ANNOUNCEMENT CONNECTED TRANSACTION ACQUISITION OF CERTAIN ASSETS OF GREAT WALL ALUMINUM AND ITS SUBSIDIARIES

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. ANNOUNCEMENT CONNECTED TRANSACTION ACQUISITION OF CERTAIN ASSETS OF GREAT WALL ALUMINUM AND ITS SUBSIDIARIES On 20 November 2018, Chalco Mining entered into the Assets Transfer Agreement with Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction, pursuant to which, Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction agreed to sell and Chalco Mining agreed to acquire the Target Assets. As at the date of this announcement, Great Wall Aluminum is a subsidiary of Chinalco, the controlling shareholder of the Company, and Henan Chinalco Carbon and Henan Chinalco Construction are subsidiaries of Great Wall Aluminum. Chalco Mining is a subsidiary of the Company. Therefore, Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction are connected persons of the Company under the Hong Kong Listing Rules. As such, the transaction contemplated under the Assets Transfer Agreement constitutes a connected transaction under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable percentage ratio (as defined under the Hong Kong Listing Rules) of the transaction contemplated under the Assets Transfer Agreement is higher than 0.1% but less than 5%, the transaction shall be subject to reporting and announcement requirements, but exempt from independent shareholders approval requirement under Chapter 14A of the Hong Kong Listing Rules. 1

2 1. INTRODUCTION On 20 November 2018, Chalco Mining entered into the Assets Transfer Agreement with Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction, pursuant to which, Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction agreed to sell and Chalco Mining agreed to acquire the Target Assets. 2. ASSETS TRANSFER AGREEMENT 2.1 Date 20 November Parties (1) Chalco Mining (being the acquirer of the Target Assets); and (2) Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction (being the seller of the Target Assets). 2.3 Nature of transaction Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction agreed to sell and Chalco Mining agreed to acquire the Target Assets, which comprise the assets concerning the ore dressing workshop, sewage treatment system, vocational training centre, pieces of machining equipment and relevant repair and maintenance equipment of Great Wall Aluminum, the online monitoring and dust collection equipment assets of Henan Chinalco Carbon, as well as the assets including certain repair and maintenance equipment, hoisting vehicles, repair workshop, etc. of Henan Chinalco Construction. 2.4 Transfer consideration and payment The transfer consideration is RMB100,062,674, being the transfer price as agreed under the Assets Transfer Agreement, which is determined with reference to the appraised value of the Target Assets as set out in the valuation report prepared by China Alliance using the asset-based approach as at the Valuation Benchmark Date upon negotiation between the parties. The transfer consideration shall be paid in cash or by other means as recognised by the parties. 2

3 2.5 Conditions precedent The Assets Transfer Agreement shall take effect after being signed by each party and affixed with their respective company chop. 2.6 Completion The Target Assets shall be delivered in accordance with laws subject to the followings: (1) the Assets Transfer Agreement having taken effect (2) the quantity and integrity of the Target Assets having being checked and verified by the parties; and (3) the assets transfer certificate with regard to the Target Assets having being signed by the parties. Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction shall support Chalco Mining in going through the ownership transfer formalities for the Target Assets. 3. INFORMATION ON THE TARGET ASSETS According to the valuation report prepared by China Alliance using the assetsbased approach, as at the Valuation Benchmark Date, the book value and appraised value of the Target Assets under the Assets Transfer Agreement were approximately RMB65,021,000 and approximately RMB100,062,700, respectively, representing an appreciation rate of 53.89%. According to the financial report of Great Wall Aluminum prepared in accordance with the generally accepted accounting principles of the PRC, the net profits of the abovementioned Target Assets for the financial years ended 31 December 2016 and 2017 (before and after taxation and extraordinary items) are set forth as below: For the year ended 31 December 2016 (audited) (RMB) For the year ended 31 December 2017 (audited) (RMB) Net profit before taxation and extraordinary items N/A N/A Net profit after taxation and extraordinary items N/A N/A Note: Since no independent accounting was carried out by Great Wall Aluminum in respect of the aforementioned Target Assets, there is no corresponding net profits (before and after taxation and extraordinary items) of the abovementioned Target Assets for the financial years ended 31 December 2016 and

4 The original cost in the Target Assets contributed by Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction represents the amount invested in the Target Assets over the years. The Directors are of the view that the original cost in the Target Assets invested by Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction are not directly related to the determination of the consideration for acquisition of the Target Assets by Chalco Mining. 4. REASONS FOR AND BENEFITS OF ACQUISITION OF THE TARGET ASSETS The Target Assets are all required for the production and operation of Chalco Mining. Upon completion of the acquisition, the Target Assets can better facilitate the production and operation through unified management and the assets value can be elaborated. Given that certain Target Assets are currently being leased, managed or maintained by Chalco Mining, the acquisition of the Target Assets is conductive to streamlining the asset relationship, reducing daily connected transactions among the enterprises and lowering the tax expenditure. The Directors (including the independent non-executive Directors) are of the view that the transaction contemplated under the Assets Transfer Agreement is on normal commercial terms, the terms contained therein are fair and reasonable and in the interests of the Company and the Shareholders as a whole. 5. IMPLICATIONS UNDER THE HONG KONG LISTING RULES As at the date of this announcement, Great Wall Aluminum is a subsidiary of Chinalco, the controlling shareholder of the Company, and Henan Chinalco Carbon and Henan Chinalco Construction are subsidiaries of Great Wall Aluminum. Chalco Mining is a subsidiary of the Company. Therefore, Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction are connected persons of the Company under the Hong Kong Listing Rules. As such, the transaction contemplated under the Assets Transfer Agreement constitutes a connected transaction under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable percentage ratio (as defined under the Hong Kong Listing Rules) of the transaction contemplated under the Assets Transfer Agreement is higher than 0.1% but less than 5%, the transaction shall be subject to reporting and announcement requirements, but exempt from independent shareholders approval requirement under Chapter 14A of the Hong Kong Listing Rules. Mr. Yu Dehui and Mr. Ao Hong, being the Directors of the Company, concurrently hold positions in Chinalco, had abstained from voting on the relevant Board resolution(s) in relation to the transaction contemplated under the Assets Transfer Agreement. Save as disclosed above, none of the Directors has any material interest in the transaction contemplated thereunder and therefore none of the other Directors has abstained from voting on the Board resolution(s). 4

5 6. GENERAL INFORMATION Information on the Company The Company is a joint stock limited company incorporated in the PRC, whose H Shares, A Shares and ADSs are listed on the Hong Kong Stock Exchange, the Shanghai Stock Exchange and the New York Stock Exchange, respectively. The Group is principally engaged in the mining of bauxite, coals and other resources; the production, sales and technology research and development of alumina, primary aluminum and aluminum alloy products; international trading; logistics industry and thermal and new energy power generation. Information on Chinalco Chinalco, as the controlling shareholder of the Company, directly and indirectly, holds 36.36% of the shares of the Company as at the date of this announcement. Chinalco is a wholly state-owned company incorporated in the PRC, whose entities and business were contributed to the Company upon the Company s establishments. The principal activities of Chinalco include the production and sales of aluminum, copper, rare earth and related non-ferrous metals mineral products, smelted products, fabrication products and carbon products. Information on Chalco Mining Chalco Mining is a company incorporated in the PRC with limited liability, and a subsidiary of the Company as at the date of this announcement. It is principally engaged in mining of bauxite, production and sale of aluminum and magnesite ore products, smelted products, fabrication products, carbon products and relevant non-ferrous metal products, etc. Information on Great Wall Aluminum Great Wall Aluminium is a company incorporated in the PRC with limited liability, and a subsidiary of Chinalco as at the date of this announcement. It is principally engaged in cement production (operated by its branch with certificate only); export of self-produced products and related technology of the company; import of raw materials, machinery, instruments, spare parts and other related products and technologies required by the company for production and scientific research; production and processing of alumina/aluminum ingots, carbon products, aluminum profiles, mechanical and electrical products and accessories; production of decorative materials; sales of glass and glass products; technical services; bottled gas business; wholesale and retail of metal materials, refractory materials, chemical products and mineral products; general cargo transportation on road, special cargo transportation (container). 5

6 Information on Henan Chinalco Carbon Henan Chinalco Carbon is a company incorporated in the PRC with limited liability, and a subsidiary of Chinalco as at the date of this announcement. It is principally engaged in the production and processing of carbon products; sales of carbon products, machinery and equipment, instruments and apparatuses, and spare parts; and the import and export of goods and technologies. Information on Henan Chinalco Construction Henan Chinalco Construction is a company incorporated in the PRC with limited liability, and a subsidiary of Chinalco as at the date of this announcement. It is principally engaged in building construction projects (class II general contracting); mechanical and electrical equipment installation (class III professional contracting); earthwork engineering; mechanical and electrical equipment maintenance; non-standard steel structure installation; installation, transformation and maintenance of pressure piping; maintenance of boilers; installation and maintenance of overhead travelling crane and gantry crane; production and sales of ready mixed concrete; leasing of building materials, crane machinery and electrical equipment; engineering survey services; transportation, loading and uploading; road transportation, etc.. 7. DEFINITIONS In this announcement, the following expressions have the following meanings unless the context requires otherwise: A Share(s) the domestic share(s) issued by the Company and subscribed for in RMB, which are listed on the Shanghai Stock Exchange; ADS(s) Assets Transfer Agreement Board the American Depository Share(s) issued by the Bank of New York Mellon as the depository bank and listed on the New York Stock Exchange, with each ADS representing 25 H Shares; the agreement entered into between Chalco Mining and Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction on 20 November 2018, pursuant to which Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction agreed to sell and Chalco Mining agreed to acquire the Target Assets; the board of Directors of the Company; 6

7 Chalco Mining China Alliance Chinalco Company connected person(s) Director(s) Great Wall Aluminum Group Chalco Mining Co., Ltd.* ( ), a subsidiary of the Company as at the date of this announcement, being the acquirer of the Target Assets; China Alliance Appraisal Co., Ltd.* ( ), a qualified assets valuer in the PRC which is jointly engaged by the Great Wall Aluminum and Chalco Mining to evaluate the Target Assets; Aluminum Corporation of China* ( ), a wholly state-owned enterprise incorporated in the PRC and the controlling shareholder of the Company holding directly and indirectly approximately 36.36% of the total issued share capital of the Company as at the date of this announcement; Aluminum Corporation of China Limited* ( ), a joint stock limited company incorporated in the PRC, the A Shares, H Shares and ADS(s) of which are listed on the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the New York Stock Exchange, respectively; has the same meaning ascribed thereto under the Hong Kong Listing Rules; the director(s) of the Company; China Great Wall Aluminum Corporation* ( ), a company incorporated in the PRC with limited liability and a subsidiary of Chinalco as at the date of this announcement, being the seller of the Target Assets; the Company and its subsidiaries; H Share(s) the overseas-listed foreign invested share(s) in the Company s share capital, with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange and subscribed for in Hong Kong dollars; 7

8 Henan Chinalco Carbon Henan Chinalco Construction Hong Kong Hong Kong Listing Rules Hong Kong Stock Exchange PRC RMB Share(s) Shareholder(s) subsidiary(ies) Target Assets Henan Chinalco Carbon Co., Ltd.* ( ), a company incorporated in the PRC with limited liability and a subsidiary of Chinalco as at the date of this announcement, being the seller of the Target Assets; Henan Chinalco Construction Engineering Co., Ltd.* ( ), a company incorporated in the PRC with limited liability and a subsidiary of Chinalco as at the date of this announcement, being the seller of the Target Assets; the Hong Kong Special Administrative Region of the PRC; the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; The Stock Exchange of Hong Kong Limited; the People s Republic of China which, for the purposes of this announcement, excludes Hong Kong, the Macau Special Administrative Region and Taiwan; Renminbi, the lawful currency of the PRC; A Shares and H Shares; holders of A Shares and holders of H Shares; has the same meaning ascribed thereto under the Hong Kong Listing Rules; certain assets of Great Wall Aluminum, Henan Chinalco Carbon and Henan Chinalco Construction to be acquired by Chalco Mining under the Assets Transfer Agreement, for details of which, please refer to the section headed Nature of transaction in this announcement; 8

9 Valuation Benchmark Date 30 June 2018; % per cent. Beijing, the PRC 20 November 2018 By order of the Board Aluminum Corporation of China Limited* Zhang Zhankui Company Secretary As at the date of the publication of this announcement, the members of the board of directors comprise Mr. Yu Dehui, Mr. Lu Dongliang and Mr. Jiang Yinggang (Executive Directors); Mr. Ao Hong and Mr. Wang Jun (Non-executive Directors); Ms. Chen Lijie, Mr. Hu Shihai and Mr. Lie-A-Cheong Tai Chong, David (Independent Non-executive Directors). * For identification purpose only 9