CIRCULAR DATED 27 OCTOBER 2009
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take, you should consult your stockbroker,
bank manager, solicitor, accountant or other professional adviser immediately.
If you have sold or transferred all of your shares in the capital of GP Industries Limited (the “Company”),
you should immediately forward this Circular together with the Notice of Extraordinary General Meeting
and the accompanying Proxy Form to the purchaser or transferee or to the bank, stockbroker or other
agent through whom the sale or transfer was effected for onward transmission to the purchaser or
transferee.
The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any
of the statements made, reports contained or opinions expressed in this Circular.
GP Industries Limited
(Incorporated in the Republic of Singapore)
Co. Reg. No. 199502128C
CIRCULAR TO SHAREHOLDERS
in relation to the
PROPOSED SELECTIVE CAPITAL REDUCTION
Financial Adviser to the Company
BNP PARIBAS CAPITAL (SINGAPORE) LTD.
(Incorporated in the Republic of Singapore)
Company Registration No. 197902035K
IMPORTANT DATES AND TIMES:
Last Date and Time for lodgement of Proxy Form
:
17 November 2009 at 10.00 a.m.
Date and Time of Extraordinary General Meeting
:
19 November 2009 at 10.00 a.m.
Place of Extraordinary General Meeting
:
Capricorn, Level 1
Marina Mandarin Singapore
6 Raffles Boulevard, Marina Square
Singapore 039594
CONTENTS
Page
DEFINITIONS .......................................................................................................................................
3
INDICATIVE TIMETABLE ....................................................................................................................
6
LETTER TO SHAREHOLDERS
1.
Introduction……………………………………………………………………………………..............
7
2.
Selective Capital Reduction…………………………………………………………………..............
7
3.
Gerard Family and the Tarway Loans……………………………………………………… .............
8
4.
Rationale for the Selective Capital Reduction ............................................................................
9
5.
Financial Information relating to the Selective Capital Reduction..............................................
9
6.
Conditions ..................................................................................................................................
11
7.
Interests of Directors and Substantial Shareholders .................................................................
12
8.
Directors’ Recommendation .......................................................................................................
12
9.
Abstention from Voting ...............................................................................................................
12
10.
Extraordinary General Meeting ..................................................................................................
12
11.
Action to be taken by GPIL Shareholders ..................................................................................
12
12.
Financial Adviser ........................................................................................................................
12
13.
Directors’ Responsibility Statement............................................................................................
13
14.
Additional Information ................................................................................................................
13
APPENDICES
1.
Audited Balance Sheets and Profit and Loss Account and Pro Forma Unaudited Balance
Sheets and Profit and Loss Account After the Selective Capital Reduction ..............................
14
Additional Information ................................................................................................................
17
NOTICE OF EXTRAORDINARY GENERAL MEETING ......................................................................
20
2.
PROXY FORM
2
DEFINITIONS
In this Circular, the following definitions apply throughout except where the context otherwise requires:
“ACRA”
:
Accounting and Corporate Regulatory Authority of Singapore
“Act”
:
The Companies Act, Chapter 50 of Singapore
“Agreement Date”
:
9 July 2009, being the date of the Share Cancellation Agreement
“Belvedire”
:
Belvedire Pty Ltd
“BNP Paribas”
:
BNP Paribas Capital (Singapore) Ltd.
“Board”
:
The board of Directors of the Company
“Cancellation Monies”
:
Has the meaning ascribed to it in paragraph 2.2 of this Circular
“CDP”
:
The Central Depository (Pte) Limited
“CIHL”
:
CIH Limited
“Court”
:
The High Court of the Republic of Singapore
“Deed of Discharge”
:
The deed of discharge to be entered or entered into (as the
case may be) by, inter alia, Belvedire and Schneider Australia to
discharge and release the Relevant Shares from the Schneider
Share Charge
“Directors”
:
The directors of the Company as at the date of this Circular
“Effective Date”
:
The date on which the Selective Capital Reduction Court Order
(together with other documents prescribed under the Act) is
lodged with ACRA
“EGM”
:
The extraordinary general meeting of the Company to be held on
19 November 2009 (and any adjournment thereof)
“EPS”
:
Earnings per share
“EWDIS”
:
Electrical wiring devices and installation systems
“FY”
:
Financial year ended or ending 31 March
“Gerard Corporation”
:
Gerard Corporation Pty Ltd
“Gerard Industries”
:
Gerard Industries (No. 3) Pty Ltd
“GPH”
:
Gold Peak Industries (Holdings) Limited
“GPIL” or the “Company”
:
GP Industries Limited
“GPIL Options”
:
Valid existing options granted under the GPIL Share Option
Scheme
3
“GPIL Share Option Scheme”
:
The GP Industries Limited Share Option Scheme 1999
“GPIL Shareholders”
:
Persons who are registered as holders of GPIL Shares in the
Register of Members of GPIL or who, being Depositors, have
GPIL Shares entered against their names in the Depository
Register
“GPIL Shares”
:
Ordinary shares in the capital of the Company
“Group”
:
The Company and its subsidiaries
“Latest Practicable Date”
:
22 October 2009, being the latest practicable date prior to the
printing of this Circular
“Long Stop Date”
:
The date falling 12 months’ from the Agreement Date (or such
later date as the parties to the Share Cancellation Agreement
may in writing agree)
“Market Day”
:
A day on which the SGX-ST is open for trading in securities
“NTA”
:
Net tangible asset
“Relevant Shares”
:
The 55,681,443 GPIL Shares held by Belvedire, representing
approximately 9.66 per cent. of the GPIL Shares in issue, which
are proposed to be cancelled by way of the Selective Capital
Reduction pursuant to the Share Cancellation Agreement
“Schneider Australia”
:
Schneider Electric Australia Holdings Pty Ltd
“Schneider Electric”
:
Schneider Electric SA
“Selective Capital Reduction”
:
The proposed selective capital reduction involving the cancellation
of the Relevant Shares under Section 78G of the Act announced
by the Company on 9 July 2009, details of which are set out on
page 7 of this Circular
“Selective Capital Reduction
Court Order”
:
The order by the Court sanctioning the Selective Capital
Reduction
“SGX-ST”
:
Singapore Exchange Securities Trading Limited
“Share Cancellation Agreement” :
The share cancellation agreement dated 9 July 2009 entered
into between the Company, Belvedire, Tarway and various parties
representing the Gerard Family, pursuant to which the Relevant
Shares will be cancelled by way of the Selective Capital Reduction
and the cash distribution is to be paid to Belvedire, which will be
satisfied by the Company setting off the Cancellation Monies
against the principal amounts outstanding under the Tarway
Loans
“Substantial Shareholder”
:
A person who has an interest (as defined in the Act) in not less
than five per cent. of the issued voting shares of the Company
“Tarway”
:
Tarway Two Pty Ltd, an indirectly wholly-owned subsidiary of the
Company
4
“Tarway Loans”
:
Has the meaning ascribed to it in paragraph 3.3 of this Circular
“VWAP”
:
Volume weighted average price
“A$”
:
Australian dollars
“S$” and “cents”
:
Singapore dollars and cents, respectively
“%” or “per cent.”
:
Per centum or percentage
The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the respective
meanings ascribed to them in Section 130A of the Act.
Words importing the singular shall, where applicable, include the plural and vice versa, and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders and
vice versa. Words importing persons shall include corporations.
Any reference in this Circular to any enactment is a reference to that enactment as for the time being
amended or re-enacted. Any word defined under the Act or any modification thereof and used in this
Circular shall, where applicable, have the meaning assigned to it under the Act or any modification
thereof, as the case may be.
Any reference to a time of day and date in this Circular is made by reference to Singapore time and date
respectively unless otherwise stated.
Any reference to “you” or “your” in this Circular is a reference to GPIL Shareholders, as the case may be,
unless the context otherwise requires.
Any discrepancies in the tables in this Circular between the listed amounts and the totals thereof are due
to rounding.
5
INDICATIVE TIMETABLE
The following are the indicative dates and times for the Selective Capital Reduction:
Last Date and Time for lodgement of Proxy Forms
:
17 November 2009 at 10.00 a.m.
Date and Time of EGM
:
19 November 2009 at 10.00 a.m.
Expected Date for Court approval of the Selective Capital
Reduction(1)
:
On or about 17 December 2009
Expected Effective Date of the Selective Capital Reduction(1)
:
On or about 26 January 2010
Notes:
(1)
The above dates are indicative only and are subject to change. Changes to the above expected dates, as well as the definitive
dates, will be announced in due course by way of SGXNET announcements released on the website of the SGX-ST.
(2)
All Proxy Forms must be lodged at the registered office of the Company at 97 Pioneer Road, Singapore 639579, not less than
48 hours before the time appointed for the EGM. Completion and return of a Proxy Form will not preclude a GPIL Shareholder
from attending and voting in person at the EGM if he finds that he is able to do so. In such event, the relevant Proxy Forms
shall be deemed to be revoked.
6
GP INDUSTRIES LIMITED
(Incorporated in the Republic of Singapore)
Company Registration No. 199502128C
Directors:
Registered Office:
Executive Directors
Victor Lo Chung Wing (Chairman)
Leung Pak Chuen (Executive Vice Chairman)
Brian Li Yiu Cheung (Managing Director)
Andrew Chuang Siu Leung
Wong Man Kit
97 Pioneer Road
Singapore 639579
Independent Non-Executive Directors
Lim Ah Doo
Phua Bah Lee
Lim Hock Beng
27 October 2009
To: The Shareholders of GP Industries Limited
Dear Sir / Madam
PROPOSED SELECTIVE CAPITAL REDUCTION
1.
INTRODUCTION
1.1
Announcement. On 9 July 2009, the Board announced (the “Announcement”) that the Company
and its indirect wholly-owned subsidiary, Tarway, had entered into the Share Cancellation
Agreement with Belvedire and various parties representing the Gerard Family to cancel the
Relevant Shares by way of the Selective Capital Reduction, and to make a cash distribution
to Belvedire which will be satisfied by the Company setting off the Cancellation Monies due to
Belvedire against the principal amounts outstanding under the Tarway Loans.
A copy of the Announcement is available on the website of the SGX-ST at www.sgx.com.
1.2
EGM. The Directors are convening the EGM to be held at Capricorn, Level 1, Marina Mandarin
Singapore, 6 Raffles Boulevard, Marina Square, Singapore 039594, on 19 November 2009 to seek
the approval of GPIL Shareholders for the Selective Capital Reduction.
1.3
Circular. The purpose of this Circular is to provide GPIL Shareholders with relevant information
relating to the Selective Capital Reduction, including the rationale and financial effects of the
Selective Capital Reduction on the Group, and to seek GPIL Shareholders’ approval for the Special
Resolution relating to the Selective Capital Reduction to be proposed at the EGM, notice of which
is set out on page 20 of this Circular.
2.
SELECTIVE CAPITAL REDUCTION
2.1
Selective Capital Reduction. The Selective Capital Reduction to cancel the Relevant Shares
will be effected under Section 78G of the Act and pursuant to the Share Cancellation Agreement,
the Company will cancel the Relevant Shares and make a cash distribution of S$0.328 for each
Relevant Share cancelled.
2.2
Cash Distribution. The amount of cash distribution, being S$0.328 for each Relevant Share
cancelled, is arrived at after negotiations between the Company and Belvedire on an arms-length
basis and takes into account, inter alia, the VWAP of the GPIL Shares transacted on the SGX-ST
during various reference periods. The amount of cash distribution represents:
(a)
a premium of approximately 2.9 per cent. over the VWAP at which the GPIL Shares were
transacted on the SGX-ST during the last one month up to and including 8 July 2009, being
the last Market Day prior to the Agreement Date;
7
(b)
a premium of approximately 18.7 per cent. over the VWAP at which the GPIL Shares were
transacted on the SGX-ST during the last three months up to and including 8 July 2009,
being the last Market Day prior to the Agreement Date; and
(c)
a premium of approximately 19.6 per cent. over the VWAP at which the GPIL Shares were
transacted on the SGX-ST during the last six months up to and including 8 July 2009, being
the last Market Day prior to the Agreement Date.
Pursuant to the Selective Capital Reduction, the issued ordinary share capital of the Company
will be reduced by the 55,681,443 GPIL Shares cancelled, and pursuant to the terms of the Share
Cancellation Agreement, the Company has agreed to return to Belvedire S$18,263,513.30 (the
“Cancellation Monies”), being the aggregate amount of the cash distribution due to Belvedire for
the Relevant Shares so cancelled. Belvedire has agreed that this shall be satisfied by the Company
setting off the Cancellation Monies (converted into A$15,744,408.02 at the conversion rate of
A$1.00 : S$1.16) against the principal amounts outstanding under the Tarway Loans.
2.3
Share Capital. Following the Selective Capital Reduction, the issued share capital of the Company
will be reduced from approximately S$304.4 million to approximately S$286.1 million and the
number of GPIL Shares in issue will be reduced from 576,601,925 to 520,920,482.
Save for the cancellation of the Relevant Shares and the return to Belvedire of the Cancellation
Monies as set out above, there will not be any change to the number of GPIL Shares held by
GPIL Shareholders as a result of the Selective Capital Reduction, nor will the Selective Capital
Reduction involve (i) the diminution of liability in respect of any unpaid share capital, or (ii) the
payment to GPIL Shareholders of any paid-up share capital (or, for the avoidance of doubt, profits)
of the Company.
3.
GERARD FAMILY AND THE TARWAY LOANS
3.1
Belvedire and Gerard Corporation. Belvedire is a company incorporated in Australia which
is beneficially owned by various parties representing the Gerard Family. The Gerard Family are
the Company’s long-standing business partners in Australia who hold 81.0 per cent. of Gerard
Corporation, an investment holding company incorporated in Australia and whose principal
investments include manufacturing, printing, packaging, freight forwarding, commercial property
ownership and rural interests in forestry and agriculture. Gerard Corporation was incorporated
following the sale, in 2003, by the Gerard Family and CIHL, a subsidiary of the Company, of their
respective interests in the EWDIS business of Gerard Industries to Schneider Australia, to hold the
non-EWDIS business of Gerard Industries. As at the date of this Circular, the Company, through
Tarway, holds 19.0 per cent. of Gerard Corporation.
3.2
Schneider Share Charge. To cover any liability that the Gerard Family may have to warranty claims
in respect of the sale of the Gerard Industries’ EWDIS business to Schneider Australia, Schneider
Electric, the parent company of Schneider Australia, retained part of the cash consideration
payable to the Gerard Family and 22,325,156 ordinary shares in the capital of CIHL (the “CIHL
Consideration Shares”) that were charged by Belvedire in favour of, and assigned to, Schneider
Australia. Pursuant to a scheme of arrangement for the privatisation of CIHL by the Company under
Section 210 of the Act which came into effect on 28 September 2006, the CIHL Consideration
Shares were converted into 70,681,443 GPIL Shares (including the Relevant Shares), of which
15,000,000 GPIL Shares were disposed by Belvedire in July 2007. Prior to 12 October 2009, the
remaining 55,681,443 GPIL Shares, being the Relevant Shares, were charged by Belvedire in
favour of, and assigned to, Schneider Australia (the “Schneider Share Charge”). Pursuant to the
Deed of Discharge dated 8 October 2009, the Schneider Share Charge was discharged and the
Relevant Shares were released and re-assigned to Belvedire on 12 October 2009.
3.3
Tarway Loans. Tarway was initially issued and allotted with approximately 52.4 per cent. of the
issued share capital of Gerard Corporation. In 2003, Tarway disposed approximately 12.4 per cent.
of the issued share capital of Gerard Corporation in favour of the Gerard Family for a consideration
of approximately A$27.0 million (the “2003 Disposal”). Pursuant to the terms of a loan agreement
dated 20 May 2005, Tarway agreed to lend to the Gerard Family part of the consideration for the
8
2003 Disposal, amounting to approximately A$4.6 million (the “First Tarway Loan Amount”), and
scheduled the final maturity date of the First Tarway Loan Amount to match the date of the release
of the Schneider Share Charge.
In 2005, Tarway further disposed of approximately 21.0 per cent. of the issued share capital
of Gerard Corporation in favour of the Gerard Family for approximately A$25.0 million (the
“2005 Disposal”), resulting in its current shareholding of 19.0 per cent. in Gerard Corporation.
Consequently, Tarway’s contribution to the shareholders’ loan to Gerard Corporation (which was
made by Tarway and the Gerard Family in proportion to their respective shareholding interests in
Gerard Corporation) was reduced in parallel with the reduction in Tarway’s shareholding in Gerard
Corporation. Tarway was therefore repaid approximately A$22.1 million (the “Shareholders’ Loan
Amount”) which was attributable to the reduction of its contribution to the shareholders’ loan to
Gerard Corporation. Pursuant to the terms of another loan agreement also dated 20 May 2005,
Tarway agreed to lend the Gerard Family part of the consideration for the 2005 Disposal and the
Shareholders’ Loan Amount, amounting to approximately A$45.6 million (the “Second Tarway Loan
Amount”, and together with the First Tarway Loan Amount, the “Tarway Loans”), and scheduled
the final maturity date of the Second Tarway Loan Amount to match the date of the release of the
Schneider Share Charge.
As at the Agreement Date, the aggregate principal amount outstanding under the Tarway Loans is
approximately A$40.2 million (equivalent to approximately S$46.6 million at the conversion rate of
A$1.00 : S$1.16).
3.4
Set-off of Cancellation Monies. Pursuant to the Share Cancellation Agreement, Belvedire and
the Gerard Family have agreed that the Company’s obligation to distribute the Cancellation Monies
to Belvedire shall be satisfied on the Effective Date by the Company setting off the Cancellation
Monies (converted into Australian dollars as stated in paragraph 2.2 of this Circular) against the
principal amounts outstanding under the Tarway Loans.
4.
RATIONALE FOR THE SELECTIVE CAPITAL REDUCTION
The Company understands that the Gerard Family intends to partially repay the Tarway Loans
through the realisation of the Relevant Shares. The Selective Capital Reduction will enable the
Company to eliminate any possible overhang of the GPIL Shares in the market which may depress
the price of the GPIL Shares in the case of a sale of the Relevant Shares on the open market by
the Gerard Family. In view of the recent difficult conditions in the global financial markets which
have generally depressed the price of the GPIL Shares, the Selective Capital Reduction (and
consequently, the cancellation of the Relevant Shares) will also benefit GPIL Shareholders by
providing an opportune time for GPIL Shareholders to increase their effective stake in the Company
without making any additional cash outlay.
5.
FINANCIAL INFORMATION RELATING TO THE SELECTIVE CAPITAL REDUCTION
5.1
Balance Sheet and Profit and Loss Account.
(a)
The audited balance sheets of the Group and the Company as at 31 March 2009 and the
audited profit and loss account of the Group for FY2009;
(b)
the pro forma unaudited balance sheets of the Group and the Company as at 31 March
2009 and the pro forma unaudited profit and loss account of the Group for FY2009 after the
Selective Capital Reduction; and
(c)
the principal assumptions applied in preparing such pro forma unaudited financial
information,
are set out in Appendix 1 of this Circular.
5.2
Assumptions relating to Pro Forma Financial Effects. The pro forma financial effects of the
Selective Capital Reduction on the share capital of the Company, the NTA, the EPS and the
gearing of the Group set out below have been prepared based on the audited financial statements
of the Company and the Group as at 31 March 2009 and for FY2009, and are purely for illustrative
9
purposes only. The information set out below assumes the cancellation of the Relevant Shares
pursuant to the Selective Capital Reduction which has the effect of reducing GPIL’s issued share
capital by S$18,263,513.30 and the Tarway Loans by A$15,744,408.02.
5.3
Share Capital. The effect of the Selective Capital Reduction on the issued share capital of the
Company is as follows:
Number of issued GPIL Shares
Before
Selective Capital
Reduction
After
Selective Capital
Reduction
576,601,925
520,920,482
Amount of share capital (S$’000)
286,107(1)
304,371
Note:
(1)
5.4
The reduction in the Company’s issued share capital has been derived from the amount of the Cancellation Monies.
NTA. For illustrative purposes only, assuming the Selective Capital Reduction had been effected on
31 March 2009 and using the Group’s closing conversion rate for Australian dollars to Singapore
dollars as at 31 March 2009, the pro forma financial effects on the NTA of the Group as at
31 March 2009 are as follows:
Before
Selective Capital
Reduction
After
Selective Capital
Reduction
398,215
381,688
69.06
73.27
NTA (S$’000)
NTA per GPIL Share (cents)
5.5
EPS. For illustrative purposes only and assuming the Selective Capital Reduction had been
effected on 1 April 2008, the pro forma financial effects on the earnings of the Group for FY2009
are as follows:
Without adjustment
for exceptional items
Before
After
Selective
Selective
Capital
Capital
Reduction
Reduction
Profit/(Loss) attributable to GPIL
Shareholders (S$’000)
Basic earnings/(loss) per GPIL Share
(cents)
(6,069)
(1.05)
(7,738)
(1.49)(2)
After adjustment
for exceptional items(1)
Before
After
Selective
Selective
Capital
Capital
Reduction
Reduction
8,918
1.55
7,249
1.39(2)
Notes:
5.6
(1)
Adjusted to exclude the net exceptional loss of approximately S$14,987,000 (the “Exceptional Items”).
(2)
The increase in the basic loss per GPIL Share (without adjustment for the Exceptional Items) and decrease in basic
earnings per GPIL Share (after adjustment for the Exceptional Items) after the pro forma completion of the Selective
Capital Reduction is mainly due to lower interest income attributable to the reduction of the interest bearing amounts
outstanding under the Tarway Loans (assuming the partial repayment of such loans following the Selective Capital
Reduction).
Gearing. For illustrative purposes only, assuming the Selective Capital Reduction had been
effected on 31 March 2009 and using the Group’s closing conversion rate for Australian dollars to
Singapore dollars as at 31 March 2009, the effect of the Selective Capital Reduction on the gearing
of the Group as at 31 March 2009 is as follows:
10
Total borrowings(1) (S$’000)
Cash and cash equivalents (S$’000)
Net assets(2) (S$’000)
Gearing(3) (times)
Before
Selective Capital
Reduction
After
Selective Capital
Reduction
208,187
208,187
44,284
44,284
405,312
388,785
0.40
0.42
Notes:
6.
(1)
Total borrowings comprise bank borrowings and obligations under finance leases, both long-term and short-term.
(2)
Net assets equals total assets less total liabilities.
(3)
Gearing is defined as total borrowings less cash and cash equivalents, divided by net assets.
CONDITIONS
The Selective Capital Reduction is conditional upon, inter alia, the following:
(a)
the passing of a special resolution of the GPIL Shareholders approving the Selective Capital
Reduction at the EGM;
(b)
the approval of the shareholders of GPH for the cancellation of the Relevant Shares by the
Company pursuant to the Selective Capital Reduction, if required;
(c)
the grant of the Selective Capital Reduction Court Order and such Selective Capital
Reduction Court Order having become final;
(d)
the registration of the Selective Capital Reduction Court Order with ACRA;
(e)
no injunction or other order being issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Selective Capital Reduction or the transactions
proposed in the Share Cancellation Agreement or any part thereof; and
(f)
the execution of (i) the Deed of Discharge and (ii) the relevant prescribed form (“CDP Form
K”) for the re-assignment of the Relevant Shares to Belvedire, and the lodgement of the duly
executed CDP Form K with CDP.
The Company understands that Belvedire and Schneider Australia have entered into the Deed of
Discharge on 8 October 2009, have executed the CDP Form K for, inter alia, the discharge, release
and re-assignment of the Relevant Shares to Belvedire, and have lodged the CDP Form K with
CDP. Accordingly, as at the Latest Practicable Date, the condition set out in paragraph 6(f) above
has been satisfied.
In relation to the condition set out in paragraph 6(b) above, the Company understands that the
approval of the shareholders of GPH for the cancellation of the Relevant Shares by the Company
pursuant to the Selective Capital Reduction is not required under the Listing Rules of The Stock
Exchange of Hong Kong Limited.
Pursuant to the Share Cancellation Agreement, if any of the conditions above is not satisfied or
waived (as the case may be) by the Long Stop Date, the Share Cancellation Agreement shall
terminate in accordance with the provisions therein and the proposed Selective Capital Reduction
will lapse.
Subject to the above conditions being satisfied, it is currently expected that the Effective Date of
the Selective Capital Reduction will take place on or about 26 January 2010.
11
A further announcement will be made by the Company in the event of (i) a material change to the
expected Effective Date of the Selective Capital Reduction or (ii) in the event the Selective Capital
Reduction lapses.
7.
INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS
The shareholding interests of the Directors and Substantial Shareholders before and after the
Selective Capital Reduction are set out in Appendix 2 of this Circular. Save as disclosed above
and in Appendix 2 of this Circular, none of the Directors or Substantial Shareholders has any
interest, direct or indirect, in the Selective Capital Reduction.
8.
DIRECTORS’ RECOMMENDATION
Having considered the terms of the Selective Capital Reduction, the Directors are of the view
that the Selective Capital Reduction is in the interests of the Company and GPIL Shareholders.
Accordingly, the Directors recommend that GPIL Shareholders vote in favour of the Special
Resolution relating to the Selective Capital Reduction (set out in the notice of EGM on page 20 of
this Circular) to be proposed at the EGM to be held on 19 November 2009.
9.
ABSTENTION FROM VOTING
As the Relevant Shares to be cancelled pursuant to the Selective Capital Reduction are held by
Belvedire and represent Belvedire’s entire shareholding interest in the Company, Belvedire, the
Gerard Family and their associates will abstain from voting on the Special Resolution relating to the
Selective Capital Reduction at the EGM and also will not accept nominations to act as proxies to
attend and to vote on behalf of any GPIL Shareholder and, if necessary, to demand a poll, at the
EGM, unless specific directions are given by such GPIL Shareholder.
10.
EXTRAORDINARY GENERAL MEETING
The EGM, notice (the “Notice”) of which is set out on page 20 of this Circular, will be held at
Capricorn, Level 1, Marina Mandarin Singapore, 6 Raffles Boulevard, Marina Square, Singapore
039594, on 19 November 2009 at 10.00 a.m. for the purpose of considering and, if thought fit,
passing with or without modification, the Special Resolution set out in the Notice.
A Depositor shall not be regarded as a GPIL Shareholder entitled to attend the EGM and to
speak and vote thereat unless he is shown to have GPIL Shares entered against his name in the
Depository Register, as certified by CDP as at 48 hours before the EGM.
11.
ACTION TO BE TAKEN BY GPIL SHAREHOLDERS
You will find enclosed with this Circular the Notice and a Proxy Form.
If you are unable to attend the EGM and you wish to appoint a proxy to attend and vote on your
behalf, you should complete, sign and return the attached Proxy Form in accordance with the
instructions printed thereon as soon as possible and, in any event, so as to reach the registered
office of the Company at 97 Pioneer Road, Singapore 639579, not less than 48 hours before
the time fixed for the EGM. Your completion and return of a Proxy Form will not prevent you from
attending and voting in person at the EGM if you so wish.
12.
FINANCIAL ADVISER
12.1 BNP Paribas. The Company has appointed BNP Paribas as its financial adviser in respect of the
Selective Capital Reduction. BNP Paribas has given and has not withdrawn its written consent to
the issue of this Circular with the inclusion of its name and all references to its name in the form
and context in which they appear in this Circular.
12.2 Responsibility Statement. BNP Paribas, as financial adviser in respect of the Selective Capital
Reduction, acknowledges that, to the best of its knowledge and belief, based on information
provided by the Company and having made reasonable enquiries, the information given in this
Circular is fair and accurate in all material respects as at the date of this Circular and that there
12
are no material facts the omission of which would make any statement in this Circular misleading.
Where the information relating to the Company and its subsidiaries has been extracted from
publicly available sources or otherwise based on the information provided by the Company, the
sole responsibility of BNP Paribas has been to ensure through reasonable enquiries that such
information is accurately extracted from these sources or, as the case may be, reflected or
reproduced in this Circular.
13.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors collectively and individually accept responsibility for the accuracy of the information
given in this Circular and confirm, having made all reasonable enquiries, that to the best of
their knowledge and belief, the facts stated and opinions expressed in this Circular are fair and
accurate in all material respects as at the date of this Circular and that there are no material facts
the omission of which would make any statement in this Circular misleading. Where information
has been extracted and/or reproduced from published and publicly available sources, the sole
responsibility of the Directors has been to ensure that such information is accurately reproduced in
this Circular.
14.
ADDITIONAL INFORMATION
Your attention is drawn to the additional information as set out in the Appendices of this Circular.
Yours faithfully
For and on behalf of
the Board of Directors of
GP INDUSTRIES LIMITED
Victor Lo Chung Wing
Chairman
13
APPENDIX 1
AUDITED BALANCE SHEETS AND
PROFIT AND LOSS ACCOUNT AND
PRO FORMA UNAUDITED BALANCE SHEETS AND
PROFIT AND LOSS ACCOUNT AFTER THE SELECTIVE CAPITAL REDUCTION
1.
ASSUMPTIONS
The pro forma unaudited balance sheets of the Group and the Company and the pro forma
unaudited profit and loss account of the Group have been prepared using the respective audited
financial statements of the Group and the Company for FY2009 and are based on:
(a)
in relation to the pro forma unaudited balance sheets of the Group and the Company, which
use the Group’s closing conversion rate for Australian dollars to Singapore dollars as at 31
March 2009, the Selective Capital Reduction having been completed and become effective
on 31 March 2009;
(b)
in relation to the pro forma unaudited profit and loss account of the Group, the Selective
Capital Reduction having been completed and become effective on 1 April 2008;
(c)
the Selective Capital Reduction having been effected out of the Company’s issued share
capital; and
(d)
the Selective Capital Reduction resulting in lower interest income and taxation expense.
The pro forma unaudited balance sheets of the Group and the Company and the pro forma
unaudited profit and loss account of the Group are for illustrative purposes only, do not reflect the
actual financial position of the Group and the Company following the completion of the Selective
Capital Reduction and should be read in conjunction with the audited financial statements of the
Group and the Company for FY2009.
2.
BALANCE SHEETS OF THE GROUP AND THE COMPANY AS AT 31 MARCH 2009
Non-current Assets
Property, plant and equipment
Interest in subsidiaries
Interest in associates
Investment in unquoted equity shares
Non-current receivables
Other investments
Intangible assets
The Group
Pro Forma
Audited
Unaudited
S$’000
S$’000
The Company
Pro Forma
Audited
Unaudited
S$’000
S$’000
38,662
–
309,981
26,033
5,334
21,104
5,664
38,662
–
309,981
26,033
5,334
21,104
5,664
141
413,121
180,547
–
–
–
–
141
413,121
180,547
–
–
–
–
406,778
406,778
593,809
593,809
14
The Group
Pro Forma
Audited
Unaudited
S$’000
S$’000
Current Assets
Inventories
Receivables and prepayments
Dividend receivable
Taxation recoverable
Bank balances, deposits and cash
The Company
Pro Forma
Audited
Unaudited
S$’000
S$’000
49,959
163,103
58
48
44,284
49,959
146,576
58
48
44,284
–
460
20,129
–
9,392
–
460
20,129
–
9,392
257,452
240,925
29,981
29,981
40,741
900
151
7,424
293
108,438
40,741
900
151
7,424
293
108,438
101,314
–
–
1,750
9
50,433
119,578
–
–
1,750
9
50,433
157,947
157,947
153,506
171,770
Net Current Assets/(Liabilities)
99,505
82,978
(123,525)
(141,789)
Non-current Liabilities
Bank loans
Obligations under finance leases
Deferred tax liabilities
99,365
233
1,373
99,365
233
1,373
93,868
–
79
93,868
–
79
100,971
100,971
93,947
93,947
Net Assets
405,312
388,785
376,337
358,073
Represented by:
Issued capital
Reserves
304,371
99,508
286,107
101,245
304,371
71,966
286,107
71,966
403,879
387,352
376,337
358,073
1,433
1,433
–
–
405,312
388,785
376,337
358,073
Current Liabilities
Trade and other payables
Provisions
Obligations under finance leases
Income tax payable
Amount due to ultimate holding company
Bank loans and overdrafts
Equity attributable to equity holders of the
Company
Minority interests
Total Equity
15
3.
PROFIT AND LOSS ACCOUNT OF THE GROUP FOR FY2009
Audited
S$’000
Revenue
Cost of sales
Pro Forma Unaudited
S$’000
242,363
(177,882)
242,363
(177,882)
Gross profit
Other operating income
Distribution costs
Administrative expenses
Exchange gain
Other operating expenses
64,481
15,217
(33,789)
(41,579)
4,653
(770)
64,481
13,362
(33,789)
(41,579)
4,653
(770)
Profit from operations
Finance costs
Exceptional items
Share of results of associates
8,213
(6,393)
(14,987)
14,550
6,358
(6,393)
(14,987)
14,550
Profit before taxation
Income tax expense
1,383
(7,727)
(472)
(7,541)
Loss for the year
(6,344)
(8,013)
Attributable to:
Equity holders of the Company
Minority interests
(6,069)
(275)
(7,738)
(275)
(6,344)
(8,013)
Weighted average number of shares used in
calculating:
Basic loss per GPIL Share
Diluted loss per GPIL Share
576,601,925
576,601,925
Loss per GPIL Share (cents)
Basic
Diluted
(1.05)
(1.05)
16
520,920,482
520,920,482
(1.49)
(1.49)
APPENDIX 2
ADDITIONAL INFORMATION
1.
DISCLOSURE OF INTERESTS
1.1
Directors. The interests of the Directors in GPIL Shares and GPIL Options as recorded in the
Register of Directors’ Shareholdings as at Latest Practicable Date are set out below:
Direct Interest
Name of Director
Victor Lo Chung Wing(1)
No. of
GPIL Shares
Deemed Interest
%
No. of
GPIL Shares
%
Total number of
GPIL Options under
the GPIL Share
Option Scheme
–
–
399,715,443
69.32
2,068,000
Leung Pak Chuen
1,608,000
0.28
–
–
730,000
Brian Li Yiu Cheung
1,465,000
0.25
–
–
650,000
Andrew Chuang Siu Leung
45,000
0.01
–
–
720,000
Wong Man Kit
72,000
0.01
–
–
175,000
Lim Ah Doo
300,000
0.05
–
–
–
Phua Bah Lee
214,000
0.04
–
–
–
Lim Hock Beng
214,000
0.04
–
–
–
Note:
(1)
Mr Victor Lo Chung Wing’s interest in the Company is by virtue of his interest in GPH. Mr Victor Lo Chung Wing is
interested in 163,017,243 shares in GPH, representing 29.68 per cent. of the issued share capital of GPH (comprising
a direct interest of 0.78 per cent. and a deemed interest of 28.90 per cent.).
Post-Selective Capital Reduction. Based on the interests of the Directors in GPIL Shares and
GPIL Options as recorded in the Register of Directors’ Shareholdings as at the Latest Practicable
Date and assuming there are no other changes to the interests of the Directors in GPIL Shares and
GPIL Options, the interests of the Directors in GPIL Shares and GPIL Options after the Selective
Capital Reduction are set out below:
Direct Interest
Name of Director
Victor Lo Chung Wing(1)
No. of
GPIL Shares
Deemed Interest
%
No. of
GPIL Shares
%
Total number of
GPIL Options under
the GPIL Share
Option Scheme
–
–
399,715,443
76.73
2,068,000
Leung Pak Chuen
1,608,000
0.31
–
–
730,000
Brian Li Yiu Cheung
1,465,000
0.28
–
–
650,000
Andrew Chuang Siu Leung
45,000
0.01
–
–
720,000
Wong Man Kit
72,000
0.01
–
–
175,000
Lim Ah Doo
300,000
0.06
–
–
–
Phua Bah Lee
214,000
0.04
–
–
–
Lim Hock Beng
214,000
0.04
–
–
–
Note:
(1)
Mr Victor Lo Chung Wing’s interest in the Company is by virtue of his interest in GPH. Mr Victor Lo Chung Wing is
interested in 163,017,243 shares in GPH, representing 29.68 per cent. of the issued share capital of GPH (comprising
a direct interest of 0.78 per cent. and a deemed interest of 28.90 per cent.).
17
1.2
Substantial Shareholders. The interests of the Substantial Shareholders in GPIL Shares as
recorded in the Register of Substantial Shareholders as at the Latest Practicable Date are set out
below:
Direct Interest
No. of
GPIL Shares
%
Name of Substantial
Shareholder
GPH
(1)
Victor Lo Chung Wing
(2)
Andrew Ng Sung On
Belvedire
Deemed Interest
No. of
GPIL Shares
%
Total Interest
No. of
GPIL Shares
%
399,715,443
69.32
–
–
399,715,443
69.32
–
–
399,715,443
69.32
399,715,443
69.32
378,412
0.07
399,715,443
69.32
400,093,855
69.39
55,681,443
9.66
–
–
55,681,443
9.66
Notes:
(1)
Mr Victor Lo Chung Wing’s interest in the Company is by virtue of his interest in GPH. Mr Victor Lo Chung Wing is
interested in 163,017,243 shares in GPH, representing 29.68 per cent. of the issued share capital of GPH (comprising
a direct interest of 0.78 per cent. and a deemed interest of 28.90 per cent.).
(2)
Mr Andrew Ng Sung On is interested in 158,254,389 shares in GPH, representing 28.81 per cent. of the issued share
capital of GPH.
Post-Selective Capital Reduction. Based on the interests of the Substantial Shareholders in GPIL
Shares as recorded in the Register of Substantial Shareholders as at the Latest Practicable Date
and assuming there are no other changes to the interests of the Substantial Shareholders in GPIL
Shares, the interests of the Substantial Shareholders in GPIL Shares after the Selective Capital
Reduction are set out below:
Direct Interest
No. of
GPIL Shares
%
Name of Substantial
Shareholder
GPH
(1)
Victor Lo Chung Wing
(2)
Andrew Ng Sung On
Belvedire
Deemed Interest
No. of
GPIL Shares
%
Total Interest
No. of
GPIL Shares
%
399,715,443
76.73
–
–
399,715,443
76.73
–
–
399,715,443
76.73
399,715,443
76.73
378,412
0.07
399,715,443
76.73
400,093,855
76.80
–
–
–
–
–
–
Notes:
2.
(1)
Mr Victor Lo Chung Wing’s interest in the Company is by virtue of his interest in GPH. Mr Victor Lo Chung Wing is
interested in 163,017,243 shares in GPH, representing 29.68 per cent. of the issued share capital of GPH (comprising
a direct interest of 0.78 per cent. and a deemed interest of 28.90 per cent.).
(2)
Mr Andrew Ng Sung On is interested in 158,254,389 shares in GPH, representing 28.81 per cent. of the issued share
capital of GPH.
MATERIAL LITIGATION
As at the Latest Practicable Date, the Directors are not aware of any litigation, claims or
proceedings pending or threatened against the Company or any of its subsidiaries or any facts
likely to give rise to any litigation, claims or proceedings which, in the opinion of the Directors,
might materially and adversely affect the financial position of the Company and its subsidiaries
taken as a whole.
3.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents may be inspected at the registered office of the Company at 97
Pioneer Road, Singapore 639579 during normal business hours from the date of this Circular up to
and including the date of the EGM:
(a)
the Memorandum and Articles of Association of the Company;
18
(b)
the annual reports of the Company for FY2008 and FY2009;
(c)
the Announcement;
(d)
the letter of consent referred to in paragraph 12 of this Circular; and
(e)
the Share Cancellation Agreement.
19
GP Industries Limited
(Incorporated in the Republic of Singapore)
Co. Reg. No. 199502128C
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Members of GP Industries
Limited (the “Company”) will be held at Capricorn, Level 1, Marina Mandarin Singapore, 6 Raffles
Boulevard, Marina Square, Singapore 039594, on 19 November 2009 at 10.00 a.m. for the purpose of
considering and, if thought fit, approving, with or without amendment, the following resolution which will
be proposed as a Special Resolution:
SPECIAL RESOLUTION
Selective Capital Reduction
That, pursuant to Article 50 of the Articles of Association of the Company and subject to the approval and
confirmation by the High Court of the Republic of Singapore:
(a)
the issued and paid-up share capital of the Company be reduced by an amount of S$18,263,513.30
and such reduction be effected and satisfied by cancelling 55,681,443 ordinary shares in the capital
of the Company (each, a “GPIL Share”) held by Belvedire Pty Ltd (“Belvedire”), and returning to
Belvedire the sum of S$18,263,513.30 on the basis of S$0.328 for each GPIL Share so cancelled
(the “Selective Capital Reduction”); and
(b)
the Directors and each of them be and hereby authorised to complete and do all such acts and
things (including executing all such documents as may be required in connection with the Selective
Capital Reduction) as they or he may consider desirable, necessary or expedient to give full effect
to this Special Resolution and the Selective Capital Reduction.
BY ORDER OF THE BOARD
Tan San-Ju
Yeo Poh Noi, Caroline
Company Secretaries
27 October 2009
Singapore
Notes:
1.
A Member of the Company entitled to attend and vote at the Extraordinary General Meeting (the “Meeting”) is entitled to
appoint a proxy to attend and vote in his/her stead. A proxy need not be a Member of the Company.
2.
The instrument appointing a proxy must be deposited at the registered office of the Company at 97 Pioneer Road, Singapore
639579 not less than 48 hours before the time appointed for holding the Meeting.
20
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21
This page has been intentionally left blank.
22
GP Industries Limited
(Incorporated in the Republic of Singapore)
Co. Reg. No. 199502128C
PROXY FORM
I/We,
of
being a member / members of GP Industries Limited (the “Company” or “GPIL”), hereby appoint:
Name
NRIC/
Passport Number
Address
Proportion of
Shareholdings (%)
and/or (delete as appropriate)
or, failing him/her, the Chairman of the Meeting as my/our proxy/proxies to attend and to vote for me/
us on my/our behalf and, if necessary, to demand a poll, at the Extraordinary General Meeting of the
Company to be held at Capricorn, Level 1, Marina Mandarin Singapore, 6 Raffles Boulevard, Marina
Square, Singapore 039594, on 19 November 2009 at 10.00 a.m. and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against
the Special Resolution as set out in the Notice of Extraordinary General Meeting. In the absence of
specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any
other matter arising at the Extraordinary General Meeting).
Special Resolution
For
Against
To approve the proposed Selective Capital Reduction
Dated this
day of
2009.
Total number of GPIL Shares held
Signature(s) of Member(s) or Common Seal
IMPORTANT: PLEASE READ NOTES OVERLEAF
Notes:
1.
Please insert the total number of ordinary shares held by you. If you have ordinary shares entered against your name in the
Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that
number of ordinary shares. If you have ordinary shares registered in your name in the Register of Members, you should insert
that number of ordinary shares. If you have ordinary shares registered in your name in the Depository Register and ordinary
shares registered in your name in the Register of Members, you should insert the aggregate number of ordinary shares
entered against your name in the Depository Register and registered in your name in the Register of Members. If no number
is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the ordinary shares held by you.
2.
A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies
to attend and vote in his/her stead. A proxy need not be a member of the Company.
3.
Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her
shareholding (expressed as a percentage of the whole) to be represented by each proxy.
4.
The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 97 Pioneer Road,
Singapore 639579 not less than 48 hours before the time appointed for the Extraordinary General Meeting.
5.
The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in
writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under
its seal or under the hand of an officer or attorney duly authorised. Where the instrument appointing a proxy or proxies is
executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be
lodged with the instrument.
6.
A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks
fit to act as its representative at the Extraordinary General Meeting, in accordance with Section 179 of the Companies Act,
Chapter 50 of Singapore.
7.
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed
or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified
in the instrument appointing a proxy or proxies. In addition, in the case of ordinary shares entered in the Depository Register,
the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown
to have ordinary shares entered against his name in the Depository Register as at 48 hours before the time appointed for
holding the Extraordinary General Meeting, as certified by The Central Depository (Pte) Limited to the Company.