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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 under the Companies Ordinance) (Stock Code: 00144) CONNECTED TRANSACTION FORMATION OF JOINT VENTURES IN CONNECTION WITH INVESTMENT IN THE DJIBOUTI INTERNATIONAL FREE TRADE ZONE SUMMARY The Board is pleased to announce that on 16 January 2017, the Company entered into (i) the Asset Company Shareholders Agreement with, inter alia, CMID and Cheer Signal in relation to the Asset Joint Venture and (ii) the O&M Shareholders Agreement with, inter alia, CMID, Cheer Signal, PDA and IZP in relation to the O&M Joint Venture, in each case, in connection with the proposed investment in the Djibouti International Free Trade Zone. Each of the Company, CMID and Cheer Signal shall have a 40%, 40% and 20% interest in the the Asset Joint Venture, respectively and each of the Company, CMID, Cheer Signal, PDA and IZP shall have a 26.7%, 26.7%, 13.3%, 25% and 8.3% interest in the O&M Joint Venture, respectively. Each of CMID and Cheer Signal is an associate of CMG, the ultimate holding company of the Company, and therefore connected persons of the Company. Accordingly, the Asset Company Shareholders Agreement and the O&M Shareholders Agreement constitute connected transactions of the Company under the Listing Rules. Furthermore, as the Asset Company Shareholders Agreement and the O&M Shareholders Agreement are inter-related, the two agreements will be aggregated and treated as if they were one transaction. Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of aggregate commitment by the Company under the Asset Company Shareholders Agreement and the O&M Shareholders Agreement exceed 0.1% but are below 5%, the transactions are therefore exempt from the circular (including independent financial advice) and shareholders’ approval requirements under Chapter 14A of the Listing Rules. — 1 — BACKGROUND The Board is pleased to announce that on 16 January 2017, the Company entered into the Asset Company Shareholders Agreement and the O&M Shareholders Agreement in relation to the Asset Joint Venture and O&M Joint Venture in connection with the proposed investment in the new Djibouti International Free Trade Zone. 1 THE ASSET COMPANY SHAREHOLDERS AGREEMENT The key terms of the Asset Company Shareholders Agreement are set out below: Date: 16 January 2017 Parties: (1) (2) (3) (4) Purpose and scope of business: The Asset Joint Venture is a company incorporated in Hong Kong and is formed as a platform for the parties to co-invest into the Djibouti Asset Company. The Company CMID Cheer Signal Asset Joint Venture The Djibouti Asset Company shall be established for the purpose of investing in and financing the development rights to develop commercial and infrastructure projects within the Djibouti International Free Trade Zone. The Asset Joint Venture will have a 30% interest in the Djibouti Asset Company and Great Horn and PDA shall have a 60% and 10% interest in the Djibouti Asset Company, respectively. Shareholding: The share capital of the Asset Joint Venture shall initially comprise of 10,000 shares of which, each of the Company, CMID and Cheer Signal shall hold 4,000, 4,000 and 2,000 shares, respectively, representing 40%, 40% and 20% of the total number of issued shares of the Asset Joint Venture, respectively. The respective amounts to be paid by each of the Company, CMID and Cheer Signal for the subscription of the shares of the Asset Joint Venture are HKD4,000, HKD4,000 and HKD2,000, respectively. — 2 — Initial investments in Djibouti Asset Company: The parties agreed that the initial investments to be made by the Asset Joint Venture to the Djibouti Asset Company shall be USD30,000,000 (equivalent to approximately HKD234,000,000) and shall be borne by the shareholders of the Asset Joint Venture in accordance with their respective shareholding in the Asset Joint Venture. Accordingly, each of the Company, CMID and Cheer Signal has agreed to contribute USD12,000,000 (equivalent to approximately HKD93,600,000), USD12,000,000 (equivalent to approximately HKD93,600,000) and USD6,000,000 (equivalent to approximately HKD46,800,000) towards such initial investment. Board of directors: The board of directors of the Asset Joint Venture will comprise four directors. Each of the Company, CMID and Cheer Signal is entitled to appoint one director and the remaining director shall be appointed jointly by the Company and CMID. The quorum for any board meeting shall be three directors and any resolutions to be passed by the board of directors of the Asset Joint Venture shall be passed by a majority of directors present. Shareholders voting and reserved matters: The following matters shall require the approval of all the directors and by shareholders holding at least 85% of the total number of issued shares of the Asset Joint Venture: (i) amendment to the business scope of the Asset Joint Venture; (ii) fundamental change to the business plan; (iii) winding up of the Asset Joint Venture; (iv) disposal of all or substantially all of the assets of the Asset Joint Venture; and (v) agreement or arrangement between the Asset Joint Venture on the one hand, and its shareholders, directors or managers on the other hand. Appointment of directors to the Djibouti Asset Company: For so long as the Asset Joint Venture is entitled to nominate three directors to the board of directors of the Djibouti Asset Company, the parties agreed that each of the Company and CMID shall be entitled to nominate one director, and the remaining director shall be appointed jointly by the Company and CMID. — 3 — As at the date of this announcement, the Asset Joint Venture has not yet commenced any business operations. 2 THE O&M SHAREHOLDERS AGREEMENT The key terms of the O&M Shareholders Agreement are set out below: Date: 16 January 2017 Parties: (1) (2) (3) (4) (5) (6) Purpose and scope of business: The O&M Joint Venture is a company incorporated in Hong Kong and is formed as a platform for the parties to co-invest into the Djibouti O&M Company. The Company CMID Cheer Signal PDA IZP O&M Joint Venture The Djibouti O&M Company shall be established for the purpose of operating and managing the Djibouti International Free Trade Zone and certain commercial and infrastructure projects within the Djibouti International Free Trade Zone. The O&M Joint Venture will have a 60% interest in the Djibouti O&M Company and the remaining 40% interest shall be held by Great Horn. Shareholding: The share capital of the O&M Joint Venture shall initially comprise of 1,200,000 shares of which, each of the Company, CMID, Cheer Signal, PDA and IZP shall hold 320,400, 320,400, 159,600, 300,000 and 99,600 shares, respectively, representing 26.7%, 26.7%, 13.3%, 25% and 8.3% of the total number of issued shares of the O&M Joint Venture, respectively. The respective amounts that have been paid by each of the Company, CMID, Cheer Signal, PDA and IZP for the subscription of the shares in the O&M Joint Venture are USD320,400 (equivalent to approximately HKD2,499,120), USD320,400 (equivalent to approximately HKD2,499,120), USD159,600 (equivalent to approximately HKD1,244,880), USD300,000 (equivalent to approximately HKD2,340,000) and USD99,600, (equivalent to approximately HKD776,880) respectively. — 4 — Board of directors: The board of directors of the O&M Joint Venture will comprise seven directors. Each of CMID and PDA is entitled to appoint two directors and each of the Company, Cheer Signal and IZP is entitled to appoint one director. Resolutions to be passed by the board of directors of the O&M Joint Venture shall be passed by a majority of directors present. Appointment of directors to the Djibouti O&M Company: For so long as the O&M Joint Venture is entitled to nominate five directors to the board of directors of the Djibouti O&M Company, the parties agreed that CMID shall be entitled to nominate two directors and each of the Company, Cheer Signal and PDA shall be entitled to nominate one director. As at the date of this announcement, the O&M Joint Venture has not yet commenced any business operations. REASONS FOR THE TRANSACTION The core business of the Group includes port and port-related business. The Group has, in recent years, been actively exploring and, as and when deemed appropriate, capturing available opportunities overseas as one of the means to effectively add new growth drivers to its existing and sustainably growing ports business. In particular, the Group has over the years invested into the Port of Djibouti (including its acquisition of a 23.5% interest in Port De Djibouti S.A. in 2012), which lies strategically at the mouth of Red Sea thus making it an ideal transshipment hub for maritime cargoes passing in and out of East Africa, offers long-term growth potential as the economic momentum in the proximity intensifies over time. Complementing the Group’s investment in Port De Djibouti, the Company, Great Horn, DPFZA, CMID, CMSIZ, PDA and IZP entered into the Investment Agreement on 15 November 2016 in relation to the proposed investment and development of the Djibouti International Free Trade Zone. The Investment Agreement sets out the framework in accordance with which the parties are to cooperate and to set up the relevant vehicles to jointly implement the design, phased development, construction and operation of the Djibouti International Free Trade Zone and the establishment of the various joint venture companies, namely the Asset Joint Venture, the O&M Joint Venture, the Djibouti Asset Company and the Djibouti O&M Company is one of the conditions to the Investment Agreement and will be conducted in accordance with the principles set out in the Investment Agreement. Furthermore, under the Investment Agreement and subject to certain retention of powers by DPFZA, DPFZA shall grant, and shall procure the Djibouti government to grant and co-ordinate with the competent government authorities to grant the Djibouti Asset Company, among — 5 — others, the following rights in relation to the Djibouti International Free Trade Zone: land use rights, development rights, exclusive rights to plan, zone, operate, manage and promote the Djibouti International Free Trade Zone. To safeguard the interest of the parties, the Investment Agreement also provides for the right of a party (other than DPFZA and Great Horn) to exit from their investment in the event of a default by DPFZA and also the right of DPFZA to buy out a defaulting party’s interest, in both cases, at a fair market value to be determined by an independent third party. The investment and development of the Djibouti International Free Trade Zone will largely promote economic development of Djibouti and is a replication of the China Merchants group’s “Port-Zone-City” development model which has demonstrated huge success in Shekou. Djibouti’s ports development (including Port De Djibouti S.A.) will also benefit from such a project. Taking into account of the above, the Directors, including the independent non-executive Directors, are of the view that the Asset Company Shareholders Agreement and the O&M Shareholders Agreement have been entered into on normal commercial terms and in the ordinary and usual course of business of the Group and that the terms of the Asset Company Shareholders Agreement and the O&M Shareholders Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole. None of the Directors have a material interest in the Asset Company Shareholders Agreement and the O&M Shareholders Agreement, nor are they required to abstain from voting on the relevant board resolutions. GENERAL INFORMATION Cheer Signal is a company incorporated in Hong Kong and its principal activities are construction, development and operation of communities, industrial zone and cruise industries. Cheer Signal is a wholly-owned subsidiary of CMSIZ. CMID is a company incorporated in the British Virgin Islands and a subsidiary of CMG, the ultimate holding company of the Company. CMID’s principal activities are management of CMG’s certain assets and international investment. CMSIZ is a company incorporated in the PRC and its principal activities are the development and operation in Shekou Industrial Zone and property development and investment in Shekou, Shenzhen, the PRC. It is an indirect subsidiary of CMG. — 6 — Great Horn is a company incorporated in Djibouti and is a subsidiary of DPFZA. Great Horn’s principal activities are investments in Djibouti and holding the related interests. IZP is a company established in the PRC and ultimately controlled by its legal representative Mr. Luo Feng. Its principal activities are research and development of computer hardware and software, consultancy services and trade. PDA is a company established in the PRC and wholly-owned by the Dalian Municipal Government. Its principal activities are operation, construction, management, investment of port and other port related business. PDA is the controlling shareholders of Dalian Port (PDA) Company Limited, a joint stock limited company incorporated in the PRC with limited liability, whose H shares and A shares are listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange, respectively, and in which the Company has an approximately 21.05% interest. To the best of the Directors’ knowledge, information and belief having made all enquiries, save as disclosed above, each of Great Horn, IZP and PDA and each of their respective ultimate beneficial owners are third parties independent of the Company and the connected persons of the Company. LISTING RULES IMPLICATIONS Each of CMID and Cheer Signal is an associate of CMG, the ultimate holding company of the Company, and therefore connected persons of the Company. Accordingly, the Asset Company Shareholders Agreement and the O&M Shareholders Agreement constitute connected transactions of the Company under the Listing Rules. Furthermore, as the Asset Company Shareholders Agreement and the O&M Shareholders Agreement are inter-related, the two agreements will be aggregated and treated as if they were one transaction. Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of aggregate commitment by the Company under the Asset Company Shareholders Agreement and the O&M Shareholders Agreement exceed 0.1% but are below 5%, the transactions are therefore exempt from the circular (including independent financial advice) and shareholders’ approval requirements under Chapter 14A of the Listing Rules. — 7 — DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: “Asset Company Shareholders Agreement” the shareholders agreement entered into among, inter alia, the Company, CMID and Cheer Signal on 16 January 2017 in relation to the Asset Joint Venture “Asset Joint Venture” Lac Assal Investment Holding Company Limited (阿薩 勒湖投資控股有限公司), a company incorporated in Hong Kong and formed by the parties to the Asset Company Shareholders Agreement for the purpose of investment into the Djibouti Asset Company “associates” has the meaning ascribed to this term under the Listing Rules “Board” the board of Directors of the Company “Cheer Signal” Cheer Signal Investment Limited (喜銓投資有限公司), a company incorporated in Hong Kong and a subsidiary of CMG “CMG” China Merchants Group Limited (招商局集團有限公 司), a company incorporated in the PRC and the ultimate holding company of the Company “CMID” China Merchants Investment Development Company Limited (招商局投資發展有限公司), a company incorporated in the British Virgin Islands and a subsidiary of CMG “CMSIZ” China Merchants Shekou Industrial Zone Company Limited (招商局蛇口工業區有限公司), a company incorporated in the PRC and an indirect subsidiary of CMG, the ultimate holding company of the Company. “Company” China Merchants Port Holdings Company Limited (招商 局港口控股有限公司), a company incorporated in Hong Kong and whose shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited “connected person” has the meaning ascribed to this term under Rule 14A.06 of the Listing Rules — 8 — “Directors” the directors of the Company “Djibouti Asset Company” Khor Ambado Free Zone Company FZCO, a free zone limited liability company incorporated in Djibouti established for the purpose of investing in and financing the development rights to develop commercial and infrastructure projects within the Djibouti International Free Trade Zone “Djibouti O&M Company” International Djibouti Industrial Parks Operation FZCO, a free zone limited liability company incorporated in Djibouti established for the purpose of operation of the Djibouti International Free Trade Zone and developing certain commercial and infrastructure projects within the Djibouti International Free Trade Zone “DPFZA” Djibouti Ports & Free Zones Authority, the sole government authority in charge of the administration and the control of all the free zones and ports in Djibouti “Great Horn” Great Horn Investment Holdings SAS, a company incorporated in Djibouti and a subsidiary of DPFZA “Group” the Company and its subsidiaries “HKD” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Investment Agreement” the investment agreement entered into among the Company, DPFZA, Great Horn, CMID, CMSIZ, PDA and IZP in respect of the Djibouti International Free Trade Zone “IZP” IZP (China) Network Technologies Co., Ltd. (億贊普(中 國)網絡技術有限公司), a company incorporated in the PRC “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited — 9 — “O&M Joint Venture” East Aden Holding Company Limited (東方亞丁投資控 股有限公司), a company incorporated in Hong Kong and formed by the parties to the O&M Shareholders Agreement for the purpose of investment into the Djibouti O&M Company “O&M Shareholders Agreement” the shareholders agreement entered into among, inter alia, the Company, CMID, Cheer Signal PDA and IZP on 16 January 2017 in relation to the O&M Joint Venture “PDA” Port of Dalian Group Co., Ltd. (大連港集團有限公司), also known as Dalian Port Corporation Limited, a limited liability company established in the PRC and wholly-owned by Dalian Municipal Government, and the controlling shareholder of Dalian Port “PRC” the People’s Republic of China “subsidiary (ies)” has the meaning ascribed to it under the Listing Rules “USD” United States dollars, the lawful currency of the United States of America “%” per cent. For reference only, an exchange rate of USD1.00 to HKD7.80 has been used for the conversion of United States dollars into Hong Kong dollars in this announcement. By Order of the Board China Merchants Port Holdings Company Limited Li Xiaopeng Chairman Hong Kong, 16 January 2017 As at the date of this announcement, the Board comprises Mr. Li Xiaopeng, Mr. Hu Jianhua, Mr. Wang Hong, Mr. Hua Li, Mr. Bai Jingtao, Mr. Wang Zhixian, Mr. Zheng Shaoping and Ms. Shi Wei as executive directors; and Mr. Kut Ying Hay, Mr. Lee Yip Wah Peter, Mr. Li Kwok Heem John, Mr. Li Ka Fai David and Mr. Bong Shu Ying Francis as independent non-executive directors. — 10 —