Convenience Retail Asia
to Raise HK$160 Million
For Circle K's Expansion into China
Hong Kong, January
8, 2001 - Convenience Retail Asia Limited (CRA), a subsidiary of privately
held Li & Fung (1937) Limited and the licensee of the Circle K convenience
store brand in Hong Kong and for most of the Mainland of China, is
seeking a listing on the Growth Enterprise Market in Hong Kong.
CRA is offering
163,900,000 shares at a price of HK$1.05 to HK$1.15, which is expected
to raise net proceeds of HK$160 million. Of the allotment, approximately
32,780,000 shares will be available for retail investors, with 131,120,000
shares placed with professional and institutional investors. Following
the listing, and assuming a price of HK$1.10, CRA will have a market
capitalization of more than HK$720 million.
Dr. Victor K.
Fung, Chairman of CRA, said: "The timing is right to take CRA public
so that we may take advantage of the enormous growth opportunities
for the Circle K brand in both Hong Kong and the Chinese Mainland.
The convenience retail market in China is in an infancy stage, but
will rapidly take shape with China's entry into the WTO and with continued
economic growth on the Mainland. In Hong Kong, fast paced lifestyles
and increasing urbanization have created the need for more convenience
retail outlets. We believe our business model and growth strategy
will meet consumer needs in both markets."
Globally, the
Circle K brand is owned by Tosco Corporation, based in the U.S., and
is one of the fastest growing convenience store chains with 5,700
stores as of December 2000.
In Hong Kong,
Circle K was established in 1985, with 100 percent of the stores owned
and managed by CRA. Today, the company employs 1,200 people in Hong
Kong and operates more than 120 stores. On average, Circle K Hong
Kong stores conduct 275,000 transactions each day.
"Because we operate
wholly owned stores, we are able to achieve total alignment in the
execution of business strategies and marketing programs, thus creating
efficiency and consistency at every level," said Mr. Richard Yeung,
Chief Executive Officer of CRA. "We believe that this business model,
combined with customer focused services emphasizing on speed, tidiness
and friendliness, will lead to Circle K becoming the fastest growing
and the preferred convenience store in Hong Kong, and ultimately Mainland
of China."
In the 12 months
ended December 31, 2000, Circle K operations in Hong Kong generated
turnover of HK$1.1 billion, with profit attributable to shareholders
of more than HK$45 million.
The proceeds from
the share offering will help fuel Circle K's expansion into the Chinese
Mainland market. This growth strategy features three stages of development:
Guangzhou and the Pearl River Delta area, followed by growth in Eastern
China, and subsequently the opening of stores in Northern China.
"Strong controlling
shareholder support from Li & Fung will assist the development of
our business, particularly with regard to the successful supply chain
management processes the company has developed," Yeung said. "We also
will benefit from Li & Fung's strong regional relationships, which
will be leveraged to assist in the development of our business, including
expansion into other geographical markets and by providing contacts
that may promote or facilitate future strategic alliances."
The CRA shares
will be offered for public subscription from January 9 to January
12. Trading in the stock will commence on Thursday, January 18. BNP
Paribas Peregrine is the Global Coordinator and Sponsor for the exercise.
About Li
& Fung
Li & Fung was
founded in Guangzhou in 1906, as a traditional Chinese family company
engaged in trading. In 1937, it was established in Hong Kong as Li
& Fung (1937) Limited, the holding company for Li & Fung (Retailing)
Limited.
In the 1970s,
the management of Li & Fung was transferred to the third generation
of the Fung family - Dr. Victor K. Fung and Dr. William K. Fung -
who remain at its helm today. Privately held Li & Fung is now a multinational
group of companies comprising three distinct core businesses, namely
export trading, retailing and distribution.
Li & Fung (Retailing)
Limited, the holding company of Convenience Retail Asia, was formed
in 1985. There are three other chains within the retailing group:
Toys "R" Us, Fotomax and Fun Fun World. The retailing group's business
extends from Hong Kong to Taiwan, Singapore, and Malaysia, with plans
for expansion into China and other Asian countries.
About Tosco
Tosco Corporation,
which currently has over US$23 billion in annualized revenues, is
the largest independent refiner and marketer of petroleum products
and convenience store merchandise in the United States. Tosco (NYSE:
TOS), a Fortune 150 company, is responsible for a family of nationally
recognized gasoline and convenience store brands including Union 76,
Exxon, Mobil, and Circle K with more than 6,300 retail sites coast-to-coast.
For more information about Tosco, please visit http://www.tosco.com.
For more information,
please contact:
Scotchbrook-BSMG
Worldwide
|
Telephone:
|
2877 3939
|
Fannie Mok
|
Direct line:
|
2863 9119
|
Ken Walker
|
Direct line:
|
2863 9168
|
Prudence
Lai
|
Direct line:
|
2863 9120
|
CRA corporate
website: www.cr-asia.com |