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. (incorporated in the Cayman Islands with limited liability) (Stock Code: 3886) HONG KONG HEALTH CHECK AND LABORATORY HOLDINGS COMPANY LIMITED * (Incorporated in Bermuda with limited liability) (Stock Code: 397) DISCLOSEABLE TRANSACTION: SHAREHOLDERS AGREEMENT On 9 April 2009, National Charm (an indirectly wholly-owned subsidiary of Town Health), Fair Jade (an indirectly wholly-owned subsidiary of HK Health Check) and the JV Partner entered into the Shareholders Agreement in relation to, among other matters, the investment and management of the JV Company. The JV Company is formed to be engaged in the business of holding and management of the Property. The transaction contemplated by the Shareholders Agreement constitutes a discloseable transaction for each of Town Health and HK Health Check under Chapter 14 of the Listing Rules. THE SHAREHOLDERS AGREEMENT On 9 April 2009, National Charm (an indirectly wholly-owned subsidiary of Town Health), Fair Jade (an indirectly wholly-owned subsidiary of HK Health Check) and the JV Partner entered into the Shareholders Agreement in relation to, among other matters, the investment and management of the JV Company. The principal terms of the Shareholders Agreement are set out below. Parties (i) (ii) National Charm (an indirectly wholly-owned subsidiary of Town Health); Fair Jade (an indirectly wholly-owned subsidiary of HK Health Check); (iii) the JV Partner; and (iv) the JV Company. * For identification purpose only - -
As at the date of this announcement, Town Health is interested in approximately 8.77% of the issued share capital of HK Health Check and 9.89% of the issued share capital of Core Healthcare Investment Holdings Limited (stock code: 8250), a subsidiary of HK Health Check. To the best of the knowledge, information and belief of the directors of Town Health having made all reasonable enquiry, (i) the principal activity of the JV Partner is investment holding and (ii) the JV Company, the JV Partner and its beneficial owner are third parties independent of and not connected with Town Health and its connected persons. To the best of the knowledge, information and belief of the directors of HK Health Check having made all reasonable enquiry, (i) the principal activity of the JV Partner is investment holding and (ii) the JV Company, the JV Partner and its beneficial owner are third parties independent of and not connected with HK Health Check and its connected persons. The JV Company is a newly established company and has not commenced business other than lodging the tender for the Property. As at the date of this announcement and immediately prior to the signing of the Shareholders Agreement, the JV Company had one issued share of HK$1 and was wholly-owned by the JV Partner. Business scope The JV Company is formed to be engaged in the business of holding and management of the Property. The Property is a seven-storey (including ground floor) industrial building known as Informtech Industrial Centre ( ) situated at No. 10-12 Yuen Shun Circuit, Shatin, New Territories, Hong Kong with a site area of 19,117 sq. ft.. The Property has a total gross area of approximately 95,582 sq. ft.. The JV Company won the tender for the acquisition of the Property at a consideration of HK$121,000,000 on 26 March 2009. An initial deposit of HK$3,000,000 has been paid by the JV Company at the time when the JV Company submitted the tender on 17 March 2009. In accordance with the tender document, the JV Company shall pay a further deposit of HK$9,100,000 to the vendor of the Property on or before 9 April 2009. The remaining balance of HK$108,900,000 shall be paid at completion of the acquisition of the Property which will take place on 30 April 2009. Vacant possession of the Property will be delivered to the JV Company at completion of the acquisition. To the best of the knowledge, information and belief of the directors of Town Health having made all reasonable enquiry, the vendor of the Property and its beneficial owners are third parties independent of and not connected with Town Health and its connected persons. To the best of the knowledge, information and belief of the directors of HK Health Check having made all reasonable enquiry, the vendor of the Property and its beneficial owners are third parties independent of and not connected with HK Health Check and its connected persons. - 2 -
Total investment amount Immediately after the signing of the Shareholders Agreement, National Charm, Fair Jade and the JV Partner subscribed for 49 shares, 20 shares and 30 shares of the JV Company respectively, in each case, for cash at par. Together with the one share of the JV Company owned by the JV Partner immediately prior to the signing of the Shareholders Agreement, the JV Company became owned as to 49%, 20% and 31% by National Charm, Fair Jade and the JV Partner respectively after such subscription. Each of National Charm, Fair Jade and the JV Partner have agreed to inject an aggregate of HK$127,999,900 to the JV Company on or before 30 April 2009 by way of shareholders loan. Set out below is a breakdown of the capital injected and to be injected by each of National Charm, Fair Jade and the JV Partner: Total amount of fund to be Subscription Amount of injected to Name of Shareholder money shareholders loan the JV Company National Charm HK$49 HK$62,719,95 HK$62,720,000 (Note 2) Fair Jade HK$20 HK$25,599,980 HK$25,600,000 The JV Partner HK$3 HK$39,679,969 HK$39,680,000 (Note 1) (Note 3) Total: HK$100 HK$127,999,900 HK$128,000,000 Notes: 1. The JV Partner paid HK$1 for the subscription of 1 share of the JV Company at the incorporation of the JV Company. 2. On 9 April 2009, National Charm injected HK$9,100,000 to the JV Company by way of shareholder s loan. 3. Prior to the signing of the Shareholders Agreement, the JV Partner has advanced HK$3,000,000 to the JV Company by way of shareholder s loan. Immediately after completion of the subscription, the JV Company will be accounted for as an associated company in the consolidated accounts of each of Town Health and HK Health Check. The total investment amount was determined pursuant to arm s length negotiations between National Charm, Fair Jade and the JV Partner based on the purchase price and the related acquisition costs of the Property. - 3 -
Each of Town Health Group and HK Health Check Group will finance the capital injection by internal resources. Unless otherwise unanimously agreed by National Charm, Fair Jade and the JV Partner, the shareholders loan will be unsecured and shall carry interest at such rate as National Charm, Fair Jade and the JV Partner may from time to time agree. The shareholders loan shall be repaid to the shareholders on an equal pro-rata basis. Future funding of the JV Company will be financed, depending on the then circumstances, by way shareholder s loan, equity or debt or bank financing. As at the date of this announcement, other than the capital injection as mentioned above, there is no capital commitment or contractual commitment on the part of Town Health Group and HK Health Check Group regarding the JV Company. The capital injected to the JV Company will be used to fund the purchase price and the related acquisition costs of the Property. Board composition The board of directors of the JV Company shall comprise three directors. Each of National Charm, Fair Jade and the JV Partner has the right to nominate one director to the board of directors of the JV Company for so long as such shareholder of the JV Company owns 20% or more of the issued share capital of the JV Company. Duration of the Shareholders Agreement The Shareholders Agreement shall terminate in the event that all the shares of the JV Company are held beneficially by one shareholder. REASONS FOR AND BENEFITS OF THE TRANSACTION Town Health Group is principally engaged in the provision of management service for private medical and dental practices and a one stop shop integrated healthcare service to the public in Hong Kong. HK Health Check Group is principally engaged in the establishment of health centres in Hong Kong and the acquisition of established health check centres in Hong Kong for the provision of health check, advanced diagnostic imaging services, day care observation services and medical laboratory related services to the public. By forming the JV Company, Town Health Group and HK Health Check Group can have a share of the interest in the Property which the directors of each of Town Health and HK Health Check considered as a valuable investment to Town Health Group and HK Health Check Group. Town Health Group and HK Health Check Group plan to centralize all of their respective divisions in the Property for cost saving and effective management purposes. Subject to the negotiations between the parties and compliance with the Listing Rules, Town Health may acquire HK Health Check s and the - 4 -
JV Partner s shareholding interests in, and shareholder s loan to, the JV Company. As at the date of this announcement, no specific terms regarding such transaction have been agreed between the parties. In addition, having (i) made reference to the recent sale prices of non-residential premises in the New Territories; and (ii) considered the fact that the Property constitutes the whole building which is rare in the property market, the directors of each of Town Health and HK Health Check considered the purchase price of the Property to be fair and reasonable. The directors of Town Health are of the view that the transaction contemplated by the Shareholders Agreement is in the interest of the Town Health Group and the terms of the transaction (including the terms of the Shareholders Agreement) are on normal commercial terms, which are fair and reasonable and in the interests of the shareholders of Town Health as a whole. The directors of HK Health Check are of the view that the transaction contemplated by the Shareholders Agreement is in the interest of the HK Health Check Group and the terms of the transaction (including the terms of the Shareholders Agreement) are on normal commercial terms, which are fair and reasonable and in the interests of the shareholders of HK Health Check as a whole. DISCLOSEABLE TRANSACTION The transaction contemplated by the Shareholders Agreement constitutes a discloseable transaction for each of Town Health and HK Health Check under Chapter 14 of the Listing Rules. DEFINITIONS Unless otherwise specified, the following terms have the following meanings in this announcement: Fair Jade HK Health Check HK Health Check Group Hong Kong JV Company Fair Jade Group Limited, a company incorporated in the British Virgin Islands with limited liability and an indirectly wholly-owned subsidiary of HK Health Check Hong Kong Health Check and Laboratory Holdings Company Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange HK Health Check and its subsidiaries Hong Kong Special Administrative Region of the People s Republic of China Profit Sources Limited, a company incorporated in Hong Kong with limited liability on 26 February 2009 and is wholly owned by the JV Partner prior to the signing of the Shareholders Agreement - 5 -
JV Partner Listing Rules National Charm Property Stock Exchange Shareholders Agreement Town Health Town Health Group HK$ Hoarder Rich Investments Limited, a company incorporated in the British Virgin Islands with limited liability the Rules Governing the Listing of Securities on the Stock Exchange National Charm Holdings Limited, a company incorporated in the British Virgin Islands with limited liability and an indirectly whollyowned subsidiary of Town Health all that piece or parcel of ground situate and lying and being at Sha Tin New Town, New Territories and registered in Land Registry as Sha Tin Lot No. 282 together with all messuages erections and buildings thereon know as Informtech Industrial Centre ( ), Sha Tin, New Territories, Hong Kong The Stock Exchange of Hong Kong Limited the shareholders agreement dated 9 April 2009 and entered into by National Charm, Fair Jade, the JV Partner and the JV Company Town Health International Holdings Company Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Stock Exchange Town Health and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong By order of the board of Town Health International Holdings Company Limited Cho Kwai Chee Executive director On behalf of the board of Hong Kong Health Check and Laboratory Holdings Company Limited Fung Yiu Tong, Bennet Chairman Hong Kong, 9 April 2009 As at the date of this announcement, the board of directors of Town Health comprises three executive directors, namely Miss Choi Ka Yee, Crystal, Dr. Cho Kwai Chee and Dr. Hui Ka Wah, Ronnie JP, one non-executive director, namely Dr. Choi Chee Ming JP, and three independent non-executive directors, namely Mr. Chan Kam Chiu, Mr. Wai Kwok Hung JP and Mr. Ho Kwok Wah, George. At the date of this announcement, the board of directors of HK Health Check comprises seven executive directors, namely Dr. Fung Yiu Tong, Bennet, Mr. Lee Chik Yuet, Dr. Cho Kwai Chee, Dr. Hui Ka Wah Ronnie JP, Mr. Cho Kwai Yee, Kevin, Miss Choi Ka Yee, Crystal and Mr. Siu Kam Chau and three independent non-executive directors namely Mr. Chan Chi Yuen, Mr. Lo Chun Nga and Mr. Chik Chi Man. - 6 -