TIDMCTI
RNS Number : 3934C
Cathay International Holdings Ld
16 October 2020
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
FOR IMMEDIATE RELEASE
16 October 2020
Cathay International Holdings Limited ("Cathay", the "Group" or
"Company")
Proposed Cancellation of Listing
Proposed Adoption of New Bye-Laws
Tender Offer
and
Notice of Special General Meeting ("SGM")
Cathay announces that, further to the announcement made on 29
September 2020, a combined circular (the "Circular"), comprising a
circular incorporating the notice of the SGM (the "SGM Circular")
and a circular effecting the Tender Offer (the "Tender Offer
Circular"), will be sent to Shareholders later today. Shareholders
in Restricted Jurisdictions will not receive the Tender Offer
Circular. The Circular details the following proposals:
-- the proposed cancellation of (i) the listing of the Common
Shares on the FCA's official list; and (ii) the admission of the
Common Shares to trading on the Main Market of the London Stock
Exchange (the "Listing Cancellation");
-- the adoption of new Bye-Laws upon the Listing Cancellation becoming effective; and
-- a Tender Offer in respect of all of the Shares held by
Qualifying Holders, save for those held by the Controlling
Shareholders, at the Tender Offer Price, which will be open for
Tenders from 16 October 2020 until 11.00am on 10 November 2020
( together the Listing Cancellation, the adoption of new
Bye-Laws and the Tender Offer being the "Proposals").
Unless otherwise stated, terms used in this announcement have
the same meanings given to them in the Circular.
The Circular sets out the terms of the Tender Offer and
incorporates a notice of SGM (the "SGM Notice"). A Proxy Form and
Tender Form for use by Shareholders who hold their Shares in
certificated form in connection with the SGM and the Tender Offer
(although the Tender Form will not be sent to Shareholders in
Restricted Jurisdictions), respectively also being despatched with
the Circular.
The Proposals are conditional (i) the passing of the Resolutions
at the SGM, as set out in the Notice of SGM and (ii) the
satisfaction of the Listing Cancellation Condition.
The SGM which has been convened in accordance with the
Requisition Notice is to be held at the Hong Kong Office of the
Company at Suites 1203-4, 12/F., Li Po Chun Chambers, 189 Des Voeux
Road Central, Hong Kong at 9:00 a.m. (London time) on 3 November
2020.
Background to SGM - Requisition Notice
On 28 September 2020, the Company received the Requisition
Notice from the Controlling Shareholders requisitioning the Company
to convene and hold an SGM (as required by bye-law 51(1) of the
Bye-Laws), for the purpose of considering and, if thought fit,
passing special resolutions to approve the Listing Cancellation and
the adoption of the New Bye-Laws in substitution for and to the
exclusion of the existing Bye-Laws.
The Requisition Notice was accompanied by a Letter of
Undertaking from Circle Finance setting out an irrevocable
commitment, which is subject to the Listing Cancellation being
approved by Shareholders, to fund the payment for an exit
opportunity available for all Shareholders (excluding those
Shareholders in certain restricted jurisdictions) who wish to offer
to sell their Shares for cash at a maximum price of 1.7 pence per
Share on certain terms and conditions.
The Directors' consideration of the Requisition Notice and the
Letter of Undertaking
The Requisition Notice was in compliance with the Bye-Laws and
Bermudan Law and therefore the Directors were satisfied that the
Company should comply with the terms of the Requisition Notice and
for a special general meeting to be convened without delay to
consider the requested resolutions, subject to certain
amendments.
Resolution 1 - Listing Cancellation
The Common Shares are currently listed on the standard segment
of the FCA's official list and to trading on Main Market of London
Stock Exchange plc.
The Directors are of the view that one of the primary purposes
and benefits of being listed is to provide a venue through which
shares may be traded and through which capital may be raised.
The Directors have considered the Listing Cancellation and make
the following comments:
Liquidity
The Shares have been relatively thinly traded for the last few
years.
Access to capital
The open offer and subscription effected by the Company in May
2020 suggested that there was little support from shareholders at
1.5 pence per share, it being noted that the total funds raised
from the open offer were USD75.1 million versus a target of USD120
million, out of which USD75 million was subscribed by the
Controlling Shareholders and approximately USD0.1 million was
subscribed by existing minority shareholders. A further USD7
million was received in the subscription out of the targeted USD10
million. The Company therefore did not raise all the capital
required for its business and financing plan as stated in the
Prospectus and, without the requisite funding, the Company will not
be able to fully implement its business plan.
The Company would need to raise further capital to fully
implement the business plan set out in the Prospectus. The
Directors believe there is a serious risk that significant capital
would not be available from shareholders, including from the
Controlling Shareholders, which should have been one of the primary
purposes and benefits of being listed.
The Company moved from a Premium Listing to a Standard Listing
on 14 July 2020. The Directors consider that the Standard Listing
will reduce the Company's ability to raise equity from public
markets in the future.
Continuing obligations
Maintaining a listing on the London Stock Exchange imposes
stringent standards of corporate governance and disclosure, many of
which will not apply if the Listing Cancellation proceeds.
Therefore, following Listing Cancellation, Shareholders would lose
many of the protections which listing affords.
However, the Company will make considerable savings in senior
management time and cost as a result of no longer being required to
comply with the requirements for a listed company.
Under the Listing Rules, a Standard Listed company does not need
shareholder approval to implement a Listing Cancellation. However,
noting the above, the Board is of the view that it is in the
interest of the Company for shareholders to decide by voting on the
Listing Cancellation Resolution in the SGM per the Requisition
Notice and the Board will act in accordance with the direction from
Shareholders set out in the resolution.
Voting on Resolution 1
Under the Listing Rules, a Standard Listed company does not need
shareholder approval to implement a Listing Cancellation. However,
the Directors note the voting requirements proposed by the
Controlling Shareholders in the Requisition Notice, in particular
that the Listing Cancellation Resolution be approved by the
Shareholders by way of a resolution passed by:
(a) a simple majority of the votes attaching to the Common
Shares held by Minority Shareholders voted on the resolution;
and
(b) a majority of not less than 75 per cent. of the votes
attaching to the Common Shares voted on the resolution.
Under the Controlling Shareholders' proposal, the votes
attaching to the A Shares will not be counted in the Listing
Cancellation Resolution. The proposal will effectively give the
independent shareholders the power to veto the Listing Cancellation
Resolution, if they wish. The Directors also noted that the two
tier voting structure follows the Listing Rules requirements for
the Listing Cancellation of a company with a Premium Listing on the
London Stock Exchange which has a controlling shareholder.
In order to comply with the Bye-Laws, matters proposed to be
passed by a special resolution (as proposed for the Listing
Cancellation Resolution) will also require approval from the
majority of not less than 75 per cent. of the total number of votes
attaching to the Common Shares and A Shares voting together. As
such, the Directors have determined that, for the Listing
Cancellation Resolution to pass, the following will need to approve
of the Listing Cancellation Resolution:
(a) at least a simple majority of more than 50 per cent. of the
total number of votes cast for and against the Listing Cancellation
Resolution by the Common Shareholders, excluding the Controlling
Shareholders;
(b) at least a majority of not less than 75 per cent. of the
total number of votes cast for and against the Listing Cancellation
Resolution by the Common Shareholders; and
(c) at least a majority of not less than 75 per cent. of the
total number of votes cast for and against the Listing Cancellation
Resolution by the Common Shareholders and the A Shareholders voting
together.
If the Listing Cancellation resolution is passed, the Directors
intend to act as directed by the resolution.
The Board noted that the Relationship Agreements required the
Controlling Shareholders to not take any action that would prevent
the Company from complying with its obligations under the Listing
Rules and to not propose or procure the proposal of any shareholder
resolution of the Company which is intended or appears to be
intended to circumvent the proper application of the Listing Rules.
The Board noted that in the event that the Listing Cancellation is
approved at the SGM, Circle Finance will need to honour its payment
obligation in the Tender Offer under the Letter of Undertaking
(referred to below), subject to the Listing Cancellation Condition
being satisfied.
In order to enable Circle Finance to honour its payment
obligation in the Tender Offer and avoid a technical breach of the
Relationship Agreements, Resolution 1 has been amended to refer to
the termination of the Relationship Agreements. The Company has
entered into a deed of termination of the Relationship Agreements
with the Controlling Shareholders which is conditional on the
passing of Resolution 1.
Resolution 2 - Bye-Laws Amendment
The Directors noted that the Bye-Laws amendment is conditional
upon the Listing Cancellation becoming effective. The Directors
noted that the existing Bye-Laws were tailored for a company with
shares admitted to trading on the Main Market and that a set of
private company style Bermuda Bye-Laws is proposed for the Company
upon the Listing Cancellation becoming effective. The New Bye-Laws
are in a customary shorter form than the existing Bye-Laws.
Shareholders should note that the New Bye-Laws do not contain
pre-emption rights on the issue of new shares and are recommended
to read the New Bye-Laws in full. Under the existing Bye-Laws, any
amendments to the Bye-Laws require the passing of a special
resolution in a general meeting of the Company.
A list of the major differences between the existing Bye-Laws
and the proposed New Bye-Laws is set out in the SGM Circular.
Shareholders should review these carefully together with the copy
of the full text of the proposed New Bye-Laws set out in the SGM
Circular for the purpose of deciding how they will vote in respect
of Resolution 2.
Voting on Resolution 2
All holders of Common Shares and A Shares will be entitled to
vote on Resolution 2, which will require a simple majority of not
less than 75 per cent. of the total number of votes cast.
Tender Offer
The Company has today published a separate circular in relation
to a Tender Offer to Qualifying Holders at 1.7 pence per share (the
"Offer Price"). The Tender Offer to Circle Finance is conditional,
inter alia, on (i) the passing of the Resolutions at the SGM, by
the requisite majorities stated in this Announcement; and (ii) the
satisfaction of the Listing Cancellation Condition.
The Directors note that:
(a) the price at which the Common Shares has traded showing a
decreasing trend in the six months preceding the date of the
Requisition Notice of 28 September 2020;
(b) the Offer Price under the Tender Offer represents a premium
of 47.8 per cent. to the closing price of a Common Share of 1.15
pence on the 25 September 2020, being the last trading day
immediately prior to the date of Requisition Notice of 28 September
2020;
(c) a premium of approximately 47.8 per cent. over the closing
price of 1.15 pence per Share as quoted on the London Stock
Exchange on 28 September 2020, being the last trading day
immediately prior to the publication of the Announcement;
(d) a premium of approximately 33.9 per cent. over the average
of the closing prices of the Shares as quoted on the Stock Exchange
for the last 90 trading days up to and including 28 September 2020,
being the last trading day immediately prior to the publication of
the Announcements, of approximately 1.27 pence per Share;
(e) a premium of approximately 13.3 per cent. over the offer and
subscription price of 1.50 per Share in the Open Offer and
Subscription of the Company in May 2020; and
(f) the sum of business parts value of the Company mainly
comprise its 52.83% equity interest in Lansen and the Hotel. The
price at which shares in Lansen are currently traded on the Hong
Kong Stock Exchange values Lansen at a level materially below its
own net asset value reported in Lansen's interim financial
statements for the six months ended 30 June 2020. If the
independent professional value of the Hotel (less related hotel
mortgage bank loan) as of 31 December 2019 and the book value of
the remaining business parts of the Company in its interim
financial statements for the six months ended 30 June 2020 are
used, the sum of business parts value per Share of the Company on a
fully diluted basis assuming all Convertible Instruments converted
to Common Shares, is slightly less than the closing price per Share
on 28 September 2020, being the last trading day immediately prior
to the publication of the Announcement.
The Directors note that the Offer Price under the Tender Offer
represents a 30.3 per cent discount to the "Equity Attributable to
Owners of the Parent" per share of 2.44 pence ("NAV per share") on
a fully diluted basis based on the Unaudited Consolidated Statement
of Financial Position published by the Company for the six months
ended 30 June 2020 (calculated as USD147,325,000 divided by
4,839,015,846 shares, assuming all Convertible Instruments
converted to Common Shares, using a USD:GBP rate of 1.25).
However, the Directors note that this value does not represent a
realisable sum and the apparent premium over the Offer Price under
the Tender Offer may not be reflected in value achieved by
shareholders through selling their shares or through distributions.
There are a number of risk factors that the Directors wish to bring
to the attention of shareholders:
(a) excluding gains made on Lansen's investment in Zhejiang
Starry Pharmaceutical Limited, the Group has consistently reported
operating losses for several accounting periods. Although the
purpose of the Group is to generate profits in future, if the Group
continues to report losses, the NAV per share will reduce;
(b) although the Group has been successful in disposing of
Starry Shares at a profit, the value of Starry Shares, which are
traded on the Shanghai Stock Exchange, is volatile and has reduced
significantly since 30 June 2020. Therefore, the price at which the
Starry Shares are disposed of or recognised in future statements of
financial position may be lower and the NAV per share may be lower
as a result; and
(c) the Hotel will be revalued at the end of the current
financial year and Board anticipates that the valuation will be
impaired due to the impact of the COVID-19 pandemic and due to the
shortening of the lease period of the Hotel on a year-on-year
basis, which will further reduce the NAV per Share as in prior
years.
Tender Offer
Circle Finance, being one of the Controlling Shareholders,
acknowledges that not all Shareholders will be able or willing to
continue to own Shares following the Listing Cancellation. Subject
to the Resolutions being approved by the requisite majorities of
Shareholders and the Listing Cancellation Condition being
satisfied, Qualifying Holders will therefore have the opportunity
to offer all or some of their Shares at the Record Date to Circle
Finance pursuant to the Tender Offer. The Tender Offer is to be
effected by the Company and Circle Finance, the Tender Offer Price
being paid by the Company, and with Circle Finance putting the
Company in funds to enable it to pay the Tender Offer Price and
agreeing with the Company the terms of the Tender Offer pursuant to
the Confirmatory Irrevocable.
The Tender Offer Price is fixed at 1.7 pence per Share.
The Tender Offer is open to Qualifying Holders on the Register
at the Record Date.
Following the Listing Cancellation becoming effective, the prior
permission of the Bermuda Monetary Authority is required for the
issuance and transfer of Shares except for certain circumstances
involving issuance and transfer to an existing shareholder within
certain range of percentage shareholding in which case only a
notification is required to be submitted to the Bermuda Monetary
Authority prior to or as soon as practicable after the such
issuance and transfer. Shareholders proposing to transfer their
Shares after the Listing Cancellation should contact the Company to
find out more details as to the requirements.
The Tender Offer to Circle Finance described in this Tender
Offer Circular is conditional, inter alia, on (i) the passing of
the Resolutions at the SGM, by the requisite majorities stated in
the SGM Circular; and (ii) the satisfaction of the Listing
Cancellation Condition.
All Qualifying Holders who are on the Register at the close of
business on the Record Date are entitled, but not required, to
tender all or some of their Shares for purchase by Circle Finance
at the Tender Offer Price.
Qualifying Holders are not obliged to tender any Shares if they
do not wish to do so. If no action is taken by Qualifying Holders,
there will be no change to the number of Shares that they hold and
they will receive no cash as a result of the Tender Offer.
Qualifying Holders are, however, warned that in the event that the
Listing Cancellation is approved and effected, the Common Shares
will no longer be admitted to trading on the Main Market and this
is likely to affect the liquidity of the Common Shares.
Shareholders should seek their own professional advice if they have
any doubts or questions relating to anything arising out of the
Tender Offer Circular.
Qualifying Holders who elect not to tender their holdings
pursuant to the Tender Offer will, on completion of the Listing
Cancellation, hold Shares in an unquoted company. There will be no
market facility for dealing in the Shares and no price will be
publicly quoted for the Shares.
The attention of Qualifying Holders who are citizens or
nationals of or resident in jurisdictions outside the United
Kingdom and who wish to participate in the Tender Offer is drawn to
Part II of the Tender Offer Circular. The Tender Offer is not being
made, directly or indirectly, in or into any Restricted
Jurisdiction.
The Tender Offer will open on 16 October 2020 (unless such date
is altered) and Tenders must not be submitted before that date. The
Tender Offer will close at 11:00 a.m. on 10 November 2020 (unless
the Closing Date is extended).
Full details of the Tender Offer are set out in Part II of the
Tender Offer Circular.
Circumstances in which the Tender Offer may not proceed
There can be no guarantee that the Tender Offer will take place.
The Tender Offer to Circle Finance is conditional, inter alia, on
(i) the passing of the Resolutions at the SGM, by the requisite
majorities stated in the SGM Circular; and (ii) the satisfaction of
the Listing Cancellation Condition. The Directors expect the
Listing Cancellation to take effect on 3 December 2020, but
Shareholders should note that the Listing Cancellation and the
Listing Cancellation Condition are subject to the FCA's
notification of the effective date of the cancellation of the
Company's Standard Listing.
Upon the Listing Cancellation becoming effective, the prior
permission of the Bermuda Monetary Authority is required for the
issuance and transfer of Shares, subject to certain exceptions.
Shareholders proposing to transfer their Shares after the Listing
Cancellation should contact the Company to find out more details as
to the requirements.
Current Trading
The company is trading in line with the expectation as described
in the interim report dated 28 August 2020.
As mentioned in the Company's interim results, the loan of
approximately USD50 million from a bank to the Company which is
secured over Crown Plaza Hotel and Suites Landmark Shenzhen matures
on June 2021. Due to the COVID-19 pandemic the hotel's performance
in 2020, and future outlook in 2021, has been adversely impacted
and will affect the hotel valuation. The Directors consider that it
may be difficult to refinance the mortgage loan on the hotel and
the Group may need to look for alternative financing in the medium
to long term. The Company is currently conducting negotiations with
the bank regarding refinancing and extending the hotel mortgage
loan for 12 months.
Effect of the Listing Cancellation
The principal effects of the Listing Cancellation, and the
factors that the Directors believe that Shareholders should take
into consideration when deciding whether or not to vote in favour
of the Resolutions, include the following:
Trading and liquidity
Following the Listing Cancellation, the Common Shares will no
longer be traded on a public market or trading facility on any
recognised investment exchange. As a result, a Shareholder will not
be able to trade Common Shares on the London Stock Exchange and,
consequently, the opportunity for Shareholders to realise their
investment in the Company will be limited and there will be no
public valuation of Common Shares held by them.
Following publication of the Circular and following Listing
Cancellation, the liquidity and marketability of the Common Shares
may be significantly reduced, and the value of such shares may be
adversely affected as a consequence.
Disclosure and reporting
The Company will no longer be subject to the regulatory and
financial reporting regime applicable to companies whose shares are
admitted to the Official List and to trading on the Main Market
including the Listing Rules, the Disclosure Guidance and
Transparency Rules, and the Corporate Governance Code,
including:
(a) the Company will be subject to fewer operational
restrictions than as a listed company, and may be subject to less
stringent accounting and reporting requirements, including related
party transactions;
(b) the Listing Cancellation may have either positive or
negative taxation consequences for Shareholders. Shareholders who
are in any doubt about their tax position should consult their own
professional independent adviser immediately; and
(c) the obligation to publish inside information which directly
concerns the Company, of transactions by persons discharging
managerial responsibilities and their connected persons and of any
dealings by shareholders who hold more than 5 per cent. of the
Company's shares.
Corporate Governance
Following Listing Cancellation, the Company will no longer be
required to comply with the Corporate Governance Code published by
the FRC and shareholders may lose some or all of the protections
afforded by the Corporate Governance Code.
Relationship agreements
The Company entered into agreements with each of Circle Finance
and Mega Worldwide on 30 January 2015 as required by the relevant
listing rules when the Company was then a premium listed company on
the London Stock Exchange. Pursuant to the agreements each of
Circle Finance and Mega Worldwide provided undertakings that:
(a) all transactions and arrangements between each of Circle
Finance and Mega Worldwide (and/or any of their respective
associates) and the Company will be at arm's length and on a normal
commercial basis;
(b) each of Circle Finance and Mega Worldwide shall not (and
shall procure that their respective associates shall not) take any
action that would prevent the Company from complying with its
obligations under the Listing Rules; and
(c) each of Circle Finance and Mega Worldwide shall not (and
shall procure that their respective associates shall not) propose
or procure the proposal of any shareholder resolution of the
Company which is intended or appears to be intended to circumvent
the proper application of the Listing Rules.
Each of Circle Finance, Mega Worldwide and the Company treats
the Controlling Shareholder and Mr. Wu Zhen Tao as associates for
the purposes of these agreements.
As stated above, the Company has entered into a deed of
termination of the Relationship Agreements with the Controlling
Shareholders which is conditional on the passing of Resolution
1.
SGM
The SGM is to be held at 9:00 a.m. on 3 November 2020 at Suites
1203-4, 12/F, Li Po Chun Chambers, 189 Des Voeux Road Central, Hong
Kong to consider the following resolutions in accordance with the
Requisition Notice:
(a) Resolution 1 is proposed as a special resolution, which
shall pass if the approvals referenced above in paragraph 2 are
obtained, to authorise, and direct the Board to effect, the Listing
Cancellation, and to authorise, and direct the Board to (i) make,
notices or announcements, for example to a Regulatory Information
Service or as required by the Listing Rules or the London Stock
Exchange Admission and Disclosure Standards; (ii) effect the
termination of the Relationship Agreements; and (iii) to do
anything else required to effect the Listing Cancellation.
(b) Resolution 2, which is conditional on the passing of
Resolution 1 and the Listing Cancellation becoming effective, is
proposed as a special resolution to approve the adoption of the New
Bye-Laws in substitution for and to the exclusion of the
Bye-Laws.
Voting
Resolution 1
The Directors note the voting requirements proposed by the
Controlling Shareholders in the Requisition Notice, in particular
that the Listing Cancellation Resolution be approved by the
Shareholders by way of a resolution passed by:
(a) a simple majority of the votes attaching to the Common
Shares held by Minority Shareholders voted on the resolution;
and
(b) a majority of not less than 75 per cent. of the votes
attaching to the Common Shares voted on the resolution.
Under the Controlling Shareholders' proposal, the votes
attaching to the A Shares will not be counted in the Listing
Cancellation Resolution. The proposal will effectively give the
independent shareholders the power to veto the Listing Cancellation
Resolution, if they wish. The Directors also noted that the two
tier voting structure follows the Listing Rules requirements for
the Listing Cancellation of a company with a Premium Listing on the
London Stock Exchange which has a controlling shareholder.
In order to comply with the Bye-Laws, the Listing Cancellation
Resolution will also require approval from the majority of not less
than 75 per cent. of the total number of votes attaching to the
Common Shares and A Shares voting together. As such, the Directors
have determined that, for the Listing Cancellation Resolution to
pass, the following will need to approve of the Listing
Cancellation Resolution:
(a) at least a simple majority of more than 50 per cent. of the
total number of votes cast for and against the Listing Cancellation
Resolution by the Common Shareholders, excluding the Controlling
Shareholders;
(b) at least a majority of not less than 75 per cent. of the
total number of votes cast for and against the Listing Cancellation
Resolution by the Common Shareholders; and
(c) at least a majority of not less than 75 per cent. of the
total number of votes cast for and against the Listing Cancellation
Resolution by the Common Shareholders and the A Shareholders voting
together.
Resolution 2
Resolution 2 shall require the approval of at least a majority
of not less than 75 per cent. of the total number of votes cast for
and against Resolution 2 by the Common Shareholders and the A
Shareholders voting together.
Controlling Shareholder's Shares
The Controlling Shareholders are interested in 1,373,940,837
Common Shares and 8,249,276 A Shares representing 71.89 per cent.
of the Shares by number, 71.79 per cent. of the votes attaching to
the Common Shares, 92.19 per cent. of the votes attaching to the A
Shares, and 73.54 per cent. of the votes attaching to the Common
Shares and A Shares in aggregate.
The Controlling Shareholders may give notice to the Company that
they require conversion in part or in full of their Convertible
Instruments, 1,787,137,527 held by Circle Finance and 1,129,118,720
held by Mega Worldwide, into Common Shares on a one-for-one basis
according to the terms of the convertible instrument and subject to
maintaining the appropriate number of shares in public hands. If
the Convertible Instruments were to be converted in full, but
before taking into account Shares acquired under the Tender Offer,
the Controlling Shareholders would be interested in 4,290,197,084
Common Shares and 8,249,276 A Shares representing 88.83 per cent.
of the Shares by number, 88.82 per cent. of the votes attaching to
the Common Shares, 92.19 per cent. of the votes attaching to the A
Shares, and 88.94 per cent. of the votes attaching to the Common
Shares and A Shares in aggregate.
No recommendation
SGM
The Directors have set out in this Announcement the proposals
put forward by the Controlling Shareholders and the factors which
Shareholders may wish to take into account when considering what
action to take. Shareholders may consider other factors applicable
to their own situation.
The Directors have carefully considered the Listing Cancellation
and consider that there are good arguments for the Listing
Cancellation to be effected but also note that the Listing
Cancellation may have negative consequences for Shareholders who
remain in the Company after the Listing Cancellation. The Directors
are cognisant that Shareholders will have their own views of these
conflicting factors and make no recommendation as to what action
Shareholders should take. The Directors will act in accordance with
the direction from Shareholders set out in the Listing Cancellation
Resolution.
Shareholders are advised to read all of the information in the
SGM Circular before deciding on the course of action they will take
in respect of the Listing Cancellation and the adoption of the New
Bye-Laws.
Tender Offer
The Directors have carefully considered the Listing Cancellation
and the terms of the Tender Offer. Qualifying Holders are referred
to the section of Part I of the SGM Circular entitled "Tender
Offer". The Directors make no recommendation to Qualifying Holders
in relation to the Tender Offer. Whether or not Qualifying Holders
decide to Tender their Shares will depend, among other things, on
their individual circumstances, including their tax position, and
on their view of the Company's prospects. Qualifying Holders in any
doubt as to the action they should take should consult an
appropriately qualified independent financial adviser authorised
under FSMA.
However, the Directors would note that any Qualifying Holder who
does not Tender their Shares pursuant to the Tender Offer may find
it difficult to sell their Shares after the Tender Offer closes and
the Listing Cancellation has taken effect, may not receive regular
information from the Company, would not benefit from regulatory
compliance with governance procedures (other than as required under
Bermudian law), nor enjoy the protections afforded by the Listing
Rules. Furthermore, there is no guarantee that Circle Finance will
be willing to buy Shares after the Tender Offer has closed and, if
it was, any price offered may not reflect the value of the
Company's assets.
If Qualifying Holders are in any doubt about the action that
they wish to take in respect of the Tender Offer, they should
consult an independent financial adviser without delay.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
The dates given are based on the Company's current expectations
and may be subject to change. If any of the times or dates below
change, the Company will give notice of the change by issuing an
announcement through a Regulatory Information Service. Details of
the revised times and/or dates will also be available on
www.cathay-intl.com.hk .
Posting of the Circular incorporation 16 October 2020
the notice of Special General Meeting,
together with Forms of Proxy and Forms
of Direction
Latest date for receipt of Forms of Direction 9:00 a.m. 29 October 2020
(to be received no later than 72 hours
before the SGM)
Latest date for receipt of Proxy Form 9:00 a.m. 30 October 2020
(to be received no later than 48 hours
before the SGM)
SGM 9:00 a.m. 3 November 2020
Announcement of results of SGM and announcement 3 November 2020 (following
of the date of the expected Listing Cancellation SGM)
Latest time and date for receipt of Tender 11:00 a.m. 10 November
Forms and TTE Instructions in relation 2020
to the Tender Offer
Announcement of results of Tender Offer 4:00 p.m. 10 November
2020
Closing Date 4:00 p.m. 2 December 2020
CREST accounts credited in respect of 2 December 2020
Tender Offer proceeds for uncertificated
Shares
Cheques despatched in respect of Tender 2 December 2020
Offer proceeds for certificated Shares
Listing Cancellation expected to be effective, 8:00 a.m. 3 December 2020
subject to FCA notifying the Company
and the Company's announcement of the
Listing Cancellation.
If any of the above times and/or dates change, the revised times
and/or dates will be notified to Shareholders by announcement
through a Regulatory Information Service.
All times are references to London time.
All events in the above timetable following the SGM are
conditional, inter alia, upon the approval of the Resolutions.
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context requires otherwise:
"A Shares" the A shares of par value USD 0.01 each in the
share capital of the Company;
"Cathay Enterprises" Cathay International Enterprises Limited, a
company incorporated in the British Virgin Islands
which is a direct shareholder of Circle Finance
and Mega Worldwide Services Limited. Mr. Wu
Zhen Tao and members of his family hold the
ultimate bene cial interest in Cathay Enterprises;
"Circle Finance" Circle Finance Limited, a company incorporated
in the British Virgin Islands which is a direct
shareholder of the Company and which is itself
directly owned by Cathay Enterprises. Mr. Wu
Zhen Tao and members of his family hold the
ultimate bene cial interest in Circle Finance;
"Common Shares" the common shares of par value USD 0.01 each
in the share capital of the Company and shall
include Common Shares represented by Depositary
Interests where the context so requires;
"Controlling Shareholders" Circle Finance and Mega Worldwide Services Limited;
"DI Holders" holders of Depositary Interests;
"Directors" the directors of the Company excluding Mr. Wu
Zhen Tao and Patrick Sung;
--------------------------------------------------------
"Lansen" Lansen Pharmaceutical Holdings Limited;
--------------------------------------------------------
"Letter of Undertaking" the letter of undertaking dated 28 September
2020 provided by Circle Finance to the Company,
setting out an irrevocable commitment, subject
to certain terms and conditions, to fund the
payment of Shares offered to be sold by selling
Shareholders;
--------------------------------------------------------
"Listing Cancellation the Directors determining that the Listing Cancellation
Condition" is reasonably likely to occur on the next business
day;
--------------------------------------------------------
"Listing Cancellation resolution 1 in the Notice of SGM;
Resolution"
--------------------------------------------------------
"Minority Shareholders" Shareholders other than the Controlling Shareholders,
and "Minority Shareholder" shall mean any one
of them;
--------------------------------------------------------
"Qualifying Holders" (i) DI Holders who are entitled to participate
in the Tender Offer, being DI Holders representing
Common Shares on the Register at 6:00pm on 13
October 2020; and (ii) Shareholders who are
entitled to participate in the Tender Offer,
being Shareholders representing Common Shares
on the Register at 6:00pm on 13 October 2020,
in each case save for DI Holders or Shareholders
located in a Restricted Jurisdiction and the
Controlling Shareholders;
--------------------------------------------------------
"Relationship the relationship agreements dated 30 January
Agreements" 2015 made between each of the Controlling Shareholders
and the Company;
--------------------------------------------------------
"Requisition Notice" the notice of requisition of special general
meeting sent by the Controlling Shareholders
to the Board on 28 September 2020;
--------------------------------------------------------
"Resolutions" the resolutions to be considered at the SGM,
being the Listing Cancellation Resolution and
the resolution to adopt the New Bye-Laws, as
set out in the SGM Circular; and
--------------------------------------------------------
"Restricted Jurisdiction" each of Australia, New Zealand, the Republic
of Ireland, South Africa, the United States,
Canada, Japan or any other jurisdiction where
the mailing of the Tender Offer circular, or
the making of the Tender Offer into such jurisdiction
would constitute a violation of the laws of
such jurisdiction.
--------------------------------------------------------
Enquiries:
Cathay International Holdings Limited Tel: +852 2828 9289
Eric Siu (Finance Director)
Patrick Sung (Director and Controller)
SPARK Advisory Partners Limited Tel: +44 (0) 20 3368 3555
Andrew Emmott
Important Notices
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or solicitation of any offer
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities or the solicitation of any vote or
approval in any jurisdiction. Any offer (if made) will be made
solely by certain documentation which will contain the full terms
and conditions of any offer (if made), including details of how
such offer may be accepted. This announcement has been prepared in
accordance with English law and the Code and information disclosed
may not be the same as that which would have been prepared in
accordance with laws outside the United Kingdom. The release,
distribution or publication of this announcement in jurisdictions
outside the United Kingdom may be restricted by the laws of the
relevant jurisdictions and therefore persons into whose possession
this announcement comes should inform themselves about, and
observe, any such restrictions. Any failure to comply with the
restrictions may constitute a violation of the securities laws of
any such jurisdiction.
Forward looking statements
This announcement includes statements that are, or may be deemed
to be, forward-looking statements. These forward-looking statements
can be identified by the use of forward-looking terminology,
including the terms "anticipates", "believes", "could",
"estimates", "expects", "intends", "may", "plans", "projects",
"should" or "will", or, in each case, their negative or other
variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions. By
their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Forward-looking statements may, and often do, differ materially
from actual results. Any forward-looking statements in this
announcement reflect the Directors' current view with respect to
future events and are subject to risks relating to future events
and other risks, uncertainties and assumptions relating to the
Group and its operations and results of operations. Other than in
accordance with its legal or regulatory obligations (including
under the Disclosure Guidance and Transparency Rules, the Market
Abuse Regulation and the rules of the London Stock Exchange), the
Company is not under any obligation and the Company expressly
disclaims any intention or obligation (to the maximum extent
permitted by law) to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Notice for US Shareholders
The Tender Offer relates to securities in a non-US company which
is registered in the UK and is subject to the disclosure
requirements, rules and practices applicable to companies listed in
the UK, which differ from those of the United States in certain
material respects. This announcement and the Circular have been
prepared in accordance with UK style and practice for the purpose
of complying with English law, and US Shareholders should read this
entire announcement and the Circular, including Part II (Terms and
Conditions of the Tender Offer) of the Circular. The financial
information relating to the Company incorporated by reference in
the Circular, which is available for review on the Company's
website, has not been prepared in accordance with generally
accepted accounting principles in the United States and thus may
not be comparable to financial information relating to US
companies.
The Tender Offer is not subject to the disclosure and other
procedural requirements of Regulation 14D under the US Exchange
Act. The Tender Offer will be extended into the United States in
accordance with the requirements of Regulation 14E under the US
Exchange Act to the extent applicable. Certain provisions of
Regulation 14E under the US Exchange Act are not applicable to the
Tender Offer by virtue of Rule 14d-1(d) under the US Exchange Act.
US Shareholders should note that the Ordinary Shares are not listed
on a US securities exchange and the Company is not subject to the
periodic reporting requirements of the US Exchange Act and is not
required to, and does not, file any reports with the US Securities
and Exchange Commission thereunder.
It may be difficult for US Shareholders to enforce certain
rights and claims arising in connection with the Tender Offer under
US federal securities laws since the Company is located outside the
United States and all of its officers and directors reside outside
the US. It may not be possible to sue a non-US company or its
officers or directors in a non-US court for violations of US
securities laws. It also may not be possible to compel a non-US
company or its affiliates to subject themselves to a US court's
judgment.
The receipt of cash pursuant to the Tender Offer by a
Shareholder who is a US person may be a taxable transaction for US
federal income tax purposes and under applicable US state and
local, as well as foreign and other, tax laws. Each Shareholder is
urged to consult his, her or its independent professional adviser
immediately regarding the tax consequences of tendering any
Ordinary Shares in the Tender Offer.
To the extent permitted by applicable law and in accordance with
normal UK practice, the Company, Shore Capital or any of their
respective affiliates, may make certain purchases of, or
arrangements to purchase, Ordinary Shares outside the United States
during the period in which the Tender Offer remains open for
participation, including sales and purchases of Ordinary Shares
effected by Shore Capital acting as market maker in the Ordinary
Shares. These purchases, or other arrangements, may occur either in
the open market at prevailing prices or in private transactions at
negotiated prices. In order to be excepted from the requirements of
Rule 14e-5 under the US Exchange Act by virtue of Rule 14e-5(b)(10)
thereunder, such purchases, or arrangements to purchase, must
comply with applicable English law and regulation and the relevant
provisions of the US Exchange Act. Any information about such
purchases will be disclosed as required in the UK and the United
States and, if required, will be reported via a Regulatory
Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com.
While the Tender Offer is being made available to Shareholders
in the United States, the right to tender Ordinary Shares is not
being made available in any jurisdiction in the United States in
which the making of the Tender Offer or the right to tender such
Ordinary Shares would not be in compliance with the laws of such
jurisdiction.
Neither this announcement nor the Circular has been approved,
disapproved or otherwise recommended by the US Securities and
Exchange Commission or any US state securities commission and such
authorities have not confirmed the accuracy or determined the
adequacy of this announcement or the Circular. Any representation
to the contrary is an offence in the United States.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables or forms may vary
slightly and figures shown as totals in certain tables or forms may
not be an arithmetic aggregation of the figures that precede
them.
No forecasts of estimate
No statement in this announcement is intended as a profit
forecast, estimate or quantified financial benefits statement for
any period and no statement in this announcement should be
interpreted to mean that cash flow from operations, free cash flow,
earnings or earnings per share for the Company for the current or
future financial years would necessarily match or exceed the
historical published cash flow from operations, free cash flow,
earnings or earnings per share for the Company.
Publication on website
A copy of this announcement, the SGM Circular and the Tender
Offer Circular will, subject to certain restrictions relating to
persons resident in restricted jurisdictions, be available on the
Company's website at http://www.cathay-intl.com.hk/newsItem/ by no
later than 12 noon on the Business Day following the date of this
announcement. For the avoidance of doubt, the content of the
website referred to above is not incorporated into and does not
form part of this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
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END
TENGPGCGUUPUGMQ
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October 16, 2020 13:16 ET (17:16 GMT)
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