HUTCHISON WHAMPOA LIMITED
(Incorporated in Hong Kong with limited liability)
CONNECTED TRANSACTION
| A conditional sale and purchase agreement was entered into between HTIL, an indirect wholly owned subsidiary of the Company, and PCCW today. Pursuant to the Sale and Purchase Agreement, HTIL has conditionally agreed to sell all the issued share capital of HTTIL and the Shareholder's Loan to PCCW for a total consideration of HK$803.4 million. The consideration will be satisfied by the issue and allotment of 183,634,285 new PCCW Shares at a price of HK$4.375 per PCCW Share.
The Transaction is a connected transaction for the Company under the Listing Rules and falls within the de mininis exception under Rule 14.25(1) of the Listing Rules. Accordingly the Transaction is only subject to disclosure requirements and no independent shareholders' approval is required. Details of the Transaction will be disclosed in the next annual report and accounts published by the Company in accordance with Rule 14.25(1) (A) to (D) of the Listing Rules. |
THE SALE AND PURCHASE AGREEMENT
| Date | 22 February, 2001 |
| Parties | |
| Vendor: | Hutchison Telecommunications International Limited ("HTIL"), an indirect wholly owned subsidiary of Hutchison Whampoa Limited (the "Company", together with its subsidiaries, the "Group"). |
| Purchaser: | Pacific Century CyberWorks Limited ("PCCW"). |
The Disposal
The assets to be disposed of pursuant to the Sale and Purchase Agreement are as follows:
(i) all the issued share capital of Hutchison Telecommunications Technology Investments Limited ("HTTIL", or, together with its subsidiaries, the "HTTIL Group") (the "Sale Shares") free from all charges, liens, equities, encumbrances, claims, third party rights or restrictions of any nature whatsoever and together with all the rights attaching or accuring to the Sale Shares and all dividends and distributions declared, made or paid on the Sale Shares or in respect of them on and after the date of the Sale and Purchase Agreement; and
(ii) all the benefits of and interests in the total amount of loans or advances outstanding and owing as at 22 February, 2001 from the HTTIL Group to the Group (which amounts to approximately HK$546 million) ("Shareholders' Loan"), together with all rights attaching thereto on or after the third business day after the date on which the conditions precedent (as disclosed below) are fulfilled ("Completion Date") free from all charges, liens, equities, encumbrances, claims, third party rights or restrictions of any nature.
(The disposal of the Sale Shares and the Shareholders' Loan, together, the "Transaction".)
Any further shareholder's loan or advance made by the Group to HTTIL Group from the date hereof to Completion will be fully reimbursed by PCCW to the Group in cash.
Consideration
The aggregate consideration for the Sale Shares and the Shareholders' Loan shall be the sum HK$803.4 million. The consideration will be satisfied by the allotment and issue of 183,634,285 new shares ("Consideration Shares") of HK$0.05 each in the capital of PCCW ("PCCW Shares") at a value of HK$4.375 each credited as fully paid. Such Consideration Shares shall rank pari passu in all respect with the existing shares of PCCW including the rights to receive all dividends and distributions declared made or distributed after the date hereof and shall be free from all charges, mortgages, liens, equities, encumbrances, claims, third party rights or restrictions of any nature whatsoever. The Consideration Shares are subject to a lock-up period of one year from the Completion Date.
The price of HK$4.375 per Consideration Share represents
- the closing price of PCCW Share as quoted on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") today;
- a discount of approximately 2.6% to the average closing price of approximately HK$4.49 per PCCW Share of the five trading days up to and including the date of this announcement; and
- a discount of approximately 6.3% to the average closing price of approximately HK$4.67 per PCCW Share of the 20 trading days up to and including the date of this announcement.
The consideration was negotiated with PCCW on an arm's length basis. The board of directors of the Company, including the independent non-executive directors, are of the opinion that the terms of the Transaction are fair and reasonable and the Disposal is in the interests of the Company and its shareholders taken as a whole.
Completion of the Transaction will result in the Company holding an indirect interest in PCCW of approximately 0.83 per cent. of the issued share capital of PCCW as enlarged by the issuance of the Consideration Shares.
Conditions for Completion
Completion of the Sale and Purchase Agreement is conditional upon the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) listing of and permission to deal in the Consideration Shares on or before 8 March, 2001.
Completion
Completion of the Sale and Purchase Agreement will take place on the third business day following fulfilment of the conditions referred to above, or such later date as HTIL and PCCW may agree.
OPERATION OF HTTIL
The principal activity of HTTIL is the holding of shares, directly or indirectly, in a number of companies incorporated in various jurisdictions including Hong Kong, Singapore, the British Virgin Islands, the Cook Islands and Cayman Islands. The HTTIL Group is engaged in the business of the provision of services and equipment relating to communications utilising very small aperture terminals.
Set out below is the consolidated profits before taxation and extraordinary items and consolidated profits after taxation and extraordinary items of the HTTIL Group for each of the two years ended 31 December, 2000.
For the year ended 31 December,
1999 2000
(audited) (unaudited)
HK$'000 HK$'000
Profit/(loss) before taxation and
extraordinary items (16,090) 14,154
Profits/(loss) after taxation and
extraordinary items (16,256) 13,971
REASONS FOR THE TRANSACTIONS
The Group's telecommunication strategy has evolved over the past few years from developing a broad international base of services, including satellite based communication to a strategy focused on mobile platform in Hong Kong and internationally. Over the past few years, the Group has disposed of its satellite interests, including the Group's equity interest in Asia Satellite Telecommunications Co. Ltd. The Transaction is part of the Group's disposal programme of satellite based businesses and its strategy to concentrate on its mobile, telecommunication businesses.
CONNECTED TRANSACTION
As Mr. Li Tzar Kai, Richard, who controls PCCW, was a director of the Company within the last 12 months, the Transaction is a connected transaction under Chapter 14 of the Listing Rules. Pursuant to Rule 14.25(1), the Transaction is deemed to be de-minimis as far as the Company is concerned and will be included in the Company's next published annual report and accounts in accordance with Rule 14.25(1) (A) to (D) of the Listing Rules.
By Order of the Board
Edith Shih
Company Secretary
Hong Kong, 22 February, 2001
22/F, Hutchison House, 10 Harcourt Road, Hong Kong. Tel: 2128 1188 Fax: 2128 1705
Website: http://www.hutchison-whampoa.com
Please also refer to the published version of this announcement in Hong Kong iMail and Sing Tao Daily.
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