Prosperity Minerals Holdings Ltd Recommended Cash offer (8669J)

TIDMPMHL

RNS Number : 8669J

Prosperity Minerals Holdings Ltd

22 July 2013

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

This Announcement is for information purposes only and does not constitute, or form part of, an offer or an invitation to purchase, subscribe for or sell any securities or a solicitation of any offer to purchase, subscribe for or sell any securities. The Offer will be made solely by way of the Offer Document and, where appropriate, the related Form of Acceptance which together will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

22 JULY 2013

RECOMMENDED CASH OFFER BY

JETGO DEVELOPMENT LIMITED ("JETGO BIDCO")

(A WHOLLY OWNED SUBSIDIARY OF

PROSPERITY INTERNATIONAL HOLDINGS (H.K.) LIMITED) ("PIHL")

FOR PROSPERITY MINERALS HOLDINGS LIMITED ("PMHL")

Summary

The Jetgo Bidco Board and the Independent Directors are pleased to announce that they have reached agreement on the terms of a recommended cash offer by Jetgo Bidco, a wholly owned subsidiary of PIHL, for the entire issued and to be issued ordinary share capital of PMHL, other than those PMHL Shares already owned by PIHL and the Treasury Shares.

Highlights

   --       The Offer is being made at a price of 130 pence in cash for each PMHL Share.

-- The Offer values PMHL's Issued Share Capital at approximately GBP186.41 million. This is based on 143,391,230 PMHL Shares in issue as at the date of this Announcement.

-- Based on the total number of 51,525,906 PMHL Shares subject to the Offer at the date of this Announcement, the Offer would be valued at approximately GBP67 million.

-- The Offer Price represents a premium of approximately 65 per cent. to the Closing Price of 79 pence per PMHL Share on the Business Day immediately preceding the Possible Offer Announcement Date; a premium of approximately 90per cent. to the average Closing Price of 68.6 pence per PMHL Share over the six month period to the Business Day immediately preceding the Possible Offer Announcement Date; a premium of approximately 94per cent. to the average Closing Price of 67.1 pence per PMHL Share over the twelve month period to the Business Day immediately preceding the Possible Offer Announcement Date; and a premium of approximately 65 per cent. to the average Closing Price of 78.9 pence per PMHL Share over the twenty four month period to the Business Day immediately preceding the Possible Offer Announcement Date.

-- The Offer Price also represents a premium of approximately 16 per cent. to the Closing Price of 112.5 pence per PMHL Share on the Latest Practicable Date; a premium of approximately 85 per cent. to the average Closing Price of 70.3 pence per PMHL Share over the six month period to the Latest Practicable Date; a premium of approximately 92 per cent. to the average Closing Price of 67.9 pence per PMHL Share over the twelve month period to the Latest Practicable Date; a premium of approximately 65 per cent. to the average Closing Price of 78.8 pence per PMHL Share over the twenty four month period to the Latest Practicable Date; and a discount of approximately 30.5 per cent. to the NAV per PMHL Share of 187.1 pence attributable to PMHL Shareholders as at 31 March 2013.

-- The Independent Directors, who have been so advised by Daniel Stewart, consider the terms of the Offer to be fair and reasonable, and intend to recommend that all Independent Shareholders accept the Offer for their PMHL Shares at the Offer Price. In providing advice to the Independent Directors, Daniel Stewart has taken into account the Independent Directors' commercial assessment of the Offer.

-- The Independent Directors intend to accept the Offer. The Independent Directors hold beneficial interests, in aggregate, in 1,563,121 PMHL Shares, representing approximately 1.1 per cent. of PMHL's Issued Share Capital. Mr. Sandy Chun-Kwan Chim, a non-executive director of PMHL, also intends to accept the Offer. Mr. Chim holds a beneficial interest in 554,180 PMHL Shares, representing approximately 0.4 per cent. of PMHL's Issued Share Capital.

   --       The Offer is conditional upon, amongst other things:

o valid acceptances being received in respect of such number of PMHL Shares which will result in PIHL (directly and/or indirectly (through Jetgo Bidco)) holding in aggregate not less than 90 per cent. of the total number of PMHL Shares, including the PMHL Shares already held by PIHL; and

o the consent of PIHL's shareholders. Irrevocable undertakings to vote in favour of the PIHL Resolution(s) at the PIHL SGM have been secured from the holders of 4,177,897,828 PIHL Shares representing approximately 65.33 per cent. of the PIHL Shares in issue at the time of this Announcement.

Further details of the terms and conditions of the Offer are set out in Appendix I to this Announcement.

-- The cash consideration payable to Independent Shareholders under the terms of the Offer will be funded by a mixture of existing cash resources and a new debt facility provided by ICBC (Asia).

-- Jetgo Bidco is a wholly owned subsidiary of PIHL, an investment holding company listed on the Main Board of the Hong Kong Stock Exchange. PIHL holds approximately a 64.07 per cent. interest in PMHL.

-- If the Offer is declared unconditional in all respects, Jetgo Bidco intends to procure that PMHL applies to the London Stock Exchange for the cancellation of admission of the PMHL Shares to AIM.

-- Jetgo Bidco will dispatch the Offer Document and Form of Acceptance to Independent Shareholders and, for information only, to persons with information rights and participants in the PMHL Share Option Scheme in hard copy form, and also publish it on PIHL's website (www.pihl-hk.com) and PMHL's website (www.pmhl.co.uk), as soon as practicable.

-- Jetgo Bidco is in the process of appointing a financial adviser and will announce such appointment as soon as practicable.

 
 Enquiries 
 Jetgo Development Limited 
  Richard Kong 
  Gloria Wong                      +852 2243 3778 
 Prosperity Minerals Holdings 
  Limited 
  Patrick Li                       +852 3187 2618 
  Anthony Williams                  +44 (0) 7810 883 145 
 Daniel Stewart & Company plc 
  (Financial adviser, nominated 
  adviser and broker to PMHL) 
 
  Antony Legge 
  Paul Shackleton 
  Ciaran Walsh                     +44 (0) 20 7776 6550 
 Citigate Dewe Rogerson 
  Martin Jackson 
  Jack Rich 
  Priscilla Garcia                 +44 (0) 20 7638 9571

The above summary should be read in conjunction with, and is subject to the full text of this Announcement, including the Appendices to this Announcement. In particular the Offer will be subject to the terms and conditions set out in Appendix I to this Announcement and to the further terms and conditions of the Offer to be set out in the Offer Document and the Form of Acceptance. Appendix II of this Announcement contains further details of the sources of information and bases of calculation set out in this summary and this Announcement. Certain terms used in this Announcement are defined in Appendix III to this Announcement.

Independent Shareholders who accept the Offer may only rely on the Offer Document and, where appropriate, the related Form of Acceptance, for all the terms and conditions of the Offer. In deciding whether or not to accept the Offer in relation to their PMHL Shares, Independent Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the accompanying Form of Acceptance. Independent Shareholders are strongly advised to read the Offer Document being posted to them shortly, which contains important information with respect to the Offer.

Daniel Stewart has given its written consent to the release of this Announcement containing references to its name in the form and context in which it appears.

Daniel Stewart, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for PMHL and no one else in connection with the Offer and accordingly will not be responsible to anyone other than PMHL for providing the protections afforded to customers of Daniel Stewart nor for providing advice in relation to the Offer, this Announcement or any other matter referred to herein.

The Independent Directors accept responsibility for the recommendation and opinions of the Independent Directors contained in this Announcement. To the best of the knowledge and belief of the Independent Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement for which they take such responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

The PMHL Directors accept responsibility for the information contained in this Announcement relating to PMHL and the PMHL Directors. To the best of the knowledge and belief of the PMHL Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement relating to PMHL and the PMHL Directors is in accordance with the facts and does not omit anything likely to affect the import of such information. The PMHL Directors (excluding the Independent Directors) are not responsible for the views of the Independent Directors and their recommendation in respect of the Offer as set out in this Announcement due to potential conflicts of interest.

The Jetgo Bidco Director and the PIHL Directors accept responsibility for all other information contained in this Announcement (other than the information relating to PMHL and the PMHL Directors). To the best of the knowledge and belief of the Jetgo Bidco Director and the PIHL Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

UK Takeover Code

Independent Shareholders are reminded that the City Code does not apply to PMHL as although it is incorporated in Jersey, its place of central management is located outside of the United Kingdom, the Channel Islands and the Isle of Man. Therefore the Offer will not be regulated by the Panel on Takeovers and Mergers in the UK.

Notice to Overseas Shareholders

The Offer is not being made directly or indirectly, and securities of PMHL will not be accepted for purchase from or on behalf of any Independent Shareholder, in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities or other laws or regulations of such jurisdiction or would require any registration, approval or filing with any regulatory authority not expressly contemplated by the terms of this Announcement.

Unless otherwise determined by Jetgo Bidco and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by the use of the mail or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction (including the United States, Canada, Australia, the Republic of South Africa or Japan) and the Offer will not capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons receiving such documents (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from a Restricted Jurisdiction.

The availability of the Offer to Independent Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Independent Shareholders who are not so resident should inform themselves of, and observe, any applicable requirements. Further details in relation to overseas shareholders will be contained in the Offer Document.

Forward-looking statements

This Announcement, including certain information included by reference, contains certain forward looking statements with respect to (amongst other things) the financial condition, results of operations and business of Jetgo Bidco, PIHL or the PIHL Group and PMHL or the PMHL Group and certain plans and objectives of the Jetgo Bidco Board, the PIHL Board and the PMHL Board. These forward looking statements can be identified by the fact that they do not relate to historical or current facts. Forward looking statements, without limitation, often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Jetgo Bidco Board, the PIHL Board and the PMHL Board in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty and the factors described in the context of such forward looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements which are not guarantees of the future performance.

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.

None of Jetgo Bidco, PIHL or PMHL, or any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

None of Jetgo Bidco, PIHL or PMHL undertakes any obligation publicly to update or revise any of the forward looking statements, whether as a result of new information, future events or otherwise, save in respect of any requirements under applicable laws, the AIM Rules and other applicable regulations.

Publication on websites

A copy of this Announcement, the Offer Document and the Form of Acceptance, is and will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on the websites of PMHL at www.pmhl.co.uk and PIHL at www.pihl-hk.com in each case by no later than 12 noon on 23 July 2013 in the case of publication of this Announcement and in case of the Offer Document by no later than 12 noon on the Business Day following its publication and will remain so during the course of the Offer.

For the avoidance of doubt, the content of the websites referred to above is not incorporated into and does not form part of this Announcement.

22 July 2013

RECOMMENDED CASH OFFER BY

JETGO DEVELOPMENT LIMITED ("JETGO BIDCO")

(A WHOLLY OWNED SUBSIDIARY OF

PROSPERITY INTERNATIONAL HOLDINGS (H.K.) LIMITED) ("PIHL")

FOR PROSPERITY MINERALS HOLDINGS LIMITED ("PMHL")

   1.             Introduction

The PMHL Board has determined that Mr. David Wong, Mr. Johannes Petrus Mulder, Mr. Michael Kim Hung Yuen and Mr. Sandy Chun-Kwan Chimare not independent directors for the purposes of considering and recommending the Offer and, accordingly, all four have absented themselves from the deliberations of the PMHL Board concerning the Offer. Mr. David Wong, co-founder of the PMHL Group and Chairman and Chief Executive Officer of PMHL, directly and indirectly through his controlled associates, holds a combined 65.33 per cent. interest in PIHL. PIHL holds a 64.07 per cent. interest in PMHL. Mr. Wong is also the co-founder and Chairman of PIHL. Mr. Johannes Petrus Mulder is an Executive Director of both PIHL and PMHL and Mr. Michael Kim Hung Yuen is an Independent Non-executive Director of both PIHL and PMHL. Mr. Sandy Chun-Kwan Chim is a co-investor and co-Director with Mr. Wong in Century Iron Mines Corp., a company listed on the TSX Exchange. Given their potential conflicts of interest with regard to the Offer, Mr. Wong, Mr. Mulder, Mr. Yuen and Mr. Chim have not participated in the evaluation of the Offer.

   2.             Summary terms of the Offer

Under the terms of the Offer, upon the Offer becoming unconditional (or the conditions of the Offer being waived) an Independent Shareholder who validly accepts the Offer will receive:

 
                for each PMHL Share   130 pence in cash

The Offer values PMHL's Issued Share Capital at approximately GBP186.41 million. Based on the total number of 51,525,906 PMHL Shares subject to the Offer at the date of this Announcement, the Offer would be valued at approximately GBP67 million.

The Offer Price represents:-

-- A premium of approximately 65 per cent. to the Closing Price of 79 pence per PMHL Share on the Business Day immediately preceding the Possible Offer Announcement Date;

-- A premium of approximately 90 per cent. to the average Closing Price of 68.6 pence per PMHL Share over the six month period to the Business Day immediately preceding the Possible Offer Announcement Date;

-- A premium of approximately 94 per cent. to the average Closing Price of 67.1 pence per PMHL Share over the twelve month period to the Business Day immediately preceding the Possible Offer Announcement Date;

-- A premium of approximately 65 per cent. to the average Closing Price of 78.9 pence per PMHL Share over the twenty four month period to the Business Day immediately preceding the Possible Offer Announcement Date;

-- A premium of approximately 16 per cent. to the Closing Price of 112.5 pence per PMHL Share on the Latest Practicable Date;

-- A premium of approximately 85 per cent. to the average Closing Price of 70.3 pence per PMHL Share over the six month period to the Latest Practicable Date;

-- A premium of approximately 92 per cent. to the average Closing Price of 67.9 pence per PMHL Share over the twelve month period to the Latest Practicable Date;

-- A premium of approximately 65 per cent. to the average Closing Price of 78.8 pence per PMHL Share over the twenty four month period to the Latest Practicable Date; and

-- A discount of approximately 30.5 per cent. to the NAV per PMHL Share of 187.1 pence attributable to PMHL Shareholders as at 31 March 2013.

PMHL Shares will be acquired by Jetgo Bidco pursuant to the Offer fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and any other third party rights or interests whatsoever and together with all rights attaching to them, now or in the future, including, without limitation, the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) declared, paid or made in the future.

The Offer extends to any PMHL Shares unconditionally allotted or issued fully paid while the Offer remains open for acceptance (or such earlier time and/or date as Jetgo Bidco may determine, but not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances), as a result of the exercise of options or other awards granted under the PMHL Share Option Scheme.

Further details of the conditions to which the Offer is subject are set out in Appendix I to this Announcement and will be set out in the Offer Document and, in the case of PMHL Shares held in certificated form, the Form of Acceptance accompanying the Offer Document.

   3.             The recommendation

The Independent Directors have considered the terms of the Offer and, having been so advised by Daniel Stewart, consider them to be fair and reasonable. In providing advice to the Independent Directors, Daniel Stewart has taken into account the Independent Directors' commercial assessment of the Offer. Daniel Stewart is acting as the independent financial adviser to PMHL for the purpose of providing independent financial advice to the Independent Directors on the Offer.

Accordingly, the Independent Directors intend to recommend that Independent Shareholders accept the Offer, as those Independent Directors intend to do so in respect of their own beneficial holdings of PMHL Shares. The Independent Directors hold beneficial interests, in aggregate, in 1,563,121 PMHL Shares, representing approximately 1.1 per cent. of PMHL's Issued Share Capital. In addition, Mr. Sandy Chun-Kwan Chim, a non-executive director of PMHL, also intends to accept the Offer. Mr. Chim holds a beneficial interest in 554,180 PMHL Shares, representing approximately 0.4 per cent. of PMHL's Issued Share Capital.

   4.             Background to and reasons for the Offer

Background to the Offer

As PMHL's majority shareholder, PIHL has a vested interest in the prosperity of PMHL. PIHL believes that although there are short-term challenges for PMHL, in the medium term there will be opportunities to create value in the business. PIHL believes it can facilitate the PMHL Group's future growth by providing long term support and access to the Hong Kong capital markets which may not be possible under the existing group structure.

PMHL Shares last traded above the Offer Price on 19 July 2011 and for the 52 weeks up to the 12 July 2013, being the Business Day immediately preceding the Possible Offer Announcement Date, PMHL Shares have traded between 53.5 and 84.5 pence per PMHL Share. In addition, PMHL Shares have been thinly traded, recording an average daily trading volume of 51,191 PMHL Shares for the past 52 weeks up to the Latest Practicable Date. This represents only 0.1per cent. of PMHL's total free float. This low trading liquidity means that PMHL Shareholders are unable to dispose of their PMHL Shares easily.

Every year since admission, PMHL has paid a dividend to PMHL Shareholders, even through the economic downturn and challenging market conditions. PMHL also paid an additional special dividend of US 9 cents (approximately 6 pence) per PMHL Share in 2011 following the sale of the majority of its cement operations. The total of the dividends paid per PMHL Share each year since admission amounts to US 73.7 cents (approximately 48 pence) per PMHL Share in aggregate. The Offer Price plus the aggregated dividends paid to PMHL Shareholders of US 73.7 cents (approximately 48 pence) since admission exceed the admission price of PMHL Shares of 148 pence, and indeed all closing prices except for 118 days out of the 1,851 days PMHL has been trading on AIM. The PMHL Board have recommended a US 3 cents (approximately 2 pence) per share dividend for the financial year ended 31 March 2013 (down from US 9 cents (approximately 6 pence) per share in fiscal 2012) even though PMHL had reported a loss for the period. PIHL believes that dividend payments are unlikely to increase until there is a sustained improvement in trading and further dividend cuts cannot be ruled out if trading worsens.

Given the cost of maintaining the AIM admission and, in PIHL's view, the lack of benefits to either PMHL or its shareholders, PIHL intends:

(i) to give Independent Shareholders the opportunity to realise their investment through the Offer at a value higher than the PMHL Shares have traded at over the last two years; and

(ii) subject to the Offer becoming unconditional in all respects, to cancel the AIM admission of PMHL.

In addition, as previously announced by PMHL and set out in paragraph 6below, the nature of PMHL Group's iron ore business is changing with increased capital investment required to support the iron ore business. However, given the low share price and poor trading liquidity, PMHL can neither utilise nor derive a capital raising benefit from its AIM admission. At the same time, being a separately quoted and independently managed entity, the PMHL Group is also unable to rely on PIHL, its major shareholder, to fund its capital requirements.

After the cancellation of the AIM admission of PMHL Shares, subject to the relevant conditions being satisfied, PIHL believes that it would be easier for it to use the consolidated financial strength of the combined group, as well as the Hong Kong capital markets, to raise funding for the PMHL Group's capital requirements.

   5.             Background to the Recommendation

The Independent Directors have considered the terms of the Offer and, having been so advised by Daniel Stewart, consider them to be fair and reasonable, and intend to recommend that all Independent Shareholders should accept the Offer for their PMHL Shares at the Offer Price.

Whilst the Offer Price is at a discount of 30.5 per cent. to the NAV per PMHL Share as at 31 March 2013 of 187 pence, it represents a premium of 94 per cent. to the average share price for the twelve months to 12 July 2013, the Business Day immediately preceding the Possible Offer Announcement Date. In evaluating the Offer, the Independent Directors have taken a number of factors into consideration including, inter alia, the following:

Current Trading and Prospects

The Independent Directors have considered the short and medium term trading prospects of the PMHL Group and, whilst they remain positive about the medium term, the short term contains considerable risks. In iron ore, for example, operating conditions are likely to remain challenging with the potential for further losses. At the same time, the property development market is expected to continue to be impacted by PRC Government legislation and continue to slow.

Future Funding Requirements

Whilst the PMHL Group's balance sheet at the end of March 2013 had minimal gearing (1.1 per cent.), its balance sheet position was boosted, during the fiscal year, by the sale deposits from Oriental Landmark, a major residential and commercial development in Guangzhou. Excluding these deposits, PMHL would have experienced a significant cash outflow of almost US$300 million in FY 2013. The Independent Directors believe that PMHL's share price performance and low share trading liquidity offer very little scope to raise funds on reasonable terms in the equity capital markets. Without such access to fresh capital, PMHL Group's ability to fully implement its strategy may be hampered.

Future Dividends

Since its admission to AIM in 2006, PMHL has paid a dividend to PMHL Shareholders every year. PMHL also paid a special dividend in FY 2011 following the sale of the majority of its cement operations. The total of the dividends paid per PMHL Share in the period since admission amounts to US 73.7 cents per PMHL Share (approximately 48 pence) in aggregate. With the losses incurred last year, the PMHL Board has recommended a US 3 cents (approximately 2 pence) per share dividend for the financial year ended 31 March 2013 (down from US 9 cents (approximately 6 pence) per share in FY 2012). Although next year will benefit from the one-off profit from Oriental Landmark, in the short term the performance of the iron ore division is expected to remain depressed. Dividend payments are unlikely to increase until there is a sustained improvement in trading and further dividend cuts cannot be ruled out if trading worsens.

Risk Premium applied to Chinese Companies

Between 31 March 2007 and 31 March 2013, PMHL has increased its NAV per PMHL Share by 75 per cent.. Over that same period, PMHL's share price has declined by approximately 50 per cent. and for the last three years has constantly traded at a significant discount to the NAV per PMHL Share. On 12 July 2013, the Business Day immediately preceding the Possible Offer Announcement Date, PMHL Shares were trading at a discount of over 57 per cent. to the NAV per PMHL Share as at 31 March 2013. The Independent Directors believe that, to a significant degree, this discount is a result of the risk premium applied to China based companies on AIM and that in the short to medium term, the equity market is unlikely to recognise any long term potential of the business.

The Offer provides the Independent Shareholders with an opportunity to exit their position at a premium of approximately 65 per cent. to the Closing Price per PMHL Share on the Business Day immediately preceding the Possible Offer Announcement Date, a premium of 16 per cent. to the Closing Price on the Latest Practicable Date and indeed at a price higher than at any time in the last two years. The Independent Directors believe that, for the reasons given above, in the absence of an offer for PMHL from PIHL, it is unlikely that the Independent Shareholders would be able to sell their shareholding in PMHL in the market in the short to medium term, should they wish to do so, at a price equal to the Offer Price or better.

   6.             Current trading and prospects of PMHL

As stated by the PMHL Board in PMHL's annual report and accounts for the year ended 31 March 2013, released on 15 July 2013, the 2013 financial year was a difficult one.

Iron Ore Business

The PMHL Group's core business is iron ore. In the past, the PMHL Group's iron ore trading business was capital free and relatively low risk, engaging in only back-to-back transactions and holding no inventory. It was also able to secure an ample supply of iron ore from international producers for sale to end users in the PRC.

However, the global iron ore industry has undergone fundamental change following the abandonment in 2010 of a forty-year-old annual benchmark price setting system in favour of quarterly price setting. Since then, the iron ore market has been characterised by unprecedented price volatility. At the same time, major producers of iron ore have sought to transact a larger proportion of their business directly with steel mills and both of these factors have led to a squeeze on traders' volumes and margins. For example, the volume of iron ore trading carried out by the PMHL Group in the financial years from 2010 to 2013 reduced from 7.9 million tonnes (FY 2010) to 6.3 million tonnes (FY 2011), 4.8 million tonnes (FY 2012) and 2.8 million tonnes (FY 2013), a fall of 65 per cent. over the four years; with the iron ore division posting a segment loss of US$7.2 million in FY 2013 compared to a segment profit of US$4.7 million in FY 2012 and US$10.4 million in 2011.

As announced in September 2011, PMHL has re-cast its iron ore trading model by making direct investments in future iron ore supplies either as principal or through long term off-take agreements or contracts. This practice has increased the cash intensity and operational risk of PHML's iron ore operation; with a significant capital commitment in the short term, but the benefits of which being only returned in the medium to long term.

Real Estate Investment and Development

The PMHL Group's real estate investment focuses on the PRC market. After a prolonged period of development, the pace of growth in China's real estate market has slowed and regional disparities have become more pronounced. This reflects the PRC Government's focus on delivering sustainable economic growth and social stability and two of its key policy instruments are the control of inflation and legislation to keep property price rises in check. This includes restrictions on loan availability and growth and rules on the scale of individual purchasing in the residential property market.

While the outlook for PRC real estate remains positive, changes in PRC Government policies have resulted in the PMHL Group taking longer to complete and sell its real estate developments, which has increased the length of time over which capital is tied up in developments. For example, in PMHL's report and accounts for the year to 31 March 2013, it stated that it was revising the development plan for the Zhangzhou City development project in light of current weakness in this regional property market and changes in government (central and local) policies. Similarly, higher than budgeted marketing costs were incurred during the year at Oriental Landmark.

   7.             Information relating to PIHL, its controlling shareholder and Jetgo Bidco

PIHL

PIHL is an investment holding company listed on the Main Board of the Hong Kong Stock Exchange. The core businesses of the PIHL Group are: (i) the trading of clinker, cement and other building materials; (ii) granite production; (iii) investment in a public port and other related facilities businesses in Jiangsu Province, the PRC; (iv) real estate investment and development; and (v) iron ore trading. The PMHL Group carries out the iron ore trading and real estate investment and development businesses of the PIHL Group.

PIHL has granted put options (the "Put Options") to LIM Asian Multi-Strategy Fund Inc. and LIM Asia Special Situations Master Fund Limited (together "LIM Advisors") in relation to their 7,869,396 PMHL Shares (the "Put Option Shares"), representing 5.49 per cent. of PMHL's Issued Share Capital.

Under the Put Options, LIM Advisors can require PIHL (or its nominee) to purchase all or part of their Put Option Shares (and any shares deriving from their Put Option Shares) at an initial exercise price of GBP1.30 per Put Option Share (the "Exercise Price"), subject to adjustments, at any time over a two year period commencing from 8 February 2013. PIHL has agreed to pay the Exercise Price by issuing PIHL shares at an initial issue price of HK$0.50 per PIHL Share (subject to adjustments) equal to the aggregate Exercise Price payable for the Put Option Shares.

PIHL holds 91,865,324 PMHL Shares, representing approximately 64.07% interest in PMHL. If LIM Advisors require PIHL to purchase all their Put Option Shares, the percentage interest held by PIHL in PMHL will increase from 64.07% to approximately 69.56%.

PIHL's controlling shareholder

Mr. David Wong, co-founder of the PIHL Group and Chairman of PIHL, directly and indirectly through his controlled associates, holds a combined 65.33 per cent. interest in PIHL. Mr. Wong is also the co-founder, Chairman and Chief Executive Officer of PMHL.

Jetgo Bidco

Jetgo Bidco was incorporated in the British Virgin Islands in 2010 and is a wholly owned subsidiary of PIHL. Jetgo Bidco has not traded since its incorporation and has not entered into any material obligations other than in connection with the Offer and its financing.

   8.             Information relating to the PMHL Group

The PMHL Group's core business is iron ore trading, which it has operated since 1992. The PMHL Group sources iron ore globally for shipment to buyers in the PRC. In the financial years ended 31 March 2012 and 2013, PMHL shipped 4.8 million tonnes and 2.8 million tonnes of iron ore respectively.

PMHL holds a 35 per cent. effective interest in United Goalink Limited (UGL), a Brazilian mining operation which owns approximately 600 square kilometres of exploration rights and 3 square kilometres of mining concession in the State of Ceará in the north east of the country.

PMHL has operated a real estate investment and development division since February 2010 which is focused on creating a portfolio of PRC property and development assets. PMHL has also entered into agreements with partners to develop residential, commercial and recreational projects in Guangzhou City and Zhangzhou City in the southern PRC. PMHL also owns an interest in an existing commercial building in Guangzhou, PRC.

PMHLhas two investment associates in the cement manufacturing industry in the PRC. PMHL indirectly holds a 33.06 per cent. interest in Anhui Chaodong Cement Company Limited (ACC), located in Anhui Province in the eastern PRC. In addition, PMHL indirectly owns 16.11% of TCC Liaoning Cement Company Limited. As announced by PMHL on 6 February 2013, this latter shareholding is the subject of a conditional sale and purchase agreement.

   9.             Management and employees, location and assets of the PMHL Group

The PIHL Board has given assurances to the Independent Directors that, following the Offer becoming or being declared wholly unconditional, the existing employment rights of the management and employees will be fully safeguarded.

In addition, the directors of the PMHL Board will remain in their current roles with no changes to their current terms and conditions of employment or appointment for the period of 12 months following the date on which Offer becomes wholly unconditional. The PIHL Board and the Jetgo Bidco Board have also confirmed to the Independent Directors that the Offer will not have any material impact on employees and senior management, and that there is no current intention to restructure the business such that it will impact the employees of the PMHL Group.

Following the Offer being declared unconditional in all respects, PIHL and Jetgo Bidco may consider disposing of certain assets of the PMHL Group in the future. However, no specific discussions have taken place to identify any PMHL assets for possible sale. Under the Facility Agreement, if the PMHL Group disposes of certain of its assets (which sale would require ICBC (Asia)'s consent), then, subject to compliance with all applicable laws and PMHL being a wholly owned subsidiary of PIHL, PIHL is required to procure that a sufficient amount of the sale proceeds are distributed upstream by way of dividend and remitted to Jetgo Bidco so that Jetgo Bidco can comply with its repayment obligations under the Facility Agreement. A brief summary of the terms of the Facility Agreement are set out in paragraph 11 of this Announcement and will be set out in more detail in the Offer Document.

   10.          PMHL Share Options and rights to PMHL Shares

The Offer extends to any PMHL Shares which are unconditionally allotted or issued whilst the Offer remains open for acceptance (or by such earlier time and/or date as Jetgo Bidco may determine, but not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances) as a result of the exercise of options or other awards granted under the PMHL Share Option Scheme.

At the date of this Announcement there are 5,590,000 PMHL Share Options outstanding which entitle the holder of such options to subscribe for PMHL Shares at an exercise price of 70 pence.

In conjunction with the making of the Offer, Jetgo Bidco will make a comparable offer to the holders of the outstanding PMHL Share Options to acquire all the outstanding PMHL Share Options at the price of 60 pence per option, which is equal to the Offer Price less the exercise price of 70 pence per PMHL Share Option, for cancellation. The Option Offer will not form part of the Offer but will be conditional upon the Offer having become unconditional in all respects.

Assuming that all holders of PMHL Share Options accept the Option Offer, the total amount payable under the Option Offer would be valued at approximately GBP3.35 million.

The PMHL Share Option Proposal will be posted to the holders of outstanding PMHL Share Options as soon as practicable. The Option Offer will be made solely by the PMHL Share Option Proposal, which will contain the full terms and conditions of the Option Offer, including details of how the Option Offer may be accepted.

   11.          Financing of the Offer

Full acceptance of the Offer in cash will result in the payment by Jetgo Bidco of approximately GBP67 million in cash to Independent Shareholders.

The Offer is to be financed by a loan facility of up to US$108 million from ICBC (Asia) and existing cash resources of Jetgo Bidco. Jetgo Bidco entered into the Facility Agreement on 22 July 2013 with ICBC (Asia) whereby ICBC (Asia) will provide certain facilities to assist in financing 90 per cent. of the consideration of the Offer, the Option Offer and any squeeze out of PMHL Shares following the Offer. Under the terms of the Facility Agreement, Jetgo Bidco is required to repay the principal amount of up to US$108 million together with accrued interest in full on or before the date falling 42 months after the date of the first drawdown of the loan facility. Under the Facility Agreement, if the PMHL Group disposes of certain of its assets (which sale would require ICBC (Asia)'s consent), then, subject to compliance with all applicable laws and PMHL being a wholly owned subsidiary of PIHL, PIHL is required to procure that sufficient amount of the sale proceeds are distributed upstream by way of dividend and remitted to Jetgo Bidco so that Jetgo Bidco can comply with its repayment obligations under the Facility Agreement. Jetgo Bidco has agreed that it will not, without the consent of ICBC (Asia) under the Facility Agreement, declare the Offer unconditional as to acceptances until it has received acceptances in respect of such number of PMHL Shares as will result in PIHL having acquired or agreed to acquire (whether directly or indirectly (through Jetgo Bidco)) an interest in at least 90 per cent. of the issued share capital of PMHL (excluding any Treasury Shares).

PIHL and its wholly owned subsidiary Jetgo Bidco confirm that they are satisfied that sufficient resources are available to Jetgo Bidco to satisfy in full the cash consideration payable by Jetgo Bidco under the terms of the Offer. Further information on the financing of the Offer and the Option Offer will be set out in the Offer Document.

   12.          Cancellation of admission to AIM and compulsory acquisition.

Cancellation of admission to AIM

The Offer is conditional upon, amongst other things, valid acceptances being received in respect of such number of PMHL Shares which will result in PIHL (directly and/or indirectly (through Jetgo Bidco)) holding in aggregate not less than 90 per cent. of the total number of PMHL Shares, including the PMHL Shares already held by PIHL. The Offer and the Option Offer are also conditional upon the consent of PIHL Shareholders. If the Offer becomes or is declared unconditional in all respects, Jetgo Bidco intends to procure the making of an application to the London Stock Exchange for the cancellation of admission of the PMHL Shares to AIM ("Cancellation"). It is anticipated that such cancellation will take effect no earlier than 20 Business Days after the Offer is declared unconditional in all respects.

Accordingly, Independent Shareholders who do not accept the Offer in respect of all or part of their PMHL Shares may be left with minority holdings in an unquoted public company. Independent Shareholders should note that Cancellation is likely to significantly reduce the liquidity and marketability of PMHL Shares with respect to which the Offer has not been accepted.

Compulsory acquisition

If acceptances are received in respect of not less than 9/10ths in nominal value of the PMHL Shares to which the Offer relates, Jetgo Bidco intends to apply the provisions of Article 117 of the Companies (Jersey) Law to acquire compulsorily any outstanding PMHL Shares to which the Offer relates.

It is also proposed that subject to compliance with the Companies (Jersey) Law, PMHL will be re-registered as a private company in due course.

   13.          Conditions and the Offer Document

Conditions

The Offer is conditional upon, amongst other things, valid acceptances being received in respect of such number of PMHL Shares which will result in PIHL (directly and/or indirectly through Jetgo Bidco) holding in aggregate not less than 90 per cent. of the total number of PMHL Shares, including the PMHL Shares already held by PIHL. At the date of this Announcement, PIHL holds approximately 64.07 per cent. of PMHL Shares. Based on the total number of 143,391,230 PMHL Shares in issue at the date of this Announcement, Jetgo Bidco will need to receive valid acceptances for approximately 37,186,783 PMHL Shares, representing approximately 72.17 per cent. of the PMHL Shares to which the Offer relates for this acceptance condition to be declared unconditional in all respects. If any further shares are allotted during the period from the date of this Announcement and the close of the offer period, then the percentage of PMHL Shares which Jetgo Bidco will need to acquire under the Offer will be adjusted accordingly.

The Offer and the Option Offer are also conditional upon the consent of PIHL's shareholders. Irrevocable undertaking(s) to vote in favour of the PIHL Resolution at the PIHL SGM have been secured from the holders of 4,177,897,828 PIHL Shares representing approximately 65.33 per cent. of the PIHL Shares in issue at the time of this Announcement.

Further details of the conditions to the Offer are set out in Appendix I to this Announcement andwill be set out in the Offer Document and, in the case of PMHL Shares held in certificated form, in the Form of Acceptance accompanying the Offer Document.

Offer Document

The Offer Document will be posted to Independent Shareholders as soon as practicable. The Offer will be made solely by the Offer Document and the Form of Acceptance, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

Appendix III contains definitions used in this Announcement.

   14.          Securities in issue

As at the Latest Practicable Date, there were 143,391,230 PMHL Shares in issue and 4,517,989 Treasury Shares in issue. On 19 July 2013, PMHL announced that the PMHL Board has approved the cancellation of all Treasury Shares. Cancellation is expected to occur in early August 2013.

   15.          Documents on display

The documents referred to below will be available for inspection at the office of Stephenson Harwood LLP at 1 Finsbury Circus London EC2M 7SH, during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) by no later than 12 noon on 23 July 2013 while the Offer remains open for acceptance:

   --       This Announcement. 
   --       The Facility Agreement. 
   16.          Overseas shareholders

The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable legal or regulatory requirements. Independent Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

 
 ENQUIRIES 
 Jetgo Development Limited 
  Richard Kong 
  Gloria Wong                     +852 2243 3778 
 Prosperity Minerals Holdings 
  Limited 
  Patrick Li                      +852 3187 2618 
  Anthony Williams                 +44 (0) 7810 883 145 
 Daniel Stewart & Company plc 
  (Financial adviser, 
  nominated adviser and broker 
  to PMHL) 
  Antony Legge 
  Paul Shackleton 
  Ciaran Walsh                    +44 (0) 20 7776 6550 
 Citigate Dewe Rogerson 
 
  Martin Jackson 
  Priscilla Garcia 
  Jack Rich                       +44 (0) 20 7638 9571

Independent Shareholders who accept the Offer may only rely on the Offer Document and, where appropriate, the related Form of Acceptance, for all the terms and the conditions of the Offer. In deciding whether or not to accept the Offer in relation to their PMHL Shares, Independent Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the accompanying Form of Acceptance. Independent Shareholders are strongly advised to read the Offer Document being posted to them shortly, which contains important information with respect to the Offer.

Daniel Stewart has given its written consent to the release of this Announcement containing references to its name in the form and context in which it appears.

The PMHL Directors accept responsibility for the information contained in this Announcement relating to PMHL. To the best of the knowledge and belief of the PMHL Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement relating to PMHL is in accordance with the facts and does not omit anything likely to affect the import of such information. The PMHL Directors (excluding the Independent Directors) are not responsible for the views of the Independent Directors and their recommendation in respect of the Offer as set out this Announcement due to their potential conflicts of interest.

The Jetgo Bidco Directors and the PIHL Directors, whose names are set out below, accept responsibility for all other information contained in this Announcement (other than the information relating to PMHL). To the best of the knowledge and belief of the Jetgo Bidco Directors and the PIHL Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

UK Takeover Code

Notice to Overseas Shareholders

Unless otherwise determined by Jetgo Bidco and permitted by applicable law and regulation, the Offer will not being made, directly or indirectly, in or into, or by the use of the mails or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction (including the United States, Canada, Australia, the Republic of South Africa or Japan) and the Offer will not capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons receiving such documents (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from a Restricted Jurisdiction.

Forward-looking statements

This Announcement, including certain information included by reference, contains certain forward looking statements with respect to (amongst other things) the financial condition, results of operations and business of Jetgo Bidco, PIHL or the PIHL Group and PMHL or the PMHL Group and certain plans and objectives of the Jetgo Bidco Board and the PMHL Board. These forward looking statements can be identified by the fact that they do not relate to historical or current facts. Forward looking statements, without limitation, often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Jetgo Bidco Board, the PIHL Board and the PMHL Board in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty and the factors described in the context of such forward looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements which are not guarantees of the future performance.

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.

Neither Jetgo Bidco nor PIHL, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Neither Jetgo Bidco nor PIHL undertakes any obligation publicly to update or revise any of the forward looking statements, whether as a result of new information, future events or otherwise, save in respect of any requirements under applicable laws, the AIM Rules and other applicable regulations.

APPENDIX I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

The Offer is subject to the following conditions:

(a) valid acceptances being received (and not, where permitted, withdrawn) by 1.00 p.m. on the First Closing Date (or such later time(s) and/or date(s) as Jetgo Bidco may, in consultation with the PMHL Board, decide) in respect of such number of PMHL Shares which, together with PMHL Shares that Jetgo Bidco shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, will result in Jetgo Bidco, PIHL or any person acting in concert with Jetgo Bidco and PIHL, holding PMHL Shares carrying in aggregate more than 90 per cent. (or such lesser percentage as Jetgo Bidco may decide) of the voting rights then normally exercisable at general meetings of PMHL (including for this purpose to the extent, if any, any votes attributable to PMHL Shares which are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances);

(b) all resolutions necessary to approve and implement the Offer and the Option Offer being duly passed by the requisite majority or majorities at the PIHL SGM or any adjournment of that meeting;

(c) save as Disclosed, there being no provision of any agreement, arrangement, license, permit, lease or other instrument to which any member of the PMHL Group is a party or by or to which any such member or any of its assets would be reasonably likely to be bound, entitled or subject, which as a consequence of the Offer or the proposed acquisition of any shares or other securities in PMHL or because of a change in the control or management of the PMHL Group or otherwise, would or could reasonably be expected to result in, to an extent which is or would reasonably be expected to be material in the context of the PMHL Group taken as a whole:

(i) any monies borrowed by or any other indebtedness (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(ii) any such agreement, arrangement, licence, permit, lease or instrument or the interest or business of any such member or the rights, liabilities, obligations or interests of any such member thereunder being terminated or adversely modified or affected or any obligation or liability arising or any adverse action being taken or arising thereunder;

(iii) any assets or interests of any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any such member otherwise than in the ordinary course of business;

(iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

(v) the rights, liabilities, obligations or interests of any such member in, or the business of any such member with, any person, firm or body (or any arrangement(s) relating to any such interest or business) being terminated, adversely modified or adversely affected;

(vi) the value of any such member or its financial or trading position or prospects being prejudiced or adversely affected;

(vii) any such member ceasing to be able to carry on business under any name under which it presently does so; or

   (viii)        the creation of any liability, actual or contingent, by any such member;

(ix) the creation of any liability of any such member to make any severance, termination, bonus or other payment to any of its directors or other officers,

and no event having occurred which, under any provision of any agreement, arrangement, license, permit, lease or other instrument to which any member of the PMHL Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, could reasonably be expected by Jetgo Bidco to result (either with the passage of time, the giving of notice or both) in any of the events or circumstances as are referred to in sub-paragraphs (i) to (ix) of this condition (c) in each case to an extent which is material in the context of the PMHL Group taken as a whole;

(d) no central bank, government, government department or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, stock exchange, trade agency, association, institution or any other body or person whatsoever in any jurisdiction (each, a "Third Party") having given notice of a decision or decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision or order, and there not continuing to be outstanding any statute, regulation, decision or order, or having taken any other step which would or would reasonably be expected by Jetgo Bidco to:

(i) require, prevent or materially delay the divestiture, or adversely alter the terms envisaged for any proposed divestiture by any member of the PIHL Group or any member of the PMHL Group of all or any material portion of their respective businesses, assets or property or impose any material limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective material assets or material properties or any part thereof;

(ii) result in a material delay in the ability of Jetgo Bidco, or prevent it or render it unable, to acquire some or all of the PMHL Shares or require a material divestiture by Jetgo Bidco or any member of the PIHL Group of any securities in PMHL;

(iii) impose any material limitation on, or result in a material delay in, the ability of any member of the PIHL Group directly or indirectly to acquire or to hold or to exercise effectively all rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the PMHL Group or the PIHL Group or to exercise, directly or indirectly, voting or management control over any such member;

(iv) otherwise materially and adversely affect the business, assets, liabilities profits or prospects or financial or trading position of any member of the PMHL Group or the PIHL Group;

(v) make the Offer, its implementation or the acquisition or proposed acquisition by Jetgo Bidco or any member of the PIHL Group of any shares or other securities in, or control or management of, PMHL void, illegal and/or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, materially restrain, prevent, restrict, prohibit, delay or otherwise interfere with, the same, or impose additional material conditions or obligations with respect to, or otherwise materially impede or challenge or require material amendment of the Offer or the acquisition by Jetgo Bidco or any member of the PIHL Group of any shares or other securities in PMHL;

(vi) require any member of the PIHL Group or the PMHL Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) or interest in any member of the PMHL Group or the PIHL Group owned by any third party (other than in the implementation of the Offer);

(vii) impose any material limitation on the ability of any member of the PMHL Group or the PIHL Group to co-ordinate its business, or any part of it, with the businesses of any other member of the PMHL Group and/or the PIHL Group; or

(viii) result in any member of the PMHL Group or the PIHL Group ceasing to be able to carry on business as it presently does, in each case to an extent which is material in the context of the Offer, or the PIHL Group or the PMHL Group taken as a whole (as the case may be), and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Offer or proposed acquisition of any shares or securities in PMHL having expired, lapsed or been terminated;

(e) all filings or applications which are reasonably considered necessary or advisable by Jetgo Bidco or which are required by law having been made in connection with the Offer and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Offer or the acquisition by any member of the PIHL Group of any shares or other securities in, or under control of, PMHL and all authorisations, declarations, decisions, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals ("authorisations") reasonably considered necessary or advisable by Jetgo Bidco, or which are required by law in respect of the Offer or the proposed acquisition of any shares or other securities in, or control of, PMHL by any member of the PIHL Group having been obtained in terms and in a form reasonably satisfactory to Jetgo Bidco from all appropriate Third Parties or persons with whom any member of the PMHL Group has entered into contractual arrangements, in each case where the absence of such authorisations would have a material adverse effect on the PIHL Group or the PMHL Group taken as a whole (as the case may be) or would be material in the context of the Offer, and all such authorisations which are reasonably considered by Jetgo Bidco to be necessary to carry on the business of any member of the PMHL Group as currently carried on remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke or not to renew any of the same and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

   (f)            save as Disclosed, no member of the PMHL Group having, since 31 March 2013:

(i) save for PMHL Shares issued pursuant to the exercise of options granted under the PMHL Share Option Scheme, issued or agreed to issue, authorised or proposed the issue of additional shares or securities of any class;

(ii) save for the grant of options under the PMHL Share Option Scheme, issued or agreed to issue, authorised or proposed the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;

(iii) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares (including treasury shares) or other securities or reduced or made or authorised any other change to any part of its share capital;

(iv) save as between PMHL and wholly-owned subsidiaries of PMHL ("Intra-PMHL Group Transactions") recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution to any shareholder whether payable in cash or otherwise;

(v) save for Intra-PMHL Group Transactions, merged with or demerged from any body corporate or partnership or, other than in the ordinary course of business, acquired or disposed of or transferred, mortgaged, charged or created any security interest over, any asset or any right, title or interest in any asset (including shares and trade investments) or authorised, proposed or announced any intention to propose the same which, in any case, is material in the context of the PMHL Group taken as a whole;

(vi) save for Intra-PMHL Group Transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital;

(vii) save for Intra-PMHL Group Transactions, issued, authorised or proposed the issue of any debentures or incurred or increased any indebtedness or liability (actual or contingent) or proposed to do any of the foregoing;

(viii) entered into, implemented, effected, authorised, proposed or announced any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement in respect of itself or another member of the PMHL Group that is material in the context of the PMHL Group;

(ix) entered into, or varied any material terms of, any agreement with any of the directors or senior executives of PMHL;

(x) entered into, varied or (in a manner which is materially prejudicial to the PMHL Group taken as a whole) terminated, or authorised, proposed or announced its intention to enter into, vary or (in a manner which is materially prejudicial to the PMHL Group taken as a whole) terminate any agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which:

   (A)          is of a long term, onerous or unusual nature or magnitude;

(B) is or would reasonably be expected to be materially restrictive to the business of any member of the PMHL Group; or

(xi) proposed, agreed to provide or modified the terms of any share option scheme or any incentive scheme relating to the employment or termination of employment of any employee of the PMHL Group save as Disclosed or other than in the ordinary course;

(xii) terminated or varied the terms of any agreement or arrangement between any member of the PMHL Group and any other person in a manner which would or would reasonably be expected to have a material adverse effect on the financial position or prospects of the PMHL Group taken as a whole;

(xiii) taken any corporate action or had any legal proceedings started or threatened against it or petition presented or order made for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed in any jurisdiction;

(xiv) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(xv) waived, settled or compromised any claim otherwise than in the ordinary course of business where such claim is not material in the context of the business of the PMHL Group taken as a whole;

(xvi) made any alteration to its memorandum or articles of association or other incorporation documents or, except for any change required by reason of a concurrent change in applicable law, regulation or generally accepted accounting practice, to any method of accounting or accounting practice used by it on the date hereof and which, in any case, is materially adverse in the context of the PMHL Group taken as a whole; or

(xvii) entered into or varied any contract, commitment, arrangement or agreement or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or proposed to, effect any of the transactions, matters or events referred to in this condition (e),

   (g)           since 31 March 2013 and save as Disclosed:

(i) no material adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the PMHL Group;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the PMHL Group is or may become a party (whether as a claimant, defendant or otherwise) and no enquiry or investigation by or complaint or reference to any Third Party against or in respect of any member of the PMHL Group having been instituted, announced or threatened by or against or remaining outstanding against or in respect of any member of the PMHL Group which in any such case would reasonably be expected to materially adversely affect any member of the PMHL Group;

(iii) no contingent or other liability having arisen or become apparent to Jetgo Bidco, which would be likely to materially adversely affect any member of the PMHL Group; and

(iv) no steps having been taken which are likely to result in the withdrawal (without replacement), cancellation, termination or modification of any authorisations, declarations, decisions, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions or approvals held by any member of the PMHL Group which is necessary for the proper carrying on of its business,

(h) save as Disclosed, Jetgo Bidco not having discovered: (a) that any financial, business or other information concerning the PMHL Group as contained in the information publicly disclosed at any time by or on behalf of any member of the PMHL Group is materially misleading, contains a misrepresentation of fact or omits to state a fact necessary to make that information not misleading; or (b) that any member of the PMHL Group, or any partnership, company or other entity in which any member of the PMHL Group has an economic interest and which is not a subsidiary undertaking of PMHL is subject to any liability (contingent or otherwise) which is material in the context of the PMHL Group taken as a whole; or

(i) since 31 March 2013, Jetgo Bidco not having discovered any information which adversely affects the import of any information Disclosed at any time by or on behalf of any member of the PMHL Group and which, in any such case, is material in the context of the PMHL Group taken as a whole. Jetgo Bidco reserves the right to waive, in whole or in part, all or any of the above conditions, except conditions (a) and (b).

(j) Jetgo Bidco not having discovered that any past or present member of the PMHL Group has failed to comply with any applicable legislation or regulations of any jurisdiction or any notice or requirement of any Third Party on any matter, including without limitation with regard to the storage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous or harmful substance or any substance likely to impair the environment or harm human or animal health or otherwise relating to environmental matters or that there has been any such storage, presence, disposal, discharge, spillage, release, leak or emission (whether or not the same constituted non-compliance by any person with any such legislation or regulation, and whenever the same may have taken place), any of which non-compliance would be likely to give rise to any liability (whether actual or contingent) or cost on the part of any member of the PMHL Group and which is material in the aggregate, in the context of the PMHL Group taken as a whole; or

(k) Jetgo Bidco not having discovered that there is, or is reasonably likely to be, any obligation or liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied, operated or made use of or controlled by any past or present member of the PMHL Group under any environmental legislation, regulation, notice, circular or order of any Third Party in any jurisdiction.

Jetgo Bidco reserves the right to waive all or any of the conditions (c) to (k) (inclusive) above, in whole or in part. Conditions (c) to (k) must be fulfilled or waived by midnight on or before the 21st day after the later of the First Closing Date and the date on which conditions (a) and (b) are met (or such later date as Jetgo Bidco may, in consultation with the PMHL Board, decide).

Jetgo Bidco shall be under no obligation to waive or treat as satisfied any of the conditions (c) to (k) (inclusive) by a date earlier than the latest date specified for the satisfaction thereof, notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

Each of the conditions shall be regarded as a separate condition and shall not be limited by reference to any other condition.

The Offerwill be governed by English law and will be subject to the jurisdiction of the English courts and to the conditions set out in this Announcement and in the formal Offer Document and, where appropriate, the related Form of Acceptance. The Offerwill comply with the applicable rules and regulations of the Financial Conduct Authority and the London Stock Exchange.

APPENDIX II

SOURCES AND BASES OF INFORMATION

In this Announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:

(a) Unless otherwise stated, the financial information relating to PMHL has been extracted or derived (without material adjustment) from the audited financial statements of PMHL for the relevant years, prepared in accordance with IFRS.

(b) On the Latest Practicable Date, there were 143,391,230 ordinary shares in PMHL in issue (excluding any Treasury Shares), of which 91,865,324 were held by PIHL.

   (c)           On the Latest Practicable Date there were 4,517,989 Treasury Shares in issue. 
   (d)           On the Latest Practicable Date there were 5,590,000 outstanding PMHL Share Options.

(e) The value of the entire issued share capital of PMHL of approximately GBP186,409,000 is calculated on the basis of the existing issued share capital of PMHL as set out in (b) above multiplied by the Offer Price.

(f) The total value of the PMHL Shares to which the Offer relates of approximately GBP67 million is calculated on the basis of the total number of 51,525,906 PMHL Shares multiplied by the Offer Price.

(g) All prices quoted for PMHL Shares have been derived from the Daily Official List and represent Closing Prices on the relevant date(s).

(h) The net asset value per PMHL Share attributable to holders of PMHL Shares being the audited net asset value (excluding minorities) extracted from the audited financial statements of PMHL for the relevant year divided by the number of PMHL Shares in issue at the relevant year end.

(i) The conversion of US$ into GBP is based on the reference exchange rate of GBP1.00 = US$1.53

APPENDIX III

DEFINITIONS

The following definitions apply throughout this Announcement, unless the context otherwise requires:

 
 "GBP" and "pence"              respectively pounds and pence sterling, 
                                 the lawful currency of the United 
                                 Kingdom; 
 "AIM"                          the market of that name operated 
                                 by the London Stock Exchange; 
 "AIM Rules"                    the AIM Rules for Companies published 
                                 by the London Stock Exchange; 
 "Announcement"                 this Announcement; 
 "Business Day"                 any day (other than a Saturday 
                                 or Sunday or a public holiday) 
                                 on which banks are generally open 
                                 for business in London (other than 
                                 solely for settlement and trading 
                                 in Euro); 
 "certificated"                 a share or other security which 
                                 is not in uncertificated form (that 
                                 is, not in CREST); 
 "City Code"                    the City Code on Takeovers and 
                                 Mergers; 
 "Companies (Jersey)            Companies (Jersey) Law 1991(as 
  Law"                           amended); 
 "Closing Price"                the closing middle market quotation 
                                 of a PMHL Share on the relevant 
                                 date as derived from the AIM Appendix 
                                 to the Daily Official List; 
 "CREST"                        the relevant system (as defined 
                                 in the CREST Regulations) of which 
                                 Euroclear is the Operator (as defined 
                                 in the CREST Regulations); 
 "CREST Regulations"            the Uncertificated Securities Regulations 
                                 2001 (SI 2001 No. 3775), as amended; 
 "Daniel Stewart"               Daniel Stewart & Company plc, financial 
                                 adviser, nominated adviser and 
                                 broker to PMHL; 
 "Disclosed"                    as referred to in PMHL's annual 
                                 report and accounts for the financial 
                                 year ended 31 March 2013; or publicly 
                                 announced by PMHL prior to the 
                                 date of this announcement (by delivery 
                                 of the announcement to a Regulatory 
                                 Information Service); or any information 
                                 or matters of which any of the 
                                 executive directors of PMHL has 
                                 knowledge at the date of this Announcement; 
 "Euroclear"                    Euroclear UK and Ireland Limited 
                                 a company incorporated under the 
                                 laws of England and Wales under 
                                 number 2872738; 
 "Facility Agreement"           the facility agreement dated 22 
                                 July 2013 entered into between 
                                 ICBC (Asia) as lender, Jetgo Bidco 
                                 as borrower and PIHL as guarantor 
                                 in respect of a term loan facility 
                                 of up to US$108 million; 
 "First Closing Date"           the date falling 21 days after 
                                 the date on which the Offer Document 
                                 is posted; 
 "Form of Acceptance"           the form of acceptance and authority 
                                 for use by holders of PMHL Shares 
                                 in certificated form in connection 
                                 with the Offer accompanying the 
                                 Offer Document; 
 "ICBC (Asia)"                  Industrial and Commercial Bank 
                                 of China (Asia) Limited; 
 "Independent Directors"        the independent directors of PMHL 
                                 being Patrick Siu Ming Li, John 
                                 Robertson, Anthony Williams, Yu 
                                 Lin Zhao and Even Sheng; 
 "Independent Shareholders"     the PMHL Shareholders (excluding 
                                 PIHL and parties acting in concert 
                                 with PIHL in connection with the 
                                 Offer); 
 "Jetgo Bidco"                  Jetgo Bidco, a private company 
                                 registered in the British Virgin 
                                 Islands under number 1569952 and 
                                 a wholly owned subsidiary of PIHL; 
 "Jetgo Bidco Board"            the board of directors of Jetgo 
                                 Bidco; 
 "Jetgo Bidco Director"         the sole director of Jetgo Bidco 
                                 as at the date of this Announcement; 
 "Latest Practicable            19 July 2013, being the latest 
  Date"                          practicable date prior to the date 
                                 of this Announcement; 
 "London Stock Exchange"        London Stock Exchange plc; 
 "NAV per PMHL Share"           the net asset value per PMHL Share 
                                 attributable to holders of PMHL 
                                 Shares being the audited net asset 
                                 value (excluding minorities) divided 
                                 by the number of PMHL Shares in 
                                 issue at the year end; 
 "Offer"                        the offer by Jetgo Bidco to acquire 
                                 the entire issued and to be issued 
                                 share capital of PMHL other than 
                                 PMHL Shares already held by PIHL 
                                 and the Treasury Shares, on the 
                                 terms and subject to the conditions 
                                 to be set out in the Offer Document 
                                 and the Form of Acceptance and, 
                                 where the context so requires, 
                                 any subsequent revision, variation, 
                                 extension or renewal thereof; 
 "Offer Price"                  130 pence per PMHL Share; 
 "Option Offer"                 the comparable cash offer by Jetgo 
                                 Bidco to acquire the outstanding 
                                 PMHL Share Options, on the terms 
                                 and subject to the conditions set 
                                 out in the PMHL Share Option Proposal; 
 "PIHL"                         Prosperity International Holdings 
                                 (H.K.) Limited, a company registered 
                                 in Bermuda with company number 
                                 29013 and listed on the Main Board 
                                 of the Stock Exchange of Hong Kong; 
 "PIHL Board"                   the board of directors of PIHL; 
 "PIHL Resolution(s)            the resolution(s) to be proposed 
                                 at the PIHL SGM in order to approve 
                                 the Offer and the Option Offer; 
 "PIHL SGM"                     the special general meeting (or 
                                 any adjournment thereof) of the 
                                 PIHL Shareholders convened to consider 
                                 and, if thought fit, approve the 
                                 resolution(s) to be proposed in 
                                 connection with the approval of 
                                 the Offer and the Option Offer; 
 "PIHL Shareholders"            the holders of PIHL Shares; 
 "PIHL Shares"                  ordinary shares in the capital 
                                 of PIHL with a nominal value of 
                                 HK$0.01; 
 "PMHL"                         Prosperity Minerals Holdings Limited, 
                                 a company registered in Jersey 
                                 with company number 92284; 
 "PMHL Board"                   the board of directors of PMHL; 
 "PMHL Directors"               the directors of PMHL as at the 
                                 date of this Announcement; 
 "PMHL Group"                   PMHL, its subsidiaries and subsidiary 
                                 undertakings; 
 "PMHL Share Option Scheme"     the Prosperity Minerals Holdings 
                                 Share Option Scheme adopted by 
                                 PMHL on 18 May 2006; 
 "PMHL Share Options"           options granted under the PMHL 
                                 Share Option Scheme; 
 "PMHL Share Option Proposal"   a proposal to be dispatched by 
                                 Jetgo Bidco to the holders of outstanding 
                                 PMHL Share Options setting out 
                                 the terms of the Option Offer; 
 "PMHL Shareholders"            holders of PMHL Shares; 
 "PMHL Shares"                  the existing unconditionally allotted 
                                 or issued and fully paid (or credited 
                                 as fully paid) ordinary shares 
                                 of 1 pence each in the capital 
                                 of PMHL and any such further shares 
                                 which are unconditionally allotted 
                                 or issued fully paid while the 
                                 Offer remains open for acceptance 
                                 or by such earlier date as Jetgo 
                                 Bidco may determine but excluding 
                                 the Treasury Shares; 
 "PMHL's Issued Share           the 143,391,230 PMHL Shares in 
  Capital"                       issue as at the date of this announcement, 
                                 excluding the Treasury Shares; 
 "Possible Offer Announcement   15 July 2013 (being the day on 
  Date"                          which PIHL published its announcement 
                                 of a possible offer for PMHL Shares 
                                 other than PMHL Shares already 
                                 held by PIHL); 
 "PRC" or "China"               the People's Republic of China; 
 "RMB"                          Renminbi, the official currency 
                                 of China; 
 "Regulatory Information        any of the services set out in 
  Service"                       Appendix 3 of the Listing Rules 
                                 of the UK Listing Authority; 
 "Restricted Jurisdiction"      the United States, Canada, Japan 
                                 and South Africa, and any other 
                                 jurisdiction where extension or 
                                 acceptance of the Offer would violate 
                                 the law of that jurisdiction 
 "Treasury Shares"              the 4,517,989 PMHL Shares held 
                                 in treasury as at the date of this 
                                 announcement; 
 "uncertificated" or            recorded in the register as being 
  "uncertificated form"          held in uncertificated form in 
                                 CREST and title to which, by virtue 
                                 of the CREST Regulations, may be 
                                 transferred by means of CREST; 
 "UK" or "United Kingdom"       the United Kingdom of Great Britain 
                                 and Northern Ireland; 
 "USA" or "U.S."                United States of America; and 
 "US$" or "cents"               respectively United States dollars 
                                 and cents, the official currency 
                                 of the USA;

This information is provided by RNS

The company news service from the London Stock Exchange

END

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