Announcement - Proposed Share Consolidation


CHINA TAISAN TECHNOLOGY GROUP HOLDINGS LIMITED

(Company Registration Number: 200711863D)



PROPOSED CONSOLIDATION OF EVERY TEN (10) EXISTING ORDINARY SHARES IN THE CAPITAL OF THE COMPANY INTO ONE (1) ORDINARY SHARE



  1. INTRODUCTION


    1. The Board of Directors (the 'Board' or 'Directors') of China Taisan Technology Group Holdings Limited (the 'Company' and together with its subsidiaries, the 'Group') wishes to announce that that the Company is proposing to undertake a share consolidation exercise (the 'Proposed Share Consolidation') pursuant to which the Company will consolidate every ten (10) existing ordinary shares ('Shares') in the capital of the Company into one (1) ordinary share ('Consolidated Share'). Accordingly, under the Proposed Share Consolidation, every ten (10) Shares registered in the name of each shareholder of the Company ('Shareholder') as at the books closure date to be determined by the Directors in their absolute discretion as they deem fit ('Books Closure Date'), will be consolidated into one (1) Consolidated Share.


    2. Shareholders should note that the number of Consolidated Shares which they will be entitled to pursuant to the Proposed Share Consolidation, based on their holdings of the Shares as at the Books Closure Date, will be rounded down to the nearest whole Consolidated Share and any fractions of Consolidated Shares arising from the Proposed Share Consolidation will be disregarded. All fractional entitlements arising from the implementation of the Proposed Share Consolidation will be dealt with in such manner as the Directors may, in their absolute discretion, deem fit in the interests of the Company, including (i) disregarding, or

      (ii) aggregating and selling the same and retaining the net proceeds for the benefit of the Company.


    3. DETAILS OF THE PROPOSED SHARE CONSOLIDATION


      1. As at the date of this announcement, the Company has an issued share capital of RMB 562,103,000 divided into 56,329,925 Shares. Following the Proposed Share Consolidation, the Company will have an issued share capital of RMB 562,103,000 divided into approximately 5,632,992 Consolidated Shares.


      2. Each Consolidated Share shall rank pari passu in all respects with each other, and will be traded in board lots of one hundred (100) Consolidated Shares.


      3. The Proposed Share Consolidation will not involve the diminution of any liability in respect of unpaid capital or the payment to any Shareholder of any paid-up capital of the Company, and has no effect on the shareholders' funds of the Group.


      4. Shareholders are not required to make any payment to the Company in respect of the Proposed Share Consolidation. The Proposed Share Consolidation will not cause any changes to the percentage shareholding of each Shareholder in the Company, other than non-material changes due to rounding.


      5. Subject to Shareholders' approval being obtained for the Proposed Share Consolidation at the extraordinary general meeting ('EGM') to be convened by the Company, Shareholders' holdings of the Consolidated Shares arising from the Proposed Share Consolidation will be ascertained on the Books Closure Date.


      6. RATIONALE OF THE PROPOSED SHARE CONSOLIDATION


        1. Since 2 March 2015, the SGX-ST has implemented a minimum trading price of S$0.20 as a continuing listing requirement for Mainboard-listed issuers. A one- time transition period of 12 months (i.e. to 1 March 2016) is given to affected issuers to undertake corporate actions to meet the new requirement, and such issuers will only be placed on the watch-list if they are unable to meet the minimum trading price requirement after this 12-month transition period. Issuers which are unable to take steps to raise its minimum trading price and exit the watch-list will be delisted after a 36-month cure period.


        2. On 22 June 2015, the Company completed the consolidation of every twenty (20) existing ordinary shares in the capital of the Company into one (1) Share (the 'June 2015 Share Consolidation'). As stated in the circular to Shareholders dated 13 May 2015 in relation to the June 2015 Share Consolidation (the 'June 2015 Circular'), the rationale of the June 2015 Share Consolidation is to, inter alia, facilitate the Company's ability to satisfy the continuing listing requirement imposed by the SGX-ST for Mainboard-listed issuers to have a minimum trading price per share of S$0.20. Full details of the rationale for the June 2015 Share Consolidation may be found in the Company's June 2015 Circular, a copy of which is available at www.sgx.com.


        3. The market price of the Shares after the completion of the June 2015 Share Consolidation has fallen below the minimum trading price per share of S$0.20. As such, the Directors believe that the Proposed Share Consolidation will generally be beneficial to the Company and its Shareholders as the Proposed Share Consolidation would facilitate the Company's ability to satisfy the continuing listing requirement imposed by the SGX-ST to have a minimum trading price per share of S$0.20.


        4. The Proposed Share Consolidation will further rationalise the share capital of the Company by reducing the number of Shares outstanding, and the trading price per Consolidated Share should theoretically be proportionally higher than the trading price per Share prior to the Proposed Share Consolidation. This will reduce the fluctuation in magnitude of the Company's share price and market capitalisation and reduce the percentage transaction cost for trading in each board lot of Shares.


        5. Furthermore, the Proposed Share Consolidation may also increase the profile of the Company amongst institutional investors and the coverage of the Company amongst research houses and fund managers. This may, in turn, increase market interest and activity in the Shares, and generally render the Shares more attractive to investors.


        6. Shareholders should note, however, that there is no assurance that the Proposed Share Consolidation will achieve the desired results as stated in this Section 3, nor is there assurance that such results (if achieved) may be sustained in the longer term.


        7. APPROVALS AND CONDITIONS


          1. The implementation of the Proposed Share Consolidation is subject to Shareholders' approval by way of an ordinary resolution at the EGM.


          2. An application will be made to the SGX-ST for the dealing in, listing of and quotation of the Consolidated Shares pursuant to the Proposed Share Consolidation on the SGX-ST. An appropriate announcement on the outcome of the application will be made in due course.


          3. EFFECT ON THE COMPANY'S TAIWAN DEPOSITORY RECEIPTS ('TDRS')


            1. As at the date of this announcement, the Company has in issue a total of 125,709,905 TDRs with a conversion ratio of 0.1 Share for 1 TDR. Pursuant to the Proposed Share Consolidation, the conversion ratio of the TDRs will be adjusted to 0.01 Consolidated Share for 1 TDR.


            2. DESPATCH OF CIRCULAR


              1. Subject to the receipt of the approval in-principle from the SGX-ST, a circular containing, inter alia, further information on the Proposed Share Consolidation will be despatched to Shareholders in due course.


              2. Meanwhile, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Company's securities. Shareholders should


                3. consult their stockbrokers, solicitors or other professional advisors if they have any doubts about the action they should take.


                BY ORDER OF THE BOARD


                Lin Wen Chang


                Chief Executive Officer 13 November 2015

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