re: merger details released ASX release after mkt close...

re: merger details released ASX release after mkt close today

Suggest all interested read for themselves

One point is that it would seem on My reading that

significantly fewer shares are to be issued than some might have thought... have a read yourself though !

motorway



"4. OVERVIEW OF THE PROPOSED ACQUISITION OF CEH
The Company and Best Winning have decided to merge their business interests and the
Company has agreed to purchase Best Winning’s 100% interest in CEH. On 14 May 2005
the Company and Best Winning entered into a Share Sale Agreement for this purpose. The
consideration for this acquisition is to be an allotment of 32.15 million fully paid ordinary
shares in the capital of the Company to Best Winning. All rights and ownership of the
Lottery Permits and the Keno Permits are owned by SKIM, a wholly owned subsidiary of
CEH.
In addition, in accordance with clause 5 of the Share Sale Agreement, Best Winning agreed to
subscribe for up to 10.5 million fully paid ordinary shares in the capital of the Company at
$0.60 per share.
Pursuant to a loan facility agreement between Best Winning and CEH, Best Winning is to
provide a loan facility of up to RMB 40 million (AUD 6.48 million) to CEH for use as
security deposits payable to SWLC for the Lottery Permits and Keno Permits to be issued to it
as well as working capital for CEH and its wholly owned subsidiaries. The outstanding loan
plus interest will be repayable by the Company to Best Winning after the completion of the
transfer of ownership in CEH to the Company.
Sino Securities International Limited
The Board believes that the merger will add to the Company’s businesses a new segment,
gaming in the PRC, which is high growth and recession proof. The gaming business in the
PRC is expected to attract major players from the international gaming industry who may be
interested in partnering with the Company in China, thus enhancing the Company’s corporate
growth prospects. The merger will also expand the earnings base of the Company. In
addition, the close working relationship between the Company and CEH’s ultimate
controlling shareholder, Horizon Investment Group Ltd (‘Horizon’), is likely to bring forth
additional investment banking assignments to the Company.
It is envisaged that the merger will also create synergy with the business of the Company’s
controlled entity, GoConnect Ltd (“GCN”). The relationship established with CEH has
already led to a licensing agreement with Horizon for GCN’s media technologies and mobile
gaming application mobile8888, for use in the China market."