Crown International Corporation Limited TERM SHEET ... - HKEXnews

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Apr 27, 2016 - If the Potential Acquisition materialises, the Directors consider that it may .... It has been the busine
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Crown International Corporation Limited (Incorporated in Hong Kong with limited liability) (Stock code: 727)

TERM SHEET IN RELATION TO A POTENTIAL ACQUISITION OF PROPERTY THE TERM SHEET The Board is pleased to announce that on 27 April 2016 (after trading hours), the Potential Purchaser and the Potential Vendor entered into the Term Sheet in relation to the potential acquisition of the Property. To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, the Potential Vendor and its ultimate beneficiary are not connected persons (as defined in the Listing Rules) to the Company and are third parties independent of the Company and its connected persons.

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The Directors wish to emphasize that no legally binding agreement in relation to the Potential Acquisition has been entered into by the Potential Purchaser with any party as at the date of this announcement. As such, the Potential Acquisition may or may not materialise. If the Potential Acquisition materialises, the Directors consider that it may constitute as a notifiable transaction under the Listing Rules and the Company shall comply with the relevant disclosure and/or Shareholders’ approval requirements under the Listing Rules where appropriate. Shareholders and potential investors are advised to exercise caution when dealing in the Shares. The Company will make further announcement(s) as and when appropriate pursuant to the requirements under the Listing Rules. This announcement is made by Crown International Corporation Limited (the “Company”, together with its subsidiaries, the “Group”) pursuant to Rule 13.09 of the Rules Governing the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

INTRODUCTION The board (the “Board”) of directors (the “Directors”) of the Company is pleased to announce that on 27 April 2016 (after trading hours), Dream Land Group Limited, (the “Potential Purchaser”) and Henan Eagle Town Group Company Limited*( 河南鷹城集團 有限公司, the “Potential Vendor”) entered into a term sheet (the “Term Sheet”) in relation to the potential acquisition (the “Potential Acquisition”) of certain leasable units (the “Property”) at Eagle Trade Centre commercial project phase I* (鷹城商貿中心一期商業項 目, “Eagle Trade Centre”), developed by the Potential Vendor, which is located at East of mid Kai Yuan Luo*( 開源路中段東側), Pingdingshan City, Henan Province, PRC. To the best of the Directors ’ knowledge, information and belief and having made all reasonable enquiries, the Potential Vendor and its ultimate beneficiary are not connected persons (as defined in the Listing Rules) to the Company and are third parties independent of the Company and its connected persons.

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MAJOR TERMS OF THE TERM SHEET The principal terms of the Term Sheet are as follows: (1)

Interest intended to be acquired Subject to the formal and legally binding agreement in respect of the Potential Acquisition (the “Definitive Agreement”), the Potential Vendor shall sell and the Potential Purchaser or its nominee shall purchase the entire interest in the Property.

(2)

Consideration The consideration of the Potential Acquisition will be determined and subject to further negotiation between the parties of the Term Sheet.

(3)

Due diligence review Commencing from the date of the Term Sheet and until the expiry of the Exclusivity Period (as defined below), the Potential Vendor will, upon its best effort, provide the Potential Purchaser and its officers, directors, employees, designated agents, advisors and other representatives (together “DD Representatives”) with all information and assistance in connection with due diligence of the Property as the Potential Purchaser or any of its DD Representatives may reasonably request for, provided that (1) the Potential Purchaser shall ensure that all documents, books and information provided by the Potential Vendor to the Potential Purchaser or any of its DD Representatives shall be subject to strict confidentiality; and (2) such due diligence review shall not cause any material disruption to the daily business operations of the Property.

(4)

Exclusivity The Potential Vendor agrees that it will not for a period of twelve (12) months from the date of the Term Sheet (the “Exclusivity Period”) initiate or continue negotiations or discussions with or furnish any information to any person or entity other than the Potential Purchaser with respect to the sale of the entire interest or the sale or the disposition of any rights and interests of the Property.

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(5)

Nature of the Term Sheet The Term Sheet was intended to record the preliminary mutual understanding between the parties in relation to the Potential Acquisition and was not intended to be legally binding on the relevant parties (save for the provisions relating to the due diligence review, exclusivity, fees and expenses, confidentiality, termination of the Term Sheet, governing law and jurisdiction, and counterparts). The Term Sheet does not constitute an offer, agreement, agreement in principle, agreement to agree or commitment by the Potential Purchaser to purchase any of the interest in the Property. Subject to the entering into the Definitive Agreement, the obligations of the parties of the Term Sheet shall cease upon the agreement of the parties. If there are any conflicts between the terms in the Term Sheet and the terms in the Definitive Agreement, the terms in the Definitive Agreement shall prevail.

INFORMATION ABOUT THE PROPERTY The Property consists of certain leasable units at Eagle Trade Centre, developed by the Potential Vendor, a 5-storey commercial complex with a total gross floor area of approximately 34,617 square metres, which is located at East of mid Kai Yuan Luo*( 開源路 中段東側), Pingdingshan City, Henan Province, PRC. The commercial complex is situated at the central business center of Pingdingshan City, PRC.

INFORMATION ABOUT THE POTENTIAL PURCHASER The Potential Purchaser is a company incorporated in Hong Kong, which is an indirect wholly-owned subsidiary of the Company and is principally engaged in the business of investment holding.

INFORMATION ABOUT THE POTENTIAL VENDOR The Potential Vendor is a company incorporated in the People’s Republic of China (the “PRC”) and is principally engaged in the business of real estate investment.

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REASONS AND BENEFITS FOR THE POTENTIAL ACQUISITION The Group is principally engaged in the businesses of hotel investment and operations and property investment. The Directors are of the view that Pingdingshan City has an abundance of market resources and land reserve, rapid economic development, which continue to attract inhabitants and foreign investors. The increasing population and the per capita income of Pindingshan City create a demand for a sizeable shopping mall. The Directors are of the view that economic growth of Pingdingshan City will further develop. The Directors also note that the Property is situated at the central business center of Pingdingshan City, PRC with potential property appreciation value. Beside the expansion of investment opportunities, the Company shall lease the Property and thus provide stable rental income thereof. The Directors consider that it is beneficial for the Group to diversify its exiting investment portfolio, and at the same time, to broaden its sources of income. If the Potential Acquisition is materialised, the Group will own the Property through the Potential Purchaser, and the Directors consider that the Property would benefit from the future real estate development in Pingdingshan City and the stable income from the leasable Property. It has been the business strategy of the Group to proactively seek potential investment opportunities, particularly in the PRC property market, to diversify its exiting investment portfolio and to broaden its sources of income which could enhance its value to its shareholders (the “Shareholders”) of the Company. In light of the above, the Directors consider that entering into the Term Sheet will benefit the Company and the Shareholders as a whole as the Potential Acquisition is considered a suitable strategic opportunity for the Group to broaden its range of investments and to increase its revenue sources and/or enhance its profitability. By order of the Board Crown International Corporation Limited Meng Jin Long Chairman Hong Kong, 27 April 2016

As at the date of this announcement, the Board comprises three executive Directors, namely Mr. MENG Jin Long (Chairman and Chief Executive Officer), Mr. LIU Hong Shen (Vice Chairman), and Mr. YEUNG Man, Simon (Chief Financial Officer); and three independent non-executive Directors, namely Mr. LONG Tao, Mr. REN Guo Hua, and Mr. CHEN Fang. * For identification purpose only

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