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viruz7667
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25-Oct-2007 15:38
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| by |
| PROVENANCE CAPITAL PTE. LTD. |
| (Company Registration No: 200309056E) |
| (Incorporated in the Republic of Singapore) |
| for and on behalf of |
| SINOSTATE | MANAGEMENT | LIMITED |
| (IBC 1433818) |
| (Incorporated in the British Virgin Islands) |
| to acquire all the issued ordinary shares in the capital of |
| GATES | ELECTRONICS | LIMITED |
| (Company registration no.: 200301902W) |
| (Incorporated in the Republic of Singapore) |
| other than those already owned, controlled or agreed to be acquired by the Offeror and parties acting or deemed to be acting in concert with it as at the date of the Offer |
| 1. INTRODUCTION |
| 1.1 The Offer Provenance Capital Pte. Ltd wishes to announce, for and on behalf of Sinostate Management Limited (Offeror), that the Offeror intends to make a mandatory unconditional cash offer (Offer) for all issued ordinary shares (Shares) in the capital of Gates Electronics Limited (Company) that are not already owned, controlled or agreed to be acquired by the Offeror or parties acting in concert with it (Offer Shares). |
| 1.2 Option Agreements On 24 October 2007, the following option agreements relating to the Shares were entered into between Mr Lee Ah Bah @ Lee Beng Hoe, a director and substantial shareholder of the Company (Lee Ah Bah), Mr Lim Chye Huat @ Bobby Lim Chye Huat (Bobby Lim) and Mr Ma Ong Kee (Ma Ong Kee): - |
| (a) a put and call option agreement (Option Agreement) pursuant to which Lee Ah Bah granted to Bobby Lim a call option over 10,851,445 Shares held by Lee Ah Bah (Option Shares), and Bobby Lim granted to Lee Ah Bah a put option over the Option Shares; and |
| (b) a put and call option agreement (Related Option Agreement) pursuant to which Lee Ah Bah granted to Ma Ong Kee a call option over 32,554,335 Shares held by Lee Ah Bah (Remaining Shares), and Ma Ong Kee granted to Lee Ah Bah a put option over the Remaining Shares. |
| 1.3 On the same day, Bobby Lim and Ma Ong Kee exercised their respective call options under the Option Agreement and the Related Option Agreement to purchase the Option Shares and the Remaining Shares respectively at a cash consideration of S$0.30 per Share, which was arrived at on a willing seller and wiling buyer basis. |
| 1.4 Completion for the purchase of Shares upon the exercise of the respective call options under the Option Agreement and Related Option Agreement will take place on 29 October 2007, following which the shareholding interests of Lee Ah Bah, Bobby Lim and Ma Ong Kee in the Company will be as follows: - |
| (a) | Lee | Ah | Bah | will | cease | to | hold | any | Shares | in | the | Company; |
| (b) Bobby Lim will own an aggregate of 10,851,445 Shares, representing approximately 15.66% of the total number of issued Shares; and |
| (c) Ma Ong Kee will own an aggregate of 32,554,335 Shares, representing approximately 46.97% of the total number of issued Shares. |
| 1.5 Concert Party Under the Option Agreement and the Related Option Agreement, Bobby Lim and Ma Ong Kee agreed to procure the Offeror to comply with Rule 14 of the Code in respect of their obligations to make an Offer consequent upon their acquisition of Shares referred to in paragraphs 1.3(b) and (c) above (Acquisition). Bobby Lim and Ma Ong Kee have on the same day entered into a concert party agreement, inter alia, to agree to obtain effective control of the Company through the Acquisition and to impose mutual restrictions on their dealings in the Shares (Concert Party Agreement). |
| 1.6 Placement As the Offeror and the parties acting in concert with the Offeror intend to maintain only approximately 51% of the shareholding in the Company, it is the intention of the Offeror and the parties acting in concert with it that 8,405,780 Shares, representing approximately 12.13% of the total number of issued Shares, be placed out to third parties at a price which does not exceed the Offer Price after the close of the Offer. After the close of the Offer, depending on the level of valid acceptances of the Offer received from shareholders of the Company, the Offeror may place out to third party such number of Shares which have been tendered in acceptance of the Offer at a price that could exceed the Offer Price. |
| 2. THE OFFER |
| 2.1 In accordance with Rule 14.1(a) of The Singapore Code on Take-overs and Mergers (Code) and Section 139 of the Securities and Futures Act (Cap 289), the Offeror will make the Offer for all the issued Shares not already owned, controlled or agreed to be acquired by the Offeror and parties acting in concert with it (Offer Shares) on the following basis:- For each Offer Share: S$0.30 in cash (Offer Price). |
| 2.2 The Offer Price is determined in accordance with Rule 14.3 of the Code and is based on the highest price paid by the Offeror and parties acting in concert with it for Shares within the six months period prior to the date of this announcement. The Offer Price is the same as the price per Share to be paid by Bobby Lim and Ma Ong Kee for the Option Shares and Remaining Shares pursuant to the exercise of their respective call options. |
| 2.3 The Offer will be extended, on the same terms and conditions, to all the Shares other than those already owned, controlled or agreed to be acquired by the Offeror and parties acting in concert with it. |
| 2.4 The Offer Shares will be acquired (a) fully paid, (b) free from all liens, equities, charges, pledges and other encumbrances, rights of pre-emption and any other third party rights or interests of any nature whatsoever and (c) together with all rights, benefits and entitlements attached thereto as at the date of this announcement and hereafter attaching thereto including all voting rights, the right to receive and retain all dividends, rights and other distributions (if any) declared, made or paid by the Company on or after the date of this announcement. |
| 3. CONDITIONS |
| 3.1 | The | Offer | is | unconditional | in | all | respects. |
| 4. OPTIONS |
| 4.1 As at the date of this announcement, based on publicly available information, there are no outstanding share options which have been granted by the Company under the Gates Employee Share Option Scheme (Option Scheme). Accordingly, the Offeror will not be making an offer for the options granted under the Option Scheme. |
| 5. | INFORMATION | ON | THE | OFFEROR |
| 5.1 The Offeror was incorporated in the British Virgin Islands on 26 September 2007. It has a total authorised capital of US$50,000 and a total issued and paid up capital of US$100. The directors of the Offeror are Ma Ong Kee and Bobby Lim, who are also the legal and beneficial owners of 75% and 25% of the issued and paid up shares in the Offeror respectively. The business activities of the Offeror include general investment holding. |
| 5.2 Ma Ong Kee is a private investor who is holding directorships in a few private companies. Bobby Lim is the managing director of Tai Sin Electric Cables Manufacturer Limited, a company listed on SGX-ST. Their acquisitions of the Option Shares and Remaining Shares are for investment purposes. |
| 6. | RATIONALE | FOR | THE | OFFER | AND | OFFEROR?S | FUTURE | PLANS | FOR | THE | COMPANY |
| 6.1 The Offer is being made in compliance with the provisions of the Code consequent upon the exercise of the call options by Bobby Lim and Ma Ong Kee under the Option Agreement and the Related Option Agreement, pursuant to which Bobby Lim and Ma Ong Kee, acting in concert pursuant to the Concert Party Agreement, acquired interests in an aggregate of 43,405,780 Shares, representing approximately 62.63% of the total number of issued Shares. |
| 6.2 The Company has an existing interest of less than 5% in the total issued share capital of Silicon Federation International Limited, a company incorporated in the British Virgin Island which invests in the design of integrated circuits. Under the Option Agreement and the Related Option Agreement, Bobby Lim and Ma Ong Kee agreed with Lee Ah Bah that in the event that they become the controlling shareholders of the Company following the Acquisition, they will use their best endeavours to procure that the Company sells the whole of its existing equity interest in Silicon Federation International Limited (SFI Interest) to Lee Ah Bah for the sum of S$840,000 (being the book value of the SFI Interest based on the Company?s latest audited accounts), subject to prior approvals of the relevant governmental and regulatory authorities (including without limitation, the consent of the Securities Industry Council) and shareholders? approval being obtained, if required, and, where applicable, the independent financial adviser to the Company in connection with the Offer and/or the proposed sale of the BVI Interest to Lee Ah Bah publicly stating that in his opinion the terms of the transaction are fair and reasonable. |
| 6.3 Although the Offeror, Bobby Lim and Ma Ong Kee have no current intention to make substantial changes to the existing business and operations of the Company, they are considering the need for an expansion and diversification of the Company?s current business operations. |
| 6.4 In connection therewith, the Offeror intends to introduce for the consideration of the board of directors of the Company (Board), the possible acquisition of China Dongyuan Environment Pte. Ltd., a company incorporated in Singapore (China Dongyuan), at such valuation and on such terms and conditions to be negotiated between the Company and the shareholders of China Dongyuan (Proposed China Dongyuan Acquisition). It is however proposed that the purchase consideration be satisfied by way of new Shares to be issued by the Company at an issue price of S$0.27 per Share. It is envisaged that the Proposed China Dongyuan Acquisition, if entered into, will be classified as a very substantial acquisition of reverse takeover of the Company as defined in Chapter 10 of the Listing Manual of the Singapore Exchange Securities Trading Limited (SGX-ST). |
| China Dongyuan and its subsidiaries (collectively the China Dongyuan Group) are principally engaged in the business of environmental protection, specialising in the treatment and management of waste gas for industrial customers in the People?s Republic of China. |
| The China Dongyuan Group undertakes the design, assembly, installation, testing and commissioning of various equipment relating to industrial waste gas treatment and management systems. The China Dongyuan Group?s customers are mainly from the power generation, cement and chemical industries. |
| There is currently no certainty whether the Company will proceed with the Proposed China Dongyuan Acquisition. Accordingly, shareholders and investors are advised to exercise caution when dealing with the Shares in the meantime. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor, accountant or other professionals. |
| The Offer is independent of the Proposed China Dongyuan Acquisition and not conditional upon the Proposed China Dongyuan Acquisition taking place. |
| Ma Ong Kee and his associates are beneficially interested in up to 45% of China Dongyuan?s issued share capital. |
| 6.5 The Offeror, Bobby Lim and Ma Ong Kee intend to preserve the listing status of the Company on the Singapore Exchange Securities Trading Limited Dealing and Automated Quotation System. Accordingly, the parties do not intend to exercise any right of compulsory acquisition under Section 215 of the Companies Act (Cap 50) in the event that they receive acceptances pursuant to the Offer representing 90% or more of the Shares. |
| In the event that the Offeror and the parties acting in concert with it, as a result of the Offer or otherwise, own or control more than 90% of the issued and paid up share capital of the Company, the Offeror will announce this to SGX-ST. Pursuant to Rule 1105 of the Listing Manual, the SGX-ST may suspend the listing of the Shares until it is satisfied that at least 10% of the Shares are held by no less than 500 members of the public. |
| 7. | DISCLOSURE | OF | SHAREHOLDERS | AND | DEALINGS |
| 7.1 As at the date of this announcement and based on the latest information available to the Offeror, (i) the Offeror and its directors, (ii) Bobby Lim, (iii) Ma Ong Kee and (iv) Provenance Capital Pte. Ltd (collectively the Relevant Persons) own, control and/or have agreed to acquire an aggregate of 43,405,780 Shares, representing approximately 62.63% of the total number of Shares, details of which are as follows: - |
| Name Number of Shares As a percentage of the total |
| number of Shares (%) |
| Offeror 0 0% |
| Bobby Lim 10,851,445 15.66% |
| Ma Ong Kee 32,554,335 46.97% |
| 43,405,780 62.63% |
| Such | information | will | be | updated | by | the | Offeror | in | the | Offer | Document. |
| 7.2 Save as disclosed below, based on the latest information available to the Offeror, none of the Relevant Persons (i) has dealt for value in any Shares during the period commencing six months prior to the date of this announcement or (ii) has received any irrevocable undertaking from any party to accept or reject the Offer. |
| The dealings by Bobby Lim in respect of the Shares during the six months prior to the date of this announcement were as follows: - |
| Date of Transaction Transaction Price per Share (S$) |
| 9 July 2007 On-market sale of 50,000 Shares 0.355 |
| 22 June 2007 On-market sale of 50,000 Shares 0.27 |
| 18 June 2007 On-market sale of 100,000 Shares 0.225 |
| 17 May 2007 On-market acquisition of 200,000 Shares 0.17 |
| 7.3 To maintain secrecy, the Offeror has not made enquiries in respect of certain other parties who are or may be deemed to be acting in concert with the Offeror in connection with the Offer. Further enquiries will be made of such persons and the relevant disclosures will be subsequently made in the Offer Document. |
| 8. | CONFIRMATION | OF | FINANCIAL | RESOURCES |
| 8.1 Provenance Capital Pte. Ltd., as financial advisor to the Offeror, confirms that sufficient financial resources are available to the Offeror to satisfy full acceptances of the Offer. |
| 9. BENCHMARKING |
| 9.1 | The | Offer | Price | of | S$0.30 | for | each | Offer | Share | represents: |
| (a) a premium of approximately 3.45% to the Company?s last transacted price on the SGX-ST of S$0.290 on 19 October 2007, being the last trading day prior to this announcement; |
| (b) a premium of approximately 2.74% to the average of the Company?s last transacted prices on the SGX-ST of S$0.292 over the 1-month period prior to 19 October 2007, being the last trading day prior to this announcement; |
| (c) a premium of approximately 12.78% to the average of the Company?s last transacted price of S$0.266, over the 3-month period prior to 19 October 2007, being the last trading day prior to this announcement; and |
| (d) a premium of approximately 23.97% to the average of the Company?s last transacted price of S$0.242 over the 6-month period prior to 19 October 2007, being the last trading day prior to this announcement. |
| 10. OFFER DOCUMENT |
| 10.1. The Offer Document setting out the terms and conditions of the Offer and enclosing the appropriate form(s) of acceptance of the Offer, will be despatched to the holders of Offer Shares not earlier than 14 days and not later than 21 days from the date of this announcement. |
| 11. OVERSEAS SHAREHOLDERS |
| 11.1 The making of the Offer to holders of the Offer Shares whose addresses are outside Singapore as shown in the register of members of the Company or, as the case may be, in the records of The Central Depository (Pte) Limited (Overseas Shareholders) may be affected by the laws of the relevant overseas jurisdictions. It is not intended that the Offer will be made, in or into, and the Offer is not capable of acceptance in or from any jurisdictions in or from which the making of the Offer is prohibited or affected by the laws of that jurisdictions. |
| 11.2 Accordingly, Overseas Shareholders should inform themselves about and observe any applicable legal requirements. For the avoidance of doubt, the Offer is made to all holders of the Offer Shares including those to whom the Offer Document will not be sent. |
| 11.3 The Offer Document will not be sent to any Overseas Shareholders due to potential restrictions of sending such documents to the relevant overseas jurisdictions. Any affected Overseas Shareholders may, nonetheless, obtain a copy of the Offer Document from the office of Boardroom Corporate & Advisory Services Pte. Ltd. at 3 Church Street #08-01, Samsung Hub, Singapore 049483. Alternatively, an Overseas Shareholder may write to Boardroom Corporate & Advisory Services Pte. Ltd. at the above address to request for the Offer Document to be sent to an address in Singapore by ordinary post at his own risk. |
| 12. RESPONSIBILITY STATEMENT |
| 12.1 The directors of the Offeror (including those who may have delegated detailed supervision of this announcement) collectively and individually accept full responsibility for the accuracy of the information given herein and confirm that, after having made all reasonable enquiries and to the best of their knowledge and beliefs, the facts stated and the opinions expressed in this announcement are fair and accurate in all material respects and that no material facts the omission of which would make any statement in this announcement misleading in any material respect. |
| 12.2 Where any information has been extracted from published or publicly available sources (including without limitation, information on the Company), the sole responsibility of the directors of the Offeror has been to ensure through reasonable enquiries that such information has been accurately and correctly extracted from such sources or, as the case may be, accurately reflected or reproduced in this announcement. |
| Issued by |
| Provenance Capital Pte. Ltd. |
| For | and | on | behalf | of |
| Sinostate Management Limited |
| 24 October 2007 |
| Singapore |