(Incorporated in Hong Kong with limited liability under the Companies Ordinance) (Stock Code: 00144)

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. (Incorporated in Hong Kong with limited liability under the Companies Ordinance) (Stock Code: 00144) PROPOSED CONTINUING CONNECTED TRANSACTIONS WITH SINOTRANS & CSC AND CHINA MERCHANTS BANK COMPREHENSIVE SERVICES FRAMEWORK AGREEMENT DETERMINATION OF ANNUAL CAPS BACKGROUND The Company has been notified by CMG, the ultimate holding company of the Company, of the Proposed Merger of Sinotrans & CSC into CMG. Upon completion of the Proposed Merger, Sinotrans & CSC will become a wholly-owned subsidiary of CMG and as a result, Sinotrans & CSC and its associates will become connected persons of the Company under the Listing Rules. Furthermore, upon completion of the Proposed Merger, the aggregate shareholding of CMG in CMB will increase from 29.97% to 30.06% and as a result, CMB will become an associate of CMG and therefore, a connected person of the Company under the Listing Rules. As a result of the above, continuing and future transactions between (i) the Group on the one hand and Sinotrans & CSC and its associates on the other hand; and (ii) the Group and CMB will become connected transactions of the Company. In particular, the transactions set out below will not be fully-exempted from the requirements under Chapter 14A of the Listing Rules. PROPOSED NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS BETWEEN SINOTRANS & CSC AND THE GROUP There are currently a number of transactions between members of the Group and members of the Sinotrans & CSC Group, these transactions can be classified into (i) the provision of Port-related Services by members of the Group to members of the Sinotrans & CSC Group; and (ii) the provision of Agency Services by members of the Sinotrans & CSC Group to members of the Group. For the year ended 31 December 2015, the aggregate service fees received by the Group from Sinotrans & CSC Group 1

2 for the Port-related Services and the aggregate service fees paid by the Group to Sinotrans & CSC Group for the Agency Services were RMB39.8 million (equivalent to HK$47.2 million) and RMB3.7 million HK$4.4 million), respectively. The transactions described above were conducted on a regular and continuing basis and in the ordinary and usual course of business of the Group. The Directors, including the independent non-executive Directors, are of the view that entering into of these transactions has been conducted on normal commercial terms, and the terms thereof are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. None of the Directors has a material interest in these transactions with the Sinotrans & CSC Group. Comprehensive Services Framework Agreement On 15 June 2016, the Company and Sinotrans & CSC entered into the Comprehensive Services Framework Agreement to set out the framework for future transactions in relation to (i) the provision of Port-related Services by members of the Group to members of the Sinotrans & CSC Group; and (ii) the provision of Agency Services by members of the Sinotrans & CSC Group to members of the Group. The Comprehensive Services Framework Agreement provides that the provision of Port-related Services by members of the Group to members of the Sinotrans & CSC Group, and the provision of Agency Services by members of the Sinotrans & CSC Group to members of the Group shall be at prices that are fair and reasonable and shall be at terms not less favourable than those provided to independent third parties. It is contemplated that specific agreements will be entered into between the relevant members of the Group and relevant members of the Sinotrans & CSC Group in respect of each transaction within the scope of the Comprehensive Services Framework Agreement and the Company and Sinotrans & CSC shall procure their respective subsidiaries to ensure that the terms of the specific agreements are entered into in accordance with the principles set out in the Comprehensive Services Framework Agreement. The specific price for each transaction shall be negotiated at arm s length by the relevant member of the Group and the relevant member of the Sinotrans & CSC Group at the time when the transaction is entered into. With respect to the provision of Port-related Services, the price to be charged will be based on the then prevailing standard fee schedule applicable to the relevant port and calculated with reference to the type of vessel and the weight of cargo to be handled. With respect to the receipt of Agency Services, the relevant member of the Group will, prior to the entering into 2

3 of the specific agreement, solicit at least two other offers from independent third parties to ensure that the price quoted by the relevant member of the Sinotrans & CSC Group complies with the relevant provisions under the Comprehensive Services Framework Agreement. The Comprehensive Services Framework Agreement is valid until 31 December 2018 provided that either party shall have the option to extend the term of the Comprehensive Services Framework Agreement for subsequent terms of three years each subject to compliance with the then applicable requirements under the Listing Rules. Listing Rules Implications and Determination of Annual Caps Upon completion of the Proposed Merger, Sinotrans & CSC will become a wholly-owned subsidiary of CMG and as a result, Sinotrans & CSC and its associates will become connected persons of the Company under the Listing Rules and the transactions contemplated under the Comprehensive Services Framework Agreement (namely, the provision of Port-related Services to, and the receipt of Agency Services from, members of the Sinotrans & CSC Group) will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. For the purpose of Rule 14A.53 of the Listing Rules, on 15 June 2016, the Directors resolved to set the annual caps in respect of the service fees for Port-related Services receivable by the Group from Sinotrans & CSC and its associates and the services fees for Agency Services payable by the Group to Sinotrans & CSC and its associates for each of the three years ending 31 December 2016, 2017 and 2018 as follow: Annual cap for the year ending 31 December Service fees receivable RMB60.00 million HK$71.2 million) RMB78.00 million HK$92.6 million) RMB million HK$120.3 million) Service fees payable RMB5.00 million HK$5.9 million) RMB6.50 million HK$7.7 million) RMB8.45 million HK$10.0 million) Since the applicable percentage ratios set out in Rule of the Listing Rules in respect of the annual caps for the service fees receivable for Port-related Services and the service fees payable for Agency Services exceed 0.1% but are below 5%, these 3

4 transactions are therefore exempt from the circular (including independent financial advice) and shareholders approval requirements under Chapter 14A of the Listing Rules but are subject to the reporting, annual review and announcement requirements. Reasons for the Transactions The core business of the Group includes port and port-related business. Sinotrans & CSC Group is one of the biggest comprehensive logistics service supplier in China with world-wide businesses in integrated logistics, shipping and shipbuilding industry. The provision of Port-related Services to, and the receipt of Agency Services from, Sinotrans & CSC Group will further strengthen the business relationship between the two groups and the Directors are of the view that this is beneficial to the Group. The Directors, including the independent non-executive Directors, are of the view that the Comprehensive Services Framework Agreement was entered into on normal commercial terms and in the ordinary and usual course of business of the Company. Taking into account the historical amounts of service fees received and paid and the expected future increase of transactions between the Group and the Sinotrans & CSC Group, the Directors, including the independent non-executive Directors, are of the view that the terms of the Comprehensive Services Framework Agreement and the proposed annual caps for the each of the three years ending 31 December 2016, 2017 and 2018 in respect of (i) the service fees for Port-related Services receivable by the Group from Sinotrans & CSC and its associates and (ii) the service fees for Agency Services payable by the Group to Sinotrans & CSC and its associates, are fair and reasonable and in the interest of the Company and its shareholders as a whole. PROPOSED NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS BETWEEN THE GROUP AND CMB The Group has from time to time placed the Deposits with CMB and CMB has accepted such Deposits in the ordinary and usual course of its business from the Group and in accordance with its applicable standard client terms. The interest rates provided by CMB on these Deposits are currently within the range of 1.3% and 3.9% and are determined with reference to rates published by the People s Bank of China and no less than the interest rate offered by CMB to other independent third parties for the same type of deposits. During the 12-month period immediately prior to the date of this announcement, the average monthly closing balance of Deposits placed by the Group with CMB was HK$2,800 million. 4

5 The above were conducted on a regular and continuing basis and in the ordinary and usual course of business of the Group. The Directors, including the independent non-executive Directors, are of the view that the making of such Deposits by the Group has been conducted on normal commercial terms, and the terms thereof are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. None of the Directors has a material interest in the transactions contemplated under the Deposits with CMB. Listing Rules Implications and Determination of Annual Caps Upon completion of the Proposed Merger, the aggregate shareholding of CMG in CMB will increase from 29.97% to 30.06% and as a result, CMB will become an associate of CMG and therefore, a connected person of the Company under the Listing Rules and the Deposits will constitute continuing connected transactions of the Company, being financial assistance provided by the Group to CMB under Chapter 14A of the Listing Rules. For the purpose of Rule 14A.53 of the Listing Rules, on 15 June 2016, the Directors resolved to set the caps in respect of the monthly closing balance of Deposits placed by the Group with CMB at HK$2,500 million for each of the three years ending 31 December 2016, 2017 and Since the applicable percentage ratios set out in Rule of the Listing Rules in respect of the annual caps for the Deposits placed by the Group with CMB exceed 0.1% but are below 5%, these transactions are therefore exempt from the circular (including independent financial advice) and shareholders approval requirements under Chapter 14A of the Listing Rules but are subject to the reporting, annual review and announcement requirements. Reasons for the Transactions The Group maintains an appropriate treasury management policy to ensure that its surplus funds are invested under a range of suitable options, including by deposit with various financial institutions. CMB is a company incorporated in the PRC and its principal activities are provision of corporate and personal banking services, conducting treasury business, provision of asset management and trustee services and other financial services. It is also one of the most established banks in Greater China Region, which offers a competitive deposit rate. The Directors consider that the deposit rate offered by CMB to the Group is on normal commercial terms and reflects the prevailing deposit rate offered by CMB to third parties. The Directors believe that maintaining Deposits with CMB will enable the Group to meet its anticipated day-to-day working capital requirements, while also enjoying a competitive deposit rate, which is in the interests of the Group. 5

6 Taking into account the historical amounts of Deposits placed with CMB and the Group s future cash flow arrangements and working capital positions, the Directors are of the view that the proposed caps for each of the three years ending 31 December 2016, 2017 and 2018 in respect of the monthly closing balance of Deposits placed by the Group with CMB are fair and reasonable and in the interest of the Company and its shareholders as a whole. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: Agency Services associates Board CMB CMG freight transportation and related agency services has the meaning ascribed to this term under Rule 14A.06 of the Listing Rules the board of Directors of the Company China Merchants Bank Co., Ltd., a joint stock company incorporated in the PRC with limited liability, the A shares of which are listed on the Shanghai Stock Exchange and the H shares of which are listed on The Stock Exchange of Hong Kong Limited China Merchants Group Limited ( ), a company incorporated in the PRC and the ultimate holding company of the Company Company China Merchants Holdings (International) Company Limited ( ), a company incorporated in Hong Kong and whose shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited Comprehensive Services Framework Agreement connected person Deposits the comprehensive service framework agreement dated 15 June 2016 entered into between the Company and Sinotrans & CSC in relation to the provision of Port-related Services by members of the Group to members of the Sinotrans & CSC Group, and the provision of Agency Services by members of the Sinotrans & CSC Group to members of the Group has the meaning ascribed to this term under Rule 14A.06 of the Listing Rules the deposits placed by the Group with CMB from time to time and accepted by CMB from the Group in the ordinary and usual course of its business and in accordance with its applicable standard client terms 6

7 Directors Group HK$ Hong Kong Listing Rules Port-related Services PRC Proposed Merger RMB Sinotrans & CSC Sinotrans & CSC Group subsidiary (ies) the directors of the Company the Company and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited port-related services and freight forwarding services the People s Republic of China the proposed reorganisation and merger between CMG and Sinotrans & CSC whereby following the completion of the transaction, Sinotrans & CSC will become a wholly-owned subsidiary of CMG Renminbi, the lawful currency of the PRC Sinotrans & CSC Holdings Co., Ltd. ( ), a company incorporated under the laws of the PRC and, following the completion of the Proposed Merger, will become a wholly-owned subsidiary of CMG Sinotrans & CSC and its subsidiaries has the meaning ascribed to it under the Listing Rules % % per cent. For reference only, an exchange rate of HK$1.00 to RMB has been used for the conversion of Renminbi into Hong Kong dollars in this announcement. By Order of the Board China Merchants Holdings (International) Company Limited Li Xiaopeng Chairman Hong Kong, 15 June 2016 As at the date of this announcement, the Board comprises Mr. Li Xiaopeng, Mr. Hu Jianhua, Mr. Fu Gangfeng, Mr. Yu Liming, Mr. Wang Hong, Mr. Deng Renjie, Mr. Bai Jingtao, Mr. Wang Zhixian and Mr. Zheng Shaoping 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. 7