GLOBAL TOKEN LIMITED 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.
Global Energy Resources International Group Limited(Continued in the Bermuda with limited liability)
(Stock Code: 8192) MAJOR AND CONTINUING CONNECTED TRANSACTION
On 29 December 2014 (after trading hours), Shun Tian Yun, an indirect non-wholly owned subsidiary of the Company, entered into (i) the Exclusivity Agreement with Li Bing whereby Shun Tian Yun is conditionally granted an exclusivity right in respect of the Energy-Saving Air-Conditioners manufactured by Li Bing; and (ii) the Purchase Agreement whereby Shun Tian Yun conditionally agrees to purchase from Li Bing Energy-Saving Air-Conditioners up to an annual cap of RMB150,000,000 (equivalent to approximately HK$188,775,000) for the year ending 31 December 2015.
As each of Mr. Wang, Yu Heng De Kun and Li Bing are connected persons of the Company within the meaning of the GEM Listing Rules, the entering into of the Agreements constitute continuing connected transactions of the Group under the Chapter 20 of the GEM Listing Rules and is subject to the reporting, announcement and independent Shareholders' approval requirements under Chapter 20 of the GEM Listing Rules. In addition, as the Exclusivity Agreement is conditional, among others, on the Purchase Agreement and certain of the applicable percentage ratios in respect of the Purchase Agreement are more than 25% but less than 100%, the Purchase, the transactions contemplated under the Agreements constitute a major transaction for the Company and are subject to the notification, announcement and Shareholders' approval requirements under Chapter 19 of the GEM Listing Rules.
A circular containing, among other things, (i) further information on the Purchase; (ii) a letter of recommendations from the Independent Board Committee to the independent Shareholders regarding the Purchase; (iii) a letter of advice from the independent financial adviser to the Independent Board Committee and the independent Shareholders; and (iv) a notice of the SGM, is expected to be despatched to the Shareholders on or before 20
January 2015.
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The Board announces that for the purpose of expanding the existing business of the Group to rental of environmentally friendly air-conditioners, on 29 December 2014 (after trading hours), Shun Tian Yun, an indirect non-wholly owned subsidiary of the Company, entered into (i) the Exclusivity Agreement with Li Bing whereby Shun Tian Yun is conditionally granted an exclusivity right in respect of the Energy-Saving Air-Conditioners manufactured by Li Bing; and (ii) the Purchase Agreement whereby Shun Tian Yun conditionally agrees to purchase from Li Bing Energy-Saving Air-Conditioners up to an annual cap of RMB150,000,000 (equivalent to approximately HK$188,775,000) for the year ending 31 December 2015.
The principal terms of the Exclusivity Agreement and the Purchase Agreement are set out below:
29 December 2014
Parties
(1) Li Bing; and
(2) Shun Tian Yun.
At a consideration of RMB1.00 (equivalent to approximately HK$1.26) to be paid by Shun Tian Yun to Li Bing, Li Bing conditionally agrees to grant to Shun Tian Yun the Exclusive Right to sell, distribute, lease or otherwise in relation to the Energy-Saving Air-conditioners manufactured by Li Bing in the PRC for a period commencing from the effective date of the Exclusivity Agreement up to 31 December 2015.
Conditions precedent
The Exclusivity Agreement shall become effective upon fulfillment of the following conditions:
(i) The Purchase Agreement become effective;
(ii) I f applicable, the publication of an announcement and circular in relation to the Exclusivity Agreement by the Company pursuant to the requirements of the GEM Listing Rules;
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(iii) I f applicable, the approval of the Exclusivity Agreement by the independent Shareholders at a special general meeting of the Company pursuant to the requirements of the GEM Listing Rules and the Bye-law; and
(iv) If applicable, all approval(s), acknowledgment(s), waiver(s) and consent(s) from any regulatory authorities or third parties in connection with the Exclusivity Agreement or the transactions contemplated thereunder being obtained by the Company.
If any of the conditions precedent has not been fulfilled by the Long Stop Date, the Exclusivity Agreement shall lapse and be terminated and thereafter all rights, obligations and liabilities of all parties thereunder shall cease and determine and no party shall have any claim against the other under the Exclusivity Agreement except for antecedent breach of any provisions of the Exclusivity Agreement.
29 December 2014
Parties
(1) Shun Tian Yun; and
(2) Li Bing
Subject to the development of the environmentally friendly air-conditioners business in the PRC, Shun Tian Yun conditionally agrees to purchase from Li Bing the Energy-Saving Air-Conditioners (inclusive of installation and maintenance service for 10 years) manufactured by Li Bing for up to an aggregate consideration of RMB150,000,000 (equivalent to approximately HK$188,775,000) for the year ending 31 December 2015.
Further details of the Energy-Saving Air-Conditioners to be purchased are set out in the section headed "Information about the assets to be purchased under the Purchase Agreement" in this announcement.
The Company currently intends to settle the consideration of the Purchase from its internal resources and/or by debt financing or equity fund raising exercise.
The Purchase Agreement shall become effective upon the fulfillment of the following conditions:
(i) If applicable, the publication of an announcement and circular in relation to the Purchase
Agreement by the Company pursuant to the requirements of the GEM Listing Rules;
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(ii) If applicable, the approval of the Purchase Agreement by the independent Shareholders at special general meeting of the Company pursuant to the requirements of the GEM Listing Rules and Bye-law; and
(iii) If applicable, (where applicable) all approval(s), acknowledgment(s), waiver(s) and consent(s) from any regulatory authorities or third parties in connection with the Purchase Agreement or the transactions contemplated thereunder being obtained by the Company.
If any of the conditions precedent has not been fulfilled by the Long Stop Date, the Purchase Agreement shall lapse and be terminated and thereafter all rights, obligations and liabilities of all parties thereunder shall cease and determine and no party shall have any claim against the other under the Purchase Agreement except for antecedent breach of any provisions of the Purchase Agreement.
Prices of the Energy-Saving Air-conditioners shall be determined after making reference to the production cost of Li Bing and the market prices of similar products in the PRC.
Purchase department of Shun Tian Yun shall conduct research on market prices of similar products periodically to prepare a reference price list and to negotiate with Li Bing the prices of the Energy-Saving Air-conditioners at arm's length's basis. The price list and the negotiated prices of the Energy-Saving Air-conditioners shall be passed to the finance department and the general manager of Shun Tian Yun for review and final approval before placement of purchase order.
The proposed annual cap in respect of the Purchase under the Purchase Agreement for the financial year ending 31 December 2015 is RMB150,000,000 (equivalent to approximately HK$188,775,000). For the avoidance of doubt, the actual amount of the Purchase to be made by Shun Tian Yun in the year ending 31 December 2015 shall depend on the then market condition and therefore, may or may not reach RMB150,000,000 (equivalent to approximately HK$188,775,000).
Basis in determining the Proposed Cap
In determining the Proposed Cap, the Board has based its estimates on the following:
1. the production capacity of Li Bing;
2. the number of Energy-Saving Air-Conditioners required to be purchased by Shun Tian
Yun based on the unit price of the Energy-Saving Air-Conditioners; and
3. the financial resources of the Group.
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As disclosed in the reports of the Company for the year ended 31 December 2013 and the six months ended 30 June 2014, the Group is principally engaged in the manufacturing and sales of environmentally friendly air-conditioners and related products. The Group is also engage in trading of metal products.
The principal business of Shun Tian Yun is manufacturing and sales of environmentally friendly air-conditioners and related products.
To expand the environmentally friendly air-conditioner business of the Group, the Group intends to engage in rental of the Energy-Saving Air-Conditioners to be purchased by Shun Tian Yun from Li Bing in the PRC.
Target customers of the Air-Conditioner Rental Business are entities in the PRC with high usage of air-conditioners and thus high electricity consumption which shall include but not limited to restaurants, karaoke, clubs, internet bars, department stores and retail shops etc. The Group intends that after purchasing the Energy-Saving Air-Conditioners as non-current assets of the Group, Shun Tian Yun shall rent out the Energy-Saving Air-Conditioners to customers for rental income.
The Directors (excluding the Independent Non-executive Directors whose views will be given after taking into account the advice from the independent financial adviser) considers that the Agreements, based on the agreed terms determined between Shun Tian Yun and Li Bing after arm's length negotiation, will be carried out in the ordinary and usual course of business of Shun Tian Yun, is in line with the existing principal business of the Group and will open up an additional source of income to the Group.
The Directors (excluding the Independent Non-executive Directors whose views will be given after taking into account the advice from the independent financial adviser) further consider that the terms under the Exclusivity Agreement, the Purchase and the terms of the Agreements, which are determined after arm's length negotiations between Shun Tian Yun and Li Bing, are normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.
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To the best of the Directors' knowledge, information and belief and after having made all reasonable enquiries, Li Bing is a company incorporated in the PRC whose principal business is manufacturing, sales and rental of energy-saving air-conditioners and related products. The Energy-Saving Air-Conditioners to be purchased by Shun Tian Yun from Li Bing are new model energy-saving environmentally friendly air-conditioners for both commercial and domestic uses with the application of the following patented technology granted by ���
���ill� (the State Intellectual Property Office of the PRC*) to Li Bing (the "Patented
Technology"): Patent certificate number Name of the patented technology Date of patent certificate
1. 1424577 (Evaporative air
conditioning condensation system and method*)
18 June 2014
2. 2623314 (A new type of evaporative cooling device*)
2 January 2013
3. 2624886 ���l(A new energy-efficient ice storage air-conditioning*)
2 January 2013
4. 2625030 ���� (A new energy- efficient central air conditioning chillers*)
2 January 2013
5. 2626136 (A new air-conditioning condensation system*
2 January 2013
6. 2711560 (A new air conditioner outdoor unit*)
13 February 2013
As at the date of this announcement, Shun Tian Yun is a 51% indirect non-wholly subsidiary of the Company and its remaining 49% of the issued shares are owned by Mr. Wang.
To the best of the Directors' knowledge, information and belief and after having made all reasonable enquiries:
(i) Mr. Wang is the registered and ultimate beneficial owner of 84.55% of the issued share capital of Yu Heng De Kun, which in turn is holding 98% of the issued share capital of Li Bing;
(ii) Mr. Wang is the legal representative and sole director of Li Bing;
(iii) out of the 3 members in the board of the directors of Shun Tian Yun, Mr. Wang is one of the directors;
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(iv) save as disclosed in points (i) to (iii) above, none of Mr. Wang, Yu Heng De Kun and Li Bin or any of their respective associates has any connection with the Group or any shareholding interest in the Company or any of its subsidiaries; and
(v) the remaining 15.45% of the equity interest in Yu Heng De Kun and 2% of the equity interest in Li Bing are owned by Independent Third Parties.
Therefore, each of Mr. Wang, Yu Heng De Kun and Li Bing are connected persons of the Company within the meaning of the GEM Listing Rules and the entering into of the Agreements constitute continuing connected transactions of the Group under the Chapter 20 of the GEM Listing Rules and is subject to the reporting, announcement and independent Shareholders' approval requirements under Chapter 20 of the GEM Listing Rules. In addition, as the Exclusivity Agreement is conditional, among others, on the Purchase Agreement and certain of the applicable percentage ratios in respect of the Purchase Agreement are more than 25% but less than 100%, the Purchase and the transactions contemplated under the Agreements constitute a major transaction for the Company and is subject to the notification, announcement and Shareholders' approval requirements under Chapter 19 of the GEM Listing Rules.
To the best of the Directors' knowledge, information and belief and after having made all reasonable enquiries, none of Mr. Wang, Yu Heng De Kun and Li Bing has no equity interest of the Group as at the date of this announcement. Given that none of the Shareholders has a material interest in the Agreements, none of them would be required to abstain from voting on the resolution(s) to be proposed at the SGM for approving the Agreements and the transactions contemplated thereunder.
The SGM will be convened for the Shareholders to consider and, if thought fit, to approve the Agreements. The Independent Board Committee comprising all the independent non- executive Directors has been formed to advise the independent Shareholders as to whether the terms of the Agreements are normal commercial terms, fair and reasonable and how to vote in respect of the resolution(s) on the Agreements after taking into account the recommendation of the independent financial adviser. Gram Capital Limited has been appointed as the independent financial adviser to advise the Independent Board Committee and the independent Shareholders in this regard.
A circular containing, among other things, (i) further information on the Purchase; (ii) a letter of recommendations from the Independent Board Committee to the independent Shareholders; (iii) a letter of advice from the independent financial adviser to the Independent Board Committee and the independent Shareholders; and (iv) a notice of the SGM, is expected to be despatched to the Shareholders on or before 20 January 2015.
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DEFINITIONS
The following terms have the following meanings in this announcement, unless the context otherwise requires:
"Agreements" the Exclusivity Agreement and the Purchase Agreement
"Air-Conditioner Rental
Business"
the provision of rental service of the Energy-Saving Air- Conditioners to be purchased by Shun Tian Yun in the PRC
"associates" has the meaning ascribed thereto in the GEM Listing Rules
"Board" board of Directors
"Bye-law" the bye-law of the Company
"Company" Global Energy Resources International Group Limited (stock code: 8192), a company incorporated in the Cayman Islands and continued in Bermuda with limited liability, the issued Shares of which are listed on GEM
"connected person(s)" has the meaning ascribed to it under the GEM Listing Rules
"Director(s)" the directors of the Company, including the independent non-executive Directors
"Energy-Saving
Air-Conditioners"
the new model energy-saving environmentally friendly air- conditioners researched and developed by Li Bing with the application of the patented technology granted by ���
���ill� (the State Intellectual Property Office of the
PRC*) to Li Bing
"Exclusive Right" the exclusive right in the PRC to sell, distribute, lease or otherwise the Energy-Saving Air-Conditioners pursuant to the Exclusivity Agreement
"Exclusivity" the Exclusive Right in relation to the Energy-Saving Air- conditioners granted by Li Bing to Shun Tian Yun in the PRC pursuant to the Exclusivity Agreement
"Exclusivity Agreement" the agreement dated 29 December 2014 entered into between Shun Tian Yun and Li Bing in relation to the grant of an exclusivity right in relation to the Energy-Saving Air- conditioners
"GEM Listing Rules" the Rules Governing the Listing of Securities on the GEM "GEM" the Growth Enterprise Market of the Stock Exchange
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"Group" the Company and its subsidiaries from time to time
"Hong Kong" the Hong Kong Special Administrative Region of the PRC
"Independent Non-executive
Directors"
the independent non-executive Directors of the Company
"Independent Third
Party(ies)"
person(s) who is/are third party(ies) not being connected person(s) (as defined in Party(ies)" person(s) who is/are independent of the Company and its connected persons (as defined in the GEM Listing Rules) and is/are not connected with, or party acting in concert with, any of the directors, chief executive and substantial shareholders of the Company or any of its subsidiaries or any of their respective associates (as defined in the GEM Listing Rules)
"Li Bing" l(Shenzhen Li Bing Air- conditioners Limited*), a company incorporated in the PRC with limited liability
"Long Stop Date" 30 April 2015, or, or such later date as Shun Tian Yu and Li
Bing may agree
"Mr. Wang" IJ! Wang Ying*, the controlling shareholder of Yu Heng De Kun and owner of 49% of the issued shares of Shun Tian Yun
"PRC" the People's Republic of China and for the sole purpose of this announcement shall exclude Hong Kong, Macau Special Administrative Region of the PRC and Taiwan
"Proposed Cap" t h e a nnual cap for the continuing connected transaction contemplated under the Purchase Agreement for the financial year ending 31 December 2015
"Purchase" t h e proposed purchase of the Energy-Saving Air- Conditioners as contemplated under the Purchase Agreement
"Purchase Agreement" the framework agreement dated 29 December 2014 entered into between Shun Tian Yun and Li Bing in relation to the purchase of the Energy-Saving Air-Conditioners
"SGM" the special general meeting of the Company to be convened for, among others, considering, and if thought fit, approving the Agreements and the transactions contemplated thereunder
"Share(s)" ordinary share(s) of HK$0.005 each in the capital of the
Company
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"Shareholder(s)" the holder(s) of the Share(s)
"Shun Tian Yun" :1R%i:' (Shenzhen Shun Tian Yun Environmental Technology Limited*), an indirect non-wholly owned subsidiary of the Company incorporated in the PRC
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"subsidiary(ies)" has the meaning ascribed to it under the GEM Listing Rules
"Yu Heng De Kun" '=lli�� :1R%i:' (Shenzhen Yu Heng De Kun Technology Limited*), a company incorporated in the PRC and the controlling shareholder of Li Bing
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"RMB" Renminbi, the lawful currency of the PRC "%" per cent
* This is English translation of Chinese name or words which is included for identification purpose only
and should not be regarded as the official English name or official translation of such Chinese name or words. If there is any inconsistency between the Chinese name or words and their English translation, the Chinese name or words shall prevail.
By order of the Board
Global Energy Resources International Group Limited Chan Kwok WingChief Executive Officer and Executive Director
Hong Kong, 29 December 2014
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For the purposes of illustration only, any amount denominated in RMB in this announcement and exchanged into HK$ was translated at the rate of RMB1= HK$1.2585. Such exchange should not be construed as a representation that the amounts in question have been, could have been or could be, converted at any particular rate at all.
As at the date of this announcement, the Board comprises Mr. Chan Kwok Wing, Mr. Chen Hong Bo, Ms. Ge Yan Hong, Mr. Lu Zhi Qiang and Mr. Zhao Liang as executive Directors and Mr. Leung Wah, Mr. Yeung Chun Wai, Anthony and Mr. Wei Zhi Hong as independent non-executive Directors.
This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.
This announcement will remain on the GEM website at www.hkgem.com on the "Latest Company Announcements" page for at least 7 days from the date of its posting and on the Company website at www.8192.com.hk.
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