(Incorporated in Singapore) (Company Registration No W)

Transcription

1 (Incorporated in Singapore) (Company Registration No W) MEMORANDUM OF UNDERSTANDING IN RELATION TO, INTER ALIA, THE PROPOSED ACQUISITION OF THE ENTIRE ISSUED AND PAID-UP SHARE CAPITAL OF CANASEA OIL AND GAS LTD 1. INTRODUCTION The Board of Directors (the Board ) of CCM Group Limited (the Company, and together with its subsidiaries, the Group ) wishes to announce that the Company has on 14 December 2012, entered into a non-legally binding memorandum of understanding (the MOU ) with Canasea Petrogas Group Holdings Limited (the Vendor ) in connection with the proposed acquisition (the Proposed Acquisition ) by the Company of the entire issued share capital of Canasea Oil and Gas Ltd (the Target ) to form the enlarged listed company (the Enlarged Listco ). 2. INFORMATION ON THE TARGET AND THE VENDOR The Target is a company having its registered address in Saskatchewan, Canada, and is extra-provincially registered in Ontario, Canada. The Target is the holder of petroleum and natural gas concessions (the Concessions or the Listing Assets ), and is primarily engaged in oil and gas exploration, exploitation, and production, sales, trade and related activities in Canada. The Vendor is a company incorporated in the British Virgin Islands and it holds 85% of the issued share capital of the Target. The Vendor has undertaken to the Company to procure the sale of the remaining 15% of the issued share capital of the Target held by another shareholder in furtherance of the Proposed Acquisition. The main shareholder of the Vendor is (Jerry) Zhenyu Fang who holds approximately 84.71% of the issued share capital of the Vendor. 3. PROPOSED ACQUISITION Pursuant to the MOU, the consideration for the Proposed Acquisition (the Consideration ) shall be based on the valuation of the Concessions ( Target Valuation ) to be set out in a report to be prepared pursuant to Practice Note 4C Disclosure Requirements for Mineral, Oil and Gas Companies of the Listing Manual Section B: Rules of Catalist ( Catalist Rules ) of the Singapore Exchange Securities Trading Limited (the SGX-ST ) from a Qualified Person (as defined in the Catalist Rules). The Consideration shall be satisfied by the issuance of new ordinary shares of the Company (the Consideration Shares ) to the Vendor and the other shareholder of the Target (if applicable). The price at which the Consideration Shares are to be issued shall be as agreed between the parties in due course, taking into consideration the traded market price (or such price upon the consolidation of shares of the Company) for each ordinary share in the Company.

2 The number of new shares in the Company to be issued to the Vendor and the other shareholder of the Target (if applicable and in proportion to their existing shareholding of the Target) shall be such that subsequent to such issuance, the percentage of the enlarged number of shares of the Company held by the Vendor and the other shareholder of the Target (if applicable) shall be: Target Valuation x 100% Target Valuation + Company Valuation where Company Valuation refers to the value to be ascribed to the Company, based on the Target Valuation. The Company Valuation shall be computed as follows: (i) (ii) (iii) If the Target Valuation is S$100 million or lower, the Company Valuation shall be set at S$5 million + the net tangible assets of the Company and its subsidiaries ( Company NTA ); If the Target Valuation is more than S$100 million and up to S$200 million, the Company Valuation shall be S$(0.05 multiplied by 100) million + S$(0.03 multiplied by the excess of Target Valuation over S$100 million) million + Company NTA; and If the Target Valuation is more than S$200 million, the Company Valuation shall be S$(0.05 multiplied by 100) million + S$(0.03 multiplied by 100) million + (0.02 multiplied by the excess of Target Valuation over S$200 million) million + Company NTA. For illustration purposes only, assuming that the Company NTA is S$3 million, and (a) If the Listing Asset is valued at S$100 million, the Company shall be valued at S$5 million + $3 million = S$8 million. (b) (c) If the Listing Asset is valued at S$200m, the Company shall be valued at S$(5+3) million + $3 million = S$11 million. If the Listing Asset is valued at S$300 million, the Company shall be valued at S$(5+3+2) million + $3 million = S$13 million. The aforesaid figures are in no way indicative of the Target Valuation as that has yet to be assessed by a Qualified Person (as defined in the Catalist Rules). As the relative figures under Chapter 10 of the Catalist Rules of the SGX-ST is expected to exceed 100%, and given that the completion of the Proposed Acquisition will result in a change in control of the Company, the Proposed Acquisition constitutes a Very Substantial Acquisition or Reverse Takeover as defined in Chapter 10 of the Catalist Rules. Accordingly, the Proposed Acquisition and the proposed issuance of the Consideration Shares are subject to the approval of shareholders of the Company (the Shareholders ) and the receipt by the Company of a listing and quotation notice by the SGX-ST pursuant to the Catalist Rules for the Consideration Shares. 4. PROPOSED DISPOSAL It is further contemplated that, concurrently with the completion of the Proposed Acquisition, all of the Company s existing businesses and undertakings shall be disposed to Mr. Liew Sen Keong (the Proposed Disposal, and together with the Proposed Acquisition, the Proposed Transactions ), a director and controlling shareholder of the Company, or such other party as Mr. Liew Sen Keong may direct, for a consideration that equals to the NTA of the Group ( Disposal Consideration ), subject to the opinion of an independent financial adviser to be appointed. The Parties may vary the Disposal

3 Consideration by mutual consent after an independent financial adviser has issued its opinion. The Proposed Disposal is an interested person transaction and will be subject to the approval of the Shareholders pursuant to Chapter 9 of the Catalist Rules. The Proposed Acquisition and the Proposed Disposal will be inter-conditional and both transactions shall complete concurrently. 5. RATIONALE FOR THE PROPOSED TRANSACTIONS 5.1 Proposed Acquisition The Directors are of the view that the Proposed Acquisition presents an opportunity for the Company to acquire a new operating business with growth potential in an emerging market. In addition, the Proposed Acquisition would have the potential to significantly increase the market capitalisation of the Company and potentially widen the investor base for the Company, thereby enabling the Company to attract more extensive analyst coverage, leading to an overall increase in investor interest and trading. 5.2 Proposed Disposal The Directors are of the view that post-acquisition of the Target, the main business of the Enlarged Listco will be in the oil and gas industry. The existing businesses and undertakings of the Company is in the construction industry which is distinct from the oil and gas industry and no synergies are expected to be derived. The Proposed Disposal would allow the Enlarged Listco to focus on its core competency, Given the foregoing, the Board is of the view that the Proposed Transactions and the resultant change of business will likely enhance shareholder value for the Company. 6. OTHER PRINCIPAL TERMS OF THE MOU 6.1 Conditions Precedent Completion of the Proposed Acquisition shall be conditional on the fulfillment of, inter alia, the following conditions:- (a) (b) (c) (d) (e) (f) (g) execution of the definitive sale and purchase agreement ( Definitive SPA ); satisfactory due diligence (whether legal, financial, contractual, tax or otherwise) by the Company and the Target on each other; no material or adverse changes to the Company s or the Target s financial conditions or operations; the receipt by the Company of a technical report in respect of the mining sites operated by the Target in a form and substance satisfactory to the SGX-ST from a geological or technical consultant acceptable to the SGX-ST and confirming such matters as may be required by the SGX-ST; the execution of the definitive agreement for the Proposed Disposal (the Disposal Agreement, and together with the Definitive SPA, the Definitive Agreements ) and the concurrent completion of the Proposed Disposal; the Securities Industry Council granting the proposed new controlling shareholder and parties acting in concert with it, a waiver from having to make a mandatory general offer pursuant to the Singapore Code on Takeovers and Mergers following completion of the Proposed Acquisition (the Whitewash Waiver ); an opinion from an independent financial adviser of the Company expressing an opinion in support of the resolution to be passed in relation to a Whitewash Waiver

4 to be sought from the Securities Industry Council and the Proposed Disposal as an interested person transaction; (h) (i) (j) (k) (l) the approvals by the respective board of directors and shareholders of the Company and the Target having been obtained; the issue of a listing and quotation notice being obtained from the SGX-ST for the listing and quotation of the Consideration Shares on Catalist; the allotment, issue and subscription of the Consideration Shares not being prohibited by any statute, order, rule, regulation, directive or request promulgated or issued after the date of the Definitive SPA by any legislative, executive or regulatory body or authority of Singapore, Canada or elsewhere, which is applicable to the Company and/or the Target (including the Listing Assets); all necessary third party, governmental and regulatory consents, approvals and waivers where required for the transactions contemplated hereunder having been obtained, and such consents, approvals and waivers not having been amended or revoked before completion date; and no delisting of the existing shares of the Company from Catalist prior to the date of completion of the Proposed Acquisition. 6.2 Exclusivity This MOU will terminate on the earlier of (a) seven (7) months from 14 December 2012, and (b) the execution of the Definitive SPA, or on any other date as may be mutually agreed between the Company and the Vendor in writing (the Term ). The Company and the Vendor have agreed that they shall not, during the Term of this MOU, take any action to consider, solicit, initiate, encourage or assist the submission of any proposal, negotiation or offer from any person or entity relating to other reverse takeover transactions. 7. FURTHER INFORMATION The Company shall make further announcements on the Proposed Transactions, as required by Chapters 9 and 10 of the Catalist Rules, upon the execution of the Definitive Agreements, or as and when there are material updates to the Proposed Transactions. 8. INTEREST OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS Mr. Liew Sen Keong is a Director and controlling shareholder of the Company and is interested in the Proposed Disposal for the reasons stated in paragraph 4 above. Ms. Chan Pui Yee is a Director and substantial shareholder of the Company and the spouse of Mr. Liew Sen Keong and hence, is deemed interested in the Proposed Disposal. Mr Chan Tien Chih is a Director and substantial shareholder of the Company and the brother of Ms Chan Pui Yee and the brother-in-law of Mr Liew Sen Keong and hence, is deemed interested in the Proposed Disposal. Save as aforesaid, none of the Directors or substantial shareholders of the Company has any interest, direct or indirect, in the Proposed Transactions, other than through their respective shareholdings in the Company. 9. CAUTION IN TRADING Shareholders are advised to exercise caution in trading their shares as there is no certainty or assurance as at the date of this announcement that (i) the Definitive Agreements will be entered into; (ii) the terms of the Proposed Transactions will not change from that in the MOU; and (iii) the Proposed Transactions will proceed.

5 Shareholders are advised to read this announcement and any further announcements made by the Company carefully. Shareholders should consult their stockbrokers, bank managers, solicitors or other professional advisers if they have any doubts about the actions they should take. 10. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information given in this announcement, save for the information pertaining to the Target and the Vendor, and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this announcement constitutes full and true disclosure of all material facts about the Proposed Transactions, and the Directors are not aware of any facts the omission of which, would make any statement in this announcement misleading. Where information in this announcement has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from these sources and/or reproduced in this announcement in its proper form and context. BY ORDER OF THE BOARD Liew Sen Keong Executive Chairman and CEO 14 December 2012 This announcement has been prepared by the Company and its contents have been reviewed by the Company's sponsor, PrimePartners Corporate Finance Pte. Ltd (the "Sponsor") for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the "SGX-ST"). The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr Mark Liew, Managing Director, Corporate Finance, at 20 Cecil Street, #21-02 Equity Plaza, Singapore , telephone (65)