Notice of AGM & Proposals in Relation to Hong Kong


 

TIDMWCC 
 
RNS Number : 1457I 
West China Cement Limited 
05 March 2010 
 

 
NOT FOR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR 
 ANY OTHER JURISDICTION IF TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF 
                                SUCH JURISDICTION 
               West China Cement Limited ("WCC" or the "Company") 
 
NOTICE OF AGM AND PROPOSALS IN RELATION TO HONG KONG LISTING AND CONDITIONAL AIM 
                                    DELISTING 
 
                                  5 March 2010 
 
West China Cement Limited announce the posting today to holders of its ordinary 
shares ("Shareholders") of a circular setting out details of the Company's 
proposed listing (the "HKEx Listing") on the main board of the Stock Exchange of 
Hong Kong Limited ("HKEx") and containing notice of the Company's annual general 
meeting ("AGM") to be held on 31 March 2010. 
At the AGM, Shareholders' approval will be sought, inter alia, to approve the 
Company's normal business of the AGM as well as specific resolutions in relation 
to the proposed HKEx Listing, including resolutions (the "Resolutions") to 
sub-divide the Company's ordinary shares (the "Sub-division"), to adopt new 
articles of association, to adopt a new share option scheme and to cancel the 
admission of the Company's shares to trading on AIM (the "De-Listing"). The 
Resolutions are conditional on the HKEx Listing taking place. The Directors 
expect the HKEx Listing and the De-Listing to take place between on or around 24 
May 2010. 
 The De-Listing and HKEx Listing expected dates are the earliest expected dates 
and are subject to change. The timing of the De-Listing is contingent on the 
HKEx Listing. In the event that these dates are revised, the Company will make 
an appropriate announcement and the final dates will be confirmed not less that 
ten clear business days in advance of the relevant date. 
Background to and reasons for the HKEx Listing and the Delisting 
 
On 10 February 2010 the Company announced that it had applied for the shares of 
the Company to be listed on the main board of the HKEx. 
Since its admission to AIM in December 2006, the Company has grown 
significantly, both in terms of assets and profitability, becoming one of the 
largest companies from the People's Republic of China ("PRC") on AIM.  The 
Directors believe that, whilst AIM has served the Company and its Shareholders 
well in this initial growth period, the Company will now be better served by 
listing its shares on a larger and more liquid stock market which can better 
accommodate the Company's next stage of growth. Having considered various 
options, the Directors believe that the HKEx will be the most suitable choice of 
stock exchange for the Company to pursue this next stage of growth. 
The HKEx has, over the past decade, become the primary destination for PRC 
companies wishing to maintain an international listing and it is now one of the 
world's largest and fastest growing stock markets. Due to its proximity and 
cultural similarity to China, the HKEx provides an equity capital market 
infrastructure for PRC companies in a world class regulatory environment. The 
Directors also believe that the HKEx provides a market and investor base with a 
closer understanding of the growth dynamics of the PRC economy and cement 
sector, and is therefore better suited to the Company.  Currently, eight of the 
largest PRC cement companies are listed on the HKEx (Anhui Conch Cement Company 
Limited, China National Building Material Company Limited, China National 
Materials Company Limited, China Shanshui Cement Group Limited, China Resources 
Cement Holdings Limited, Asia Cement (China) Holdings Corporation, BBMG 
Corporation and TCC International Holdings Limited) and this grouping provides a 
strong valuation benchmark for the Company and an international investor base 
with a strong perspective on the market valuations of cement companies in the 
PRC. 
The Directors believe that the HKEx, as a main board market with a significant 
proportion of PRC issuers and Asian investors, provides a larger trading 
platform for the shares of the Company. The Directors believe that this will be 
a significant factor in increasing liquidity in the Company's shares and that 
this should be reflected in the medium to long term market valuation of the 
Company.The Directors have made no decision as to whether it will seek to raise 
additional capital at the time of the HKEx Listing. 
The Directors recognise that the AIM market has provided the Company with an 
excellent stock market platform for the last three years of its growth, and that 
the Company and its Shareholders have benefited greatly from listing on AIM. 
However, the Directors believe that the HKEx will be able to provide a stronger 
platform for this growth going forward, and that it is in the best interests of 
the Shareholders for their shares to be solely listed on the HKEx. 
The Directors have considered this move very carefully and are of the opinion 
that a dual-listing with AIM is likely to result in a division of liquidity 
between the two markets, which may partly negate the benefit of joining a main 
board market. A dual-listing would entail extra legal and audit fees as well as 
management time as the Company would have to comply with two sets of regulatory 
and disclosure requirements. The Directors do not believe that the benefits of a 
dual listing would outweigh the extra costs. 
Listing of the Ordinary Shares on the main board of HKEx is subject to, amongst 
other things, the approval of the listing sub-committee of the board of 
directors of the HKEx (the "Listing Committee") and, subject to this approval, 
it is expected that the HKEx Listing will occur on or around 24 May 2010 The 
De-Listing is conditional on shareholder approval and on the HKEx Listing. If 
these conditions are met, it is proposed that the De-Listing will be effective 
on the first day of dealing in the Ordinary Shares on the HKEx. The expected 
dates of De-Listing and HKEx Listing are subject to change. The timing of the 
De-Listing is contingent on the HKEx Listing. In the event that these dates are 
revised, the Company will make appropriate announcement and the final dates will 
be confirmed not less than ten clear business days in advance of the relevant 
date. 
The proposed De-Listing and its effect on Shareholders and the Company 
In accordance with Rule 41 of the AIM Rules, the Company has notified the London 
Stock Exchange of the proposed De-Listing. The Company will inform the London 
Stock Exchange and the market of the precise proposed date for De-Listing at 
least ten clear business days in advance of the date. The De-Listing is 
conditional upon: 
(a)        the approval of a resolution approving the De-Listing (the 
"De-Listing Resolution") by Shareholders holding not less than 75 per cent. of 
votes cast in accordance with the AIM Rules; and 
(b)       the commencement of trading of the Ordinary Shares on the HKEx within 
three months of the approval of the De-Listing Resolution. 
Subject to the requisite shareholder approval being received and approval of the 
HKEx Listing by the Listing Committee, the HKEx Listing and De-Listing are 
expected to be effective on or around 24 May 2010. In the event that HKEx 
Listing does not occur within three months of the approval of the De-Listing 
Resolution and the Directors still believe that it is in the best interests of 
the Company to list its shares on the HKEx and to de-list from AIM, the Company 
will seek a further shareholders' resolution in the same form as the De-Listing 
Resolution to approve the cancellation of admission to trading on AIM of the 
Ordinary Shares conditional on commencement of trading of the Ordinary Shares on 
the HKEx.  The Company will announce a definitive date for the HKEx Listing and 
the De-Listing as soon as such dates are confirmed (and, in any event, no later 
than ten clear business days prior to the De-Listing becoming effective). 
Following the De-Listing, the Company will cease to have a nominated adviser and 
AIM stockbroker and it will no longer be required to comply with the AIM Rules 
or with the corporate governance requirements applicable to AIM companies. 
Following the HKEx Listing, the Company will be bound by the rules of the HKEx 
and the Hong Kong Code on Corporate Governance Practices. Following the HKEx 
Listing, the Company will have three independent non-executive directors and 
will have an audit committee comprising solely independent non-executive 
directors and a remuneration committee comprising two independent non-executive 
directors and an executive director. Following the HKEx Listing, the Company 
will also set up a nomination committee comprising two independent non-executive 
directors and an executive director. 
Transactions in Ordinary Shares following the Delisting 
 
Following the HKEx Listing and the De-Listing, all Shareholders will retain the 
same number of Ordinary Shares (as adjusted pursuant to subject to the 
Sub-division). It is expected that the De-Listing will take place between on or 
around 24 May 2010 and will, in effect, be simultaneous with the commencement of 
trading of the Ordinary Shares on the HKEx. 
The Directors understand that some Shareholders may not be familiar with share 
trading on the HKEx, and so the Company has made informal arrangements with a 
number of London retail stockbrokers who will be able to support Shareholders in 
the trading of their Ordinary Shares on the HKEx. Subject to steps being taken 
by Shareholders (if necessary) to lodge their shares with a Hong Kong 
stockbroker, nominee or custodian, the Ordinary Shares will be able to be traded 
on the HKEx from the first day of trading. The Company will send a letter to 
each Shareholder closer to the date of HKEx Listing which will set out the 
options open to Shareholders to allow them to trade their shares on the HKEx. 
Changes to the composition of the Board 
Prior to the HKEx Listing, it is intended that changes will be made to the 
composition of the Board. 
The HKEx Listing provides a move to a main board market with a strong 
understanding of the China growth story. Given the market's unique dynamics, the 
board believes that that the Company will be better served with a local Hong 
Kong and PRC board composed of professionals with a strong knowledge of the PRC 
business environment and the Hong Kong capital markets. Therefore, subject to 
and following the approval of the application for the HKEx Listing by the HKEx 
Listing Authority, it is intended that Robert Robertson, non-executive chairman, 
and Brett Miller, non-executive director, will step down as directors and that 
three independent non-executive directors will be appointed. The directors will 
have a strong background and understanding of the HKEx regulations and corporate 
governance procedures. 
Sub-division 
The Company is proposing, conditional on HKEx listing and subject to the passing 
of the necessary resolution at the AGM, to sub-divide each existing authorised 
issued and unissued ordinary share of GBP0.10 each in the capital of the Company 
into 100 new ordinary shares of GBP0.001 each. Following the Sub-division, the 
authorised and issued share capital of the Company will comprise 6,486,213,300 
ordinary shares of GBP0.001 each.  It is intended that the resulting lower 
nominal value and increased number of shares will encourage greater liquidity in 
the Company's shares. Any options held over Ordinary Shares will be adjusted in 
such manner as the board may determine to reflect the Sub-division pursuant to 
the terms of the Company's existing option scheme. 
Adoption of New Articles 
The Company is proposing, subject to the passing of the necessary resolution at 
the AGM and conditional on the HKEx Listing, to adopt new articles of 
association to reflect the requirements of the HKEx that will take effect 
following and conditional on HKEx Listing.  A copy of the proposed new articles 
can be reviewed at www.westchinacement.com. 
Adoption of New Share Option Scheme 
In order to comply with the HKEx Rules, it is intended that, subject to the 
passing of the necessary resolution at the AGM and conditional on the HKEx 
Listing, the Company's employees will be entitled to participate in a new share 
option scheme and the new share option scheme will replace the Company's 
existing option scheme. 
 
For further information please contact: 
West China Cement Limited 
Anthony Schindler 
Tel: +44 7710 1789 28 
Anthony.schindler@wcc_uk.com 
 
NCB Stockbrokers Ltd 
Christopher Caldwell 
Tel: + 44 20 7071 5200 
Christopher.caldwell@ncb.ie 
 
Citigate Dewe Rogerson Asia 
Pui Shan Lee 
Tel: +86 21 6340 4186 
ps.lee@citigate.com.cn 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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