Somerley Limited
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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 14.63 your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or (2)(b) other professional adviser. 14A.58 If you have sold or transferred all your shares in Great Eagle Holdings Limited (the ‘‘Company’’), you (3)(b) should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes 14.58(1) no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any 14.88 loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. 14A.59(1) This circular does not constitute an offer or invitation to acquire, purchase or subscribe for securities nor is it calculated to invite any such offer or invitation. A1B.1 (Stock Code: 41) VERY SUBSTANTIAL DISPOSAL IN RELATION TO THE PROPOSED SPIN-OFF OF CHAMPION REAL ESTATE INVESTMENT TRUST ON THE MAIN BOARD OF THE STOCK EXCHANGE OF HONG KONG LIMITED AND CONNECTED TRANSACTION IN RELATION TO THE REORGANIZATION OF CERTAIN PROPERTY INTERESTS OF GREAT EAGLE HOLDINGS LIMITED Financial advisor to Great Eagle Holdings Limited Independent financial advisor to the Independent Board Committee and the Shareholders SOMERLEY LIMITED A letter from Somerley Limited, the independent financial advisor to the independent board committee and shareholders of the Company, is set out on pages 38 to 61 of this circular. A notice convening the special general meeting (‘‘SGM’’) of the Company to be held at the Penthouse, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong on Wednesday, 10 May 2006 at 3 p.m. is set out in this circular. Whether or not you intend to attend the SGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s principal office at 33rd Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the SGM or any adjourned meeting should you so wish. 24 April 2006 EXPECTED TIMETABLE 2006 Despatch date of this circular ************************************** 24 April Last day for dealing in Shares cum-entitlement to the Preferential Offering 2 May First day for dealing in Shares ex-entitlement to the Preferential Offering** 3 May Latest time for lodging transfers of Shares cum-entitlement to the Preferential Offering ***************************************************** 4 p.m. on 4 May Latest time for return of proxy forms in respect of the SGM ************ 3 p.m. on 8 May Record Date for determining the entitlement to the Preferential Offering*** 8 May Register of members of the Company closes on *********************** 8 May Register of members of the Company re-opens on ********************* 9 May SGM********************************************************** 3 p.m. on 10 May All times refer to Hong Kong local time. Please note that the above timetable is subject to change. If there are changes to the above timetable, the Company will publish an announcement as soon as possible. i CONTENTS Page Expected Timetable ********************************************************** i Contents ******************************************************************** ii Definitions ****************************************************************** 1 Parties Involved in the Proposed Spin-off *************************************** 9 Letter from the Board Introduction**************************************************************** 11 Background**************************************************************** 12 Information on Champion REIT *********************************************** 13 Proposed Spin-off*********************************************************** 15 Listing and Dealings ******************************************************** 20 Preferential Offering********************************************************* 20 Closure of Register of Members of the Company ********************************* 21 Reorganization ************************************************************* 21 Relationship with the Group ************************************************** 26 Financial and Trading Prospects of the Group ************************************ 29 Unaudited Financial Information of the Property********************************** 30 Financial Effects of the Proposed Spin-off*************************************** 30 Management Discussion and Analysis on the Remaining Group ********************* 31 SGM ********************************************************************* 35 Recommendations*********************************************************** 35 Additional information******************************************************* 36 Letter from the Independent Board Committee ********************************** 37 Letter from Somerley Limited ************************************************* 38 Appendix I Property Valuation Report ******************************** I-1 Appendix II Financial Information of the Group ************************ II-1 Appendix III Unaudited Pro forma Financial Information of the Remaining III-1 Group************************************************ Appendix IV General Information ************************************* IV-1 Notice of Special General Meeting ********************************************* (I) Attached document Form of proxy for special general meeting ii DEFINITIONS In this circular, unless the context otherwise requires, the following terms shall have the following meanings: Annual Distributable Income has the meaning given to it in the sub-paragraph headed ‘‘Distribution policy’’ under the paragraph headed ‘‘Information on Champion REIT’’ of this circular Application Form(s) the WHITE application form(s), YELLOW application form(s), and BLUE application form(s) or where the context so requires, any of them Appraised Value the value of the Property, as of 28 February 2006, as appraised by the Independent Property Valuer as set out in Appendix I to this circular Assured Entitlement the entitlement of Qualifying Shareholders to apply for Reserved Units under the Preferential Offering on the basis of an assured entitlement of one Reserved Unit for every whole multiple of 4 Shares held by each Qualifying Shareholder as of the close of business on Record Date. For the avoidance of doubt, a Qualifying Shareholder is not entitled to any Reserved Unit in respect of any holding of fewer than 4 Shares Authorisation the authorisation of Champion REIT by the SFC under section 104 of the SFO Board the board of Directors BVI British Virgin Islands CCASS the Central Clearing and Settlement System established and operated by HKSCC Champion REIT Champion Real Estate Investment Trust, a collective investment scheme which will be constituted as a unit trust and which will be subject to authorisation by the SFC under section 104 of the SFO Charge-Out Collections in respect of a real estate property, and in relation to any financial year or part thereof, all items of air-conditioning charges, management fees, promotional charges, government rates, government rent, utility charges, cleaning and other charges to the extent the same are payable by tenants or licensees to the Trustee or the relevant Special Purpose Vehicle, as the case may be Cojoin Properties Reorganization the reorganization agreement to be entered into between, among Agreement others, Elegant Mark International Limited and the Trustee for the sale and purchase of the entire issued share capital of Cojoin Properties Limited, a company incorporated in the BVI and which indirectly, through its wholly-owned subsidiaries, owns a portion of the Property Company Great Eagle Holdings Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on the Main Board of the Stock Exchange (Stock Code: 41) Connected Transaction the Reorganization, pursuant to which Units will be issued to KP Holder, a wholly-owned subsidiary of Kerry Properties (a connected person of the Company by virtue of being a substantial shareholder of certain of the Company’s subsidiaries) 1 DEFINITIONS Deeds of Tax Covenant the deeds of tax covenant to be entered into between the relevant Vendor Company and the relevant guarantor(s) in favour of the Trustee and the relevant Holding Company and its subsidiaries Director(s) director(s) of the Company Distribution Waiver the proposed waiver by each of GE Holder (together with the Company as guarantor), KP Holder (together with Kerry Properties as guarantor) and Wing Tai (together with the Company as guarantor) of its entitlement to receive any distributions payable by Champion REIT (a) for the FY06 Distribution Period with respect to all of the Units it holds as of the Listing Date; (b) for the FY07 Distribution Periods with respect to 55% of the Units it holds as of the Listing Date; and (c) for the FY08 Distribution Periods with respect to 20% of the Units it holds as of the Listing Date,