SOCAM Development Limited (Incorporated in Bermuda with limited liability) (Stock Code: 983)

Transcription

1 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. * SOCAM Development Limited (Incorporated in Bermuda with limited liability) (Stock Code: 983) CONNECTED TRANSACTIONS LOAN ARRANGEMENTS FOR NANJING PROJECT The Board announces that on 12 October 2015, Jiangsu Jiu Xi (a subsidiary of the Company under the Listing Rules), as borrower, entered into the Loan Agreement with ICBC, as lender, pursuant to which ICBC has agreed to grant the Loan Facility in a principal amount of RMB330 million (equivalent to approximately HK$403.2 million) to Jiangsu Jiu Xi. The Loan Facility shall be secured by the Pledge of Jiangsu Jiu Xi and the Guarantee of the Company. As an associate of ICBC is a substantial shareholder of a subsidiary of the Company, ICBC is a connected person of the Company at the subsidiary level. As such, the Loan Arrangements under the Loan Agreement, the Pledge Agreements and the Letter of Undertaking constitute connected transactions of the Company under Chapter 14A of the Listing Rules. Despite one of the applicable percentage ratios calculated pursuant to Rule of the Listing Rules in respect of the Loan Arrangements exceeds 5%, the entering into of the Loan Arrangements with a connected person at the subsidiary level is subject to the reporting and announcement requirements only but exempt from the circular, independent financial advice and shareholders approval requirements under Rule 14A.101 of the Listing Rules. 1

2 THE LOAN ARRANGEMENTS The Board announces that on 12 October 2015, Jiangsu Jiu Xi (a subsidiary of the Company under the Listing Rules), as borrower, entered into the Loan Agreement with ICBC, as lender, pursuant to which ICBC has agreed to grant the Loan Facility to Jiangsu Jiu Xi. The Loan Facility shall be secured by the Pledge of Jiangsu Jiu Xi and the Guarantee of the Company. The principal terms and conditions of the Loan Agreement are set out as follows: Principal amount of the Loan Facility: Purpose: RMB330 million (equivalent to approximately HK$403.2 million) for financing the development of the Nanjing Project of Jiangsu Jiu Xi Term: three (3) years from the date of drawdown, with repayment to be made in accordance with the pre-sale or sale progress of the Nanjing Project as follows: (i) not less than 20% of the outstanding principal amount of the Loan Facility shall be repaid when the contracted sales of the above-ground saleable gross floor area of the Nanjing Project (the Project Sales ) reach 20%; (ii) not less than 50% of the outstanding principal amount of the Loan Facility shall be repaid when the Project Sales reach 50%; and (iii) all the outstanding principal amount of the Loan Facility and the interests accrued thereon shall be repaid when the Project Sales reach 75%, provided that a minimum of the outstanding principal amount of the Loan Facility shall be repaid in accordance with the following schedule: 21 November 2016: RMB21.67 million (equivalent to approximately HK$26.5 million) 22 May 2017: RMB70 million (equivalent to approximately HK$85.5 million) 20 November 2017: RMB58.33 million (equivalent to approximately HK$71.3 million) 2

3 20 July 2018: RMB180 million (equivalent to approximately HK$219.9 million) Interest rate: 5% per annum, which is the loan prime rate as promulgated by the People s Bank of China (the PBOC Rate ) as of the date of the Loan Agreement (subject to yearly adjustment as per the prevailing PBOC Rate) Interest payment period: on quarterly basis Security: (i) pledge of Jiangsu Jiu Xi s land use rights to the Land Parcels and the construction works thereon (with a total book value of approximately RMB468.6 million (equivalent to approximately HK$572.5 million) as at 30 September 2015) (the Pledge ), pursuant to pledge agreements all dated 12 October 2015 executed by Jiangsu Jiu Xi in favour of ICBC (the Pledge Agreements ); and (ii) guarantee of the Company with respect to the payment obligations of Jiangsu Jiu Xi under the Loan Agreement (the Guarantee ), pursuant to a letter of undertaking dated 12 October 2015 executed by the Company in favour of ICBC (the Letter of Undertaking ) In addition, Jiangsu Jiu Xi will enter into a fee agreement with ICBC upon drawdown of the Loan Facility, pursuant to which Jiangsu Jiu Xi shall also pay on the drawdown date a loan arrangement fee calculated at 30% of the prevailing PBOC Rate on the actual drawdown amount for the term of the Loan Facility. It is estimated that the maximum amount of the aforesaid arrangement fee payable by Jiangsu Jiu Xi to ICBC will not be more than RMB14.9 million (equivalent to approximately HK$18.2 million). INDEMNIFICATION PROVIDED BY ROSY OPPORTUNITY Jiangsu Jiu Xi is an indirect wholly-owned subsidiary of Win Lead which in turn is owned as to 50% by Wealth Frame, a wholly-owned subsidiary of the Company, and 50% by Rosy Opportunity, a wholly-owned subsidiary of SOTAN Fund. In consideration of the Company providing the Guarantee to ICBC for the benefit of 3

4 Jiangsu Jiu Xi, Rosy Opportunity executed an indemnification deed on 12 October 2015 in favour of the Company whereby Rosy Opportunity agreed to (i) provide a counter-indemnity to the Company in respect of its 50% share of the guarantee obligations of the Company under the Guarantee in proportion to its effective interest in Jiangsu Jiu Xi held through Win Lead; and (ii) pledge its entire 50% share interest in Win Lead in favour of the Company. REASONS FOR AND BENEFITS OF THE LOAN ARRANGEMENTS Situated in the heart of Yangtze River Delta Economic Zone, the Nanjing Project consists of a residential development on the Land Parcels with a total developable gross floor area of approximately 132,600 square metres and is scheduled for completion in The Loan Facility will provide additional funding to Jiangsu Jiu Xi for the development of the Nanjing Project and enhance its cashflow and working capital position. As security for the Loan Facility, the Group shall provide the Pledge and the Guarantee in favour of ICBC. The respective terms of the Loan Agreement, the Pledge Agreements and the Letter of Undertaking were agreed between the parties after arm s length negotiations having taken into account the prevailing market interest rates and practices. The Directors (including the independent non-executive Directors) consider that the respective terms of the Loan Agreement, the Pledge Agreements and the Letter of Undertaking are fair and reasonable, and the Loan Arrangements thereunder are on normal commercial terms, in the ordinary and usual course of business of the Group and are in the interests of the Company and its shareholders as a whole. LISTING RULES IMPLICATIONS Jiangsu Jiu Xi is a joint-venture company indirectly owned as to 50% by the Company and 50% by SOTAN Fund, in which the Company holds only 0.075% effective interest. However, as SOTAN Fund is managed by a subsidiary of the Company as its general partner, both SOTAN Fund and Jiangsu Jiu Xi are regarded as subsidiaries of the Company for the purposes of the Listing Rules. As an associate of ICBC is a substantial shareholder of a subsidiary of the Company, ICBC is a connected person of the Company at the subsidiary level. As such, the Loan Arrangements under the Loan Agreement, the Pledge Agreements and the Letter of Undertaking constitute connected transactions of the Company under Chapter 14A of the Listing Rules. 4

5 Despite one of the applicable percentage ratios calculated pursuant to Rule of the Listing Rules in respect of the Loan Arrangements exceeds 5%, the entering into of the Loan Arrangements with a connected person at the subsidiary level is subject to the reporting and announcement requirements only but exempt from the circular, independent financial advice and shareholders approval requirements under Rule 14A.101 of the Listing Rules. None of the Directors has any material interest in the Loan Arrangements nor was any of them required to abstain from voting on the resolutions passed by the Board in connection therewith. The Board acknowledges that there is a slight delay in publishing an announcement on the Loan Arrangements as required under Rule 14A.35 of the Listing Rules, which was due to the fact that the Company has not been informed promptly by certain subsidiaries of the Company of the entering into of the Loan Arrangements. The Board will take appropriate steps to further strengthen the Group s internal control system on connected transactions to prevent the same from happening in future. GENERAL INFORMATION The Group principally engages in property development and investment, asset management and construction in Hong Kong and the PRC. ICBC is a licensed bank established under the laws of the PRC and a connected person of the Company at the subsidiary level. DEFINITIONS In this announcement, the following expressions have the following meanings unless the context otherwise requires: associate, connected person, subsidiary(ies) and substantial shareholder Board each shall have the meaning ascribed to it under the Listing Rules; the board of Directors; Company SOCAM Development Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on the main board of the Stock Exchange (stock code: 983); 5

6 Directors Group Guarantee HK$ Hong Kong ICBC the directors of the Company; collectively, the Company and its subsidiaries; Hong Kong dollars, the lawful currency of Hong Kong; the Hong Kong Special Administrative Region of the People s Republic of China; Industrial and Commercial Bank of China Limited, Nanjing Yuhua Sub-Branch, a licensed bank established under the laws of the PRC; Jiangsu Jiu Xi (Jiangsu Jiu Xi Development Co. Ltd.*), a company established under the laws of the PRC with limited liability, which is an indirect wholly-owned subsidiary of Win Lead; Land Parcels Letter of Undertaking Listing Rules Loan Agreement Loan Arrangements three parcels of land located in the Jiangning District, Nanjing, the PRC with a total site area of approximately 110,500 square metres; the Rules Governing the Listing of Securities on the Stock Exchange; the loan agreement dated 12 October 2015 entered into between Jiangsu Jiu Xi, as borrower, and ICBC, as lender, in relation to the Loan Facility; collectively, the Loan Facility, the Pledge and the Guarantee; 6

7 Loan Facility Nanjing Project PBOC Rate Pledge Pledge Agreements PRC Project Sales Rosy Opportunity RMB SOTAN Fund Stock Exchange Wealth Frame a construction loan facility in a principal amount of RMB330 million (equivalent to approximately HK$403.2 million) granted by ICBC to Jiangsu Jiu Xi pursuant to the Loan Agreement; a property project known as Nanjing Scenic Villa being developed on the Land Parcels; the People s Republic of China (for the purpose of this announcement, excluding Hong Kong, Taiwan and the Macao Special Administrative Region of the People s Republic of China); Rosy Opportunity Limited, a company incorporated in the British Virgin Islands with limited liability, which is a wholly-owned subsidiary of SOTAN Fund; Renminbi, the lawful currency of the PRC; SOTAN China Real Estate I, LP, a limited partnership formed in England for the purpose of raising funds for investments in distressed property projects in the PRC; The Stock Exchange of Hong Kong Limited; Wealth Frame Limited, a company incorporated in the British Virgin Islands with limited liability, which is a wholly-owned subsidiary of the Company; 7

8 Win Lead Win Lead Holdings Limited, a company incorporated in the British Virgin Islands with limited liability, which indirectly holds the entire equity interest in Jiangsu Jiu Xi and in turn is owned as to 50% by Wealth Frame and 50% by Rosy Opportunity; and % per cent. For the purpose of this announcement and for illustrative purpose only, RMB is converted into HK$ at the rate of RMB1 : HK$ No representation is made that any amounts in RMB have been or could be converted at the above rate or at any other rates. Hong Kong, 16 October 2015 By order of the Board SOCAM Development Limited Choi Yuk Keung, Lawrence Vice Chairman and Managing Director At the date of this announcement, the executive Directors are Mr. Lo Hong Sui, Vincent, Mr. Choi Yuk Keung, Lawrence and Mr. Wong Fook Lam, Raymond; the non-executive Director is Mr. Tsang Kwok Tai, Moses; and the independent non-executive Directors are Mr. Gerrit Jan de Nys, Ms. Li Hoi Lun, Helen and Mr. Chan Kay Cheung. * For identification purpose only Website: 8