Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.
MIKO INTERNATIONAL HOLDINGS LIMITED
米 格 國 際 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 1247)
MAJOR TRANSACTION
DISPOSAL OF PROPERTY
On 12 December 2019, Red Kids China entered into the Sale and Purchase Agreement with Shanghai Yanhe, pursuant to which Red Kids China has agreed conditionally to sell, and Shanghai Yanhe has agreed conditionally to purchase the Target Property, for an aggregate consideration of RMB26,300,000.
As one of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Sale and Purchase Agreement is more than 25% but less than 75%, the Sale and Purchase Agreement and the transaction contemplated thereunder constitute a major transaction for the Company under Chapter 14 of the Listing Rules, and is subject to the notification, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.
A circular of the Company containing, among others, further details of the Sale and Purchase Agreement and the transaction contemplated thereunder as well as a notice of extraordinary general meeting is expected to be despatched to the Shareholders on or before 7 January 2020 for information purposes.
INTRODUCTION
On 12 December 2019, Red Kids China entered into the Sale and Purchase Agreement with Shanghai Yanhe, pursuant to which Red Kids China has agreed conditionally to sell, and Shanghai Yanhe has agreed conditionally to purchase the Target Property, for an aggregate consideration of RMB26,300,000.
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SALE AND PURCHASE AGREEMENT
The principal terms of the Sale and Purchase Agreement are as follows:
Date: | 12 December 2019 (after trading hours) |
Parties: | Vendor: Red Kids China |
Purchaser: Shanghai Yanhe | |
To the best of the Directors' knowledge, information and | |
belief, having made all reasonable enquiries, Shanghai | |
Yanhe and its ultimate beneficial owner are Independent | |
Third Parties. | |
Target Property: | Building No. 3 (also known as Building No. 7), Shanghai |
Shangzhifang Fashion Culture Creative Park, No. 6066 | |
Songze Avenue, Qingpu District, Shanghai, PRC (中國上海 | |
青浦區崧澤大道6066號上海尚之坊時尚創意產業園3號樓 | |
(又名7號樓)), with a gross floor area of 2,069.13 square | |
metres. | |
As at 31 December 2018, the audited carrying value of the | |
Target Property was RMB32,239,000. The Target Property | |
has recorded no income for the past two financial years. | |
Consideration: | The aggregate consideration for the disposal of the Target |
Property is RMB26,300,000, including the costs of building | |
reconstruction, refurbishment and facilities amounting to | |
RMB3,000,000. | |
The aforesaid consideration was determined after arm's | |
length negotiations between the parties and on normal | |
commercial terms, with reference to the potentials and value | |
of the Target Property, market conditions and the prevailing | |
market price of similar properties in the surrounding area. | |
Payment terms: | RMB18,300,000 shall be paid by Shanghai Yanhe to Red |
Kids China within seven business days after the Sale and | |
Purchase Agreement has been executed and sealed by the | |
parties and becomes effective . The balance of the | |
consideration shall be paid before 15 February 2020. |
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Completion: | Red Kids China shall make the Target Property vacant and |
deliver a notice to Shanghai Yanhe for inspection, acceptance | |
and handover within 14 days after the transaction under the | |
Sale and Purchase Agreement has been approved at the | |
extraordinary general meeting to be held by the Company or | |
by 15 February 2020. Shanghai Yanhe shall inspect the | |
Target Property and its decoration and facilities within three | |
days after receiving the notice, after which Red Kids China | |
shall deliver the keys of the houses to Shanghai Yanhe. | |
Conditions: | The transaction under the Sale and Purchase Agreement is |
subject to the obtaining by the Company of the approval of | |
the Shareholders in accordance with the applicable laws and | |
regulations (including the Listing Rules). |
POTENTIAL FINANCIAL IMPACTS AND USE OF PROCEEDS
The Group shall record a book loss of RMB5,939,000 (subject to audit) from the disposal of the Target Property, which represents the difference between the consideration of disposal and the audited carrying value of the Target Property as at 31 December 2018.
The Group intends to apply the proceeds from the disposal of the Target Property for repayment of bank borrowings and for supplementing the general working capital.
REASONS FOR AND BENEFITS OF THE TRANSACTION
The Group originally intended to set up its research and development centre at the Target Property. However, the location of the Target Property is no longer suitable for the intended use due to business strategy reasons. As of the date of this announcement, the Target Property has been left idle for more than 12 months, and no rental returns were generated. Besides, the Target Property is subject to a mortgage for the grant of bank borrowings, by which borrowing interest is borne by the Group. After further consideration of the market conditions, the Board considers that, although the Target Property would be disposed of at a price lower than the carrying value, the transaction allows the Group to dispose of an idle property in exchange of proceeds for repayment of bank borrowings and release of mortgage, as well as supplementing the Group's working capital, which is a more efficient way to use the Group's resources.
Taking into account of the above factors, the Board considers that the terms of the disposal of the Target Property are fair and reasonable and are in the interests of the Company and its Shareholders as a whole.
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INFORMATION ON THE GROUP
The Group's business is primarily marketing products through wholesaling to distributors, and self-operated stores who operate "redkids" branded retail stores in various provinces and municipalities in Mainland China.
INFORMATION ON SHANGHAI YANHE
Shanghai Yanhe is principally engaged in engineering survey, geotechnical engineering survey, technical service and technical consultation in the area of construction engineering, construction engineering design of water conservancy, bidding agency of construction engineering, construction engineering detection and engineering management service.
LISTING RULES IMPLICATIONS
As one of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Sale and Purchase Agreement is more than 25% but less than 75%, the Sale and Purchase Agreement and the transaction contemplated thereunder constitute a major transaction for the Company under Chapter 14 of the Listing Rules, and is subject to the notification, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.
A circular of the Company containing, among others, further details of the Sale and Purchase Agreement and the transaction contemplated thereunder as well as a notice of extraordinary general meeting is expected to be despatched to the Shareholders on or before 7 January 2020 for information purposes.
DEFINITIONS
In this announcement, the following expressions shall have the following meanings unless the context requires otherwise:
"Board" | the board of Directors |
"Company" | Miko International Holdings Limited, a company |
incorporated in the Cayman Islands with limited | |
liability and the shares of which are listed on The Stock | |
Exchange of Hong Kong Limited | |
"Directors" | the directors of the Company |
"Group" | the Company and its subsidiaries |
"Independent Third | third party(ies) independent to any Director, chief |
Party(ies)" | executive or substantial shareholder of the Company or |
its subsidiaries or any associate (as defined in the | |
Listing Rules) of any of them |
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"Listing Rules" | the Rules Governing the Listing of Securities on The |
Stock Exchange of Hong Kong Limited | |
"PRC" | the People's Republic of China |
"Red Kids China" | Red Kids (China) Co., Ltd. (紅孩兒(中國)有限公司), a |
wholly foreign-owned enterprise incorporated under | |
the laws of the PRC on 20 January 2000 and an indirect | |
wholly-owned subsidiary of the Company | |
"RMB" | Renminbi, the lawful currency of the PRC |
"Sale and Purchase | the Shanghai Real Estate Sale and Purchase Agreement |
Agreement" | and the supplemental agreement to it dated 12 |
December 2019 entered into between Red Kids China | |
and Shanghai Yanhe, pursuant to which Red Kids | |
China has agreed conditionally to sell the Target | |
Property to Shanghai Yanhe | |
"Shanghai Yanhe" | 上海晏河建設勘測設計有限公司, a c o m p a n y |
incorporated under the laws of the PRC with limited | |
liability | |
"Target Property" | Building No. 3 (also known as Building No. 7), |
Shanghai Shangzhifang Fashion Culture Creative Park, | |
No. 6066 Songze Avenue, Qingpu District, Shanghai, | |
PRC (中國上海青浦區崧澤大道6066號上海尚之坊時 | |
尚創意產業園3號樓(又名7號樓)) | |
"%" | per cent. |
By Order of the Board | |
Miko International Holdings Limited | |
Ding Peiji | |
Chairman | |
Hong Kong | |
12 December 2019 |
As at the date of this announcement, our executive Directors are Mr. Ding Peiji, Mr. Ding Peiyuan and Ms. Ding Lizhen; and our independent non-executive Directors are Mr. Hung Cho Sing, Mr. Chan Wai Wong and Mr. Wu Shiming.
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