LANKom Elelectronics Co., Ltd.
Lane 345, Yang Guang Street,
Neihu, Taipei 114, Taiwan R.O.C
MASNET No. 39 OF 04.10.2004
Announcement No. 52
LANKOM ELECTRONICS LIMITED
PROPOSED SHARE CONSOLIDATION AND BONUS ISSUE
1.1 The Board of Directors (the "Directors") of LANKom Electronics Limited (the "Company") is pleased to announce that the Company is proposing (subject to the conditions described in section 4 below):
(a) to consolidate (the "Share Consolidation") every five (5) ordinary shares of par value United States dollars ("US$") 0.02 each ("Existing Shares") in the capital of the Company held by shareholders of the Company (“Shareholders”) at such time and date as the Directors may determine ("Books Closure Date") into one (1) ordinary share of par value US$0.10 each in the capital of the Company ("Consolidated Share"); and
(b) a bonus issue (the "Bonus Issue"”) of up to 45,412,800 new ordinary shares of par value US$0.10 each on the basis of one (1) ordinary share credited as fully paid ("Bonus Shares") for every one (1) Consolidated Share held by Shareholders as at the Books Closure Date on the assumption that the Share Consolidation has been effected as at the Books Closure Date.
1.2 An application will be made to the Singapore Exchange Securities Trading Limited ("SGX-ST") for its approval in-principle for the listing of and quotation for the Consolidated Shares arising from the Share Consolidation and the Bonus Shares on the Official List of the SGX-ST.
A special general meeting ("SGM") of the Company will be convened to seek the approval of the Shareholders for the Share Consolidation and the Bonus Issue.
The Bonus Issue is conditional on the Share Consolidation being approved by the shareholders and will not be undertaken by the Company unless, inter alia, approval for the Share Consolidation is obtained from the Shareholders.
2. THE SHARE CONSOLIDATION
2.1 Under the Share Consolidation, every five (5) Existing Shares (both issued and unissued) registered in the name of each Shareholder as at the Books Closure Date will be consolidated to constitute one (1) existing Consolidated Share.
2.2 Pursuant to Bye-Law 5 of the Bye-Laws of the Company (which provides that the Directors may settle, as they deem expedient, issues which may arise in relation to any share consolidation) :
(a) fractional entitlements of Shareholders (save for Shareholders who hold less than five (5) Existing Shares prior to the Share Consolidation) to a Consolidated Share will not be allotted to such Shareholders but will be aggregated and disposed of in such manner as the Directors in their absolute discretion deem fit, and the proceeds retained for the benefit of the Company; whereas
(b) fractional entitlements of Shareholders who hold less than five (5) Existing Shares prior to the Share Consolidation ("Relevant Shareholders") to a Consolidated Share will not be allotted to the Relevant Shareholders but will be aggregated and disposed of in such manner as the Directors in their absolute discretion deem fit, and the proceeds (after deduction of the expenses of such disposal) will be distributed in due proportion amongst such of the Relevant Shareholders who would have been entitled to such fractional entitlements of a Consolidated Share.
2.3 Each Consolidated Share will rank pari passu in all respects with five (5) Existing Shares and with each other, and will be traded in board lots of 1,000 shares.
2.4 As at the date of this announcement, the Company has an authorised share capital of US$50,000,000 divided into 2,500,000,000 ordinary shares of par value US$0.02 each and an issued and paid-up capital of US$4,541,280 divided into 227,064,000 ordinary shares of par value US$0.02 each.
Following the implementation of the Share Consolidation, the Company will have an authorised share capital of US$50,000,000 divided into 500,000,000 ordinary shares of par value US$0.10 each and an issued and paid-up capital of US$4,541,280 divided into 45,412,800 ordinary shares of par value US$0.10 each.
2.5 The Share Consolidation will not involve the diminution of any liability in respect of unpaid capital or the payment to any Shareholder of any paid-up capital of the Company, and has no effect on the shareholders' funds of the Company and its subsidiaries.
2.6 Shareholders are not required to make any payment to the Company in respect of the Share Consolidation.
2.7 The Directors are of the view that the Share Consolidation may increase the profile of the Company amongst institutional investors and the coverage of the Company amongst research houses and fund managers. This may in turn increase market interest in the shares of the Company and generally make the shares of the Company more attractive to investors.
Shareholders should note however that there can be no assurance that the Share Consolidation will achieve this result, and even if such result is achieved, that there can be no assurance that it can be sustained in the long term.
3. THE BONUS ISSUE
3.1 Under the Bonus Issue, up to 45,412,800 Bonus Shares will be allotted on the basis of one (1) Bonus Share credited as fully paid for every one (1) existing Consolidated Share (on the assumption that the Share Consolidation had been effected as at the Books Closure Date) held by Shareholders as at the Books Closure Date.
3.2 The Bonus Shares, when allotted and issued, will rank pari passu in all respects with the then existing Consolidated Shares.
3.3 The Bonus Issue will be effected by capitalising the Taiwan dollars ("NT$") equivalent of US$4,541,280 (approximately NT$149,862,240) from the share premium account of the Company which will be used for payment in full at par for the Bonus Shares to be issued. As at 31 December 2003, the balance in the Company's share premium account was NT$198,515,000.
3.4 The Bonus Issue is intended to reward Shareholders for their loyalty and continued support and to enlarge the capital base of the Company to reflect the growth and expansion of the business operations and asset base of the Company.
4. APPROVALS REQUIRED FOR THE SHARE CONSOLIDATION AND BONUS ISSUE
4.1 The Share Consolidation is subject to:
(a)the approval in-principle of the SGX-ST for the admission of, and listing of and quotation for the Consolidated Shares on the Official List of the SGX-ST; and
(b) the approval of Shareholders at the SGM for the Share Consolidation.
4.2 The Bonus Issue is subject to:
(a) the approval in-principle of the SGX-ST for the admission of, and listing of and quotation for the Bonus Shares on the Official List of the SGX-ST; and
(b) the approval of Shareholders at the SGM for the Share Consolidation and the Share Consolidation being effected;
(c) the approval of Shareholders at the SGM for the Bonus Issue.
5. CIRCULAR TO SHAREHOLDERS
5.1 The circular (enclosing the notice of SGM) setting out, inter alia, details of the Share Consolidation and Bonus Issue, will be dispatched to the Shareholders in due course.
5.2 Notice of the Books Closure Date for purposes of determining Shareholders' entitlements pursuant to the Share Consolidation and Bonus Issue will be given at a later date, after all the necessary approvals set out above have been obtained.
By Order of the Board
Lotus Isabella Lim Mei Hua
Submitted by Lotus Isabella Lim Mei Hua, Company Secretary on 04/10/2004 to the SGX