BENEFUN INT'L<1130> - Announcement & Resumption of Trading
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.
Benefun International Holdings Limited
(Incorporated in the Cayman Islands with limited liability)
Subscription of New Shares
The board of directors (the `Board') of Benefun International
Holdings Limited (the `Company') announces that pursuant to two
subscription agreements both dated 5th July, 1999 (the `Subscription
Agreements'), the Company has conditionally agreed to issue, and
Forest Leader Limited (`Forest Leader') and Danmeter (Asia) Limited
(`Danmeter') (the `Subscribers') have respectively agreed to
subscribe for, 39 million and 6 million new shares of HK$0.1 each
(the `Subscription Shares') in the share capital of the Company (the
`Subscription') at a price of HK$0.25 per Subscription Share (the
`Subscription Price').
Each of the Subscription Agreements is conditional upon the Listing
Committee of The Stock Exchange of Hong Kong Limited (the `Stock
Exchange') granting or agreeing to grant the listing of, and
permission to deal in, the number of Subscription Shares refered to
in the respective Subscription Agreement on or before 16th July, 1999
or such later date as the respective parties to the Subscription
Agreements may agree.
None of the Subscribers and their respective associates (as defined
in The Rules Governing the Listing of Securities on the Stock
Exchange (the `Listing Rules')), directors, shareholders and
beneficial owners is a connected person (as defined in the Listing
Rules) of the Company.
The Subscription Shares represent approximately 9.39% and 8.58% of
the existing and enlarged issued share capital of the Company
respectively.
The net proceeds of the Subscription of approximately HK$11.2
million will be used by the Company and its subsidiaries (the
`Group') as to approximately HK$5 million to repay all the
outstanding bank borrowings and other liabilities of the Company, as
to approximately HK$4 million for potential business projects and
development of the Group and as to the balance of approximately
HK$2.2 million as working capital.
The Company requested suspension of tradings of the Company's shares
on both the Stock Exchange and the Singapore Stock Exchange on 6th
July, 1999. Tradings of the Company's shares will resume at 10:00
a.m. on the Stock Exchange and at 9:00 a.m. on the Singapore Stock
Exchange on 7th July, 1999.
Subscription agreements dated 5th JULY, 1999
Subscription Shares
45 million new shares of HK$0.1 each in the capital of the Company,
representing approximately 9.39% and 8.58% of the existing and
enlarged issued share capital of the Company respectively.
The Subscription Shares will rank pari passu in all respects with
the other shares of the Company (the `Shares') in issue at the date
of completion of the Subscription. The Subscription Shares to be
issued represent approximately 46.92% of approximately 95.9 million
Shares in respect of which a general mandate has been granted to the
directors of the Company at the extraordinary general meeting of the
Company held on 18th December, 1998 to allot, issue and deal with the
same.
Subscription Price
HK$0.25 per Subscription Share
The Subscription Price was determined after arm's length
negotiations between the Subscribers and the Company. The
Subscription Price represents a discount of approximately 23.08% to
the average closing price of HK$0.325 per Share as quoted on the
Stock Exchange for the last thirty trading days ended on 5th July,
1999, a discount of approximately 46.92% to the average closing price
of HK$0.471 per Share as quoted on the Stock Exchange for the last
ten trading days ended on 5th July, 1999 and a discount of
approximately 48.98% to the closing price of HK$0.49 per Share as
quoted on the Stock Exchange on 5th July, 1999. Although the
Subscription Price of HK$0.25 represents a discount of approximately
48.98% to the closing price as on 5th July, 1999, the extent of such
discount is due to the short-term sharp increase in the Company's
share price over the past three weeks as compared to the steady share
price in the past months. Based on the longer term share price
movement of the Company's shares from early January to 5th July, 1999
which was at most of the time between HK$0.2 to HK$0.24 and in view
of the Subscribers' long term investment intention in the Company and
the fact that negotiation between the Company and the Subscribers in
respect of the Subscription began in around the second week of June,
1999 at which time the share price was at the level of HK$0.25, the
Board considers the Subscription Price is fair and reasonable to the
Company and its shareholders.
The Subscribers
39 million Subscription Shares, representing approximately 8.14% and
7.44% of the existing and enlarged issued share capital of the
Company respectively, will be placed to Forest Leader. 6 million
Subscription Shares, representing approximately 1.25% and 1.14% of
the existing and enlarged issued share capital of the Company
respectively, will be placed to Danmeter.
Forest Leader is a company incorporated in Hong Kong on 15th August,
1986 and Mr. Yuen Chi, John together with his wife, Madam Lau Yick
Kiu, Mavis, own approximately 49.67% of its issued share capital. The
aggregate balance of approximately 50.33% of the issued share capital
of Forest Leader is held by four other independent shareholders.
Forest Leader is engaged in importing and distributing medical
equipment and consumables in Hong Kong. Danmeter is a company
incorporated in Hong Kong on 14th July, 1997 and is owned as to 70%
by Danmeter A/S which in turn is a company incorporated in Denmark.
The remaining 30% of Danmeter is owned by Mr. Yuen Chi, John.
Danmeter is engaged in distributing medical equipment manufactured by
Danmeter A/S in Asia. Danmeter and a company in which Mr. Yuen Chi,
John holds 50% interest respectively own 10% and 30% interest in a
joint venture company, namely Danco Group Limited, in which the
Company has 40% interest. The joint venture partners of Danco Group
Limited entered into this joint venture on 24th March, 1999 to engage
in the distribution of medical equipment in mainland China. The
Subscribers intend to hold the Subscription Shares as long-term
investment.
None of the Subscribers and their respective associates (as defined
in the Listing Rules), directors, shareholders and beneficial owners
is a connected person (as defined in the Listing Rules) of the
Company and save as aforesaid, the Subscribers and their respective
directors, shareholders and beneficial owners 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 (as defined in the Listing Rules). At
present, it is not intended that any representative of Forest Leader
and Danmeter be appointed on the Board.
Condition of the Subscription
Each of the Subscription Agreements is conditional upon the Listing
Committee of the Stock Exchange granting or agreeing to grant the
listing of, and permission to deal in, the number of Subscription
Shares referred to in the respective Subscription Agreement.
Completion
Subject to the satisfaction of the condition stated above,
completion of the Subscription Agreements is expected to take place
on the third business day after the date on which the condition is
fulfilled, which shall be no later than 16th July, 1999 (or such
later date as the Company and the respective Subscribers may agree
prior to completion of the Subscription).
Application for listing
Application will be made to the Stock Exchange for the listing of,
and permission to deal in, the Subscription Shares.
Substantial shareholders
The impact of the Subscription on the shareholdings in the Company
of the substantial shareholders of the Company (according to the
register of interests kept by the Company under section 16(1) of the
Securities (Disclosure of Interests) Ordinance) will be as follows:
Name of substantial As at 6th July, 1999 Immediately After
shareholder the Placing (note 3)
Tan Sim Chew (note 24.8% 22.7%
1)
Chen Miao Zhu (note 14.9% 13.6%
1)
Crimson 14.9% 13.6%
International
Limited
Soh Kim Yong 11.8% 10.8%
Double 13.6% 12.5%
International
Limited
Ng Guek Keow (note 13.6% 12.5%
2)
Notes:
1.
Tan Sim Chew and Chen Miao Zhu, executive directors of the Company,
are beneficial shareholders of 60% and 40% respectively of the issued
share capital of Crimson International Limited. Their respective
interests in the Company include the shares in the Company held by
Crimson International Limited.
2.
Ng Guek Keow, an independent third party, is the beneficial
shareholder of the entire issued share capital of Double
International Limited. Her interest includes the shares in the
Company held by Double International Limited.
3.
Assuming there is no change in the issued share capital of the
Company other than the issue of the Subscription Shares and the
shareholdings of the substantial shareholders in the Company are the
same as those on 6th July, 1999.
Reasons for the Subscription and use of proceeds
The Board considers the terms of the Subscription to be fair and
reasonable and are in the interests of the Company and its
shareholders. The Board further believes that the Subscription will
enlarge the capital base of the Company and further strengthen the
financial position of the Company.
The Company is principally engaged in the retailing and manufacture
of casual wear in mainland China. As at the date of this
announcement, the Company has total outstanding bank borrowings and
other liabilities of approximately HK$5 million. The net proceeds of
approximately HK$11.2 million from the Subscription will be used as
to approximately HK$5 million to repay all the outstanding bank
borrowings and other liabilities of the Company, as to approximately
HK$4 million for potential business projects and development of the
Group and as to the balance of approximately HK$2.2 million as
working capital.
The Company is currently considering the possibility of
diversifying further into the distribution of medical equipment
business (the `Diversification') and there have been preliminary
discussions relating thereto. However, save as aforesaid and the
entering into of the joint venture of Danco Group Limited, no
contracts or agreement in relation to the Diversification have been
entered into.
The Company requested suspension of tradings of the Company's shares
on both the Stock Exchange and the Singapore Stock Exchange on 6th
July, 1999. Tradings of the Company's shares will resume at 10:00
a.m. on the Stock Exchange and at 9:00 a.m. on the Singapore Stock
Exchange on 7th July, 1999.
By Order of the Board
Tan Sim Chew
Chairman
Hong Kong, 6th July, 1999
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