RENAISSANCE ASIA SILK ROAD GROUP LIMITED (Incorporated in the Cayman Islands with limited liability)
Room 2811, 28/F., China Merchants Tower, Shun Tak Centre, No.168-200 Connaught Road Central, H.K. Telephone: 2201 4577 Fax: 2851 2990
29 January 2016
To the Shareholders
Dear Sir or Madam,
- PROPOSED CAPITAL REORGANISATION;
- OPEN OFFER ON THE BASIS OF TWO OFFER SHARES FOR EVERY ONE REORGANISED SHARE HELD ON THE OPEN OFFER RECORD DATE;
- ISSUE OF SETTLEMENT SHARES AND SETTLEMENT CONVERTIBLE BONDS UNDER DEBT SETTLEMENT AGREEMENTS;
- APPLICATION FOR WHITEWASH WAIVER;
- ADOPTION OF NEW ARTICLES OF ASSOCIATION;
- ADOPTION OF NEW SHARE OPTION SCHEME; AND
- PROPOSED CHANGE OF BOARD LOT SIZE
Reference is made to the Announcement dated 16 December 2015 in relation to the proposed Capital Reorganisation, the Open Offer, the Debt Settlement Agreements and the application for Whitewash Waiver.
The purpose of this Circular is to provide the Shareholders with (i) further information of the proposed Capital Reorganisation, the Open Offer, the Debt Settlement Agreements and the Whitewash Waiver; (ii) the letter from the Independent Board Committee; (iii) the letter from the Independent Financial Adviser; (iv) the notice of the EGM; (v) information in relation to the adoption of New Articles and Association and New Share Option Scheme; (vi) the proposed change of board lot size; and (vii) other information as required under the Listing Rules and the Takeovers Code.
As at the Latest Practicable Date, the existing authorised share capital of the Company is HK$800 million, divided into 8,000 million Shares of HK$0.10 each, of which 5,235,303,300 Shares were issued and fully paid up or credited as fully paid up in the amount of HK$523,530,330.00.
The Board proposes to implement the Capital Reorganisation which will be subject to Shareholders' approval at the EGM. The Capital Reorganisation will entail the Capital Reduction, the Capital Cancellation, the Share Consolidation, the increase in authorised share capital and the Share Premium Reduction with details as follows:
The nominal value of each issued Share shall be reduced from HK$0.10 to HK$0.005 by the reduction of HK$0.095 for each issued Share. The credit balance arising from the Capital Reduction of HK$497,353,813.50 will be applied in a manner as permitted by the Companies Law, the existing Articles of Association and other applicable laws to, including but not limited to, the setting off of part of the accumulated deficit of the Company as at the effective date of the Capital Reduction.
The existing 2,764,696,700 unissued Shares in the un-issued share capital of the Company of HK$276,469,670 will, immediately after the completion of the Capital Reduction, be cancelled in its entirety resulting in the authorized share capital being reduced to the amount of the Company's issued share capital, namely HK$26,176,516.50.
Immediately after the Capital Reduction and Capital Cancellation becomes effective, every two (2) shares of HK$0.005 each will be consolidated into one Reorganised Share of HK$0.01 each. As a result, 5,235,303,300 issued shares of the Company of HK$0.005 each will be consolidated into 2,617,651,650 issued Reorganised Shares of HK$0.01 each.
Immediately after the Share Consolidation becomes effective, the Company proposes to increase the authorised share capital of the Company from HK$26,176,516.50 to HK$250,000,000.00 by the creation of 22,382,348,350 new Reorganised Shares.
The entire amount standing to the credit of the share premium account of the Company, which as at 30 June 2015 amounted to approximately HK$2,101,765,000, will be applied to set off against the accumulated deficit of the Company or in such manner determined by the Directors as permitted by the Companies Law, the Articles of Association and other applicable laws.
The effectiveness of the proposed Capital Reorganisation is conditional upon:
the passing of the necessary resolutions for (i) the Capital Reduction; (ii) the Capital Cancellation; (iii) the Share Consolidation; (iv) the increase in authorised share capital; and (v) the Share Premium Reduction, by the Shareholders at the EGM;
the approval of the Capital Reduction by the Grand Court of the Cayman Islands;
compliance with any conditions which the Grand Court of the Cayman Islands may impose in relation to the Capital Reduction;
the Listing Committee of the Stock Exchange having granted the listing of, and permission to deal in, the Reorganised Shares in issue immediately upon the Capital Reorganisation becoming effective; and
registration by the Registrar of Companies in the Cayman Islands of the order of the Grand Court of the Cayman Islands confirming the Capital Reduction and the minutes approved by the Grand Court of the Cayman Islands containing the particulars required under the Companies Law with respect to the Capital Reduction.
The following table sets out the effect of the Capital Reorganisation on the share capital of the Company before and after completion of the Capital Reorganisation:
Nominal value HK$0.10 HK$0.01
Number of authorised shares
8,000,000,000 25,000,000,000
Authorised share capital HK$800,000,000.00 divided into
8,000,000,000 Shares
HK$250,000,000.00
divided into 25,000,000,000
Reorganised Shares
Number of issued and paid-up shares
Issued and paid-up share capital
5,235,303,300 2,617,651,650
HK$523,530,330.00 HK$26,176,516.50
Under the Companies Law, the Company is restricted in its ability to issue Shares at a price lower than their par value. The Capital Reorganisation will reduce the par value of the Shares, enable the re-capitalisation of the share capital of the Company and facilitate the issuance of the Offer Shares, the Settlement Shares and the Conversion Shares. The issuance of the Settlement Shares will enable the Company to discharge most of its liabilities while the issuance of the Settlement Convertible Bonds which are convertible into Conversion Shares enable the rescheduling of the relevant debts for an additional three years. Such settlement together, with the funds to be raised from the Open Offer will improve the financial position of the Group. The Capital Reorganisation will also provide the Company with the flexibility to accommodate issue of new Reorganised Shares in the future when necessary.
Accordingly, the Directors are of the view that the implementation of the Capital Reorganisation is in the best interests of the Company and the Shareholders as a whole.
Subject to the Capital Reorganisation becoming effective, the Board proposes that the Company makes the Open Offer on the basis of two (2) Offer Shares for every one (1) Reorganised Share held on the Open Offer Record Date by the Qualifying Shareholders. A total of 5,235,303,300 Offer Shares will be allotted and issued by the Company to the Qualifying Shareholders at the Offer Price of HK$0.03 for each Offer Share and the gross proceeds to be raised from the issuance of the Offer Shares is expected to be approximately HK$157.1 million.
China Billion Resources Limited issued this content on 29 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 16:38:03 UTC
Original Document: http://www.chinabillion.net/en/doc/2016 English/(010) Letter from the Board.pdf
