HISTORY AND CORPORATE STRUCTURE

Transcription

1 HISTORY AND BUSINESS DEVELOPMENT Our history is traced back to 1992 when Zhanjiang Deni was established with our Group holding a 35% equity interest. Zhanjiang Deni was established to engage in the manufacture and sale of carburetors and automotive parts. As a result of an increase in the registered share capital of Zhanjiang Deni and the participation of an additional joint venture partner in December 1994, our interest in Zhanjiang Deni was reduced from 35% to 28%, which has remained unchanged as at the Latest Practicable Date. In 1994, Investment was established as an investment holding company with our Group holding a 50% shareholding. In 1995, the Group began to distribute Caterpillar Products and provide customer service in Yunnan, Guizhou and Sichuan provinces of the PRC and the Group has since 1995 become the sales distributor for Caterpillar Products with its service territory covering the western part of the PRC (excluding the Xinjiang Uyghur Autonomous Region). By 2009, the Group is responsible for the sale, leasing and customer service of Caterpillar Products in Yunnan, Guizhou, Sichuan, Shaanxi, Gansu and Qinghai provinces, Ningxia Hui Autonomous Region, Tibet Autonomous Region and Chongqing municipality. In 1995, and Zhumadian were established. was established to produce and sell CTC products namely CTC HCL and CTC Premix and Zhumadian was established to produce and sell CTC Premix. In June 2014, as a result of corporate restructuring, equity interest in Zhumadian, comprising s holding of 70% equity interest and Zhengzhou Jinyuweiye s holding of 30% equity interest, was transferred to s 69.5% owned subsidiary,. After this corporate restructuring was completed, our biochemical business has been held through two wholly-owned subsidiaries, and which together have an aggregate interest of 69.7% in. in turn holds the entire equity interest in Zhumadian. Key Business Development Milestones The following events are the key corporate and business development milestones of the businesses of our Group since our establishment: 1995 was established to produce and sell CTC products namely CTC HCL and CTC Premix and Zhumadian was established to produce and sell CTC Premix obtained the Animal Drugs GMP certification Zhumadian obtained the Animal Drugs GMP certification Zhumadian obtained the ISO9001:2000 accreditation s CTC products were awarded Fujian Brand Products by the Fujian Provincial Government. 67

2 2012 obtained ISO9001:2008 accreditation, Zhumadian obtained ISO9001:2008 accreditation Zhumadian was awarded The 50 Most Important Enterprises in Zhumadian by the Zhumadian Municipal Government and Zhumadian, which had previously been separately held as to 69.5% and 70% of their registered capital by and, respectively completed their corporate restructuring, resulting in the latter companies each being a wholly-owned subsidiary of our Group, and together holding an aggregate 69.7% interest in which in turn holds interest in Zhumadian. Corporate Development Our Company was incorporated in Bermuda on 16 October 1987 in the name of C.T. Progressive (Sino) Industrial Ltd. On 28 April 1993, our Company changed its name from C.T. Progressive (Sino) Industrial Ltd. to Ek Chor China Motorcycle Co. Ltd. and in June 1993, our shares were listed on The New York Stock Exchange. Our Company remained listed on The New York Stock Exchange until we were taken private and delisted from The New York Stock Exchange as a result of the low trading volume of our shares and our then relatively small market capitalisation. In connection with taking our Company private and our delisting from The New York Stock Exchange, a scheme of arrangement was implemented, whereby, effective on 23 June 2003, 5,574,000 shares of US$0.10 each in the capital of our Company not owned by CPP, representing approximately 31.8% of our Company s then issued share capital, were cancelled in consideration of a payment by our Company at US$3.75 per share using cash on hand. As a result, we became a wholly-owned subsidiary of CPP again from 23 June On 5 May 2014, our Company changed its name from Ek Chor China Motorcycle Co. Ltd. to Enterprises International Limited. As at the Latest Practicable Date, our Company had in issue 11,952,000 shares of US$0.10 each. Immediately prior to the Distribution, and assuming the number of CPP Shares in issue as at the Distribution Record Date is the same as at the Latest Practicable Date, our Company will issue 228,766,372 new Ordinary Shares and 12,610,777 new Preference Shares by way of the Capitalisation Issue, following which the number of issued Ordinary Shares and Preference Shares of our Company will be increased to 240,718,372 and 12,610,777 respectively. Upon Listing, our biochemical business will be conducted by our subsidiaries (i) ; and (ii) Zhumadian ; and we will have interest in the industrial business through our 50% owned joint venture, Investment, and our 28% owned associate, Zhanjiang Deni. 68

3 was established in the PRC on 24 August 1995 with a registered capital of RMB34,000,000, which was fully paid-up and contributed as to 30% by County Biochemical Factory and as to 70% by Shanghai Co., Ltd. ( ). On 24 November 1995, the registered capital of was increased to RMB56,000,000 which was fully-paid and contributed at the same time by its equity holders in proportion to their respective equity interests. On 16 January 2002, 70% equity interest in was transferred from Shanghai Co., Ltd. ( ) to (China) Agro-Industrial Ltd. ( ( ) ). On 20 October 2003, Xinglv Gongyipin acquired 1% equity interest in from County Biochemical Factory and Smart Universe Investments Limited ( ) and Shanghai Zhengcheng acquired 9.5% and 0.5% equity interest in from (China) Agro-Industrial Ltd. ( ( ) ), respectively. On 19 July 2005, the registered capital of was further increased to RMB100,000,000 and the increased capital was contributed by its equity holders in proportion to their respective equity interests. On 13 March 2008, 60% and 9.5% equity interest in was transferred from (China) Agro-Industrial Ltd. ( ( ) ) and Smart Universe Investments Limited ( ) to, respectively. On 10 February 2014, the registered capital of was further increased to RMB189,890,000. The then four equity holders of, namely, Xinglv Gongyipin, County Biochemical Factory, Shanghai Zhengcheng and entered into an equity contribution agreement with and Zhengzhou Jinyuweiye with respect to the transfer by and Zhengzhou Jinyuweiye of their respective 70% and 30% equity interest in Zhumadian to (the Zhumadian Transfer ) as their contribution to the capital of. Upon completion of the Zhumadian Transfer and as at the Latest Practicable Date, and held a 36.6% and 33.1% equity interest in, respectively, and County Biochemical Factory, Zhengzhou Jinyuweiye, Xinglv Gongyipin and Shanghai Zhengcheng held 15.3%, 14.2%, 0.5% and 0.3% equity interest in, respectively. According to the articles of association of, as adopted and amended by agreement between its six existing equity holders, namely,,, County Biochemical Factory, Zhengzhou Jinyuweiye, Xinglv Gongyipin and Shanghai Zhengcheng, the board of directors of shall consist of five members, three of whom shall be appointed by and two of whom by County Biochemical Factory. According to the articles, all matters shall be approved with the approval of not less than one-half of the directors, with the exception of the following matters on which board resolutions shall only be passed with the unanimous approval of all of the directors attending the board meeting, namely: (i) amendment of the articles of association; (ii) termination, dissolution and liquidation of ; (iii) increase or transfer of the registered capital of ; (iv) merger of with any other entity; and (v) extension of the joint venture period. 69

4 Zhumadian Zhumadian was established in the PRC on 13 December 1995 with a registered capital of RMB40,000,000, which was fully paid-up and contributed as to 30% by (Henan Province Tianfang Pharmaceutical Group Company*), formerly known as (Henan Province Pharmaceutical Group Company*), and as to 70% by (China) Agro-Industrial Ltd. ( ( ) ). The registered capital of Zhumadian was increased to RMB54,000,000 in 2000 and was further increased to RMB72,000,000 in 2004, which was fully-paid at the same time by its equity holders in proportion to their respective equity interests. On 16 May 2007, (Yiwu Jinhengyuan Investment Company Limited*) acquired 30% equity interest in Zhumadian from (Henan Province Tianfang Pharmaceutical Group Company*) and on 20 February 2008, (China) Agro-Industrial Ltd. ( ( ) ) transferred its 70% equity interest in Zhumadian to. On 15 July 2012, Zhengzhou Jinyuweiye acquired 30% equity interest in Zhumadian from (Yiwu Jinhengyuan Investment Company Limited*). As a result of the Zhumadian Transfer and as at the Latest Practicable Date, Zhumadian was owned by. Investment Investment was established in the BVI in November 1994 in the name of ECI Machinery Investment Co., Ltd. and was renamed as Investment Co., Ltd. in the same month. Investment was established as an investment holding company with our Group holding a 50% shareholding. In 1995, the Group began to distribute Caterpillar Products in the PRC and the Group subsequently became the sales distributor for Caterpillar Products with its service territory covering the western part of the PRC (excluding the Xinjiang Uyghur Autonomous Region). As at the Latest Practicable Date, ECI Machinery, a wholly-owned subsidiary of our Company, and Tractor, an Independent Third Party, each had a 50% shareholding interest in Investment. According to information provided by Tractor, Tractor is an investment holding company and is part of Machinery Group, which is principally engaged in the distribution of heavy equipment and has over 30 years of experience in the heavy equipment business in Thailand. ECI Machinery has not entered into any written joint venture agreement with Tractor in respect of their interests in Investment. The shareholders relationship of Investment is governed by its articles of association. Under the articles, shareholders resolutions can be passed with a simple majority of the votes of the shares entitled to vote thereon which were present (in person or by proxy) at the meeting. The directors of Investment shall be elected by its shareholders and a director may be removed from office, with or without cause, by shareholders resolution. 70

5 Zhanjiang Deni Zhanjiang Deni was established in the PRC on 11 November 1992 in the name of (Zhanjiang Deni Carburetor Co. Ltd.*) and was renamed as (Zhanjiang Deni Vehicle Parts Co. Ltd.*) on 20 August 2014, with our Group originally holding a 35% equity interest and commenced operations in January It is engaged in the manufacture and sale of carburetors and automotive parts. In December 1994, as a result of an increase in the registered share capital of Zhanjiang Deni and the participation of an additional joint venture partner, our shareholding in Zhanjiang Deni was reduced to 28%. Our Group had joint control over Zhanjiang Deni as of 1 January In May 2011, one of the joint venture partners acquired additional equity interest of Zhanjiang Deni from another joint venture partner and the articles of association of Zhanjiang Deni were amended. Since then, our Group has not had joint control over Zhanjiang Deni and Zhanjiang Deni has become our associated company. As at the Latest Practicable Date, Golden Industrial, a wholly-owned subsidiary of our Company, held a 28% equity interest in Zhanjiang Deni and Dongfeng Electronic and Guangdong Rising, Independent Third Parties, held 52% and 20% equity interest in Zhanjiang Deni, respectively. According to the articles of association of Zhanjiang Deni entered into between Golden Industrial, Dongfeng Electronic and Guangdong Rising, the board of directors of Zhanjiang Deni shall consist of eleven members, three of whom shall be appointed by Golden Industrial. Under the articles, board resolutions can generally be passed with the approval of not less than one-half of the directors attending the relevant board meeting, with the exception of the following matters on which board resolutions shall only be passed by the board unanimously: (i) amendment of the articles of association; (ii) termination, dissolution and liquidation of Zhanjiang Deni; (iii) increase or transfer of the registered capital of Zhanjiang Deni; (iv) merger of Zhanjiang Deni with any other entity; (v) strategic development planning of Zhanjiang Deni; (vi) approval of annual profit distribution of Zhanjiang Deni; (vii) confirmation, transfer and acceptance of the trademark by Zhanjiang Deni; and (viii) guarantee to be granted by Zhanjiang Deni. On 25 December 2014, Zhanjiang Deni entered into an equity interest transfer agreement in relation to its acquisition of of the equity interest in Dongfeng Shiyan from Dongfeng Electronic and (Shanghai Dongyi Automobile Trade Co. Ltd.*), which at that time held 99% and 1%, respectively, of the equity interest in Dongfeng Shiyan. The total consideration for the acquisition was RMB58,649,600. The acquisition was completed on 5 January Following the acquisition, Dongfeng Shiyan became a wholly-owned subsidiary of Zhanjiang Deni. Dongfeng Shiyan was established in the PRC on 25 November 2003 and currently has a registered capital of RMB100 million. 71

6 THE REORGANISATION In preparation for the Listing, we carried out the following principal steps with respect to the Reorganisation. All steps involved in the Reorganisation were conducted in accordance with applicable laws and regulations. Transfer of and On 25 September 2014, CPP entered into a sale and purchase agreement (and a supplemental addendum thereto was entered into on 16 April 2015) with our Company in respect of the transfer of the shareholding in and held by CPP to our Company at the consideration of HK$118,715, which had been determined on the basis of the net asset value of and as at 31 August As a result of the completion of such transfer on [ ], our Company now holds (i) shareholding in which in turn holds 36.6% equity interest in and (ii) shareholding in which in turn holds 33.1% equity interest in. Because of our Group s total holding of 69.7% equity interest in, has become a subsidiary of our Group. Following the transfer of and, County Biochemical Factory and Zhengzhou Jinyuweiye, which hold 15.3% and 14.2% equity interests in, have respectively become substantial shareholders of our subsidiary and connected persons of our Company. CAPITALISATION ISSUE The Capitalisation Issue is subject to the Listing Committee granting the listing of, and permission to deal in, our Ordinary Shares in issue as of the Distribution Record Date and any Ordinary Shares which may be issued upon exercise of the conversion rights attached to the Preference Shares or pursuant to the exercise of options granted under the Share Option Scheme on the Stock Exchange, and will be effected immediately prior to the Listing. Pursuant to the Capitalisation Issue, and assuming the number of CPP Shares in issue as at the Distribution Record Date is the same as at the Latest Practicable Date, our Company will allot and issue 228,766,372 new Ordinary Shares and 12,610,777 new Preference Shares, credited as fully paid, to CPP by way of capitalisation of (i) firstly, the amount due from our Company to CPP as at the date on which the Listing Committee grants approval for the Listing and (ii) as to any remainder, out of our profit available for distribution. Our Company will have an issued share capital of US$25,332, divided into 240,718,372 Ordinary Shares and 12,610,777 Preference Shares of US$0.10 each after the Capitalisation Issue and immediately prior to the Listing. 72

7 CORPORATE STRUCTURE The following diagram illustrates our Group s major operating companies immediately prior to the completion of the Reorganisation: (Note 1) CPF CPFI ITOCHU Corporation CPP Interested Directors Public (Notes 2 and 3) CPP (Note4) Company CP Enterprises Golden Industrial ECI Machinery (Note 5) 50% Offshore Investment Note 1: Onshore 36.6% (Note 6) 33.1% 28% Trading Zhumadian CPF was interested in [REDACTED] CPP Preference Shares and [REDACTED] CPP Ordinary Shares through its wholly-owned subsidiary, CPFI before the Reorganisation. Note 4: CPP is also engaged in other businesses, which are not shown in this diagram. Note 5: The remaining 50% shareholding in Investment is held by Tractor, an Independent Third Party. Note 6: The remaining 30.3% equity interest in is held as to 15.3%, 14.2%, 0.5% and 0.3% by County Biochemical Factory, Zhengzhou Jinyuweiye, Xinglv Gongyipin and Shanghai Zhengcheng, respectively. Except for County Biochemical Factory and Zhengzhou Jinyuweiye, the other equity holders are Independent Third Parties. Note 7: The remaining 72% equity interest in Zhanjiang Deni is held as to 52% and 20% by Dongfeng Electronic and Guangdong Rising, respectively which are Independent Third Parties. Note 2: Percentage in relation to the CPP Ordinary Shares of US$0.01 each only. Note 3: Based on the shareholding structure of CPP as at the Latest Practicable Date, Mr. Dhanin Chearavanont, Mr. Thanakorn Seriburi, and Mr. Meth Jiaravanont being CPP Directors, were respectively interested in, and of the ordinary issued share capital of CPP immediately before the Reorganisation. Gansu ECI Guizhou ECI Qinghai ECI Shaanxi ECI Sichuan ECI Yunnan ECI Machinery & Power Sichuan Yi Ming Zhanjiang Deni (Note 7) 73

8 The following diagram illustrates the structure of our Group immediately following the completion of the Reorganisation but before the Distribution (assuming there is no change in the shareholdings in CPP from the shareholdings as at the Latest Practicable Date): (Note 1) CPF CPFI ITOCHU Corporation CPP Interested Directors Public (Notes 2 and 3) (Note 4) CPP Company CP Enterprises Golden Industrial ECI Machinery Offshore (Note 5) 50% Investment Onshore 36.6% (Note 6) 33.1% Trading Gansu ECI Guizhou ECI (Note 7) 28% Zhanjiang Deni Zhumadian Qinghai ECI Shaanxi ECI Note 1: Note 2: Note 3: Note 4: CPF is interested in [REDACTED] CPP Preference Shares, and [REDACTED] CPP Ordinary Shares through its wholly-owned subsidiary, CPFI after the Reorganisation but before the Distribution. Percentage in relation to CPP Ordinary Shares of US$0.01 each only. As at the Latest Practicable Date, Mr. Dhanin Chearavanont, Mr. Thanakorn Seriburi, and Mr. Meth Jiaravanont, being CPP Directors, are interested in, and of the ordinary issued share capital of CPP. CPP is also engaged in other businesses, which are not shown in this diagram. Sichuan ECI Yunnan ECI Machinery & Power Sichuan Yi Ming Note 5: Note 6: Note 7: The remaining 50% shareholding in Investment is held by Tractor, an Independent Third Party. The remaining 30.3% equity interest in is held as to 15.3%, 14.2%, 0.5% and 0.3% by County Biochemical Factory, Zhengzhou Jinyuweiye, Xinglv Gongyipin and Shanghai Zhengcheng, respectively. Except for County Biochemical Factory and Zhengzhou Jinyuweiye, the other equity holders are Independent Third Parties. The remaining 72% equity interest in Zhanjiang Deni is held as to 52% and 20% by Dongfeng Electronic and Guangdong Rising, respectively which are Independent Third Parties. 74

9 The following diagram illustrates the shareholding structure of our Group in relation to the Ordinary Shares immediately after the completion of the Reorganisation and the Distribution and upon the Listing: (Note 1) CPF CPFI ITOCHU Corporation Company s Directors Public Company CP Enterprises Golden Industrial ECI Machinery 50% Offshore Investment Onshore 36.6% 33.1% Trading Gansu ECI Guizhou ECI 28% Zhanjiang Deni Zhumadian Qinghai ECI Shaanxi ECI Sichuan ECI Note 1: Note 2: CPF will be interested in of the issued Preference Shares, which will be unlisted and of the issued Ordinary Shares through its wholly-owned subsidiary, CPFI, immediately after the Distribution and the Listing. Mr. Thanakorn Seriburi and Mr. Thirayut Phityaisarakul, who are directors of the Company, will be interested in and of the issued ordinary share capital of the Company, respectively immediately after the Distribution and upon the Listing. Yunnan ECI Machinery & Power Sichuan Yi Ming 75