THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION 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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Intime Department Store (Group) Company Limited, you should at once hand this circular to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale was effected for transmission to the purchaser or the transferee. The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. DISCLOSEABLE TRANSACTION ACQUISITION OF EQUITY INTEREST IN AND SHAREHOLDER S LOAN OF HIWELL REAL ESTATE 5 October 2007

2 CONTENTS Page Definitions... 1 Letter from the Board... 2 Introduction... 2 The Agreements... 3 Information on Hiwell Real Estate and the Property Development... 5 Reasons for the Acquisition... 5 Financial Effect of the Acquisition... 5 Additional Information... 6 Appendix General Information... 7 i

3 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meanings: Acquisition Agreements Company Group Director(s) the acquisition of the 33% equity interest in and the outstanding shareholder s loan of Hiwell Real Estate pursuant to the Sale and Purchase Agreement and the Loan Assignment Agreement respectively the Sale and Purchase Agreement and the Loan Assignment Agreement Intime Department Store (Group) Company Limited, a company incorporated in the Cayman Islands whose shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (Stock Code:1833) the Company and its subsidiaries (as defined in the Listing Rules) from time to time the director(s) of the Company Hiwell Holdings (Hiwell Holdings Company Limited), a company established in Hangzhou, PRC, with principal activities in property development, metal product processing and furniture manufacturing Hiwell Real Estate (Hiwell Real Estate Company Limited), a company established in Hangzhou, PRC, with principal activities in property development Hong Kong Stock Exchange Intime Investment Management Latest Practicable Date Listing Rules Property Development Sale Shares Sale Loan SFO Shareholders The Stock Exchange of Hong Kong Limited (Intime Investment Management Company Limited), an indirect wholly owned subsidiary of the Company 2 October 2007, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited a residential and commercial development project located at the south bank of Qiantang River, Binjiang District, Hangzhou, PRC with a total site area of approximately 55,000 square meters Shares representing 33% of the issued share capital of Hiwell Real Estate A total sum amounting to RMB204,808,370.96, representing all the outstanding shareholder s loan made by the Vendor to Hiwell Real Estate the Securities and Future Ordinance (Chapter 571 of the Laws of Hong Kong) shareholders of the Company Vendor (Zhejiang Zhelian Property Group Company Limited), a company located at 208 Qingtai Street, Hangzhou, PRC., and which is the beneficial owner of a 33% equity interest in Hiwell Real Estate 1

4 LETTER FROM THE BOARD Executive directors: Mr. Shen Guojun (Chairman) Mr. Ching Siu Leung Registered Office: P.O. Box 309GT Ugland House South Church Street, George Town Grand Cayman Cayman Islands Non-executive director: Mr. Xin Xiangdong Independent non-executive directors: Mr. Chen Dagang Mr. Lee Lawrence Mr. Chow Joseph To the Shareholders Place of Business in Hong Kong Room 1707, Tower II Admiralty Centre 18 Harcourt Road Hong Kong 5 October 2007 Dear Sir or Madam, INTRODUCTION DISCLOSEABLE TRANSACTION ACQUISITION OF EQUITY INTEREST IN AND SHAREHOLDER S LOAN OF HIWELL REAL ESTATE The Board announced on 14 September 2007 that Intime Investment Management, an indirect whollyowned subsidiary of the Company, has on 10 September 2007 entered into a sale and purchase agreement (the Sale and Purchase Agreement ) with the Vendor, pursuant to which Intime Investment Management has agreed to purchase and the Vendor has agreed to sell a 33% equity interest in Hiwell Real Estate for a total cash consideration of RMB33,000, The Board announced on 14 September 2007 that in relation to the Sale and Purchase Agreement, Intime Investment Management has also on 10 September 2007 entered into a loan assignment agreement (the Loan Assignment Agreement ) with the Vendor pursuant to which Intime Investment Management has agreed to acquire and the Vendor has agreed to sell all its rights in respect of the outstanding shareholder s loan made by the Vendor to Hiwell Real Estate for a total cash consideration of RMB204,808,

5 LETTER FROM THE BOARD The parties mutual intention is that the Sale and Purchase Agreement and the Loan Assignment Agreement shall both be completed, such that if one is completed before the other, and the other is not completed within a mutually agreed reasonable period of time, then the parties mutual intention is that the completed agreement shall be terminated, and the parties shall be restored to their original position as if the completed agreement has never been made. Hiwell Real Estate is a company incorporated in Hangzhou, PRC. The sole asset of significance held by Hiwell Real Estate is the Property Development. The Vendor is the beneficial owner of a 33% equity interest in Hiwell Real Estate. The Acquisition constitutes a discloseable transaction for the Company under Rule of the Listing Rules. THE AGREEMENTS Date of each of the Agreements: 10 September 2007 Parties to each of the Agreements: Purchaser: Vendor: (Intime Investment Management Company Limited) (Zhejiang Zhelian Property Group Company Limited) The Vendor is a property development company incorporated in Hangzhou, PRC. The Company confirms that, to the best of the Directors knowledge, information and belief having made all reasonable enquiry, the Vendor and its ultimate beneficial owners are third parties independent of the Company and connected persons of the Company. Asset to be acquired: The Sale Shares The Sale Shares, representing 33% of the issued share capital of Hiwell Real Estate. The Sale Loan A total sum amounting to RMB204,808,370.96, representing all the outstanding shareholder s loan made by the Vendor to Hiwell Real Estate. The amount of the Sale Loan will not change before Completion. The Sale Loan earns interest at 5.40% per annum. Consideration: The total cash consideration for the sale and purchase of the Sale Shares and Sale Loan is RMB237,808,370.96, consisting of: (a) (b) RMB33,000,000, being the consideration for the Sale Shares ; and RMB204,808, (equivalent to the face value of the Sale Loan as at 30 June 2007), being the consideration for the Sale Loan. 3

6 LETTER FROM THE BOARD The total consideration will be satisfied by Intime Investment Management in cash as follows: (a) (b) RMB33,000,000 shall be paid by Intime Investment Management to the Vendor within 5 business days after the effective date of and pursuant to the Sale and Purchase Agreement. RMB204,808, shall be paid by Intime Investment Management to the Vendor within 7 days after the effective date of and pursuant to the Loan Assignment Agreement. The effective date of the Sale and Purchase Agreement is defined therein as the date upon which all conditions for its Completion are satisfied, namely when Intime Investment Management having obtained all necessary authorizations and approvals required under applicable laws, rules, regulations and internal corporate authorization requirements. The effective date of the Loan Assignment Agreement is defined therein as the date upon which Hiwell Real Estate issues a receipt of the notice of the assignment of the Sale Loan. The Acquisition shall be financed by internal resources and proceeds from the initial public offering of the Company. The consideration for the Sale Shares has been arrived at after arm s length negotiation between Intime Investment Management and the Vendor with reference to prevailing market prices of the Property Development and to the business valuation of Hiwell Real Estate by (Zhong Lian Assets Appraisal Co. Ltd), an independent third party valuer. The valuation methods adopted by in respect of the Property Development, which is the sole asset of significance of Hiwell Real Estate, as stated in the Hiwell Real Estate s balance sheet are: residual method for the residential premises and method of base price of land coefficient modification for the hotel and department store portion of the property. According to the business valuation by as of 30 June 2007, the net asset value of Hiwell Real Estate is RMB105,945,600 and the total asset value of Hiwell Real Estate is RMB966,425,600. The consideration for Sale Loan has been arrived at after arms length negotiation between Intime Investment Management and the Vendor and by reference to the audited financial statements of Hiwell Real Estate as of 30 June 2007 prepared by (Shu Lun Pan Certified Public Accountant Co. Ltd). The Directors, including Independent Non-Executive Director, consider the terms of the Acquisition to be fair and reasonable. Completion: Completion of the Sale and Purchase Agreement in respect of the Sale Shares is subject to Intime Investment Management having obtained all necessary authorizations and approvals required under applicable laws, rules, regulations and internal corporate authorization requirements. Completion of the Loan Assignment Agreement in respect of the Sale Loan, whereupon all of the Vendor s rights in respect of the Sale Loan shall pass to Intime Investment Management, shall occur upon the service of a notice of such assignment on Hiwell Real Estate. Pursuant to the Loan Assignment Agreement, the parties are required to serve such notice on Hiwell Real Estate on the date of execution of the Loan Assignment Agreement. Hiwell Real Estate has confirmed in writing that it has received such notice on 10 September

7 LETTER FROM THE BOARD INFORMATION ON HIWELL REAL ESTATE AND THE PROPERTY DEVELOPMENT Hiwell Real Estate is a company established in Hangzhou, PRC on 4 March The sole asset of significance held by Hiwell Real Estate is the Property Development. The issued share capital of Hiwell Real Estate is owned as to 67% by Hiwell Holdings and 33% by the Vendor. Outstanding shareholders loans are owned as to 67% to Hiwell Holdings and as to 33% to the Vendor. Hiwell Holdings and its ultimate beneficial owners are third parties independent of the Company and connected persons of the Company. Based on the audited financial statements of Hiwell Real Estate as at 30 June 2007, the total assets and net assets of Hiwell Real Estate as at 30 June 2007 was RMB892,381, and RMB32,498, respectively. The losses for the period since its incorporation to 31 December 2005, the year of 2006 and the six months ended 30 June 2007 was RMB1,012,045.64, RMB8,954, and RMB6,677, respectively, as Hiwell Real Estate has not yet commenced operations. There are no differences in the figures before and after taxation and extraordinary items for the period ended December 2005, the year of 2006 and the six months ended 30 June The net asset value of Hiwell Real Estate, according to a valuation thereof by (Zhong Lian Assets Appraisal Co. Ltd), an independent third party valuer, as of 30 June 2007 is RMB105,945,600. The difference between such net asset value and the audited book value of net assets as shown in its audited financial statements is due to increase in market value of the Property Development. The Property Development is a department store, hotel and residential development project located at the south bank of Qiantang River, Binjiang District, Hangzhou, PRC with a total site area of approximately 55,000 square meters and a total gross floor area of approximately 300,000 square meters. The Property Development commenced in July As at 30 June 2007, the Property Development remain in an early stage of development. It is currently expected that the Property Development will be fully completed in or around late REASONS FOR THE ACQUISITION The Group is engaged in the business of operation and management of department stores and is the largest department store chain in Zhejiang province. The Property Development is located at a prime location in Hangzhou and consists of a mixed development of department store, hotel and residential premises. Through the Acquisition, the Group as a shareholder intends to acquire the department store property of the Property Development upon its completion, and plan to use it to expand and further enhance the Group s market leadership position in Hangzhou retail market. The Directors, including Independent Non-Executive Directors, believe that the terms of the Acquisition are fair and reasonable and in the interests of the shareholders of the Company as a whole. As part of its future expansion strategy, the Company will continue to seek appropriate opportunities to acquire strategic assets to enhance its values to the shareholders. FINANCIAL EFFECT OF THE ACQUISITION Total assets The Consideration for the Acquisition shall be financed by internal resources and proceeds from the initial public offering of the Company. Accordingly, the Acquisition is not expected to have any material impact on the total assets of the Group. 5

8 LETTER FROM THE BOARD Liability The Acquisition is not expected to have any material impact on the liability of the Group as the Consideration for the Acquisition shall be paid in cash and financed by internal resources and proceeds from the initial public offering of the Company. Earnings Hiwell Real Estate s losses for the period since its incorporation to 31 December 2005, the year of 2006 and the six months ended 30 June 2007 was RMB1,012,045.64, RMB8,954, and RMB6,677, respectively. The Acquisition is not expected to materially affect the earnings of the Group. Liquidity Taking into account the Group s unaudited cash and cash-equivalent balance (which was approximately RMB2,127,178,000 as at 30 June 2007) and the positive operating cashflows of the Group s business, the Directors consider that the payment of the Consideration for the Acquisition would have no material adverse effect on the liquidity of the Group. Accordingly, the Acquisition would not have any material impact on the financial position of the Group. ADDITIONAL INFORMATION Your attention is drawn to the additional information contained in the Appendix to this circular. Yours faithfully, For and on behalf of Intime Department Store (Group) Company Limited Shen Guojun Chairman 6

9 APPENDIX GENERAL INFORMATION RESPONSIBILITY STATEMENT This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquires, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading. DISCLOSURE OF INTERESTS (a) Directors and chief executive As at the Latest Practicable Date, the interests of each Director and the chief executive of the Company in the ordinary shares of the Company which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, recorded in the register required to be kept by the Company pursuant to section 352 of the SFO or as otherwise notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows: Name of Directors Nature of Interest Number and class of securities (2) Approximate percentage of interest in such corporation Mr. Shen Guojun Corporate Interest (1) L769,652, % Mr. Ching Siu Leung Beneficial (3) L2,200, % Mr. Xin Xiangdong Nil Nil Nil Mr. Chen Dagang Nil Nil Nil Mr. Lawrence Lee Nil Nil Nil Mr. Joseph Chow Nil Nil Nil Notes: (1) Mr. Shen Guojun is the beneficial owner of the entire share capital of Fortune Achieve Group Ltd., which in turn is the beneficial owner of the entire issued share capital of Glory Bless Limited, which in turn is the beneficial owner of the entire issued share capital of Intime International Holdings Limited, which holds 769,652, 255 Shares. (2) The Letter L denotes the person s long position in such Shares. (3) Mr. Ching was granted options under the Company s Share Option Scheme on 21 March 2007 exercisable in respect of a total of 2,200,000 shares in the Company over a vesting period. Save as disclosed above, as at the Latest Practicable Date, none of the Directors, the chief executive and any other person had any long or short positions in the shares, underlying shares or debentures of the Company as recorded in the register required to be kept under section 336 of the SFO. 7

10 APPENDIX GENERAL INFORMATION (b) Substantial Shareholders As at the Latest Practicable Date, so far as was known to the Directors or the chief executive, persons having interests and short positions in 5% or more in the shares, underlying shares and debentures of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV, and required to be recorded in the register of interests and short positions required to be kept by the Company pursuant to section 336, of the SFO were as follows: Name of shareholder Nature of Interest Number of Ordinary Shares (1) Approximate percentage of interest in the Company Mr. Shen Guojun (2) Corporate Interest L769,652, % Fortune Achieve Group Ltd. (2) Corporate Interest L769,652, % Glory Bless Limited (2) Corporate Interest L769,652, % Intime International Holdings Limited (2) Beneficial Interest L769,652, % Warburg Pincus & Co. (3) Corporate Interest L405,000, % Warburg Pincus Partners LLC (3) (4) Corporate Interest L405,000, % Warburg Pincus IX, LLC (3) Corporate Interest L202,500, % Warburg Pincus Private Equity IX, L.P. (3) Beneficial Interest L202,500, % Warburg Pincus International Partners L.P. (3) Beneficial Interest L194,100, % UBS AG Corporate Interest L92,056, % Notes: (1) The letter L denotes the person s long position in such Shares. (2) Mr. Shen Guojun is the beneficial owner of the entire issued share capital of Fortune Achieve, which in turn is the beneficial owner of the entire issued share capital of Glory Bless, which in turn is the beneficial owner of the entire issued share capital of Intime International, which holds 769,652, 255 Shares. (3) Warburg Pincus Private Equity IX, L.P. and Warburg Pincus International Partners, L.P. are part of the Warburg Pincus Funds. The direct general partner of Warburg Pincus Private Equity IX, L.P. is Warburg Pincus IX, LLC. Warburg Pincus IX, LLC is therefore deemed to be interested in shares held by Warburg Pincus Private Equity IX, L.P. The controlling entity of the Warburg Pincus Funds is Warburg Pincus Partners LLC, which is a subsidiary of Warburg Pincus & Co. Each of Warburg Pincus Partners LLC and Warburg Pincus & Co. is therefore deemed to be interested in the shares held by the Warburg Pincus Funds, which includes Warburg Pincus International Partners, L.P. and Warburg Pincus Private Equity IX, L.P. as well as five other funds. DIRECTORS SERVICE CONTRACTS As at the Latest Practicable Date, none of the Directors had a service contract with the Company or any of its subsidiaries which is not terminable by the Company within one year without payment of compensation other than statutory compensation. DIRECTORS INTERESTS IN COMPETING BUSINESS As at the Latest Practicable Date, none of the Directors or their respective associates had any business or interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group. LITIGATION As at the Latest Practicable Date, neither the Company nor any member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against the Company or any member of the Group. 8

11 APPENDIX GENERAL INFORMATION MISCELLANEOUS (a) (b) (c) (d) The registered office of the Company is at P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The head office of the Company is at 42 nd Floor, Yintai Centre Tower C, 2 Jianguomenwai Avenue, Beijing , PRC. The principal place of business of the Company in Hong Kong is at Room 1707, Tower II, Admiralty Centre, 18 Harcourt Road, Hong Kong. The qualified accountant and the company secretary of the Company is Mr. Chow Hok Lim, who is a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountant and a fellow member of the Association of Chartered Certified Accountants. The Company s Hong Kong branch share registrar and transfer office is Computershare Hong Kong Investor Services Limited, which is situated at Shops , 17 th Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong. The English version of this circular shall prevail over the Chinese version in case of any discrepancy. 9