SYNERTONE COMMUNICATION CORP 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 appears for information purpose only and does not constitute an offer or an invitation to induce an offer by any person to acquire, subscribe for or purchase any securities.
協 同 通 信 集 團 有 限 公 司
Synertone Communication Corporation(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1613)On 27 November 2015 (after the trading hours of the Stock Exchange), the Purchaser and the Vendors entered into the S&P Agreement for the acquisition by the Purchaser of 49% equity interest in Sense Field Group Limited, for a consideration of HK$195 million to be satisfied by the issue and allotment of the Consideration Shares at the issue price of approximately HK$0.1474 per Consideration Share upon Completion. Detailed terms and conditions of the S&P Agreement are set out in this announcement.
As the highest of the applicable Percentage Ratios in respect of the Acquisition is more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. As such, the Acquisition is subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.
The Board is pleased to announce that on 27 November 2015 (after the trading hours of the Stock Exchange), the Purchaser and the Vendors entered into the S&P Agreement in respect of the Acquisition, the principal terms and conditions of which are set out below.
Date | : | 27 November 2015. |
Vendors | : |
Cheng Edward, Xiong Sylvia Wei and Hua Shu have respectively agreed to transfer 20, 24 and 5 ordinary shares of Sense Field to the Purchaser, which amounts to 49 ordinary shares of Sense Field in total (representing 49% of its issued share capital). To the best knowledge of the Board, the above individuals are all Independent Third Parties. |
Purchaser | : | Vastsuccess Holdings Limited, a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of the Company. |
Subject matter | : | The Sale Shares, representing 49% of the issued share capital of Sense Field. |
Consideration | : | The consideration payable by the Purchaser for the purchase of the Sale Shares is HK$195 million which will be satisfied by the allotment and issue of the Consideration Shares at the issue price of approximately HK$0.1474 per Consideration Share ('Issue Price') to the Vendors upon Completion. The 1,323,000,000 Consideration Shares to be issued represent approximately 18.76% of the issued share capital of the Company as at the date of this announcement and approximately 15.80% of the Company's issued share capital as enlarged by the Consideration Shares (assuming that there will be no other change in the share capital of the Company immediately after the date of this announcement and prior to the issue of the Consideration |
Shares). The Issue Price represents a premium of approximately 4.5% and 1.8% to the closing price of HK$0.141 for the Shares on the Stock Exchange on 27 November 2015 (date of the S&P Agreement) and the average closing price of approximately HK$0.1448 for the last five consecutive trading days (up to and including 27 November 2015) respectively. The Consideration Shares will be issued pursuant to the General Mandate. An application will be made by the Company to the Stock Exchange for the approval of listing of, and permission to deal in, the Consideration Shares. The Consideration Shares, when issued upon Completion, will be credited as fully paid and will rank pari passu in all respects with the existing Shares in issue. The Consideration Shares will be subject to a lock-up period of 3 months commencing from the Completion Date. | ||
Warranties | : | The Vendors jointly and severally represent, warrant and undertake to the Purchaser the warranties set out in the S&P Agreement. |
The Consideration was determined by the Purchaser and the Vendors following arm's length negotiation and with reference to a business valuation report dated 27 November 2015 prepared by Roma Appraisals Limited ('Roma'), a valuer independent to the Group and the Vendors, which has put a valuation of RMB354 million (approximately HK$435 million) to the SF Group as at 31 October 2015. In determining the business valuation of the SF Group, Roma has adopted the discounted cash flow method under the income-based approach as its valuation methodology. The Consideration under the S&P Agreement represents a discount of approximately 8.52% to the business valuation as determined by Roma mentioned above. No discount factor was provided by Roma in its valuation notwithstanding that the Purchaser would only be acquiring 49% of the equity interest in Sense Field because:
(i) the Purchaser would become the single largest shareholder of Sense Field upon Completion; and (ii) pursuant to the shareholders agreement to be entered into between the Purchaser and the existing shareholders of Sense Field (save and except Mr. Cheng Edward, who will no longer be a shareholder of Sense Field upon Completion) upon Completion, the Purchaser would have a right to subscribe further shares of Sense Field to increase its shareholding to more than 50%.
Conditions precedent to CompletionCompletion of the S&P Agreement is conditional upon, amongst others, (i) the Listing Committee having granted the listing of, and permission to deal in the Consideration Shares, and such permission not subsequently revoked or withdrawn prior to Completion; (ii) all necessary approvals, consents, authorisations, or waivers (as appropriate) from, or notices to, third parties, the Stock Exchange and/or any other regulatory authorities having been obtained for the S&P Agreement and the transactions contemplated therein; (iii) the Purchaser having satisfied its due diligence on the SF Group and its businesses on or before the Completion Date; and (iv) the warranties given by the Vendor(s) in the S&P Agreement remaining true and accurate and not misleading in any material respect.
In the event any of the conditions precedent shall not have been satisfied by the Long Stop Date, all rights and obligations of the parties under the S&P Agreement shall terminate and cease to have any effect, and no party shall have any claim against the other save for claim (if any) in respect of any antecedent breach thereof.
Subject to the fulfilment of the conditions as set out in the paragraph headed 'Conditions precedent to Completion' above and the terms and conditions of the S&P Agreement, Completion shall take place within seven Business Day upon fulfilment of such conditions (or such other date as the parties may agree in writing), unless the Purchaser exercises its right to waive any such conditions precedent (if allowed under the applicable laws, regulations and the Listing Rules) as contained in the S&P Agreement.
All the Consideration Shares will be allotted and issued pursuant to the General Mandate. Under the General Mandate, the Directors are allowed to allot and issue up to 1,409,800,000 Shares, being 20% of the issued share capital of the Company as at the date of the annual general meeting of the Company on 30 September 2015.
As at the date of this announcement, the Company has not issued any Shares under the General Mandate. As such, the General Mandate will be sufficient and no further Shareholders' approval is required for the allotment and issue of the Consideration Shares.
Corporate structures of Sense Field before and after the Acquisition are as follows:
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