RNS26 Apr 2012 10:53
The board of directors of LED (the "Board") is pleased to announce that Mr. Stephen Chan (¡§Mr. Chan¡¨), the Company¡¦s Chief Executive Officer, has agreed to provide a loan to the Company¡¦s subsidiary, Green Pearl Energy Conservation Holdings Limited (¡§Green Pearl¡¨) for the principal amount of USD1,282,000 (approximately £795,000) (the ¡§Loan¡¨). The proceeds of the Loan will be used primarily to capitalise Shenzhen Strongbase New Opto-Electronics Technology Co Ltd. (¡§Strongbase New¡¨) as well as for general working capital purposes.
Strongbase New is a wholly owned direct subsidiary of Yanford Limited which is in turn a wholly owned direct subsidiary of Green Pearl. As announced on 27 September 2011, Green Pearl is the corporate vehicle for the new joint venture entered into by the Company with Mr. So Hing Chung in which the Company holds a majority stake (the ¡§Joint Venture¡¨). Following the growing popularity of the Joint Venture¡¦s energy management contract (¡§EMC¡¨) business model with its customers, the Loan will enable Strongbase New to be sufficiently capitalised in order to meet demand for the Joint Venture¡¦s energy-saving solutions.
The Loan matures in one year (or on such other date as Green Pearl and Mr. Chan shall subsequently agree in writing) and bears interest at 9.0 per cent. per annum. The interest payable by Green Pearl under the Loan shall be satisfied in arrears in one year¡¦s time by the allotment and issue to Mr. Chan of 9.0 million ordinary shares in the Company at HK$0.1 per share (approximately 0.8 pence) representing a premium of approximately 132 per cent. to the closing mid-market price of 0.345 pence on 25 April 2012 (being the latest practicable date prior to the issue of this announcement) (the ¡§Interest Shares¡¨). The Loan will be secured by a charge over Green Pearl¡¦s entire shareholding in its subsidiaries, Carten International Limited and Yanford Limited (the ¡§Security¡¨).
As Mr. Chan is a director of the Company, the Loan (the ¡§Transaction¡¨) constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. The Company's directors (other than Mr. Chan), having consulted with the Company's nominated adviser, Allenby Capital Limited, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.
The Interest Shares are equivalent to approximately 2.40 per cent. of the Company¡¦s share capital as enlarged by the issue of the Interest Shares. When issued and aggregated with his existing shareholding, the issue of the Interest Shares will result in Stephen Chan holding 27,220,000 ordinary shares or 7.25 per cent. of the Company
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