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.
CONNECTED TRANSACTION
THE ACQUISITIONS
The First Acquisition
On 10 January 2019, the Purchaser, a wholly-owned subsidiary of the Company, entered into the First Agreement with the First Vendor under which the Purchaser has conditionally agreed to purchase the First Sale Shares from the First Vendor at the consideration of HK$107,129,000.
The First Sale Shares represent 20% of the issued share capital in each of the First Target Companies. The First Target Companies are non wholly owned subsidiaries of the Company. Upon completion, the First Target Companies will be owned as to 80% by GAL, a 72% non wholly-owned subsidiary of the Purchaser, and as to 20% by the Purchaser, and the First Target Companies will continue to be accounted as subsidiaries of the Group with their financial statements consolidated with the accounts of the Group.
The Second Acquisition
On 10 January 2019, the Purchaser entered into the Second Agreement with the Second Vendor under which the Purchaser has conditionally agreed to purchase the Second Sale Shares from the Second Vendor at the consideration of HK$92,871,000.
The Second Sale Shares represent 20% of the issued share capital in the Second Target Company. The Second Target Company is a 80% non wholly-owned subsidiary of the Company. Upon completion of the Second Acquisition, the Second Target Company together with its wholly-owned subsidiary will become wholly-owned subsidiaries of the Group with their financial statements consolidated with the accounts of the Group.
The First Target Companies and the Second Target Company, together with their subsidiaries, operate the financial services business of the Group.
LISTING RULES IMPLICATIONS
As each of the Vendors is indirectly wholly-owned by Mr. Cheung, the First Acquisition and the Second Acquisition are required to be aggregated for the purpose of classifying the transactions. In addition, as Mr. Cheung is a connected person of the Company at the subsidiary level, the Acquisitions also constitute connected transactions for the Company.
As the applicable ratios in respect of the Acquisitions are more than 1% but less than 5%, the Acquisitions are subject to the reporting and announcement requirements and exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
THE ACQUISITIONS
The First Agreement
Date: 10 January 2019
Parties:
(1) The Purchaser; and
(2) The First Vendor.
Subject matter
Pursuant to the First Agreement, the First Vendor has agreed to sell and the Purchaser has agreed to purchase the First Sale Shares. The First Sale Shares represents 20% of the issued share capital of each of the First Target Companies.
Consideration
The consideration for the First Acquisition is HK$107,129,000 (subject to possible adjustment, if any) and was determined by the parties after arm's length negotiations with reference to the sum of the following items (collectively referred to as the ''First Consideration Principle''):
1. 2.2 times of the 30% of the net asset value of the First Target Companies as at 31 December 2015;
2. The further capital contribution made by the First Vendor and Mr. Cheung to the First Target Companies from 1 January 2016 until the date of announcement; and
3. Undistributed profits of the First Target Companies attributable to the First Vendor and
Mr. Cheung from 1 January 2016 to 31 December 2018.
The consideration will be satisfied by the internal resources of the Group and is payable in accordance with the following schedule:
(1) 35% of the consideration, equivalent to HK$37,495,150, is payable on or before 11 January 2019;
(2) 50% of the consideration, equivalent to HK$53,564,500, is payable on or before 31 January 2019; and
(3) the remaining balance of the consideration, equivalent to HK$16,069,350, is payable within 30 days upon the release of 2018 audited financial statements of the First Target Companies.
The consideration for the First Agreement may be adjusted on a dollar-to-dollar basis in accordance with the 2018 audited financial statements of the First Target Companies and the First Consideration Principle.
Conditions precedent
Completion of the First Agreement is conditional upon the transactions contemplated under the First Agreement having obtained the required approvals (if necessary) from the Stock Exchange, the SFC and the relevant authorities, and the parties and/or their respective ultimate controlling shareholders having obtained (where necessary) the consents and/or approvals from their respective shareholders, board of directors and relevant supervisory authorities.
The parties have agreed to use their best endeavours to cause the completion of the conditions to the First Agreement as soon as practicable.
The Second Agreement
Date: 10 January 2019
Parties:
(1) The Purchaser; and
(2) The Second Vendor.
Subject matter
Pursuant to the Second Agreement, the Second Vendor has agreed to sell and the Purchaser has agreed to purchase the Second Sale Shares. The Second Sale Shares represents 20% of the issued share capital of the Second Target Company.
Consideration
The consideration for the Second Acquisition is HK$92,871,000 (subject to possible adjustment, if any) and was determined by the parties after arm's length negotiations with reference to the sum of the following items (collectively referred to the ''Second Consideration Principle''):
1. 2.2 times of the 30% of the net asset value of the Second Target Company as at 31 December 2015;
2. The further capital contribution made by the Second Vendor and Mr. Cheung to the Second Target Company from 1 January 2016 until the date of announcement; and
3. Undistributed profits of the Second Target Company attributable to the Second Vendor
and Mr. Cheung from 1 January 2016 to 31 December 2018.
The consideration will be satisfied by the internal resources of the Group and is payable in accordance with the following schedule:
(1) 35% of the consideration, equivalent to HK$32,504,850, is payable on or before 11 January 2019;
(2) 50% of the consideration, equivalent to HK$46,435,500, is payable on or before 31 January 2019; and
(3) the remaining balance of the consideration, equivalent to HK$13,930,650, is payable within 30 days upon the release of the 2018 audited financial statements of the Second Target Company.
The consideration for the Second Agreement may be adjusted on a dollar-to-dollar basis in accordance with the 2018 audited financial statements of the Company and the Second Consideration Principle.
Conditions precedent
Completion of the Second Agreement is conditional upon the transactions contemplated under the Second Agreement having obtained the required approvals (if necessary) from the Stock Exchange, the SFC and the relevant authorities, and the parties and/or their respective ultimate controlling shareholders having obtained (where necessary) the consents and/or approvals from their respective shareholders, board of directors and relevant supervisory authorities.
The parties have agreed to use their best endeavours to cause the completion of the conditions to the Second Agreement as soon as practicable.
INFORMATION ON THE TARGET COMPANIES
Each of the First Target Companies is held as to 80% by GAL, a 72% owned subsidiary of the Group, and as to 20% by the Purchaser as at the date of this announcement.
The First Target Companies have seven directly held wholly-owned subsidiaries established in Hong Kong and four indirectly held wholly-owned subsidiaries established in the PRC. Among these subsidiaries, CG Securities is licensed to carry out Type 1, Type 2, Type 4, Type 6 and Type 9 regulated activities under the SFO, and CG Asset Management Limited is licensed to carry out type 4 and type 9 regulated activities under the SFO.
The Second Target Company is an investment holding company. As at the date of this announcement, the Second Target Company is held as to 80% by the Purchaser and as to 20% by the Second Vendor. The wholly-owned subsidiary of the Second Target Company, CG Credit, holds a money-lender license in Hong Kong.
The Target Companies together with their subsidiaries, operate the financial services business of the Group.
Organisation chart of the Target Companies before and upon completion of the Acquisitions
Before the Acquisitions
The Company
100%
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Disclaimer
China Goldjoy Group Ltd. published this content on 10 January 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 10 January 2019 05:28:10 UTC
