T h e St o c k E x c h a n g e o f H o n g K o n g L i m i t e d t a k e s n o re s p o n s i b i l it y f o r t h e
c o n t e n t s o f t hi s a n n o u n c e m e n t , m a k e s n o re p re s e n t a t i o n a s t o it s a c c u r a c y o r
completeness and expressly discla ims any liability whatsoever for any loss
h o ws o e v e r a r i s i n g f ro m o r i n re l i a n c e u p o n t h e w h ol e o r a n y p a r t of t h e
contents of this announcement.
H UNG F UN G G RO UP H O LDING S LIM ITED
雄豐集團控股有限公司*
(incorporated in Bermuda with limited liability)
P R O P O S E D D E B T R E S T R U C T U R I N G,
D E S PAT C H O F C I R C U L A R ,
I N D E P E N D E N T A C C O U N TA N T ' S R E P O RT A N D
C O N D I T I O N A L A P P R O VA L O F R E S U M P T I O N P R O P O S A L
The circular containing details of the proposed debt restructu ring of the
Company will be despatched to the Shareholders on 26th April, 2002. The
Circular contains, among other things, information on the pro forma unaudited
adjusted consolidated net tangible assets of the Group and the expected
t i m e t a b l e o f t h e O p e n O f f e r a s s e t o u t b e l o w.
The Directors further announce updated information on the Group in response to
the Report of the Independent Accountant. The Company is pleased to announce
that the Resumption Proposal has been conditionally approved b y the Listin g
Committee of the Stock Exchange.
Reference is made to the press announcements of Hung Fung Group Holdings
L i m i t e d ( t h e " C o m p a n y " ) d a t e d 2 2 n d F e b r u a r y, 2 0 0 2 , 1 4 t h M a r c h , 2 0 0 2 a n d 1 2 t h
1
HUNG FUNG - Announcement
Hong Kong, 25th April, 2002
April, 2002 in relation to the proposed debt restructuring of the Compa ny
involving, among other things, a subscription of new Shares, an Open Offer with
assured allotments of three Offer Shares for ever y two existing Shares held,
compromise of debts, application for a whitewash waiver and increase in
authorised share capital. Capitalised terms used herein have the same meanings
as defined in the announcements unless otherwise stated.
CIRCULAR
The Company announce that copies of the circular ("Circular") containing, inter
alia, the letter of advice from Equitas Capital Limit ed to the independent board
c o m m i t t e e o f t h e C o m p a n y o n t h e R e s t r u c t u r i n g P r o p o s a l a n d t h e Wa i v e r ,
financial information on the Group, details of the Settlements, and a notice of
t h e s p e c i a l g e n e r a l m e e t i n g o f t h e C o m p a n y t o b e c o n v e n e d f o r M o n d a y, 1 3 t h
M a y, 2 0 0 2 , w i l l b e d e s p a t c h e d t o S h a r e h o l d e r s o n 2 6 t h A p r i l , 2 0 0 2 .
The Company wish to draw the attention of Shareholders to the information set
o u t b e l o w, w h i c h h a s b e e n i n c l u d e d i n t h e C i r c u l a r.
F I N A N C I A L I N F O R M AT I O N
Set out below is the pro forma state ment of unaudited adjusted consolidated net
tangible assets of the Group based on the audited consolidated deficiency in
assets of the Group as at 31st March, 2001 and adjusted as follows:
HK$' million
Audited consolidated deficiency in assets of
the Group as at 31st March, 2001
(69.6 )
Unaudited consolidated loss of the Group for
t h e s i x m o n t h s e n d e d 3 0 t h S e p t e m b e r, 2 0 0 1
(25.1 )
Unaudited consolidated deficiency in assets
o f t h e G r o u p a s a t 3 0 t h S e p t e m b e r, 2 0 0 1
(94.7 )
Revaluation deficit (Note 2)
(6.6 )
2
HUNG FUNG - Announcement
Hong Kong, 25th April, 2002
Adjusted consolidated deficiency in assets
before the Restructuring Proposal and the Settlements
Add:
Less:
(101.3 )
Indebtedness waived pursuant to the
Restructuring Proposal (Note 3)
70.4
Proceeds from the Open Offer (Note 5)
37.3
Proceeds from the Subscription
30.0
Reduction of indebtedness pursuant
to the Settlements (Note 4)
16.2
Estimated professional fees and expenses in
connection with the Restructuring Proposal
(7.0 )
Pro forma unaudited adjusted consolidated
net tangible assets of the Group after completion
of the Restructuring Proposal and Settlements
45.6
HK$
Pro forma unaudited adjusted consolidated deficiency
in assets per Share prior to completion of the
Restructuring Proposal and Settlements (Note 5)
(0.041 )
Pro forma unaudited adjusted consolidated net
tangible assets per Share upon completion of the
Restructuring Proposal and Settlements (Note 6)
0.0044
Notes:
1.
The pro forma unaudited adjusted consolidated net tangible assets prepared
above does not take into account the effect upon conversion of the
outstanding Options, Existing Convertible Note, the Convertible Bonds and
the New Convertible Note to be issued.
2.
The carrying value of the leasehold land and buildings and the constructio n
3
HUNG FUNG - Announcement
Hong Kong, 25th April, 2002
i n p r o g r e s s o f t h e G r o u p a s a t 2 8 t h F e b r u a r y, 2 0 0 2 a m o u n t e d t o H K $ 8 5 . 6
m i l l i o n a n d n i l r e s p e c t i v e l y, a n d w e r e r e v a l u e d b y K n i g h t F r a n k , a n
i n d e p e n d e n t f i r m o f p r o f e s s i o n a l v a l u e r s , a t 2 8 t h F e b r u a r y, 2 0 0 2 a t
approximately HK$124.0 million in aggregate.
The revalued amounts of the leasehold land and buildings of the Group
a m o u n t e d t o H K $ 9 5 . 0 m i l l i o n a s a t 2 8 t h F e b r u a r y, 2 0 0 2 a s s e t o u t i n
A p p e n d i x I I o f t h e C i r c u l a r. I n t h e o p i n i o n o f t h e D i r e c t o r s , c e r t a i n o f
these leasehold land and buildings were impair ed as they had been left
vacant and currently not been used by the Group and provisions for
impairment of HK$16.0 million were made as at 31st March, 2001. The
revaluation deficit of HK$6.6 million as set out in the pro forma statement
of unaudited adjusted consolidated net tangible assets, represents the
shortfall of the revalued amounts of HK$95.0 million after deducting the
aforesaid provisions for impairment of HK$16.0 million, under the then
carrying values of leasehold land and buildings of HK$85.6 mi llion as at
2 8 t h F e b r u a r y, 2 0 0 2 .
T h e c o n s t r u c t i o n i n p r o g r e s s w i t h n o c a r r y i n g v a l u e a s a t 2 8 t h F e b r u a r y,
2002 had been revalued at HK$29.0 million by Knight Frank as set out in
A p p e n d i x I I o f t h e C i r c u l a r. I n t h e o p i n i o n o f t h e D i r e c t o r s , t h e a f o r e s a i d
construction in progress were impaired as development of which had been
put on hold by the Group. As a result, the corresponding revaluation
surplus of approximately HK$29.0 million has not been incorporated in the
pro forma statement of unaudited adjusted consolidated net tangible assets.
3.
B e i n g t h e To t a l C o m p r o m i s e d D e b t o f H K $ 9 9 . 7 m i l l i o n a f t e r n e t t i n g o f f t h e
principal amount of the Convertible Bonds of HK$6.5 million to be issued,
HK$20.0 million to be repaid to the Bank Group by cash and the interes t
a c c r u e d b y t h e G r o u p i n r e s p e c t o f t h e To t a l C o m p r o m i s e d D e b t o f H K $ 2 . 8
m i l l i o n f o r t h e p e r i o d f r o m 1 s t O c t o b e r, 2 0 0 1 t o 1 7 t h D e c e m b e r, 2 0 0 1 .
4.
Being the settlement of debts of HK$34.3 million due to certain creditors
of the Group after netting off the cash payment of HK$2.1 million and the
issue of the New Convertible Note in the amount of HK$16.0 million.
5.
Based on the existing issued share capital of 2,483,936,760 Shares.
6.
Based on the enlarged issued share capital of 10,280,121,900 Shares afte r
4
HUNG FUNG - Announcement
Hong Kong, 25th April, 2002
the Restructuring Proposal and Settlements.
EXPECTED
T I M E TA B L E
OF
THE
RESTRUCTURING
PROPOSAL AND OPEN OFFER
Set out below is the expected timetable of the Restructuring Proposal and the
proposed Open Offer:
2002
Shares become ex-entitlement to the
Open Offer on the Stock Exchange
We d n e s d a y, 8 t h M a y
Latest time for lodging transfers of Shares
to qualif y for entitlements to the Open Offer
Book closure period (both dates inclusive)
Latest time for lodging forms of proxy
for the Special General Meeting
4:00 p.m. on
T h u r s d a y, 9 t h M a y
F r i d a y, 1 0 t h M a y t o
M o n d a y, 1 3 t h M a y
9:00 a.m. on
S a t u r d a y, 1 1 t h M a y
Record Date
M o n d a y, 1 3 t h M a y
Special General Meeting
9:00 a.m. on
M o n d a y, 1 3 t h M a y
Prospectus Documents posted to
Qualifying Shareholders
M o n d a y, 1 3 t h M a y
Completion to take place
T h u r s d a y, 1 6 t h M a y
Latest time for application for Offer
Shares and payment therefor
4:00 p.m. on
M o n d a y, 2 7 t h M a y
5
HUNG FUNG - Announcement
Hong Kong, 25th April, 2002
Underwriting Agreement
becomes unconditional
We d n e s d a y, 2 9 t h M a y
Announcement of the results
of the Open Offer
We d n e s d a y, 2 9 t h M a y
Certificates for Offer Shares
posted on or before
M o n d a y, 3 r d J u n e
Expected date of completion
of the Settlements
M o n d a y, 1 0 t h J u n e
The following are information additional to that which has been included i n the
Circular and which are important to the Shareholders:
I N D E P E N D E N T A C C O U N TA N T S ' R E P O RT
The Group went into financial difficulties in late 2000. The Directors
a n n o u n c e d o n 1 s t D e c e m b e r, 2 0 0 0 t h a t i n a r o u n d N o v e m b e r 2 0 0 0 , t h e G r o u p
commissioned an independent accounting firm (the "Independent Accountant")
to carry out a special financial and business review of the Group. The
I n d e p e n d e n t A c c o u n t a n t a f t e r c o n d u c t i n g a l i m i t e d r e v i e w, ( i ) e x p r e s s e d c o n c e r n
in its report (the "Report") on the ability of th e Group to continue operation as
a going concern and to control its PRC operation; and (ii) expressed their view
that seeking new investors may generate a higher recovery than putting the
Company into liquidation.
The findings of the Independent Accountan t as set out in their report have been
largely overtaken by events or changes occurred subsequent to the Report. The
p r e s e n t B o a r d , l e d b y i t s p r e s e n t C h a i r m a n , M r. C h a r l e s L o , a p r o f e s s i o n a l
accountant and an experienced businessman, took over the managem ent of the
G r o u p i n D e c e m b e r, 2 0 0 0 . T h e n e w m a n a g e m e n t h a s m a n a g e d t o s u c c e s s f u l l y
conclude the Restructuring Proposal which, if successfully completed, will
significantly improve the financial and operational position of the Group. The
new management is now in full control over the overall operation of the Group
i n c l u d i n g t h e P R C F a c t o r y.
6
HUNG FUNG - Announcement
Hong Kong, 25th April, 2002
Shareholders are advised to refer to the Circular for detailed information on the
latest operational and financial position of the Group.
RESUMPTION OF TRADING OF SHARE S
Completion of the Restructuring Proposal is conditional upon, among other
things, resumption of trading of Shares on the Stock Exchange. The Company
submitted a proposal for the resumption of trading of the Shares (the
"Resumption Proposal") to the Stoc k Exchange on 4th April, 2002. The
Resumption Proposal has been conditionally approved by the Listing Committee
of the Stock Exchange, subject to, among others, restoring the holding of at
least 25% of the Company's issued Shares in public hands, the fulfi llment of all
other conditions precedent to the completion of the Restructuring Proposal and
the approval of the Restructuring Proposal by the Independent Shareholders.
The issue of the Circular does not indicate that the Restructuring Proposal and
the Resumption Proposal will be successfully implemented and completed.
Further announcement will be made as soon as possible after the resumption in
the trading of the Shares is confirmed.
By Order of the Board
Lo Ming Chi, Charles
Chairman
Hong Kong, 25th April, 2002
*
for identification purpose only
The directors of the Company jointly and severally accept full
responsibility for the accuracy of the information contained in this
announcement and confirm, having made all reasonable enquiries, that to
the best of their knowledge, the opinions expressed in this announcement
have been arrived at after due and careful consideration and there are
no other facts not contained in this announcement, the omission of which
would make any in this announcement misleading.
"Please also refer to the published version of this announcement in the Hong
Kong i-mail"
7
HUNG FUNG - Announcement
Hong Kong, 25th April, 2002