CHINA GLASS 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. CHINA GLASS HOLDINGS LIMITED * (Incorporated in Bermuda with limited liability) (Stock Code: 3300) CONNECTED TRANSACTIONS (1) NIGERIA CONSTRUCTION CONTRACT, (2) FLUE-GAS TREATMENT CONTRACT, AND (3) DESIGN CONTRACT THE CONNECTED TRANSACTIONS The Board announces that on 15 December 2015, (i) CNG Glass (Nigeria) entered into the Nigeria Construction Contract with Bengbu Institute, pursuant to which Bengbu Institute was engaged by CNG Glass (Nigeria) to carry out the supply, installation and testing work for the construction of glass production lines in the Nigeria Production Base; (ii) Linyi CNG Glass entered into the Flue Gas Treatment Contract with Shenzhen Triumph Technology Engineering, pursuant to which Shenzhen Triumph Technology Engineering was engaged by Linyi CNG Glass to provide the construction services, including preliminary and construction design, sourcing of equipment and material, installation and testing of equipment, for the Flue-gas Treatment System of Linyi CNG Glass; and (iii) CNG Electronic Glass entered into the Design Contract with CTIEC, pursuant to which CTIEC was engaged by CNG Electronic Glass to carry out design and planning work for an electronic glass production line. 1

2 LISTING RULES IMPLICATIONS Triumph Group Company, a substantial shareholder of the Company, is a connected person of the Company under the Listing Rules. Each of (i) Bengbu Institute, being a wholly-owned subsidiary of Triumph Group Company, (ii) Shenzhen Triumph Technology Engineering, being a wholly-owned subsidiary of CTIEC, which is directly owned as to 91% by CNBM, which in turn is directly and indirectly owned by CNBM Group Corporation through various entities as to a total of 44.11%, which wholly owns Triumph Group Company, and (iii) CTIEC is directly owned as to 91% by CNBM, which in turn is directly and indirectly owned through various entities as to a total of 44.11% by CNBM Group Corporation, which wholly owns Triumph Group Company, which in turn owns 14.36% interests in the Company, is an associate of Triumph Group Company under the Listing Rules. Accordingly, the entering into the New Triumph Group Contracts constitutes connected transactions of the Company under Chapter 14A of the Listing Rules. In addition to the New Triumph Group Contracts, the Group also entered into a number of contracts with certain associates of Triumph Group Company on 13 May 2015 and 11 June 2015, the Existing Triumph Group Contracts. As the Existing Triumph Group Contracts involve the provision of construction, design, installation and supply services by various associates of Triumph Group Company to the Group, the consideration of each of the Existing Triumph Group Contracts, together with the New Triumph Group Contracts, are aggregated for the purpose of classification of connected transactions in accordance with Rule 14A.81 of the Listing Rules. As the applicable percentage ratios in respect of the New Triumph Group Contracts, when aggregated with each other and with the Existing Triumph Group Contracts, are more than 5%, the entering into of the New Triumph Group Contracts, are subject to the reporting, announcement and Independent Shareholders approval requirements under Chapter 14A of the Listing Rules. Hence, the New Triumph Group Contracts, are conditional on approval by the Independent Shareholders being obtained at the special general meeting of the Company. 2

3 THE SPECIAL GENERAL MEETING A special general meeting will be convened by the Company with a view to seeking approval of the New Triumph Group Contracts from the Independent Shareholders in accordance with the requirements of the Listing Rules. As certain associates of Triumph Group Company are the counterparties to the relevant contracts, Triumph Group Company and its associates will abstain from voting in the resolutions to be proposed at the special general meeting to be convened for approving the above matters. A circular containing, among other things, further details of the New Triumph Group Contracts, a letter from the independent board committee to the Independent Shareholders in respect of the New Triumph Group Contracts, a letter from the independent financial adviser to the independent board committee and the Independent Shareholders in respect of the New Triumph Group Contracts, and a notice convening the special general meeting, will be dispatched to the Shareholders as soon as practicable on or before 7 January 2016 in accordance with the requirements of the Listing Rules. BACKGROUND The Board announces that on 15 December 2015, (i) CNG Glass (Nigeria) entered into the Nigeria Construction Contract with Bengbu Institute, pursuant to which Bengbu Institute was engaged by CNG Glass (Nigeria) to carry out the supply, installation and testing work for the construction of glass production lines in the Nigeria Production Base; (ii) Linyi CNG Glass entered into the Flue Gas Treatment Contract with Shenzhen Triumph Technology Engineering, pursuant to which Shenzhen Triumph Technology Engineering was engaged by Linyi CNG Glass to provide the construction services, including preliminary and construction design, sourcing of equipment and material, installation and testing of equipment, for the Flue-gas Treatment System of Linyi CNG Glass; and (iii) CNG Electronic Glass entered into the Design Contract with CTIEC, pursuant to which CTIEC was engaged by CNG Electronic Glass to carry out design and planning work for an electronic glass production line. 3

4 NIGERIA CONSTRUCTION CONTRACT Date 15 December 2015 Parties (1) CNG Glass (Nigeria), as hirer (2) Bengbu Institute, as contractor Scope of services under the Nigeria Construction Contract Pursuant to the Nigeria Construction Contract, Bengbu Institute agrees to carry out construction work for the glass production lines in the Nigeria Production Base, including the sourcing and supply of equipment and materials for the construction work, installation and testing work for the glass production lines, and providing training to the relevant staff who operate and maintain the production lines in the Nigeria Production Base. The Company has been implementing the going abroad strategy with a view to diversify and explore new business opportunities in the African markets, and the Nigeria Production Base in the Ogun Guangdong Free Trade Zone at Nigeria, Africa is one of the new construction material projects established by the Group in Africa. The Nigeria Production Base is expected to have a total site area of approximately 272,000 square meter, and the Group plans to construct a float glass production line with 500 tonnes per day capacity on the site. The Nigeria Production Base is proceeding to its construction stage, the construction work on which is expected to complete in around October The finished glass products from the Nigeria Production Base will be supplied to local customers in Nigeria which is expected to broaden the customer base of the Group s glass products. 4

5 Contract price The total contract price for the services is RMB million, consisting of costs of equipment and materials, installation and testing fee and other fees. The contract price was arrived at after arm s length negotiation between CNG Glass (Nigeria) and Bengbu Institute having considered the expected cost for other independent contractors providing such services in an overseas construction project including, among other things, the cost of construction materials, labour, transportation, technical support and other equipment to be deployed in the construction site. The contract price is no less favorable than the market prices of other independent contractors for works of similar nature. Payment terms CNG Glass (Nigeria) will make installment payments to Bengbu Institute based on the progress of the work completed by Bengbu Institute in accordance with the terms of the Nigeria Construction Contract. FLUE-GAS TREATMENT CONTRACT Date 15 December 2015 Parties (1) Linyi CNG Glass, as hirer (2) Shenzhen Triumph Technology Engineering, as contractor 5

6 Scope of services under the Flue-Gas Treatment Contract Pursuant to the Flue-Gas Treatment Contract, Shenzhen Triumph Technology Engineering shall act as the main contractor to provide the construction services for the design, planning and construction of the flue gas treatment system of Linyi CNG Glass. The services to be provided by Shenzhen Triumph Technology Engineering include the preliminary and construction design, sourcing of equipment and material, and installation and testing of equipment. In addition, Shenzhen Triumph Technology Engineering shall also ensure that the flue gas treatment system meets the performance standards agreed in the Flue-Gas Treatment Contract. The flue gas treatment system is a comprehensive gas treatment system equipped with flue gas dust removal, desulphurization and denitration functions. Upon completion of the flue gas treatment system, all flue gas generated by the Linyi CNG Glass production lines will be treated by the system. Contract price The total contract price for the services is RMB28.6 million, consisting of costs of design, equipment and materials fee and installation fee. The contract price was arrived at after arm s length negotiation between Linyi CNG Glass and Shenzhen Triumph Technology Engineering having considered the expected cost for other independent contractors providing such services including, among other things, the cost of construction materials, labour, technical support, installation and testing. The contract price is no less favorable than the market prices of other independent contractors for works of similar nature. Payment terms Linyi CNG Glass will make installment payments to Shenzhen Triumph Technology Engineering based on the progress of the work completed by Shenzhen Triumph Technology Engineering in accordance with the terms of the Flue-Gas Treatment Contract. 6

7 DESIGN CONTRACT Date 15 December 2015 Parties (1) CNG Electronic Glass, as hirer (2) CTIEC, as contractor Scope of services under the Design Contract Pursuant to the Design Contract, CTIEC agrees to carry out design and planning work for an electronic glass production line for CNG Electronic Glass. Contract price The total contract price for the services is RMB2.58 million. The contract price was arrived at after arm s length negotiation between CNG Electronic Glass and CTIEC having considered the expected cost for other independent contractors providing such services including, among other things, the cost of design, labour and technical advice on electronic glass production line. The contract price is no less favorable than the market prices of other independent contractors for works of similar nature. Payment terms CNG Electronic Glass will make installment payments to CTIEC based on the progress of the work completed by CTIEC in accordance with the terms of the Design Contract. 7

8 INFORMATION ON THE GROUP AND THE PARTIES TO THE NEW TRIUMPH GROUP CONTRACTS The Company and the Group The principal business activity of the Company is investment holding. The Group is one of China s leading manufacturers of flat glass, specialised in the research and development, manufacturing and selling of a variety of building coated glass, energyefficient and environmental-friendly glass and new-energy products, in which it occupies a leading technological position. CNG Glass (Nigeria) is an indirectly wholly-owned subsidiary of the Company, CNG Glass (Nigeria) is a project company for the Company s investment in the Nigeria Production Base. Linyi CNG Glass is an indirect subsidiary of the Company. Linyi CNG Glass is principally engaged in the production, marketing and distribution of glass and glass products. CNG Electronic Glass is an indirect wholly-owned subsidiary of the Company, which is principally engaged in the production, marketing and distribution of glass and glass products. Counterparties to the New Triumph Group Contracts Bengbu Institute is a wholly-owned subsidiary of Triumph Group Company, which in turn owns 14.36% interests in the Company. Bengbu Institute is principally engaged in the contracting of professional engineering survey, consultancy, design and supervision projects in relation to construction and building materials. Shenzhen Triumph Technology Engineering is a wholly-owned subsidiary of CTIEC. CTIEC is directly owned as to 91% by CNBM, which in turn is directly and indirectly owned by CNBM Group Corporation through various entities as to a total of 44.11%. CNBM Group Corporation wholly owns Triumph Group Company, which in turn owns 14.36% interests in the Company. Shenzhen Triumph Technology Engineering is primarily engaged in providing research and development, technical consulting and technical support on areas such as new materials, ceramics, heat-proof materials and 8

9 environmental protection. For environmental protection, it has extensive experience in pollution control, environmental impact assessment and other services in relation to air treatment, waste water treatment, solid waste treatment projects. CTIEC is a national comprehensive Grade-A D & R unit, an internationalized engineering group company, a key hi-tech enterprise of China and an engineering technology platform of CNBM. CTIEC possesses foreign trade right and grade-a qualifications for design & general contracting, engineering consultation and engineering supervision in the respects of the building material industry, light textile (domestic silicate), civil engineering, new energy engineering and special engineering projects of environment pollution treatment. REASONS FOR AND BENEFITS OF ENTERING INTO THE NEW TRIUMPH GROUP CONTRACTS The Nigeria Construction Contract Since the Company s implementation of the going abroad strategy, the Company has been seeking ways to diversify and explore new business opportunities in the African markets. The Nigeria Production Base in the Ogun Guangdong Free Trade Zone at Nigeria, Africa is one of the new construction material projects established by the Group in Africa. Following the design and planning work conducted by CTIEC earlier this year, the Company has been planning to engage a construction contractor to allow the Nigeria Production Base to proceed to its construction stage. Bengbu Institute is an established institute specialized in the design and supervision projects in relation to construction and building materials. In addition, as an affiliate of CTIEC, Bengbu Institute has extensive experience in construction projects that are designed by CTIEC. The Company considers that the experience and expertise of Bengbu Institute to be important factors given the size of the Nigeria Production Base construction project and the fact that it is the first overseas construction project established by the Company. 9

10 The Flue-Gas Treatment Contract In light of the Company s strategy to enhance its environmental protection efforts and the introduction of the new environmental protection laws and regulations in the PRC, the Company has been constantly upgrading its production lines to increase efficiency and reduce emission. In accordance with the Company s internal planning, the Linyi CNG Glass production lines are scheduled for maintenance, and their flue-gas treatment system to be upgraded at the some period. Shenzhen Triumph Technology Engineering is an established engineering company in the aspect of environmental protection-related engineering projects and a leading player for construction of flue gas treatment systems. The Company considers that experience and expertise of Shenzhen Triumph Technology Engineering will provide good project management and assurance on the quality of the construction project. The Design Contract It is the Company s strategy to promote innovation and maintain its high technology competitive edge in the industry, and the Company has been pursuing new product planning, one of which is the research and development on electronic glass. Electronic glass is ultra-thin glass products designed for uses mainly in electronic products and electrical appliances. Due to its demanding technological requirement, currently only a limited number of glass manufacturers in the PRC possess the production capabilities to manufacture electronic glass. To allow the Company to develop its electronic glass manufacturing capability, the Company plans to construct an electronic glass production line in Suqian, Jiangsu Province, the PRC. As part of the construction project, the Company intends to instruct CTIEC to carry out design and planning work before any construction work commence. CTIEC is a leading and established engineering company and one of the few engineering companies with experience in designing electronic glass production lines in the PRC. Given the experience and expertise of CTIEC, the Company considers that CTIEC will provide valuable contribution and quality assurance in the Company s construction plan for an electronic glass production line. 10

11 Mr. Peng Shou, the deputy chairman of the Board, is also the executive director and vice president of CNBM, legal representative and general manager of the Triumph Group Company, chairman and legal representative of CTIEC, chairman of Shenzhen Triumph Technology Engineering and dean and party secretary of Bengbu Institute, and Mr. Zhao Lihua, an independent non-executive director of the Company, is also an independent non-executive director of CNBM. Although the above directors have no material interest in the New Triumph Group Contracts, they have abstained from voting on the relevant Board meeting approving the above contracts for better corporate governance practice. The Directors (except for Mr. Peng and Mr. Zhao, and the other independent nonexecutive Directors who will give their views after considering the recommendation of the independent financial advisors) believe that the terms and conditions of the New Triumph Group Contracts are on normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders as a whole. LISTING RULES IMPLICATIONS Triumph Group Company, a substantial shareholder of the Company, is a connected person of the Company under the Listing Rules. Each of (i) Bengbu Institute, being a wholly-owned subsidiary of Triumph Group Company, (ii) Shenzhen Triumph Technology Engineering, being a wholly-owned subsidiary of CTIEC, which is directly owned as to 91% by CNBM, which in turn is directly and indirectly owned by CNBM Group Corporation through various entities as to a total of 44.11%, which wholly owns Triumph Group Company, and (iii) CTIEC is directly owned as to 91% by CNBM, which in turn is directly and indirectly owned through various entities as to a total of 44.11% by CNBM Group Corporation, which wholly owns Triumph Group Company, which in turn owns 14.36% interests in the Company, is an associate of Triumph Group Company under the Listing Rules. Accordingly, the entering into the New Triumph Group Contracts constitutes connected transactions of the Company under Chapter 14A of the Listing Rules. In addition to the New Triumph Group Contracts, the Group also entered into the following contracts with certain associates of Triumph Group Company (together the Existing Triumph Group Contracts ): (i) a construction contract with CTIEC dated 13 May 2015 for the supply, installation and servicing of machinery parts and materials to Xianyang Blue Star Coated Glass Company Limited, further details which is set out in the Company s announcement dated 13 May 2015; 11

12 (ii) a design contract with CTIEC dated 11 June 2015 for carrying out design and planning works for CNG (Nigeria) Investment Limited, further details which is set out in the Company s announcement dated 11 June 2015; and (iii) a flue-gas treatment supply contract with CTIECEP dated 11 June 2015 for supply and install machinery parts and materials to conduct flue-gas dust removal, desulphurization and denitration processes on the glass furnace of one of the Suqian Huayi s production line, further details which is set out in the Company s announcement dated 11 June As the Existing Triumph Group Contracts involve the provision of construction, design, installation and supply services by various associates of Triumph Group Company to the Group, the consideration of each of the Existing Triumph Group Contracts, together with the New Triumph Group Contracts, are aggregated for the purpose of classification of connected transactions in accordance with Rule 14A.81 of the Listing Rules. As the applicable percentage ratios in respect of the New Triumph Group Contracts, when aggregated with each other and with the Existing Triumph Group Contracts, are more than 5%, the entering into of the New Triumph Group Contracts, are subject to the reporting, announcement and Independent Shareholders approval requirements under Chapter 14A of the Listing Rules. Hence, the New Triumph Group Contracts, are conditional on approval by the Independent Shareholders being obtained at the special general meeting of the Company. THE SPECIAL GENERAL MEETING A special general meeting will be convened by the Company with a view to seeking approval of the New Triumph Group Contracts from the Independent Shareholders in accordance with the requirements of the Listing Rules. As certain associates of Triumph Group Company are the counterparties to the relevant contracts, Triumph Group Company and its associates will abstain from voting in the resolutions to be proposed at the special general meeting to be convened for approving the above matters. An independent board committee has been established to consider the New Triumph Group Contracts. Octal Capital Limited has been appointed by the Company as its independent financial adviser to advise the independent board committee and the Independent Shareholders in respect of the above matters. 12

13 A circular containing, among other things, further details of the New Triumph Group Contracts, a letter from the independent board committee to the Independent Shareholders in respect of the New Triumph Group Contracts, a letter from the independent financial adviser to the independent board committee and the Independent Shareholders in respect of the New Triumph Group Contracts, and a notice convening the special general meeting, will be dispatched to the Shareholders as soon as practicable on or before 7 January 2016 in accordance with the requirements of the Listing Rules. DEFINITION In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings when used herein: Bengbu Institute Bengbu Glass Industrial Design and Research Institute*, an enterprise under ownership of the whole people incorporated in the PRC and a wholly-owned subsidiary of Triumph Group Company Board the board of Directors of the Company CNBM China National Building Material Company Limited* (Stock Code: 3323), a limited company incorporated under the laws of the PRC and the shares of which are listed on the main board of the Stock Exchange. CNBM is directly and indirectly owned by CNBM Group Corporation through various entities as to a total of 44.11%, which wholly owns Triumph Group Company CNBM Group Corporation China National Building Material Group Corporation*, a limited company incorporated under the laws of the PRC and wholly owns Triumph Group Company 13

14 CNG Electronic Glass Suqian CNG Electronic Glass Co., Ltd*, a limited company incorporated under the laws of the PRC and an indirect whollyowned subsidiary of the Company CNG Glass (Nigeria) CNG Glass (Nigeria) Fze, a limited company incorporated under the laws of Nigeria and Ogun Guangdong Free Trade Zone at Nigeria and an indirectly wholly-owned subsidiary of the Company Company China Glass Holdings Limited (Stock Code: 3300), a company incorporated in Bermuda with limited liability and the Shares of which are listed on the main board of the Stock Exchange CTIEC China Triumph International Engineering Company Limited*, a limited company incorporated under the laws of the PRC and is directly owned as to 91% by CNBM, which in turn is directly and indirectly owned by CNBM Group Corporation through various entities as to a total of 44.11%, which wholly owns Triumph Group Company CTIECEP Jiangsu China Triumph Environmental Protection Research Institute Limited*, a limited company incorporated under the laws of the PRC, which is owned as to 92% by CTIEC Design Contract the design contract dated 15 December 2015 entered into between CNG Electronic Glass and CTIEC for the design and planning work for an electronic glass production line 14

15 Flue-Gas Treatment Contract the construction contract dated 15 December 2015 entered into between Linyi CNG Glass and Shenzhen Triumph Technology Engineering for the provision of construction services for the flue gas treatment system of Linyi CNG Glass Directors the directors of the Company Group the Company and its subsidiaries HK$ Hong Kong dollars, the lawful currency of Hong Kong Hong Kong Hong Kong Special Administrative Region of the PRC Independent Shareholders Shareholders who are not required to abstain from voting on the resolution to be proposed at the special general meeting under the bye-laws of the Company and the Listing Rules Linyi CNG Glass Linyi CNG Glass Co., Ltd*, a limited company incorporated under the laws of the PRC and an indirect subsidiary of the Company Listing Rules the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited New Triumph Group Contracts the Nigeria Construction Contract, Flue-Gas Treatment Contract and the Design Contract Nigeria Construction Contract the construction contract dated 15 December 2015 entered into between CNG Glass (Nigeria) and Bengbu Institute for the supply, installation and testing of glass production lines in the Nigeria Production Base 15

16 Nigeria Production Base the production base of the Group located in Ogun State, Nigeria, for the production of float glass PRC The People s Republic of China (excluding, for the purpose of this announcement, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan) RMB Renminbi, the lawful currency of the PRC Shareholders the holders of the Shares of the Company Shares ordinary shares of HK$0.05 each in the issued share capital of the Company Shenzhen Triumph Technology Engineering Shenzhen Triumph Technology Engineering Co., Ltd*, a limited company incorporated under the laws of the PRC and a whollyowned subsidiary of CTIEC, which is directly owned as to 91% by CNBM, which in turn is directly and indirectly owned by CNBM Group Corporation through various entities as to a total of 44.11%, which wholly owns Triumph Group Company Stock Exchange The Stock Exchange of Hong Kong Limited 16

17 Triumph Group Company Triumph Technology Group Company*, a limited company incorporated under the Laws of PRC % per cent. In this announcement, unless the context requires otherwise, the terms associate(s), connected person(s), connected transaction(s), percentage ratio(s), substantial shareholder(s) and subsidiary(ies), shall have the meaning given to such terms in the Listing Rules. By Order of the Board China Glass Holdings Limited Cui Xiangdong Chief Executive Officer Hong Kong, 15 December 2015 As at the date of this announcement, the directors of the Company are as follows: Executive director: Mr. Cui Xiangdong (Chief Executive Officer) Non-executive directors: Mr. Zhao John Huan (Chairman); Mr. Peng Shou (Deputy Chairman); Mr. Zhou Cheng (Honorary Chairman); and Mr. Guo Wen Independent non-executive directors: Mr. Zhang Baiheng; Mr. Zhao Lihua; and Mr. Chen Huachen * For identification only 17