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From: Nigel
ArtDate: 19th September 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.94.108
Date: 20/09/06
Time: 09:06
19th September 2006
Asian Growth Properties - Acquisition
News Item - Conduit PR
AGP ACQUIRES PROPERTY PORTFOLIO IN HONG KONG AND CHINA FOR HK$4,430 MILLION (£302 MILLION)
Asian Growth Properties Limited (AIM stock code: AGP), the Hong Kong based property development and investment company has conditionally agreed to acquire a portfolio of six properties in Hong Kong and China from its major shareholder S E A Holdings Limited (“SEA”) for approximately HK$4,430 million (£302 million). These properties are currently held by the Target Group. Accordingly, it is proposed that the Company will acquire the Target Company from SEA. The consideration will be satisfied by the issue to SEA of 668,653,817 Ordinary Shares and the payment of approximately HK$500 million (£34 million) in cash from AGP's existing cash reserves. The property portfolio is valued at approximately HK$6,425 million (£437 million) and represents the majority of SEA's portfolio of Hong Kong and China property interests.
Due to the size of the transaction relative to the size of AGP and SEA's shareholding in AGP, the proposed transaction constitutes a related party transaction and a reverse takeover for AGP under the AIM Rules.
Highlights:
AGP currently has a property portfolio consisting of three development properties and one investment property, all located in Hong Kong. AGP’s total asset value and net asset value were, as at 30 June 2006, HK$2,221 million (£151 million) and HK$1,575 million (£107 million) respectively. AGP has negotiated a unique opportunity to purchase the property portfolio from SEA at market value, determined by Savills, an independent, internationally recognised professional valuer. The total asset value and net asset value of the Target Group as at 30 June 2006 were HK$7,742 million (£527 million) and HK$4,403 million (£302 million) respectively. SEA is the major shareholder of AGP holding approximately 85.42% of the Existing Ordinary Shares. The portfolio of properties in the Target Company comprises the majority of SEA's real property investment and development assets in Hong Kong and China. Upon Completion of the Acquisition, the Target Company will become a wholly-owned subsidiary of AGP and SEA will increase its shareholding interest in AGP to approximately 96.42%. The combined portfolios (after deducting approximately HK$500 million (£34 million) cash consideration) will increase AGP's total asset value and net asset value to HK$9,463 million (£644 million) and HK$5,505 million (£375 million) respectively and the proposed Acquisition will, in one transaction, facilitate AGP's entry into the China property market. The consideration for the proposed transaction is expected to be in the region of HK$4,430 million (£302 million) (subject to a cash adjustment upon Completion). This figure is based on the net asset value of the Target Group adjusted to take account of property valuations and minority interests. The consideration will be paid partly by the issue by AGP to SEA of 668,653,817 Consideration Shares at a price of 40 pence per share (and based on an exchange rate of £1.00 = HK$14.693). The balance of HK$500 million (£34 million) will be settled in cash from AGP's existing cash balances. The deemed issue price of 40 pence per share represents a premium of 19.74% over the average trading price of the AGP shares on AIM over the last three months ended 15 September 2006 and a discount of 18.78% to the net asset value per AGP share as at 30 June 2006. The Board considers this transaction to be fair and reasonable and that the 14.17% dilution in net asset value per Existing Ordinary Share on completion of the transaction impacting Shareholders is, in the opinion of the Board, more than compensated by the quality, value and potential of the property portfolio being purchased from SEA. The transaction is subject to the approval of AGP Shareholders at an EGM to be held at 5:00 p.m. (Hong Kong time) on 4 October 2006. AGP expects the Enlarged Share Capital of AGP to be admitted to trading on AIM on 5 October 2006. As part of the Proposals, a Management Agreement between the Company and SEA has been negotiated, pursuant to which SEAIA will undertake to manage AGP's investment and development assets. The Company is particularly pleased with the terms and conditions of the management agreement given SEAIA's management team have been operating in Hong Kong and China for 50 years and have wide experience in property development and investment. Commenting on the proposed transaction, Don Fletcher, Chief Executive Officer of AGP said:
"The Board of AGP unanimously endorses this transaction and see it as an exciting expansion of AGP's activities in China and Hong Kong. We recommend that Shareholders vote in favour of the Resolution. It is not often that an opportunity to purchase a portfolio of assets presents itself in the Hong Kong and China market".
This summary should be read in conjunction with the full text of this announcement.
ENQUIRIES
Don Fletcher Tel: +61 414693968 Asian Growth Properties Limited
David Mathewson Tel: +44 (0) 7730 074777 Asian Growth Properties Limited
Richard Gray Andrew Potts Tel: +44 (0) 20 7459 3600 Panmure Gordon (Broking) Limited
Abigail Singleton Leesa Peters Tel: +44 (0) 20 7429 6666 Conduit PR abigail@conduitpr.com / leesa@conduitpr.com
The Admission Document will be available on AGP's website www.asiangrowth.com and at the offices of Stephenson Harwood, One St. Paul’s Churchyard, London EC4M 8SH.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, such securities by any person in any circumstances, and in any jurisdiction, in which such offer or solicitation is unlawful. Accordingly, copies of this announcement are not being and must not be mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia, the Republic of Ireland, South Africa or Japan and any person receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute or send it in or into or from the United States, Canada, Australia, the Republic of Ireland or Japan.
The Ordinary Shares have not been, and will not be registered under the United States Securities Act of 1933, as amended (the 'Securities Act') or under the securities legislation of any state of the United States, and may not be offered or sold in the United States. The relevant clearances have not been, and will not be, obtained from the Securities Commission of any province or territory of Canada; no document in relation to the Admission or the Offer has been, or will be, lodged with, or registered by, The Australian Securities and Investments Commission; no registration statement has been, or will be, filed with the Japanese Ministry of Finance in relation to the Admission or the Offer; and no registration statement has been, or will be, filed with the Irish Stock Exchange in relation to the Admission or the Offer. Accordingly, subject to certain exceptions, the Common Shares the subject of the Offer may not, directly or indirectly, be offered or sold within the United States, Canada, Australia, Japan or the Republic of Ireland or offered or sold to a resident of the United States, Canada, Australia, Japan or the Republic of Ireland.
This press release may contain forward-looking statements with respect to AGP and its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward looking words such as 'may', 'will', 'expect', 'estimate', 'anticipate', 'intends', 'believe' or 'continue' or the negative thereof or similar variations. The actual results and performance of AGP could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transaction contemplated herein is completed. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation. The cautionary statements qualify all forward-looking statements attributable to AGP and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the parties have no obligation to update such statements.
This announcement has been issued by, and is the sole responsibility of, AGP. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, purchase or subscribe for any securities. This announcement has not been examined or approved by the FSA or the London Stock Exchange or any other regulatory authority.
Panmure Gordon (Broking) Limited is nominated adviser and broker to the Company for the purpose of the AIM Rules. Panmure Gordon (Broking) Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority and is a member of the London Stock Exchange, is acting exclusively for the Company in relation to the Proposals. Panmure Gordon (Broking) Limited is not acting for any other person in connection with the matters referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Panmure Gordon (Broking) Limited or for giving advice in relation to the matters referred to in this announcement.
This announcement is not for release, publication or distribution in or into Australia, Canada, Hong Kong, Japan, The Republic of Ireland, South Africa or the United States of America.
Edward Portman Conduit PR Ltd 76 Cannon St EC4N 6AE Office: +44 (0) 20 7429 6666 Direct: +44 (0) 20 7429 6607 Fax: +44 (0) 20 7429 6699 Mob: +44 (0) 773 3363 501
www.conduitpr.com
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