25 Mar 2009 15:35
China Growth Opportunities Limited
("China Growth" or "the Company")
New Support Agreement Arrangements
The Board of China Growth is pleased to announce that it has today entered into an agreement with London Asia Capital plc ("London Asia") and London Asia Capital (S) PTE Limited ("LACS") to terminate the Investment Support Agreement dated 7 March 2006 (the "Termination Agreement") and that it has also today entered into a new Asset Divestment Support Agreement with LACS.
Under the Termination Agreement, the Company has agreed to pay £350,000 to London Asia by no later than 31 March 2009. In addition a further sum of £150,000 will be payable to London Asia in the event that China Growth releases its accounts for the year ending 31 March 2009 by no later than 30 June 2009, failing which this sum shall be reduced to £100,000 and payable on 31 July 2009. These payments are in full and final settlement of all sums owing or due to either party and any duties owed by any party to the other. The Company has paid away no fees nor commissions since 30 September 2008 in relation to the Investment Support Agreement dated 7 March 2006.
Under the Termination Agreement, the Company has also agreed a new arrangement with London Asia with effect from 31 March 2009 whereby it will pay London Asia a commission of 5% of the net proceeds of any investments realised as a result of an introduction of a buyer by London Asia or LACS effected after 31 March 2009 subject to the Company agreeing to the sale.
The Company has also today entered into a new Asset Divestment Support Agreement with LACS whereby LACS will continue to provide the same investment support services to the Company for a fixed fee of £20,000 per month. The new Asset Divestment Support Agreement is terminable on one months' notice by either party, such notice to expire only after six months.
These new arrangements will align the interests of the Company and London Asia more closely in the implementation of the Company's new investment objective.
The Directors estimate that the effect of these agreements is that the Company would currently have pro forma net current assets (being cash balances and other receivables net of all current and accrued liabilities and other provisions) of £4.8 million (30 September 2008; net current liabilities of £0.8 million.). This is currently equivalent to 9.6 pence per share.
With regard to the implementation of the Company's new investment objective, the Board of the Company has initiated the process of selectively soliciting offers for certain of its shareholdings in the investee companies. The Board has also received a number of preliminary approaches from third parties regarding the potential purchase of certain shareholdings in some investee companies. These approaches are at an early stage and discussions have not yet commenced. The Company will report any progress to its shareholders when available.
Furthermore, the Company is making good progress in the appointment of an Independent Non-Executive Director and expects to make an announcement shortly on this matter.
For further information, please visit www.chinagrowthopportunities.com or contact:
| China Growth Opportunities Limited | Rhys Davies | + 41 (0) 796 200 215 |
| Collins Stewart Europe Limited (Nomad) | Hugh Field | + 44 (0) 20 7523 8350 |