15-11-11 - Paul Y. Engineering Shareholders Fully Support US$220.5 Million Investment in Legendary East
Paul Y. Engineering Group Limited (“PYE” or “the Group”, 0577.HK) announced that its shareholders have approved the US$220.5 million investment in a new film joint venture, Legendary East Ltd. (“Legendary East”) at the special general meeting (“SGM”) held today. All other resolutions regarding the related transactions were also approved.
Shareholders voted in favour of the acquisition being funded by a proposed placing and subscription of 3,100 million plus 500 million shares (over allotment) at HK$0.65 per share, raising up to HK$2,340 million. A cash dividend of HK$0.25 per share has been approved to be paid to the existing PYE shareholders. A specific mandate for the issuance of a maximum of 4,207 million new PYE shares to be allotted to the other shareholders of Legendary East in exchange for their interests in Legendary East at their option was also approved. In addition, the distribution in specie of 49% of PYE BVI, the intermediate holding company of PYE’s entire existing businesses was approved.
The closing of the joint venture is conditional upon the completion of the placing of shares. At that time, Legendary East will be jointly held by Legendary Entertainment and members of Legendary East management (40.1%), PYE (50%) and Huayi Brothers International Limited (9.9%). Through an investment of US$35 million in PYE, AID Partners will become a significant shareholder of PYE.
On completion of placing, Mr. Kelvin Wu, Principal Partner of AID Partners and Legendary East’s CEO, and Mr. Joel Chang, Partner of AID Partners and Legendary East’s Chief Financial Officer, will become new executive directors of PYE. Their election to the PYE Board was approved at today’s SGM.
PYE’s parent company, PYI, has previously announced that the deemed very substantial disposal as a result of the above PYE placing and subscription had been approved by the PYI shareholders at the SGM held on 17 October 2011.