If you are in doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountants or other professional adviser.
If you have sold all your shares and/or warrants in Silver Grant International Industries Limited you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
GENERAL MANDATES TO REPURCHASE SECURITIES
AND TO ISSUE SHARES
A notice convening the Extraordinary General Meeting of Silver Grant International Industries Limited (the "Company") to be held at Grand I & II, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, the 26th day of June, 2000 at 9:30 a.m. (or so soon thereafter as the Annual General Meeting of the Company convened for the same day and place shall have been concluded or adjourned) is set out on pages 9 to 12 of this circular. Whether or not you are able to attend, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion of the form of proxy will not preclude you from attending and voting at the meeting should you so wish.
| 31st May, 2000 |
Letter from the Managing Director
Appendix -- Explanatory Statement
Notice of Extradordinary General Meeting
| Directors | Registered Office: | |
| Shi Chun Gui (Chairman) | Suite 4901, | |
| Hui Xiao Bing (Vice Chairman) | 49th Floor, | |
| Gao Jian Min (Managing Director) | Office Tower, | |
| Xu Shi Quan | Convention Plaza, | |
| Tan Jiansheng | 1 Harbour Road, | |
| Gu Jianguo | Wanchai, | |
| Wang Beilai | Hong Kong, | |
| Cheung Chung Kiu | ||
| Yuen Wing Shing | ||
| Kang Dian* | ||
| Zhang Lu* | ||
*Independent Non-executive director
| 31st May, 2000 |
To the Shareholders and, for information only,
the Warrantholders
Dear Sir or Madam,
INTRODUCTION
The Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") contain provisions to regulate the repurchase by companies with primary listing on the Stock Exchange of their own securities on the Stock Exchange. The Companies Ordinance (Chapter 32 of the Laws of Hong Kong) ("the Companies Ordinance") allows companies incorporated in Hong Kong, if so permitted by their articles of association, to repurchase their own shares. In addition, listed company may, if authorised in the terms and conditions of their warrants, purchase their warrants.
At the extraordinary general meeting of the Company held on 28th June, 1999, general mandates were granted to the directors of the Company (the "Directors") to exercise the powers of the Company to repurchase shares of the Company ("Shares") and warrants issued by the Company to subscribe for Shares ("Warrants") and to issue Shares. The general mandate to issue Shares granted on 28th June, 1999 was substantially exercised by the Directors under a subscription agreement dated 4th January, 2000 between the Company and Catic Limited as announced by the Company's announcement dated 8th January, 2000. At the extraordinary general meeting of the Company held on 19th February, 2000, the general mandate to issue Shares granted on 28th June, 1999 was revoked to the extent not exercised by the Directors and a new general mandate was granted to the Directors to exercise the power of the Company to issue Shares. The new general mandate to issue Shares granted on 19th February, 2000 has been substantially exercised by the Directors under a placing agreement dated 23rd February, 2000 between the Company and Tai Fook Securities Limited as announced by the Company's announcement dated 23rd February, 2000. Under the terms of the Listing Rules, these general mandates will lapse at the conclusion of the next annual general meeting of the Company. Ordinary resolutions will therefore be proposed at an extraordinary general meeting of the Company to be held on 26th June, 2000 ("Extraordinary General Meeting") immediately following the annual general meeting of the Company convened for that date to approve fresh general mandates to repurchase securities and to issue Shares.
The purpose of this circular is to provide you with information regarding the proposed general mandates to repurchase securities and to issue Shares.
GENERAL MANDATES TO REPURCHASE SECURITIES
At the Extraordinary General Meeting, an ordinary resolution will be proposed to grant a general mandate to the Directors to exercise the powers of the Company to repurchase on the Stock Exchange Shares representing up to a maximum of 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of the resolution and Warrants up to a maximum of 10% of the aggregate amount of subscription rights attached to the Warrants outstanding at the date of the passing of the resolution ("the Repurchase Mandate").
In accordance with the Listing Rules, an explanatory statement to provide shareholders with all the information reasonably necessary to enable them to make an informed decision on whether to vote for or against the resolution to approve the Repurchase Mandate is set out in the Appendix hereto.
GENERAL MANDATE TO ISSUE SHARES
An ordinary resolution will be proposed at the Extraordinary General Meeting to grant to the Directors a general mandate to issue Shares representing up to 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of the resolution ("Issue Mandate") in order to ensure flexibility and discretion to the Directors to issue any Shares. In addition, an ordinary resolution will be proposed to extend the general mandate to issue Shares by adding to it the number of Shares repurchased under the Repurchase Mandate.
EXTRAORDINARY GENERAL MEETING
Set out on pages 9 to 12 of this circular is a notice convening the Extraordinary General Meeting to consider the ordinary resolutions relating to the Repurchase Mandate and Issue Mandate.
A form of proxy for use at the Extraordinary General Meeting is enclosed. Whether or not you intend to be present at the Extraordinary General Meeting, you are requested to complete the form of proxy and return it to the registered office of the Company in accordance with the instructions printed thereon not later than 48 hours before the time fixed for holding the Extraordinary General Meeting. Completion and deposit of the form of proxy will not preclude you from attending and voting at the Extraordinary General Meeting if you so wish.
RECOMMENDATION
Your Directors consider that the granting of the Repurchase Mandate and Issue Mandate is in the best interest of the Company and its shareholders and accordingly the Directors recommend that all shareholders should vote in favour of the resolutions to be proposed at the Extraordinary General Meeting.
Yours faithfully,
Gao Jian Min
Managing Director
| APPENDIX | EXPLANATORY STATEMENT |
The following is the explanatory statement as required by the Listing Rules, to provide requisite information to you for your consideration of the Repurchase Mandate.
For the purpose of this appendix, the term "shares" shall be defined in the Code of Share Repurchases which mean shares of all classes and securities which carry a right to subscribe or purchase shares.
The circular also constitutes the memorandum as required under Section 49BA(3) of the Companies Ordinance.
1. LISTING RULES
The Listing Rules permit companies whose primary listings are on the Stock Exchange to repurchase their fully paid-up shares on the Stock Exchange subject to certain restrictions, the most important of which are summarised below:
(a) Shareholders' Approval
The Listing Rules provide that all on-market share repurchases by a company with its primary listings on the Stock Exchange must be approved in advance by an ordinary resolution, either by way of a specific approval in relation to specific transactions or by a general mandate to the directors of the company to make such repurchases.
(b) Source of Funds
Repurchases must be made out of funds which are legally available for such purpose in accordance with the company's constitutive documents and the laws of the jurisdiction in which the company is incorporated or otherwise established.
(c) Maximum Number of Shares to be Repurchased and Subsequent Issues
A maximum of 10% of the issued share capital of the company at the date of the passing of the resolution granting the general mandate may be repurchased on the Stock Exchange and a company may not, without the prior approval of the Stock Exchange, issue new shares or announce a proposed new issue of shares for a period of 30 days immediately following a share repurchase, whether on the Stock Exchange or otherwise (other than an issue of securities pursuant to the exercise of share options or conversion rights attaching to the convertible guaranteed bonds or similar instruments, requiring the company to issue securities, which are outstanding prior to the repurchase).
(d) Trading Restrictions
All share repurchases on the Stock Exchange in any given calendar month are limited to a maximum of 25% of the trading volume of the company's shares in the immediately preceding calendar month. The Listing Rules also prohibit a company from making share repurchases on the Stock Exchange if the result of the repurchase would be that less than 25% (or the prescribed minimum percentage for that company as determined by the Stock Exchange at the time of listing) of its issued share capital would be in public hands. A company shall not purchase its own shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.
(e) Status of Repurchased Shares
The Listing Rules require the listings of all repurchased shares to be automatically cancelled upon purchase and the share certificates to be cancelled and destroyed as soon as reasonably pacticable following settlement of any such purchase. Under the Companies Ordinance, the shares repurchased will be treated as cancelled but the aggregate amount of the company's authorised share capital would not be reduced.
(f) Suspension of Repurchases
The Listing Rules require any share repurchase programme to be suspended after a price sensitive development has occurred or has been the subject of a decision until the price sensitive information is made publicly available. In particular, during the period of one month immediately preceding either the preliminary announcement of a company's annual results or the publication of a company's interim report, a company may not purchase shares on the Stock Exchange, unless the circumstances are exceptional. In addition, the Stock Exchange reserves the right to prohibit a share repurchase programme on the Stock Exchange if a company breaches the Listing Rules.
(g) Reporting Requirements
Under the Listing Rules, share repurchases on the Stock Exchange or otherwise must be reported to the Stock Exchange not later than 9:30 a.m. (Hong Kong Time) on the following business day. In addition, the company's annual report is required to disclose information regarding share repurchases made during the year, including the number of shares repurchased each month, the purchase price per share or the highest and lowest purchase price paid for such purchases and the aggregate price paid and the directors' reasons for making such repurchases. A company shall procure that any broker appointed by the company to effect the purchase of shares shall disclose to the Stock Exchange such information with respect to purchases made on behalf of the company as the Stock Exchange may request.
(h) Connected Parties
The Listing Rules prohibit a company from knowingly purchasing shares on the Stock Exchange from a "connected person", that is, a director, chief executive or substantial shareholder of the company or any of its subsidiaries or their respective associates (as defined in the Listing Rules) and a connected person is prohibited from knowingly selling his/her shares to the company on the Stock Exchange.
2. SHARE CAPITAL
As at 29th May, 2000 (the latest practicable date prior to the printing of the circular) ("the Latest Practicable Date")), the issued share capital of the Company comprised 1,284,684,100 Shares. At the same time, there were outstanding Warrants carrying rights to subscribe up to HK$78,462,340 in aggregate for Shares, equivalent to the aggregate subscription price for a total of 93,407,547 Shares on the basis of the current subscription price of HK$0.84 per Share (subject to adjustment).
Subject to the passing of ordinary resolution and on the basis that no further Shares are issued or repurchased and no Warrants are exercised or repurchased prior to the Extraordinary General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 128,468,410 Shares and Warrants carrying rights to subscribe up to a maximum of HK$7,846,234 in aggregate for Shares, equivalent to the aggregate subscription price for a total of 9,340,754 Shares on the basis of the subscription price per Share as aforesaid.
3. REASONS FOR REPURCHASE
The Directors believe that the Repurchase Mandate is in the best interests of the Company and its shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and its shareholders.
4. FUNDING OF REPURCHASE
Repurchase would be financed from available cash flow or working capital facilities of the Company and its subsidiaries which will be funds legally available for such purpose in accordance with the Memorandum and Articles of Association of the Company and the Companies Ordinance. The Companies Ordinance provides that the amount of capital repaid in connection with a share repurchase may only be paid from the distributable profits of the Company and/or the proceeds of a new issue of Shares made for the purpose. The Companies Ordinance further provides that the amount of premium payable on repurchase may only be paid out of the distributable profits of the Company. Where the repurchased Shares were issued at a premium, any premium payable on repurchase may be paid out of the proceeds of a fresh issue of shares made for the purpose of the repurchase to such extent allowable under the Companies Ordinance.
There might be material adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited consolidated accounts contained in the annual report for the year ended 31st December, 1999 in the event that the Repurchase Mandate was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.
5. SHARE AND WARRANT PRICES
The highest and lowest traded prices at which the Shares and Warrants have traded on the Stock Exchange during each of the previous 12 months before the date of this circular were as follows:--
Shares Warrants
Highest Lowest Highest Lowest
Price Price Price Price
$ $ $ $
1999
May 0.890 0.680 -- --
June 1.220 0.710 -- --
July 1.300 1.010 0.700 0.520
August 1.070 0.850 0.580 0.440
September 1.100 0.880 0.510 0.410
October 0.900 0.780 0.410 0.285
November 0.860 0.750 0.380 0.280
December 0.860 0.740 0.380 0.260
2000
January 1.030 0.780 0.395 0.280
February 1.260 0.900 0.550 0.380
March 1.020 0.840 0.380 0.250
April 0.770 0.620 0.280 0.218
*Dealings in the Warrants commenced on 5th July, 1999.
6. UNDERTAKING
The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Ordinary Resolution No.1 set out in the Notice of Extraordinary General Meeting in accordance with the Listing Rules and the Companies Ordinance.
None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their associates, have any present intention to sell any Shares or Warrants to the Company under the Repurchase Mandate if such is approved by the shareholders.
No other connected persons (as defined in the Listing Rules) have notified the Company that they have a present intention to sell Shares or Warrants to the Company, or have undertaken not to do so, in the event that the Repurchase Mandate is approved by the shareholders.
7. HONG KONG CODES ON TAKEOVERS AND MERGERS AND SHARE REPURCHASES
If on exercise of the powers to repurchase Shares pursuant to the Repurchase Mandate, a shareholder's proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of Hong Kong Codes on Takeover and Mergers and Share Repurchases ("the Takeover Code"). As a result, a shareholder or group of shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeover Code.
As at the Latest Practicable Date, Silver Grant International Holdings Limited held 179,966,400 Shares representing approximately 14.01% of the issued share capital of the Company and China Cinda Asset Management Corporation indirectly held 178,468,000 Shares representing approximately 13.89% of the issued share capital of the Company. To the best of the knowledge and belief of the Company, no other person, together with his/her associates, was beneficially interested in Shares representing 10% or more of the issued share capital of the Company.
In the event that the Directors exercise in full the power to repurchase Shares and Warrants which is proposed to be granted pursuant to the Ordinary Resolution No.1 set out in the Notice of Extraordinary General Meeting, then (if the present shareholdings otherwise remained the same) the attributable shareholdings of Silver Grant International Holdings Limited and China Chinda Asset Management Corporation in the Company would be increased from approximately 14.01% and 13.89% to approximately 15.57% and 15.44% respectively of the issued share capital of the Company. The Directors are not aware of any consequences which may arise under the Takeover Code as a consequence of any purchases made under the Repurchase Mandate.
8. SHARE AND WARRANT REPURCHASE MADE BY THE COMPANY
The Company has not purchased any of its Shares and Warrants (whether on the Stock Exchange or otherwise) in the 6 months preceding the date of this circular.
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Silver Grant International Industries Limited (the "Company") will be held at Grand I & II, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, the 26th day of June, 2000 at 9:30 a.m. (or so soon thereafter as the Annual General Meeting of the Company convened for the same day and place shall have been concluded or adjourned) for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Ordinary Resolutions:--
1. "THAT:--
(a) subject to paragraphs (b) and (c) of this Resolution, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all powers of the Company to repurchase securities of the Company on The Stock Exchange of Hong Kong Limited ("the Stock Exchange") or on any other stock exchange on which the securities of the Company may be listed and is recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and/or the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;
(b) the aggregate nominal amount of shares of the Company which may be repurchased pursuant to the approval in paragraph (a) of this Resolution shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution and the said approval shall be limited accordingly;
(c) the aggregate amount of subscription rights attached to the warrants issued by the Company to subscribe for shares in the capital of the Company which may be repurchased pursuant to the approval in paragraph (a) of this Resolution shall not exceed 10 per cent. of the aggregate amount of subscription rights attached to such warrants outstanding as at the date of the passing of this Resolution and the said approval shall be limited accordingly; and
(d) for the purposes of this Resolution, "Relevant Period" means the period from the passing of this Resolution until whichever is the earliest of:--
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and
(iii) the passing of an ordinary resolution by shareholders of the Company in general meeting revoking or varying the authority given to the directors of the Company by this Resolution."
2. "THAT:--
(a) subject to paragraph (c) of this Resolution and pursuant to Section 57B of the Companies Ordinance, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make and grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require shares to be allotted be and is hereby generally and unconditionally approved;
(b) the approval in paragraph (a) of this Resolution shall authorise the directors of the Company during the Relevant Period to make and grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require shares to be allotted after the end of the Relevant Period;
(c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Right Issue (as hereinafter defined) or (ii) the exercise of rights of subscription or conversion under the terms of any existing warrants, bonds, debentures, notes or other securities issued by the Company which carry rights to subscribe for or are convertible into shares of the Company or (iii) the exercise of options under any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company or (iv) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution and the said approval shall be limited accordingly; and
(d) for the purposes of this Resolution:
"Relevant Period" means the period from the passing of this Resolution until whichever is the earliest of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; and
(iii) the passing of an ordinary resolution by shareholders of the Company in general meeting revoking or varying the authority given to the directors of the Company by this Resolution; and
"Rights Issue" means an offer of shares or issue of options, warrants or other securities giving the right to subscribe for shares of the Company open for a period fixed by the directors of the Company to holders of shares whose names appear on the register of members of the Company (and, where appropriate, to holders of other securities of the Company entitled to the offer) on a fixed record date in proportion to their then holdings of such shares of the Company (or, where appropriate such other securities) (subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company.)"
3. "THAT subject to the passing of Resolution Nos.1 and 2 set out in the notice convening this meeting, the general mandate granted to the directors of the Company to exercise the powers of the Company to allot, issue and deal with additional shares in the Company pursuant to Resolution No.2 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to the Resolution No.1 set out in the notice convening this meeting, provided that such extended amount shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution."
By Order of the Board
Michael TUNG
Secretary
Hong Kong, 31st May, 2000.
Registered Office:
Suite 4901, 49th Floor,
Office Tower,
Convention Plaza,
1 Harbour Road,
Wanchai,
Hong Kong.
Notes:
1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him. A proxy need not be a member of the Company.
2. A form of proxy for use at the meeting is enclosed.
3. To be valid, a form of proxy, together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority must be deposited at the registered office of the Company, Suite 4901, 49th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting.
| © Copyright 1996-2013 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |