CM TELECOM INTL<0989> - 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
arising from or in reliance upon the whole or any part of
the contents of this announcement.
CM TELECOM INTERNATIONAL LIMITED
(Incorported in Bermuda with limited liability)
ANNOUNCEMENT
The Directors of CM Telecom International Limited (the
"Company") wish to announce the recent changes in the
corporate structure of the Company and its subsidiaries (the
"Group") as well as its associated companies as follows:
(1) Restructuring of subsidiaries for long distance call
business ("Restructuring One")
(2) Restructuring of a group of associated companies
("Restructuring Two")
(3) Acquisition of a new subsidiary
(4) Change of name of a subsidiary
Under the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, the above transactions
are not subject to the disclosure requirement. This
announcement is made in compliance with the Listing Manual
issued by the Singapore Exchange Securities Trading Limited.
(1) RESTRUCTURING ONE
Restructuring One involves an acquisition of two new
subsidiaries ("Transaction 1" and "Transaction 2") and
relocation of three existing subsidiaries under the new
subsidiary acquired by Transaction 1 ("Transaction 3",
"Transaction 4" and "Transaction 5").
(a) Transaction 1
* Nature of the transaction
Acquisition of a new subsidiary namely CM Tel Holdings
Limited.
* Information on the new subsidiary:
CM Tel Holdings Limited ("CM Tel") is a private limited
company incorporated in the British Virgin Islands on 28
January 2000. Its authorised share capital is US$50,000.00
divided into 50,000 shares of US$1.00 each. CM Tel has not
commenced any business and has no assets or liabilities since
its incorporation.
* Parties:
Vendor: Offshore Incorporations Limited, an independent
third party who is not connected to any of the directors,
chief executive or substantial shareholders of the Company
or its subsidiaries or their respective associates.
Purchaser: China Motion Telecom Holdings Limited ("CMTH"),
a wholly-owned subsidiary of the Company.
* Date of the transaction:
1 April 2000
* Share allotted:
1 ordinary share of US$1.00 each being the entire issued
share capital of CM Tel was allotted for cash at par to CMTH.
Immediately following Transaction 1, CM Tel becomes a
wholly-owned subsidiary of CMTH.
* Acquisition consideration:
The consideration is US$1.00.
* Nature of business:
The principal activity of CM Tel is investment holding.
(b) Transaction 2
* Nature of the transaction
Immediately following Transaction 1, CM Tel acquired all
interests in a new subsidiary namely CM Tel (HK) Limited
("CMHK").
* Information on the new subsidiary
CMHK is a private limited company incorporated in Hong Kong
on 2 February 2000. Its authorised share capital is
HK$10,000.00 divided into 10,000 shares of HK$1.00 each.
CMHK has not commenced any business and has no assets or
liabilities since its incorporation.
* Parties:
Vendor: Acota Limited, an independent third party who is
not connected to any of the directors, chief executive or
substantial shareholders of the Company or its subsidiaries
or their respective associates.
Purchaser: CM Tel, a wholly-owned subsidiary of the
Company.
* Date of the transaction:
1 April 2000
* Shares acquired:
A total of 2 ordinary shares of HK$1.00 each being the entire
share capital of CMHK were acquired from the Vendor for cash
at par. Following Transaction 2, CMHK becomes a wholly-owned
subsidiary of CM Tel.
* Acquisition consideration:
The acquisition consideration is HK$2.00.
* Nature of business:
The principal activity of CMHK will be operating the Group's
newly launched long distance call business in Hong Kong.
(c) Transaction 3
* Nature of the transaction:
Immediately following Transaction 1, CM Tel acquired all
interests in Eagle Heights Limited ("Eagle Heights") from
CMTH. One ordinary share of US$1.00 each being the entire
issued capital of Eagle Heights was acquired from CMTH for
cash at par. Following Transaction 3, Eagle Heights becomes
a wholly-owned subsidiary of CM Tel which in effect is a
wholly-owned subsidiary of CMTH after Transaction 1.
* Information on Eagle Heights:
Eagle Heights is a private limited company incorporated in
the British Virgin Islands on 18 December 1998. Its
authorised share capital is US$50,000.00 divided into 50,000
shares of US$1.00 each.
* Date of the transaction:
1 April 2000
* Nature of business:
Eagle Heights has been acting as a carrier for transmitting
outbound and inbound signals for the Group.
(d) Transaction 4
* Nature of the transaction:
CM Tel intends to acquire the entire interests in CM Tel Co.
Ltd. ("CMTC") from CMTH. Following Transaction 4, CMTC will
become a wholly-owned subsidiary of CM Tel which in effect
is a wholly-owned subsidiary of CMTH after Transaction 1.
The consideration for the transaction, though not yet fixed,
shall be at costs since it will be an intra-group transfer
for the purpose of group restructuring.
* Information on CMTC:
CMTC is a private limited company incorporated in the British
Columbia of Canada on 15 November 1993. Its authorised share
capital is Canadian Dollars 1,000,000.00 divided into
1,000,000 common shares without par value. The principal
activity of CMTC is to provide regional agency service to
the Group for long distance call business in Canada.
* Status of the transaction:
The Group has instructed a Canadian law firm to process
Transaction 4 on the Group's behalf. It is expected the
transaction can be completed within one month.
(e) Transaction 5
* Nature of the transaction:
CM Tel intends to acquire the entire interests in CM Tel (USA)
LLC ("CMTUS") from CMTC. Following Transaction 5, CMTUS will
become a wholly-owned subsidiary of CM Tel which in effect
is a wholly-owned subsidiary of CMTH after Transaction 1.
The consideration for the transaction, though not yet fixed,
shall be at costs since it will be an intra-group transfer
for the purpose of group restructuring.
* Information on CMTUS:
CMTUS is a private limited liability company incorporated
in the State of Delaware of the United States of America on
13 July 1999. Its authorised share capital is US$10,000.00
divided into 10,000 ordinary shares of US$1.00 each. The
principal activity of CMTUS is to provide regional agency
service to the Group for long distance call business in the
United States.
* Status of the transaction:
The Group has instructed a law firm in the United States to
process Transaction 5 on the Group's behalf. It is expected
the transaction can be completed within one month.
(f) Reasons for proceeding with Restructuring One
The Directors of the Company consider that with the expected
growth of the Group's long distance call business in the
coming years, to consolidate the scattered subsidiaries
under one investment holding company may enable better
performance review and specialised management.
(2) RESTRUCTURING TWO
Restructuring Two involves an acquisition of a new
associated company ("Transaction 6") and relocation of three
existing associated companies under the new associated
company acquired by Transaction 6 ("Transaction 7").
(a) Transaction 6
* Nature of the transaction
Acquisition of a new associated company namely Goodfine
Holdings Limited ("GHL").
* Information on the new associated company:
GHL is a private limited company incorporated in Hong Kong
on 27 October 1999. Its authorised share capital is
HK$10,000.00 divided into 10,000 shares of HK$1.00 each. GHL
has not commenced any business and has no assets or
liabilities since its incorporation.
* Parties:
Vendor: Acota Limited, an independent third party who is
not connected to any of the directors, chief executive or
substantial shareholders of the Company or its subsidiaries
or their respective associates.
Purchaser: Wanbao Telecom (H.K.) Company, Limited
("WTHK"), a 48%-owned associated company of the Company.
* Date of the transaction:
8 May 2000
* Shares acquired:
A total of 2 ordinary shares of HK$1.00 each being the entire
issued share capital of GHL were acquired from the Vendor
for cash at par. Following Transaction 6, GHL becomes a
wholly-owned subsidiary of WTHK and a 48%-owned associated
company of the Company.
* Acquisition consideration:
The acquisition consideration is HK$2.00.
* Nature of business:
The principal activity of GHL shall be investment holding.
(b) Transaction 7
* Nature of the transaction
Immediately following Transaction 6, GHL acquired from WTHK
on 8 May 2000 all interests in the following companies which
were incorporated in Hong Kong:-
% of
Number of shareholdings Cash Principal
Name of Company shares acquired Consideration Activities
Runbao Enterprises 10,000 100% HK$10,000.00 Property
Limited ("Runbao") Investment
Sheen Ventage 10,000 100% HK$10,000.00 Prepaid Sim
Limited Business
("Sheen Ventage")
Wanbao Telecom 100,000 100% HK$100,000.00 Investment
Investment Limited Holding
("WTIL")
Upon completion of Transaction 7, Runbao, Sheen Ventage and
WTIL become wholly-owned subsidiaries of GHL and associated
companies of the Company.
(c) Reasons for proceeding with Restructuring Two
Formerly, Runbao, Sheen Ventage and WTIL were wholly-owned
subsidiaries of WTHK. WTHK is a 48%-owned associated company
of the Company. The Directors of WTHK consider that with the
addition of GHL as an intermediate holding vehicle, WTHK can
maintain a more flexible structure for future shareholding
restructuring when the need arises. However, as at the date
of this announcement, the Directors of WTHK have not
finalised any plan of shareholding restructuring.
(3) ACQUISITION OF A NEW SUBSIDIARY ("Transaction 8")
* Nature of the transaction
Acquisition of a new subsidiary namely ChinaMotion.com.HK
Limited ("CMCHK").
* Information on the new subsidiary:
CMCHK is a private limited company incorporated in Hong Kong
on 29 March 2000. Its authorised share capital is
HK$10,000.00 divided into 10,000 shares of HK$1.00 each.
CMCHK has not commenced any business and has no assets or
liabilities since its incorporation.
* Parties:
Vendor: Acota Limited, an independent third party who is
not connected to any of the directors, chief executive or
substantial shareholders of the Company or its subsidiaries
or their respective associates.
Purchaser: ChinaMotion.com Inc. ("CMC"), a 60%-owned
subsidiary of the Company.
* Date of the transaction:
28 April 2000.
* Shares acquired:
A total of 2 ordinary shares of HK$1.00 each being the entire
issued share capital of CMCHK were acquired from the Vendor
for cash at par. Following Transaction 8, CMCHK becomes a
wholly-owned subsidiary of CMC.
* Acquisition consideration:
The acquisition consideration is HK$2.00.
* Nature of business:
The principal activity of CMCHK shall be engaging in E-
commerce related business in Hong Kong.
(4) CHANGE OF NAME OF A SUBSIDIARY
On Legend Limited, a 60%-owned subsidiary of the Company,
has been renamed as "CM Internet (China) Limited" with effect
from 17 March 2000.
General
The principal businesses of the Company and its subsidiaries
are:- sale of telecommunication-related equipment and
products, provision of paging and trunking radio services,
provision of maintenance services, provision of technical
advisory, maintenance and accounts management services to
telecommunication operators, installation and sale of
hardware and software equipment for the establishment of
paging network systems, leasing of telecommunication
equipment and provision of Internet-related services in the
People's Republic of China and in Hong Kong.
Others
Save as disclosed above, none of the directors, chief
executive or substantial shareholders of the Company or its
subsidiaries or their respective associates has any interest,
direct or indirect, in the above transactions.
By Order of the Board
Chu Oi Wan, Cecilia
Company Secretary
Hong Kong, 10 May 2000
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