(凯源露天煤矿).pdf

If you are in any 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. If you have sold or transferred all your shares in Artfield Group Limited the “Company”, you should at once hand this circular with the accompanying of proxy to the purchaser or transferee or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee. 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. ARTFIELD GROUP LIMITED incorporated in Bermuda with limited liability Stock Code 1229 VERY SUBSTANTIAL ACQUISITION – ACQUISITION OF 51 EQUITY INTEREST IN STAR FORTUNE INTERNATIONAL INVESTMENT COMPANY LIMITED Financial adviser to the Company BRIDGE PARTNERS A notice convening the special general meeting of the Company the “SGM” to be held at Suites 1003-1006, 10/F., Two Pacific Place, 88 Queensway, Hong Kong on Monday, 29 June 2009 at 1100 a.m. is set out on pages 255 to 256 to this circular. A of proxy for use at the SGM is enclosed. Whether or not you are able to attend at the SGM, please complete and return the enclosed of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Union Registrars Limited at Rooms 1901-1902, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjourned meeting thereof as the case maybe. Completion and deposit of the of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish. THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION 12 June 2009 Page Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Appendix I–Financial ination on the Group . . . . . . . . . . . . . . . . . . . . .24 Appendix II–Accountants’report on the Target Group. . . . . . . . . . . . . . . . .90 Appendix III–Unaudited pro a financial ination on the Enlarged Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133 Appendix IV–Valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144 Appendix V–Technical report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168 Appendix VI–General ination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .247 Notice of Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .255 CONTENTS In this circular, unless the context requires otherwise, the following expressions shall have the following meanings “Acquisition”the acquisition of 51 equity interest in the Target Company by the Purchaser “associates”has the meaning ascribed to it under the Listing Rules “Board”the board of Directors “Business Days”a day on which licensed banks in Hong Kong are open for normal banking business throughout their normal business hours excluding Saturdays and Sundays “BVI”the British Virgin Islands “Coal Mines”Kaiyuan Open Pit Coal Mine 凱源露天煤礦 and Zexu Open Pit Coal Mine 澤旭露天煤礦, both are situated at Bei Ta Mountain, Qi Tai County, Xinjiang Uygur Autonomous Region, the PRC 中國新疆維吾爾自治區 奇台縣北塔山 “Company” or “Purchaser’s Guarantor” Artfield Group Limited, a company incorporated in Bermuda with limited liability and the issued Shares of which are listed on the main board of the Stock Exchange “Completion”completion of the sale and purchase of the Sale Shares “Completion Date”within 5 Business Days after all the conditions precedent have been fulfilled or waived by the Purchaser or the Vendor or such later date as the parties to the Sale and Purchase Agreement may agree in writing “connected persons”has the meaning ascribed to it under the Listing Rules “Consideration”HK100,000,000.00, being the consideration for the Sales Shares, subject to adjustment “Directors”the directors of the Company, including the independent non-cutive directors “Earnest Money”a sum of HK2,000,000.00 as refundable earnest money for the proposed Acquisition deposited by the Purchaser into an escrow account with the Purchaser’s solicitors upon signing of the MOU DEFINITIONS – 1 – “Encumbrances”anymortgage,charge,pledge,lien,equities, hypothecation or other encumbrance, priority of security interest, deferred purchase, title retention, leasing, sale-and-repurchase or sale-and-lease back arrangement whatsoever over or in any property, assets or rights of whatsoever nature and includes any agreement for any of the same “Enlarged Group”together, the Group and the Target Group “Escrow Agreement”theescrowagreementtobeenteredintoon Completion, between the Purchaser, the Purchaser’s solicitors as escrow agent and the Vendor in respect of the escrow of the remaining balance of the Consideration, being HK28,000,000.00, in the escrow account with the Purchaser’s solicitors “Event of Force Majeure”there shall have developed, occurred, existed or come into effect any event or series of events, matters or circumstances on and/or after Completion including an event or change in relation to or a development of an existing state of affairs concerning or relating to i new law or regulation or any change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority, which have material adverse effect on the operation of the Coal Mines; or ii any event of force majeure including, without limiting the generality thereof, act of God, war, riot, social or public disorder, civil commotion, fire, flood, explosion, epidemic, outbreak of an infectious disease, calamity, crisis, terrorism, strike or lock-out whether or not covered by insurance in Xinjiang Uygur Autonomous Region, the PRC, which may materially affect the operation of the Target Group “Exploration Permit”the exploration permit granted by the relevant authorities to conduct exploration activities in the ZexuOpenPitCoalMine澤旭露天煤礦by Subsidiary B “Final Net Profit”the audited net profit after tax of Subsidiary A attributable to the Subsidiary A’s shareholder for the period from 1 January 2009 ending 31 December 2009 in accordance with the HKGAAP DEFINITIONS – 2 – “First Annual Period”the first 12 months ending immediately after the Completion Date “er Agreement”the sale and purchase agreement dated 3 July 2007 entered into between Ming Kei International Holding Co. Limited, Mr. Wong Wai Sing, Mr. Wong Wai Ngok and the Target Company in respect of the acquisition of the entire issued share capital in Ming Kei Kai Yuan by the Target Company “GEM Listing Rules”the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange “Group”the Company and its subsidiaries “HKGAAP”accounting principles, standards, and practices generally accepted in Hong Kong, including but not limited to Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards, and Interpretations issued by the Hong Kong Institute of Certified Public Accountants “Hong Kong”The Hong Kong Special Administrative Region of the PRC “Independent Technical Adviser” John T. Boyd Company, an independent mining and geologicalconsultant,beingtheindependent technical adviser appointed by the Company in respect of the Coal Mines and being a person with experience in the mining industry “Lasting Power” or “Purchaser”Lasting Power Investments Limited 力恒投資有限公司, a wholly-owned subsidiary of the Company “Latest Practicable Date”8 June 2009, being the latest practicable date before the printing of this circular for ascertaining certain ination for inclusion in this circular “Listing Rules”the Rules Governing the Listing of Securities on the Main Board of the Stock Exchange “Loan Facilities Agreement”a loan facilities agreement in relation to the provision of unsecured loan facilities in the maximum principal amount of approximately RMB25 million to the Target Group by the Vendor and the Vendor’s Guarantor for the daily operation of the Target Group, to be entered into between the Target Company, the Vendor and the Vendor’s Guarantor DEFINITIONS – 3 – “Long Stop Date”31 July 2009 or such later date to be agreed by the parties to the Sale and Purchase Agreement in writing “Ming Kei Kai Yuan”Ming Kei Kai Yuan Investment Company Limited 明基凱源投資有限公司, a company incorporated in Hong Kong and legally and beneficially owned as to 100 by the Target Company “Mining Rights”the mining rights granted by the relevant authorities to conduct mining activities in the Kaiyuan Open Pit Coal Mine 凱源露天煤礦 by Subsidiary A “MOU”the memorandum of understanding entered into between the Purchaser and the Vendor on 13 March 2009 concerning the Acquisition “Output Accounts”separate statements for each of a 12-month period certifying the actual sales volume of coal sold based on the coal sold as stated on the value-added tax invoices by Subsidiary A for each of the First Annual Period and the Second Annual Period “Perance Guarantee”the perance guarantee, where the Vendor and the Vendor’s Guarantor jointly, severally, unconditionally and irrevocably guarantee to the Purchaser that the volume of coal sold based on the coal sold as stated on the value-added tax invoices by Subsidiary A for each of the First Annual Period and the Second Annual Period shall not be less than 900,000 tonnes “PRC”The People’s Republic of China, which for the purpose of this circular, shall exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan “Profit Guarantee”the profit guarantee, where the Vendor and the Vendor’s Guarantor jointly, severally, unconditionally and irrevocably guarantee to the Purchaser that the Final Net Profit shall not be less than HK40 million “Profit Shortfall”the amount equivalent to the difference between the Profit Guarantee and the Final Net Profit times a price to earnings ratio of 4.90 and the percentage of equity interest in the Target Company held by the Purchaser DEFINITIONS – 4 – “Sale and Purchase Agreement”the sale and purchase agreement in respect of the Acquisition “Sale Shares”51 shares of US1.00 each in the share capital of the Target Company, representing 51 equity interest in the Target Company, held by the Vendor immediately before the Completion “Second Annual Period”the 12 months ending immediately after the First Annual Period “SFID” or “Vendor”Star Fortune International Development Company Limited 星力富鑫國際發展有限公司, an indirect wholly-owned subsidiary of the Vendor’s Guarantor “SFO”Securities and Futures Ordinance Chapter 571 of the Laws of Hong Kong “SGM”a special general meeting of the Company to be held on 29 June 2009 at 1100 a.m. to consider and, if thought fit, approve the Sale and Purchase Agreement and the transaction contemplated thereunder “Shares”ordinary shares of HK0.10 each in the existing share capital of the Company “Shareholders”holders of Shares “Shareholders’Agreement”a shareholders’agreement relating to the management and organization of the Target Company to be entered into on Completion between the Purchaser, the Company, the Vendor, the Vendor’s Guarantor and the Target Company “Stock Exchange”The Stock Exchange of Hong Kong Limited “Subsidiary A”木壘縣凱源煤炭有限責任公司transliterated as Mulei CountyKaiYuanCoalCompanyLimited,a wholly-owned foreign enterprise established in the PRC and beneficially owned as to 100 by Ming Kei Kai Yuan “Subsidiary B”奇台縣澤旭商貿有限責任公司transliterated as Qitai County Zexu Trading Company Limited, a company established in the PRC and beneficially owned as to 100 by Subsidiary A DEFINITIONS – 5 – “Target Company”Star Fortune International Investment Company Limited 星力富鑫國際投資有限公司, a company incorporated in the British Virgin Islands and a direct wholly-owned subsidiary of the Vendor “Target Group”the Target Company and its subsidiaries, and details of which are disclosed in the section headed “Ination on the Vendor, the Target Group and the Coal Mines” of this circular “Vendor’s Guarantor”Ming Kei Energy Holdings Limited, a company incorporated in Cayman Islands with limited liability and the issued shares of which are listed on the Growth Enterprise Market of the Stock Exchange stock code 8239 “HK”Hong Kong dollars, the lawful currency of Hong Kong “RMB”renminbi, the lawful currency of the PRC “US”United States dollars, the lawful currency of the United States of America “mm”millimeter “”per cent. DEFINITIONS – 6 – ARTFIELD GROUP LIMITED incorporated in Bermuda with limited liability Stock Code 1229 Directors Ms. Lo Fong Hung Chairperson and Managing Director Mr. Wang Xiangfei Mr. Kwan Man Fai Mr. Wong Man Hin, Raymond Mr. Lam Ka Wai, Graham Mr. Chan Yiu Fai, Youdey Independent non-cutive Director Registered office Clarendon House 2 Church Street Hamilton HM 11 Bermuda Principal place of business in Hong Kong Suites 1003-1006, 10/F Two Pacific Place 88 Queensway Hong Kong 12 June 2009 To the Shareholders, Dear Sir or Madam, VERY SUBSTANTIAL ACQUISITION – ACQUISITION OF 51 EQUITY INTEREST IN STAR FORTUNE INTERNATIONAL INVESTMENT COMPANY LIMITED INTRODUCTION On 7 May 2009, the Board announced that, after trading hours on 30 April 2009, the Purchaser a wholly-owned subsidiary of the Company and the Company as the Purchaser’s Guarantor entered into a conditional Sale and Purchase Agreement with the Vendor and the Vendor’s Guarantor, pursuant to which the Vendor has agreed to sell and the Purchaser has agreed to acquire 51 equity interest in the Target Company at the consideration of HK100 million subject to adjustment. The Acquisition constitutes a very substantial acquisition for the Company under Chapter 14 of the Listing Rules. As no Shareholder has any material interest in the Acquisition, no Shareholder is required to abstain from voting at the SGM in respect of the resolutions to approve the Sale and Purchase Agreement and the transaction contemplated thereunder. LETTER FROM THE BOARD – 7 – The purpose of this circular is to provide you with, among other things, i details of the Acquisition; ii financial ination on t