TIDMCWO
RNS Number : 2623E
China Wonder Limited
04 April 2011
China Wonder Limited
("China Wonder" or the "Company")
Proposed disposal of Jinzhou Wonder Packaging Machinery Co.,
Limited
Approval of Investing Policy
Adoption of New Articles of Association
and
Notice of General Meeting
China Wonder is pleased to announce that it has entered into a
conditional agreement for the disposal of Jinzhou Wonder Packaging
Machine Co., Limited for a gross cash consideration of RMB33
million (approximately equal to GBP3,142,857). Wonder Packaging is
a Chinese manufacturer and distributor of special packaging
machinery to the Chinese and overseas pharmaceutical markets and is
the only trading asset currently owned by China Wonder.
In view of the size and fundamental nature of the Disposal, it
is a requirement of the AIM Rules that the Disposal be approved by
Shareholders at a general meeting of the Company.
As the Disposal will result in the Company no longer having a
trading business, following the Disposal, it will, for the purposes
of the AIM Rules, be an investing company. Accordingly, China
Wonder is also seeking Shareholders' approval at the General
Meeting of a proposed Investing Policy for the Company following
Completion.
The Company is also seeking Shareholders' approval for the
adoption of new Articles of Association.
A General Meeting of the Company will be held at the conference
room of Jinzhou Jinsha International Hotel, No. 91, Jeifang Road,
Jinzhou City, Liaoning Province, PRC at 10.00 am on 27 April 2011
at which resolutions will be proposed to approve the Proposals. A
notice convening the General Meeting is set out in the
Circular.
A circular containing further details of the Disposal, the
Investing Policy and the adoption of the New Articles is expected
to be posted to Shareholders today and will be available from the
Company's website at www.chinawonderlimited.com.
For further information, please contact:
Mark Chapman China Wonder Limited Tel: 01483 894 627
Mob: 07918 733 111
Dan Bate WH Ireland Limited Tel: 0161 832 2174
1. Introduction
On 4 April 2011, the Company announced that it had entered into
the Share Sale Agreement for the Disposal for a cash consideration
of RMB 33,000,000 (approximately GBP3,142,857) (together with
Prescribed Interest thereon). On Completion of the Disposal, which
is conditional, inter alia, upon Shareholder approval, the Company
will receive gross proceeds of RMB 28,050,000 (approximately
GBP2,671,429) (together with the Prescribed Interest thereon) in
cash on Completion and up to a further RMB 4,950,000 (approximately
GBP471,429) (together with the Prescribed Interest thereon) in cash
subject to the Escrow Funds being released in full on the Escrow
Release Date. The estimated net proceeds, assuming release of the
Escrow Funds in full, will be RMB 32,700,000 (approximately
GBP3,114,286) (together with all Prescribed Interest thereon).
Further details of the conditions for release of the Escrow Funds
are set out in section 2 below.
In view of the size and fundamental nature of the Disposal by
the Company, it is a requirement of the AIM Rules that the Disposal
be approved by Shareholders at a general meeting of the Company.
The Disposal is therefore conditional, amongst other things, on the
passing of Resolution 1 in the Notice as an ordinary resolution of
the Company. Further details of the Disposal are set out below in
section 2.
It is also a requirement of the AIM Rules, as the Disposal will
result in the Company no longer having a trading business and it
becoming, for the purposes of the AIM Rules, an "investing
company", that following the Disposal the Company must adopt an
investing policy (as such term is defined in the AIM Rules) which
outlines, amongst other things, the nature of the investments it
intends to make over the next 12 months. A failure to make such an
investment within 12 months of the Disposal would result in the
London Stock Exchange suspending the trading of the Ordinary Shares
on AIM pending the cancellation of the admission of the Ordinary
Shares. The Investing Policy must also be approved by the
Shareholders in general meeting. The Directors set out, in section
3 below, the proposed Investing Policy for the Company following
Completion. Implementation of the Investing Policy is conditional
upon the passing of Resolutions 1 and 2 in the Notice as ordinary
resolutions of the Company.
The Company would also like to take this opportunity to update
its articles of association in line with new provisions of Jersey
law and accordingly, Resolution 3 proposes the adoption of the New
Articles. Section 4 sets out a summary of some of the more
significant changes.
2. Details of the Disposal
Wonder Packaging is the only trading asset currently owned by
China Wonder. It is a Chinese manufacturer and distributor of
special packaging machinery to the Chinese and overseas
pharmaceutical markets.
During the year ended 31 December 2009, Wonder Packaging
recorded an aggregate audited turnover of GBP1,876,542 with a
profit before interest and tax of GBP291,011. The carrying value of
Wonder Packaging in the consolidated balance sheet of the China
Wonder group of companies as at 30 June 2010 was GBP2,845,674.
Following the Disposal, Qingdong Zeng, Chief Executive Officer
and Hailin Liang, Executive Director, will step down from the
Board.
Share Sale Agreement
Pursuant to the Share Sale Agreement, the Purchaser has agreed,
subject, inter alia, to Shareholder approval, to acquire the entire
issued share capital of Wonder Packaging for a cash consideration
of RMB 33,000,000 (approximately GBP3,142,857) (together with
Prescribed Interest thereon) of which RMB 28,050,000 (approximately
GBP2,671,429) (together with Prescribed Interest thereon) is
payable to China Wonder on the Completion Date. The effective date
of the Disposal will be 1 January 2011. The Purchaser has agreed to
pay any capital gains tax arising on the Disposal (whether such
amounts are for the account of the Company or otherwise).
The balance of RMB 4,950,000 (approximately GBP471,429)
(together with Prescribed Interest thereon), being the Escrow
Funds, will be retained in the Escrow Account against any liability
for potential claims for breach of the warranties and indemnities
given by the Company to the Purchaser in the Share Sale Agreement.
Assuming no such warranty or indemnity claims are brought by the
Purchaser within a period of 12 months of Completion, the Escrow
Funds will be paid to the Company by the Purchaser in cash on the
Escrow Release Date. In the event that the Purchaser has given
notice to the Company on or prior to the Escrow Release Date that
it alleges a claim under the warranties or indemnities contained in
the Share Sale Agreement then the Escrow Funds will not be released
until such time as the claim has been settled. If the Company is
required to pay damages in respect of any such claim the payment of
such damages will be made firstly from the Escrow Funds and the
balance (if any) returned to the Company. To the extent that the
Escrow Funds are insufficient to settle any damages the Company
will have to pay the difference.
Pursuant to the terms of the Share Sale Agreement the Company
has given the usual warranties in respect of trading and other
matters, and warranties and indemnities in respect of taxation
matters. The Share Sale Agreement is subject to PRC law, and as
such is subject to the PRC requirements on the period of time
during which a claim may be made under the warranties and
indemnities. Pursuant to PRC law, such limitations are mandatory,
apply only to the period of time from when a purchaser becomes
aware of or should be aware of a breach of warranty or indemnity,
and cannot be deviated from by contracting parties in the same way
as they can be under UK law.
Liability under the warranties (save as set out below) is
limited to a maximum liability of RMB 10,000,000 (approximately
GBP952,381).
Warranties and indemnities in relation to taxation and in
relation to the Company's capacity to sell Wonder Packaging and in
relation to certain matters concerning ownership of the shares in
Wonder Packaging are unlimited in amount.
The Disposal is subject to certain conditions precedent
(including Shareholder approval, which is being sought pursuant to
Resolution 1), which include:
-- the approval of the Purchaser's supervisory board, which was
obtained on 28 March 2011;
-- approval by the Chinese Examination and Approval Authorities
in accordance with the following three stages:
(i) within 30 days of submission of all requisite documents, the
governmental authorities will approve or disapprove the
Disposal;
(ii) if the Disposal is approved, a revised Foreign-invested
Enterprise Approval Certificate will be issued within 30 days;
(iii) the Disposal will be registered with the Jinzhou Municipal
Administration of Industry and Commerce within a further 30 days
following the later of the issue of a revised Foreign-invested
Enterprise Approval Certificate and all of the other conditions
being satisfied; and
-- the relevant authorities in the PRC having indicated (prior
to the issue of formal permission) that they would view favourably
an application by Wonder Packaging to build a new factory building
on the land occupied by Wonder Packaging.
In the event that the conditions precedent are not satisfied
within six months of execution of the Share Sale Agreement the
Purchaser shall have the right to withdraw therefrom.
Rationale for the Disposal
The Directors believe that Wonder Packaging requires
significantly more working capital than China Wonder can provide,
and that the price achieved on the Disposal represents a good
return for Shareholders at a time when the Company cannot itself
realise the growth potential of its subsidiary.
In line with this, and in line with the proposed Investing
Policy (detailed in section 3 below), the Directors consider that
the appropriate course of action is to dispose of Wonder Packaging
and utilise the proceeds, along with its current cash resources, to
implement its Investing Policy.
Effect of the Disposal
As announced on 5 November 2010, China Wonder has also disposed
of the entire issued share capital of Creative Legend Group Limited
for a cash consideration of RMB 30,000,000 (approximately equal to
GBP2,857,143). At the time of this disposal, Creative Legend Group
Limited owned the entire issued share capital of Jinzhou Wonder
Machinery Equipment Co., Limited, a manufacturer of bespoke and
specialised machinery for a wide range of industries, and Jinzhou
Wonder Paper Products Co., Limited, a manufacturer of colour
printing and paper products.
Following Completion, the Company will no longer have any
trading businesses and will become an investing company (as such
term is defined in the AIM Rules).
Application of Disposal proceeds
Following the Disposal, the Company will have cash resources
(excluding the Escrow Funds) of approximately RMB 57,532,000
(approximately GBP5,479,000) (excluding any Prescribed Interest
which is paid). The Company proposes to utilise its cash resources
to take advantage of acquisition opportunities as they arise in
line with its Investing Policy.
3. Investing Policy
After careful consideration, the Board has determined that the
Investing Policy will be:
-- to acquire either (i) a controlling interest in, or the
entire share capital of, one or more trading companies involved
primarily in the engineering sector which will be capable of
significant growth; or (ii) the business and/or assets of such a
company or companies;
-- to focus its acquisition strategy on China. However, given
the broad nature of the sector which the Company will focus on, the
directors of China Wonder will consider opportunities in other
geographic locations should any such opportunities arise;
-- to undertake a significant acquisition which constitutes a
reverse takeover under the AIM Rules within 12 months of the GM,
failing which the Company will return any funds it holds to the
Shareholders by way of dividend;
-- to undertake only one or two key acquisitions in the next 12
months;
-- to satisfy the consideration for any such acquisition by (i)
the utilisation of its current cash resources, (ii) the issue of
new Ordinary Shares to the relevant vendors; (iii) the utilisation
of cash raised pursuant to the issue of new Ordinary Shares in
conjunction with such acquisition; (iv) the utilisation of cash
made available through the securing of new debt facilities; and/or
(v) a combination of (i) to (iv); and
-- if it chooses to invest by way of a share acquisition, China
Wonder intends to take, as a minimum, a controlling interest in any
company whose shares it acquires and will be active in the way it
manages such investment.
Acquisition targets will be subject to the scrutiny of the
Continuing Directors, all of whom either have experience in this
sector or in raising capital for companies. Their experience can be
summarised as follows:
-- Mark Chapman has nearly 20 years of experience in investing
in the Far East and has acted as Chairman of China Wonder and as a
senior executive of other private and public companies involved in
the engineering sector in China. Following Completion, Mark will
remain as Chairman of China Wonder;
-- Qiang Hao has executive experience in the role of Chief
Financial Officer of China Wonder and, following Completion, will
remain as the Chief Financial Officer of China Wonder; and
-- Roberto Lima is a mechanical engineer and has been working in
the automotive industry in Brazil and Germany for several years.
Following Completion, Roberto will remain as Non- executive
director of China Wonder.
In reviewing investment opportunities relevant legal and
financial due diligence will be carried out by suitably qualified
advisers to determine the efficacy, feasibility and risks
associated with any potential acquisition or investment.
If the Investing Policy is not approved at the GM, the Board
proposes to proceed with a voluntary liquidation of the
Company.
4. New Articles
A copy of the New Articles is provided with the Circular. The
purpose of adopting the New Articles is primarily to take account
of certain changes to Jersey law since the current articles of
association of the Company were adopted and to reflect some of the
more comprehensive provisions often found in the articles of
association of a Jersey company with its shares traded on AIM. The
key changes introduced in the New Articles include (but are not
limited to) the following:
-- a range of provisions that incorporate certain aspects of
English law which have no equivalent under Jersey law but which are
commonly included in the articles of association of a company
registered in Jersey with its shares traded on AIM. Examples of
such provisions include (i) the requirement for directors to be
granted authority to allot relevant securities, (ii) shareholder
pre-emption rights on new issues of shares, (iii) the requirement
to disclose interests in shares (equivalent to Chapter 5 of the
Disclosure Rules and Transparency Rules) and associated restriction
notice provisions, (iv) shareholder information rights, (v)
circulation of shareholder resolutions, (vi) the power to require
website publication of audit concerns, (vii) independent report on
poll; and (viii) payments for loss of office. A small number of
these already exist in the Company's current articles of
association but have been updated and are now more
comprehensive;
-- the New Articles contain more comprehensive provisions in
relation to uncertificated shares held through CREST;
-- the New Articles are more comprehensive in relation to
communications generally;
-- the New Articles now contain more comprehensive provisions
for the holding of general meetings. In addition, under the Jersey
Act, only 14 clear days' notice now needs to be given in respect of
annual general meetings and other general meetings which is less
than currently required under the existing articles of association
of the Company.
It is noted that, in accordance with the Jersey Act, special
resolutions require a two-thirds majority vote, rather than
three-quarters as in the UK. This remains the case under the New
Articles, notwithstanding the fact that the Jersey Act has recently
changed to allow companies to elect, in their articles of
association, to set the threshold at higher than two-thirds if they
wish to do so.
5. General Meeting
Set out at the end of the Circular is the Notice convening the
General Meeting to be held at the conference room of Jinzhou Jinsha
International Hotel, No. 91, Jeifang Road, Jinzhou City, Liaoning
Province, PRC at 10.00 a.m. on 27 April 2011, at which the
Resolutions will be proposed as ordinary resolutions of the Company
for the purposes of approving the Disposal and the approval of the
Investing Policy, and a special resolution will be proposed to
approve the adoption of the New Articles.
6. Recommendation
The Board considers the Proposals to be in the best interests of
the Company and Shareholders as a whole and accordingly unanimously
recommend Shareholders to vote in favour of the Resolutions to be
proposed at the GM.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Circular and Forms of Proxy posted to Shareholders 4 April 2011
Latest time for receipt of completed Forms 10.00 a.m. on 25
of Proxy for General Meeting April 2011
General Meeting of the Company 10.00 a.m. on 27
April 2011
All times stated in this announcement are China Standard Time
(which is seven hours ahead of British Summer Time.)
DEFINITIONS
The following definitionsapply throughout thisannouncement,
unless the context otherwise requires:
"AIM" the AIM market of the London Stock
Exchange
"AIM Rules" the AIM Rules for Companies governing
the admission to, and operation of,
AIM published by the London Stock
Exchange
"Circular" the circular to Shareholders to be
dated 4 April 2011
"Company" or "China Wonder" China Wonder Limited, a Jersey incorporated
company with its shares admitted to
trading on AIM
"Completion" completion of the Share Sale Agreement
in accordance with its terms
"Completion Date" the date upon which Completion takes
place
"Continuing Directors" Mark Chapman, Qiang Hao and Roberto
Lima
"CREST" the computerised settlement system
to facilitate the holding of and transfer
of title to or interests in securities
in uncertificated form, operated by
Euroclear
"Directors" or "Board" the directors of the Company as at
the date of the Circular
"Disposal" the proposed disposal of the entire
issued share capital of Wonder Packaging
which is subject to Shareholder approval
"Escrow Account" a bank account to be set up in accordance
with the terms
of the Share Sale Agreement
"Escrow Funds" the sum of RMB 4,950,000 (approximately
GBP471,429), representing 15% of the
consideration for the Disposal (together
with Prescribed Interest thereon),
to be held in escrow pursuant to the
Share Sale Agreement. Further details
of the escrow arrangements are set
out in section 2 of this announcement
"Escrow Release Date" the date falling 12 calendar months
from Completion, when, subject to
certain conditions, the Escrow Funds
will be released to the Company
"Euroclear" Euroclear UK & Ireland Limited, the
operator of CREST
"Form of Proxy" the form of proxy for use at the GM
"General Meeting" or "GM" the general meeting of the Company
to be held at the conference room
of Jinzhou Jinsha International Hotel,
No. 91, Jeifang Road, Jinzhou City,
Liaoning Province, PRC at 10.00 a.m.
on 27 April 2011
"Investing Policy" the investing policy proposed to be
adopted by the Company following the
Disposal, further details of which
are set out in section 3 of this announcement
"Jersey Act" Companies (Jersey) Law 1991
"London Stock Exchange" London Stock Exchange plc
"New Articles" new articles of association of the
Company proposed to be adopted by
the Company at the GM
"Notice" the notice convening the GM
"Ordinary Shares" ordinary shares of 2.5p each in the
capital of the Company
Company
"Proposals" the proposals set out in this announcement,
comprising the Disposal, the adoption
of the Investing Policy and the adoption
of the New Articles
"PRC" or "China" The People's Republic of China excluding
Hong Kong, Macau and Taiwan
"Prescribed Interest" interest to be applied to sums payable
under the Share Sale Agreement, calculated
at the rate of:
(i) (i) 5% per annum from 1 January
2011 to the date of payment of the
relevant sums to the Company or into
the Escrow Account; and
(ii) (ii) the rate achieved on deposit
in the Escrow Account for the period
from the payment of such sums into
the Escrow Account to the date on
which such sums are paid to the Company
or the Purchaser in accordance with
the Share Sale Agreement
"Purchaser" Uhlmann Asien Holding GmbH & Co. KG,
being the purchaser of Wonder Packaging
pursuant to the Share Sale Agreement
"Resolutions" the resolutions set out in the Notice
"RMB" Renminbi or Yuan, the lawful currency
of the PRC
"Shareholders" holders of Ordinary Shares
"Share Sale Agreement" the conditional agreement for the
sale and purchase of the entire issued
share capital of Wonder Packaging
dated 4 April 2011 between the Company
(1) and the Purchaser (2)
"Wonder Packaging" Jinzhou Wonder Packing Machinery Co.,
Limited, a PRC subsidiary of the Company
For the purposeof this announcement, the following exchange rate
has been used: GBP1 = RMB 10.5.
This information is provided by RNS
The company news service from the London Stock Exchange
END
DISLLFLSSIISIIL
China Wonder (LSE:CWO)
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부터 5월(5) 2024 으로 6월(6) 2024
China Wonder (LSE:CWO)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
