RNS Number:7105T
Pokphand (C.P.) Co Ltd
30 December 2003
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.
C.P. POKPHAND CO. LTD.
(Incorporated in Bermuda with limited liability)
DISCLOSEABLE TRANSACTION
DISPOSAL OF CERTAIN EQUITY INTERESTS IN
SHANGHAI-EK CHOR GENERAL MACHINERY CO., LTD.
The board of Directors announces that on 26th December, 2003, the Vendor (an
indirect wholly-owned subsidiary of the Company), Purchaser (1) and Purchaser
(2) entered into the Equity Transfer Contract whereby the Vendor agreed to
dispose of 32.5% and 17.5% equity interests in SEGM to Purchaser (1) and
Purchaser (2) respectively, representing the Group's entire equity interests in
SEGM, for the respective consideration of US$26,000,000 (HK$202,800,000) and
US$14,000,000 (HK$109,200,000).
The Disposal constitutes a discloseable transaction of the Company under Rule
14.12 of the Listing Rules as both (i) the aggregate amount of the consideration
for the transfer of 50% equity interest in SEGM under the Disposal; and (ii) the
net tangible assets of SEGM attributable to the equity interest being sold by
the Vendor under the Disposal represent more than 15% (but less than 50%) of the
latest published net tangible asset value of the Group of US$127,140,000 (being
the unaudited net tangible asset value of the Group as at 30th June, 2003).
A circular containing further details of the Disposal will be issued to
shareholders of the Company as soon as practicable.
A.THE EQUITY TRANSFER CONTRACT
Date: 26th December, 2003
Parties:
(i)Vendor (an indirect wholly-owned subsidiary of the Company)
(ii)Purchaser (1) (an Independent Third Party)
(iii)Purchaser (2) (an Independent Third Party)
Transfer of equity interests
Pursuant to the Equity Transfer Contract, each of Purchaser (1) and Purchaser
(2) has conditionally agreed to acquire from the Vendor the following portions
of equity interests in SEGM and for the consideration as follows:
Equity
interests
Transferee to be Consideration
transferred
Purchaser (1) 32.5% US$26,000,000
(HK$202,800,000)
Purchaser (2) 17.5% US$14,000,000
(HK$109,200,000)
The consideration for the Disposal was determined by commercial negotiations
between the parties on an arm's length basis having regard to the financial
performance and the net tangible asset value of SEGM as at 31st December, 2002.
The aggregate consideration for the Disposal represents (i) a premium of
approximately 67% to the amount of RMB198,680,000 (approximately
HK$186,759,000), representing 50% (being the aggregate equity interest in SEGM
being sold by the Vendor under the Disposal) of the audited net tangible asset
value of SEGM as at 31st December, 2002; and (ii) a premium of approximately 66%
to the amount of RMB199,567,000 (approximately HK$187,593,000), representing 50%
(being the aggregate equity interest in SEGM being sold by the Vendor under the
Disposal) of the audited net asset value of SEGM as at 31st December, 2002.
Pursuant to the Equity Transfer Contract, the aggregate consideration for the
Disposal is payable in cash by Purchaser (1) and Purchaser (2) within 10 days
from the Approval Date.
The aggregate 50% equity interest in SEGM being sold by the Vendor under the
Disposal represents the Group's entire interest in SEGM. Upon completion of the
Disposal, the Group will have no further interest in SEGM.
Condition
The Disposal shall take effect upon the date on which all necessary approvals
from the relevant PRC authorities of the transactions contemplated in the Equity
Transfer Contract have been obtained, which is required under the Equity
Transfer Contract to be no later than 15th March, 2004.
Information on SEGM
SEGM was established in the PRC on 14th May, 1990 as a sino-foreign equity joint
venture. The registered capital and total investment of SEGM are US$29,840,000
(approximately HK$232.8 million) and US$74,600,000 (approximately HK$581.9
million) respectively. As at the date of this announcement, the equity interests
in SEGM are owned as to 50% by the Vendor and as to 40% and 10% respectively by
two PRC parties which are Independent Third Parties. SEGM has been accounted for
in the Group's financial results as a jointly controlled entity of the Company.
SEGM is principally engaged in the production and sale of automotive air
conditioner compressors and other automotive accessories. The table below sets
out audited financial information on SEGM (based on accounts prepared in
accordance with the accounting principles generally accepted in the United
States of America) for the two years ended 31st December, 2002:
Year ended Year ended
31st December, 2002 31st December, 2001
RMB'000 HK$'000 RMB'000 HK$'000
Turnover 1,039,054 976,711 985,784 926,637
Profit before taxation and
extraordinary items 163,809 153,980 183,151 172,162
Taxation 44,488 41,819 49,745 46,760
Profit after taxation and
extraordinary items 119,321 112,162 133,406 125,402
The audited net tangible assets of SEGM as at 31st December, 2001 and 2002 were
RMB385,069,000 (approximately HK$361,965,000) and RMB397,360,000 (approximately
HK$373,518,000) respectively. The audited net assets of SEGM as at 31st
December, 2001 and 2002 were RMB388,337,000 (approximately HK$365,037,000) and
RMB399,133,000 (approximately HK$375,185,000) respectively.
B.REASONS FOR THE DISPOSAL
The Group is principally engaged in the trading of agricultural products,
feedmill and poultry operations, the production and sale of motorcycles and
accessories for automotives and property and investment holding.
As previously disclosed in, among others, the 2002 annual report, the 2003
interim report and the announcement issued by the Company in November this year
in connection with the Group's debt restructuring arrangements, the Group is
required to make scheduled distributions to its creditors to reduce its
indebtedness and such distributions are to be funded by various means including
cashflows from operations and proceeds from asset disposals. The Disposal will
form part of the overall asset disposal program contemplated under the Group's
debt restructuring arrangements. As at the date of this announcement, the
Company has made an aggregate distribution of US$334.2 million. As disclosed in
the 2003 interim report of the Company, the Company's creditors have agreed to
an amended debt reduction schedule and an extension of the period of the
restructuring by twelve months to 31st December, 2004.
After deducting the expenses comprising potential capital gain tax, stamp duty
and professional fees amounting to approximately US$2,000,000 (HK$15,600,000),
the net proceeds of the Disposal of approximately US$38,000,000 (approximately
HK$296,400,000) will be used for reducing the Group's debts.
C.DISCLOSEABLE TRANSACTION
The Disposal constitutes a discloseable transaction of the Company under Rule
14.12 of the Listing Rules as both (i) the aggregate amount of the consideration
for the transfer of 50% equity interest in SEGM under the Disposal
(US$40,000,000); and (ii) the net tangible assets of SEGM attributable to the
equity interest being sold by the Vendor under the Disposal (RMB198,680,000)
represents more than 15% (but less than 50%) of the latest published net
tangible asset value of the Group of US$127,140,000 (being the unaudited net
tangible asset value of the Group as at 30th June, 2003).
D.GENERAL
A circular containing further details of the Disposal will be issued to
shareholders of the Company as soon as practicable.
Definitions
"Approval Date" the date on which all necessary approvals from the relevant PRC
authorities of the transactions contemplated in the Equity
Transfer Contract have been obtained
"associate(s)" has the meaning ascribed to it under the Listing Rules
"Company" C.P. Pokphand Co. Ltd., an exempted company incorporated in
Bermuda with limited liability whose shares are listed on the
main board of the Hong Kong Stock Exchange and the London Stock
Exchange Limited
"Directors" the directors of the Company
"Disposal" the disposal by the Vendor to Purchaser (1) and Purchaser (2) of
certain equity interests in SEGM pursuant to the terms of the
Equity Transfer Contract
"Equity the conditional equity transfer contract entered into between
Transfer the Vendor, Purchaser (1) and Purchaser (2) dated 26th December,
Contract" 2003 relating to the Disposal
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the People's
Republic of China
"Independent independent third party(ies) who are not connected with the
Third Party Company or the director, chief executive or substantial
(ies)" shareholder (as defined in the Listing Rules) of the Company or
any of its subsidiaries or any of their respective associates
"Listing Rules" the Rules Governing the Listing of Securities on the Hong Kong
Stock Exchange
"PRC" the People's Republic of China
"Purchaser (1)" a limited company established in Japan which is an Independent
Third Party
"Purchaser (2)" a company established in Germany which is an Independent Third
Party
"SEGM" (Shanghai-Ek Chor General Machinery Co.,
Ltd.), a sino-foreign equity venture established in the PRC
which is owned as to 50% by the Vendor, and as to 40% and 10%
respectively by two PRC parties which are Independent Third
Parties
"Hong Kong The Stock Exchange of Hong Kong Limited
Stock Exchange"
"Vendor" Ek Chor Investment Company Limited, a company incorporated in
Hong Kong with limited liability and which is an indirectly
wholly-owned subsidiary of the Company
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"RMB" Renminbi yuan, the lawful currency of the PRC (except the
territories of Hong Kong and the Macau Special Administrative
Region)
"US$" United States dollars, the lawful currency of the United States
"%" per cent.
By Order of the Board
Dhanin Chearavanont
Chairman and Chief Executive Officer
Hong Kong, 29th December, 2003
Note: For the purpose of this announcement, the following exchange rates have
been used for conversion into Hong Kong dollars for indication only:
RMB$1 = HK$0.94
US$1 = HK$7.80
This information is provided by RNS
The company news service from the London Stock Exchange
END
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