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Sunwah International Limited Enters Agreement to Privatize


TORONTO, Feb. 27, 2021 /CNW/ - Sunwah International Limited (the "Company") announces that on February 27, 2021, it entered into an agreement (the "Agreement") with Sun Wah Capital Limited ("Sun Wah Capital") to privatize by way of share consolidation and purchase under Bermuda corporate law (the "Transaction").  Pursuant to the Agreement, the Company will complete a share consolidation and then compulsorily purchase all common shares, other than the common shares held by Sun Wah Capital, for cash consideration of $0.30 per pre-consolidation common share.  The consideration offered under the Transaction represents a premium of approximately 43% over the $0.21 closing price of the Company's shares last traded on the Toronto Stock Exchange on February 26, 2021.  Upon completion of the Transaction, Sun Wah Capital will be the sole shareholder of the Company, which will then be delisted from the Toronto Stock Exchange.

Sun Wah Capital currently owns 36,966,159 common shares representing approximately 39.69% of the Company's outstanding common shares.  Dr. Jonathan Koon Shum Choi, a director and Chairman of the Board of the Company, and his brother, Mr. Michael Koon Ming Choi, a director and Chief Executive Officer of the Company, owns, respectively, 82.5% and 17.5% of Sun Wah Capital.  Dr. Jonathan Koon Shum Choi and Mr. Michael Koon Ming Choi also, directly and indirectly, owns or controls, including through Sun Wah Capital, an aggregate of 85,143,679 common shares representing approximately 91.41% of the Company's outstanding common shares.  The Company has 93,139,927 common shares issued and outstanding, of which 7,996,248 common shares representing approximately 8.59% of the Company's outstanding common shares are not owned or controlled by Sun Wah Capital or by Dr. Jonathan Koon Shum Choi, Mr. Michael Koon Ming Choi or their affiliates and associates. 

The Transaction will be effected by way of a 36,000,000-to-1 share consolidation of all of the issued and outstanding common shares of the Company.  Following the share consolidation, the Company will purchase for cancellation all of the common shares held by shareholders who holds less than one whole post-consolidation share.  Shareholders holding fractional shares, including shareholders holding fractional shares through CDS & Co. or other nominees, following the consolidation, will be entitled to receive a cash payment of CAN$0.30 for each pre-consolidation common share upon purchase by the Company of such fractional post-consolidated common shares.  As a result, upon completion of the Transaction, only Sun Wah Capital will remain as a shareholder of the Company.

Prior to completing the Transaction, in addition to seeking shareholder approval for the Transaction, the Company will seek to amend its Bye-Laws.  At the shareholders' meeting to be announced, shareholders will be asked to approve ordinary resolutions: (1) authorizing an amendment to the Company's Bye-laws to clarify the ability to consolidate share capital, recognize beneficial interests in any share held by a nominee (including by CDS & Co.), purchase shares representing fractions, and, in certain circumstances, such as with the Transaction, provide an enforceable right that is substantially equivalent to the appraisal remedy provided for in section 190 of the Canada Business Corporations Act, and (2) authorizing a consolidation of the issued common shares of the Company on the basis of one-post-consolidation common share for every 36,000,000 pre-consolidation common shares and  purchase without prior notice of all fractional post-consolidation common shares.  These resolutions must each be passed by at least a majority of the votes cast by shareholders present in person or represented by proxy at the shareholders' meeting.  The Company does not expect that these resolutions require the approval by a majority of the votes cast by minority shareholders, being shareholders other than Sun Wah Capital, Dr. Jonathan Koon Shum Choi, Mr. Michael Koon Ming Choi, their joint actors or other interested or related parties, as the Company will seek to rely on the "90 per cent exemption" under Multilateral Instrument 61-101 ? Protection of Minority Security Holders in Special Transactions based on the interested party beneficially owning, in the aggregate, over 90 per cent of the outstanding common shares at the time of the Agreement and shareholders is expected to be given an enforceable right that is substantially equivalent to the appraisal remedy provided for in section 190 of the Canada Business Corporations Act and will be described in the information circular for the shareholders' meeting to approve the Transaction.

A special committee of independent directors (the "Special Committee"), comprised of Mr. Robert Fung (Chair), Ms. Elizabeth Law and Dr. Lee Lam, was established to consider and make recommendations regarding the Transaction.  The Special Committee engaged Evans & Evans, Inc. as its independent valuator and to prepare a valuation report and fairness opinion with respect to the Transaction.  Based on the valuation work and subject to the conditions, assumptions and qualifications set forth in the valuation and fairness opinion, in the opinion of Evans & Evans, as at the valuation date of December 31, 2020, the consideration payable under the Transaction is fair, from a financial point of view, to the minority shareholders.  The Special Committee unanimously determined that the Transaction is in the best interests of the Company.  Accordingly, the Special Committee unanimously recommended that the Company's board of directors approve the Agreement and recommend that shareholders vote for the Transaction.

The Company's board of directors, following the recommendation of the Special Committee, unanimously resolved (with the abstention of the interested directors) to authorize the Company to enter into the Agreement.  A copy of the valuation and fairness opinion, the factors considered by the Special Committee in arriving at its recommendation, and other relevant background information will be included in the management information circular that will be sent to shareholders in connection with the meeting and will be posted on SEDAR at www.sedar.com.

If the Transaction is completed, the common shares of the Company will be delisted from the Toronto Stock Exchange and the Company will also apply to the applicable Canadian securities regulatory authorities to cease to be a reporting issuer in each province in which it is a reporting issuer.

The Company's board of directors cautions shareholders and others considering trading in the common shares of the Company that the completion of the Transaction remains subject to a number of conditions including, but not limited to, receipt of all regulatory and shareholder approvals.  The completion of the Transaction is subject to the satisfaction of certain other closing conditions customary in a transaction of this nature.  If and when these conditions are satisfied, it is expected that the completion of the Transaction will be completed following the shareholders' meeting.

Trading of the Company's common shares on the TSX are expected to be voluntarily halted at least three business days prior to the shareholders' meeting pending approval and completion of the Transaction, such halt is intended to avoid or minimize settlement and entitlement issues.

Forward-Looking Statements

This news release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations.  When used in this news release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information.  The forward-looking statements and information in this news release includes information relating to the completion of the going private transaction.  The forward-looking information is based on certain assumptions, which could change materially in the future, including the assumption that the Company is able to effect the privatization using the proposed method, the Company is able to obtain the necessary regulatory and shareholder approvals, the parties are able to satisfy or waive, if waiver is possible, the conditions to completing the transaction.  Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.  By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, among others, the risk that the necessary regulatory and shareholder approvals are not obtained, the conditions to completing the transaction may not be met, or the transaction may be terminated or renegotiated on different terms.  These and other risks are further described under "Risk Factors" in the Company's Annual Information Form dated September 24, 2020, which is available on SEDAR and may be accessed at www.sedar.com.  When relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.  The Company has assumed a certain progression, which may not be realized.  It has also assumed that the material factors referred to above will not cause such forward-looking statements and information to differ materially from actual results or events.  However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE.  READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE.  WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE SECURITIES LEGISLATION.

SOURCE Sunwah International Limited


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