Shanghai Asia Holdings Limited (Company Registration No: D) (Incorporated in Singapore with limited liabilities)

Transcription

1 Shanghai Asia Holdings Limited (Company Registration No: D) (Incorporated in Singapore with limited liabilities) PROPOSED SALE OF SUBSTANTIALLY ALL OF THE ASSETS, LIABILITIES AND BUSINESSES Reference is made to the circular to shareholders of the Company ( Shareholders ) dated 13 July 2011 ( Circular ). Unless otherwise defined, all capitalized terms used in this announcement shall bear the same meanings as in the Circular. The Board of Directors of the Company ( Board ) wishes to update the Shareholders on the following matters: 1. SWP ACQUISITION As stated in the Company s announcement on 2 March 2012, the SWP Acquisition has closed. Following the closing of the SWP Acquisition and after deducting the capital gains tax described below, the net consideration of the SWP Acquisition is S$ million:- Items S$ 1 (million) Consideration (equivalent to RMB million) Less Capital gains tax in PRC of ten per cent (10%) paid in RMB 7.95 Net Consideration Note: (1) Based on the foreign exchange rate of Bank of China of S$1: RMB as at 9 April The Company has received the net consideration from SWP on 9 April GTPL ACQUISITION The Board is pleased to announce that the GTPL Acquisition has closed on 25 April In relation to the closing, SACPL has on 25 April 2012 entered into a variation deed with GTPL varying the terms of the Amended GTPL Agreement (please refer to paragraph 4.2 of the Circular for more details of the terms of the Amended GTPL Agreement) as follows: (a) SACPL has exercised the option of excluding DGTGLP from the GTPL Acquisition prior to the closing. Accordingly, SACPL has on 25 April 2012 paid to GTPL the sum of S$1.19 million (equivalent to RMB6 million). Please refer to paragraph 4 below for more information;

2 (b) GTPL has waived the conditions precedent requiring SACPL to obtain approvals from the Ministry of Commerce of the PRC and revised business licenses from the State Administration of Industry and Commerce of the PRC in relation to the following:- (i) (ii) 13 1/3 equity interest on BJP; 52% equity interest in JZELM. Accordingly, the parties may proceed to closing. After the closing, SACPL will provide to GTPL the necessary documents to enable GTPL to obtain the approvals from Ministry of Commerce of the PRC and revised business licenses from the State Administration of Industry and Commerce of the PRC in relation to the 13 1/3 equity interest on BJP and 52% equity interest in JZELM; (c) the agreed closing date of the GTPL Acquisition shall be 25 April 2012; (d) the Interest Due Amount payable to GTPL shall be calculated up to and including 15 March 2012 instead of the agreed closing date. Following closing of the GTPL Acquisition and taking into account the deductions described below, the net consideration of the GTPL Acquisition is S$45.69 million:- Items S$ (million) Consideration Less Capital gains tax in PRC of ten per cent (10%) paid in RMB ,3 Interest Due Amount Amount payable to GTPL as the value of the DGTGLP shares held by SACPL Net Consideration Note: (1) By 20 December 2010, SACPL has received S$49 million of the consideration from GTPL. GTPL retained S$1 million of the consideration. Please refer to paragraph 4.2(c) of the Circular for more information. (2) Based on the exchange rate of Bank of China of S$1.00: RMB as at 9 April (3) The capital gains tax was paid in the PRC utilising the funds from the SWP consideration following closing of the SWP Acquisition. (4) The Interest Due Amount was paid on closing of the GTPL Acquisition on 25 April (5) SACPL has exercised the option of excluding DGTGLP from the GTPL Acquisition prior to the GTPL Closing. Accordingly, the sum of S$1.19 million was paid to GTPL. Please refer to paragraph 4 below for more information.

3 3. CASH BALANCE IN THE COMPANY The amount of cash balance in the Company as at 25 April 2012 is as follows:- Items Net consideration from the GTPL Acquisition S$ (million) Paying in S$ (million) Paying out Repayment of AmBank Loan Dividend paid to shareholders for the financial year ended 31 December Net consideration from the SWP Acquisition Expenses of the Company and SACPL Finder s Fee Cash balance in the Company ( Cash Balance ) Amount deposited into Escrow Account (being 90% of the Cash Balance). Please see paragraph 4.2 of this announcement. Amount to be retained by the Company (being 10% of Cash Balance) Note: (1) Please refer to footnote 1 in paragraph 2 above as to when SACPL received substantially all of the consideration for the GTPL Acquisition. (2) The AmBank Loan was repaid on 30 December The payment was funded substantially with the consideration of the GTPL Acquisition received by SACPL. Please refer to paragraphs 4.2(a)(vi) and 10.5 of the Circular for more information. (3) The dividend was paid around 31 May The payment was funded substantially with the consideration of the GTPL Acquisition received by SACPL. Please refer to paragraph 10.2 of the Circular. (4) The expenses were paid out over a period of time, are generally categorised as follows: (a) (b) S$1.45 million relating to the professional and other expenses for the Transaction. S$3.86 million relating to salaries and related costs, office rental, other professional fees, travelling expenses etc. (5) The Finder s Fee payable to Mr. Yao is an amount equal to 0.9% of the aggregate consideration of the Transaction paid to SACPL (being RMB750 million for the SWP Acquisition and S$50 million for the GTPL Acquisition less S$1.19 million paid to GTPL as the value of the 17% equity interest in DGTGLP held by SACPL). Please refer to paragraph 11.3 of the Circular for more information on the Finder s Fee.

4 (6) The Company intends to utilise part of the 10% of Cash Balance for the purpose of paying, inter alia, the dividend to shareholders for the financial year ended 31 December 2011 (if the same is approved by shareholders at the forthcoming annual general meeting on 26 April 2012) and the Directors fee (if the same is approved by shareholders at the forthcoming annual general meeting on 26 April 2012). 4. DGTGLP As stated in paragraphs 4.2(h) and 4.2(i) of the Circular, the Amended GTPL Agreement also provides that SACPL has the option of removing DGTGLP from the GTPL Acquisition prior to closing. In the event SACPL exercises the option of removing DGTGLP from the GTPL Acquisition, SACPL shall pay to GTPL a sum of RMB6 million as the value of the DGTGLP shares held by SACPL. SACPL could not obtain the necessary consents and waivers of pre-emption rights from the third party shareholders of DGTGLP. As such, SACPL has exercised the option of excluding DGTGLP from the GTPL Acquisition prior to the closing. SACPL has paid to GTPL a sum of S$1.19 million (equivalent to RMB6 million based on the exchange rate of S$1: RMB5.0529) as the value of the 17% equity interest in DGTGLP held by SACPL. The Board are exploring their options in relation to the 17% equity interest in DGTGLP retained by the Group. 5. RULE 1018 OF THE LISTING MANUAL & ESCROW ACCOUNT (a) RULE 1018 OF THE LISTING MANUAL Rule 1018 of the Listing Manual is applicable to the Company as the assets of the Company consist wholly of cash. Rule 1018 of the Listing Manual provides as follows: (1) If the assets of an issuer consist wholly or substantially of cash or short-dated securities, its securities will normally be suspended. The suspension will remain in force until the issuer has a business which is able to satisfy the Exchange s requirements for a new listing, and all relevant information has been announced. Upon completion of the disposal of its operations and/or assets, the issuer must:- (a) (b) Place 90% of its cash and short-dated securities (including existing cash balance and the consideration arising from the disposal(s) undertaken by the issuer) in an account opened with the operated by an escrow agent which is part of any financial institution licensed and approved by the Monetary Authority of Singapore. The amount that is placed on the escrow account cannot be drawn down until the completion of the acquisition of a business which is able to satisfy the Exchange s requirements for a new listing, except for payment of expenses incurred in a reverse takeover approved by shareholders and pro-rata distributions to shareholders; and provide monthly valuation of its assets and utilisation of cash, and quarterly updates of milestones in obtaining a new business to the market via SGXNET. Taking the above compliance into account, the Exchange may allow continued trading in a cash company s securities on a cash-by-case basis, subject to:-

5 (a) (b) contractual undertakings from the issuer s directors, controlling shareholders, chief executive officer and their associates to observe a moratorium on the transfer or disposal of all their interests, direct and indirect, in the securities of the issuer; and the period of the moratorium must commence from the date shareholders approve the disposal of business, up to and including the completion date of the acquisition of a business which is able to satisfy the Exchange s requirements for a new listing. The Exchange will proceed to remove an issuer from the Official List of it is unable to meet the requirements for a new listing within 12 months from the time it becomes a cash company. The Issuer may apply to the Exchange for a maximum 6-month extension to the 12-month period if it has already signed a definitive agreement for the acquisition of a new business, of which the acquisition must be completed in the 6-month extension period. The extension is subject to the issuer providing information to investors on its progress in meeting key milestones in the transaction. In the event the issuer is unable to meet its milestones or complete the relevant acquisition despite the time extension granted, no further extension will be granted and the issuer will be required to delist and a cash exit offer in accordance with Rule 1309 be made to the issuer s shareholders within 6 months. (b) ESCROW ACCOUNT Pursuant to Rule 1018 of the Listing Manual, the Company is required to deposit 90% of its cash and short-dated securities, that include existing cash balances and the consideration arising from the completion of the Transaction, in an account opened with and operated by an escrow agent which is part of any financial institution licensed and approved by the Monetary Authority of Singapore. The amount that is placed in the escrow account cannot be drawn down until the completion of the acquisition of a business which is able to satisfy the SGX-ST s requirements for a new listing, except for payment of expenses incurred in a reverse takeover approved by Shareholders and pro-rata distributions to Shareholders. The Company will open an escrow account with a financial institution licensed and approved by the Monetary Authority of Singapore ( Escrow Account ). The Company will shortly be depositing the sum of approximately S$ million representing 90% of the Cash Balance into the Escrow Account. The Company will also be announcing its monthly report of its net assets and utilisation of cash shortly after the release by the Company of its first quarter interim financial results. (c) CONTINUED TRADING OF COMPANY S SECURITIES ON SGX-ST Further, as announced by the Company on 16 February 2012, SGX-ST has allowed the continued trading in the Company s securities immediately after completion of the Transaction, subject to the following conditions:-. (i) (ii) Compliance with the SGX-ST s continuing listing obligations; Execution of the moratorium undertakings by Hong Ji International Holdings Limited, Liu Ying Kang, Liu Yi Fang, Zhou Hui Ling, Liu Jian Zhong, New Toyo Ventures Pte Ltd and New Toyo International Holdings Limited. The moratorium undertakings were duly executed on 13 February 2012;

6 (iii) SGXNET announcements being made on the use of proceeds received from the GTPL Acquisition and the SWP Acquisition, and the amount of the proceeds kept in an escrow account as required under Rule 1018(1) of the Listing Manual; and (iv) The monitoring of the use of proceeds received from the GTPL Acquisition and the SWP Acquisition by the Audit Committee of the Company. 6. USE OF PROCEEDS As stated in paragraph 9 of the Circular, the Board proposes to distribute up to fifty percent (50%) of the net proceeds, with the distribution to be by way of dividend, capital reduction or such other manner as the Board shall determine at a later stage and in respect of the remaining fifty per cent (50%) of the net proceeds, the Company will assess and explore various investment options to seek viable business opportunities in other areas of business and/or utilise the net proceeds for any working capital requirements. Such options will include exploring other investment opportunities as well as the option whether or not to distribute up to 100% of the net proceeds to Shareholders. The Company will update Shareholders from time to time with announcements when appropriate. BY ORDER OF THE BOARD Lee Wei Hsiung Company Secretary 25 April 2012