| SUMMARY
The directors of Wing Shan International Limited (the "Company") wish to announce that Foshan Shakou Power Plant Co., Ltd. ("Foshan Shakou"), an 80% owned subsidiary of Hensil Worldwide Inc. ("Hensil"), which in turn is a wholly-owned subsidiary of the Company, entered into an agreement (the "Agreement") on 30 September 2001 with a European supplier of electrical plant equipments and spare parts (the "Supplier") whereby the Supplier agreed to (i) supply spare parts and upgrading materials (the "Supply") to the electricity generating plant (the "Electricity Plant") owned and operated by Foshan Shakou and (ii) to render technical services (the "Service") to Foshan Shakou for the performance of a routine large-scale inspection and overhaul, and an upgrading of the Electricity Plant. Pursuant to the Agreement, the Supplier is scheduled to commence (i) delivery of the Supply on 1 November 2002 and (ii) performance of the Service in the beginning of 2003 and such performance is expected to be concluded by April 2003. The Supply and the Service are for the purposes of undertaking a routine major service and maintenance overhaul program for the Electricity Plant and to upgrade the Electricity Plant. The total consideration payable by Foshan Shakou to the Supplier pursuant to the Agreement is US$19,470,500.00 (equivalent to approximately HK$151,869,900.00) (the "Total Contract Price"). The entering into of the Agreement by Foshan Shakou constitutes a discloseable transaction for the Company under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"). The Company will send a circular containing further details on the Agreement to the shareholders of the Company as soon as practicable. |
Date of the Agreement
30 September 2001
Parties to the Agreement
| (1) Purchaser | : | Foshan Shakou, an 80% owned subsidiary of Hensil, which in turn is a wholly-owned subsidiary of the Company; |
| (2) Supplier | : | the Supplier, being a European supplier of electrical plant equipments and spare parts and an independent third party not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates (as defined in the Listing Rules). |
Assets and Services Acquired
Pursuant to the Agreement, the Supplier agreed (i) to supply spare parts and upgrading materials to the Electricity Plant owned and operated by Foshan Shakou and (ii) to render technical services to Foshan Shakou for the performance of a routine large-scale inspection and overhaul, and an upgrading of the Electricity Plant.
Consideration
The aggregate consideration payable by Foshan Shakou to the Supplier pursuant to the Agreement for the Supply and the Service is US$19,470,500.00 (equivalent to approximately HK$151,869,900.00). The consideration was negotiated on an arm's length basis between Foshan Shakou and the Supplier and is based on the cost of spare parts and materials, the number of manhours estimated to be spent and the profit margin of the Supplier.
Payment Method
Foshan Shakou shall pay the Total Contract Price to the Supplier in the following manner:
(1) as to US$2,920,575.00 (equivalent to approximately HK$22,780,485.00), representing 15% of the Total Contract Price, which shall be paid within 30 days as an advance payment after the signing of the Agreement by Foshan Shakou and the Supplier, and upon receipt of the Supplier's invoice and against a letter of guarantee for the said amount to be opened by the beneficiary bank within the said 30 day period;
(2) as to US$2,920,575.00 (equivalent to approximately HK$22,780,485.00), representing 15% of the Total Contract Price, which shall be paid within 45 days as an advance payment after the signing of the Agreement by Foshan Shakou and the Supplier, and upon receipt of the Supplier's invoice and against a letter of guarantee for the said amount to be opened by the beneficiary bank with the said 45 day period;
(3) as to US$11,682,300.00 (equivalent to approximately HK$91,121,940.00), representing 60% of the Total Contract Price, which shall be paid upon receipt of the contractor's invoice accompanied by the proper bill of lading anytime during the validity of the irrevocable letter of credit which must be opened by Foshan Shakou pursuant to the Agreement, that is from 1 September 2002 to 30 May 2003; and
(4) as to US$1,947,050.00 (equivalent to approximately HK$15,186,990.00), representing 10% of the Total Contract Price, which shall be paid upon receipt of the contractor's invoice accompanied by a certificate of completion approved by Foshan Shakou.
The time gap between the first scheduled payment of the Total Contract Price by Foshan Shakou on the one hand, and the scheduled commencement of delivery of the Supply and performance of the Service by the Supplier on the other hand, is due to the fact that certain parts and materials necessary for the Supply must be designed and manufactured by the Supplier prior to commencement of delivery of the Supply and performance of the Service.
Term
Pursuant to the Agreement, the Supplier is scheduled to commence (i) delivery of the Supply on 1 November 2002 and (ii) performance of the Service in the beginning of 2003 and such performance is expected to be concluded by April 2003.
Means of Financing
A portion of the Total Contract Price, being approximately 50% of the Total Contract Price, is expected to be financed by bank loans which are currently under negotiation, with the remaining portion of the Total Contract Price to be funded by internal resources. The directors of the Company believe that the Company has sufficient internal resources to finance such remaining portion of the Total Contract Price.
Reasons for entering into the Agreement
The principal activity of the Company is investment holding. The principal activities of the Company and its subsidiaries are the generation and sale of electricity in Foshan City, Guangdong Province, the People's Republic of China.
The Supply and the Service are for the purposes of undertaking a routine major service and maintenance overhaul program for the Electricity Plant and to upgrade the Electricity Plant. Upon completion of the Supply and Service, Foshan Shakou's power generating facilities are expected to benefit in the following manner:
(a) ability to maintain maximum capacity availability of the power generating facilities at all times, especially during peak load demand periods;
(b) ability to maintain uninterrupted electricity supply to the relevant locality; and
(c) avoidance of or reduction in the occurrence of unexpected failures and breakdowns.
General
The entering into of the Agreement by Foshan Shakou constitutes a discloseable transaction on the part of the Company under the Listing Rules.
A circular, containing, amongst other things, further details of the Agreement will be despatched to the shareholders of the Company as soon as practicable.
| For the purposes of this announcement, unless otherwise indicated, the exchange rate of US$1 = HK$7.80 has been used, where applicable, for purposes of illustration only and does not constitute a representation that any amounts have been, could have been or may be exchanged. |
By order of the Board
Wing Shan International Limited
He Haochang
Chairman & Managing Director
Hong Kong, 3 October, 2001
Please also refer to the published version of this announcement in the Hong Kong iMail and Hong Kong Economic Times.
| © Copyright 1996-2012 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. |