Boyaa Interactive International Limited

Transcription

1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited 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. Boyaa Interactive International Limited (Incorporated in the Cayman Islands with limited liability) (Stock Code: 0434) Connected Transaction Disposal of Equity Interest in Blingstorm The Board announces that the Share Purchase Agreement was entered into on 13 February 2015 between OurPalm (as Purchaser), on the one hand, and Boyaa Shenzhen (an entity controlled by the Group through certain contractual arrangements), Mr. Dai (one of the Company s executive Directors), Beijing Sequoia (a connected person of the Company) and Other Vendors (as Vendors), on the other, pursuant to which OurPalm agreed to purchase and Boyaa Shenzhen, Mr. Dai, Beijing Sequoia and Other Vendors agreed to sell their 100% equity interest in Blingstorm for the preliminary total consideration of RMB2,137,565,000, subject to adjustment. Boyaa Shenzhen, Mr. Dai, Beijing Sequoia and some of the Other Vendors will receive only cash consideration and the remaining Vendors will receive both cash consideration and shares in OurPalm. As at the date of the Share Purchase Agreement, the total registered capital of Blingstorm is RMB11,250,000, of which 9.36% is held by Boyaa Shenzhen, 4.32% is held by Mr. Dai, 11.02% is held by Beijing Sequoia and the remaining 75.3% is held by the Other Vendors. The preliminary cash consideration for the Disposal payable by OurPalm to Boyaa Shenzhen is RMB80,145,000, subject to adjustment. Mr. Dai is an executive Director of the Company and therefore a connected person of the Company under Rule 14A.07(1) of the Listing Rules. Mr. Zhou Kui, the non-executive Director of the Company, holds 40% equity interest in Sequoia Capital Equity Investment Management (Tianjin) Co., Ltd. ( ( ) ), which is the general partner of Beijing Sequoia. Therefore, Beijing Sequoia is a connected person of the Company under Rule 14A.13(3) of the Listing Rules. 1

2 As the transactions contemplated under the Share Purchase Agreement involve sale of equity interest in Blingstorm by, among others, Boyaa Shenzhen, Mr. Dai and Beijing Sequoia, to OurPalm, OurPalm is a deemed connected person of the Company under Rule 14A.20 of the Listing Rules. Accordingly, the sale of 9.36% equity interest in Blingstorm by Boyaa Shenzhen to OurPalm or, the Disposal, constitutes a connected transaction for the Company under Rule 14A.25 of the Listing Rules. As the applicable percentage ratios set out in Rule of the Listing Rules in respect of the Disposal under the Share Purchase Agreement is above 0.1% but below 5%, the Disposal is only subject to the reporting and announcement requirements under Rule 14A.76(2) of the Listing Rules and is exempt from the circular and independent shareholders approval requirements. Shareholders and potential investors of the Company should note that the Disposal is subject to the conditions precedents being satisfied and to the extent applicable, adjustment to the total consideration being agreed and the Supplemental Agreement being entered into. Therefore, the Disposal may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company. Further announcement will be made by the Company if an adjustment is made to the consideration receivable by Boyaa Shenzhen or if applicable where the parties to the Share Purchase Agreement do not agree to the Supplemental Agreement. The Board announces that the Share Purchase Agreement was entered into on 13 February 2015 between OurPalm (as Purchaser), on the one hand, and Boyaa Shenzhen (an entity controlled by the Group through certain contractual arrangements), Mr. Dai (one of the Company s executive Directors), Beijing Sequoia (a connected person of the Company) and Other Vendors (as Vendors), on the other, pursuant to which OurPalm agreed to purchase and Boyaa Shenzhen, Mr. Dai, Beijing Sequoia and Other Vendors agreed to sell their 100% equity interest in Blingstorm for the preliminary total consideration of RMB2,137,565,000, subject to adjustment. Boyaa Shenzhen, Mr. Dai, Beijing Sequoia and some of the Other Vendors will receive only cash consideration and the remaining Vendors will receive both cash consideration and shares in OurPalm. As at the date of the Share Purchase Agreement, the total registered capital of Blingstorm is RMB11,250,000, of which 9.36% is held by Boyaa Shenzhen, 4.32% is held by Mr. Dai, 11.02% is held by Beijing Sequoia and the remaining 75.3% is held by the Other Vendors. The preliminary cash consideration for the Disposal payable by OurPalm to Boyaa Shenzhen is RMB80,145,000, subject to adjustment. 2

3 THE SHARE PURCHASE AGREEMENT Date 13 February 2015 Parties Purchaser: Vendors: OurPalm Boyaa Shenzhen Mr. Dai Beijing Sequoia Other Vendors Consideration As at the date of the Share Purchase Agreement, 9.36% equity interest in Blingstorm is held by Boyaa Shenzhen, 4.32% by is held by Mr. Dai, 11.02% is held by Beijing Sequoia and the remaining 75.3% is held by the Other Vendors. The preliminary total consideration for the 100% equity interest in Blingstorm is RMB2,137,565,000, representing the estimate value of the equity interest in Blingstorm. Boyaa Shenzhen, Mr. Dai, Beijing Sequoia and some of the Other Vendors will receive only cash consideration and the remaining Vendors will receive both cash consideration and shares in OurPalm. The preliminary consideration for the Disposal is RMB80,145,000 (subject to adjustment), which is determined after arm s length negotiation between OurPalm and Boyaa Shenzhen and is determined on a pro-rata basis of the shareholdings of Boyaa Shenzhen and those Vendors which are subject to the same terms and conditions of Boyaa Shenzhen for their respective original investments in Blingstorm and in the Share Purchase Agreement. The consideration shall be payable by OurPalm in cash in three installments as follows: (1) 30% of such consideration, equivalent to RMB24,043,500 (subject to adjustment), shall be payable (i) within 6 months after completion of the transfer of the 9.36% equity interest in Blingstorm, or (ii) within 10 business days after the settlement of proceeds raised from the proposed issuance of shares of OurPalm for the purpose of the transactions contemplated under the Share Purchase Agreement, whichever is earlier; 3

4 (2) 40% of such consideration, equivalent to RMB32,058,000 (subject to adjustment), shall be payable within 10 business days after the publication by OurPalm of the Special Audit Report for the year of 2015; and (3) 30% of such consideration, equivalent to RMB24,043,500 (subject to adjustment), shall be payable within 10 business days after the publication by OurPalm of the Special Audit Report for the year of The above preliminary total consideration under the Share Purchase Agreement for the 100% equity interest in Blingstorm is subject to adjustment. According to the Share Purchase Agreement, the final total consideration shall be determined upon mutual agreement among the parties to the Share Purchase Agreement after arm s length negotiation in good faith and by reference to the value of the equity interest in Blingstorm as determined by a licensed valuer with requisite securities and futures business qualification and set out in a valuation report (the Valuation Report ). The parties also agreed that a supplemental agreement to the Share Purchase Agreement (the Supplemental Agreement ) shall be entered into among the parties in order to fix the final consideration. If the value of the equity interest in Blingstorm as shown in the Valuation Report is different from the estimate total consideration for the 100% equity interest in Blingstorm, being RMB2,137,565,000, and the parties to the Share Purchase Agreement do not reach agreement on adjustment to the final total consideration and enter into the Supplemental Agreement, each party is then entitled to terminate the Share Purchase Agreement. Furthermore, if the aggregate gross billings of the games of Blingstorm in respect of the six months ending 30 June 2015 do not reach RMB200 million, the final total consideration shall be adjusted after further negotiation between the parties. If the parties do not reach adjustment to the final total consideration, each party is then entitled to terminate the Share Purchase Agreement. In addition, some of the Other Vendors considerations for their disposal of interests to OurPalm are subject to adjustments depending on the other future financial results of Blingstorm. For the avoidance of doubt, consideration receivable by Boyaa Shenzhen is not subject to such adjustment. Conditions Precedents and Completion The completion of the transactions contemplated under the Share Purchase Agreement is conditional upon: (1) the execution of the Share Purchase Agreement (which was executed on 13 February 2015 and hence this condition has been fulfilled); (2) the transactions contemplated under the Share Purchase Agreement being approved by the shareholders of OurPalm at a shareholders general meeting of OurPalm; and 4

5 (3) the transactions contemplated under the Share Purchase Agreement being approved by the China Securities Regulatory Commission. If any of the conditions precedents is not fulfilled within the period of effectiveness of the resolutions passed at a shareholders general meeting of OurPalm, the Share Purchase Agreement shall lapse and no party shall be held liable for the lapse of the Share Purchase Agreement except where the failure for the fulfillment of a condition precedent is due to willful intent or gross negligence by a party. Upon fulfillment of the conditions precedents above, the Share Purchase Agreement shall become effective, and the parties thereto shall, within 35 business days upon the effective date of the Share Purchase Agreement, proceed to the changes of registration (the Registration ) with relevant administration for industry and commerce regulators in respect of the equity transfer of their equity interests in Blingstorm. The completion date of the transactions under the Share Purchase Agreement shall be the date on which the Registration is completed. Upon completion, Boyaa Shenzhen will not hold any equity interest in Blingstorm. Information on Blingstorm Blingstorm is primarily engaged in provision of mobile games (other than online card and board games) in the PRC. As at the date of the Share Purchase Agreement, the total registered capital of Blingstorm is RMB11,250,000, of which 9.36% is held by Boyaa Shenzhen, 4.32% is held by Mr. Dai, 11.02% is held by Beijing Sequoia and the remaining 75.3% is held by the Other Vendors. Boyaa Shenzhen acquired 13% equity interest in Blingstorm in December 2011, as a passive investor, at a consideration of RMB4,600,000. After certain increase in the registered capital of Blingstorm, as at the date of the Share Purchase Agreement, the holding of Boyaa Shenzhen in Blingstorm dropped to 9.36%. Blingstorm reported significant loss in 2012 and 2013 and the Directors considered that the carrying amount of such investment was not recoverable and full impairment was made to the investment in Blingstorm. According to the unaudited management accounts of Blingstorm as at 31 December 2014, the net asset value of Blingstorm was RMB5,909,700 and it continued to record a significant loss in Mr. Dai made his investment in Blingstorm in December As at the date of the Share Purchase Agreement, Mr. Dai held 4.32% equity interest in Blingstorm and is one of the three directors of Blingstorm. Beijing Sequoia made its investment in Blingstorm after the Company issued its prospectus on 31 October 2013 through the acquisition of equity interests in Blingstorm from shareholders other than Boyaa Shenzhen. 5

6 Financial Impact Upon completion of the transactions contemplated under the Share Purchase Agreement and assuming no adjustment to the preliminary consideration of RMB80,145,000, there will be a realised pre-tax gain of RMB75,545,000, being the difference between the preliminary consideration of RMB80,145,000 and the initial investment of RMB4,600,000. The sale proceeds from the Disposal will be used as general working capital of the Group. REASONS FOR AND BENEFITS OF THE TRANSACTIONS The transactions contemplated under the Share Purchase Agreement were initiated and negotiated by Blingstorm s major shareholders and OurPalm is interested in purchasing the entire equity interest of Blingstorm. As mentioned above, as Blingstorm recorded significant loss in 2012 and 2013, full impairment was made to the investment in Blingstorm, and Blingstorm continued to record a significant loss in Having considered that Blingstorm has not been making profit nor making any distribution to its shareholders, and that the consideration is attractive, it is desirable for the Company to dispose of its equity interest in Blingstorm, which in the opinion of the Directors is in the interests of the Company and the Company s shareholders as a whole. LISTING RULES IMPLICATIONS Mr. Dai is an executive Director of the Company and therefore a connected person of the Company under Rule 14A.07(1) of the Listing Rules. Mr. Zhou Kui, the non-executive Director of the Company, holds 40% equity interest in Sequoia Capital Equity Investment Management (Tianjin) Co., Ltd. ( ( ) ), which is the general partner of Beijing Sequoia. Therefore, Beijing Sequoia is a connected person of the Company under Rule 14A.13(3) of the Listing Rules. Beijing Sequoia is a fund mainly engaged in investment and assets management businesses. As the transactions contemplated under the Share Purchase Agreement involve sale of equity interest in Blingstorm by, among others, Boyaa Shenzhen, Mr. Dai and Beijing Sequoia, to OurPalm, OurPalm is a deemed connected person of the Company under Rule 14A.20 of the Listing Rules. Accordingly, the sale of 9.36% equity interest in Blingstorm by Boyaa Shenzhen to OurPalm or, the Disposal, constitutes a connected transaction for the Company under Rule 14A.25 of the Listing Rules. As the applicable percentage ratios set out in Rule of the Listing Rules in respect 6

7 of the Disposal under the Share Purchase Agreement is above 0.1% but below 5%, the Disposal is only subject to the reporting and announcement requirements under Rule 14A.76(2) of the Listing Rules and is exempt from the circular and independent shareholders approval requirements. The Directors expect that even if the final consideration for the Disposal is adjusted according to the terms of the Share Purchase Agreement, it will not result in any of the applicable ratios set out in Rule of the Listing Rules exceeding 5%, and therefore in the event of an adjustment, the Disposal will still not be subject to the circular and independent shareholders approval requirement under the Listing Rules. The Group has no other prior transactions with OurPalm and its associates which require aggregation with the Disposal under Rule 14A.81 of the Listing Rules. Mr. Dai and Mr. Zhou Kui abstained from voting on the board resolution approving the Disposal. The Directors (including independent non-executive Directors but excluding Mr. Dai and Mr. Zhou Kui who abstained from voting) are of the view that the Disposal is in the interests of the Company and the Company s shareholders as a whole, and that the Share Purchase Agreement was entered into after arm s length negotiation between the Company and OurPalm, and that the Disposal reflects normal commercial terms and the terms for the Disposal are fair and reasonable. GENERAL INFORMATION The Company is an investment holding company. The principal activity of the Group is the development and operation of online card and board games. Boyaa Shenzhen is the operating company of the Group. The financial results of Boyaa Shenzhen are consolidated into the Group as a wholly-owned subsidiary under International Financial Reporting Standards by virtue of it being controlled by the Group through certain contractual arrangements. OurPalm is mainly engaged in development, publication and operation of online games. The issued shares of OurPalm are listed on the Shenzhen Stock Exchange (Stock Code: ). To the best of the Directors knowledge, information and belief having made all reasonable enquiry, each of the Other Vendors and his/its ultimate beneficial owner are a third parties independent of the Company and connected person of the Company. Shareholders and potential investors of the Company should note that the Disposal is subject to the conditions precedents being satisfied and to the extent applicable, adjustment to the total consideration being agreed and the 7

8 Supplemental Agreement being entered into. Therefore, the Disposal may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company. Further announcement will be made by the Company if an adjustment is made to the consideration receivable by Boyaa Shenzhen or if applicable where the parties to the Share Purchase Agreement do not agree to the Supplemental Agreement. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: Beijing Sequoia Blingstorm Board Boyaa Shenzhen Company Connected person Directors Disposal Group Beijing Sequoia Xin Yuan Equity Investment Center (being unofficial English translation) ( ), a limited liability partnership established in the PRC Blingstrom Entertainment Ltd. ( ( ) ), a company incorporated in the PRC the board of Directors Shenzhen Dong Fang Bo Ya Technology Co., Ltd. ( ), a company established in the PRC with limited liability, and the financial results of which are consolidated into the Group as a wholly-owned subsidiary by virtue of it being controlled by the Group through certain contractual arrangements Boyaa Interactive International Limited ( ), a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the main board of the Stock Exchange has the meaning ascribed thereto under the Listing Rules the directors of the Company the sale of 9.36% equity interest in Blingstorm by Boyaa Shenzhen to OurPalm pursuant to the Share Purchase Agreement the Company and its subsidiaries 8

9 Hong Kong Listing Rules Mr. Dai Other Vendors OurPalm or Purchaser PRC RMB Share Purchase Agreement Special Audit Report(s) Stock Exchange Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on the Stock Exchange Mr. Dai Zhikang, an executive Director Yang Xinmiao, Yu Chao, Shenzhen Tencent Industry Investment Fund Co., Ltd. ( ), Shenzhen Century Kai Hua Investment Fund Co., Ltd. ( ) and Beijing Tong Chuang Gong Xiang Venture Capital ( ) OurPalm Co., Ltd ( ), a company incorporated in the PRC, the issued shares of which are listed on the Shenzhen Stock Exchange (Stock Code: ) the People s Republic of China, and for the purpose of this announcement only, excluding Hong Kong, the Macau Special Administrative Region and Taiwan Renminbi, the lawful currency of the PRC the assets purchase agreement by way of issuing shares and payment of cash dated 13 February 2015 and entered into among OurPalm and the Vendors the special audit report(s) to be prepared by one of the top 10 accounting firms with securities and futures business qualification on Blingstorm for the purpose of assessing Blingstorm s performance and profitability for the years ending 31 December 2015, 2016 and 2017 according to the terms set out in the Share Purchase Agreement The Stock Exchange of Hong Kong Limited 9

10 Vendors Boyaa Shenzhen, Mr. Dai, Beijing Sequoia and Other Vendors % per cent. By Order of the Board Boyaa Interactive International Limited ZHANG Wei Chairman and Executive Director Hong Kong, 15 February 2015 As at the date of this announcement, the executive Directors are Mr. ZHANG Wei, Mr. DAI Zhikang and Mr. GAO Junfeng; the non-executive Director is Mr. ZHOU Kui; the independent non-executive Directors are Mr. CHEUNG Ngai Lam, Mr. CHOI Hon Keung Simon and Mr. GAO Shaofei. 10