By 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 the Cayman Islands with limited liability)
(Stock Code: 03366) POSSIBLE DISCLOSEABLE TRANSACTION
According to the Tender Document, the Chengdu Government is looking for an investor to invest in the Land Resumption Project. The selection of the said investor will be through Tender. Chengdu OCT, a non-wholly owned subsidiary of the Company, has submitted a bid for the Tender on 27 May 2014 (after trading hours).
If Chengdu OCT wins the Tender, it will enter into the Formal Agreement with Xinjin Gongfa Investment pursuant to which Chengdu OCT shall provide the Land Resumption Fund of an aggregate amount of RMB300 million (equivalent to approximately HK$375 million) to Xinjin Gongfa Investment and it will be entitled to certain investment return as detailed in the paragraph headed "Capital cost return and investment return" in this announcement.
As one or more of the applicable percentage ratios calculated in accordance with Chapter 14 of the Listing Rules for the Possible Transaction are more than 5% but less than 25%, such transaction constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under the Listing Rules.
According to the Tender Document, the Chengdu Government is looking for an investor to invest in the Land Resumption Project. The selection of the said investor will be through Tender. Chengdu OCT, a non-wholly owned subsidiary of the Company, has submitted a bid for the Tender on
27 May 2014 (after trading hours).
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A summary of the Tender Document is as follows:-
Issuer of the Tender Document
Xinjin Gongfa Investment
To the best information, knowledge and belief of the Directors, after having made all reasonable enquiries, Xinjin Gongfa Investment is a third party independent of the Company and its connected persons.
Tender period
From 22 May 2014 to 27 May 2014
Tender procedure
Bid applications for the Tender can be submitted during the tender period as set out in the paragraph headed "Tender period" above. Xinjin Gongfa Investment will review and give ratings to the qualified bidders for final selection of the successful bidder by the Chengdu Government. Upon selection of the successful bidder by the Chengdu Government, tender results will be published by Xinjin Gongfa Investment for three days and a notice will be issued to the successful bidder thereafter. The successful bidder shall enter into the Formal Agreement with Xinjin Gongfa Investment within 10 days upon receipt of the aforesaid notice.
Ratings will be given to the bidders based on their respective registered capital, amount of tax paid for the past three years, the bidders' requested percentage of investment return for the Land Resumption Fund provided and whether the bidder is a state-owned enterprise.
If Chengdu OCT succeeds in its bid, it will enter into the Formal Agreement with Xinjin Gongfa
Investment.
Provision of Land Resumption Fund
The successful bidder shall provide the Land Resumption Fund of an aggregate amount of RMB300 million (equivalent to approximately HK$375 million) by two installments as detailed below:-
1. an initial amount of RMB220 million (the "Initial Amount") shall be provided to Xinjin Gongfa Investment within 10 business days after (i) the entering into of the Formal Agreement between the successful bidder and Xinjin Gongfa Investment and (ii) the entering into of a land resumption agreement by Xinjin Gongfa Investment in accordance with the relevant laws; and
2. the remaining RMB80 million shall be provided to Xinjin Gongfa Investment within 90 days after the advancement of the above Initial Amount.
If Chengdu OCT succeeds in its bid, it intends to provide the Land Resumption Fund out of its internal resources.
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Capital cost return and investment return
The successful bidder shall be entitled to the following cost of the Land Resumption Fund and investment return:-
(A) Cost of the Land Resumption Fund will be calculated using the formula below:
Land
Resumption
Fund x
The One-year
Benchmark
Lending Rate
(Note) x
The actual number of days of the Advancement Period
365
(B) Investment return will be calculated using the formula below:
Land
Resumption
Fund x
An annual rate of
not more than 10%
(Note) x
The actual number of days of
Advancement Period
365
Note: Pursuant to the Tender Document, the aggregate of the annual rate of cost of the Land Resumption Fund and the annual rate of investment return should not exceed 16% per annum. Chengdu OCT has requested for an aggregate rate of 16% per annum in its bid submitted. The aforesaid rate was determined by Chengdu OCT with reference to the rate of investment return of 10% of similar projects in the market and the current benchmark interest rate of 6% of one year bank loan, which was considered and approved by the Board.
The actual repayment date of Land Resumption Fund and the actual payment date of the cost of the Land Resumption Fund and the investment return from Xinjin Gongfa Investment to the successful bidder of the Tender have not been set out in the Tender Document and will be fixed in accordance with the actual situation of the return of the proceeds from the transfer of the Land, Detailed terms regarding the actual repayment date of Land Resumption Fund and the actual payment date of the cost of the Land Resumption Fund and the investment return will be agreed by the relevant parties and set out in the Formal Agreement.
Information about the Land and the Land Resumption Project
The Land is situated in area No. 4, No. 6 and No.11 of Tu Qiao Cun, Chengdu Jinniu District
(Jlljf�'l'!ll±JitH4'6'11Jl.) with an area of approximately 124.7645 mu. It is currently
for industrial use. It is intended that the usage of Land will be changed to residential use and
commercial use after completion of the Land Resumption Project.
The Land Resumption Project is expected to be completed within 9 months from the date of advancement of the Initial Amount.
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The Group is principally engaged in the comprehensive development business and the manufacture and sale of cartons and paper products. Chengdu OCT is a non-wholly owned subsidiary of the Company and is indirectly owned as to approximately 51% by the Company. Chengdu OCT is principally engaged in the development and operation of properties, tourism and hotel complex in the PRC.
Chengdu Government is the People's Government of Jin Niu District, Chengdu, the PRC.
Xinjin Gongfa Investment is a state-owned enterprise and a wholly-owned subsidiary of Jlljfrtf�
'l'!ll@:ft1�'i1':i (the Chengdu Jin Niu District State-owned Assets Management Bureau*).
Xinjin Gongfa Investment is principally engaged in project investment and management, and
corporate management advisory and planning.
The Directors are of the view that the Possible Transaction, if materializes, would bring satisfactory return to the Group, enable the Group to reach out to new business opportunities and diversify sources of revenue for the Group. The Directors are of the view that the Possible Transaction, if materializes, would promote the business development of the Group.
The Board considers that the terms of the Possible Transaction are fair and reasonable, and that the Possible Transaction, if materializes, is in the interest of the Company and the Shareholders as a whole.
As one or more of the applicable percentage ratios calculated in accordance with Chapter 14 of the Listing Rules for the Possible Transaction are more than 5% but less than 25%, such transaction constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under the Listing Rules.
As the Tender is still in progress and there is no certainty that Chengdu OCT will succeed in its bid and the Possible Transaction may or may not proceed, Shareholders and potential investors should exercise extreme caution when dealings in the Shares. The Company will make a further announcement on the results of the Tender in accordance with the Listing Rules.4
DEFINITIONS
In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:
"Advancement Period" the period between the date of advancement of the Land Resumption Fund from Chengdu OCT to Xinjin Gongf a Investment and the date of repayment from Xinjin Gongfa Investment
"associate" has the meaning ascribed thereto under the Listing Rules
"Board" the board of Directors
"Chengdu Government" Jlljfrtf�'l'!llA�il& M(the People's Government of Jin Niu
District, Chengdu, the PRC)
"Chengdu OCT" Jlljf M :ft (Chengdu Tianfu OCT Industry Development Company Limited*), a sino-foreign equity joint venture established under the laws of the PRC and a non-wholly owned subsidiary of the Company
"connected person" has the meaning ascribed to it in the Listing Rules
"Directors" the directors of the Company
"Formal Agreement" the agreement to be entered into between the successful bidder of the Tender and Xinjin Gongfa Investment
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the PRC "HK$" Hong Kong dollar(s), the lawful currency of Hong Kong
"Land" a plot of land located at area No. 4, No. 6 and No.11 of Tu Qiao
Cun, Chengdu Jinniu District, the PRC (r:f@Jlljf�'l'!ll±JitH
4'6'11Jl.) with an area of approximately 124.7645 mu
"Land Resumption Fund" the fund(s) to be provided by the successful bidder of the Tender to Xinjin Gongfa Investment for the Land Resumption Project
"Land Resumption Project" a project in relation to land resumption, consolidation and site clearance works for the Land to be undertaken by Xinjin Gongfa Investment as delegated by the Chengdu Government
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange
"mu" mu (ii>), a Chinese unit of measurement, equivalent to 666 2/3
square meters
"Possible Transaction" transaction to be contemplated under the Formal Agreement if
Chengdu OCT wins the Tender
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"PRC" the People's Republic of China (for the purpose of this announcement, excluding Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan)
"RMB" Renminbi, the lawful currency of the PRC
"Share(s)" Share(s) of HK$0.1 each in the share capital of the Company
"Shareholder(s)" shareholder(s) of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Tender" the public tender selection of an investor by Xinjin Gongfa Investment (as delegated by the Chengdu Government) for the Land Resumption Project
"Tender Document" the tender document (N�X-t) dated 22 May 2014 and issued by Xinjin Gongfa Investment
"The One-year Benchmark
Lending Rate"
The People's Bank of China benchmark interest rate for financial institutions for RMB-denominated loans with a term of one year
"Xinjin Gongfa Investment" Jlljfrtf � 1:ft (Chengdu Shi Xinjin Gongfa
Investment Company Limited*), a stated-owned enterprise
"%" percent.
In this announcement, the English names of the PRC entities are translation of their Chinese names and included for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail.
Unless otherwise specified in this announcement and for the purpose of illustration only, RMB is translated to HK$ at the rate of HK$1.00 = RMB0.80. No representation has been made by the Company that any amount expressed in foreign currency in this announcement has been, could have been or could be converted at any rates or at all.
* For identification purpose only.
By order of the Board
Chairman
Hong Kong, 27 May 2014
As at the date of this announcement, the Board comprises se ven Director s, namely: Ms. Wang Xiaowen, Ms. Xie Mei and Mr. Yang Jie as executive Directors; Mr. Zhou Ping as non-executive Director; Mr. Lu Gong, Ms. Wong Wai Ling and Professor Lam Sing Kwong Simon as independent non-executive Directors.
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