Wah Nam International Holdings Limited 華南投資控股
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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Wah Nam International Holdings Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. This circular is for information purposes only and does not constitute an offer or invitation to subscribe for or purchase any securities nor is it calculated to invite any such offer or invitation. In particular, this circular is not an offer of securities for sale in Hong Kong, the United States or elsewhere. Securities may not be offered or sold in the United States absent registration or an exemption from registration. WAH NAM INTERNATIONAL HOLDINGS LIMITED 華 南 投 資 控 股 有 限 公 司 * (incorporated in Bermuda with limited liability) (Stock code: 159) (I) VERY SUBSTANTIAL ACQUISITIONS (II) DUAL LISTING APPLICATION ON ASX AND OFFER FOR SUBSCRIPTION OF NEW SHARES IN AUSTRALIA (III) ISSUE OF NEW SHARES UNDER A SPECIFIC MANDATE (IV) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL (V) PROPOSED REFRESHMENT OF GENERAL MANDATE AND (VI) NOTICE OF SPECIAL GENERAL MEETING Financial Adviser Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders KBC Bank N.V. Hong Kong Branch A letter from the Board is set out on pages 9 to 76 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders in respect of the Proposed Refreshment of General Mandate (as defined herein) is set out on page 77 of this circular. A letter from KBC Bank N.V. Hong Kong Branch containing its advice to the Independent Board Committee and the Independent Shareholders in respect of the Proposed Refreshment of General Mandate (as defined herein) is set out on pages 78 to 84 of this circular. A notice convening a special general meeting of Wah Nam International Holdings Limited to be held at Room 2805, 28/F., West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong on Monday, 13 December 2010 at 11:30 a.m. is set out on pages 191 to 197 of this circular. Whether or not you intend to attend and vote at the special general meeting or any adjourned meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Secretaries Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for holding the such meeting or any adjourned meetings). Completion and return of the form of proxy will not preclude you from attending and voting in person at the special general meeting or any adjourned meeting should you so wish. * for identification purpose only 26 November 2010 contents Page DEFINITIONS .................................................... 1 LETTER FROM THE BOARD INTRODUCTION ................................................. 9 THE CONDITIONAL OFFERS . 10 DUAL LISTING APPLICATION ON ASX AND THE OFFER FOR SUBSCRIPTION . 23 ISSUE MANDATE ................................................ 31 PROPOSED REFRESHMENT OF GENERAL MANDATE . 34 SHAREHOLDING OF THE COMPANY . 35 THE GROUP’S SHAREHOLDING IN BRM AND FRS .................... 37 INFORMATION ON BRM .......................................... 37 INFORMATION ON FRS ........................................... 50 DUE DILIGENCE . 61 FINANCIAL EFFECTS OF THE CONDITIONAL OFFERS ................. 63 PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL .............. 64 REMUNERATION OF DIRECTORS . 65 REASONS FOR AND BENEFITS OF THE TRANSACTIONS . 66 LISTING RULES REQUIREMENTS AND THE SGM ..................... 73 RECOMMENDATION ............................................. 75 GENERAL ...................................................... 76 — i — contents Page LETTER FROM THE INDEPENDENT BOARD COMMITTEE . 77 LETTER FROM KBC BANK . 78 APPENDIX I — INDUSTRY OVERVIEW ......................... 85 APPENDIX II — LAWS AND REGULATIONS RELATING TO IRON ORE MINING IN AUSTRALIA . 93 APPENDIX III — RISK FACTORS ................................ 107 APPENDIX IV — FINANCIAL INFORMATION OF THE GROUP ...... 119 APPENDIX V — FINANCIAL INFORMATION OF THE BRM GROUP ............................ 145 APPENDIX VI — FINANCIAL INFORMATION OF THE FRS GROUP . 150 APPENDIX VII — PUBLIC INFORMATION ON BRM’S PRINCIPAL PROJECT ......................... 156 APPENDIX VIII — PUBLIC INFORMATION ON FRS’S PRINCIPAL PROJECT . 169 APPENDIX IX — TERMS OF THE WN OPTIONS ................... 180 APPENDIX X — GENERAL INFORMATION ...................... 183 NOTICE OF SGM ................................................. 191 — ii — definitions In this circular, unless the context requires otherwise, the following terms shall have the following meanings: “2009 AGM” the annual general meeting of the Company held on 14 May 2010 “Announcement Date” the day the Conditional Offers were announced, being 10 November 2010 “ASIC” Australian Securities and Investments Commission “Associate” has the meaning given in section 12 of the Corporations Act “ASX” ASX Limited (trading as the Australian Securities Exchange) “ASX Listing Rules” the official listing rules of the ASX, as amended from time to time “AUD” Australian dollars, the lawful currency of Australia “Bidder’s Statement(s)” each of, and where the case requires it, both, the offer documents to be issued by WN Australia in respect of each of the Conditional Offers “Bid Period” the period starting when the Bidder’s Statement is given to BRM or FRS (as the case may be) and ending at the end of the Offer Period “Board” the board of Directors of the Company “BRM” Brockman Resources Limited ACN 009 372 150, the ordinary shares of which are listed on ASX “BRM Board” the board of directors of BRM “BRM Conditional Offer” the takeover offer by WN Australia to acquire all the BRM Shares not held by it as set out in the Bidder’s Statement — 1 — definitions “BRM Group” BRM and its subsidiaries “BRM Options” options issued by BRM carrying rights to subscribe for new BRM Shares subject to the terms and conditions of the options “BRM Shareholders” holders of any BRM Shares “BRM Shares” ordinary fully paid shares in BRM “Bye-laws” the bye-laws of the Company “CCASS” the Central Clearing and Settlement System established and operated by The Hong Kong Securities Clearing Company Limited “CHESS” Clearing House Electronic Sub register System which provides for electronic share transfers in Australia “Company” Wah Nam International Holdings Limited, the shares of which are listed on the Stock Exchange “Conditional Offer(s)” the BRM Conditional Offer and/or the FRS Conditional Offer (as the case may be) “Consideration WN Shares” WN Shares which may be issued by the Company as the consideration for the Conditional Offers “Corporations Act” the Australian Corporations Act 2001 (Cth) “Directors” the directors of the Company “Enlarged Group” the Group, the BRM Group and the FRS Group “Existing General Mandate” the existing general mandate granted by the Shareholders to the Directors at the 2009 AGM to allot, issue and deal in up to 708,887,097 new WN Shares — 2 — definitions “FRS” FerrAus Limited ACN 097 422 529, the ordinary shares of which are listed on ASX “FRS Board” the board of directors of FRS “FRS Class B Shares” class B performance shares issued by FRS “FRS Conditional Offer” the takeover offer by WN Australia to acquire all the FRS Shares not held by it as set out in the Bidder’s Statement “FRS Group” FRS and its subsidiaries “FRS Options” options issued by FRS carrying rights to subscribe for new FRS Shares subject to the terms and conditions of the options “FRS Shareholders” holders of any FRS Shares “FRS Shares” ordinary fully paid shares in FRS “Group” the Company and its subsidiaries “HK Placing Price” the placing price per HK Placing Share determined in accordance with the conditions set out in the paragraph headed “HK Placing Price” of this circular “HK Placing Shares” up to 600,000,000 new WN Shares to be issued by the Company pursuant to the Issue Mandate “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Implied Offer Value” the value of the offer consideration for the BRM Conditional Offer and/or the FRS Conditional Offer (as the case may be) based on the volume weighted average price of WN Shares over two consecutive trading days within the five business days prior to the despatch of the Bidder’s Statements — 3 — definitions “Independent Board Committee” the independent committee of the Board, comprising the independent non-executive Directors, namely Mr. Lau Kwok Kuen, Eddie, Mr. Uwe Henke Von Parpart and Mr. Yip Kwok Cheung, Danny, established for the purpose of advising the