HUTCHISON WHAMPOA LIMITED
(Incorporated in Hong Kong with limited liability)
CONNECTED TRANSACTION
Proposed acquisition of interests in Hutchison Telephone Company Limited
| On 22 February 2001, the Agreement was entered into by (1) WHL, an indirect wholly owned subsidiary of the Company; (2) MAL; (3) Motorola; and (4) HIL, a wholly owned subsidiary of the Company, pursuant to which MAL agreed to sell and WHL agreed to purchase or procure to be purchased the Subject Shares subject to the other terms and conditions contained in the Agreement. The consideration will be paid in full by way of cash upon Completion.
Completion is conditional upon the conditions set out below having been fulfilled or waived (as the case may be). The terms of the Agreement were arrived at after arm's length negotiations between the parties thereto and are on normal commercial terms. HTCL, the subject company, is currently held as to about 55.9 per cent by WHL, as to about 25.1 per cent by MAL and as to about 19 per cent by HTCL Holdings. Being a substantial shareholder of HTCL (which is a subsidiary of the Company), MAL is a connected person of the Company and the Acquisition constitutes a connected transaction for the Company under the Listing Rules. Pursuant to Rule 14.25(1) of the Listing Rules, brief details of the Acquisition are required to be disclosed in this announcement, and details of the Acquisition 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. |
THE AGREEMENT
Date
22 February 2001
Parties
| Vendor | : | MAL |
| Purchaser | : | WHL |
| Vendor Guarantor | : | Motorola |
| Purchaser Guarantor | : | HIL |
Sale and Purchase
MAL has agreed to sell and WHL has agreed to purchase or procure to be purchased the Subject Shares subject to the terms and conditions of the Agreement.
Consideration
A consideration being more than 0.03 per cent but less than 3 per cent of the book value of the net tangible assets of the Company as disclosed in its latest published audited accounts for the year ended 1999 adjusted to take account of subsequent transactions in the manner described in Rule 14.04(1) and (6) of the Listing Rules is payable by WHL to MAL by way of cash on Completion.
MAL shall be entitled to participate in 50 per cent of the net profits which WHL may make in any disposal by WHL of up to 25.1% of the issued shares in HTCL at Completion within two (2) years from Completion.
Conditions of the Agreement
Completion of the Agreement is conditional upon fulfilment of the following conditions:
(i) all requisite consents and approvals under certain loan facility documents and leasing transactions entered into by HTCL for entering into the Agreement and carrying out the transactions contemplated thereby having been obtained;
(ii) all requisite consents and approvals from the Telecommunications Authority of Hong Kong under the relevant telecommunication licences granted to HTCL for entering into the Agreement and carrying out the transactions contemplated thereby having been obtained;
(iii) HTCL Holdings having given a waiver of its pre-emption rights in respect of, and consent to, the sale and purchase of the Subject Shares pursuant to the terms of the Agreement; and
(iv) appropriate confirmation/evidence showing that MAL and Motorola will have been released and discharged in full from all obligations and liabilities under the facility documents and leasing transactions referred to above upon Completion in such form and substance reasonably satisfactory to MAL having been obtained.
Completion of the Agreement
Completion will take place on the third business day after the date on which all the conditions set out above have been fulfilled or waived (as the case may be), on or before 30 April 2001 or such later date as the parties may agree in writing from time to time.
Indemnity
If condition (iv) above shall not have been fulfilled at Completion, MAL, WHL and, if applicable, Motorola shall use their respective reasonable endeavours to procure and obtain the release and discharge from such facility documents and leasing transactions as mentioned in condition (iv) above as soon as practicable after Completion. WHL has agreed and undertaken with MAL that prior to such release and discharge and subject to MAL and, if applicable, Motorola duly discharging their foregoing obligations, it shall indemnify MAL and Motorola fully against all liabilities, losses, claims, costs and expenses incurred or sustained by MAL or Motorola under such facility documents and leasing transactions after Completion.
Guarantee
Motorola has agreed to guarantee the due and punctual performance by MAL, a direct wholly owned subsidiary of Motorola, of its obligations under the Agreement.
HIL has agreed to guarantee the due and punctual performance by WHL, an indirect wholly owned subsidiary of HIL, of its obligations under the Agreement.
Offer to HTCL Holdings
As HTCL Holdings is a shareholder of HTCL, WHL has offered it a pro rata portion of the Subject Shares (i.e. 6.37 per cent of the interest in HTCL out of the 25.1 per cent currently held by MAL) to preserve HTCL Holdings' right to participate under its existing pre-emption right. Such offer is subject to the same terms and conditions as contained in the Agreement and will be open for 60 days from the date of Completion.
REASONS FOR THE ACQUISITION
HTCL is a provider of cellular mobile telephone services.
The Acquisition gives the Company a good opportunity to increase its interests in HTCL from about 55.9 per cent to about 81 per cent or about 74.6 per cent if HTCL Holdings accepts in full the offer as mentioned above. The directors of the Company consider the making of such investment on the terms of the Agreement to be a good and sound investment.
The terms of the Agreement were arrived at after arm's length negotiations between the parties thereto and are on normal commercial terms. The directors of the Company, including the independent non executive directors, consider the Acquisition to be in the interests of the Company and its shareholders and the terms of the Acquisition to be fair and reasonable so far as the Company and its shareholders are concerned.
CONNECTED TRANSACTION
HTCL is currently held as to about 55.9 per cent by WHL, as to about 25.1 per cent by MAL and as to about 19 per cent by HTCL Holdings. Being a substantial shareholder of HTCL (which is a subsidiary of the Company), MAL is a connected person of the Company and the Acquisition constitutes a connected transaction for the Company under the Listing Rules.
Pursuant to Rule 14.25(1) of the Listing Rules, brief details of the Acquisition are required to be disclosed in this announcement, and details of the Acquisition 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.
Should HTCL Holdings accept the offer to acquire part of the Subject Shares, such acquisition will constitute another connected transaction for the Company and will be subject to compliance with any applicable requirements of the Listing Rules.
In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:
| "Acquisition" | the proposed acquisition by WHL from MAL of the Subject Shares subject to the terms and conditions of the Agreement |
| "Agreement" | the agreement dated 22 February 2001 between WHL, MAL, Motorola and HIL in respect of the sale and purchase of the Subject Shares |
| "Company" | Hutchison Whampoa Limited, a limited liability company incorporated in Hong Kong, the shares of which are listed on the Stock Exchange |
| "Completion" | completion of the Agreement |
| "HIL" | Hutchison International Limited, a limited liability company incorporated in Hong Kong and a wholly owned subsidiary of the Company |
| "Hong Kong" | the Hong Kong Special Administrative Region of the PRC |
| "HTCL" | Hutchison Telephone Company Limited, a limited liability company incorporated in Hong Kong and an indirect non wholly owned subsidiary of the Company |
| "HTCL Holdings" | HTCL Holdings Limited, a limited liability company incorporated in Hong Kong and an indirect subsidiary of NTT DoCoMo, Inc. |
| "HK$" | Hong Kong dollars |
| "Listing Rules" | the Rules Governing the Listing of Securities on the Stock Exchange |
| "MAL" | Motorola Asia Limited, a limited liability company incorporated in Hong Kong and a direct wholly owned subsidiary of Motorola |
| "Motorola" | Motorola Inc., incorporated under the laws of the State of Delaware, the United States of America |
| "PRC" | the People's Republic of China |
| "Stock Exchange" | The Stock Exchange of Hong Kong Limited |
| "Subject Shares" | 30,000 "B" shares of HK$10 each in the share capital of HTCL, representing about 25.1 per cent of the entire issued share capital of HTCL |
| "WHL" | Whampoa Holdings Limited, a company incorporated in Jersey and an indirect wholly owned subsidiary of each of HIL and the Company |
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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