TRISTATE HOLDINGS 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.
CONTINUING CONNECTED TRANSACTIONThe Board wishes to announce that on 13 February 2017, Gold Flower, a wholly- owned subsidiary of the Company, has entered into the New Tenancy Agreement with TDB for the leasing of the Premises.
As the entire issued share capital of TDB is held by a discretionary trust of which Mr. WANG Kin Chung, Peter and Ms. WANG KOO Yik Chun, both being Directors, are eligible beneficiaries, TDB is a connected person of the Company for the purpose of the Listing Rules. Accordingly, the New Tenancy Agreement constitutes a continuing connected transaction of the Company under the Listing Rules.
As the applicable percentage ratios represented by the Annual Caps in respect of the New Tenancy Agreement are more than 0.1% but less than 5%, the entering into of the New Tenancy Agreement is only subject to the announcement, annual reporting and annual review requirements under Rules 14A.35, 14A.49 and 14A.55 to 14A.59 of the Listing Rules and is exempt from the circular and independent shareholders' approval requirements under the Listing Rules.
BACKGROUNDReference is made to the announcement of the Company dated 24 February 2015 in respect of the Existing Tenancy Agreement made between Gold Flower, a wholly- owned subsidiary of the Company, as tenant, and TDB, as landlord, for the leasing of the premises at Ground Floor, 2nd to 11th Floors, and a portion of 1st Floor of the Building which constituted a continuing connected transaction of the Company under the Listing Rules. On 30 April 2015, Gold Flower and TDB entered into a Supplemental Tenancy Agreement whereby the parties agreed to reduce the monthly rent from HK$717,000 to HK$693,000 as a result of reduction in rented space with effect from 1 May 2015 with all other terms and conditions of the Existing Tenancy Agreement remaining unchanged. In view of the forthcoming expiration of the Existing Tenancy Agreement (as amended by the Supplemental Tenancy Agreement) on 31 March 2017, Gold Flower has entered into the New Tenancy Agreement with TDB on 13 February 2017 for the leasing of the Premises.
PRINCIPAL TERMS OF THE NEW TENANCY AGREEMENTTerm: Two years from 1 April 2017 to 31 March 2019 (both days inclusive)
Monthly rent: HK$570,000 (excluding management fees, government rates and government rent)
Premises: Ground Floor, 2nd Floor, 4th to 7th Floors, 9th to 10th Floors, and a portion of flat roofs on 3rd Floor, Tak Dah Industrial Building, 66-72 Lei Muk Road, Kwai Chung, New Territories, Hong Kong (the "Building")
ANNUAL CAPSThe rent payable under the New Tenancy Agreement is no less favourable to Gold Flower than those for comparable premises available from independent third parties and has been arrived at by reference to comparable rental transactions and offerings as available in the relevant market with similar age, size, use and attributes. The Annual Caps payable in cash on a monthly basis by Gold Flower to TDB for each of the three financial years ending 31 December 2019 under the New Tenancy Agreement are as follows:
Period 1 April 2017 to 31 December 2017 | Annual Cap (HK$) 5,130,000 |
1 January 2018 to 31 December 2018 | 6,840,000 |
1 January 2019 to 31 March 2019 | 1,710,000 |
For the purpose of reference only, the annual rent payable by Gold Flower to TDB pursuant to the Existing Tenancy Agreement (as amended by the Supplemental Tenancy Agreement) amounted to HK$8,316,000.
USE OF THE PREMISESThe Premises will be occupied by the Company and certain of its subsidiaries for factory, storage and ancillary office uses.
REASONS FOR AND BENEFITS OF ENTERING INTO THE NEW TENANCY AGREEMENTSince April 1999, the Company through its wholly-owned subsidiary, has been leasing the Premises from TDB for use by the Company and certain of its subsidiaries as their principal place of business in Hong Kong. The Existing Tenancy Agreement (as amended by the Supplemental Tenancy Agreement) shall expire on 31 March 2017. The Company considers it to be commercially necessary and beneficial to enter into the New Tenancy Agreement so that the Company and such subsidiaries can use the Premises as their principal place of business in Hong Kong and avoid any relocation costs and disruption of operation.
The terms of the New Tenancy Agreement were arrived at after arm's length negotiations between Gold Flower and TDB and on the basis of the valuation made by an independent property valuer by reference to comparable rental transactions and offerings as available in the relevant market with similar age, size, use and attributes. The Board (including the independent non-executive Directors) considers that the New Tenancy Agreement has been entered into in the ordinary and usual course of business of the Company, is on normal commercial terms and such terms and the Annual Caps are fair and reasonable and in the interests of the shareholders of the Company as a whole.
INFORMATION ON THE GROUP AND TDBThe Group (including Gold Flower) is principally engaged in (i) garment manufacturing; and (ii) branded product distribution, retail and trading.
TDB is an investment holding company.
LISTING RULES IMPLICATIONSAs the entire issued share capital of TDB is held by a discretionary trust of which Mr. WANG Kin Chung, Peter and Ms. WANG KOO Yik Chun, both being Directors, are eligible beneficiaries, TDB is a connected person of the Company for the purpose of the Listing Rules. Accordingly, the New Tenancy Agreement constitutes a continuing connected transaction of the Company under the Listing Rules.
As the applicable percentage ratios represented by the Annual Caps in respect of the New Tenancy Agreement are more than 0.1% but less than 5%, the entering into of the New Tenancy Agreement is only subject to the announcement, annual reporting and annual review requirements under Rules 14A.35, 14A.49 and 14A.55 to 14A.59 of the Listing Rules and is exempt from the circular and independent shareholders' approval requirements under the Listing Rules.
Mr. WANG Kin Chung, Peter and Ms. WANG KOO Yik Chun have material interests in the New Tenancy Agreement and have abstained from voting on the relevant board resolutions approving the New Tenancy Agreement.
DEFINITIONSIn this announcement, unless the context requires otherwise, the following expressions shall have the following meanings:
"Annual Caps" the annual rent payable under the New Tenancy Agreement
"Board" the board of Directors
"Building" Tak Dah Industrial Building, 66-72 Lei Muk Road, Kwai Chung, New Territories, Hong Kong
"Company" Tristate Holdings Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"Directors" the directors of the Company
"Existing Tenancy Agreement" the tenancy agreement dated 24 February 2015
made between Gold Flower and TDB in respect of the leasing of the premises at Ground Floor, 2nd to 11th Floors, and a portion of 1st Floor of the Building for two years from 1 April 2015 to 31 March 2017 (both days inclusive)
"Gold Flower" Gold Flower Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company
"Group" the Company and its subsidiaries
"HK$" Hong Kong dollar(s), 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
"New Tenancy Agreement" the tenancy agreement dated 13 February 2017
made between Gold Flower and TDB in respect of the leasing of the Premises, particulars of which are set out in this announcement
"Premises" Ground Floor, 2nd Floor, 4th to 7th Floors, 9th to 10th Floors, and a portion of flat roofs on 3rd Floor of the Building
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Supplemental Tenancy Agreement"
the supplemental tenancy agreement dated 30 April 2015 made between Gold Flower and TDB modifying the Existing Tenancy Agreement
Tristate Holdings Ltd. published this content on 13 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 13 February 2017 09:52:05 UTC.
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