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On 23rd January, 2013, Tian An (Shenzhen) (an indirect wholly-owned subsidiary of the Company) entered into the First Guarantee in favour of Bank A, pursuant to which Tian An (Shenzhen) agreed to provide guarantee in respect of the repayment obligations of the First Loan in the amount of RMB180,000,000 (equivalent to approximately HK$222,222,000) granted to the Borrower (a jointly controlled entity owned as to 50% by each of Tian An (Shenzhen) and Junye Company respectively) by Bank A for a term of five years from the date of drawdown of the First Loan. On the same date, Junye Company also entered into a guarantee which is in a form substantially the same as the First Guarantee in favour of Bank A to provide guarantee for the repayment obligations of the Borrower under the First Loan Agreement.
On 29th January, 2013, Tian An (Shenzhen) entered into the Second Guarantee in favour of Bank B, pursuant to which Tian An (Shenzhen) agreed to provide guarantee in respect of the repayment obligations of the Second Loan in the amount of RMB250,000,000 (equivalent to approximately HK$308,642,000) granted to the Borrower by Bank B for a term of two years. On the same date, Junye Company also entered into a guarantee which is in a form substantially the same as the Second Guarantee in favour of Bank B to provide guarantee for the repayment obligations of the Borrower under the Second Loan Agreement.
The transactions under the Guarantees constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules on the basis that the relevant Percentage Ratio(s), on an aggregate basis, exceeds 5% but less than 25%, accordingly, the transactions under the Guarantees constitute a discloseable transaction for the Company.
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On 23rd January, 2013 and 29th January, 2013, the Borrower, a jointly controlled entity of the Company, entered into the First Loan Agreement with Bank A and the Second Loan Agreement with Bank B respectively.
At the requests of Bank A and Bank B, the First Guarantee and the Second Guarantee were entered into by Tian An (Shenzhen), being the shareholder holding 50% equity interest of the Borrower, in favour of each of Bank A and Bank B to guarantee the repayment obligations of the Borrower under the First Loan Agreement and the Second Loan Agreement on 23rd January, 2013 and 29th January, 2013 respectively. On the other hand, Junye Company also entered into a guarantee in favour of each of Bank A and Bank B to guarantee the repayment obligations of the Borrower under the First Loan Agreement and the Second Loan Agreement respectively, each of which is in a form substantially the same as the First Guarantee and the Second Guarantee.
At the request of Bank B, a personal guarantee was also given in favour of Bank B by each of a shareholder of Junye Company and a director of the Borrower, who, other than being a shareholder of Junye Company and a director of the Borrower respectively, to the best knowledge, information and belief of the Directors having made all reasonable enquiries, are third parties independent of the Company and its connected persons, to secure the repayment obligations of the Borrower under the Second Loan Agreement.
It was agreed in the First Memorandum and the Second Memorandum that as shareholders of the Borrower, each of Tian An (Shenzhen) and Junye Company shall be responsible collectively for any liability incurred by the Borrower under the First Loan Agreement and the Second Loan Agreement in accordance with the terms therein.
To the best knowledge, information and belief of the Directors having made all reasonable
enquiries, Bank A and its ultimate beneficial owners are third parties independent of the Company and its connected persons.
The principal terms of the First Guarantee are as follows:
Term: commencing from the date of the First Guarantee and shall expire two years after the expiry of the term of the First Loan Agreement.
Considerations: Tian An (Shenzhen) shall not receive any fee or commission for providing the First Guarantee.
Scope of guarantee: including the amount of the First Loan together with any interest, penalties, liquidated damages, other relevant expenses for the realisation of Bank A's rights incurred.
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To the best knowledge, information and belief of the Directors having made all reasonable
enquiries, Bank B and its ultimate beneficial owners are third parties independent of the Company and its connected persons.
The principal terms of the Second Guarantee are as follows:
Term: commencing from the date of the Second Guarantee and shall expire two years after the expiry of the term of the Second Loan Agreement.
Considerations: Tian An (Shenzhen) shall not receive any fee or commission for providing the Second Guarantee.
Scope of guarantee: including the amount of the Second Loan together with any interest, penalties, liquidated damages and other relevant expenses for the realisation of Bank B's rights incurred.
In order to ensure that shareholders of the Borrower shall shoulder the liability under the First Loan Agreement and the Second Loan Agreement in proportion to their respective shareholdings, Tian An (Shenzhen) and Junye Company entered into the First Memorandum and Tian An (Shenzhen), Junye Company and a director of the Borrower entered into the Second Memorandum, pursuant to which it was proposed that each of them to provide guarantee and in particular, each of Tian An (Shenzhen) and Junye Company to provide guarantee in proportion to their respective shareholdings in the Borrower in respect of the repayment obligations under the First Loan Agreement and the Second Loan Agreement. In order to reflect this consensus, it was agreed in the event that Bank A or Bank B enforces the guarantee and recovers payment from Tian An (Shenzhen) or Junye Company, which exceeds the proportion that the shareholder should be responsible according to its shareholding in the Borrower, the other shareholder shall repay such excess to the shareholder making the payment to Bank A or Bank B, failing which, the non-paying shareholder shall transfer its shareholding interest in the Borrower to the shareholder who makes the payment, with reference to the excess payment amount.
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The Directors consider that the provision of each of the Guarantees will facilitate funding of the existing urban renewal project of the Borrower.
The Directors, after due consideration, agreed to give the Guarantees and are of the view that the entering into of the Guarantees will not undermine the interest of the Company.
The Directors are of the view that the terms of each of the Guarantees are entered into on normal commercial terms and are fair and reasonable and in the interests of the Company and its shareholders as a whole.
The Company is incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board of the Stock Exchange. The principal business activity of the Company is investment holding. The Group is engaged principally in the development of high-end apartments, villas, office buildings and commercial properties, property investment and property management, as well as the manufacture, sales and trading of cement and clinker in China.
Bank ABank A is a licensed commercial bank in the PRC and they provide a variety of financial products and services to corporate and personal banking customers.
Bank BBank B is a licensed commercial bank in the PRC and they provide a variety of financial products and services to corporate and personal banking customers.
LISTING RULES IMPLICATIONS
The transactions under the Guarantees constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules on the basis that the relevant Percentage Ratio(s), on an aggregate basis, exceeds 5% but less than 25%, accordingly, the transactions under the Guarantees constitute a discloseable transaction for the Company.
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"Bank A" a licensed commercial bank in the PRC, being the lender under the First Loan Agreement
"Bank B" a licensed commercial bank in the PRC, being the lender under the Second Loan Agreement
"Board" the board of Directors
"Borrower" W :J) X
