TSX Venture Exchange: TOM
TORONTO, March 13 /CNW/ - On January 22, 2007 T S Telecom Technologies
Limited ("TSTT"), a subsidiary of T S Telecom Ltd. (the "Company") entered
into a Sale and Purchase Agreement with Mr. Raymond Lau, the Chairman and
Chief Executive Officer of TSTT and the Company, pursuant to which TSTT has
conditionally agreed to sell and Mr. Lau has conditionally agreed to purchase
all the issued share capital of the "Disposal Group" and assume the "Advances"
to the Disposal Group, upon completion of a corporate restructuring for cash
consideration of HK$3,000,000 (approximately CAD$455,444) (the
TSTT is listed on the Stock Exchange of Hong Kong. The "Disposal Group"
being sold are certain subsidiaries of TSTT which include: (a) T S Telecom
(B.V.I.) Ltd. and its subsidiaries comprised of T S International Company
Limited, TSTT (Canada) Ltd., T S International Ltd., T S Electric and Power
Co. Ltd., T S Telecom (Shenzhen) Co., Ltd., Ying Zhi Xun Telecom Equipment
(Shenzhen) Co., Ltd.; and (b) T S Bio-Medical (B.V.I.) Ltd. and its
subsidiaries comprised of T S Bio-Technology Ltd. and T S Bio-Technology
(Wuhan) Co. Ltd. The "Advances" to the Disposal Group being assumed by Mr. Lau
equal the sum of approximately HK$120,000,000 (approximately CAD$18,217,702)
which represent in the aggregate the amounts owing by certain members of the
Disposal Group to TSTT.
The Consideration, which has been arrived at after arm's length
negotiations between the parties, was determined with reference to the sum of
(a) the unaudited consolidated net deficit of approximately HK$117,100,000
(approximately CAD$17,777,440) as at November 30, 2006; and (b) the Advances
to the Disposal Group owed by certain members of the Disposal Group to TSTT of
approximately HK$120,000,000 (approximately CAD$ 18,217,702) as at
November 30, 2006, and after taking into consideration the Disposal Group's
further expected operating losses for the period from December 1, 2006 to the
date the transaction is completed, which is expected to be in the second
quarter of 2007. No fee has been paid to any party in connection with the
The reasons for, and benefits to, the Company of entering into the Sale
and Purchase Agreement and the financial effect to the Company and TSTT have
been outlined in full on pages 10, 11 and 12 of TSTT's disclosure circular
included as Schedule A to this press release.
The transaction has received the approval of the minority shareholders of
TSTT at the Extraordinary General Meeting (EGM) held in Hong Kong on March 5,
2007 and has received the necessary approvals of the Hong Kong Stock Exchange.
For details regarding the transaction, please refer to the documents, included
as Schedule A to this press release, which include the Announcement - Major
and connected transaction and resumption of trading; Circular - Major and
connected transaction; Announcement - Voting Result of the EGM.
On March 9, 2007, the Board of Directors of the Company (with Mr. Raymond
Lau-Chairman and Chief Executive Director abstaining from voting) approved
this transaction. In the opinion of the Board, the terms of the Sale and
Purchase Agreement are fair and reasonable in the circumstances and the
entering into of the Sale and Purchase Agreement is in the best interests of
the Company and its shareholders as a whole. The Board believes that the sale
of the Disposal Group will improve the financial position of the Company, as
each entity in the Disposal Group has operated at a loss for the previous
years. This transaction is designed to improve the Company's likelihood of
returning to profitability in the future. The Board has concluded that
although this transaction would constitute a "related party transaction" for
purposes of applicable securities regulation, the transaction does not require
shareholder approval or a valuation given that the Company is in serious
financial difficulty and the costs associated with holding a shareholder
meeting and preparing a valuation are not feasible given the Company's current
economic situation. The Consideration to be paid by Mr. Raymond Lau will
enhance the Company's financial position going forward.
Shareholders should note that the Sale and Purchase Agreement is subject
to a number of conditions precedent which may or may not be satisfied.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Cindy Lau, Director of T S Telecom Ltd., at