DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF ENTIRE INTEREST IN CIMC

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. (Incorporated in Hong Kong with limited liability under the Companies Ordinance) (Stock Code: 00144) DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF ENTIRE INTEREST IN CIMC SHARE PURCHASE AGREEMENT On 7 April 2017, the Company entered into the Share Purchase Agreement with CMIHCL, pursuant to which the Company agreed to sell the Sale Share, representing the entire issued share capital of Soares, and to assign the Shareholder Loan to CMIHCL. The principal asset of Soares is its indirect interest in the CIMC Shares, representing approximately 24.53% of the total issued share capital of CIMC as at 31 December 2016 and the entire indirect interest of the Company in CIMC. The total consideration for the sale and purchase of the Sale Share and the assignment of the Shareholder Loan under the Share Purchase Agreement is HK$8,542,964,799. LISTING RULES IMPLICATIONS As CMIHCL is an indirect wholly-owned subsidiary of CMG, the ultimate holding company of the Company, it is therefore a connected person of the Company and the Transaction constitute a connected transaction of the Company under the Listing Rules. Since the applicable percentage ratios set out in Rule of the Listing Rules in respect of the Transaction are more than 5% but less than 25%, the Transaction constitutes a discloseable and connected transaction of the Company, and is subject to (1) the notification and announcement requirements under Chapter 14 of the Listing Rules and (2) the announcement, shareholders approval, circular and annual reporting requirements under Chapter 14A of the Listing Rules. 1

2 The EGM will be convened for the purpose of considering, and if thought fit, approving the Transaction. In accordance with the Listing Rules, CMG and its associates are required to abstain from voting on the ordinary resolution approving the Transaction at the EGM. An Independent Board Committee has been established to advise the Independent Shareholders in respect of the Transaction and the Independent Financial Adviser has been engaged to advise the Independent Board Committee and the Independent Shareholders in respect of the Transaction. A circular containing, among other things, (1) further information regarding the details of the Transaction; (2) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; (3) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (4) a notice of the EGM and other information as required under the Listing Rules will be despatched to the Shareholders on or before 2 May BACKGROUND On 7 April 2017, the Company entered into the Share Purchase Agreement with CMIHCL, an indirect wholly-owned subsidiary of CMG, the ultimate holding company of the Company, in relation to the sale and purchase of the Sale Share and the assignment of the Shareholder Loan. 2. SHARE PURCHASE AGREEMENT Date 7 April 2017 Parties (1) the Company (as seller) (2) CMIHCL (as purchaser) Subject Matter Pursuant to the Share Purchase Agreement, the Company agreed to sell the Sale Share, representing the entire issued share capital of Soares, and to assign the Shareholder Loan to CMIHCL. The principal asset of Soares is its indirect interest in the CIMC Shares, representing approximately 24.53% of the total issued share capital of CIMC as at 31 December 2016 and the entire indirect interest of the Company in CIMC. 2

3 Consideration The total consideration for the sale and purchase of the Sale Share and the assignment of the Shareholder Loan under the Share Purchase Agreement is HK$8,542,964,799 of which HK$2,562,889,440 will be paid within five Business Days from (and excluding) the date of the Share Purchase Agreement as a deposit and the remaining HK$5,980,075,359 will be paid on Closing. The deposit will be refunded to CMIHCL if Closing does not take place. The Company and CMIHCL further agreed that (1) CMIHCL shall be entitled to any dividend or distribution declared or made by CIMC in respect of the CIMC Shares for the financial year ended 31 December 2016; and (2) the Company shall be entitled to any net gain, and shall bear any net loss, in the equity attributable to ordinary shareholders of CIMC (excluding any changes as a result of any dividend to the Shareholders of CIMC which has been proposed, declared or paid during the period from (and including 1 January 2017 to (and including) 30 June 2017) in respect of the CIMC Shares during the period from (and including) 1 January 2017 to (and including) the Closing Date (as shown in the consolidated statement of change in shareholders equity in the interim results announcement to be published by CIMC for the six months ending 30 June 2017). The consideration is negotiated and agreed by the parties on an arm s length basis with reference to, among other factors, the appraised value of Soares as at 31 December 2016, the Shareholder Loan, the historical trend of share price and performance of the CIMC Shares. Conditions Precedent The Share Purchase Agreement is conditional on the satisfaction of the following conditions: (1) the obtaining of the approval by the Independent Shareholders of the Transaction in accordance with the Listing Rules; and (2) the approval from CMG authorising the performance of the Share Purchase Agreement and the Transaction. Since the Transaction is carried out by means of a non-public transfer agreement pursuant to the Enterprise State-owned Assets Transaction Supervision and Management Regulations ( ( 32 )), it is subject to the approval of CMG acting in its capacity as the state funding entity. 3

4 If the conditions precedent are not satisfied by 30 June 2017, the Company or CMIHCL may, in its sole discretion, terminate the Share Purchase Agreement. Closing Closing will take place on the fifth Business Day following the satisfaction of the conditions precedent, or such later date as may be agreed by the Company and CMIHCL. Information on Soares Soares is a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of the Company. Its principal activity is investment holding and its principal asset is its indirect interest in the CIMC Shares, representing approximately 24.53% of the total issued share capital of CIMC as at 31 December 2016 and the entire indirect interest of the Company in CIMC. Based on the unaudited consolidated financial statements of Soares as at 31 December 2016, the total assets and net assets of Soares amounted to approximately HK$7,863 million and HK$5,921 million, respectively. The net profits (both before and after taxation) for the two years ended 31 December 2015 and 2016 based on the unaudited consolidated financial statements of Soares are as follows: Year ended 31 December 2015 (HK$ million) Year ended 31 December 2016 Profit before taxation Profit after taxation Information on CIMC CIMC is a joint stock limited company incorporated in the PRC, the H shares and A shares of which are listed on the Stock Exchange and the Shenzhen Stock Exchange, respectively. CIMC and its subsidiaries are principally engaged in the manufacture of modern transportation facilities, facilities for energy, food, chemistry and rendering of relative services, manufacture of logistic equipment & related services, marine projects, railway trucks production and property development. 4

5 Based on the audited consolidated financial statements of CIMC prepared in accordance with China Accounting Standards for Business Enterprises, the total assets and net assets attributable to the ordinary shareholders of CIMC as at 31 December 2016 amounted to approximately RMB124,615 million (equivalent to approximately HK$140,365 million) and RMB27,237 million (equivalent to approximately HK$30,679 million), respectively. Based on the audited consolidated financial statements of CIMC prepared in accordance with China Accounting Standards for Business Enterprises, the net profits (both before and after taxation) of CIMC for the two years ended 31 December 2015 and 2016 are as follows: Year ended 31 December 2015 (restated) (RMB million) Year ended 31 December 2016 Net profit before taxation 3,302 (equivalent to approximately HK$3,719 million) Net profit after taxation 2,350 (equivalent to approximately HK$2,647 million) 1,702 (equivalent to approximately HK$1,917 million) 735 (equivalent to approximately HK$828 million) Information on the Purchaser CMIHCL is a company incorporated in Hong Kong and its principal activity is investment holding. It is an indirect wholly-owned subsidiary of CMG. Reasons for the Transaction The core business of the Group includes ports and port-related businesses. In recent years, it has been the strategy of the Group to focus on the development of its ports and port-related businesses and to divest, when suitable opportunity arises, non-core businesses that do not complement with ports and port-related businesses of the Group. The main business of CIMC, which focuses on manufacture of modern transportation facilities, facilities for energy, food, chemistry and rendering of relative services, manufacture of logistic equipment & related services, marine projects, railway trucks production and property development, therefore no longer 5

6 complements the core business of the Group and the Transaction will benefit the Company by allowing the management and the Directors to focus the resources of the Group on its ports and port-related business. The Directors (save for the independent non-executive Directors, who will express their view after considering the advice from the Independent Financial Adviser), are of the view that the Share Purchase Agreement was entered into in the ordinary and usual course of business of the Group and on normal commercial terms. Taking into account the consideration amount, the Directors (save for the independent non-executive Directors, who will express their view after considering the advice from the Independent Financial Adviser) are of the view that the terms of the Share Purchase Agreement are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. The view of the independent non-executive Directors in respect of the Transaction, after considering the advice from the Independent Financial Adviser, will be set out in the circular. None of the Directors have a material interest in the Share and Purchase Agreement, nor are they required to abstain from voting on the relevant board resolution approving the Transaction. Financial Effects of the Transaction Upon Closing, the Company will no longer have any interests in Soares and CIMC. Soares and CIMC will cease to be recognised as a subsidiary and an associate, respectively, in the consolidated financial statements of the Company. The Company is expected to record a net gain (after deducting the relevant taxes and expenses) from the Transaction of approximately HK$775 million in its consolidated statement of profit or loss for the year ending 31 December 2017 calculated based on, among others factors, the consideration of the Transaction, the net asset value attributable to the shareholder of Soares, the Shareholder Loan and release of various reserves accumulated in equity as at 31 December 2016, subject to the changes in equity attributable to ordinary shareholders of CIMC in respect of the CIMC Shares during the period from (and including) 1 January 2017 to (and including) the Closing Date. Use of Proceeds from the Transaction The entire amount of the proceeds of the Transaction is intended to be used for its general working capital and to fund possible future investment opportunities of the Company in ports and port-related business. 6

7 3. LISTING RULES IMPLICATONS As CMIHCL is an indirect wholly-owned subsidiary of CMG, the ultimate holding company of the Company, it is therefore a connected person of the Company and the Transaction constitute a connected transaction of the Company under the Listing Rules. Since the applicable percentage ratios set out in Rule of the Listing Rules in respect of the Transaction are more than 5% but less than 25%, the Transaction constitutes a discloseable and connected transaction of the Company, and is subject to (1) the notification and announcement requirements under Chapter 14 of the Listing Rules and (2) the announcement, shareholders approval, circular and annual reporting requirements under Chapter 14A of the Listing Rules. 4. EGM The EGM will be convened for the purpose of considering, and if thought fit, approving the Transaction. In accordance with the Listing Rules, CMG which is interested in approximately 55% shares in the Company, and its associates are required to abstain from voting on the ordinary resolution approving the Transaction at the EGM. 5. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER An Independent Board Committee has been established to advise the Independent Shareholders in respect of the Transaction and the Independent Financial Adviser has been engaged to advise the Independent Board Committee and the Independent Shareholders in respect of the Transaction. 6. DESPATCH OF CIRCULAR A circular containing, among other things, (1) further information regarding the details of the Transaction; (2) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; (3) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (4) a notice of the EGM and other information as required under the Listing Rules will be despatched to the Shareholders on or before 2 May

8 7. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: associate(s) Board Business Day(s) CIMC has the meaning ascribed to this term under the Listing Rules the board of Directors of the Company a day on which banks are open for business in Hong Kong and the PRC (excluding Saturdays, Sundays and public holidays) China International Marine Containers (Group) Co., Ltd. ( ), a joint stock limited company incorporated in the PRC with limited liability, whose H shares and A shares are listed on the Stock Exchange and Shenzhen Stock Exchange, respectively CIMC Shares the 730,557,217 H shares of CIMC, representing approximately 24.53% of the total issued share capital of CIMC as at 31 December 2016 Closing CMG CMIHCL the closing of the Transaction pursuant to the Share Purchase Agreement China Merchants Group Limited ( ), a company incorporated in the PRC and the ultimate holding company of the Company China Merchants Industry Holdings Company Limited ( ), a company incorporated in Hong Kong and an indirect wholly-owned subsidiary of CMG and a connected person of the Company Company China Merchants Port Holdings Company Limited ( ), a company incorporated in Hong Kong and whose shares are listed on the Main Board of the Stock Exchange connected person(s) has the meaning ascribed to this term under the Listing Rules 8

9 Directors EGM Group HK$ Hong Kong Independent Board Committee Independent Financial Adviser Independent Shareholders Listing Rules PRC RMB Sale Share Share(s) the directors of the Company the extraordinary general meeting to be convened by the Company to approve the Transaction the Company and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC the independent board committee comprising all the independent non-executive Directors, namely Mr. Kut Ying Hay, Mr. Lee Yip Wah Peter, Mr. Li Kwok Heem John, Mr. Li Ka Fai David and Mr. Bong Shu Ying Francis, established to advise the Independent Shareholders in respect of the Transaction Somerley Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Transaction the Shareholders other than CMG and its associates the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited the People s Republic of China, which for the purpose of this announcement, excludes Hong Kong, the Macau Special Administration Region of the People s Republic of China and Taiwan Renminbi, the lawful currency of the PRC the one ordinary share of Soares, representing the entire issued share capital of Soares the ordinary share(s) of the Company 9

10 Share Purchase Agreement Shareholder(s) Shareholder Loan Soares Stock Exchange Transaction the share purchase agreement entered into between CMIHCL (as purchaser) and the Company (as seller) in relation to the sale of the Sale Share and the assignment of the Shareholder Loan the holder of the Share(s) all the shareholder loan advanced by the Company to Soares and outstanding as at Closing Soares Limited, a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of the Company The Stock Exchange of Hong Kong Limited the sale of the Sale Share and the assignment of the Shareholder Loan contemplated by the Share Purchase Agreement, as described in this announcement % per cent. For reference only, an exchange rate of HK$1.00 to RMB has been used for the conversion of Renminbi into Hong Kong dollars in this announcement. Hong Kong, 7 April 2017 By Order of the Board of China Merchants Port Holdings Company Limited Li Xiaopeng Chairman As at the date of this announcement, the Board comprises Mr. Li Xiaopeng, Mr. Hu Jianhua, Mr. Wang Hong, Mr. Hua Li, Mr. Bai Jingtao, Mr. Wang Zhixian, Mr. Zheng Shaoping and Ms. Shi Wei as executive directors; and Mr. Kut Ying Hay, Mr. Lee Yip Wah Peter, Mr. Li Kwok Heem John, Mr. Li Ka Fai David and Mr. Bong Shu Ying Francis as independent non-executive directors. 10