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 Deson Development International
Holdings Limited, you should at once hand this circular to the purchaser or the transferee
or to the bank, stockbroker or other agent through whom the sale or the transfer was
effected for transmission to the purchaser or the transferee.
DESON DEVELOPMENT INTERNATIONAL HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
(Stock Code: 262)
DISCLOSEABLE TRANSACTION
DISPOSAL OF PROPERTY
A letter from the Board is set out on pages 3 to 6 of this circular.
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
21 December 2007
Page
DEFINITIONS ..................................................... 1
LETTER FROM THE BOARD
1. Introduction ................................................ 3
2. The Provisional Agreement ..................................... 4
3. Information on the Group and the Purchaser ........................ 5
4. Reasons for and benefits of the Disposal ........................... 5
5. Listing Rules Implications ..................................... 5
6. Additional Information ........................................ 6
APPENDIX – GENERAL INFORMATION .......................
| 7 |
| CONTENTS |
| –i– |
In this circular, the following expressions shall have the following meanings unless the
context otherwise requires:
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Board” the board of Directors
“Company” Deson Development International Holdings Limited, an
exempted company incorporated in Bermuda with
limited liability and the shares of which are listed on
the main board of the Stock Exchange
“Completion” the completion of the sale and purchase of the Property
which is expected to take place on or before 28 March
2008
“connected person” has the meaning ascribed to it under the Listing Rules
“Directors” the directors of the Company
“Disposal” the disposal of the Property by the Vendor to the
Purchaser pursuant to the terms of the Provisional
Agreement
“Group” the Company and its subsidiaries
“Hong Kong” the Hong Kong Special Administrative Region of the
People’s Republic of China
“HK$” Hong Kong dollars, the lawful currency in Hong Kong
“Latest Practicable Date” 18 December 2007, being the latest practicable date
prior to the printing of this circular for ascertaining
certain information included in this circular
“Listing Rules” the Rules Governing the Listing of Securities on the
Stock Exchange
“Property” the commercial property situated at 13th and 14th
Floor, Max Share Centre, No. 373 King’s Road, Hong
Kong
“Provisional Agreement” the provisional agreement dated 27 November 2007
entered into between the Vendor, the Purchaser and the
agent in relation to the sale and purchase of the
Property
DEFINITIONS
–1–
“Purchaser” Asian Time Investment Limited, a company
incorporated in Hong Kong
“SFO” Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong)
“Shareholders” the shareholders of the Company
“Stock Exchange”
DEFINITIONS
–2–
DESON DEVELOPMENT INTERNATIONAL HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
(Stock Code: 262)
Executive Directors:
Mr. Wang Ke Duan (Chairman)
Mr. Tjia Boen Sien
(Managing Director and Deputy Chairman)
Mr. Wang Jing Ning
Mr. Keung Kwok Cheung
Mr. Ong Chi King
Independent non-executive Directors:
Dr. Ho Chung Tai, Raymond
Mr. Siu Man Po
Mr. Wong Shing Kay, Oliver
Registered office:
Canon’s Court
22 Victoria Street
Hamilton HM12
Bermuda
Head office and principal place of
business in Hong Kong:
11th Floor
Nanyang Plaza
57 Hung To Road
Kwun Tong
Kowloon
Hong Kong
21 December 2007
To the Shareholders and for information only, holders of outstanding share options issued by
the Company.
Dear Sirs,
DISCLOSEABLE TRANSACTION
DISPOSAL OF PROPERTY
INTRODUCTION
The Company announced on 30 November 2007 that the Vendor, an indirectly wholly
owned subsidiary of the Company entered into the Provisional Agreement with the Purchaser
pursuant to which the Vendor agreed to sell its interest in the Property to the Purchaser for a
total consideration of HK$27,178,800.
As the applicable percentage ratio for the Disposal calculated pursuant to Rule 14.07(4)
exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction for the
Company under Chapter 14 of the Listing Rules. The purpose of this circular is to provide
you with further information on the Disposal.
LETTER FROM THE BOARD
–3–
THE PROVISIONAL AGREEMENT
1. Date
27 November 2007
2. The Parties
(1) The Vendor, an indirectly wholly owned subsidiary of the Company
(2) The Purchaser
(3) Midland Realty (Comm.) Ltd, the agent
3. The Property to be disposed of
The Vendor has pursuant to the Provisional Agreement agreed to sell the Property to
the Purchaser. The Property is for office use and is located at 13th and 14th Floor, Max
Share Centre, No. 373, King’s Road, Hong Kong. The Property is subject to an existing
tenancy which expires on 30 September 2009.
4. Consideration
The total consideration for the Property shall be HK$27,178,800, payable by the
Purchaser to the Vendor in the following manner:
(a) HK$1,000,000 as initial deposit, which was paid upon the signing of the
Provisional Agreement;
(b) HK$1,717,880 as further deposit which was paid on 12 December 2007; and
(c) the balance of the consideration in the sum of HK$24,460,920 to be paid on or
before 28 March 2008.
Under the Provisional Agreement, the Vendor and the Purchaser have agreed to pay
HK$240,000 and HK$271,788, respectively to the agent as commission for the services
rendered by the agent.
The consideration was arrived at after arm’s length negotiations with reference to the
current commercial property market.
5. Completion
Under the Provisional Agreement, Completion is to take place on or before 28 March
2008. The terms and conditions of the formal sale and purchase agreement in respect of the
Property are still under negotiations.
LETTER FROM THE BOARD
–4–
INFORMATION ON THE GROUP AND THE PURCHASER
The Group is principally engaged in (i) the construction business, as a main contractor,
as well as the provision of contracting intelligent building engineering and electrical and
mechanical engineering services, mainly in Hong Kong and the PRC; and (ii) the property
development and investment business.
To the best of the Directors’ knowledge, the Purchaser is a newly incorporated
investment holding company and is principally engaged in property investment.
To the best of the Directors’ knowledge, information and belief having made all
reasonable enquiry, the Purchaser and its beneficial owners are third parties independent of
the Company and connected persons of the Company.
REASONS FOR AND BENEFITS OF THE DISPOSAL
The Property was used as the office of the Group until 2001 and was then held as a
long term asset for sale. From 2002, the Property was temporarily rented out for rental
income. Based on Hong Kong Accounting Standards, the net profit before tax attributable to
the Property for the years ended 31 March 2006 and 2007 was HK$510,000 and
HK$660,000, respectively and the net profit after tax attributable to the Property for the
same period was HK$420,000 and HK$544,500, respectively. However, the Board is of the
view that the consideration offered by the Purchaser which would result in an estimated gain
before tax of approximately HK$12,300,000, after expenses, to the Group as compared to
the book value of the Property as at 30 September 2007 of approximately HK$14,500,000 is
attractive. The Board considers that the Disposal provides an opportunity for the Group to
realize the Property and provide additional working capital for the Group.
The proceeds from the Disposal will be applied as general working capital.
The Directors are of the view that the disposal will not affect the Group’s existing
principal business and the Group will continue to be involved in the property development
and investment business.
The Directors (including the independent non-executive Directors) consider the terms
of the Provisional Agreement and the Disposal contemplated therein are on normal
commercial terms and are fair and reasonable and in the interests of the Shareholders as a
whole.
LISTING RULES IMPLICATIONS
As the applicable percentage ratio for the Disposal calculated pursuant to Rule 14.07(4)
exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction for the
Company under Chapter 14 of the Listing Rules.
LETTER FROM THE BOARD
–5–
ADDITIONAL INFORMATION
Your attention is also drawn to the additional information set out in the appendix to
this circular.
Yours faithfully,
For and on behalf of the Board
DESON DEVELOPMENT INTERNATIONAL
HOLDINGS LIMITED
Tjia Boen Sien
Managing Director and Deputy Chairman
LETTER FROM THE BOARD
–6–
A. RESPONSIBILITY STATEMENT
This circular includes particulars given in compliance with the Listing Rules for the
purpose of giving information with regard to the Company. The Directors collectively and
individually accept full responsibility for the accuracy of the information contained in this
circular and confirm, having made all reasonable enquiries, that to the best of their
knowledge and belief there are no other facts the omission of which would make any
statement herein misleading.
B. DISCLOSURE OF INTERESTS
(i) Save as disclosed below, as at the Latest Practicable Date, none of the Directors
and chief executive of the Company had any interest or short position in the
shares, underlying shares or debentures of the Company or any associated
corporations (within the meaning of Part XV of the SFO) which will have to be
notified to the Company and the Stock Exchange pursuant to the provisions under
Divisions 7 and 8 of Part XV of the SFO (including the interests and short
positions which he would be deemed or taken to have under Sections 344 and 345
of the SFO) or the Model Code for Securities Transactions by Directors of Listed
Companies, or which will have to be, pursuant to Section 352 of the SFO, entered
in the register referred to herein:
Long positions in the shares
Name of Director Capacity
Number of
shares
Approximate
percentage of
the Company’s
issued share
capital
Mr. Tjia Boen Sien
(“Mr. Tjia”)
Interest by
attribution
(Note 1)
226,250,000 39.51%
Beneficial Owner 41,494,400 7.25%
Mr. Wang Jing Ning Beneficial Owner 12,839,600 2.24%
Mr. Wang Ke Duan Beneficial Owner 268,960 0.05%
Mr. Siu Man Po Beneficial Owner 180,000 0.03%
Note 1: These shares are held by Sparta Assets Limited (“Sparta Assets”), a company
incorporated in the British Virgin Islands which is wholly owned by Mr. Tjia. Mr. Tjia is
also a director of Sparta Assets.
APPENDIX GENERAL INFORMATION
–7–
Long positions in the underlying shares of the Company
Name Capacity
Number
of options
Exercise
price Exercise period
HK$
Dr. Ho Chung Tai,
Raymond
Beneficial
Owner
400,000 0.340 5 March 2006 to
4 March 2008
Mr. Siu Man Po Beneficial
Owner
400,000 0.340 5 March 2006 to
4 March 2008
(ii) Save as disclosed below, the Directors or chief executive of the Company are not
aware of any other person (other than a Director or chief executive whose
interests are disclosed under (i) above) who, as at the Latest Practicable Date, had
an interest or short position in the shares or the underlying shares which would
fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of
Part XV of the SFO or who will be interested, directly or indirectly, in 10% or
more of the nominal value of any class of share capital carrying rights to vote in
all circumstances at general meetings of any other member of the Group:
Long positions in the shares or underlying shares
Name of Shareholder Capacity
Number of
shares
Number of
underlying
shares (under
equity
derivatives of
the Company)
Aggregate
interest
Approximate
percentage of
the Company’s
issued share
capital
Sparta Assets Beneficial Owner 226,250,000 – 226,250,000 39.51%
Penta Investment
Advisers Limited
(“Penta”) (Note 1)
Investment
Manager
97,260,000 35,000,000 132,260,000 23.09%
Mr. John Zwaanstra
(Note 2)
Interest by
attribution
97,260,000 35,000,000 132,260,000 23.09%
Penta Japan Fund, Ltd.
(“Penta Japan”)
(Note 3)
Interest by
attribution
66,897,000 23,333,333 90,230,333 15.76%
Mr. Todd Zwaanstra
(Note 4)
Trustee (other
than a bare
trustee)
66,897,000 23,333,333 90,230,333 15.76%
Mercurius GP LLC
(“Mercurius”)
(Note 5)
Founder of a
discretionary
trust
66,897,000 23,333,333 90,230,333 15.76%
Note 1: These include (i) an interest in 97,260,000 Shares and (ii) a derivative interest in
35,000,000 shares.
Note 2: Mr. John Zwaanstra has declared the interest and derivative interest in the same shares
in which Penta has declared the same interests as Penta is his controlled corporation.
APPENDIX GENERAL INFORMATION
–8–
Note 3: These include (i) an interest in 66,897,000 shares and (ii) a derivative interest in
23,333,333 shares.
Note 4: Mr. Todd Zwaanstra has declared the interest and derivative interest in the same Shares
in which Penta Japan has declared the same interests pursuant to his capacity as trustee
of the Mercurius Partners Trust and as Penta Japan is his controlled corporation.
Note 5: Mercurius has declared the interest and derivative interest in the same Shares in which
Penta Japan has declared the same interests in its capacity as founder of Mercurius
Partners Trust.
C. SERVICE CONTRACTS
As at the Latest Practicable Date, none of the Directors or proposed Directors has
entered into any existing or proposed service contracts with the Company or any other
member of the Group save for those expiring or determinable by the relevant employer
within one year without payment of compensation (other than statutory compensation).
D. MATERIAL LITIGATION
As far as the Directors are aware, save as disclosed below in respect of the outstanding
pending litigations as at the Latest Practicable Date, no member of the Group is engaged in
any litigation or claim of material importance and no litigation or claim of material
importance is known to the Directors to be pending or threatened against any member of the
Group.
(i) On 7 December 2006, legal proceedings were instituted against Kenworth
Engineering Limited (“Kenworth”), a 100%-owned subsidiary of the Company, by
Watfield Technology Limited (“Watfield”), in respect of Kenworth Watfield Joint
Venture Limited, a joint venture established in Hong Kong which is owned as to
50% by Kenworth and as to 50% by Watfield (the “Joint Venture”). In its
Statement of Claim, Watfield averred that Kenworth is in breach of the joint
venture agreement dated 13 November 2003. In addition to the claim for damages
as a result of the alleged breach by Kenworth, Watfield is seeking for the court’s
declaration that (1) Watfield is entitled to have the loan of HK$2,500,000
provided by Watfield to set off, as first priority, against its credit balance in the
Joint Venture accounts; (2) Kenworth holds on trust for the Joint Venture and
Watfield all monies received by the Joint Venture from Kaden-Leader-Kenworth
Joint Venture, a consortium formed by Kaden Construction Limited, Leader Civil
Engineering Corporation Limited and Kenworth (the “Consortium”); (3) Kenworth
shall deliver all other necessary accounts and enquiries for tracing all monies
received by the Joint Venture from the Consortium; (4) Kenworth was in breach
of its duty towards Watfield by failing to render full information in respect of the
financial affairs of the Joint Venture; and (5) Kenworth do forthwith render all
books and accounts kept by the Joint Venture and full information in respect of
the financial affairs of the Joint Venture.
(ii) On 9 January 2007, legal proceedings were instituted against Watfield by
Kenworth, in respect of the outstanding working capital to be provided by
Watfield and a loan provided by Kenworth under a loan facility. In its Statement
APPENDIX GENERAL INFORMATION
–9–
of Claim, Kenworth averred that Watfield has not paid 50% of the total working
capital in the sum of HK$9,797,740.63 to the Joint Venture and Watfield owed
Kenworth the amount of HK$2,787,126.22 being the loan provided by Kenworth
to Watfield under a loan facility for operation of the Joint Venture.
(iii) On 7 December 2006, legal proceedings were instituted against Kenworth by
Allied Electric Corporation Limited (“AEC”) in respect of the alleged work
performed under a construction project. According to its Statement of Claim,
AEC’s construction claims include outstanding payments, variation claims and
claims in respect of loss and expenses in the total sum of HK$19,673,246.57.
The Directors have obtained an advice letter dated 11 October 2007 from the Group’s
legal counsel and:
(a) in relation to proceedings (i), the Directors are of the view that Kenworth has a
reasonable chance to successfully defend these proceedings and set-off the claims
of Watfield against the payments that Kenworth has made in carrying out the
construction works for the project to which these proceedings relate;
(b) in relation to proceedings (ii), a default judgment has been obtained by Kenworth
against Watfield in the sum of HK$12,584,866.85 with interest, costs and further
damages to be assessed. In view of the present status of the proceedings and the
default judgment obtained by Kenworth, the Directors are of the view that
Kenworth has a reasonable chance of recovering payments from Watfield;
(c) in relation to proceedings (iii), from the information available, the Directors are
of the view that Kenworth has a reasonable chance to successfully defend these
proceedings.
E. COMPETING INTEREST
None of the Directors or their respective associates has any interest in a business which
competes or is likely to compete, either directly or indirectly, with the business of the
Group.
F. INTEREST IN ASSETS
Save as disclosed in the circular issued by the Company on 18 October 2007, none of
the Directors has any direct or indirect interest in any asset which has been acquired or
disposed of by or leased to any member of the Group since 31 March 2007 (the date to
which the latest published audited consolidated financial statements of the Group were made
up to) or proposed to be so acquired, disposed of or leased.
APPENDIX GENERAL INFORMATION
–10–
G. GENERAL
(i) The Company’s registered office is at Canon’s Court, 22 Victoria Street, Hamilton
HM12 Bermuda.
(ii) The head office and principal place of business of the Company in Hong Kong is
at 11th Floor, Nanyang Plaza, 57 Hung To Road, Kwun Tong, Kowloon, Hong
Kong.
(iii) The branch share registrar and transfer office of the Company in Hong Kong is
Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong
Kong.
(iv) Mr. Ong Chi King is an executive director and the secretary of the Company. Mr.
Ong holds a bachelor degree in Business Administration from the Hong Kong
University of Science and Technology. He is a fellow of the Association of
Chartered Certified Accountants and a Certified Public Accountant of the Hong
Kong Institute of Certified Public Accountants.
(v) Ms. Wong Ka Yan is the financial controller and qualified accountant of the
Company. Ms. Wong holds a Bachelor degree in Commerce from the University
of Adelaide, Australia and is a Certified Public Accountant of CPA Australia.
(vi) The English text of this circular shall prevail over the Chinese text.
APPENDIX GENERAL INFORMATION
–11–
