GREAT WALL MOTOR COMPANY LIMITED *

Transcription

1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. GREAT WALL MOTOR COMPANY LIMITED * (a joint stock company incorporated in the People s Republic of China with limited liability) (Stock code: 2333) ANNOUNCEMENT INVESTMENT IN MINING RIGHTS THROUGH SUBSCRIPTION OF NO MORE THAN 3.5% EQUITY INTEREST IN PILBARA MINERALS IN AUSTRALIA BY BILLION SUNNY DEVELOPMENT, AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THE COMPANY Important notice: The mining rights involved in the subscription of equity interest were acquired and are held legally by Pilbara Minerals Limited ( Pilbara Minerals ) in Australia. Pilbara Minerals holds 100% interest in the Pilgangoora Lithium-Tantalum Project located at 120km south of Port Hedland of Western Australia. The production of the first phase of the project is expected to be 300,000 tons per annum of spodumene concentrate. The project is expected to commence production in the first half of The second phase of the project is expected to commence production in the first half of I. Transaction summary (I) General information and considerations of the board of directors On 28 September 2017, the Resolution on Investment in Mining Rights through Subscription of No More Than 3.5% Equity Interest in Pilbara Minerals in Australia by Billion Sunny Development, an Indirect Wholly-owned Subsidiary of the Company ( Pilbara Minerals 3.5% ) was approved at the fifth meeting of the sixth session of the board of directors of Great Wall Motor Company Limited (the Company ), pursuant to which the proposed subscription of 56,000,000 new shares in Pilbara Minerals at 1

2 AUD0.5 (RMB ) per share, amounting to AUD28 million (RMB million) in aggregate, by Billion Sunny Development Limited ( Billion Sunny Development ), an indirect wholly-owned subsidiary of the Company, to be financed by internal resources was approved. Upon completion of the subscription, Billion Sunny Development will hold no more than 3.5% equity interest in Pilbara Minerals. (II) Opinions of independent non-executive directors The independent non-executive directors of the Company are of the view that the subscription will secure the provision of lithium required for the business development of the Company and will provide strong support to the profitability and sustainable development of the Company. The subscription facilitates the long-term development of the Company and is in the interests of the Company and its shareholders as a whole, in particular the minority shareholders. The approval of the subscription complied with relevant laws and regulations. The independent non-executive directors have agreed the subscription. (III) The transaction is subject to approval and other procedures The subscription does not constitute a related party transaction under the Rules Governing the Listing of Stocks on Shanghai Stock Exchange and is not a significant asset restructuring under the Administration Measures on Significant Asset Restructuring of Listed Companies ( ). The subscription does not constitute a notifiable transaction or a connected transaction under Chapter 14 and Chapter 14A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The subscription is not subject to approval by the general meeting of the Company. II. General information of the subject of the transaction (I) General information Name: Pilbara Minerals Limited Registered date: 10 January 2005 Registered address: Level 2, 88 Colin Street, WEST PERTH WA, AUSTRALIA 6005 Status of the company: public company limited by shares Principal business: Lithium and tantalum exploration and mine development 2

3 (II) Financial data for the recent year The major financial data extracted from the annual financial report of Pilbara Minerals for the period from July 2016 to June 2017 audited by KPMG, an accounting firm, are set out as below: Unit: AUD 000 Indicator 30 June 2017 (Audited) Total assets 336,478 Total liabilities 136,306 Net assets 200,172 Indicator July 2016 to June 2017 (Audited) Operating revenue 2,074 Net profit -25,954 (III) The closing price and average closing price per share of Pilbara Minerals as quoted on the Australian Securities Exchange for the 10 trading days ended on 28 September 2017 are as follows: Date Stock Price (AUD) Average

4 III. Mining Rights The mining rights are mainly related to the Pilgangoora Lithium-Tantalum Project of Pilbara Minerals located at 120 km south of Port Hedland of Western Australia and entirely owned by Pilbara Minerals. (I) General information of the mining rights of Pilgangoora Lithium-Tantalum Project No. Type of Tenements Tenement ID Mining Area Expiration Date 1 Mining Lease M45/1256 1,202.3 hectares Mining Lease M45/ hectares Mining Lease M45/ hectares Mining Lease M45/ hectares Prospecting Licence P45/ hectares Exploration Licence E45/2241-I 9 parcels of land Exploration Licence E45/ parcels of land Exploration Licence E45/ parcels of land Exploration Licence E45/ parcels of land Exploration Licence E45/ parcels of land Exploration Licence E45/ parcels of land Exploration Licence E45/ parcels of land Exploration Licence E45/ parcels of land (II) Mineral Resources According to the Mineral Resource published by Pilbara Minerals on 25 January 2017, the assessed measured, indicated and inferred resources of Pilgangoora Lithium Tantalum Project are as follows: Mineral resource (million tons) Lithium-oxide (tons) Average grade (%) Measured resource , % Indicated resource ,017, % Inferred resource , % Total resource ,952, % (III) Formalities for the transfer of the ownership of the mining rights The transaction involves no more than 3.5% equity interest in Pilbara Minerals. The mining rights will still be owned by Pilbara Minerals and no transfer of the ownership of the mining rights is involved. 4

5 (IV) According to the legal due diligence document issued by Allion Partners Pty Ltd, a law firm in Australia commissioned by Beijing Zhong Lun (Guangzhou) Law Firm, a law firm engaged by the Company, the mining rights are legally held by Pilbara Minerals. IV. Major terms of the agreement (I) Major terms of equity subscription agreement Billion Sunny Development intends to subscribe for 56,000,000 new shares in Pilbara Minerals at AUD0.5 (RMB ) per share, amounting to AUD28 million (RMB million) in aggregate, to be financed by internal resources and to be settled in a lump sum. Upon completion of the subscription, Billion Sunny Development will hold no more than 3.5% equity interest in Pilbara Minerals and will secure the right to off-take certain production of the Pilgangoora Lithium-Tantalum Project. (II) Major terms of the off-take arrangement The Company will have the right to off-take 75,000 tons of spodumene concentrate each year from the Pilgangoora Lithium-Tantalum Project at the pricing mechanism agreed between the parties. The offtake will be increased to 150,000 tons of spodumene concentrate each year if 50% of the development cost of the second phase of the project, subject to a maximum of US$50 million, is financed by the Company. Delivery is expected to commence in the first half of V. Purpose of the transaction and its effects on the Company (I) Purpose The transaction will facilitate the strategic development of new energy vehicles of the Company by securing resources for the production chain of new energy vehicles. (II) Effects of the transaction on the Company The transaction will reduce the cash flow of the Company to a certain level but will not have significant impact on the working capital of the Company required for normal operation. The effects of the transaction on the financial conditions and operation results of the Company for 2017 are expected to be insignificant. (III) Risks 1. According to the Mineral Resource published by Pilbara Minerals on 25 January 2017, although the resource of spodumene of Pilgangoora Lithium-Tantalum Project has been assessed by a professional firm, the calculation and preparation of resource data may be affected by human, technical and other uncontrollable factors. There are risks that the assessed total resource may be different from the actual total resource. 2. Mining requires various investment in fixed assets and technology and is restricted by natural environment of the mine. There are technical risks that the production may be less than the estimates. 5

6 The board of directors of the Company will closely monitor the progress and promptly perform the disclosure obligation. Investors are advised to exercise caution and be aware of the risks involved. VI. Specific Legal Opinion The Company has engaged Zhong Lun Law Firm to issue specific legal opinion letter concerning the matters relating to the transaction. Note: The conversion of AUD into RMB was made at the rate of AUD1 to RMB5.2093, the median RMB exchange rate quoted by the People s Bank of China on 28 September This announcement will be published on the websites of The Stock Exchange of Hong Kong Limited ( and Shanghai Stock Exchange ( and the official website of the Company ( Baoding, Hebei Province, the PRC, 28 September 2017 As at the date of this announcement, members of the Board comprise: By order of the Board Great Wall Motor Company Limited Xu Hui Company Secretary Executive Directors: Mr. Wei Jian Jun, Ms. Wang Feng Ying and Ms. Yang Zhi Juan. Non-executive Director: Mr. He Ping. Independent Non-executive Directors: Mr. Ma Li Hui, Mr. Li Wan Jun and Mr. Ng Chi Kit. * For identification purpose only 6