Hong Kong, 29 September 2009 - The Board is pleased to announce that, on 29 September 2009, WCIL, a wholly owned subsidiary of the Company, entered into the Heads of Agreement with the Vendor, pursuant to which WCIL will acquire the 51% equity interests of the Target Companies from the Vendor.
GENERAL
The Heads of Agreement sets out all provisions and other basic understanding of the Proposed Acquisition. The final terms of the formal agreement for the Proposed Acquisition have yet to be further negotiated and finalized pending on the outcome of the due diligence review to be conducted.
Subject to the terms of the formal agreement of the Proposed Acquisition and the Company proceeds with the Proposed Acquisition, the Proposed Acquisition may constitute a very substantial acquisition of the Company under the Listing Rules. Further announcement(s) will be made by the Company as and when necessary.
Shareholders and potential investors of the Shares should note that the Proposed Acquisition may or may not materialize.
Parties:
Purchaser: WCIL, a wholly-owned subsidiary of the Company
Vendor: Mr. Gong Weifeng
To the best knowledge of the Directors after making all reasonable enquiries, the Vendor is a third party independent of the Company and its connected persons (as defined in the Listing Rules).
The Proposed Acquisition
On 29 September 2009, WCIL, a wholly-owned subsidiary of the Company entered into the Heads of Agreement with the Vendor, pursuant to which WCIL will acquire 51% equity interests in the Target Companies from the Vendor. According to information from the Vendor, the Target Company A is principally engaged in the sale and manufacture of modified starch and corn-based biochemical products in the PRC whilst the Target Company B is principally engaged in the sale of corn-based biochemical products and animal feed additives products. Upon completion of the Proposed Acquisition, the Target Companies will be become non-wholly owned subsidiaries of the Company.
The Company will conduct and the Vendor will provide assistance to the Company to conduct due diligence exercise on the Target Companies. The Vendor has undertaken that during the period of six months from the date of the Heads of Agreement, it will not initiate or encourage inquiries, offers,
negotiation or discussions or entering into any agreement or statement of understanding with any other party other than the Company with respect to the sale or other disposition of any interest in the Target Companies. In addition, the Company and the Vendor agreed that in the event that the aggregate net profits of the Target Companies for the two years ending 31 December 2010 could not exceed a certain predetermined benchmark, the Vendor will buy back the equity interests in the Target Companies from the Company at the same consideration paid by the Company in respect of the Proposed Acquisition. Moreover, the Vendor will procure to retain the existing senior management of the Target Companies and facilitate them to enter into service agreements for the purpose of management and supervision of the operations of the Target Companies upon completion of the Proposed Acquisition.
The completion of the Proposed Acquisition will be conditional upon, inter alia, the obtaining of all approvals and consents from all the relevant government departments and authorities in the PRC in respect of the transfer of interests in the Target Companies and transforming the Target Companies into sino-foreign joint ventures enterprises from domestic enterprises.
Save for the matters disclosed above and other matters, the entering into the Heads of Agreement does not constitute the parties’ legally binding commitments as to the Proposed Acquisition.
REASONS FOR THE PROPOSED ACQUISITION
The Group is principally engaged in the trading, manufacturing and exporting of athletic and athletestyle leisure footwear, working shoes, safety shoes, golf shoes and other functional footwear.
In order to seek for more business opportunities and to maximize return to the Company and the Shareholders in the long run, the Company has decided to enter into the Heads of Agreement with the Vendor to explore the possibility of diversification of the business of the Group.
GENERAL
The Heads of Agreement set out all provisions and other basic understanding of the respective Proposed Acquisition. The final terms of the formal agreement for the Proposed Acquisition have yet to be further negotiated and finalized pending on the outcome of the respective due diligence exercise to be conducted. Subject to the terms of the formal agreement of the Proposed Acquisition and the Company proceeds with the Proposed Acquisition, the Proposed Acquisition may constitute a very substantial acquisition of the Company under the Listing Rules. Further announcement(s) will be made by the Company as and when necessary.
Shareholders and potential investors of the Shares should note that the Proposed Acquisition may or may not materialize.