The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.
| Yau Lee aims to raise a minimum of approximately HK$63.8 million, before expenses, by way of a rights issue of a minimum of 590,328,134 Rights Shares at the Subscription Price of HK$0.108 per Rights Share, payable in full on acceptance. The number of Rights Shares will be increased, if necessary, by a number of new Shares to be allotted and issued by Yau Lee at or before 4:00 p.m. on 6th December, 1999 upon exercise of outstanding share options granted by Yau Lee capable of being exercised. If all outstanding share options are exercised as aforesaid, the total number of Rights Shares to be issued will be increased to 613,922,134. Yau Lee will provisionally allot one Rights Share in nil-paid form for every two Shares held by the Qualifying Shareholders, being Shareholders other than the Non-Qualifying Shareholders. No excess applications in connection with the Rights Issue will be provided.
The Rights Issue is not available to any Non-Qualifying Shareholders, being Shareholders whose names appear on the register of members of Yau Lee on the Record Date whose addresses as shown on the register of members are outside Hong Kong where, in the Directors' opinion, it could be unlawful or impracticable for the Rights Shares to be offered in such place without compliance with registration and/or other legal or regulatory requirements or special formalities. The prospectus in relation to the Rights Issue will be despatched to all Shareholders on 8th December, 1999. Provisional allotment letters will be sent to all Qualifying Shareholders. The Rights Issue is subject to the conditions set out below under the section headed "Conditions of the Rights Issue". All Fine, which is currently beneficially interested in approximately 31.5% of the issued share capital of Yau Lee, has given an irrevocable and unconditional undertaking to Yau Lee and ICEA to accept its entitlement to Rights Shares in full under the Rights Issue. Pursuant to the Underwriting Agreement, any Rights Shares not subscribed for under the Rights Issue is fully underwritten by ICEA Capital Limited subject to and in accordance with the terms and conditions therein. To qualify for the Rights Issue, all transfers of Shares must be lodged for registration with Yau Lee's branch share registrar in Hong Kong before 4:00 p.m. on 6th December, 1999. |
1. RIGHTS ISSUE
Issue statistics:
| Basis of the Rights Issue | One Rights Share for every two existing Shares held by a Qualifying Shareholder on the Record Date |
| No. of existing Shares in issue as at 22nd November, 1999 | 1,180,656,268 Shares |
| No. of Rights Shares | a minimum of 590,328,134 Rights Shares and up to 613,922,134 Rights Shares, representing 50% of the existing issued share capital of Yau Lee and approximately 33.33% of the issued share capital of Yau Lee as enlarged by such Rights Shares and Shares falling to be issued upon full exercise of all outstanding share options, respectively |
Qualifying Shareholders:
Yau Lee will send the Rights Issue Documents to each Qualifying Shareholder who:
1. is registered as a member of Yau Lee on the Record Date; and
2. has an address in Hong Kong as its address on the register of members of Yau Lee on the Record Date or has an address not in Hong Kong as its address on the register of members of Yau Lee on the Record Date but is in a place where an offer of Rights Shares is permitted under the laws of that place without the requirements of compliance with any legal or regulatory requirements or special formalities in such place.
Closure of the register of members:
The register of members of Yau Lee will be closed from 7th December, 1999 to 8th December, 1999 (both dates inclusive). In order to be registered as a member on or before the Record Date, Shareholders must lodge any transfer of Shares (with the relevant Share certificate(s)), with Yau Lee's branch share registrar in Hong Kong, Central Registration Hong Kong Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong, not later than 4:00 p.m. on Monday, 6th December, 1999.
2. TERMS OF THE RIGHTS ISSUE
Subscription Price:
HK$0.108 per Rights Share, payable in full upon acceptance.
The Subscription Price represents:
i. a discount of approximately 13.6% to the closing price of HK$0.125 per Share as quoted on the Stock Exchange on 22nd November, 1999;
ii. a discount of approximately 13.6% to the average closing price of approximately HK$0.125 per Share for the 10 trading days up to and including 22nd November, 1999;
iii. a discount of approximately 9.2% to the theoretical ex-rights price of about HK$0.119 per Share based on such closing Share price on 22nd November, 1999.
Each of the Rights Shares has a nominal value of HK$0.05 each. In light of the current market price trading on the Stock Exchange, the Directors consider that such subscription price is fair and reasonable.
Status of the Rights Shares:
When allotted and issued as fully-paid, the Rights Shares will rank pari passu with the then existing Shares as at the date of the allotment.Holders of the fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared on or after the date of allotment of the Rights Shares.
Rights of Non-Qualifying Shareholders:
The Rights Issue Documents will not be registered under the applicable legislation of any jurisdictions other than Hong Kong and Bermuda.No provisional allotments of Rights Shares or any allotment of Rights Shares will be made to Non-Qualifying Shareholders. Yau Lee will send a prospectus to Non-Qualifying Shareholders for their information only. Yau Lee will not send provisional allotment letters to Non-Qualifying Shareholders.
Arrangements will be made for Rights Shares which would otherwise have been provisionally allotted to Non-Qualifying Shareholders to be sold in the market in their nil-paid form as soon as practicable after dealings in the nil-paid Rights Shares commence, if a premium (net of expenses) can be obtained.The proceeds of such sale, less expenses, of HK$100 or more will be paid to Non-Qualifying Shareholders in Hong Kong dollars as soon as practicable. Yau Lee will retain individual amounts of less than HK$100 for its own benefit.
Fractions of Rights Shares:
Fractions of Rights Shares in nil-paid form will not be provisionally allotted. Yau Lee will sell any such nil-paid Rights Shares created by aggregating fractions of Rights Shares (if a premium, net of expenses, can be obtained) and will retain the proceeds for its own benefit.
Application for excess Rights Shares:
No excess applications in connection with the Rights Issue will be provided.Qualifying Shareholders may not apply for any unsold entitlements of Non-Qualifying Shareholders, any unsold Rights Shares created by adding together fractions of Rights Shares, nor any Rights Shares provisionally allotted but not accepted.
Application for listing:
Yau Lee will apply to the Listing Committee of the Stock Exchange for the listings of, and permission to deal in, the Rights Shares (in both nil-paid and fully-paid forms).
Dealings in the Rights Shares (in both nil-paid and fully-paid forms) will be subject to the payment of stamp duty in Hong Kong.
Share certificates:
Share certificates for all fully-paid Rights Shares are expected to be posted to subscribers who have been allotted the relevant Rights Shares at their own risk on or before 29th December, 1999.
Share options:
According to the rules of the Share Option Scheme, as a result of the Rights Issue, adjustments may need to be made to (a) the number or nominal amount of Shares subject to the options granted thereunder so far as unexercised and/or (b) the subscription price and/or (c) the method of exercise of such options as the auditors of Yau Lee shall certify in writing to be fair and reasonable in their opinion. In the event that the Rights Issue is completed, the Directors will request the auditors of Yau Lee to provide such certification as soon as reasonably practicable thereafter which will be final and binding on Yau Lee and all participants in the Share Option Scheme. Yau Lee will notify all participants in the Share Option Scheme on details of such certification. As at 22nd November, 1999, there are outstanding share options in respect of 47,188,000 Shares, representing an entitlement of 23,594,000 Rights Shares pursuant to the Rights Issue if such share options are exercised in full.
3. IRREVOCABLE UNDERTAKING BY SUBSTANTIAL SHAREHOLDER
As at 22nd November, 1999, All Fine, which is the single largest Shareholder, is interested in 371,856,063 Shares, representing approximately 31.5% of the existing issued share capital of Yau Lee. All Fine has pursuant to a letter of undertaking ("Letter of Undertaking") irrevocably undertaken to Yau Lee and ICEA to take up or procure the taking up of its respective entitlements in full, representing 185,928,031 Rights Shares, irrespective of whether the additional 23,594,000 Rights Shares will be issued upon full exercise of the outstanding share options pursuant to the Share Option Scheme..
4. CONDITIONS OF THE RIGHTS ISSUE
The Rights Issue is conditional upon, inter alia, the following conditions being fulfilled or waived on or before 5:00 p.m. on 24th December, 1999:
i. the Listing Committee of the Stock Exchange granting the listings of, and permission to deal in, the Rights Shares in nil-paid and fully-paid forms;
ii. the registration of all relevant documents with the Registrar of Companies in Hong Kong;
iii. the filing of all relevant documents with the Registrar of Companies in Bermuda;
iv. compliance by All Fine with the undertaking referred to in the section headed "Irrevocable Undertaking by Substantial Shareholder" above; and
v. the obligations of ICEA under the Underwriting Agreement not being terminated by ICEA in accordance with its terms.
5. UNDERWRITING ARRANGEMENT
Underwriting Agreement:
| Date: | 22nd November, 1999 |
| Underwriter: | ICEA Capital Limited, which is not connected with the Directors, chief executive or substantial Shareholders of Yau Lee or its subsidiaries or their respective associates (as defined in the Listing Rules) |
| Number of Shares underwritten: | up to 427,994,103 Rights Shares representing a maximum of 23.2% of Yau Lee's enlarged issued capital after the Rights Issue assuming all outstanding share options have been exercised (having excluded the 185,928,031 Rights Shares to be provisionally allotted to All Fine) |
| Commission: | 2.0% of the total issue price of the Rights Shares underwritten by the Underwriter |
Termination of the Underwriting Agreement:
If, at any time prior to 5:00 p.m. on the second business day immediately after the date on which the latest time for acceptance of the provisional allotments falls (provided that such business day shall be a business day on which no storm warning is or remains hoisted between 9:00 a.m. and 4:00 p.m. on that day) or prior to the time/date set out in the particular provision below:-
(i) there shall develop, occur, exist or come into effect:-
(a) any new law or regulation or any change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority in Hong Kong or any other place in which any member of the Group conducts or carries on business which the Underwriter is not, or ought not reasonably be, aware of on the date of the Underwriting Agreement; or
(b) any event or change (whether or not forming part of a series of events or changes occurring or continuing before, on and/or after the date of the Underwriting Agreement) in, local, national or international financial, political, military, economic, or stock market conditions; or
(c) any material adverse change in the conditions of local, national or international securities markets (including but without limitation, the imposition of any moratorium, suspension or material restriction on trading in securities generally on the Stock Exchange due to exceptional financial circumstances or otherwise); or
(d) any change or a firm proposal put forward by the Hong Kong Government for a prospective change in Hong Kong taxation or exchange control which in the reasonable opinion of the Underwriter will materially and adversely affect the Group (taken as a whole),
which, in the opinion of the Underwriter after consultation with the Company:-
(1) is or will or is likely to have an adverse effect (in a material respect) on the business and financial conditions of the Group (taken as a whole); or
(2) makes it inadvisable or inexpedient for Yau Lee to proceed with the Rights Issue; or
(ii) there comes to the notice of the Underwriter:-
(a) any matter or event showing any of the warranties set out in the Underwriting Agreement or any representations in the Letter of Undertaking to be untrue or misleading in any material respect or as having been breached in any material respect and considered by the Underwriter to be material in the context of the Rights Issue; or
(b) any material breach of, or omits to observe, any material obligations by Yau Lee under the Underwriting Agreement which are considered by the Underwriter to be material in the context of the Rights Issue,
then and in any such case the Underwriter may, after consultation with Yau Lee, (but shall not be bound to), upon giving notice to Yau Lee, terminate the Underwriting Agreement with immediate effect.
If the Underwriter terminates the Underwriting Agreement, the Rights Issue will not proceed.
6. USE OF PROCEEDS OF THE RIGHTS ISSUE
Yau Lee is an investment holding company. The Group is principally engaged in the contracting of building projects and fitting out works and the manufacturing and supply of building materials.
Yau Lee intends to use the net proceeds of approximately HK$45 million from the Rights Issue as additional working capital for future tenders of building contracts and the remaining balance of approximately HK$16 million as general working capital purposes for the Group. The Directors consider that the Rights Issue is the most effective way of raising such funds.
7. TIMETABLE
| The expected timetable for the Rights Issue is set out below: | 1999 |
| Last day of dealings in Shares on a cum-rights basis | Thursday, 2nd December |
| First day of dealings in Shares on an ex-rights basis | Friday, 3rd December |
| Latest time for lodging transfers of Shares in order to qualify for the Rights Issue | 4:00 p.m. on Monday, 6th December |
| Register of members of Yau Lee closed to determine the eligibility for the Rights Issue (both days inclusive) | Tuesday, 7th December to Wednesday, 8th December |
| Record Date and Rights Issue Documents despatched on | Wednesday, 8th December |
| Register of members of Yau Lee reopens | Thursday, 9th December |
| First day of dealings in nil-paid Rights Shares | Friday, 10th December |
| Latest time for splitting nil-paid Rights Shares | 4:00 p.m. on Tuesday, 14th December |
| Last day of dealings in nil-paid Rights Shares | Friday, 17th December |
| Latest time for acceptance and payment of Rights Shares | 4:00 p.m. on Wednesday, 22nd December |
| Rights Issue expected to become unconditional | Friday, 24th December |
| Announcement of results of the Rights Issue | Tuesday, 28th December |
| Certificates for fully-paid Rights Shares to be despatched on or before | Wednesday, 29th December |
| 2000 | |
| Commencement date of dealings in fully-paid Rights Shares | Monday, 3rd January |
| WARNING
It should be noted that the Shares will be dealt in on an ex-rights basis as from 3rd December, 1999; and that the Rights Shares will be dealt in their nil-paid form from 10th December, 1999 to 17th December, 1999 (both dates inclusive). If the Underwriter terminates the Underwriting Agreement (see the section headed "Termination of the Underwriting Agreement" above) or if the conditions of the Rights Issue (see the section headed "Conditions of the Rights Issue" above) are not fulfilled, the Rights Issue will not proceed. Any buying or selling of the Shares up to the date on which all such conditions are fulfilled, and any buying or selling of nil-paid Rights Shares between 10th December, 1999 to 17th December, 1999 (both dates inclusive), is at investors' own risk. Any person contemplating selling or purchasing the Shares and/or the Rights Shares in their nil-paid form during such periods who is in doubt about his/her position is recommended to consult his/her professional adviser. |
8. DEFINITIONS
| "All Fine" or "Substantial Shareholder" | All Fine Investment Company Limited |
| "Announcement" | this announcement |
| "Directors" | directors of Yau Lee |
| "Group" | Yau Lee and its subsidiaries |
| "ICEA" or "Underwriter" | ICEA Capital Limited |
| "Listing Rules" | the Rules Governing the Listing of Securities on the Stock Exchange |
| "Non-Qualifying Shareholders" | Shareholders whose names appear on the register of members of Yau Lee on the Record Date whose addresses as shown on the register of members are outside Hong Kong where, in the Directors' opinion, it could be impracticable or unlawful for the Rights Shares to be offered in such place without compliance with registration and/or other legal or regulatory requirements or special formalities |
| "Optionholder" | a holder of the outstanding share option(s) granted pursuant to the Share Option Scheme |
| "Qualifying Shareholders" | Shareholders other than Non-Qualifying Shareholders, whose names appear on the register of members of Yau Lee as at the close of business on the Record Date |
| "Record Date" | 8th December, 1999, being the date by reference to which entitlements to the Rights Issue as described in this Announcement will be determined |
| "Rights Issue" | the proposed issue by Yau Lee by way of rights of up to 613,922,134 Rights Shares at a price of HK$0.108 per Rights Share |
| "Rights Issue Documents" | the Rights Issue prospectus to be issued by Yau Lee in relation to the Rights Issue and the provisional allotment letters |
| "Rights Shares" | new Shares to be issued pursuant to the Rights Issue |
| "Share(s)" | share(s) of HK$0.05 each in the share capital of Yau Lee |
| "Share Option Scheme" | the share option scheme of Yau Lee adopted on 5th August, 1991 |
| "Shareholder(s)" | holder(s) of the Shares |
| "Stock Exchange" | The Stock Exchange of Hong Kong Limited |
| "Underwriting Agreement" | the underwriting agreement dated 22nd November, 1999 entered into between Yau Lee, Messrs. Wong Ip Kuen and Wong Tin Cheung (both being executive Directors of Yau Lee) and ICEA in relation to the Rights Issue |
| "Yau Lee" | Yau Lee Holdings Limited, a company incorporated in Bermuda with limited liability, the securities of which are listed on the Stock Exchange |
By order of the Board
Yau Lee Holdings Limited
Chui Man Lung, Everett
Company Secretary
Hong Kong, 22nd November, 1999
The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this Announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this Announcement, the omission of which would make any statement in this Announcement misleading.
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