DISPOSAL AND WITHDRAWAL

RNS Number:6026X
Worldsec Ld
21 June 2002


WORLDSEC LIMITED DISPOSAL AND WITHDRAWAL FROM TRADING ACTIVITIES


('WORLDSEC' OR 'THE COMPANY' AND TOGETHER WITH ITS SUBSIDIARIES 'THE GROUP')


Worldsec announces that it has today agreed, conditional on (among other things)
the approval of shareholders and regulatory consents, to sell to UOB Kay Hian
Private Limited ('UOBKH') the entire issued share capital of Worldsec
International (U.K.) Limited ('WIUK'), the entire registered equity of Worldsec
Investment Consulting (Shanghai) Co., Ltd ('WICS') and certain research
materials held by Worldsec International Limited ('WIL') leading to the Group's
withdrawal from its broking, research and corporate finance businesses ('the
Proposed Disposal').


The Proposed Disposal will be for cash consideration equal to the aggregate of
the net asset value of WIUK and WICS and US$300,000 (approximately UK£201,750 at
US$1.487/£). The consideration is receivable in full at completion which is
expected to take place on 1 October 2002 or, in the case of the sale of the
registered equity of WICS, if completion of such sale may be deferred to a later
date, such date being no later than six months after completion of the sale of
the other assets subject to the Proposed Disposal (unless the Purchaser agrees
to extend this period for a further six months). In the case of such deferred
completion of the sale of WICS, the portion of the consideration attributable to
the sale by WICS shall be payable on such deferred completion.


UOBKH is a subsidiary of UOB - Kay Hian Holdings Limited, which is one of the
largest stockbrokers based in Singapore formed from the merger of Kay Hian
Holdings Limited and UOB Securities, the stockbroking arm of United Overseas
Bank in October 2000.




Information on the Proposed Disposal


The Group's broking, research, and corporate finance departments currently
comprise agency broking in securities, futures, and options dealing, and the
provision of corporate finance, financial advisory and nominee services, and
generate substantially all of the revenue for the Group. Thirteen employees
specified by UOBKH, working in the broking, research and corporate finance
departments are expected to agree to join UOBKH's affiliated corporations as a
condition to completion of the Proposed Disposal.


Subject to completion of the Proposed Disposal, the Company intends to terminate
the employment of those employees remaining in the broking, research and
corporate finance departments of the Group although UOBKH's affiliated
corporations have expressed an intention to offer employment contracts to
substantially all such employees. The Group will thereby have completed its
withdrawal from the broking, research and corporate finance businesses. The role
of non-client facing support and administrative staff will depend on the future
activities of the Group.


The Group's activities are currently operated through a number of the Group's
subsidiaries, including- WIUK and WICS. WIUK operates as an arranger for
dealings in securities for WIL clients in the UK. WICS is a wholly-owned foreign
enterprise established under the laws of the People's Republic of China ('PRC'),
performing research and investment consulting services for the Group in the PRC.
WIUK and WICS are wholly owned subsidiaries of Worldsec, and both companies
perform services almost exclusively on behalf of WIL, a fellow Group subsidiary,
and substantially all of their income is received from WIL.


The research materials which are the subject of the Proposed Disposal comprise
the materials for the research, reference or use by WICS and WIL for the purpose
of their investment advisory and research functions.


The Proposed Disposal will result in the Group withdrawing from substantially
its only revenue generating activities. In the year ended 31 December 2001 the
Group's loss after tax was US$7.9 million and its net assets at that date were
US$24.2 million. The net assets of WIUK and WICS at 31 December 2001 were
approximately US$1.5 million.


Background to and reasons for the Proposed Disposal


Worldsec has for a number of years maintained a strategy of building a broking
business specialising in Asian markets, cultivating clients in predominantly
Asia, the UK and USA. This strategy aimed to grow the client base to enable the
Group to benefit from the economies of scale of a larger broking business and
develop other opportunities such as corporate finance work. In the past two
years, South East Asian equity markets have become marginalised by institutional
investors and, against the background of mounting losses, the feasibility of
this strategy has been reviewed by the Directors of Worldsec.


This review has already resulted in the closure of the Group's Philippines and
Malaysian offices during 2001. As described above, the Proposed Disposal would
result in the Group's exit from the broking, research and corporate finance
businesses which are substantially the Group's only revenue generating
activities. Accordingly, the Directors believe that they have taken appropriate
steps to stem the losses and cash outflow experienced in the recent past.


Details of the documentation relating to the Proposed Disposal


The sale documentation has the following main features:


 a. It provides for the sale to UOBKH's affiliated corporations of the whole of
    the issued share capital of WIUK and the whole of the registered equity of
    WICS for a consideration equal to their net asset value (as stated in the
    unaudited management accounts of WIUK and WICS as at the last day of the
    month immediately preceding completion or deferred completion of WICS as the
    case may be).

 b. It provides for the sale of the research materials and various other matters
    provided in the agreement for a consideration of US$300,000.

 c. It requires the acceptance of employment with UOBKH's affiliated corporations
    by the 13 specified employees of the Group as a condition to completion. The
    condition is waivable by UOBKH.

 d. It provides that the Proposed Disposal is subject to all necessary
    governmental, regulatory and other approvals and/or consents being obtained
    on or before completion (or, in respect of the sale of registered equity of
    WICS, no later than 6 months after completion of the sale of the other
    assets subject to the Proposed Disposal).


In addition, as part of this transaction, there is a put option exerciseable
within 12 months of completion of the Proposed Disposal to the benefit of UOBKH
for the repurchase of WIUK by the Group at a price equivalent to the cash assets
less liabilities of WIUK as stated in the unaudited management accounts of the
company as at the last day of the month preceding the repurchase date.


Financial effects of the Proposed Disposal


Following completion of the Proposed Disposal, Worldsec will have no significant
trading activity, and it is intended that the Group's remaining assets will be
realised to maximise the cash available. The remaining assets comprise entities
which maintain brokerage and futures trading rights on the Hong Kong market,
trading rights on The Philippine Stock Exchange Inc, a B share trading seat
approved by the Shanghai Stock Exchange and registration as a broker-dealer
under the Securities Stock Exchange Act of 1934 and membership of the National
Association of Securities Dealers in the USA and some fixed assets and sundry
assets. The Group has agreed, in principle, to procure the sale of the Group's B
share trading seat approved by the Shanghai Stock Exchange and the futures
trading rights issued by the Hong Kong Futures Exchange Limited, to UOBKH at
market value.


The role of the remaining non-client facing support and administrative staff
will depend on the future activities of the Group. The Directors are seeking
acquirers for all remaining assets in the Group so as to leave the Group holding
substantially only cash.


The Directors of the Company will consider whether to reinvest the net proceeds
of the Proposed Disposal and the realisations of the remaining assets, or
whether to return funds to shareholders, or a combination of both.


Circular and EGM


A circular containing details of the Proposed Disposal which will be accompanied
by a notice convening an Extraordinary General Meeting of the Company will be
sent to shareholders as soon as practicable.


For further information, please contact:


Worldsec Limited
In Hong Kong

Paul Cheng, Finance Director                  (852) 2867 7288

In U.K.

Alastair Gunn-Forbes                          (44) 207 972 0880

Deloitte & Touche Corporate Finance

Robin Binks                                   (44) 207 936 3000


Deloitte & Touche Corporate Finance, which is authorised in respect of regulated
activities by the Financial Services Authority, is acting for Worldsec and no
one else and will not be responsible to anyone other than Worldsec for providing
the protections afforded to clients of Deloitte & Touche Corporate Finance.
Deloitte & Touche Corporate Finance can be contacted at its principal office:
Stonecutter Court, 1 Stonecutter Street, London EC4A 4TR.



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