Guoco Securities (Bermuda) Limited ("GSB"), a wholly-owned subsidiary
of Guoco Group Limited ("Guoco") has on 23rd December, 1998 exercised a
put option to sell to ABN AMRO Bank, N.V. ("ABN AMRO") the total number
of shares held by GSB in ABN AMRO Asia (Holdings) Limited ("AAAH") pursuant
to the Amended and Restated Put and Call Option Agreement dated 5th December,
1997.
Put and Call Option Agreement dated 5th December, 1997 ("Option Agreement")
Exercise of Put Option
Exercise Date
Hong Kong, 23rd December, 1998
ANNOUNCEMENTS
The Stock Exchange of Hong Kong Limited takes no responsibility
for the contents of this announcement, makes no representation as to its
accuracy or completeness and expressly disclaims any liability whatsoever
for any loss howsoever arising from or in reliance upon the whole or any
part of the contents of this announcement.
The estimated total consideration amounts to approximately US$220
million (subject to final determination) and the profit on such exercise
of option is expected to contribute approximately US$172 million as an
exceptional gain in Guoco's consolidated profit and loss account for the
year ending 30th June, 1999.
Parties
Seller : GSB
Purchaser
:
ABN AMRO
Option
:
Under the Option Agreement dated 5th December, 1997,
a put option ("Put Option") is granted to GSB by ABN AMRO over the 3,581,670
ordinary shares ("Shares"), representing the entire interest of GSB in
AAAH and approximately 29.83% of the issued share capital of AAAH, exercisable
at any time after 28th April, 1998 and a call option is granted by GSB
to ABN AMRO over the Shares in AAAH owned by GSB.
On 23rd December, 1998, GSB gave notice to exercise the Put Option
granted by ABN AMRO in respect of the Shares subject to the conditions
set out below.
Option Price
The estimated total consideration for the Shares amounts to approximately
US$220 million. However, the final determination of the price payable in
respect of the option ("the Option Price") will be ascertained pursuant
to a formula set out in the Option Agreement that is based on an earlier
agreed valuation, as adjusted to the date of exercise. The directors consider
the estimated Option Price to be fair and reasonable.
Conditions
Completion is conditional upon the receipt of the approvals from all
relevant regulatory authorities required in relation to the sale of shares
in AAAH from GSB to ABN AMRO.
Completion of the sale of Shares
Subject to the fulfilment of the conditions described above, completion
of the exercise of the Option is due to occur within ten business days
after the final determination of the Option Price. It is expected that
Completion will take place not later than 31st January, 1999.
Consideration
The consideration is to be paid in full in cash by ABN AMRO at Completion.
It is intended that the net proceeds of the disposal will be used by the
Guoco Group to reduce external bank borrowings and to provide additional
working capital.
Profit on exercise of Put Option
The exercise of the Put Option is expected to contribute approximately
US$172 million as an exceptional gain in Guoco's consolidated profit and
loss account for the year ending 30th June, 1999.
Information on AAAH
AAAH is a joint venture company incorporated in Jersey in which GSB
and ABN AMRO respectively hold approximately 29.83% and 70.17% interest
in the issued share capital. Its principal businesses are stockbroking
and merchant banking.
Reasons for the Exercise of the Put Option
Notwithstanding the negative impact of the current economic downturn,
the Group's financial position continues to be sound. Nonetheless, the
Group's management team has conducted an appraisal of each of its investment
assets. As a result, the Group has resolved to exercise the Put Option
to enhance the financial position of the Group and to strengthen its resolve
to concentrate on those core businesses with synergistic potential.
Discloseable Transaction
The consideration under the Agreement represents more than 15% but less
than 50% of the latest audited net tangible asset value of Guoco as at
30th June, 1998. Pursuant to the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited, the exercise of the Put Option
by GSB of the sale of the Shares to ABN AMRO constitutes a discloseable
transaction for Guoco. A circular containing details of the exercise of
the Put Option will be sent to the shareholders of Guoco as soon as practicable.
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