MAGNIFICENT ESTATES LIMITED

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Magnificent Estates Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee. The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular. MAGNIFICENT ESTATES LIMITED (Incorporated in Hong Kong with limited liability) (Stock Code: 201) DISCLOSEABLE TRANSACTION ACQUISITION OF SALE ASSETS A letter from the board of directors of Magnificent Estates Limited is set out on pages 4 to 8 of this circular. 30th June, 2008

2 CONTENTS Page(s) Definitions Letter from the Board 1. Introduction The Agreement Completion of the Agreement Reasons for and benefits of the Acquisition Financial effects of the Acquisition General Additional information... 8 Appendix General information i

3 DEFINITIONS In this circular, the following expressions have the following meanings, unless the context requires otherwise: Acquisition Agreement associate(s) Board the acquisition of the Sale Assets by the Purchaser from the Vendors pursuant to the Agreement the agreement entered into between the Vendors and the Purchaser on 21st May, 2008 has the meaning ascribed to it under the Listing Rules the board of Directors of the Company Companies Shun Ho Resources, Shun Ho Technology and the Company Company Magnificent Estates Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange Completion the completion of the sale and purchase of the Sale Assets pursuant to the terms and conditions of the Agreement Completion Date 15th August, 2008 Consideration Director(s) Enlarged Group Group Hong Kong Independent Third Party(ies) Latest Practicable Date the consideration payable by the Purchaser for the Sale Assets under the Agreement director(s) of the Company the Group as enlarged immediately after Completion the Company and its subsidiaries The Hong Kong Special Administrative Region of The People s Republic of China an independent third party(ies) which is not connected with the chief executive, directors and substantial shareholders of the Companies or any of their respective subsidiaries and their respective associates and independent of the Companies connected persons 24th June, 2008, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular 1

4 DEFINITIONS Listing Rules Property Purchaser Sale Assets Sale Debt SFO Share(s) Shun Ho Resources Shun Ho Technology the Rules Governing the Listing of Securities on the Stock Exchange ALL Those pieces or parcels of ground registered in the Land Registry as FIRSTY, THE REMAINING PORTION OF INLAND LOT NO.491, SECTION B OF INLAND LOT NO.491 AND SECTION C OF INLAND LOT NO.491 (Nos.338, 340 and 342 Queen s Road West, Hong Kong) AND SECONDLY, THE REMAINING PORTION OF SECTION A OF INLAND LOT NO.490 AND SUBSECTION 2 OF SECTION A OF INLAND LOT NO.490 (Nos.344 and 346 Queen s Road West, Hong Kong) together with the messuages, erections and building erected thereon Babenna Limited, a wholly-owned subsidiary of the Company the Sino Share and the Sale Debt the existing shareholders loan payable by Sino to the Vendors the Securities and Future Ordinance (Chapter 571 of the Laws of Hong Kong) share(s) of HK$0.01 each in the share capital of the Company Shun Ho Resources Holdings Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange Shun Ho Technology Holdings Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange Sino Sino Money Investments Limited, a company incorporated in Hong Kong with limited liability Sino Share Stock Exchange 4 ordinary shares of HK$1.00 each in Sino, representing the entire issued share capital of Sino The Stock Exchange of Hong Kong Limited 2

5 DEFINITIONS Vendors (1) Phoenix Asia Real Estate Investments L.P., an Independent Third Party, a company incorporated in Cayman Islands with limited liability; (2) Dennis Law Sau Yiu, an Independent Third Party; and (3) Law Kwok Hung, an Independent Third Party HK$ Hong Kong dollars, the lawful currency of Hong Kong % per cent. 3

6 LETTER FROM THE BOARD MAGNIFICENT ESTATES LIMITED (Incorporated in Hong Kong with limited liability) (Stock Code: 201) Executive Directors: Mr. William CHENG Kai Man (Chairman) Mr. Albert HUI Wing Ho Non-executive Directors: Mr. David CHENG Kai Ho Madam Mabel LUI FUNG Mei Yee Registered Office: 3rd Floor, Shun Ho Tower Ice House Street Central Hong Kong Independent Non-executive Directors: Mr. Vincent KWOK Chi Sun Mr. CHAN Kim Fai Mr. HUI Kin Hing To the Shareholders 30th June, 2008 Dear Sir or Madam, DISCLOSEABLE TRANSACTION ACQUISITION OF SALE ASSETS 1. INTRODUCTION In the announcement dated 21st May, 2008, the boards of directors of Shun Ho Resources, Shun Ho Technology and the Company jointly announced that the Purchaser, a wholly-owned subsidiary of the Company, had on 21st May, 2008 entered into the Agreement with the Vendors for the purchase of the Sale Assets for a consideration of HK$198,000, THE AGREEMENT Date: 21st May, 2008 Parties: (i) Phoenix Asia Real Estate Investments L.P., an Independent Third Party, as the first vendor 4

7 LETTER FROM THE BOARD (ii) Dennis Law Sau Yiu, an Independent Third Party, as the second vendor (iii) Law Kwok Hung, an Independent Third Party, as the third vendor (iv) Babenna Limited, as the Purchaser The Purchaser is a wholly-owned subsidiary of the Company. To the best of the knowledge, information and belief of the Boards, after making all reasonable enquiries, as at the date of this circular, the Vendors and the ultimate beneficial owners of the Vendors are Independent Third Parties, and the Companies have not entered into any transactions with the Vendors or its related persons in the 12 months prior to the date of the Agreement. Assets to be acquired Pursuant to the Agreement, (i) the Vendors as the beneficial owners agreed to sell the Sino Share to the Purchaser; and (ii) the Vendors agreed to sell its benefits and interests of the Sale Debt (i.e. the existing shareholders loan payable by Sino to the Vendors which as at 21st May, 2008 was approximately HK$88,290,000). The major assets of Sino comprise of (a) 100% shareholding in the Property; and (b) all the interests and benefits of Sino in the shareholders loan to the Vendors (which is interest-free, unsecured and repayable on demand). Based on the audited financial statements provided by the Vendors, the net book value of Sino as at 31st December, 2007 and 30th September, 2006 were HK$65,667,000 and HK$1,435,000 respectively. However, in order to be consistent with the Group s accounting policies, the net book value of Sino as at 31st December, 2007 was approximately negative HK$303,000. The major difference is due to the different accounting treatment on the Property which had been stated at fair value in the audited financial statements provided by the Vendors. However, in order to be consistent with the Group s accounting policies, it was reclassified as prepaid lease payments for land and stated at cost. When taking into account the amount of approximately HK$87,260,000 of the shareholders loan due from Sino to the Vendors which was part of the Sale Assets, the book value of Sales Assets as at 31st December, 2007 was HK$86,957,000. As at 31st December, 2007 and 30th September, 2006, the value of the total assets of Sino were HK$86,965,000 and HK$68,042,000 respectively. The loss before and after taxation of Sino for the period from 1st October, 2006 to 31st December, 2007 and the period from 12th April, 2005 (date of in) to 30th September, 2006 were approximately HK$199,000 and HK$104,000 respectively. As at 31st December, 2007, the shareholders loan owed by Sino to the Vendors was approximately HK$87,260,000. 5

8 LETTER FROM THE BOARD The Property The Property is ALL Those pieces or parcels of ground registered in the Land Registry as FIRSTY, THE REMAINING PORTION OF INLAND LOT NO.491, SECTION B OF INLAND LOT NO.491 AND SECTION C OF INLAND LOT NO.491 (Nos.338, 340 and 342 Queen s Road West, Hong Kong) AND SECONDLY, THE REMAINING PORTION OF SECTION A OF INLAND LOT NO.490 AND SUBSECTION 2 OF SECTION A OF INLAND LOT NO.490 (Nos.344 and 346 Queen s Road West, Hong Kong) together with the messuages, erections and building erected thereon. The site area of the Property is approximately 4,892 square feet. The Property situates near the future MTR station and is held for re-development purpose. Currently, the Group has four operating hotels and three hotels under development. The Directors intend to re-develop the Property into a 250 rooms service apartment building with gross floor area approximately 60,000 square feet. The current status of the Property is vacant. Consideration The Consideration for the purchase of the Sale Assets shall be in the sum of HK$198,000,000. The Consideration shall then be paid by the Purchaser in the following manner: (i) (ii) a sum of HK$5,900,000 being the initial deposit and in part payment of the Consideration (the Initial Deposit ) was paid by the Purchaser on 21st May, 2008 to the Vendors solicitors upon the signing of the Agreement; a sum of HK$23,800,000 being the further deposit and in part payment of the Consideration (the Further Deposit ) was paid by the Purchaser to the Vendors Solicitors on 2nd June, 2008, and (iii) the balance of the Consideration (i.e. HK$168,300,000) shall be paid by the Purchaser to the Vendors on Completion in such manner as directed by the Vendors. The entire Initial Deposit and Further Deposit shall be held by the Vendors solicitors as stakeholders who shall only release the same to the Vendors upon Completion. The deposits aforementioned shall be refunded to the Purchaser forthwith upon demand in accordance with the provisions of the Agreement. On Completion, the Initial Deposit and the Further Deposit shall be attributed to be part payment of the Sino Share consideration and/or Sale Debt consideration in such proportion as appropriate or as the Vendors shall determine. The Consideration was determined after arm s length negotiations between the parties to the Agreement taking into account the prevailing market conditions in Hong Kong and values of comparable properties in the vicinity. The Board consider that the terms of the Agreement and the Acquisition are fair and reasonable and are in the interests of the Company and its shareholders as a whole. 6

9 LETTER FROM THE BOARD 3. COMPLETION OF THE AGREEMENT Completion of the Agreement will take place on 15th August, Upon Completion, the Vendors shall deliver vacant possession of the Property to the Purchaser. After Completion, the Purchaser will hold 100% of the issued share capital of Sino. Sino will be a wholly-owned subsidiary of the Company and consolidated in the financial statements of the Group. 4. REASONS FOR AND BENEFITS OF THE ACQUISITION The Group is principally engaged in property investment, hotel development and management. To the best knowledge and information of the Directors, one of the Vendors, Phoenix Asia Real Estate Investments L.P., a company incorporated in Cayman Islands with limited liability and its principal activities, is investment real estate fund. Given the current favourable market conditions, indicated by the strong economic condition in Hong Kong and prosperous tourism and retail business in Hong Kong, the Board consider that the Acquisition represents a good opportunity for the Group to acquire a commercial and retail property in the Queen s Road West at a fair price. The Company currently intends to re-develop the property into a with about 250 rooms service apartment. The Acquisition will be financed by the internal resources and the external borrowings and the proportion of finance is not yet fixed. The Board are of the view that the transaction is in the best interests of the Company and its Shareholders as a whole. 5. FINANCIAL EFFECTS OF THE ACQUISITION There will not be any significant impact on the net assets of the Group following the Acquisition as the increase in prepaid lease payments for land will be offset by the decrease in cash and bank balances and increase in secured bank loans of the Group. Under the Agreement, vacant possession of the Property is to be handed over to the Purchaser. In other words, the Group does not expect any income immediately from the Property after Completion. 6. GENERAL As the consideration ratio of the Acquisition are more than 5% and each of the applicable percentage ratios as defined in Chapter 14 of the Listing Rules is less than 25%, the Acquisition constitutes a discloseable transaction for the Company. 7

10 LETTER FROM THE BOARD 7. ADDITIONAL INFORMATION Your attention is drawn to the information set out in the appendix to this circular. Yours faithfully, By Order of the Board Magnificent Estates Limited William CHENG Kai Man Chairman 8

11 APPENDIX GENERAL INFORMATION 1. 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. 2. DISCLOSURE OF INTERESTS Directors and chief executive As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any of its associated s (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) which were required to be entered in the register maintained by the Company pursuant to Section 352 of the SFO; or (c) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as set out in appendix 10 to the Listing Rules, were as follows: (i) Interests in shares in the Company Name of Director Capacity Nature of interests Number of Shares held Approximate % of shareholding William Cheng Kai Man Interest of controlled s Corporate 2,986,809,400 (Note) Note: Shun Ho Technology Holdings Limited, South Point Investments Limited and Shun Ho Technology Developments Limited beneficially owned 2,709,729,423 shares, 273,579,983 shares and 3,500,000 shares of the Company respectively, representing approximately 45.43%, 4.59% and 0.06% respectively of the issued share capital of the Company. Mr. William Cheng Kai Man has controlling interests in each of these companies. 9

12 APPENDIX GENERAL INFORMATION (ii) Interests in associated s (within the meaning of Part XV of the SFO) of the Company Name of Director Name of associated Capacity Nature of interests Number of Shares held Approximate % of shareholding William Cheng Kai Man Shun Ho Technology (Note 1) Interest of controlled s Corporate 350,742, William Cheng Kai Man Shun Ho Resources (Note 2) Interest of controlled s Corporate 216,608, William Cheng Kai Man Trillion Resources Limited (Note 3) Beneficial owner Personal Notes: 1. Shun Ho Technology Holdings Limited, the Company s immediate holding company, is a public limited company incorporated in Hong Kong, the shares of which are listed on the Stock Exchange. 2. Shun Ho Resources Holdings Limited, the Company s intermediate holding company, is a public limited company incorporated in Hong Kong, the shares of which are listed on the Stock Exchange. 3. Trillion Resources Limited, the Company s ultimate holding company, is a company incorporated in the British Virgin Islands. Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in the Shares, underlying Shares and/or debentures (as the case may be) of the Company and/or any of its associated s (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) entered in the register of interests required to be kept by the Company pursuant to Section 352 of the SFO; or (c) notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as set out in appendix 10 of the Listing Rules. 10

13 APPENDIX GENERAL INFORMATION Substantial Shareholders So far as is known to the Directors, as at the Latest Practicable Date, each of the following persons (not being Directors or chief executive of the Company), had an interest and/or short position in the Shares or underlying Shares (as the case may be) which would fall to be disclosed to the Company and the Stock Exchange under Divisions 2 and 3 of Part XV of the SFO, or was otherwise interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group: Name of Shareholder Capacity Number of Shares Approximate % of shareholding Shun Ho Technology (Note 1) Beneficial owner and interest of controlled s 2,986,809, Omnico Company Inc. ( Omnico ) (Note 2) s 2,986,809, Shun Ho Resources (Note 2) s 2,986,809, Trillion Resources Limited ( Trillion ) (Note 2) s 2,986,809, Liza Lee Pui Ling (Note 3) Interest of spouse 2,986,809, Credit Suisse Securities (Europe) Limited (Note 4) Beneficial owner 404,586, Credit Suisse Investment Holdings (UK) (Note 4) 404,586, Credit Suisse Investments (UK) (Note 4) 404,586, Credit Suisse (International) Holding AG (Note 4) 404,758, Credit Suisse (Note 4) 404,758,

14 APPENDIX GENERAL INFORMATION Name of Shareholder Capacity Number of Shares Approximate % of shareholding Credit Suisse Group (Note 4) 404,758, Mackenzie Cundill Recovery Fund (Note 5) Beneficial owner 500,000, Power Financial Corporation (Note 5) 597,040, Power Corporation of Canada (Note 5) 597,040, Nordex Inc. (Note 5) 597,040, IGM Financial Inc. (Note 5) 597,040, Gelco Enterprises Ltd (Note 5) 597,040, Desmarais Paul G. (Note 5) 597,040, Notes: 1. Shun Ho Technology beneficially owned 2,709,729,423 shares of the Company (the Shares ) and was taken to be interested in 273,579,983 Shares held by South Point Investments Limited and 3,500,000 Shares held by Shun Ho Technology Developments Limited, all of which are wholly-owned subsidiaries of Shun Ho Technology. 2. Shun Ho Technology is directly and indirectly owned as to 65.3% by Omnico, which was in turn owned as to 100% by Shun Ho Resources, which was in turn directly and indirectly owned as to 71.17% by Trillion, which was in turn wholly-owned by Mr. William Cheng Kai Man. So, Omnico, Shun Ho Resources and Trilllion were taken to be interested in 2,986,809,406 Shares by virtue of their direct and indirect interests in Shun Ho Technology. 3. Madam Liza Lee Pui Ling was deemed to be interested in 2,986,809,406 Shares by virtue of the interest in such Shares of her spouse, Mr. William Cheng Kai Man, a Director. 4. Credit Suisse Securities (Europe) Limited and Credit Suisse (Hong Kong) Limited beneficially owned 404,586,000 Shares and 172,000 Shares respectively. Credit Suisse Securities (Europe) Limited was wholly owned by Credit Suisse Investment Holdings (UK), which was in turn owned as to 98.07% by Credit Suisse Investments (UK) and as to 1.93% by Credit Suisse First Boston Management AG. Credit Suisse (Hong Kong) Limited was owned as to 94.75% by Credit Suisse (International) Holding AG and as to 5.25% by Credit Suisse First Boston International (Guernsey) Limited. Credit Suisse Investments (UK), Credit Suisse First Boston Management AG and Credit Suisse First Boston International (Guernsey) Limited are wholly owned by Credit Suisse (International) Holding AG, which was in turn wholly owned by Credit Suisse. Credit Suisse was wholly owned by Credit Suisse Group. 12

15 APPENDIX GENERAL INFORMATION 5. Mackenzie Cundill Recovery Fund was an investment fund managed by Mackenzie Financial Corporation ( MFC ). MFC was, through its subsidiaries, interested in the total number of 597,040,000 Shares. MFC was an indirect wholly owned subsidiary of IGM Financial Inc. (held as to 100%). IGM Financial Inc. was a non-wholly owned subsidiary of Power Financial Corporation (held as to 55.99%) which was in turn an indirect non-wholly owned subsidiary of Power Corporation of Canada (held as to 66.4%). Power Corporation of Canada was 54.18% owned by Gelco Enterprises Ltd, a 94.95% subsidiary of Nordex Inc. Desmarais Paul G. was holder of 68.0% of the interest in Nordex Inc. Save as disclosed above and so far as is known to the Directors, as at the Latest Practicable Date, no other person (other than the Directors and chief executives) had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group. 3. DIRECTORS INTERESTS IN COMPETING BUSINESS As at the Latest Practicable Date, none of the Directors or, so far as is known to them, any of their respective associates, was interested in any business (apart from the Group s business) which competes or is likely to compete either directly or indirectly with the Group s business (as would be required to be disclosed under Rule 8.10 of the Listing Rules if each of them were a controlling shareholder). 4. DIRECTORS INTERESTS IN SERVICE CONTRACTS As at the Latest Practicable Date, none of the Directors had entered into any service contract with the Company or any member of the Group which will not expire or is not determinable by the employer within one year without payment of compensation (other than statutory compensation). 5. LITIGATION None of any member of the Enlarged Group was engaged in any litigation or arbitration of material importance and no litigation or arbitration of material importance was pending or threatened against the Enlarged Group as at the Latest Practicable Date. 13

16 APPENDIX GENERAL INFORMATION 6. GENERAL (a) The secretary of the Company is Mr. Peter Lee Yip Wah, a praticising solicitor in Hong Kong, a consultant of Messrs. Woo, Kwan, Lee & Lo, Solicitors and Notaries and a China Appointed Attesting Officer. (b) The qualified accountant of the Company is Madam Kimmy Lau Kam May, ACCA, CPA. (c) The registered office of the Company is situated at 3rd Floor, Shun Ho Tower, Ice House Street, Central, Hong Kong. (d) The share registrar and the transfer office of the Company are Tricor Tengis Limited of 26th Floor, Tesbury Centre, 28 Queen s Road East, Wanchai, Hong Kong. (e) In the event of any inconsistency, the English language text of this circular shall prevail over the Chinese language text. 14