KWONG SANG HONG<0189> - 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 KWONG SANG HONG INTERNATIONAL LIMITED
(Incorporated in Bermuda with limited liability)
PLACING OF EXISTING SHARES
AND
SUBSCRIPTION FOR NEW SHARES
Power Jade Capital Limited (the ``Vendor'') has agreed to place,
through its placing agent, Tai Fook Securities Company Limited (``Tai
Fook''), 122,699,000 existing ordinary shares (the ``Placing
Shares'') of HK$0.40 each (``Shares'') in the share capital of The
Kwong Sang Hong International Limited (the ``Company'') to
independent investors at a price of HK$0.59 per Placing Share (the
``Placing'') and the Vendor will subscribe for 122,699,000 new Shares
(the ``Subscription Shares'') at the price of HK$0.59 per
Subscription Share (the ``Subscription'').
The Placing is fully underwritten by Tai Fook.
The Placing Shares represent approximately 20% of the existing issued
share capital of the Company of 613,496,416 Shares and approximately
16.67% of the Company's issued share capital as enlarged by the
Subscription of 122,699,000 new Shares. The net proceeds from the
Subscription of approximately HK$71 million will be used by the
Company and its subsidiaries (the ``Group'') for the repayment of
borrowings.
The Vendor, the controlling shareholder of the Company, has
approximately a 64.29% interest in the Company as at the date of
this announcement.
The shareholding of the Vendor in the Company will be reduced from
approximately 64.29% to approximately 44.29% immediately upon
completion of the Placing and will be increased from approximately
44.29% to approximately 53.58% immediately upon completion of the
Subscription.
A. PLACING OF 122,699,000 EXISTING SHARES
A placing agreement dated 2nd March, 2000 (the ``Placing Agreement'')
was entered into between the Vendor and Tai Fook containing the
following terms:
Vendor
The Vendor, the controlling shareholder of the Company.
Placing agent and Underwriter
Tai Fook, which is independent of, not connected with the directors,
chief executive or substantial shareholders of any member of the
Group or any of their respective associates (as defined under the
Rules (the ``Listing Rules'') Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (the ``Stock Exchange'').
Tai Fook would receive placement commission of 2% on the gross
proceeds of the Placing.
Placees
The placees (which will be six or more individual, corporate and/or
institutional investors) will be independent of, not connected with
the directors, chief executive or substantial shareholders of any
member of the Group or any of their respective associates. It is
expected that no placee will become a substantial shareholder of
the Company as a result of the Placing.
Placing price
HK$0.59 per Placing Share. This price was agreed after arm's length
negotiations and represents (i) a discount of approximately 10.61%
to the closing price of HK$0.66 per Share quoted on the Stock Exchange
on 2nd March, 2000, being the last trading day of the Shares
immediately before the date of this announcement; and (ii) a discount
of approximately 15.83% to the average closing price of approximately
HK$0.701 per Share as quoted on the Stock Exchange from 18th February,
2000 to 2nd March, 2000, both dates inclusive, being the last ten
trading days of the Shares immediately before the date of this
announcement.
Rights
The Placing Shares will rank equally with the existing Shares.
Number of existing Shares to be placed
122,699,000 Shares to be placed, representing approximately 20% of
the existing issued share capital of the Company of 613,496,416
Shares and approximately 16.67% of the issued capital of the Company
as enlarged by the issue of the Subscription Shares under the
Subscription. The Placing is fully underwritten by Tai Fook.
Completion of the Placing
The Placing is unconditional. Completion will take place on or before
7th March, 2000.
B. SUBSCRIPTION OF 122,699,000 NEW SHARES
A subscription agreement dated 2nd March, 2000 between the Vendor
and the Company containing the following terms:
Subscriber
The Vendor
Number of new Shares to be subscribed for
The Company will issue 122,699,000 new Shares and the Vendor will
subscribe for them, representing approximately 20% of the existing
issued share capital of the Company and approximately 16.67% of the
issued share capital of the Company as enlarged by the issue of the
Subscription Shares under the Subscription.
Subscription price
HK$0.59 per Subscription Share. The Company will bear the costs and
expenses in connection with the Placing and the Subscription. The
estimated expenses for the Placing and the Subscription will be
approximately HK$1.5 million.
General Mandate to issue Subscription Shares
The Subscription Shares will be issued pursuant to the general
mandate to allot, issue and deal with Shares granted to the directors
of the Company by resolution of its shareholders passed at the
Company's annual general meeting held on 6th May, 1999.
Ranking of the Subscription Shares
The Subscription Shares will rank equally with Shares in issue at
the time of issue and allotment of the Subscription Shares.
Use of Proceeds
The net proceeds from the Subscription of approximately HK$71 million
will be used by the Group for the purpose of the repayment of
borrowings.
Condition of the Subscription
The Subscription is conditional upon:
(a) completion of the Placing; and
(b) the Listing Committee of the Stock Exchange granting listing
of, and permission to deal in, the Subscription Shares to be issued
under the Subscription.
Completion
Under the Listing Rules, the Subscription must be completed within
14 days from the date of the Subscription Agreement, that is, on
or before 16th March, 2000 (or such later date as the Company and
the Vendor may agree such agreement not to unreasonably withheld
or delayed and subject to compliance with the Listing Rules), failing
which the Subscription shall cease and terminate.
Application for listing
Application will be made by the Company to the Stock Exchange to
grant the listing of, and permission to deal in, the Subscription
Shares.
C. Effects of the Placing and the Subscription
The shareholding of the Vendor in the Company immediately before
completion of the Placing, immediately after completion of the
Placing but before completion of the Subscription, and immediately
after completion of both the Placing and the Subscription are and
will be as follows:
Shareholding in No. of Shares in
the Company the Company
held by the held by the
Vendor Vendor
(Note) (Note)
Immediately before the Placing and the Subscription
64.29% 394,442,047
Immediately after the Placing but before the Subscription
44.29% 271,743,047
Immediately after the Placing and the Subscription
53.58% 394,442,047
Note: Assumes that other than the Subscription Shares, no new Shares
are issued or purchased by the Company and other than the Placing
Shares no Shares are sold or purchased by the Vendor, in each case
after the date of this announcement up to the date of the completion
of the Subscription.
D. Reason for the Placing and Subscription
In view of the current market conditions, the directors of the Company
consider that the Placing and Subscription represents a good
opportunity to raise capital for the Company while broadening the
shareholders base and the capital base of the Company and also enables
the Group to have a higher level of working capital to further
diversify its business.
By Order of the Board
The Kwong Sang Hong International Limited
Katherine Siu, Po-sim
Company Secretary
Hong Kong, 2nd March, 2000
Website: http://www.irasia.com/listco/hk/ksh
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