BONVESTS HOLDINGS LIMITED (Registration No M)

Transcription

1 BONVESTS HOLDINGS LIMITED (Registration No M) ACQUISITION OF SHARES IN RICHVEIN PTE LTD The Board of Directors ("Board") of Bonvests Holdings Limited (the "Company", and together with its subsidiaries, the "Group") refers to the Company's announcements on 25 February 2010, 4 January 2011 and 11 February 2011, which stated that the Company intended to purchase the 30% shareholding of Over & Over Limited ("Over & Over") in Richvein Pte Ltd ("Richvein") pursuant to a court order dated 24 February 2010 of the Court of Appeal of the Supreme Court of Singapore in relation to Civil Appeal No. 141 of 2008/E, in Suit No. 449 of 2007/Z (the "Court Order"), and that further announcements would be made as and when there were material developments in this regard. Further to the said announcement, the Board wishes to announce that the Company has today entered into a sale and purchase agreement (the "SPA") with Over & Over for the acquisition (the "Proposed ") of 59,400,000 ordinary shares representing approximately 30% of the entire issued and paid-up share capital of Richvein (the "Sale Shares"), for a consideration of S$100,989,000 (the "Consideration"). Upon completion of the Proposed, Richvein will be a wholly-owned subsidiary of the Company. 1. RATIONALE FOR THE PROPOSED ACQUISITION The Court Order had directed, inter alia, that: the Company and Over & Over appoint an independent valuer to assess the value of Richvein; the Company elect whether or not to purchase Over & Over's entire shareholding in Richvein within 14 days of the receipt of the independent valuer's valuation; and in the event that the Company elected not to purchase Over & Over's shareholding in Richvein, Over & Over might then proceed to wind up Richvein and appoint an independent liquidator to realise and distribute its assets, the costs of such liquidation to be paid from the assets of Richvein. The Court of Appeal subsequently extended the deadline for the Company to decide whether or not to acquire the 30% stake in Richvein, to 21 February The Company and Over & Over jointly appointed PricewaterhouseCoopers LLP ("PWC") as the independent valuer on 23 April On 4 January 2011, the Company announced that PWC had issued their valuation report on the fair market value of Richvein s assets (the "Valuation Report"). Based on the fair market value of Richvein's assets as assessed in the Valuation Report, the Company subsequently announced that it intended to purchase the Sale Shares for the Consideration, based on PWC's assessment of the fair market value of Richvein as at 1 March 2010, and that this was expected to be completed by 8 May 2011.

2 Richvein currently owns and operates the Sheraton Towers Singapore hotel. At present, the shares of Richvein other than the Sale Shares belong to the Group. According to the Group's audited consolidated accounts for the financial year ended 31 December 2010, the Sheraton Towers Singapore hotel s operations remained profitable and achieved its budgeted gross operating profit and net operating profit margins. The revenue and net profit of Richvein accounted for approximately 32.3% and 19.4% of the Group's revenue and net profit (before income tax, minority interests and extraordinary items) respectively for the financial year ended 31 December The board of directors of the Company is of the view that the Sheraton Towers Singapore hotel is a significant asset of the Group which is material to the Group's performance and financial condition, and that the Proposed is in the Company's and its shareholders' best interests. 2. INFORMATION ON RICHVEIN Richvein is a limited private company and was incorporated in Singapore on 20 August As mentioned above, Richvein's principal business is the ownership and operation of the Sheraton Towers Singapore hotel. 3. PRINCIPAL TERMS OF THE PROPOSED ACQUISITION Under the terms of the SPA, the Sale Shares will be transferred to the Company by Over & Over and the Consideration will be satisfied by a cash payment by the Company to Over & Over, upon completion of the Proposed. There are no conditions precedent to the Proposed ; the Proposed is pursuant to the Court Order and the Company's election thereunder. Under the SPA, Over & Over also confirms that on completion of the Proposed, Over & Over, as well as its holding company and any subsidiary or associated company of Over & Over or its holding company from time to time (collectively, the "Over & Over Group"), shall have no claims or demands whatsoever against Richvein or the Company or its nominees, holding company, or any subsidiary or associated company of the Company or its holding company from time to time (collectively, the "Bonvests Group") in relation to Richvein and/or the respective rights, interests and liabilities of Over & Over and the Company as shareholders thereof, and the Company confirms that on completion of the Proposed, the Bonvests Group shall have no claims or demands whatsoever against the Over & Over Group in relation to Richvein and the respective rights, interests and liabilities of Over & Over and the Company as shareholders thereof. Completion of the Proposed will take place on 3 May 2011 or such date as may be agreed in writing by Over & Over and the Company (being a date no later than 8 May 2011). The Consideration has been derived by an independent valuer, PWC, from a valuation of Richvein on the basis of the fair market value of its assets as at 1 March The net book value and net tangible asset value of Richvein, based on its unaudited accounts for the full year ended 31 December 2010 are S$ million. 4. FUNDING FOR THE PROPOSED ACQUISITION The Consideration will be largely funded by the Group's standby bank facilities, and the Group has adequate financial resources to be able to complete the Proposed.

3 5. RELATIVE FIGURES UNDER RULE 1006 OF THE CATALIST RULES Chapter 10 of the Listing Manual (the "Listing Manual") of the Singapore Exchange Securities Trading Limited (the "SGX-ST") governs the continuing listing obligations of the Company in respect of acquisitions and realisations. The relative figures of the Proposed computed on the relevant bases set out in Rule 1006 to (d) of the Listing Manual are as follows: Rule 1006 (d) Bases Net asset value of the assets to be disposed of, compared with the Group's net asset value Net profits attributable to the assets acquired, compared with the Group's net profits The aggregate value of the consideration given, compared with the Company's market capitalisation The number of equity securities issued by the Company as consideration for an acquisition, compared with the number of equity securities previously in issue Proposed N.A. 5.8% (1) 24.9% (2) N.A. Notes: (1) Based on the Group's audited consolidated accounts for the financial year ended 31 December 2010, the net profits (before income tax, minority interests and extraordinary items) attributable to the Sale Shares amount to approximately S$4.760 million and represent approximately 5.8 per cent (5.8%) of the Group s net profits. (2) Based on the Company's market capitalisation of S$ million based on the volume weighted average price of the Company's shares on 4 April 2011, the Consideration represents approximately 24.9 per cent (24.9%) of the said market capitalisation. Notwithstanding the relative figures of the Proposed above, computed on the bases set out in Rule 1006 of the Listing Manual, the SGX-ST has confirmed that shareholders approval is not required for the Proposed Disposal under Rule 1014 of the Listing Manual, in response to the Company s application (made to the Exchange on 18 February 2011, based on the Group's unaudited consolidated accounts as at 30 September 2010 as announced by the Company) to the Exchange for confirmation that the Company is not required to seek such approval pursuant to the provisions of Chapter 10 read with Practice Note 10.1 of the Listing Manual. After due and careful enquiry, the Board is of the opinion that the Proposed is in the ordinary course of the Group's business, and there will be no material change in the risk profile of the Company arising from the Proposed. The bases for their opinion is as follows: there will be no change in the business profile of the Group pursuant to the Proposed as hotel ownership and management is one of the Group s core businesses; the Group already owns a majority 70% stake in Richvein, and the Group has a strong balance sheet; and the Group has low gearing and adequate resources to fund the Proposed.

4 The Board is also of the opinion that the Proposed is in the best interests of the Company's shareholders. Based on the relative figures of the Proposed computed on the bases set out in Rule 1006 of the Listing Manual, the Proposed is regarded as a "Discloseable Transaction" under Rule 1010 of the Listing Manual. 6. PROFORMA FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION Financial Effects Net Tangible Assets For illustrative purposes only, the financial effects of the Proposed on the net tangible assets per share of the Company, for the financial year ended 31 December 2010, assuming that the Proposed had been effected at the end of that financial year, are set out below. NTA of the Company (S$'million) NTA per share (1) (cents) As at 31 December 2010 After the Proposed Note: (1) Based on 402,167,668 total issued shares of the Company as at 31 December Earnings per Share For illustrative purposes only, the financial effects of the Proposed on the earnings per share of the Company for the financial year ended 31 December 2010, assuming that the Proposed had been effected at the beginning of that financial year, are set out below. Net Profits of the Group (1) (S$ million) Earnings per share (2) (cents) As at 31 December 2010 After the Proposed Note: (1) Net profit (after tax, minority interests and extraordinary items) based on the Group's audited consolidated accounts for the financial year ended 31 December (2) Based on 402,167,668 total issued shares of the Company as at 31 December 2010.

5 7. INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS None of the Directors (other than in his capacity as a Director or a shareholder of the Company) or controlling shareholders of the Company (other than in its capacity as a shareholder of the Company) has any interest, direct or indirect, in the Proposed. No persons are proposed to be appointed as a director of the Company in connection with the Proposed. By Order of the Board Foo Soon Soo Company Secretary 5 April 2011