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Sunwah International Limited Enters Agreement to Privatize

Added 02-27-21 01:04:03am EST - “27, 2021 /CNW/ - Sunwah International Limited (the "Company") announces that on February 27, 2021, it entered into an agreement (the "Agreement") with Sun Wah Capital Limited ("Sun Wah Capital") to privatize by way of share consolidation…” - Finance.yahoo.com

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Posted By TheNewsCommenter: From Finance.yahoo.com: “Sunwah International Limited Enters Agreement to Privatize”. Below is an excerpt from the article.

TORONTO, Feb. 27, 2021 /CNW/ - Sunwah International Limited (the "Company") announces that on February 27, 2021, it entered into an agreement (the "Agreement") with Sun Wah Capital Limited ("Sun Wah Capital") to privatize by way of share consolidation and purchase under Bermuda corporate law (the "Transaction"). Pursuant to the Agreement, the Company will complete a share consolidation and then compulsorily purchase all common shares, other than the common shares held by Sun Wah Capital, for cash consideration of $0.30 per pre-consolidation common share. The consideration offered under the Transaction represents a premium of approximately 43% over the $0.21 closing price of the Company's shares last traded on the Toronto Stock Exchange on February 26, 2021. Upon completion of the Transaction, Sun Wah Capital will be the sole shareholder of the Company, which will then be delisted from the Toronto Stock Exchange.

Sun Wah Capital currently owns 36,966,159 common shares representing approximately 39.69% of the Company's outstanding common shares. Dr. Jonathan Koon Shum Choi, a director and Chairman of the Board of the Company, and his brother, Mr. Michael Koon Ming Choi, a director and Chief Executive Officer of the Company, owns, respectively, 82.5% and 17.5% of Sun Wah Capital. Dr. Jonathan Koon Shum Choi and Mr. Michael Koon Ming Choi also, directly and indirectly, owns or controls, including through Sun Wah Capital, an aggregate of 85,143,679 common shares representing approximately 91.41% of the Company's outstanding common shares. The Company has 93,139,927 common shares issued and outstanding, of which 7,996,248 common shares representing approximately 8.59% of the Company's outstanding common shares are not owned or controlled by Sun Wah Capital or by Dr. Jonathan Koon Shum Choi, Mr. Michael Koon Ming Choi or their affiliates and associates.

The Transaction will be effected by way of a 36,000,000-to-1 share consolidation of all of the issued and outstanding common shares of the Company. Following the share consolidation, the Company will purchase for cancellation all of the common shares held by shareholders who holds less than one whole post-consolidation share. Shareholders holding fractional shares, including shareholders holding fractional shares through CDS & Co. or other nominees, following the consolidation, will be entitled to receive a cash payment of CAN$0.30 for each pre-consolidation common share upon purchase by the Company of such fractional post-consolidated common shares. As a result, upon completion of the Transaction, only Sun Wah Capital will remain as a shareholder of the Company.

Prior to completing the Transaction, in addition to seeking shareholder approval for the Transaction, the Company will seek to amend its Bye-Laws. At the shareholders' meeting to be announced, shareholders will be asked to approve ordinary resolutions: (1) authorizing an amendment to the Company's Bye-laws to clarify the ability to consolidate share capital, recognize beneficial interests in any share held by a nominee (including by CDS & Co.), purchase shares representing fractions, and, in certain circumstances, such as with the Transaction, provide an enforceable right that is substantially equivalent to the appraisal remedy provided for in section 190 of the Canada Business Corporations Act, and (2) authorizing a consolidation of the issued common shares of the Company on the basis of one-post-consolidation common share for every 36,000,000 pre-consolidation common shares and purchase without prior notice of all fractional post-consolidation common shares. These resolutions must each be passed by at least a majority of the votes cast by shareholders present in person or represented by proxy at the shareholders' meeting. The Company does not expect that these resolutions require the approval by a majority of the votes cast by minority shareholders, being shareholders other than Sun Wah Capital, Dr. Jonathan Koon Shum Choi, Mr. Michael Koon Ming Choi, their joint actors or other interested or related parties, as the Company will seek to rely on the "90 per cent exemption" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions based on the interested party beneficially owning, in the aggregate, over 90 per cent of the outstanding common shares at the time of the Agreement and shareholders is expected to be given an enforceable right that is substantially equivalent to the appraisal remedy provided for in section 190 of the Canada Business Corporations Act and will be described in the information circular for the shareholders' meeting to approve the Transaction.

A special committee of independent directors (the "Special Committee"), comprised of Mr. Robert Fung (Chair), Ms. Elizabeth Law and Dr. Lee Lam, was established to consider and make recommendations regarding the Transaction. The Special Committee engaged Evans & Evans, Inc. as its independent valuator and to prepare a valuation report and fairness opinion with respect to the Transaction. Based on the valuation work and subject to the conditions, assumptions and qualifications set forth in the valuation and fairness opinion, in the opinion of Evans & Evans, as at the valuation date of December 31, 2020, the consideration payable under the Transaction is fair, from a financial point of view, to the minority shareholders. The Special Committee unanimously determined that the Transaction is in the best interests of the Company. Accordingly, the Special Committee unanimously recommended that the Company's board of directors approve the Agreement and recommend that shareholders vote for the Transaction.

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