Statement re Completion of Investment in Oriental Ventures Limited / Shenzhen Maxlife Catering Management Limited
Alpha Returns Group PLC
("Alpha Returns" or the "Company")
1 April 2016
Completion of Investment in Oriental Ventures Limited ("Oriental Ventures")
/ Shenzhen Maxlife Catering Management Limited ("Maxlife")
Further to the announcement made on 5 February, Alpha Returns, the AIM traded investing company focussing on investments in high-growth Asian economies, is pleased to announce the completion of its 30 per cent. investment in Oriental Ventures, a BVI registered special purpose vehicle formed to acquire Maxlife, originally announced on 31 March 2014. The second and final tranche consideration is to be satisfied by the issue of 32,142,857 new ordinary shares in Alpha Returns (the "Consideration Shares") (£168,750 at yesterday's closing price of 0.525p), representing approximately 4.63 per cent. of the Company's enlarged issued ordinary share capital, to Mr Wong Xin Yan, the Vendor of the 30 per cent. Oriental Ventures shareholding. First tranche consideration of HK$5,812,500 cash (then c. £451,000) was paid to the Vendor of Oriental Ventures in April 2014, giving total consideration for the 30 per cent. holding of approximately £620,000. There are not intended to be any further contributions by Alpha Returns to Oriental Ventures or its subsidiaries beyond its initial investment, albeit Alpha Returns has an option to purchase from the Vendor an additional 15 per cent. of the issued shares in Oriental Ventures.
Maxlife has transformed its core business from a start-up coffee chain into operations of a subscription based e-commerce platform targeting mid-to-high end consumers in the PRC. Members subscribe to a 24-month contract and monthly subscription fees of RMB1,300 to RMB3,250 are collected through an auto-debit arrangement. Maxlife gives a 200% money-back guarantee to all members against any counterfeit goods purchased from Maxlife's e-commerce platform. Maxlife has been trading profitably since September 2015.
From September to December 2015, Maxlife made unaudited pre-tax profits of RMB 1.1 million (c. £119,000) on revenue of RMB 10.6 million (c. £1,106,000). At 31 December 2015, it had cash and cash equivalents of RMB 6.9 million (c. £720,000) and net assets of RMB 3.2 million (c. £335,000). For the full year ended 31 December 2015, unaudited losses of RMB 1.2 million were made on revenue of RMB 11.1 million.
Under the terms of a shareholders' agreement ("SHA") entered into at completion with the Vendor, the business to be carried on by Oriental Ventures and its subsidiaries is confined to the operation of e-commerce platforms in the Asia-Pacific region. It is intended that Oriental Ventures itself will act only as a holding company. Oriental Ventures has a paid up share capital of US$1,000,000 and, save for establishing Oriental Ventures Hong Kong Limited (a wholly-owned subsidiary in Hong Hong) on 21 January 2014 and completion of the acquisition of Maxlife, has not yet traded. Under the terms of the SHA, Oriental Ventures shall have two directors, one appointed by each of the Vendor and ARGP Investments Limited ("ARGPI") with the Vendor's appointee being Chairman, albeit with no casting vote.
It is intended that Maxlife continue under its existing operational management with the Vendor or his nominee as its sole director after Completion.
Under the SPA, ARGPI has an option to purchase from the Vendor an additional 15 per cent. of the issued shares in Oriental Ventures. The option may be exercised in tranches of 5 per cent. with an exercise price for each tranche of US$250,000, payable at the choice of the Vendor in cash or in Alpha Returns shares at a price of 1.4p per share. The option is exercisable at any time for a period of three years from Completion of the investment in Oriental Ventures. Any decision to exercise the option is entirely at the discretion of Alpha Returns acting through its wholly-owned subsidiary ARGPI.
Application will be made for the new ordinary shares, which rank pari passu with the Company's existing issued ordinary shares, to be admitted to trading on AIM. Admission is expected to become effective and dealings to commence on or around 12 April 2016. The enlarged issued share capital of Alpha Returns with voting rights attached consists of 693,737,368 ordinary shares of 0.01p each with one vote per ordinary share. There are no shares held in Treasury. The total number of voting rights in Alpha Returns is therefore 693,737,368, which figure may be used by shareholders (and others with notification obligations) as the denominator for the calculations by which they will determine whether they are required to notify their interest, or a change to their interest, in Alpha Returns under the Financial Conduct Authority's Disclosure and Transparency Rules.
A further announcement will be made when the Consideration Shares are allotted.
For further information:
| Alpha Returns Group plc || Christopher Neo|
| 020 3286 6388 |
| ZAI Corporate Finance Ltd (NOMAD) || Peter Trevelyan-Clark / Tim Cofman || 020 7060 2220 |
| Peterhouse Corporate Finance (Broker) || Duncan Vasey / Lucy Williams || 020 7220 9797 |
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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Alpha Returns Group plc via Globenewswire