CHINA VANGUARD GROUP LIMITED 
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: 8156) PROPOSED SHARE CONSOLIDATION Financial adviser to the Company
The Board proposes to put forward to the Shareholders a proposal to effect the proposed Share Consolidation, whereby every five (5) issued and unissued Shares of par value of HK$0.01 each will be consolidated into one (1) Consolidated Share of par value of HK$0.05 in compliance with Rule 17.76 of the GEM Listing Rules.
The expected timetable for the Share Consolidation is set forth under the section headed "Expected timetable" below.
The Share Consolidation is subject to the Shareholders' approval at the EGM by way of poll and no Shareholders are required to abstain from voting on the resolution in relation to the Share Consolidation. Circular containing, among other things, further details of the Share Consolidation and the notice of the EGM is expected to be despatched to the Shareholders on or before 15 January 2013.
PROPOSED SHARE CONSOLIDATIONThe Board proposes to put forward to the Shareholders a proposal to effect the proposed Share Consolidation, whereby every five (5) issued and unissued Shares of par value of HK$0.01 each will be consolidated into one (1) Consolidated Share of par value of HK$0.05 in compliance with Rule 17.76 of the GEM Listing Rules.
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Conditions precedent to the Share Consolidation
The Share Consolidation is conditional upon (i) the passing of the relevant ordinary resolution to approve the Share Consolidation by the Shareholders at the EGM; and (ii) the Listing Committee of the Stock Exchange granting approval to the listing of, and permission to deal in, the Consolidated Shares.
The Share Consolidation will become effective on the next Business Day immediately following the fulfillment of the above conditions.
As at the date of this announcement, the authorised share capital of the Company is HK$200,000,000 divided into 20,000,000,000 Shares of HK$0.01 each, of which
3,771,893,839 Shares have been issued and are fully paid or credited as fully paid. Assuming that no further Shares are issued or repurchased between the date of this announcement and the date of the EGM, immediately after the Share Consolidation becoming effective, the authorised share capital of the Company will become HK$200,000,000 divided into 4,000,000,000 Consolidated Shares of HK$0.05 each, of which 754,378,767 whole Consolidated Shares will be in issue which are fully paid or credited as fully paid following the Share Consolidation.
Upon the Share Consolidation becoming effective, the Consolidated Shares will rank pari passu in all respects with each other. Fractional Consolidated Shares will not be issued by the Company to the Shareholders. Any fractional entitlements of the Consolidated Shares will be aggregated, sold and retained for the benefit of the Company.
Other than the relevant expenses, including but not limited to professional fees and printing charges incurred, the implementation of the Share Consolidation will have no effect on the consolidated net asset value of the Group, nor will it alter the underlying assets, business, operations, management or financial position of the Company or the interests of the Shareholders, save for any fractional Consolidated Shares to which Shareholders may be entitled. The Directors believe that the Share Consolidation will not have any material adverse effect on the financial position of the Group.
Board lot size for trading will remain unchanged at 5,000 shares for the Consolidated Shares per board lot, which is the same board lot size for trading in the Shares on the Stock Exchange. Based on the closing price of HK$0.093 per Share (i.e. HK$0.465 per Consolidated Share assuming the Share Consolidation becoming effective) on the Last Trading Day, the value of each board lot of 5,000 Consolidated Shares would be HK$2,325.
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Reasons for the Share ConsolidationThe Share Consolidation will increase the trading price per board lots of the Shares, which will reduce the overall transaction costs of dealings in the Shares. The Board also believes that the Share Consolidation may attract more investors and extend the shareholders' base of the Company. In view of the above, the Board considers that the Share Consolidation is in the interests of the Company and the Shareholders as a whole.
Free exchange of certificates for the Consolidated Shares and trading arrangementSubject to the Share Consolidation becoming effective, which is expected to be on Friday, 1 February 2013, Shareholders may, during a period to be specified in the Circular, submit share certificates for Shares to the Company's branch share registrar, Tricor Standard Limited, at 26th Floor, Tesbury Centre, 28 Queen's Road East, Wanchai, Hong Kong, to exchange, at the expense of the Company, for new certificates of the Consolidated Shares. Thereafter, certificates for the existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may be from time to time be specified by the Stock Exchange) for each new share certificate issued for the Consolidated Shares or each share certificate for the Shares submitted for cancellation, whichever the number of certificates issued or cancelled is higher. Nevertheless, the share certificates for the Shares will continue to be good evidence of legal title and may be exchanged for new share certificates for the Consolidated Shares at any time but are not accepted for trading, settlement and registration upon completion of the Share Consolidation.
Odd lots arrangements and matching servicesIn order to alleviate difficulties arising from the existence of odd lots of the Consolidated Shares, the Company will procure an arrangement with a designated broker to stand in the market to provide matching services for odd lots of the Consolidated Shares on a best effort basis. Further details in respect of the odd lots arrangement and the new share certificates will be set out in the Circular.
EXPECTED TIMETABLEThe expected timetable for the Share Consolidation is set out below:
Event Time and date2013
Despatch of Circular with notice of EGM on or before . . . . . . . . . . .Tuesday, 15 January Despatch and publication of notice of EGM . . . . . . . . . . . . . . . . . . .Tuesday, 15 January Latest time for lodging
proxy form of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . 11:00 a.m. Tuesday, 29 January
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Date of EGM 11:00 a.m. Thursday, 31 January Announcement on results of EGM . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 31 January Dealings in Consolidated Shares commence . . . . . . . . . . . . 9:00 a.m. Friday, 1 February
First day for free exchange of existing share
certificates for new share certificates . . . . . . . . . . . . . . . . . . . . . . . Friday, 1 February
Original counter for trading in Shares in board lots of 5,000 Shares (in the form of existing share
certificates) temporarily closes . . . . . . . . . . . . . . . . . . . . 9:00 a.m. Friday, 1 February
Temporary counter for trading in
Consolidated Shares in board lots of 1,000
Consolidated Shares (in the form of existing
share certificates) opens . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. Friday, 1 February
Original counter for trading in Consolidated
Shares in board lots of 5,000 Consolidated
Shares (only new certificates for the
Consolidated Shares can be traded at
this counter) re-opens . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. Wednesday, 20 February
Parallel trading in Consolidated Shares
(in the form of new share certificates for Consolidated Shares and existing
share certificates) commences . . . . . . . . . . . . . . . 9:00 a.m. Wednesday, 20 February
Designated broker starts to stand in the market to provide matching services
for odd lots of Consolidated Shares . . . . . . . . . . . 9:00 a.m. Wednesday, 20 February
Temporary counter for trading in
Consolidated Shares in board lots of
1,000 Consolidated Shares (in the form
of existing share certificates) closes . . . . . . . . . . . . . . . . 4:00 p.m. Tuesday, 12 March
Designated broker ceases to stand in the market to provide matching services
for odd lots of Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . .Tuesday, 12 March
Last day for free exchange of existing
share certificates for new share certificates
for Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 14 March
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All times and dates in this announcement refer to Hong Kong local times and dates. Dates or deadlines specified in the expected timetable above are indicative only and may be extended or varied by the Company. Any changes to the expected timetable will be published or notified to the Shareholders as and when appropriate.
Listing application
An application will be made by the Company to the Listing Committee of the Stock
Exchange for the listing of, and the permission to deal in, the Consolidated Shares.
Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on the Stock Exchange or, under contingent situation, such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.
The Share Consolidation is subject to the Shareholders' approval at the EGM by way of poll and no Shareholders are required to abstain from voting on the resolution in relation to the Share Consolidation. Circular containing, among other things, further details of the Share Consolidation and the notice of the EGM is expected to be despatched to the Shareholders on or before 15 January 2013.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:
"Board" the board of Directors
"Business Day" a day (other than a Saturday and Sunday) on which licensed banks are generally open for business more than five hours in Hong Kong
"CCASS" the Central Clearing and Settlement System established and operated by HKSCC
"Circular" the circular to be despatched by the Company on or before 15 January 2013 to provide, among other things, further details regarding the Share Consolidation
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"Company" China Vanguard Group Limited (
