Zall Infrastructure Investments 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 joint 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 joint announcement. This joint announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of CIG Yangtze Ports PLC. Zall Infrastructure Investments Company Limited (Incorporated in the British Virgin Islands with limited liability) (Incorporated in the Cayman Islands with limited liability) (Stock code: 8233) JOINT ANNOUNCEMENT (1) ACQUISITION OF SALE SHARES IN CIG YANGTZE PORTS PLC BY ZALL INFRASTRUCTURE INVESTMENTS COMPANY LIMITED; (2) POSSIBLE UNCONDITIONAL MANDATORY CASH OFFERS BY GF SECURITIES (HONG KONG) BROKERAGE LIMITED FOR AND ON BEHALF OF ZALL INFRASTRUCTURE INVESTMENTS COMPANY LIMITED FOR ALL THE ISSUED SHARES IN, AND CANCELLATION OF ALL OUTSTANDING SHARE OPTIONS OF, CIG YANGTZE PORTS PLC (OTHER THAN THOSE ALREADY OWNED BY ZALL INFRASTRUCTURE INVESTMENTS COMPANY LIMITED AND PARTIES ACTING IN CONCERT WITH IT); (3) SPECIAL DEAL; AND (4) RESUMPTION OF TRADING Financial Adviser to Zall Infrastructure Investments Company Limited * for identification purpose only 1

2 THE S&P AGREEMENT Pursuant to the S&P Agreement dated 21 September 2011 entered into among the Offeror (as purchaser), the Vendors, the Vendors Guarantor and Mr. Yan, the Vendors have conditionally agreed to sell and the Offeror has conditionally agreed to acquire an aggregate of 599,888,141 Shares (as to 82,523,793 Shares from Chow Holdings, 53,521,466 Shares from CIG China, 185,164,427 Shares from Harbour Master and 278,678,455 Shares from Unbeatable respectively), representing approximately 50.97% of the entire issued share capital of the Company as at the date of this joint announcement. The aggregate consideration for the Sale Shares is HK$215,959, (equivalent to HK$0.36 per Sale Share) which was agreed between the Offeror and the Vendors after arm s length negotiations. The Vendors Guarantor, as the ultimate beneficial owner of Unbeatable, Chow Holdings and CIG China, has agreed to guarantee the performance by the Vendors of their obligation under the S&P Agreement, whereas Mr. Yan, as the ultimate beneficial owner of the Purchaser, has agreed to guarantee the performance by the Purchaser under the S&P Agreement. Completion will, subject to satisfaction of the Conditions (unless otherwise waived by the Offeror in accordance with the S&P Agreement), take place on the date falling the first Business Day after the publication of this joint announcement or such later date as may be agreed between the Vendors and the Offeror in writing. POSSIBLE UNCONDITIONAL MANDATORY CASH OFFERS Immediately following Completion, the Offeror and parties acting in concert with it will own in aggregate 599,888,141 Shares, representing approximately 50.97% of the entire issued share capital of the Company (assuming that there is no other change in the issued share capital of the Company). The Offeror will therefore be required under Rule 26.1 of the Takeovers Code to make mandatory unconditional cash offers to acquire all the issued Shares and to cancel all the outstanding Share Options not already owned or agreed to be acquired by the Offeror and parties acting in concert with it. In the event of Completion taking place, GF Securities will make the Offers, on behalf of the Offeror in compliance with section 103 of the SFO, which will be unconditional in all respects, in compliance with the Takeovers Code on the following terms: Share Offer The Share Offer Price is the same as the price agreed to be paid by the Offeror for each Sale Share under the S&P Agreement. ForeveryOfferShare...HK$0.360incash The Offer Shares to be acquired under the Offers shall be fully paid and free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature together with all rights attaching thereto as at the Completion Date, including all dividends and distributions declared, made or paid on or after the Completion Date. 2

3 Option Offer The Share Option Offer Price is the difference between the price agreed to be paid by the Offeror for each Sale Share under the S&P Agreement and the exercise price per Share relevant to that Share Option tranche. For cancellation of each Share Option of outstanding 8,433,796ShareOptionswithexercisepriceatHK$ HK$0.260incash For cancellation of each Share Option of outstanding 4,552,823ShareOptionswithexercisepriceatHK$ HK$0.178incash As at the date of this joint announcement, there are 1,177,056,180 Shares in issue and there are (i) the Share Options entitling the grantees to subscribe for an aggregate of 8,433,796 Shares at an exercise price of HK$0.10 per Share; and (ii) the Share Options entitling the grantees to subscribe for an aggregate of 4,552,823 Shares at an exercise price of HK$0.182 per Share granted under the Share Option Scheme. On the basis of the Share Offer Price of HK$0.36 per Offer Share, the entire issued share capital of the Company is valued at approximately HK$423,740,225. Each of 577,168,039 Shares and 12,986,619 outstanding Share Options will be subject to the Offers and the Offers are valued at approximately HK$207,780,494 and HK$3,003,189 respectively. GF Capital is satisfied that sufficient financial resources are available to the Offeror to satisfy full acceptances of the Offers. SPECIAL DEAL The Service Agreement constitutes a special deal for the Company under Rule 25 of the Takeovers Code and requires consent of the Executive. Such consent, if granted, will be subject to (i) an independent financial adviser publicly stating that in its opinion the terms of the Service Agreement are fair and reasonable; and (ii) the approval of the Service Agreement by the SD Independent Shareholders by way of poll at the EGM. Shareholders including (i) the Vendors, its associates and parties acting in concert with any of them; (ii) the Offeror, Mr. Yan and parties acting in concert with any of them; and (iii) any Shareholders who are involved in or interested in the Service Agreement or any transactions contemplated therein (including Mr. Chow Kwong Fai, Edward) shall abstain from voting on the proposed resolution approving the Service Agreement at the EGM. 3

4 GENERAL The Independent Board Committee comprising all the non-executive Directors, other than Mr. Wong Yuet Leung, Frankie, has been established to advise the Independent Shareholders and the Independent Option Holders in respect of the Offers, in particular as to whether the Offers are, or are not, fair and reasonable and as to its acceptance. As Mr. Wong Yuet Leung, Frankie is a director of Harbour Master, one of the Vendors in the S&P Agreement, he will not serve as a member of the Independent Board Committee as his significant connection with Harbour Master and the Company within the 2 years prior to the commencement of the offer period for the Offers may reasonably likely affect the objectivity of his advice. An independent financial adviser will be appointed by the Company after approval by the Independent Board Committee to advise the Independent Board Committee in respect of the Offers and the special deal, respectively, and in particular as to whether the Offers and the special deal are, or are not, fair and reasonable and as to its acceptance and voting, respectively. It is the intention of the Offeror and the Company to combine the offer document with the offeree board circular from the Company in a composite offer document. In accordance with Rule 8.2 of the Takeovers Code, the composite offer document containing, among other things, (i) details of the Offers (including the expected timetable); (ii) a letter of advice from the Independent Board Committee to the Independent Shareholders and the Independent Option Holders in relation to the Offers; and (iii) a letter of advice from an independent financial adviser to the Independent Board Committee and the Independent Shareholders and the Independent Option Holders in relation to the Offers, together with the relevant forms of acceptance and transfer, is required to be despatched to the Shareholders within 21 days of the date of this joint announcement or such later date the Executive may approve. The Circular will be despatched to the Shareholders as soon as practicable. SUSPENSION AND RESUMPTION OF TRADING At the request of the Company, trading in the Shares on GEM was suspended with effect from 9:00 a.m. on 22 September 2011 pending the release of this joint announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on GEM with effect from 9:00 a.m. on 3 October WARNING Shareholders and potential investors are advised to exercise caution when dealings in the Shares, and if they are in any doubt about their position, they should consult their professional advisers. 4

5 THE S&P AGREEMENT On 21 September 2011 (after trading hours), the Offeror, the Vendors, the Vendors Guarantor and Mr. Yan entered into the S&P Agreement in relation to the sale and purchase of the Sale Shares. The principal terms of the S&P Agreement are summarised below: Date 21 September 2011 Parties Vendors: (i) Chow Holdings, which held 82,523,793 Shares as at the date of this joint announcement, representing approximately 7.01% of the entire issued share capital of the Company; (ii) CIG China, which held 53,521,466 Shares as at the date of this joint announcement, representing approximately 4.55% of the entire issued share capital of the Company; (iii) Harbour Master, which held 185,164,427 Shares as at the date of this joint announcement, representing approximately 15.73% of the entire issued share capital of the Company; and (iv) Unbeatable, which held 278,678,455 Shares as at the date of this joint announcement, representing approximately 23.68% of the entire issued share capital of the Company. Purchaser: Vendors Guarantor: Purchaser s Guarantor: The Offeror Mr. Chow Kwong Fai, Edward, an executive Director and the ultimate beneficial owners of the entire issued capital of each of Chow Holdings, CIG China and Unbeatable, agreed to guarantee the performance by the Vendors under the S&P Agreement. Mr. Yan, the ultimate beneficial owner of the Offeror, agreed to guarantee the performance by the Purchaser under the S&P Agreement. Subject of the S&P Agreement Pursuant to the S&P Agreement dated 21 September 2011 entered into among the Offeror (as purchaser), the Vendors, the Vendors Guarantor and Mr. Yan, the Vendors have conditionally agreed to sell and the Offeror has conditionally agreed to acquire an aggregate of 599,888,141 Shares (as to 82,523,793 Shares from Chow Holdings, 53,521,466 Shares from CIG China, 185,164,427 Shares from Harbour Master and 278,678,455 Shares from Unbeatable respectively), representing approximately 50.97% of the entire issued share capital of the Company as at the date of this joint announcement. 5

6 The Sale Shares will be sold free from all Encumbrances together with all rights attaching thereto as at the Completion Date including all dividends and distributions declared, made or paid on or after the Completion Date. Consideration The aggregate consideration for the Sale Shares is HK$215,959, (equivalent to HK$0.36 per Sale Share) which was agreed between the Offeror and the Vendors after arm s length negotiations and will be paid by the Offeror to the Vendors upon Completion. The consideration was determined with reference to the consolidated net asset value of the Company as at 30 June 2011, the strategic importance of the port controlled by the Company and the business prospect of the Company. Conditions precedent of the S&P Agreement Completion of the sale and purchase of the Sale Shares is conditional upon satisfaction (or waiver) of the following conditions: (i) the Warranties remaining true and accurate in all respects and not misleading in any respect as of the Completion Date by reference to the facts and circumstances subsisting as at the Completion Date; (ii) no notice, order, judgment, action or proceeding of any court, arbitrator, Governmental Authority, statutory or regulatory body having been served, issued or made which restrains, prohibits or makes unlawful any transaction contemplated by the S&P Agreement or which is reasonably likely to materially and adversely affect the right of the Offeror to own the legal and beneficial title to the Sale Shares, free from Encumbrances, following the Completion Date; (iii) all necessary Consents required to be obtained by any member of the Group from any Governmental Authority or other third party in respect of the S&P Agreement and/or the transactions contemplated thereunder having been obtained unconditionally and irrevocably, or where such approval or consent is given subject to conditions, on such conditions as are acceptable to the Offeror acting reasonably; (iv) the trading of the Shares on GEM not having been suspended (excluding any suspension of not exceeding six Business Days (or such longer period as the parties to the S&P Agreement may otherwise agree in writing) for the purposes of clearing any announcement (including this joint announcement) and circular in relation to the sale and purchase of the Sale Shares and/or the Offers by the regulatory authorities) or listing of the Shares on GEM not having been revoked or otherwise withdrawn and the Shares continuing to be traded on the Stock Exchange and there having been no process to delist the Shares; and (v) there being no indication from the Stock Exchange or the SFC that listing of the Shares shall be suspended, revoked or withdrawn at any time immediately after Completion, as a result of the transactions contemplated by the S&P Agreement or otherwise. 6

7 The Covenantors shall jointly and severally, use their respective reasonable endeavours to ensure the satisfaction of the Conditions set out above as soon as possible after the date of the S&P Agreement but in any event not later than the Long-Stop Date, namely the date being 30 days after the date of the S&P Agreement being 21 October 2011 (or such other date as may be agreed between the Purchaser and the Vendors in writing). The Offeror may at any time waive in whole or in part and conditionally or unconditionally any Conditions set out above by notice in writing to the Vendors. If the Conditions are not satisfied or waived on or before the Long-Stop Date, the S&P Agreement shall, unless otherwise provided herein, automatically lapse without liability to any party to the S&P Agreement, provided however that the lapse of the S&P Agreement shall be without prejudice to the rights and liabilities of any party to the S&P Agreement accrued prior to such lapse. As confirmed by the Company, the S&P Agreement and the transactions contemplated thereunder, including the Offers are not subject to any regulatory approvals and no consent is required to be obtained by any member of the Group from any governmental authority or other third party in respect of the S&P Agreement. Completion Completion shall, subject to satisfaction of the Conditions (unless otherwise waived by the Offeror in accordance with the S&P Agreement), take place on the date falling the first Business Day after the publication of this joint announcement or such later date as may be agreed between the Vendors and the Offeror in writing. It is expected that Completion will take place on 3 October POSSIBLE UNCONDITIONAL MANDATORY CASH OFFER Immediately following Completion, the Offeror and parties acting in concert with it will own in aggregate 599,888,141 Shares, representing approximately 50.97% of the entire issued share capital of the Company (assuming that there is no other change in the issued share capital of the Company). The Offeror will therefore be required under Rule 26.1 of the Takeovers Code to make mandatory unconditional cash offer to acquire all the issued Shares and to cancel all the outstanding Share Options not already owned or agreed to be acquired by the Offeror and parties acting in concert with it. 7

8 Principal terms of the Offers In the event of Completion taking place, GF Securities will make the Offers, on behalf of the Offeror in compliance with section 103 of the SFO, which will be unconditional in all respects, in compliance with the Takeovers Code on the following terms: Share Offer The Share Offer Price is the same as the price agreed to be paid by the Offeror for each Sale Share under the S&P Agreement. ForeveryOfferShare... HK$0.360incash The Offer Shares to be acquired under the Offers shall be fully paid and free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature together with all rights attaching thereto as at the Completion Date, including all dividends and distributions declared, made or paid on or after the Completion Date. Option Offer The Share Option Offer Price is the difference between the price agreed to be paid by the Offeror for each Sale Share under the S&P Agreement and the exercise price per Share relevant to that Share Option tranche. For cancellation of each Share Option of outstanding 8,433,796 Share Options with exercise price at HK$ HK$0.260incash For cancellation of each Share Option of outstanding 4,552,823 Share Options with exercise price at HK$ HK$0.178incash Comparison of value The Share Offer Price of HK$0.36 per Share is the same as the price as agreed to be paid by the Offeror to the Vendors for each Sale Share under the S&P Agreement, and represents: (a) (b) (c) a premium of approximately 62.9% over the closing price of HK$0.221 per Share on the Stock Exchange on 21 September 2011, being the Last Trading Day prior to the suspension of trading in the Shares before the release of this joint announcement; a premium of approximately 71.4% over the average closing price of HK$0.210 per Share on the Stock Exchange over the last 5 consecutive Trading Days up to and including 21 September 2011; a premium of approximately 86.5% over the average closing price of HK$0.193 per Share on the Stock Exchange over the last 10 consecutive Trading Days up to and including 21 September 2011; 8

9 (d) (e) a premium of approximately 125.0% over the average closing price of HK$0.160 per Share on the Stock Exchange over the last 30 consecutive Trading Days up to and including 21 September 2011; and a premium of approximately 224.3% over the unaudited consolidated total equity attributable to equity shareholders of the Company of approximately HK$0.111 per Share as at 30 June 2011 as shown in the interim report of the Company for the six months ended 30 June Highest and lowest Share prices The highest and lowest closing prices of the Shares as quoted on the Stock Exchange during the sixmonth period immediately preceding the date of this joint announcement were HK$0.221 per Share (on 21 September 2011) and HK$0.089 per Share (on 6 April 2011) respectively. Value of the Offers As at the date of this joint announcement, there are 1,177,056,180 Shares in issue and there are (i) the Share Options entitling the grantee to subscribe for an aggregate of 8,433,796 Shares at an exercise price of HK$0.10 per Share; and (ii) the Share Options entitling the grantee to subscribe for an aggregate of 4,552,823 Shares at an exercise price of HK$0.182 per Share granted under the Share Option Scheme. On the basis of the Share Offer Price of HK$0.36 per Offer Share, the entire issued share capital of the Company is valued at approximately HK$423,740,225. Each of 577,168,039 Shares and 12,986,619 outstanding Share Options will be subject to the Offers and the Offers are valued at approximately HK$207,780,494 and HK$3,003,189 respectively. Financial resources available to the Offeror GF Capital is satisfied that sufficient financial resources are available to the Offeror to satisfy full acceptances of the Offers. The Offers will be satisfied by internal resources of the Offeror. Dealings and interests in the Company s securities Save for the acquisition of the Sale Shares under the S&P Agreement, none of the Offeror, Mr. Yan nor parties acting in concert with any one of them holds or has dealt with any Shares, Share Options, warrants or convertible or exchangeable securities carrying rights to subscribe for, convert or exchange into Shares during the six-month period ended on the date of this joint announcement. Up to the date of this joint announcement, neither the Offeror, Mr. Yan nor the parties acting in concert with any one of them owns or has control or direction over, any voting rights or rights over Shares or any options, warrants or securities convertible into Shares. Save for the agreement under the S&P Agreement that the Vendor s Guarantor has agreed to sell the 914,508 Outstanding Options at an exercise price of HK$0.10 per Share and 271,360 Outstanding Options at an exercise price of HK$0.182 per Share held by him to the Offeror under the Option Offer, 9

10 neither the Offeror, Mr. Yan nor any parties acting in concert with any one of them has entered into any arrangements or contracts in relation to the outstanding derivatives in respect of securities in the Company nor has any outstanding derivative in respect of any securities in the Company as at the date of this joint announcement. None of the Offeror, Mr. Yan nor any parties acting in concert with any one of them has borrowed or lent any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company. Effects of accepting the Offers Acceptance of the Offers by any Shareholders and/or Optionholders will be deemed to constitute a warranty by such Shareholders and/or Optionholders that all existing Shares and Share Options sold under the Offers are free from all liens, claims, charges, options, equities, adverse interests, third party rights or encumbrances whatsoever and together with all rights accruing or attaching thereto, including without limitation, the right to receive all dividends and distributions declared, paid or made, if any, on or after the Completion Date. Stamp duty In Hong Kong, seller s ad valorem stamp duty arising in connection with acceptances of the Share Offer will be payable by relevant Shareholders at a rate of 0.1% of (i) the market value of the Offer Shares; or (ii) consideration payable by the Offeror in respect of the relevant acceptances of the Share Offer, whichever is higher, will be deducted from the cash amount payable by the Offeror on behalf of the relevant Shareholder accepting the Share Offer. The Offeror will arrange for payment of the seller s ad valorem stamp duty on behalf of relevant Independent Shareholders accepting the Share Offer and will pay the buyer s ad valorem stamp duty in connection with the acceptance of the Share Offer and the transfer of the Shares in accordance with the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong). No stamp duty is payable in connection with the acceptances of the Option Offer. Payment Payment in cash in respect of acceptances of the Offers will be made as soon as practicable but in any event within 10 days of the date on which the relevant documents of title are received by the Offeror to render each such acceptance complete and valid pursuant to Note 1 to Rule 30.2 of the Takeovers Code. Other arrangements in relation to the Offers Other than 914,508 Outstanding Options at an exercise price of HK$0.10 per Share and 271,360 Outstanding Options at an exercise price of HK$0.182 per Share held by the Vendor s Guarantor which the Vendor s Guarantor has agreed to accept the Option Offer, as at the date of this joint announcement, none of the Offeror nor any parties acting in concert with it has received any irrevocable commitment to accept the Offers. 10

11 As at the date of this joint announcement, there is no arrangement (whether by way of option, indemnity or otherwise) of any kind referred to in Note 8 to Rule 22 of the Takeovers Code in relation to the shares of the Offeror or the Company and which might be material to the Offers. Save for the S&P Agreement, there is no agreement or arrangement to which the Offeror is a party which relates to circumstances in which it may or may not invoke or seek to invoke a pre-condition or a condition to the Offers. Overseas Shareholders and overseas Optionholders The Offers are in respect of securities of a company incorporated in the Cayman Islands and are subject to the procedural and disclosure requirements of Hong Kong, which may be different from other jurisdictions. Overseas Shareholders or Overseas Optionholders who wish to participate in the Offers but with a registered address outside Hong Kong are also subject to, and may be limited by, the laws and regulations of their respective jurisdictions in connection with their participation in the Offers. Overseas Shareholders and Overseas Optionholders shall be fully responsible for the payment of any transfer or other taxes and duties due by them in respect of the relevant jurisdictions. SHAREHOLDING STRUCTURE OF THE COMPANY Set out below are the shareholding structure of the Company (i) as at the date of this joint announcement; and (ii) immediately following the Completion: Shareholders As at the date of this joint announcement Approximate % Number of Shares of issued Shares Immediately following Completion Approximate % Number of Shares of issued Shares Chow Holdings 82,523, % CIG China 53,521, % Harbour Master 185,164, % Unbeatable 278,678, % Offeror 599,888, % Subtotal 599,888, % 599,888, % Ramweath Company Limited (Note) 11,725, % 11,725, % Public Shareholders 565,442, % 565,442, % Total 1,177,056, % 1,177,056, % Note: Mr. Lee Jor Hung, Dannis, a non-executive Director, is entitled to exercise or control the exercise of one-third or more of the voting power at the general meetings of Ramweath Company Limited. Mr. Lee is therefore deemed to be interested in all the Shares held by Ramweath Company Limited by virtue of the SFO. 11

12 As at the date of this joint announcement, other than (i) the Share Options entitling the grantees to subscribe for an aggregate of 8,433,796 Shares at an exercise price of HK$0.10 per Share; and (ii) the Share Options entitling the grantees to subscribe for an aggregate of 4,552,823 Shares at an exercise price of HK$0.182 per Share granted under the Share Option Scheme which remains outstanding as at the date hereof, the Company has no other outstanding options, warrants or convertible or exchangeable securities carrying rights to subscribe for, convert or exchange into, Shares. INFORMATION ON THE OFFEROR The Offeror is an investment holding company incorporated in the British Virgin Islands on 5 July 2011 with limited liability. The Offeror is wholly and ultimately beneficially owned by Mr. Yan. Mr. Yan is the sole director of the Offeror. Before the date of the S&P Agreement, the Offeror has not conducted any business since its incorporation, and save for the cash to be used for the settlement of the Consideration and the Offers, and does not have any material assets as at the date of this joint announcement. Mr. Yan, aged 39, is the controlling shareholder and an executive director of Zall Development (Cayman) Holding Co. Ltd. (Stock Code: 2098.HK), a company listed on the main board of the Stock Exchange. Mr. Yan has extensive experience in logistics, project planning, business and operation management. He has approximately six years of experience in the commercial property and wholesale shopping mall industries, as well as approximately 15 years of experience in the advertising and media industry and business management. INFORMATION ON THE GROUP The Group is principally engaged in the businesses of port construction and operation and the management has regarded port construction and operation as the only dominant reportable operating segment. The Group recorded audited loss attributable to equity holders of the Company of approximately HK$6.004 million for the financial year ended 31 December 2009 and audited loss attributable to equity holders of the Company of approximately HK$2.93 million for the financial year ended 31 December The unaudited net loss attributable to equity holders of the Company as at 30 June 2011 was approximately HK$4.04 million. On 8 April 2011, the Company made an announcement in relation to the entering into of a letter of intent ( LOI ) regarding a possible disposal of the entire equity interests in CIG Port Holdings Limited, a wholly owned subsidiary of the Company incorporated in the British Virgin Islands to an intended purchaser which is a third party independent of and not connected with the Company and its connected persons. CIG Port Holdings Limited holds the entire port assets of the Group. The LOI has lapsed and the Company has been in the process of negotiating the terms of a sale and purchase agreement with the intended purchaser. So far, no legally binding agreement has been signed. If the possible disposal materializes, it is expected that the disposal may constitute a notifiable transaction for the Company under the GEM Listing Rules. 12

13 It was noted that according to Rule 4.1 of the Takeovers Code, once the Offers had been communicated to the Board, no action which could effectively result in an offer being frustrated, or in the Shareholders being denied an opportunity to decide on the merits of an offer, shall be taken by the Board in relation to the affairs of the Company without approval of the Shareholders in a general meeting. In particular, the Company must not, without such approval, do or agree to sell, dispose of or acquire assets of a material amount. Taking into account the implications under Rule 4 of the Takeovers Code and the fact that no legal binding agreement has been reached, the Board unanimously resolved to withhold the negotiation regarding the proposed disposal until further determination by the Board after the close of the Offers. OFFEROR S INTENTION ON THE GROUP AND PROPOSED CHANGE OF BOARD COMPOSITION Assuming the S&P Agreement has been completed and following the close of the Offers, it is the intention of the Offeror that the Group to continue its existing principal activities and the Offeror does not intend to introduce any major changes to the existing operations and business of the Company immediately after the Completion and the Offers. The Offeror will regularly review the operations and business activities of the Group to formulate a suitable business strategy for the Group and will explore other business opportunities and consider whether any assets and/or business acquisitions by the Group will be appropriate in order to enhance its growth. The Offeror has no intention to discontinue the employment of the employees (save for a change in the composition of the Board) or to dispose of or redeploy the assets of the Group other than those in its ordinary course of business. The Offeror has no plan on any injection of any assets or businesses into the Company as at the date of this joint announcement. Subject to Completion, an existing executive Director, namely Mr. Chow Kwong Fai, Edward, and existing non-executive Director, namely Mr. Wong Yuet Leung, Frankie, will resign as Director with effect on the earliest date on which such resignation may take effect under the Takeovers Code (being the first closing date of the Offers). Following Completion and for the purpose ensuring continuity of the Group s business, it is proposed that subject to compliance with the requirement under Rule 25 of the Takeovers Code with respect to special deal, Mr. Chow Kwong Fai, Edward, being the existing sole executive Director, will enter into a separate service agreement with the Company in relation to his appointment as a consultant of the Company for a term of two years with effect upon the resignation of Mr. Chow Kwong Fai, Edward as Director becoming effective with a monthly fee of HK$150,000, which is the same as his current monthly salary as an executive Director, and an additional payment of HK$150,000 on each anniversary of his commencement of service as consultant under such service agreement. Following Completion, the Offeror currently intends to nominate Mr. Yan as a non-executive Director and Mr. Duan Yan ( Mr. Duan ) as an executive Director to the Board and such appointment will not take effect earlier than the date of the posting of the composite offer document subject to compliance 13

14 with the Takeovers Code. No service contract or appointment letter has been entered into between the Company and any of these proposed Directors as at the date of this joint announcement and therefore their respective terms of employment or appointment and emoluments, if any, have not been fixed as at the date of this joint announcement. In addition, the Offeror is in the process of identifying other suitable candidates of Directors. Further announcement will be made upon any appointment of new Directors. Details of the proposed Directors are set out below: Mr. Yan, aged 39, the biographical details of Mr. Yan are set out in the paragraph headed Information on the Offeror in this joint announcement above. Mr. Duan, aged 32, is the chairman of 卓爾大新華物流有限公司 (Wuhan Zall Grand China logistics Co., Ltd*) and 卓爾寶沃勤 ( 武漢 ) 物流有限公司 (Zall Power Chain (Wuhan) logistics Co., Ltd*) and is currently an assistant to chief executive director of Zall Development (Cayman) Holding Co. Ltd. (Stock Code: 2098.HK), a company listed on the main board of the Stock Exchange. Mr. Duan is also the deputy chairman of 漢南港實業集團有限公司 (Hubei Hannan Port Industrial Co., Ltd*) Mr. Duan holds a Master Degree of E-Commerce from Middlesex University in London and has extensive experience in logistics as well as business and operation management. As at the date of this joint announcement, save for Mr. Yan s indirect interest in the Sale Sales, none of Mr. Yan and Mr. Duan has any interest in the securities of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Special deal The Service Agreement constitutes a special deal for the Company under Rule 25 of the Takeovers Code and requires consent of the Executive. Such consent, if granted, will be subject to (i) an independent financial adviser publicly stating that in its opinion the terms of the Service Agreement are fair and reasonable; and (ii) the approval of the Service Agreement by the SD Independent Shareholders by way of poll at the EGM. Shareholders including (i) the Vendors, its associates and parties acting in concert with any of them; (ii) the Offeror, Mr. Yan and the parties acting in concert with any of them; and (iii) any Shareholders who are involved in or interested in the Service Agreement or any transactions contemplated therein (including Mr. Chow Kwong Fai, Edward) shall abstain from voting on the proposed resolution approving the Service Agreement at the EGM. The Company will apply to the Executive for consent under Rule 25 of the Takeovers Code in relation to the Service Agreement. Should any of the approval of the Service Agreement by the Independent Shareholders or the consent of the Executive to the Service Agreement be not forthcoming, the Company and Mr. Chow Kwong Fai, Edward will not enter into the Service Agreement. 14

15 MAINTENANCE OF THE LISTING STATUS OF THE COMPANY The Offeror intends to maintain the listing of the Shares on GEM after the close of the Offers and will undertake to the Stock Exchange to take appropriate steps as soon as possible following the close of the Offers to ensure that a sufficient public float exists for the Shares. The Stock Exchange has stated that if, upon the close of the Offers, less than the minimum prescribed percentage applicable to the Company, being 25%, of the issued Shares are held by the public or if the Stock Exchange believes that (i) a false market exists or may exist in the trading of the Shares; or (ii) there are insufficient Shares in public hands to maintain an orderly market, then it will consider exercising its discretion to suspend trading in the Shares. DEALINGS DISCLOSURE In accordance with Rule 3.8 of the Takeovers Code, associates (as defined under the Takeovers Code) of the Company (including persons holding 5% or more of any class of relevant securities of the Company) and the Offeror (within the meaning of the Takeovers Code) are hereby reminded to disclose their dealings in the securities of the Company pursuant to the Takeovers Code. In accordance with Rule 3.8 of the Takeovers Code, the full text of Note 11 to Rule 22 of the Takeovers Code is reproduced below: Responsibilities of stockbrokers, banks and other intermediaries Stockbrokers, banks and others who deal in relevant securities on behalf of clients have a general duty to ensure, so far as they are able, that those clients are aware of the disclosure obligations attaching to associates and other persons under Rule 22 of the Takeovers Code and that those clients are willing to comply with them. Principal traders and dealers who deal directly with investors should, in appropriate cases, likewise draw attention to the relevant rules of the Takeovers Code. However, this does not apply when the total value of dealings (excluding stamp duty and commission) in any relevant security undertaken for a client during any 7 day period is less than HK$1 million. This dispensation does not alter the obligation of principals, associates and other persons themselves to initiate disclosure of their own dealings, whatever total value is involved. Intermediates are expected to co-operate with the Executive in its dealings enquiries. Therefore, those who deal in relevant securities should appreciate that stockbrokers and other intermediates will supply the Executive with relevant information as to those dealings, including identities of clients, as part of that co-operation. 15

16 GENERAL Independent Board Committee and the independent financial adviser The Company has established the Independent Board Committee comprising five non-executive Directors, namely Mr. Lee Jor Hung, Dannis, Mr. Goh Pek Yang, Michael, Mr. Lee Kang Bor, Thomas, Dr. Wong Tin Yau, Kelvin and Mr. Fan Chun Wah, Andrew, to advise the Independent Shareholders and the Independent Option Holders on the terms of the Offers. As Mr. Wong Yuet Leung, Frankie is a director of Harbour Master, one of the Vendors in the S&P Agreement, he will not serve as a member of the Independent Board Committee as his significant connection with Harbour Master and the Company within the 2 years prior to the commencement of the offer period for the Offers may reasonably likely affect the objectivity of his advice. An independent financial adviser will be appointed by the Company after approval by the Independent Board Committee to advise the Independent Board Committee in respect of the Offers and the special deal, respectively, and in particular as to whether the Offers and the special deal are, or are not, fair and reasonable and as to its acceptance and voting, respectively. Despatch of the composite offer document and the Circular It is the intention of the Offeror and the Company to combine the offer document with the offeree board circular from the Company in a composite offer document. In accordance with Rule 8.2 of the Takeovers Code, the composite offer document containing, among other things, (i) details of the Offers (including the expected timetable); (ii) a letter of advice from the Independent Board Committee to the Independent Shareholders and the Independent Option Holders in relation to the Offers; and (iii) a letter of advice from an independent financial adviser to the Independent Board Committee and the Independent Shareholders and the Independent Option Holders in relation to the Offers, together with the relevant forms of acceptance and transfer, is required to be despatched to the Shareholders within 21 days of the date of this joint announcement or such later date the Executive may approve. The Circular will be despatched to the Shareholders as soon as practicable. WARNING Shareholders and potential investors are advised to exercise caution when dealings in the Shares, and if they are in any doubt about their position, they should consult their professional advisers. SUSPENSION AND RESUMPTION OF TRADING At the request of the Company, trading in the Shares on GEM was suspended with effect from 9:00 a.m. on 22 September 2011 pending the release of this joint announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on GEM with effect from 9:00 a.m. on 3 October

17 DEFINITIONS In this joint announcement, the following expressions have the meanings set out below unless the context requires otherwise. acting in concert associates Board Business Day BVI Chow Holdings CIG China Circular Company Completion Completion Date Conditions has the meaning ascribed thereto in the Takeovers Code has the meaning ascribed thereto under the GEM Listing Rules the board of Directors a day (other than Saturday, Sunday, public holiday and any day on which a typhoon signal 8 or above is hoisted or a black rainstorm warningisgiveninhongkongatanytimeduring9:00a.m.to5:00 p.m.) on which banks in Hong Kong are open for general banking business British Virgin Islands Chow Holdings Limited, a company incorporated in BVI with limited liability and is ultimately beneficially owned by Mr. Chow Kwong Fai, Edward, being one of the Vendors under the S&P Agreement CIG China Holdings Limited, a company incorporated in the Cayman Islands with limited liability and is ultimately beneficially owned by Mr. Chow Kwong Fai, Edward, being one of the Vendors under the S&P Agreement the circular to be despatched to the Shareholders containing, among other things, (i) the Service Agreement; (ii) the letter of recommendation from an Independent Board Committee and letter of advice from an independent financial adviser in respect of the Service Agreement; and (iii) notice convening the EGM CIG Yangtze Ports PLC (stock code: 8233), a company incorporated in the Cayman Islands with limited liability, the issued Shares of which are listed on GEM completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the S&P Agreement the date on which Completion takes place the conditions precedent for the completion of the sale and purchase of the Sale Shares as set out in the section headed Conditions precedent of the S&P Agreement in this joint announcement 17

18 Consents Covenantors Directors EGM Encumbrances Executive GEM GEM Listing Rules GF Capital GF Securities any license, consent, approval, authorization, permission, waiver, order or exemption collectively, Chow Holdings, CIG China, Unbeatable and the Vendors Guarantor directors of the Company extraordinary general meeting(s) to be convened by the Company to consider and, if thought fit, approve, among other things, the Service Agreement by the Independent Shareholders any claim, charge, mortgage, security, lien, option, equity, power of sale, hypothecation or other third party rights, retention of title, right of pre-emption, right of first refusal or security interest of any kind the Executive Director of the Corporate Finance Division of the SFC or any of his delegates the Growth Enterprise Market of the Stock Exchange the Rules Governing the Listing of Securities on GEM GF Capital (Hong Kong) Limited, a licensed corporation to carry on business in type 6 regulated activity under the SFO, being the financial adviser to the Offeror GF Securities (Hong Kong) Brokerage Limited, a licensed corporation to carry on business in type 1 regulated activity under the SFO Governmental Authority any governments, courts, governmental, regulatory or official authorities, departments, agencies or bodies, stock exchange whether in Hong Kong, the PRC or elsewhere including but not limited to the Stock Exchange and the SFC and Governmental Authority means any one of them Group Harbour Master Hong Kong the Company and its subsidiaries Harbour Master Limited, a company incorporated in the BVI with limited liability, which is a wholly-owned subsidiary of The Yangtze Ventures II Limited which, in turn, is an indirect, non-wholly-owned subsidiary of Shui On Construction and Materials Limited (Stock code: 983), being one of the Vendors under the S&P Agreement Hong Kong Special Administrative Region of the PRC 18

19 Independent Board Committee Independent Option Holders Independent Shareholders Independent Third Parties the independent committee of the Board comprising all the nonexecutive Directors other than Mr. Wong Yuet Leung, Frankie, namely Mr. Lee Jor Hung, Dannis, Mr. Goh Pek Yang, Michael, Mr. Lee Kang Bor, Thomas, Dr. Wong Tin Yau, Kelvin and Mr. Fan Chun Wah, Andrew, established to give recommendation to the Independent Shareholders and the Independent Option Holders regarding the terms of the Offers holders of the Share Options other than the Offeror, Mr. Yan and the parties acting in concert with any one of them Shareholders other than the Offerorr, Mr. Yan and the parties acting in concert with any one of them the parties who, to the best of the Directors knowledge, information and belief and having made all reasonable enquiries, are independent of and not connected with any of the Director(s), chief executive(s) of the Company or substantial Shareholder(s) or any of the subsidiaries or their respective associate(s) Last Trading Day 21 September 2011, being the last trading day of the Shares immediately prior to the suspension in trading of the Shares on the Stock Exchange at 9:30 a.m. on the same day pending the release of this joint announcement Long-Stop Date Mr. Yan Offeror Offers Offer Share(s) Optionholder(s) the date being 30 days after the date of the S&P Agreement, or such other date as may be agreed between the Offeror and the Vendors in writing Mr. Yan Zhi, the ultimate beneficial owner of the Offeror Zall Infrastructure Investments Company Limited ( 卓爾基業投資有限公司 *), a company incorporated in BVI with limited liability and is ultimately beneficially owned by Mr. Yan the Share Offer and the Option Offer issued Share(s) and Shares which may be issued by the Company following the date of this joint announcement, other than those already owned by the Offeror and parties acting in concert with it holder(s) of the Share Option(s) 19

20 Option Offer PRC S&P Agreement Sale Shares SD Independent Shareholder(s) Service Agreement SFC SFO Share(s) Shareholders Share Offer the offer to be made by GF Securities on behalf of the Offeror for the cancellation of the outstanding Share Options other than those already ownedbyoragreedtobeacquiredbytheofferoranditspartiesacting in concert pursuant to the Takeovers Code the People s Republic of China which, for the purpose of this joint announcement, shall exclude Hong Kong, Macau Special Administrative Regions of PRC and Taiwan the sale and purchase agreement dated 21 September 2011 entered into among the Offeror, the Vendors, the Vendors Guarantor and Mr. Yan in relation to the sale and purchase of the Sale Shares 599,888,141 Shares acquired by the Offeror from the Vendors pursuant to the terms and conditions of the S&P Agreement Shareholders other than (i) the Vendors, its associates and parties acting in concert with any of them; (ii) the Offeror, Mr. Yan and the parties acting in concert with any one of them; and (iii) any Shareholders who are involved in or interested in the Service Agreement or any transactions contemplated therein (including Mr. Chow Kwong Fai, Edward) the service agreement to be entered into between Mr. Chow Kwong Fai, Edward, being the existing sole executive Director, and the Company in relation to the appointment of Mr. Chow Kwong Fai, Edward as a consultant of the Company, following Completion. Details of the service agreement set out in paragraph Offeror s intention on the Group and proposed change of Board composition in this joint announcement the Securities and Futures Commission the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) ordinary share(s) of HK$0.10 each in the issued share capital of the Company holders of the issued Shares the unconditional mandatory offer to bemadebygfsecuritiesforand on behalf of the Offeror for all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it) pursuant to the Takeovers Code 20

21 Share Offer Price Share Option Share Option Offer Price the price at which the Share Offer will be made, being HK$0.36 per Offer Share option(s) to subscribe for Shares granted under the Share Option Scheme the difference between the price agreed to be paid by the Offeror for each Sale Share under the S&P Agreement and the exercise price per Share relevant to that Share Option tranche Share Option Scheme the share option scheme adopted by the Company on 2 September 2005 Stock Exchange Takeovers Code Trading Day Unbeatable The Stock Exchange of Hong Kong Limited the Hong Kong Code on Takeovers and Mergers a day on which securities can be freely traded on the Stock Exchange during whole of the normal trading hours of the Stock Exchange regardless of whether any trades actually occur Unbeatable Holdings Limited, a company incorporated in BVI with limited liability and is ultimately beneficially owned by Mr. Chow Kwong Fai, Edward, being one of the Vendors under the S&P Agreement Vendors collectively, Chow Holdings, CIG China, Harbour Master and Unbeatable Vendors Guarantor Warranties HK$ Mr. Chow Kwong Fai, Edward, an executive Director and the ultimate beneficial owner of Chow Holdings, CIG China and Unbeatable the representations, warranties and undertakings of the Covenantors and Harbour Master set out in the S&P Agreement Hong Kong dollars, the lawful currency of Hong Kong % per cent. * for identification purpose only By order of the board of director of Zall Infrastructure Investments Company Limited Yan Zhi Director By order of the Board of CIG Yangtze Ports PLC Ivan Cheung Company Secretary Hong Kong, 30 September