CCT Fortis : Announcement Regarding Consent Given to Glory Merit to Place 10,000,000,000 CCT Land Shares at HK$0.035 per Share and Arrangement to Repay the Transfer Consideration and Release of the Undertakings

Microsoft Word - e_138_ announcement on voluntary basis _26 Janaury 2016 (final)

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 and continued in Bermuda with limited liability)

(Stock Code: 00138)

ANNOUNCEMENT REGARDING CONSENT GIVEN TO GLORY MERIT TO PLACE 10,000,000,000 CCT LAND SHARES AT HK$0.035 PER SHARE AND ARRANGEMENT TO REPAY THE TRANSFER CONSIDERATION AND RELEASE OF THE UNDERTAKINGS

This announcement is made by the Company on a voluntary basis.

Reference is made to the announcement dated 25 September 2015 and the circular dated 20 October 2015 of the Company and the Joint Announcements.

THE AGREEMENT 26 January 2016 (after trading hours of the Stock Exchange), the Agreement was entered into by and among Glory Merit, the Company and Jade Assets, under which it was agreed that, the Company and Jade Assets have given consent to Glory Merit to place 10,000,000,000 CCT Land Shares at HK$0.035 per CCT Land Share, the arrangements for Glory Merit to repay the Transfer Consideration and to release the Undertakings in respect of the Convertible Bonds and CCT Land Shares held by Glory Merit.

After signing of the Agreement, Glory Merit has entered into the Placing Agreement with Kingsway Financial to appoint Kingsway Financial as the placing agent to place on a best efforts basis, during the Placing Period of up to 10,000,000,000 Placing Shares, at the Placing Price of HK$0.035 per CCT Land Share. Glory Merit has agreed that the net proceeds from the Placing of all the 10,000,000,000 Placing Shares will be remitted the Company as full settlement of the Transfer Consideration due to the Company and Jade Assets.

This announcement is made by the Company on a voluntary basis. Reference is made to the announcement dated 25 September 2015 and the circular dated 20 October 2015 of the Company and the Joint Announcements.

THE AGREEMENT

The Agreement was entered into amongst the following parties and the key terms of which are as follows:

Date:

26 January 2016 (after trading hours of the Stock Exchange)

Parties:

1. Glory Merit : Glory Merit International Investment Limited,

   
   

2. the Company: CCT Fortis Holdings Limited; and

   
   

3. Jade Assets: Jade Assets Company Limited.

   
   

   To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, Glory Merit and its ultimate beneficial owner(s) is a third party independent of the Company and connected persons of the Company.

   
   

   Background and subject matter of the Agreement

   
   

   As at the date of this announcement, Glory Merit is indebted to the Company and Jade Assets a total amount of HK$300,000,000, representing the Transfer Consideration payable to the Company and Jade Assets pursuant to the Transfer Agreement. As disclosed in the Joint Announcements, Glory Merit has subscribed for HK$300,000,000 Convertible Bonds as settlement of equal amount of the Promissory Notes then due by CCT Land to Glory Merit, pursuant to the terms and conditions of the Subscription Agreement. The transactions under the Subscription Agreement were completed on 7 December 2015 and Convertible Bonds in the principal amount of HK$300,000,000 have been issued by CCT Land to Glory Merit, and the Convertible Bonds of the principal amount of HK$90,000,000 have been converted by Glory Merit into 9,000,000,000 CCT Land Shares in December 2015. As at the date of this announcement, Glory Merit holds 9,000,000,000 CCT Land Shares and Convertible Bonds of the principal amount of HK$210,000,000,

   convertible into 21,000,000,000 Conversion Shares, based on the initial Conversion Price of HK$0.01 per Conversion Share (subject to adjustment pursuant to the CB Conditions). The 9,000,000,000 CCT Land Shares and the Convertible Bonds of HK$210,000,000 held by Glory Merit were subject to restrictions under the Undertakings under the Subscription Agreement.

   
   

   The Agreement is entered to facilitate Glory Merit to repay the Transfer Consideration, the key terms of which are summarized as follows:

   
   

4. The Company and Jade Assets have agreed to release the Undertakings in respect of the Convertible Bonds and the CCT Land Shares held by Glory Merit and have agreed to give consent to Glory Merit to enter into the Placing Agreement with Kingsway Financial, in respect of placing of the Placing Shares.

   
   

5. Glory Merit will convert part of the Convertible Bonds that it owns into CCT Land Shares and out of the CCT Land Shares which it holds or it will hold, Glory Merit will deposit a total of 10,000,000,000 CCT Land Shares into the securities account maintained by Glory Merit with Kingsway Financial for placing purposes.

   
   

6. Glory Merit would enter into the Placing Agreement with Kingsway Financial to appoint Kingsway Financial as the placing agent, to place on a best efforts basis up to 10,000,000,000 Placing Shares held by Glory Merit, at the Placing Price of HK$0.035 per CCT Land Share, during the Placing Period commencing from the date of the Placing Agreement to 30 April 2016. Glory Merit has entered into the Placing Agreement with Kingsway Financial after the signing of the Agreement.

   
   

7. Glory Merit has agreed that all the net proceeds from the Placing, after deduction of the placing agent's fees and the transaction expenses will be remitted to the Company as full settlement of the Transfer Consideration due by Glory Merit to the Company and Jade Assets.

   
   

8. Provided that Glory Merit has fully complied with provisions in the Agreement, it would have no further repayment obligations in respect of the Transfer Consideration.




The 10,000,000,000 Placing Shares represent approximately 10.84% of the existing total number of issued shares of CCT Land.

The Placing Price of HK$0.035 per Placing Share represents:




1. a premium of approximately 40.0% to the closing price of HK$0.025 per CCT Land Share as quoted on the Stock Exchange on 25 January 2016, being the date immediately prior to the date of the Agreement (the "Last Trading Day");

   
   

2. a premium of approximately 34.6% to the average closing price of HK$0.026 per CCT Land Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day; and

   
   

3. a premium of approximately 34.6% to the average closing price of HK$0.026 per CCT Land Share as quoted on the Stock Exchange for the last 10 consecutive trading days up to and including the Last Trading Day.




If all the Placing Shares are successfully placed at the Placing Price of HK$0.035 per CCT Land Share, the gross proceeds from the Placing is HK$350,000,000 and the net proceeds after deduction of the placing agent's fees and transaction expenses is approximately HK$343,800,000, which will be remitted by Kingsway Financial to the bank account of the Company.




REASONS FOR AND BENEFITS OF THE AGREEMENT




By entering into the Agreement, the Company will have a potential upside gain of approximately HK$43,800,000 over and above the Transfer Consideration of HK$300,000,000. The Board is optimistic about the future share price performance of the CCT Land Shares and consider that the Agreement will encourage and facilitate Glory Merit to repay the Transfer Consideration to the Company before its due date of 30 June 2016.




INFORMATION ON JADE ASSETS, THE COMPANY AND THE GROUP




Jade Assets is an indirect wholly-owned subsidiary of the Company, and it is engaged in investment business.




The Company is the holding company of the Group which is principally engaged in:




1. property development and property trading in Hong Kong;

2. property investment and holding;

3. manufacture and sale of plastic components;

4. the securities business;

5. trading and sale of classic cars;

6. investment in classic cars;