| The directors of Bossini International Holdings Limited (the "Company") announce that on 30 August 2000, Active Link entered into a conditional acquisition agreement (the "Agreement") with Tung Hing pursuant to which Active Link agreed to acquire Tung Hing's retail operations in Taiwan and part of its retail business assets at a consideration of HK$20,000,000 and not exceeding NT$249,126,578 (approximately HK$62,281,650) respectively (the "Acquisition").
The Acquisition constitutes a discloseable transaction under Rule 14.12(1) of the Listing Rules. A circular containing further details of the Acquisition will be despatched to shareholders of the Company as soon as practicable. |
PARTIES TO THE AGREEMENT
| Purchaser | : | Active Link Limited ("Active Link"), a subsidiary in which the Company owns 80% equity interests. The remaining 20% interests are held by an independent third party not connected with any of the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined in the Listing Rules). |
| Vendor | : | Tung Hing Chun Yip Shareholdings Limited ("Tung Hing"), a company incorporated in Taiwan. It is an independent third party not connected with any of the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined in the Listing Rules). |
REASON OF ACQUISITION
Tung Hing is principally engaged in property investment and retail of casual apparel under the Bossini brand name in Taiwan. It is the authorised licencee of Bossini brand in Taiwan. At present, Tung Hing operates 49 shops and counters in Taiwan under the Bossini brand name. Since the directors consider Taiwan as a market with numerous business opportunities and good potential for further development, the Company decided to expand the retail operations in Taiwan. However, as Tung Hing lacks of sufficient human and financial resources to further expand its business, the directors believe that the Acquisition will contribute positively to the future growth of retail operations in Taiwan and can further strengthen the Company's position in Taiwan's apparel retail market.
CONSIDERATION
Pursuant to the Agreement, the total consideration of the Acquisition consisted of the following two portions:
1) acquire Tung Hing's retail operations in Taiwan at HK$20,000,000 which can be regarded as goodwill of the retail operations; and
2) acquire part of Tung Hing's retail business assets (consisted of inventories; decorations, improvements and air-conditioning; prepayment, deposits and deferred expenses; furniture, fittings and equipments and motor vehicles and leased assets) (the "Assets") at the price to be determined based on the Assets' value as at 31 August 2000 but will not exceed NT$249,126,578 (approximately HK$62,281,650). The final purchase price will be arrived at by reference to Tung Hing's balance sheet as at 31 August 2000, and after adjustments and provisions made in accordance with the Company's Hong Kong accounting policies.
The total consideration was agreed after arm's length negotiations. The directors consider that the terms of the Agreement are fair and reasonable as far as the shareholders of the Company are concerned.
PAYMENT TERMS
1) NT$30,000,000 (approximately HK$7,500,000) has paid as deposit;
2) provided that Tung Hing can produce its balance sheet as at 31 August 2000 to be prepared by a qualified accountant on or before 15 September 2000, 70% of the balance of total consideration will be paid on or around 26 September 2000; and
3) if no claims from Active Link on or before 31 December 2000, the remaining balance will be settled on or before 7 January 2001.
CONDITIONS PRECEDENT
Completion of the Agreement is conditional upon, inter alia, the fulfilment of the following conditions by Tung Hing on or before 1 September 2000:
1) not less than 70% of the leases of its shops and counters should be successfully assigned to Active Link; and
2) the employment of existing workforce of its retail business in Taiwan and the Assets to be transferred to Active Link.
SOURCE OF FINANCE
The Company intends to finance the Acquisition wholly by bank borrowings.
GENERAL
The Company and its subsidiaries are principally engaged in design and retail of casual apparel and accessories under the Bossini brand name mainly in Hong Kong, People's Republic of China and Singapore.
The Acquisition constitutes a discloseable transaction under Rule 14.12(1) of the Listing Rules. A circular containing further details of the Acquisition will be despatched to shareholders of the Company as soon as practicable.
By Order of the Board
Bossini International Holdings Limited
Mr. Ka Sing LAW
Director
Hong Kong, 30 August 2000
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