The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this
announcement, makes no representation as to its accuracy or completeness and expressly
disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the
whole or any part of the contents of this announcement.
MIDLAND REALTY (HOLDINGS) LIMITED
(Incorporated in Bermuda with limited liability)
CONNECTED TRANSACTION
JOINT VENTURE WITH
CHEUNG KONG (HOLDINGS) LIMITED
AND AMERICAN EXPRESS BANK LIMITED
On 7th September, 2000, Harvest Time (an indirect 80% owned subsidiary of Midland Realty),
Midland Realty, Market Model (an indirect wholly owned subsidiary of Cheung Kong), Cheung
Kong, Amex Cyber (an indirect wholly owned subsidiary of American Express), American
Express and mReferral entered into the Shareholders' Deed to invest in and operate the
mReferral Group, which is principally engaged in provision of referral services for mortgage and
consumer loans and other value-added services to customers. Each of Harvest Time, Market
Model and Amex Cyber will have a one-third equity interest in mReferral and each of Midland
Realty, Cheung Kong and American Express agreed to give a guarantee and indemnity in respect
of the due performance of obligations of its relevant subsidiary under the Shareholders' Deed.
On completion of the Shareholders' Deed, each mReferral Shareholder will advance a
shareholder's loan of HK$9,700,000 to mReferral for its pre-operating and operating expenses.
The Shareholders' Deed provides that, subject to unanimous approval of the board of directors of
mReferral, further working capital requirements of mReferral will be satisfied by proceeds from
further subscription of shares in mReferral and advance of shareholders' loans in accordance with
their respective proportion of shareholdings in mReferral.
Cheung Kong and Market Model are connected persons of Midland Realty for the purposes of
the Listing Rules. The entering into of the Shareholders' Deed constitutes a connected transaction
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for Midland Realty under Rule 14.25 of the Listing Rules.
Each of Amex Cyber and American Express is an independent third party not connected with any
of the directors, substantial shareholders or chief executive of Midland Realty or any of its
subsidiaries or their respective associates (as defined in the Listing Rules).
I.
THE SHAREHOLDERS' DEED DATED 7TH SEPTEMBER,
2000 ("SHAREHOLDERS' DEED")
The board of directors of Midland Realty (Holdings) Limited ("Midland Realty")
announced that one of the joint ventures mentioned in the announcement dated 16th
August, 2000 in relation to provision of household related services has been agreed to be
established and the Shareholders' Deed has been made with, inter alia, Cheung Kong
(Holdings) Limited ("Cheung Kong"), whose shares are listed on The Stock Exchange of
Hong Kong Limited (the "Stock Exchange"), and American Express Bank Limited
("American Express") in the following terms:
A.
Parties and shareholdings:
mReferral Shareholders:
Harvest Time Investments Limited ("Harvest Time"), a
company incorporated in the British Virgin Islands and
indirectly owned as to 80% by Midland Realty and 20% by
Cheung Kong
Market Model Investments Limited ("Market Model"), a
company incorporated in the British Virgin Islands and
indirectly wholly owned by Cheung Kong
Amex Cyber International Limited ("Amex Cyber"), a
company incorporated in the British Virgin Islands and
indirectly wholly owned by American Express
Guarantors:
Midland Realty, as Harvest Time's guarantor
Cheung Kong, as Market Model's guarantor
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American Express, as Amex Cyber's guarantor
mReferral:
mReferral Corporation Limited, a company incorporated in
the British Virgin Islands
Cheung Kong is a connected person of Midland Realty because Cheung Kong is an
indirect substantial shareholder holding 20% interest in Midland CyberNet Limited
("Midland CyberNet"), an indirect 80% owned subsidiary of Midland Realty. Market
Model is a connected person of Midland Realty because Market Model is an indirect
wholly owned subsidiary of Cheung Kong and is therefore an associate of Cheung Kong
(as defined in the Rules Governing the Listing of Securities on the Stock Exchange
("Listing Rules")).
Each of Amex Cyber and American Express is an independent third party not connected
with any of the directors, substantial shareholders or chief executive of Midland Realty or
any of its subsidiaries or their respective associates (as defined in the Listing Rules).
Each of the above mReferral Shareholders will, on completion of the Shareholders' Deed,
have 40,000 ordinary shares of US$1.00 each in mReferral and advance a shareholder's
loan of HK$9,700,000 to mReferral for its pre-operating and operating expenses. Each of
the Guarantors gives a several guarantee and an indemnity to the other parties of the
Shareholders' Deed (other than its relevant mReferral Shareholder and mReferral) in
respect of the due and punctual performance and observance of obligations of its relevant
mReferral Shareholder under the Shareholders' Deed.
B. Purpose and business of mReferral Group:
It is intended that mReferral and mReferral Corporation (HK) Limited, a wholly owned
subsidiary of mReferral incorporated in the British Virgin Islands, (collectively the
"mReferral Group") will engage in the business of providing referral services for mortgage
and consumer loans to banks and financial institutions, other value-added services and
products to customers of the mReferral Group and formation of home-owners club
("Club"). mReferral Group will develop and operate an Internet portal as one of the
channels to make available these services and products. It will also facilitate the cross-sale
of certain products and services among Cheung Kong group, Midland Realty group,
American Express group, the mReferral Group and various service providers through the
Club to generate revenues from various sources (including but not limited to advertising
and the provision of networks of services for customers) for mReferral Group.
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C. Completion:
Completion of the Shareholders' Deed shall take place on (a) the date being the first
business day falling after the earliest date on which all of the conditions precedent of the
Shareholders' Deed have been satisfied (or waived by all the parties in writing) or (b) 30th
September, 2000 (or such later date as the parties may agree in writing), whichever is
earlier.
On completion, Harvest Time shall subscribe at par value for 40,000 ordinary shares in
mReferral at a consideration of US$40,000 (equivalent to about HK$312,000) so as to
acquire its one-third equity interest as mentioned above and will also advance a
shareholder's loan of HK$9,700,000 to mReferral for its pre-operating and operating
expenses. The subscription of shares in and advance of shareholder's loan will be financed
from shareholders' fund in Midland CyberNet. Each of the other mReferral Shareholders
will also advance shareholder loan in the same amount and on the same terms. The interest
rate and interest period in respect of the shareholders' loan shall be agreed by the
mReferral Shareholders, failing any such agreement, they shall be deemed to be 3-month
HIBOR and 3 months respectively. Unless the board of directors of mReferral agree, any
such shareholders' loan shall only be repaid (i) on liquidation of mReferral or (ii) on a
listing of mReferral at a recognised stock exchange or (iii) upon unanimous agreement by
mReferral Shareholders and mReferral in writing. It should be noted that there is at present
no concrete plan for the listing of mReferral and it may or may not proceed and investors
should exercise caution in dealing with the shares of Midland Realty.
D. Other Terms:
(a)
Subject to unanimous approval of all the directors of mReferral, further working
capital requirements of mReferral will be satisfied by proceeds from further
subscription of shares in mReferral and advance of shareholders' loans in
accordance with their respective shareholdings in mReferral. Save as stated in this
paragraph and above, there is no other capital commitment on the part of Harvest
Time in respect of mReferral Group under the Shareholders' Deed.
(b)
The board of directors of mReferral will comprise 6 directors, each mReferral
Shareholders being entitled to appoint 2 directors.
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(c)
Certain matters will require unanimous approval of all mReferral Shareholders
including any change to the authorised or issued share capital, variation of
shareholders' rights, winding up, disposal of material part of the business and
making change to the business plan of mReferral.
II. REASONS FOR THE SHAREHOLDERS' DEED
Midland Realty group is principally engaged in real estate agency, broking and marketing
in Hong Kong and the People's Republic of China and operation of a property and
e-commerce portal.
The Shareholders' Deed provides an opportunity for Midland Realty group to expand in
internet related referral services. The entering into of the Shareholders' Deed will enhance
the profitability of Midland Realty group by diversification to various referral businesses.
The terms of the Shareholders' Deed were concluded after arm's length negotiation and the
directors (including the independent non-executive directors) of Midland Realty consider
that the terms of the Shareholders' Deed (including the terms of the shareholder loan) are
on normal commercial terms and are fair and reasonable.
III. CONNECTED TRANSACTION
Cheung Kong, is a connected person of Midland Realty because Cheung Kong is an
indirect substantial shareholder of Midland CyberNet, an indirect 80% owned subsidiary
of Midland Realty. Market Model is a connected person of Midland Realty because
Market Model is an indirect wholly owned subsidiary of Cheung Kong and is therefore an
associate of Cheung Kong. The entering into of the Shareholders' Deed with the proposed
injection of capital and shareholder's loan by Harvest Time to mReferral and the giving of
a guarantee and indemnity by Midland Realty to Cheung Kong and Market Model in
respect of the due performance of the obligations of Harvest Time under the Shareholders'
Deed constitutes a connected transaction for Midland Realty under Rule 14.25 of the
Listing Rules but no shareholders approval is required. Further details will be included in
Midland Realty's next published annual report and accounts pursuant to Rule 14.25.
By order of the Board
Midland Realty (Holdings) Limited
Wong Kin Yip, Freddie
Chairman and Managing Director
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Hong Kong, 7th September, 2000
"Please also refer to the published version of this announcement in the Hong Kong i-mail"
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