KUNLUN ENERGY COMPANY LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.
This circular is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.
(Stock Code: 00135.HK)
- VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF PETROCHINA KUNLUN GAS CO., LTD. AND
- PROPOSED CONTINUING CONNECTED TRANSACTIONS
A letter from the Board is set out on pages 7 to 33 of this circular and a letter from the Independent Board Committee, containing its recommendation to the Independent Shareholders of the Company, is set out on page 34 of this circular. A letter from ING Bank N.V., Hong Kong Branch, an independent financial adviser, containing its advice to the Independent Board Committee and Independent Shareholders in respect of the Acquisition and the Revised Caps for certain continuing connected transactions is set out on pages 35 to 65 of this circular.
A notice of SGM to be held at President's Suite, 38th Floor, World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong on 18 February 2016 (Thursday) at 10:00 a.m. is set out on pages SGM-1 to SGM-2 of this circular. A proxy form for use by the Shareholders at the SGM is enclosed with this circular. Whether or not you intend to attend and vote at the SGM in person, you are requested to complete the proxy form enclosed in accordance with the instructions printed thereon and return it to the principal office of the Company at 39th Floor, 118 Connaught Road West, Hong Kong as soon as practicable but in any event not later than 48 hours before the time for holding the SGM or adjourned meeting (as the case may be). Completion and return of the proxy form will not preclude you from attending and voting in person at the SGM should you so wish.
23 January 2016
Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
II. THE ACQUISITION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SHAREHOLDING STRUCTURE OF THE COMPANY AND
THE TARGET GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
BUSINESS AND FINANCIAL INFORMATION OF KUNLUN GAS . . 12
FINANCIAL EFFECT OF THE ACQUISITION ON THE GROUP . . . . 14
REASONS FOR AND BENEFITS OF THE ACQUISITION . . . . . . . . . 17
CONTINUING CONNECTED TRANSACTIONS ARISING FROM
THE ACQUISITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
LISTING RULES IMPLICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
IX. INFORMATION ON THE PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
X. SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
XI. RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
XII. ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . 34
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . 35
INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
APPENDIX I MANAGEMENT DISCUSSION AND ANALYSIS OF
THE GROUP AND THE TARGET GROUP. . . . . . . . . . . . . . . . I-1 APPENDIX II FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . II-1 APPENDIX III ACCOUNTANTS' REPORT OF THE TARGET GROUP . . . . . . III-1
APPENDIX IV UNAUDITED PRO FORMA FINANCIAL INFORMATION OF
THE ENLARGED GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
APPENDIX V VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
APPENDIX VI GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1 NOTICE OF SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SGM-1
In this circular, unless the context otherwise requires, the following terms shall have the meanings set out below:
"Acquisition" the acquisition by the Company of the entire equity interest in Kunlun Gas owned by PetroChina pursuant to the terms and conditions of the Acquisition Agreement;
"Acquisition Agreement" the agreement dated 28 December 2015 and entered into
between the Company and PetroChina in respect of the Acquisition;
"associates" has the meaning ascribed thereto under the Listing Rules; "Audited Financial Statements" the consolidated financial statements of Kunlun Gas as at
the Valuation Reference Date which have been audited by
KPMG Huazhen LLP;
"Board" the board of Directors of the Company;
"CNG" compressed natural gas;
"CNPC" 中國石油天然氣集團公司 (China National Petroleum Corporation), a state-owned enterprise established under the laws of the PRC;
"CNPC Group" CNPC and its subsidiaries, but excluding members of the Enlarged Group;
"Company" Kunlun Energy Company Limited (Stock Code: 00135.HK), a company incorporated with limited liability in Bermuda and the shares of which are listed on the Stock Exchange;
"Completion" completion of the Acquisition in accordance with the Acquisition Agreement;
"Completion Date" the date of Completion, i.e. the last calendar day of the
calendar month when all the conditions precedent specified in the Acquisition Agreement is satisfied or waived or such other date agreed by the Company and PetroChina in writing;
"Completion Date Financial Statements"
the consolidated financial statements of Kunlun Gas as at the Completion Date which will be reviewed by KPMG Huazhen LLP;
"connected person" has the meaning ascribed to it under the Listing Rules;
"Consideration" RMB14,827,093,900 (equivalent to approximately HK$17,998,414,600 or US$2,322,357,900), being the
consideration for the Acquisition of the entire equity interest in Kunlun Gas owned by PetroChina pursuant to the Acquisition Agreement;
"Director(s)" the director(s) of the Company;
"Enlarged Group" the Group as enlarged by the Acquisition after the Completion;
"Fifth Supplemental Agreement" means the agreement dated 6 November 2014 entered
into between the Company and CNPC amending certain terms of, and renewing the Master Agreement for the three years ending on 31 December 2017;
"Financial Advisers" Goldman Sachs (Asia) L.L.C. and China International
Capital Corporation Hong Kong Securities Limited;
"First Supplemental Agreement" means the agreement dated 14 November 2006 entered
into between the Company and CNPC amending certain terms of, and renewing, the Master Agreement;
"Fourth Supplemental Agreement"
means the agreement dated 14 November 2011 entered into between the Company and CNPC renewing the terms of the Master Agreement for the three years ending on 31 December 2014;
"Gain or Loss during the Transition Period"
the difference between the net asset value of Kunlun Gas set out in the Completion Date Financial Statements and the net asset value of the Kunlun Gas set out in the Audited Financial Statements as at the Valuation Reference Date after deducting the Special Dividend;
"GDP" gross domestic product;
"Group" the Company and its subsidiaries;
Kunlun Energy Co. Ltd. issued this content on 2016-01-22 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-22 15:20:06 UTC
Original Document: http://www.kunlun.com.hk/attachment/2016012223020100012417797_en.pdf
