UNITED ENVIROTECH LTD (Incorporated in the Republic of Singapore) (Company registration no.: G)

Transcription

1 UNITED ENVIROTECH LTD (Incorporated in the Republic of Singapore) (Company registration no.: G) THE PROPOSED ACQUISITION OF THE BUSINESS, ASSETS AND PRINCIPAL SUBSIDIARIES OF MEMSTAR TECHNOLOGY LTD BY UNITED ENVIROTECH LTD ENTRY INTO SECOND SUPPLEMENTAL SALE AND PURCHASE AGREEMENT 1. INTRODUCTION The board of directors (the Board ) of United Envirotech Ltd (the Company ) refers to the announcements made by the Company on 29 July 2013, 7 August 2013 and 13 August 2013 (the Announcements ) in relation to the proposed acquisition of the business, assets and principal subsidiaries of Memstar Technology Ltd (the Vendor ) by the Company (the Transaction ). Unless otherwise expressly specified, capitalised terms herein shall bear the same meanings as defined in the Announcements. 2. UPDATES IN RELATION TO THE TRANSACTION Further to the Announcements, the Board wishes to announce that the Company has, on 26 November 2013, entered into a second supplemental agreement (the 2 nd Supplemental Agreement ) to the sale and purchase agreement with the Vendor dated 29 July 2013 (as amended by the first supplemental agreement dated 13 August 2013) (the SPA ), pursuant to which the Company and the Vendor (the Parties ) have mutually agreed to extend the existing Long Stop Date under the SPA from 28 January 2014 to 28 April 2014 (the Extended Long Stop Date ), and to further revise the terms of the SPA as follows pursuant to the 2 nd Supplemental Agreement: 2.1 Company s Additional Obligations and Undertakings to Vendor The Company undertakes to the Vendor that, on the date of entry into the 2 nd Supplemental Agreement, it shall procure the following undertakings from KKR China Water Investment Holdings Limited ( KKR ), the single largest shareholder of the Company, as at the date of this Announcement (the Announcement Date ):

2 (i) Conversion Undertaking: KKR will (a) immediately upon Completion (and in any event, not later than the Completion Date), convert US$51.1 million in aggregate principal amount of its Convertible Bonds (the KKR Conversion ) into an aggregate number of 136,955,188 Shares (the KKR Conversion Shares ) at the conversion price of S$0.45 per KKR Conversion Share; and (b) prior to Completion, subject to the obtaining of the respective approvals of shareholders of the Company and the Vendor for the Transaction (the Requisite Shareholders Approvals ), deposit at the registered office of the Company a duly executed notice (the KKR Conversion Notice ) relating to the KKR Conversion (the KKR Conversion Undertaking ); and Moratorium Undertaking: KKR will not directly or indirectly sell, transfer or otherwise dispose of any or all the ordinary shares in the capital of the Company ( Shares ) held by it, for a period commencing on and from the Completion Date and expiring on a date falling six (6) months thereafter (the KKR Moratorium Undertaking ). Following Completion and the KKR Conversion, KKR will hold in aggregate (i) 235,491,188 Shares; and Convertible Bonds of US$62.7 million in aggregate principal amount. The Parties have also mutually agreed that in the event that Completion does not take place for any reason whatsoever on or prior to the Extended Long Stop Date, the KKR Conversion Notice will automatically lapse and be revoked (and the KKR Conversion will not take place), such that KKR will not be obliged to effect the KKR Conversion, and the Company will return the KKR Conversion Notice to KKR and not allot and issue the KKR Conversion Shares The Company further undertakes to the Vendor that: (i) (iii) it will not waive any obligation of KKR under the KKR Conversion Undertaking without the prior written consent of the Singapore Exchange Securities Trading Limited (the SGX-ST ) and the Vendor; subject to the Requisite Shareholders Approvals being obtained, the Company shall use its best endeavours to procure that KKR deposits the KKR Conversion Notice at the registered office of the Company prior to the Completion Date; and notwithstanding any provision to the contrary in the terms and conditions of the Convertible Bonds in relation to the timing for the deposit by KKR of the KKR Conversion Notice and the timing for the allotment and issuance by the Company of all the KKR Conversion Shares to KKR, following receipt by the Company of the KKR Conversion Notice prior to the Completion Date, the Company shall allot and issue all the KKR Conversion Shares to KKR immediately after Completion and no later than the Completion Date. 2.2 Special Dividend as a Condition Precedent to the Transaction

3 2.2.1 The Parties have mutually agreed that the Vendor shall distribute all or substantially all the Purchase Consideration to its shareholders (the Vendor Shareholders ) by way of (i) a distribution in specie of Consideration Shares (to the extent of the Vendor s total distributable profits and retained earnings) (the Special Dividend ); and capital reduction (the Capital Reduction ) or voluntary liquidation (the Voluntary Liquidation ) (as the case may be, depending on the approval of the Vendor Shareholders) (collectively, the Proposed Distribution ) In addition, the Parties have mutually agreed that the Transaction will be further conditional upon, and Completion shall not take place until, the approval of the Special Dividend by Vendor Shareholders at a general meeting (the Vendor EGM ) The Company understands from the Vendor that it is currently contemplated that the Vendor will effect the Special Dividend immediately after the Completion Date, and the Capital Reduction on or about the same time, if approved by Vendor Shareholders and subject always to compliance with the requirements and procedures under the Companies Act, Chapter 50 of Singapore (the Companies Act Requirements ). In the event that Vendor Shareholders approve the Voluntary Liquidation instead of the Capital Reduction, the timing for the distribution under the Voluntary Liquidation will be dependent on the timing for the appointment of the liquidator and the time required by the liquidator to complete the liquidation process. 2.3 Revised Completion Mechanism and Proposed Set-off Arrangement The Parties have mutually agreed that the Purchase Consideration shall be satisfied by the Company by way of (i) a cash consideration (the Cash Consideration ); and the allotment and issuance of new ordinary shares in the Company (the Consideration Shares ), via 2 payment tranches as follows: (i) the payment of part of the Cash Consideration of S$63,728,702 and the allotment and issuance of 173,805,550 Consideration Shares to the Vendor on Completion; and the payment of the remaining Cash Consideration of S$9,625,000 in cash and the allotment and issuance of the remaining 26,250,000 Consideration Shares to the Vendor within approximately two (2) months after the Completion Date As at the Announcement Date, the Company holds 13.18% of the total issued share capital of the Vendor. The Company will, accordingly, be entitled to proportionately participate in any distribution pursuant to the Special Dividend and if duly approved by Vendor Shareholders, the Capital Reduction (or the Voluntary Liquidation, as the case may be) (the Company s Entitlement ) The Parties have further mutually agreed that the Company s Entitlement may be set off against the Purchase Consideration payable by the Company to the Vendor in connection with the Transaction (the Proposed Set-off Arrangement ) Pursuant to the Proposed Set-off Arrangement:

4 (i) if Vendor Shareholders approve the Capital Reduction (or the Voluntary Liquidation, as the case may be), the Company will be entitled to set off its entitlement under both the Special Dividend and the Capital Reduction (or the Voluntary Liquidation, as the case may be) against the Second Tranche Payment; however, if Vendor Shareholders only approve the Special Dividend but not the Capital Reduction (or the Voluntary Liquidation, as the case may be), the Company will only be entitled to set-off its entitlement under the Special Dividend against the Second Tranche Payment. 2.4 Other Revisions under the 2 nd Supplemental Agreement The Parties have further mutually agreed that, pending Completion, the following parties shall undertake, or procure the following undertakings (as the case may be): (i) (iii) the Vendor shall undertake, and shall procure that each of Pan Shuhong and Ge Hailin provide an undertaking (in their capacities as Shareholders), to the Company that, for a two (2)-year period commencing from the Completion Date, they will not (a) requisition, or procure any of their nominees and/or proxies to requisition, for a general meeting to in any way re-constitute the Board; and (b) abstain and procure that their nominees and/or proxies will abstain, from voting on any resolution in relation to any change in the Board; the Vendor shall procure that each of Pan Shuhong and Ge Hailin provide an undertaking (in their capacities as Vendor Shareholders) to the Company that they will exercise their respective voting rights as shareholders of the Vendor to ensure that the Vendor complies with its undertaking as set out in 2.4.1(i) above; and the Company shall procure that each of KKR and Lin Yucheng provide an undertaking (in their capacities as Shareholders) to the Company that, for a two (2)-year period commencing from the Completion Date, they will vote against, and procure any of their nominees and/or proxies to vote against, any resolution in relation to any change in the Board as nominated by the Vendor, Pan Shuhong or Ge Hailin, (collectively, the Board Control Undertakings, and each a Board Control Undertaking ) The Parties have also agreed that the Company shall not waive any obligations of any party under the Board Control Undertakings without the prior written consent of the SGX-ST. 3. UNDERTAKINGS PROVIDED AS AT THE DATE OF THIS ANNOUNCEMENT

5 Pursuant to the entry into the 2 nd Supplemental Agreement by Parties, the Company wishes to inform Shareholders that, as at the Announcement Date, the KKR Conversion Undertaking, the KKR Moratorium Undertaking and each of the Board Control Undertakings have been duly provided to the Company. 4. SHAREHOLDERS CIRCULAR, 2 ND SUPPLEMENTAL AGREEMENT AND RELEVANT UNDERTAKINGS Subject to the approval of the SGX-ST, the circular to Shareholders containing, inter alia, further details of the Transaction and enclosing the notice of the extraordinary general meeting will be despatched to the Shareholders in due course. Copies of (i) the 2 nd Supplemental Agreement, the KKR Conversion Undertaking, (iii) the KKR Moratorium Undertaking and (iv) each of the Board Control Undertakings will be made available for inspection during normal business hours at the Company s registered office at 80 Robinson Road, #02-00, Singapore , for a period of three (3) months from the Announcement Date. 5. CAUTIONARY STATEMENT The Board would like to advise Shareholders that Completion of the Transaction is subject to conditions precedent being fulfilled and there is no assurance that Completion of any or all of the Transaction will take place. Accordingly, Shareholders are advised to exercise caution in dealings in the Shares. Shareholders are advised to read this Announcement and any further update announcement(s) released by the Company in relation to the Transaction carefully. Shareholders should consult their stockbrokers, bank managers, solicitors or other professional advisers if they have any doubt about the actions they should take. 6. DEFINITIONS For the purpose of this Announcement, the following defined terms shall have the corresponding meanings ascribed: Completion means the completion of (i) the sale and purchase of 100% of Memstar Pte Ltd; and the transfer of certain assets of the Vendor on the Completion Date; Completion Date means: (i) the Designated Date, in the event all conditions precedent are satisfied and/or waived by the Company or the Vendor (other than those conditions precedent which by their terms are to be fulfilled by or on Completion or the Completion Date) prior to the Designated Date; or two (2) Business Days after all conditions precedent are satisfied and/or waived by the Company or the Vendor (other than those conditions precedent which by their terms are to be fulfilled by or on Completion or the Completion Date), in the event such conditions precedents are fulfilled and/or waived on or after the Designated Date; or

6 (iii) such other date falling prior to the Designated Date, as the Parties may agree in writing; and Designated Date means the date falling sixty (60) days after the date on which the Requisite Shareholders Approvals for the Transaction are obtained or such other date as may be mutually agreed between the Parties. BY ORDER OF THE BOARD Dr. Lin Yucheng Chairman and Chief Executive Officer 26 November 2013