THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.
If you have sold or transferred all your shares in eSun Holdings Limited, you should at once hand this circular with the accompanying form of proxy to the purchaser(s) or transferee(s), or to the licensed securities dealer, registered institution in securities, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
eSun Holdings Limited
(Incorporated in Bermuda with limited liability)
(Stock Code: 571)
PROPOSED GENERAL MANDATES TO
ISSUE AND BUY BACK SHARES
Capitalised terms used in the lower portion of this cover page shall have the same respective meanings as those defined in the section headed "Definitions" in this circular.
A letter from the Board is set out on pages 3 to 6 of this circular.
The notice convening 2019 AGM to be held at Grand Ballroom 1, Level B, Hong Kong Ocean Park Marriott Hotel, 180 Wong Chuk Hang Road, Aberdeen, Hong Kong on Friday, 20 December 2019 at 10:00 a.m. is contained in the 2018-2019 Annual Report.
Shareholders are advised to read the Notice of 2019 AGM and if you are not able to attend 2019 AGM or its adjournment (as the case may be) in person but wish to exercise your right as a Shareholder, please complete and sign the form of proxy enclosed with the 2018-2019 Annual Report in accordance with the instructions printed thereon and deposit the same with the Company's branch share registrar in Hong Kong, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible, but in any event not less than 48 hours before the time fixed for holding 2019 AGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy shall not preclude you from attending and voting in person at 2019 AGM or any adjournment thereof (as the case may be) should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.
21 November 2019
TABLE OF CONTENTS | ||
Page | ||
DEFINITIONS ........................................................................................................................ | 1 | |
LETTER FROM THE BOARD | ||
1. | Introduction .......................................................................................................... | 3 |
2. | Proposed Granting of Share Issue Mandate and Buy Back Mandate .................... | 4 |
3. | 2019 AGM ............................................................................................................ | 4 |
4. | Voting by Way of Poll .......................................................................................... | 5 |
5. | Recommendation .................................................................................................. | 5 |
6. | General Information ............................................................................................. | 6 |
APPENDIX - EXPLANATORY STATEMENT ON BUY BACK MANDATE ...... | 7 |
This circular in both English and Chinese is available in printed form and published on the respective websites of the Company at www.esun.com and the Stock Exchange at www.hkexnews.hk.
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DEFINITIONS
Unless the context otherwise requires, terms used in this circular and the appendix shall have the following respective meanings:
"2018-2019 Annual Report" | annual report of the Company for the year ended 31 July 2019; |
"2018 AGM" | the AGM held on 21 December 2018; |
"2019 AGM" | the AGM to be convened and held at Grand Ballroom 1, Level B, |
Hong Kong Ocean Park Marriott Hotel, 180 Wong Chuk Hang | |
Road, Aberdeen, Hong Kong on Friday, 20 December 2019 | |
at 10:00 a.m. or any adjournment thereof; | |
"AGM" | annual general meeting of the Company; |
"Board" | the board of Directors; |
"Buy-backs Code" | the Code on Share Buy-backs issued by the SFC; |
"Buy Back Mandate" | a general and unconditional mandate proposed to be granted |
to the Directors at 2019 AGM to exercise all the powers of the | |
Company to buy back Shares not exceeding 10% of the total | |
issued Shares as at the date of passing such resolution; | |
"Bye-laws" | the Bye-laws of the Company; |
"close associate(s)" | has the meaning ascribed to it under Rule 1.01 of the Listing |
Rules; | |
"Company" | eSun Holdings Limited (豐德麗控股有限公司), an exempted |
company incorporated in Bermuda with limited liability, the | |
issued Shares of which are listed and traded on the Main Board | |
of the Stock Exchange (Stock Code: 571); | |
"control" | has the meaning ascribed to it under the Takeovers Code; |
"controlling shareholder(s)" | has the meaning ascribed to it under Rule 1.01 of the Listing |
Rules; | |
"core connected person(s)" | has the meaning ascribed to it under Rule 1.01 of the Listing |
Rules; | |
"Director(s)" | the director(s) of the Company; |
"Group" | the Company and its subsidiaries from time to time; |
"HK$" | Hong Kong dollars, the lawful currency of Hong Kong; |
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DEFINITIONS | |
"Hong Kong" | the Hong Kong Special Administrative Region of the People's |
Republic of China; | |
"Latest Practicable Date" | 14 November 2019, being the latest practicable date prior to |
the printing of this circular for the purpose of ascertaining | |
certain information contained herein; | |
"Listing Rules" | the Rules Governing the Listing of Securities on the Stock |
Exchange as amended, supplemented or otherwise modified | |
from time to time; | |
"LSD" | Lai Sun Development Company Limited (麗新發展有限 |
公司), a company incorporated in Hong Kong with limited | |
liability, the issued shares of which are listed and traded on the | |
Main Board of the Stock Exchange (Stock Code: 488); | |
"LSG" | Lai Sun Garment (International) Limited (麗新製衣國際 |
有限公司), a company incorporated in Hong Kong with | |
limited liability, the issued shares of which are listed and | |
traded on the Main Board of the Stock Exchange (Stock Code: | |
191); | |
"Notice of 2019 AGM" | the notice convening 2019 AGM is contained in 2018-2019 |
Annual Report; | |
"SFC" | the Securities and Futures Commission in Hong Kong; |
"SFO" | the Securities and Futures Ordinance (Chapter 571 of the Laws |
of Hong Kong); | |
"Share(s)" | the ordinary share(s) of HK$0.50 each in the share capital of |
the Company; | |
"Share Issue Mandate" | a general and unconditional mandate proposed to be granted |
to the Directors at 2019 AGM to exercise all the powers of | |
the Company to allot, issue and deal with additional Shares | |
not exceeding 20% of the total issued Shares as at the date of | |
passing such resolution; | |
"Share Option Scheme" | the share option scheme adopted by the Company on |
11 December 2015 and became effective on 23 December 2015; | |
"Shareholder(s)" | the duly registered holder(s) of the Shares; |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited; |
"Takeovers Code" | The Code on Takeovers and Mergers and Share Buy-back |
issued by the SFC as amended from time to time; and | |
"%" | per cent. |
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LETTER FROM THE BOARD
eSun Holdings Limited
(Incorporated in Bermuda with limited liability)
(Stock Code: 571)
Executive Directors: | Registered Office: |
Mr. Lui Siu Tsuen, Richard (Chief Executive Officer) | Clarendon House |
Mr. Chew Fook Aun | 2 Church Street |
Mr. Lam Hau Yin, Lester | Hamilton HM 11 |
Mr. Yip Chai Tuck | Bermuda |
Non-executive Director: | Head Office and Principal Place |
Madam U Po Chu | of Business: |
Independent Non-executive Directors: | 11th Floor |
Lai Sun Commercial Centre | |
Mr. Low Chee Keong (Chairman) | 680 Cheung Sha Wan Road |
Mr. Lo Kwok Kwei, David | Kowloon |
Dr. Ng Lai Man, Carmen | Hong Kong |
Mr. Alfred Donald Yap | |
21 November 2019 | |
To the Shareholders | |
Dear Sir and Madam, |
PROPOSED GENERAL MANDATES TO
ISSUE AND BUY BACK SHARES
1. INTRODUCTION
At 2018 AGM, general mandates were granted by the Shareholders to the Directors to exercise all the powers of the Company to issue and buy back Shares. Pursuant to the provisions of the Listing Rules, these general mandates will lapse at the conclusion of 2019 AGM unless renewal at that meeting.
The purpose of this circular is to provide you with an explanatory statement as required by the Listing Rules and the information relating to the proposed renewal of the general mandates to the Directors to allot, issue and deal with additional Shares and to buy back Shares, so as to give you all information reasonably necessary to enable you to make an informed decision on whether to vote for or against the proposed resolutions at 2019 AGM.
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LETTER FROM THE BOARD
2. PROPOSED granting of SHARE ISSUE MANDATE AND BUY BACK MANDATE
At 2018 AGM, ordinary resolutions were passed respectively to grant general mandates to the Directors to exercise all the powers of the Company (i) to allot, issue and deal with additional
Shares not exceeding 20% of the total issued Shares as at the date of 2018 AGM; (ii) to buy back Shares not exceeding 10% of the total issued Shares as at the date of 2018 AGM; and
(iii) to extend the general mandate granted to the Directors to issue Shares by adding the number of Shares bought back by the Company pursuant to the mandate to buy back Shares referred in (ii) above.
The above mandates will expire at the conclusion of 2019 AGM unless renewed at that meeting. To keep in line with the current corporate practice, resolutions will be proposed at 2019 AGM to grant the Share Issue Mandate and the Buy Back Mandate to the Directors as well as to extend the general mandate granted to the Directors to issue Shares by adding the number of Shares bought back under the Buy Back Mandate, if granted. The full text of above resolutions is set out in ordinary resolutions nos. (A), (B) and (C) under agenda item 4 of the Notice of 2019 AGM. As regards these resolutions, the Directors wish to state that they have no immediate plans to allot and issue any new Shares or buy back any Shares pursuant to the relevant mandates.
As at the Latest Practicable Date, the total number of issued Shares was 1,491,854,598. Assuming that there is no issue of Shares or any buy back of Shares from the Latest Practicable Date up to the date of 2019 AGM, up to a maximum of 298,370,919 Shares representing 20% of the total issued Shares may be issued under the Share Issue Mandate; and up to a maximum of 149,185,459 Shares representing 10% of the total issued Shares may be bought back by the Company under the Buy Back Mandate.
An explanatory statement, as required by the Listing Rules in connection with the Buy Back Mandate is set out in Appendix to this circular, and contains all the information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the ordinary resolution relating to the Buy Back Mandate.
3. 2019 AGM
The 2019 AGM will be held at Grand Ballroom 1, Level B, Hong Kong Ocean Park Marriott Hotel, 180 Wong Chuk Hang Road, Aberdeen, Hong Kong on Friday, 20 December 2019 at 10:00 a.m. The Notice of 2019 AGM is contained in the 2018-2019 Annual Report. The resolutions in relation to, among other things, the proposed granting of Share Issue Mandate, Buy Back Mandate and extension of the Share Issue Mandate will be proposed at 2019 AGM for approval by the Shareholders.
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LETTER FROM THE BOARD
Shareholders are advised to read the Notice of 2019 AGM and if you are not able to attend 2019 AGM or its adjournment (as the case may be) in person but wish to exercise your right as a Shareholder, please complete and sign the form of proxy enclosed with the 2018-2019 Annual Report (also published on both the websites of the Company at www.esun.com and the Stock Exchange at www.hkexnews.hk) in accordance with the instructions printed thereon and deposit the same with the Company's branch share registrar in Hong Kong, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible, but in any event not less than 48 hours before the time fixed for holding 2019 AGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy shall not preclude you from attending and voting in person at 2019 AGM or any adjournment thereof (as the case may be) should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.
To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, no Shareholder is required to abstain from voting on the above resolutions to be proposed at 2019 AGM.
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VOTING BY WAY OF POLL
In compliance with Rule 13.39(4) of the Listing Rules, save for resolutions which relate purely to a procedural or administrative matter to be voted by a show of hands, any vote of the Shareholders at a general meeting of the Company must be taken by poll. Accordingly, the ordinary resolutions to be proposed at 2019 AGM will be voted by way of a poll by the Shareholders.
Bye-law 66 of the Bye-laws provides that on a poll, every member present in person or by proxy or in the case of a member being a corporation, by its duly authorised representative, shall have one vote for every fully-paid Share of which he/she/it is the holder.
An explanation of the detailed procedures of conducting a poll will be provided to the Shareholders at 2019 AGM. Tricor Tengis Limited, the branch share registrar of the Company in Hong Kong, will serve as the scrutineers for the vote-taking. The Company will publish an announcement on the poll results on the respective websites of the Company at www.esun.com and the Stock Exchange at www.hkexnews.hk shortly after the conclusion of 2019 AGM pursuant to Rule 13.39(5) of the Listing Rules. - RECOMMENDATION
The Directors are of the opinion that the proposed granting of Share Issue Mandate, Buy Back Mandate and extension of the Share Issue Mandate (details of which are set out in the Notice of 2019 AGM) are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend all Shareholders to vote in favour of the relevant resolutions to be proposed at 2019 AGM.
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LETTER FROM THE BOARD
6. GENERAL INFORMATION
Your attention is drawn to the additional information set out in the Appendix to this circular and the Notice of 2019 AGM contained in the 2018-2019 Annual Report.
In case of any inconsistency between the English and Chinese versions of this circular, the English version will prevail.
Yours faithfully,
For and on behalf of the Board of
eSun Holdings Limited
Low Chee Keong
Chairman
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APPENDIX | EXPLANATORY STATEMENT |
ON BUY BACK MANDATE | |
This explanatory statement contains all the information required by Rule 10.06(1)(b) of the Listing Rules to be given to the Shareholders reasonably necessary to enable them to make an informed decision on whether to vote for or against the ordinary resolution relating to the Buy Back Mandate to be proposed at 2019 AGM.
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SHARE CAPITAL
As at the Latest Practicable Date, there were a total of 1,491,854,598 Shares in issue and there was no outstanding share option granted under the Share Option Scheme.
Subject to the passing of the proposed ordinary resolution granting the Buy Back Mandate and on the basis that no further Shares will be issued prior to the date of 2019 AGM, exercise in full of the Buy Back Mandate would result in up to a maximum of 149,185,459 Shares (i.e. 10% of the entire issued share capital of the Company as at the Latest Practicable Date) which could be bought back by the Company during the relevant period. - REASONS FOR BUY BACK
Although the Directors have no present intention to buy back any Shares, they believe that the flexibility afforded by the Buy Back Mandate will be in the best interests of the Company and the Shareholders as a whole. Such buy back may, depending on the market conditions and funding arrangements at the time, lead to an enhancement of the net assets value of the Company and/or earnings per Share and will only be made when the Directors believe that such buy back will benefit the Company and the Shareholders as a whole (e.g. if there are occasions in the future when depressed market conditions arise and the Shares are trading at a discount to their underlying value). - FUNDING OF BUY BACK
Pursuant to the Buy Back Mandate, the Company may only apply funds legally available for buy back in accordance with the Laws of Bermuda in which the Company is incorporated, and the Memorandum of Association and the Bye-laws of the Company.
Funds for a buy back of the Shares, to the extent of the nominal value attributable to the bought back Shares, may be paid out of the capital paid up thereon or out of the proceeds of a new issue of Shares made for the purpose or from the funds of the Company otherwise available for dividend or distribution. The premium over the nominal value of the bought back Shares may be paid out of the share premium account before the Shares are bought back or the funds of the Company otherwise available for dividend or distribution.
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APPENDIX | EXPLANATORY STATEMENT |
ON BUY BACK MANDATE | |
If the Buy Back Mandate is to be exercised in full at any time during the proposed buy back period, there may be a material adverse effect on the working capital or the gearing position of the Group which in the opinion of the Directors is from time to time appropriate for the Group (as compared with the position disclosed in the published audited consolidated financial statements of the Company for the year ended 31 July 2019). However, the Directors do not currently propose to exercise the Buy Back Mandate to such an extent unless the Directors are of the view that such buy back will, taking into account of all the relevant factors, be in the best interests of the Group.
4. SHARE PRICES
The monthly highest and lowest prices per Share at which the Shares had been traded on the Stock Exchange during each of the twelve months preceding the Latest Practicable Date were as follows:
Month | Highest | Lowest |
HK$ | HK$ | |
2018 | ||
November | 1.21 | 1.15 |
December | 1.22 | 1.18 |
2019 | ||
January | 1.24 | 1.19 |
February | 1.25 | 1.19 |
March | 1.30 | 1.22 |
April | 1.28 | 1.21 |
May | 1.25 | 1.14 |
June | 1.20 | 1.10 |
July | 1.22 | 1.08 |
August | 1.10 | 0.98 |
September | 1.45 | 1.00 |
October | 1.18 | 0.97 |
November (up to the Latest Practicable Date) | 1.17 | 1.01 |
5. BUY BACK BY THE COMPANY
The Company had not made any purchase of Shares (whether on the Stock Exchange or otherwise) during the six months immediately preceding the Latest Practicable Date.
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APPENDIX | EXPLANATORY STATEMENT |
ON BUY BACK MANDATE | |
- INTENTION AND UNDERTAKING
None of the Directors nor, to the best of their knowledge and belief having made all reasonable enquiries, any of their respective close associates have any present intention to sell any Shares held by them to the Company under the Buy Back Mandate if such Buy Back Mandate is approved by the Shareholders.
The Directors have undertaken to the Stock Exchange that so far as the same may be applicable, they will exercise the Buy Back Mandate in accordance with the Listing Rules, the Bye-laws and the applicable laws of Bermuda.
No core connected person of the Company has notified the Company that he/she/it has a present intention to sell the Shares held by him/her/it to the Company, or has undertaken not to do so, in the event that the Buy Back Mandate is approved by the Shareholders. - IMPLICATIONS OF THE TAKEOVERS CODE AND THE LISTING RULES
If a Shareholder's proportionate interest in the voting rights of the Company increases as a result of a share bought back by the Company, such increase will be treated as an acquisition of voting rights for the purpose of Rule 32 of the Takeovers Code and Rule 6 of the Buy-backs Code. Accordingly, a Shareholder or a group of Shareholders acting in concert could, depending on the level of increase in their shareholding interest(s), obtain or consolidate control of the Company and thereby become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code for all the Shares not already owned by such Shareholder or group of Shareholders.
As at the Latest Practicable Date, the controlling shareholders of the Company named below were interested or were deemed to be interested under the SFO in the issued Shares as follows:
Number of issued Shares held | Approximate | ||||||
percentage of | |||||||
Personal | Corporate | total issued | |||||
Name | Capacity | interests | interests | Total | Shares | ||
LSD | Owner of controlled | Nil | 1,113,260,072 | 1,113,260,072 | 74.62% | ||
corporation | (Note 1) | ||||||
LSG | Owner of controlled | Nil | 1,113,260,072 | 1,113,260,072 | 74.62% | ||
corporations | (Note 2) | ||||||
Dr. Lam Kin | Beneficial owner and | 2,794,443 | 1,113,260,072 | 1,116,054,515 | 74.81% | ||
Ngok, Peter | owner of controlled | (Note 2) | |||||
("Dr. Lam") | corporations |
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APPENDIX | EXPLANATORY STATEMENT |
ON BUY BACK MANDATE | |
Notes:
- These interests in the Company representing all the Shares beneficially owned by Transtrend Holdings Limited, an indirect wholly-owned subsidiary of LSD.
- LSG and Dr. Lam (an executive Director from 15 October 1996 to 13 February 2014) were deemed to be interested in the same 1,113,260,072 Shares (approximately 74.62% of the total issued Shares) indirectly owned by LSD by virtue of his personal and deemed interests of approximately 41.96% (excluding share option) of the total issued shares of LSG; LSD was approximately 56.07% directly and indirectly owned by LSG; and LSG was approximately 12.52% (excluding share option) owned by Dr. Lam and approximately 29.44% owned by Wisdoman Limited, which in turn 100% beneficially owned by Dr. Lam.
In the event that the Company exercises the Buy Back Mandate in full and taking no account of the issue of new Shares by the Company pursuant to any general and specific mandates granted by the Shareholders at any general meeting, the Share Option Scheme and/or any other scheme or otherwise, the aggregate beneficial shareholding interests and deemed shareholding interests of LSD, LSG and Dr. Lam in the Company (for illustration) will be as follows:
Approximate percentage | |
Name | of total issued Shares |
LSD | 82.91% |
LSG | 82.91% |
Dr. Lam | 83.12% |
The Directors are not aware of any Shareholders or group of Shareholders acting in concert, who may become obliged to make a mandatory offer under Rule 26 of the Takeovers Code as a consequence of any buy back of Shares pursuant to the Buy Back Mandate.
The Directors have no present intention to exercise the Buy Back Mandate to such an extent as would result in the number of issued Shares held by the public falling below the minimum prescribed percentage of public float as required under the Listing Rules.
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