Omega Capital Limited has been appointed as the Financial Adviser and Manager (the Manager) for the Rights Issue.

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Marybeth Reynolds
5 years ago
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1 SUN BUSINESS NETWORK LTD. (THE COMPANY) (Company registration no Z) PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE OF SHARES IN SUN NEW MEDIA, INC ( SNMD ) IN PLACE OF THE DISTRIBUTION IN SPECIE AS ANNOUNCED ON 25 JULY INTRODUCTION The directors of the Company (the Directors) wishes to announce that the Company is proposing to offer a renounceable non-underwritten rights issue of SNMD Shares (herein defined) (the Rights Shares) to shareholders of the Company (the Shareholders) (the Rights Issue). Omega Capital Limited has been appointed as the Financial Adviser and Manager (the Manager) for the Rights Issue. 1.1 Purpose of the Rights Issue On 25 July 2006, the Directors had announced the intention to distribute by way of a dividend in specie the ordinary shares in SNMD (the SNMD Shares) held by the Company (the Distribution). The Distribution was to be made on the basis of six (6) SNMD shares for every 1,000 shares held in the capital of the Company, fractional entitlements to be disregarded. The aggregate number of SNMD Shares in the proposed distribution was 5,865,286. Pursuant to consultations with legal advisers in the United States (U.S.) the Company has been advised that, as no purchase consideration will be paid by Shareholders in respect of the Distribution, the present restrictions on the trading of SNMD Shares, as set out in section 2, will remain effective. This means Shareholders getting the SNMD Shares under the Distribution will not get freely tradable stock. In order to remove this restriction a sale transaction in accordance with the Registration Statement (herein defined in section 2) must be created. In view of the above considerations, the Company proposes the Rights Issue whereby Shareholders will be able to acquire the SNMD Shares at a nominal price. Please refer to section 3 below on particulars of the Rights Issue. The Directors believe that the Rights Issue will achieve the same ends as the Distribution in benefiting the Shareholders, that is: (a) Return of value. The Rights Issue allows the Company to return value to its Shareholders. The issue price of each Rights Share, which is set at a nominal price of S$0.20, represented a discount of approximately 96% to the last traded market price of SNMD on 25 September (b) Investment Flexibility for Shareholders. Following the Rights Issue, Shareholders will become direct shareholders of SNMD. The Rights Issue will enable Shareholders to individually and directly participate in the ownership of, and enjoy returns from, shares held in two separate companies with different businesses

2 2 INFORMATION ON SNMD AND SNMD SHARES On 21 April 2006 the Directors of the Company announced the completion of the divestment of assets and grant of licence to Sun New Media, Inc (SNMD) and also the issue of new ordinary shares in the Company (the Shares). The purchase consideration for the aforesaid transactions was to be satisfied by the issue of ordinary shares in SNMD (the SNMD Shares) at an issue price of US$3.50 per SNMD Share. As at the date of this Announcement, Panpac Tech Strategic Limited (PTS), a wholly-owned subsidiary of the Company, holds 12,942,915 SNMD Shares. The aggregate market value of these SNMD Shares based on US$3.40 per SNMD Share is approximately US$44.01 million (S$69.67 million based on the exchange rate of US$1 = US$1.583 as at 25 September 2006, being the immediate market day preceding the date of this announcement). SNMD was formed in September 2005 as a result of a reverse takeover of SE Global, a company listed on the Over-the-counter Bulletin Board of the National Association of Securities Dealers Automated Quotations (NASDAQ OTC BB). SNMD is one of China s first integrated, interactive business-to-business marketing services company for consumer products companies and their channel and distribution partners. The SNMD Group comprises 3 core business divisions that include advanced interactive content development, distribution, sales and marketing services, and channel management software solutions. The SNMD Shares issued to the Company are subject to the U.S. securities law and were issued pursuant to certain exemptions from the registration requirements of the US Securities Act, and therefore such may not be resold unless a subsequent disposition is registered under the US Securities Act or is exempt from such registration. The SNMD Shares are therefore considered restricted securities, subject to a restricted legend on the share certificate as well as restrictions on subsequent resale transactions, including resale transactions to US persons (as defined in by US securities laws). On 12 September 2006, SNMD filed a registration statement with the U.S. Securities and Exchange Commission (SEC) in its respect of the SNMD Shares held by PTS (Registration Statement). The filing of the Registration Statement is to register subsequent sales of restricted SNMD Shares by the SNMD shareholders named in the Registration Statement. As at the date of this announcement, the Registration Statement is pending review and approval by the SEC. Shareholders may view the Registration Statement on SEC s website at A copy of the Registration Statement is also available for inspection at the registered office of the Company during normal business hours. 3 PARTICULARS OF THE RIGHTS ISSUE 3.1 Basis of Rights Issue The Rights Shares are proposed to be offered at an issue price of S$0.20 (the Issue Price) each to the Shareholders with registered addresses in Singapore on the basis of eight (8) Rights Share for every thousand (1,000) existing ordinary Shares in the capital of the Company (the Shares) held on a books closure date to be determined (the Books Closure Date), fractional entitlements to be disregarded. Based on the Company s existing issued and paid-up share capital of 977,547,812 Shares as at the date of this announcement, up to 7,820,376 Rights Shares will be issued pursuant to the Rights Issue. As at the date of this announcement, there are 427,000 outstanding options exercisable into 427,000 Shares granted pursuant to the SBN Share Option Scheme. If all these options were exercised in full, an additional 3,416 Rights Shares could be issued as a consequence of such exercise. This may result in the Rights Issue comprising up to 7,823,792 Rights Shares

3 Fractional entitlements to any Rights Shares will be disregarded and will be disposed of in such manner as the Directors may in their absolute discretion deem fit, in the interest of the Company. Entitled Shareholders will be at liberty to accept, decline, renounce or trade their provisional allotments of the Rights Issue during the provisional allotment trading period prescribed by the SGX-ST. 3.2 Issue Price The Issue Price of S$0.20 for each Rights Share represents a discount of approximately 96% from the last traded price on 25 September 2006 of US$3.40 (approximately S$5.38 based on an exchange rate of US$1=S$1.583 as at 25 September 2006, being the immediate market day preceding the date of this announcement). 3.3 Rights of the Rights Shares The Rights Shares will be payable in full upon acceptance and/or application and, when fully paidup, will rank pari passu in all respects with the then existing ordinary shares in the issue and paidup capital of SNMD for any dividends, rights, allotments or other distributions, the record date of which falls on or after the date of issue of the Rights Shares. 3.4 No Excess Rights Applications Shareholders may subscribe to their entitlements in part or in full. Shareholders may also purchase or dispose their provisional allotments of Rights Shares during trading period for the provisional allotments of Rights Shares. However Shareholders will not be permitted to apply for excess Rights Shares. 3.5 Eligibility of Shareholders to Participate in the Rights Issue Singapore Registered Shareholders The Rights Shares are to be provisionally allotted to Shareholders with registered addresses in Singapore as at the Books Closure Date or who have, at least five (5) market days prior to the Books Closure Date, provided the Company or The Central Depository (Pte) Limited (CDP) (as the case may be) addresses in Singapore for the purpose of service of notices and documents (Entitled Shareholders). In order to avoid any requirement to register the Rights Issue with U.S. SEC, residents of the U.S., including entities formed in the U.S. and entities formed to hold securities of U.S. persons (collectively US Persons) are not Entitled Shareholders. US Persons should not participate even if they have a Singapore address Foreign Shareholders and U.S. Persons The Circular and its accompanying documents have not been and will not be registered or filed in any jurisdiction other than Singapore. The distribution of the Circular and its accompanying documents may be prohibited or restricted (either absolutely or subject to various relevant securities requirements, whether legal or administrative, being complied with) in certain jurisdictions under the relevant securities laws of those jurisdictions. For practical reasons and in order to avoid any violation of the securities legislation applicable in countries other than in Singapore, the Circular and its accompanying documents will NOT be despatched to Shareholders with registered addresses outside Singapore (Foreign Shareholders). In addition, as stated above, US Persons should not participate even if they have a Singapore address. Foreign Shareholders will not be entitled to participate in the Rights Issue. Accordingly, no provisional allotment of the Rights Shares will be made to Foreign Shareholders and no purported acceptance thereof or application therefore by Foreign Shareholders will be valid

4 The Circular and its accompanying documents will also not be despatched to persons purchasing the provisional allotments of Rights Shares through the book entry (scripless) settlement system if their registered addresses with CDP are outside Singapore (Foreign Purchasers). Depositors, being Entitled Shareholders with accounts with CDP, should note that all correspondences and notices will be sent to their last registered addresses with CDP. Depositors who may wish to maintain a rights mailing address (Rights Mailing Address) with CDP for the purpose of receiving the Rights Issue documents should inform CDP in writing at 4 Shenton Way, #02-01, SGX Centre 2, Singapore Depositors are reminded that any request to register a Rights Mailing Address or to effect any change in address must reach CDP not later than five (5) market days before the Books Closure Date. Shareholders (not being Depositors) who do not presently have an address in Singapore for the service of notices and documents and who wish to be eligible to participate in the Rights Issue may provide such a Singapore address by notifying the Company s Share Registrar, Tricor Barbinder Share Registration Services, 8 Cross Street, #11-00, PWC Building, Singapore not later than five (5) Market Days before the Books Closure Date. If it is practicable to do so, arrangements may, at the discretion of the Company, be made for the provisional allotments of Rights Shares which would otherwise have been provisionally allotted to Foreign Shareholders to be sold nil paid on the SGX-ST as soon as practicable after dealings in the provisional allotments of Rights Shares commence. Such sales will, however, only be effected if the Company, in its absolute discretion, determines that a premium can be obtained from such sales, after taking into account expenses to be incurred in relation thereto. The net proceeds from all such sales, after deduction of all expenses therefrom, will be pooled and thereafter distributed to Foreign Shareholders in proportion to their respective shareholdings or, as the case may be, the number of Shares entered against their names in the Depository Register as at the Books Closure Date and sent to them at their own risk by ordinary post, provided that where the amount of net proceeds to be distributed to any single Foreign Shareholder is less than $10.00, the Company shall be entitled to retain or deal with such net proceeds as the Directors may, in their absolute discretion, deem fit for the sole benefit of the Company and no Foreign Shareholder shall have any claim whatsoever against the Company or CDP in connection therewith. Where such provisional allotments of Rights Shares are sold nil-paid on the SGX-ST, they will be sold at such price or prices as the Company may, in its absolute discretion, decide and no Foreign Shareholder shall have any claim whatsoever against the Company or CDP in respect of such sales, the provisional allotments of Rights Shares or the Rights Shares represented by such provisional allotments. If such provisional allotments of Rights Shares cannot be sold or are not sold on the SGX-ST as aforesaid for any reason by such time as the SGX-ST shall have declared to be the last day for trading in the provisional allotments of Rights Shares, the Rights Shares represented by such provisional allotments will be lapsed. Shareholders should note that the special arrangements described above will apply only to Foreign Shareholders. The Company further reserves the right to reject any acceptances of the Rights Shares where it believes or has reason to believe, that such acceptances and/or applications may violate the applicable legislation of any jurisdiction. 3.6 Circular The terms and conditions of the Rights Issue are subject to such changes as the Directors, after consultation with the Manager, may deem fit. The final terms and conditions of the Rights Issue will be contained in the circular to be issued by the Company in connection with the Rights Issue (the Circular)

5 4 INTERESTS OF SUBSTANTIAL SHAREHOLDERS As at the date of this announcement, to show their support for the Rights Issue and to demonstrate their commitment to and confidence in the prospects of the Company and its subsidiaries (the Group), the following substantial shareholders, as set out in the table below, will subscribe for and/or procure subscriptions and payment for their respective provisional allotments of Rights Shares pursuant to the Rights Issue (Rights Entitlements) (the Undertakings) as follows: Shareholder No. of Shares Shareholding (%) Rights entitlements Low Song Take 6,117, % 48,936 Ang Gee Hing Ricky 10,513, % 84,104 Kevin Low Ka Choon 2,600, % 20,800 International Press Holdings Pte Ltd (IPHPL) 76,962, % 615,696 Sun Media Investment Holdings (SMIH) 105,700, % 845,600 Fontana Investments Pte Ltd (FIPL) 28,197, % 225,576 SNMD 150,000, % 1,200,000 Notes: 1. Low Song Take and Kevin Low Ka Choon are deemed interested in the 76,962,588 Shares held by IPHPL. 2. Ang Gee Hing Ricky is deemed interested in the 28,197,294 Shares held by FIPL.. 3. Yang Lan and Wu Zheng, who are Directors of the Company, are deemed interested in the Shares held by SMIH and SNMD. Pursuant to the Irrevocable Undertakings, an aggregate minimum of 3,040,712 Rights Shares (or approximately 38.9% of the Rights Issue of 7,820,376 Right Entitlements) will be subscribed for (Minimum Subscription). Dr Bruno Wu is currently the Chairman and Director of SNMD and Mr Ang Gee Hing Ricky, the Chief Executive Officer and Director of SNMD. As at the date of this announcement, SMIH has an interest of 21.56% in SNMD and Mr Ricky Ang, an interest of 0.71%. Save as disclosed above, no Director or Substantial Shareholder has any interest, direct or indirect in the shares of the Company or SNMD. 5 USE OF PROCEEDS Assuming that only the Rights Shares which are the subject of the Undertakings are subscribed in full, the estimated gross proceeds will be S$0.61 million. Assuming that all 7,820,376 Rights Shares are exercised, the gross proceeds arising will amount to approximately S$1.56 million. The estimated total expenses for the Right Issue will amount to S$0.5 million which include professional expenses as well as the costs relating to the transfer of the ownership of the SNMD Shares to the respective Shareholders upon the acceptance and payment of the Rights Shares. The balance of the proceeds will be used for working capital purposes. Pending deployment of the net proceeds for working capital purposes, the net proceeds of the Rights Issue may be deposited with banks or financial institutions and/or used for investment in short-term money market and/or debt instruments, as the Directors may deem fit in the best interests of the Group. 6 APPROVALS The Rights Issue is subject to, inter alia, the - 5 -

6 i) approval in-principle of the SGX-ST for the listing of and quotation for the Rights Shares on the SGX-ST; ii) approval by Shareholders; and iii) where applicable, the lodgement of the Offer Information Statement in respect of the Rights Issue with the Monetary Authority of Singapore; and iv) compliance with the requirements of the US securities laws. 7 RESPONSIBILITY STATEMENT The Directors (including any Director who may have delegated detailed supervision of the preparation of this announcement) have taken all reasonable care to ensure that the facts stated in this announcement are fair and accurate and that no material facts have been omitted from this announcement, and they jointly and severally accept responsibility accordingly. By Order of the Board Bruno Zheng Wu Executive Chairman 26 September

2. RATIONALE FOR THE RIGHTS ISSUE AND THE USE OF PROCEEDS

2. RATIONALE FOR THE RIGHTS ISSUE AND THE USE OF PROCEEDS VALLIANZ HOLDINGS LIMITED (Company Registration No. 199206945E) (Incorporated in the Republic of Singapore) PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE OF NEW ORDINARY SHARES (THE "NEW SHARES")