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HONG KONG, Aug 26, 2010 - (ACN Newswire) - Emperor Watch & Jewellery Limited (the "Group")(SEHK: 0887), a leading luxury watch and jewellery retailer, has announced a Memorandum of Understanding in Respect of Business Cooperation.
Memorandum of Understanding
The Board of the Company wishes to announce that on 26 August 2010, the Company entered into a memorandum of understanding with L Capital Advisors setting out the framework for their future cooperation. Pursuant to the memorandum, L Capital Advisors will become a strategic partner of the Company and will offer professional advice to the Group in sales expansion, brand building, advertising, marketing, retail operation, human resources, distribution and costs management of the Group. The memorandum of understanding shall become effective upon the issuance of the Warrants and the L Capital CB to L Capital.
Purchase of the Existing Convertible Bonds
Reference is made to the announcement dated 4 March 2010 and the circular dated 9 April 2010 in respect of the issue of the Existing Convertible Bonds. On 25 August 2010 (after trading hours), Winner Sea (Issuer), the Company (the guarantor) and the Existing CB Subscribers entered into the Purchase Agreement pursuant to which the Existing CB Subscribers have agreed to sell and the Issuer has agreed to purchase the Existing Convertible Bonds in cash from the Existing CB Subscribers. The purchased Existing Convertible Bonds will be cancelled on 21 September 2010.
Issue of new Convertible Bonds
L Capital CB:
On 26 August 2010, L Capital entered into the L Capital CB Subscription Agreement with Winner Sea as Issuer and the Company as guarantor pursuant to which Winner Sea will issue and L Capital will subscribe for the L Capital CB in the aggregate principal amount of HK$140 million. The L Capital CB is convertible into L Capital Conversion Shares at the initial Conversion Price of HK$0.54 per L Capital Conversion Shares and on the terms detailed below in this announcement. Upon full exercise of the conversion rights attached to the L Capital CB based on the initial Conversion Price, a total of 259,259,259 L Capital Conversion Shares will be allotted and issued. The 259,259,259 L Capital Conversion Shares represent approximately 4.97% of the issued capital of the Company as at the date of this announcement and approximately 4.74% of the issued share capital of the Company as enlarged by the issue of the L Capital Conversion Shares.
D. E. Shaw group CB:
On 26 August 2010, D. E. Shaw Valence entered into the D. E. Shaw group CB Subscription Agreement with Winner Sea as Issuer and the Company as guarantor pursuant to which Winner Sea will issue and D.E. Shaw Valence will subscribe for the D. E. Shaw group CB in the aggregate principal amount of HK$240 million. The D. E. Shaw group CB is convertible into D. E. Shaw group Conversion Shares at the initial Conversion Price of HK$0.54 per D. E. Shaw group Conversion Share and on the terms detailed below in this announcement. Upon the full exercise of the conversion rights attached to the D. E. Shaw group CB, a total of 444,444,444 D. E. Shaw group Conversion Shares will be allotted and issued. The 444,444,444 D. E. Shaw group Conversion Shares represent approximately 8.52% of the issued capital of the Company as at the date of this announcement and approximately 7.85% of the issued share capital of the Company as enlarged by the issue of the D. E. Shaw group Conversion Shares.
Issue of Warrants
On 26 August 2010, the Company executed the Warrant Instrument in favour of L Capital pursuant to which the Company will issue to L Capital the Warrants conferring rights to subscribe up to HK$100 million in cash for the Warrant Shares.
Assuming the subscription rights attaching to the Warrants are exercised in full at the initial Warrant Exercise Price of HK$0.62 per Share, the Company will receive an aggregate of HK$100 million and issue 161,290,322 Warrant Shares. The 161,290,322 Warrant Shares represent approximately 3.09% of the issued capital of the Company as at the date of this announcement and approximately 3.00% of the issued capital of the Company as enlarged by the issue of such Warrant Shares (on the assumption that no other new Shares are issued by the Company). If L Capital exercises the L Capital CB and the Warrants in full, a total of 420,549,581 Shares will be allotted and issued. The 420,549,581 Shares represent approximately 7.46% of the issued capital of the Company as enlarged by the issue of such L Capital Convertible Shares and Warrant Shares.
Shareholders and potential investors should note that completion of the memorandum of understanding, the D. E. Shaw group CB Subscription Agreement, the L Capital CB Subscription Agreement and the Warrant Instrument is subject to fulfillment of certain conditions. As the transactions may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.
Use of Proceeds
Assuming the Convertible Bonds are issued in full to D. E. Shaw Valence and L Capital respectively, gross proceeds will be HK$380 million and the net proceeds will be approximately HK$378.7 million after deducting all related expenses (including professional advisors fees and printing costs).
The Company intends to apply the net proceeds from the subscription of the Convertible Bonds as (i) general working capital of the Group including the expansion of the Group's retail network including opening new outlets and (ii) to settle the interest and principal of the Existing Convertible Bond pursuant to the Purchase
Agreement.
Assuming the exercise in full of the subscription rights attaching to the Warrants, the net proceeds from the Warrant Shares are expected to be HK$99.8 million, which are intended to be used as the general working capital of the Group.
GENERAL
An EGM will be convened on or around 21st September 2010 by the Company to seek the approval of the Shareholders to ratify the extension of the Option Period. A circular containing the notice of the EGM will be despatched to the Shareholders as soon as practicable in compliance with the Listing Rules.
Please download the complete document: www.emperorwatchjewellery.com/shape_downloads/LTN20100826042.pdf
Contact:
Emperor Group,
Corporate Communications Department
Catherine Liu, +852 2835 6776, catherineliu@emperor.com.hk
Alice Chek, +852 2835 6786, alicechek@emperor.com.hk
Topic: Business Tieup
Source: Emperor Watch & Jewellery Limited
Sectors: Retail & eCommerce, Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
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