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Telecom Service One Holdings Limited
電 訊 首 科 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3997)
CONTINUING CONNECTED TRANSACTIONS
SURRENDER AGREEMENTS
SURRENDER AGREEMENTS
On 6 May 2019, TSO (a wholly-owned subsidiary of the Company) has entered into the Surrender Agreements with GEL and ORL to surrender the Surrendered Premises under the Fourth 2019/20 Tenancy Agreement and Fifth 2019/20 Tenancy Agreement respectively.
GEL and ORL are indirectly wholly-owned by the Cheung Family Trust which indirectly holds 51.43% of the shares of the Company in issue. As such, GEL and ORL are connected persons of the Company under the Listing Rules. Accordingly, the Surrender Agreements constitute continuing connected transactions for the Company.
Pursuant to the Surrender Agreements, TSO shall surrender the Surrendered Premises under the Fourth 2019/20 Tenancy Agreement and Fifth 2019/20 Tenancy Agreement to GEL and ORL respectively on 31 May 2019. Accordingly, the Company is subject to the announcement requirement under the Note to Rule 14A.35 of the Listing Rules.
As one or more applicable percentage ratios (other than the profits ratio) in respect of the revised aggregate annual rental under the Surrender Agreements and 2019/20 Tenancy Agreements are less than 5% but the revised aggregate annual rental is more than HK$3,000,000, such tenancy agreements and the revised aggregate annual rental are subject to the announcement, annual review and reporting requirements, but exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
SURRENDER AGREEMENTS
Reference is made to the announcement of the Company dated 31 March 2019 in relation to the 2019/20 Tenancy Agreements entered into between GEL, GIL and ORL with TSO (a wholly-owned subsidiary of the Company) respectively in which setting out the terms and conditions for leasing of properties for a term up to 31 March 2020.
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On 6 May 2019, TSO has entered into the Surrender Agreements with GEL and ORL to surrender the Surrendered Premises under the Fourth 2019/20 Tenancy Agreement and Fifth 2019/20 Tenancy Agreement respectively.
Pursuant to the Surrender Agreements, TSO shall surrender the Surrendered Premises under the Fourth 2019/20 Tenancy Agreement and Fifth 2019/20 Tenancy Agreement to GEL and ORL respectively on 31 May 2019, the tenancies of the Surrender Premises shall be absolutely ceased and terminated and both parties shall release each other from all liabilities and obligations in relation to the Surrender Premises thereof.
Details of the tenancies of the Surrender Premises under the Surrender Agreements are as follows:
Date of tenancy | Usage and | ||||
Address | Landlord | agreement | Term | Monthly rent | area |
Fourth 2019/20 Tenancy Agreement | |||||
Portion of Unit A, | GEL | 30 March 2019 | from 1 April 2019 | HK$21,120 | repair center |
23/F., Kyoto Plaza, | to 31 March 2020 | (exclusive of | |||
Nos. 491-499 | (tenancy will be | government rates, | saleable | ||
Lockhart Road, | terminated in advance | government rent | area: | ||
Causeway Bay, | on 31 May 2019) | and building | 640 sq. ft. | ||
Hong Kong | management fee) | (gross) | |||
Fifth 2019/20 Tenancy Agreement | |||||
Unit B, 23/F., | ORL | 30 March 2019 | from 1 April 2019 | HK$42,372 | repair center |
Kyoto Plaza, | to 31 March 2020 | (exclusive of | |||
Nos. 491-499 | (tenancy will be | government rates, | saleable | ||
Lockhart Road, | terminated in advance | government rent | area: | ||
Causeway Bay, | on 31 May 2019) | and building | 1,284 sq. ft. | ||
Hong Kong | management fee) | (gross) |
REVISED AGGREGATE ANNUAL CAP
The revised aggregate annual cap of the Surrender Agreements and 2019/20 Tenancy Agreements based on the aggregate annual rental payable thereunder during their respective terms of tenancy for the year ending 31 March 2020 will be as follows:
For the year | ||
ending | ||
31 March 2020 | ||
HK$'000 | ||
First 2019/20 Tenancy Agreement | 953 | |
Second 2019/20 Tenancy Agreement | 392 | |
Third 2019/20 Tenancy Agreement | 1,830 | |
Fourth 2019/20 Tenancy Agreement | 42 | |
Fifth 2019/20 Tenancy Agreement | 85 | |
3,302 | ||
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Further details of the Other Tenancy Agreements are as follows:
Date of | |||||
tenancy | |||||
Address | Landlord | agreement | Term | Monthly rent | Usage and area |
First 2019/20 Tenancy Agreement | |||||
Unit 1807, 18/F., | ORL | 30 March 2019 from 1 April 2019 | HK$79,420 | head office, | |
Riley House, | to 31 March 2020 | (exclusive of | repair center and | ||
No.88 Lei Muk Road, | government rates, | warehouse | |||
Kwai Chung, | government rent and | ||||
New Territories, | building management | saleable area: | |||
Hong Kong | fee) | 7,220 sq. ft. | |||
(gross) | |||||
Second 2019/20 Tenancy Agreement | |||||
Portion B of Unit | GIL | 30 March 2019 from 1 April 2019 | HK$32,626 | head office, | |
1806, 18/F., | to 31 March 2020 | (exclusive of | repair center and | ||
Riley House, | government rates, | warehouse | |||
No.88 Lei Muk Road, | government rent and | ||||
Kwai Chung, | management fee) | saleable area: | |||
New Territories, | 2,966 sq. ft. | ||||
Hong Kong | (gross) | ||||
Third 2019/20 Tenancy Agreement | |||||
Units 1201-1203 and | ORL | 30 March 2019 from 1 April 2019 | HK$152,495 | repair center | |
Units 1205-1206, | to 31 March 2020 | (exclusive of building | |||
12/F., Ginza Plaza, | management fee and | saleable area: | |||
No. 2A Sai Yeung | air-conditioning | 4,357 sq. ft. | |||
Choi Street South, | charges but inclusive | (gross) | |||
Mongkok, Kowloon, | of government rates | ||||
Hong Kong | and government rent) |
REASON FOR ENTERING INTO SURRENDER AGREEMENTS
Given the uncertainties and challenges faced by the world's major economies, the Group keep implementing stricter financial control, streamlining structure and expenditure austerity. The Group decided to restructure its repair centers and close the Surrendered Premises in May 2019. The Surrender Agreements were entered to surrender the Surrendered Premises.
The terms of the Surrender Agreements are arrived at after arm's length negotiation and are on normal commercial terms. The Directors (except the Cheung Brothers being the Directors who have material interests in the Surrender Agreements and who abstained from participating in the approval of the relevant Board resolutions due to conflict of interest), including the independent non-executive Directors, considered that the terms of the Surrender Agreements are fair and reasonable and the Surrender Agreements are on normal commercial terms, in the ordinary and usual course of business of the Group, and in the interests of the Company and its shareholders as a whole.
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IMPLICATIONS UNDER THE LISTING RULES
GEL and ORL, the property holding companies, are indirectly wholly-owned by the Cheung Family Trust which indirectly holds 51.43% of the shares of the Company in issue. As such, GEL and ORL are connected persons of the Company under the Listing Rules. Accordingly, the Surrender Agreements constitute continuing connected transactions for the Company.
Upon entering into the Surrender Agreements, the tenancies of the Surrender Premises under the Surrender Agreements are to be terminated in advance. Accordingly, the Company is subject to the announcement requirement under the Note to Rule 14A.35 of the Listing Rules.
As one or more applicable percentage ratios (other than the profits ratio) in respect of the revised aggregate annual rental under the Surrender Agreements and 2019/20 Tenancy Agreements are less than 5% but the revised aggregate annual rental is more than HK$3,000,000, such tenancy agreements and the revised aggregate annual rental are subject to the announcement, annual review and reporting requirements, but exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
GENERAL INFORMATION
The Company is listed on Main Board of the Stock Exchange and is principally engaged in investment holding. The principal activities of the Group (including TSO) are provision of repair and refurbishment services for mobile phones and personal electronic products and the sales of related accessories therefor.
DEFINITIONS
In this announcement, the following expressions have the following meanings unless the context requires otherwise:
"2019/20 Tenancy Agreements" | the First to Fifth 2019/20 Tenancy Agreements dated 30 |
March 2019 entered into between GEL, GIL and ORL with | |
TSO respectively in relation to the tenancies of properties | |
"Board" | board of the Directors |
"Cheung Brothers" | Mr. Cheung King Shek, Mr. Cheung King Shan, Mr. Cheung |
King Chuen Bobby and Mr. Cheung King Fung Sunny | |
"Cheung Family Trust" | a discretionary trust established for the benefit of certain |
family members of the Cheung family, the discretionary | |
beneficiary includes the Cheung Brothers, all being Directors |
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"Company" | Telecom Service One Holdings Limited, a company |
incorporated in the Cayman Islands with limited liability, the | |
shares of which are listed on Main Board of the Stock | |
Exchange (Stock Code: 3997) | |
"connected person(s)" | has the meaning ascribed to it under the Listing Rules |
"Director(s)" | Director(s) of the Company |
"Fifth 2019/20 Tenancy | the tenancy agreement dated 30 March 2019 entered into |
Agreement" | between ORL and TSO in relation to the tenancy of Unit B, |
23/F., Kyoto Plaza, Nos. 491-499 Lockhart Road, Causeway | |
Bay, Hong Kong | |
"Fourth 2019/20 Tenancy | the tenancy agreement dated 30 March 2019 entered into |
Agreement" | between GEL and TSO in relation to the tenancy of Portion of |
Unit A, 23/F., Kyoto Plaza, Nos. 491-499 Lockhart Road, | |
Causeway Bay, Hong Kong | |
"GEL" | Glossy Enterprises Limited, a company incorporated in Hong |
Kong with limited liability and indirectly wholly-owned by | |
the Cheung Family Trust which indirectly holds 51.43% of | |
the shares of the Company in issue, and thus a connected | |
person of the Company | |
"GIL" | Glossy Investment Limited, a company incorporated in Hong |
Kong with limited liability and indirectly wholly-owned by | |
the Cheung Family Trust which indirectly holds 51.43% of | |
the shares of the Company in issue, and thus a connected | |
person of the Company | |
"Group" | the Company and its subsidiaries |
"HK$" | Hong Kong dollars, the lawful currency of Hong Kong |
"Hong Kong" | the Hong Kong Special Administrative Region of the PRC |
"Listing Rules" | the Rules Governing the Listing of Securities on the Stock |
Exchange | |
"ORL" | Oceanic Rich Limited, a company incorporated in Hong Kong |
with limited liability and indirectly wholly-owned by the | |
Cheung Family Trust which indirectly holds 51.43% of the | |
shares of the Company in issue, and thus a connected person | |
of the Company | |
"Other Tenancy Agreements" | the tenancy agreements dated 30 March 2019 entered into |
between GIL and ORL with TSO respectively in relation to | |
the tenancies of the premises under the First 2019/20 Tenancy | |
Agreement, Second 2019/20 Tenancy Agreement and Third | |
2019/20 Tenancy Agreement | |
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Telecom Service One Holding Limited published this content on 06 May 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 06 May 2019 11:32:04 UTC