PROPOSED LISTING OF SHUI ON LAND LIMITED

Transcription

1 THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER, OR AN INVITATION TO INDUCE AN OFFER BY ANY PERSON, TO ACQUIRE, SUBSCRIBE, PURCHASE OR DISPOSE OF SECURITIES. The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims 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 Bermuda with limited liability) Stock Code: 983 PROPOSED LISTING OF SHUI ON LAND LIMITED This announcement is made pursuant to Rule of the Listing Rules. The Board is pleased to announce that SOL has today launched its Hong Kong Public Offer. At the date of this announcement, the Group has a 31.0% ordinary shareholding in SOL, whose remaining issued ordinary shares are held as to 67.2% indirectly by Shui On Company and as to 1.8% by a third party investor. The Group further holds 50 million Junior Preference Shares. The remaining 170 million Junior Preference Shares and 170 million Senior Preference Shares are held by certain financial investors. All Junior Preference Shares and Senior Preference Shares will be converted into SOL Shares on the date of Listing. Further details of the shareholdings of the Senior Preference Shares and the Junior Preference Shares are set out in the SOL Prospectus. SOL is the flagship property company of the Shui On Group in mainland China through which the Group holds its interest in the property development and investment projects, including interests in the Rainbow City and the Taipingqiao area in Shanghai, PRC. The Global Offering comprises initially 735,264,500 new SOL Shares from SOL and 319,350,500 existing SOL Shares from certain existing shareholders of SOL (excluding the Group and Shui On Group). No assured entitlements to the SOL Shares will be provided to shareholders under the Global Offering. Based on the information contained in the SOL Prospectus, the indicative offer price under the Global Offering will be not more than HK$7.55 and is currently expected to be not less than HK$5.60 per Offer Share under the Global Offering. Following the completion of the Global Offering, the Group s interest in SOL is expected to be approximately 17.8% (based on an offer price of HK$5.60) or 18.3% (based on an offer price of HK$7.55) based on the Share Capital Assumptions (as defined in the SOL Prospectus). The Company will remain indirectly a substantial shareholder of SOL following completion of the Global Offering.

2 Following the Listing, SOL will no longer be considered to be an associate of the Group for accounting purposes. The SOL Shares held by the Group will be treated as financial instruments for accounting purposes and the value of the SOL Shares will be measured at its fair value subsequent to initial recognition in accordance with the Hong Kong Accounting Standard 39 Financial Instruments: Recognition and Measurement. Based on the indicative price range of the SOL Share under the Global Offering, and barring other unforeseen circumstances, this is expected to lead to an increase in the net assets value of the Group and reduce the Group s gearing ratio following the Listing. The Group will recognize a gain on the deemed disposal of part of the interests in an associate arising from the dilution of the Group s interests in SOL as a result of the Listing. The Global Offering is subject to, among other things, the Listing being approved by the Listing Committee and conditions set out in the underwriting agreement in relation to the Global Offering. Shareholders and other investors are reminded to exercise caution when dealing in the securities of the Company. The Board is pleased to announce that SOL has today launched its Hong Kong Public Offer. PROPOSED LISTING AND BUSINESS OF SOL At the date of this announcement, our Group has a 31.0% ordinary shareholding in SOL, whose remaining issued ordinary shares are held as to 67.2% indirectly by Shui On Company and as to 1.8% by a third party investor. The Group further holds 50 million Junior Preference Shares. The remaining 170 million Junior Preference Shares and 170 million Senior Preference Shares are held by certain financial investors. All Junior Preference Shares and Senior Preference Shares will be converted into SOL Shares on the date of Listing. Further details of the shareholdings of the Senior Preference Shares and the Junior Preference Shares are set out in the SOL Prospectus. SOL is the flagship property company of the Shui On Group in mainland China through which the Group holds its interest in the property development and investment projects, including interests in the Rainbow City and the Taipingqiao area in Shanghai, PRC. The Group understands it is the intention of the Shui On Group that SOL will remain its flagship property company in PRC. A listing of SOL will enable the investors to appraise and assess the potential and performance of SOL separately. The Company will remain indirectly a substantial shareholder of SOL, thereby allowing its shareholders to continue to enjoy the benefits from the property development and investment businesses in PRC. THE GLOBAL OFFERING The Global Offering comprises initially 735,264,500 new SOL Shares from SOL and 319,350,500 existing SOL Shares from certain existing shareholders of SOL (excluding the Group and Shui On Group). No assured entitlements to the SOL Shares will be provided to shareholders under the Global Offering. Based on the information contained in the SOL Prospectus, the indicative offer price under the Global Offering will be not more than HK$7.55 and is currently expected to be not less than HK$5.60 per Offer Share under the

3 Global Offering. Following the completion of the Global Offering, the Group s interest in SOL is expected to be approximately 17.8% (based on an offer price of HK$5.60) or 18.3% (based on an offer price of HK$7.55) based on the Share Capital Assumptions (as defined in the SOL Prospectus). The Company will remain indirectly a substantial shareholder of SOL following completion of the Global Offering. IMPACT ON THE GROUP The Company has also provided a non disposal undertaking in respect of its direct and indirect interest in the SOL Shares to the joint global co-ordinator(s) of the Global Offering for a period of 12 months from the first dealing date of SOL Shares on the Stock Exchange in the Hong Kong underwriting agreement entered into by, inter alia, SOL, the Company and the underwriters of the Global Offering on 9 June 2006 in respect of the Hong Kong Public Offer. The same undertaking will be provided in the international underwriting agreement to be entered into by, inter alia, SOL, the Company and the underwriters of the Global Offering in relation to the international offer. As at 30 September 2005, the carrying value of the Group s interests in SOL in the unaudited condensed consolidated balance sheet of the Company was HK$2,007 million. The net assets value, bank borrowings (net of bank balances, deposits and cash) and gearing ratio of the Group were HK$2,104 million, HK$1,748 million and 83% respectively. Following the Listing, SOL will no longer be considered to be an associate of the Group for accounting purposes. The SOL Shares held by the Group will be treated as financial instruments for accounting purposes and the value of the SOL Shares will be measured at its fair value subsequent to initial recognition in accordance with the Hong Kong Accounting Standard 39 Financial Instruments: Recognition and Measurement. Based on the indicative offer price range of HK$5.60 to HK$7.55 per SOL Share under the Global Offering, and barring other unforeseen circumstances, this is expected to lead to an increase in the net assets value of the Group and reduce the Group s gearing ratio following the Listing. As mentioned above, it is expected that the Group s ordinary shareholding in SOL will be reduced from approximately 31.0% to 17.8% (based on an offer price of HK$5.60) or 18.3% (based on an offer price of HK$7.55) as a result of the Listing (based on the Share Capital Assumptions (as defined in the SOL Prospectus). This will be accounted for as a deemed disposal of part of the Group s interests in an associate in the consolidated financial statements of the Group for the financial period subsequent to 31 March Based on the indicative price range of HK$5.60 to HK$7.55 per SOL Share under the Global Offering, the Group will recognize a gain on this deemed disposal, being the total of (a) the difference between the share of net assets of SOL attributable to the Group immediately before and after the Listing and (b) the release of any realized profits in SOL that has not yet been recognised. Any such gain will, however, be non-recurring in nature and will not have any additional cash impact. The Global Offering is subject to, among other things, the Listing being approved by the Listing Committee and conditions set out in the underwriting agreement in relation to the Global Offering. Shareholders and other investors are reminded to exercise caution when dealing in the securities of the Company.

4 DEFINITIONS In this announcement, unless the context otherwise requires, the following expression have the following meanings: Company Global Offering Group Hong Kong Public Offer Junior Preference Shares Listing Listing Committee Listing Rules Offer Shares PRC Senior Preference Shares Shui On Construction and Materials Limited, a company incorporated in Bermuda and listed on the main board of the Stock Exchange; the offer of the Offer Shares to the public in Hong Kong and the international offer of the Offer Shares to investors for subscription and purchase; the Company and its subsidiaries; the offer of Offer Shares for subscription by the public in Hong Kong; the junior convertible redeemable participating preference shares of US$0.01 each in the capital of SOL; the listing of and permission to deal in the SOL Shares on the main board of the Stock Exchange; the listing committee of the Stock Exchange; The Rules Governing the Listing of Securities on the Stock Exchange; new SOL Shares and existing SOL Shares to be offered in the Global Offering; the People s Republic of China, and for the purpose of this announcement, excluding Hong Kong and Macau Special Administration Regions and Taiwan; the senior convertible redeemable participating preference shares of US$0.01 each in the capital of SOL; Shui On Company Shui On Company Limited, the controlling shareholder interested, directly and indirectly, in approximately 66.6% of the issued share capital of the Company; Shui On Group SOL SOL Prospectus Shui On Company and its subsidiaries excluding the Group; Shui On Land Limited, a company incorporated in the Cayman Islands; the Prospectus issued by SOL dated 12 June 2006 in respect of the Hong Kong Public Offer;

5 SOL Shares Stock Exchange ordinary shares of US$ each of SOL; and The Stock Exchange of Hong Kong Limited. By Order of the Board Shui On Construction and Materials Limited Edmond Chong Company Secretary Hong Kong, 12 June 2006 * for identification purposes only As at the date of this announcement, the executive directors of the Company are Mr. Vincent Lo Hong Sui, Mr. Lawrence Choi Yuk Keung, Mr. Frankie Wong Yuet Leung, Mr. Raymond Wong Fook Lam and Mrs. Vivien Lowe Hoh Wai Wan; the non-executive director of the Company is Professor Michael John Enright; and the independent non-executive directors of the Company are Mr. Anthony Griffiths, Mr. Moses Cheng Mo Chi and Professor K.C. Chan.

6 Please also refer to the published version of this announcement in South China Morning Post and Hong Kong Economic Times.