Download PACIFIC ANDES - Announcement

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.
PACIFIC ANDES INTERNATIONAL
HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
CONNECTED TRANSACTION
INVOLVING THE SALE OF SHARES IN
NEW MILLENNIUM GROUP HOLDINGS LIMITED
TO PACIFIC ANDES (HOLDINGS) LIMITED
On 13 June 2000, Pelican, a wholly-owned subsidiary of the Company, entered into the Sale and
Purchase Agreement pursuant to which Pelican agreed to sell the Sale Shares to PAH for an
aggregate consideration of US$6,920,000 to be satisfied by the issue of the New Shares by PAH
to Pelican or, if Pelican so directs, Clamford, a wholly-owned subsidiary of the Company.
Completion of the Sale and Purchase Agreement is conditional upon a number of conditions as
set out below. The sale and purchase may or may not proceed.
The Directors believe that the disposal of the Business to PAH will allow the Group greater
flexibility in utilising the financial resources of the Group for the development and expansion of
the Business.
Under Chapter 14 of the Listing Rules, PAH is regarded as a "connected person" of the Company
and the Transaction constitutes a connected transaction requiring Shareholders' approval at a
special general meeting of the Company unless a waiver is granted by the Exchange.
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Pacific Andes International Holdings Limited – Connected Transaction
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The Exchange has indicated that a waiver may be granted to the Company from compliance with
the requirement to convene a special general meeting to approve the Transaction subject to (a)
N.S. Hong Investment (BVI) Limited, a major shareholder of the Company holding
approximately 53.1% of the issued share capital of the Company as at the date hereof approving
the Transaction, and (b) compliance by the Company, with the usual disclosure requirements for
connected transactions, including the issue of a circular to shareholders with a letter from an
independent financial adviser on the Transaction. In this regard, the Company will be issuing to
shareholders a circular setting out (among others) the details of the Transaction and also a letter
from an independent financial adviser on the Transaction.
1.
Date
13 June 2000
2.
Parties
Vendor
Purchaser
3.
:
:
Pelican, a wholly-owned subsidiary of the Company
PAH, a subsidiary of the Company whose shares are listed on the
SGX-ST
The Sale Shares and Information on NMGH
The Sale Shares represent the entire issued and paid-up share capital of NMGH.
NMGH and its 3 subsidiaries, Pacific Andes Vegetables Inc., Qingdao Pacific Andes
Farms Co. Limited and Qingdao New Millennium Food Co. Limited, are principally
engaged in the production and processing of vegetables in the Shandong province, PRC
("Business") for export to Japan and Western Europe. Details of the NMGH group are set
out below:
(a)
NMGH is incorporated in the British Virgin Islands on 4 February 1999 and has an
issued share capital of US$2 comprising two (2) ordinary shares of US$1 each. It is
an investment holding company and is also engaged in the trading of processed
vegetable products sourced from Qingdao New Millennium Food Co. Limited.
(b)
Pacific Andes Vegetables Inc. is incorporated in the British Virgin Islands on 15
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Pacific Andes International Holdings Limited – Connected Transaction
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December 1998 and has an issued share capital of US$1 comprising one share of
US$1 each. It is an investment holding company which holds the entire issued
share capital of Qingdao Pacific Andes Farms Co. Limited.
(c)
Qingdao Pacific Andes Farms Co. Limited is incorporated in the PRC on 21
January 1999 and has a paid-up share capital of RMB3,800,000. It is engaged in
the cultivation of vegetables in Qingdao, PRC.
(d)
Qingdao New Millennium Food Co. Limited is incorporated in the PRC on 30
March 1999 with a registered share capital of US$843,000. It is engaged in the
processing of vegetables.
The unaudited consolidated loss of the NMGH group for the six-month period ended 30
September 1999 was HK$3,076,000. The NMGH group is in the course of finalising its
accounts and the Company will provide financial information on the NMGH group for the
financial year ended 31 March 2000 in the circular to be despatched to shareholders as
referred to in paragraph 9 below.
4.
Consideration
US$6,920,000 (equivalent to approximately HK$53,699,000 based on an exchange rate of
HK$7.76 to US$1) to be satisfied by the issue by PAH of 34,600,000 New Shares,
representing approximately 16.43% of the issued and paid-up share capital of PAH as at 7
June 2000, to Pelican or, if Pelican so directs, the Company's wholly-owned subsidiary
Clamford Holdings Limited ("Clamford"). The New Shares will be issued at US$0.20 per
New Share. Application will be made for the New Shares to be listed on the SGX-ST.
Following the issue of the New Shares, the Company's shareholding in PAH will increase
from the existing 56.83% to 62.54% on a fully diluted basis.
5.
Lock up period for the New Shares
Pursuant to the Sale and Purchase Agreement, the Company has undertaken not to sell,
dispose of or transfer any of the New Shares for a period of twelve (12) months from their
date of issue.
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Pacific Andes International Holdings Limited – Connected Transaction
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6.
Basis of determining the Consideration
The Consideration was arrived at on a "willing buyer, willing seller" basis, and based on a
valuation report by Sallmanns (Far East) Ltd dated 9 June 2000 which valued the NMGH
Group on the discounted cashflow basis at US$6,920,000 as at 31 December 1999.
The purchase price of US$0.20 per New Share is the nominal value of the PAH Shares and
represents approximately 35% discount to the unaudited net tangible asset per PAH Share
as at 30 September 1999. It also represents a 56.45% premium to the weighted average
prices of PAH Shares for trades done on the SGX-ST for the five (5) market days
immediately preceding the date of signing of the Sale and Purchase Agreement.
7.
Conditions of the Sale and Purchase Agreement
Completion of the Sale and Purchase Agreement is conditional upon (among others):
(a)
the approval of the shareholders of PAH being obtained in a special general meeting.
The approval of PAH shareholders for the Transaction is required:
(i)
for the issued and allotment of the New Shares; and
(ii)
because the Transaction constitutes an interested person transaction within Chapter
9A of the SGX-ST Listing Manual for which shareholders' approval is required;
(b)
the in-principle approval of the SGX-ST for the listing of and quotation for the New
Shares on the Main Board of the SGX-ST; and
(c)
the approval of the shareholders of the Company in connection with the sale of the
Sale Shares by the Company to the PAH as required by the Listing Rules.
8.
Reasons for the Transaction
The Directors believe that injecting the Business under the PAH Group will allow the
Group greater flexibility in utilising the financial resources of the Group for the
development and expansion of the Business, because the NMGH group will be able to tap
not only the financial resources of the Company but also that of the PAH Group.
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Pacific Andes International Holdings Limited – Connected Transaction
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In view of the above, notwithstanding the dilution of the Company's equity interest in the
Business as a result of the Transaction, the Directors of the Company are of the view that
entering into the Transaction is in the interests of the Company.
9.
Connection between the parties
PAH is an indirect non wholly-subsidiary of the Company and is a "connected person" of
the Company for the purposes of the Listing Rules. The Transaction, therefore, consitutes
a connected transaction within Chapter 14 of the Listing Rules and requires independent
shareholders' approval of the Company in a special general meeting unless a waiver is
granted by the Exchange.
Although the Transaction is a connected transaction within Chapter 14 of the Listing Rules,
no director, chief executive or substantial shareholder of the Company or any of its
subsidiaries, nor any associate of any of them (as defined in the Listing Rules), has an
interest in PAH other than indirectly through the Company.
N.S. Hong Investment (BVI) Limited ("N.S. Hong"), the major shareholder of the
Company holding approximately 53.1% of the Company's issued share capital as at the
date hereof, is entitled to vote on any shareholders' resolution to approve the Transaction
and has confirmed that it approves of the Transaction. On this basis, the Exchange has
indicated that a waiver may be granted to the Company from compliance with the
requirement to seek shareholders' approval at a special general meeting, subject to (a) N.S.
Hong providing a written certificate of its approval of the Transaction, and (b) compliance
with the usual disclosure requirements for connected transactions, including the issue of a
circular to shareholders containing, among other things, an opinion from an independent
financial adviser as to the Transaction.
In view of the above, no special general meeting of the Company will be held to approve
the Transaction. A circular setting out (among others) further details of the Transaction and
the opinion of an independent financial adviser will be despatched to shareholders in due
course.
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Pacific Andes International Holdings Limited – Connected Transaction
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10. Business of the Group
The Group is principally engaged in global sourcing, further processing on shore and
international distribution of a variety of frozen seafood products, fuel-trading-at-sea, the
provision of shipping and agency services and trade related finance.
11. Terms used in this announcement
In this announcement, the following expressions have the meanings set out below unless
the context otherwise requires:
"Business"
has the meaning ascribed to it in paragraph 3 of this
Announcement;
"Clamford"
means Clamford Holdings Limited
"Company"
means Pacific Andes International Holdings Limited;
"Completion"
means completion of the Sale and Purchase Agreement;
"Directors"
means directors of the Company;
"Exchange"
means The Stock Exchange of Hong Kong Limited;
"Group"
means the Company and its subsidiaries;
"Listing Rules"
means the Rules Governing the Listing of Securities on the
Exchange;
"New Shares"
means 34,600,000 new PAH Shares;
"NMGH"
means New Millennium Group Holdings Limited;
"PAH"
means Pacific Andes (Holdings) Limited;
"PAH Group"
means PAH and its subsidiaries;
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Pacific Andes International Holdings Limited – Connected Transaction
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"PAH Share"
means an ordinary share of US$0.20 each in the capital of
PAH;
"Pelican"
means Pelican Food Limited;
"PRC"
means the People's Republic of China;
"Sale and Purchase
Agreement"
means the Agreement relating to the sale and purchase of the
entire issued share capital of NMGH;
"Sale Shares"
means two (2) ordinary shares of US$1 each in the capital of
NMGH;
"SGX-ST"
means Singapore Exchange Securities Trading Limited; and
"Transaction"
means the sale and purchase of the Sale Shares pursuant to the
Sale and Purchase Agreement.
For the purpose of this announcement, an exchange rate of HK$7.76 to US$1 is used.
By Order of the Board
Pacific Andes International Holdings Limited
Cheng Nai Ming
Company Secretary
Hong Kong, 13 June 2000
"Please also refer to the published version of this announcement in the South China Morning
Post"
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Pacific Andes International Holdings Limited – Connected Transaction
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