TSIT WING INTERNATIONAL HOLDINGS LIMITED (Incorporated in Bermuda) (Company Registration No.: 28653)

Transcription

1 TSIT WING INTERNATIONAL HOLDINGS LIMITED (Incorporated in Bermuda) (Company Registration No.: 28653) PROPOSED ACQUISITION OF BUSINESS AND BUSINESS ASSETS OF WHOLE SUN LIMITED 1. INTRODUCTION The board of directors (the Board ) of Tsit Wing International Holdings Limited (the Company ) is pleased to announce that its wholly owned subsidiary, Tsit Wing International Company Limited (as buyer) (the Buyer ) has on 24 January 2013 entered into a conditional sale and purchase agreement (the SPA ) with: (a) (b) (c) Whole Sun Limited (as seller) (the Seller ); Tsit Wing Frozen Food Trading Limited (the Subsidiary ); and Chu Sun Chi and Fan Yin Fun (in their capacity as the shareholders and guarantors of the Seller) (collectively, the Guarantors ); pursuant to which the Buyer will be acquiring all of the Seller s business and business assets together with the goodwill of such business and transfer the same to the Subsidiary, a 60%- owned subsidiary of the Company (the ). The Guarantors will guarantee jointly and severally the obligations of the Seller under the SPA and to join with the Seller in giving warranties and indemnities on a joint and several basis under the terms of the SPA. The remaining 40% of the Subsidiary is currently owned by the Guarantors. 2. INFORMATION AND RATIONALE FOR THE PROPOSED ACQUISITION 2.1 Information on the Seller The Seller was incorporated on 11 September 1987 under the laws of Hong Kong and is engaged in trading of frozen food, including chilled fishes, chilled grain fed pork, chilled lamb rack, chilled wagyu beef, live mussel and clam and live oyster, with retail networks in Hong Kong. 2.2 Rationale for the The is in line with the Company s strategy intent to explore other viable business opportunities that can enhance the shareholders value over the long term. The Company believes that the presents an opportunity for the Company to acquire new businesses that will improve the performance of the Company. The will also enlarge the range of products and services of the Company and enable it to penetrate the growing of frozen food market in Hong Kong. Furthermore, the is expected to provide the Company with a relatively more stable income stream. For these reasons, the Board considers the to be in the interest of and beneficial to the Company. 3. SALIENT TERMS OF THE PROPOSED ACQUISITION 3.1 Business and Business Assets Pursuant to the SPA, the Buyer will acquire the business of marketing and selling of frozen food carried on by the Seller as a going concern, business assets including contracts, information, intellectual property, know how, business rights, computer systems, fixed assets, goodwill, movable assets, business records, inventory, all other property rights, and assets Page 1

2 employed exercised or enjoyed in or in connection with the Business, the details of which are set out in the SPA (collectively, the Business and Business Assets ), and to hire certain employees of the Seller upon completion. Subsequently, the Buyer will transfer the Business and Business Assets to the Subsidiary and the Subsidiary will assume the obligation and responsibility to carry on the Business as a going concern. 3.2 Consideration The purchase consideration for the Business and Business Assets is HK$33,600,000 (the Consideration ), and was arrived at following arm s length negotiation between the Buyer and the Seller, on a willing buyer, willing seller basis, taking into account, inter alia, the track record of the Business, its customers and suppliers base and relationship, its financial statements and position, the results of financial due diligence undertaken by Baker Tilly Hong Kong Business Services Limited which was engaged by the Company for this purpose, the Company s assessment of the Business and prospects of the Business (including synergy with the existing businesses of the Company and its subsidiaries (the Group )). The latest market value of 100% interest of the Business and Business Assets being acquired as at 30 September 2012 is HK$58,000,000 and was determined based on the independent valuation carried out by Appraisal and Consultancy (Asia) Limited (the Valuer ) as commissioned by the Company (the Valuation Report ). The net profit attributable to the Business and Business Assets being acquired for the financial period ended 30 September 2012 is HK$3,223,000. The valuation team has over 10 years of solid experience in business valuation and consultancy services. As an independent valuer, the Valuer had been involved in over a hundred valuation projects for public disclosure, accounting reference, mergers & acquisitions, public listing and corporate financing. 3.3 Payment and Source of Fund for the Consideration The Consideration will be fully settled in cash to the Seller at the completion of the sale and purchase in accordance with the provisions set out in the SPA (the Completion ). The Company intends to fund the through internal sources of funds or external borrowings, or a combination of internal resources and external borrowings as deemed appropriate by the Board. 3.4 Condition Precedent The Completion of the is conditional upon certain conditions precedent, including: (a) (b) (c) (d) (e) the Buyer being satisfied with the due diligence investigations into the financial, contractual and trading position and prospects of the Business; a resolution being passed at a general meeting of the Buyer approving the SPA; all consents and approvals required under any and all applicable laws regulations and codes of conduct of all government, statutory or other body vested with the supervision and/or control of any company/entity listed in the Singapore Stock Exchange and/or Hong Kong having jurisdiction or right of supervision over the Company are obtained; the notice pursuant to sections 4 and 5 of the Transfer of Business (Protection of Creditors) Ordinance, Cap. 49 of the Laws of Hong Kong has been given and becomes complete; written consent is obtained from the landlord of the business premises for the Buyer to take over the existing tenancy thereof or otherwise allow the Buyer to occupy the business premises for such term and on such condition as may be agreed by the Buyer; Page 2

3 (f) (g) a special resolution passed by the shareholders of the Seller and the relevant Certificate of Change of Name issued by the Companies Registry changing its company name to a name which is in no way similar to Whole Sun Limited ( 浩新貿易有限公司 ) (the Name ); and a special resolution passed by the shareholders of the Subsidiary and the relevant Certificate of Change of Name issued by the Companies Registry that the Subsidiary has changed its company name to the Name. 3.5 Other salient terms The sale and purchase of the Business and Business Assets will take effect as from the date on which Completion occurs as the date of issuance of the relevant Certificate of Change of Name by Companies Registry that the Subsidiary has changed its name to the Name, but not later than two (2) months from the announcement date on the Singapore Stock Exchange Securities Trading Limited (the SGX-ST ) (the Transfer Date ). The Seller will immediately on the Transfer Date be deemed to have ceased to trade in its own right but shall retain possession of those of the assets which are not capable of transfer by delivery on behalf of and as agent for the Buyer until actual completion of the relevant instruments of transfer in respect of such assets. 3.6 Indemnity As an independent and primary obligation, the Guarantors unconditionally and irrevocably agree to indemnify and keep indemnified the Buyer against all and any losses, costs, claims, liabilities, damages, demands and expenses suffered or incurred by the Buyer arising from failure of the Seller to comply with any of its obligations or discharge any of its liabilities under the SPA or arising from the termination of the SPA, or by reason of the Seller not being at any time, or ceasing to be, liable in respect of the obligations and liabilities purported to be assumed by it in accordance with the express terms of the SPA. 3.7 Completion Completion of the SPA shall take place on the Transfer Date and when the Seller has complied and fulfilled with all the requirements and conditions precedent set out in the SPA. In the event that the Completion fails to take place on the date set for Completion, the Buyer or the Seller may (a) defer the Completion to a date not less than 7 nor more than 28 days; (b) proceed to Completion so far as practicable (including, at the Buyer s or, as the case may be, the Seller s option, completion of the purchase of some only of the Business Assets) but without prejudice to any other rights which it or they may have under the SPA; or (c) rescind the SPA by notice in writing. 4. MAJOR TRANSACTION 4.1 Relative figures under 1006 applicable to the Based on the latest announced unaudited consolidated results of the Group for the financial period ended 30 September 2012, the relative figures applicable to the computed on the bases pursuant to 1006 (a) to (d) of the Listing Manual of the SGX-ST are as follows: Listing Bases Relative Figures (%) 1006(a) 1006(b) The net asset value of the assets to be disposed of, compared with the Group's net asset value. This basis is not applicable to an acquisition of assets. The net profits attributable to the assets acquired or disposed of, compared with the Group's net profits. This basis is not applicable to acquisition. 21% Page 3

4 1006(c) 1006(d) The aggregate value of the consideration given or received, compared with the issuer's market capitalisation based on the total number of issued shares excluding treasury shares. The number of equity securities issued by the issuer as consideration for an acquisition, compared with the number of equity securities previously in issue. 11% This basis is not applicable because no securities will be issued. Note: (1) Under 1002(3) of the Listing Manual of the SGX-ST, net profits means profit or loss before income tax, minority interests and extraordinary items. (2) Under 1002(5) of the Listing Manual of the SGX-ST, market capitalization is determined by multiplying the number of shares in issue by the weighted average price of such shares transacted on the market day preceding the date of the SPA. (3) As at 23 January 2013, the market capitalization of the Company is approximately S$48,977,000. The market capitalization is derived from the volume weighted average price of S$0.23 per share as at 23 January 2013, being the last traded market day prior to the date of the SPA of the Listing Manual states that a major transaction, that is where any of the relative figures as computed on the bases set out in 1006 exceeds 20%, must be made conditional upon approval by shareholders in a general meeting. However, if the only limit breached is 1006(b), approval by shareholders will not be required. Accordingly, the constitutes a major transaction under the provision of 1010 of the Listing Manual but does not require the approval of shareholders of the Company. 5. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION The is not expected to have a significant impact on the financial position of the Company and its subsidiaries for the current financial year ending 31 December The proforma financial effects of the, based on the audited consolidated financial statements of the Company for the year ended 31 December 2011 and the audited financial statements of the Seller for the year ended 31 December 2011, are set out below. The proforma financial effects are presented for illustration purposes only and are not intended to reflect the actual future financial situation of the Company after completion of the. For purpose of the illustration, as the Company had not completed the purchase price allocation exercise, the difference between the cash consideration of HK$33,600,000 and the net tangible assets acquired of HK$21,018,000 is assumed to be goodwill. 5.1 Earnings Per Share (EPS) Assuming that the had been completed on 1 January 2011, the effect of the on the EPS of the Company for the financial year ended 31 December 2011 would be as follows: Profits attributable to the shareholders of the Company (HK$ 000) Weighted average number of shares used in the computation of basic EPS ( 000) Before the After the 9,857 13, , ,355 Basic EPS (HK$ cents) NET TANGIBLE ASSETS (NTA) Assuming that the had been completed on 31 December 2011, the effect of the on the NTA of the Company for the financial year ended 31 December 2011 would be as follows: Page 4

5 Before the After the NTA (HK$ 000) 307, ,764 Number of shares ( 000) 212, ,944 NTA per share (HK$ cents) OTHER INFORMATION 6.1 Interests of Directors or Controlling Shareholders None of the directors and to the best knowledge of the directors, none of the controlling shareholders of the Company has any interest, direct or indirect, in the save in respect of their respective shareholdings (if any) in the Company. No person is proposed to be appointed to the Company in connection with the. 6.2 Documents for Inspection Copies of the SPA and Valuation Report are available for inspection during the normal business hours at the Company s registered office at Canon s Court, 22 Victoria Street, Hamilton HM 12, Bermuda and the office of the Company s Singapore Share Transfer Agent, Boardroom Corporate and Advisory Services Pte Ltd at 50 Raffles Place #32-01 Singapore Land Tower Singapore for 3 months from the date of this announcement. 6.3 Updates The Company will provide further material updates to shareholders of the Company as and when necessary. BY ORDER OF THE BOARD Wong Tat Tong Chairman and Chief Executive Officer 25 January 2013 Page 5