FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For October 18, 2005
Euro Tech Holdings Company Limited
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(Translation of registrant?s name into English)
18/F Gee Chang Hong Centre, 65 Wong Chuk Hang Road, Hong Kong
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(Address of Principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12G3-2(b):82-______________.
Euro Tech Holdings Company Limited
Form 6-K
Page 2 of 5
Item 5. Other Events
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Entry into Material Agreements
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On or about October 18, 2005, the Registrant, through its
subsidiary EuroTech (Far East) Limited, entered into two agreements
with Tamworth Industrial Limited ("Tamworth") to purchase (a) 2,100
shares (approximately 21%) of the 10,000 issued and outstanding shares
of Pact Asia Pacific Limited ("Pact") for approximately US $525,000
(the "Pact Agreement") and (b) a twenty-one (21%) percent equity
interest in Yixing Pact Environmental Technology Co. Ltd. ("Yixing")
for approximately US $475,000. The foregoing agreements are subject to
many legal, accounting, and other preconditions by each of the parties
and satisfaction of a customary due diligence and government
approvals. Additionally, the Registrant's subsidiary is not to be
required to complete the purchases unless it also acquires the
interests in both Pact and Yixing pursuant to the agreements.
If the transactions are completed, the parties agreed that Pact
will:
* comply with the U.S. Sarbanes-Oxley Act requirements
on internal controls at Pact's cost.
* appoint an accountant for both Pact and Yixing
recommended by the Registrant's subsidiary.
* prepare and provide monthly financial accounts in
compliance with U.S. GAAP requirements for the
Registrant's subsidiary.
* appoint auditors nominated by the Registrant's
subsidiary.
And that Yixing:
* will have a majority of its directors appointed by
Registrant's subsidiary.
* (unless prohibited by the law or regulation of the
People's Republic of China ("PRC")) distribute at
least 35% of its net profits by way of dividends.
* comply with the U.S. Sarbanes-Oxley Act requirements
on internal controls at Yixing's cost.
Euro Tech Holdings Company Limited
Form 6-K
Page 3 of 5
* prepare and provide monthly financial statements to
Registrant's subsidiary.
* prepare financial statements both in compliance with
the regulations of the PRC and, separately, U.S. GAAP.
* appoint auditors selected by Registrant's subsidiary.
* prohibit expenditures in excess of a certain level
without the prior approval of Yixing's Chairman.
* Registrant's subsidiary has the right to prohibit
loans to Yixing staff and approve all deviation from
Yixing's existing bonus scheme.
Both Pact and Registrant's subsidiary granted to the other a
right of first refusal should either elect to sell some or all of
their shares to a third party at the same price and with the same
conditions as that offered by the third party.
The Registrant's subsidiary also granted Tamworth a put option
exercisable any time after three years from a closing to require the
Registrant's subsidiary to acquire part of all of the remaining shares
of Pact owned by Tamworth. The acquisition price for each remaining
share is to be based on the following formula:
5.2 times the Average Net Profit of the latest 3 years of Pact
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Total Number of Shares Outstanding
Similarly, the Registrant's subsidiary also granted Tamworth a
put option exercisable any time after three years from a closing to
require the Registrant's subsidiary to acquire all remaining
securities of Yixing held by Tamworth at 5.2 times of Yixing's net
profit for the three prior fiscal years.
As part of the Yixing agreement, Mr. George Hayek is to continue
his employment relationship with Pact and Yixing at an annual income
of not less than U.S. $110,000 with salary increments after 2005 is to
be the subject to further discussions. Mr. Hayek is the majority
shareholder of Tamworth. Also, as a substantial portion of Yixing's
income is derived from sales to a Middle East company that Mr. Hayek
owns a beneficial interest in, Mr. Hayek is to disclose the pricing
policy for sales to that Middle East company and is to adopt this
policy for future sales to the Middle East company after completion of
the transactions.
Euro Tech Holdings Company Limited
Form 6-K
Page 4 of 5
In January 2002, the Registrant acquired a 30% equity interest in
Pact and Yixing. Pact and Yixing are privately owned engineering firms
situated in Shanghai that specialize in the design, manufacture and
operation of water and wastewater treatment plants in several
industries situated in China. Pact and Yixing, through associates and
business alliances, also conduct similar operations in the Middle
East. Registrant believes that Pact and Yixing's businesses are
complementary to the Registrant's business.
Item 9.01 FINANCIAL STATEMENT AND EXHIBITS
(c) Exhibits. The following exhibits are filed with this report:
Exhibit 10.1. Share Sale and Purchase Agreement between Tamworth
Industrial Ltd. and Registrant's subsidiary.
Exhibit 10.2 Equity Interest Transfer Agreement between Tamworth
Industrial Ltd. and the Registrant's subsidiary.
Euro Tech Holdings Company Limited
Form 6-K
Page 5 of 5
SIGNATURES
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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, thereunto duly authorized.
EURO TECH HOLDINGS COMPANY LIMITED
(Registrant)
Dated: October 25, 2005 By: /s/T.C. Leung
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T.C. Leung, Chief Executive Officer
and Chairman of the Board