SANDMARTIN INTERNATIONAL HOLDINGS LIMITED 
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.
On 10 May 2013, the Company and Dish Media entered into the Agreement, pursuant of which, the Company has conditionally agreed to subscribe for 6,195,652 new shares in the capital of Dish Media for an aggregate subscription price of US$7,289,002 (equivalent to HK$56,489,765). The Subscription Shares represent 12.88% of the enlarged issued share capital of Dish Media upon completion of the Subscription. Upon completion of the Subscription, the Company's interest in Dish Media will increase from 47% to 60% and Dish Media will become a non-wholly owned subsidiary of the Company.
As the applicable percentage ratios (as defined in the Listing Rules) in respect of the Subscription are more than 5% but less than 25%, the Subscription constitutes a discloseable transaction for the Company and is subject to the notification and announcement requirements as set out in the Listing Rules.
The Board wishes to announce that the Company and Dish Media have entered into the Agreement, pursuant to which Dish Media has agreed to issue, and the Company has conditionally agreed to subscribe for 6,195,652 new shares of Dish Media for an aggregate consideration of US$7,289,002 (equivalent to HK$56,489,765). The Subscription Shares represent 12.88% of the enlarged issued share capital of Dish Media upon the completion of the Subscription.
Date: 10 May 2013
Parties: the Company, the subscriber of the Subscription Shares
Dish Media, the issuer of the Subscription Shares
The Company is interested in 47% of the issued share capital of Dish Media as at the date of this announcement. Save for such shareholding interest, to the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, Dish Media and its other ultimate beneficial owners are independent of and not connected with the Company and its connected persons.
Pursuant to the Agreement, the Company has conditionally agreed to subscribe 6,195,652 new shares to be issued by Dish Media, which represent 12.88% of the enlarged issued share capital of Dish Media upon the completion of the Subscription. Following completion of the Subscription, the Company's interest in Dish Media will increase from 47% to 60%, and Dish Media will become a non-wholly owned subsidiary of the Company.
Subscription priceThe subscription price for the Subscription Shares was determined after arm's length negotiations between the Company and Dish Media. When determining the subscription price, the Board has taken into account the financial position of Dish Media, its growth potential and the Group's goal of consolidating control in the company as a step of realising the Group's strategy of transforming from an integrated device manufacturer into a multimedia platform owner. The subscription price will be satisfied in cash from the internal resources of the Company.
Conditions precedent to the SubscriptionCompletion of the Subscription is subject to the obtaining of the appropriate consents from the Department of Industries ("DOI") and the Ministry of Finance ("MOF") of Nepal as to the allotment of the Subscription Shares to the Company. In the event that the DOI or the MOF do not approve the contemplated transactions, all consideration paid under the Subscription shall be refunded by Dish Media, without interest, to the Company.
CompletionCompletion of the Subscription is expected to be in December 2013.
INFORMATION ON DISH MEDIADish Media is a limited liability company incorporated in Nepal and is headquartered in Kathmandu. It is principally engaged in the business of provision of Direct-to-Home services for satellite television broadcasting in Nepal.
Currently, Dish Media has more than 190,000 subscribers for its Direct-to-Home satellite television services and it offers over 50 channels to its subscribers covering the full spectrum of satellite television contents. Satellite television enjoys competitive advantage in Nepal, an emerging and mountainous country, by offering high quality broadcasting and coverage to its existing and potential customers.
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Financial information of Dish Media
Set out below is the audited financial information of Dish Media for the years ended 30 June
2011 and 2012 respectively which were prepared in accordance with the Nepal Accounting
Standards:
For the year ended
30 June
For the year ended
30 June
2012 2011
US$ US$
Revenue 2,047,486 3,434,585
Loss before tax 2,754,041 6,646,638
Loss after tax 2,622,915 6,646,628
The net asset value of Dish Media as at 30 June 2012 was US$1,455,858.
INFORMATION ON THE GROUPThe principal activities of the Group are design, manufacturing and trading of media entertainment platform related products and connectors, cables, and assorted electronic accessories.
REASONS FOR AND THE BENEFITS OF THE SUBSCRIPTION
Dish Media is the only satellite television operator in Nepal and currently it provides Direct- to-Home satellite television services to its subscribers under the brand name of Dish Home. As the reception quality of satellite television outplayed cable television services in Nepal and the satellite television broadcasting is still in its initial stage of development, the Directors consider that Nepal market present good business opportunities and growth potential for the Group's products. The Subscription will enable the Company to consolidate its control over Dish Media and provide the Group with a strategic platform to explore and develop the market of set top boxes and other digital media equipment in Nepal. It is the Group's strategy to continue investing resources for the transformation from an integrated device designer and manufacturer to a multimedia platform owner.
For the reasons set out above and that the subscription price of the Subscription Shares was arrived at after arm's length negotiations and on normal commercial terms, the Directors, including the independent non-executive Directors, consider that the terms and conditions of the Subscription are fair and reasonable and the entering into of the transactions contemplated under the Agreement are in the interests of the Company and the Shareholders as a whole.
As the applicable percentage ratios (as defined in the Listing Rules) in respect of the Subscription are more than 5% but less than 25%, the Subscription constitutes a discloseable transaction for the Company and is subject to the notification and announcement requirements under Rule 14.06 of the Listing Rules.
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DEFINITIONSIn this announcement, unless the context otherwise requires, the following terms have the meaning set opposite to them below:
"Agreement" The joint venture and share sale and purchase agreement dated 10 May 2013 entered into between the Company and Dish Media in relation to the subscription of new shares in Dish Media;
"Board" the board of Directors;
"Company" Sandmartin International Holdings Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange;
"connected person(s)" has the meaning ascribed to it in the Listing Rules; "Director(s)" director(s) of the Company;
"Dish Media" Dish Media Network Private Limited, a company incorporated in Nepal with limited liability;
"Group" the Company and its subsidiaries;
"HK$" Hong Kong dollar, the lawful currency of Hong Kong;
"Hong Kong" the Hong Kong Special Administrative Region of the
People's Republic of China;
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange;
"NPR" Nepalese Rupee, the lawful currency of Nepal;
"Subscription Shares" 6,195,652 shares of NPR100 each in the share capital of Dish Media to be subscribed by the Company pursuant to the Agreement;
"Stock Exchange" The Stock Exchange of Hong Kong Limited;
"Subscription" the subscription for the new shares to be issued by Dish
Media pursuant to the Agreement;
"US$" United States dollar, the lawful currency of the United States of America;
"%" per cent.
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In this announcement, amounts in the United States Dollars have been converted into Hong Kong Dollars at the rate of US$1.00 = HK$7.75 for illustration purpose, unless otherwise stated. No representation is made that any amounts in US$ or HK$ could have been or could be converted at that rate or other rate or at all.
By Order of the Board Sandmartin International Holdings Limited Hung Tsung Chin
Chairman
Hong Kong, 10 May 2013
As at the date of this announcement, the executive directors are Mr. Hung Tsung Chin, Ms. Chen Mei Huei, Mr. Liao Wen I, Mr. Frank Karl-Heinz Fischer, Mr. Mu Yean Tung and Mr. Shou Philip Ming Yung; the independent non-executive directors are Mr. Hsu Chun Yi, Mr. Lee Chien Kuo and Mr. Han Chien Shan.
* For identification purpose only
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