Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim 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 the Cayman Islands with limited liability)
Stock Code: 8156
The Board is pleased to announce that on 12 January 2016 (after trading hours), the Company has entered into the Restructuring Agreement with the Sellers and Anhui Ao Cai through its wholly-owned subsidiary, as the Purchaser, pursuant to which the Purchaser has conditionally agreed to acquire, and the Sellers have conditionally agreed to sell, the Target Interests (representing 8.54% of the equity interest in Anhui Ao Cai upon the Completion). The Consideration shall amount to approximately RMB15,297,200.
Upon the Completion, the Company, through the Purchaser, will indirectly hold 59.54% of the equity interest in Anhui Ao Cai from the previous 51%.
As at the date of this announcement, the Sellers are substantial shareholders and directors of Anhui Ao Cai. Since Anhui Ao Cai is a non-wholly-owned subsidiary of the Company prior to the Completion, the Sellers are connected persons to the Company and to the transactions contemplated under the Restructuring Agreement, which constitutes a connected transaction for the Company under Chapter 20 of the GEM Listing Rules.
As the applicable percentage ratios for the Acquisition are over 0.1% but less than 5%, the Acquisition is subject to the reporting and announcement requirements but is exempt from the circular (including independent financial advice) and shareholders' approval requirement pursuant to Rule 20.74(2)(a) of the GEM Listing Rules.
The Board is pleased to announce that on 12 January 2016 (after trading hours), the Company entered into the Restructuring Agreement with the Sellers through its wholly-owned subsidiary, collectively as the Purchaser, pursuant to which the Purchaser has agreed to purchase, and the Sellers have agreed to sell, the Target Interests (representing 8.54% of the equity interest in Anhui Ao Cai). Upon Completion, the Company, through the Purchaser, will indirectly hold 59.54% of the equity interest in Anhui Ao Cai from the previous 51%.
RESTRUCTURING AGREEMENT
Date: 12 January 2016
Parties:
Purchaser: United Power Asia Investment Limited, directly holds 51% of the equity interest in Anhui Ao Cai;
Sellers: Mr. LYU Dong, beneficial owner of 17.15% of the equity interest in Anhui Ao Cai;
Mr. TOnG Jun, beneficial owner of 17.15% of the equity interest in Anhui Ao Cai;
Mr. HOU Zong Jian, beneficial owner of 7.35% of the equity interest in Anhui Ao Cai; and
Mr. JIAnG Gao, beneficial owner of 7.35% of the equity interest in Anhui Ao Cai.
As at the date of this announcement, Mr. LYU Dong, Mr. TOnG Jun, Mr. HOU Zong Jian and Mr. JIAnG Gao are all shareholders and directors of the Anhui Ao Cai. Therefore, all of them are connected persons of the Company (as defined under the GEM Listing Rules).
The Restructuring Agreement is a legally binding agreement which governs the structure and the obligations of the parties in relation to the Acquisition. The Consideration was determined and negotiated on an arm's length basis between all parties with reference to the business prospects of Anhui Ao Cai.
Upon fulfillment of all the below, the Purchaser shall acquire an additional 8.54% of the equity interest in Anhui Ao Cai. Upon the Completion, the Company, through the Purchaser, will indirectly hold 59.54% of the equity interest in Anhui Ao Cai from the previous 51%.
The principal terms of the Restructuring Agreement are as follows:-
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6.25% Equity Interest to be Acquired by Cash
Pursuant to the Restructuring Agreement, the Purchaser has conditionally agreed to acquire and Sellers have conditionally agreed to sell 6.25% of the equity interest in Anhui Ao Cai at a cash consideration of RMB8,500,000 upon the agreed conditions have been fulfilled as stipulated:-
the Sellers shall dispose of and surrender pre-emptive right to 6.25% of their equity interest in Anhui Ao Cai (prior to the Restructuring Agreement) to the Purchaser (or other entities nominated by the Purchaser) and complete the registration with the Anhui Administration for Industry and Commerce;
Within one month upon the signing of the Restructuring Agreement, the Sellers shall ensure that Anhui Ao Cai will enter into a cooperation agreement with ningxia Hui Autonomous Region Sports Lottery Administration Centre;
Within three months upon the signing of the Restructuring Agreement, the Sellers shall ensure that Anhui Ao Cai shall renew the self-service sales cooperation agreement with Anhui Sports Lottery Administration Centre. In the event of failure to achieve such renewal the Sellers shall, within one month at the end of the three month period, ensure that Anhui Ao Cai will enter into a self-service sales cooperation agreement with a provincial level Sports Lottery Administration Centre ranked amongst the top eighteen in terms of sales in 2015 according to data provided by the PRC government.
As at the date of this announcement, the Purchaser holds 51% of the equity interest in Anhui Ao Cai. Upon fulfillment of the above terms and conditions in the Restructuring Agreement, the Purchaser shall settle RMB8,500,000 pertaining to the equity interest in Anhui Ao Cai to the Sellers (or the Sellers' nominee(s)) by cash. Immediately after completion of transaction, the Purchaser will increase its equity holding in Anhui Ao Cai by 6.25% to 57.25%.
Pursuant to the Restructuring Agreement, the Group shall conditionally transfer the SG Interest to Anhui Ao Cai for approximately RMB1,512,200. At the same consideration by way of capital injection, the Purchaser has agreed to further acquire 1.18% (effectively 0.49% net of dilution effect) of the equity interest in Anhui Ao Cai upon the Completion.
Pursuant to the Restructuring Agreement, the Company shall conditionally transfer the rights to operate certain sports lottery related business in Sichuan to Anhui Ao Cai for approximately RMB5,285,000. At the same consideration by way of capital injection, the Purchaser has agreed to further acquire 4.12% (effectively 1.8% net of dilution effect) of the equity interest in Anhui Ao Cai upon the Completion.
Conditions Precedent
Completion is conditional upon the satisfaction of all conditions precedent as stipulated in the Restructuring Agreement.
Completion
Completion shall take place within six month upon the execution of the Restructuring Agreement.
In the event that the acquisition of 6.25% of the equity interest in Anhui Ao Cai will not proceed, the adjustment mechanism in the Restructuring Agreement shall be triggered rendering the Purchaser's equity interest in Anhui Ao Cai to reach 59.60% upon the completion of transfer of SG Interest and transfer of operating rights of Sichuan Jia Ming.
Termination
Both parties may terminate the Restructuring Agreement upon the occurrence of a force majeure event (rendering performance of the Restructuring Agreement impossible) or due to a substantial subsequent change in events at any time upon mutual agreement by both parties.
China Vanguard Group Ltd. issued this content on 2016-01-13 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-13 02:25:03 UTC
Original Document: http://www.cvg.com.hk/attachment/201601131009481740039248_en.pdf
