connected transaction subscription of new shares proposed grant of ...

More documents

Recommendations

Info

(e) as at the date of fulfilment or waiver of the last in time to be fulfilled of theConditions Precedent (other than this Condition Precedent) to completion of theSubscription Agreement, no legal proceedings shall have been brought by anyperson (other than any of the parties to the Subscription Agreement) in any courtof competent jurisdiction against any of the parties thereto challenging the legalityor validity of the Subscription Agreement or restraining any of the parties theretofrom proceeding to completion of the Subscription Agreement.Save for the Condition Precedent of (d) above which may be waived only by theSubscriber, none of the other Conditions Precedent may be waived by any party to theSubscription Agreement.If the Subscription Agreement has not become unconditional by the Longstop Date,all rights, obligations and liabilities of the parties under the Subscription Agreementin relation to the Subscription shall cease and terminate and none of the parties shallhave any claim against any other in respect of the Subscription save for any antecedentbreaches of the Subscription Agreement.CompletionCompletion of the Subscription shall take place on the Subscription Completion Date orsuch other time as the parties to the Subscription Agreement may agree.Mandate for the issue of the Subscription SharesThe Company will seek the grant of the Specific Mandate from the IndependentShareholders to cater for the allotment and issue of the Subscription Shares. The generalmandate to allot and issue Shares granted at the annual general meeting of the Companyheld on 7 May 2012 by the then Shareholders will not be utilized for the allotment andissue of the Subscription Shares.Application for listingThe Company will apply to the Listing Committee of the Stock Exchange for the listingof, and permission to deal in, the Subscription Shares on GEM.INFORMATION ON THE SUBSCRIBERThe Subscriber is a company incorporated in the British Virgin Islands on 10 September2007 and an investment holding company.The entire issued share capital of the Subscriber is solely and beneficially owned by itssole director, Mr Mei Wei. Mr Mei Wei is the brother of Mr Mei Ping, the chairman ofthe Company and an executive Director. As at the date of this announcement, Mr MeiPing does not have any interest in the securities of the Company.6
Except as disclosed above and for being the general manager of the mining divisionof the Group and a director of a wholly-owned subsidiary of the Company, Mr MeiWei has no other relationship with the Company or its subsidiaries or their respectiveassociates nor holds any position with any members of the Group as at the date of thisannouncement.Following completion of the Subscription, the Subscriber intends that the Group willcontinue to operate and develop its existing business.REASONS FOR THE SUBSCRIPTIONThe Company is an investment holding company and its principal subsidiaries areengaged in the mining, processing and trading of mineral resources.It is the intention of the Group to expand its business by way of investment in qualitycompanies in the PRC mining industry and/or increase the scale of its existing operation.To achieve these expansion strategies, the Group has from time to time been exploringinternal expansion alternatives as well as suitable acquisition and/or investmentopportunities that are complementary or offer synergy to the Group’s existing businessor are considered to be advantages to or in line with the long-term business strategies ofthe Group.Based on the unaudited condensed consolidated statement of financial position of theGroup as at 30 June 2012, the aggregate balance of the cash and bank balances andcurrent borrowings of the Group were approximately RMB29.7 million and RMB55.5million respectively. The Directors consider that it is necessary for the Group to increaseits capital for the Group to capture potential acquisition and investment opportunities asand when they arise and to meet its ongoing working capital requirements.In view of the above, the Board has considered various fund raising methods apartfrom the Subscription such as debt financing, placement of new Shares to independentinvestors as well as rights issue or open offer. As regards debt financing, havingconsidered that it would increase the gearing level of the Group and the interestexpenses incurred which would impose additional financial burden to the Group’sfuture cash flows, the Board considers that such fund raising method is currently notthe most appropriate method to the Group. In considering equity financing throughplacement of new Shares to independent investors, the Company has encountereddifficulties in engaging a placing agent which is believed to be due to relative smallmarket capitalization and the low trading volume of the Shares under the current marketsentiment. As regards the viability of a rights issue or an open offer, the Company hasfound it difficult to find an independent underwriter in Hong Kong which is interestedto underwrite a rights issue or open offer of the Company. The Directors considerthat even if such an independent underwriter were identified, the rights issue or openoffer would incur costly underwriting commission and the process would be relativelytime consuming. The Directors believe that the Company would have difficulties tocomplete a rights issue or an open offer, in particular at an issue price comparable to7
Page 1 and 2: Hong Kong Exchanges and Clearing Li
Page 3 and 4: GeneralAn Independent Board Committ
Page 5: The Subscription Price was determin
Page 9 and 10: EFFECT ON THE SHAREHOLDING STRUCTUR
Page 11 and 12: of the exercise or conversion (as t
Page 13 and 14: (b)(c)from approximately 29.39% to
Page 15 and 16: DEFINITIONSIn this announcement, un
Page 17 and 18: “Outstanding CB”“Outstanding
Page 19: “HK$ and cents”Hong Kong dollar

connected transaction subscription of new shares proposed grant of ...

Create successful ePaper yourself

Delete template?

Save as template?