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Published on Wednesday, 30 January 2008

Letter to Shareholders

Letter to Shareholders

A.C.N. 063 656 333
A.B.N. 64 063 656 333
VIETNAM INDUSTRIAL INVESTMENTS LIMITED

30 January 2008

Dear Shareholder

PRO RATA RENOUNCEABLE RIGHTS ISSUE

Vietnam Industrial Investments Limited (the Company) is pleased to announce an opportunity for Shareholders with a registered address in Australia or New Zealand (Eligible Shareholders) and registered at 5.00 pm (AWDST) on 6 February 2008 (Record Date) to participate in the Company's renounceable pro rata rights issue (Rights Issue).

Pursuant to the ASX Listing Rules (Listing Rules), the Company is required to provide you with certain information as part of the procedure under a Rights Issue. This notice contains all the information required by Appendix 3B of the Listing Rules.

An Offer Document, a copy of which was lodged with ASX on 29 January 2008, will be despatched to all Eligible Shareholders, together with an Entitlement and Acceptance Form, on 12 February 2008. A copy of the Offer Document has been lodged with ASX and is available on the ASX website and the Company's website (www.vii.net.au). Full details of the terms and conditions of the Rights Issue will be contained in the Offer Document.

Pursuant to the Rights Issue, the Company may issue a maximum of 51,660,000 fully paid ordinary shares in the capital of the Company (New Shares) at an issue price of A$0.15 each, to raise a maximum of approximately A$7,749,000 (before expenses of the issue). This will result in the Company having a maximum of 154,980,002 fully paid ordinary shares (Shares) on issue following the Rights Issue. The New Shares will be offered on the basis of one (1) New Share for every two (2) Shares held (Offer). Fractional entitlements to New Shares will be rounded down to the nearest whole number of shares. The New Shares will have the same rights as, and will rank equally with, existing Shares on issue.

Please note that Shareholders at the Record Date that have an address registered outside Australia or New Zealand (Excluded Shareholders) will not be eligible to participate in the Offer. The Company has appointed an ASIC-approved nominee, Euroz Securities Limited, as nominee for the Excluded Shareholders to arrange for the sale of the rights to subscribe for New Shares pursuant to the Offer
which would have been offered to Excluded Shareholders (Rights). The Company will transfer the Rights of the Excluded Shareholders to the nominee who will send the net proceeds from the sale of the Rights (if any) to those Excluded Shareholders. This process is set out in the Offer Document.

The Rights Issue is renounceable which means that all or part of an Eligible Shareholder's Rights are tradeable on the ASX during the Rights trading period, from 31 January 2008 until 19 February 2008.

Eligible Shareholders may:
„h take up all their entitlement to subscribe for New Shares under the Offer (Entitlement);
„h allow all or part of their Entitlement to lapse;
„h sell all their Entitlement as Rights on the ASX;
„h take up part of their Entitlement and sell the balance on the ASX,
„h take up part of their Entitlement under the Offer and allow the balance to lapse; or
„h transfer all or part of their Rights to another person other than on the ASX provided that the purchaser is not an Excluded Shareholder or would not be an Excluded Shareholder if the
purchaser was the registered holder of the Shares.

Eligible Shareholders should refer to section 2 of the Offer Document and the Entitlement and Acceptance Form to determine how to deal with their Rights. The Rights may have a value. Rights which are not accepted, traded or transferred will lapse and Eligible Shareholders will receive no benefit.

Eligible Shareholders who wish to subscribe for some or all of the New Shares making up their Entitlement must return a completed Entitlement and Acceptance Form with their application money by 5.00 pm (AWDST) on 26 February 2008.

Eligible Shareholders may sell some or all of their Rights otherwise than on the ASX by completing a standard renunciation form and the Entitlement and Acceptance Form with the transferee's cheque for the application money by 5.00 pm (AWDST) on 26 February 2008.

Corbyns International Limited ARBN 126 976 529 (Corbyns), currently the largest shareholder of the Company, has confirmed that its present intention is to take up all of its Entitlement. Corbyns may not purchase any further Rights that may be sold on the ASX. Corbyns and its Associates (as that term is defined in the Corporations Act 2001 (Cth) (Act)) currently have a relevant interest in 75.59% of the Shares on issue.

In the event that Corbyns takes up all of its entitlement under the Offer, VII will raise a minimum of approximately A$5,815,425 (before costs).

It is proposed that the funds raised by the Offer, after payment of the costs of the Offer, will be used by the Company to address the following activities:
(a) repayment of loan provided to the Company, totalling approximately A$1,600,000;
(b) reduce SSESTEEL's short term debt and net deficiency of approximately A$3,000,000; and
(c) fund working capital requirements of a minimum of approximately A$1,200,000 of the Company and its operating subsidiaries in Vietnam, namely VRC Weldmesh(Vietnam) Ltd, Vinausteel Limited, SSESTEEL Ltd, Total Building Systems Ltd, Austnam Joint Stock Corporation, to enable the Company and its subsidiaries to continue to expand their manufacturing capacity and capabilities.

As required under the Listing Rules, the Company informs you that no shareholder approval is required for the Rights Issue and,therefore, no shareholder approval will be sought. The Company also informs you that it currently has no dividend policy.

The New Shares will be offered via the Rights Issue without disclosure to Eligible Shareholders under Part 6D.2 of the Act in accordance with the following timetable:

Announce Offer and lodge Appendix 3B 29 January 2008

Offer Document lodged with ASX 29 January 2008

Notice to Shareholders containing information required by Appendix 3B 30 January 2008

Existing Shares quoted on an 'ex' basis and Rights trading commences 31 January 2008

Record Date 6 February 2008

Rights Issue Notice lodged with ASX 11 February 2008

Offer Document and Entitlement and Acceptance Form despatched to Shareholders and announce completion of
despatch 12 February 2008

Opening date of Offer 12 February 2008

Rights trading ends 19 February 2008

Closing date for acceptances 26 February 2008

Company to notify ASX of under-subscriptions (if any) 29 February 2008

Allotment date of New Shares 5 March 2008

Despatch holding statements 5 March 2008

Cleansing notice lodged with ASX 5 March 2008

Commencement of trading of the New Shares 6 March 2008

This timetable is indicative only and subject to change. The Directors of the Company reserve the right to vary these dates, including the closing date of the Offer without prior notice. The Directors also reserve the right not to proceed with the whole or part of the Offer at any time prior to allotment. In that event, the relevant application money (being the amount paid for New Shares applied for in a duly completed Entitlement and Acceptance Form) will be returned without interest.

Before taking up Entitlements under the Rights Issue, Eligible Shareholders should read all the information set out in the Offer Document, including the risk factors. If you have any enquiries, please consult your financial adviser.

For further information on your entitlement to the Rights Issue, or how to deal with the Rights Issue, please contact the Company Secretary on (+61 8) 9322 2911 or the Company's Share Registry, Security Transfer Registrars Pty Limited on (+61 8) 9315 2333.

Yours faithfully

 

Alan Alexander Young
Director & Chief Operating Officer

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