| The board of directors ("Board") of Shun Cheong Holdings Limited ("Company") is pleased to announce that the Company, through its wholly owned subsidiary, Well Admire Limited, has entered into a conditional sales and purchase agreement ("Sale & Purchase Agreement A") with Mr. Chiou Wei Hang ("Dr. Chiou") on 25 April 2000 pursuant to which Well Admire Limited is to acquire from Mr. Chiou approximately 5.35% of the issued share capital of Chii Hang International Co., Ltd. ("Chii Hang"), a company incorporated in Taiwan, Republic of China and engages in developing computer Video-on-Demand karaoke system for the karaoke industry, for a total cash consideration of NT$99,999,000 (approximately HK$25,900,000) ("Transaction I").
In addition, the Company, through its wholly owned subsidiary, Wonderland.com Limited ("Wonderland") , has entered into a shareholders' agreement ("Shareholders' Agreement A") with Chii Hang and Gentle Victory Limited ("GVL") to invest in Investrade International Limited ("Investrade") , a company incorporated in British Virgin Islands which will be appointed by Chii Hang as the sole and exclusive distributor of its products in Hong Kong and Macau and will be granted the right of first refusal to distribute Chii Hang's products in PRC. Shareholders' Agreement A is to regulate the ownership, business and management of Investrade. ( "Transaction II" ) Furthermore, Investrade has entered into a conditional sales and purchase agreement ("Sale & Purchase Agreement B") with Viewise Management Corp. ("Viewise"), and Mr. Chow Chung Kit, Maurice ("Dr. Chow") and Mr. Li Ping Por ("Dr. Li") with respect to shares in Binary KOD Limited ("Binary KOD"). Investrade has also entered into a subscription agreement with respect to new shares of Binary KOD ("Subscription Agreement") with Viewise, Binary KOD, Mr. Chow and Mr. Li. Furthermore, Investrade has entered into two share option agreements with respect to shares in Binary KOD ("Share Option Agreement A" and "Share Option Agreement B") with Viewise, Mr. Chow and Mr. Li. Finally, Investrade has entered with Viewise, Binary KOD, Mr. Chow and Mr. Li a shareholders' agreement ("Shareholders' Agreement B") to regulate the ownership, business and management of Binary KOD. Binary KOD supplies, installs and maintains karaoke hardware and control systems to karaokes in Hong Kong, Macau and PRC. (the foregoing five agreements collectively "Transaction III") Transaction I, Transaction II and Transaction III collectively constitute a discloseable transaction for the Company pursuant to Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Stock Exchange") ("Listing Rules") . A circular containing further information on these transactions will be dispatched to the Company's shareholders in due course. |
INFORMATION REGARDING THE TRANSACTIONS
(A) Transaction I
Sale & Purchase Agreement A - relating to acquire 1,818,000 shares in Chii Hang International Co., Ltd. dated 25 April 2000
Parties:
| Vendor: | Mr. Chiou Wei Hang, a substantial shareholder of Chii Hang International Co., Ltd. |
| Purchaser: | Well Admire Limited, a company incorporated in Hong Kong with limited liability and a wholly owned subsidiary of the Company. |
Acquisition:
Well Admire has conditionally agreed to acquire 1,818,000 shares of Chii Hang held by Mr. Chiou ("Shares"), at NT$55 (approximately HK$14.2) per share, which represents approximately 5.35% of the issued share capital of Chii Hang.
Consideration:
The total consideration is NT$99,990,000 (approximately HK$25,900,000) ("Price A") of which Well Admire will deduct 0.3% (amounting to NT$299,970 (approximately HK$78,000)) as securities transaction tax to be paid in accordance with the provisions of tax laws of Taiwan.
The terms of Transaction I have been arrived at following arm's length negotiations and the Price A is arrived at an agreed price/earnings ratio of 15.6 times of the Reference Profit (as defined below). The Board of the Company considers that the terms of the Sale & Purchase Agreement A and the Price A are fair and reasonable.
Refund of the Price A:
Pursuant to the terms of Sale & Purchase Agreement A, if the profit before taxation of Chii Hang for the fiscal year ended 31 December 2000 is less than NT$120,000,000 (approximately HK$31,080,000) ("Peference Profit"), Mr. Chiou should refund a percentage of the Price A to Well Admire before August 2001. The percentage refunded will be calculated as the amount of the shortfall of actual profit before taxation divided by the Reference Profit. No adjustment will be made to the Price A if the profit before tax of the aforementioned period is higher than the Reference Profit.
Payment Terms:
Well Admire will remit the Price A in equivalent amount of US dollar to the Company's legal counsel in Taiwan to process the settlement of the sales and purchase of the shares after the Company obtains the foreign investment approval from the Ministry of Economic Affairs of Taiwan but before the Closing Day (as defined below).
Transaction I will be financed by the internal resources of the Company.
Conditions of Sale & Purchase Agreement A:
The Acquisition contemplated in Sale & Purchase Agreement A is subject to the following conditions precedent for Well Admire:
(a) Chii Hang has obtained internal authorization and approval from the relevant authorities in charge in respect of the execution, delivery and performance of the Shareholders' Agreement A.
(b) The results of the due diligence investigation of Chii Hang's finances and intellectual property rights conducted by Well Admire prior to the Closing Day (as defined below) are satisfactory to the Company.
(c) Well Admire has received from its legal counsel in Taiwan a legal opinion which is issued on the Closing Day and is satisfactory to Well Admire with respect to Mr. Chiou's performance of the sale and purchase of the Shares, completion of the Closing (as defined below) and the registration of the transfer of the Shares as well as the lawfulness of Chii Hang's investment in Investrade and the entry into the Shareholders' Agreement A.
(d) Well Admire has obtained Foreign Investment Approval.
(e) Well Admire, the Company and Wonderland have obtained approval from the authorities in charge of securities in Hong Kong and all other necessary internal authorizations and government permissions in respect of the transactions.
(f) Mr. Chiou has reported the transfer of the Shares to the Securities and Futures Commission of Taiwan within three days prior to the Closing Day.
(g) Chii Hang and the other investor(s) have entered into the Shareholders' Agreement A with Wonderland and these three parties have established Investrade.
(h) Mr. Chiou has delivered the share certificates and Chii Hang has completed the registration of the transfer of the Shares.
Closing:
Closing of the sale and purchase of the Shares.
Closing Day:
Closing of the sale and purchase of the Shares will be carried out ten days after the date of signing of the Sale & Purchase Agreement A, i.e. 5 May 2000.
Information on Chii Hang:
Chii Hang is a public company incorporated under the laws of Taiwan, Republic of China, whose registered address is at No.29, He Ping West road, Section 2, Taipei, Taiwan. Its principal business is, after having obtained authorization from the original song rights owners to reprocess songs and karaoke videotapes, to input the reprocessed songs and karaoke video tapes ("Peprocessed Songs") into the computerized VOD karaoke system ("VOD System") developed and manufactured by Chii Hang or by others on its behalf and to sell or lease the VOD System in Taiwan to the karaoke industry for the purpose of public broadcasting of the Reprocessed Songs. Besides lease rental incomes from the VOD System, Chii Hang also charges its customers for the broadcasting of the Reprocessed Songs by usage.
As at the date of the Sales & Purchase Agreement A, the amount of paid-up capital of Chii Hang was NT$340,106,000 (approximately HK$88 million) and the total number of issued shares was 34,010,600. Since inception, for the first financial period from 18 February 1998 to 31 December 1998, the audited net profit was NT$23.1 million (approximately HK$6.0 million) and, as at 31 December 1998, the audited net assets was NT$196.7 million (approximately HK$50.9 million). The audited financial statements for the year ended 31 December 1999 are not available now.
Connection between the Parties:
Mr. Chiou is an independent third party and is not connected with the directors, chief executives and substantial shareholders of the Company, its subsidiaries or any associates of it.
(B) Transaction II
Shareholders' Agreement A - relating to Investrade International Limited dated 25 April 2000
Parties:
| Shareholders: | (1) Wonderland.com Limited, (2) Chii Hang International Co., Ltd., (3) Gentle Victory Limited (collectively the "Shareholders" and each of them as "Shareholder") with interests in the share capital of Investrade International Limited in a proportion of 55: 25: 20 respectively |
Wonderland.com Limited, a company incorporated in British Virgin Islands with limited liability, whose registered address is at Tropic Isle Building, PO Box 438, Road Town, Tortola, British Virgin Islands with an address in Hong Kong at Flat 201, 2/F., Premier Centre, 20 Cheung Shun Street, Lai Chi Kok, Kowloon, Hong Kong and a wholly owned subsidiary of the Company.
Gentle Victory Limited, a company incorporated in British Virgin Islands with limited liability, whose registered address is at Drake Chambers, Road Town, Tortola, British Virgin Islands.
Investrade International Limited, a company incorporated in British Virgin Islands with limited liability, whose registered address is at The Lake Building, 1st Floor, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands.
Each of Chii Hang and GVL is a third party independent from the directors, chief executive, substantial shareholders of the Company and their respective associates. Pursuant to Transaction I, the Company will have an approximately 5.35% shareholding in Chii Hang.
Incorporation of Investrade:
The Shareholders and Investrade have entered into a Shareholders' Agreement A to regulate the ownership, business and management of Investrade. The respective proportion of investment among the three parties will be Wonderland: 55%, Chii Hang: 25% and GVL: 20% ("Agreed Proportion") .
Business of Investrade:
Investrade will be appointed by Chii Hang as its sole and exclusive distributor of all the products developed, manufactured, produced, distributed and/or sold from time to time by Chii Hang or on its behalf ("The Product") , including but not limited to the VOD System products in Hong Kong and Macau and granted a first right of refusal to be appointed by Chii Hang as its sole and exclusive distributor of the Product in PRC, and it is further intended that Investrade will, together with another company, invest in Binary KOD Limited for the purpose of developing the karaoke market in PRC and Hong Kong (for details, please refer to the section headed "Transaction III" below").
Since being the sole and exclusive distributor of Chii Hang is one of the key businesses of Investrade, therefore, any of the Shareholders ( except Chii Hang ) may terminate the Shareholders" Agreement A, if, in the event that for any reason the appointment of Investrade as Chii Hang 's sole and exclusive distributor of the Product in Hong Kong and Macau pursuant to Shareholders" Agreement A is terminated, revoked or otherwise rendered invalid.
Terms of Subscription and Transfer:
Pursuant to the terms of the Shareholders" Agreement A, Wonderland accepts a transfer of 2 subscriber shares at par of US$1 each for cash and each of Wonderland, Chii Hang and GVL will subscribe for 53 shares, 25 shares and 20 shares, respectively, at par of US$1 each for cash. The total consideration payable by Wonderland for the shares is US$55 in cash.
Shareholders' Loan:
Pursuant to the terms of the Shareholders' Agreement A, each of the Shareholders agrees to make available to Investrade shareholders' loans ("Shareholders' Loans") , in the proportion of 55: 25: 20 in respect of Wonderland, Chii Hang and GVL respectively or, following any change in the shareholding of the Shareholders, to meet with Investrade's financial requirements. The Shareholders' Loans are unsecured, interest free and repayable on demand.
The maximum aggregate principal sum of the Shareholders' Loans is HK$38,000,000 of which (a) HK$30,000,000 shall be made within 1 month after the date of Shareholders' Agreement A ("First Loan") ; (b) HK$4,000,000 shall be made within 1 year after the date of Shareholders' Agreement A; and HK$4,000,000 shall be made between 1 year and 2 years after the date of Shareholders' Agreement A. ((b) and (c) together "Subsequent Loans")
If any of the Shareholders fails to provide the First Loan within twenty one days after the date of Shareholders' Agreement A, any of the Shareholders shall have the right to cancel and terminate Shareholders' Agreement A.
In the event of any Shareholder failing to make its agreed proportion of Subsequent Loans to Investrade, any non-defaulting Shareholder will entitle to make such agreed proportion of Subsequent Loans to Investrade. The non-defaulting Shareholder(s) entitle the right to purchase the defaulting Shareholder's shares. The number of shares that can be purchased is determined based on the amount of Subsequent Loans the non-defaulting Shareholder provides and the purchase price per share will be equivalent to 70% of the net asset value per share of Investrade as determined by the auditors of Investrade.
Consideration:
| Subscription and transfer of shares: | US$55 |
| Shareholders' Loans: | HK$16,500,000 |
Transaction II will be financed by the internal resources of the Company.
Management of Investrade:
The board of directors of Investrade will consist of 5 directors of which 3, 1 and 1 directors will be nominated by Wonderland, Chii Hang and GVL respectively. The Shareholders procure to appoint all the directors nominated by each of the Shareholders. In addition, the number of directors which each Shareholder is entitled to nominate to the board will be adjusted from time to time according to the then shareholding in Investrade.
Termination:
Shareholders' Agreement A will continue in full force and effect until the happening of certain situations, including: the termination of the sole and exclusive distributorship right granted by Chii Hang; the dissolution or winding up of Investrade; the merger or acquisition of the entire issued share capital of Investrade; and when Investrade is under receivership.
(C) Transaction III
Sale & Purchase Agreement B - relating to 510 shares in Binary KOD Limited dated 25 April 2000
Parties:
| Buyer: | Investrade International Limited, a company of which the Company has an interest of 55% of the issued share capital. |
| Seller: | Viewise Management Corp., a company incorporated in the British Virgin Islands, whose registered office is at The Lake Building, 1st Floor, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands |
| Guarantors: | Mr. Chow Chung Kit Maurice and Mr. Li Ping Por, the beneficial owners of the entire issued share capital of Viewise. |
Assets Acquired:
510 shares of US$1 each in Binary KOD, representing 51% of the issued share capital of Binary KOD
Consideration:
The aggregate consideration of HK$12,750,000 ("Price B") in cash to be paid in full on completion of the sale and purchase pursuant to Sale & Purchase Agreement B. The amount of consideration was determined after arm 's length negotiations and an agreed historical price/earnings ratio of 8 for Binary KOD, and the Board of the Company and the shareholders of Investrade believe the consideration to be fair and reasonable.
Funding for the transaction will be derived from the cash injections into Investrade by its shareholders.
Profit Guarantee:
Viewise warrants that the aggregate audited profit after taxation but before extraordinary and exceptional gains of Binary Evolution Computer Limited and Stage Engineering ( HK ) Company Limited, both subsidiaries of Binary KOD ("Profit") for the financial year ending on 31 March 2000 shall not be less than HK$3,500,000. If the Profit for the financial year ending on 31 March 2000 shall be less than HK$3,500,000, the Price B payable by Investrade to Viewise shall be reduced by the full amount of such difference multiplied by eight ( 8 ) which is the agreed historical price/earnings ratio.
Subject to certain clauses, Viewise warrants that the Profit for each of the two financial years beginning on the financial year ending 31 March 2001 shall be as follows ("Guaranteed Profit") :
| Financial year ending on | Guaranteed Profit | |
| 31 March 2001 | HK$3,850,000 | |
| 31 March 2002 | HK$4,235,000 |
The Guaranteed Profit shall be reduced by the extent of any adverse impact on the Profit for the same period which is a direct and natural consequence of the occurrence of certain unanticipated events, namely changes in existing or introduction of new laws and the occurrence of any acts of god (the amount of such reduction shall be referred to as "Profit Adjustment") . Viewise undertakes to compensate Investrade in full the shortfall between the aggregate Guaranteed Profit less the Profit Adjustment and the aggregate amount of Profit for the above financial years on a dollar for dollar basis. Viewise shall pay to Investrade the full amount of such shortfall in cash on the second anniversary of the date of Sale & Purchase Agreement B, or if earlier, the date of completion of Share Option Agreement B.
Information on Binary KOD:
Binary KOD was incorporated on 28 February 2000 in British Virgin Islands with limited liability, whose registered address is at The Lake Building, 1st Floor, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. It was formed for the purpose of reorganizing the company structure of its subsidiaries, including Binary Evolution Computer Limited ("Binary Evolution") and Stage Engineering (HK) Company Limited ("Stage Engineering"), prior to the investment made by Investrade into Binary KOD. Through its subsidiaries, Binary KOD supplies, installs and maintains karaoke hardware and control systems to karoakes in Hong Kong, Macau, and PRC. Binary KOD serves approximately over 60% of the karaoke market in Hong Kong. The company has deployed VOD technology in several karaoke chains in Hong Kong. Binary KOD 's primary business is to further develop the karaoke market in PRC and Hong Kong.
For the year ended 31 March 1998 and 1999, the audited net profits of Binary Evolution was HK$24,334 and HK$2,604,931, respectively. As at 31 March 1998 and 1999, and the net shareholders' deficit of Binary Evolution was HK$2,698,085 and HK$93,152, respectively. For the year ended 31 March 1998 and 1999, the audited net profits of Stage Engineering was HK$81,866 and HK$97,867, respectively. As at 31 March 1998 and 1999, and the net assets of Stage Engineering was HK$440,835 and HK$538,702, respectively.
Conditions of Sale & Purchase Agreement B:
Completion of Sale & Purchase Agreement B is conditional upon the following conditions being fulfilled or, in the case of (a), (b) and (c), waived by Investrade at any time on or before 5:00 p.m. on the Business Day immediately prior to the completion date of Sale & Purchase Agreement B:
(a) Investrade having informed Viewise that Investrade is fully satisfied with the result of due diligence to be carried out by the Investrade on the business, assets, liabilities and financial position and prospects of Binary KOD and its subsidiaries;
(b) All warranties, representations and undertakings as set out in the Sale & Purchase Agreement B having remained true and accurate in all respects;
(c) All necessary approvals from government and regulatory authorities, corporate approvals and consents and third party consents for the transactions contemplated in Sale & Purchase Agreement B being obtained on or before completion of Sale & Purchase Agreement B
(d) Viewise shall use its best endeavours to ensure that the conditions specified in (a), (b) and (c) above are fulfilled as soon as practicable and in any event not later than 5:00 p.m. on the Business Day immediately prior to the completion of Sale & Purchase Agreement B; and
(e) If all the conditions specified in (a), (b), and (c) above have not been satisfied or waived by 5:00 p.m. on the Business Day immediately prior to the completion of Sale & Purchase Agreement B, then Sale & Purchase Agreement B, other than certain clauses, shall lapse and have no further effect.
Completion Date:
Completion will take place on the date falling one month from the date of Sale & Purchase Agreement B, or if such day is not a Business Day, the next following Business Day, or such other date as Investrade and Viewise may agree in writing.
Connection between the Parties:
Viewise, Binary KOD, Mr. Chow and Mr. Li are all parties independent of the directors, chief executive and substantial shareholders of the Company, any of its subsidiaries or their respective associates.
Shareholders' Agreement B - relating to Binary KOD Limited dated 25 April 2000
Parties:
| Shareholders: | (1) Investrade International Limited, (2) Viewise Management Corp. (together "The Shareholders of B" and each of them as "The Shareholder of B") with interests in the share capital of Binary KOD in a proportion of 51: 49 respectively |
| Guarantors: | Mr. Chow Chung Kit Maurice and Mr. Li Ping Por, the beneficial owners of the entire issued share capital of Viewise. |
Reason for Shareholders' Agreement B:
The Shareholders of B have entered into Shareholders' Agreement B to regulate the participation of the Shareholders of B in Binary KOD.
Funding of Binary KOD:
Pursuant to the terms of the Shareholders' Agreement B, each of the Shareholders of B agrees to make available to Binary KOD in the proportion of their holdings such sums as the directors of Binary KOD determine to be necessary from time to time by way of share or secured or unsecured loan capital, and on such terms as the directors determine.
Management of Binary KOD:
The board of directors of Binary KOD will consist of 6 directors of which 4 and 2 directors will be nominated by Investrade and Viewise respectively. Investrade shall have the right to nominate the chairman and managing director of the directors by written notice to Binary KOD.
Subscription Agreement - relating to 1,000 new shares in Binary KOD Limited dated 25 April 2000
Parties:
| Investrade: | Investrade International Limited |
| Viewise: | Viewise Management Corp. |
| Binary KOD: | Binary KOD Limited |
| Guarantors: | Mr. Chow Chung Kit Maurice and Mr. Li Ping Por, the beneficial owners of the entire issued share capital of Viewise prior to the acquisition of 510 shares by Investrade. |
Subscription:
Investrade and Viewise have agreed to subscribe for, and Binary KOD has agreed to issue, 634 and 366 new shares of US$1 par each of Binary KOD, respectively. Following the completion of the subscription, the respective shareholding of Investrade and Viewise of Binary KOD will be 57.2% and 42.8% respectively.
Consideration:
Subject to terms and conditions of the Subscription Agreement, Investrade will subscribe for 634 new shares of Binary KOD for HK$13,000,000 in cash, while Viewise will subscribe for 366 new shares of Binary KOD for HK$7,000,000 in cash. The amount of consideration was determined after arm 's length negotiations, and the Board of the Company and the shareholders of Investrade believe the consideration to be fair and reasonable.
Funding for the transaction will be derived from the cash injections into Investrade by its shareholders.
Conditions of Subscription Agreement:
Completion of the Subscription Agreement is conditional upon the following conditions being fulfilled or waived on or before 5:00 p.m. on the Business Day immediately prior to the completion date:
(a) Completion of the sale and purchase of Sale & Purchase Agreement B; and
(b) All necessary approvals and consents being obtained on or before the Completion date ( as defined below ) .
Completion Date:
Completion will take place on the date falling one month from the date of the Subscription Agreement, or if such date is not a Business Day, the next following Business Day or such other date as the parties may agree in writing.
Share Option Agreement A - relating to 96 shares in Binary KOD Limited dated 25 April 2000
Parties:
| Grantee: | Investrade International Limited |
| Grantor: | Viewise Management Corp. |
Option Shares:
Share Option Agreement A requires the Grantor to sell to the Grantee, and the Grantee to purchase from the Grantor, the option ("Share Option A") to purchase 96 shares ("Option Shares A") in the capital of Binary KOD Limited, representing 4.8% of the issued share capital of Binary KOD after the completion of the Subscription Agreement. The Grantor is the registered holder and beneficial owner of the Option Shares A.
Exercise of Option:
Share Option A may be exercised at any time during the period commencing from the date of completion of the Sale & Purchase Agreement B to the date falling on the first anniversary of the date of such completion, both dates inclusive. Share Option A, if not so exercised, will expire at the end of said period. Share Option A may be exercised for all, but not some only, of the Option Shares A.
Terms of Sale:
The total consideration to be paid by the Grantee for the purchase of the Option Shares A shall be HK$ 5,000,000 in cash. Funding for the transaction will be derived from the cash injections into Investrade by its shareholders.
Completion Date:
Completion of the sale and purchase of the Option Shares A will take place at mid-day on the 5th Business Day following the day of service of written notice of exercise of Share Option A.
Connection between the Parties:
Viewise and Binary KOD are parties independent of the directors, chief executive and substantial shareholders of the Company, any of its subsidiaries or their respective associates.
Share Option Agreement B - relating to 60 shares in Binary KOD Limited dated 25 April 2000
Parties:
| Grantee: | Investrade International Limited |
| Grantor: | Viewise Management Corp. |
Option Shares:
Share Option Agreement B requires the Grantor to sell to the Grantee, and the Grantee to purchase from the Grantor, the option (Share Option B) to purchase 60 shares ("Option Shares B") in the capital of Binary KOD Limited, representing 3% of the issued share capital of Binary KOD after the completion of the Subscription Agreement. The Grantor is the registered holder and beneficial owner of the Option Shares B.
Exercise of Option:
Share Option B may be exercised at any time during the period commencing from the date of the first anniversary of the date of completion of Sale & Purchase Agreement B to the date falling on the second anniversary of the date of such completion, both dates inclusive. Share Option B, if not so exercised, will expire at the end of said period. Share Option B may be exercised for all, but not some only, of the Option Shares B.
Terms of Sale:
The total consideration to be paid by the Grantee for the purchase of the Option Shares B shall be HK$ 5,000,000 in cash. Funding for the transaction will be derived from the cash injections into Investrade by its shareholders.
Completion Date:
Completion of the sale and purchase of the Option Shares will take place at mid-day on the 5th Business Day following the day of service of written notice of exercise of Share Option B.
Connection between the Parties:
Viewise and Binary KOD are parties independent of the directors, chief executive and substantial shareholders of the Company, any of its subsidiaries or their respective associates.
REASONS FOR THE TRANSACTIONS
The Company and its subsidiaries (collectively, the "Group") are principally engaged in the provision and maintenance of multi-discipline building services including electrical engineering, water pumping and fire services, air conditioning, plumbing and drainage, environmental engineering, extra voltage system engineering and telecom wiring.
The Group has also expanded to provide and manage a comprehensive in-building telecom infrastructure (refers as "First Mile") for building developers, building management companies and building owners" associations. The Transactions will add value to the provision of First Mile.
BUSINESS PLAN
First Mile will enable end-users to freely choose from fixed network operators, pay TV operators, internet content providers, and companies engage in e-commerce (B2B and B2C) the services related to voice, video, data, especially broadband content over the Internet. By combining old economy model in proven songs distribution companies such as Binary Evolution, new digital system by Chii Hang, and broadband technology, the Group believes that the Transactions and First Mile will add value to each other.
INFORMATION FOR SHAREHOLDERS
Under the Listing Rules, the Transactions in aggregate is a Discloseable Transaction, and a circular giving details of the agreements will be sent to shareholders shortly.
Exchange Rate: NT$1=HK$0.259
Terms used in this Announcement:
In this announcement, the following terms have the meanings set out below unless the context requires otherwise:
| "Agreed Proportion" | the proportion of 55: 25: 20 in respect of Wonderland, Chii Hang and GVL respectively or, following any change in the shareholding of the Shareholders in accordance with the provisions of this Agreement and/or the Articles, their respective shareholdings in the capital of the Company expressed as a percentage of the total issued share capital of the Company |
| "Business Day" | A day on which banks in Hong Kong are open for business, excluding Saturdays and Sundays |
| "Foreign Investment Approval" | means the approval by the Investment Commission of the Ministry of Economic Affairs of Taiwan |
| "HK$" | Hong Kong dollars, the lawful currency of Hong Kong |
| "Hong Kong" | the Hong Kong Special Administrative Region of the PRC |
| "Macau" | the Macau Special Administrative Region of the PRC |
| "NT$" | New Taiwan dollars, the lawfully currency of Taiwan, Republic of China |
| "PRC" | the People's Republic of China excluding for the purposes of this Agreement, Hong Kong, Macau and Taiwan |
| "US Dollar or US$" | United States dollars, the lawful currency of The United States |
Made by order of the Board of the Company, the Directors of which individually and jointly accept responsibility for the accuracy of this statement.
By Order of the Board
Kwok Shun On
Managing Director
Hong Kong, 25 April 2000
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