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CONNECTED TRANSACTION
Further to the announcement dated 11th April, 1997, the directors of Guoco Group Limited ("Guoco") announce that on 23rd July, 1997 it was agreed to terminate the agreement for sale and purchase of shares ("S&P" Agreement") dated 11th April, 1997 entered into between its wholly-owned subsidiary, Guoco Securities (Bermuda) Limited ("GSBL") and HLG Capital Berhad ("HLG"), a subsidiary of Hong Leong Company (Malaysia) Berhad ("HLCM").
Under the terms of the S&P Agreement, HLG conditionally agreed to buy and GSBL agreed to sell 1,570,204 shares ("the Shares") of US$1.00 each in the capital of Growluck Limited ("Growluck") comprising 50% of the issued share capital of Growluck, at a total consideration of Ringgit Malaysia 8 million (HK$24.9 million approximately) ("Proposed Transaction"). A 10% initial deposit was paid on 11th April, 1997.
Prior to the completion of the Proposed Transaction, GSBL and HLG mutually agreed not to proceed with the Proposed Transaction in the circumstances of the changing business direction of both parties. The 10% initial deposit paid by HLG has been refunded by GSBL to HLG without interest. The directors of Guoco believe the decision not to proceed with the Proposed Transaction is in the best interests of GSBL, Guoco and its shareholders.
HLCM is a substantial shareholder of Guoco and HLG. Mr. Quek Leng Chan is a substantial shareholder of HLCM and is a director of Guoco and HLG. As a result, the Proposed Transaction constituted a connected transaction for the purpose of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The consideration in respect of the Shares represented less than 3% of the net tangible assets of Guoco.
Hong Kong, 23rd July, 1997