RCG Holdings Limited Disposal (2255F)

TIDMRCG

RNS Number : 2255F

RCG Holdings Limited

21 May 2013

RCG HOLDINGS LIMITED

("RCG" or the "Company" and together with its subsidiaries, the "Group")

Disposal

RCG Holdings Limited (AIM: RCG, HKSE: 802), an international provider of biometric and RFID products and solution services with a primary focus in the Asia Pacific markets, announces that on 21 May 2013, RCG China Holdings Limited ("RCG China"), an indirect wholly-owned subsidiary of the Company, entered into a sale and purchase agreement pursuant to which RCG China agreed to dispose of its 6% equity interest in Hero View Limited ("Hero View") for an aggregate consideration of HK$20 million (approximately GBP1.69 million) (the "Disposal").

Hero View is principally engaged in the business of manufacturing of fructose in the PRC and the Group's 6% equity interest in Hero View was acquired in June 2011 for a total consideration of HK$19.2 million. The unaudited net asset value of Hero View as at 31 December 2012 was approximately HK$168,197,762 and Hero View had sales of approximately HK$224,623,693. The net profits before and after taxation of Hero View for the year ended 31 December 2012 were approximately HK$37,356,481 and HK$33,329,164 respectively.

The book value of the Group's investment in Hero View in its group accounts for the year ended 31 December 2012 was HK$19.2 million, resulting in a HK$800,000 (approximately GBP67,597) gain from the Disposal.

THE AGREEMENT

   Date:                                                    21 May 2013 
   Assets to be disposed of:                      6% equity interest in Hero View 
   Consideration:                                      HK$20,000,000

Completion: The completion of the Disposal takes place on 21 May 2013.

ASSETS TO BE DISPOSED OF

The Purchaser agreed to purchase and the Vendor agreed to sell the 6% equity interest in Hero View.

CONSIDERATION

The aggregate Consideration received by the Group for the Disposal is HK$20,000,000, which was arrived at after arm's length negotiations between the Vendor and the Purchaser.

The Consideration shall be paid by the Purchaser in cash within one month upon the signing of this Agreement (or such other means as may be agreed between the parties).

COMPLETION

The completion of the Disposal took place on 21 May 2013.

After completion of the Disposal, Hero View will no longer be treated as an associate of the Company.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Directors consider that the Group shall streamline its business and it is beneficial to the Company to dispose its interest in Hero View so as to focus its financial resources in other businesses of the Group. The Disposals have been effected to generate additional cash to provide the Group with additional working capital resources. The Directors are of the view that the terms of the Disposal are fair and reasonable and the Disposal is in the interests of the Company and its shareholders as a whole.

USE OF PROCEEDS

The proceeds of the Disposal will be used by the Group for general working capital purposes.

GENERAL INFORMATION

The Group's business is divided generally into four categories; "Trading of Security of Biometrics Products", "Solutions, Projects and Services", "Internet and Mobile Applications & Related Accessories" and "Commodities Trading".

Hero View is a company incorporated in British Virgin Islands with limited liabilities. It is principally engaged in the business of the manufacturing of fructose in PRC.

The Purchaser is an individual and to the best of the directors' knowledge, information and belief having made all reasonable enquiry, the Purchaser is a third party independent of the Group.

LISTING RULES IMPLICATION

As the highest applicable percentage ratios in respect of the Disposal (which are aggregated pursuant to Rule 14.22 of the Hong Kong Listing Rules) exceed 5% but are less than 25%, the Disposal constitutes a disclosable transaction for the Company and accordingly, is subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules.

Enquiries:

 
RCG Holdings Limited                Tel: +852 2637 2800 
Danny Chew, Acting Chief Executive 
 Officer 
ir@rcg.tv 
 
 
Smith & Williamson Corporate Finance 
 Limited 
(Nominated adviser and broker) 
Dr. Azhic Basirov / David Jones       Tel: +44 (0) 20 7131 4000

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning:

 
 "Agreement"      The sale and purchase agreement dated 21 May 2013 
                     entered into between the Vendor and the Purchaser 
                     in respect of the Disposal; 
 
 "AIM"            AIM, a market operated by the LSE; 
 
 "Board"          The board of Directors; 
 
 "Company"        RCG Holdings Limited, a company incorporated in 
                     Bermuda with limited liability and the shares of 
                     which are listed on The Stock Exchange of Hong 
                     Kong Limited and admitted to trading on AIM and 
                     are traded on the ISDX Secondary Market; 
 
 "Consideration"   The consideration payable by the Purchaser to the 
                     Vendor for the Disposal pursuant to the Agreement; 
 
 "Director(s)"    The director(s) of the Company; 
 
 "Disposal"       The sale of 6% equity interest of Hero View by 
                     the Vendor to the Purchaser pursuant to Sale and 
                     Purchase Agreement; 
 
 "Group"          The Company and its subsidiaries; 
 
 "HK$"            Hong Kong dollars; 
 
 "Hong Kong        The Rules Governing the Listing of Securities on 
  Listing Rules"     The Stock Exchange of Hong Kong Limited; 
 
 "Hero View"      Hero View Limited, a company incorporated in British 
                     Virgin Islands with limited liabilities; 
 
 "Purchaser"      The purchaser of the 6% equity interest in Hero 
                     View Limited being Mr. Liu Ling Hao; 
 
 "RCG China"      RCG China Holdings Limited, a wholly owned subsidiary 
                     of the Company; 
 
 "Vendor"         RCG China Holdings Limited; and 
 
 "%"              percent.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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