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Published on Tuesday, 29 January 2008

Pro Rata Renounceable Rights Issue

Pro Rata Renounceable Rights Issue

 A.C.N. 063 656 333
A.B.N. 64 063 656 333

VIETNAM INDUSTRIAL INVESTMENTS LIMITED

29 January 2008

Company Announcements Office
ASX Limited
Exchange Plaza
2 The Esplanade
PERTH WA 6000

Dear Sirs

NOTICE OF RENOUNCEABLE RIGHTS ISSUE AND LODGEMENT OF APPENDIX 3B

Vietnam Industrial Investments Limited (the Company) is pleased to announce that it will be making a renounceable pro rata rights issue (Rights Issue) to Shareholders whose registered addresses are situated in Australia or New Zealand (Eligible Shareholders) and who are registered at 5.00 pm (AWDST) on 6 February 2008 (Record Date).

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). The New Shares will be offered (Offer) on the basis of one (1) New Share for every two (2) fully paid ordinary shares held in the capital of the Company (Shares).

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 to subscribe for New Shares under the Offer. 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 Ltd'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.

This capital raising is made on the basis of an initial review of operations by Corbyns. Further capital raising may be required.

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.

An Offer Document, a copy of which has been lodged with this notice, will be despatched to all Shareholders, together with an Entitlement and Acceptance Form, on 12 February 2008. Full details of the terms and conditions of the Rights Issue will be contained in the Offer Document.

The Company hereby states:

1) The Company will offer the New Shares for issue without disclosure to investors under Part 6D.2 of the Act;

2) The Company is providing this notice under s708AA(2)(f) of the Act;

3) As at the date of this notice, the Company has complied with:
(a) the provisions of Chapter 2M of the Act as they apply to the Company; and
(b) section 674 of the Act; and

4) As at the date of this notice, there is no information:
(a) that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules (Listing Rules); and
(b) that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:
(i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or
(ii) the rights and liabilities attaching to the New Shares.

5) The Offer may impact on the control of the Company. Below is some information on the impact that the Offer may have on the control of the Company.

The current relevant interests of the two largest shareholders of the Company are as follows:
(a) Corbyns International Limited and its Associates: 75.59% (comprising 77,539,007 Shares held by Corbyns and 561,280 Shares held by Mr Henry Van Hung Lam, who is an Associate of Corbyns, out of a total of 103,320,002 Shares currently on issue in the Company as at the date of this notice); and
(b) Land & General Berhad Company Number 5507-H, a company with a registered address in Malaysia and its Associates (comprising 13,002,000 Shares out of the total of 103,320,002 Shares currently on issue in the Company as at the date of this notice).

As noted above, Corbyns has confirmed to the Company that it intends to take up all of its entitlement to subscribe for New Shares pursuant to the Offer as an Eligible Shareholder with respect to its holding of 77,539,007 Shares. Corbyns may not purchase any further rights to subscribe for New Shares pursuant to the Offer (Rights) that may be sold on the ASX.

The maximum increase in Corbyns and its Associates' relevant interest by reason of their entitlement to subscribe for New Shares pursuant to the Offer will be 6.66% (bringing their relevant interest to approximately 82.25%).

The following table shows the number of issued Shares at the date of this notice and the total number of issued Shares at the close of the Offer based on the maximum total New Shares that may be issued under the Offer.

Ordinary New Shares Number
Issued Shares at the date of the Offer Document 103,320,002
Maximum number of New Shares offered under the Offer Document 51,660,000
Total issued Shares at the close of the Offer 154,980,002

This assumes that all Eligible Shareholders take up their Entitlement under the Offer and the Rights that would have been offered to Excluded Shareholders are sold by the ASIC-approved nominee (in a process set out in the Offer Document) to purchasers who take up all their Entitlement.

An analysis of the changes in control has been undertaken to indicate the effect on Corbyns'(and its Associates') and Land & General Berhad's (and its Associates') total relevant interests
in the Company under various scenarios. The results are detailed below.

Before Offer
The following table shows the existing capital structure of the Company at the date of this notice.
Shareholder Shares %of Total Shares
Corbyns International Limited and Associates 78,100,287 75.59%
Land & General Berhad and Associates 13,002,000 12.58%
Others 12,217,715 11.83%
Total 103,320,002 100%

Scenario 1 - Maximum Entitlement take up
The following table shows the capital structure of the Company if each Eligible Shareholder elects to take up all of their entitlement to subscribe for New Shares pursuant to the Offer(Entitlement) and the Rights that would have been offered to Shareholders whose registered addresses are not situated in Australia or New Zealand (Excluded Shareholders) are sold by the ASIC-approved nominee (in a process set out in the Offer Document) to purchasers who take up all their Entitlement.

Shareholder Shares %of Total Shares
Corbyns International Limited and Associates 117,150,430 75.59%
Land & General Berhad and Associates 13,002,000 8.39%
Others 24,827,572 16.02%
Total 154,980,002 100%

Scenario 2 - Corbyns takes up 100% of its Entitlement, all other Eligible Shareholders take up 50% of their Entitlement and 50% of Rights of Excluded Shareholders lapse

The following table shows the capital structure of the Company in the event that:
(a) other than Corbyns, all Eligible Shareholders; and
(b) all purchasers who purchase, from the ASIC-approved nominee, the Rights that would have been offered to Excluded Shareholders, each elect to contribute half of their respective Entitlements and Corbyns elects to take up all of its Entitlement under the Offer as an Eligible Shareholder.

Shareholder Shares %of Total Shares
Corbyns International Limited and Associates 117,010,110 78.78%
Land & General Berhad and Associates 13,002,000 8.75%
Others 18,522,643 12.47%
Total 148,534,753 100%

Scenario 3 - Corbyns takes up 100% of its Entitlement, Nil take up by Eligible Shareholders and all Rights of Excluded Shareholders lapse

The table below shows the capital structure of the Company where:
(a) all Eligible Shareholders (other than Corbyns) elect not to take up their Entitlement and all their Rights are allowed to lapse; and
(b) all the Rights of the Excluded Shareholder are allowed to lapse.

Shareholder Shares %of Total Shares
Corbyns International Limited and Associates 116,869,790 82.25%
Land & General Berhad and Associates 13,002,000 9.15%
Others 12,217,715 8.60%
Total 142,089,505 100%

It is not expected that this change in the percentage holding by Corbyns will have any material consequences on the control of the Company.

Future intentions of Corbyns

Corbyns has no present intention to divest any Share it holds following the Offer.

Set out below are Corbyns’ present intentions with respect to the Company's business and strategy following the Rights Issue.

ASX Listing

Subject to maintaining a sufficient spread of Shareholders, Corbyns intends to retain the listing of the Company on the ASX.

Limitation on intentions

The implementation of Corbyns’ present intentions for the Company will be subject to the law (including the Act), the Listing Rules and the Company's constitution.

In particular, the requirements of the Act and the Listing Rules in relation to conflicts of interest and "related party" transactions will apply given that Corbyns will be treated as a related party of the Company.

Corbyns has confirmed it would only make a decision on its courses of action in these circumstances after it receives appropriate legal and financial advice on such matters and, where required, including in relation to any requirements for Shareholder approval.

It is the present intention of Corbyns to procure that the Company will:
(i) generally continue the businesses of the Company;
(ii) not make any major changes to the business of the Company nor redeploy any of the fixed assets of the Company; and
(iii) continue the employment of the Company’s present employees. The intentions and statements of future conduct set out in this notice must be read as being subject to the legal obligation of the Directors of the Company at the time, including any nominees of Corbyns, to act in good faith in the best interest of the Company and for the proper purposes and to have regard to the interests of the Shareholders.

Yours faithfully

 

Alan Alexander Young
Director & Chief Operating Officer

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