Offeror(s): Richina Enterprise Holdings Limited

Independent Adviser(s): PWC (Rule 18)

Company Meeting Date: 10/01/2003

Offer Type: Full

In October 2002, Richina Pacific Limited (“RPL”) announced that it intended to undertake a one-for-one renounceable pro-rata rights issue of ordinary shares to existing shareholders rights issue to raise approximately US$10 million in capital (“the rights issue”). The rights issue formed part of a wider restructuring of RPL and the proceeds would be used to provide immediate funding for its business and to repay related party loans.

Richina Enterprise Holdings Limited (“REHL”), RPL’s largest shareholder, proposed to underwrite the issue. REHL held 25.5% of RPL’s total issued share capital at the time. If no shareholder of RPL exercised their rights under the rights issue, the underwriting agreement would require REHL to subscribe for 72,188,205 shares, increasing REHL’s shareholding in RPL to 62.75%. As such, shareholder approval was required for the allotment of voting securities to the REHL under rule 7(d) of the Code.

As the particulars of any allotment resulting from the meeting or the resulting percentage of RPL’s shares that would be held or controlled by REHL would not be known when the notice of meeting was sent, the Panel granted an exemption to REHL from rule 7(d), and RPL from rule 16(b).

At the special meeting on 10 January 2003, RPL shareholders approved the allotment of shares to REHL under the rights issue.

 

PWC prepared a rule 18 independent adviser’s report on the merits of the proposed allotment.