MINGLY CORP<0478> & HKR INT'L<0480> - Joint 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 any part of the contents of this announcement.
THE MINGLY CORPORATION LIMITED HKR INTERNATIONAL LIMITED
(incorporated in the Cayman (incorporated in the Cayman
Islands with limited Islands with limited
liability) liability)
JOINT ANNOUNCEMENT
CONNECTED TRANSACTION
On 23 December 1999, Quebostage, a wholly-owned subsidiary of
HKRI entered into the Agreement with Osbert and Waibert, whereby
Quebostage agreed to purchase all the Shares of Questor and the
Shareholders' Loans. The consideration for the purchase of the Shares
and the Shareholders' Loans was in aggregate HK$13,438,810, being the
sum of the nominal value of the Shares and the amount outstanding
under the Shareholders' Loans. The Agreement also provides that
Quebostage will procure the release of the Guarantee by providing a
Replacement Guarantee. Questor's principal asset is the Property.
As at 23 December, 1999, Mingly owned 663,513,818 ordinary shares of
HK$0.25 each in HKRI, representing approximately 57.33% of the issued
share capital of HKRI. Quebostage is a wholly-owned subsidiary of
HKRI and a subsidiary of Mingly. Pursuant to the Listing Rules,
Osbert and Waibert are associates of Mr. Cha, the managing director
of HKRI and a joint managing director of Mingly. The execution of the
Agreement by Quebostage constitutes a connected transaction of each
of HKRI and Mingly under the Listing Rules.
The directors of HKRI and Mingly (including the independent
non-executive directors) consider that the transaction was made on
normal commercial terms, that such terms are fair and reasonable and
that the transaction was in the best interests of HKRI and Mingly. As
the consideration for the transaction is less than 3% of the
consolidated net asset value of each of HKRI and Mingly, no
independent shareholders' approval is required.
The Agreement
Date of the Agreement: 23 December 1999
Parties : Osbert and Waibert as
vendors. Quebostage as
purchaser.
Principal terms of the Agreement
Osbert and Waibert agreed to sell and Quebostage agreed to purchase
the Shares of Questor and the Shareholders' Loans at the
consideration set out hereunder. In addition, Quebostage agreed to
procure the release of the Guarantee by providing a Replacement
Guarantee. In the Agreement, Waibert and Osbert warrant that Questor
is the owner of the Property (subject to the Mortgage).
Information concerning Questor
Questor is a private limited company incorporated in Hong Kong and
the principal activity of Questor is property holding. Its audited
net losses have been the same before and after taxation and
extraordinary items and were HK$9,955 and HK$18,857 for the years
ended 31 March 1999 and 31 March 1998 respectively. Based on the
unaudited management accounts of Questor as at 22 December 1999, the
negative net tangible asset value was HK$572,267.
Questor is currently the owner of the Property subject to the
Mortgage. The Property, which is currently vacant, is an apartment
with a gross floor area of 3,638 sq.ft. forming the 15th floor of
Century Tower II, 1-1A Tregunter Path, Mid Levels, Central, Hong
Kong, together with a car parking space, and is valued by an
independent professional valuer, at HK$32 million as at 14 December
1999. As at 22 December 1999, the outstanding amount under the Loan
was HK$17,508,286.
Information concerning HKRI, Mingly and Quebostage
The principal activities of HKRI are property development and
property investment. The principal activities of Mingly are
investment holding. Quebostage is a wholly-owned subsidiary of HKRI
and is engaged in the business of property and investment holding.
Consideration
The consideration for the purchase of the Shares and the
Shareholders' Loan is HK$20 and HK$13,438,790 respectively, being the
nominal value of the Shares and the amount outstanding under the
Shareholders' Loans, which was paid in cash on execution of the
Agreement. This represents a discount of HK$1,052,904 to the value of
the Property less the amount outstanding under the Loan. Quebostage
raised the consideration through internal funding.
In addition Quebostage will procure the release of the Guarantee by
the provision of a Replacement Guarantee in the principal amount of
HK$17,500,000. Taking into account the valuation made on the
Property, the above consideration was agreed after arms' length
negotiation between the parties hereto.
Reasons for and Benefits of the Transaction
Quebostage currently owns the apartment forming the 14th floor of
Century Tower II, 1 and 1A Tregunter Path, Hong Kong, and car parking
space no. 12 on level 1 of Century Tower II for investment purposes.
Each of the directors of HKRI and Mingly consider that the
acquisition of the Shares in Questor and henceforth the Property may
have add-in value as the addition of the Property to the existing
property investment of Quebostage, in particular for deluxe
residential property in prime location, will benefit Quebostage
eventually. Questor intends to hold the Property as a long-term
investment. The directors including the independent non-executive
directors of each of HKRI and Mingly consider that the acquisition of
the Shares of Questor and the Shareholders' Loans, and the provision
of the Replacement Guarantee were made on normal commercial terms,
that such terms are fair and reasonable as regard to HKRI and Mingly
and that the acquisition was in the best interests of HKRI, Mingly
and their respective shareholders.
General
Quebostage is a wholly-owned subsidiary of HKRI and a subsidiary of
Mingly. Pursuant to the Listing Rules, Osbert and Waibert are
associates of Mr. Cha, the managing director of HKRI, and a joint
managing director of Mingly. The execution of the Agreement
constitutes a connected transaction to each of HKRI and Mingly. As
the consideration for the acquisition of Shares, Shareholders' Loans
and the release of Guarantee is less than 3% of the consolidated net
asset value of each of HKRI and Mingly as at 31 March 1999, no
independent shareholders' approval is required. Details of the
transaction will be included in the next annual report to be issued
by HKRI and Mingly.
By order of the Board
The Mingly Corporation Limited
Fong Suk Laurence
Company Secretary
By order of the Board
HKR International Limited
Fong Suk Laurence
Company Secretary
Hong Kong, 24 December 1999
Definitions of terms used in this announcement:
`Agreement' the sale and purchase
agreement dated 23 December
1999, relating to entire
issued share capital and the
entire Shareholders' Loans of
Questor
`Guarantee' the guarantee dated 21
September 1999, whereby Mr
Cha guaranteed the
performance of Questor's
obligations under the
Loan
`HKRI' HKR International Limited
`Loan' the loan made to Questor by a
financial institution for the
purpose of acquiring the
Property
`Listing Rules' the Rules governing the
listing of securities on the
Stock
Exchange
`Mingly' The Mingly Corporation Limited
`Mortgage' the mortgage taken by a
financial institution over
the Property at the time of
the
Loan
`Mr. Cha' Mr. Cha Mou Sing Payson
`Osbert' Osbert International Limited,
a private limited company
incorporated in the British
Virgin Islands
`Property' the apartment forming the
15th floor of Century Tower
II, 1 and 1A Tregunter Path,
Hong Kong, and car parking
space no. 13 on level 1 of
Century Tower II
`Quebostage' Quebostage Limited, a private
limited company incorporated
in Hong Kong
`Questor' Questor Holdings Limited, a
private limited company
incorporated in Hong
Kong
`Replacement Guarantee' guarantee to be provided by
HKR Properties Limited, a
wholly-owned subsidiary of
HKRI, in favour of a
financial institution for a
principal amount of
HK$17,500,000 to replace the
Guarantee
`Shareholders' Loans' the amount of HK$13,438,790
owed by Questor to Osbert and
Waibert equally as at 23
December 1999
`Shares' the 2 shares of HK$10 each
par value in the capital of
Questor owned by Waibert and
Osbert and representing the
entire issued share capital
of Questor
`Stock Exchange' The Stock Exchange of Hong
Kong Limited
`Waibert' Waibert Holdings Limited, a
company incorporated in the
Republic of Liberia
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