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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2, 1997
Dransfield China Paper Corporation
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(Translation of registrant's name into English)
36-42 Pok Man Street, 1st & 2nd Fls., Mongkok, Kowloon, Hong Kong
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(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.]
Form 20-F X Form 40-F
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[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.]
Yes No X
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[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82-_________]
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The following sets forth portions of a press release issued on April
2, 1997, by Dransfield Holdings Limited, the controlling shareholder of
Dransfield China Paper Corporation. The quoted portions of the press release
describe certain transactions which are material with respect to Dransfield
China Paper Corporation concerning the acquisitions or dispositions of assets:
The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this announcement, makes no representation as to its accuracy or
completeness and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the
contents of this announcement.
DRANSFIELD HOLDINGS LIMITED
(Incorporated in the Cayman Islands with limited liability)
CONNECTED TRANSACTION
AND GENERAL MANDATE
INTRODUCTION
The directors (the "Directors") of Dransfield Holdings Limited (the "Company")
announce that an agreement (the "Agreement") dated 27 March 1997 was entered
into between (1) Dransfield China Paper Corporation ("DCPC"), a 94.9%
subsidiary of the Company incorporated in the British Virgin Islands; (2)
Dransfield Paper (HK) Trading Limited ("DPHK"), a wholly-owned subsidiary of CS
Paper Holdings (International) Limited ("CS Paper") incorporated in Hong Kong;
(3) CS Paper, a 66.7% owned subsidiary of DCPC incorporated in the British
Virgin Islands; (4) Summerhouse Profits Limited ("SPL"), a company incorporated
in the British Virgin Islands; and (5) Mr. Ian K.Y. Fung ("Mr. Fung").
Pursuant to the Agreement: (1) SPL agreed to sell to DCPC its entire beneficial
holdings of shares in CS Paper representing 33.3% of the issued share capital
of CS Paper (the "CSP Share Transaction") and Mr. Fung agreed to sell to DCPC
his interest in an interest-free loan owed to him by CS Paper in the principal
amount of HK$2,253,000 (the "CSP Loan Transaction"); (2) CS Paper agreed to
sell to SPL its entire beneficial holding of shares in Dransfield Paper
(S.E.A.) Pte. Limited ("DPSEA"), a wholly-owned subsidiary of CS Paper
incorporated in Singapore, representing 100% of the issued share capital of
DPSEA (the "DPSEA Share Transaction") and DPHK agreed to sell to Mr. Fung its
interest in an interest-free loan owed to it by DPSEA in the principal amount
of HK$3,611,000 (the "DPSEA Loan Transaction"); (3) DPHK agreed to sell to SPL
its entire beneficial holding of shares in Central National Hong Kong Limited
("CNHK") representing 50% of the "A" class voting share capital and 51% of the
"B" class non-voting ordinary share capital of CNHK (the "CNHK Share
Transaction"); and
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(4) Mr. Fung agreed to repay DCPC the interest-free loan owed to him by DCPC in
the principal amount of HK$150,000 (the "DCPC Loan Transaction"), being the net
balance of the current expenses account between Mr. Fung and DCPC; (the CSP
Share Transaction, the CSP Loan Transaction, the DPSEA Share Transaction, the
DPSEA Loan Transaction, the CNHK Share Transaction and the DCPC Loan
Transaction are collectively referred to as the "Transactions").
The remaining issued shares of CNHK are held by two independent third parties
(the "CN Shareholders").
INFORMATION RELATING TO THE AGREEMENT
SPL is the holder of 33.3% of the issued share capital of CS Paper and is
wholly-owned by Mr. Fung. Mr. Fung is a director of CS Paper and its four
subsidiaries, namely DPHK, DPSEA, CNHK and Dransfield Paper (International)
Trading Limited ("DPIT"). DPIT is a wholly-owned subsidiary of CS Paper.
The Transactions constitute connected transactions for the Company under Rule
14.23(1) of the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited (the "Listing Rules") by virtue only of SPL being a
substantial shareholder of CS Paper and Mr. Fung being a director of CS Paper
and all of its four subsidiaries. Mr. Fung does not hold any shares in, and
is not a director of, the Company.
Pursuant to the terms of the Agreement the Agreement is conditional on the
shareholders of the Company passing at an extraordinary general meeting of the
Company ("Extraordinary General Meeting") an ordinary resolution approving the
Agreement and the Transactions contemplated thereunder.
The consideration (the "Consideration") for the CSP Loan Transaction, the DPSEA
Share Transaction, the DPSEA Loan Transaction and the CNKH Share Transaction
are HK$5,182,001, HK$2,253,000, HK$1, HK$3,611,000 and HK$674,000 respectively.
The net asset value of the shares being transferred in CS Paper, DPSEA and
CNHK, as determined in the relevant management accounts as at 30th September,
1996, were HK$5,180,000, negative HK$322,000 and HK$674,000 respectively. The
consideration for each of the loan assignments is on a dollar for dollar basis.
The Agreement provides that completion of the Transactions ("Completion") will
take place seven days after the satisfaction of the condition referred to in
the paragraph above (or such other date as the parties to the Agreement may
agree in writing prior thereto). Accordingly, the net amount of consideration
payable by DCPC, CS Paper and DPHK on the one hand to SPL and Mr. Fung on the
other hand under the Transactions is equal to HK$3,000,000 (the "Net
Consideration"). The Agreement provides that the Consideration shall be paid
in cash at Completion. The Consideration was arrived at after arms-length
negotiations between the parties to the Agreement. It is intended that the Net
Consideration payable by the Dransfield group of companies will be financed by
internal resources.
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CS Paper and its subsidiaries carry on the business (the "CS Paper Business")
of the trading of paper products involving packaging board paper and fine
paper. The parties have entered into the Transactions as the Company and Mr.
Fung wish to terminate the business venture between them and their respective
affiliated companies; the Company believes that it is in its commercial
interests to expand in the CS Paper Business carried on in Hong Kong by DPHK
and to dispose of its CS Paper Business carried on in Singapore by DPSEA; and
Mr. Fung also wishes to divest of his interests in the CS Paper Business in
Hong Kong and to increase his interests in the CS Paper Business in Singapore.
Furthermore, DPHK and the CN Shareholders have entered into a shareholders'
agreement in relation to their shareholdings in CNHK, under which the
shareholders have a right of preemption on a proposed transfer of shares. The
CN Shareholders have agreed to waive their said preemptive rights in respect of
the transfers of shares by DPHK if the transfer is made to Mr. Fung or to SPL.
GENERAL
The terms of the Agreement were reached on an arm's length basis and the
Directors (including the independent non- executive Directors) consider the
terms of the Agreement to be fair and reasonable so far as the shareholders of
the Company are concerned and that entering into the Agreement is in the best
interest of the Company and its shareholders as a whole.
A circular containing, inter alia, further details of the Agreement and the
general mandate to be granted to the Directors, together with a notice
convening the Extraordinary General Meeting, will be dispatched to shareholders
of the Company as soon as practicable.
By Order of the Board of
Dransfield Holdings Limited
Warren Ma Kwok Hung
Company Secretary
Hong Kong, 2 April 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DRANSFIELD CHINA PAPER CORPORATION
Date: April 2, 1997 By: /s/ Thomas J. Kenan
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Thomas J. Kenan, Director
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