Emperor International Holdings Limited (HKG:0163) & Emperor Entertainment Hotel Limited (HKG:0296) today jointly announced its corporate exercise in the form of a series of transactions.
Hong Kong, Dec 4, 2010 AEST (ABN Newswire) - Emperor International Holdings Limited (
HKG:0163) & Emperor Entertainment Hotel Limited (HKG:0296) today jointly announced its corporate exercise in the form of a series of transactions.
1. Sale of a development project in Shanghai (the "Project") from EEH to EIHL
A wholly-owned subsidiary of EIHL has entered into a sale and purchase agreement for the purchase of the Project, held by the wholly-owned subsidiary of EEH at the consideration, equivalent to the sum of the unaudited consolidated net asset value of the Project in the books of EEH as at completion with the value of the development site of the Project to be valued as at 24 November 2010 and adjusted for the deferred taxation recognized plus the amount of the shareholders' loan of the Project. Based on the unaudited consolidated accounts of EEH as at 30 September 2010 of which the Project is consolidated therein, the consideration will be approximately HK$1,062.93 million.
The consideration shall be settled by the allotment and issue of 258,509,196 shares in EIHL (the "EIHL Consideration Shares") at HK$4.11 per EIHL share, determined with reference to the unaudited consolidated net asset value of EIHL as at 30 September 2010 and after adjusting for cash interim dividend, the market value of all its properties in place of the book value, the deferred taxation recognized for its properties and the carrying value of the amount due to related company be replaced by the contractual amount as at 30 September 2010.
The remaining balance is to be settled in cash. The EIHL Consideration Shares amount to approximately 8.01% of the total issued share capital of EIHL on enlarged basis.
The Project is located in Yu Yuan, Shanghai and it is under development. It will be developed into a shopping arcade and hotel/services apartment complex on a 246,200 square feet prime site. The main body of the complex will be a multi-storey shopping arcade with the expected total gross area of 1,298,500 square feet. A new Shanghai M10 subway route will be adjacent to the Project site.
Ms. Vanessa Fan, Managing Director of EIHL and Executive Director of EEH, said, "It offers a good opportunity for EEH to dispose of its interest in the Project so that it can realize the currently non-revenue generating Project into marketable securities. More importantly, it can also rationalize the business line of both EIHL and EEH. EIHL, with its business in property investment and development, is more financially viable in developing the Project, while EEH does not need to further devote substantial capital into the Project which is still under construction. EEH can then more focus on its entertainment and hospitality business in Macau with effective reallocation of financial resources and management efforts. This transaction allows both EIHL and EEH to enjoy win-win situation with corporate restructuring in effective manner."
This transaction allows EIHL to increase its stake in the Project with potential prospect without substantial cash commitment and to increase the number of shares for enhancing market capitalization.
2. Proposed distribution in species of shares in EIHL to EEH shareholders
EEH proposed to distribute the EIHL Consideration Shares received by it upon completion of the acquisition of the Project as special dividend (the "EEH Special Dividend") to EEH shareholders on the basis of 1 EIHL share for every 5 EEH shares held.
The distribution allows EEH shareholders to enjoy the benefit of realizing the Project which has turned into marketable securities. Leveraging the increased capital base, EIHL can enhance investor profile and improve liquidity in public capital market.
3. Voluntary conditional offer to acquire all EEH shares by EIHL
Simultaneously, EIHL, through its wholly-owned subsidiary, will make a voluntary conditional cash and securities exchange offer to acquire all the issued shares in the share capital of EEH (the "General Offer"). Under the General Offer, every 4 EEH shares will be tendered for 3 EIHL shares plus HK$0.16 in cash. Currently, 549,318,168 shares in EEH are eligible to accept the General Offer. EEH shareholders accepting the General Offer will tender their EEH shares together with their EIHL shares entitlement under the EEH Special Dividend mentioned above as well as the cash interim dividend of HK$0.04 per EEH Share. In return, EEH shareholders will receive EIHL shares in the aforesaid ratio plus the cash portion of the General Offer which is equivalent to the amount of cash interim dividend payable to EEH shareholders.
Ms. Fan added, "It is a kind of option for EEH shareholders becoming shareholders of EIHL upon the securities exchange for enjoying comprehensive property portfolio with more diversified projects and higher liquidity in the share market and larger shareholder base. However, if EEH shareholders do not accept this offer, they can still retain its EEH shareholding and receive 1 EIHL share for every 5 EEH shares held as special dividend."
The General Offer allows EIHL to increase the stake of the business of EEH without extra cash commitment. Assuming some or all of the EEH shareholders accept this offer, it can enlarge EIHL capital base, hence strengthening EIHL investor profile. EEH shareholders can extend their investments in EIHL and retain its investment participation in the Project at the same time.
4. Proposed distribution in specie of EIHL shares to EIHL shareholders
Subject to the above transactions, EIHL proposed to distribute (i) the EIHL Shares received under the EEH Special Dividend, (ii) the EIHL shares entitlement under the EEH Special Dividend tendered by EEH Shareholders under the General Offer and (iii) the additional EIHL shares to be issued by way of bonus issue, to EIHL shareholders in a form of special dividend on the basis of 1 EIHL share for every 10 EIHL shares held.
The distribution will increase the liquidity of shares of EIHL in the public market, hence enlarging its share capital base. The EIHL shareholders can also enjoy the benefit of the enlarged capital base, improved liquidity and realization of the marketable assets in the form of distribution of shares.
Appendix:
Summary of Shareholders Benefits
-----------------------------------------------------------EIHL Shareholders EEH Shareholders(163.HK) (296.HK) ----------------------------------------------------------- If Accept If NOT Accept General Offer General Offer --------------------------------------- Cash Dividend (i) Surrender 4 EEH Retain shares (which comes with EEH shares EIHL shares entitlement under EEH Special Dividend (thru T2) and the entitlement under the cash interim dividend) (ii) receive 3 EIHL shares (thru T3) ------------------------------------------------------------ Receive 1 EIHL Receive the cash portion Receive 1 share for every under the General Offer EIHL share 10 EIHL shares (equivalent to cash for every 5 held(thru T4) interim dividend)(thru T3) EEH shares (thru T2)----------------------------------------------------------- Receive cash interim dividend, (equivalent to the cash portion under the General Offer) ------------------------------------------------------------T1: Sale of the Project from EEH to EIHLT2: Proposed distribution in species of shares in EIHL to EEH ShareholdersT3: Voluntary conditional offer to acquire all EEH shares by EIHLT4: Proposed distribution in specie of EIHL shares to EIHL Shareholders------------------------------------------------------------
Key Timeline For Shareholders
------------------------------------------------Date EIHL Shareholders EEH Shareholders (163.HK) (296.HK)------------------------------------------------15 Dec 2010 Ex-entitlement to distribution ------------------------------------------------20 Dec 2010 Record date for Commencement of entitlement General Offer------------------------------------------------ 5 Jan 2011 Special general Special general meeting meeting------------------------------------------------19 Jan 2011 Closure of General Offer------------------------------------------------20 Jan 2011 Ex-entitlement to distribution------------------------------------------------24 Jan 2011 Record date for entitlement------------------------------------------------28 Jan 2011 Despatch of share Despatch of share certificates for certificates for distribution distribution (thru T4) (thru T2)------------------------------------------------
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Contact
Press/Investor Enquiry
Ms. Anna Luk
Investor Relations Manager
Tel: +852-2835-6783
Tel: +852-6184-0181
Email: annaluk@emperor.com.hk
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