FORD EAGLE GROUP LTD: Posting of Circular and notice of General Meeting
FORD EAGLE GROUP LTD: Posting of Circular and notice of General Meeting 8 May 2013
Ford Eagle Group Limited ("Ford Eagle" or the "Company") Posting of Circular and notice of General Meeting Ford Eagle announce today the posting of a circular to shareholders and notice of a General Meeting, the full details of which are shown in Appendix I below. The directors of Ford Eagle accept responsibility for this announcement. About Ford Eagle Group Limited Ford Eagle is a specialist financial services company, based in Hong Kong and Shenzhen, China. For further information: Ford Eagle Group Ltd Tony Drury, Non-Executive Chairman + 44 (0)79737 37284 (UK) Alexander David Securities Limited - Corporate Adviser David Scott +44 (0)20 7448 9800 Appendix I THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or as to what action you should take, you are recommended to seek your own personal financial advice from an independent financial adviser authorised and regulatedunder the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom or, if not, from another appropriately authorised independent financial adviser. Copies of this Document are being sent to shareholders. If you sell or have sold or otherwise transferred all of your Ordinary Shares in Ford Eagle Group Limited, please send this document, together with the accompanying Form of Proxy, at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The Directors, whose names are set out on page 7 of this Circular and the Company, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Directors and the Company (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the importance of such information. Ford Eagle Group Limited
(To be renamed Globe Capital Limited) (Incorporated and registered in Cayman Islands with Registration No:231187)
Proposals relating to: Disposal of a trading subsidiary Change of Business and Adoption of Investing Strategy Capital Reorganisation Change of Name Underwritten Open Offer to Raise c. £207,330 Share Issue Authorities Directors' Dealings Adoption of New Articles of Association and Notice of General Meeting Your attention is drawn to the letter from the Directors, which is set out on pages 7 to14 of this document and which recommends that you vote in favour of the resolutions to be proposed at the General Meeting. This document does not constitute a prospectus for the purpose of the Prospectus Rules neither does it constitute an admission document drawn up in accordance with the ISDX Growth Market Rules for Issuers. Accordingly, this Document has not been, and will not be, reviewed or approved by the Financial Conduct Authority of the United Kingdom (in its capacity as UK Listing Authority or otherwise) pursuant to sections 85 and 87 of FSMA, or any other authority or regulatory body and has not been approved for the purposes of section 21 FSMA. This Document and the accompanying documents should not be forwarded or transmitted in or into the United States of America, Canada, Australia, Japan, the Republic of Ireland, the British Virgin Islands, Singapore or South Africa or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Notice of the General Meeting of Ford Eagle Group Limited, to be held at Unit A, 18/F, Epoch Industrial Building, No.8 Cheung Ho Street, Tsing Yi, New Territories, Hong Kong on 31 May 2013 at 9:00 am BST is set out at the end of this document. Whether or not you intend to be present at the General Meeting you are urged to complete and return the enclosed Form of Proxy in accordance with the instructions printed thereon so as to be received by the Company at Unit A, 18/F, Epoch Industrial Building, No.8 Cheung Ho Street, Tsing Yi, New Territories, Hong Kong as soon as possible and, in order to be valid, in any event not later than 9:00 am BST on 29 May 2013. Completion and return of a Form of Proxy will not preclude shareholders from attending and voting at the General Meeting should they so wish. EXPECTED TIMETABLE OF PRINCIPAL EVENTS Each of the times and dates in the table below are indicative only and may be subject to change. Publication of this document 8 May 2013
General Meeting 9:00 am BST on 31 May 2013
Latest time and date for receipt of Forms 9:00 am BST on 29 May 2013 of Proxy
Record date for the Share Capital 5.30 pm BST on 31 May 2013 Reorganisation
Commencement of dealings in the New 8.00 am BST on 7 June 2012 Ordinary Shares on ISDX Growth Market
OPEN OFFER TIMETABLE
Record Date for Open Offer Close of business on 8 May 2013
Announcement of Open Offer and dispatch of 8 May 2013 Open Offer Entitlement Letters/Application Forms
Existing Ordinary Shares marked "Open Offer Close of business on 8 May 2013 Entitlement" by ISDX Growth Market
Latest time and date for splitting 4.30 pm BST on 29 May 2013 Application Forms to satisfy bona fide market claims
Latest time and date for acceptance, 11.00 am BST on 31 May 2013 payment in full and receipt of completed Application Forms
CREST members' accounts credited in respect 8.00 am BST on 4 June 2013 of New Ordinary Shares in uncertificated form
Dispatch of definitive share certificates within 14 days of Admission for the New Ordinary Shares
(1) The actions specified in this timetable are subject to certain restrictions relating to Shareholders with registered addresses outside the UK.
(2) The times and dates set out in the expected timetable of principal events above and mentioned throughout this document may be adjusted by Ford Eagle Group Limited (in consultation with Alexander David Securities Limited), in which event details of the new times and dates will be notified to ISDX Growth Market, and an announcement will be made via a Regulated Information Service and, if appropriate, will be notified to Shareholders. Notwithstanding the foregoing, Qualifying Shareholders may not receive any further written communication.
(3) References to times in this document are to British Summer Time (BST) unless otherwise stated.
Price per New Ordinary Share 1 pence
Basis of Open Offer five for one
Number of Existing Ordinary Shares in Issue and as 4,146,600 at the Record Date of the Open Offer
Nominal Value of Existing Ordinary Shares 10 pence
Number of New Ordinary Shares in issue following 4,146,600 the General Meeting
Nominal Value of New Ordinary Shares following the 1 pence General Meeting
Number of New Ordinary Shares to be issued for the 4,146,600 purchase of Non-Voting Ordinary Shares
Number of New Ordinary Shares to be issued up to 20,733,000 pursuant to the Open Offer
Number of Ordinary Shares in issue immediately approx. 24,879,600 following completion of the Open Offer
New Ordinary Shares as a percentage of the approx. 83.33% enlarged share capital of the Company immediately following completion of the Open Offer
Estimated gross proceed receivable by the Company approx. £207,330
Estimated net proceeds receivable by the Company approx. £180,000 after expenses
DEFINITIONS "Admission" admission of the New Ordinary Shares to trading on ISDX Growth Market;
"Alexander David Securities Limited" or Alexander David Securities Limited, the Alexander David" Company's ISDX Corporate Adviser, a
firm authorised and regulated by the FCA
"Application Form" the application form to be used by
Qualifying Non-CREST Shareholders in connection with the Open Offer;
"Articles" the articles of association of the
Company as amended from time to time;
"Business Day" a day (excluding Saturdays and Sundays
or public holidays in England and Wales) on which banks generally are open in London for the transaction of normal business;
"Companies Law" the Companies Law (2012 Revision), as
amended, of the Cayman Islands;
"CREST" the relevant system (as defined in the
CREST Regulations) for the paperless settlement of trades and the holding of uncertificated shares in respect of which Euroclear is the Operator (as defined in the CREST Regulations);
"CREST member" a person who has been admitted by
Euroclear as a system-participant (as defined in the CREST Regulations);
"CREST Participant" a person who is, in relation to CREST,
a system-participant (as defined in the CREST Regulations);
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001/3755) (as amended);
"Directors" or the "Board" the directors of the Company, whose
names appear on page 7 of this document;
"Document" this document dated 8 May 2013;
"Euroclear" Euroclear UK & Ireland Limited, the
operator of CREST;
"Excluded Territory" the United States of America, Canada,
Australia, Japan, the Republic of Ireland, the British Virgin Islands, Singapore or South Africa or any other jurisdiction where the extension or availability of the Open Offer (and any other transaction contemplated thereby and any activity carried out in connection therewith) would breach any applicable law;
"Existing Ordinary Shares" the existing ordinary shares of 10
pence each in the capital of the Company;
"Ford Eagle Capital Limited" or Ford Eagle Group Limited incorporated
and registered in Hong Kong with "FEC" Registration No. 273814, a wholly owned
subsidiary of the Company;
"Ford Eagle Group Limited", or the Ford Eagle Group Limited incorporated "Company" and registered in Cayman Islands with
Registration No. 231187;
"Form of Proxy" the form of proxy accompanying this
document for use by Shareholders in the General Meeting;
"Globe Alliance Group" or "Globe Globe Alliance Group Limited, a Company Alliance" registered in British Virgin Islands
under company number 1741158 and whose registered office is Akara Building, 24 De Castro Street, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands;
"General Meeting" the General Meeting of the Company to
be held at 9:00 am BST on 31 May 2013 at Unit A, 18/F, Epoch Industrial Building, No.8 Cheung Ho Street, Tsing Yi, New Territories, Hong Kong;
"Investing Strategy" the Investing Strategy of the Company
as described on pages 8 and 9;
"Irrevocable Voting Undertaking" an irrevocable undertaking by
shareholders to vote in favour of the Resolutions proposed at the General Meeting
"ISDX Growth Market" , "ISDX Growth a market operated by ISDX Growth Market Market-quoted" or "ISDX" Stock Exchange plc which allows trading
of shares in unquoted companies;
"ISDX Growth Market Rules" ISDX Growth Market Rules for Issuers
dated October 2012, as amended from time to time;
"New Articles" the Articles of the Company to be
adopted following approval at General Meeting to be held on 31 May 2013;
"New Ordinary Shares" or "Ordinary ordinary shares of 1 pence each in the Shares" share capital of the Company;
"Non-Voting Ordinary Shares" the Non-Voting ordinary shares of 9
pence each in the capital of the Company to be created as part of the Share Capital Reorganisation;
"Notice" the notice of General Meeting set out
at the end of this document;
"Open Offer" the offer made by the Company to
Qualifying Shareholders of Open Offer Shares on the terms and conditions set out in this Document and, where relevant, in the Open Offer Entitlement Letter;
"Open Offer Entitlements" or the entitlements of Shareholders to "Entitlements" participate in the Open Offer;
"Open Offer Entitlement Letters" the open offer entitlement letter to be
sent to Qualifying Shareholders in respect of the New Ordinary Shares to be provisionally allotted to them pursuant to the Open Offer;
"Open Offer Price" 1 pence per New Ordinary Share;
"Open Offer Shares" ordinary shares of 1 pence each in the
capital of the Company to be offered to Shareholders as part of the Open Offer;
"p" or "pence" one hundredth part of one pound;
"Participant ID" the identification code or membership
number used in CREST to identify a particular CREST member or other CREST Participant;
"Proposals" the proposals set out in this document
including, the adoption of a Investing Strategy, reorganisation of the share capital of the Company, and other matters to be considered at the General Meeting;
Qualifying CREST Shareholders qualifying Shareholders whose Existing
Ordinary Shares on the register of members of the Company on the Record Date are in certificated form;
"Qualifying Non-CREST Shareholders" qualifying Shareholders whose Existing
Ordinary Shares on the register of members of the Company on the Record Date are in uncertificated form;
"Qualifying Shareholders" holders of Ordinary Shares on the
register of members of the Company at the Record Date with the exclusion (subject to certain exceptions) of persons with a registered address or located or resident in an Excluded Territory;
"Record Date" close of business on 8 May 2013;
"Register of Members" the register of members of the Company;
"Registrars" Computershare Investor Services
"Resolutions" the resolutions contained in the
"Shareholders" holders of ordinary shares in the
"Share Capital Reorganisation" each of the Existing Ordinary Shares
with a nominal value of 10 pence will be subdivided into one New Ordinary Share with a nominal value of 1 pence and one Non-Voting Share with a nominal value of 9 pence;
"Underwriter" Globe Alliance Group Limited;
"Underwriting Agreement" the underwriting agreement dated 8 May
2013 between the Company and the Underwriter relating to the Open Offer. PART I Letter from the Directors of Ford Eagle Group Limited Directors: Registered office:
Anthony Drury- Non-Executive Chairman Cricket Square
Stanley Tse - Chief Executive Officer Hutchins Dr,
Xinyan Wong - Executive Director P.O. Box 2681
Jack Law - Non-Executive Director Grand Cayman
Garry Willinge- Non-Executive Director KY1-1111
David Hirst- Non-Executive Director Cayman Islands
8 May 2013
The purpose of this Document is to: * explain the background to and reasons for the Proposals; * explain the Proposals and the Resolutions to be put to Shareholders at the General Meeting; * explain why the Board believes the Proposals are in the best interests of Shareholders and why it unanimously supports the Proposals; * recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting and which are set out in the notice of Extraordinary General Meeting at the end of this Document; and * bring to the attention of Shareholders that the Company has received Irrevocable Undertakings from Shareholders, including Directors, representing 63.33% of total voting rights to vote in favour of Resolution 1 and from Shareholders, including Directors, representing 70.02% of total voting rights to vote in favour of Resolutions 2 to 7.
The Notice of the General Meeting, together with a Form of Proxy for the General Meeting to be held at 9.00 am BST on 31 May 2013 is included with this Document.
The Company also intends to raise approximately £207,330 by way of an Open Offer to Shareholders. This means that Qualifying Shareholders can acquire New Ordinary Shares at a price of 1 pence per New Ordinary Share in proportion to their existing holdings of shares in the Company on the terms described in more detail in this document under the paragraph headed "Open Offer" below.
The key terms of the Open Offer are:
* for every one New Ordinary Shares held following the Share Capital
Reorganisation, described below, you can acquire a further five Open Offer Shares at a price of 1 pence each. * the offer to acquire new Ordinary Shares as part of the Open Offer is non-renounceable and therefore cannot be transferred (except to satisfy market claims).
The Open Offer Price of 1 pence per Open Offer Share represents a 90% discount to the closing price of 10 pence per Existing Ordinary Share on 7 May 2013 (being the last Business Day before the announcement of the Open Offer).
Globe Alliance Group Limited which holds 25.76% of the Company has irrevocably committed to take up its full entitlement to acquire Open Offer Shares under the Open Offer and is underwriting the Open Offer for the Company. This indicates their strong support for the Company and the Open Offer.
As Shareholders are aware, the Company has faced a period of financial difficulty resulting from unfavourable economic conditions and cash constraints. In order to secure the Company's future, the Directors believe it necessary to change the Company's strategy and raise additional working capital in order to implement that strategy.
As part of the fundraising process, the Board has decided to seek Shareholder approval for the following steps:
1. Disposal of a trading subsidiary - Resolution 1
2. Change of Business Strategy and adoption of Investing Strategy - Resolution 2; 3. Reorganisation of the share capital of the Company - Resolution 3; 4. Change of name - Resolution 4; 5. Authority to issue shares and dis-application of pre-emption rights - (Resolutions 5 and 6); and 6. Adoption of New Articles - (Resolution 7) 3. Disposal of a trading subsidiary(Resolution 1)
FEC, a wholly owned subsidiary of the Company, is involved in management consulting. As at 31 March 2013, it had net liabilities of £184,076 before taking into account of amount due from the Company to FEC of £161,688. The only assets of FEC are certain listed shares with current market value of £176,400 which are subject to a lock up until August 2013. FEC's total debts amount to £366,582, of which £246,582 is currently due. In order to strengthen the balance sheet and to avoid a further drain of cash flow of the Company, the Board proposes to dispose the Company's entire interest in FEC to Jack Law for a total consideration of £1 in exchange for Jack Law taking over the debt of £161,688 due by the Company to FEC.
As the Company will no longer have any interest in FEC, this effectively constitutes a disposal of the Company's trading subsidiary to a related party, Jack Law, and a fundamental change in the Company's business. Under the ISDX Rules for Issuers, any disposal, either directly or indirectly, to one of more related parties that will result in a fundamental change in the business, will require the consent of shareholders.
Jack Law will not vote on this resolution (Resolution 1). The Directors, excluding Jack Law, believe that the terms of this transaction are fair and reasonable insofar as the Shareholders are concerned.
4. Change of Business Strategy and Investing Strategy (Resolution 2)
As a result of the disposal, the Company will become an Investing Company. The proposed investing strategy is to maximise Shareholder value over a period of five to seven years by investing a combination of debt and equity in businesses with potential for significant growth in the medium to long term. Key Strengths The Directors believe that, collectively, they have strong corporate management and advisory experience and intend to utilise their collective skills and experience to add value to any investments and/or acquisitions. They consider their strengths to be: * Expertise in advisory and listing of small-to-mid cap companies; * Direct experience in the wide range of business sectors including financial advisory and corporate finance; and * Access to opportunities over a wide geographical area through the Directors' contacts and business experience in Europe, North America, Latin America, Greater China, South-East Asia, and Oceania.
The Directors believe that their business experience and expertise will enable them to identify and bring to fruition a succession of investment projects.
Strategy and Investment Criteria
The Company will seek investments which would generally create capital appreciation for its Shareholders. The Directors' main investment criteria are:
* A strong and credible business plan;
* A core of competent and dedicated management team committed to developing and expanding the business; * Businesses with highly marketable products/services which require funding to growth; * Businesses which have the potential to realise sustainable value through the receipt of further funding and possibly listing on a public market; * Investment opportunities which can be developed through the investment of capital or where part of or all of the consideration could be satisfied by the issue of ordinary shares or other securities in the Company; and
* Businesses where the Directors can be proactive in value-creation through
their experience and expertise.
However, these criteria are not intended to be exhaustive and the Directors may make an investment which does
not fulfill any or all of the investment criteria if they believe it is in the interests of shareholders as a whole to
proceed with such an investment.
The Company intends to be an active investor in situations where the Company can make a clear contribution to the progress and development of the investment. To this end, where the Directors believe that an investee company could significantly benefit from the expertise and input of the Directors, the Directors would seek representation on the board of the investee company.
The Company will invest for the medium to long-term. However, should an opportunity arise earlier to realise its investments, the Company will seek to maximise value for Shareholders.
The Company intends to raise approximately £180,000 net of expenses for the implementation of this investment strategy. At present, the Directors are seeking suitable investment and acquisition opportunities. Once a suitable opportunity has been identified, initial due diligence will be carried out by the Directors.
5. Capital Reorganisation (Resolution 3)
The mid-price of the Company's Existing Ordinary Shares as quoted on ISDX on 07 May 2013 was 10 pence, while the nominal value of the Existing Ordinary Shares of the Company is 10 pence. However, the Directors believe that the market price is an inaccurate reflection of the true market value of the Ordinary Shares when the value of the current investments and the level of indebtedness of the Company are taken into consideration. Consequently, the Directors have found it impossible to raise additional equity funding at those prices.
Under the terms of the Companies Law, the Company is prohibited from issuing ordinary shares at a discount to the nominal value. Accordingly, the Directors believe it is necessary to reorganise the capital structure of the Company to allow for additional funds to be raised for the Company.
In order to effect the Capital Reorganisation, the Company proposes that the entire share capital of the Company be converted into stock of £414,660, immediately following which the stock will be reconverted into 4,146,600 New Ordinary Shares with a nominal value of 1 penny each and 4,146,600 Non-Voting Shares with a nominal value of 9 pence each (Resolution 3). This procedure for altering the share capital is prescribed under the Cayman Islands Companies Law and requires the approval of three-fourths of the existing shareholders.
The New Ordinary Shares of 1 pence nominal value each will continue to carry the same rights as attached to the Existing Ordinary Shares of 10 pence each (save for the reduced nominal value). The Non-Voting Ordinary Shares will not be admitted to trading on ISDX (or any other stock exchange) and will have no right to receive notice of, attend or vote at general meetings or to receive any dividends or other distributions, save for the return of nominal value in the event of a winding up of the Company.
Following the capital restructuring, each existing shareholder will own the same percentage of the capital of the Company assuming they take up their pre-emptive entitlement to the Open Offer described below.
The Directors believe that the proposed Capital Reorganisation together with the disposal of FEC and Open Offer will enable the Company to strengthen its balance sheet, raise further funds as working capital and implement its new strategy.
6. Change of Name (Resolution 4)
The Board proposes, conditional on the passing of Resolutions 1 to 3 and 5 and 6, to change the name of the Company to Globe Capital Limited.
Under Cayman Islands law, the change of the Company's name requires the approval of Shareholders by special resolution. Therefore, Resolution 4 is being proposed at the General Meeting for the proposed change in the Company's name. If approved, existing share certificates will remain valid after the change of name and the Company does not intend to issue replacement certificates.
7. Authority to allot shares and disapplication of pre-emption rights
(Resolution 5 and 6)
In order facilitate the Open Offer, as described below, and to enable the Company to raise further funds to implement its intended Investing Strategy with minimal limitations, it is necessary for the Company to increase its authority to issue New Ordinary Shares and dis-apply pre-emption rights. The net proceeds of this fundraising will be used to provide working capital for the Company going forward and to implement the Company's Investing Strategy.
Resolution 5 seeks the authority to allot shares up to a nominal value of £10,000,000. It is proposed, in Resolution 6, that the Directors should be able to allot shares amounting to an aggregate nominal amount of £1,000,000 other than on a pre-emptive basis.
Pre-emption rights require all equity shares, which it is proposed to allot for cash, to be offered to existing shareholders in proportion to their existing shareholdings, unless a special resolution is passed to dis-apply such rights. Such rights do not apply to an issue of shares other than for cash, such as an issue in consideration of an acquisition. The Directors believe that these requirements are too restrictive and it is proposed, in Resolution 6, that the Directors should be able to allot shares amounting to an aggregate nominal amount of £1,000,000 other than on a pre-emptive basis, if it becomes necessary for the Company to raise further funds following the Open Offer.
In each case, the authority conferred shall expire fifteen months after the passing of this resolution or at the conclusion of the next annual general meeting of the Company following the passing of this resolution, whichever occurs first. The Directors may look to raise additional funds for the Company following the General Meeting subject to the resolutions being approved by Shareholders.
8. The Open Offer
The Board has determined that it is appropriate for the Company to raise funds to finance potential investments which the Directors believe will improve its prospects for the future. The Board believes that a fundraising, through an Open Offer, is the most appropriate method for the Company to improve its overall financial position and put it in a position whereby it can potentially make value enhancing investments which will allow all Shareholders to benefit from the underlying value of the Company going forward. The Board believes that the Open Offer will enable the Company to increase its financial flexibility and to widen the scope of investments available to the Company, whilst at the same time enabling it to implement its Investing Strategy, which the Board believes will position the Company more appropriately to generate financial returns for Shareholders.
The Company is offering Shareholders who hold Existing Ordinary Shares on the Record Date a participation in a non-renounceable entitlement (except to satisfy bona fide market claims) issue of five New Ordinary Shares in the Company for every one Existing Ordinary Share held, at a price of 1 penny per share. The total number of shares in issue as at 8 May 2013 is 4,146,600 Existing Ordinary Shares and the shares to be offered pursuant to the Open Offer is approximately 20,733,000 for gross proceeds of £207,330.
Qualifying Shareholders may apply for any number of Open Offer Shares up to their maximum entitlement which is equal to the number of Open Offer Entitlements as shown on their Application Form. Qualifying Shareholders with holdings of existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their entitlements under the Open Offer.
No application in excess of a Qualifying Shareholder's maximum entitlement will be met, and any Qualifying Shareholder so applying will be deemed to have applied for his maximum entitlement only.
The Open Offer is conditional, inter alia, upon the passingof Resolutions 1 and 6 at the General Meeting,which will reorganise the share capital of the Company, give the Directors the necessary authorities to allot and issue shares in connection with this fundraising.
Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike a rights issue, any Open Offer Shares not applied for by Qualifying Shareholders will not be sold in the market on behalf of, or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer.
1. Potential controlling interest of Globe Alliance Group Limited
As a significant Shareholder in the Company, Globe Alliance Group has recognised the need for an injection of new capital in the Company and has formally committed, in an agreement dated 8 May 2013, to underwrite the Open Offer to be undertaken by the Company.
The Directors, who hold between them 17.01% of the Existing Ordinary Shares of the Company, have considered carefully the merits of requesting Globe Alliance to underwrite the Open Offer and the importance of their support for the Open Offer.
The Subscription Price represents a discount of approximately 90% to the closing price of 10 pence per Existing Ordinary Share as quoted on the ISDX on 7 May 2013.
The Subscription Price was agreed after arm's length negotiation between the Company and the Underwriter with reference to the prevailing market condition. After considering (i) the discounts for the subscription prices of recent open offer of other listed issuers, (ii) the low liquidity of the Existing Ordinary Shares, (iii) the Group's business had been operating at loss for the financial years 2011-2012, (iv) the need of new capital for continuing the Group's existing business and (v) that a lower subscription price can attract more investors or Shareholders to participate in the Open Offer, the Directors consider that the Subscription Price and the discount for the Open Offer Shares are fair and reasonable.
It is possible that, as a result of their underwriting obligations, Globe Alliance Group may hold Ordinary Shares representing 30 per cent or more of the enlarged issued share capital of the Company following the completion of the Open Offer. Globe Alliance Group will not be making an offer for the remaining shares in the Company.
Following the Director's Dealings (see below), Globe Alliance Group holds 10,068,100 shares representing 25.76% of the issued share capital of the Company. Globe Alliance Group undertakes to take up its entitlement under the Open Offer. In addition Globe Alliance Group has agreed to underwrite the Open Offer. The maximum potential voting power of Globe Alliance Group, in the Company, at the conclusion of the Open Offer would be approx. 63.65%, were other Shareholders (excluding Sze Thye Group Limited and Xinyan Wong, who have irrevocably undertaken to take up their full entitlement under the Open Offer) not to take up their entitlements under the Open Offer.
2. Overseas Shareholders
New Ordinary Shares will be provisionally allotted (nil paid) to all Shareholders on the Register at the Record Date. However, Open Offer Entitlement Letters will not be sent to Shareholders with registered addresses in the Excluded Territories or their agent or intermediary, except where the Company is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction. Notwithstanding any other provision of this document or the Open Offer Entitlement Letter, the Company reserves the right to permit any Shareholder to take up his rights if the Company in its sole and absolute discretion is satisfied that the transaction in question will not violate applicable laws.
The attention of Overseas Shareholders who have registered addresses outside the UK, or who are citizens of, or resident or located in, countries other than the UK, is drawn to the information in Appendix A (`Terms and Conditions of the Open Offer').
9. Adoption of New Articles (Resolution 7)
In order to effect the subdivision of the Existing Ordinary Shares, which is fully described in the paragraph entitled "Share Reorganisation" above, the Company needs to create a new class of share, the Non-Voting Ordinary Shares. Resolution 7 proposes the adoption of new articles of association ("New Articles") to create a new class of share, the Non-Voting Ordinary Share. The Non-Voting Ordinary Shares will not be admitted to trading on ISDX Growth Market (or any other investment exchange) and will carry no rights to participate in the profits of the Company. On a winding up, the holders of Non-Voting Shares are either entitled to nothing or to the return of the nominal value of the shares. The Non-Voting Ordinary Shares will carry no rights to receive notice of, attend, speak or vote at any general meeting of the Company. In addition, the Company will have the irrevocable authority at any time to: (a) appoint any person to execute on behalf of any holder of Non-Voting Ordinary Shares a transfer of all or any part thereof to any person as the Directors determine; (b) purchase all or any of the Non-Voting Ordinary Shares for an amount equal to one pence in aggregate; (c) for the purposes of (b) to appoint any person to execute on behalf of a holder of Non-Voting Ordinary Shares a contract for sale; and (d) to cancel all or any of the Non-Voting Ordinary Shares purchased under (e) in accordance with the Companies Law.
10. Directors' Dealing
The Company announces that as part of the overall transaction, the following Directors' dealings have been undertaken today:
* Advance Link Investment Limited, which is controlled by Jack Law, has sold
270,000 shares at a price of 1.77 pence per share to Globe Alliance Group. * Jack Law has sold 200,000 shares to Globe Alliance Group at 1.77 pence per share, 80,000 shares to Wong Xinyan at 1.77 pence per share. Jack Law has also sold 210,000 shares to unrelated third-parties and acquired 99,000 shares from Tony Dury at 1.77 pence per share. * Stanley Tse has sold 37,000 shares at a price of 1.77 pence per share to Globe Alliance Group. As a result of these transactions: * Jack Law's interest in the Company is reduced from 27.79%% to 11.85%; * Tony Drury's interest in the Company is reduced from 2.41% to 0.02%; * Stanley Tse's interest in the Company is reduced from 1.69% to 0.80%; * Wong Xinyan's interest is increased to 1.93%;and * Globe Alliance Group's interest in the Company is increased from 13.53% to 25.76%.
The share price reflects most recent transaction in the shares as announced on 2 May 2013.
The Directors' dealings are deemed to be a related transaction. In relation to these transactions, Garry Willinge and David Hirst are considered to be independent directors. The independent directors believe that the terms of the transaction are fair and reasonable insofar as the Shareholders are concerned.
11. Share Certificates
No new share or warrant certificates will be issued as a result of the change in the nominal value of the shares of the Company.
If you are in any doubt with regard to your current shareholding in Existing Ordinary Shares, you should contact Computershare Investor Services (Jersey) Limited on +44 (0)870 707 4040. For any queries on the Share Capital Reorganisation, you should contact Alexander David Securities Limited on: +44 (0)20 7448 9800.
The New Ordinary Shares will retain the same rights as those currently accruing to the Existing Ordinary Shares (save for the change in nominal value) under the Company's New Articles of Association, including those relating to voting and entitlement to dividends.
12. General Meeting
The Notice convening the General Meeting is set out on pages 24 to 25 of this document at which the Resolutions will be proposed for the purposes of the transaction. A summary of the Resolutions is set out below:
Resolution 1, which will be proposed as an ordinary resolution, seeks approval for the disposal of Ford Eagle Capital Limited to a related party;
Resolution 2, which will be proposed as an ordinary resolution, seeks approval for adoption of the Investing Strategy;
Resolution 3, which will be proposed as a special resolution, seeks approval for the conversion of each issued share of the Company into stock of £0.10 and for the immediate reconversion of such stock into 1 New Ordinary Share of nominal value 1 pence each and 1 Non-Voting Ordinary Share of nominal value 9 pence each
Resolution 4, which will be proposed as a special resolution and is subject to the passing of Resolutions 1 to 3 and 5 to 6 seeks to approval to change the Company's name to Globe Capital Limited;
Resolution 5, which will be proposed as a special resolution and is subject to the passing of Resolutions 1 to 4 seeks to grant the Directors authority to allot New Ordinary Shares in the capital of the Company;
Resolution 6, which will be proposed as a special resolution and is subject to the passing of Resolutions 1 to 5, seeks to grant the Directors the power to dis-apply statutory pre-emption rights over certain shares;
Resolution 7, which will be proposed as a special resolution, seeks approval for the adoption of the new Articles of Association of the Company;
13. Action to be taken
Shareholders will find a Form of Proxy enclosed for use at the General Meeting. Whether or not you intend to be present at the General Meeting, you are requested to complete and return the Form of Proxy in accordance with the instructions printed thereon as soon as possible. To be valid, completed Forms of Proxy must be received by the Company at Unit A, 18/F, Epoch Industrial Building, No.8 Cheung Ho Street, Tsing Yi, New Territories, Hong Kong, not later than 9.00 am BST on 29 May 2013. Completion of the Form of Proxy will not preclude you from attending and voting at the General Meeting in person if you so wish.
14. Action to be taken in respect of the Open Offer
(Qualifying Non-CREST Shareholders (i.e. holders of Existing Ordinary Shares who hold their Existing Ordinary Shares in certificated form)) & (Qualifying CREST Shareholders (i.e. holders of Existing Ordinary Shares who hold their Existing Ordinary Shares in uncertificated form))
Please refer to Section 2 of Appendix A for action to be taken in relation to the Open Offer. You will be sent Open Offer Entitlement Letter/Acceptance Form together with this Document.
If you sell or have sold or otherwise transferred all of your Existing Ordinary Shares (other than ex-Open Offer entitlement) before 8 May 2013, please forward this Document and the accompanying documents to the purchaser or transferee or the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.
Should the Resolutions not be approved by Shareholders at the General Meeting, the Directors will have to consider winding up the Company and seeking cancellation of the Company's trading facility on ISDX Growth Market.
The Directors consider the Proposals to be fair and reasonable and in the best interests of the Company as a whole and therefore unanimously recommend that you vote in favour of the Resolutions, as they intend to do in respect of their own beneficial holdings, amounting in aggregate to 705,500 Existing Ordinary Shares representing approximately 17.01% of the issued share capital of the Company (note: Jack Law who holds 11.85% is excluded from voting on Resolution 1).
The Company has received irrevocable undertakings to vote in favour of Resolution 1 at the General Meeting from Shareholders, including Directors, who together, as at the date of this Document, hold 63.33% of the current issued ordinary share capital of the Company. The Company has received irrevocable undertakings to vote in favour of Resolutions 2 to 7 at the General Meeting from Shareholders, including Directors, who together, as at the date of this Document, hold 70.02% of the current issued ordinary share capital of the Company.
Garry Willinge and David Hirst
Independent Non-Executive Directors
NOTICE OF GENERAL MEETING FORD EAGLE GROUP LIMITED (Incorporated and registered in Cayman Islands with No: 231187) NOTICE IS HEREBY GIVEN that a General Meeting of Ford Eagle Group Limited (the "Company") will be held at 9.00 am BST on 31 May 2013 at Unit A, 18/F, Epoch Industrial Building, No.8 Cheung Ho Street, Tsing Yi, New Territories, Hong Kong for the purpose of considering and, if thought fit, passing the following resolutions: Ordinary Resolutions 1. THAT, the disposal of Ford Eagle Capital Limited as set out in the Document be approved. 2. THAT, conditional upon each of the other Resolutions being passed, the Investing Strategy as set out in the Document be approved. Special Resolutions 3. THAT each of the issued ordinary shares of nominal value 10 pence each in the capital of the Company be converted into stock of £0.10 and such stock be immediately reconverted into one ordinary share of nominal value 1 pence (an "Ordinary Share") and one Non-Voting share of nominal value 9 pence (a "Non-Voting Ordinary Share") with each class of shares having the rights and being subject to the restrictions set out in the Articles of Association of the Company (as adopted pursuant to Resolution 6 below). 4. THAT the Company's name is changed to Globe Capital Limited. 5. THAT, the directors of the Company ("Directors") be generally and unconditionally authorised to allot shares in the Company and to grant rights to subscribe for or to convert any security into shares in the Company ("Rights") up to an aggregate nominal amount of £10,000,000 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on the conclusion of the Annual General Meeting of the Company to be held in 2014 or, if earlier, 15 months after the date on which this resolution has been passed, provided that the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted or Rights to be granted and the Directors may allot shares or grant Rights in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired. This authority is in substitution for all previous authorities conferred on the Directors in accordance with section 551 of the 2006 Act. 6. THAT, subject to the passing of resolution 4 the Directors be generally empowered to allot equity securities for cash pursuant to the authority conferred by resolution 4 above, as if any pre-emption provisions in the Company's articles of association or other rights did not apply to any such allotment, provided that the power conferred by this resolution shall be limited to:
6.1 any allotment of equity securities where such securities have been offered whether by way of rights issue, open offer, or otherwise to holders of equity securities in proportion as nearly as may be practicable to their then holdings of such securities but subject to the directors having the right to make such exclusions or other arrangements in connection with such offer as they deem necessary or expedient to deal with fractional entitlements or legal or practical problems arising in, or pursuant to, the laws of any territory or the requirements of any regulatory body or stock exchange in any territory or otherwise howsoever,
6.2 the allotment (otherwise then pursuant to sub-paragraph (1) above of equity securities up to an aggregate nominal value of £1,000,000 such authority and power shall, unless renewed, varied or revoked by the Company, expire on the conclusion of the Annual General Meeting of the Company to be held in 2014 or, if earlier, 15 months after the date on which this resolution has been passed, provided that the Company may, before such expiry, make any offer or agreement or other arrangement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement or other arrangement as if the power hereby conferred had not expired.
7. THAT the articles of association set out in the document produced to the
meeting and initialled by the Chairman of the meeting for identification be and are hereby approved and as the articles of association of the Company adopted in substitution for and to the exclusion of the existing articles of association of the Company. By Order of the Board Registered Office:
Garry Willinge Cricket Square
Director Hutchins Dr,
P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands NOTES TO THE NOTICE OF GENERAL MEETING 1. A member entitled to attend, speak and vote at the meeting in accordance with note 5 below may appoint a proxy to exercise all of his rights to attend, speak and vote instead of him at the meeting. A proxy can only be appointed using the procedures set out in these notes and the notes to the form of proxy. A proxy need not also be a member of the Company but he must attend the meeting to represent the member appointing him. The form of proxy for use at the meeting, which is attached, must be lodged with the Company at Unit A, 18/F, Epoch Industrial Building, No.8 Cheung Ho Street, Tsing Yi, New Territories, Hong Kong not later than 9.00 am BST on 29 May 2013. 2. A member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. More than one proxy may not be appointed to exercise rights attached to any one share. 3. Completion and return of the form of proxy will not preclude members entitled to attend and vote at the meeting (or at any adjournment of the meeting) from doing so in person if they so wish. 4. The Company specifies, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, that only those shareholders registered in the register of members of the Company no later than 9:00 am BST on 29 May 2013 or if this meeting is adjourned at 6 pm BST on the day two days prior to the adjourned meeting (but no account shall be taken of a part of a day that is not a working day) shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their respective names at that time. Any changes to the register of members after such time shall be disregarded in determining the rights of any person to attend and vote at the meeting. 5. The notes to the proxy form explain how to direct the proxy to vote on each resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be: - completed and signed; - sent or delivered to the Company at Unit A, 18/F, Epoch Industrial Building, No.8 Cheung Ho Street, Tsing Yi, New Territories, Hong Kong; and - received by the Company no later than 9.00 am BST on 29 May 2013 (or not less than 48 hours before any adjournment of the meeting but no account shall be taken of a part of a day that is not a working day). 6. In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. 7. Please note that communications regarding the matters set out in this notice of General Meeting will not be accepted in electronic form. END -0- May/08/2013 14:30 GMT