|SEQ_NO||3||Date of announcement||2022/11/09||Time of announcement||20:06:16|
The BOD of Far Eastern New Century Co. resolved to exchange shares with its subsidiaries
|Date of events||2022/11/09||To which item it meets||paragraph 11|
1.Type of merger and acquisition (e.g.merger, spin-off, acquisition, or share transfer):Share exchange 2.Date of occurrence of the event:2022/11/09 3.Names of companies participating in the merger and acquisition (e.g., name of the other company participating in the merger, newly established company in a spin-off, acquired company, or company whose shares are transferred): Acquired company: Far Eastern New Century Corp. (FENC or the Company) Target companies: Far Eastern Fibertech Co., Ltd. (FEFC) Oriental Resources Development Co., Ltd. (ORD) Oriental Green Materials Ltd. (OGM) Far Eastern Apparel Co., Ltd. (FEAC) 4.Trading counterparty (e.g., name of the other company participating in the merger, company spinning off, or trading counterparty to the acquisition or share transfer): Shareholder of the transferor companies: Yuan Ding Investment Co., Ltd. (YDI) 5.Whether the counterparty of the current transaction is a related party: Yes 6.Relationship between the trading counterparty and the Company (investee company in which the Company has re-invested and has shareholding of XX%), explanation of the reasons for the decision to acquire from or transfer shares to an affiliated enterprise or related party, and whether it will affect shareholders’ equity: FENC holds 99.7% shares of YDI directly and indirectly. In consideration of the overall long-term strategic development, simplify the investment structure and improve the group synergy, FENC proposed to exchange shares among subsidiaries in accordance with the Article 29 of Business Mergers and Acquisitions Act. The share exchange would not impact shareholders’ equity of FENC as the share exchange will be within the Company’s consolidated entities based on the share exchange agreement 7.Purpose of the merger and acquisition: consideration of the overall long-term strategic development, simplify the investment structure and improve the group synergy 8.Anticipated benefits of the merger and acquisition: After the share exchange completion, the Company expect the resource integration will improve its operational performance and industrial competency due to the operational management and holding structure consolidated 9.Effect of the merger and acquisition on net worth per share and earnings per share: The share exchange will help improve operational efficiency and profitability. 10.Follow-up procedures for mergers and acquisitions, including the time and method of payment of the consideration for mergers and acquisitions, etc.: FEFC: 1 share for NT$15.16842071; total payment of NT$1,380,326,285. ORD: 1 share for NT$24.41869865; total payment of NT$140,127,215. OGM: 1 share for NT$12.48658906; total payment of NT$825,569,353. FEAC: 1 share for NT$4.05197651; total payment of NT$181,416,158. The record date for the share exchange will be on Dec. 30, 2022. 11.Types of consideration for mergers and acquisitions and sources of funds: The transaction is settled in cash through self-financing. 12.Share exchange ratio and calculation assumptions: FEFC: 1 share for NT$15.16842071; ORD: 1 share for NT$24.41869865; OGM: 1 share for NT$12.48658906; FEAC: 1 share for NT$4.05197651. The record date for the share exchange will be on Dec. 30, 2022. 13.Whether the CPA, lawyer or securities underwriter issued an unreasonable opinion regarding the transaction:No 14.Name of accounting, law or securities firm:BDO Taiwan 15.Name of CPA or lawyer:George Chou 16.Practice certificate number of the CPA: License No. Taiwan-Finance-Securities-VI-3209 17.The content of the independent expert opinion on the reasonableness of the share exchange ratio, cash or other assets allotted to shareholders in this merger and acquisition: Considering that the transaction was for organizational restructure, there is no change to the interests of both parties due to unchanged joint control over the target companies. The transaction price of the share exchange was reasonable in accordance with the provisions of the relevant interpretation letter issued by the government. 18.Estimated date of completion: The record date for the share exchange will be on Dec. 30, 2022. 19.Matters related to the assumption of corporate rights and obligations of the dissolving company (or spin-off) by the existing or newly-established company:N/A 20.Basic information of companies participating in the merger: FENC: Petrochemical and polyester materials, semi-finished products, finished goods, woven and knitted garments FEFC: Production and sales of nylon fibers ORD: Production of antibacterial dressings, biofiber scald dressings, artificial skin and other products OGM: Recycled PET bottles and converted to high quality R-PET FEAC: Sales of textile, garments, and bedding, etc. 21.Matters related to the spin-off (including estimated value of the business and assets planned to be transferred to the existing company or new company.The total number of shares to be acquired by the spun-off company or its shareholders, and their respective types and no.Matters related to the reduction, if any, in capital of the spun-off company)(note: not applicable for announcements unrelated to spin-offs):N/A 22.Conditions and restrictions for future transfer of shares resulting from the merger and acquisition:NIL 23.The plan after the merger and acquisition is completed: After share exchange completion, FEFC, ORD, OGM and FEAC will become fully owned subsidiaries of the Company and will continue their operations. 24.Other important terms and conditions:NIL 25.Other major matters related to the mergers and acquisitions:NIL 26.Any objections from directors to the transaction:No 27.Information on interested directors involved in the mergers and acquisitions: Directors: Mr. Douglas Tong Hsu and Mr. Johnny Hsi, the representative of Asia Cement Corp. Material information of its own interest or that of the representative of the enterprise: Mr. Douglas Tong Hsu and Mr. Johnny Hsi were assigned as FEFC’s directors by YDI. Circumvention and reasons: Referring to item 7 under Article 29, item 6 under Article 18 of Business Mergers and Acquisitions Act and relevant regulations, the transaction is to transfer the shares under joint control, which will not impact the rights and interests of shareholders. Thus, the aforementioned directors can participate the meeting and voting. Reasons for or against the share exchange: With the organizational restructure, the simplified investment structure can improve operational efficiency and shareholders' equity. After the review of Audit Committee and the Price Reasonableness Opinion issued by CPA, the share exchange was considered fair and reasonable. Therefore, the BOD was resolved to approve the share exchange. 28.Whether the transaction involved in change of business model:No 29.Details on change of business model:N/A 30.Details on transactions with the counterparty for the past year and the expected coming year:N/A 31.Source of funds:N/A 32.Any other matters that need to be specified: The share exchange will be reported to 2023 Annual Shareholders’ Meeting.