If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should
consult your licensed securities dealer, bank manager, solicitor, professional accountant or other
professional adviser.
If you have sold or transferred all your shares in Nam Fong International Holdings Limited, you
should at once hand this circular to the purchaser or the transferee or to the bank, licensed securities
dealer or other agent through whom the sale or the transfer was effected for transmission to the
purchaser or the transferee.
NAM FONG INTERNATIONAL HOLDINGS LIMITED
V
(incorporated in Bermuda with limited liability)
(stock code: 1176)
DISCLOSEABLE TRANSACTION
ACQUISITION OF 100% SHAREHOLDING INTEREST IN
BOSHING INVESTMENTS LIMITED
31 December 2007
For identification purposes onl
CONTENTS
– i –
Page
Definitions ...................................................................................................................................... 1
Letter from the Board .................................................................................................................. 4
Appendix — General information.............................................................................................. 9
DEFINITIONS
– 1 –
In this circular, unless the context requires otherwise, the following expressions shall have meanings
as set out below when used herein:
“Acquisition” the proposed acquisition of the Sale Shares pursuant to the
Agreement
“Agreement” the conditional sale and purchase agreement dated 13 December
2007 entered into between the Vendor and the Purchaser in
relation to the Acquisition
“associate” has the meaning ascribed to it under the Listing Rules
“Board” board of Directors
“Boshing Investments” Boshing Investments Limited, a company established in the BVI
with limited liability
“Business Day(s)” any day(s) except Saturday(s) and Sunday(s) on which banks
in Hong Kong are open for business
“BVI” the British Virgin Islands
“Chaohu City Government” the People’s Government of Juchao District, Chaohu City in
the Anhui Province, the PRC (QQA5')
“Chaohu Land Site” a land site at Chaohu City, Zhong Miao Street, Ming Feng Gang
District (Q{"7P) with a gross area of
approximately 334 mu (equivalent to approximately 222,667
sq. m.)
“Company” Nam Fong International Holdings Limited (V
), a company incorporated in Bermuda with limited
liability and whose issued Shares are listed on the main board
of the Stock Exchange
“Completion” the completion of the Acquisition in accordance with the terms
and conditions of the Agreement thereof
“Completion Date” the date of Completion
“Consideration” the consideration payable by the Purchaser to the Vendor for
the Acquisition
DEFINITIONS
– 2 –
“Cooperation Agreement” the cooperation agreement dated 28 September 2007 entered
into between Boshing Investments and the Chaohu City
Government for the arrangement in respect of the preliminary
development of the Chaohu Land Site
“Directors” the directors of the Company
“Group” the Company and its subsidiaries
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Independent Third Party(ies)” third party(ies) independent of the Company and connected
person(s) (as defined under the Listing Rules) of the Company
and are not connected person(s) (as defined under the Listing
Rules) of the Company
“Latest Practicable Date” 27 December 2007, being the latest practicable date prior to the
printing of this circular for ascertaining certain information in
this circular
“Listing Rules” the Rules Governing the Listing of Securities on the Stock
Exchange
“PRC” the People’s Republic of China (for the purpose of this circular,
excluding Hong Kong, the Macau Special Administrative
Region and Taiwan)
“Purchaser” Nam Fong International Group Limited, a direct wholly-owned
subsidiary of the Company incorporated in the BVI with limited
liability
“Sale Shares” the entire issued share capital of Boshing Investments
“Share(s)” fully paid ordinary share(s) of HK$0.10 each in the share capital
of the Company
“Shareholder(s)” holder(s) of the Shares of the Company
“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws
of Hong Kong)
“Stock Exchange” m.” square metres
“&#%8221; per cent.
For the purpose of this circular, unless otherwise indicated, the exchange rate at RMB1.00 = HK$0.95
has been used, where applicable, for the purpose of illustration only and does not constitute a
representation that any amount in RMB has been, could have been or may be exchanged at that rate
or any other rates.
LETTER FROM THE BOARD
– 4 –
NAM FONG INTERNATIONAL HOLDINGS LIMITED
V
(incorporated in Bermuda with limited liability)
(stock code: 1176)
Executive Directors: Registered office:
Mr. Tong Shi Jun (Chairman) Clarendon House
Mr. Zhao Lishen 2 Church Street
Mr. Chiu Kong Hamilton HM 11
Ms. Huang Ling Bermuda
Ms. Zhu Jun
Principal place of business in Hong Kong:
Independent non-executive Directors: Room 1901, 19th Floor
Mr. Yuen Wai Ho Office Tower, Convention Plaza
Mr. Chen Song Sheng 1 Harbour Road
Ms. Zhou Mei Zhen Wanchai
Hong Kong
31 December 2007
To the Shareholders
Dear Sir or Madam,
DISCLOSEABLE TRANSACTION
ACQUISITION OF 100% SHAREHOLDING INTEREST IN
BOSHING INVESTMENTS LIMITED
INTRODUCTION
On 13 December 2007, the Purchaser, a direct wholly-owned subsidiary of the Company, entered
into the Agreement with the Vendor pursuant to which the Vendor has conditionally agreed to sell
and the Purchaser has conditionally agreed to purchase the Sale Shares for a total consideration of
HK$25 million which will be paid in cash.
The Acquisition constitutes a discloseable transaction for the Company under the Listing Rules. The
purpose of this circular is to give you further information regarding the Acquisition and other
information of the Group.
LETTER FROM THE BOARD
– 5 –
THE AGREEMENT
Date
13 December 2007
Parties
Purchaser: Nam Fong International Group Limited, a direct wholly-owned subsidiary of the
Company
Vendor: Mediterranean International Group Limited
The Vendor is an investment holding company. To the best of the Directors’ knowledge, information
and belief having made all reasonable enquiry, each of the Vendor and its ultimate beneficial owner is
an Independent Third Party.
Assets to be acquired
The Sale Shares, being the entire issued share capital of Boshing Investments.
Consideration
The total consideration for the Acquisition is HK$25 million, which had been paid in cash upon
Completion and was satisfied from the Group’s internal resources.
The Consideration was arrived at after arm’s length negotiations between the parties and was made
with reference to the unaudited net assets value of Boshing Investments as at 30 November 2007 of
approximately HK$21 million and after taking into consideration of the potential development of the
Chaohu Land Site, the costs of investment paid and time and effort made by the Vendor in setting up
Boshing Investments and liasing with the Chaohu City Government. The Board considers that the
Consideration is fair and reasonable.
Conditions precedent
The Agreement is conditional upon:
(a) all necessary approvals and consent in connection with the Acquisition having been obtained
by the Vendor and the Purchaser;
(b) there being no breach or possible breach of warranties contained in or representations made by
the Purchaser in the Agreement;
LETTER FROM THE BOARD
– 6 –
(c) the Purchaser having obtained a PRC legal opinion in form and substance to its satisfaction on
the transactions contemplated under the Agreement; and
(d) the Purchaser having conducted a due diligence review and investigation on Boshing Investments
and the Purchaser being satisfied with the results thereof.
All of the conditions (except condition (a) above) are waivable by the Purchaser. If any of the conditions
has not been fulfilled or waived by the Purchaser on or before 31 January 2008, or such other date as
the parties may otherwise agree, the Agreement shall lapse and be terminated and no party to the
Agreement shall have any liability under the Agreement (without prejudice to the rights of the parties
in respect of any antecedent breaches).
Completion
Pursuant to the Agreement, Completion shall take place on or before the third Business Day after the
fulfilment (or, as the case may be, waiver) of the conditions precedent (or any other date as may be
agreed between the parties). The Acquisition was completed on 17 December 2007 and Boshing
Investments had become a wholly-owned subsidiary of the Company and its results will be consolidated
into the Group.
INFORMATION ON BOSHING INVESTMENTS
As at the Latest Practicable Date, so far as the Directors are aware of and after making all reasonable
enquiries, Boshing Investments is an investment holding company and has no material assets or
subsidiaries except for the entering into of the Cooperation Agreement with the Chaohu City
Government on 28 September 2007 for an arrangement in respect of the preliminary development of
a land site at Chaohu City, Zhong Miao Street, Ming Feng Gang District (Q{"7P
) with a gross area of approximately 334 mu (equivalent to approximately 222,667 sq.m.). To
the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the
Chaohu City Government is an Independent Third Party. Under the Cooperation Agreement, Boshing
Investments agreed to develop the Chaohu Land Site jointly with the Chaohu City Government by
contributing an aggregate amount of approximately RMB40 million (equivalent to approximately
HK$42.1 million) for the funding of the preliminary development of the Chaohu Land Site including
removal and relocation compensation, demolition cost, and fees for the requisition formalities, of
which approximately RMB20 million (equivalent to approximately HK$21.1 million) has been
contributed by Boshing Investments as at the Latest Practicable Date. On the other hand, the Chaohu
City Government will be responsible for obtaining approvals for the requisition of the Chaohu Land
Site, carrying out removal and relocation arrangements, land use rights formalities, and procuring the
sale of the Chaohu Land Site through public auction at land transaction organisation. The Board
considers that the aforesaid arrangement is not unusual and is a common practice in the PRC. It was
intended that the Chaohu Land Site will be developed for residential, commercial, and tourism uses.
Upon Completion, the Group was responsible for the contribution of the remaining balance of the
development cost of approximately RMB20 million (equivalent to approximately HK$21.1 million)
through its internal resources.
LETTER FROM THE BOARD
– 7 –
As at the Latest Practicable Date, the preliminary development of the Chaohu Land Site is in progress,
which is expected to be completed in the first quarter of 2008. According to the terms of the Cooperation
Agreement, after the preliminary development of the Chaohu Land Site is completed, the Chaohu
City Government will put the Chaohu Land Site to public auction according to the relevant rules and
requirements. Boshing Investments shall be entitled to the return of its investment cost of approximately
RMB40 million out of the proceeds arising from the sale of the Chaohu Land Site by way of public
auction. In the event that the concluded sales price of the Chaohu Land Site is higher than the minimum
bid price determined by the relevant authorities, such extra portion of the proceeds from the sales of
the Chaohu Land Site will be distributed between Boshing Investments and the Chaohu City
Government in the proportion of 90% and 10% respectively, as agreed under the Cooperation
Agreement which the Directors consider is fair and reasonable.
The Company has obtained legal opinion dated 13 December 2007 from its PRC legal adviser that
the arrangement under the Cooperation Agreement does not infringe the relevant PRC laws and
regulations, and the terms of the Cooperation Agreement are legal and valid under the PRC laws.
Boshing Investments recorded an unaudited loss both before and after taxation for the period from
3 July 2007 (being the date of incorporation) and up to 30 November 2007 of HK$1,500 and an
unaudited net assets value of approximately HK$21 million as at 30 November 2007 which mainly
represented the deposit of the development cost of Chaohu Land Site. Based on the above and the
Consideration, it is expected that there will not be any material impact on the Group’s earnings and
assets and liabilities.
REASONS FOR AND BENEFITS OF THE ACQUISITION
The Company is currently engaged in property development, property investment and property rental
activities in the PRC.
As stated in the Company’s interim report for the six months ended 30 June 2007, the Group has
continued to explore and evaluate certain property investment projects in the PRC with a view to
enhancing recurring revenue base and securing a firm and steady cash inflow position for the Group.
Through the Acquisition, the Group is able to further strengthen its property development related
business in the PRC, which the Group considers is in line with the Group’s business strategy. In view
of the cooperation arrangements between Boshing Investments and the Chaohu City Government,
the Company believes that the Cooperation Agreement will provide the Group with a further source
of income and further improve the financial performance of the Company. Moreover, the Company
plans to participate in the bidding of the Chaohu Land Site when it is put to public auction which the
Company considers a good opportunity to further enhance its property development project portfolio.
The Company has no pre-emptive rights in obtaining the ownership of the Chaohu Land Site in the
public auction.
The Directors (including independent non-executive Directors) are of the view that the terms of the
Agreement are fair and reasonable and the entering into of the Agreement is in the interests of the
Company and the Shareholders as a whole.
LETTER FROM THE BOARD
– 8 –
GENERAL
Your attention is drawn to the information set out in the appendix of this circular.
Yours faithfully,
For and on behalf of the Board
NAM FONG INTERNATIONAL HOLDINGS LIMITED
Tong Shi Jun
Chairman
APPENDIX GENERAL INFORMATION
– 9 –
1. RESPONSIBILITY STATEMENT
This circular includes particulars given in compliance with the Listing Rules for the purpose of
giving information with regard to the Group. The Directors collectively and individually accept
full responsibility for the accuracy of the information contained in this document 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.
2. DISCLOSURE OF INTERESTS
(a) Directors’ interests and short positions
(i) As at the Latest Practicable Date, none of the Directors nor the chief executive of
the Company had or was deemed to have any interests and short positions in the
Shares, underlying Shares or debentures of the Company or its associated
corporations (within the meaning of Part XV of the SFO) which (i) were required
to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and
8 of Part XV of the SFO (including interests and short positions which they were
taken or deemed to have under such provisions of the SFO); or (ii) were required,
pursuant to section 352 of the SFO, to be entered in the register referred to therein;
or (iii) were required to be notified to the Company and the Stock Exchange pursuant
to the Model Code for Securities Transactions by Directors of Listed Companies
contained in the Listing Rules.
(ii) As at the Latest Practicable Date, none of the Directors had any direct or indirect
interests in any assets which have since 31 December 2006 (being the date to
which the latest published audited accounts of the Group were made up) been
acquired or disposed of by or leased to any members of the Group, or are proposed
to be acquired or disposed of by or leased to any member of the Group.
(iii) None of the Directors was materially interested in any contracts or arrangements
subsisting at the Latest Practicable Date which was significant in relation to the
business of the Group.
APPENDIX GENERAL INFORMATION
– 10 –
(b) Persons who have an interest or short position which is discloseable under Divisions
2 and 3 of Part XV of the SFO and substantial shareholders in other members of
the Group
So far as is known to the Directors and the chief executive of the Company, as at the
Latest Practicable Date, the following person (not being Directors or chief executive of
the Company) had, or was deemed to have, interests or short positions in the Shares or
underlying Shares (including any interests in options in respect of such capital) which
would fall to be disclosed to the Company and the Stock Exchange under the provisions
of Divisions 2 and 3 of Part XV of the SFO, or, who is, directly or indirectly, interested
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
Substantial shareholders of the Company:
Approximate
percentage
or attributable
Nature of percentage of
Name of Shareholder Note interest Total shareholdings
(%)
(Note 3)
Great Capital Holdings 1 Beneficial owner 429,162,000 (L) 26.30%
Limited (“GCH”)
Mr. Hung Ka Faat 2 Interest of a controlled 405,280,000 (L) 24.83%
corporation
Sinowin Enterprises 2 Beneficial owner 405,280,000 (L) 24.83%
Limited (“SEL”)
Access Achievement 2 Person having security 405,280,000 (L) 24.83%
Limited interest in Shares
Hong Long Holdings 2 Person having security 405,280,000 (L) 24.83%
Limited interest in Shares
Zhang Suqian Beneficial owner 272,000,000 (L) 16.67%
(L) Long position
Notes:
(1) 264,162,000 Shares out of 429,162,000 Shares have been pledged by GCH to secure banking facilities
for the group companies of GCH.
(2)Mr. Hung Ka Faat beneficially owns and controls SEL. All of the Shares have been pledged by
SEL to Access Achievement Limited, a wholly-owned subsidiary of Hong Long Holdings Limited,
both of them are deemed to have interest in the capacity of person having security interest in the
405,280,000 Shares by virtue of the SFO.
(3) For the purpose of this section, the shareholding percentage in the Company is calculated on the
basis of 1,632,000,000 Shares in issue as at the Latest Practicable Date.
APPENDIX GENERAL INFORMATION
– 11 –
Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief
executive of the Company were not aware of any other person (other than the Directors
and the chief executive of the Company) who had, or was deemed to have, interests or
short positions in the Shares or underlying Shares of the Company (including any interests
in options in respect of such capital), which would fall to be disclosed to the Company
and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the
SFO, or, who are, directly or indirectly, interested 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 members of the Group.
3. DIRECTORS’ SERVICE CONTRACTS
As at the Latest Practicable Date, none of the Directors has entered into or proposed to enter
into any service contract with the Company or any other members of the Group, which will not
expire or may not be terminated by the Company within a year without payment of any
compensation (other than statutory compensation).
4. LITIGATION AND CONTINGENT LIABILITIES
As at the Latest Practicable Date, neither the Company nor any of its subsidiaries were engaged
in any litigation, arbitration or claim of material importance and there is no litigation, arbitration
or claim of material importance known to the Directors to be pending or threatened against the
Company or any of its subsidiaries.
5. COMPETING INTERESTS
As at the Latest Practicable Date, so far as the Directors are aware of, none of the Directors or
their respective associates were considered to have any interests in a business which competes
or may compete, either directly or indirectly, with the business of the Group or have or may
have any other conflicts of interests with the Group pursuant to the Listing Rules .
6. MISCELLANEOUS
(a) The Company’s registered office is at Clarendon House, 2 Church Street, Hamilton HM11,
Bermuda. The principal place of business is located at Room 1901, 19th Floor, Office
Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong.
(b) The qualified accountant and the company secretary of the Company is Mr. Tang Sze
Lok. He is an associate member of the Association of Chartered Certified Accountants
and an associate member of the Hong Kong Institute of Certified Public Accountants.
