PACIFIC ANDES INTERNATIONAL HOLDINGS 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 licensed securities dealer or other registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Pacific Andes International Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, licensed securities dealer or other registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s). Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular. This circular is for information purposes only and does not constitute an offer or invitation to subscribe for or purchase any securities nor is it calculated to invite any such offer or invitation. In particular, this circular is not an offer of securities for sale in Hong Kong, the United States or elsewhere. Securities may not be offered or sold in the United States absent registration or an exemption from registration. PACIFIC ANDES INTERNATIONAL HOLDINGS LIMITED (STOCK CODE: 1174) (I) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE PROPOSED ACQUISITION OF A SIGNIFICANT EQUITY INTEREST IN COPEINCA ASA, A COMPANY LISTED ON THE OSLO BØRS WITH A SECONDARY LISTING ON THE LIMA STOCK EXCHANGE; (II) MAJOR TRANSACTIONS IN RELATION TO THE ACQUISITION OF EQUITY INTEREST IN COPEINCA ASA PAYMENT OF THE ESCROW AMOUNT AND EXERCISE OF CALL OPTION; AND (III) NOTICE OF SPECIAL GENERAL MEETING Financial advisers to the Company on the Acquisition A letter from the Board of Directors of Pacific Andes International Holdings Limited is set out on pages 13 to 48 of this circular. A notice convening a special general meeting of Pacific Andes International Holdings Limited to be held at Dynasty I, 7/F, The Dynasty Club, South West Tower, Convention Plaza, 1 Harbour Road, Wan Chai, Hong Kong on Tuesday, 13 August 2013 at 9:30 a.m. is set out on pages SGM-1 to SGM-2 of this circular. Whether or not you intend to attend and vote at the special general meeting or any adjourned meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 Queen s Road East, Wanchai, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for holding such meeting or any adjourned meetings. Completion and return of the form of proxy will not preclude you from attending and voting in person at the special general meeting or any adjourned meeting should you so wish. 24 July 2013

2 CONTENTS Page Definitions... 1 Indicative Timetable Letter from the Board Appendix I Risk factors... I-1 Appendix II Financial information of the Group... II-1 Appendix III Financial information and additional information of the Offeree Group... III-1 Appendix IV Unaudited pro forma financial information of the Group... IV-1 Appendix V General Information... V-1 Notice of SGM... SGM-1 i

3 DEFINITIONS In this circular, unless the context requires otherwise, the following terms shall have the following meanings: Acceptance Period Acquisition Announcement Date associate(s) A$ Board Bye-laws Business Days Call Option Call Option Agreement Call Option Shares Call Price the period during which the New Offer can be accepted by the Offeree Shareholders as extended from time to time the proposed New Offer and Second General Offer, and/or Compulsory Acquisition (as applicable) and acquisitions including but not limited to acquisitions of Offeree Shares in the open market or in privately negotiated transactions or otherwise, by the Group (including the Offeror) (as applicable) and the transactions contemplated thereunder the day, among other things, the Acquisition and the New Offer were announced by the Company in Hong Kong, being 26 June 2013 has the meaning ascribed to it in the Listing Rules Australian dollars, the lawful currency of Australia the board of Directors of the Company the bye-laws of the Company a day other than Saturday, Sunday or any other day on which commercial banks and public entities are not open for business in Peru, Singapore, Hong Kong, Norway or the United States of America the option given by Veramar to the Offeror to acquire the Call Option Shares at the Call Price, pursuant to the terms of the Call Option Agreement the agreement dated 25 February 2013 between the Offeror and Veramar in relation to the grant of the Call Option by Veramar to the Offeror 6,295,100 Offeree Shares a price equal to the number of Call Option Shares multiplied by NOK59.70 (approximately HK$77.61) 1

4 DEFINITIONS Cancellation Amount CAVALI CDP Cermaq CET CF Fleet an amount of US$5.0 million (approximately HK$39.0 million) payable by the Offeror to the pre-accepting and accepting shareholders of the New Offer in accordance with an undertaking given by the Offeror under the Dyer-Weilheim Pre-acceptance Cavali S.A. ICLV, the central securities depository of Peru the Central Depository (Pte) Limited or its nominee(s) as the case may be Cermaq ASA, a Company listed on the Oslo Børs Central European Time the vessels owned and operated by the CFGL Group CFGL China Fishery Group Limited, a company incorporated in the Cayman Islands and an indirect non-wholly-owned subsidiary of the Company, the shares of which are listed and quoted on the SGX-ST CFGL Circular CFGL Directors the circular to be issued by CFGL to its shareholders in relation to, among other things, the Acquisition the directors of CFGL as at the date of the CFGL Circular CFGL EGM the extraordinary general meeting of CFGL Shareholders to be convened by CFGL for CFGL Shareholders to consider and if thought fit, to approve the Acquisition CFGL Group CFGL and its subsidiaries, which shall include the Offeror CFGL Rights Issue the rights issue of CFGL which was completed on 19 April 2013, further details of which can be found in the February Announcement and the February Circular CFGL Share(s) share(s) of par value US$0.05 (approximately HK$0.39) each in the capital of CFGL 2

5 DEFINITIONS CFGL Shareholder(s) CFIL Company Compulsory Acquisition Conditions Contract Supply Business Contract Supply Vessels controlling shareholder Copeinca S.A.C. registered holder(s) of CFGL Shares in the Register of Members of CFGL or where CDP is the registered holder, the term CFGL Shareholders shall in relation to such CFGL Shares and where the context admits, mean the depositors who have CFGL Shares entered against their names in the depository register. Any reference to CFGL Shares held by or shareholdings of CFGL Shareholders shall include CFGL Shares standing to the credit of their respective Securities Accounts China Fisheries International Limited, an indirect wholly-owned subsidiary of CFGL Pacific Andes International Holdings Limited, the Shares of which are listed on the Main Board of the Hong Kong Stock Exchange under the stock code 1174 a compulsory acquisition under Norwegian law by a shareholder who directly or indirectly acquires and holds shares representing 90% or more of the total number of all the issued shares of the Offeree ( Majority Shareholder ) to acquire the remaining shares not owned by the Majority Shareholder, from the minority shareholders who have not accepted the New Offer or the Second General Offer ( Minority Shareholders ). The Minority Shareholders have a corresponding right to require the Majority Shareholder to acquire their shares the conditions to the New Offer as set out in the section headed Terms of the New Offer in the Letter from the Board in this circular sourcing of fish under the Supply Agreements fishing vessels that supply fish for fixed periods under the Supply Agreements or predecessor agreements. At all times these vessels are owned and operated by the respective Vessel Owning Companies has the meaning ascribed to it under the Listing Rules Corporacion Pesquera Inca S.A.C., a wholly-owned subsidiary of the Offeree 3

6 DEFINITIONS DCH Dyer-Weilheim Pre-acceptance Director(s) Enlarged CFGL Group Enlarged Group Escrow Agent Escrow Agreement Escrow Amount EUR February Announcement February Circular Dyer Coriat Holding S.L., an Offeree Shareholder holding 19,098,000 Offeree Shares (representing 27.21% of all issued and outstanding Offeree Shares as at the Latest Practicable Date) the pre-acceptances in relation to the New Offer received from each of DCH and Weilheim covering a total of 22,583,930 Offeree Shares, representing approximately 32.17% of the outstanding Offeree Shares as at the Latest Practicable Date the director(s) of the Company the enlarged group of companies comprising the CFGL Group and the Offeree Group after completion of the Acquisition the enlarged group of companies comprising the Group and the Offeree Group after completion of the Acquisition Scotiabank Peru S.A.A, appointed under the Escrow Agreement an escrow agreement entered into between, among others, the Offeror, DCH, Weilheim and the Escrow Agent on 21 June 2013 in relation to the payment of the Escrow Amount to the Escrow Agent by the Offeror US$5.0 million (approximately HK$39.0 million) paid by the Offeror to the Escrow Agent, which is being held by the Escrow Agent in accordance with the terms and conditions of the Escrow Agreement Euro, the lawful currency of the European Union the Company s announcement dated 26 February 2013 in relation to, among other things, the launch of the Old Offer the circular dated 28 February 2013 issued by the Company to the Shareholders in connection with, among other things, the Old Offer 4

7 DEFINITIONS Financing Agreement First Lima VGO First Offer Document First Supply Agreement Fourth Supply Agreement GO Settlement Date as defined in the paragraph under Financing of the New Offer in the section headed I. The Acquisition the New Offer in Norway and Peru in the Letter from the Board in this circular the current proposed conditional voluntary cash tender offer by the Offeror for the Peruvian Securities pursuant to the Peruvian Tender Regulations the offer document setting out the terms of the Old Offer the agreement originally named as vessel operating agreement dated 6 January 2004 between CFIL and Perun Limited, as amended by four addenda dated 20 January 2004, 1 April 2005, 20 July 2010 and 15 December 2010, and further replaced with and renamed as Supply Agreement on 16 July 2012 the agreement originally named as vessel operating agreement dated 24 January 2007 between CFIL and Perun Limited, as amended by an addendum dated 20 July 2010 and further replaced with and renamed as Supply Agreement on 16 July 2012 the settlement date of the New Offer Golden Target Golden Target Pacific Limited, an indirect non-wholly-owned subsidiary of the Company Group HK$ HKFRS Hong Kong Stock Exchange IFFO IFRS ISIN the Company and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong Hong Kong Financial Reporting Standards The Stock Exchange of Hong Kong Limited International Fishmeal and Fish Oil Organisation International Financial Reporting Standards International Securities Identification Number 5

8 DEFINITIONS Last Trading Day Latest Practicable Date Lima Stock Exchange Listing Rules Long Stop Date Market Day New Fourth Supply Agreement New Offer New Offer Document New Offer Price NOK 21 June 2013, the last Market Day immediately preceding the date that the New Offer was announced in Oslo, Norway and in Singapore 17 July 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein Bolsa de Valores de Lima, being the stock exchange in Peru the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange the latest time for the Conditions to be fulfilled or waived by the Offeror (as applicable) pursuant to the terms of the New Offer, being 9:00 p.m. CET/3:00 p.m. PET on 14 October 2013 or if the Acceptance Period is extended, the latest possible Long Stop Date will be on 9:00 p.m. CET/3:00 p.m. PET on 9 December 2013 a day on which the Oslo Børs is open for trading of securities the new supply agreement between CFIL and Perun Limited dated 14 November 2012 to replace the Fourth Supply Agreement dated 16 July The New Fourth Supply Agreement took retrospective effect from 1 October 2012 and shall terminate on 30 September 2030 the Norway VGO and/or the First Lima VGO as the context requires the offer document setting out the terms of the New Offer which has been despatched by the Offeror to the Offeree Shareholders on 16 July 2013 NOK68.17 (approximately HK$88.62), being the offer price per Offeree Share or each unit of Peruvian Securities representing one Offeree Share pursuant to the New Offer Norwegian Krone, the lawful currency of Norway 6

9 DEFINITIONS Norway MGO Norway VGO the mandatory cash offer under the rules of the Norwegian Takeover Code the current proposed voluntary conditional cash offer by the Offeror for the Offeree Shares pursuant to the Norwegian Takeover Code Norwegian Takeover Code the Norwegian Securities Trading Act of 29 June 2007 no. 75 and the relevant regulations N.S. Hong Offer Announcements Offeree Offeree Bond Issue Offeree Board Offeree Group Offeree Shareholder(s) Offeree Shares N.S. Hong Investment (BVI) Limited, the controlling shareholder of the Company holding approximately 54.9% of the Company s entire issued share capital as at the Latest Practicable Date the announcements in relation to, amongst others things, the New Offer released by the Company, PARD, CFGL and the Offeror in Hong Kong, Singapore, Oslo (Norway) and Lima (Peru) on 24 June 2013 and 26 June 2013, respectively (as the case may be). The announcements made by PARD, CFGL and the Offeror in Singapore, Oslo (Norway) and Lima (Peru) are available free of charge at and respectively Copeinca ASA, a company incorporated in Norway with organisation number and listed on the Oslo Børs with a secondary listing on the Lima Stock Exchange the bond issue by the Offeree as described under the section headed 8. The Offeree Bond Issue of Appendix III of this circular the board of directors of the Offeree the Offeree and its subsidiaries holder(s) of the Offeree Shares issued and registered voting shares in the Offeree, each with a nominal value of NOK5.0 (approximately HK$6.5) 7

10 DEFINITIONS Offeror Old Offer Oslo Børs PARD Penalty Fee Amount Peruvian Securities Peruvian Tender Regulations PET QIBs Rabobank Grand Success Investment (Singapore) Private Limited, a wholly-owned subsidiary of CFGL which has made the New Offer the voluntary cash offers launched by the Offeror on 13 March 2013 to acquire all of the Offeree Shares as announced in the February Announcement, which has lapsed on 23 May 2013 the Oslo Stock Exchange of Norway Pacific Andes Resources Development Limited, a company incorporated in Bermuda and an indirect non-wholly-owned subsidiary of the Company, the shares of which are listed and quoted on the SGX-ST an amount of US$3.0 million (approximately HK$23.4 million) payable by the Offeror to the Offeree in accordance with an undertaking given by the Offeror under the Dyer-Weilheim Pre-acceptance the Offeree securities listed on the Lima Stock Exchange, whether they are Offeree Shares or depositary receipts representing the Offeree Shares the applicable tender offer regulations in Peru Peru time Qualified Institutional Buyers within the meaning of Rule 144A of the Securities Act Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (trading as Rabobank International), Hong Kong Branch, one of the financial advisers to the Company in connection with the Acquisition, is a licensed bank under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) and a Registered Institution to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO Richtown Richtown Development Limited, an indirect non-wholly-owned subsidiary of the Company 8

11 DEFINITIONS RMB Rothschild Second General Offer Second Lima VGO Second Supply Agreement Securities Account SFO SGM SGX-ST Shares Shareholders Chinese Renminbi, the lawful currency of the People s Republic of China Rothschild (Hong Kong) Limited, one of the financial advisers to the Company in connection with the Acquisition, a corporation licensed under the SFO to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO the possible Norway MGO and the possible Second Lima VGO the possible voluntary cash tender offer by the Offeror for the Peruvian Securities pursuant to the Peruvian Tender Regulations the agreement originally named as vessel operating agreement dated 20 February 2006 between CFIL and Alatir Limited, as amended by an addendum dated 20 July 2010 and further replaced with and renamed as Supply Agreement on 16 July 2012 a securities account maintained by a depositor with CDP but does not include a securities sub-account maintained with a Depository Agent the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) the special general meeting to be convened and held by the Company on Tuesday, 13 August 2013 at 9:30 a.m. (Hong Kong time) (which is prior to the successful close of the New Offer) at Dynasty I, 7/F, The Dynasty Club, South West Tower, Convention Plaza, 1 Harbour Road, Wan Chai, Hong Kong to seek approval from Shareholders for the Acquisition and the New Offer The Singapore Exchange Securities Trading Limited ordinary shares of HK$0.10 each in the share capital of the Company holders of Shares 9

12 DEFINITIONS Singapore Listing Manual SMV substantial shareholder The Listing Manual of the SGX-ST, as may be amended, varied or supplemented from time to time Superintendencia del Mercado de Valores, the regulator of the Lima Stock Exchange has the meaning ascribed to it under the Listing Rules Super Investment Super Investment Limited, an indirect non-wholly-owned subsidiary of the Company Supply Agreements S$ Third Supply Agreement US$ or USD Veramar Vessel Owning Companies Weilheim Zhonggang Fisheries collectively, the First Supply Agreement, the Second Supply Agreement, the Third Supply Agreement, the Fourth Supply Agreement and the New Fourth Supply Agreement pursuant to which a long-term supply of fish harvested by the Contract Supply Vessels is secured Singapore dollar, the lawful currency of Singapore the agreement originally named as vessel operating agreement dated 4 January 2007 among CFIL, Perun Limited and Alatir Limited as amended by an addendum dated 20 July 2010 and further replaced with and renamed as Supply Agreement on 16 July 2012 United States dollar, the lawful currency of the United States of America Veramar Azul S.L., an Offeree Shareholder owning 6,295,100 Offeree Shares representing approximately 8.97% of the outstanding Offeree Shares as at the Latest Practicable Date the Russian companies that own and operate the Contract Supply Vessels Weilheim Investments S.L., an Offeree Shareholder holding 3,485,930 Offeree Shares (representing 4.97% of all issued and outstanding Offeree Shares as at the Latest Practicable Date) Zhonggang Fisheries Limited % per cent 10

13 DEFINITIONS For illustration purposes only, the following exchange rates have been applied in this circular: A$1.00 = HK$7.16; EUR1.00 = HK$10.40; NOK1.00 = HK$1.30; S$1.00 = HK$6.18; US$1.00 = HK$7.80 No representation is made that any amount in A$, EUR, NOK, S$ or US$ was, could have been or could be converted at such rate or at any other rate or at all. 11

14 INDICATIVE TIMETABLE The following is an indicative timetable only and assumes that approval for all the resolutions to be proposed at the Company s SGM and the CFGL EGM will be obtained prior to the settlement date of the New Offer. Acquisition Event Date and time New Offer Announcement of the New Offer in Oslo, Norway : 24 June 2013 Launch of the New Offer and despatch of New Offer Document : 16 July 2013 Acceptance period of the New Offer : 17 July 31 July 2013 at 9:00 p.m. CET/ 3:00 p.m. PET Settlement of the New Offer : Maximum 3 weeks after all conditions of the New Offer have been met or waived and in any event no later than 30 December 2013 Second General Offer (if triggered) Expected launch of Second General Offer (despatch of offer document) Expected Second General Offer acceptance period : Maximum 4 weeks after settlement of New Offer : 4-6 weeks Expected settlement of Second General Offer : Maximum 2 weeks after close of acceptance period Compulsory Acquisition (if triggered) The Compulsory Acquisition of all the Offeree Shares not owned by the Offeror at the close of the New Offer or the Second General Offer is subject to the Offeror owning 90% or more of all the Offeree Shares at the close of the Second General Offer. 12

15 LETTER FROM THE BOARD PACIFIC ANDES INTERNATIONAL HOLDINGS LIMITED (STOCK CODE: 1174) Executive Directors: Madam Teh Hong Eng (Chairperson) Mr. Ng Joo Siang (Managing Director and Vice-Chairman) Mr. Ng Joo Kwee Mr. Ng Joo Puay, Frank Ms. Ng Puay Yee Independent Non-executive Directors: Mr. Lew V Robert Mr. Kwok Lam Kwong, Larry Mr. Tao Kwok Lau, Clement Registered office: Canon s Court 22 Victoria Street Hamilton HM12 Bermuda Principal Place of Business in Hong Kong: Rooms Hong Kong Plaza 188 Connaught Road West Hong Kong 24 July 2013 To the Shareholders Dear Sir or Madam, (I) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE PROPOSED ACQUISITION OF A SIGNIFICANT EQUITY INTEREST IN COPEINCA ASA, A COMPANY LISTED ON THE OSLO BØRS WITH A SECONDARY LISTING ON THE LIMA STOCK EXCHANGE; (II) MAJOR TRANSACTIONS IN RELATION TO THE ACQUISITION OF EQUITY INTEREST IN COPEINCA ASA PAYMENT OF THE ESCROW AMOUNT AND EXERCISE OF CALL OPTION; AND (III) NOTICE OF SPECIAL GENERAL MEETING INTRODUCTION References are made to the announcements of the Company dated 26 February 2013, 1 March 2013, 13 March 2013, 5 April 2013, 11 April 2013, 10 May 2013, 21 May 2013, 24 May 2013, the February Circular and the First Offer Document in relation to, among other things, the Old Offer. The Old Offer was initially launched at the offer price of NOK53.85 (approximately HK$70.01) per Offeree Share, which was subsequently increased to NOK59.70 (approximately 13

16 LETTER FROM THE BOARD HK$77.61) per Offeree Share. As disclosed in the Company s announcement dated 24 May 2013, the Old Offer was not completed and that CFGL was reviewing its options regarding the launch of a possible new voluntary cash tender offer to acquire all of the Offeree Shares. Further, as disclosed in the Company s announcement dated 5 April 2013, Cermaq announced on 5 April 2013 that it had acquired shares in the Offeree and would make an offer to acquire all remaining outstanding Offeree Shares in the Offeree for NOK59.70 (approximately HK$77.61) per Offeree Share. Cermaq s offer was conditioned upon, among other things, approval from its shareholders of Cermaq s proposed rights issue, which was intended to fund the offer. On 21 June 2013, Cermaq s shareholders voted down the proposed rights issue and causing Cermaq s offer to lapse. Further, reference is also made to the Offer Announcements made on 24 June 2013 in Oslo, Norway and in Singapore by the Offeror and CFGL, and on 26 June 2013 made by the Company in relation to, among other things, the Acquisition and the New Offer. The Offeree is a company incorporated in Norway and listed on the Oslo Børs with a secondary listing on the Lima Stock Exchange. As stated in the Offer Announcement, the Offeror, being a wholly-owned subsidiary of CFGL (which is an indirect non-wholly owned subsidiary of the Company and is listed on the SGX-ST), proposed to acquire up to 100% equity interest in the Offeree through the launch of the New Offer. The New Offer comprises of the Norway VGO and the First Lima VGO and has been launched in accordance with the relevant Norwegian and Peruvian laws and regulations. The Offeror has issued the New Offer Document in Oslo, Norway and in Lima, Peru setting out the details of the terms and conditions of the New Offer on 16 July This circular will also set out the information relating to (i) the Dyer-Weilheim Pre-Acceptance and the payment of the Escrow Amount; and (ii) the exercise of the Call Option by the Offeror on 21 June 2013, the details of which have been previously disclosed in the Company s announcement dated 26 June PURPOSE AND STRUCTURE OF THIS CIRCULAR The Acquisition As certain applicable size test percentages (as defined under Rule of the Listing Rules) in respect of the Acquisition are more than 100%, the Acquisition constitutes a very substantial acquisition for the Company under Chapter 14 of the Listing Rules. Accordingly, the Acquisition is subject to the reporting, announcement and Shareholders approval requirements under Chapter 14 of the Listing Rules. The Acquisition will be conditional on, among other things, Shareholders approval at the SGM at which voting is to be made by poll. No Shareholder is required to abstain from voting at the SGM, unless such Shareholder has a material interest in the Acquisition other than being a Shareholder. As at the Latest Practicable Date and to the best of the Directors knowledge, information and belief, the Board is not aware that any Shareholder has such a material interest in the Acquisition. As at the Latest Practicable Date, N.S. Hong owns an aggregate of approximately 54.9% of the issued share capital of the Company. N.S. Hong therefore holds more than 50% of the entire issued Shares in the Company giving the rights to attend and vote at the SGM to approve the Acquisition. N.S. Hong has 14

17 LETTER FROM THE BOARD previously entered into a deed of undertaking, pursuant to which it has unconditionally and irrevocably given, inter alia, an undertaking in favour of the Company and the Offeror that N.S. Hong will exercise all of its voting rights and/or do any other acts to vote in favour of the Acquisition at the SGM. Exercise of the Call Option and the payment of the Escrow Amount As certain applicable size test percentages (as defined under Rule of the Listing Rules) in respect of the exercise of the Call Option exceed 25% but are less than 100%, the exercise of the Call Option constitutes a major transaction of the Company under Chapter 14 of the Listing Rules. Accordingly, the exercise of the Call Option is subject to the reporting, announcement and shareholders approval requirements under Chapter 14 of the Listing Rules. As at the Latest Practicable Date and to the best of the Directors knowledge, information and belief, the Board is not aware that any Shareholder has a material interest in the exercise of the Call Option other than being a Shareholder. As such, no Shareholder would be required to abstain from voting under the Listing Rules if the Company were to convene a general meeting for the approval of these transactions. As the applicable size test percentages (as defined under Rule of the Listing Rules) in respect of the payment of the Escrow Amount is less than 5%, the payment of the Escrow Amount by itself is not subject to the reporting, announcement and shareholders approval requirements under Chapter 14 of the Listing Rules. Aggregation of transactions As announced by the Company on 13 March 2013, the Offeror and Ocean Harvest S.L. entered into a sale and purchase agreement on 12 March 2013 pursuant to which the Offeror agreed to purchase and Ocean Harvest S.L. agreed to sell a total of 5,773,000 Offeree Shares, representing approximately 8.22% of the outstanding Offeree Shares, for a total consideration of approximately NOK310.9 million (approximately HK$404.2 million). (i) The acquisition by the Offeror of the Offeree Shares from Ocean Harvest S.L. on 13 March 2013; (ii) the payment of the Escrow Amount; and (iii) the exercise of the Call Option are a series of transactions in relation to the acquisition of Offeree Shares by the Offeror and therefore they should be aggregated and regarded as one transaction pursuant to Rules and of the Listing Rules. These transactions, when calculated on an aggregate basis, constitute a major transaction of the Company under Chapter 14 of the Listing Rules. Therefore, the payment of the Escrow Amount also constitutes a major transaction under the Listing Rules. 15

18 LETTER FROM THE BOARD As at the Latest Practicable Date, N.S. Hong owns an aggregate of approximately 54.9% of the issued share capital of the Company. Pursuant to Rule of the Listing Rules, N.S. Hong has issued a written shareholder s approval certificate to approve the exercise of the Call Option and the payment of the Escrow Amount and accordingly, no special general meeting will be convened by the Company to approve the exercise of the Call Option and the payment of the Escrow Amount. Purpose of this circular The purpose of this circular is to provide you with further details of the Acquisition, the payment of the Escrow Amount and the exercise of the Call Option by the Offeror. Part I of this circular, the Letter from the Board sets out, among other things, (i) further details of the Acquisition and the New Offer, the payment of the Escrow Amount and the exercise of the Call Option by the Offeror; (ii) information on the Offeree, the Group and the Offeror; (iii) Listing Rules implications of the Acquisition, the payment of the Escrow Amount and the exercise of the Call Option by the Offeror; and (iv) recommendation from the Board on the Acquisition and the New Offer. The appendices to this circular set out further information relating to the Acquisition, the payment of the Escrow Amount and the exercise of the Call Option by the Offeror: (i) certain risk factors associated with the Acquisition and the New Offer (Appendix I); (ii) certain financial information on the Group (Appendix II); (iii) certain financial information on the Offeree Group (Appendix III); (iv) unaudited pro forma information of the Group in relation to the exercise of Call Option and the payment of the Escrow Amount (Appendix IV); (v) certain additional general information on the Group (Appendix V); and (vi) a notice of the SGM at which resolutions will be proposed to Shareholders to consider and, if thought fit, to approve, among other things, the revision to the terms of the Acquisition and the New Offer (pages SGM-1 to SGM-2). I. THE ACQUISITION THE NEW OFFER IN NORWAY AND PERU Terms of the New Offer The Offeror and CFGL announced in Oslo, Norway and Lima, Peru and in Singapore on 24 June 2013, and the Company announced on the Announcement Date, that the Offeror intends to make the New Offer in Norway and Peru for all the outstanding Offeree Shares and the Peruvian Securities, respectively. The New Offer will be made at the Offer Price of NOK68.17 (approximately HK$88.62) (or the equivalent amount in US dollars for a Peruvian Security, based on the applicable exchange rate published by Norges Bank on the date the Offeror issues a confirmation through the online system of the Oslo Børs that all conditions for completion of the New Offer have been met or waived) per Offeree Share. The maximum consideration for all Offeree Shares (other than the Offeree Shares currently owned by the Offeror) is NOK4,392.0 million (approximately HK$5,709.6 million). The Offeror has obtained the approval of Oslo Børs and the SMV for the New Offer Document in connection with the launch of the New Offer in accordance with the voluntary offer rules of the Norwegian Securities Trading Act 2007 and the applicable rules in Lima. The New Offer Document has been despatched by the Offeror to the Offeree Shareholders on 16 July

19 LETTER FROM THE BOARD The Offeree is a company listed on the Oslo Børs with a secondary listing on the Lima Stock Exchange and therefore the New Offer has been launched in accordance with the relevant Norwegian and Peruvian laws and regulations. Based on the public information available as at the Latest Practicable Date, there are 70,200,000 Offeree Shares in issue, which are traded on the Oslo Børs or on the Lima Stock Exchange. Based on the Offeree s private placement prospectus dated 10 May 2013, the Offeree has 264,200 outstanding options. As at the Latest Practicable Date, the Offeror holds 5,773,000 Offeree Shares, representing approximately 8.22% of the outstanding Offeree Shares. As disclosed in the Company s announcement dated 26 June 2013 and 27 June 2013, the Offeror has also exercised the Call Option to acquire the Call Option Shares (being 6,295,100 shares in the Offeree and representing approximately 8.97% of the outstanding Offeree Shares as at the Latest Practicable Date) from Veramar. However, the transfer of the Call Option Shares from Veramar to the Offeror has not been effected in accordance with the terms and conditions of the Call Option as at the Latest Practicable Date due to an alleged breach of the Call Option Agreement on the part of Veramar. As a result, the Offeror has commenced arbitration proceedings in Peru against Veramar. Please refer to the section headed III. Exercise of the Call Option in the Letter from the Board of this circular for further information. In addition, the Offeror has received pre-acceptances of the New Offer from Offeree Shareholders holding in aggregate a total of 40,039,247 Offeree Shares, representing approximately 57.04% of the outstanding Offeree Shares and votes in the Offeree. On this basis, the Offeror has control over Offeree Shares and rights to Offeree Shares equal to approximately 65.26% of the Offeree Shares as at the Latest Practicable Date, not including the Call Option Shares. Below is a summary of the terms of the New Offer: Offeror The New Offer and the New Offer Price Grand Success Investment (Singapore) Private Limited, a wholly owned subsidiary of CFGL which in turn is an indirect non-wholly-owned subsidiary of the Company. The Offeror is offering to acquire all outstanding shares in the Offeree (including the Peruvian Securities) on the terms and subject to the conditions and limitations set out in the New Offer Document. The Offeror is offering to pay NOK68.17 (approximately HK$88.62) for each Offeree Share (or the equivalent amount in US$ for each unit of Peruvian Securities, based on the applicable exchange rate published by Norges Bank on the date the Offeror issues a confirmation through the online system of the Oslo Børs ( that all the conditions for completion of the New Offer have been met or waived, which is equivalent to approximately US$11.36 (approximately HK$88.62) in cash for each Offeree Share or each unit of Peruvian Securities representing one Offeree Share, which are tendered in the New Offer. 17

20 LETTER FROM THE BOARD If the Offeror acquires Offeree Shares, Peruvian Securities or rights to acquire such Offeree Shares or Peruvian Securities (in the open market or in privately negotiated transactions or otherwise) at a consideration higher than the New Offer Price before the later of (i) the expiry of the Acceptance Period for the New Offer and (ii) the expiry of the acceptance period in the Second General Offer, or if the offer price in a Second General Offer is increased above the New Offer Price by the Offeror, then all shareholders of the Offeree who have accepted the New Offer for either Offeree Shares or Peruvian Securities shall be compensated accordingly through payment in cash of the surplus amount. Any non-cash element in such higher consideration shall be valued and converted into cash for the purpose of determining the increase of the New Offer Price. For the avoidance of doubt, the foregoing will not apply to any increase in price in a Compulsory Acquisition. Conditions The New Offer will be conditional upon the following conditions having been fulfilled or, as the case may be, waived (save for condition (a) which shall not be waived, all other conditions may be waived) by the Offeror: (a) Valid acceptances having been rendered and remaining valid and binding, and not being subject to any third-party consents in respect of pledges or other rights (or any such consents that have been obtained), in respect of a number of Offeree Shares which (together with any Offeree Shares held by the Offeror) is not less than 50.01% of the Offeree Shares and votes in the Offeree on a Fully Diluted basis. For this purpose, Fully Diluted shall mean all issued Offeree Shares together with all shares which the Offeree would be required to issue if all rights to subscribe for or otherwise require the Offeree to issue additional shares, under any agreement or instrument, existing at or prior to completion of the New Offer, were exercised. 18

21 LETTER FROM THE BOARD (b) The receipt of all applicable competition and antitrust approvals, if required, and no antitrust regulator or body shall have instituted any action or proceeding that would or might: (i) (ii) (iii) make the New Offer void or illegal; require, prevent or delay the divestiture by any of the Enlarged CFGL Group or their respective subsidiaries of all or part of their business or impose any limitation on their ability to conduct their business; or impose any limitation on the ability of any of the Enlarged CFGL Group, the Offeree Group or their respective subsidiaries to conduct, integrate or coordinate their business. Based on a review of publicly available information on the Offeree Group, as of the Latest Practicable Date, the Offeror has not concluded that there are competition or antitrust approvals required for completion of the New Offer. However, this is being analysed further and it cannot be excluded that filings for competition or antitrust approvals will be required or advisable in one or more jurisdictions. The Offeror expects to be able to complete its analysis once further information on the Offeree Group is made available. Further, as at the Latest Practicable Date, the Offeror has no reason to believe that any antitrust regulator or body will institute any action outlined in (i) (iii) above as a result of the New Offer. (c) That all authorisations, consents, clearances and approvals (other than those stated under Condition (b) above) necessary for the completion of the New Offer from relevant governmental authorities having been obtained and such authorisations, consents, clearances and approvals being unconditional and remaining in full force and effect as at the date of satisfaction of the last of the conditions of the New Offer. At the Latest Practicable Date, the Offeror is not aware of any such authorisations, consents, clearances or approvals being necessary. 19

22 LETTER FROM THE BOARD (d) That no event has occurred, or could occur as a result of the Offeror obtaining a controlling interest in the Offeree, which has or can reasonably be expected to have a Material Adverse Effect on business, operations, property, prospects or condition (financial or otherwise) of the Offeree Group, taken as a whole. An event shall be considered as having a Material Adverse Effect if it materially and adversely affects the assets, earnings or solvency of the Offeree Group taken as a whole, provided however that the effects of the following events shall not be deemed to have a Material Adverse Effect: (i) (ii) (iii) any event which has not affected the Offeree Group taken as a whole disproportionately relative to other similar businesses in the industry in which the Offeree Group operates; any event or fact which is known or should reasonably have been known to the Offeror; and any event or fact which should be reasonably foreseen by the Offeror to have a Material Adverse Effect at the commencement of the New Offer. (e) That the business of the Offeree Group, in the period until settlement of the New Offer, has in all material respects been conducted in the ordinary course and in accordance with applicable laws, regulations and decisions of any governmental body. 20

23 LETTER FROM THE BOARD (f) (g) (h) That neither the Offeree nor any of its subsidiaries shall until the settlement of the New Offer have decided or made public its intention to: (i) undertake any material acquisitions or material disposals (including by way of sale of shares in a subsidiary) or enter into binding agreements for such acquisitions or disposals; (ii) enter into any contracts or agree to amend any existing contracts which will materially change the business of the Offeree Group taken as a whole; (iii) make or agree to any material change of the terms of employment of any member of senior management which would cause the terms of employment of such employee to deviate materially from customary terms of employment of management of comparable companies; (iv) make any proposal or pass any resolution to (aa) change its share capital or number of Offeree Shares, (bb) make any distribution to its shareholders, or (cc) issue any financial instrument giving a right to subscribe for Offeree Shares; or (v) enter into any contracts which are outside normal commercial terms at the time when they are entered into. That the CFGL Shareholders and Shareholders of the Company duly approve, in their respective general meetings of shareholders, the New Offer and the Acquisition. Shareholders holding over 50% of the voting rights in CFGL and the Company have provided irrevocable undertakings that they will vote for approval of the aforesaid matters in their respective general meetings. That all conditions precedent set out in the Financing Agreement have been met or waived. As soon as each of the Conditions above has been met, waived or failed to be met, the Offeror will issue a notification to that effect through the online information system of Oslo Børs. 21

24 LETTER FROM THE BOARD Financing of the New Offer The Acquisition will be financed by: (a) external bank financing from Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (trading as Rabobank International), Hong Kong Branch and DBS Bank (Hong Kong) Limited for up to USD401,400,000 (approximately HK$3,130.9 million pursuant to a financing agreement entered into on 12 July 2013 (the Financing Agreement )), subject to customary conditions precedent including (i) delivery of duly executed transaction documents, corporate certificates and legal opinions, (ii) correctness of representations and warranties, (iii) no default, (iv) all necessary consents being obtained and filings having been made (if any), (v) no material term or condition of the New Offer having been waived without the consent of the lenders, and (vi) no material adverse effect having occurred with respect to the business, prospects or financial condition of any member of the CFGL Group or the CFGL Group as a whole, their ability to perform their obligations under the agreement or the lenders rights, (b) (c) proceeds from the CFGL Rights Issue, and other internal resources of CFGL. The financing resources described in (a) (c) above will in aggregate be sufficient to fully finance the Acquisition. It is expected that the conditions of the Financing Agreement will be met and the funds will be available for draw-down, on or about 23 August Although the Offeror is confident that the conditions of the Financing Agreement will be met and the funds will be available in a timely manner, there can be no assurance of this. Accordingly, completion of the New Offer is subject to all conditions precedent set out in the Financing Agreement having been met or waived. 22

25 LETTER FROM THE BOARD Acceptance Period The New Offer can be accepted from and including 17 July 2013 to and including 31 July 2013 at 9:00 p.m. CET/ 3:00 p.m. PET. Subject to approval by Oslo Børs, the Offeror may in its sole discretion extend the Acceptance Period (one or more times) so that the aggregate Acceptance Period amounts up to a total of ten weeks (in which case the Acceptance Period would end at the latest on 25 September 2013 at 9:00 p.m. CET/ 3:00 p.m. PET). Any extension of the Acceptance Period will be announced by a notification to that effect through the online information system of Oslo Børs before the expiry of the prevailing Acceptance Period. Any acceptance received may be revoked in whole or in part within the Acceptance Period or, if the New Offer has not been completed and settled on or before 3 October 2013, from 4 October 2013 until such time that the Offeror issues a notice confirming that all the Conditions for the New Offer have been met or waived, by submitting a written withdrawal to the relevant receiving agent in Norway or Peru. Long Stop Date Settlement The Offeror expects that the conditions for completion of the New Offer will be met no later than 23 August 2013; however, there is no assurance of this or that the conditions will be met or waived, as applicable. In the event that the conditions for closing of the New Offer have not been met or waived by 9:00 p.m. CET/ 3:00 p.m. PET on 14 October 2013, the New Offer will not be completed and the Offeree Shareholders who have tendered their Offeree Shares will be released from their acceptances of the New Offer. If the Acceptance Period is extended, the Long Stop Date shall be deemed to be extended accordingly and the latest possible Long Stop Date will be at 9:00 p.m. CET/ 3:00 p.m. PET on 9 December Settlement of the Norway VGO will be made in Norwegian Krone (NOK) for the Offeree Shares. Settlement of the Peruvian Securities will be made in US$ due to the Peruvian settlement standards. As the New Offer Price is calculated in NOK, any payment in US$ will be based on the applicable exchange rate published by Norges Bank on the date the Offeror issues a confirmation through the online information system of Oslo Børs ( that all the conditions for completion of the New Offer have been met or waived. 23

26 LETTER FROM THE BOARD Settlement will be made as soon as reasonably possible, and not later than three weeks after the date the Offeror makes an announcement that all conditions for completion of the New Offer have been met or waived, as applicable. Settlement is expected to take place in late August 2013; however no assurance regarding the actual settlement date can be given. However, the last possible settlement date will be 4 November 2013, equalling three weeks calculated from the Long Stop Date. If the Acceptance Period, and thus the Long Stop Date, is extended, the latest possible settlement date will be 30 December Peruvian Securities Revision of the terms of the New Offer To the extent that the Peruvian Securities are depositary receipts and are linked to a beneficial ownership of the underlying Offeree Shares they represent, any acceptance of the New Offer in respect of the Peruvian Securities will also be regarded as an acceptance of the transfer of such beneficial ownership from the accepting holder of Peruvian Securities to the Offeror. Accordingly, in such cases, once a holder of Peruvian Securities has submitted a Peruvian acceptance form as set out in the New Offer Document, he may not, unless and until the acceptance is revoked or the New Offer otherwise lapses, transfer, pledge, encumber, dispose of or take any other action with respect to the beneficial ownership in the corresponding Offeree Shares. The tender of a Peruvian Security (to the extent such Peruvian Security is a depositary receipt) in the New Offer makes the corresponding Offeree Share ineligible for tender. In such cases, the Offeror will disregard any Norwegian acceptance form received for Offeree Shares which are held in the Norwegian Central Securities Depository and which relate to Peruvian Securities for which tenders have been received. If, after the date that the Offeror has despatched the New Offer Document for the Norway VGO and the First Lima VGO, the Offeree decides to (a) change the Offeree s share capital, the number of Offeree Shares issued (including, without limitation, as a result of existing or new share options or similar rights to acquire Offeree Shares being exercised) or the par value of the Offeree Shares, (b) resolve to distribute dividend or other distributions to the Offeree Shareholders, (c) issue instruments which give the right to require Offeree Shares to be issued, or (d) announce that the Offeree has decided on any such measures, the Offeror may adjust the New Offer Price and/or other terms and conditions of the New Offer to compensate for the economic effects of such decisions. If such adjustments are made, acceptances of the Offeree Shares received prior to the adjustments shall be deemed an acceptance of the New Offer as revised. 24

27 LETTER FROM THE BOARD Subject to approval by Oslo Børs, the Offeror reserves the right to amend the terms of the New Offer in its sole discretion at any time during the Acceptance Period, including without limitation, the New Offer Price, provided however that the Offeror may not amend the New Offer in a manner which is disadvantageous to the Offeree Shareholders. Any amendments made are binding on the Offeror (a) as to the Norway VGO, once a notice is published by the Offeror as soon as after the Conditions have been fulfilled or waived in accordance with the Norwegian rules and regulations, and (b) as to the First Lima VGO, once a notice is filed with the SMV. Subject to the terms of the Dyer-Weilheim Pre-acceptance, any acceptance (unless withdrawn within the Acceptance Period) will be binding even if the Acceptance Period and/or the Long Stop Date is extended and/or the New Offer is otherwise amended in accordance with the terms of the Offer Document. Offeree Shareholders who have already accepted the New Offer in its original form or with previous amendments will be entitled to any benefits arising from such amendments. Pre-Acceptances As at the Latest Practicable Date, Offeree Shareholders representing in aggregate approximately 57.04% of the outstanding shares and votes in the Offeree, have irrevocably undertaken to accept the New Offer in respect to their Offeree Shares. The pre-accepting shareholders include DCH (19,098,000 Offeree Shares, or approximately 27.21% of the shareholding interest in the Offeree), Weilheim (3,485,930 Offeree Shares, or approximately 4.97% of the shareholding interest in the Offeree), Cermaq (13,620,492 Offeree Shares, or approximately 19.40% of the shareholding interest in the Offeree), South Winds AS (1,489,750 Offeree Shares, or approximately 2.12% of the shareholding interest in the Offeree) and Ocean Harvest S.L. (2,345,075 Offeree Shares, or approximately 3.34% of the shareholding interest in the Offeree). 25