By 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 Cayman Islands with limited liability)
(Stock code: 1129) DISCLOSEABLE TRANSACTION DISPOSAL OF SHARES OF CHINESE ENERGY HOLDINGS LIMITED
The Board wishes to announce that on 18 December 2012 and 30 January 2013 respectively, the Vendor disposed the Sales Shares of 96,244,700 Chinese Energy Shares to the Agent (which in turn has disposed all the Sale Shares to its clients) at the Consideration. Immediately after the completion of the Disposals, the Group is not interested in any Chinese Energy Shares.
As the applicable percentage ratios of the Disposals, when aggregated, calculated pursuant to Rule 14.07 of the Listing Rules exceed 5% but are less than 25%, the Disposals constituted a discloseable transaction for the Company and are subject to reporting and announcement requirements of Chapter 14 of the Listing Rules.
Date: 18 December 2012 and 30 January 2013
Vendor: Bonus Raider Investments Limited, a wholly owned subsidiary of the
Company
Purchaser: The Agent (which in turn has disposed all the Sale Shares to its clients)
To the best of the knowledge, information and belief of the Board having made all reasonable enquiry, the Agent is a third party independent of the Company and connected persons (as defined under the Listing Rules) of the Company.
The Agent has confirmed that it has disposed the Sale Shares to four individuals namely Mr. Xin Jun, Mr. Ma Shui Cheong, Ms. Wang Jiao and Mr. Liang Yingshu, who are third parties independent and not connected (as defined in the Listing Rules) with the Company and its associates (as defined in the Listing Rules).
Asset disposed of: 96,244,700 Sale Shares
* For identification purpose only
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Consideration: Approximately HK$21.41 millon, which has been paid to the Vendor in cash.
22,000,000 Sales Shares were disposed at the price of HK$0.18 per Share on 18 December 2012 while 74,244,700 Sale Shares were disposed at the price of HK$0.235 per Share on 30 January 2013 by the Vendor to the Agent respectively. The Consideration was arrived at after arm's length negotiations between the Vendor and the Agent based on a discount of not more than 5% to the closing prices of Chinese Energy Shares on the respective preceding days to the date of the Disposals at the Stock Exchange with an average price per Sale Share of approximately HK$0.2224. The 5% discount was determined taken into account of the prevailing market prices of Chinese Energy Shares and the bulk volume of the Sale Shares. The Board considers that the Consideration is fair and reasonable.
Completion: Immediately before the Disposals, the Vendor was interested in
96,244,700 Chinese Energy Shares, representing approximately
10.59% of the issued share capital of Chinese Energy. Immediately after the completion of the Disposals, the Group is not interested in any Chinese Energy Shares.
The Group expects to recognize a loss in the amount of approximately HK$1.53 million for the
22,000,000 Sales Shares disposed on 18 December 2012 for the year ended 31 December 2012 (subject to the audit to be performed by the Company's auditors) and a loss in the amount of approximately HK$1.18 million for the 74,244,700 Sales Shares disposed on 30 January 2013 for the year ending 31 December 2013 (subject to the audit to be performed by the Company's auditors) as a result of the Disposals, representing the difference between the gross proceeds from the Disposals of approximately HK$21.41 million (as to HK$3.96 million for the year ended 31 December 2012 and as to approximately HK$17.45 million for the year ending 31
December 2013), the related commission and related expenses of approximately HK$0.10 million (as to approximately HK$30,000 for the year ended 31 December 2012 and as to approximately HK$70,000 million for the year ending 31 December 2013) and the fair value of the 96,244,700
Sale Shares as shown in the Group's financial statement as at 31 December 2011 in the amount of approximately HK$24.06 million.
The net proceeds of the Disposals are estimated to be approximately HK$21.31 million and are intended to be applied as general working capital and business developments of the Group.
Chinese Energy is principally engaged in provision of management services, investment in financial and investment products. Chinese Energy is a company incorporated in Hong Kong with limited liability whose shares are listed on the GEM.
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Set out below is a summary of the audited consolidated financial information of Chinese Energy for the two years ended 31 March 2011 and 2012 as disclosed in the annual reports of Chinese Energy:
For the financial year ended 31 March2011 HK$ million | 2012 HK$ million | |
Loss before taxation | 286.15 | 103.58 |
Loss after taxation | 317.30 | 125.49 |
According to the interim report of Chinese Energy for the six months ended 30 September 2012, Chinese Energy recorded unaudited net asset value of approximately HK$564.40 million as at 30
September 2012.
The Group is principally engaged in provision of water supply, sewage treatment; and construction of water supply and sewage treatment infrastructure.
In view of the continuous loss making performance of Chinese Energy since the year ended
31 March 2010 and the prolonged decline in market value of Chinese Energy Shares, the Directors consider the Disposals realization of the Group's investments in Chinese Energy, which is being classified as an available-for-sale investment of the Group could strengthen the cash position of the Group and minimize further impairment loss to be recognized on this available-for-sale investment. The Directors consider the Disposals fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole.
As the applicable percentage ratios of the Disposals, when aggregated, calculated pursuant to Rule 14.07 of the Listing Rules exceed 5% but are less than 25%, the Disposals constituted a discloseable transaction for the Company and are subject to reporting and announcement requirements of Chapter 14 of the Listing Rules.
DEFINITIONS
Unless otherwise defined, terms used in this announcement shall have the same meanings as those defined below:
"Agent" Astrum Capital Management Limited, a licensed corporation to carry out business in type 1 regulated activity (dealing in securities), type 2 regulated activity (dealing in futures contracts), type 6 regulated activity (advising on corporate finance) and type 9 regulated activity (asset management) under the SFO
"Board" the board of Directors
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"Chinese Energy" Chinese Energy Holdings Limited (stock code: 8009), a company incorporated in Hong Kong with limited liability whose shares are listed on the GEM
"Chinese Energy Shares" ordinary shares of HK$0.10 each in the issued share capital of Chinese Energy
"Company" China Water Industry Group Limited (stock code: 1129), a company incorporated in the Cayman Islands with limited liability whose shares are listed on the Main Board of the Stock Exchange
"Consideration" the aggregate considerations of the Disposals in the amount of approximately HK$21.41 million
"Disposals" disposals of the Sale Shares by the Vendor to the Agent on
18 December 2012 and 30 January 2013 respectively
"Directors" the directors of the Company
"GEM" the Growth Enterprise Market of the Stock Exchange
"Group" the Company and its subsidiaries
"Listing Rules" Rules Governing the Listing of Securities on the Stock
Exchange
"Sale Shares" 96,244,700 Chinese Energy Shares
"SFO" Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Vendor" Bonus Raider Inv estments Limited, a wholly owned subsidiary of the Company
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"%" per cent.
By order of the Board
Chairman and Chief Executive Officer
Hong Kong, 30 January 2013
As at the date of this announcement, the Board comprises Mr. Wang De Yin, Mr. Liu Feng, Mr. Lin Yue Hui, Ms. Chu Yin Yin, Georgiana and Ms. Deng Xiao Ting, all being executive directors, and Mr. Guo Chao Tian, Mr. Li Jian Jun and Mr. Wong Siu Keung, Joe, all being independent non-executive directors.
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