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.
This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.
China Gogreen Assets Investment Limited(Incorporated in Bermuda with limited liability)
(Stock Code: 397) DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO PROPOSED ACQUISITION OF MINORITY EQUITY INTERESTS IN JUN YANG HOLDINGS THE SP AGREEMENT
On 17 January 2013 (after trading hours), the Company entered into the SP Agreement with the Vendors pursuant to which the Company has conditionally agreed to acquire, and each of the Vendors has conditionally agreed to sell the Sale Shares, representing approximately 11.247% of the issued share capital of Jun Yang Holdings, for a Consideration of HK$42,284,991.36. Subject to the fulfilment of the Conditions Precedent as detailed below, the Consideration will be satisfied by the Company allotting and issuing, credited as fully paid, of 264,281,196
Consideration Shares to the Vendors (or such other person as nominated by the Vendors). Such Consideration Shares are subject to a lock-up period of 9 months from the date of the SP Agreement.
As part of the Group's continuing strategy to strengthen its business in the downstream solar energy business, the Directors believe that the Acquisition represents an excellent opportunity for the Group to increase its shares in downstream solar power projects.
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As at the date of this announcement, one of the Vendors, Mr. Bai Liang, is an executive Director and Chairman of the Company and the other Vendors, namely Mr. Duan Lun and Mr. Liu Xinglang, are respectively, the nephew and father-in-law of an executive Director of the Company. As such, all the Vendors are connected persons of the Company within the meaning of the Listing Rules and therefore, the Acquisition constitutes a connected transaction for the Company and is subject to the reporting, announcement and independent Shareholders' approval requirements set out in Chapter 14A of the Listing Rules.
Furthermore, certain of the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in respect of the Acquisition exceed 5%, the Acquisition also constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.
An Independent Board Committee will be established to advise the independent Shareholders in respect of the terms of the SP Agreement and the transactions contemplated thereunder.
The SGM will be convened and held for the independent Shareholders to consider, and if thought fit, to approve, among other matters, the Acquisition and the allotment and issue of the Consideration Shares as contemplated under the SP Agreement. The votes of the independent Shareholders regarding the resolution for approval of the SP Agreement and the transactions contemplated thereunder will be taken by way of poll at the SGM.
The Circular containing, among other matters, (i) further information on the Acquisition and Jun Yang Group; (ii) the advice of the independent financial adviser regarding the Acquisition; (iii) the recommendation of the Independent Board Committee regarding the Acquisition; and (iv) the notice convening the SGM and a form of proxy will be despatched to the Shareholders on or before 7 February 2013.
The Board wishes to announce that the Company has entered into the SP Agreement with the Vendors in respect of the acquisition of approximately 11.247% of the issued share capital of Jun Yang Holdings, a non-wholly owned subsidiary of the Company. Major terms of the SP Agreement are set out below.
Date:17 January 2013
Parties:
(1) Purchaser: the Company
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(2) Vendors: (i) Mr. Bai Liang, one of the executive Directors and the Chairman of the
Company;
(ii) Mr. Duan Lun (the nephew of Mr. Peng Libin, an executive Director);
and
(iii) Mr. Liu Xinglang (the father-in-law of Mr. Peng Libin, an executive
Director)
Each of the Vendors conditionally agreed to sell, and the Company conditionally agreed to purchase, the Sale Shares free from all encumbrances for an aggregate consideration of HK$42,284,991.36. The Sale Shares represent approximately 11.247% of the issued share capital of Jun Yang Holdings, of which approximately 5.623%, approximately 2.812% and approximately
2.812% is held by Mr. Bai Liang, Mr. Duan Lun and Mr. Liu Xinglang respectively.
The Consideration for the Sale Shares is HK$42,284,991.36, which shall be satisfied by the allotment and issue, credited as fully paid, of 264,281,196 Consideration Shares at an issue price of HK$0.16 per Consideration Share by the Company to the Vendors (or their respective nominee(s)) at Completion in the proportion set out below:
Names (or their respective nominee(s)) Number of Consideration Shares
Bai Liang 132,140,598
Duan Lun 66,070,299
Liu Xinglang 66,070,299
The Sale Shares were acquired by the Vendors upon the exercise of the respective share options granted to each of them pursuant to their respective deed of option all dated 21 June 2010. The respective original subscription cost of Mr. Bai Liang, Mr. Duan Lun and Mr. Liu Xinglang of their respective Sale Shares were approximately HK$15,600, approximately HK$7,800 and HK$7,800. The Consideration was determined between the parties with reference to, among other matters, the net assets value of Jun Yang Group and the business prospects of Jun Yang Group. The Directors consider that the basis of the Consideration is fair and reasonable, and the settlement of the Consideration by the allotment and issue of the Consideration Shares is beneficial to the Company and the Shareholders as a whole.
Completion is conditional upon all necessary consents and approvals in relation to the transaction contemplated under the SP Agreement, having been obtained by the Company and such consents and approvals should be valid up to the Completion Date, including, but not limited to, (i) the passing of the ordinary resolution by the independent Shareholders at the SGM approving the Acquisition and the allotment and issue of the Consideration Shares; and (ii) the approval by the Stock Exchange for listings of, and permission to deal, in the Consideration Shares.
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If the Condition Precedents have not been fulfilled on or before 5:00 p.m. on 30 June 2013 (or such later date as the Company and the Vendors may agree in writing), the SP Agreement should be terminated. All provisions (save as the survival clauses in relation to notice and miscellaneous matters) of the SP Agreement should cease to be enforceable and the obligations of the parties thereunder should cease and terminate. No party should have any claim against the other save for the claim in respect of any antecedent breach of the SP Agreement.
Completion of the SP Agreement will take place on the first Business Day after the fulfillment of all Conditions Precedent (or such later date as the Company and the Vendors may agree in writing). The Company is under the right to not proceed with the Acquisition in the event that the entire Sale Shares is not completed simultaneously.
Consideration Shares and lock-up undertaking
The 264,281,196 Consideration Shares represent (i) approximately 4.19% of the existing issued share capital of the Company; and (ii) approximately 4.02% of the issued share capital of the Company as enlarged by allotment and the issue of the Consideration Shares.
The issue price of HK$0.16 per Consideration Share was arrived at by the Company and the Vendors after arm's length negotiation taking into account the closing price of the Shares prior to the signing of the SP Agreement. The issue price of the Consideration Shares also represents:
(a) a discount of approximately 3.03% to HK$0.165, being the closing price of the Shares on the date of the SP Agreement;
(b) a premium of approximately 4.30% over the average closing price of HK$0.1534 per Share as quoted on the Stock Exchange for the last five trading days up to and including the date of the SP Agreement; and
(c) a premium of approximately 27.90% over the average closing price of HK$0.1251 per Share as quoted on the Stock Exchange for the last 10 trading days up to and including the date of the SP Agreement.
The Consideration Shares will be allotted and issued by the Company pursuant to the Specific Mandate to be sought at the SGM. Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares. The Consideration Shares to be allotted and issued shall rank pari passu among themselves and with all Shares in issue on the date of Completion.
Pursuant to the SP Agreement, the Vendors have undertaken to the Company that save with the prior written approval of Company, it will not, and will procure that none of their respective nominees or trustees holding on trust for him will, dispose of or agree to dispose of, or create any encumbrances or third party rights against any direct or indirect interest in the Consideration Shares within a period of 9 months from the date of the SP Agreement.
The Directors consider that the terms of the issue of the Consideration Shares are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
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Jun Yang Holdings is a company incorporated in the Cayman Islands with limited liability and is a non- wholly owned subsidiary of the Company. It is an investment holding company and holds a number of subsidiaries incorporated in the British Virgin Islands, Hong Kong and the PRC.
Jun Yang Group is principally engaged in the development of large-scale solar photovoltaic power stations and rooftop power station. The principal projects currently undertaken by Jun Yang Group are:
- The 20-megawatt rooftop power station project in Zhengzhou, Henan Province, of which
1.5-megawatt construction has been completed;
- The 10-megawatt large-scale grid-connected on-ground solar photovoltaic power station project in Geermu, Qinghai Province which has been completed and put into full operation and has been generating revenue from the second half of 2012.
- The 20-megawatt rooftop power station project in Xuchang, Henan Province which has recently been completed and put into operation.
Set out below are certain audited consolidated financial information of Jun Yang Group for the two years ended 31 December 2010 and 2011 and the unaudited consolidated financial information of Jun Yang Group for the six months ended 30 June 2012.
HK$'000 HK$'000 HK$'000
Turnover - 18,190 10,996 (Loss)/profit before taxation and
extraordinary items (3,367) 3,116 (3,394) (Loss)/profit after taxation and
extraordinary items (3,367) 1,648 (4,126)
HK$'000 HK$'000 HK$'000
Net (liabilities)/assets (1,716) 3,431 233,345
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The Group is principally engaged in (i) solar energy business with a current focus on development, construction, operation and maintenance of power station projects; (ii) money lending business; and (iii) assets investment. As indicated in the Company's interim report for the six months ended
30 June 2012 and following the Group's disposal of China Gogreen Energy Investment Holdings Limited as announced in the Company's announcement dated 7 October 2012, the Company has been focusing on the development of the downstream solar energy market and has achieved encouraging progress in various projects undertaken by the Jun Yang Group. Following and/or approaching the completion of the solar photovoltaic power projects invested by the Jun Yang Group, the management of the Group is optimistic that the Group will be able to receive steady investment returns from Jun Yang Group. The Directors believe that the Acquisition represents an excellent opportunity for the Group to increase its shares in downstream solar power projects.
The Directors are of the view that the SP Agreement is on normal commercial terms and are fair and reasonable and in the interest of the Company and the Shareholders as a whole.
To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, save for Mr. Bai Liang and Mr. Peng Libin, no Director has a material interest in the SP Agreement and was required to abstain from voting at the meeting of the Board approving the SP Agreement and the transactions contemplated thereunder. Both Mr. Bai Liang and Mr. Peng Libin abstained from voting in the meeting of the Board approving the SP Agreement.
To the best of the Directors' knowledge, information and belief, no Shareholder is required to abstain from voting at the SGM.
As at the date of this announcement, one of the Vendors, Mr. Bai Liang, is an executive Director and Chairman of the Company and the other Vendors, namely Mr. Duan Lun and Mr. Liu Xinglang, are respectively, the nephew and father-in-law of an executive Director of the Company. As such, all the Vendors are connected persons of the Company within the meaning of the Listing Rules and therefore, the Acquisition constitutes a connected transaction for the Company and is subject to the reporting, announcement and independent Shareholders' approval requirements set out in Chapter
14A of the Listing Rules.
Furthermore, certain of the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in respect of the Acquisition exceed 5%, the Acquisition also constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.
An Independent Board Committee will be established to advise the independent Shareholders in respect of the terms of the SP Agreement and the transactions contemplated thereunder.
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The SGM will be convened and held for the independent Shareholders to consider, and if thought fit, to approve, among other matters, the Acquisition and the allotment and issue of the Consideration Shares as contemplated under the SP Agreement. The votes of the independent Shareholders regarding the resolution for approval of the SP Agreement and the transactions contemplated thereunder will be taken by way of poll at the SGM.
The Circular containing, among other matters, (i) further information on the Acquisition and Jun Yang Group; (ii) the advice of the independent financial adviser regarding the Acquisition; (iii) the recommendation of the Independent Board Committee regarding the Acquisition; and (iv) the notice convening the SGM and a form of proxy will be despatched to the Shareholders on or before
7 February 2013.
In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:
"Acquisition" the proposed acquisition of the Sale Shares by the Company pursuant to the terms of the SP Agreement
"Board" the board of Directors
"Business Day" a day (other than a Saturday) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours
"Circular" the circular to be despatched to the Shareholders by the
Company relating to, among other matters, the Acquisition
"Company" China Gogreen Assets Investment Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Main Board of the Stock Exchange
"Completion" completion o f t he Acquisition i n accordance with the provisions of the SP Agreement
"Completion Date" the date on which Completion is to take place
"Condition Precedent" condition precedent to the completion of the SP Agreement as set out in the paragraph headed "Conditions Precedent" in this announcement
"connected persons" has the meaning ascribed thereto in the Listing Rules
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"Consideration" the total consideration of HK$42,284,991.36 payable by the
Company to the Vendors for the Acquisition
"Consideration Shares" the 264,281,196 new Shares to be allotted and issued, credited as fully paid, by the Company to satisfy the Consideration
"Director(s)" the director(s) of the Company
"Group" The Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the PRC
"Independent Board Committee" t h e independent board committee of the Compan y established by all the independent non-executive Directors to advise the independent Shareholders on the terms of the SP Agreement and the transactions contemplated thereunder
"Jun Yang Group" Jun Yang Holdings and its subsidiaries
"Jun Yang Holdings" Jun Yang Solar Power Investment Holdings Limited, a company incorporated in the Cayman Islands with limited liability and a non-wholly o w ned subsidiary of the Company. As at the date of the SP Agreement, the Company holds approximately 56.66% of the issued share capital of Jun Yang Holdings
"Listing Rules" Rules Governing the Listing of Securities on the Stock
Exchange
"PRC" the People's Republic of China excluding, for the purpose of this announcement, Hong Kong, the Macau Special Administrative Region of the People's Republic of China and Taiwan
"Sale Shares" 4,000 shares of US$1.00 each, representing approximately
11.247% of the issued share capital of Jun Yang Holdings, of which 2,000 shares, 1,000 shares and 1,000 shares are held by Mr. Bai Liang, Mr. Duan Lun and Mr. Liu Xinglang respectively at the date of the SP Agreement
"SGM" the special general meeting of the Company to be convened to be held for the independent Shareholders to consider and, if thought fit, to appro v e , among other matters, the Acquisition as contemplated under the SP Agreement
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"Shares" shares of the Company of HK$0.02 each
"Shareholder(s)" shareholder(s) of the Company
"SP Agreement" the sale and purchase agreement dated 17 January 2013 entered into between the Company and the Vendors in relation to the Acquisition
"Specific Mandate" the specific mandate to be sought at the SGM to authorise the Directors to allot and issue the Consideration Shares
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Vendors" (i) Mr. Bai Liang, an executive Director and the Chairman of the Company; (ii) Mr. Duan Lun and (iii) Mr. Liu Xinglang
"HK$" Hong Kong dollar(s), the lawful currency of Hong Kong
"%" per cent.
By order of the Board
Executive Director
17 January 2013
As at the date of this announcement, the executive Directors are Mr. Bai Liang, Mr. Siu Kam Chau, Mr. Lawrence Tang and Mr. Peng Libin, and the independent non-executive Directors are Mr. Chan Chi Yuen, Mr. Chik Chi Man and Mr. Yu Chun Fai.
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