Asia Coal Limited : PLACING OF NEW SHARES UNDER GENERAL MANDATE (in PDF)

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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

(Incorporated in Bermuda with limited liability)

On 22 April 2013 (after trading hours), the Company entered into the Placing Agreement with the Placing Agent pursuant to which the Placing Agent has conditionally agreed to place, on a best effort basis, to not less than six independent Placees for up to 400,000,000 Placing Shares at the Placing Price of HK$0.12 per Placing Share.
Assuming that there will be no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, the maximum number of 400,000,000 Placing Shares under the Placing represents (i) approximately 4.64% of the existing issued share capital of the Company of
8,621,133,752 Shares as at the date of this announcement; and (ii) approximately 4.43% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares.
The Placing Price of HK$0.12 per Placing Share represents (i) a discount of approximately 9.8% to the closing price of HK$0.1330 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and (ii) a discount of approximately 8.8% to the average closing price of HK$0.1316 per Share as quoted on the Stock Exchange in the 5 trading days immediately prior to the date of the Placing Agreement.
The gross proceeds from the Placing will be approximately HK$48.0 million. The net proceeds from the Placing will amount to approximately HK$47.6 million which is intended to be used for repaying the outstanding debts and for general working capital of the Group. The net price raised per Placing Share will be approximately HK$0.119 per Share.
The Placing is conditional upon, among other things, the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Placing Shares. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.
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22 April 2013 (after trading hours)

The Company

Shenyin Wanguo Capital (H.K.) Limited, the Placing Agent has conditionally agreed to place, on a best effort basis, to not less than six independent Placees for up to 400,000,000 Placing Shares at the Placing Price of HK$0.12 per Placing Share and will receive a placing commission of 0.75% on the gross proceeds of the actual number of Placing Shares being placed. The Directors are of the view that the placing commission of 0.75% is fair and reasonable based on current market conditions and is in the interests of the Company and the Shareholders as a whole.
To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owners are third parties independent of and not connected with the Company and the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or an associate of any of them.

The Placing Agent has conditionally agreed to place, on a best effort basis, the Placing Shares to not less than six Placees who will be independent professional, institutional or other investor(s), who and whose ultimate beneficial owners, are third parties independent of the directors, chief executive and substantial shareholders of the Company or any of its subsidiaries or their respective associates (each as defined in the Listing Rules).
So far as the Company is aware, the Placing will not result in any of the Placees becoming a substantial shareholder of the Company.

Assuming that there will be no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, the maximum number of 400,000,000 Placing Shares under the Placing represents (i) approximately 4.64% of the existing issued share capital of the Company of
8,621,133,752 Shares as at the date of this announcement; and (ii) approximately 4.43% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares. The aggregate nominal value of the Placing Shares under the Placing will be HK$4,000,000.

The Placing Shares under the Placing will rank, upon issue, pari passu in all respects with the Shares in issue on the date of allotment and issue of the Placing Shares.
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The Placing Price of HK$0.12 represents (i) a discount of approximately 9.8% to the closing price of HK$0.1330 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and (ii) a discount of approximately 8.8% to the average closing price of HK$0.1316 per Share as quoted on the Stock Exchange in the 5 trading days immediately prior to the date of the Placing Agreement.
The Placing Price was determined with reference to the prevailing market price of the Shares and was negotiated on an arm's length basis between the Company and the Placing Agent. The Directors consider that the terms of the Placing are fair and reasonable based on the current market conditions and are in the interests of the Company and the Shareholders as a whole.

The Placing Shares will be issued under the General Mandate to allot, issue and deal with Shares granted to the Directors by resolution of the Shareholders passed at the AGM of the Company held on 27 August 2012 subject to the limit up to 20% of the then aggregated nominal amount of the entire issued share capital of the Company at the date of passing the resolution at the AGM. Accordingly, the issue of the Placing Shares is not subject to the approval by the Shareholders. Under the General Mandate, the Company is authorised to issue up to 421,056,687 Shares under the General Mandate. Up to the date of this announcement, no Share has been issued under the General Mandate.

The Placing is conditional upon:
(i) the continued listing of the issued Shares on the Stock Exchange and there having been no suspension in trading in the Shares on the Stock Exchange (other than for any trading halt pending publication of any announcement(s) in relation to the Placing, if any);
(ii) the Listing Committee of the Stock Exchange having granted the listing of, and permission to deal in, the
Placing Shares and such listing and permission not having been subsequently revoked;
(iii) the Bermuda Monetary Authority having granted all, and not revoking any necessary approvals and permissions for the creation, allotment and issue of new Shares to be issued under the Placing (if necessary); and
(iv) none of the warranties, representations, undertakings and agreements made by the Company and set out in the Placing Agreement have been breached in any material respect (or, if capable of being remedied, has not been remedied), or is misleading, inaccurate or untrue in any material respect.
If the above conditions are not fulfilled to the satisfaction of the Placing Agent or waived by the Placing Agent (to the extent permissible) on or before the fifteenth (15) Business Days from the date of the Placing Agreement (or such later date as may be agreed by the Placing Agent and the Company), all rights, obligations and liabilities of the parties under the Placing Agreement shall cease and determine and none of the parties shall have any claim against any other party in respect of the Placing save for any antecedent breaches of the Placing Agreement.
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Completion of the Placing shall take place as soon as possible following the satisfaction of the conditions set out above and in any event not later than the fourth Business Days immediately following the satisfaction of the conditions set out above (or such other date as maybe agreed by the Placing Agent and the Company).
Further announcement will be made by the Company upon the completion of the Placing.

The Placing Agent shall use its best endeavour to procure, on behalf of the Company, each Placee to undertake to the Company that it shall not, without the prior written consent of the Company, directly or indirectly, in the period commencing on the date of completion of the Placing and ending on a date which is 12 months from the date of allotment and issue of the Placing Shares transfer or dispose of, nor enter into any agreement to transfer or dispose of or otherwise create any options, rights, interests or encumbrances in respect of any of the Placing Shares or any interest in such Placing Shares (which includes any interest in a company which holds any such Placing Shares).
The Company undertakes to and covenants with the Placing Agent that, without the prior written consent of the Placing Agent (whose consent shall not be unreasonably withheld), that the Company will not (save pursuant to the exercise of any options which have been or may be granted or issue of any options under the Share Option Schemes or any scrip dividend or similar schemes of the Company in accordance with the Memorandum and Bye-laws or save for the issue of the Shares which are offered to all Shareholders whose names appear on the Company's register of members on a fixed record date in proportion to their then holdings of Shares) within a period commencing from the date of the Placing Agreement and ending on the expiry of three months from the date of completion of the Placing issue or agree to issue any Shares or securities in the Company or grant or agree to grant any options, warrants or other rights carrying the rights to subscribe for, or otherwise convert into, or exchange for, any securities of the Company.

The Placing Agent may, in its reasonable opinion, terminate the Placing Agreement by notice in writing to the Company at any time up to 12:00 noon on the second Business Day immediately following the date of receipt of a copy of the Listing Approval by the Placing Agent from the Company if:
(i) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the reasonable opinion of the Placing Agent materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Placing; or
(ii) there is any change in national, international, financial, exchange control, political, economic conditions in Hong Kong which in the reasonable opinion of the Placing Agent would be materially adverse in the consummation of the Placing; or
(iii) there is any breach of the warranties, representations and undertakings given by the Company in the Placing Agreement and such breach is considered by the Placing Agent on reasonable grounds to be material in the context of the Placing; or
(iv) there is any material change (whether or not forming part of a series of changes) in market conditions which in the reasonable opinion of the Placing Agent would materially and prejudicially affect the Placing or makes it inadvisable or inexpedient for the Placing to proceed; or
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(v) any statement contained in this announcement and other announcements or circulars (if required) in connection with the Placing Agreement or in relation to the Placing has become or been discovered to be untrue, incorrect or misleading in any material respect which in the opinion of the Placing Agent would be materially adverse in the consummation of the Placing; or
(vi) any event of force majeure including, without limiting the generality thereof, any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out; or
(vii) any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole whether or not ejusdem generis with any of the foregoing.
The Company may, in its reasonable opinion, after consultation with the Placing Agent, terminate the Placing Agreement by notice in writing to the Placing Agent at any time up to 12:00 noon on the second Business Day immediately following the date of receipt of a copy of the Listing Approval by the Placing Agent from the Company if there is a breach of the warranties, representations and undertakings given by the Placing Agent in this Agreement and such breach is considered by the Company on reasonable grounds to be material.

The Company is an investment holding company with its subsidiaries principally engaged in coal-related business and the manufacturing and distribution of personal care and beauty products and provision of beauty services.
The Directors consider it beneficial for the Group to raise fund through the Placing. The Placing represents a good opportunity to raise additional funds for the Company while broadening the Shareholder and capital base of the Company as well as strengthening the financial position of the Group. The Directors consider that the Placing is fair and reasonable and in the interests of the Company and the Shareholders as a whole.
The gross proceeds from the Placing will be approximately HK$48.0 million. The net proceeds from the Placing will amount to approximately HK$47.6 million, of which HK$17.0 million is intended to be used for repaying the outstanding debts due to (i) CEC Resources and Minerals Holdings Limited, a substantial shareholder of the Company, of which Mr. Sun David Lee, an executive Director and the Chairman of the Board, is a director; and (ii) Elmfield Limited, which is wholly and beneficially-owned by Dr. Kung Chi Kang Silver, a non-executive Director, and the remaining for general working capital of the Group. The net price raised per Placing Share will be approximately HK$0.119 per Share.

Save as disclosed above, the Company had not raised any fund from the issuance of any equity securities of the
Company in the past twelve months immediately preceding the date of this announcement.
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The existing shareholding structure of the Company and the effect on the shareholding structure of the Company upon completion of the Placing are set out below:

Sharp Victory Holdings Limited

(Note 1) 6,465,850,314 75.00 6,465,850,314 71.68

Placees

(Note 2) - - 400,000,000 4.43

Other public Shareholders

(Note 2) 2,155,283,438 25.00 2,155,283,438 23.89

Notes:

1. Sharp Victory Holdings Limited, a company incorporated in the British Virgin Islands with limited liability, is wholly and beneficially-owned by Mr. Zhu Xinjiang, a non-executive Director.

2. Pursuant to the Placing Agreement, the Placing Agent agreed to procure that the Placees and their ultimate beneficial owners shall be third parties independent of the directors, chief executive and substantial shareholders of the Company or any of its subsidiaries or their respective associates (each as defined in the Listing Rules). Therefore, the Placees shall be treated as public Shareholders.

Application will be made by the Company to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

In this announcement, unless the context otherwise requires, the following words and expressions shall have the meaning ascribed to them below:
"AGM" the annual general meeting of the Company held on 27 August 2012 "Board" the board of Directors
"Business Day(s)" any day(s) (excluding Saturdays, Sundays and public holidays) in Hong Kong on which licensed banks in Hong Kong are generally open for normal banking business to the public
"Company" Asia Coal Limited, a company incorporated in the Bermuda with limited liability and the securities of which are listed on the Stock Exchange
"Director(s)" the director(s) of the Company
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"General Mandate" the mandate granted to the Directors by the Shareholders at the AGM to allot, issue and deal with up to 20% of the then aggregate nominal amount of the entire issued share capital of the Company as at the date of passing the resolution at the AGM
"GF CB" the zero coupon unsecured convertible bonds issued and redeemed by the
Company, details of which are set out in the circulars of the Company dated
8 February 2013 and 19 May 2008 respectively
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the PRC
"Listing Approval" the letter from the Stock Exchange confirming that the Listing Committee of the Stock Exchange has granted listing of and permission to deal in the Placing Shares
"Listing Committee" the meaning ascribed thereto in the Listing Rules
"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange
"Memorandum and the memorandum of association and bye-laws of the Company
Bye-laws"
"Placee(s)" any professional, institutional or other investors procured by or on behalf of the Placing Agent and/or its agent(s) to subscribe for any of the Placing Shares
"Placing" the placing of the Placing Shares by the Company, through the Placing Agent, pursuant to the Placing Agreement
"Placing Agent" Shenyin Wanguo Capital (H.K.) Limited, a licensed corporation to carry on business in type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
"Placing Agreement" the conditional placing agreement entered into between the Company and the Placing Agent dated 22 April 2013 (after trading hours) in relation to the Placing
"Placing Price" HK$0.12 per Placing Share
"Placing Share(s)" up to 400,000,000 new Shares to be placed pursuant to the Placing Agreement
"PRC" The People's Republic of China
"SFO" Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) "Share(s)" ordinary share(s) of HK$0.01 each in the share capital of the Company "Shareholder(s)" holder(s) of the Share(s)
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"Share Option Schemes" the two share option schemes adopted by the Company pursuant to resolutions passed on 26 August 2003 and 28 September 2007 respectively
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"substantial shareholder" the meaning ascribed thereto in the Listing Rules
"Termination CB" the zero coupon unsecured convertible bonds issued and redeemed by the
Company, details of which are set out in the circulars of the Company dated
8 February 2013 and 28 January 2011 respectively "HK$" Hong Kong dollars, the lawful currency of Hong Kong "%" per cent.
By Order of the Board Asia Coal Limited SUN David Lee Chairman
Hong Kong, 22 April 2013

As at the date of this announcement, the Board comprises (i) Mr. SUN David Lee as executive Director; (ii) Mr. Zhu Xinjiang, Dr. Kung Chi Kang Silver and Mr. YEUNG Ting Lap, Derek Emory as non-executive Directors; and (iii) Mr. HO Man Kin, Tony, Mr. LI Kar Fai, Peter and Mr. Edward John HILL III as independent non-executive Directors.

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