16th Feb 2007 10:00
Asian Citrus Holdings Ltd16 February 2007 For immediate release 16 February 2007 Asian Citrus Holdings Limited ("Asian Citrus" or the "Company") The information in this announcement is restricted and is not for distributionin the United States, Canada, Australia or Japan NOTICE OF SGM Asian Citrus is shortly posting to Shareholders a circular convening a SpecialGeneral Meeting ("SGM") to propose the following resolutions: (i) to grant the Directors the authority to allot and issue up to 14 million newOrdinary Shares and to do so for cash on a non pre--emptive basis (the "Share Issue Resolution"); and (ii) to amend the bye-laws of the Company to ensure compliancewith guidance to the AIM Rules in relation to notification of major interests inshares by Shareholders (the "Bye-laws Resolution"). As far as the Directors are aware, Asian Citrus is the leading producer oforanges in the PRC. It owns and operates two orange plantations: one in HepuCounty in the Guangxi Zhuang Autonomous Region and one in Xinfeng County inJiangxi province. The Hepu plantation is fully operational and the Xinfengplantation, which is nearing completion, is expected to produce its firstcommercial harvest in November 2007. The Board continues to be excited about the growth prospects of the Companydriven by increasing demand for high quality oranges in the PRC and theCompany's success to date in concluding supermarket contracts. As announced at the time of the preliminary results on 17 October 2006, theBoard has identified Hunan province as another potential source of high qualityoranges for the Company and has been exploring various business opportunities inthe region. The Company has undertaken a feasibility study on the proposed Hunandevelopment and is currently in discussions with the Hunan provincial governmentregarding the plans it has to develop a new plantation in the Dao County area. The Board would like to put the Company in a position to be able to raise thenecessary finance for the future development of the business including thepossible development of a new plantation. Whilst the Company has existingresources and access to future cash flows, given its growth prospects, the Boardbelieves that it is appropriate to maintain flexibility around the financing offuture growth and developments. As such, the Board wishes to be in a positionwhereby the Company is able to raise additional finance by way of a placing ofnew Ordinary Shares, provided that any such placing is considered to be in thebest interests of shareholders as a whole. There can be no assurance as to the outcome of the discussions with the Hunanprovincial government, and even in the event that agreement can be reached withthe Hunan provincial government, there can be no assurance that the Company willbe able to conclude the further land agreements necessary for the constructionand operation of any new plantation (or that it will be able to do so oncommercially acceptable terms). There can be no assurance as to the likelytiming of any such developments. As such, there is no certainty as to whether anequity raising will be undertaken, nor as to the size or timing of any equityraising. The Board will update shareholders as appropriate. The interim results are expected to be announced on 21 March 2007. Reasons for the SGMAsian Citrus' bye-laws (the "Bye-laws") contain restrictions on the number ofshares the Company can issue to new Shareholders without first offering them toexisting Shareholders. To undertake an equity raising, the Board believes that,given the current Shareholder structure, it would create greater institutionaldemand and allow capital to be raised more quickly, efficiently and costeffectively to do so on a non pre-emptive basis. The purpose of the Share Issue Resolution is to provide the Board withadditional flexibility to fund the Company's existing growth opportunities in atimely manner and its future expansion in a manner which it believes to be inthe best interests of Shareholders. In proposing the Share Issue Resolution, the Board makes the following commentsand undertakings: 1. The Share Issue Resolution will authorise the allotment andissue of up to 14 million new Ordinary Shares of HK$0.10 each in the sharecapital of the Company equivalent to approximately 18 per cent. of the enlargedissued share capital if the authority were to be utilised in full. In the eventof a placing, the new Ordinary Shares will be issued at a price not more than 10per cent. below the mid-market closing price on the day prior to theannouncement of the placing price. This has been determined to maintain fundingflexibility and is in line with normal market practice. In the event of aplacing, the actual price and whether this was at a premium or discount would bea function of, inter alia, market conditions and levels of investor demand. 2. Based on the mid-market closing price of the Ordinary Shares on15 February 2007, the value of 14 million shares is approximately £39 millionwhich reflects the maximum amount that the Board would consider appropriate toraise by issuing new Ordinary Shares for the purpose of financing currentlyenvisaged future projects, and still providing an appropriate amount ofheadroom. 3. If the authority were to be used in relation to a placing of newOrdinary Shares with investors on a non pre-emptive basis, the Board will useits reasonable endeavours to procure that existing institutional shareholdersreceive preferential allocations. 4. The Bye-laws contain certain mandatory takeover provisions.Accordingly, no issue of shares will be made which would result in a singleshareholder or concert party holding 30 per cent. or more of the issued sharecapital of the Company, without a vote of independent shareholders being soughtto waive the requirement of such shareholder or concert party to make an offerfor the whole of the share capital of the Company. In addition, no new shareswould be allocated to either Market Ahead Investments Limited or Huge MarketInvestments Limited that would increase the voting rights attributable to sharesheld by either thereof. 5. The Board will consult with its nominated adviser, JPMorganCazenove Limited, on the terms and conditions of any issue utilising thisauthority. 6. The Share Issue Resolution, if passed, will be valid until theearlier of the first anniversary of that resolution being passed and theconclusion of the next annual general meeting. The Board may put forward similarresolutions for further consideration by Shareholders at future general meetingsof the Company, on terms reflecting whether or not any current authorities havebeen utilised in the meantime and any other changes in circumstances. 7. In accordance with the terms of the Asian Citrus Holdings LimitedShare Options Plan dated 29 June 2005, the terms of existing share options maybe varied to take account of any equity raising to such an extent and in suchmanner as the Company's auditors confirm is fair and reasonable.The Board also proposes the Bye-laws Resolution in order to amend the Bye-lawsto ensure compliance with recently-introduced guidance to the AIM Rules inrelation to notification by shareholders of their major interests. Rule 17 ofthe AIM Rules requires the Company to notify the market via its RegulatoryInformation Service of significant shareholdings. In order to enable the Companyto discharge its obligation under Rule 17, any such Shareholders must assume,pursuant to the amended Bye-laws, a corresponding obligation to advise it whenthey acquire or cease to have a notifiable interest in its shares and of anyinteger percentage point changes in any significant shareholding from time totime. The obligation applies equally to changes in shareholders' positionswhether deriving from their own acquisitions or disposals, or from changes incircumstances outside their control. The SGMA Special General Meeting is to be held at 4.30 p.m. (Hong Kong time) (8.30 a.m.(London time)) on 15 March 2007 at the offices of Lovells, 23/F Cheung KongCentre, 2 Queen's Road, Central, Hong Kong. Shareholders will be asked to consider, and if thought fit, pass: 1. the Share Issue Resolution to grant the Directors of the Company ageneral authority to allot and issue up to 14 million new Ordinary Shares forcash on a non pre-emptive basis, as if Bye-law 16 did not apply to suchallotment; and 2. the Bye-laws Resolution to amend the Bye-laws to ensure compliance withrecently introduced guidance to the AIM Rules in relation to the notification ofmajor interests in shares by Shareholders. For Further Information Contact: Terry Garrett/John Moriarty/Helen Thomas 0207 067 0700Weber Shandwick Square Mile This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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