GUANGDONG INVESTMENT LIMITED 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 Hong Kong with limited liability)
(Stock Code: 0270) CONTINUING CONNECTED TRANSACTION AND REVISION OF ANNUAL CAPS FOR TENANCY AGREEMENTS
Reference is made to the announcement of the Company dated 30 September 2014 in relation to the continuing connected transactions and the annual caps of the Existing Tenancy Agreements.
On 20 July 2015, Guangdong Teem entered into the New Tenancy Agreements with
Guangdong Holdings for three years ending on 20 July 2018.
Save for the above tenancy, Guangdong Teem had also entered into the Existing Tenancy Agreements with Guangdong Holdings. A summary of the particulars of the New Tenancy Agreements and the Existing Tenancy Agreements is set out in this announcement.
Guangdong Holdings is the ultimate controlling shareholder of the Company. Accordingly, Guangdong Holdings is a connected person of the Company and the transaction as contemplated under the New Tenancy Agreements constitutes a continuing connected transaction of the Company under the Listing Rules.
As all the applicable percentage ratios of the Listing Rules in respect of the annual revenue income to be received by the Company under the New Tenancy Agreements are less than 0.1% pursuant to Rule 14A.76(1) of the Listing Rules, the transaction is fully exempt from shareholders' approval, annual review and all disclosure requirements.
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The aggregate annual revenue income received and to be received by the Group under the Existing Tenancy Agreements and the New Tenancy Agreements for the years ending 31 December 2015, 2016, 2017 and 2018 will be revised to approximately RMB13,822,811, RMB16,137,349, RMB13,119,981 and RMB1,844,136, respectively. The annual caps for the aforementioned continuing connected transactions for the years
2015, 2016, 2017 and 2018 will be revised to RMB14,000,000, RMB17,000,000, RMB14,000,000 and RMB2,000,000, respectively. The highest annual cap is estimated to be RMB17,000,000 (equivalent to approximately HK$21,557,700), which exceeds
0.1% but is less than 5% of the applicable percentage ratios pursuant to Rule 14.07 of the Listing Rules. Accordingly, the transactions as contemplated under the Existing Tenancy Agreements and the New Tenancy Agreements in aggregate are subject to the
reporting and announcement requirements, but shall be exempt from the circular and
shareholders' approval requirements in accordance with Rule 14A.76(2) of the Listing
Rules.
The Company will comply with the annual review requirements under Rules 14A.55 to
14A.57 of the Listing Rules in relation to the Tenancy Agreements.
On 20 July 2015, Guangdong Teem entered into the New Tenancy Agreements with Guangdong Holdings whereby Guangdong Teem has agreed to let and Guangdong Holdings has agreed to rent the Premises at the monthly rent of RMB161,332.95 for a fixed term of three years commencing on 21 July 2015, expiring on 20 July 2018 and with a rent-free period of three months. Guangdong Holdings is also required to pay management fees and other expenses in relation to the Premises to a wholly-owned subsidiary of Guangdong Teem which provides property management services to the Premises. Pursuant to the New Tenancy Agreements, Guangdong Holdings will pay a deposit equivalent to two months' rent to Guangdong Teem.
EXISTING TENANCY AGREEMENTSPursuant to the Existing Tenancy Agreements, Guangdong Teem lets and Guangdong Holdings rents the office premises situate at the whole of 42nd and 45th Floors of Teem Tower at the monthly rent of RMB885,166.10 for a fixed term of three years commencing on 1 October 2014 and expiring on 30 September 2017. Guangdong Holdings is also required to pay management fees and other expenses in relation to the above premises to a wholly-owned subsidiary of Guangdong Teem which provides property management services to the above premises.
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BASIS AND REASONS FOR THE TRANSACTION AND THE ANNUAL CAPS
The entering into of the New Tenancy Agreements is in the ordinary and usual course of business of Guangdong Teem. The terms of the New Tenancy Agreements are on normal commercial terms or better and were negotiated on an arm's length basis between the parties with reference to the current market rent of the Premises as advised by an independent property valuer having taken into account of the prevailing market conditions.
The leasing of the Premises to Guangdong Holdings will enhance the occupancy rate of Teem Tower and provides revenue income to the Group. Pursuant to the Existing Tenancy Agreements and the New Tenancy Agreements, the annual caps for the aggregate annual revenue income (comprising the above rental income and outgoings) for the relevant periods in 2015, 2016, 2017 and 2018 are as follows:
Estimated total revenue income to be generated from:
2015 2016 2017 2018 (RMB) (RMB) (RMB) (RMB)
(i) New Tenancy Agreements 971,471 3,209,492 3,364,760 1,844,136 (ii) Existing Tenancy Agreements 12,851,340 12,927,857 9,755,221 -
Total: 13,822,811 16,137,349 13,119,981 1,844,136
Annual Cap (each an "Annual Cap") 14,000,000 17,000,000 14,000,000 2,000,000
The above estimated total revenue income and the related Annual Caps are calculated based on the aggregate monthly rental of approximately RMB1,046,500 and the estimated total monthly management fees and expenses of approximately RMB300,000, which in turn have been calculated by reference to the latest charging rates and current consumption level for the various services used by Guangdong Holdings in connection with its occupation of the relevant premises.
The Directors (including the independent non-executive Directors) are of the view that the Tenancy Agreements were entered into in the ordinary and usual course of business of Guangdong Teem and on normal commercial terms or better and that the terms of the Tenancy Agreements are fair and reasonable under the prevailing market conditions and are in the interests of the Company and its shareholders as a whole.
Mr. Huang Xiaofeng, Mr. Huang Zhenhai and Mr. Wu Jianguo, Directors of the Company, are also directors of Guangdong Holdings. All of the abovementioned Directors present at the board meeting of the Company were not counted in the quorum and they did not vote on the Directors' resolutions approving, inter alia, the entering into of the New Tenancy Agreements and the Annual Caps of the aggregate annual revenue income of the Tenancy Agreements for the relevant periods.
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CONNECTED PERSON
Guangdong Holdings holds the entire issued share capital of GDH Limited which is the controlling shareholder of the Company, holding approximately 54.68% interests in the Company. Guangdong Holdings is therefore the ultimate controlling shareholder of the Company.
Accordingly, Guangdong Holdings is a connected person (as defined in the Listing Rules) of the Company and the transaction as contemplated under each of the Tenancy Agreements constitutes a continuing connected transaction of the Company under the Listing Rules.
As all the applicable percentage ratios of the Listing Rules in respect of the annual revenue income to be received by the Company under the New Tenancy Agreements are less than 0.1% pursuant to Rule 14A.76(1) of the Listing Rules, the transaction is fully exempt from shareholders' approval, annual review and all disclosure requirements.
The aggregate annual revenue income received and to be received by the Group under the
Existing Tenancy Agreements and the New Tenancy Agreements for the years ending
31 December 2015, 2016, 2017 and 2018 will be revised to approximately RMB
13,822,811, RMB16,137,349, RMB13,119,981 and RMB1,844,136, respectively. The annual caps for the aforementioned continuing connected transactions for the years 2015,
2016, 2017 and 2018 will be revised to RMB14,000,000, RMB17,000,000, RMB14,000,000 and RMB2,000,000, respectively. The highest annual cap is estimated to
be RMB17,000,000 (equivalent to approximately HK$21,557,700), which exceeds 0.1%
but is less than 5% of the applicable percentage ratios pursuant to Rule 14.07 of the Listing Rules. Accordingly, the transactions as contemplated under the Existing Tenancy Agreements and the New Tenancy Agreements in aggregate are subject to the reporting and announcement requirements, but shall be exempt from the circular and shareholders' approval requirements in accordance with Rule 14A.76(2) of the Listing Rules.
The Company will comply with the annual review requirements under Rules 14A.55 to
14A.57 of the Listing Rules in relation to the Tenancy Agreements.
The Group is principally engaged in investment holding, water resources, property holding and investment, hotel ownership and operations, hotel management, department stores operations, and investment in infrastructure and energy projects.
The principal business of Guangdong Holdings includes investment holding and project development.
The principal business of Guangdong Teem includes property leasing, corporate management investment, property agency, hotel investment and hotel management.
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DEFINITIONS
In this announcement, the following expressions shall have the following meanings unless the context requires otherwise:
"Company" Guangdong Investment Limited, a company incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board of the Stock Exchange;
"Director(s)" the director(s) of the Company;
"Existing Tenancy
Agreements"
"Group" "Guangdong
Holdings"
the tenancy agreement and its supplemental tenancy agreement both dated 30 September 2014 entered into between Guangdong Teem as landlord and Guangdong Holdings as tenant in respect of leasing of the whole of 42nd and 45th Floors of Teem Tower;
the Company and its subsidiaries;
廣東粤海控股集團有限公司(Guangdong Holdings Limited*), an enterprise established under the laws of the PRC;
"Guangdong Teem" 廣東天河城(集團)股份有限公司(Guangdong Teem (Holdings)
Limited*), a subsidiary of the Company established under the
laws of the PRC;
"HK$" Hong Kong dollars, the legal currency of Hong Kong; "Hong Kong" The Hong Kong Special Administrative Region of the PRC; "Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange, as amended from time to time;
"New Tenancy
Agreements"
the new tenancy agreement and its supplemental tenancy agreement both dated 20 July 2015 in respect of the leasing of the Premises between Guangdong Teem as landlord and Guangdong Holdings as tenant;
"Premises" Units 01, 02A, 07B and 08 of 35th Floor of Teem Tower; "PRC" the People's Republic of China;
"RMB" Reminbi, the lawful currency of the PRC;
"Stock Exchange" The Stock Exchange of Hong Kong Limited;
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"Teem Tower" Teem Tower, No. 208 Tianhe Road, Tianhe District, Guangzhou, Guangdong Province, PRC;
"Tenancy
Agreements"
the Existing Tenancy Agreements and the New Tenancy
Agreements; and
"%" per cent.
By Order of the Board TSANG Hon Nam Director
Hong Kong, 20 July 2015
* The English translation of the Chinese name of the relevant company included in this announcement is prepared by the Company for reference only, and such translation may not be accurate and such company may not have an official English translation/version of its Chinese name.
For the purpose of this announcement, unless otherwise indicated, the exchange rate of RMB1.00=HK$1.2681 has been used, where applicable, for purpose of illustration only and it does not constitute any representation that any amount has been, could have been or may be exchanged at that rate or at any other rate.
As at the date of this announcement, the board of Directors comprises three Executive Directors, namely, Mr. HUANG Xiaofeng, Mr. WEN Yinheng and Mr. TSANG Hon Nam; six Non-Executive Directors, namely, M r. H U A N G Z h e n h a i , M r. W U J i a n g u o , M r. Z H A N G H u i , M s . Z H A O C h u n x i a o , M r. L AN Run in g an d M r. LI Wa i Ke un g; a nd fi ve In dep en de nt Non -Exec utiv e Di re cto rs , namely, Dr. CHAN Cho Chak, John, Dr. the Honourable LI Kwok Po, David, Mr. FUNG, Daniel R., Dr. CHENG Mo Chi, Moses and Mr. WU Ting Yuk, Anthony.
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