TIDMALR
RNS Number : 0802U
Alternative Energy Limited
21 December 2012
FOR IMMEDIATE RELEASE 21 December 2012
Alternative Energy Limited
("Alternative Energy", "AEL" or the "Company")
POSTING OF SHAREHOLDER CIRCULAR
Proposed Placement, Preferential Offering, Share Option,
Proposed Disposal and Revised Convertible Loan
and
NOTICE OF EXTRAORDINARY GENERAL MEETING
Further to the announcement of the 4 October 2012 the Board of
Directors of Alternative Energy (the "Board") is pleased to
announce that the Company is today posting a circular dated 21
December 2012 ("Circular") to Shareholders containing details of
the Placement, Preferential Offering, Share Option, Proposed
Disposal and Revised Convertible Loan (together, the "Proposed
Transactions").
All capitalised terms used but not defined herein shall have the
same meaning ascribed to them in the Circular and which are also
set out at the end of this announcement, unless expressly provided
or the context requires otherwise.
The Circular contains a notice convening an extraordinary
general meeting of Shareholders ("EGM") at Red Azalea and White
Azalea Room, Mezzanine Level, Shangri-La Hotel, 22 Orange Grover
Road, Singapore 258350, on 11 January 2013 at 3.00p.m (Singapore
time), at which, amongst other things, Independent Shareholders
approval to the Whitewash Resolution, the Revised Convertible Loan
Agreement and the issue and allotment of the Revised Convertible
Loan Shares and Shareholder approval to the Preferential Offering
will be sought.
The Circular will be made available for inspection at the
registered office of the Company at 1 Science Park Road, #02-09,
The Capricorn, Singapore Science Park II, Singapore 117528 during
normal business hours from the date of the Circular up to the date
and time of the EGM.
The Indicative Timetable and Letter to Shareholders below has
been extracted without material adjustment from the Circular.
Shareholders should read this letter in conjunction with the
Circular. The Circular should be read carefully and in its entirety
before making a decision with respect to the Proposed
Transactions.
Subject to receiving the necessary Shareholder approvals or
Independent Shareholders approvals (as the case may be) at the EGM,
the Company intends to send the Offering Letter (together with the
Application Form) to Shareholders on or about 14 January 2013 which
will contain the terms and conditions of the Preferential Offering,
to be issued by the Company to the Entitled Shareholders.
The Circular contains the following fundamental risk factor:
"As noted in the Announcement, the Heads of Agreement, the MOU,
the Supplemental Heads of Agreement and the Conditional Private
Placement Agreement are not definitive and are therefore subject to
changes and will in any event be subject to the execution of final
binding agreements. There is no certainty or assurance as at the
date of the Circular that these arrangements will be completed, or
that no changes will be made to the terms thereof. The Company will
make the necessary announcements when there are further
developments on the Heads of Agreement, the MOU, the Supplemental
Heads of Agreement, the Conditional Private Placement Agreement,
the Preferential Offering and the Revised Convertible Loan.
Shareholders are advised to read any further announcements by the
Company carefully. In particular, Shareholders should note that the
Company's ability to provide sufficient working capital for its
business and to meet its operational needs, requires these
arrangements to be completed. If for, whatever reason, they are not
then there can be no certainty that the Company will have
sufficient working capital for its present requirements. It should
also be noted that the Preferential Offering is not underwritten
and that there is no guarantee that the amount raised there under
will be sufficient for the Company's working capital needs".
Accordingly, Shareholders should consult their stock brokers,
bank managers, solicitors or other professional advisers if they
have any doubt about the actions they should take.
For further information, please contact:
Richard Lascelles, Independent Non-executive Director Tel: 020
7408 1067
Roland Cornish, Emily Staples and James Biddle, Beaumont Cornish
Limited Tel: 020 7628 3396
Eric Goh, Executive Director Tel: +65 68737782
A copy of this announcement will be available at
www.alternativenergy.com.sg. The content of the website referred to
in this announcement is not incorporated into and does not form
part of this announcement.
Beaumont Cornish Limited, which is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting
exclusively for the Company in relation to the Whitewash Resolution
, as further described in this Circular, and is not taking
responsibility for the commercial assessment of the Proposed
Transactions, which remain the sole responsibility of the Board,
nor is it advising any other person and accordingly will not be
responsible to any person other than the Company for providing the
protections afforded to the clients of Beaumont Cornish Limited or
for providing advice in relation to the matters described in the
Circular.
Forward looking statements
This announcement may contain certain "forward-looking
statements" with respect to the financial condition, results of
operations and business of the Company and the Group and certain
plans and objectives of the Group. In some cases, these
forward-looking statements can be identified by the fact that they
do not relate to historical or current facts and by the use of
forward-looking terminology, including the terms "anticipates",
"believes", "estimates", "expects", "intends", "plans", "prepares",
"goal", "target", "will", "may", "should", "could" or "would" or,
in each case, their negative or other variations or comparable
terminology. These statements are based on assumptions and
assessments made by the Directors in light of their experience and
their perception of historical trends, current conditions, expected
future developments and other factors they believe appropriate.
Investors should specifically consider the factors identified in
this announcement that could cause actual results to differ before
making an investment decision. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
the Company or the Group, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. They are
also based on numerous assumptions regarding the Company's and/or
the Group's present and future business strategies and the
environment in which it is believed that the Group will operate in
the future. These forward-looking statements speak only as at the
date of this announcement. Except as required by the London Stock
Exchange or applicable law, the Company expressly disclaims any
obligations or undertaking to release publicly any updates or
revisions to any forward-looking statements contained in this
announcement to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. Should one or
more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described in this announcement.
INDICATIVE TIMETABLE
UK Time
(unless otherwise stated)
Event Date and Time
Last date and time for : 9 January 2013 at 3.00p.m.
lodgement of Proxy Forms (Singapore time)
Date and time of EGM : 11 January 2013 at
3.00p.m. (Singapore
time)
Subject to the approval of (i) the Shareholders
for the Preferential Offering; and (ii) the
Independent Shareholders for the Revised Convertible
Loan and Whitewash Resolution, being obtained
at the EGM:
Offer Record Date : (a) in respect of Entitled
Scriptholders, 9 January
2013 at 3.00p.m. (Singapore
time); and
(b) in respect of Entitled
Depositary Interest Holders,
9 January 2013 at 3.00p.m.
(UK time)
------------------------------- ----------------------------------
Despatch of Offering : 14 January 2013
Letter (together with
the Application Form)
to the Entitled Shareholders
------------------------------- ----------------------------------
Opening Date for the : 14 January 2013
Preferential Offering
------------------------------- ----------------------------------
Closing Date for the : 25 January 2013 at 3.00p.m.
Entitled Scripholders (Singapore time)
------------------------------- ----------------------------------
Closing Date for the : 25 January 2013 at 3.00p.m.
Entitled Depositary (UK time)
Interest Holders
------------------------------- ----------------------------------
Expected date for issuance : 1 February 2013
and crediting of Preferential
Offering Shares
------------------------------- ----------------------------------
Expected date for commencement : 1 February 2013
of trading of Preferential
Offering Shares on
AIM
------------------------------- ----------------------------------
Expected date for refund : 11 February 2013
of unsuccessful applications
(if any)
------------------------------- ----------------------------------
The timetable for the events which are scheduled to take place
after the EGM is indicative only and is subject to change at the
Company's absolute discretion. The Company intends to announce any
changes (including any determination of the relevant dates) to the
timetable above once the Company becomes aware or determines the
necessity of such changes.
ALTERNATIVE ENERGY LIMITED
(Incorporated in the Republic of Singapore)
Directors:- Registered Office:-
Mr Christopher George 1 Science Park Road
Edward Nightingale #02-09, The Capricorn
Mr Richard Anthony Finlayson Singapore Science
Lascelles Park II
Mr Bay Yew Chuan Singapore 117528
Dr Eric Goh Swee Ming
21 December 2012
To: The Shareholders of Alternative Energy Limited
Dear Sir/Madam
1. INTRODUCTION
On the Announcement Date, the Board announced, amongst other
things:
(a) the execution of the Heads of Agreement between the Company,
MUP and LDK on 22 June 2012;
(b) the execution of the Supplemental Heads of Agreement between
the Company and MUP on 22 June 2012, pursuant to which the Share
Option was granted by the Company to MUP;
(c) the execution of the Conditional Private Placement Agreement
between the Company and LDK on 30 August 2012;
(d) the proposed implementation of the Preferential Offering; and
(e) the execution of the Revised Convertible Loan Agreement
between the Company and Christopher Nightingale on 3 October
2012,
which collectively represent a series of transactions having a
substantial impact on the Company.
1.1 The Heads of Agreement
(a) On 22 June 2012, the Company entered into a binding heads of
agreement (the "Heads of Agreement") with MUP and LDK, pursuant to
which, MUP has proposed that the Company be appointed as the
exclusive engineering, procuring, and construction ("EPC")
contractor for the 1000 Island Project, subject to the relevant
approval from the Government of Indonesia and execution of a
definitive master project agreement (the "Master Project
Agreement") between MUP, the Company and such other person(s) as
may be nominated by MUP.
(b) Pursuant to the Heads of Agreement:
(i) MUP will secure a soft loan from the PRC government with a
first tranche of up to US$100,000,000, which shall be disbursed
through MUP in various stages in accordance with the terms of the
Master Project Agreement;
(ii) The Company will, among other things, design all of the
solar systems to be installed for the 1000 Island Project, provide
construction oversight in the form of onsite project management and
provide installation manuals for the systems being installed;
and
(iii) LDK will be the exclusive supplier of the solar panels
required for the 1000 Island Project.
(c) Information on MUP and LDK:
(i) MUP is an Indonesian project development company which has (i) so far signed a total of US$7,100,000,000 worth of energy and infrastructure projects in Indonesia; and (ii) been appointed the main project developer by the Government of Indonesia to procure funding for and carry out the 1000 Island Project.
(ii) LDK is listed on the New York Stock Exchange and is one of
the world's leading producers of solar wafers in terms of capacity
and a leading high-purity polysilicon and solar module
manufacturer. Headquarters and manufacturing facilities of LDK are
located in the Hi-Tech Industrial Park, Xin Yu City, Jiang Xi
Province in the PRC and LDK maintains sales, marketing and customer
support offices across Asia, Europe and North America.
1.2 The Supplemental Heads of Agreement and the Share Option
(a) On 22 June 2012, the Company entered into the supplemental
heads of agreement (the "Supplemental Heads of Agreement") with
MUP, pursuant to which, the Company had agreed to grant to MUP an
option to subscribe for new Shares in the Company (the "Option
Shares") representing up to 29.9% of its entire issued share
capital at a price of US$0.005 per share (the "Option Price"),
exercisable in tranches of at least US$100,000 at any time for six
(6) months following the execution of the Master Project Agreement
relating to the 1000 Island Project (and lapsing if such Master
Project Agreement is not signed) (the "Share Option"). In the event
of any share issuance by the Company prior to the exercise of the
Share Option, MUP shall be entitled to subscribe for up to 29.9% of
the enlarged issued share capital of the Company at the Option
Price.
(b) Further, under the Supplemental Heads of Agreement:
(i) the Company had agreed to pay to MUP:
(1) by way of reimbursement, preliminary project and feasibility
study costs of US$1,000,000 (which has been paid by the Company in
two tranches);
(2) a development fee of 5% of invoice value for invoices
derived from the 1000 Island Project; and
(3) an introductory commission of 5% of contract value for any
other projects in Indonesia introduced by MUP in respect of which
the Company is appointed as contractor;
(ii) MUP will be appointed as the Company's sole and exclusive
distributor and agent in Indonesia in respect of all of the
Company's solar and alternative energy products (except lighting
products);
(iii) MUP will appoint the Company as the EPC contractor for all
of its forthcoming projects in Indonesia, including the e-Village
program which is the subject of the MOU (please see paragraph 1.4
of this Circular); and
(iv) in the event that MUP holds more than 20% of the issued
share capital of the Company pursuant to the Share Option, MUP will
be entitled to nominate one (1) director to the Board, and in the
event that MUP holds more than 28% of the issued share capital of
the Company, MUP will be entitled to nominate two (2) directors to
the Board, such nominations as aforesaid being subject to
regulatory approval(s).
1.3 The Heads of Terms of the Conditional Private Placement and the Placement
(a) On 30 August 2012, the Company entered into the heads of
terms of the conditional private placement agreement (the
"Conditional Private Placement Agreement") with LDK in respect of
the subscription by LDK for Shares (the "Placement Shares") at a
placement price per Placement Share (the "Placement Price") of 25%
discount to the closing market price of Shares traded on AIM as at
the close of business on the relevant share issuance date (the
"Placement").
(b) The Placement will raise US$3,000,000 for the Company and is
conditional upon the occurrence of the first drawdown by LDK from
the Indonesian Ministry of Finance pursuant to the 1000 Island
Project.
(c) The Placement Price is not ascertainable at the present as
it will be based on the future prevailing market price of the
Shares as at the close of business on the relevant share issuance
date. As such, it is also impractical at the present to determine
the aggregate number of Placement Shares that will be issued to LDK
pursuant to the Placement.
1.4 Memorandum of Understanding
(a) On 22 June 2012, a memorandum of understanding (the "MOU")
was entered into between the Company and MUP AE, being a green
energy subsidiary of MUP.
(b) Under the MOU, it has been agreed that:
(i) MUP will use the Company and the Company's technologies and
will appoint the Company as its principal sub-contractor in
connection with the community concept, roofing, energy systems and
energy saving devices (including lightings) in connection with the
eVillage program, which the parties agree to jointly develop and
promote;
(ii) the Company will work with the other contractors nominated
by MUP AE (which may include construction companies) in the
creation of low cost, energy self-sustaining buildings and will
appoint MUP AE as its sole and exclusive agent in Indonesia for all
of its technologies utilised in the eVillage program, including any
additional technology developed during the carrying out of the
eVillage program;
(iii) the Company will grant to MUP AE licences to use all of
its patents, trademarks and other intellectual property used in the
eVillage program; and
(iv) both parties will progress their arrangements towards
conclusive agreements relating to the creation of an Indonesian
Government-backed program for the creation of green sustainable
communities as soon as possible.
(c) The MOU will be effective for a period of two (2) years from
the date of its execution, after which it may be renewed.
1.5 The Proposed Disposal
(a) Christopher Nightingale has made a commitment to dispose of,
or to procure the parties acting in concert with him to dispose of,
approximately 150,000,000 Shares (the "Proposed Disposal") to
certain third parties unrelated to and independent of the Concert
Parties (the "Independent Third Parties") at a price to be
determined. It is intended that the Proposed Disposal be effected
whenever appropriate but in any event shall not be effected within
the close period prescribed under the AIM Rules, being, amongst
other things, a period during which the Directors and certain
employees are restricted from dealing in any of their securities in
the Company preceding the publication(s) of the financial results
of the Company or when the Company is in possession of unpublished
price sensitive information.
(b) As at the Latest Practicable Date, no Shares have been
disposed of by Christopher Nightingale pursuant to the Proposed
Disposal. Notwithstanding the above, Shareholders should note that
at present, there is no assurance that the Proposed Disposal will
take place.
1.6 The Preferential Offering
(a) The Company is proposing to make a preferential offering
(the "Preferential Offering") on a non-renounceable and
non-underwritten basis, for the issue of up to 600,000,000 new
Shares (the "Preferential Offering Shares") at the issue price of
US$0.008 for each Preferential Offering Share (the "Issue Price"),
of which the final allotment will be:
(i) based on the number of Preferential Offering Shares applied
for by the Subscribing Shareholders; and
(ii) in the event of over-subscription, made in proportion to
the number of Preferential Offering Shares applied for by each
Subscribing Shareholder relative to the total number of
Preferential Offering Shares available for subscription, fractional
Shares to be rounded upwards or downwards in the absolute
discretion of the Directors.
(b) The Preferential Offering is conditional upon, amongst other
things, (i) the approval of the Shareholders for the Preferential
Offering being obtained at the EGM; (ii) the approval of the
Independent Shareholders for the Revised Convertible Loan being
obtained at the EGM; and (ii) the admission of the Preferential
Offering Shares to trading on AIM becoming effective.
(c) The Preferential Offering is proposed to be made on a non-renounceable basis.
(d) As this is not a rights issue, Entitled Shareholders will
not have any pro-rata provisional entitlements to the Preferential
Offering Shares. As such, Entitled Shareholders are required to
subscribe for the Preferential Offering Shares in accordance with
the manner set forth in the Offer Documents.
(e) The Preferential Offering will also be undertaken by the
Company on a non-underwritten basis.
(f) In the event of any Preferential Offering Shares not being
taken up by the Entitled Shareholders, the Company may offer these
Preferential Offering Shares to third parties for subscription at
the same price as the Issue Price and on the same terms as those
offered and applicable to the Entitled Shareholders.
Further details in relation to the Preferential Offering are set
forth in paragraph 2 of this Circular.
1.7 The Revised Convertible Loan
(a) On 14 May 2010, the Company entered into a convertible loan
agreement (the "Original Convertible Loan Agreement") with
Christopher Nightingale, pursuant to which Christopher Nightingale
agreed to provide the Company with an unsecured and interest-free
convertible facility of US$2,000,000 (the "Original Convertible
Loan"). The Original Convertible Loan was repayable on 1 May 2012
(the "Initial Repayment Date") and was convertible at any time at
the option of Christopher Nightingale during the term of the
Original Convertible Loan into ordinary listed shares in the
Company (the "Convertible Loan Shares") at a price of US$0.03 per
Convertible Loan Share (the "Original Conversion Price").
(b) On 1 March 2011, the Company entered into an addendum to the
Original Convertible Loan Agreement (the "Addendum to the Original
Convertible Loan Agreement") with Christopher Nightingale, pursuant
to which, Christopher Nightingale had agreed to grant the Company
an additional loan of US$1,000,000 based on the same terms under
the Original Convertible Loan Agreement. A further facility for an
aggregate amount of US$2,000,000 was subsequently made available by
Christopher Nightingale to the Company on the same terms as under
the Original Convertible Loan Agreement. As the term of the
Original Convertible Loan has expired, the Original Convertible
Loan has been extended on a rolling basis since the Initial
Repayment Date. At present, a facility of an aggregate amount of
approximately US$4,500,000 has been drawn-down by the Company under
the terms of the Original Convertible Loan Agreement for general
working capital purposes of the Company.
(c) On 3 October 2012, Christopher Nightingale signed a revised
convertible loan agreement (the "Revised Convertible Loan
Agreement"), which the Company will sign after the relevant
Independent Shareholders' approval has been obtained, pursuant to
which, the Original Convertible Loan Agreement (together with the
Addendum to the Original Convertible Loan Agreement) is to be
amended, restated and superseded in its entirety by the Revised
Convertible Loan Agreement, and as a result of which it was agreed,
inter alia, that (i) an unsecured term loan in an aggregate
principal amount of US$7,000,000 (the "Revised Convertible Loan")
would be granted by Christopher Nightingale to the Company; and
(ii) the term of the Original Convertible Loan would be extended
for a period of an additional two (2) years and on the terms and
subject to the conditions set out in the Revised Convertible Loan
Agreement.
(d) The Revised Convertible Loan is conditional upon:
(i) the Whitewash Resolution being passed by the Shareholders at
the EGM to be convened; and
(ii) the Whitewash Waiver being granted by the SIC,
being obtained by 14 November 2012 (the "Cut-off Date"), failing
which any amount outstanding at that date shall be repaid by the
Company to Christopher Nightingale, and the Revised Convertible
Loan Agreement shall become null and void.
(e) On 14 November 2012:
(i) a letter ("Christopher's Letter") has been signed by
Christopher Nightingale and addressed to the Company, pursuant to
which Christopher Nightingale has expressed, inter alia:
(1) his consent that the Cut-off Date be extended from 14
November 2012 to 31 January 2013, or to any other date as may be
agreed by Christopher Nightingale in writing; and
(2) his confirmation that the Addendum to the Original
Convertible Loan Agreement shall be amended, restated and
superseded in its entirety by the Revised Convertible Loan
Agreement, and
(ii) the Company has confirmed, vide its letter (the "Company's
Letter"), its acknowledgment and acceptance of the terms stated in
Christopher's Letter .
For the purposes herein, "Extension Letters" shall mean
Christopher's Letter and the Company's Letter.
(f) Further details on the Revised Convertible Loan are set
forth in paragraph 3 of this Circular.
1.8 Purpose of the Circular
The purpose of this Circular is to provide the Shareholders and
the Independent Shareholders with, amongst other things, the
relevant information relating to the Preferential Offering and the
Revised Convertible Loan, and to seek the approvals of the
Shareholders and/or the Independent Shareholders, as the case may
be, for the ordinary resolutions set out in the Notice of EGM.
2. THE PREFERENTIAL OFFERING
2.1 Basis of the Preferential Offering
The Preferential Offering is proposed to be offered on a
non-renounceable and non-underwritten basis by the Company, with
the issue of up to 600,000,000 Preferential Offering Shares at the
Issue Price, final allotment to be based on the number of
Preferential Offering Shares applied for by the Subscribing
Shareholders, and in the event of over-subscription, in proportion
to the number of Preferential Offering Shares applied for by each
Subscribing Shareholder relative to the total number of
Preferential Offering Shares available for subscription, fractional
Shares to be rounded upwards or downwards in the absolute
discretion of the Directors.
The Preferential Offering Shares are payable in full upon
application and, upon allotment and issue, will rank pari passu in
all respects with the then existing Shares for any dividends,
rights, allotments or other distributions, the Record Date for
which falls on or after the date of issue of the Preferential
Offering Shares.
The Issue Price represents a discount of approximately 70.91% to
the closing price of US$0.0275 per Share on AIM on 29 May 2012,
being the last trading day prior to the Announcement and the date
on which the Issue Price was set, and a discount of approximately
68% to the closing price of US$0.025 on the LPD.
As at the LPD, the Total Shareholding of the Company consists of
1,935,916,264* Shares. The Company will issue up to 600,000,000
Preferential Offering Shares pursuant to the Preferential
Offering.
* Note: Based on the Unaudited Interim Financial Results ended
31 August 2012, it was disclosed that the Total Shareholding of the
Company consists of 1,610,473,974 Shares (excluding 1,922,966
treasury shares). For the avoidance of doubt, Shareholders should
note that:
(a) an additional 275,442,290 Shares were allotted (but not
issued) by the Company as part settlement for the consideration for
the purchase of patents and technology from a related party
transaction, and such number of Shares was included in the capital
reserve as the Shares had not been issued as at 31 August 2012.
Such additional Shares were only issued pursuant to the said
transaction subsequent to 31 August 2012, being the date to which
the Unaudited Interim Financial Results ended 31 August 2012 were
drawn up. Please also refer to note 11 at page 19 of the Unaudited
Interim Financial Results ended 31 August 2012 for further
information; and
(b) an aggregate of 50,000,000 Shares were allotted and issued
to an investor subsequent to 31 August 2012, being the date to
which the Unaudited Interim Financial Results ended 31 August 2012
were drawn up, at an issue price of US$0.008 per Share.
As this is a Preferential Offering and not a rights issue,
Entitled Shareholders will not have any pro-rata provisional
entitlements to Preferential Offering Shares. Each Entitled
Shareholder will be at liberty to apply for any number of
Preferential Offering Shares, up to a maximum of 600,000,000
Preferential Offering Shares. The Preferential Offering Shares will
be allotted to Subscribing Shareholders based on the number of
Preferential Offering Shares applied for by the respective
Subscribing Shareholder. In the event of over-subscription by
Subscribing Shareholders, the final allotment of Preferential
Offering Shares to the Subscribing Shareholders will be in
proportion to the number of Preferential Offering Shares applied
for by each Subscribing Shareholder relative to the total number of
Preferential Offering Shares available for subscription, being
600,000,000, fractional Shares to be rounded upwards or downwards
in the absolute discretion of the Directors.
Preferential Offering Shares not taken up by Entitled
Shareholders may be offered by the Company to third parties for
subscription at the same price as the Issue Price and on the same
terms as those offered and applicable to the Entitled
Shareholders.
2.2 Principal Terms of the Preferential Offering Shares
Number of : Up to 600,000,000 Preferential
Preferential Offering Shares to be issued.
Offering Shares
Basis of subscription : Entitled Shareholders will
be at liberty to apply for
any number of Preferential
Offering Shares, up to a maximum
of 600,000,000 Preferential
Offering Shares.
Basis of allotment : The Preferential Offering
Shares will be allotted to
Subscribing Shareholders based
on the number of Preferential
Offering Shares applied for
by the respective Subscribing
Shareholder. In the event
of over-subscription by Subscribing
Shareholders, the final allotment
of Preferential Offering Shares
to the Subscribing Shareholders
will be in proportion to the
number of Preferential Offering
Shares applied for by each
Subscribing Shareholder relative
to the total number of Preferential
Offering Shares available
for subscription, being 600,000,000,
fractional Shares to be rounded
upwards or downwards in the
absolute discretion of the
Directors.
Issue Price : US$0.008 for each Preferential
Offering Share, payable in
full upon application.
Status of : The Preferential Offering
the Preferential Shares will, upon allotment
Offering Shares and issuance, rank pari passu
in all respects with the then
existing Shares for any dividends,
rights, allotments or other
distributions, the Record
Date for which falls on or
after the date of issue of
the Preferential Offering
Shares.
Eligibility : Please see paragraph 2.4 of
to participate this Circular.
Discount : The Issue Price represents
a discount of approximately
(i) 70.91% to the closing
price of US$0.0275 per Share
on AIM on 29 May 2012, being
the last trading day prior
to the Announcement and (ii)
68% to the closing price of
US$0.025 per Share on the
Latest Practicable Date.
Trading of : Upon the admission of the
the Preferential Preferential Offering Shares
Offering Shares to trading on AIM, the Preferential
Offering Shares will be traded
on AIM under the CREST system.
Applications : The terms and conditions and
for and acceptances the procedures for applications
of the allotments for the Preferential Offering
Shares pursuant to the Preferential
Offering will be set out in
the Offer Documents.
Non-underwriting : The Preferential Offering
will not be underwritten.
Shortfall : Preferential Offering Shares
subscription not taken up by Entitled Shareholders
may be offered by the Company
to third parties for subscription
at the same price as the Issue
Price and on the same terms
as those applicable and offered
to the Entitled Shareholders.
Governing : Laws of Singapore.
law
The above terms and conditions of the Preferential Offering are
subject to such changes as the Directors may deem fit.
2.3 Conditions for the Preferential Offering
Shareholders should note that the Preferential Offering is
subject to, inter alia, the following:-
(a) the admission of the Preferential Offering Shares to trading
on AIM becoming effective; and
(b) the Preferential Offering being approved by the Shareholders
and the Revised Convertible Loan being approved by Independent
Shareholders at the EGM.
An application will be made to the London Stock Exchange for the
Preferential Offering Shares to be admitted to trading on AIM.
2.4 Eligibility of Shareholders to Participate in the Preferential Offering
(a) Entitled Shareholders
Entitled Shareholders will be entitled to participate in the
Preferential Offering and to receive the Offer Documents at their
registered addresses on the Register of Members or the Depositary
Register, as the case may be.
Entitled Depositary Interest Holders who do not receive the
Offer Documents may obtain them from the Depositary at
Computershare, Corporate Actions Projects, Bristol, BS99 6AH, for
the period commencing from the Opening Date up to the Closing
Date.
Entitled Scripholders who do not receive the Offer Documents may
obtain them from the Company at 1 Science Park Road, #02-09, The
Capricorn, Singapore Science Park II, Singapore 117528 or the Share
Registrar at 50 Raffles Place #32-01 Singapore Land Tower Singapore
048623 for the period commencing from the Opening Date up to the
Closing Date.
(b) Foreign Shareholders
The documents relating to the Preferential Offering will be
distributed only in Singapore and the United Kingdom. The
distribution of the documents relating to the Preferential Offering
may be prohibited or restricted (either absolutely or subject to
various relevant securities requirements, whether legal or
administrative, being complied with) in certain jurisdictions under
the relevant securities laws of those jurisdictions. For practical
reasons and in order to avoid any violation of the securities
legislation applicable in countries other than Singapore and the
United Kingdom, the Preferential Offering is only made in Singapore
and the United Kingdom and the Offer Documents will not be
despatched to Foreign Shareholders or into any jurisdictions
outside Singapore and the United Kingdom.
Accordingly, Foreign Shareholders will not be entitled to
participate in the Preferential Offering. No purported application
thereof by Foreign Shareholders will be valid or accepted.
The Company reserves the right to treat as invalid any
Application Form which (a) appears to the Company or its agents to
have been executed in any jurisdiction outside Singapore or the
United Kingdom which may violate the applicable legislation of such
jurisdiction; (b) provides an address outside Singapore or the
United Kingdom for the receipt of the Offer Documents; or (c)
purports to exclude any express or deemed representation or
warranty. The Company further reserves the right to reject any
applications for the Preferential Offering Shares where it
believes, or has reason to believe, that such applications and/or
acceptances may violate the applicable legislation of any
jurisdiction.
Foreign Shareholders who wish to be eligible to participate in
the Preferential Offering may provide a Singapore or United Kingdom
address by sending a written notification to:
(i) in respect of applications by the Entitled Depositary Interest Holders, the Depositary at Computershare, Corporate Actions Projects, Bristol, BS99 6AH; or
(ii) in respect of applications by the Entitled Scripholders,
the Share Registrar at 50 Raffles Place #32-01 Singapore Land Tower
Singapore 048623,
not later than three (3) Market Days before the Offer Record
Date.
Notwithstanding the above, Shareholders and any other person
having possession of the documents relating to the Preferential
Offering are advised to inform themselves of and to observe any
legal requirements applicable thereto. No person in any territory
outside Singapore and the United Kingdom receiving the documents
relating to the Preferential Offering may treat the same as an
offer, invitation or solicitation to subscribe for any Preferential
Offering Shares unless such offer, invitation or solicitation could
lawfully be made without violating any regulatory or legal
requirements in those territories.
The procedures for applications and acceptances of the
Preferential Offering Shares pursuant to the Preferential Offering
will be set out in the Offer Documents.
2.5 Purpose of the Preferential Offering and Use of Proceeds
The Company expects to receive net proceeds of approximately
US$4,424,000 from the Preferential Offering after deducting
professional fees and related expenses of approximately US$376,000,
on the assumption that all 600,000,000 Preferential Offering Shares
are subscribed for under the Preferential Offering. The Company
intends to use the net proceeds of approximately US$4,424,000
raised from the Preferential Offering for the general working
capital purposes of the Company and to develop the business and
technologies of the Company, particularly those in relation to the
1000 Island Project.
Pending the deployment of the proceeds for the uses mentioned
above, the proceeds may be placed as deposits with banks and/or
financial institutions or invested in short-term money market or
debt instruments and/or marketable securities or used for any other
purposes on a short-term basis as the Directors may in their
absolute discretion deem fit.
The Preferential Offering is not underwritten, in view of the
cost savings by the Company in respect of underwriting fees, and in
view of the fact that Preferential Offering Shares which are not
otherwise taken up or allotted for any reason may be offered by the
Company to third parties for subscription at the same price as the
Issue Price.
2.6 Takeover Limits
As this is a Preferential Offering and not a rights issue,
Entitled Shareholders will not have any pro-rata provisional
entitlements to Preferential Offering Shares. Each Entitled
Shareholder will be at liberty to apply for any number of
Preferential Offering Shares, up to a maximum of 600,000,000
Preferential Offering Shares.
The subscription for and acquisition of Shares are regulated by,
amongst other things, the Takeover Code. Except with the consent of
the SIC, where:
(a) any person acquires whether by a series of transactions over
a period of time or not, Shares which (taken together with Shares
held or acquired by persons acting in concert with them) carry 30%
or more of the voting rights in the Company; or
(b) any person who, together with persons acting in concert with
him, holds not less than 30% but not more than 50% of the voting
rights in the Company and such person, or any person acting in
concert with him, acquires in any period of six (6) months
additional Shares carrying more than 1% of the voting rights in the
Company,
such person must extend a mandatory take-over offer immediately
to the Shareholders for the remaining Shares in accordance with the
provisions of the Takeover Code. In addition to such person, each
of the principal members of the group of persons acting in concert
with him may, according to the circumstances of the case, have the
obligation to extend an offer.
Depending on the level of subscription for the Preferential
Offering Shares, the Company will, if necessary, scale down the
subscription for the Preferential Offering Shares by any of the
Substantial Shareholders who subscribe for Preferential Offering
Shares, to avoid placing the relevant Substantial Shareholder
and/or parties acting in concert with it/him/her in the position of
incurring a mandatory general offer obligation under the Takeover
Code as a result of the other Entitled Shareholders not applying
for any Preferential Offering Shares or the other Entitled
Shareholders only applying for a relatively small number of
Preferential Offering Shares.
2.7 AIM quotation
An application will be made to the London Stock Exchange for the
admission of the Preferential Offering Shares to trading on AIM in
accordance with the indicative timetable set out at the start of
this Circular. If the London Stock Exchange does not admit the
Preferential Offering Shares to trading on AIM before the
expiration of 3 months after the date of issue of the Offer
Documents, the Company will not issue any Preferential Offering
Shares and will refund all application monies for the Preferential
Offering Shares within 14 calendar days, without interest being
paid to the relevant Subscribing Shareholders.
The fact that the London Stock Exchange may admit the
Preferential Offering Shares to trading on AIM is not to be taken
in any way as an indication of the merits of the Company or the
Preferential Offering Shares now offered for subscription.
3. THE REVISED CONVERTIBLE LOAN AGREEMENT
3.1 Introduction
Under the Revised Convertible Loan Agreement, it was agreed,
inter alia, that:
(a) Christopher Nightingale will grant to the Company the
Revised Convertible Loan on the terms and subject to the conditions
of the Revised Convertible Loan Agreement;
(b) the term of the Revised Convertible Loan commences on 3
October 2012 (subject to the satisfaction of the conditions
precedent prescribed under the Revised Convertible Loan Agreement)
and shall terminate on 3 October 2014 (the "Revised Repayment
Date;
(c) Christopher Nightingale shall have the rights (the
"Conversion Rights") at any time during the term of the Revised
Convertible Loan to elect to convert any part of the Revised
Convertible Loan into ordinary listed shares in the Company (the
"Revised Convertible Loan Shares") at a price of US$0.008 per
Revised Convertible Loan Share (the "Revised Conversion Price");
and
(d) the Revised Convertible Loan Agreement is conditional upon, inter alia:
(i) the waiver by the SIC being obtained by the Concert Parties
in relation to the obligation of the Concert Parties or any of them
to make a general offer for all the Shares of the Company under
Rule 14 of the Takeover Code and such waiver not having been
amended or revoked prior to completion of the Revised Convertible
Loan Agreement, and to the extent that such waiver is subject to
any conditions required to be fulfilled prior to completion of the
Revised Convertible Loan Agreement, all such conditions having been
fulfilled (the "Whitewash Waiver"); and
(ii) the Whitewash Resolution,
being obtained before the Cut-off Date. Pursuant to the
Extension Letters, the Cut-off Date has been extended from 14
November 2012 to 31 January 2013, or to such other date to be
determined by Christopher Nightingale in writing.
Further information on the amendments to be made to the Original
Convertible Loan Agreement is set out in paragraph 3.2 of this
Circular.
The Revised Conversion Price for the Shares represents a premium
of approximately 6.4% to the last audited net asset value per Share
of the Company and represents a discount of approximately 68% to
the last closing price of US$0.025 for the Shares on AIM on the
Latest Practicable Date.
3.2 Information on the Amendments to the Original Convertible Loan Agreement
(a) Background Information on the Original Convertible Loan Agreement
The Company had on 14 May 2010 entered into the Original
Convertible Loan Agreement with Christopher Nightingale, pursuant
to which Christopher Nightingale had agreed to provide the Company
with the Original Convertible Loan for general working capital
purposes.
The salient terms of the Original Convertible Loan Agreement are
as set forth:
(i) The term of the Original Convertible Loan commenced on 14
May 2010 and was to terminate on the Initial Repayment Date or on
such other date as the parties may agree in writing.
(ii) Christopher Nightingale shall have the right at any time
during the term of the Original Convertible Loan by notice in
writing to elect to convert any part of the Original Convertible
Loan into Convertible Loan Shares at the Original Conversion
Price.
(iii) The Company shall have the right to, without penalty,
repay the whole of the outstanding Original Convertible Loan before
the Initial Repayment Date.
(iv) Standard default provisions are included so that if the
Company defaults in any of the circumstances listed in the Original
Convertible Loan Agreement, Christopher Nightingale shall have the
right to demand:
(1) immediate repayment of the Original Convertible Loan;
(2) all reasonably incurred recoverable losses and other damages; or
(3) to exercise any other rights or remedies available to it under the agreement.
(v) The granting of the Original Convertible Loan was
conditional upon the Independent Shareholders' approval in relation
to the granting of the exemption from the provisions of the
Takeover Code having been obtained.
On 7 May 2010, the SIC granted its waiver of the obligation
under Rule 14.1 of the Takeover Code for Christopher Nightingale
and parties deemed acting in concert with him within the meaning of
the Takeover Code to make a general offer of the Company arising
from the allotment and issue of Shares upon conversion of the
Original Convertible Loan (the "Original Whitewash Waiver"). The
Independent Shareholders approved the resolution in relation to the
Original Whitewash Waiver subsequently in an extraordinary general
meeting held on 31 May 2010.
Further facilities for an aggregate amount of US$3,000,000 have
subsequently been made available by Christopher Nightingale to the
Company pursuant to the Addendum to the Original Convertible Loan
Agreement on the same terms as under the Original Convertible Loan
Agreement. As the term of the Original Convertible Loan has
expired, the Original Convertible Loan has been extended on a
rolling basis since the Initial Repayment Date. As at 31 August
2012, being the date to which the Unaudited Interim Financial
Results ended 31 August 2012 was drawn up, a facility of
approximately US$3.34 million has been drawn-down by the Company
for general working capital purposes of the Company.
(b) Information on the Revised Convertible Loan Agreement
Pursuant to the Revised Convertible Loan Agreement, the parties
have agreed that the Original Convertible Loan Agreement (together
with the Addendum to the Original Convertible Loan Agreement) be
amended, restated and superseded in its entirety by the Revised
Convertible Loan Agreement. The salient terms of the Revised
Convertible Loan Agreement are as set forth:
(i) Amendment to the facility amount
Pursuant to the Revised Convertible Loan Agreement, the parties
have determined to increase the total facility available to the
Company to an aggregate amount of US$7,000,000. Further, parties
have also agreed that in the event of redemption by the Company of
all or any of the Revised Convertible Loan during its term,
Christopher Nightingale shall have the option to require the
Company to draw the amount of the Revised Convertible Loan in order
to enable him to exercise his Conversion Rights. Such option was
not available under the Original Convertible Loan Agreement.
The two relevant clauses under the respective agreement are as
set forth:
Old Clause 3:
"The Lender grants to the Borrower an unsecured term loan in an
aggregate principal amount of US$2,000,000 on the terms, and
subject to the conditions, of this Agreement. In addition, the
Lender may on request of the Borrower grant the Borrower an
additional loan facility for an amount to be agreed upon between
the parties on the same terms and conditions, subject to a separate
supplemental agreement to this Agreement to be entered into between
the parties".
New Clause 3:
"The Lender grants to the Borrower an unsecured term loan in an
aggregate principal amount of US$7,000,000 on the terms, and
subject to the conditions, of this Agreement. In addition, the
Lender may on request of the Borrower grant the Borrower an
additional loan facility for an amount to be agreed upon between
the parties on the same terms and conditions, subject to a separate
supplemental agreement to this Agreement to be entered into between
the parties. In addition, in the event of redemption by the
Borrower of all or any part of the Loan during the term of the
Loan, the Lender shall retain the option to require the Borrower to
draw the amount of the Loan in order to enable him to exercise his
conversion rights".
(ii) Amendment to the term of the loan
Pursuant to the Revised Convertible Loan Agreement, the parties
have agreed to extend the Initial Repayment Date from 1 May 2012 to
3 October 2014. The two relevant clauses under the respective
agreement are as set forth:
Old Clause 5:
"The term of the Loan commences on the date of this Agreement
and shall terminate on 1(st) May 2012 (the "Repayment Date") or on
such other date as the parties may agree in writing, on which date
the loan shall be repaid by the Borrower".
New Clause 5:
"The term of the Loan commences on the date of this Agreement
(subject to the fulfilment of the conditions precedent under
sub-clause 2.1 herein) and shall terminate on 3 October 2014 (being
the date two (2) years from the date of this Agreement)(the
"Repayment Date") or on such other date as the parties may agree in
writing, on which date the loan shall be repaid by the
Borrower".
(iii) Amendment to the interest rate
The Original Convertible Loan was interest-free under the terms
of the Original Convertible Loan Agreement. Pursuant to the Revised
Convertible Loan Agreement, the parties have agreed that an
interest rate of 4% per annum be imposed on the Revised Convertible
Loan. The relevant clauses under the respective agreement are as
set forth:
Old Clause 7.1:
"The Loan shall be interest free".
New Clause 7.1:
"The Loan shall be subject to the payment by the Borrower of a
nominal interest rate of 4% per annum, such interest to be payable
on amounts outstanding and to only be payable upon redemption of
the Loan or conversion of the Loan into shares of the Borrower
("Conversion Shares"), and subject to the conversion price to be
amended to the same price as that made to other Shareholders of the
Borrower in the proposed preferential offering of the Borrower,
which is US$0.008 per Share ("Conversion Price")".
New Clause 8.2:
"If the conversion of the Loan into Conversion Shares does not
take place either fully or partially, the Borrower shall on the
Repayment Date repay all outstanding sums of the Loan, including
the interest on the Loan, in United States dollars"
(iv) Amendment to the conversion price
Pursuant to the Revised Convertible Loan Agreement, the parties
have agreed to revise the conversion price of the loan from US$0.03
per Convertible Loan Share to US$0.008 per Revised Convertible Loan
Share. The Conversion Rights are exercisable by Christopher within
the term of the Revised Convertible Loan. In the event that the
conversion does not take place either fully or partially within the
term of the Revised Convertible Loan, all outstanding amounts,
including any interest payable, shall be repaid by the Company on
the Revised Repayment Date in US$. The relevant clauses under the
respective agreement are as set forth:
Old Clause 8:
"The Lender shall have the right at any time during the term of
the Loan by notice in writing to elect to convert any part of the
Loan into ordinary listed shares of the Borrower at a price of US$
0.03c (three US cents) per share".
New Clause 8.1:
"The Lender shall have the right at any time during the term of
the Loan by notice in writing to elect to convert any part of the
Loan into ordinary listed shares of the Borrower at a price of US$
0.008 per share".
New Clause 8.2:
"If the conversion of the Loan into Conversion Shares does not
take place either fully or partially, the Borrower shall on the
Repayment Date repay all outstanding sums of the Loan, including
the interest on the Loan, in United States dollars"
(v) Amendment to the drawn down amount
Under the Original Convertible Loan Agreement, the Company
acknowledged that it had drawn down the sum of US$1,750,000 on or
prior to the date of the Original Convertible Loan Agreement. Under
the Revised Convertible Loan Agreement, the Company acknowledged
that it had drawn down the sum of US$5,000,000* on or prior to the
date of the Revised Convertible Loan Agreement. The two relevant
clauses under the respective agreement are as set forth:
Old Clause 6.1:
"The Loan is available for drawing by the Borrower during the
term of this Agreement and the Borrower acknowledges having drawn
down the sum of US$1,750,000 on or prior to the date of this
Agreement".
New Clause 6.1:
"The Loan is available for drawing by the Borrower during the
term of this Agreement and the Borrower acknowledges having drawn
down the sum of US$5,000,000* on or prior to the date of this
Agreement".
*Note: Pursuant to the Extension Letters, Christopher
Nightingale has confirmed, and the Company has acknowledged, that
the aggregate drawn-down amount was approximately US$4,500,000 as
of the date of the Revised Convertible Loan Agreement. As such, new
Clause 6.1 shall be deemed amended accordingly insofar as the
aggregate drawn-down amount is concerned.
3.3 Rationale for the Revised Convertible Loan Agreement and Use of Proceeds
In addition to the Original Convertible Loan of US$2,000,000,
further facilities for an aggregate amount of US$3,000,000 have
subsequently been made available by Christopher Nightingale to the
Company, pursuant to the Addendum to the Original Convertible Loan
Agreement, on the same terms as under the Original Convertible
Loan. As at 30 November 2012, the Company has already drawn-down
approximately US$4,500,000 which has been utilised for the general
working capital purposes of the Company.
Christopher Nightingale has been supporting the Company's
business and development since 2010, particularly in its research
and development as well as marketing of the technologies developed
by the Company, through the granting of the unsecured and
interest-free Original Convertible Loan. As the term of the
Original Convertible Loan expired on 1 May 2012 and has since then
been extended on a rolling basis, in view of the new investors
coming into the Company, it is necessary to find an appropriate and
longer term arrangement in respect of the amounts outstanding to
Christopher Nightingale. As he is not participating in the
Preferential Offering (either directly or indirectly through
persons acting in concert with him (as defined under the Takeover
Code)), the Company also deems it fit to amend the terms of the
Original Convertible Loan Agreement and revise the conversion price
to be similar to the Preferential Offering Price.
Further, it is anticipated that the Proposed Transactions will
result in changes in the Concert Parties' interests in the enlarged
Total Shareholding.
As illustrated in Table B in paragraph 4.4 of this Circular, the
interests of the Concert Parties in the enlarged Total Shareholding
will be diluted as a result of the completion of the Preferential
Offering (particularly under the Maximum Subscription Scenario).
The Revised Convertible Loan will nonetheless allow the Concert
Parties to offset such dilution and return approximately to their
current shareholding interests in the enlarged Total Shareholding
upon the exercise of the Conversion Rights by Christopher
NIghtingale.
In the light of the above, the Company believes that there will
be no prejudice to the interest of the Independent Shareholders of
the Company, as the Preferential Offering and the Revised
Convertible Loan will allow the Company to raise working capital
for its new projects, and at the same time will allow the
Independent Shareholders and the Concert Parties to retain
approximately their respective current interests in the Total
Shareholding under the Maximum Subscription Scenario as set out in
Table B in paragraph 4.4 of this Circular.
3.4 Related Party Transaction
Mr. Christopher Nightingale is a Director and, together with the
parties acting in concert with him, has an interest, direct or
indirect, in 49.07% of the Total Shareholding as of the LPD. The
Revised Convertible Loan, therefore, is a related party transaction
under the AIM Rules. Accordingly, the Independent Directors, having
consulted with Beaumont Cornish, the Company's nominated adviser,
consider that the terms of the Revised Convertible Loan Agreement
are fair and reasonable insofar as the Independent Shareholders are
concerned.
3.5 Abstention from voting
Christopher Nightingale will abstain, and will ensure that
Perfection Group Limited and other parties acting in concert with
him will abstain, from voting at the EGM in respect of the Revised
Convertible Loan.
Christopher Nightingale has also abstained from making any
recommendation in respect of the Revised Convertible Loan.
4. THE WHITEWASH RESOLUTION
4.1 Application of the Takeover Code
Under Rule 14 of the Takeover Code, any person who:
(a) acquires whether by a series of transactions over a period
of time or not, Shares which (taken together with Shares held or
acquired by persons acting in concert with him) carry 30% or more
of the voting rights in the Company; or
(b) together with persons acting in concert with him, holds not
less than 30% but not more than 50% of the voting rights in the
Company and such person, or any person acting in concert with him,
acquires in any period of six (6) months additional Shares carrying
more than 1% of the voting rights in the Company,
is required to make a mandatory general offer for all Shares in
the Company which he does not already own or control (the
"Mandatory Offer"), unless such obligation to make the Mandatory
Offer is waived by the SIC.
4.2 Concert Parties
Under the Takeover Code, persons "acting in concert" comprise
individuals or companies who, pursuant to an agreement or
understanding (whether formal or informal), co-operate through the
acquisition by any of them of shares in a company, to obtain or
consolidate effective control of that company.
Christopher Nightingale is a 100% shareholder of Perfection
Group Limited, a controlling Shareholder of the Company. For the
purposes of this Circular, "Concert Parties" means Christopher
Nightingale and all persons (including Perfection Group Limited)
deemed to be acting in concert with him (as defined under the
Takeover Code).
4.3 Information on Christopher Nightingale
Christopher Nightingale is the Chairman of the Company and is 54
years old this year. A solicitor by profession, Christopher
Nightingale was, until 31 July 2008, the Executive Deputy Chairman
of Global Voice Group Limited (now renamed Eunetworks Limited), a
company that he co-founded in 2002 and which is listed on the
Singapore Securities Exchange Trading Limited (SGX-ST). Christopher
Nightingale resigned from his position at Global Voice Group
Limited in order to concentrate on the development of the
technology of the Company. Before going into business in 1997 and
subsequently developing Global Voice Group Limited, Christopher
Nightingale was in legal practice, gaining admission as a solicitor
in England in 1983 and in Hong Kong in 1988.
4.4 Effects of the issuance of the Revised Convertible Loan
Shares (taking into consideration the occurrence and completion of
the Proposed Disposal, Preferential Offering, Placement and Share
Option)
(a) As at 5 November 2012 (being a date used for illustrative purposes only):
(i) the Total Shareholding comprises 1,885,916,264 Shares
(excluding 1,922,966 treasury shares); and
(ii) Christopher Nightingale is a registered owner of 2 Shares,
and is deemed interested in 950,000,664 Shares through other
parties acting in concert with him (within the meaning of the
Takeover Code), including Perfection Group Limited.
(b) The effects and changes to the number of issued Shares and
share capital of the Company following the completion of the
Proposed Transactions are set out below:
Number of Shares Share Capital
(US$)
------------------------- ------------------ --------------
Issued and paid-up
share capital
as at 5 November
2012, being a
date used for
illustrative
purposes only. 1,885,916,264(1) 37,072,125(2)
------------------------- ------------------ --------------
After the issue of Preferential
Offering Shares
------------------------- ----------------------------------
Increase in issued
share capital
from the issue
of Preferential
Offering Shares(3) 600,000,000 4,800,000
------------------------- ------------------ --------------
Enlarged share
capital 2,485,916,264 41,872,125
------------------------- ------------------ --------------
After the issue of Placement
Shares
------------------------- ----------------------------------
Increase in issued
share capital
from the issue
of Placement
Shares(4) 122,950,819 3,000,000
------------------------- ------------------ --------------
Enlarged share
capital 2,608,867,083 44,872,125
------------------------- ------------------ --------------
After the exercise of Share
Option
------------------------- ----------------------------------
Increase in issued
share capital
from the issue
of Option Shares(5) 1,112,769,269 5,563,846
------------------------- ------------------ --------------
Enlarged share
capital 3,721,636,352 50,435,971
------------------------- ------------------ --------------
After the issue of Revised
Convertible Loan Shares
------------------------- ----------------------------------
Increase in issued
share capital
from the issue
of Revised Convertible
Loan Shares(6) 875,000,000 7,000,000
------------------------- ------------------ --------------
Enlarged share
capital 4,596,636,352 57,435,971
------------------------- ------------------ --------------
Notes:
(1) The figure excludes 1,922,966 treasury shares. Based on the
Unaudited Interim Financial Results ended 31 August 2012, it was
disclosed that the Total Shareholding of the Company consists of
1,610,473,974 Shares (excluding 1,922,966 treasury shares). For the
avoidance of doubt, Shareholders should note that:
(a) an additional 275,442,290 Shares were allotted (but not
issued) by the Company as part settlement for the consideration for
the purchase of patents and technology from a related party
transaction, and such number of Shares was included in the capital
reserve as the Shares have not been issued as at 31 August 2012.
Such additional Shares were only issued pursuant to the said
transaction subsequent to 31 August 2012, being the date to which
the Unaudited Interim Financial Results ended 31 August 2012 were
drawn up. Please also refer to note 11 at page 19 of the Unaudited
Interim Financial Results ended 31 August 2012 for further
information; and
(b) an aggregate of 50,000,000 Shares were allotted and issued
to an investor subsequent to 31 August 2012, being the date to
which the Unaudited Interim Financial Results ended 31 August 2012
were drawn up, at an issue price of US$0.008 per Share.
(2) The figure includes the fair value component of US$21,833,334, being the aggregate of:
(a) US$14,166,667, representing the fair value of 333,333,334
Shares (at the relevant date) issued by the Company as
consideration for the purchase of patents and technology for a
contractual consideration of US10,000,000 in January 2011; and
(b) US$7,666,667, representing the fair value of 133,333,333
Shares (at the relevant date) issued by the Company as purchase
consideration for certain patents and technology for a contractual
obligation of US$4,000,000.
Please refer to Note 8 of the Unaudited Interim Financial
Results ended 31 August 2012 for further information.
(3) On the assumption that the Preferential Offering is
completed and 600,000,000 Preferential Offering Shares are fully
subscribed for.
(4) On the assumption that the Placement Price is US$0.0244
(being at a 25% discount to the closing market price for a Share of
US$0.0325 as at the close of business on 5 November 2012, being a
date used for illustrative purposes only).
(5) On the assumption that MUP exercises its option under the
Share Option to subscribe for 1,112,769,269 Option Shares
representing 29.9% of the then enlarged Total Shareholding of the
Company at the Share Option Price.
(6) On the assumption that Christopher Nightingale is entitled
to and elects to fully convert the Revised Convertible Loan into
875,000,000 Revised Convertible Loan Shares pursuant to the terms
and conditions of the Revised Convertible Loan Agreement.
(c) The effects and resultant changes to the Concert Parties'
interests in the Total Shareholding as a result of the occurrence
and completion of the Proposed Transactions are set forth in Table
A below.
Table A:
Shareholder(s) Interest Interest Interest Interest in Interest in Interest in
in the Total in the Total in the Total the Total the Total the Total Shareholding
Shareholding Shareholding Shareholding Shareholding Shareholding after issue
at 5 November after the after issue after issue after issue of Revised
2012, being Proposed of Preferential of Placement of Option Convertible
a date used Disposal Offering Shares(4) Shares(5) Loan Shares(6)
for illustrative Shares(3)
purposes
only
---------------- ----------------------- ----------------------- ---------------------- ---------------------- ---------------------- ----------------------------
Number % Number % Number % Number % Number % Number %
of shares of shares of shares of shares of shares of shares
---------------- --------------- ------ --------------- ------ -------------- ------ -------------- ------ -------------- ------ ----------------- ---------
Concert
Parties 950,000,666(1) 50.37 800,000,666(2) 42.42 800,000,666 32.18 800,000,666 30.66 800,000,666 21.50 1,675,000,666(7) 36.44
---------------- --------------- ------ --------------- ------ -------------- ------ -------------- ------ -------------- ------ ----------------- ---------
LDK - - - - - - 122,950,819 4.71 122,950,819 3.30 122,950,819 2.67
---------------- --------------- ------ --------------- ------ -------------- ------ -------------- ------ -------------- ------ ----------------- ---------
MUP - - - - - - - - 1,112,769,269 29.90 1,112,769,269 24.21(8)
---------------- --------------- ------ --------------- ------ -------------- ------ -------------- ------ -------------- ------ ----------------- ---------
Other
Shareholders
(excluding
the Concert
Parties,
LDK and
MUP) 935,915,598 49.63 1,085,915,598 57.58 1,685,915,598 67.82 1,685,915,598 64.63 1,685,915,598 45.30 1,685,915,598 36.68
---------------- --------------- ------ --------------- ------ -------------- ------ -------------- ------ -------------- ------ ----------------- ---------
Total
Shareholding 1,885,916,264 100 1,885,916,264 100 2,485,916,264 100 2,608,867,083 100 3,721,636,352 100 4,596,636,352 100
---------------- --------------- ------ --------------- ------ -------------- ------ -------------- ------ -------------- ------ ----------------- ---------
Notes:-
(1) As of 5 November 2012, being a date used for illustrative
purposes only, Christopher Nightingale is the registered owner of 2
Shares and has a deemed interest in 950,000,664 Shares through:
(a) Perfection Group Limited, a company which is in turn
wholly-owned by him, which holds 804,877,709 Shares, representing
approximately 42.68% of the Total Shareholding; and
(b) several other nominees, who collectively own 145,122,955
Shares, representing approximately7.70% of the Total
Shareholding.
(2) On the assumption that 150,000,000 Shares are disposed of by
Christopher Nightingale pursuant to the Proposed Disposal.
(3) On the assumption that the Preferential Offering is
completed and 600,000,000 Preferential Offering Shares are fully
subscribed for.
(4) On the assumption that the Placement Price is US$0.024
(being at a 25% discount to the closing market price for a Share of
US$0.0325 as at the close of business on 5 November 2012, being a
date used for illustrative purposes only).
(5) On the assumption that MUP subscribes for 1,112,769,269
Option Shares which represent approximately 29.9% of the then
enlarged Total Shareholding (taking into consideration the Proposed
Disposal, Preferential Offering Shares and Placement Shares).
(6) On the assumption that Christopher Nightingale is entitled
to and elects to fully convert the Revised Convertible Loan to
875,000,000 Revised Convertible Loan Shares pursuant to the terms
and conditions of the Revised Convertible Loan Agreement.
(7) In the event that the Proposed Disposal does not take place,
the maximum holding of the Concert Parties would be 1,825,000,666
Shares representing 39.70% of the then Total Shareholding.
(8) Under the Supplemental Heads of Agreement, MUP is entitled
to subscribe for such number of Option Shares representing 29.9% of
the Total Shareholding exercisable in tranches of at least
US$100,000 at any time for six (6) months following the execution
of the Master Project Agreement. In the event that the Company
issues any Shares prior to the exercise of the Share Option by the
Company, MUP shall be entitled to subscribe for up to 29.9% of the
enlarged Total Shareholding upon the exercise of the Share Option.
As such, MUP's interest in the Total Shareholding will differ
depending on the timing at which the Share Option is exercised. In
the event that the Share Option is exercised subsequent to the
exercise of the Conversion Rights by Christopher Nightingale, MUP
will own 29.9% of the enlarged Total Shareholding of the Company
pursuant to the Share Option.
(d) Essentially, as illustrated in Table A, it is anticipated
that as a result of the occurrence and completion of the Proposed
Transactions:
(i) on the assumption that 150,000,000 Shares will be disposed
of by Christopher Nightingale to Independent Third Parties, the
interests in the Total Shareholding of the Concert Parties will
decrease from 50.37% to 42.42% and the interests in the Total
Shareholding of the other Shareholders (excluding the Concert
Parties) will increase from 49.63% to 57.58%;
(ii) on the assumption that (d)(i) occurs and the Preferential
Offering is completed and 600,000,000 Preferential Offering Shares
are fully subscribed for, the interests in the Total Shareholding
of the Concert Parties will decrease from 42.42% to 32.18% and the
interests in the Total Shareholding of the other Shareholders
(excluding the Concert Parties) will increase from 57.58% to
67.82%;
(iii) on the assumption that (d)(i) and (d)(ii) occur and the
Placement Price is US$0.0244, being a price at a 25% discount to
the closing market price for a Share of US$0.0325 as at the close
of business on 5 November 2012, being a date used for illustrative
purposes only (taking into account the Preferential Offering
Shares), the interests in the Total Shareholding of the Concert
Parties will decrease from 32.18% to 30.66% and the interests in
the Total Shareholding of the other Shareholders (excluding the
Concert Parties and LDK) will be diluted from 67.82% to 64.63%;
(iv) on the assumption that (d)(i), (d)(ii) and (d)(iii) occur
and MUP is entitled and fully elects to subscribe for 1,112,769,269
Shares which represent 29.9% of the then enlarged Total
Shareholding (taking into consideration the Preferential Offering
Shares and Placement Shares), the interests in the Total
Shareholding of the Concert Parties will decrease from 30.66% to
21.50% and the interests in the Total Shareholding of the other
Shareholders (excluding the Concert Parties, LDK and MUP) will be
diluted from 64.63% to 45.30%;
(v) on the assumption that (d)(i), (d)(ii), (d)(iii) and (d)(iv)
occur and Christopher Nightingale is entitled and elects to fully
convert the Revised Convertible Loan to 875,000,000 Revised
Convertible Loan Shares pursuant to the terms and conditions of the
Revised Convertible Loan Agreement (taking into account the
Preferential Offering Shares, Placement Shares and Option
Shares):
(1) the interests in the Total Shareholding of the Concert
Parties will in turn increase from 21.50% to 36.44%, resulting in
them having acquired Shares which carry 30% or more of the voting
rights of the Company and triggered the Mandatory Offer obligation
under Rule 14 of the Code, unless the obligation to make the
Mandatory Offer is waived by the SIC; and
(2) the interests in the Total Shareholding of the other
Shareholders (excluding the Concert Parties, LDK and MUP) will be
further diluted from 45.30% to 36.68%.
(e) In the event that the Proposed Disposal does not take place,
the maximum shareholding of the Concert Parties would be
1,825,000,666 Shares representing 39.70% of the Total Shareholding
(taking into account the Preferential Offering Shares, Placement
Shares and Option Shares, and assuming that the assumptions
mentioned in paragraphs (d)(ii), (iii), (iv) and (v) apply).
(f) For the purposes of seeking the Independent Shareholders'
approval for the Whitewash Resolution, the potential interests of
the Concert Parties in the Total Shareholding under the Maximum
Subscription Scenario and the Minimum Subscription Scenario (and
based on certain assumptions as set forth below) are set out in
Table B below.
Table B:
Shareholder(s) Interest in Interest Interest in Interest
the Total in the Total the Total in the Total
Shareholding Shareholding Shareholding Shareholding
as at 5 November after the after the after the
2012, being Proposed Preferential issue of
a date used Disposal Offering the Revised
for illustrative Convertible
purposes only Loan Shares(5)
---------------- ----------------------- ----------------------- ------------------------- -------------------------
Number % Number % Number % Number %
of Shares of Shares of Shares of Shares
---------------- --------------- ------ --------------- ------ ----------------- ------ ----------------- ------
Maximum Subscription Scenario
------------------------------------------------------------------------------------------------------------------------
Concert
Parties 950,000,666(1) 50.37 800,000,666(2) 42.42 800,000,666 32.18 1,675,000,666(6) 49.84
---------------- --------------- ------ --------------- ------ ----------------- ------ ----------------- ------
Other
Shareholders
(excluding
Concert
Parties) 935,915,598 49.63 1,085,915,598 57.58 1,685,915,598(3) 67.82 1,685,915,598 50.16
---------------- --------------- ------ --------------- ------ ----------------- ------ ----------------- ------
Total
Shareholding 1,885,916,264 100 1,885,916,264 100 2,485,916,264 100 3,360,916,264 100
---------------- --------------- ------ --------------- ------ ----------------- ------ ----------------- ------
Minimum Subscription Scenario
------------------------------------------------------------------------------------------------------------------------
Concert
Parties 950,000,666(1) 50.37 800,000,666(2) 42.42 800,000,666 42.42 1,675,000,666(7) 60.67
---------------- --------------- ------ --------------- ------ ----------------- ------ ----------------- ------
Other
Shareholders
(excluding
Concert
Parties) 935,915,598 49.63 1,085,915,598 57.58 1,085,915,598(4) 57.58 1,085,915,598 39.33
---------------- --------------- ------ --------------- ------ ----------------- ------ ----------------- ------
Total
Shareholding 1,885,916,264 100 1,885,916,264 100 1,885,916,264 100 2,760,916,264 100
---------------- --------------- ------ --------------- ------ ----------------- ------ ----------------- ------
Notes:-
(1) Please refer to note (1) of Table A under paragraph 4.4(c) of this Circular.
(2) On the assumption that 150,000,000 Shares are disposed of by
Christopher Nightingale pursuant to the Proposed Disposal.
(3) Under the Maximum Subscription Scenario, assuming all
600,000,000 Preferential Offering Shares are fully subscribed for
by the Subscribing Shareholder(s).
(4) Under the Minimum Subscription Scenario, assuming that none
of the 600,000,000 Preferential Offering Shares are taken up by the
Subscribing Shareholder(s), and the Preferential Offering Shares
not taken up are not offered to third parties by the Company.
(5) Assuming that Christopher Nightingale is entitled and elects
to fully convert the Revised Convertible Loan into 875,000,000
Revised Convertible Loan Shares and such conversion takes place
prior to the occurrence or completion of the Placement and Share
Option.
(6) In the event that the Proposed Disposal does not proceed,
the maximum holding of the Concert Parties under the Maximum
Subscription Scenario would be 1,825,000,666 Shares representing
54.30% of the Total Shareholding.
(7) In the event that the Proposed Disposal does not proceed,
the maximum holding of the Concert Parties under the Minimum
Subscription Scenario would be 1,825,000,666 Shares representing
66.10% of the Total Shareholding.
(g) As illustrated in Table B above, it is anticipated that:
(i) the interests of the Concert Parties in the Total
Shareholding will decrease from 50.37% to 42.42% and the interests
of the other Shareholders (excluding the Concert Parties) in the
Total Shareholding will increase from 49.63% to 57.58% as a result
of the Proposed Disposal, on the assumption that 150,000,000 Shares
will be disposed of;
(ii) subsequent to the completion of the Proposed Disposal:
(1) under the Maximum Subscription Scenario:
(A) the interests of the Concert Parties in the Total
Shareholding will decrease from 42.42% to 32.18% and the interests
of the other Shareholders (excluding the Concert Parties) will
increase from 57.58% to 67.82%, as a result of the completion of
the Preferential Offering; and
(B) as a result of the exercise of the Conversion Rights by
Christopher Nightingale (assuming that such exercise takes place
prior to the Placement and Share Option):
(i) the interests of the Concert Parties in the Total
Shareholding will in turn increase from 32.18% to 49.84% (being a
shareholding interest close to their current aggregate interest in
the Total Shareholding of 50.37%), resulting in them having
acquired Shares carrying more than 1% of the voting rights in the
Company in any period of six (6) months and triggered the
obligation to make a Mandatory Offer, unless such obligation is
waived by the SIC; and
(ii) the interests of the other Shareholders (excluding the
Concert Parties) will be diluted from 67.82% to 50.16% (being a
shareholding interest close to their current aggregate interest in
the Total Shareholding of 49.63%).
(2) under the Minimum Subscription Scenario:
(A) the interests of the Concert Parties and the other
Shareholders (excluding the Concert Parties) in the Total
Shareholding will remain unchanged subsequent to the close of the
Preferential Offering; and
(B) as a result of the exercise of the Conversion Rights by
Christopher Nightingale (assuming that such exercise takes place
prior to the Placement and Share Option), the interests of the
Concert Parties in the Total Shareholding will increase from 42.42%
to 60.67% and the interests of the other Shareholders (excluding
the Concert Parties) will be diluted from 57.58% to 39.33%.
(iii) in the event that the Proposed Disposal does not take
place (assuming that the Conversion Rights are fully exercised by
Christopher Nightingale and such exercise takes place prior to the
Placement and Share Option):
(1) under the Maximum Subscription Scenario, the maximum holding
of the Concert Parties would be 1,825,000,666 Shares representing
54.30% of the Total Shareholding; and
(2) under the Minimum Subscription Scenario, the maximum holding
of the Concert Parties would be 1,825,000,666 Shares representing
66.10% of the Total Shareholding.
4.5 Confirmation from the SIC
The SIC has in its letter dated 5 December 2012 confirmed that
the SIC waives the requirement for the Concert Parties to make the
Mandatory Offer in the event the Concert Parties incur an
obligation to do so as a result of subscribing for the Revised
Convertible Loan Shares, subject to the following conditions:
(a) a majority of holders of voting rights of the Company
present and voting at a general meeting, held before the completion
of the Revised Convertible Loan Agreement, approve by way of a
poll, a resolution (the "Whitewash Resolution") to waive their
rights to receive a general offer from the Concert Parties;
(b) the Whitewash Resolution is separate from other resolutions;
(c) the Concert Parties and parties not independent of them
abstain from voting on the Whitewash Resolution;
(d) the Concert Parties did not acquire or are not to acquire
any Shares or instruments convertible into and options in respect
of the Shares (other than subscriptions for, rights to subscribe
for, instruments convertible into or options in respect of new
Shares which have been disclosed in this Circular):
(i) during the period between the Announcement Date and the date
on which Independent Shareholders' approval is obtained for the
Whitewash Resolution; and
(ii) in the 6 months prior to the Announcement but subsequent to
negotiations, discussions or the reaching of understandings or
agreements with the Directors of the Company in relation to the
Revised Convertible Loan Agreement;
(e) the Company appoints an independent financial adviser to
advise its Independent Shareholders on the Whitewash
Resolution;
(f) the Company sets out clearly in its circular to Shareholders:
(i) details of the Revised Convertible Loan Agreement, as well
as the Proposed Transactions;
(ii) the possible dilution effect to existing holders of voting
rights of the Concert Parties acquiring the Revised Convertible
Loan Shares, taking into account the Proposed Transactions;
(iii) the number and percentage of voting rights in the Company
as well as the number of instruments convertible into, rights to
subscribe for and options in respect of Shares held by the Concert
Parties as at the LPD;
(iv) the number and percentage of voting rights to be issued to
the Concert Parties as a result of them subscribing for the Revised
Convertible Loan Shares;
(v) that Shareholders, by voting for the Whitewash Resolution,
are waiving their rights to a general offer from the Concert
Parties at the highest price paid by the Concert Parties for the
Shares in the six (6) months preceding the commencement of the
offer; and
(vi) that Shareholders of the Company, by voting for the
Whitewash Resolution, could be foregoing the opportunity to receive
a general offer from another person who may be discouraged from
making a general offer in view of the potential dilution effect of
the Revised Convertible Loan Agreement;
(g) the circular by the Company to its Shareholders states that
the waiver granted by SIC to the Concert Parties from the
requirement to make a general offer under Rule 14 of the Takeover
Code is subject to the conditions stated at sub-paragraphs 4.5(a)
to (f) above;
(h) the Concert Parties obtain the SIC's approval in advance for
those parts of the Circular that refer to the Whitewash Resolution;
and
(i) to rely on the Whitewash Resolution, the Revised Convertible
Loan Agreement must be completed within three (3) months of the
date of approval of the Whitewash Resolution and the subscription
of the Revised Convertible Loan Shares by the Concert Parties must
be completed within five (5) years of the completion of the Revised
Convertible Loan Agreement.
Save for the conditions mentioned under paragraph 4.5(a) and
4.5(i) above, all other conditions set out above have been complied
with as of the date of this Circular.
4.6 Confirmation by the Concert Parties
The Concert Parties confirm that they did not acquire or are not
to acquire any Shares or instruments convertible into and options
in respect of Shares (other than subscriptions for, rights to
subscribe for, instruments convertible into or options in respect
of new Shares which have been disclosed in this Circular):
(a) during the period between the Announcement Date and the date
Independent Shareholders' approval is obtained for the Whitewash
Resolution; and
(b) in the six (6) months prior to the Announcement but
subsequent to negotiations, discussions or the reaching of
understandings or agreements with the Directors in relation to the
Revised Convertible Loan Agreement.
4.7 The Independent Financial Adviser
Pursuant to the conditions imposed by the SIC, Beaumont Cornish
has been appointed the independent financial adviser (the
"Independent Financial Adviser") to advise the Independent
Directors in relation to the Whitewash Resolution. The Independent
Directors are deemed to be independent for the purposes of the
Whitewash Resolution.
A copy of the letter from the Independent Financial Adviser to
the Independent Directors is set out in Appendix C to this
Circular.
Shareholders are advised to read the letter carefully.
Beaumont Cornish is of the view that having regard to the
considerations and factors set forth in this letter and the
information available as at the Latest Practicable Date, the
Whitewash Resolution is not prejudicial to the interests of the
Independent Shareholders in the context of the Revised Convertible
Loan.
BEAUMONT CORNISH WISHES TO HIGHLIGHT TO THE INDEPENDENT
SHAREHOLDERS THAT IT CURRENTLY HOLDS 1,013,000 SHARES IN THE SHARE
CAPITAL OF THE COMPANY. THESE SHARES WERE RECEIVED ON 12 OCTOBER
2007 AS PART OF BEAUMONT CORNISH'S FEES FOR ACTING AS THE COMPANY'S
NOMINATED ADVISER WITH REGARDS TO THE COMPANY'S ORIGINAL AIM
QUOTATION IN OCTOBER 2007. THESE SHARES AMOUNT TO ONLY 0.05% OF THE
TOTAL SHAREHOLDING (WORTH ABOUT US$25,325 BASED ON THE COMPANY'S
SHARE PRICE OF US$0.025 AS OF THE LPD) AND WERE NOT RECEIVED IN
RELATION TO ANY OF THE TRANSACTIONS DESCRIBED IN THIS CIRCULAR.
4.8 Abstention from voting
Pursuant to the Whitewash Waiver granted by the SIC on 5
December 2012, Christopher Nightingale, the parties acting in
concert with him and parties not independent of the Concert Parties
are required to abstain from voting in respect of the Whitewash
Resolution.
Christopher Nightingale has also abstained from making any
recommendation in respect of the Whitewash Resolution.
5. ADDITIONAL INFORMATION ON THE COMPANY
Additional information on the Company is set out in Appendix B
to this Circular.
6. OFFER DOCUMENTS
An Offering Letter, together with the Application Form and other
relevant documents, if any, will be despatched to Entitled
Shareholders, subject to, inter alia, the approval of Shareholders
for the Preferential Offering being obtained at the EGM, which is
in turn conditional upon the Independent Shareholders' approval in
respect of the Revised Convertible Loan and the Whitewash
Resolution being obtained at the EGM. Applications under the
Preferential Offering can only be made in the manner as prescribed
in the Offer Documents and using the Application Form attached
thereto.
7. OFFER RECORD DATE
Subject to Shareholders' approval of the Preferential Offering
at the EGM, which is in turn conditional upon the Independent
Shareholders' approval in respect of the Revised Convertible Loan
and the Whitewash Resolution being obtained at the EGM, the Offer
Record Date for the purposes of determining the identities of the
Entitled Shareholders under the Preferential Offering will fall on
9 January 2013 (please refer to the Indicative Timetable for
further details), or such other date(s) and time(s) to be
determined and announced by the Board at a later date.
8. FUNDAMENTAL RISK FACTOR
As noted in the Announcement, the Heads of Agreement, the MOU,
the Supplemental Heads of Agreement and the Conditional Private
Placement Agreement are not definitive and are therefore subject to
changes and will in any event be subject to the execution of final
binding agreements. There is no certainty or assurance as at the
date of this Circular that these arrangements will be completed, or
that no changes will be made to the terms thereof. The Company will
make the necessary announcements when there are further
developments on the Heads of Agreement, the MOU, the Supplemental
Heads of Agreement, the Conditional Private Placement Agreement,
the Preferential Offering and the Revised Convertible Loan.
Shareholders are advised to read any further announcements by the
Company carefully. In particular, Shareholders should note that the
Company's ability to provide sufficient working capital for its
business and to meet its operational needs requires these
arrangements to be completed. If, for whatever reason, they are not
then there can be no certainty that the Company will have
sufficient working capital for its present requirements. It should
also be noted that the Preferential Offering is not underwritten
and that there is no guarantee that the amount raised thereunder
will be sufficient for the Company's working capital needs.
Accordingly, Shareholders should consult their stock brokers,
bank managers, solicitors or other professional advisers if they
have any doubt about the actions they should take.
9. DIRECTORS' RECOMMENDATION
The Directors, having considered the purposes of the
Preferential Offering as set out in paragraph 2.5 of this Circular
are of the opinion that the Preferential Offering is in the best
interests of the Company and the Shareholders as a whole, and
accordingly recommend that Shareholders vote in favour of ordinary
resolution 4 relating thereto set out in the Notice of EGM.
The Independent Directors, taking into account the opinion of
Beaumont Cornish, as set out in its letter, are of the opinion that
the Whitewash Resolution is in the best interests of the Company
and having consulted with Beaumont Cornish, that the terms of the
Revised Convertible Loan Agreement are fair and reasonable insofar
as the Independent Shareholders are concerned. The Independent
Directors recommend that the Independent Shareholders vote in
favour of ordinary resolution 1, being the entry into the Revised
Convertible Loan Agreement with Christopher Nightingale by the
Company, ordinary resolution 2, being the issue and allotment of
the Revised Convertible Loan Shares to Christopher Nightingale and
ordinary resolution 3, being the Whitewash Resolution.
By voting for the Whitewash Resolution, the Independent
Shareholders are waiving their rights to a Mandatory Offer from the
Concert Parties, at the highest price paid or agreed to be paid by
the Concert Parties for the Shares in the six (6) months preceding
the issue of the Revised Convertible Loan Shares upon the exercise
of the Conversion Rights by Christopher Nightingale pursuant to the
Revised Convertible Loan, which they would otherwise have been
obliged to make for the Shares.
By voting for the Whitewash Resolution, the Independent
Shareholders could also be foregoing the opportunity to receive a
general offer from another person who may be discouraged from
making a general offer in view of the potential dilution effect of
the Revised Convertible Loan.
Independent Shareholders should further note that as the Concert
Parties will own Shares carrying over 49 per cent. of the voting
rights of the Company based on its enlarged issued capital in the
Minimum Subscription Scenario (or in the Maximum Subscription
Scenario if the Proposed Disposal does not proceed (as per note 6
of Table B in paragraph 4.4 of the Circular)), the Concert Parties
will in these circumstances thereafter be free to acquire further
Shares without incurring any obligation under Rule 14 of the
Takeover Code to make a general offer for the Company.
Independent Shareholders should further note that the
Preferential Offering is conditional upon the approval of the
execution of the Revised Convertible Loan Agreement and upon the
approval of the allotment and issue of the Revised Convertible Loan
Shares to Christopher Nightingale, which is in turn conditional
upon Independent Shareholders voting in favour of the Whitewash
Resolution. In view of this, in the event that the Whitewash
Resolution is not passed by the Independent Shareholders, the issue
of the Preferential Offering Shares and the Revised Convertible
Loan Shares will not take place.
Shareholders should note that if the Whitewash Resolution is not
passed by the Shareholders at the EGM, the resolutions relating to
the Revised Convertible Loan and the Preferential Offering will not
become unconditional and thus cannot be implemented by the Company.
In that event, the Original Convertible Loan Agreement and the
Addendum to the Original Convertible Loan Agreement will terminate
and consequently, the amount owing to Christopher Nightingale under
the Original Convertible Loan Agreement and all additional
facilities granted by Christopher Nightingale to the Company
thereafter under the Addendum to the Original Convertible Loan
Agreement will immediately become due and payable. This would
adversely impact the fund-raising process and the working capital
position of the Company, and would also render the Company to be in
severe financial difficulties.
Shareholders should read and consider carefully this Circular in
its entirety, including the purpose of the Preferential Offering
and use of proceeds set out in paragraph 2.5 of this Circular, the
rationale for the Revised Convertible Loan and use of proceeds set
out in paragraph 3.3 of this Circular, the unaudited pro forma
statement of the net assets of the Group (taking into account the
Revised Convertible Loan and Preferential Offering) set out in
paragraph 1 of Appendix B to this Circular and for those who may
require advice in the context of their specific investment, to
consult their respective stockbroker, bank manager, solicitor,
accountant or other professional adviser, before giving their
approval for the ordinary resolutions set out in the Notice of
EGM.
In the event that ordinary resolutions 1, 2 and 3 are not
approved by the Independent Shareholders, Shareholders will not be
asked to consider ordinary resolution 4.
10. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors (including those who have delegated detailed
supervision of this Circular) collectively and individually accept
responsibility for the accuracy of the information given in this
Circular and confirm that having made all reasonable enquiries and
to the best of their knowledge and belief, this Circular
constitutes full and true disclosure of all material facts about
the Preferential Offering and the Revised Convertible Loan, the
Company and its subsidiaries, and the Directors are not aware of
any facts the omission of which would make any statement in this
Circular misleading.
Where information contained in this Circular has been extracted
from published or otherwise publicly available sources or obtained
from a named source, the sole responsibility of the Directors has
been to ensure that such information has been accurately and
correctly extracted from these sources and/or reproduced in the
Circular in its proper form and context.
11. ACTION TO BE TAKEN BY SHAREHOLDERS
Shareholders who are unable to attend the EGM and who wish to
appoint a proxy to attend and vote at the EGM on their behalf will
find attached to this Circular a Proxy Form which they are
requested to complete, sign and return in accordance with the
instructions printed thereon as soon as possible and in any event
so as to arrive at the office of the Share Registrar at Boardroom
Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place,
#32-01, Singapore Land Tower, Singapore 048623 not less than 48
hours before the time fixed for the EGM.
The sending of a Proxy Form by a Shareholder does not preclude
him from attending and voting in person at the EGM if he finds that
he is able to do so. In such event, the relevant Proxy Forms will
be deemed to be revoked.
A person will not be regarded as a Shareholder of the Company
entitled to attend the EGM and to speak and vote thereat unless his
name appears on the Register of Members at least 48 hours before
the time fixed for the EGM.
For the avoidance of doubt, a Depositary Interest Holder will
not be entitled to attend the EGM and to speak and vote thereat
unless his name appears on the Depositary Register at close of
business on the day which is three (3) Business Days before the
time fixed for the EGM. Should a Depositary Interest Holder, or a
representative of that Depositary Interest Holder, wish to attend
the EGM and to speak and vote thereat, he must notify the
Depositary in writing to Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol, BS99 6ZY or email to
!UKALLDITeam2@computershare.co.uk by 7 January 2013 at 3.00p.m. (UK
time).
12. EXTRAORDINARY GENERAL MEETING
The EGM, notice of which is set out on pages 79 to 81 of this
Circular, will be held on 11 January 2013, at 3.00p.m. at Red
Azalea and White Azalea Room, Mezzanine Level, Shangri-La Hotel, 22
Orange Grove Road, Singapore 258350, for the purpose of considering
and, if thought fit, passing with or without any modifications, the
ordinary resolutions set out in the Notice of EGM.
13. CONSENTS
The Independent Financial Adviser has given and has not
withdrawn its written consent to the issue of this Circular with
the inclusion of its name and the letter from the Independent
Financial Adviser set out in Appendix C and all references thereto,
in the form and context in which they are included in this
Circular.
14. DOCUMENTS AVAILABLE FOR INSPECTION
The following documents are available for inspection at the
registered office of the Company at 1 Science Park Road, #02-09,
The Capricorn, Singapore Science Park II, Singapore 117528 during
normal business hours from the date of this Circular up to the date
and time of the EGM:-
(a) the Memorandum and Articles of Association of the Company;
(b) the annual reports of the Company for FY2010 and FY2011;
(c) the Unaudited Interim Financial Results ended 31 August 2012
and the unaudited interim condensed consolidated financial results
of the Group for the six-month period ended 29 February 2012;
(d) the letter from the Independent Financial Adviser dated 21 December 2012; and
(e) the letter of consent referred to in paragraph 13 of this Circular.
Yours faithfully
For and on behalf of
The Board of Directors
Christopher Nightingale
Executive Chairman
DEFINITIONS
In this announcement, the following definitions apply throughout
unless the context otherwise requires or is otherwise stated:-
"1000 Island Project" : A projected US$600,000,000
project for the construction
of solar farms across Indonesia
to be funded by soft loans
from the government of the
PRC to Indonesia and which
was confirmed at the bilateral
summit between the Indonesian
President and the Chinese Premier
on 23 March 2012, at which
an initial memorandum was signed
between MUP and LDK.
"Act" : Companies Act (Chapter 50)
of Singapore, as amended or
modified from time to time.
"Addendum to the : Shall have the meaning ascribed
Original Convertible to it in paragraph 1.7(b) of
Loan Agreement" this announcement.
"AIM" : A market of that name operated
by the London Stock Exchange.
"AIM Rules" : The AIM Rules for Companies
and AIM Rules for Nominated
Advisers published by the London
Stock Exchange governing admission
to and operation of AIM.
"Announcement" : The announcement made by the
Company via a RIS on the Announcement
Date, the salient contents
of which are provided for in
paragraph 1 of this announcement.
"Announcement : 4 October 2012.
Date"
"Application Form" : Application and acceptance
form for Preferential Offering
Shares under the Preferential
Offering to be issued to the
Entitled Shareholders.
"Articles" : The articles of association
of the Company, as amended
from time to time.
"Beaumont Cornish" : Beaumont Cornish Limited, authorised
and regulated by the UK Financial
Services Authority.
"Circular" : The Circular to be posted to
Shareholders dated 21 December
2012.
"Closing Date" : The date(s) and time(s) set
out in the Indicative Timetable,
or any other date(s) and time(s)
to be determined and announced
by the Directors, being the
last time and date for application
and payment for the Preferential
Offering Shares under the Preferential
Offering.
"Company" : Alternative Energy Limited.
"Concert Parties" : Shall have the same meaning
ascribed to it in paragraph
4.2 of this announcement.
"Conditional Private : Shall have the same meaning
Placement Agreement" ascribed to it in paragraph
1.3(a) of this announcement.
"Conversion Rights" : Shall have the same meaning
ascribed to it in paragraph
3.1(c) of this announcement.
"Convertible Loan : Shall have the same meaning
Shares" ascribed to it in paragraph
1.7(a) of this announcement.
"CREST" : The computerised settlement
system for trading securities
in uncertificated form operated
by Euroclear UK & Ireland Limited
(as defined in the CREST Regulations).
"CREST Regulations" : The Uncertificated Securities
Regulations 2001 (SI2001/3755)
as amended and any applicable
rules made under those Regulations.
"Christopher Nightingale" : Mr. Christopher George Edward
Nightingale, the Executive
Chairman of the Company.
"Christopher's : Shall have the same meaning
Letter" ascribed to it under paragraph
1.7(e) of this announcement.
"Company's Letter" : Shall have the same meaning
ascribed to it under paragraph
1.7(e) of this announcement.
"Cut-off Date" : Shall have the same meaning
ascribed to it under paragraph
1.7(d) of this announcement.
"Directors" or : The board of directors of the
"Board" Company for the time being.
"Depositary" : Computershare Investor Services
PLC.
"Depositary Interest" : The Depositary interests issued
by the Depositary representing
Shares which may be traded
through CREST in dematerialised
form.
"Depositary Interest : A holder of Depositary Interest.
Holder"
"Depositary Register" : The register of Depositary
Interest Holders maintained
by the Depositary.
"Ecotecworld" : Ecotecworld Environmental Product
GmbH
"EGM" or "Extraordinary : The extraordinary general meeting
General Meeting" of the Company, the notice
of which is set out on pages
79 to 81 of the Circular.
"Entitled Depositary : Persons who are registered
Interest Holders" as holders of Depositary Interests
in the Depositary Register
and whose registered addresses
are in Singapore or the United
Kingdom as at the Offer Record
Date, or who have, at least
three (3) Market Days prior
to the Offer Record Date, provided
the Depositary in writing with
addresses in Singapore or the
United Kingdom for the service
of notices and documents in
relation to the Preferential
Offering.
"Entitled Scripholders" : Shareholders whose Shares are
registered in their own names
in the Register of Members
of the Company and whose registered
addresses are in Singapore
or the United Kingdom as at
the Offer Record Date or who
have, at least three (3) Market
Days prior to the Offer Record
Date, provided the Share Registrar
in writing with addresses in
Singapore or the United Kingdom
for the service of notices
and documents in relation to
the Preferential Offering.
"Entitled Shareholders" : Entitled Scripholders and Entitled
Depositary Interest Holders,
except for the Concert Parties.
"EPC" : Shall have the same meaning
ascribed to it under paragraph
1.1(a) of this announcement.
"eVillage" : Energy efficient communities
across Indonesia utilising
solar, wind and other green
energy generation and energy
saving technologies which the
Government of Indonesia is
proposing to develop and create.
"Extension Letters" : Shall have the same meaning
ascribed to it under paragraph
1.7(e) of this announcement.
"Foreign Shareholders" : Shareholders with registered
addresses outside Singapore
and the United Kingdom as at
the Offer Record Date and who
have not, at least three (3)
Market Dates prior thereto,
provided to the Share Registrar
or the Depositary, as the case
may be, addresses in Singapore
or the United Kingdom for the
service of notices and documents
in relation to the Preferential
Offering.
"Group" : The Company and its subsidiaries.
"Heads of Agreement" : Shall have the same meaning
ascribed to it in paragraph
1.1(a) of this announcement.
"Independent Directors" : The Directors who are independent
of and have no interest in
the Revised Convertible Loan
and includes all Directors
except Christopher Nightingale.
"Independent Shareholders" : Shareholders other than the
Concert Parties.
"Independent Third : Shall have the same meaning
Parties" ascribed to it in paragraph
1.5(a) of this announcement.
"Indicative Timetable" : The timetable set out in page
3 of this announcement providing
the indicative dates of the
crucial milestones or events
in relation to the implementation
of the Preferential Offering.
"Initial Repayment : Shall have the same meaning
Date" ascribed to it in paragraph
1.7(a) of this announcement.
"Issue Price" : Shall have the same meaning
ascribed to it in paragraph
1.6(a) of this announcement.
"LDK" : LDK Solar Co. Ltd, a company
incorporated in the PRC.
"London Stock : London Stock Exchange plc
Exchange"
"LPD" or "Latest : 17 December 2012, being the
Practicable Date" latest practicable date prior
to the printing of the Circular.
"Mandatory Offer" : Shall have the same meaning
ascribed to it in paragraph
4.1 of this announcement.
"Market Day" : A day on which AIM is open
for trading in securities.
"Master Project : Shall have the same meaning
Agreement" ascribed to it in paragraph
1.1(a) of this announcement.
"Maximum Subscription : A scenario where 600,000,000
Scenario" Preferential Offering Shares
are allotted and issued by
the Company, assuming that
all 600,000,000 Preferential
Offering Shares are fully subscribed
for by the Subscribing Shareholder(s)
under the Preferential Offering.
"Minimum Subscription : A scenario where no Preferential
Scenario" Offering Shares are allotted
and issued by the Company,
assuming that none of the Preferential
Offering Shares are subscribed
for by the Subscribing Shareholders,
and none of the Preferential
Offering Shares not taken up
by the Subscribing Shareholders
are offered to other third
parties by the Company.
"MOU" : Shall have the same meaning
ascribed to it in paragraph
1.4(a) of this announcement.
"MUP" : P.T. Mega Urip Pesona, a project
development company incorporated
in Indonesia.
"MUP AE" : P.T. MUP Alternatif Energi.
"Offering Letter" : The offer letter containing
the terms and conditions of
the Preferential Offering to
be issued by the Company to
the Entitled Shareholders.
"Offer Documents" : The Offering Letter, together
with the relevant accompanying
form(s), including the Application
Form, containing the terms
and conditions of the Preferential
Offering, to be issued by the
Company to the Entitled Shareholders,
subject to the approval of
the Shareholders for the Preferential
Offering being obtained at
the EGM.
"Offer Record : The time(s) and date(s) set
Date" out in the Indicative Timetable,
or other time(s) and date(s)
to be determined and announced
by the Directors, being the
time and date at and on which
the Register of Members and
the Depositary Register of
the Company will be closed
to determine the Entitled Shareholders
of the Company who would be
entitled to apply for Preferential
Offering Shares, subject to
the Preferential Offering being
approved by Shareholders at
the EGM.
"Opening Date" : The date set out in the Indicative
Timetable, or any other date
to be determined and announced
by the Directors, being the
date on which the Entitled
Shareholders are entitled to
subscribe for the Preferential
Offering Shares under the Preferential
Offering.
"Option Price" : Shall have the same meaning
ascribed to it in paragraph
1.2(a) of this announcement.
"Option Shares" : Shall have the same meaning
ascribed to it in paragraph
1.2(a) of this announcement.
"Original Convertible : Shall have the same meaning
Loan" ascribed to it in paragraph
1.7(a) of this announcement.
"Original Convertible : Shall have the same meaning
Loan Agreement" ascribed to it in paragraph
1.7(a) of this announcement.
"Original Conversion : Shall have the same meaning
Price" ascribed to it in paragraph
1.7(a) of this announcement.
"Original Whitewash : Shall have the same meaning
Waiver" ascribed to it in paragraph
3.2(a) of this announcement.
"Placement" : Shall have the same meaning
ascribed to it in paragraph
1.3(a) of this announcement.
"Placement Price" : Shall have the same meaning
ascribed to it in paragraph
1.3(a) of this announcement.
"Placement Shares" : Shall have the same meaning
ascribed to it in paragraph
1.3(a) of this announcement.
"PRC" : The People's Republic of China.
"Preferential : The preferential offering proposed
Offering" to be implemented by the Company
as described in paragraph 1.6(a)
of the announcement.
"Preferential : Shall have the same meaning
Offering Shares" ascribed to it in paragraph
1.6(a) of this announcement
and "Preferential Offering
Share" shall be construed accordingly.
"Proposed Disposal" : Shall have the same meaning
ascribed to it in paragraph
1.5(a) of this announcement.
"Proposed Transactions" : The Proposed Disposal, the
Preferential Offering, the
Placement, the Share Option
and the Revised Convertible
Loan.
"Proxy Form" : The form of proxy for use by
Shareholders in connection
with the EGM.
"Record Date" : In relation to any dividends,
rights, allotments or other
distributions, the date as
at the close of business (or
such other time as may have
been notified by the Company)
on which Shareholders must
be registered with the Share
Registrar or the Depositary,
as the case may be, in order
to participate in such dividends,
rights, allotments or other
distributions.
"Register of Members" : The principal register of members
of the Company maintained in
Singapore or the branch register
of members of the Company maintained
in the United Kingdom and/or
the Channel Islands respectively.
"Revised Convertible : Shall have the same meaning
Loan" ascribed to it in paragraph
1.7(c) of this announcement.
"Revised Convertible : Shall have the same meaning
Loan Agreement" ascribed to it in paragraph
1.7(c) of this announcement.
"Revised Convertible : Shall have the same meaning
Loan Shares" ascribed to it in paragraph
3.1(c) of this announcement.
"Revised Conversion : Shall have the same meaning
Price" ascribed to it in paragraph
3.1(c) of this announcement.
"Revised Repayment : Shall have the same meaning
Date" ascribed to it in paragraph
3.1(b) of this announcement.
"RIS" Regulatory Information Service.
"Shareholders" : Registered holders of Shares
in the Register of Members,
except that where the registered
holder is the Depositary, the
Depositary Interest Holders
whose names are entered in
the Depositary Register shall
also be deemed Shareholders
in respect of the Shares entered
against their respective names
in the Depositary Register.
"Share Option" : Shall have the same meaning
ascribed to it in paragraph
1.2(a) of this announcement.
"Share Registrar" : Boardroom Corporate & Advisory
Services Pte. Ltd.
"Shares" : Issued and paid up ordinary
shares in the capital of the
Company.
"SIC" : Securities Industry Council
of Singapore.
"Subscribing Shareholder" : Entitled Shareholders who subscribe
for the Preferential Offering
Shares under the Preferential
Offering.
"Supplemental : Shall have the same meaning
Heads of Agreement" ascribed to it in paragraph
1.2(a) of this announcement.
"Takeover Code" : The Singapore Code on Takeovers
and Mergers as administered
and amended by the SIC from
time to time.
"Total Shareholding" : The total issued and paid up
share capital of the Company
(excluding the treasury shares).
"UK" or "United : The United Kingdom of Great
Kingdom" Britain.
"Unaudited Interim : The unaudited interim condensed
Financial Results consolidated financial results
ended 31 August of the Group for the six-month
2012" period ended 31 August 2012.
"Uncertificated" : A Share recorded in the Company's
or "in uncertificated register as being held in uncertificated
form" form in CREST and title to
which by virtue of the CREST
Regulations may be transferred
by means of CREST.
"Whitewash Resolution" : Shall have the same meaning
ascribed to it in paragraph
4.5(1)(a) of this announcement.
"Whitewash Waiver" Shall have the same meaning
ascribed to it in paragraph
3.1(d)(i) of this announcement.
"Euro" : The official currency of the
European Union.
"S$" and "cents" : Singapore dollars and cents
respectively.
"US$" and "US : United States dollars and cents
cents" respectively.
"%" or "per cent." : Per centum or percentage.
The terms "subsidiary" and "Substantial Shareholder" shall have
the meanings ascribed to them in Sections 5 and 81 of the Act
respectively.
Words importing the singular shall, where applicable, include
the plural and vice versa. Words importing the masculine gender
shall, where applicable, include the feminine and neuter genders
and vice versa, and words importing persons shall include
corporations.
Any reference in this announcement to any enactment is a
reference to that enactment as for the time being amended or
re-enacted. Any word defined under the Act or any statutory
modification thereof and used in this announcement shall have the
same meaning assigned to it under the Act or any modification
thereof, as the case may be, unless the context otherwise
requires.
Any reference to a time of a day in this announcement shall be a
reference to UK time unless otherwise stated.
Any discrepancies in the figures in this announcement between
the figures listed and the totals thereof are due to rounding.
Accordingly, figures shown as totals in this Circular may not be an
arithmetic aggregation of the figures that precede them.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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