.
Subject matter: sale and purchase of the Sale Shares.
Consideration: HK$1,000,000 which will be satisfied in the
manner as set out in the section headed "Consideration" below.
Date of Agreement: 8th July, 1999.
Shares purchased
1,120 ordinary shares of HK$1 each representing 25 per cent. of
the entire issued share capital of STC. The remaining 75 per cent.
of the entire issued share capital of STC are currently beneficial
owned by YWC. Upon completion of the sale and purchase of the Sale
Shares, STC shall become a wholly owned subsidiary of the Group.
Consideration
The consideration for the sale and purchase of the Sale Shares
is HK$1,000,000 and shall be satisfied in the following manner:
(i) HK$500,000 were paid by YWC to SGD's solicitors as stakeholder
on 8th July, 1999; and
(ii) On completion, YWC shall deliver to SGD a cheque payable
to SGD for HK$500,000 together with its authorisation to SGD's
solicitors for the release of HK$500,000 stakeheld deposit
referred to in paragraph (i) above.
Such cash consideration will be sourced from internal funding of
the Company.
Completion Date
Completion shall take place not later than 5:00 p.m. on Friday,
30th July, 1999 or such earlier date as agreed between the parties.
Reasons for the transactions
The Directors, including Kwan Steven and Lee Sheung Wah, James,
the independent non-executive directors, are of the opinion that
the sale and purchase of the Sale Shares from SGD were made on
normal commercial terms and that such terms are fair and reasonable
as regards to the Group and that the said transaction is in the
best interests of the Company and its shareholders. The Directors
are of the opinion that the entering into this transaction is
beneficial to the Group on the following basis:
(a) the consideration of HK$1,000,000 is calculated based on the
unaudited net asset value of OPL, a wholly owned subsidiary of
STC, as of 31st March, 1999, of approximately HK$12,717,845 and
the consideration of HK$1,000,000 represents a discount of
approximately 68.5 per cent. of the unaudited net asset value per
share of OPL as at 31st March, 1999; and
(b) the Directors wishes to purchase the Sale Shares from SGD so
that the Group can have an overall control over the management
of OPL.
Information about OPL
The audited profit before taxation and extraordinary items of,
and the audited profit after taxation and extraordinary items of
OPL for the year ended 31st March, 1997 are HK$3,107,719 and
HK$2,531,251 respectively. Both the audited loss before taxation
and extraordinary items of, and the audited loss after taxation
and extraordinary items of OPL for the year ended 31st March, 1998
is HK$3,378,784.
Implications to the Listing Rules
SGD is a connected person to the Company by virtue of the fact
that it is a substantial shareholder of STC, a subsidiary of the
Company. The shareholders and directors of SGD are not connected
to the substantial shareholders, chief executive or directors of
the Company or any of its subsidiaries, or any of their associates.
Save as referred to in this Announcement, SGD is not otherwise
connected with the substantial shareholders, chief executive, or
directors of the Company or any of its subsidiaries, or any of
their associates.
As the consideration to the sale and purchase of the Sale Shares
is less than the higher of HK$10,000,000 or 3% of the book value
of the audited net tangible assets of the Company, according to
Rule 14.25(1) of the Listing Rules, no shareholders' approval is
required. The Company will include details of the sale and purchase
of the Sale Shares together with the settlement of the litigation
cases in the Company's next published reports and accounts.
General
The Group is principally engaged in the business of building
construction and maintenance, property investment and
development, restaurant operations and other investment
activities.
2. definitions
"Agreement" the settlement agreement dated 8th July,
1999 and entered into between TL Lee, OPL, YW Cheung, CM Cheng,
WH Cheung, WK Cheung, WS Cheung, KC Lo, STC, YWC, SGD and QI
"CM Cheng" Cheng Chao Ming, executive director of the
Company
"Company" King Pacific International Holdings Limited
"Directors" the directors of the Company
"Group" the Company and its subsidiaries
"HCA 6467" Court of First Instance Action No.6467 of 1999
and brought by OPL against TL Lee for approximately HK$1,844,893
being the outstanding amount TL Lee was indebted to OPL
"HCA 6516" Court of First Instance Action No.6516 of 1999
and brought by QI and TL Lee against OPL and CM Cheng for
approximately HK$4,306,295 being the outstanding management fee
of QI payable by OPL
"HCA 9095" Court of First Instance Action No.9095 of 1999
and brought by STC against TL Lee for specific performance that
TL Lee transfer the legal title of one share in OPL to STC
"HCCW 351" Companies (Winding Up) Action No.351 of 1999
and filed by TL Lee as the petitioner and OPL, YW Cheung, CM Cheng,
WH Cheung, WK Cheung, WS Cheung, KC Lo and STC as the respondents
for, inter alia, the winding up of OPL
"KC Lo" Lo Kwai Chu
"Listing Rules" the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited
"OPL" Ocean Palace Restaurant and Nightclub Limited
"QI" Quiteem Investments Limited
"Sale Shares" 1,120 ordinary shares of HK$1 each in STC,
representing 25% interests in STC
"SGD" Surplus Gain Developments Limited
"STC" Smartgain Trading Company Limited
"TL Lee" Lee Ting Lun, Timothy (also known as Lee Ching
Tin, Timothy)
"WH Cheung" Cheung Wing Hong Frankie
"WK Cheung" Cheung Wing Keung, Samuel, executive director
of the Company
"WS Cheung" Chung Wing Sun, Sunny
"YWC" Yiu Wing Construction Company Limited
"YW Cheung" Cheung Yiu Wing, executive director of the
Company
By Order of the Board
Xiong Ping Bo, Paul
Director
Hong Kong, 10th July, 1999
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
inquiries, 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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