News released in Australia, not on domestic wires yet. May give the stock a pop today. 1/2Fast Eddie
irasia.com
CONDITIONAL ACQUISITION OF AN INDIRECT INTEREST IN
A TV CABLE NETWORK IN THE PRC
Hong Kong, 18 January, 2000 ~ [ASX: CHI; NASDAQ: CPIH; FSX: OLSA] Australian and United States Nasdaq listed company, China Prosperity International Holdings Limited (the "Company"), announces that it entered into a conditional agreement ("Agreement") with Millennium Touch Limited, an independent party, to acquire from Millennium Touch Limited 50 shares ("Sale Shares") in the issued share capital of Solar Touch Limited, which represents 50% equity interest in Solar Touch Limited. The sole major asset of Solar Touch Limited is a 49% interest in Baoding Pascali Broadcasting Cable TV Integrated Information Networking Company Limited (the "JV"), a sino-foreign equity joint venture established in the People's Republic of China ("PRC"). The JV is engaged in the construction of cable TV integrated information network and the development of the related business including data related business, the maintenance of family electrical appliances and cable TV equipment. Millennium Touch Limited has represented to the Company that the JV has exclusive right to providing television cable network in Baoding City. The JV is the first and as of today the only one in the PRC to have successfully obtained government approval for the foreign investment in 49% equity interest in television cable network in China.
According to the Vendor, the JV now has approximately 180,000 cable TV subscribers. According to the JV's estimation, the number of subscribers will soar during the year 2000 to approximately 250,000 in view of the JV's recent completion of the building of optical fibre backbone network and the extension of the television cable network to the county-villages.
The Company believes that the proposed acquisition provides a considerable opportunity for the Company. With over 80 million household subscribers, China's cable TV market is the largest in the world. In addition, with the rapid development of new technologies, cable TV and Internet-related activities are converging. The JV is actually collaborating with State Administration of Radio, Film and TV (SARFT) and China Netcom Corporation Limited (CNC) in the integration of local cable networks to create a national backbone network in China (which is targeted to be completed by 2005 and will become by far the largest network in the world) and testing of IP high speed Internet services. The Company believes that the proposed acquisition will be the gateway for the Company to capture the fast growing market potentials of development and provision of broadband services through the cable networks in China.
Material terms of the Agreement are as follows:
Vendor: Millennium Touch Limited, an independent party
Purchaser: the Company or one of its wholly-owned subsidiary
Consideration: HK$900,000,000 which will be satisfied by 28,213,200 new ordinary shares at the price of A$0.638 to be issued by the Company upon completion
Conditions: (a) Written consent being obtained from the other shareholder of Solar Touch Limited for the Company to acquire the Sale Shares;
(b) The Vendor proving to the satisfaction of the Company that each of the warranties, representations and undertakings in the Agreement if given being true and accurate in all aspects;
(c) The Vendor having delivered to the Company a legal opinion regarding the JV issued by a reputable law firm;
(d) The JV being duly registered with the local government with the issuance of the original business licence for the JV;
(e) The Company being satisfied with the results of the due diligence to be conducted by the Company into the business, assets, liabilities and prospects of Solar Touch Limited and the JV;
(f) The shareholders of the Company approving the issue of the 28,213,200 new shares as the consideration;
(g) Australian Stock Exchange granting listing of, and permission to deal in, the new shares to be issued by the Company as the consideration; and
(h) Compliance of the Company with the requirements of the listing rules, regulations and requirements of Australian Stock Exchange and Nasdaq National Market, if any.
If all the conditions are not fulfilled within 4 months from the date of the Agreement (or such later date as the parties may agree), the Agreement shall lapse and no party shall be liable to the other save for antecedent breaches.
Completion: Completion shall take place within 5 business days of satisfaction of all conditions.
Formal agreement: Within 4 months of the date of the Agreement (or such later date as the parties may agree), the parties will execute a formal agreement which will reflect the terms of the Agreement and contain other representations and warranties which are usual for a transaction of this type. Nevertheless, the terms of the Agreement are binding whether or not a formal agreement will be entered into.
NEGOTIATIONS FOR ACQUISITIONS OF INTEREST IN
A BROADBAND MUTLIMEDIA PROJECT
The Company also announces that it is in negotiations with Best Fortune Capital Ltd., the Company's single largest shareholder holding approximately 30% interest in the Company, and another independent party for possible acquisitions of an aggregate interest of 67% in Win's Prosperity Group Limited. The remaining 33% interest in Win's Prosperity Group Limited is currently held indirectly by the Company's Hong Kong-listed subsidiary, China Prosperity Holdings (Hong Kong) Limited through its acquisition of the entire issued capital of Win's Group Limited in December 1999 (please refer to the Company's announcements dated 15 September, 1999 and 21 December, 1999).
Win's Prosperity Group Limited is engaged in the development of a broadband multimedia network project named "Century Vision Network". Century Vision Network plans to use advanced interactive multimedia technology to deliver video-on-demand, information, e-commerce and comprehensive Internet services to users in China and Hong Kong.
In view of the growing market potentials of broadband Internet in China, the Company hopes to launch Century Vision Network in the cable network of the JV to be acquired through the proposed transaction described in the above.
Nevertheless, the negotiations with Best Fortune Capital Ltd. and the other independent shareholder of Win's Prosperity Group Limited are still in progress as at the date of this announcement. The Company will make further announcement when the negotiations have reached any conclusion.
FOR FURTHER INFORMATION, please contact:
Mr. Gareth Tang (Chief Executive)
China Prosperity International Holdings Limited
Fax: (852) 2866 0669
Telephone: (852) 2918 9988
E-mail : china.prosperity@chinaprosper.com
Website: www.chinaprosper.com
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Source: China Prosperity International Holdings Limited |
