Zhitong Finance App News, Jianyi Group (00638) and the offender Resplendent Global Limited jointly announced that on March 27, 2024, the offeror requested the board of directors to make this proposal to the planned shareholders to privatize the company through an agreement arrangement in accordance with section 99 of the Company Law. The plan requires cancellation of plan shares in exchange for payment of HK$0.72 (i.e. cancellation price) in cash to plan shareholders for each plan share, a premium of about 33.3% over the closing price of HK$0.54 per share on March 27.
As of the date of this joint announcement, the 700,000 share options granted under the share option scheme have not been exercised, with an exercise price of HK$2.262 or HK$2.470. Since the exercise price of unexercised share options under the share option scheme is higher than the cancellation price, the “see-through price” is negative and a cash offer with a face value of HK$0.01 for each unexercised share option will be made. A share option offer can only be effected after the plan comes into effect.
Overall, stock prices are sluggish and trading liquidity is low. The cancellation price represents a 55.9% premium over the 90-day average closing price of HK$0.46, providing plan shareholders with an attractive opportunity to withdraw and realise all of their investments in the company in a challenging market environment. Furthermore, due to continued significant discounts in net asset value per share compared to market price, the company was unable to raise any meaningful equity capital without diluting its net asset value per share. From the company's perspective, if the proposal is successfully implemented, the company can increase flexibility in formulating long-term strategies and saving public listed company expenses.
The offender was a company incorporated in the British Virgin Islands and an investment holding company. In the end, the offeror was effectively owned by Mr. Zheng Chujie, the executive director, chairman and chief executive of the company, while the remaining 48% of the offender's shares were equally held by his spouse, Ms. Zeng Yuyun, and their two sons, namely executive directors Mr. Zheng Zitao and Mr. Zheng Ziheng. The principal asset of the offeror is its shares in the company. The directors of the offender are Mr. Zheng Chujie and Ms. Zeng Yuyun.
After implementation of the proposal, the Offeror Plan Group will continue to carry out its business through the classification of electrical and electronic products, the classification of electrical appliances and the real estate development business classification. The Offeror has no plans to hold listed shares in other stock markets and make significant changes to the Group's business and employment of the Group's employees, except for changes that may be implemented from time to time after the Offeror has reviewed its strategy relating to the Group's business, structure and/or direction.
After the plan comes into effect, all plan shares will be cancelled (at the same time, the offeror will be issued the same number of new paid up shares), and the shares of the plan shares will no longer be valid as documents or evidence of ownership. The company will apply to the Stock Exchange to withdraw the listing status of its shares on the Stock Exchange in accordance with section 6.15 of the listing rules, and the withdrawal will take effect immediately after the effective date.
Furthermore, the company has applied to the Stock Exchange to resume trading of shares on the Stock Exchange starting at 9:00 a.m. on April 18, 2024.