By 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 Bermuda with limited liability)
(Stock Code: 8046) MAJOR TRANSACTION DISPOSAL OF ASSETS Financial Adviser to the Company
In November 2010, as part of its digital cable television business, the Vendor, an indirect wholly-owned subsidiary of the Company, entered into a business cooperation agreement with Hebei TV, a State-owned television broadcasting company in Hebei Province, PRC, to develop and construct digital cable television broadcasting networks in the rural areas of Hebei for a term of 15 years. Under the said agreement, the Vendor would provide to Hebei TV among other things the necessary telecommunication equipment and technical services for constructing the cable digital television networks in rural Hebei in return for a share of the revenue received by Hebei TV from its television subscribers. Subsequently, various subsidiary contracts were entered into between the Vendor and the Purchaser, a wholly-owned subsidiary of Hebei TV which was designated by Hebei TV to perform the cooperation agreement, with detailed terms on the technical cooperation and the construction and operation of the networks between the parties.
On 31 December 2013, the Vendor and the Purchaser entered into the Termination Agreement, pursuant to which the Vendor conditionally agreed to sell to the Purchaser, and the Purchaser conditionally agreed to purchase from the Vendor, the Assets in three tranches at a total consideration of RMB108 million (equivalent to approximately HK$138.2 million), which will be satisfied in full by cash upon completion of each of the tranches.
Upon the Final Completion, (i) the Vendor will waive all its rights to the accounts receivable accrued up to the date of the Final Completion due from the Purchaser, representing the Vendor's share of the revenue from the subscribers in Hebei under the Cooperation Agreement and (ii) the Cooperation Agreement shall forthwith terminate and none of the Vendor, the Purchaser and Hebei TV will have any further rights and obligations thereunder.
* For identification purposes only
- 1 -
As at 31 October 2013, the total amount of accounts receivable due from the Purchaser was approximately
RMB120.5 million (equivalent to approximately HK$154.2 million).
As the Disposal, together with the waiver of accounts receivable, exceeds 25% but does not exceed 75% of one or more of the applicable percentage ratios (as defined in the GEM Listing Rules), it constitutes a major disposal for the Company under the GEM Listing Rules and is therefore subject to the approval of the Shareholders at the SGM.
Reference is made to the announcement of the Company dated 26 November 2010 regarding the business cooperation agreement made on the same date between the Vendor as part of its digital cable television business and Hebei TV in respect of the development and construction of digital cable television broadcasting networks in the rural areas of Hebei. Under the said agreement, which has a term of 15 years, the Vendor would provide to Hebei TV among other things the necessary telecommunication equipment and technical services for constructing the cable digital television networks in rural Hebei in return for a share of the revenue received by Hebei TV from its television subscribers. Subsequently, various subsidiary contracts were entered into between the Vendor and the Purchaser, a wholly-owned subsidiary of Hebei TV which was designated by Hebei TV to perform the cooperation agreement, with detailed terms on the technical cooperation and the construction and operation of the networks between the parties.
As at 31 October 2013, the total amount of accounts receivable due from the Purchaser, representing the Vendor's share of revenue from television subscribers in Hebei under the Cooperation Agreement, was approximately RMB120.5 million (equivalent to approximately HK$154.2 million). Owing to certain disputes between the Purchaser and the Vendor in relation to their respective obligations under the Cooperation Agreement as further described under the section headed "Reasons for the Disposal" below, the Vendor and the Purchaser agreed to terminate their cooperation and settle their accrued rights and obligations under the Cooperation Agreement. Accordingly, they entered into the Termination Agreement on 31 December 2013.
On 31 December 2013 (after trading hours of the Stock Exchange), the Vendor and the Purchaser entered into the Termination Agreement, pursuant to which the Vendor conditionally agreed to sell to the Purchaser, and the Purchaser conditionally agreed to purchase from the Vendor, the Assets in three tranches at a total consideration of RMB108 million (equivalent to approximately HK$138.2 million), which will be satisfied in full by cash upon completion of each of the tranches.
Termination AgreementDate: 31 December 2013
Parties
Vendor: Shenzhen Champion Maxiumic Group Co., Limited* (
