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    BOTO INTERNATIONAL HOLDINGS LIMITED

    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.

    (incorporated in Bermuda with limited liability)

    MAJOR AND CONNECTED TRANSACTION,

    CHANGE OF NAME

    AND

    ADOPTION OF NEW SHARE OPTION SCHEME

    * The Directors announce that on 29th March, 2002 the Company and one of its

    wholly-owned subsidiaries (i.e., Boto Company) entered into the Disposal Agreement

    with GGCL and GFEL pursuant to which:

     (i) the Company has agreed to sell the Boto Strategic Shares to GGCL and to

    assign the GCL Loan to GFEL; and

     (ii) Boto Company has agreed to sell the Boto Business and the Boto Business

    Assets to GFEL and to sell the Bo Cheong Shares to GGCL,

     for an aggregate cash consideration of HK$994 million (subject to adjustments).

     Pursuant to the Disposal Agreement, Boto Strategic and its subsidiaries and/or Boto

    Company shall declare and pay a dividend of an amount of HK$92.5 million to the

    Company and/or Topway on the business day immediately prior to the date of the

    Completion.

     Page 1 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

     Mr. Kao, the Chairman of the board of Directors and the Managing Director of the

    Company, is interested in the Disposal as detailed below. The Disposal under the

    Disposal Agreement will constitute a major and connected transaction of the

    Company under the Listing Rules and will be conditional upon, among other things,

    approval by the Independent Shareholders at a special general meeting of the

    Company.

    * The Directors also announce that on 29th March, 2002 Boto Company, a

    wholly-owned subsidiary of the Company, entered into the Boto Property Disposal

    Agreement with GFEL in respect of the disposal of the Boto Property to GFEL for a

    consideration of HK$13.5 million. As Mr. Kao and Sino Pearl will together hold 30%

    of the entire issued share capital of GIHL, each of GIHL and its wholly-owned

    subsidiaries (i.e., GGCL and GFEL) will be an associate of Mr. Kao, and, hence, a

    connected person of the Company. The Boto Property Disposal will thus constitute a

    connected transaction of the Company under the Listing Rules and will therefore be

    subject to the approval of the Independent Shareholders.

    * The Directors propose to change the name of the Company to Imagi International

    Holdings Limited subject to and after Completion.

    * The Directors also propose to adopt the New Share Option Scheme in place of the

    Existing Share Option Scheme, which will comply with the requirements of Chapter

    17 of the Listing Rules, which came into effect on 1st September, 2001.

    * A circular of the Company containing, among other things, details of the Disposal

    Agreement, the Boto Property Disposal Agreement, the proposed change of name, a

    letter from the independent board committee of the Company containing its

    recommendation to the Independent Shareholders in respect of the Disposal and the

    Boto Property Disposal, a letter from the independent financial adviser to the

    independent board committee of the Company, the principal terms of the New Share

    Option Scheme and a notice convening a special general meeting of the Company

    will be despatched to the Shareholders as soon as practicable.

    * Trading in the Shares has been suspended at the request of the Company with effect

    from 9:30 a.m. on Tuesday, 2nd April, 2002 pending the release of this

    announcement. An application has been made to the Stock Exchange for resumption

    in trading of the Shares with effect from 9:30 a.m. on Wednesday, 3rd April, 2002.

     Page 2 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

THE DISPOSAL AGREEMENT

Date : 29th March, 2002

    Parties : (i) The Company (in its capacity as the vendor of the Boto Strategic Shares

    and the assignor of the GCL Loan and in its capacity as the guarantor of

    the obligations of the other vendor (i.e. Boto Company) under the

    Disposal Agreement);

     (ii) GGCL (in its capacity as the purchaser of the Sale Shares);

     (iii) Boto Company (in its capacity as the vendor of the Boto Business, the

    Boto Business Assets and the Bo Cheong Shares); and

     (iv) GFEL (in its capacity as the purchaser of the Boto Business, the Boto

    Business Assets and the assignee of the GCL Loan).

    GIHL will be owned as to 70% by the limited partnerships affiliated with The Carlyle Group, as to 29% by Sino Pearl, a wholly-owned subsidiary of Happy Nation, and as to 1% by Mr. Kao. Mr. Kao is the Chairman of the board of Directors and the Managing Director of the Company. Mr. Kao is as at the date hereof directly interested in 62,055,000 Shares (about 1.8% of the Company's issued share capital), indirectly interested in 31,243,410 Shares (about 0.9% of the Company's issued share capital) which are held by Kessuda Consultants Limited, which is beneficially owned by Mr. Kao and beneficially interested in 1,823,815,030 Shares (about 53.0% of the Company's issued share capital) through Happy Nation's 51% interest in Sunni. Happy Nation is a company which is indirectly wholly-owned by HSBC International Trustee Limited (in its capacity as the trustee of the Cheerco Trust, a discretionary trust of which Mr. Kao and his family members are discretionary objects).

     Page 3 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

    The Carlyle Group, based in Washington D.C., is one of the largest global private investment firms in the world with more than US$12.5 billion of committed capital under management. Carlyle originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings. Since its inception, Carlyle has invested more than US$6.4 billion of equity in 233 corporate and real estate transactions with an aggregate acquisition value of over US$18 billion. Save for the fact that the limited partnerships affiliated with The Carlyle Group will be shareholders of GIHL, they are independent of, and not connected with, the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates.

Corporate structure

    Set out below is the corporate structure of the Group before and immediately after Completion:

     Page 4 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

    Before Completion

     Page 5 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

    Immediately after Completion

     Page 6 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

Assets to be disposed of

    The interests to be disposed of by the Group comprise the Sale Shares, the GCL Loan, the Boto Business and the Boto Business Assets, which together effectively constitute the Group's Christmas festive products and leisure furniture businesses. Set out below is the financial performance of the Group for the financial years ended 31st March, 2000 and 31st March, 2001 and for the 6 months ended 30th September, 2001, which principally reflects the Group's Christmas festive products and leisure furniture businesses:

     (Unaudited) (Audited)

     6 months ended Year ended

     30th September, 31st March,

     2001 2001 2000

     HK$m HK$m HK$m

Turnover

     Christmas festive products 780.6 827.9 754.3

     Leisure furniture 25.0 81.7 48.9

     805.6 909.6 803.2

Profit before taxation 171.4 161.9 158.3

    Profit attribute to Shareholders 160.7 156.4 152.3

    Based on the audited accounts of the Group as at 31st March, 2001, the net asset value of the assets to be disposed of as mentioned above amounted to approximately HK$632.8 million, after adjusting for the pre-completion dividend of HK$92.5 million as mentioned below.

Consideration

    The Consideration for the sale of the Sale Shares, the GCL Loan, the Boto Business and the Boto Business Assets will amount to HK$994 million (subject to adjustments as described below). The Consideration shall be payable in cash on Completion.

     Page 7 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

    Upon finalisation of the Audited Completion Accounts (as defined in the Disposal Agreement) (i.e. the statement of accounts of the aggregation of the audited consolidated balance sheet of Boto Strategic and its subsidiaries and the audited statement of assets and liabilities of Boto Business as at the date of Completion):

    (i) if the aggregate of Net Cash, Net Working Capital and Net Fixed Asset, (each as

    defined in the Disposal Agreement) derived from the Audited Completion Accounts

    shall be less than HK$709 million, the Vendors shall pay to the Purchasers an amount

    equal to the Aggregate Net Cash and Net Working Capital and Net Fixed Assets

    Shortfall (as defined in the Disposal Agreement); and/or

    (ii) if the Boto.Net Group Accounts Payable (as defined in the Disposal Agreement)

    derived from the Audited Completion Accounts shall be in excess of HK$32.6

    million, the Vendors shall pay to the Purchasers an amount equal to any such excess,

    in each case as repayment of the Consideration. Any such sum which is payable by the Vendors (if any) shall be due and payable to the Purchasers within 30 days from the finalisation of the abovementioned Audited Completion Accounts.

    The Consideration has been arrived at after arm's length negotiations between the parties taking into consideration, inter alia, the past performance of the Christmas festive products and leisure furniture businesses, the net asset values of Boto Strategic and its subsidiaries, the face value of the GCL Loan, the net asset value of Bo Cheong, the value of the Boto Business and the Boto Business Assets. The Consideration represents a price earnings multiple of approximately 6.4 times based on the audited profit attributable to Shareholders of approximately HK$156.4 million for the year ended 31st March, 2001. The Consideration, after adjusting for the pre-completion dividend and the Boto Property Disposal that are incidental to the Disposal and described in detail below, represents a price earnings multiple of approximately 7 times based on the audited profit attributable to Shareholders of approximately HK$156.4 million for the financial year ended 31st March, 2001. The Directors, including the independent non-executive Directors, consider that the Consideration is fair and reasonable to the Company.

     Page 8 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

Pre-completion dividend

    Pursuant to the Disposal Agreement, Boto Strategic and its subsidiaries and/or Boto Company shall declare and pay a dividend of an amount of HK$92.5 million to the Company and/or Topway on the business day immediately prior to the date of the Completion. The parties to the Disposal Agreement have agreed that such dividend shall not be included in the calculation of Net Cash (as defined in the Disposal Agreement) and Net Working Capital (as defined in the Disposal Agreement) for the purposes of the Audited Completion Accounts (as defined in the Disposal Agreement).

Net asset value undertaking

    Pursuant to the Disposal Agreement, the Company has undertaken to the Purchasers that it and its subsidiaries will maintain net assets of not less than HK$200 million for a period of 15 months after Completion. However, in the event that, during the TOB Notice Period, any TOB Proceedings are instituted and:

    (i) in aggregate such proceedings relate to an amount in excess of HK$70,000,000; and

    (ii) the liabilities to which such proceedings relate are Excluded Liabilities (as defined in

    the Disposal Agreement); and

    (iii) such proceedings have not been settled on or before the date of the Disposal

    Completion,

    the Company has undertaken to the Purchasers that it and its subsidiaries will maintain net assets of not less than HK$200 million plus the difference between the aggregate amount of the liabilities to which the TOB Proceedings relate and HK$70,000,000 for the period from the date of the Completion until the earlier of the date on which such proceedings have been settled and/or finally determined or the end of the 15-month period referred to above.

    In the event that, during the TOB Notice Period, any TOB Proceedings are instituted and:

    (i) in aggregate such proceedings relate to an amount in excess of HK$10,000,000; and

    (ii) the liabilities to which such proceedings relate are Excluded Liabilities (as defined in

    the Disposal Agreement); and

     Page 9 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

    BOTO INTERNATIONAL HOLDINGS LIMITED

    (iii) such proceedings have not been settled on or before the last date of the 15-month

    period referred to above,

    the Company has undertaken to the Purchasers that it and its subsidiaries will, after the end of the 15-month period referred to above and until each such proceedings have been settled and/or finally determined, maintain net assets of not less than:

    (i) the aggregate amount of the liabilities to which the TOB Proceedings relate; or

(ii) the outstanding amount of such liabilities,

whichever is less.

Conditions

    Completion is subject to each of the following conditions being satisfied or waived (in the case of the conditions described in paragraph (ii) to (iv) below:

    (i) the passing of the necessary resolutions by the Independent Shareholders at a special

    general meeting of the Company to approve the Disposal Agreement and the

    transactions contemplated thereunder;

    (ii) all consents, approvals or clearances required under any and all applicable laws and

    relevant agreements with third parties for the sale and purchase of the Sale Shares

    and the Boto Business and to give effect to the transactions contemplated under the

    Disposal Agreement being obtained;

    (iii) the receipt by the Purchasers of legal opinions from their legal advisors in the agreed

    terms and from the Hong Kong and Bermuda legal advisors of the Vendors in the

    form to be agreed between the Purchasers and the Hong Kong legal advisors of the

    Vendors; and

    (iv) the delivery by the Company and Boto Company to the Purchasers of the list of

    documents specified in the Disposal Agreement.

     Page 10 of 28

    Boto International Holdings Limited Announcement

    (2nd April, 2002)

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