ENTERING INTO THE COOPERATION AGREEMENT AND THE CAPITAL INCREASE AGREEMENT

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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. CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD. (a joint stock company incorporated in the People s Republic of China with limited liability) (Stock Code: 2039) DISCLOSEABLE TRANSACTIONS (1) ENTERING INTO THE COOPERATION AGREEMENT AND PROVISION OF INDEMNITIES; AND (2) ENTERING INTO THE CAPITAL INCREASE AGREEMENT AND DEEMED DISPOSAL ENTERING INTO THE COOPERATION AGREEMENT AND THE CAPITAL INCREASE AGREEMENT The Board announces that on 28 December 2016, (1) the Company entered into the Cooperation Agreement with Tianjin Lanshui, CIMC Qianhai Leasing (a wholly-owned subsidiary of the Company) and the Target Company (a wholly-owned subsidiary of the Company); and (2) the Target Company, CIMC Qianhai Leasing and Tianjin Lanshui entered into the Capital Increase Agreement. Cooperation Agreement Pursuant to the Cooperation Agreement, the parties thereto agreed to cooperate in the construction, development and operation of the CR600 Platform and the D90 1# Platform, involving, among others, (i) the proposed Capital Increase, (ii) entrusting the management of the Target Company to CIMC Qianhai Leasing, (iii) the proposed purchase and operation of the CR600 Platform and the D90 1# Platform by the Target Company, and (iv) the Expected Annual Return to Tianjin Lanshui and provision of the Indemnities by the Company. Capital Increase Agreement Pursuant to the Capital Increase Agreement, Tianjin Lanshui agreed to make a capital contribution of RMB5,525 million and CIMC Qianhai Leasing agreed to make a capital contribution of RMB974.9 million to the Target Company. Upon completion of the Capital Increase, the registered capital of the Target Company will be increased from RMB100,000 to RMB6,500 million, and Tianjin Lanshui and CIMC Qianhai Leasing will hold 85% and 15% equity interest of the Target Company, respectively. After the Capital Increase, as the Group will continue to have de facto control over the Target Company and enjoy variable profit or loss, the financial results of the Target Company will continue to be consolidated into the Group s results after completion of the Capital Increase. 1

2 IMPLICATIONS UNDER THE HONG KONG LISTING RULES As the equity interest of the Company in the Target Company will be diluted from 100% to 15% upon completion of the Capital Increase, the Capital Increase constitutes a deemed disposal under Chapter 14 of the Hong Kong Listing Rules. The Indemnities to be provided by the Company for Tianjin Lanshui for the Shortfall of the Expected Annual Return and the Shortfall of the Transfer Price under relevant provisions of the Cooperation Agreement constitute indemnities under Chapter 14 of the Hong Kong Listing Rules. As one or more of the applicable percentage ratios calculated in accordance with the Hong Kong Listing Rules in relation to the Capital Increase and provision of the Indemnities exceed 5% but are less than 25%, the Capital Increase and provision of the Indemnities constitute discloseable transactions of the Company and are subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules. I. introduction Reference is made to the overseas regulatory announcement of the Company dated 23 December 2016 in relation to the joint establishment of a partnership and proposed cooperation by certain subsidiaries. CIMC Offshore, a wholly-owned subsidiary of the Company, entered into a partnership agreement on 23 December 2016 with Shenzhen Mangrove and China Industrial Trust to jointly establish Tianjin Lanshui. After further negotiation among the relevant parties, the Company s wholly-owned subsidiary, CIMC Qianhai Leasing, and Tianjin Lanshui intend to jointly make capital contribution to the Target Company (a wholly-owned subsidiary of the Company) and cooperate, through the Target Company, in the construction, development and operation of the CR600 Platform and the D90 1# Platform, upon establishment of Tianjin Lanshui. Tianjin Lanshui was established on 26 December 2016 in Tianjin Free Trade Experimental Area ( ) in the PRC. The Board announces that on 28 December 2016, (1) the Company entered into the Cooperation Agreement with Tianjin Lanshui, CIMC Qianhai Leasing and the Target Company; and (2) the Target Company, CIMC Qianhai Leasing and Tianjin Lanshui entered into the Capital Increase Agreement. II. COOPERATION AGREEMENT Principal Terms of the Cooperation Agreement Date 28 December

3 Parties (1) Tianjin Lanshui; (2) CIMC Qianhai Leasing; (3) the Target Company; and (4) the Company Nature of the cooperation Pursuant to the Cooperation Agreement, the parties thereto agreed to cooperate in the construction, development and operation of the CR600 Platform and the D90 1# Platform, involving, among others, (i) the proposed Capital Increase, (ii) entrusting the management of the Target Company to CIMC Qianhai Leasing, (iii) the proposed purchase and operation of the CR600 Platform and the D90 1# Platform by the Target Company, and (iv) the Expected Annual Return to Tianjin Lanshui and provision of the Indemnities by the Company. (i) Proposed Capital Increase of the Target Company Pursuant to the Cooperation Agreement, details in relation to the proposed Capital Increase of the Target Company would be provided in the Capital Increase Agreement. Please refer to the section headed III. Capital Increase Agreement below for more details regarding the proposed Capital Increase of the Target Company. (ii) Entrusting the management of the Target Company to CIMC Qianhai Leasing Tianjin Lanshui and CIMC Qianhai Leasing, being the shareholders of the Target Company after completion of the Capital Increase, agreed to entrust CIMC Qianhai Leasing to manage the Target Company for a term of three years. CIMC Qianhai Leasing shall propose to the board of directors of the Target Company investment management and capital plans and implement at its sole discretion such investment management and capital plans after they are approved by the board of directors of the Target Company. In the event that the Target Company achieves earnings exceeding 8% of the expected annualised return of the principal of all the investors during the entrustment period, the entrustee, CIMC Qianhai Leasing, shall be entitled to receive an entrustment dividend amounting to 40% of the portion of the earnings exceeding such annualised return. 3

4 (iii) Proposed purchase and operation of the CR600 Platform and the D90 1# Platform by the Target Company Pursuant to the Cooperation Agreement, after the Capital Increase, the Target Company will establish single-vessel project company(ies) to purchase and operate the CR600 Platform and the D90 1# Platform being constructed by Yantai CIMC Raffles for certain oversea ship owner. Separate agreement(s) in relation to the proposed purchase of the CR600 Platform and the D90 1# Platform will be entered into by relevant parities at a later stage. Details regarding the CR600 Platform and the D90 1# Platform are set out below: (a) CR600 Platform: the platform (total length: meters; width: 68.9 meters; deck area: 2,100 square meters) is equipped with 2x60MT deck cranes with DP3 dynamic positioning system, accommodation capacity of 600 dwellers and a living area that meets the requirements of the American Bureau of Shipping (ABS). It is designed to operate in the sea areas of Brazil, the Gulf of Mexico and West Africa, and has also considered the need for use at the North Sea of the United Kingdom; and (b) D90 1# Platform: the platform (length: 117 meters; width: 92.7 meters; height: 118 meters; maximum displacement: 70,000 tonnes) is one of the largest ultra-deepwater dual-rig semi-submersible drilling platforms in the world, equipped with DP3 dynamic positioning system and certified by Det Norske Veritas. The platform is also the world s most advanced seventh generation ultra-deepwater semi-submersible drilling platform (maximum water depth: 12,000 feet (approximately 3,658 meters); drilling depth: 50,000 feet (approximately 15,250 meters)). (iv) the Expected Annual Return to Tianjin Lanshui and provision of the Indemnity by the Company Pursuant to the Cooperation Agreement, the parties thereto agreed that the Expected Annual Return of Tianjin Lanshui over the Investment Term in the Target Company following the date of the Capital Increase Agreement shall be no less than 4.944%. From 2018 and upon completion of the Capital Increase, shall the dividend received by Tianjin Lanshui from the distributable profits of the Target Company as at 31 January of each year be less than the Expected Annual Return, the Company shall indemnify Tianjin Lanshui for the Shortfall of the Expected Annual Return. Pursuant to the Cooperation Agreement, the Investment Term is three years (or five years upon mutual agreement). Upon expiry of the Investment Term, Tianjin Lanshui has the right to exit from the Target Company by way of transfer of equity or disposal of assets. In the event that Tianjin Lanshui intends to transfer the equity interest in the Target Company held by it upon expiry of the Investment Term, CIMC Qianhai Leasing has the right of first refusal with respect to the equity interest to be transferred. CIMC Qianhai Leasing can also designate a third party as the transferee of the equity interest to be transferred by Tianjin Lanshui. Tianjin Lanshui is entitled to transfer its equity interest in the Target Company at fair value to other third parties other than CIMC Qianhai Leasing if CIMC Qianhai Leasing waives its right of first refusal. Shall the Transfer Price be less than RMB5,525 million (the amount of the capital contribution made by Tianjin Lanshui to the Target Company pursuant to the Capital Increase Agreement), the Company shall indemnify Tianjin Lanshui for the Shortfall of the Transfer Price. 4

5 Appointment of the directors, supervisor and senior management of the Target Company Pursuant to the Cooperation Agreement, the board of directors of the Target Company shall comprise three directors, including one director to be appointed by Tianjin Lanshui through CIMC Offshore in its capacity as a general partner and two directors to be appointed by CIMC Qianhai Leasing; the Target Company shall have one supervisor who shall be appointed by Tianjin Lanshui; and the general manager of the Target Company shall be nominated by CIMC Qianhai Leasing and appointed and/or dismissed by the board of the directors of the Target Company. III. THE CAPITAL INCREASE AGREEMENT Principal Terms of the Capital Increase Agreement Date 28 December 2016 Parties (1) Tianjin Lanshui; (2) CIMC Qianhai Leasing; and (3) the Target Company Nature of transaction Pursuant to the Capital Increase Agreement, Tianjin Lanshui agreed to make a capital contribution of RMB5,525 million to the Target Company and CIMC Qianhai Leasing agreed to make a capital contribution of RMB974.9 million to the Target Company. Upon completion of the Capital Increase, the registered capital of the Target Company will be increased from RMB100,000 to RMB6,500 million. The amount of the Capital Increase was determined after arm s length negotiations among the parties with reference to, among other things, the project budget for the purchase and construction of the CR600 Platform and the D90 1# Platform. 5

6 The amount of the capital contribution of RMB974.9 million to be made by CIMC Qianhai Leasing will be funded by its internal resources. As at the date of this announcement, the Target Company is owned as to 100% by CIMC Qianhai Leasing and therefore an indirect wholly-owned subsidiary of the Company. Upon completion of the Capital Increase, the Target Company will be held as to 85% by Tianjin Lanshui and 15% by CIMC Qianhai Leasing, respectively. Conditions precedent Tianjin Lanshui shall make its capital contribution to the Target Company upon satisfaction of all the following conditions precedent (or written waiver or exemption thereof by Tianjin Lanshui): (1) There is no legal requirement to prohibit or restrict the execution or performance of the Capital Increase Agreement. Each of the Cooperation Documents and annexes thereto and relevant letters has been duly executed by the parties and received by Tianjin Lanshui, and the procedures as provided in the Cooperation Documents have been completed; (2) The representations and warranties made by the Target Company, CIMC Qianhai Leasing and the parties to the Cooperation Documents under the Capital Increase Agreement and each of the Cooperation Documents are true, accurate and complete without violation of representations, warranties, undertakings, conditions or obligations contained in any Cooperation Document, and none of the Target Company, CIMC Qianhai Leasing, Tianjin Lanshui and the other parties to the Cooperation Documents has refused to perform the provisions which shall be performed and complied with as stipulated in the Cooperation Documents; (3) There is no material adverse change in the operation and financial position of the Target Company or CIMC Qianhai Leasing after the execution of the Capital Increase Agreement; (4) The Target Company has no shareholder other than CIMC Qianhai Leasing, and the shareholding in the Target Company is not subject to any encumbrance or defect; (5) Each of the Target Company, CIMC Qianhai Leasing, Tianjin Lanshui and the parties to the Cooperation Documents has, as requested by Tianjin Lanshui, submitted its resolutions of the board of directors approving the execution and performance of the Capital Increase Agreement and relevant Cooperation Documents; and (6) All the other conditions stipulated in the Cooperation Documents have been satisfied. Completion Pursuant to the Capital Increase Agreement, within two months upon execution of the Capital Increase Agreement, Tianjin Lanshui and CIMC Qianhai Leasing shall make their respective capital contribution in cash in one lump sum to the Target Company. Use of the capital contribution Pursuant to the Capital Increase Agreement, the capital contribution to be made by Tianjin Lanshui and CIMC Qianhai Leasing shall be utilised by the Target Company for the purchase and construction of the CR600 Platform and the D90 1# Platform. 6

7 IV. FINANCIAL EFFECTS OF ENTERING INTO THE COOPERATION AGREEMENT AND THE CAPITAL INCREASE AGREEMENT ON THE GROUP Upon completion of the Capital Increase, the equity interest of the Company in the Target Company will be diluted from 100% to 15%. However, as (1) all the three directors of the Target Company will be appointed by the subsidiaries of the Group pursuant to the Cooperation Agreement, with one director to be appointed by CIMC Offshore in its capacity as the general partner of Tianjin Lanshui and the other two to be appointed by CIMC Qianhai Leasing; and (2) the Company shall indemnify Tianjin Lanshui for the Shortfall of the Expected Annual Return and the Shortfall of the Transfer Price, the Group will continue to have de facto control over the Target Company and enjoy variable profit or loss, and the financial results of the Target Company will continue to be consolidated into the Group s financial statements. The external equity interest in the Target Company will primarily be reflected as minority interests in the Group s consolidated balance sheet. Entering into the Cooperation Agreement and the Capital Increase Agreement will help optimize the Group s capital structure and reduce its level of gearing ratio, and are not expected to have any significant influence on the Group s profit or loss for the year. V. REASONS AND BENEFITS OF ENTERING INTO THE COOPERATION AGREEMENT AND THE CAPITAL INCREASE AGREEMENT The Group is one of the leading contractors of high-end offshore engineering equipment in China and has long been in the international market of offshore engineering business. As the offshore engineering industry is a capital intensive industry, its sustainable and stable development requires the support of significant funds and capital. As the international oil price is experiencing a rebound from its lows, entering into the Cooperation Agreement and the Capital Increase Agreement will introduce external capital and broaden the funding resources for the Group s offshore engineering operation. It will be conducive to enhancing the capital strength and risk resistance capacity of the offshore engineering business of the Group, enhancing its sound and healthy operation and financial condition and establishing long term and stable cooperation with investors, and is in line with the overall strategic development goals and long-term interest of the Group. The consideration of the Capital Increase was determined after arm s length negotiations among the parties with reference to the project budget of the CR600 Platform and the D90 1# Platform to be purchased and constructed by Tianjin Yongwang. The Directors (including the independent non-executive Directors) are of the view that the terms of the Cooperation Agreement and the Capital Increase Agreement are fair and reasonable and in the interest of the Company and the shareholders of the Company as a whole. VI. GENERAL INFORMATION OF THE PARTIES OF THE COOPERATION AGREEMENT AND THE CAPITAL INCREASE AGREEMENT Tianjin Lanshui Tianjin Lanshui was established as a limited partnership in Tianjin, the PRC, on 26 December It is principally engaged in investments and services related to offshore engineering. Term of the partnership commenced from 26 December 2016 and will expire on 25 December The subscribed capital contribution of Tianjin Lanshui is RMB5, million, of which CIMC Offshore (being the general partner), Shenzhen Mangrove and China Industrial Trust (both being limited partners) shall contribute RMB10,000, RMB3,575 million and RMB1,950 million, with capital contribution proportion being %, % and %, respectively. The management and operation of Tianjin Lanshui shall be carried out by the general partner, CIMC Offshore. CIMC Offshore, the general partner of Tianjin Lanshui, is a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company. It is principally engaged in offshore engineering design and development, offshore engineering data mining and marine data analysis. 7

8 Shenzhen Mangrove, a limited partner of Tianjin Lanshui, is a company established in the PRC with limited liability, and is principally engaged in venture capital investment. China Industrial Trust, a limited partner of Tianjin Lanshui, is a company established in the PRC with limited liability, and is principally engaged in trust services and other financial services. To the best of the Directors knowledge, information and belief having made all reasonable enquiries, Shenzhen Mangrove, China Industrial Trust and their respective ultimate beneficial owner(s) are Independent Third Parties. CIMC Qianhai Leasing CIMC Qianhai Leasing is a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company. It is principally engaged in financial leasing. The Target Company The Target Company was established as a limited liability company in the PRC on 2 December 2016 with a registered capital of RMB100,000. As at the date of this announcement, it is wholly owned by CIMC Qianhai Leasing. It is principally engaged in offshore engineering equipment leasing, ship leasing and relevant technical services. As at the date of this announcement, the Target Company has not yet commenced operation and no revenue nor profits have been generated since its establishment. The respective paid-up registered capital and net asset value of the Target Company are both RMB100,000 as at the date of this announcement. The Company The Company was established in the PRC as a joint stock company with limited liability, and its H shares are listed on the Main Board of the Hong Kong Stock Exchange and its A shares are listed on the Shenzhen Stock Exchange. The Group is principally engaged in the container manufacturing business, road transportation vehicle business, energy, chemical and liquid food equipment business, offshore engineering business, logistic service business and airport facilities equipment business, etc.. VII. IMPLICATIONS UNDER THE HONG KONG LISTING RULES As the equity interest of the Company in the Target Company will be diluted from 100% to 15% upon completion of the Capital Increase, the Capital Increase constitutes a deemed disposal under Chapter 14 of the Hong Kong Listing Rules. The Indemnities to be provided by the Company to Tianjin Lanshui for the Shortfall of the Expected Annual Return and the Shortfall of the Transfer Price under relevant provisions of the Cooperation Agreement constitute indemnities under Chapter 14 of the Hong Kong Listing Rules. 8

9 As one or more of the applicable percentage ratios calculated in accordance with the Hong Kong Listing Rules in relation to the Capital Increase and provision of the Indemnities exceed 5% but are less than 25%, the Capital Increase and provision of the Indemnities constitute discloseable transactions of the Company and are subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules. VIII. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning: Board Capital Increase Capital Increase Agreement China Industrial Trust CIMC Offshore CIMC Qianhai Leasing Company Cooperation Agreement the board of Directors of the Company the capital contributions to be made by Tianjin Lanshui in an amount of RMB5,525 million and CIMC Qianhai Leasing in an amount of RMB974.9 million, respectively, to the Target Company pursuant to the terms and conditions of the Capital Increase Agreement, upon completion of which the registered capital of the Target Company will be increased from RMB100,000 to RMB6,500 million the capital increase agreement entered into by the Target Company, CIMC Qianhai Leasing and Tianjin Lanshui on 28 December 2016, in relation to, among others, the Capital Increase China Industrial International Trust Limited* ( ), a company established in the PRC with limited liability CIMC Offshore Engineering Co., Ltd.* ( ), a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company CIMC Qianhai Financial Leasing (Shenzhen) Co., Ltd.* ( ), a company established in the PRC with limited liability and a wholly owned subsidiary of the Company China International Marine Containers (Group) Co., Ltd.* ( ), a joint stock company with limited liability established in the PRC in January 1980, and the H shares of which are listed on the Hong Kong Stock Exchange and the A shares of which are listed on the Shenzhen Stock Exchange the cooperation agreement entered into by Tianjin Lanshui, CIMC Qianhai Leasing, the Target Company and the Company on 28 December

10 Cooperation Documents CR600 Platform the Cooperation Agreement, the articles of association of the Target Company dated 28 December 2016 and relevant agreement(s), resolution(s), statement(s), undertaking(s), memorandum(s) and other legal document(s) which are/ will be executed/issued by relevant parties for the purpose of contemplating transactions under the Cooperation Agreement the CR600 deep-water semi-submersible accommodation platform, which is being constructed by Yantai CIMC Raffles in Yantai, the PRC D90 1# Platform the D90 1# deep-water dual-rig semi-submersible drilling platform, which is being constructed by Yantai CIMC Raffles in Yantai, the PRC Director(s) Expected Annual Return Group Hong Kong Hong Kong Listing Rules Hong Kong Stock Exchange Indemnity(ies) Independent Third Parties Investment Term Shenzhen Mangrove director(s) of the Company the expected return of 4.994% per annum to be received by Tianjin Lanshui from the Target Company during the Investment Term pursuant to the Cooperation Agreement the Company and its subsidiaries the Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited The Stock Exchange of Hong Kong Limited the indemnity(ies) to be provided by the Company to Tianjin Lanshui for the Shortfall of the Expected Annual Return and/or the Shortfall of the Transfer Price pursuant to the Cooperation Agreement third parties independent to the Company and its connected persons (as defined under the Hong Kong Listing Rules) the term of the equity investment made by Tianjin Lanshui in the Target Company pursuant to the Cooperation Agreement, which is three years (may be extended to five years upon mutual agreement) Shenzhen Mangrove Venture Capital Co., Ltd.* ( ), a company established in the PRC with limited liability 10

11 PRC RMB Shortfall of the Expected Annual Return Shortfall of the Transfer Price Target Company Tianjin Lanshui Transfer Price Yantai CIMC Raffles the People s Republic of China, excluding, for the purpose of this announcement only, Hong Kong, Macau Special Administrative Region and Taiwan Renminbi, the lawful currency of the PRC the shortfall between the Expected Annual Return and the amount of the actual dividend to be received by Tianjin Lanshui each year during the Investment Term the shortfall between the Transfer Price and the amount of RMB5,525 million (being the amount of the capital contribution made by Tianjin Lanshui to the Target Company) Tianjin Yongwang Machinery and Equipment Rental Co., Ltd.* ( ), a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company as at the date of this announcement Tianjin Lanshui Offshore Engineering Partnership (Limited Partnership)* ( )), a limited partnership established in the PRC the price received by Tianjin Lanshui as the consideration for transferring the equity interest in the Target Company held by it Yantai CIMC Raffles Offshore Limited* ( ), a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company % per cent Hong Kong, 28 December 2016 By order of the Board China International Marine Containers (Group) Co., Ltd. Yu Yuqun Company Secretary As at the date of this announcement, the Board comprises Mr. WANG Hong (Chairman), Mr. WANG Yuhang (Vice Chairman), Mr. WANG Zhixian and Mr. LIU Chong as non-executive directors; Mr. MAI Boliang as executive director; and Mr. PAN Chengwei, Mr. PAN Zhengqi and Mr. WONG Kwai Huen, Albert as independent non-executive directors. * For identification purpose only 11