ALLAN INTERNATIONAL HOLDINGS LIMITED 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 Bermuda with limited liability)
(Stock Code: 684)The Board wishes to announce that on 29 December 2015, after trading hours, the Vendor (a wholly-owned subsidiary of the Company) and the Purchaser entered into the Provisional SPA pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to acquire, the Property, namely, all that 12th Floor of Zung Fu Industrial Building, No. 1067 King's Road, Hong Kong, at the Consideration of HK$179,000,000.
It is provided in the Provisional SPA that subject to satisfaction of the condition precedent that the Purchaser having entered into binding agreements to purchase the whole of 5th, 9th and 11th Floors of Zung Fu Industrial Building, No. 1067 King's Road, Hong Kong with the respective owners of such properties, Completion shall take place on or before 3 March 2016. If this condition precedent is not satisfied by 3 March 2016, the Purchaser is entitled to choose in its absolute discretion either to proceed with Completion as originally scheduled or to annul the sale and purchase of the Property in which case all the deposits paid to the Vendor shall be returned to the Purchaser and the Provisional SPA shall be terminated and each party shall not have any rights or remedies against the other.
It is also provided in the Provisional SPA that the Purchaser as the landlord and the Vendor as the tenant shall on Completion enter into a tenancy agreement for the Property for a term of 36 months commencing from the date of Completion at the monthly rental of HK$1 for the first two years and at the market rate (but in any event not exceeding HK$250,000 per month) for the third year, all exclusive of rates, government rent and management fee.
As certain applicable percentage ratios (as defined under the Listing Rules) exceed 25% but are less than 75%, the Disposal constitutes a major transaction for the Company and is therefore subject to reporting, announcement and shareholders' approval requirements pursuant to Chapter 14 of the Listing Rules.
As no Shareholder has a material interest in the Disposal, none of the Shareholders is required to abstain from voting if the Company were to convene a general meeting for the approval of the Disposal. As at the date of this announcement, the Controlling Shareholders together hold directly or indirectly approximately 60.36% of the issued share capital of the Company. Pursuant to Rule 14.44 of the Listing Rules, the Company has sought a written approval of the Disposal from the Controlling Shareholders who constituted a closely allied group of Shareholders and together hold more than 50% of the voting rights of the Company in lieu of holding a general meeting for seeking the approval of the Disposal. Therefore, no general meeting of the Company will be held for approval of the same.
It is expected that the Company will despatch a circular containing further details of the Disposal and further information as required under the Listing Rules for the Shareholders' information on or before 20 January 2016.
The Board wishes to announce that on 29 December 2015, after trading hours, the Vendor and the Purchaser entered into the Provisional SPA pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to acquire, the Property at the Consideration of HK$179,000,000.
Set out below are the principal terms of the Provisional SPA:
in Hong Kong with limited liability and a wholly-owned subsidiary of the Company
Purchaser: Lead Harvest Group Limited, a company incorporated in British Virgin Islands with limited liability and principally engaged in the business of investment company. As at the date of this announcement, to the best of the Directors' knowledge, information and belief having made all reasonable enquiry, the Purchaser and its ultimate beneficial owners are Independent Third Parties.
Property to be disposed ofThe Property is all that 12th Floor of Zung Fu Industrial Building, No. 1067 King's Road, Hong Kong with approximate gross floor area of 16,500 square feet which was acquired by the Group in 1989 and is solely and beneficially owned by the Vendor.
The Property has since 1989 been and is still occupied and used by the Group as the Company's head office and principal place of business. Accordingly, no rental income has been generated since then. Therefore, no net profits were attributable to the Property for the two years immediately preceding the transaction.
As at 31 March 2015, the carrying value of the Property was approximately HK$9,220,000.
The Consideration of HK$179,000,000 for the Disposal shall be payable by the Purchaser to the Vendor in the following manner:
an initial deposit in the sum of HK$5,370,000 has been paid by the Purchaser to the Vendor's solicitors upon signing of the Provisional SPA;
a further deposit in the sum of HK$12,530,000 shall be paid by the Purchaser to the Vendor's solicitors upon signing of the formal agreement for sale and purchase of the Property on or before 13 January 2016; and
the balance of the Consideration in the sum of HK$161,100,000 shall be paid by the Purchaser to the Vendor upon Completion on or before 3 March 2016 and the initial deposit and further deposit shall be released to the Vendor upon Completion.
The Consideration was arrived at after arm's length negotiation between the Purchaser and the Vendor with reference to the prevailing market value of commercial properties of similar size and age as the Property in the same vicinity.
Pursuant the Provisional SPA, Completion is subject to satisfaction of the condition precedent that the Purchaser having entered into binding agreements (with provisions on specific performance) to purchase the whole of 5th, 9th and 11th Floors of Zung Fu Industrial Building, No. 1067 King's Road, Hong Kong with the respective owners of such properties. If this condition precedent is not satisfied by 3 March 2016, the Purchaser is entitled to choose in its absolute discretion either to proceed with Completion as originally scheduled or to annul the sale and purchase of the Property in which case all the deposits paid to the Vendor shall be returned to the Purchaser and the Provisional SPA shall be terminated and each party shall not have any rights or remedies against the other.
Pursuant the Provisional SPA, the formal agreement for sale and purchase of the Property shall be signed between the Purchaser and the Vendor on or before 13 January 2016 and Completion shall take place on or before 3 March 2016.
LEASEBACK ARRANGEMENTUpon Completion, the Group would continue occupying the Property by the Vendor entering into a tenancy agreement with the Purchaser in respect of the Property with the following principal terms as provided in the Provisional SPA:
Term: 36 months commencing from the date of Completion
Rental: Monthly rental of HK$1 for the first two years and at market rate (but in any event not exceeding HK$250,000 per month) for the third year, all exclusive of rates, government rent and management fee
Termination: During the lease term, the Vendor shall be entitled to terminate the
tenancy by giving a written notice of not less than 6 months to the Purchaser.
Deposit: The Vendor shall pay to the Purchaser a sum of HK$1,000,000 as
deposit upon signing of the tenancy agreement which shall be 100% refunded to the Vendor upon termination of the tenancy agreement.
According to the Provisional SPA, the Consideration is HK$179,000,000. It is estimated that the net proceeds from the Disposal will be approximately HK$177,666,000 after deducting all relevant expenses. The Directors intend to utilise the net proceeds as the general working capital of the Group and for future investment and expansion of the Group's business.
The Company is an investment holding company and its subsidiaries are principally engaged in manufacture and distribution of household electrical appliances.
The Property has been held by the Group for long term purpose as property, plant and equipment for self-use since 1989. The Directors consider that the Consideration for the Disposal has substantially reflected the long term investment potential of the Property, the Disposal provides an opportunity for the Company to realise its investment in the Property. According to the leaseback arrangement upon Completion as contemplated under the Provisional SPA, the Group would be able to continue occupying the Property as its head office and principal place of business in Hong Kong for 36 months after Completion at a nominal rental of HK$1 per month for the first two years and at market rate for the third year with a cap of HK$250,000 per month.
The gain expected to accrue to the Group from the Disposal is approximately HK$168,446,000 before tax and subject to auditing of the financial statements of the Group for the financial year ending 31 March 2016. The estimated gain represents the difference between the Consideration and the Group's carrying value of the Property as at 31 March 2015 and the relevant fees expected to be payable by the Group. The Group intends to use the net proceeds from the Disposal, estimated to be approximately HK$177,666,000, for general working capital of the Group and for future investment and expansion of the Group's business.
Allan International Holdings Limited issued this content on 2015-12-29 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2015-12-29 14:58:30 UTC
Original Document: http://www.allan.com.hk/attachment/2015122922470200002396608_en.pdf
