Hang Ten Group Holdings Limited (Incorporated in Bermuda with Limited Liability) on the Stock Exchange of Hong Kong Limited by Way of Introduction
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this document or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Akai Holdings Limited (In Compulsory Liquidation), you should at once hand this document together with the enclosed forms 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 and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this document, 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 document. This document does not constitute a public offering of securities nor is it calculated to invite public offers for securities and it must not be used for the purposes of offering or inviting offers for any securities to the public. Proposal for Akai Holdings Limited (In Compulsory Liquidation) (incorporated in Bermuda with limited liability) by way of a shareholders’ scheme of arrangement (under section 99 of the Companies Act 1981 of Bermuda) and withdrawal of the listing of the shares of Akai Holdings Limited (In Compulsory Liquidation) and the listing of the ordinary shares of Hang Ten Group Holdings Limited (incorporated in Bermuda with limited liability) on The Stock Exchange of Hong Kong Limited by way of introduction Sponsor Kim Eng Capital (Hong Kong) Limited Co-Sponsor Independent financial adviser to shareholders of Akai Holdings Limited (In Compulsory Liquidation) A letter from the joint and several liquidators of Akai Holdings Limited (In Compulsory Liquidation) is set out on pages 38 to 41 of this document. A letter from Horwath Capital Asia Limited, the independent financial adviser to shareholders of Akai Holdings Limited (In Compulsory Liquidation), is set out on pages 91 to 101 of this document. A letter from the board of directors of Hang Ten Group Holdings Limited is set out on pages 42 to 90 of this document. Notices of meetings of shareholders of Akai Holdings Limited (In Compulsory Liquidation) to be held at Plaza I-III, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wan Chai, Hong Kong on 25 November 2002 are set out on pages 366 to 368 of this document. Whether or not you intend to attend any of the meetings, you are requested to complete the enclosed forms of proxy and return them in accordance with the instructions printed respectively thereon as soon as possible and in any event not less than 48 hours before the times appointed for the holding of the meetings. This document is published in connection with the introduction on The Stock Exchange of Hong Kong Limited of the entire issued and proposed issued ordinary share capital of Hang Ten Group Holdings Limited and contains particulars given in compliance with the Companies Act 1981 of Bermuda, the Hong Kong Code on Takeovers and Mergers, the Securities (Stock Exchange Listing) Rules of Hong Kong and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to Akai Holdings Limited (In Compulsory Liquidation), Hang Ten Group Holdings Limited and its subsidiaries, the Proposal (as defined herein), and the Scheme (as defined herein). Subject to the granting of the listing of, and permission to deal in, the shares of HK$0.001 each in the capital of Hang Ten Group Holdings Limited on The Stock Exchange of Hong Kong Limited as well as compliance with the stock admission requirements of Hong Kong Securities Clearing Company Limited, the shares will be accepted as eligible securities by Hong Kong Securities Clearing Company Limited for deposit, clearance and settlement in the Central Clearing and Settlement System with effect from the commencement date of dealings in the shares or such other date as determined by Hong Kong Securities Clearing Company Limited. All activities under the Central Clearing and Settlement System are subject to the General Rules of the Central Clearing and Settlement System and Central Clearing and Settlement System Operational Procedures in effect from time to time. 31 October 2002 CONTENTS Neither Akai Holdings Limited (In Compulsory Liquidation) nor the joint and several liquidators of Akai Holdings Limited (In Compulsory Liquidation) nor Hang Ten Group Holdings Limited have authorised anyone to provide you with information that is different from the contents of this document. You should rely only on the information contained in this document. Any information or representation not contained in this document must not be relied on by you as having been authorised by Akai Holdings Limited (In Compulsory Liquidation), the joint and several liquidators of Akai Holdings Limited (In Compulsory Liquidation), Hang Ten Group Holdings Limited, Kim Eng Capital (Hong Kong) Limited, Asian Capital (Corporate Finance) Limited, Horwath Capital Asia Limited or the directors of any of them or any other person involved in the Proposal (as defined herein). Page Definitions . 1 Important note on information relating to Akai Holdings Limited (In Compulsory Liquidation) and its subsidiaries . 10 Responsibility statements . 11 Summary of the Proposal . 13 Parties involved in the Proposal . 22 Expected timetable . 23 Risk factors . 25 Directors of Hang Ten Group Holdings Limited . 31 Corporate information relating to Hang Ten Group Holdings Limited . 32 Industry overview . 34 Letter from the joint and several liquidators of Akai Holdings Limited (In Compulsory Liquidation) . 38 Letter from the board of directors of Hang Ten Group Holdings Limited . 42 Letter from Horwath Capital Asia Limited . 91 Explanatory statement (in compliance with Section 100 of the Companies Act 1981 of Bermuda) . 102 – i – CONTENTS Page Appendix I – Summary of the terms of the Warrants and CPS . 120 Appendix II – Accountants’ report . 123 Appendix III – Pro forma financial information about Hang Ten Group Holdings Limited . 161 Appendix IV – Valuation report . 166 Appendix V – Information on Akai Holdings Limited (In Compulsory Liquidation) and its subsidiaries . 198 Appendix VI – Summary of the constitution of Hang Ten Group Holdings Limited and Bermuda company law . 236 Appendix VII – Statutory and general information on Hang Ten Group Holdings Limited . 259 Scheme of arrangement . 353 Order on originating summons . 363 Notice of Scheme Meeting . 366 Notice of Special General Meeting . 368 Form of proxy for Scheme Meeting Form of proxy for Special General Meeting – ii – DEFINITIONS In this document (other than the scheme of arrangement, the notice of the scheme meeting, the notice of the special general meeting, the order on originating summons, the form of proxy for the scheme meeting and the form of proxy for the special general meeting) the following expressions shall, unless the context otherwise requires, have the meanings respectively set out opposite such expressions: “Akai” Akai Holdings Limited (In Compulsory Liquidation), an exempted company incorporated in Bermuda with limited liability “Akai Directors” the directors of Akai “Akai Group” Akai and its Subsidiaries “Akai Share(s)” the issued ordinary share(s) of HK$0.10 each credited as being fully paid up in the share capital of Akai “Akai Shareholders” the Persons listed in Akai’s register of members as shareholders of Akai from time to time “Announcement Date” the date of the announcement of the Proposal on 13 May 2002 “Asian Capital” Asian Capital (Corporate Finance) Limited, an investment adviser and dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong), co-sponsor of the Introduction “Asian Wide” Asian Wide Services Limited, a company incorporated in BVI and owned as to 30% by Mr. Kenneth Hung, 30% by Mrs. Hung Cheng Sui Tsen, the mother of Mr. Kenneth Hung, and 20% each by Ms. Peggy Hung and Ms. Pamela Hung, both of them being sisters of Mr. Kenneth Hung “associate(s)” has the meaning ascribed thereto under the Listing Rules “Bermuda Court” the Supreme Court of Bermuda “Best Standand” Best Standand Limited, a party acting in concert with the Investors which is beneficially owned as to 50% each by Mr. Chow Sik Wak and Ms. Wang Xin, each of whom is not connected with any of the directors, chief executive or substantial shareholders of Hang Ten or its subsidiaries or any of their respective associates (as defined under the Listing Rules) and will be subscribing for an interest of approximately 2.10% in the enlarged share capital of Hang Ten (BVI) for cash consideration of HK$20 million. Upon or prior to Closing, the equity interest in Hang Ten (BVI) held by Best Standand will be exchanged for 463,000,000 Hang Ten Shares (with one Warrant for every five Hang Ten Shares) and 153 CPS “Business Day” a day (other than Saturday or Sunday) on which banks are open for ordinary banking business in Hong Kong and Bermuda – 1 – DEFINITIONS “BVI” the British Virgin Islands “CCASS” the Central Clearing and Settlement System established and operated by HKSCC “Claim” any debt, liability or obligation of Akai which would be admissible to proof in an insolvent winding-up of Akai under the