ISSUE OF CONVERTIBLE NOTE AND RESUMPTION OF TRADING

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ISSUE OF CONVERTIBLE NOTE AND RESUMPTION OF TRADING Powered By Docstoc
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responsibility for the contents of this announcement, 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 content of this announcement.




                                    (Incorporated in Bermuda with limited liability)
                                                 (Stock Code: 346)

                                    ISSUE OF CONVERTIBLE NOTE
                                               AND
                                      RESUMPTION OF TRADING

                                        Financial Adviser to the Company




 On 9 February 2009, the Company and the Subscriber entered into the Subscription Agreement,
 pursuant to which the Company has conditionally agreed to issue and the Subscriber has conditionally
 agreed to subscribe for the Convertible Note with a principal amount of HK$100,000,000 at an initial
 conversion price of HK$1.25 per Conversion Share, subject to adjustment. Assuming full conversion
 of the Convertible Note, 80,000,000 Conversion Shares will be issued by the Company, representing (i)
 approximately 1.33% of the existing share capital of the Company; and (ii) approximately 1.31% of the
 share capital of the Company as enlarged by the issue of the Conversion Shares upon full conversion
 of the Convertible Note.

 The Conversion Shares shall be issued under the General Mandate. An application will be made to the
 Stock Exchange for the listing of, and permission to deal in, the Conversion Shares.

 Trading in the Shares on the Stock Exchange was suspended at the request of the Company from 9:33
 a.m. on 9 February 2009 pending the release of this announcement and an application has been made
 to the Stock Exchange for the resumption of trading in the Shares from 9:30 a.m. on 12 February 2009.

 The Company noted that a typo error was made in the Suspension Announcement and would like to
 clarify that the trading in Shares was suspended pending the release of an announcement regarding the
 Subscription instead of an announcement in relation to the subscription of new shares of the Company
 as stated in the Suspension Announcement.




* for identification purpose only


                                                       —1—
THE SUBSCRIPTION AGREEMENT

Date

9 February 2009

Parties

Issuer:           the Company

Subscriber:       Mr. Chan Ping Che. To the best of the knowledge, information and belief of the
                  Directors, having made all reasonable enquiries, the Subscriber and his associates are
                  not connected persons of the Company and each of them is independent of the Company
                  and its connected persons.

The Subscription

On 9 February 2009, the Company and the Subscriber entered into the Subscription Agreement, pursuant
to which the Company has conditionally agreed to issue and the Subscriber has conditionally agreed to
subscribe for the Convertible Note with a principal amount of HK$100,000,000 at an initial conversion
price of HK$1.25 per Conversion Share, subject to adjustment.

Principal terms of the Convertible Note

Principal amount:      HK$100,000,000

Interest rate:         The prime rate as quoted by The Hongkong and Shanghai Banking Corporation
                       Limited as adjusted from time to time, payable annually in arrears.

Maturity date:         The date falling one year after the date of issue of the Convertible Note.

Conversion right:      The holder of the Convertible Note shall have the right to convert the whole or
                       part of the principal amount of the Convertible Note into Conversion Shares at any
                       time during the conversion period.

Conversion price:      The initial conversion price of HK$1.25 per Conversion Share, subject to usual
                       anti-dilution adjustments in certain events including share consolidation, share
                       subdivision, capitalization issue, capital distribution, rights issue and open offer.

                       The initial conversion price of HK$1.25 per Conversion Share represents:

                       (i)   a premium of approximately 76.1% over the closing price of HK$0.710 per
                             Share as quoted on the Stock Exchange on the Last Trading Day;




                                                  —2—
                     (ii)   a premium of approximately 76.6% over the average closing price of
                            approximately HK$0.708 per Share as quoted on the Stock Exchange for the
                            last five trading days up to and including the Last Trading Day; and

                     (iii) a premium of approximately 77.3% over the average closing price of
                           approximately HK$0.705 per Share as quoted on the Stock Exchange for the
                           last ten trading days up to and including the Last Trading Day.

                     The initial conversion price of HK$1.25 was arrived at after arm’s length
                     negotiation between the Company and the Subscriber with reference to the
                     prevailing market price and the recent trading volume of the Shares and the
                     business prospects of the Group. The Board considers that the initial conversion
                     price is fair and reasonable and in the interests of the Company and its
                     Shareholders as a whole.

Conversion period:   Any time from the issue date of the Convertible Note up to and including the
                     maturity date of the Convertible Note.

Redemption:          The Company may redeem the Convertible Note in whole at 100% of the issue
                     price of the Convertible Note on the maturity date.

Conversion Shares:   The maximum number of Conversion Shares to be issued upon full conversion
                     of the Convertible Note will be 80,000,000 Conversion Shares, representing
                     (i) approximately 1.33% of the existing share capital of the Company; and (ii)
                     approximately 1.31% of the share capital of the Company as enlarged by the issue
                     of the Conversion Shares upon full conversion of the Convertible Note.

                     The Conversion Shares shall be issued under the General Mandate. An application
                     will be made to the Stock Exchange for the listing of, and permission to deal in,
                     the Conversion Shares to be issued as a result of the exercise of the conversion
                     rights attaching to the Convertible Note, which will rank pari passu in all respects
                     with the then existing Shares save for any dividend or other distribution declared,
                     made or paid by the Company by reference to a record date falling before the date
                     of issue of the Conversion Shares.

Voting:              The holder of the Convertible Note will not be entitled to attend or vote at any
                     general meeting of the Company by reason only of his/her being the holder of the
                     Convertible Note.

Transferability:     The Convertible Note may be assigned or transferred in whole or in part to third
                     parties (including connected persons of the Company), subject to written approval
                     of the Company and the conditions, approvals, requirements and any other
                     provisions under the Listing Rules and all applicable laws and regulations.

Listing:             No application will be made for the listing of the Convertible Note on any stock
                     exchange.


                                                —3—
Conditions Precedent

The completion of the Subscription Agreement shall be conditional upon the Listing Committee of the
Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Conversion
Shares.

In the event that the above condition is not fulfilled on or before 28 February 2009 or such other date
as may be agreed between the Company and the Subscriber, the Subscription Agreement shall cease
and determine and the parties shall be released from all obligations and liabilities under it, save for any
antecedent breaches of the provisions under the Subscription Agreement.

Completion of the Subscription Agreement shall take place on the business day following the date on
which the above condition is fulfilled, or such other date as may be mutually agreed by the parties
thereto.

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

The Group is principally engaged in the sale and distribution of petroleum products and polyurethane
materials in the PRC as well as oil and gas exploration, exploitation and operation in the Republic of
Madagascar.

The net proceeds from the Subscription is estimated to be approximately HK$99,800,000, which will be
used for general working capital purposes. The Directors consider that the Subscription shall provide
additional working capital to the Group for further strengthening its financial position and cashflow
without causing immediate dilution to the shareholding of the existing Shareholders. The capital base of
the Company shall also be broadened upon the conversion of the Convertible Note.

The Directors consider that the terms of the Subscription Agreement, which were negotiated on an
arm’s length basis and agreed on normal commercial terms between the parties involved, are fair and
reasonable, and the Subscription is in the interest of the Company and the Shareholders as a whole.

GENERAL MANDATE

The Conversion Shares will be issued under the General Mandate, under which the Directors have been
authorized by the Shareholders to allot and issue up to 1,140,492,730 Shares. Up to the date of this
announcement, no new Share has been issued under the General Mandate. The Subscription and the
issue of Conversion Shares are not subject to Shareholders’ approval. The Company will comply with the
applicable Listing Rules in the event that the number of Conversion Shares exceed the maximum number
of Shares issuable under the General Mandate of 1,140,492,730 Shares as a result of adjustment of the
initial conversion price.




                                                 —4—
CHANGE IN THE SHAREHOLDING STRUCTURE

Assuming that there is no change in the issued share capital of the Company prior to the conversion of
the Convertible Note, the shareholding structures of the Company as at the date of this announcement
and upon full conversion of the Conversion Note will be as follows:

                                                      As at the date of this     Upon full conversion of
                                                          announcement            the Convertible Note
                                                      No. of Shares          %   No. of Shares         %

Golden Nova Holdings Limited (Note)                   2,318,256,666      38.49    2,318,256,666       37.99
Wisdom On Holdings Limited (Note)                       213,770,000       3.55      213,770,000        3.50
Barta Holdings Limited (Note)                            98,810,000       1.64       98,810,000        1.62
Good Progress Group Limited (Note)                      138,888,889       2.31      138,888,889        2.28
Sukapeak Holdings Limited (Note)                        760,416,666      12.63      760,416,666       12.46
Right Up Holdings Limited (Note)                       320,000,000        5.31     320,000,000         5.24

Sub-total of shareholdings held by
 Dr. Hui Chi Ming and his associates                  3,850,142,221      63.93    3,850,142,221       63.09
The Subscriber                                                   —          —        80,000,000        1.31
Other public Shareholders                             2,172,321,428      36.07    2,172,321,428       35.60

Total                                                6,022,463,649      100.00    6,102,463,649      100.00

Note: These companies are wholly-owned by Dr. Hui Chi Ming, the Chairman of the Board, an executive Director
      and a controlling Shareholder.

As at the date of this announcement, the Company has 40,000,000 outstanding share options with an
exercise price of HK$0.132 per Share. Save as disclosed above, the Company has no outstanding share
options, warrants or other securities which carry rights to subscribe for or be converted into Shares.




                                                  —5—
FUND RAISING ACTIVITIES IN THE PAST 12 MONTHS

Save as disclosed below, the Company has not conducted any fund raising activity in the twelve months
immediately preceding the date of this announcement:

                                                             Intended use
Date of                                                      of proceeds as       Actual use of
announcement       Event                Net proceeds         announced            proceeds

22 April 2008      Subscription of     Approximately         Capital investment   The net proceeds
                   35,720,000 Shares   HK$99,800,000         in relation to the   have been applied
                   at a subscription                         oil exploration      for capital
                   price of HK$2.8                           and exploitation     investment in
                   per Share pursuant                        business and the     relation to the
                   to the general                            general working      oil exploration
                   mandate granted                           capital of the       and exploitation
                   by the Shareholders                       Group                business and
                   to the Directors at                                            general working
                   the general meeting                                            capital
                   held on 25 October
                   2007

SUSPENSION AND RESUMPTION OF TRADING

Trading in the Shares on the Stock Exchange was suspended at the request of the Company from 9:33
a.m. on 9 February 2009 pending the release of this announcement and an application has been made to
the Stock Exchange for the resumption of trading in the Shares from 9:30 a.m. on 12 February 2009.

CLARIFICATION

Reference is made to the Suspension Announcement. The Company noted that a typo error was made
in the Suspension Announcement and would like to clarify that the trading in Shares was suspended
pending the release of an announcement regarding the Subscription instead of an announcement in
relation to the subscription of new shares of the Company as stated in the Suspension Announcement.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following
meanings:

“Board”                        the board of Directors

“Company”                      Sino Union Petroleum & Chemical International Limited, a company
                               incorporated in Bermuda with limited liability and the Shares of which
                               are traded on the Stock Exchange



                                              —6—
“connected persons”        has the meaning ascribed to it under the Listing Rules

“Conversion Shares”        the Shares to be issued upon the exercise of the conversion rights
                           attaching to the Convertible Note

“Convertible Note”         the convertible note in the principal amount of HK$100,000,000 to be
                           issued by the Company to the Subscriber pursuant to the Subscription
                           Agreement

“Directors”                the directors of the Company

“General Mandate”          the general mandate that was granted by the Shareholders to the
                           Directors at the annual general meeting of the Company held on 25
                           September 2008 to allot, issue and deal with up to 1,140,492,730
                           Shares, being the limit of 20% of the Shares in issue as at the date of
                           the passing of the resolution

“Group”                    the Company and its subsidiaries

“HK$”                      Hong Kong dollars, the lawful currency of Hong Kong

“Hong Kong”                the Hong Kong Special Administrative Region of the People’s Republic
                           of China

“Last Trading Day”         6 February 2009, being the last trading day for the Shares prior to the
                           date of this announcement

“Listing Rules”            The Rules Governing the Listing of Securities on the Stock Exchange

“Share(s)”                 ordinary share(s) of HK$0.02 each in the share capital of the Company

“Shareholder(s)”           the holder(s) of the Share(s)

“Stock Exchange”           The Stock Exchange of Hong Kong Limited

“Subscriber”               Mr. Chan Ping Che, a third party independent of the Company and its
                           connected persons

“Subscription”             the subscription of the Convertible Note by the Subscriber pursuant to
                           the terms of the Subscription Agreement

“Subscription Agreement”   the subscription agreement dated 9 February 2009 entered into between
                           the Company and the Subscriber in respect of the Subscription




                                           —7—
“Suspension Announcement”       the announcement of the Company dated 9 February 2009 in relation to
                                suspension of trading of the Shares

“%”                             per cent

                                                            By Order of the Board
                                           Sino Union Petroleum & Chemical International Limited
                                                                Chui Say Hoe
                                                              Executive Director

Hong Kong, 11 February 2009

As at the date of this announcement, the Board comprises:

Executive Directors                               Non-executive Directors
Dr. Wang Tao                                      Dr. Fok Chun Wan, Ian
Dr. Hui Chi Ming                                  Mr. Chow Charn Ki, Kenneth
Mr. Cheung Shing
Dr. Chui Say Hoe                                  Independent Non-executive Directors
Dr. Ching Men Ky, Carl                            Dr. Yu Sun Say
Mr. Cui Yeng Xu                                   Mr. Ng Wing Ka
                                                  Mr. Edmund Siu




                                                 —8—