POWERLONG REAL ESTATE HOLDINGS LIMITED

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. POWERLONG REAL ESTATE HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 1238) CONNECTED TRANSACTION SUBSCRIPTION OF SHARES PURSUANT TO THE CAPITAL INCREASE OF SHANGHAI LIFE INSURANCE SUBSCRIPTION AGREEMENT On 10 December 2015, Fuzhou Powerlong, an indirectly wholly-owned subsidiary of the Company, entered into the Subscription Agreement with Shanghai Life Insurance, pursuant to which, Fuzhou Powerlong has agreed to participate in the Capital Increase by subscribing for an additional of 120,000,000 SLI Shares at an issue price of RMB1.06 per SLI Share, equivalent to a total subscription amount of RMB127,200,000. At the same time when Fuzhou Powerlong entered into the Subscription Agreement with Shanghai Life Insurance, Shanghai Life Insurance also entered into separate subscription agreements with various existing shareholders and new investors of Shanghai Life Insurance for the purpose of the Capital Increase. Upon completion of the Subscription and the Capital Increase, the registered capital of Shanghai Life Insurance will be increased from RMB2,000,000,000 to RMB6,000,000,000, and the number of SLI Shares held by Fuzhou Powerlong will be increased from 180,000,000 SLI Shares to 300,000,000 SLI Shares while its shareholding will be decreased from 9% to 5%. LISTING RULES IMPLICATIONS As at the date of this announcement, Shanghai Life Insurance held as to 30% equity interest in a subsidiary of the Company. Accordingly, Shanghai Life Insurance is a substantial shareholder of a subsidiary of the Company and therefore a connected person at the subsidiary level of the Company under Chapter 14A of the Listing Rules. Accordingly, the entering of the Subscription Agreement between Fuzhou Powerlong and Shanghai Life Insurance constitutes a connected transaction of the Company pursuant to the Listing Rules. 1

2 Further, given that the Subscription and the Capital Increase would result in a dilution of the Company s indirect equity interest in Shanghai Life Insurance from 9% to 5%, therefore such transaction contemplated under the Subscription Agreement and the Capital Increase gives rise to a deemed disposal of equity interest in Shanghai Life Insurance by the Company according to Rule 14A.24(1) of the Listing Rules. As one or more of the applicable percentage ratios exceed 1% but are all less than 5%, the entering of the Subscription Agreement and the transactions contemplated thereunder (including the deemed disposal as a result of the Capital Increase) are subject to the reporting and announcement requirements, but exempt from the independent shareholders approval requirement under Chapter 14A of the Listing Rules. SUBSCRIPTION AGREEMENT Date: 10 December 2015 Parties: (i) Fuzhou Powerlong; and (ii) Shanghai Life Insurance. Subject matter of the Subscription Agreement Pursuant to the Subscription Agreement, Fuzhou Powerlong has conditionally agreed to subscribe, and Shanghai Life Insurance has conditionally agreed to allot, for an additional of 120,000,000 SLI Shares at an issue price of RMB1.06 per SLI Share, equivalent to a total subscription amount of RMB127,200,000. The 120,000,000 SLI Shares to be subscribed by Fuzhou Powerlong, together with the 180,000,000 SLI Shares held by Fuzhou Powerlong as at the date of this announcement, represents 5% of the entire equity interest of Shanghai Life Insurance as enlarged by the Capital Increase. Subscription price The total subscription amount of RMB127,200,000 for the Subscription shall be settled by Fuzhou Powerlong in cash by depositing the sum to the designated bank account of Shanghai Life Insurance within 10 days upon receipt of the funding request from Shanghai Life Insurance after the entering into of the Subscription Agreement. The subscription price of RMB1.06 per SLI Share for the Subscription was arrived at after arm s length negotiation between Fuzhou Powerlong and Shanghai Life Insurance after taking into consideration of an independent valuation of Shanghai Life Insurance as at 30 June 2015 by Shanghai Lixin Appraisal Co., Ltd, an independent valuer. The subscription price for the Subscription payable by Fuzhou Powerlong will be funded by internal resources of the Group. 2

3 Capital Increase The existing registered and paid up capital of Shanghai Life Insurance is RMB2,000,000,000, which is currently owned as to 9% and 91% by Fuzhou Powerlong and other independent third parties, respectively. For the purpose of Capital Increase, Shanghai Life Insurance will increase its registered capital from RMB2,000,000,000 to RMB6,000,000,000, among which, Fuzhou Powerlong has agreed to participate in the Capital Increase by subscribing for an additional of 120,000,000 SLI Shares at an issue price of RMB1.06 per SLI Share, equivalent to a total subscription amount of RMB127,200,000. As not all existing shareholders of Shanghai Life Insurance will make additional contribution and that new investors will also make contribution to Shanghai Life Insurance, the capital contribution by Fuzhou Powerlong pursuant to the Subscription Agreement is on a non prorata basis. The amount of registered capital to be increased pursuant to the Capital Increase, being RMB4,000,000,000, was arrived upon taking into consideration of (i) the current business and development of Shanghai Life Insurance; (ii) the business prospects of the Shanghai Life Insurance; and (iii) the historical performance of Shanghai Life Insurance. Conditions precedent of the Subscription Completion of the Subscription is conditional upon and subject to: (a) (b) (c) the passing of a resolution by the shareholders of Shanghai Life Insurance to approve the Subscription, the Capital Increase and the transactions contemplated thereunder; the due payment of the subscription price for the Subscription by Fuzhou Powerlong on or before the deadline as stipulated therein the funding request from Shanghai Life Insurance; and the obtaining of all necessary permissions and approval by the relevant PRC governmental authorities in respect of the Subscription, the Capital Increase and the transactions contemplated thereunder. Completion Upon fulfillment of all the conditions precedent above, Shanghai Life Insurance shall issue a completion notice to Fuzhou Powerlong, pursuant to which the parties shall then agree on the date of completion for the Subscription. 3

4 INFORMATION ON SHANGHAI LIFE INSURANCE Shanghai Life Insurance, established in the PRC on 15 February 2015, is the first national life insurance company registered in the China (Shanghai) Pilot Free Trade Zone principally engaged in life insurance business. As at the date of this announcement, Fuzhou Powerlong, an indirectly wholly-owned subsidiary of the Company, held 9% equity interest in Shanghai Life Insurance. Shanghai Life Insurance is not accounted as a subsidiary or an associate of the Group. The following table is a simplified summary of the shareholding structure of Shanghai Life Insurance prior to and immediately after the completion of the Subscription and the Capital Increase: Shareholders Capital contribution immediately Capital contribution prior to the completion of the Subscription and the Capital Increase (Registered capital) after the completion of the Subscription and the Capital Increase (Registered capital) RMB (%) RMB (%) Fuzhou Powerlong 180,000, ,000,000 5 Other shareholders (Note 1) 1,820,000, ,700,000, Total: 2,000,000, ,000,000, Note 1: To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, the other shareholders of Shanghai Life Insurance and their respective ultimate beneficial owner are third parties independent of the Company and its connected persons. As at 30 June 2015, the audited total assets and net assets of Shanghai Life Insurance were approximately RMB5,123,493,200 and RMB1,920,701,300, respectively. The net loss attributable to Shanghai Life Insurance for the six months ended 30 June 2015 were approximately RMB31,804,100. FINANCIAL IMPACT ON THE GROUP As at the date of this announcement, the Company indirectly holds 9% equity interest of Shanghai Life Insurance. Upon completion of the Subscription and the Capital Increase, the equity interest of Shanghai Life Insurance indirectly held by the Company will be diluted from 9% to 5%. Shanghai Life Insurance is not accounted as a subsidiary or an associate of the Group, its financial results is not and will not be consolidated to the financial statements of the Group. The Subscription and the deemed disposal as a result of the Capital Increase will not lead to any gain or loss to the Group. 4

5 REASONS FOR AND BENEFIT OF ENTERING INTO THE SUBSCRIPTION AGREEMENT The Directors consider that the entering into of the Subscription Agreement could (i) provide an opportunity for Fuzhou Powerlong to participate in the Capital Increase; and (ii) provide support for the expansion and continuous development of Shanghai Life Insurance. Through the investment in Shanghai Life Insurance, the Company will be able to explore diversified development strategies, and the insurance funds will provide favorable conditions for the Company to expand into other sectors. The Directors (including the independent non-executive Directors) are of the view that the Subscription Agreement was entered into on normal commercial terms, and the terms and conditions therein are fair and reasonable and in line with the overall development strategy of the Group as well as in the interests of the Company and its shareholders as a whole. LISTING RULES IMPLICATIONS As at the date of this announcement, Shanghai Life Insurance held as to 30% equity interest in a subsidiary of the Company. Accordingly, Shanghai Life Insurance is a substantial shareholder of a subsidiary of the Company and therefore a connected person at the subsidiary level of the Company under Chapter 14A of the Listing Rules. Accordingly, the entering of the Subscription Agreement between Fuzhou Powerlong and Shanghai Life Insurance constitutes a connected transaction of the Company pursuant to the Listing Rules. As one or more of the applicable percentage ratios exceed 1% but are all less than 5%, the entering of the Subscription Agreement and the transactions contemplated thereunder are subject to the reporting and announcement requirements, but are exempted from the independent shareholders approval requirement under Chapter 14A of the Listing Rules. Further, given that the Subscription and the Capital Increase would result in a dilution of the Company s indirect equity interest in Shanghai Life Insurance from 9% to 5%, therefore such transaction contemplated under the Subscription Agreement and the Capital Increase gives rise to a deemed disposal of equity interest in Shanghai Life Insurance by the Company according to Rule 14A.24(1) of the Listing Rules. None of the other Directors is considered to have a material interest and be required to abstain from voting at the board meeting approving the entering of the Subscription Agreement and the transactions contemplated thereunder. GENERAL The Company is an investment holding company and together with its subsidiaries is a leading real estate developer in the PRC specializing in the development and operation of highquality, large-scale, integrated commercial and residential complexes. Fuzhou Powerlong, an indirectly wholly-owned subsidiary of the Company, is principally engaged in, among others, business management and corporate management business in the PRC. 5

6 DEFINITIONS In this announcement, unless the context otherwise requires, the following words and expressions shall have the meanings ascribed to them below: Board Capital Increase Company connected person(s) Director(s) Fuzhou Powerlong Group Hong Kong Listing Rules PRC RMB Shanghai Life Insurance SLI Shares Stock Exchange Subscription the board of Directors the increase in registered capital of Shanghai Life Insurance in an amount of RMB4,000,000,000 by way of issuing an additional of 4,000,000,000 SLI Shares at a price of RMB1.06 per SLI Share, to which RMB127,200,000 will be contributed by Fuzhou Powerlong by subscribing 120,000,000 SLI Shares pursuant to the Subscription Agreement Powerlong Real Estate Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange has the meaning ascribed to it under the Listing Rules the director(s) of the Company, an indirectly wholly-owned subsidiary of the Company 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 the People s Republic of China, which for the purpose of this announcement only, excludes Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan Renminbi, the lawful currency of the PRC Shanghai Life Insurance Company Ltd. ( ) ordinary share(s) of RMB1 each in the registered capital of Shanghai Life Insurance The Stock Exchange of Hong Kong Limited the subscription of 120,000,000 SLI Shares by Fuzhou Powerlong pursuant to the terms of the Subscription Agreement 6

7 Subscription Agreement subsidiary(ies) the subscription agreement dated 10 December 2015 entered into by and between Fuzhou Powerlong and Shanghai Life Insurance in relation to the Subscription has the meaning ascribed to it under the Listing Rules % per cent By Order of the Board Powerlong Real Estate Holdings Limited Hoi Kin Hong Chairman Hong Kong, 10 December 2015 As at the date of this announcement, the executive Directors are Mr. Hoi Kin Hong, Mr. Hoi Wa Fong, Mr. Xiao Qing Ping, Ms. Shih Sze Ni and Mr. Zhang Hong Feng; the non-executive Director is Ms. Hoi Wa Fan; and the independent non-executive Directors are Dr. Ngai Wai Fung, Dr. Mei Jian Ping and Dr. Ding Zu Yu. 7