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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Origo Partners Plc | LSE:OPP | London | Ordinary Share | IM00B1G3MS12 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.075 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMOPP TIDMOPPP
RNS Number : 2653L
Origo Partners PLC
30 September 2016
30 September 2016
Origo Partners Plc
("Origo" or the "Company" and together with its subsidiaries the "Group")
Interim Financial Report for the six months ended 30 June 2016 ("the Period")
Origo announces its unaudited interim results for the six months ended 30 June 2016.
Highlights:
-- Agreement reached following the Period end to restructure the Company's share capital and settle ongoing disputes with Brooks Macdonald Group plc ("Brooks Macdonald")
-- Trading on AIM restored on 7 September 2016 -- Investment gain of US$0.9 million (30 June 2015 investment gain: US$3.2 million) -- Loss after tax of US$4.1 million (30 June 2015 loss after tax: US$4.1 million) -- Total assets of US$109.7 million (31 December 2015: US$109.5 million)
-- Net asset value of US$26.5 million (31 December 2015: US$30.6 million) reflecting, inter alia, the continued accrued rate of return relating to the Company's convertible zero dividend preference shares ("CZDPs") and the Company's operating costs during the Period
-- Total other administrative expenses of US$1.0 million (30 June 2015: US$2.5 million) -- Net asset value per share of US$0.07 as at 30 June 2016 (31 December 2015: US$0.09) -- Closing net cash position of US$0.6 million as at 30 June 2016
Chairman's Statement
During the first half of 2016, and following the Period end, the Board made significant progress in addressing a number of issues facing the Company.
Following extensive discussions with key shareholders, and further to the proposed restructuring of the Company's share capital set out in a circular sent to shareholders in January 2016, a revised set of proposals (the "Proposals") to restructure the Company's share capital, settle the ongoing disputes with Brooks Macdonald, and provide Origo with greater flexibility to implement its Investing Policy were agreed.
In particular, the Proposals, which were set out in detail in the Company's announcement of 7 September 2016 and in the related circular sent to shareholders ("the Circular"), were designed to remove the Company's obligations in respect of the redemption of at least 12 million CZDPs, remove any final CZDP redemption and/or maturity date and also make a number of further significant changes to the terms of the CZDPs. Following the publication of the Circular on 7 September 2016, trading in the Company's ordinary shares and CZDPs on the AIM market of the London Stock Exchange ("AIM") resumed.
The approval of the Proposals by the requisite majority of ordinary and CZDP shareholders on September 26, 2016 brings to an end a significant period of uncertainty and expense for the Company and its shareholders. We can now work with all of the Company's shareholders to return Origo to a more stable footing.
The implementation of the Proposals will have a number of NAV accretive impacts. It will reset the aggregate accreted principal amount of the CZDPs (now renamed 'redeemable preference shares' following implementation of the Proposals) to approximately US$60 million and freeze accruals in respect of the redeemable preference shares until January 1, 2018. It will also reduce ongoing fees and increase the hurdle for any investment performance incentive fee payments to Origo Advisors Ltd ("OAL"), our Investment Consultant.
Most importantly, with the resumption of trading of the Company's shares on AIM, the restructuring of the Company's share-capital and the resolution of the disputes with Brooks Macdonald, Origo is in a significantly improved position to deliver its Investing Policy of divesting the Company's entire portfolio by November 2018.
Although markets remain difficult, we believe that opportunities for divestment are beginning to emerge and the Origo board of directors (the "Board") will now focus its efforts on working with the Company's investment consultant, Origo Advisers Limited, to identify and progress initiatives to release value from the portfolio and to improve the Company's funding position.
Investment Consultant's Report
The first half of 2016 saw improved market conditions compared to 2015, with greater stability in commodities markets and a Chinese government stimulus package supporting the sectors in which many of our investee companies operate.
Origo's financial performance stabilised compared to previous periods, with the fair value of the portfolio (equity and debt investments) of US$104.3 million, slightly higher compared to US$103.6 million at the end of 2015.
Similarly, although Origo's net asset value fell by approximately US$4 million to US$26.5 million during the Period, US$3.1 million of this movement related to the continued accrued rate of return relating to the CZDPs from US$69.4 million to US$72.5 million. Following receipt of shareholder approval for the Proposals described above, the accrued value of the redeemable preference shares has been reset, with a corresponding increase in the Company's net asset value which will be recognised in the results for the year ending 31 December 2016.
Reflecting the revised Investing Policy, we continued to adjust our operations and successfully reduced administrative costs by 60 per cent. during the Period compared to the first half of 2015 (H1 2016: US$1.0 million, H1 2015: US$2.5 million).
No further investments were made during the Period.
The Company recorded a loss after tax of US$4.1 million for the Period, compared to a loss of US$4.1 million in the corresponding period of 2015.
At the end of the Period, the Company had cash and cash equivalents of US$0.64 million, down from US$1.30 million at the end of 2015.
Outlook
With greater stability in commodity prices during the Period, we have seen a return to more positive market conditions.
A number of significant resources sector transactions have been announced by Chinese companies at valuations which in some cases have exceeded market expectations in recent months. Whilst these transactions have involved producing assets, we believe they indicate that the prospects for achieving value accretive disposals from Origo's mining and metals portfolio are improving.
In the cleantech sector, the Chinese government's support for electric vehicles and other environmentally friendly industries continues to grow, providing underlying support for a number of investments in our portfolio.
In addition, the successful restructuring of the CZDPs and resolution of the ongoing disputes with Brooks Macdonald should enable Origo to manage divestments from a stronger, more stable position.
Despite these positive developments, debates continue over the future trajectory for Chinese economic growth with concerns focussed on, amongst other things, growing debt levels. Liquidity conditions in China impact, directly or indirectly, all of our Chinese investments as well as the demands for our resource assets outside of China.
Consequently, we remain cautious about the prospects for achieving divestments in the short term and the Company's cash resources remain limited. Accordingly, and as previously announced, the Board is exploring a number of possible options to secure additional working capital for Origo. Following the acceptance of the Proposals, and settlement of the ongoing disputes with Brooks MacDonald, we believe that the Company should be better positioned to obtain such funding though there can be no certainty over the timing or proposed structure of any financing.
For further information about Origo please visit www.origoplc.com or contact:
Origo Partners plc Niklas Ponnert niklas@origoplc.com Nominated Adviser Smith & Williamson Corporate Finance Limited Azhic Basirov +44 (0)20 7131 Ben Jeynes 4000 Public Relations Aura Financial +44 (0)20 7321 Andy Mills 0000
Interim Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2016
Hot Features
Premium
(Unaudited)
(Unaudited) Six months
Six months ended
ended 30 June
30 June 2016 2015
Notes US$'000 US$'000
--------------------------------- ------ -------------- ------------
Investment income: 3
Realised gains/(losses)
on disposal of investments 26 (978)
Unrealised gains on investments 497 3,819
Income from loans 356 368
879 3,209
--------------------------------- ------ -------------- ------------
Fund Consulting fee 4 (966) (1,044)
Other income 18 65
Performance incentive 5 (71) (542)
Share-based payments 21 (29) (54)
Other administrative
expenses 6 (951) (2,526)
--------------------------------- ------ -------------- ------------
Net loss before finance
costs and taxation (1,120) (892)
Foreign exchange gains/(losses) 92 (103)
Finance income 9 9 -
Finance costs 9 (3,086) (2,840)
--------------------------------- ------ -------------- ------------
Loss before tax (4,105) (3,835)
Income tax 10 (44) (305)
--------------------------------- ------ -------------- ------------
Loss after tax (4,149) (4,140)
--------------------------------- ------ -------------- ------------
Other comprehensive income
--------------------------------- ------ -------------- ------------
Other comprehensive income
to be reclassified to
profit or loss in subsequent
periods:
Exchange differences
on translating foreign
operations 16 94
Tax on other comprehensive
losses - -
--------------------------------- ------ -------------- ------------
Net other comprehensive
income to be reclassified
to profit or loss in
subsequent periods 16 94
--------------------------------- ------ -------------- ------------
Total comprehensive loss
after tax (4,133) (4,046)
Loss after tax
--------------------------------- ------ -------------- ------------
Attributable to:
- Owners of the parent (4,144) (4,128)
- Non-controlling interests (5) (12)
--------------------------------- ------ -------------- ------------
(4,149) (4,140)
--------------------------------- ------ -------------- ------------
Total comprehensive loss
--------------------------------- ------ -------------- ------------
Attributable to:
- Owners of the parent (4,128) (4,034)
- Non-controlling interests (5) (12)
--------------------------------- ------ -------------- ------------
(4,133) (4,046)
--------------------------------- ------ -------------- ------------
(1.18)
Basic loss per share 11 (1.18) cents cents
--------------------------------- ------ -------------- ------------
(1.18)
Diluted loss per share 11 (1.18) cents cents
--------------------------------- ------ -------------- ------------
The accompanying notes form an integral part of these financial statements.
Interim Consolidated Statement of Financial Position
As at 30 June 2016
(Unaudited) (Audited)
30 June 2016 31 December 2015
Assets Notes US$'000 US$'000
-------------------------------------------------- ------ -------------- ------------------
Non-current assets
Property, plant and equipment 50 64
Intangible assets 3 4
Investments at fair value through profit or loss 13 77,959 77,571
Loans 14 266 350
78,278 77,989
-------------------------------------------------- ------ -------------- ------------------
Current assets
Trade and other receivables 15 4,461 4,101
Loans due within one year 14 26,300 26,093
Cash and cash equivalents 640 1,272
-------------------------------------------------- ------ -------------- ------------------
31,401 31,466
-------------------------------------------------- ------ -------------- ------------------
Total assets 109,679 109,455
-------------------------------------------------- ------ -------------- ------------------
Current liabilities
Trade and other payables 16 3,835 2,701
Performance incentive payable within one year 16 8 8
Financial guarantee contracts 17 435 435
4,278 3,144
-------------------------------------------------- ------ -------------- ------------------
Non-current liabilities
Convertible zero dividend preference shares 18 72,468 69,385
Provision 19 4,309 4,262
Deferred income tax liability 2,125 2,082
-------------------------------------------------- ------ -------------- ------------------
78,902 75,729
-------------------------------------------------- ------ -------------- ------------------
Net assets 26,499 30,582
-------------------------------------------------- ------ -------------- ------------------
Equity attributable to owners of the parent
Issued capital 20 56 56
Share premium 150,414 150,414
Share-based payment reserve 7,626 7,573
Retained earnings (139,968) (135,824)
Translation reserve (1,479) (1,495)
Equity component of convertible zero
dividend preference shares 18 8,297 8,297
Other reserve 1,056 1,056
-------------------------------------------------- ------ -------------- ------------------
26,002 30,377
Non-controlling interests 497 505
-------------------------------------------------- ------ -------------- ------------------
Total equity 26,499 30,582
-------------------------------------------------- ------ -------------- ------------------
Total equity and liabilities 109,679 109,455
-------------------------------------------------- ------ -------------- ------------------
The accompanying notes form an integral part of these financial statements.
Interim Consolidated Statement of Changes in Equity
For the six months ended 30 June 2016
Attributable to equity holders of the parent
Share- Equity
based component
Issued Share payment Retained of Other Translation Non-controlling Total
capital premium reserve earnings CZDPs* reserve reserve Total interests equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January
2016 56 150,414 7,573 (135,824) 8,297 1,056 (1,495) 30,077 505 30,582
--------------- -------- -------- -------- ---------- ---------- -------- ------------ -------- ---------------- --------
Loss for
the period - - - (4,144) - - - (4,144) (5) (4,149)
Other
comprehensive
income - - - - - - 16 16 - 16
--------------- -------- -------- -------- ---------- ---------- -------- ------------ -------- ---------------- --------
Total
comprehensive
income/
(loss) - - - (4,144) - - 16 (4,128) (5) (4,133)
Share-based
payment
expense - - 53 - - - - 53 - 53
Minority
interests - - - - - - - - (3) (3)
At 30 June
2016 56 150,414 7,626 (139,968) 8,297 1,056 (1,479) 26,002 497 26,499
--------------- -------- -------- -------- ---------- ---------- -------- ------------ -------- ---------------- --------
Attributable to equity holders of the parent
Share- Equity
based component
Issued Share payment Retained of Other Translation Non-controlling Total
capital premium reserve earnings CZDPs* reserve reserve Total interests equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January
2015 55 150,262 7,147 (111,484) 8,297 995 (1,500) 53,772 572 54,344
--------------- -------- -------- -------- ---------- ---------- -------- ------------ -------- ---------------- --------
Loss for
the period - - - (4,128) - - - (4,128) (12) (4,140)
Other
comprehensive
income - - - - - - 94 94 - 94
--------------- -------- -------- -------- ---------- ---------- -------- ------------ -------- ---------------- --------
Total
comprehensive
income/
(loss) - - - (4,128) - - 94 (4,034) (12) (4,046)
Capital
redemption
of CCP fund 1 184 - - - - - 185 - 185
Share-based
payment
expense - (32) - - - 61 - 29 - 29
Minority
interests - - 178 - - - - 178 - 178
At 30 June
2015 56 150,414 7,325 (115,612) 8,297 1,056 (1,406) 50,130 560 50,690
--------------- -------- -------- -------- ---------- ---------- -------- ------------ -------- ---------------- --------
The following describes the nature and purpose of each reserve within parent's equity:
Reserve Description and purpose
-------------------- ----------------------------------------
Share premium Amounts subscribed for share capital
in excess of nominal value.
-------------------- ----------------------------------------
Share-based payment Equity created to recognise share-based
reserve payment expense.
-------------------- ----------------------------------------
Equity component Convertible zero dividend preference
of CZDPs shares.
-------------------- ----------------------------------------
Other reserve Equity created to recognise own
shares acquired.
-------------------- ----------------------------------------
Translation reserve Equity created to recognise foreign
currency translation differences.
-------------------- ----------------------------------------
The accompanying notes form an integral part of these financial statements.
Interim Consolidated Statement of Cash Flows
For the six months ended 30 June 2016
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
Notes US$'000 US$'000
------------------------------------ ------ ------------ ------------
Loss before tax (4,105) (3,835)
------------------------------------ ------ ------------ ------------
Adjustments for:
Depreciation and amortisation 6 14 20
Performance incentive 5 71 542
Share-based payments 21 29 54
Provision for bad debts 6 - 49
Realised losses on disposal
of investments 3 (26) 978
Unrealised gains on investments
at FVTPL* 3 (373) (4,138)
Unrealised (gains)/losses
on loans 3 (124) 308
Fair value losses on derivative
financial assets 3 - 11
Income from loans 3 (356) (368)
Foreign exchange (gains)/losses (92) 103
Interest expenses of convertible
zero dividend preference shares 9 3,083 2,826
Purchases of investments at
FVTPL - (21)
Purchases of loans - (363)
Proceeds from disposals of
investments at FVTPL - 300
Repayment of loans - 245
Operating (losses)/gains before
changes in working capital
and provisions (1,879) (3,289)
------------------------------------ ------ ------------ ------------
Decrease in trade and other
receivables 36 77
Increase in trade and other
payables 1,206 748
Net cash outflow from operations (637) (2,464)
------------------------------------ ------ ------------ ------------
Investing activities
------------------------------------ ------ ------------ ------------
Net cash acquired from subsidiary 8 -
------------------------------------ ------ ------------ ------------
Net cash flows outflow from
investing activities 8 -
------------------------------------ ------ ------------ ------------
Financing activities
Repayment of short-term borrowings - -
Net cash outflow from financing
activities - -
------------------------------------ ------ ------------ ------------
Net decrease in cash and cash
equivalents (629) (2,464)
------------------------------------ ------ ------------ ------------
Effect of exchange rate changes
on cash and cash equivalents (3) 91
Cash and cash equivalents
at beginning of period 1,272 5,185
------------------------------------ ------ ------------ ------------
Cash and cash equivalents
at end of period 640 2,812
------------------------------------ ------ ------------ ------------
* FVTPL refers to fair value through profit or loss
The accompanying notes form an integral part of these financial statements.
Notes to the Interim Consolidated Financial Statements
1 General information
Origo Partners Plc is a limited liability company incorporated and domiciled in the Isle of Man whose shares are publicly traded on the AIM market of the London Stock Exchange.
The Company and its subsidiaries are collectively referred to as the Group.
The principal activities of the Group are private equity investment, focused on growth opportunities created by the urbanization and industrialization of China. The Group's Investing Policy has now changed from that of a closed-ended, permanent capital vehicle to that of a realisation company with the mandate to return the net proceeds of realisations to shareholders.
These interim consolidated financial statements have been approved and authorised for issue by the Company's board of directors on 29 September 2016.
2 Basis of preparation and significant accounting policies 2.1 Basis of preparation
These interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting".
These interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2015.
2.2 Significant accounting policies
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2015.
The following new and revised IFRSs did not have any impact on the accounting policies, financial position or performance of the Group:
IAS 19 Amendments to defined benefit plans
The Group has not early adopted any other standard, interpretation or amendment that was issued but is not yet effective.
3 Investment income
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
------------------------------- ------------ ------------
Realised gains/(losses) on
disposal of investments 26 (978)
- Investments at FVTPL 29 (612)
- Loans - (363)
- Subsidiary (3) (3)
Unrealised gains/(losses)
on investments 497 3,819
- Investments at FVTPL 373 4,138
- Loans 124 (308)
- Derivative financial assets - (11)
Income from loans 356 368
Total 879 3,209
------------------------------- ------------ ------------
4 Fund Consulting fee
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
----------------------------- ------------ ------------
Consulting Services payable (966) (1,044)
Total (966) (1,044)
----------------------------- ------------ ------------
5 Performance incentive
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
----------------------------- ------------ ------------
Provision for performance
incentive payable over one
year (71) (542)
----------------------------- ------------ ------------
Total (71) (542)
----------------------------- ------------ ------------
A balance sheet provision for future performance incentive for the period ended 30 June 2016 was US$4,265,070 (31 December 2015: US$4,194,262). The performance incentives are accrued and payable to Origo Advisers Ltd ("OAL") (refer to Note 22 for details on Origo Advisers Ltd.)
The amount of performance incentives has been calculated and accrued on the following basis: (i) from the time the Hurdle has been reached, the next US$1,700,000 of Gross Realisations shall be applied towards equal payments of performance incentives; and thereafter (ii) 20 per cent of each subsequent Gross Realisation shall be applied towards an equal further payment of performance incentive.
* Hurdle: US$90,000,000 of Gross Realisations
** Gross Realisation: cumulative gross cash proceeds received by or on behalf of the Group which are derived from the realisation of assets in the Portfolio, after having made full provision for repayment of any third party debt (including any unpaid interest thereon) and any related hedge or other break costs and any prepayment fees and penalties thereon, but before any related transactional costs, fees and expenses and any taxes required to be paid by the relevant selling entity that arise directly as a result of completion of the relevant transaction to dispose of the relevant asset, provided that any amounts of deferred consideration or earn-out shall not be counted towards such realisations until actually received by the relevant selling member of the Group.
Effective on 26 September, 2016, the terms of the consulting agreement under which OAL provide services to the Company, including the definition of the Hurdle as stated above, have been amended. Please refer to Note 24 for details.
6 Other administrative expenses
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
-------------------------- ------------ ------------
Employee expenses (162) (91)
Professional fees (682) (2,062)
Including:
-Audit fees (2) (109)
Depreciation expenses (14) (20)
Provision for bad debts* - (49)
Others (93) (304)
-------------------------- ------------ ------------
Total (951) (2,526)
-------------------------- ------------ ------------
* Provision has been recognised only on receivables where it is considered that there is a greater than 50% risk of failure of collection.
7 Directors' remuneration
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
----------------------- ------------ ------------
Directors' emoluments 153 68
Share-based payment
expenses 45 79
-------------------------- ------------ ------------
Total 198 147
-------------------------- ------------ ------------
Directors' remuneration for the six months ended 30 June 2016 and number of options held were as follows:
Director Share-based
Salaries* Fee payments** Total Number
Name US$'000 US$'000 US$'000 US$'000 of options
------------------------ ----------- --------- ------------ --------- ------------
Mr. Wang Chao
Yong*** - - 7 7 4,000,000
Mr. Chris
A Rynning*** - - 19 19 3,500,000
Mr. Niklas
Ponnert - - 19 19 5,300,000
Mr. Christopher
Jemmett*** - - - - 100,000
Mr. Lionel
de Saint Exupery - 78 - 78 -
Mr. Tom Preststulen*** - - - - -
Ms. Shonaid
Jemmett Page - 75 - 75 -
- 153 45 198 12,900,000
------------------------------------ --------- ------------ --------- ------------
Directors' remuneration for the six months ended 30 June 2015 and number of options held were as follows:
Director Share-based
Salaries* Fee payments** Total Number
Name US$'000 US$'000 US$'000 US$'000 of options
------------------------ ---------- --------- ------------ --------- ------------
Mr. Wang Chao
Yong*** 3 - (9) (6) 4,000,000
Mr. Chris
A Rynning*** - - 44 44 3,500,000
Mr. Niklas
Ponnert - - 44 44 5,300,000
Mr. Christopher
Jemmett*** - 3 - 3 100,000
Mr. Lionel
de Saint Exupery - 28 - 28 -
Mr. Tom Preststulen*** - 6 - 6 -
Ms. Shonaid
Jemmett Page - 28 - 28 -
3 65 79 147 12,900,000
------------------------ ---------- --------- ------------ --------- ------------
* Short term employee benefits
** Share-based payments refer to expenses arising from the Company's share option scheme (see note 21 for details).
*** Mr. Wang Chao Yong, Mr. Chris A Rynning, Mr. Christopher Jemmett and Mr. Tom Preststulen resigned as Directors of the Company on 16 February 2015. The remaining directors of the Company are Shonaid Jemmett-Page (Non-executive Chairman), Lionel de Saint-Exupery (Non-executive Director) and Niklas Ponnert (Executive Director).
8 Operating segment information
Operating segments are components of the entity whose results are regularly reviewed by the entity's chief operating decision-maker to make decisions about resources to be allocated to the segment and to assess its performance. The chief operating decision-maker for the Group is considered to be the Executive Director. The Group's operating segments has been defined based on the types of investments which was equity investment and debt instrument in 2016 and 2015.
For the six months ended 30 June 2016 (Unaudited)
Unlisted Listed Total
Equity Debt Total Equity Debt Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
------------------------------- ------- ------- -------- ------- ------ ------ --------
Investment
income/(loss):
Realised gains
on disposal
of investments 4 - 4 22 - 22 26
Unrealised
gains/(losses)
on investments (540) (3) (543) 913 127 1,040 497
Income from
loans - 271 271 - 85 85 356
------------------------------- ------- ------- -------- ------- ------ ------ --------
Total (536) 268 (268) 935 212 1,147 879
Net divestment/(investment)
Net proceeds
of divestment - - - - - - -
Investment - - - - - - -
------------------------------- ------- ------- -------- ------- ------ ------ --------
Balance sheet
Investment
portfolio 75,585 24,646 100,231 2,374 1,920 4,294 104,525
------------------------------- ------- ------- -------- ------- ------ ------ --------
The Group's geographical areas, based on the location of investment assets (non-current assets), are defined primarily as China, Mongolia, Europe and South Africa as presented in the following table.
For the six months ended 30 June 2016 (Unaudited)
South
Europe China Mongolia Africa Total
$'000 $'000 $'000 $'000 $'000
----------------------------- ------- ------- --------- -------- --------
Investment
income/loss:
Realised gains/(losses)
on disposal
of investments - (3) 29 - 26
Unrealised
gains/(losses)
on investments (75) 534 38 - 497
Income from
loans - 271 85 - 356
----------------------------- ------- ------- --------- -------- --------
Total (75) 802 152 - 879
Net divestment/(investment)
Net proceeds
of divestment - - - - -
Investment - - - - -
----------------------------- ------- ------- --------- -------- --------
Balance sheet
Investment
portfolio 1,025 88,000 15,500 - 104,525
----------------------------- ------- ------- --------- -------- --------
For the six months ended 30 June 2015 (Unaudited)
Unlisted Listed Total
Equity Debt Total Equity Debt Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
------------------------------- ------- ------- -------- ------- ------ ------ --------
Investment
income/(loss):
Realised losses
on disposal
of investments (3) (363) (366) (612) - (612) (978)
Unrealised
gains/(losses)
on investments 3,324 (187) 3,137 803 (121) 682 3,819
Income from
loans - 282 282 - 86 86 368
------------------------------- ------- ------- -------- ------- ------ ------ --------
Total 3,321 (268) 3,053 191 (35) 156 3,209
Net divestment/(investment)
Net proceeds
of divestment - 245 245 300 - 300 545
Investment (21) (363) (384) - - - (384)
------------------------------- ------- ------- -------- ------- ------ ------ --------
Balance sheet
Investment
portfolio 92,203 26,360 118,563 2,350 2,017 4,367 122,930
------------------------------- ------- ------- -------- ------- ------ ------ --------
For the six months ended 30 June 2015 (Unaudited)
South
Europe China Mongolia Africa Total
$'000 $'000 $'000 $'000 $'000
----------------------------- ------- ------- --------- -------- --------
Investment
income/(loss):
Realised
losses on
disposal
of investments (366) - (612) - (978)
Unrealised
gains/(losses)
on investments 328 4,307 (547) (269) 3,819
Income from
loans - 282 86 - 368
----------------------------- ------- ------- --------- -------- --------
Total (38) 4,589 (1,073) (269) 3,209
Net divestment/(investment)
Net proceeds
of divestment - 245 300 - 545
Investment (384) - - - (384)
----------------------------- ------- ------- --------- -------- --------
Balance sheet
Investment
portfolio 1,843 94,287 25,220 1,580 122,930
----------------------------- ------- ------- --------- -------- --------
9 Finance income and costs
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
------------------------------------ ------------ ------------
Finance income
Bank interest 9 -
------------------------------------ ------------ ------------
9 -
------------------------------------ ------------ ------------
Finance costs
Bank charges (3) (15)
Interest expenses of convertible
zero
dividend preference shares (3,083) (2,825)
(3,086) (2,840)
------------------------------------ ------------ ------------
Total (3,077) (2,840)
------------------------------------- ------------ ------------
10 Income tax
No provision for current tax was made for the year as the subsidiaries had no assessable profit. As the Group is not in receipt of income from Manx land, property or retail activity and does not hold a Manx banking licence, it is taxed at the standard rate of zero per cent on the Isle of Man.
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
------------------------------------- ------------ ------------
Current taxes
Current year - -
Deferred taxes
Deferred income taxes* (44) (305)
Total income taxes in the statement
of comprehensive income (44) (305)
------------------------------------- ------------ ------------
* The deferred income tax relates to net change in fair value gains/(losses) of Celadon Mining Ltd, China Rice Ltd, Unipower Battery Ltd, Shanghai Yi Rui Tech New Energy Technology Ltd and Niutech Energy Ltd, estimated in accordance with the relevant tax laws and regulations of the PRC based on a tax rate of 10 per cent.
11 Earnings per share
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
Numerator US$'000 US$'000
------------------------------------ ------------ ------------
Loss for the period attributable
to owners of the parent
as used in the calculation
of basic loss per share (4,144) (4,128)
Loss for the period attributable
to owners of the parent
as used in the calculation
of diluted loss per share (4,144) (4,128)
(Unaudited) (Unaudited)
30 June 30 June
2016 2015
Number Number
Denominator of shares of shares
------------------------------------ ------------ ------------
Weighted average number of
ordinary shares for basic LPS 351,035,389 350,387,378
Weighted average number of
ordinary shares adjusted for
the effect of dilution 351,035,389 350,387,378
------------------------------------ ------------ ------------
(1.18) (1.18)
Basic LPS cents cents
(1.18) (1.18)
Diluted LPS cents cents
------------------------------------ ------------ ------------
12 Investments in subsidiaries
The principal subsidiaries of the Company, all of which have been included in these consolidated financial statements, are as follows:
Proportion
of Proportion
ownership of ownership
interest interest
Country at 30 June at 31 December
Name of incorporation 2016 2015
------------------------- ------------------- ------------ ----------------
Ascend Ventures
Ltd Malaysia 100% 100%
Origo Resource Partners
Ltd Guernsey 100% 100%
PHI International
Holding Ltd Bermuda 100% 100%
PHI International
(Bermuda) Holding
Ltd* Bermuda 100% 100%
Ascend (Beijing)
Consulting Ltd** China 100% 100%
China Cleantech
Partners, L.P. Cayman 100% 100%
China Commodities
Absolute Return Isle of
Ltd Man 95.3% 95.3%
British
ISAK International Virgin
Holding Ltd** Islands 71.2% 71.2%
* Owned by Origo Resource Partners Ltd
** Owned by Ascend Ventures Ltd
13 Investments at fair value through profit or loss
As at 30 June 2016 (Unaudited)
Fair
Value Proportion Fair
Country hierarchy of ownership Cost value
Name of incorporation level interest US$'000 US$'000
-------------------------- ------------------- ------------------------------- -------------- --------- ---------
British
IRCA Holdings Virgin
Ltd. Islands 3 49.1% 9,505 -
Shanghai Yi Rui
Tech New Energy
Technology Ltd China 3 49.0% 675 450
British
Resources Investment Virgin
Capital Ltd. Islands 3 38.5% 287 -
British
Roshini International Virgin
Bio Energy Corporation Islands 3 35.9% 17,050 -
British
Virgin
China Rice Ltd Islands 3 32.1% 13,000 16,050
Kincora Copper
Ltd** Canada 1 26.5% 6,728 1,925
R.M.Williams Agricultural
Holdings Pty Ltd Australia 3 24.0% 20,214 -
British
Virgin
Moly World Ltd Islands 3 20.0% 10,000 5,383
British
Niutech Energy Virgin
Ltd Islands 3 19.1% 6,350 11,467
Unipower Battery Cayman
Ltd Islands 3 16.5% 4,301 5,820
British
Fans Media Co., Virgin
Ltd Islands 3 14.3% 2,360 -
British
Gobi Coal & Energy Virgin
Ltd** Islands 3 10.8% 14,960 5,693
British
Celadon Mining Virgin
Ltd Islands 3 9.7% 13,069 24,637
Staur Aqua AS Norway 3 9.2% 719 373
Ares Resources** Mongolia 3 5.0% 148 -
Bach Technology
GmbH Germany 3 2.5% 60 -
Rising Technology
Corporation Ltd/
Beijing Rising British
Information Technology Virgin
Ltd * Islands/China 3 2%/1.6% 5,565 3,964
Cayman
Kooky Panda Ltd Islands 3 1.2% 25 -
British
Virgin
Six Waves Inc Islands 3 1.1% 240 1,461
Marula Mines Ltd** South Africa 3 0.9% 250 129
Fram Exploration
AS Norway 3 0.6% 1,223 157
Other quoted investments** 1 1,569 450
Total 128,298 77,959
----------------------------------------------- ------------------------------- -------------- --------- ---------
As at 31 December 2015 (Audited)
Fair Proportion
Country Value of Fair
of hierarchy ownership Cost value
Name incorporation level interest US$'000 US$'000
--------------- ---------------- ------------------------------- ----------- -------------------------- ---------------------
British
IRCA Holdings Virgin
Ltd. Islands 3 49.1% 9,505 -
Shanghai Yi
Rui
Tech New
Energy
Technology
Ltd China 3 49.0% 675 793
Resources British
Investment Virgin
Capital Ltd. Islands 3 38.5% 287 -
Roshini
International British
Bio Energy Virgin
Corporation Islands 3 35.9% 17,050 -
British
Virgin
China Rice Ltd Islands 3 32.1% 13,000 16,417
Kincora Copper
Ltd** Canada 1 26.1% 6,728 1,180
R.M.Williams
Agricultural
Holdings Pty
Ltd Australia 3 24.0% 20,214 -
British
Virgin
Moly World Ltd Islands 3 20.0% 10,000 5,419
British
Niutech Energy Virgin
Ltd Islands 3 19.1% 6,350 11,531
Unipower
Battery Cayman
Ltd Islands 3 16.5% 4,301 5,795
Fans Media British
Co., Virgin
Ltd Islands 3 14.3% 2,360 -
Gobi Coal & British
Energy Virgin
Ltd** Islands 3 14.0% 14,960 6,575
British
Celadon Mining Virgin
Ltd Islands 3 9.7% 13,069 23,674
Staur Aqua AS Norway 3 9.2% 719 373
Ares
Resources** Mongolia 3 5.0% 148 -
Bach
Technology
GmbH Germany 3 2.5% 60 -
Rising
Technology
Corporation
Ltd/
Beijing
Rising
Information British
Technology Virgin 2%/
Ltd * Islands/China 3 1.6% 5,565 3,884
Kooky Panda Cayman
Ltd Islands 3 1.2% 25 -
British
Virgin
Six Waves Inc Islands 3 1.1% 240 1,218
Marula Mines
Ltd** South Africa 3 0.9% 250 214
Fram
Exploration
AS Norway 3 0.6% 1,223 232
Other quoted
investments** 1 1,569 266
Total 128,298 77,571
--------------------------------- ------------------------------- ----------- -------------------------- ---------------------
* 2% equity stake in Rising Technology Corporation Ltd and 1.6% beneficial interest (under a nominee arrangement) in Beijing Rising Information Technology Ltd, a company incorporated in the PRC.
** Investments held partially by China Commodities Absolute Return Ltd ("CCF"), a fund managed by the Group. The investments were transferred to the Company on Jan 6, 2016.
As at 30 June 2016 the proportion of ownership interest held by CCF in investments is as follows:
Fair
Proportion of Cost value
Name ownership interest US$'000 US$'000
-------------------- -------------------- --------- ---------
Gobi Coal & Energy
Ltd 0.2% 252 96
In accordance with IFRS 7: Financial Instruments: Disclosures, financial instruments recognized at fair value are required to be analysed between those whose fair value is based on:
a) Quoted prices in active markets for identical assets or liabilities (Level 1);
b) Those involving inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
c) Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
In according with IFRS 13: For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement at a whole) at the end of each reporting period. There have been no transfers between Levels during the period of first six months of 2016. There have been no transfers between Levels during the period of 2015.
Statement of changes in investments at fair value through profit or loss based on level 3:
(Unaudited)
Six month
ended (Audited)
30 June
2016 2015
US$'000 US$'000
--------------------------------------- -------------- ----------
Opening balance 76,125 88,860
Acquisitions - 20
Proceeds from disposals of
investments - -
Realised losses on disposals
of investments - -
Realised losses on write-off
of investments - -
Net exchange difference (2,148) (1,327)
Movement in unrealised gains/(losses)
on investments -
- In profit or loss 1,607 (11,428)
Transfers out of Level 3 - -
Closing balance 75,584 76,125
--------------------------------------- -------------- ----------
The fair value decrease on investments categorised within Level 3 of US$540,849 (2015: US$12,754,500), was recorded in the statement of comprehensive income.
Description of significant unobservable inputs to valuation:
as at 30 June 2016
Significant
Valuation unobservable
technique inputs Range
----------------------- ------------ ------------------- ----------
Investments in
unquoted equity
shares - metal
& mining sector DCF method WACC 19%
Discount
for lack
of marketability 20% - 30%
Investments in
unquoted equity Discount
shares - metal Multiples for lack
& mining sector method of marketability 20% - 30%
Investments in
unquoted equity Discount
shares - cleantech Multiples for lack
sector method of marketability 30%
Investments in
unquoted equity Discount
shares - agriculture Multiples for lack
sector method of marketability 30%
Investments in
unquoted equity Discount
shares - TMT Multiples for lack
sector method of marketability 30%
as at 31 December 2015
Significant
Valuation unobservable
technique inputs Range
----------------------- ------------ ------------------- ----------
Investments in
unquoted equity
shares - metal
& mining sector DCF method WACC 19%
Discount
for lack
of marketability 20% - 30%
Investments in
unquoted equity Discount
shares - metal Multiples for lack
& mining sector method of marketability 20% - 30%
Investments in
unquoted equity Discount
shares - cleantech Multiples for lack
sector method of marketability 30%
Investments in
unquoted equity Discount
shares - agriculture Multiples for lack
sector method of marketability 30%
Investments in
unquoted equity Discount
shares - TMT Multiples for lack
sector method of marketability 30%
Risk management activities
Fair value risk
The Group's financial assets are predominantly investments in unquoted companies, and the fair value of each investment depends upon a combination of market factors and the performance of the underlying asset. The Group does not hedge the market risk inherent in the portfolio but manage asset performance risk on an asset-specific basis by continuously monitoring each asset's performance and charging the change of each asset's fair value to the statement of comprehensive income as necessary.
Cash flow interest rate risk
The Group currently view interest rate risk as low since the fixed rate return from interest generating assets is not material in the context of the portfolio return as a whole and the Group's investments are financed mainly by shareholders' funds with investment needs being met ahead of planned investments.
Other risk management activities
As a result of its international activities, some of the Group's assets, liabilities, income and expenses are effectively denominated in currencies other than US Dollars (the Group's reporting currency). Fluctuations in the exchanges rates between these currencies and US Dollars will have an effect on the reported value of those items.
The Group has considered the possibility of further aggressive fluctuations in exchange rates, however, due to the level of assets and liabilities denominated in currencies other than US Dollars, the Group do not believe the potential foreign exchange fluctuations would have a material effect on the Group's financial statements.
Valuation techniques
The fair value of financial instruments traded in active markets (such as publicly traded securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current closing price.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group has estimated the value of each of its unquoted equity instruments by using judgement to select the most appropriate valuation methodology for each investment based on the recommendations of the International Private Equity and Venture Capital Valuation Guidelines. Valuation methodologies mainly include the price of recent investments, multiples, discounted cash flows or earnings, industry valuation benchmarks, available market prices and so on, which may apply individually or in combination. Key assumptions and judgements applied under each methodology concerning the future and other key sources of estimation uncertainty will have a significant risk of causing a material adjustment to the fair value of the instruments within the next reporting period.
Inputs applied in the valuation methodologies are sensitive to assumptions made when ascertaining the fair value of financial assets. A reasonable alternative assumption would be to apply a standard marketability discount of 25% for all unquoted financial instruments rather than the specific approach adopted. This would have a positive impact on the portfolio of US$1,920,035 or 2.54% of total unquoted financial instruments.
14 Loans
The Group has entered into convertible credit agreements and has the right to convert the outstanding principal balance of relevant loans into borrower's shares according to certain conversion conditions, and loan agreements with certain investee companies, as set forth in the table below.
As at 30 June 2016 (Unaudited)
Loans Loans
due due
within after
Loan Loan one one Fair
rates principal year year value
-----------
Fair US$'000 US$'000 US$'000 US$'000
value
hierarchy
Borrower level %
------------------------- ----------- ------- ----------- -------- -------- --------
Convertible credit
agreements*
China Rice Ltd 3 4 15,000 15,000 - 15,000
Unipower Battery
Ltd 3 6 9,000 9,000 - 9,000
IRCA Holdings
Ltd 3 1.5-8 11,645 - - -
R.M. Williams
Agricultural
Holdings Pty
Ltd 3 8-20 3,090 - - -
Staur Aqua AS 3 0-15 3,848 229 266 495
Kincora Copper
Ltd 3 8.7 2,254 1,920 - 1,920
Roshini International
Bio Energy Corporation 3 - 424 - - -
Sub-total 45,261 26,149 266 26,415
------------------------- ----------- ------- ----------- -------- -------- --------
Loans Loans
due due
within after
Loan Loan one one Amortised
rates principal year year cost
Borrower % US$'000 US$'000 US$'000 US$'000
--------------------------- --------- ----------- -------- -------- ----------
Loan agreements*
IRCA Holdings
Ltd 6-10 8,909 - - -
TPL GmbH 10 3,807 - - -
R.M.William Agricultural 15.5+RBA
Holdings Pty cash
Ltd rate 1,725 - - -
Shanghai Evtech
New Energy Technology
Ltd - 510 - - -
China Silvertone
Investment Co
Ltd - 478 - - -
Unipower Battery
Ltd 12 164 151 - 151
View Step Corporation
Ltd - 25 - - -
--------------------------- --------- ----------- -------- -------- ----------
Sub-total 15,618 151 - 151
---------------------------- --------- ----------- -------- -------- ----------
Total 60,879 26,300 266 26,566
---------------------------- --------- ----------- -------- -------- ----------
* Loans in relation to convertible credit agreements are measured at fair value, which is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. Loans in relation to loan agreements are measured at amortised cost using the effective interest rate method less any identified impairment losses. The carrying value of loans in relation to loan agreements is a reasonable approximation of fair value.
As at 31 December
2015
Loans Loans
due due
within after
Loan Loan one one Fair
rates principal year year value
-----------
Fair US$'000 US$'000 US$'000 US$'000
value
hierarchy
Borrower level %
------------------------- ----------- ------- ----------- -------- -------- --------
Convertible credit
agreements*
China Rice Ltd 3 4 15,000 15,000 - 15,000
Unipower Battery
Ltd 3 6 9,000 9,000 - 9,000
IRCA Holdings
Ltd 3 1.5-8 11,645 - - -
R.M. Williams
Agricultural
Holdings Pty
Ltd 3 8-20 3,090 - - -
Staur Aqua AS 3 0-15 3,848 145 350 495
Kincora Copper
Ltd 3 8.7 2,254 1,793 - 1,793
Roshini International
Bio Energy Corporation 3 - 424 - - -
Sub-total 45,261 25,938 350 26,288
------------------------- ----------- ------- ----------- -------- -------- --------
Loans Loans
due due
within after
Loan Loan one one Amortised
Rates principal year year cost
Borrower % US$'000 US$'000 US$'000 US$'000
--------------------------- --------- ----------- -------- -------- ----------
Loan agreements*
IRCA Holdings
Ltd 6-10 8,909 - - -
TPL GmbH 10 3,807 - - -
R.M.William Agricultural 15.5+RBA
Holdings Pty cash
Ltd rate 1,725 - - -
Shanghai Evtech
New Energy Technology
Ltd - 510 - - -
China Silvertone
Investment Co
Ltd - 478 - - -
Unipower Battery
Ltd 12 164 155 - 155
View Step Corporation
Ltd - 25 - - -
--------------------------- --------- ----------- -------- -------- ----------
Sub-total 15,618 155 - 155
---------------------------- --------- ----------- -------- -------- ----------
Total 60,879 26,093 350 26,443
---------------------------- --------- ----------- -------- -------- ----------
Statement of changes in loans:
(Unaudited)
Six months
ended (Audited)
30 June
2016 2015
US$'000 US$'000
----------------- ------------ ----------
Opening balance 26,443 28,899
Additions - 363
Repayment - (459)
Write-offs - (363)
Revaluation 123 (894)
Impairment - (1,103)
Closing balance 26,566 26,443
----------------- ------------ ----------
Statement of changes in convertible credit agreements based on level 3:
(Unaudited)
Six months
ended (Audited)
30 June
2016 2015
US$'000 US$'000
----------------------------- ------------ ----------
Opening balance 26,288 27,397
Additions - -
Repayment - (215)
Write-offs - -
Movement in unrealised loss
on investments - -
* In profit or loss 127 (894)
Closing balance 26,415 26,288
----------------------------- ------------ ----------
The fair value decrease on convertible credit agreements categorised within Level 3 of US$227,345 (2014: US$6,851,090), was recorded in the statement of profit or loss.
15 Trade and other receivables
(Unaudited) (Audited)
31 December
30 June 2016 2015
US$'000 US$'000
--------------------------- -------------- -------------
Trade debtors 5 5
Other debtors 1,331 1,378
Loan interest receivables 3,046 2,676
Prepayments 79 42
Total 4,461 4,101
--------------------------- -------------- -------------
16 Trade and other payables
(Unaudited)
30 June 2016 (Audited)
31 December
US$'000 2015 US$'000
----------------------- -------------- ---------------
Trade payables 5 5
Other payables 3,830 2,696
Performance incentive
payable within one
year* 8 8
----------------------- -------------- ---------------
Total 3,843 2,709
----------------------- -------------- ---------------
* Refer to note 5 for total performance incentive expenses.
17 Financial guarantee contracts
(Unaudited)
30 June 2016 (Audited)
31 December
US$'000 2015 US$'000
--------------------- -------------- ---------------
Financial guarantee
contracts* 435 435
--------------------- -------------- ---------------
Total 435 435
--------------------- -------------- ---------------
* In July 2013, the Group entered into a guarantee agreement with IRCA Holding Ltd and ABSA Bank Limited to guarantee the repayment of loan facilities of up to Rand 6,769,000 extended by ABSA Bank Limited to IRCA Holdings Ltd. A potential claim related to this guarantee is expected in the next 12 months. A provision has been made for the total amount of the guarantee.
18 Liability component of convertible zero dividend preference shares
Early
redemption
Number Liability Equity option
of Component component derivative
Shares US$'000 US$'000 US$'000
-------------------- ----------- ----------- ----------- ------------
Balance at 1
January 2015 57,000,000 63,609 8,297 -
--------------------- ----------- ----------- ----------- ------------
Interest expenses
on convertible
zero dividend
preference shares - 5,776 - -
-------------------- ----------- ----------- ----------- ------------
Balance at 31
December 2015 57,000,000 69,385 8,297 -
--------------------- ----------- ----------- ----------- ------------
Interest expenses
on convertible
zero dividend
preference shares - 3,083 - -
-------------------- ----------- ----------- ----------- ------------
Balance at 30
June 2016 57,000,000 72,468 8,297 -
--------------------- ----------- ----------- ----------- ------------
On 8 March 2011, the Group issued 60 million convertible zero dividend preference shares ("Convertible Preference Shares") at a price of US$1.00 per share. The Convertible Preference Shares have a maturity period of five years from the issue date and can be converted into 1 ordinary share of the Group at the conversion price of US$0.95 per share at the holder's option at any time between more than 40 dealing days after 8 March 2011 up to 5 dealing days prior to the maturity date and, if it has not been converted, it will be redeemed on maturity at the redemption price of US$1.28 per share (representing a gross redemption yield of 5 per cent per annum at issue).
The Convertible Preference Shares contain a redemption feature which allows for early redemption at the option of issuer. The issuer has the option to redeem all or some of the Convertible Preference Shares subject to the restrictions on redemption described below:
(a) at any time after the second anniversary of 8 March 2011, for a cash sum of US$1.28 per Convertible Preference Share redeemed;
(b) at any time after the second anniversary of 8 March 2011, if in any period of 30 consecutive dealing days the closing middle market price of the ordinary shares of the Company exceeds US$1.235 per ordinary share of the Company on 20 or more of those days, for a cash sum equal to the Accreted Principal Amount in respect of the Convertible Preference Shares being redeemed;
(c) at any time, if less than 15 per cent of the Convertible Preference Shares remain outstanding, for a cash sum equal to the Accreted Principal Amount in respect of the Convertible Preference Shares being redeemed.
The Convertible Preference Shares contain three components, a liability component, an equity component and the early redemption option derivative. The effective interest rate of the liability component is 6.5 per cent. The early redemption option derivative is presented as derivative financial assets in the consolidated statement of financial position and is measured at fair value subsequent to initial recognition with changes in fair value recognized in profit and loss.
In March 2013, the Company restructured the terms of its existing Convertible Preference Shares, the principal terms of restructure includes: i) extension of the maturity date of the Convertible Preference Shares by 18 months from 8 March 2016 to 8 September 2017 (the "Extended Period"); ii) amendment of the final capital value ("FCV") of the Convertible Preference Shares to US$1.41 each, with the accrued rate of return for the Extended Period equivalent to 10 per cent of the accrued value of the Convertible Preference Shares at the start of the Extended Period; iii) a commitment by the Company to repurchase, by means of tender offers to holders, at least 12 million Convertible Preference Shares by 8 March 2016, the original maturity date (see note 23 for details); and iv) the Company to set aside, for the funding of Convertible Preference Shares tender offers, 50 per cent of the next US$24 million of net proceeds (post transaction costs and management incentives) from investment realisations by the Company. The new effective interest rate of the liability component is 9.0%. In addition to the restructure, the Company has repurchased 3 million Convertible Preference Shares from holders at a price of US$1.00 per Convertible Preference Shares on the same date. Finance cost of US$4.2 million was credited to reverse the liability component after the payoff of US$3 million of cash for repurchase.
Effective on 26 September 2016, the terms of the Convertible Preference Shares have been amended. Please refer to Note 24 for details.
19 Provision
(Unaudited) (Audited)
31 December
30 June 2016 2015
US$'000 US$'000
----------------------- -------------- -------------
USR/contingent share
awards * 44 67
Performance incentive
provision** 4,265 4,195
----------------------- -------------- -------------
Total 4,309 4,262
----------------------- -------------- -------------
* The provision relates to the fair value of Upper Share Rights ("USR") and share awards granted to certain directors, executives and key employees under the Company's joint share ownership scheme. Further details about the USR and shared awards are included in note 21 to the financial statements.
** Refer to note 5 for total performance incentive expenses. Effective on 26 September 2016, the terms of the consulting agreement under which OAL provide services to the Company have been amended. Please refer to Note 24 for details
20 Issued capital
(Unaudited) (Audited)
30 June 2016 31 December 2015
Number of Number of
Authorized shares GBP'000 shares GBP'000
--------------------- ------------ -------- ------------ --------
Ordinary shares
of GBP 0.0001
each 500,000,000 50 500,000,000 50
--------------------- ------------ -------- ------------ --------
Issued and fully Number of Number of
paid shares US$'000 shares US$'000
--------------------- ------------ -------- ------------ --------
At beginning
of the period/year 358,746,814 56 356,706,814 55
New issued shares - - 2,390,000 1
Buyback shares - - (350,000)
--------------------- ------------ -------- ------------ --------
At end of the
period/year 358,746,814 56 358,746,814 56
--------------------- ------------ -------- ------------ --------
21 Share-based payments
The Group has a number of share schemes that allow employees to acquire shares in the Company.
The total cost recognized in the statement of comprehensive income is shown below:
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 30 June
2016 2015
US$'000 US$'000
----------------------------- ------------ ------------
Equity-settled option (53) (178)
USR/contingent share awards 24 124
(29) (54)
----------------------------- ------------ ------------
The following table illustrates the number ("No.") and weighted average exercise prices ("WAEP") of, and movements in share options during the six months ended 30 June 2016 and year ended 31 December 2015.
(Unaudited) (Audited)
31 December
30 June 2016 2015
No. WAEP No. WAEP
------------------ ----------- ------- ----------- ---------
Outstanding
at 1 January 23,001,932 27.24p 21,451,932 26.97p
------------------ ----------- ------- ----------- ---------
Granted during
the period/year - -
Forfeited during
the period/year (500,000) (31.00p)
Exercised during
the period/year - -
Expired during
the period/year - -
Outstanding
at the end of
the period/year 23,001,932 27.24p 20,951,932 26.87p
------------------ ----------- ------- ----------- ---------
Exercisable
at the end of
the period/year 11,451,932 23.45p 11,451,932 23.45p
------------------ ----------- ------- ----------- ---------
The weighted average remaining contractual life for the share options outstanding as at 30 June 2016 was 3.06 years (31 December 2015: 3.56 years).
The range of exercise prices for options outstanding at the end of the period was 20 pence to 59.85 pence (31 December 2015: 20 pence to 59.85 pence).
Outstanding options include 6,800,000, 3,500,000, 500,000 and 13,600,000 equity-settled options granted on 26 October 2006, 13 March 2008, 06 February 2009 and 02 February 2012 respectively to certain directors and employees of the Company and 651,932 equity-settled options granted on 21 December 2006 to Seymour Pierce Ltd, the Company's former nominated adviser. The Company did not enter into any share-based transactions with parties other than employees during the six months ended 30 June 2015 and2014, except as described above.
The following table illustrates the number ("No.") and weighted average exercise prices ("WAEP") of, and movements in USRs and contingent share awards during the six months ended 30 June 2016 and year ended 31 December 2015.
(Unaudited) (Audited)
31 December
30 June 2016 2015
No. WAEP No. WAEP
------------------ ---------- ------ ----------- ------------------------
Outstanding
at 1 January 7,711,425 9.48p 8,061,425 9.07p
------------------ ---------- ------ ----------- ------------------------
Granted during
the period/year - -
Forfeited during
the period/year - -
Exercised during
the period/year (350,000)* -
Expired during
the period/year - -
Outstanding
at the end of
the period/year 7,711,425 9.48p 7,711,425 9.48p
------------------ ---------- ------ ----------- ------------------------
Exercisable
at the end of
the period/year 7,711,425 9.48p 7,711,425 9.48p
------------------ ---------- ------ ----------- ------------------------
* The weighted average share price at the date of exercise of these options was 5.70 pence.
The weighted average remaining contractual life for the share options outstanding as at 30 June 2016 was 5.02 years (31 December 2015: 5.51 years).
The range of exercise prices for options outstanding at the end of the period was zero to 15.5 pence (31 December 2015: zero to 15.5 pence).
On 16 October 2009, 4,847,099 of Upper Share Rights ("USR") were granted to certain directors, executives and key employees under the Company's joint share ownership scheme ("JSOS"). 50 per cent of USR will vest 12 months from the date of grant and 50% of USR will vest 24 months from the date of grant. The exercise price of the USR granted is 15.50 pence compounded at 3.5 per cent per annum over the year from the grant date to the exercise date of USR. The fair value of the USRs is estimated at the end of each reporting period using the Binomial Tree option pricing model. The contractual life of each USR granted is 10 years.
On 20 July 2012, 1,120,000 of contingent share awards were granted to certain directors, executives and key employees under the Company's JSOS, which will vest 197 days from the date of grant. The contractual life of each contingent share awards granted is 10 years.
On 30 December 2014, 2,423,358 of shares awards were granted to certain key employees under the Company's JSOS, which will vest immediately at the date of the grant. The contractual life of each share offers granted is 10 years.
The following table lists the inputs to the model used to calculate the fair value of USRs for the period.
(Unaudited) (Audited)
31 December
30 June 2016 2015
------------------------- -------------- -------------
Underlying stock price
(pence) 0.01 1.50
Exercise price (pence) 15.5 15.5
Expected life of option
(years) 2 2
Expected volatility (%) 196.62 34.53
Expected dividend yield - -
(%)
Risk-free interest rate
(%) 0.50 0.50
------------------------- -------------- -------------
The volatility assumption, measured at the standard deviation of expected share price returns, was based on a statistical analysis of the Company's daily share prices from 1 July 2012 to 30 June 2015 using source data from Reuters.
The carrying amount of the liability relating to the USR and contingent share awards as at 30 June 2016 is US$44,075 and the expense recognized as share-based payments during the period is (US$22,820).
22 Related party transactions
Identification of related parties
The Group has a related party relationship with its subsidiaries, jointly controlled entites, associates and key management personnel. The company receives and pays certain debtors and creditors on behalf of its subsidiaries and the amounts are recharged to the entities. The amount in current period was (US$278,886) and the balance at the end of the period was (US$15,831,673). Transactions between the Company and its subsidiaries have been eliminated on consolidation.
Transactions with key management personnel
The Group's key management personnel are the Executive and Non-executive Directors as identified in the director's report.
Trading transactions
The following table provides the total amount of significant transactions that have entered into with related parties during the six months ended 30 June 2016 and 30 June 2015, as well as balances with related parties at 30 June 2016 and 31 December 2015.
(Unaudited) (Audited)
30 June 31 December
2016 2015
US$'000 US$'000
---------------------------- ------------ ------------
Loans to related parties
Subsidiaries:
ISAK International Holding
Ltd 870 870
China Cleantech Partners,
L.P. 340 340
---------------------------- ------------ ------------
(Unaudited) (Audited)
30 June 31 December
2016 2015
US$'000 US$'000
------------------------------- ------------ -------------
Amounts due from/(to) related
parties*
Key management personnel:
Lionel de Saint-Exupery*** (84) (25)
Shonaid Jemmett Page*** (156) (100)
Other:
Origo Advisers Ltd** (5,827) (5,039)
------------------------------- ------------ -------------
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June
2016 30 June 2015
US$'000 US$'000
Transactions
Origo Advisers Ltd** 788 3,209
------------------------------- ------------ -------------
* The amounts are unsecured and have no fixed terms of repayment
** Origo Advisers Ltd is controlled by entities whose ultimate beneficiaries include Niklas Ponnert (Directors of the Company), Chris A Rynning and Luke Leslie.
*** Lionel de Saint-Exupery (Non-executive Director of the Company); Shonaid Jemmett Page (Non-executive Chairman of the Company).
23 Commitments and contingencies
In February 2014, the Company made an announcement regarding a complaint raised by Brooks Macdonald with the Company in respect of the terms of Convertible Zero Dividend Preference Shares ("Convertible Preference Shares" or the "CZDP") (the "First Complaint"). Brooks Macdonald contends that the change of control provisions should have included an option exercisable by the holders of the CZDP to redeem the CZDP upon a change of control in respect of Origo (a "CZDP COC Redemption Option"). This is on the basis on a reference in a short-form term sheet (the "CZDP Term Sheet") that was appended to the placing letter entered into between Origo's Broker and NOMAD (on behalf of Origo) and Spearpoint (now part of the Brook MacDonald group) for the subscription by Spearpoint of the CZDP (the CZDP Admission Document and Articles, as amended, having not yet been prepared when the placing letter was signed). The CZDP Term Sheet contained a provision that Brooks Macdonald argued should be interpreted as indicating that Spearpoint would have a CZDP COC Redemption Option.
The CZDP Term Sheet contained only brief details of the CZDP and Spearpoint's subscription was subject (amongst other things) to detailed documentation being produced and approved (i.e. the CZDP Admission Document and the Articles, as amended). Spearpoint had the opportunity to review this detailed documentation prior to its acquisition of the CZDP and should have made its actual subscription for the CZDP based on the final information contained in the CZDP Admission Document and the Articles. No query regarding the purported non-inclusion in the terms of the CZDP of a CZDP COC Redemption Option was raised by Spearpoint at the time of issue of the CZDP in 2011 or subsequently (including at the time of the 2013 CZDP Amendment), until the communication by Brooks Macdonald of its complaint.
Brooks Macdonald has indicated that it may commence legal proceedings if the terms of the CZDP are not amended to provide a CZDP COC Redemption Option. Such an amendment could only be made if shareholders approve the relevant changes to the Articles at a general meeting. Origo has also sought legal advice in respect of the First Complaint. On the basis of that legal advice, Board considers that a legal claim against Origo, in respect of the First Complaint if initiated by Brooks Macdonald, would be unlikely to succeed.
To date, no legal proceedings have been commenced by Brooks MacDonald in relation to the First Complaint, although Brooks MacDonald has not withdrawn its threat to bring such legal proceedings.
Separately, Brooks MacDonald, through its lawyers in the Isle of Man (where the Company is incorporated), has raised a further complaint (the "Second Complaint"). Brooks MacDonald asserted that the resolution passed on 8 March 2011 ("March 2011 Resolution") to amend the Company's Articles to reflect the creation of the CZDP shares was not validly passed. This assertion rested on an argument that a "75% Resolution" (as defined in the Articles), which is required in order to amend the Company's Articles, requires a majority of holders of 75% of all issued and outstanding shares to have voted in favour of it rather than a majority of 75% of votes cast. Brooks MacDonald, therefore, contended that if the March 2011 Resolution was not validly passed it would have a legal claim for the return from the Company of the consideration paid for the purchase of the CZDP.
On July 9, 2015, the Isle of Man Court handed down judgment in favour of the Company in respect of the Second Complaint, confirming that the Articles bear the meaning propounded by the Company.
Following the hearings of the Second Complaint, Brooks MacDonald has notified the Company of a claim in relation to the construction of a provision of the Company's Articles (the "Third Complaint"). This claim is in relation to article 4.17 of the Articles, which primarily addresses a conversion mechanism relating to the Company's convertible zero dividend preference shares.
On 29 September 2015, after extensive consultations with Brooks MacDonald, and other shareholders, the Company announced a set of proposals which would restructure the CZDPs and provide Origo with greater flexibility to implement its orderly realisation strategy. The proposals, if approved by Shareholders, would also have served to settle the ongoing dispute with Brooks Macdonald. At the relevant general meeting of the Company held on 4 February 2016, the proposals were voted down by the Company's shareholders by way of poll.
On 10 February 2016, Brooks MacDonald issued proceedings in the Isle of Man Court in respect of the Third Complaint, seeking a declaration as to the correct interpretation of article 4.17. Those proceedings were subsequently stayed by consent and Brooks MacDonald has made no attempt to prosecute that claim.
The Company announced on 8 March 2016 that, whilst the Company's Articles include a requirement for the Company to have redeemed US$12 million of CZDP by 8 March 2016, it was not in a position to redeem US$12 million of CZDPs at the current time. The 8 March 2016 announcement went on to confirm that the Company remains under a continuing obligation to undertake the redemption of US$12 million of CZDPs as and when it is legally able to do so.
The Articles expressly envisage the possibility that the Company will not have the available funds to redeem CZDP shares on the relevant redemption date (whether 8 March 2016 or later). Article 4.8 provides:
"If on any date fixed for redemption the Company is unable to redeem in full the relevant number of Convertible Preference Shares [CZDPs], if as a result of so doing the Company would be unable to satisfy the Solvency Test immediately thereafter, on any date fixed for redemption, the Company shall redeem as many of such Convertible Preference Shares as can lawfully and properly be redeemed and the Company shall redeem the balance as soon as it is lawfully and properly able to do so."
Further, under the Isle of Man Companies Act of 2006, no Redemption of the CZDP may be made by the Company if, immediately following any such redemption, the Company would be unable to satisfy the Solvency Test under the 2006 Act, the effect of the 2006 Act is to postpone the obligation to redeem those CZDP which cannot be redeemed due to the Solvency Test until such time as the Company can redeem and pass the Solvency Test, and to avoid the Company becoming insolvent by converting CZDP shareholders to creditors when the Company cannot afford to redeem.
On 10 March 2016, the Company was notified by Brooks Macdonald Asset Management (International) Limited that it has filed a Claim Form, dated 9 March 2016, at the Isle of Man High Court seeking an order to wind-up the Company on the grounds that it is just and equitable to do so and/or as relief under section 180 of the Isle of Man Companies Act 2006.
On 7 April 2016, the first hearing of this Winding-up Claim was heard in the Isle of Man Courts of Justice and certain directions were made. The presentation of Brooks Macdonald's claim to the Isle of Man Court for winding up is deemed to have commenced a winding up by the Isle of Man Court, under section 169(2) of the Isle of Man Companies Act 1931. Section 167 of the Isle of Man Companies Act 1931 states that any disposition of the property of the Company after the commencement of the winding up by the Isle of Man Court is void unless the court orders otherwise. Consequently, whilst the Company judged that its daily operations should remain broadly unaffected, disposals of its assets without Court approval may be rendered void. The Company has received legal advice that the Isle of Man Court is likely to validate realisations where no person will be prejudiced by them which are for fair value and on arm's length, and also that the provisions of section 167 of the Isle of Man Companies Act 1931 may extend to any transfer of the Company's shares. As a result, At the request of the Company trading on AIM for the under-mentioned securities was temporarily suspended 0n 11 March, 2016, pending clarification of the Company's financial position.
There were no other material contracted commitments or contingent assets or liabilities at 30 June 2016 (31 December 2015: none) that have not been disclosed in the consolidated financial statements.
24 Events after the reporting period
On 28 July, 2016, Kincora Copper Limited (TSX.V: KCC) ("Kincora") announced that it had closed a non-brokered private placement for gross proceeds of C$1,053,060 through the issuance of 3,510,200 shares at a price of C$0.30 per share (the "Offering"). Concurrent with, and on the same terms of the offering, 6,666,667 shares were issued to Origo for settlement of an outstanding convertible note in the amount of C$2,000,000. Funds in escrow of C$500,000 were returned to Origo and, subsequently, accrued interest was converted into Kincora share, fully settling the note.
On 19 August 2016, the Company announced that, following extensive discussions with its key shareholders and further to the proposed restructuring of the Company's share capital set out in the circular sent to shareholders in January 2016, a revised set of proposals (the "Proposals") had been agreed and would be put to shareholders for their approval.
In August 2016, with the agreement of the Company, Brooks Macdonald Group PLC and Pacific Alliance Asia Opportunity Fund L.P. ("PAX"), the Isle of Man Court granted validation orders such that: (i) transfers of the Company's issued shares shall not be void by virtue of section 167 of the 1931 Act in the event of a winding up order being made (the "Share Transfer Validation Order"); and (ii) dispositions of the property of the Company made in the ordinary course of business for proper value shall not be void by virtue of the provisions of section 167 of the 1931 Act notwithstanding the presentation of the Winding-up Claim.
On 7 September 2016 the Company posted a Circular to Shareholders providing details of the proposed restructuring of the Company's share capital together with notices convening a general meeting, a CZDP class meeting and an ordinary share class meeting (together the "Meetings") for the purpose of putting the Proposals to shareholders.
As a result of the Share Transfer Validation Order and the publication of the Circular, which contained full details of the Proposals and the likely implications for the Company should the Proposals be rejected, the Company applied for the resumption in trading in the Company's securities on AIM. The temporary suspension was lifted on 9 September, 2016.
On September 27 2016, the Company announced that the Proposals were duly approved by the Meetings, and hence the Proposals were implemented.
The Proposals restructured the share-capital of the Company and provides Origo with greater flexibility to implement its orderly realisation strategy with a view to maximising value on behalf of Origo's shareholders. The key elements of the Proposals included the following:
-- the removal of all obligations of the Company in respect of the redemption of at least 12 million CZDPs and the removal of any final CZDP redemption and/or maturity date;
-- the reset of the accreted principal amount per CZDP to US$1.0526;
-- that all distributions made to CZDP Shareholders shall upon receipt by CZDP Shareholders operate to redeem the relevant whole number of issued CZDPs (pro rata as between CZDP Shareholders in direct proportion to the numbers of CZDPs which they respectively hold);
-- that no rate of return on the CZDPs will begin to accrete until 1 January 2018 and, in respect of each CZDP still in issue on 1 January 2018, its principal amount of US$1.0526 shall be subject to the accretion of a rate of return equal to 4 per cent. per annum from (and including) 1 January 2018 to (and including) the date on which such CZDP is redeemed, with such return accruing on a simple and not compound basis;
-- that the current liquidation preference of the CZDPs shall be removed, except if a winding up of the Company is commenced within 365 days of the Settlement Date (other than such a winding up which is initiated in breach of the BM Undertaking or otherwise initiated by Brooks Macdonald or any of its group entities), as further explained below;
-- that the rights attaching to the CZDPs and the Ordinary Shares will be amended such that, other than on a winding up (other than any such winding up which is initiated in breach of the BM Undertaking or which is otherwise initiated by Brooks Macdonald or any entity or person which controls or is controlled by or is under common control with any Brooks Macdonald entity) commencing within 365 days of the Settlement Date, Ordinary Shareholders shall receive a proportion of all future distributions alongside CZDP Shareholders on the following basis (pro rata within the respective classes of shares):
o in respect of the first US$15 million of distributions, 80 per cent. (i.e. US$12 million) to the CZDP Shareholders and 20 per cent. (i.e. US$3 million) to the Ordinary Shareholders;
o in respect of distributions in excess of the first US$15 million:
- until such time as all CZDPs have been redeemed in full, 44 per cent. to the CZDP Shareholders and 56 per cent. to the Ordinary Shareholders;
- thereafter, 100 per cent. to the Ordinary Shareholders;
-- that until such time as all CZDPs have been redeemed in full:
o distributions on Ordinary Shares will be made solely in the proportions set out above, and at the same time as distributions are made to the CZDP Shareholders, after which time former CZDP Shareholders will no longer be entitled to receive any further distributions or other amounts from the Company;
o the CZDPs will have priority in respect of the balance of their accreted principal amount over the Ordinary Shares on a winding up of the Company (other than any such winding up which is initiated in breach of the BM Undertaking, or which is otherwise initiated by Brooks Macdonald or any entity or person which controls or is controlled by or is under common control with any Brooks Macdonald entity) provided such winding up commences within 365 days of the Settlement Date;
o That the CZDP conversion provisions will all be removed;
o That the Articles also be amended so that any single person holding the greatest number of Ordinary Shares and any single person holding the greatest number of CZDPs shall each have the right to nominate an independent person to be appointed as a non-executive director of the Company, such appointment being subject to relevant regulatory requirements;
-- That the rights attaching to the CZDPs will be amended such that, for so long as there are CZDPs in issue, the Company shall not, and shall procure that no member of the Group shall:
o without CZDP Majority Shareholder Consent:
- undertake or permit or incur (i) any borrowings (or enter into or vary any contracts for financial indebtedness or arrangements for financial indebtedness), or (ii) any other financial indebtedness on the part of any member of the Group, other than in each case for the purposes of discharging liabilities of any member of the Group existing as at 19 August 2016 towards fees or disbursements of professional advisers (excluding the fees and disbursements of OAL), but which in any event shall not exceed GBP2 million in aggregate;
- without prejudice to the obligation of the directors of the Company to have due regard to the interests of all shareholders as a whole, cease to have due regard to the interests of the CZDP Shareholders as a class and do anything materially prejudicial to them;
- change the terms of engagement or appointment or the fees payable to any investment manager (including OAL) of any member of the Group;
- if any CZDPs remain in issue on 1 January 2019, extend the Asset Realisation Support Agreement (further details of which are set out in paragraph 7 below) beyond that date;
- enter into, or permit the entry into of, any transaction or arrangement between any member of the Group on the one hand and any of Pacific Alliance Group Asset Management Limited and/or PAX ("PAG Entity") and/or any affiliate of any PAG Entity who or which is a "related party" (as defined in the AIM Rules for Companies) of the Company and/or any agent of any PAG Entity or such affiliate thereof (including, without limitation, any fund manager) and/or any shareholder of the Company from time to time owning more than 10 per cent. of the voting rights of the Company and/or persons acting in concert with any of them, on the other hand save in respect of issues of any further Ordinary Shares in the Company issued on bona fide arm's length terms; and
- allot or issue any shares or securities or rights to subscribe for or to convert or exchange any securities into shares or securities or reclassify any shares or permit any of the foregoing by any member of the Group (other than (i) issues of Ordinary Shares made to the Company or any wholly owned subsidiary of it; and (ii) issues of any further Ordinary Shares in the Company in every case issued on bona fide arm's length terms); and;
o without CZDP Ordinary Consent, make or permit any change in its Investing Policy;
The Company and OAL are party to an asset realisation support agreement (the "Asset Realisation Support Agreement"), the terms of which were approved by shareholders on 20 November 2014. The Asset Realisation Support Agreement became effective on 13 January 2015. On 6 September 2016, the Company entered into an amendment agreement with OAL to the Asset Realisation Support Agreement (the "Amendment Agreement"). Following shareholder approval of the Proposals at the Meetings, the Asset Realisation Support Agreement has been amended as follows:
The aggregate annual fees payable to OAL for the provision of services pursuant to the Asset Realisation Support Agreement has been reduced as follows:
o US$1.6 million (previously US$1.8 million) in respect of the second year of the Asset Realisation Support Agreement (i.e. the year commencing on 13 January 2016);
o US$1.2 million (previously US$1.6 million) in respect of the third year of the Asset Realisation Support Agreement (i.e. the year commencing on 13 January 2017);
o US$1 million (previously US$1.05 million) in respect of the fourth year of the Asset Realisation Support Agreement (i.e. the period commencing on 13 January 2018 and ending on 31 December 2018);
-- The Existing Performance Hurdle (as defined below) will be removed and instead OAL shall be entitled to receive the performance fee under has been removed and instead OAL shall be entitled to receive the performance fee under the Asset Realisation Support Agreement only if the Company has made aggregate Distributions in excess of US$90 million to Shareholders during the period from the date on which the Proposals were approved until the termination of the Asset Realisation Support Agreement (the "New Performance Hurdle"); and
-- Realisation Support Agreement will be a fixed term expiring on 31 December 2018 and will be subject to termination for cause.
Under the terms of the Asset Realisation Support Agreement, OAL were to receive an additional performance fee if the Group has received realised gross cash proceeds from the realisation of assets in its portfolio (net of repayment of third party debts, any related hedge or other break costs and any prepayment fees and penalties, but before any related transactional costs, fees and expenses and any taxes payable) ("Gross Realisations") in excess of US$90 million (the "Existing Performance Hurdle"). The Existing Performance Hurdle will be amended pursuant to the Amendment Agreement as set out above such that OAL will be entitled to a performance fee (the quantum of which reflects the existing terms of the Asset Realisation Support Agreement) of 20 per cent. of Gross Realisations over the New Performance Hurdle, subject to the first US$1.7 million of Gross Realisations over the New Performance Hurdle being payable to OAL
Finally, in connection with the Proposals, the Company entered into a settlement deed (the "Settlement Deed") with Brooks Macdonald Group PLC ("BM"), Pacific Alliance Group Asset Management Limited ("PAGAML") and certain of their affiliates. The Settlement Deed was conditional on, inter alia, the Proposals being approved by shareholders. The Settlement Deed, once it becomes effective, disposes of the legal claims pursued and/or intimated by BM to date and BM has agreed to take all required steps to discontinue the proceedings it has brought in respect of the Conversion Claim and the Winding-up Claim.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFIDASIAFIR
(END) Dow Jones Newswires
September 30, 2016 02:00 ET (06:00 GMT)
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