By 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: 8207)
ANNOUNCEMENT POSSIBLE CONNECTED TRANSACTION: PROPOSED GRANT OF WAIVERS IN RELATION TO TRANSFER OF 25% EQUITY INTEREST IN CHINA RUNKING FINANCING GROUP HOLDINGS LIMITED
The Board wishes to announce that on 3 January 2014, Jovial Lead was informed by Richfield that Richfield had delivered the Offer Letter to Gold Kingdom pursuant to which Richfield offered to purchase the Sale Shares from Gold Kingdom for a cash consideration of HK$70,700,000.
Under the Shareholders' Agreement, Jovial Lead, Full Plus and Profounders were granted the Right of First Refusal and the Right of Co-Sale in respect of the Transfer of China Runking Shares by Gold Kingdom to a third party. As such, before Gold Kingdom could sell the Sale Shares to Richfield, it has to obtain waivers from Jovial Lead, Full Plus and Profounders. Richfield has requested Jovial Lead to grant the Waivers to Gold Kingdom.
The Company intends to procure Jovial Lead to grant the Waivers to Gold Kingdom after the offer under the Offer Letter is accepted by Gold Kingdom.
Given the entire issued share capital of Richfield is legally and beneficially owned by Mr. Ting and Mr. Ting is an executive Director, hence, a connected person of the Company, the proposed grant of the Waivers by Jovial Lead in favour of Gold Kingdom constitutes a connected transaction of the Company under Rule 20.13 of the GEM Listing Rules. As all of the applicable percentage ratios as defined in the GEM Listing Rules exceed 0.1% but are less than 5%, the proposed grant of the Waivers by Jovial Lead in favour of Gold Kingdom is subject to the reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 20 of the GEM Listing Rules.
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Reference is made to the announcement of the Company dated 14 November 2011 (the "Announcement"). Capitalised terms used in this announcement shall have the same meanings as those defined in the Announcement, unless specified otherwise.
As at the date of this announcement, China Runking is owned as to 60% by Jovial Lead, a wholly-owned subsidiary of the Company, as to 25% by Gold Kingdom, 10% by Full Plus and 5% by Profounders.
The Board wishes to announce that on 3 January 2014, Jovial Lead was informed by Richfield that Richfield had delivered the Offer Letter to Gold Kingdom pursuant to which Richfield offered to purchase the Sale Shares from Gold Kingdom for a cash consideration of HK$70,700,000.
Under the Shareholders' Agreement, Jovial Lead, Full Plus and Profounders were granted the Right of First Refusal and the Right of Co-Sale in respect of the Transfer of China Runking Shares by Gold Kingdom to a third party. As such, before Gold Kingdom could sell the Sale Shares to Richfield, it has to obtain waivers from Jovial Lead, Full Plus and Profounders. Richfield has requested Jovial Lead to grant the Waivers to Gold Kingdom.
The Company intends to procure Jovial Lead to grant the Waivers to Gold
Kingdom after the offer under the Offer Letter is accepted by Gold Kingdom.
Upon Completion, Richfield will enter into a deed of adherence ("Deed of Adherence") with the existing shareholders of China Runking whereby Richfield covenants to be bound by all the terms of the Shareholders' Agreement entered into among the existing shareholders of China Runking. Upon execution of the Deed of Adherence, Richfield will have the same rights and obligations as Gold Kingdom currently has under the Shareholders' Agreement.
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SHAREHOLDING STRUCTURE
The following charts show the shareholding structure of China Runking before and after
Completion:
(a) Before Completion:
The Company
100% | |||
Jovial Lead | Gold Kingdom | Full Plus | Profounders |
60% | 25% | 10% | 5% |
China Runking
(b) After Completion:
The Company
100% | |||
Jovial Lead | Richfield | Full Plus | Profounders |
60% | 25% | 10% | 5% |
China Runking
INFORMATION OF JOVIAL LEAD AND CHINA RUNKING
Jovial Lead is a company limited by shares and incorporated in the British Virgin Islands and its principal business activity is investment holding. China Runking and its subsidiaries are principally engaged in small loan financing services.
As at the date of this announcement, Jovial Lead is interested in 60% equity interest in
China Runking.
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Financial information of China Runking
Set out below is the consolidated financial information of China Runking and its subsidiaries for the period from 3 June 2011 (the date of incorporation) to 31 December
2011 and the year ended 31 December 2012:
HK$'000 HK$'000
Turnover - 28,828
Net profit/(loss) before tax (3,089) 23,394
Net profit/(loss) after tax (3,089) 18,159
Net assets/(liabilities) (3,133) 14,995
Richfield is a company incorporated in Hong Kong with limited liability and its principal business activity is investment holding. The entire issued share capital of Richfield is legally and beneficially owned by Mr. Ting.
REASONS AND BENEFITS FOR THE GRANT OF WAIVERS
The Group is principally engaged in the provision of financing services including entrusted loan service, real estate-backed loan service, micro loan service, pawn loan service and other collateral-backed loan service to small and medium enterprises and individuals in the PRC and Hong Kong.
The Directors are of the view that as Jovial Lead owns 60% of the equity interest in China Runking, China Runking has already been treated as a subsidiary of the Company and its results are consolidated with the financial results of the Company. Therefore, the acquisition of a maximum of further 25% interest in China Runking at a consideration of HK$70,700,000 by way of the exercise of Jovial Lead's Right of First Refusal would not change its controlling position in China Runking. Under the current financial market situation, the Company has resorted to maintain its strong cash flow and low gearing ratio position. In addition, the Company has no intention at present to dispose of its interest in China Runking. In view of the above, the Directors consider that it would not be in the best interests of the Company and the Shareholders as a whole to exercise the Right of First Refusal and the Right of Co-Sale at this point of time.
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The Directors (including the independent non-executive Directors) consider that the proposed grant of the Waivers is made on an arm's length basis and on normal commercial terms, and is fair and reasonable and in the interest of the Company and the Shareholders as a whole. Mr. Ting and Mr. Shi, being the brother-in-law of Mr. Ting, who have or are deemed to have a material interest in the grant of the Waivers, have abstained from voting on the relevant resolutions of the Board in relation to the grant of the Waivers.
GENERALGiven the entire issued share capital of Richfield is legally and beneficially owned by Mr. Ting and Mr. Ting is an executive Director, hence, a connected person of the Company, the proposed grant of the Waivers by Jovial Lead in favour of Gold Kingdom constitutes a connected transaction of the Company under Rule 20.13 of the GEM Listing Rules. As the applicable percentage ratios as defined in the GEM Listing Rules exceed 0.1% but are less than 5%, the proposed grant of the Waivers by Jovial Lead in favour of Gold Kingdom is subject to the reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 20 of the GEM Listing Rules.
DEFINITIONS
"Board" the board of Directors
"Business Day" a day on which licensed banks in Hong Kong are generally open for normal banking business throughout their normal business hours (excluding a Saturday, Sunday or public holiday)
"China Fortune" China Fortune Financial Group Limited (stock code: 290), a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the main board of the Stock Exchange
"China Runking" China Runking Financing Group Holdings Limited (formerly known as Media Eagle Limited), a company incorporated in Hong Kong with limited liability, which is owned as to 60% by Jovial Lead, 25% by Gold Kingdom, 10% by Full Plus and 5% by Profounders as at the date of this announcement
"China Runking
Shares"
shares of HK$1.00 each in the issued share capital of China
Runking
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"Company" Credit China Holdings Limited (stock code: 8207) , a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on GEM
"Completion" Completion of the Transfer
"Director(s)" the director(s) of the Company
"Full Plus" Full Plus Group Limited, a company incorporated in the British Virgin Islands with limited liability, which is interested in 10% equity interest of China Runking as at the date of this announcement
"GEM" the Growth Enterprise Market of the Stock Exchange
"GEM Listing Rules" the Rules Governing the Listing of Securities on GEM
"Gold Kingdom" Gold Kingdom Holdings Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly- owned subsidiary of China Fortune, which is interested in
25% equity interest of China Runking as at the date of this announcement
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the PRC "HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Jovial Lead" Jovial Lead Limited, a company incorporated in the British Virgin Islands with limited liability, an indirect wholly- owned subsidiary of the Company
"Mr. Shi" Mr. Shi Zhi Jun, an executive Director
"Mr. Ting" Mr. Ting Pang Wan, Raymond, an executive Director
"Offer Letter" an offer letter dated 3 January 2014 and issued by Richfield to Gold Kingdom in relation to the Transfer
"PRC" the People's Republic of China which for the purpose of this announcement excludes Hong Kong, Macau Special Administrative Region of the PRC and Taiwan
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"Profounders" Profounders Project I Limited, a company incorporated in the British Virgin Islands with limited liability, which is interested in 5% equity interest of China Runking as at the date of this announcement
"Richfield" Richfield Asia Investment Limited, a company incorporated in Hong Kong and the entire issued share capital of which are legally and beneficially owned by Mr. Ting
"Right of Co-Sale" the right of co-sale granted to the current shareholders of China Runking, under the Shareholders' Agreement, pursuant to which the non-selling shareholder(s) of China Runking which does not exercise its Right of First Refusal shall have the right to participate in any proposed sale, in aggregate of, more than 20% of the China Runking Shares on the same terms and conditions as offered to the selling shareholder of China Runking
"Right of First
Refusal"
the right of first refusal granted to current shareholders of China Runking, under the Shareholders' Agreement, pursuant to which in the event that any shareholder of China Runking proposes to transfer any of China Runking Shares, the non-selling shareholder(s) of China Runking shall have a right of first refusal to purchase such China Runking Shares
"Sale Shares" 58,500,000 shares of HK$1.00 each, being 25% of the issued share capital of China Runking as at the date of the Offer Letter which is legally and beneficially owned by Gold Kingdom
"Shareholder(s)" holder(s) of the issued Shares
"Shareholders' Agreement"
the shareholders' agreement entered into amongst Gold Kingdom, Jovial Lead, Full Plus and Profounders, being all the existing shareholders of China Runking, in relation to the management of China Runking and its relationship with each of its shareholders
"Share(s)" ordinary share(s) of HK$0.10 each in the capital of the
Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
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"Transfer" the possible sale by Gold Kingdom and the possible purchase by Richfield of the Sale Shares in accordance with the terms of the Offer Letter
"Waivers" the waivers of the Right of First Refusal and Right of Co- Sale by Jovial Lead
"%" per cent
By order of the Board
Chairman
Hong Kong, 3 January 2014
As at the date of this announcement, the directors of the Company are as follows:
Executive Directors:
Mr. Ting Pang Wan, Raymond (Chairman)
Mr. Phang Yew Kiat (Deputy Chairman)
Mr. Shi Zhi Jun
Mr. Ji Zu Guang
Ms. Shen Li (Chief Executive Officer)
Mr. Sheng Jia
Independent Non-executive Directors:
Mr. Neo Poh Kiat
Dr. Lau Reimer Mary Jean
Mr. Lee Sze Wai
This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.
This announcement will remain on the "Latest Company Announcements" page of the GEM website (www.hkgem.com) for at least 7 days from the date of its publication and on the website of the Company (www.creditchina.hk).
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