SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A#2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 6, 1996
(September 19, 1996)
HENG FAI CHINA INDUSTRIES, INC.
(Exact name of Registrant as specified in charter)
Delaware 0-7619 93-063633
(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
650 West Georgia Street, Vancouver, British Columbia, Canada V6B 4N8
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (604) 685-8318
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(Former Address) (Zip Code)
Item 2. Acquisition or Disposition of Asset
As of September 4, 1996, Heng Fai China Industries, Inc. (the "Registrant"
or the "Company"), entered into an agreement, a copy of which is annexed as
exhibits to this Report (the "Original Agreement"), with Monkey King Group (the
"Seller") pursuant to which Worldwide Container Company Ltd. ("Worldwide"), a
wholly owned subsidiary of the Company, acquired from the Seller a 70% interest
in Wuhan Container Co., Ltd. ("Wuhan") in exchange for 727,272 shares of the
Company's restricted common stock (the "Shares"). On December 5, 1996, the
parties entered into an amendment to the Original Agreement, a copy of which is
annexed to this report as Exhibit D (the "Amended Agreement"). Based upon
negotiations between the Company's President and the Seller the Shares were
valued at a per share price of $5.50. Pursuant to the terms of the Original
Agreement the Shares were to be held in escrow by an escrow agent in Singapore ^
until Worldwide received cumulative profits, contributions and/or dividends
aggregating a minimum of $4,000,000 from the operations of Wuhan. During the
escrow period the Shares were not available for sale by the Seller. In
accordance with the Amended Agreement, the escrow provisions were deleted and
the sale of Shares by the Seller will not be subject to any conditions. Wuhan is
a People's Republic of China state company which was formed to engage in the
design, manufacture, lease and repair of standard and non-standard containers
and related steel structure products. Wuhan commenced trial production of its
containers in the Spring of 1996.
The closing of the Agreement was conditioned upon the approval of the Board
of Directors of the Company as well as the Company's satisfactory completion of
a due diligence review of Wuhan. On September 19, 1996 the Company's Board
approved the Agreement, completed its due diligence review of Wuhan and directed
the issuance of the Shares to Hubei Monkey King Investment & Development
Corporation ("HMK"). Pursuant to the Agreement the transaction will be deemed
closed upon delivery of the Shares to the Seller.
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The assets acquired by the Company through the acquisition of a 70%
interest in Wuhan consisted of assembly lines, plant and manufacturing
production equipment, power generators and related equipment. Wuhan presently
owns its manufacturing plant which is located in the City of Wuhan on the banks
of the Yangtze River and Hanshui River. The facility consists of approximately
480,000 square feet which will Wuhan estimates has a capacity to produce 10,000
containers on an annual basis. The Company believes that approximately
$5,000,000 in capital improvements will be required to be made to the plant in
order to reach maximum capacity. The Company intends to utilize Wuhan's assets
in order to engage in the full scale design, manufacture and production of
container and related steel structure products.
Neither the Company nor any of the affiliates possessed any interest in
Wuhan, the Seller and/or HMK prior to the execution and/or closing of the
Agreement.
Item 7. Financial Statements and Exhibits
a) Annexed as Exhibit A are Wuhan's audited financial statements for the year
ended December 31, 1995. (previously filed)
b) Annexed as Exhibit B are the Company's Pro-Forma condensed balance sheet
and statement of operations and explanatory notes, giving effect to the
combined accounts of the Company and Wuhan as required by the instructions
to Form 8-K. (previously filed)
c) Annexed as Exhibit C is a copy of the Stock Purchase Agreement between the
Company and the Monkey King Group. (previously filed)
d) Annexed as Exhibit D is a copy of the amendment to the Stock Purchase
Agreement between the Company and the Monkey King Group.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
December 6, 1996
HENG FAI CHINA INDUSTRIES, INC.
(Registrant)
By:s\ Robert H. Trapp
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Robert H. Trapp,
Secretary, Treasurer and Director
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EXHIBIT D
THIS AGREEMENT WAS MADE as of the 30th day of November, 1996.
Between:
Worldwide Container Co. Ltd.
Unit B, 13th Floor, Lippo Leighton Tower,
103-109 Leighton Road,
Causeway Bay, Hong Kong
(hereinafter called the "Party A")
AND
Heng Fai China Industries Inc. ("HFCI")
1600-650 West Georgia Street
Vancouver, B.C. Canada
(hereinafter called the "Party B")
AND
Monkey King Group
344, Yi Ling Road
Yichang, Hubei,
People's Republic of China
(hereinafter called the "Party C")
Further to the agreement ("the original agreement") dated 4th September, 1996
made amongst Party A, Party B & Party C in relation to the transfer of the 70%
interest of Wuhan Container Co. Ltd. ("WCCL"), the three parties considered the
cancellation of the escrow agent as requested by Party C. This supplementary
agreement was entered into between Party A, Party B and Party C after
negotiation to amend Clauses 6, 7, 8 & 9 of the original agreement as follows:
Original Clause 6: "The vendor jointly authorizes the Buyer to deliver the
727,272 shares of HCFI Treasury Stocks as consideration
shares in the name of the Escrow Agent. Upon the execution
for this Agreement the Buyer will deliver in the Escrow
Agent's name the HFCI Shares to the Escrow Agent and the
Issuer will properly register the Escrow Agent's name in the
Issuer's shareholders' register."
It is amended to: "Party A will deliver 727,272 shares of HCFI common stocks
registered in the name of Hubei Monkey King Investment &
Development Corporation ("HMK") to HMK and Party B will
register these shares in its Register of Shareholders."
Original Clause 7 "The Vendor agrees to register the 70% interest of the WCCL
in the name of the Buyer upon effected payment of the HFCI
Shares to the Escrow Agent.
It is amended to: "Party C agrees to procure HMK to properly transfer and
register the 70% interest of WCCL in the name of Party A
before 31st December, 1996 upon effected delivery of HFCI
Shares to HMK.
Original Clause 8 "The Escrow Agent agrees to facilitate the policing of this
Agreement so that all parties to this agreement will
undertake the terms and conditions of this agreement."
This Clause is cancelled.
Original Clause 9 "The Vendor agrees to keep the 727,272 HFCI Shares in the
Escrow Agent as performance shares. The Vendor further
agrees only to sell the HFCI Shares upon meeting the
following criteria:
a. A total profit contribution to Worldwide Container Co,
Ltd. of 100% US$4,000,000 in the form of cash dividend
payments deposited in the designated bank accounts
operated by Worldwide Container Co. Ltd. in the United
States or in Hong Kong;
b. The profit contribution can be accumulative but must be
totaled up to US$4,000,000 before release of share for
sales in the over counter markets;"
This Clause is cancelled.
Except for the aforesaid amendments, all other clauses of the original agreement
remain unchanged.
SIGNED, SEALED AND DELIVERED BY
Worldwide Container Co. Ltd.
in the presence of:
[ILLEGIBLE]
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Signature
Date: 30th November, 1996
Address: Unit B, 13th Floor
Lippo Leigton Tower
103-109 Leighton Road
Causeway Bay, Hong Kong
SIGNED, SEALED AND DELIVERED BY
Heng Fai China Industries Inc.
in the presence of
/s/ Fai H. Chan
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Signature
Date: 30th November, 1996
Address: 1600-650 West Georgia Street
Vancouver, B.C. Canada
SIGNED, SEALED AND DELIVERED BY
Monkey King Group
in the presence of:
[ILLEGIBLE]
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Signature
Date: 30th November, 1996
Address: 344, Yi Ling Road,
Yichang, Hubei,
People's Republic of China