THIRD FRAMEWORK AGREEMENT AND ADVANCE TO AN ENTITY

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13 Δεκ 2013 (πριν από 3 χρόνια και 7 μήνες)

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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 disclaims 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: 8272)
THIRD FRAMEWORK AGREEMENT
AND
ADVANCE TO AN ENTITY
THE THIRD FRAMEWORK AGREEMENT
Revised Further Transaction
Further to the Previous Announcement and the Circular, the Board is pleased to
announce that the Parties entered into the Third Framework Agreement on 24 April
2013. Subject to the fulfillment of such conditions precedent to be agreed by the
Parties, including, inter alia, the completion of the Transaction and entering into
the Further Formal Agreement by the Parties on or before expiry of the Relevant
Period, the Subscriber shall, after completion of the FLM Restructuring, carry out and
complete the Revised Further Transaction by acquiring from Coqueen the assets as set
out below.
Further Acquisition from Minority Shareholders of FLM HK and FLM Kowloon
Pursuant to the Third Framework Agreement, the SPV and the Guarantors shall
consent to and facilitate the Subscriber’s negotiations with (i) the minority
shareholders of FLM HK for and in relation to the Subscriber’s acquisition of their
respective interest in FLM HK, and (ii) the minority shareholder of FLM Kowloon for
and in relation to the Subscriber’s acquisition of its interest in FLM Kowloon as well
as the Subscriber’s acquisition of such minorities interest.
As the Revised Further Transaction and the Further Negotiations may or may
not be materialized, Shareholders and potential investors of the Company shall
exercise caution when dealing in the Shares.
IMPLICATIONS UNDER THE GEM LISTING RULES
Under Rule 17.15 of the GEM Listing Rules, a general disclosure obligation arises
where the relevant advance to an entity by the Company and its subsidiaries exceeds
8% of the Company’s latest published consolidated total assets. The Framework
Deposit constitutes an advance to entity under Rule 17.15 of the GEM Listing Rules
and the details of which are disclosed herein in compliance with Rule 17.15 of the
GEM Listing Rules.
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BACKGROUND
Reference is made to the announcement of the Company dated 30 January 2013 (the
“Previous Announcement”) and the circular of the Company dated 20 April 2013 (the
“Circular”), in respect of the very substantial acquisition in relation to the subscription
of Convertible Bonds. Unless context requires otherwise, capitalised terms used herein
shall have the same meanings as defined in the Circular.
On 18 December 2012, the Company, the Subscriber, the SPV, Coqueen, CPK and Mr.
Chui Tak Keung, Duncan (the “Parties” and each individually as a “Party”) entered
into the CB Subscription Agreement under and pursuant to which, inter alia, the
Subscriber has conditionally agreed to subscribe for Convertible Bonds to be issued by
the SPV (the “Transaction”). On 23 January 2013, the Parties entered into the Second
Framework Agreement and supplemented by the Supplemental Second Framework
Agreement dated 30 January 2013 in relation to, inter alia, the adjustment with relevant
parties of the CB Subscription Agreement concerning the Further Investment.
THE THIRD FRAMEWORK AGREEMENT
Revised Further Transaction
Further to the Previous Announcement and the Circular, the Board is pleased to
announce that the Parties entered into the third framework agreement on 24 April 2013
(the “Third Framework Agreement”) in relation to, inter alia, (i) supersede the Second
Framework Agreement and Supplemental Second Framework Agreement; and (ii)
replace the Further Investment (together, the “Revised Further Transaction”). Subject
to the fulfillment of such conditions precedent to be agreed by the Parties, including,
inter alia, the completion of the Transaction and entering into the Further Formal
Agreement (as defined below) by the Parties on or before expiry of the Relevant Period
(as defined below), the Subscriber shall, after completion of the FLM Restructuring,
carry out and complete the Revised Further Transaction by acquiring from Coqueen the
assets as set out below.
Principal terms of the Revised Further Transaction
Pursuant to the Third Framework Agreement, the Revised Further Transaction shall
involve and shall result in, the Subscriber’s acquiring from Coqueen: (i) the entire
interest of Coqueen in and over the FLM HK Properties, (ii) the entire interest of
Coqueen in and over the FLM Kowloon Properties, (iii) the entire interest of Coqueen in
and over the FLM HK Operation (or such substantive part of Coqueen’s interest as the
Parties may agree in the Further Formal Agreement), (iv) the entire interest of Coqueen
in and over the FLM Kowloon Operation (or such substantive part of Coqueen’s interest
as the Parties may agree in the Further Formal Agreement), and (v) the entire interest
of Coqueen in and over the FLM Trademarks (or such substantive part of Coqueen’s
interest as the Parties may agree in the Further Formal Agreement) (collectively the
“Subscriber Further Acquisitions”). The terms and conditions of and in relation to the
Subscriber Further Acquisitions shall be agreed by the Parties prior to the execution of
the Further Formal Agreement and shall be incorporated and fully set out in the Further
Formal Agreement. The Subscriber Further Acquisitions shall be completed on or before
a date to be agreed by the Parties and to be stated in the Further Formal Agreement.
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The consideration in relation to the Subscriber’s acquisition of Coqueen’s entire legal
and equitable interest in and over the FLM HK Properties and the FLM Kowloon
Properties under and in accordance with such relevant part of the Subscriber Further
Acquisitions should not exceed HK$200,000,000 in aggregate (the “Property
Consideration”).
The consideration in relation to the Subscriber’s acquisition of entire portfolio (or
such substantive part as the Parties may agree in the Further Formal Agreement)
of Coqueen’s interest and/or equities in and over the FLM HK Operation, the FLM
Kowloon Operation and the FLM Trademarks (the “Operation Consideration”) shall be
determined by the Parties with reference to not higher than 9 times the net profit after
tax: (i) of the FLM HK Operation and the FLM Kowloon Operation; (ii) arising from
licensing of the FLM Trademarks; and (iii) arising from all other business, undertakings
and operation of subsidiaries of the SPV during the fiscal year ending 31 March 2014.
Pursuant to the Third Framework Agreement, the Subscriber shall, forthwith upon
execution of the Third Framework Agreement, pay HK$20,000,000 to Coqueen by way
of internal resources of the Group as refundable deposit (the “Framework Deposit”).
The Framework Deposit shall be refunded by Coqueen (without interest) within 14 days
of the Subscriber’s written demand issued at any time after (i) 24 May 2013, or (ii) the
Subscriber’s issuance of any written notice to Coqueen to terminate negotiation on the
terms of the Further Formal Agreement, whichever shall be later.
The remaining balance of the Property Consideration and the Operation Consideration
shall be settled and discharged by the Subscriber in cash, promissory notes, issue of new
Shares in the Company, issue of bonds convertible into new Shares in the Company or
a combination of any of the foregoings and in such manner and on such terms as set out
in the Further Formal Agreement provided that the issue price of any new Shares in the
Company for settlement and discharge of the Operation Consideration shall not be less
than HK$0.80 per Share.
The Parties shall enter into an agreement which sets out the definitive terms and
conditions for, and which governs and regulates, the Subscriber Further Acquisitions
as well as the completion (the “Further Formal Agreement”) on or before 30 June
2014 (or such later date as the Parties may agree in writing) (the “Relevant Period”).
If no Further Formal Agreement is executed by the Parties prior to the expiration of the
Relevant Period, (i) the Third Framework Agreement shall automatically become null
and void and no Party shall have any claim against any other Party in respect of anything
covered by or arising from the Third Framework Agreement, (ii) Coqueen shall refund
the Framework Deposit (but without any interest) to the Subscriber forthwith upon the
expiration of the Relevant Period or within 14 days of the issuance of Subscriber’s
written demand for such refund made in accordance with the Third Framework
Agreement, whichever shall be the earlier, and (iii) there shall not be any Subscriber
Further Acquisitions, and the Parties shall proceed only with the Transaction.
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Further Acquisition from Minority Shareholders of FLM HK and FLM Kowloon
Pursuant to the Third Framework Agreement, the SPV and the Guarantors shall consent
to and facilitate the Subscriber’s negotiations with (i) the minority shareholders of FLM
HK, namely, Chui Yau Foon, Tsui Yau Hing, Tsui Yau Hoi and Tsui Yau Mui for and
in relation to the Subscriber’s acquisition of their respective interest in FLM HK, and
(ii) the minority shareholder of FLM Kowloon, namely, Fullbond Properties Limited,
for and in relation to the Subscriber’s acquisition of its interest in FLM Kowloon
as well as the Subscriber’s acquisition of such minorities interest (collectively, the
“Further Negotiations”). To facilitate the conduct of the Further Negotiations and the
Subscriber’s acquisition of the aforementioned minorities interest, the Subscriber hereby
appoints the SPV and the Guarantor as agents to conduct the Further Negotiations and
the Subscriber’s acquisition of the aforementioned minorities interest, and the SPV and
the Guarantors shall report to the Subscriber the progress of the Further Negotiations
and the Subscriber’s acquisition of the aforementioned minorities interest from time
to time or as requested by the Subscriber (collectively, the “Further Negotiations
Authorisation”). For any avoidance of doubt, (i) the Subscriber may withdraw or
revoke the Further Negotiations Authorisation as and when the Subscriber deems fit
and appropriate to do so by written notice given to the SPV and the Guarantors; (ii)
no promise or assurance whatsoever is given or held out by the SPV or the Guarantors
that the Further Negotiations will result in or lead to anything; and (iii) no obligation is
imposed on the SPV nor the Guarantors to continue or facilitate the Further Negotiations
if at any time minority shareholders or any of them express an intention not to conduct
the Further Negotiations.
REASONS FOR ENTERING INTO THE THIRD FRAMEWORK AGREEMENT
The Company is an investment holding company and its subsidiaries are principally
engaged in the local catering business, brand management and are acting as a sourcing
agent for reputable buyers in a variety of products.
As mentioned in the Previous Announcement and the Circular, the Board has been
actively exploring business opportunities with good business potential and growth
prospects. The Directors consider that the Subscriber Further Acquisitions provides the
Company with further opportunity to participate in the fine dining market in the Greater
China region with strong earnings potential and create synergy effect with its business.
Taking into consideration (i) the Company’s corporate strategy at exploring the
feasibility of further expansion in food and beverage business, (ii) the possible
expansion with the setting up a food manufacturing plant with floor area of
approximately 30,000 sq. ft. for development of branded bakery, cooked and packaged
food business, and (iii) the development potential of the fine dining market in the
Greater China region, the Directors are of the view that the terms of the Third
Framework Agreement are fair and reasonable and in the interests of the Company and
the Shareholders as a whole.
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IMPLICATIONS UNDER THE GEM LISTING RULES
Under Rule 17.15 of the GEM Listing Rules, a general disclosure obligation arises
where the relevant advance to an entity by the Company and its subsidiaries exceeds
8% of the Company’s latest published consolidated total assets. The Framework Deposit
constitutes an advance to entity under Rule 17.15 of the GEM Listing Rules and the
details of which are disclosed herein in compliance with Rule 17.15 of the GEM Listing
Rules.
The Revised Further Transaction and the Further Negotiations, if materialize, may
constitute a notifiable transaction to the Company and the Company will comply with
the requirements of the GEM Listing Rules accordingly.
As the Revised Further Transaction and the Further Negotiations may or may not
be materialized, Shareholders and potential investors of the Company shall exercise
caution when dealing in the Shares.
By order of the Board
CHINESE FOOD AND BEVERAGE GROUP LIMITED
Yu Sau Lai
Executive Director
Hong Kong, 24 April 2013
As at the date of this announcement, Ms. Yu Sau Lai, Mr. Too Shu Wing and Mr. Lam
Raymond Shiu Cheung are executive Directors; and Mr. Orr Joseph Wai Shing, Mr.
Matthew Pau and Mr. Hu Dongguang are independent non-executive Directors.
This announcement, for which the Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the GEM Listing Rules for
the purpose of giving information with regard to the Company. The Directors, having
made all reasonable enquiries, confirm that to the best of their knowledge and belief the
information contained in this announcement is accurate and complete in all material
respects and not misleading or deceptive, and that there are no other matters the
omission of which would make any statement herein or this announcement misleading.
This announcement will remain on the “Latest Company Announcements” page of the
GEM website at www.hkgem.com for at least 7 days and on the Company website at
www.cfbgroup.com.hk from the date of its publication.