In summary, the principal terms of the Investment Agreement are as follows:

Transcription

1 Press Release SINGAPORE, 18 February 2009 SGX Main Board-listed TT International Limited ( TT International or the Company ), a leading international trader and distributor of consumer electronics, announced today the signing of an Investment Agreement with Hornington Enterprises Limited for an investment amount of up to SGD 50 million. TT International is pleased to announce that it has on 18 February 2009 entered into an agreement ("Investment Agreement") with Hornington Enterprises Limited ( Hornington ), a leading Hong Kong company involved in the distribution of computers and related accessories, the manufacture and trading of electronics and toys, etc for the investment of a principal amount of up to SGD50 million (the Investment Amount ). In summary, the principal terms of the Investment Agreement are as follows: (i) (ii) Hornington will lend the Company the Investment Amount, to be disbursed in two tranches, the first SGD20 million on the date falling two (2) working days after the date the Conditions Precedent are satisfied ("Investment Date"), and the balance on the date falling three (3) months from the date of the first disbursement. Interest on the prevailing principal amount outstanding shall accrue at a rate of 12% per annum; The Company may opt to prepay part or the entire Investment Amount, together with accrued interest. Subject to the conversion right of Hornington set out in (iii) below, the Company shall repay all amounts owing under the Investment Agreement (including accrued interest) to Hornington 36 months from the Investment Date ("Maturity Date") or such later date as Hornington may agree; and (iii) Hornington may request to convert the outstanding Investment Amount (subject to the SGX-ST free float requirement; any accrued interest shall be waived) into new ordinary shares in the Company at the issue price of SGD0.025 per new share (subject to adjustments in the issue price in the event of any capital-raising exercise, share buyback or capital reduction) at any one time from the Maturity Date to the date falling 36 months later. Page 1 of 6

2 The Investment Agreement is subject to certain conditions precedent ("Conditions Precedent") being satisfied, including, among others: (i) (ii) (iii) (iv) (v) (vi) (vii) The receipt by Hornington of a first ranking debenture over the Company s assets; Hornington being satisfied with the results of its financial due diligence; Relevant approvals of the Company's shareholders ("Shareholders"); Relevant regulatory approvals and waivers from SGX-ST being granted; A whitewash waiver from the Securities Industry Council being granted and relevant conditions thereunder fulfilled; A scheme of arrangement (the Scheme ) on terms approved by Hornington being supported and approved by the requisite minimum of 50% in number and representing 75% in value of the Company s creditors as described in the Scheme; That no creditor of the Company or of its key operating subsidiaries commences any legal action to put the Company or any of its key operating subsidiaries into judicial management, receivership or liquidation; and (viii) That Mr Sng Sze Hiang and Ms Tong Jia Pi Julia remain as Executive Directors of the Company and continue to manage the Company s businesses and operations. If any of the Conditions Precedent are not fulfilled by the date falling twelve (12) months after the date of the Investment Agreement, the Investment Agreement shall ipso facto cease and determine and no party shall have any claim against the other for costs, damages, compensation or otherwise. The Investment Amount is for the purpose of meeting the working capital requirements of the Company and its subsidiaries and to retire the Company s debts owed pursuant to the Scheme. Consensual restructuring of the Company: On 31 Oct 2008, TT International updated its stakeholders on the impact of the global financial crisis and economic slowdown on TT International s existing working capital provided by financial institutions and its ongoing fund raising efforts to enhance the efficiency of its capital structure and augment its working capital needs. The Board appointed ntan Corporate Advisory Pte Ltd ( ntan ) as its Independent Financial Advisor to the Company, its subsidiaries and associated companies (collectively the Group ). ntan s scope of work includes, inter alia: 1. Advising and assisting the Group to review and develop strategic options with the objective of enhancing value for all stakeholders; 2. Advising and assisting the Group, as appropriate, on suitable options to restructure its operational activities and financial arrangements; and 3. Advising and assisting the Group in identifying and securing potential investors. The Board also appointed WongPartnership LLP as its Legal Advisor to act for the Group in relation to matters arising. Page 2 of 6

3 The Company and its advisors met with the Company s principal bankers on 31 October 2008 to seek their support in allowing for a standstill of repayment of amounts owing to the banks pending a consensual restructuring of its operational activities and financial arrangements. On 21 January 2009, the Company announced that it had filed an application to Court to propose a Scheme between the Company and its creditors to provide a platform for the implementation of the Company s restructuring plan. The Company had been in detailed discussions with its key creditors, including its key bank creditors on its proposed restructuring plan and this application was a key element of that restructuring plan. This application was made with the support of the Company s key bank creditors. On 29 January 2009, the Company successfully obtained an Order from the Court under Section 210(10) of the Companies Act restraining the commencement or continuation of proceedings against the Company pending the approval by the Court of the proposed Scheme. With this Order, the Company and its advisors can now move forward with the consensual restructuring without the threat and distraction of legal proceedings by minority creditors. The Company also received the Court s approval to call a meeting of its creditors to propose a Scheme to progress this restructuring plan. Mr Nicky Tan was appointed as the Scheme Manager for the proposed Scheme. Commenting on the Court Order granted, Mr Nish Shetty of M/s WongPartnership LLP stated: The Order under S210 provides a platform for the Company to implement the consensual restructuring process and provides a basis with which to further progress negotiations with creditors and potential investors. In this context, we believe it is the best available avenue for maintaining the business and preserving value. TT International remains focused on its core competencies in the areas of trading, distribution and retail and supply chain management. In addition to its overall strategy for sales and profit growth, the Company is currently focusing on cash generation, so as to ensure the continued viability of its core businesses which remain fundamentally sound. This strategy addresses the following three areas: 1. Improving cash generation from stocks and receivables so as to reduce its cash conversion cycle; 2. Implementation of cost control and operational efficiency measures; and 3. Restructuring of its liabilities to creditors. Going forward, the Group has been and will continue to review its businesses, working capital requirements and capital structure and take some tough measures which may involve downsizing certain operations in order to direct resources to higher margin businesses. Page 3 of 6

4 Injection of new monies by proposed investors: One of the key priorities of the Company and its advisors since the start of its restructuring efforts has been to bring in new monies to meet the working capital needs of the Group and allow the retirement of some bank debt. The Company together with its advisors have been actively sourcing for and negotiating with various potential investors for the investment of new monies in the Group. The proposed investment by Hornington is therefore a timely and welcome development in the progress of the consensual restructuring process. Hornington, incorporated in 1984, is part of the Chainrai Group of Companies controlled by the Chainrai family. Based in Hong Kong, the Company is involved in the manufacture and trading of electronics and toys, the distribution of computers and related accessories and trade finance activities. The Hornington group has significant investments in several countries including Hong Kong, Australia, Eastern and Western Europe, and a worldwide customer base. With staff strength of some 140, the Hornington group reports an annual turnover of approximately USD410 million per year worldwide. The Hornington group also owns Ameris Holdings Ltd in Israel. The group has the licensee rights for Europe and the Commonwealth of Independent States to manufacture home electronics such as televisions and audio products, as well as home appliances, under the Telefunken and Hyundai brand names. The Company views the proposed investment of up to SGD50 million as a validation of the viability and long term business potential of TT International. Commenting on the proposed investment, Ms Julia Tong, Executive Director of TT International stated: We hope to keep working closely with the Company s creditors, with the assistance of ntan Corporate Advisory Pte Ltd and WongPartnership LLP, to restructure all liabilities so that we can generate maximum returns for all of the Company s stakeholders. The proposed investment by Hornington is indeed a vote of strong confidence in the management team and the underlying strength of the Company s core business. Also commenting on the proposed investment, Mr Sng Sze Hiang, Chairman and Chief Executive Officer of TT International stated: The cash injection from the proposed investment will help TT International shore up its stressed balance sheet and provide much needed working capital funding. This will help management to focus on executing its business plans and delivering value. Page 4 of 6

5 Commenting on the proposed investment, Mr P.G. Chainrai, Chairman of the Chainrai Group of Companies stated: We are delighted and privileged to have this opportunity to invest in one of Singapore s home-grown brands. TT International has established itself in a significant number of key markets and we are making this long-term investment to capitalise on TT s strengths which fit in well with our investment objectives. We look forward to working closely with TT International. The Company and its advisors are also currently in advanced discussions with other potential investors. Active discussions are concurrently being held with potential strategic equity partners to develop the property under the Warehouse Retail Scheme adjacent to the Jurong East MRT station. ~ End ~ For more information please contact: Ms. Julia Tong Executive Director TT International Limited 10 Toh Guan Road #10-00 TT International Tradepark Singapore Tel: Fax: julia@tt-intl.com Mr Nicky Tan CEO ntan Corporate Advisory Pte Ltd 55 Market Street #06-01 Singapore Tel: Fax: nicky.tan@ntan.com.sg Mr Nish Shetty Partner M/s WongPartnership LLP One George Street #20-01 Singapore Tel: Fax: nish.shetty@ wongpartnership.com.sg Company website: Page 5 of 6

6 Brief corporate information on TT International Limited ( TT International ) TT International is an Asian MNC with strong expertise in penetrating into emerging markets worldwide. Established in 1984, and listed on the SGX in June 2000, its core businesses are: Sourcing, trading and distribution of branded electrical and electronics products; Marketing, sale and brand management of its AKIRA brand of consumer electronics products; and Complemented by third-party warehousing & logistics services. Headquartered in Singapore, and with regional offices around the world, it is one of Singapore s leading international traders of electrical and electronics products. For the past 25 years, the Group has established strong business relationships with more than 100 suppliers and has successfully provided customized valued-added services to meet its customers needs in more than 60 countries worldwide. TT International s AKIRA brand of consumer electronics products that includes a full range of audio-visual products, household products and home appliances, has market coverage of some 60 countries worldwide. The Group is fully committed to providing total supply chain management services to its customers. Its aim is to strengthen its global reach and it will continue to position its business activities to remain focused on its mission of making the world its market. Page 6 of 6