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the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim
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This announcement appears for information purposes only and does not constitute an invitation or offer to acquire,
purchase or subscribe for securities.
Distribution of this announcement into jurisdictions other than Hong Kong may be restricted by law. Persons into whose possession this announcement comes should inform themselves of and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
Neither this announcement nor any copy thereof may be released into or distributed in the United States or any other jurisdiction where such release or distribution might be unlawful. The securities referred to herein have not been, and will not be, registered under the US Securities Act of 1933 (the “US Securities Act”) or the laws of any state or jurisdiction of the United States and may not be offered or sold in the United States absent registration or an applicable exemption from, or transaction not subject to, the registration requirements of the US Securities Act and applicable state laws. The Company does not intend to register any portion of the Rights Issue or any securities described herein in the United States or to conduct a public offering of securities in the United States.
MONGOLIAN MINING CORPORATION(Incorporated in the Cayman Islands with limited liability) (Stock Code: 975)
PROPOSED RIGHTS ISSUE ON THE BASIS OF
THREE RIGHTS SHARES FOR EVERY TWO SHARES HELD ON
THE RECORD DATE AT HK$0.28 PER RIGHTS SHARE
CLOSURE OF REGISTER OF MEMBERSAND
POTENTIAL PARTICIPATION IN A BID
FOR COAL MINING OPERATIONJoint Underwriters of the Rights Issue (in alphabetical order) Independent Financial Adviser
SOMERLEY CAPITAL LIMITED1
PROPOSED RIGHTS ISSUEThe Company proposes to raise not less than approximately HK$1,556 million and not more than approximately HK$1,567 million, before estimated expenses, by way of a rights issue of not less than 5,557,554,750 Rights Shares and not more than 5,597,079,750 Rights Shares on the basis of three Rights Shares for every two Shares held by Qualifying Shareholders on the Record Date at the Subscription Price of HK$0.28 perRights Share payable in full on acceptance. The Company will provisionally allot three Rights Shares in nil-paid form for every two existing Shares held by each Qualifying Shareholder on the Record Date. Fractional entitlements will not be allotted but will be aggregated and sold for the benefit of the Company.
The Rights Issue is only available to Qualifying Shareholders and will not be available to Non-Qualifying Shareholders.
The Rights Shares (other than the Rights Shares that will be provisionally allotted to the Irrevocable Undertaking Covenantors pursuant to the Irrevocable Undertakings) will be fully underwritten by the Joint Underwriters, on the terms and subject to the conditions of the Underwriting Agreement, details of which are set out in the section headed “Underwriting Agreement” of this announcement.
The estimated net proceeds from the Rights Issue will be not less than approximately HK$1,516 million and not more than approximately HK$1,527 million after deduction of all estimated expenses. The Directors currently intend to use the net proceeds of the Rights Issue to improve liquidity and finance its general working capital, details of which are set out in the section headed “Reasons for the Rights Issue and Use of Proceeds” of this announcement.
Assuming no new Shares (other than the Rights Shares) are allotted and issued on or before completion of the Rights Issue, the aggregate number of nil-paid Rights Shares proposed to be provisionally allotted pursuant to the terms of the Rights Issue represents 150.0% of the Company’s total number of Shares in issue as at the Latest Practicable Date and will represent approximately 60.0% of the Company’s Shares in issue as enlarged by the Rights Issue.
Assuming new Shares (other than the Rights Shares) are allotted and issued on or before completion of the Rights Issue pursuant to the full exercise of all outstanding Share Options on or prior to the Last Day for Transfer, the aggregate number of nil-paid Rights Shares proposed to be provisionally allotted pursuant to the terms of the Rights Issue represents approximately 151.1% of the Company’s total number of Shares in issue as at the Latest Practicable Date and will represent approximately 60.0% of the Company’s Shares in issue as enlarged by the Rights Issue.
Each of MCS Mining Group, a controlling Shareholder (as defined under the Listing Rules), Novel Holdings Group Limited, Trimunkh Limited, Sumberu Limited, Eco Mogul Limited, Inter Group Mongolia Limited, Gera Investments Limited, Benu Investment Limited, Crystalline Investment Limited, Tamirana Limited, Tugs Investment Limited, Shunkhlai Mining, Kerry Mining (UHG) Limited, Lotus Amsa Limited, Highline Holdings Limited, True Kind Limited, Anand & Co. Holding Limited and Botgo Limited (which held 1,241,150,586 Shares, 184,659,019 Shares, 106,304,907 Shares, 27,927,529 Shares, 13,782,736 Shares, 10,120,113 Shares, 11,811,657 Shares, 3,327,908 Shares, 5,051,079 Shares, 1,971,079 Shares, 11,819,579 Shares, 183,000,000 Shares, 300,000,000 Shares, 112,833,333 Shares, 47,000,000 Shares, 18,833,334 Shares, 47,000,000 Shares and 112,833,333 Shares, respectively, as at the Latest Practicable Date, representing approximately 33.50%, 4.98%, 2.87%, 0.75%, 0.37%, 0.27%, 0.32%, 0.09%, 0.14%, 0.05%, 0.32%, 4.94%, 8.10%, 3.05%, 1.27%, 0.51%, 1.27% and 3.05% of the total number of the existing Shares in issue, respectively) has irrevocably undertaken to the Company and the Joint Underwriters pursuant to the Irrevocable Undertakings that, each of them will, among other things, (a) take up its entitlement to the Rights Shares under the Rights Issue pursuant to the terms of the Rights Issue in respect of the Shares legally and beneficially owned (as the case may be) by it as at the date of the Irrevocable Undertaking or the Record Date (as the case may be); (b) lodge the PALs with the Registrar with full payment therefor in accordance with the Rights Issue and not to revoke the submission of such PALs; (c) not dispose of or transfer (directly or indirectly, including without limitation by the creation of any option, charge or encumbrance or rights over or in respect of) any of its rights to subscribe for Rights Shares (in the form of Rights Shares in nil-paid form) up to and including the last date for acceptance and payment in respect of provisional allotments under the Rights Issue; and (d) not dispose of or transfer (directly or indirectly, including without limitation by the creation of any option, charge or encumbrance or rights over or in respect of) its legal and beneficial interests (as the case may be) in any of the Shares owned by it as at the date of the respective Irrevocable Undertaking from the date of the respective Irrevocable Undertaking up to and including the Record Date.
IMPLICATIONS UNDER THE LISTING RULESAn application will be made to the Stock Exchange for the listing of, and permission to deal in, the Rights Shares (in both nil-paid and fully-paid forms).
In compliance with Rule 7.19(6) of the Listing Rules, the Rights Issue must be made conditional on approval of the Independent Shareholders by way of poll at the EGM. As at the date of this announcement, MCS Mining Group is a controlling Shareholder. MCS Mining Group and its associates will abstain from voting in favour of the resolution approving the Rights Issue and the transactions contemplated thereunder at the EGM.
The Rights Issue is conditional on, among other things, being approved by the Independent Shareholders at the EGM. An independent board committee comprising all the independent non-executive Directors will be established by the Company to advise the Independent Shareholders as to whether the terms of the Rights Issue are fair and reasonable and as to voting in respect thereof at the EGM. An independent financial adviser will be appointed to advise the independent board committee of the Company and the Independent Shareholders in this regard.
A circular containing, among other things, (i) further details about the Rights Issue; (ii) a letter of recommendation from the independent board committee of the Company to the Independent Shareholders in respect of the Rights Issue; (iii) a letter of advice from the independent financial adviser to the independent board committee of the Company and the Independent Shareholders in respect of the Rights Issue; and (iv) the notice convening the EGM, will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules. Subject to, among other things, the approval of the Rights Issue by the Independent Shareholders at the EGM, the Rights Issue Documents will be despatched to the Qualifying Shareholders and the Prospectus (subject to the advice given in the legal opinions provided by the Company’s legal advisers in the relevant jurisdictions and to the extent reasonably practicable and legally permitted) will be despatched to the Non-Qualifying Shareholders for information purposes only as soon as practicable.
WARNING OF THE RISK OF DEALINGS IN THE SHARES AND RIGHTS SHARES
The Underwriting Agreement contains provisions granting the Joint Underwriters the right to terminate the Underwriting Agreement on the occurrence of certain events.
Please refer to the section headed “Termination of the Underwriting Agreement” in this announcement below for further details. If the Underwriting Agreement does not become unconditional or is terminated, the Rights Issue will not proceed, in which case a further announcement will be made by the Company at the relevant time.
Any Shareholder or other person dealing in Shares or other securities of the Company up to the date on which all conditions to which the Rights Issue is subject (as set out under the paragraph headed “Conditions of the Rights Issue” in this announcement) are fulfilled (and the date on which the right of termination of the Joint Underwriters under the Underwriting Agreement ceases) and any person dealing in the nil-paid Rights Shares during the period from 5 December 2014 (Friday) to 12 December 2014 (Friday) (both days inclusive) will bear the risk that the Rights Issue may not become unconditional or may not proceed and are advised to exercise caution when dealing in the Shares and/or nil-paid Rights Shares. If in any doubt, Shareholders and other persons contemplating dealing in securities of the Company and potential investors are recommended to consult their professional advisers. Shareholders and potential investors should exercise caution in dealing in the securities of the Company. Any buying or selling of the securities of the Company from now up to the date on which all the conditions to which the Rights Issue is subject are fulfilled, and any buying or selling of nil-paid Rights Shares, is at each investor’s own risk that the Rights Issue may not become unconditional and may not proceed.
The last day for dealing in the Shares on a cum-rights basis is 25 November 2014 (Tuesday).
The Shares will be dealt with on an ex-rights basis from 26 November 2014 (Wednesday). To qualify for the Rights Issue, a Shareholder or investor must: (i) be registered as a member of the Company on the Record Date; and (ii) not be a Non-Qualifying Shareholder. In order to be registered as a member of the Company on the Record Date, any transfer of Shares (together with the relevant share certificate(s)) must be lodged with the Registrar by 4:30 p.m. on the Last Day for Transfer. The register of members will be closed from 28 November 2014 (Friday) to 2 December 2014 (Tuesday) (both days inclusive) for determining the entitlements to the Rights Issue. No transfer of Shares will be registered during this period.
Holders of the outstanding Share Options who wish to participate in the Rights Issue should exercise their Share Options in accordance with the terms of the Share Option Scheme so as to enable them to be registered as members of the Company on or before the Last Day for Transfer.
POTENTIAL PARTICIPATION IN A BID FOR COAL MINING OPERATIONPursuant to resolution number 268 of the Government of Mongolia (“GoM”) dated 20 August 2014, the GoM is continuing a tender process established in 2010 whereby participants can bid for an opportunity to, among others, engage in coal mining operation and exploration in the licensed area of West and East Tsankhi, Mongolia. It is conditional for the bidder to be not less than 51% owned by a private operator or a consortium of companies that has had at least five years of experience in coal mining, processing, transportation and exportation activities in Mongolia, and the controlling interest of such bidder must be owned by Mongolian citizen for the previous five years. The bid was initially required to be submitted by 31 October 2014 and has been extended to 1 December 2014, and it is expected that the investment and cooperation agreement between the winning bidder and the relevant state-owned company (the “ICA”) will be entered into on or before 15 December 2014.
The Group has been approached by other independent parties to explore and discuss possibilities in connection with participating in the bidding process. As at the date of this announcement, no definitive terms or conditions have been agreed by the Group. The Company will make further announcement(s) as and when required under the Listing Rules.