CHINA ALL ACCESS (HOLDINGS) LIMITED 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 the Cayman Islands with limited liability)
(Stock Code: 633) DISCLOSEABLE AND CONNECTED TRANSACTION: DISPOSAL OF 26% EQUITY INTEREST IN SHENZHEN XINGFEI DISPOSAL OF 26% EQUITY INTEREST IN SHENZHEN XINGFEIThe Board hereby announces that on 13 April 2015, Changfei Investment, a non-wholly owned subsidiary of the Company, entered into the Equity Transfer Agreement with the Purchaser in relation to the disposal of 26% equity interest in Shenzhen Xingfei by Changfei Investment for a total consideration of RMB234 million (equivalent to about HK$292.5 million). Upon completion of the Disposal, Changfei Investment's equity interest in Shenzhen Xingfei will decrease from 80% to 54%.
LISTING RULES IMPLICATIONS
As the applicable percentage ratios (as calculated in accordance with Rule 14.07 of the Listing Rules) for the Disposal are more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is required to be disclosed by way of this announcement.
As the Purchaser is owned and controlled by Mr. Chen Feng and Mr. Chen Chu Shan, who are directors of Shenzhen Xingfei and certain other subsidiaries of the Company, the Purchaser is a connected person of the Company at the subsidiary level and the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.
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By virtue of Rule 14A.101 of the Listing Rules, as (i) the Purchaser is a connected person of the Company at the subsidiary level; (ii) the Disposal is on normal commercial terms; (iii) the Board has approved the Disposal; and (iv) the Directors, including the independent non-executive Directors, have confirmed that the terms of the Disposal are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms and in the ordinary and usual course of business of the Group, and in the interests of the Company and the Shareholders as a whole, the Disposal is subject to the reporting and announcement requirements but is exempted from the circular, independent financial advice and Shareholders' approval requirements under Chapter 14A of the Listing Rules.
The Board hereby announces that on 13 April 2015, Changfei Investment entered into the Equity Transfer Agreement with the Purchaser in relation to the disposal of 26% equity interest in Shenzhen Xingfei by Changfei Investment on the principal terms and conditions as set out below:
13 April 2015
Parties
(1) Changfei Investment, a non-wholly owned subsidiary of the Company, as vendor
(2) the Purchaser, as purchaser
To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, (i) the Purchaser is a limited liability company established in the PRC and is principally engaged in investment holding and (ii) the Purchaser is owned and controlled by Mr. Chen Feng and Mr. Chen Chu Shan, who are directors of Shenzhen Xingfei and certain other subsidiaries of the Company. As the Purchaser is an associate (as defined in the Listing Rules) of Mr. Chen Feng and Mr. Chen Chu Shan, the Purchaser is a connected person (as defined in the Listing Rules) of the Company at the subsidiary level. Save for its relationship with Mr. Chen Feng and Mr. Chen Chu Shan, the Purchaser is independent of the Company and the connected persons (as defined in the Listing Rules) of the Company.
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Under the Equity Transfer Agreement, Changfei Investment has agreed to transfer, and the Purchaser has agreed to accept the transfer of, 26% equity interest in Shenzhen Xingfei together with all rights and obligations incidental thereto.
Consideration
The total consideration for the Disposal is RMB234 million (equivalent to about HK$292.5 million) and shall be payable in cash by the Purchaser in full on or before the date of completion of registration of the transfer of the equity interest in Shenzhen Xingfei with the relevant PRC industry and commerce bureau.
The consideration was determined by the parties after taking into account, among other factors, the net asset value of Shenzhen Xingfei of approximately RMB560 million as at 31 December 2014 and an agreed price-to-earnings ratio in respect of Shenzhen Xingfei based on its consolidated net profit after tax of approximately RMB121 million for the year ended 31 December 2014.
Completion of the Disposal is subject to the following conditions having been fulfilled:
(1) the approval by the shareholders and/or board of directors of the Company (where applicable) for the Equity Transfer Agreement and the transactions contemplated thereunder as may be required under the Listing Rules;
(2) the shareholders of Changfei Investment approving the Disposal;
(3) the shareholders of Shenzhen Xingfei approving the transfer of equity interest in Shenzhen Xingfei contemplated under the Disposal and the related amendments to the articles of association of Shenzhen Xingfei; and
(4) the relevant PRC industry and commerce bureau issuing a notice of completion of change of registration in respect of Shenzhen Xingfei.
As at the date of this announcement, all the conditions precedent above have not yet been fulfilled, save for condition precedent (1) above which has been fulfilled taking into account (among others) the matters disclosed under "Listing Rules Implications" below. Under the Equity Transfer Agreement, the parties shall procure the change of registration in Shenzhen Xingfei with the relevant PRC industry and commerce bureau as soon as possible after the signing of the Equity Transfer Agreement. In the
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event that any of the conditions precedent above is not fulfilled within six months after the date of the Equity Transfer Agreement (or such other date as may be agreed between Changfei Investment and the Purchaser), the Equity Transfer Agreement shall terminate automatically and the Disposal will not proceed.
Upon completion of the Disposal, Changfei Investment's equity interest in Shenzhen Xingfei will decrease from 80% to 54%, while the Purchaser 's equity interest in Shenzhen Xingfei will increase from 7.1% to 33.1%.
Shenzhen Xingfei will continue to be a subsidiary of the Company immediately upon completion of the Disposal.
The Group is principally engaged in provision of integrated information communication application solutions and services, and research and development and production of a wide spectrum of products and parts in the supply chain of various types of mobile terminals.
Shenzhen Xingfei is a limited liability company established in the PRC and a non-wholly owned subsidiary of the Company. As at the date of this announcement, Shenzhen Xingfei is the direct or indirect holding company (as the case may be) of five PRC subsidiaries. Shenzhen Xingfei and its operating subsidiaries are principally engaged in the research and development, manufacturing and sales of mobile phones and mobile power source products.
Set out below is the net profit (both before and after tax) of Shenzhen Xingfei for the years ended 31 December 2013 and 31 December 2014 according to the financial statements of Shenzhen Xingfei:
RMB million RMB million
Net profit before tax 122 138
Net profit after tax 106 121
As at 31 December 2014, the net asset value of Shenzhen Xingfei was approximately
RMB560 million.
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Subject to final audit, as the Disposal will not result in a loss of control in Shenzhen Xingfei by the Group and Shenzhen Xingfei will continue to be a subsidiary of the Company immediately upon completion of the Disposal, the Disposal is accounted for as an equity transaction, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss before tax is recognised. The Company expects to recognize an increase in equity attributable to equity shareholders of the Company before tax and non-controlling interest of approximately RMB88 million (equivalent to approximately HK$110 million) as a result of the Disposal,which is calculated on the basis of the difference between the net asset value of Shenzhen Xingfei attributable to the 26% equity interest in Shenzhen Xingfei and the consideration receivable from the Disposal.
The Group intends to use the net proceeds from the Disposal for general corporate purposes of Changfei Investment.
The Disposal is intended to provide the core management of Shenzhen Xingfei, i.e. Mr. Chen Feng and Mr. Chen Chu Shan, with the opportunity to own a substantial equity interest in Shenzhen Xingfei through the Purchaser as their investment holding company. The Directors consider that the Disposal can better align the interests of the core management of Shenzhen Xingfei with those of the Group as a whole, incentivize the core management of Shenzhen Xingfei for their continuing dedication and contribution to the development of Shenzhen Xingfei, and is conducive to the further release of the development potential of Shenzhen Xingfei.
The Directors (including the independent non-executive Directors) consider that the terms of the Equity Transfer Agreement (including the consideration thereof) are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms and in the ordinary and usual course of business of the Group, and in the interest of the Company and the Shareholders as a whole.
As the applicable percentage ratios (as calculated in accordance with Rule 14.07 of the Listing Rules) for the Disposal are more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is required to be disclosed by way of this announcement.
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As the Purchaser is owned and controlled by Mr. Chen Feng and Mr. Chen Chu Shan, who are directors of Shenzhen Xingfei and certain other subsidiaries of the Company, the Purchaser is a connected person of the Company at the subsidiary level and the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.
By virtue of Rule 14A.101 of the Listing Rules, as (i) the Purchaser is a connected person of the Company at the subsidiary level; (ii) the Disposal is on normal commercial terms; (iii) the Board has approved the Disposal; and (iv) the Directors, including the independent non-executive Directors, have confirmed that the terms of the Disposal are fair and reasonable, and the transactions contemplated thereunder are on normal commercial terms and in the ordinary and usual course of business of the Group, and in the interests of the Company and the Shareholders as a whole, the Disposal is subject to the reporting and announcement requirements but is exempted from the circular, independent financial advice and Shareholders' approval requirements under Chapter 14A of the Listing Rules.
As none of the Directors is regarded as having a material interest in the Disposal, none of the Directors is required to abstain from voting on the Board resolution approving the Equity Transfer Agreement and the transactions contemplated thereunder.
In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:
"Board" the board of Directors
"Changfei Investment" �i:Jrn-&�5i�:tfN0PJ (Shenzhen City Changfei Investment Company Limited*), a limited liability company established in the PRC and an indirect non-wholly owned subsidiary of the Company
"Company" China All Access (Holdings) Limited (r:f��W(�x)
:tfN0PJ), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"Director(s)" director(s) of the Company
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"Disposal" the transfer of 26% equity interest in Shenzhen Xingfei by Changfei Investment to the Purchaser pursuant to the terms and conditions of the Equity Transfer Agreement
"Equity Transfer
Agreement "
an agreement dated 13 April 2015 entered into between
Changfei Investment and the Purchaser in respect of the
Disposal
"Group" the Company and its subsidiaries
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Listing Rules" Rules Governing the Listing of Securities on the Stock
Exchange
"Mr. Chen Chu Shan" Mr. Chen Chu Shan, a PRC individual being a director of Shenzhen Xingfei and certain other subsidiaries of the Company
"Mr. Chen Feng" Mr. Chen Feng, a PRC individual being a director of Shenzhen Xingfei and certain other subsidiaries of the Company
"PRC" the People's Republic of China
"Purchaser" �i:Jrna�i�:tfN0PJ (Shenzhen City Teng Xing Wang Da Co., Ltd.*), a limited liability company established in the PRC and the purchaser as named in the Equity Transfer Agreement
"RMB" Renminbi, the lawful currency of the PRC "Shareholder(s)" shareholder(s) of the Company
"Shenzhen Xingfei" �i:Jrn�� :tfN0PJ (Shenzhen Xing Fei
Technology Co., Ltd.*), a limited liability company established in the PRC and an indirect non-wholly owned subsidiary of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"%" per cent.
* The English translation of the Chinese name is for information only, and should not be regarded as the official English translation of such name.
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In this announcement, for illustration purpose only, amounts quoted in RMB has been converted into HK$ at the rate of HK$1.00 to RMB0.80. Such exchange rate has been used, where applicable, for illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.
Hong Kong, 13 April 2015
By order of the Board
Chief Executive Officer
As at the date of this announcement, the executive Directors are Mr. Chan Yuen Ming, Mr. Shao Kwok Keung and Mr. Xiu Zhi Bao; the non-executive Director is Mr. Xu Qiang; and the independent non-executive Directors are Mr. Pun Yan Chak, Mr. Wong Che Man Eddy and Mr. Lam Kin Hung Patrick.
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