GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

Transcription

1 The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this document, 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 document. (Incorporated in Bermuda with limited liability) (Stock Code: 983) Executive Directors: Lo Hong Sui, Vincent GBS JP (Chairman) Wong Ying Wai, Wilfred JP (Vice-Chairman) Choi Yuk Keung, Lawrence (Vice-Chairman) Wong Yuet Leung, Frankie (Chief Executive Officer) Wong Fook Lam, Raymond Lowe Hoh Wai Wan, Vivien Non-executive Directors: Wong Hak Wood, Louis Enright, Michael John Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda Head Office: 34th Floor Shui On Centre 6-8 Harbour Road Hong Kong Independent Non-executive Directors: Griffiths, Anthony Cheng Mo Chi, Moses Chan, K. C. 28 July 2005 To the Shareholders Dear Sir or Madam, GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES At the Annual General Meeting of the Company held on 27 September 2004, ordinary resolutions were passed giving general mandates to the Directors (i) to repurchase shares of the Company on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) up to 10 * For identification purposes only 1

2 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of passing the resolution; and (ii) to allot, issue and otherwise deal with shares of the Company up to a limit equal to (a) 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date the resolution was passed, plus (b) the nominal amount of any shares repurchased by the Company. No shares have been repurchased, allotted, issued or otherwise dealt with pursuant to these mandates. These general mandates will lapse at the conclusion of the forthcoming Annual General Meeting (the Meeting ) of the Company, which will be held on Friday, 19 August 2005, unless renewed at the Meeting. Ordinary resolutions will be proposed to renew these mandates. However, the Directors do not at present have any intention to exercise the power to repurchase or issue shares of the Company pursuant to the relevant proposed mandates. The Explanatory Statement required by the Rules Governing the Listing of Securities on the Stock Exchange (the Listing Rules ) to be sent to shareholders in connection with the proposed general mandate for the repurchase of shares of the Company is set out in the Appendix to this circular. ANNUAL GENERAL MEETING The ordinary resolutions for the renewal of the general mandates to repurchase shares and to issue shares are set out in full in the notice of the Meeting. A form of proxy for use at the Meeting is enclosed. If you do not intend to attend the Meeting, you are requested to complete the form of proxy and return it to the head office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the Meeting. The completion and return of the form of proxy will not preclude you from attending and voting at the Meeting if you so wish. RESPONSIBILITY STATEMENT This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading. RECOMMENDATIONS The Directors believe that the proposed resolutions are in the best interests of the Company and its shareholders. Accordingly, the Directors recommend you to vote in favour of such resolutions at the Meeting. 2 Yours faithfully, Tam Ching Wah, Janice Company Secretary

3 The following is the Explanatory Statement required to be sent to shareholders under the Listing Rules in connection with the proposed general mandate for repurchase of shares. References in this statement to Share(s) mean fully paid-up share(s) of HK$1.00 each in the capital of the Company. THE REPURCHASE MANDATE It is proposed that the repurchase mandate will authorise the repurchase of up to 10 per cent. of the Shares in issue at the date of passing the resolution to approve the repurchase mandate. As at 25 July 2005, the latest practicable date prior to the printing of this statement ( the Latest Practicable Date ), the number of Shares in issue was 269,418,000 Shares. Subject to the passing of the resolution granting the Directors the repurchase mandate and on the basis that no further Shares will be issued or repurchased after 25 July 2005 and up to the date of the passing of such resolution, the exercise in full of the repurchase mandate would result in the repurchase of up to a maximum of 26,941,800 Shares. 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 value of the Company and its assets and/or earnings per Share and will only be made when the Directors believe that such repurchases will benefit the Company and its shareholders. FUNDING OF REPURCHASE In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Memorandum of Association and Bye-laws, the Listing Rules and the applicable laws of Bermuda. It is envisaged that any repurchase of Shares would be made out of the capital paid up on the relevant Shares and the surplus of the Company which would otherwise be available for dividend or other distributions and, in the case of any premium payable on such repurchase, from the Company s share premium account and/or its distributable surplus. IMPACT ON THE WORKING CAPITAL OR GEARING POSITION There might be an adverse impact on the working capital or gearing position of the Company, as compared with the position disclosed in the audited financial statements contained in the Annual Report for the year ended 31 March 2005, in the event that the repurchase mandate was exercised in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the repurchase mandate to such extent which 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. 3

4 DIRECTORS UNDERTAKING The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the repurchase mandate only in accordance with the Listing Rules and the applicable laws of Bermuda. DISCLOSURE OF INTEREST As at the Latest Practicable Date, only the following persons having an interest in 5% or more of the issued share capital was recorded in the register required to be kept by the Company under Section 336 of the Securities and Futures Ordinance: Number of Shares held Percentage of shareholding Mr. Lo Hong Sui, Vincent 185,183,000 (Note 1) 68.7% Mr. Cheah Cheng Hye 13,912,000 (Note 2) 5.2% Notes: 1. The 185,183,000 Shares are respectively held as 166,148,000 Shares and 19,035,000 Shares by the ultimate holding company, Shui On Company Limited and Shui On Finance Company Limited which is an indirect wholly-owned subsidiary of Shui On Company Limited. Shui On Company Limited is owned by the Bosrich Unit Trust. The units of the Bosrich Unit Trust are the property of a discretionary trust of which Mr. Lo Hong Sui, Vincent is a discretionary beneficiary. Accordingly, Mr. Lo Hong Sui, Vincent is deemed to be interested in such Shares. 2. Of the 13,912,000 shares, 13,450,000 shares are held by Value Partners Limited which is an associate of Mr. Cheah Cheng Hye. TAKEOVERS CODE If a shareholder s proportionate interest in the voting rights of the Company increases as a result of the Directors exercising the powers to repurchase Shares, such increase will be treated as an acquisition of voting rights for the purposes of Rule 32 of the Hong Kong Code on Takeovers and Mergers ( the Takeovers Code ). Accordingly, 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 Rule 26 of the Takeovers Code. As at the Latest Practicable Date, Mr. Lo Hong Sui, Vincent was interested in 185,183,000 Shares which represent approximately 68.7% of the existing issued share capital of the Company. Assuming the shareholding of Mr. Lo Hong Sui, Vincent remains unchanged, full exercise by the Company of the general mandate to repurchase the Shares as mentioned herein will increase the interest of Mr. Lo Hong Sui, Vincent in the issued shares capital of the Company to 76.3%. Any purchase of Shares which results in the public shareholdings being reduced to less than 25% could only be implemented with the agreement of the Stock Exchange. Except 4

5 in exceptional circumstances, such agreement would not normally be given by the Stock Exchange. The Directors have no present intention to exercise the Repurchase Mandate which will result in the public shareholdings being reduced to less than 25%. The Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any repurchase of Shares made under the repurchase mandate. None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules) have any present intention to sell any Shares to the Company or its subsidiaries in the event that the repurchase mandate is approved by the shareholders of the Company. CONNECTED PERSONS No connected persons (as defined in the Listing Rules) of the Company have notified the Company that they have a present intention to sell Shares to the Company, or have undertaken not to do so, in the event that the repurchase mandate is granted by the shareholders of the Company. SHARE PURCHASE MADE BY THE COMPANY No purchase has been made by the Company of its Shares (whether on the Stock Exchange or otherwise) in the six months prior to the Latest Practicable Date before the printing of this statement. 5

6 SHARE PRICES The highest and lowest prices at which the Shares were traded on the Stock Exchange in each of the previous twelve months are as follows: Share Prices Month Highest Lowest HK$ HK$ 2004 July August September October November December January February March April May June July (up to the Latest Practicable Date)