Press Room
Significant Change of Shareholding
The Board of Et-china is pleased to announce the acquisition of a 31.8% stake in the Company by leading leisure travel company Kuoni Travel Holding Limited ("Kuoni"). Kuoni acquired the 31.8% stake,
representing 10,515,762 shares, from Gandhara Master Fund Limited ("Gandhara"), a Hong Kong and London based hedge fund, on 3 June 2009.
The Board considers the acquisition of Gandhara's shares to be in the best interests of the Company given the expected synergistic benefits and the global expertise of Kuoni.
Matthew Ng, Et-china's President and Chief Executive Officer, commented: "I am delighted that Kuoni has acquired a stake in the Company and believe this gives us an opportunity to create a strategic alliance with an established global tour operator. Kuoni is one of the largest global leisure travel companies, and is the world's leading premium travel and tour operator. This acquisition also allows our previous largest shareholder, Gandhara, to exit their shareholding and at the same time have what we believe will be a positive impact on the Company. This marks another significant change for Et-china and we expect growth opportunities in the inbound and outbound business by working together with Kuoni".
In connection with the acquisition, the Board has:
| (a) | approved the purchase of the 31.8% stake in the Company by Kuoni as a Permitted Acquisition under article 171.4(a) of the Articles of Association |
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| (b) | agreed to give Kuoni the right to nominate a Director for appointment to the Board for as long as Kuoni holds 25% or more of the issued share capital of the Company; and |
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| (c) | agreed to call an extraordinary general meeting to vote on two proposed changes to the Articles of Association, as follows:
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The Company has received irrevocable undertakings from both Kuoni and its second largest shareholder, Mintpine Pty Limited ("Mintpine") to vote in favour of the proposed changes at the extraordinary general meeting. The combined shareholding of Kuoni and Mintpine amounts to 58% of the currently issued share capital of the Company.
In light of the transaction, the Company has also taken the opportunity to renew the lock-in arrangements with its key management and director shareholders. The three largest current and proposed individual shareholders, Matthew Ng, Chris Rose and Justin Xiong (together, the "Lock-In Shareholders") have entered into an arrangement that restricts the sale or disposal of their shares. The following are the major exceptions set out in the deed:
| (a) | Acceptance of a full takeover offer for the Company (where the Lock-In Shareholders would be permitted to sign an irrevocable undertaking to accept the takeover offer as long as it did not prohibit acceptance of a higher offer); and |
| (b) | the Lock-In Shareholders are permitted to sell or dispose of 25% of their shareholding in the Company after issuing a public notice three weeks before selling or disposing of the shares. The public notice will specify the number of shares being sold and the price per share agreed with the potential buyer. |
Any shareholder who holds 20% or more of the issued share capital of the Company is entitled to enforce the provisions of the lock-in deed. The Lock-In Shareholders remain restricted to any dealing in their shares during close periods.
As parties to the lock-in arrangements, and substantial shareholders in the Company, Directors Matthew Ng and Chris Rose abstained from participating in all resolutions, however they agreed with the decisions.
Matthew Ng, said, "We are happy with this decision and we are looking forward to working with Kuoni to generate growth for both companies and create value for all shareholders. This is a good move forward for the Company. Having a Kuoni representative on the Board will bring significant benefits to the Group and considerable skill and expertise to the Board. Following the transforming Yoee.com acquisition in March 2009, this will be an exciting year for Et-china."
The Company intends to call an extraordinary general meeting shortly to vote on these proposed changes to the Articles of Association.
Contact details for enquiries:
| Et-china.com International Holdings Limited | 0207 067 0700 |
| Matthew Ng, Chief Executive Officer | |
| Seymour Pierce, Nomad and Broker | 0207 107 8000 |
| Mark Percy Catherine Leftley |
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| Weber Shandwick Financial | 0207 067 0700 |
| Terry Garrett Stephanie Badjonat John Moriarty |