e-kong Group Limited (Incorporated in Bermuda with limited liability) (Stock Code: 524)

Transcription

1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. e-kong Group Limited (Incorporated in Bermuda with limited liability) (Stock Code: 524) MAJOR TRANSACTION ACQUISITION OF APPROXIMATELY 17.70% OF THE ISSUED SHARE CAPITAL OF FLASH HOPE HOLDINGS LIMITED THE ACQUISITION The Board is pleased to announce that on 19 November 2016, the Company entered into the Agreement with the Vendor and the Principal, pursuant to which the Company conditionally agreed to acquire and the Vendor conditionally agreed to sell and/or cause to be sold, the Sale Shares, representing approximately 17.70% of the entire issued share capital of the Target Company for the consideration of US$42,000,000 (equivalent to approximately HK$325,794,000), which shall be settled by the Company in cash. The Target Group is principally engaged in the development of battery-powered electric vehicles. LISTING RULES IMPLICATIONS The Group completed the Previous Investment in February As at the date of this announcement, the Group owned approximately 0.20% of issued share capital of the Target Company. Pursuant to Rule of the Listing Rules, the Acquisition and the Previous Investment shall be aggregated as if they were one transaction for the purpose of Chapter 14 of the Listing Rules. As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition as aggregated with the Previous Investment are more than 25% and all of such ratios are less than 100%, the Acquisition and the Previous Investment, as aggregated, constitute a major transaction for the Company under Chapter 14 of the Listing Rules. The Agreement and the transactions contemplated thereunder are therefore subject to, among others, the approval of the Shareholders at the SGM. 1

2 SGM The SGM will be convened for the purpose of considering and approving, among other things, the Agreement and the transactions contemplated thereunder. To the best of the knowledge, information and belief of the Directors, no Shareholder has a material interest in the transactions contemplated under the Agreement. As such, no Shareholder will be required to abstain from voting on the resolutions to approve the Agreement and the transactions contemplated thereunder. Any vote exercised by the Shareholders at the SGM shall be taken by way of poll. GENERAL The Circular containing, among other things, (i) further details of the Acquisition; (ii) further information on the Target Group; and (iii) a notice convening the SGM, will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules. It is expected that the Circular will be despatched to the Shareholders on or before 14 December 2016 as additional time is required to prepare and finalise certain information to be included in the Circular. Shareholders and potential investors of the Company should be aware that completion of the Agreement and the transactions contemplated thereunder are subject to certain conditions being satisfied, and consequently the Acquisition may or may not proceed. Accordingly, they are advised to exercise caution when dealing in the securities of the Company. References are made to the announcements of the Company dated 15 February 2016, 19 February 2016 and 31 May 2016, in relation to, among other things, the Group s investment in TPHK. In February 2016, the Group subscribed for new ordinary shares of TPHK for US$1 million. Following the re-organisation of the Target Group, as at the date of this announcement, the Group owned approximately 0.20% of issued share capital of the Target Company, which holds TPHK. The Board is pleased to announce that on 19 November 2016, the Company entered into the Agreement with the Vendor and the Principal, pursuant to which the Company conditionally agreed to acquire and the Vendor conditionally agreed to sell and/or cause to be sold, the Sale Shares, representing approximately 17.70% of the entire issued share capital of the Target Company. 2

3 The Agreement Date: 19 November 2016 Parties: (i) (ii) The Company The Vendor (iii) The Principal To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, each of the Vendor and the Principal and their respective associates is independent of the Company and connected persons (as defined in the Listing Rules) of the Company. Assets to be acquired Pursuant to the terms of the Agreement, the Company conditionally agreed to acquire and the Vendor conditionally agreed to sell and/or cause to be sold the Sale Shares, representing 17.70% of the issued share capital of the Target Company or 14.75% of the issued share capital of the Target Company on a fully diluted basis after taking into account the options granted or to be granted under the option scheme of the Target Company. As the Target Company will not become a subsidiary of the Company, its financial results will not be consolidated into the financial statements of the Company. The Company s investment in the Target Company will be accounted for as available-for-sale financial asset. Consideration The consideration payable by the Company for the Sale Shares is US$42,000,000 (equivalent to approximately HK$325,794,000), which shall be settled by the Company in cash upon Closing. The consideration payable by the Company under the Agreement was determined after arm s length negotiations between the parties to the Agreement, after taking into account (i) the consolidated financial statements of the Target Group, (ii) the business prospects of the Target Group, and (iii) the independent valuation report from a qualified valuer on some of the patents granted to the Target Group. The Company will settle the consideration for the Sale Shares using the proceeds of the fund raising mentioned in paragraph (c) in the section headed Conditions precedent below. 3

4 Conditions precedent The obligations of the Company to consummate the Closing are subject to the fulfillment, to the satisfaction of the Company on or prior to the Closing, or waiver by the Company, of the following conditions: (a) (b) (c) (d) each of the representations and warranties of the Vendor and the Principal in the Agreement being true and complete; the Shareholders having approved the transactions contemplated under the Agreement in accordance with the requirement under the Listing Rules; the Company having successfully raised funds in the amount of not less than US$42,000,000 (equivalent to approximately HK$325,794,000) after the date of the Agreement, whether by way of placing of shares or otherwise; and a cooperation agreement having been duly executed by the Company and the Target Company or their respective subsidiaries in relation to a joint venture which will be engaged in Super Car. The Principal shall use his best endeavor to procure that each of the above conditions (other than the conditions set out in paragraphs (b) and (c) above) shall be satisfied, unless waived by the Company pursuant to the terms of the Agreement, by or before 18 January 2017 or such other date as the parties to the Agreement may agree in writing. The Company may at any time waive in whole or in part and conditionally or unconditionally any of the conditions set out above (other than the condition set out in paragraph (b) above) by notice in writing to the Vendor. Closing Closing shall take place on the tenth Business Day after the condition set out in paragraph (b) above has been satisfied or such other date as may be agreed by the parties to the Agreement. The Agreement may be terminated by the Purchaser or the Vendor if Closing has not been consummated on or before 18 January 2017 or such other date as the parties to the Agreement may agree in writing. Minority shareholder s rights Following Closing, the Company will have the right of first refusal and tag-along right with respect to transfer of shares in the Target Company by the Vendor and/or the Principal. The Company will also have pre-emptive right with respect to issue of new shares by the Target Company. 4

5 INFORMATION ABOUT THE TARGET GROUP The Target Company was a company incorporated in the British Virgin Islands with limited liability on 30 September TPHK and its subsidiaries underwent a re-organisation in 2016 following which TPHK and its subsidiaries became subsidiaries of the Target Company on 5 July The Target Group is principally engaged in the development of batterypowered electric vehicles. Set out below is the financial information of the Target Company extracted from its unaudited management accounts for the period from 30 September 2015 (date of incorporation) to 31 December 2015 and the period from 1 January 2016 to 30 September 2016 based on the unaudited financial statements for the same period and prepared in accordance with Hong Kong Financial Reporting Standards, as provided by the Vendor: For the period from 1 January 2016 to 30 September 2016 (unaudited) Period from 30 September 2015 (date of incorporation) to 31 December 2015 (unaudited) Turnover Loss before tax Loss after tax US$5,177,969 (equivalent to approximately HK$40,165,506) US$5,177,969 (equivalent to approximately HK$40,165,506) 5

6 Set out below is the financial information of TPHK and its subsidiaries extracted from their audited consolidated accounts for the two years ended 31 December 2014 and 31 December 2015 based on the audited consolidated financial statements for the same period and prepared in accordance with Hong Kong Financial Reporting Standards, as provided by the Vendor: For the year ended 31 December 2015 (audited) For the year ended 31 December 2014 (audited) Turnover HK$1,164,308 HK$915,265 Loss before tax HK$44,569,218 HK$11,371,753 Loss after tax HK$44,569,218 HK$11,371,753 The unaudited consolidated net assets of the Target Group as at 30 September 2016 was approximately US$135,453,708 (equivalent to approximately HK$1,050,714,413). REASONS FOR AND BENEFITS OF THE ACQUISITION The Company is an investment holding company and the Group is principally engaged in the provision of (i) telecommunication services and (ii) insurance-related product distribution services and consultancy services. The Group has a portfolio of business interests in the telecommunication and information technology sector in the PRC, Hong Kong and Singapore. The Group makes further progress in expanding its cloud services in Singapore and around the neighboring regions. In addition, the Group is actively pursuing other opportunities that are complementary to its existing operations, in particular, in the technology related business which have high growth potential, ability to generate healthy cashflows and capabilities to produce optimum return on capital. The Target Group is operating principally in Milan, China and Hong Kong with the aim to deliver state-of-the-art pure battery-powered electric vehicles that are smart, aesthetically designed and equipped with class-leading range. The products of the Target Group have been designed from ground up by its team of sophisticated engineers who previously worked in world-renowned car makers such as Bugatti, Porsche, Ferrari and BMW. The development work is also supported by a number of top European engineering specialists like Dallara, Robert Bosch and CSI. The Target Group has been granted over 40 patents in China, Europe and the United States for its proprietary electric vehicle technology. With the close support of the Company and the Ganzhou Economic & Technological Development Zone Administration Committee, the Target Group has entered into a joint venture agreement with the largest industrial investment fund in Jiangxi, which establishment has been approved by the National Development and Reform Commission of the People s Republic of China, for the manufacturing of the Target Group s electric vehicle product in China. Pursuant to the joint venture agreement, the registered capital of the sino-foreign joint venture will reach RMB2.51 billion with the Target Group and the industrial investment fund making intellectual property injection and cash injection respectively. The Target Group will hold 51% interest in the joint venture. The joint venture has commenced the construction of its prototype workshop in Ganzhou, China. 6

7 References are made to the announcements of the Company dated 15 February 2016, 19 February 2016 and 31 May In February 2016, the Group subscribed for new ordinary shares of TPHK for US$1 million. Following the re-organisation of the Target Group, as at the date of this announcement, the Group owned approximately 0.20% of issued share capital of the Target Company, which holds TPHK. Pursuant to the Agreement, Closing is conditional upon a cooperation agreement having been duly executed by the Company and the Target Company or their respective subsidiaries in relation to a joint venture which will be engaged in Super Car. Thunder Power Super Car joint venture is to establish core business in research and development, manufacturing, sales and marketing of luxury ultra-performance pure electric vehicles targeting the highest segment of automotive market. The super cars are planned and expected to be manufactured in Europe. The Target Company or its subsidiaries will exclusively license relevant and required patents and technologies to the joint venture for the successful completion of research, development and commercialization of the super cars. Pursuant to the term sheet entered into between the Company and TPHK on 15 February 2016 and the subsequent agreement between the Company and TPHK, the Company has an option to subscribe for convertible preferred shares in the Target Company on or before 31 December Following the execution of the Agreement, the Company will not exercise the option to subscribe for the convertible preferred shares in the Target Company. The Board believes that the demand for electric vehicles is on an upward trend and there is a fast expanding market in the world, in particular, the PRC, for electric vehicles, which are known to be more environmentally friendly than traditional vehicles in terms of omissions. Given the prospects of the electric vehicle industry, and leveraging on the Target Group s advanced technologies and expertise, the Directors are of the view that the Acquisition would deepen the partnership with the Target Group, allow the Company to participate and benefit from the fast growing electric vehicle industry, enhancing its profitability outlook and achieving a better return for the Shareholders. The terms of the Agreement were negotiated on an arm s length basis between the parties to the Agreement. The Directors are of the view that the terms of the Agreement are fair and reasonable and are on normal commercial terms and the Acquisition is in the interest of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS The Group completed the Previous Investment in February As at the date of this announcement, the Group owned approximately 0.20% of issued share capital of the Target Company. Pursuant to Rule of the Listing Rules, the Acquisition and the Previous Investment shall be aggregated as if they were one transaction for the purpose of Chapter 14 of the Listing Rules. As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition as aggregated with the Previous Investment are more than 25% and all of such ratios are less than 100%, the Acquisition and the Previous Investment, as aggregated, constitute a major transaction for the Company under Chapter 14 of the Listing Rules. The Agreement and the transactions contemplated thereunder are therefore subject to, among others, the approval of the Shareholders at the SGM. 7

8 SGM The SGM will be convened for the purpose of considering and approving, among other things, the Agreement and the transactions contemplated thereunder. To the best of the knowledge, information and belief of the Directors, no Shareholder has a material interest in the transactions contemplated under the Agreement. As such, no Shareholder will be required to abstain from voting on the resolutions to approve the Agreement and the transactions contemplated thereunder. Any vote exercised by the Shareholders at the SGM shall be taken by way of poll. GENERAL The Circular containing, among other things, (i) further details of the Acquisition; (ii) further information on the Target Group; and (iii) a notice convening the SGM, will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules. It is expected that the Circular will be despatched to the Shareholders on or before 14 December 2016 as additional time is required to prepare and finalise certain information to be included in the Circular. Shareholders and potential investors of the Company should be aware that completion of the Agreement and the transactions contemplated thereunder are subject to certain conditions being satisfied, and consequently the Acquisition may or may not proceed. Accordingly, they are advised to exercise caution when dealing in the securities of the Company. DEFINITIONS In this announcement, unless the context otherwise requires, the following words and expressions shall have the following meanings when used herein: Acquisition the acquisition of the Sale Shares pursuant to the terms of the Agreement Agreement the conditional sale and purchase agreement dated 19 November 2016 entered into between the Company, the Vendor and the Principal relating to the Acquisition associate(s) Board Business Day Circular has the meaning ascribed to it under the Listing Rules the board of the Directors from time to time any day that is not a Saturday, Sunday, statutory holiday or other day on which commercial banks are required or authorized by law to be closed in Hong Kong and Taiwan the circular to be issued by the Company in accordance with the Listing Rules in respect of the Agreement and the transactions contemplated thereunder 8

9 Closing Company Director(s) Group Hong Kong Listing Rules PRC Previous Investment Principal Sale Shares SGM Share(s) Shareholder(s) Stock Exchange Target Company closing of the Acquisition pursuant to the terms of the Agreement e-kong Group Limited, a company incorporated in Bermuda with limited liability and the issued Shares of which are listed on the main board of the Stock Exchange (stock code: 524) the director(s) of the Company from time to time the Company and its subsidiaries from time to time the Hong Kong Special Administrative Region of the People s Republic of China the Rules Governing the Listing of Securities on the Stock Exchange the People s Republic of China, which for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the People s Republic of China and Taiwan the acquisition of 0.20% of the issued share capital of TPHK by the Group in February 2016, details of which are set out in the announcements of the Company dated 15 February 2016 and 19 February 2016 Mr. Shen Wei 38,532,110 shares in the Target Company, representing approximately 17.70% of the issued share capital of the Target Company the special general meeting of the Company to be convened to consider and, if thought fit, approve each of the Agreement and the transactions contemplated thereunder ordinary share(s) of HK$0.01 each in the share capital of the Company holder(s) of the issued Share(s) The Stock Exchange of Hong Kong Limited Flash Hope Holdings Limited, a company incorporated in the British Virgin Islands with limited liability on 30 September

10 Target Group TPHK Vendor HK$ US$ the Target Company and its subsidiaries Thunder Power Hong Kong Limited, a company incorporated in Hong Kong with limited liability an individual, being a holder of 58.81% of the total issued and outstanding shares of the Target Company Hong Kong dollar(s), the lawful currency of Hong Kong United States dollar(s), the lawful currency of the United States of America % per cent. By order of the Board e-kong Group Limited Yeung Chun Wai, Anthony Chairman Hong Kong, 19 November 2016 As at the date of this announcement, the Board comprises Mr. Yeung Chun Wai, Anthony, Mr. Chan Chi Yuen, Mr. Wong Xiang Hong and Mr. Yeung Chun Sing Standly as executive Directors; and Mr. Chan Chiu Hung, Alex, Mr. Fung Chan Man, Alex and Mr. Chan Fong Kong, Francis as independent non-executive Directors. For the purpose of this announcement, unless the context otherwise requires, conversion of United States dollars into Hong Kong dollars is based on the approximate exchange rate of US$1 to HK$ Such exchange rate is for the purpose of illustration only and does not constitute a representation that any amounts in United States dollars or Hong Kong dollars have been, could have been or may be converted at such or any other rate or at all. 10