Future Land Development 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. Future Land Development Holdings Limited (incorporated in the Cayman Islands with limited liability) (Stock Code: 1030) MAJOR TRANSACTIONS IN RELATION TO (1) THE DISPOSAL OF A SUBSIDIARY FOR THE ASSET SECURITIZATION SCHEME AND (2) THE PREFERENTIAL RIGHTS AGREEMENT INTRODUCTION The Target Company is an indirect wholly-owned subsidiary of Future Land Holdings, a subsidiary of the Company with its A shares listed on the SSE (stock code: ), and is currently holding the Property. Orient Asset intends to acquire the Target Company for the purpose of the Asset Securitization Scheme. Pursuant to the Asset Securitization Scheme, Orient Asset, as the administrator of the Asset Securitization Scheme, will issue Securities in the amount of RMB1.05 billion to Security Holders, who will in return enjoy the economic benefits generated from the Property. Orient Asset will also engage a subsidiary of Future Land Holdings, whose principal business is commercial property management, to manage and operate the Property after the Asset Securitization Scheme is established. THE ACQUISITION AGREEMENT The Board is pleased to announce that on June 22, 2016 (after trading hours), the Seller, being a wholly-owned subsidiary of Future Land Holdings, entered into the Acquisition Agreement with Orient Asset, pursuant to which the Seller agreed to sell, and Orient Asset agreed to purchase, the Sale Interest in the Target Company for the Consideration of RMB1, million (including the repayment of the Seller s Loan). THE PREFERENTIAL RIGHTS AGREEMENT The Board further announces that on June 22, 2016 (after trading hours), Orient Asset and Future Land Holdings entered into the Preferential Rights Agreement, pursuant to which Future Land Holdings agreed to pay the Preferential Rights Premium and Orient Asset agreed to grant the Right of Purchase and the Right of First Refusal to Future Land Holding. 1

2 IMPLICATIONS UNDER THE LISTING RULES The applicable percentage ratios (as defined in Rule of the Listing Rules) in respect of the Disposal and the Acquisition Agreement exceed 5% but are less than 25% and the applicable percentage ratios (as defined in Rule of the Listing Rules) in respect of the Preferential Rights Agreement exceed 25% but are less than 100%. Pursuant to Rule of the Listing Rules, since the underlying subject of the Preferential Rights Agreement is also the Property, and the Disposal and the Preferential Rights Agreement will be regarded as one transaction involving both an acquisition and a disposal. The Disposal and the Preferential Rights Agreement will be classified by reference to the highest of the percentage ratios of the Disposal and the Preferential Rights Agreement, being a major transaction, and subject to the reporting, announcement and shareholders approval requirements under Chapter 14 of the Listing Rules applicable to major transaction. Only the Preferential Rights Agreement will be subject to the circular content requirements under Chapter 14 of the Listing Rules applicable to major transaction. GENERAL To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, none of the Shareholders nor any of their respective associates has any material interest in the Disposal and the Preferential Rights Agreement and therefore none of them is required to abstain from voting if a general meeting is to be convened for the approval of the Disposal and the Preferential Rights Agreement. The Company has obtained a written approval for the Disposal and the Preferential Rights Agreement in lieu of holding a general meeting in accordance with Rule of the Listing Rules from Wealth Zone Hong Kong Investments Limited, the beneficial owner of 4,105,450,000 Shares with voting rights of approximately 72.56% as at the date of this announcement. Wealth Zone Hong Kong Investments Limited has the right to vote at the extraordinary general meeting (if convened) to approve such transactions. As such, the Company is not required to convene a general meeting for the purpose of approving the Disposal and the Preferential Rights Agreement as permitted under Rule of the Listing Rules. A circular in relation to the Preferential Rights Agreement containing, among other things, the accountant s report of the Target Company, the valuation report of the Property and other information as required by the Listing Rules will be despatched to the Shareholders on or before July 14, 2016 in accordance with the Listing Rules. INTRODUCTION The Target Company is an indirect wholly-owned subsidiary of Future Land Holdings, a subsidiary of the Company with its A shares listed on the SSE (stock code: ), and is currently holding the Property. Orient Asset intends to acquire the Target Company for the purpose of the Asset Securitization Scheme. Pursuant to the Asset Securitization Scheme, Orient Asset, as the administrator of the Asset Securitization Scheme, will issue Securities in the amount of RMB1.05 billion to Security Holders, who will in return enjoy the economic benefits generated from the Property. Orient Asset will also engage a subsidiary of Future Land Holdings, whose principal business is commercial property management, to manage and operate the Property after the Asset Securitization Scheme is established. 2

3 THE ACQUISITION AGREEMENT The Board is pleased to announce that on June 22, 2016 (after trading hours), the Seller, being a wholly-owned subsidiary of Future Land Holdings, entered into the Acquisition Agreement with Orient Asset, pursuant to which the Seller agreed to sell, and Orient Asset agreed to purchase, the Sale Interest in the Target Company for the Consideration of RMB1, million (including the repayment of the Seller s Loan). A summary of the principal terms of the Acquisition Agreement is set out below. Date: June 22, 2016 Parties: Seller: Shanghai Future Land Wanjia Real Estate Co., Ltd.* ( ) Purchaser: Shanghai Orient Asset Asset Management Company Limited* ( ) Target Company: Shanghai Diyu Commercial Operation Management Co., Ltd* ( ) Consideration The Consideration for the Disposal is RMB1, million, subject to the Completion Adjustment, being RMB million in cash and the repayment of the Seller s Loan in the amount of RMB700 million. The Consideration was determined and agreed between the parties after arm s length negotiations based on normal commercial terms, with reference to the unaudited net assets of the Target Company in the amount of RMB15,397,753 as at May 31, 2016 and the valuation of the Property of RMB1,191 million as at March 31, 2016 by the independent valuer, Cushman & Wakefield. Completion Adjustment The Seller and Orient Asset will agree on the Reference Date of Completion Audit and jointly engage an accounting firm to conduct Completion Audit on the Target Company and issue Completion Audit report on the Target Company as at the Reference Date of Completion Audit. Based on the Completion Audit, the pre-paid rental revenue of the Property for the rental period before and after the Reference Date of Completion Audit should be allocated to the Seller and Orient Asset respectively. Seller s Loan The Target Company has the outstanding Seller s Loan in the amount of RMB700 million as at the date of this announcement, which bears no interest. It is agreed that Orient Asset will provide a loan to the Target Company from the proceeds raised under the Asset Securitization Scheme, which will be used to repay the Seller s Loan. 3

4 Payment Terms The Consideration shall be paid by the Seller in the following sequence: the first tranche of cash in the amount of RMB million shall be paid within 60 working days after the date of the Acquisition Agreement or the Reference Date of Completion Audit, whichever is later; the Seller s Loan in the amount of RMB700 million shall be repaid within 20 working day after the payment of the first tranche of cash; and the second tranche of cash in the amount of RMB150 million shall be paid within 3 working days after the Seller provides the report for the Completion Audit to Orient Asset and the payment under to the Completion Adjustment is made. Completion Completion shall take place upon completion of the industrial and commercial registration of the transfer in respect of the Sale Interest in accordance with the terms of the Acquisition Agreement. Future Land Holdings Guarantee Future Land Holdings has given a guarantee in favour of Orient Asset for the Seller s performance of its obligations under the Acquisition Agreement. THE PREFERENTIAL RIGHTS AGREEMENT The Board further announces that on June 22, 2016 (after trading hours), Orient Asset and Future Land Holdings entered into the Preferential Rights Agreement, pursuant to which Future Land Holdings agreed to pay the Preferential Rights Premium and Orient Asset agreed to grant the Right of Purchase and the Right of First Refusal to Future Land Holding. Right of Purchase Pursuant to the Right of Purchase, Future Land Holdings has the exclusive right to acquire, and Orient Asset should procure all Security Holders to sell, all the Securities under the Asset Securitization Scheme, at the ROP Exercise Price of RMB1.1 billion, upon the ROP Exercise Day, which is the third anniversary after the Asset Securitization Scheme is established. If Future Land Holdings exercises the Right of Purchase, Future Land Holdings should give Orient Asset a written notice at least 20 working days before the ROP Exercise Day. Right of First Refusal If Future Land Holdings does not exercise the Right of Purchase, Future Land Holdings will have the Right of First Refusal during the ROFR Exercise Period, which is the fourth and fifth years after the Asset Securitization Scheme is established (the last day excluded). During the ROFR Exercise Period, Future Land Holdings has the right to acquire, and Orient Asset should procure all Security Holders to sell, all the Securities under the Asset Securitization Scheme, at the ROFR Exercise Price. In particular, if Orient Asset reaches a preliminary agreement with a third party on the acquisition of the Securities, Orient Asset should notify Future Land Holdings in writing and Future Land Holdings should decide whether to exercise the Right of First Refusal within the period specified under the said notice from Orient Asset. 4

5 Preferential Rights Premium Future Land Holdings agrees to pay to Orient Asset the Preferential Rights Premium in the total amount of RMB200 million in the following sequence: 1st installment in the amount of RMB60 million upon the payment of the Consideration by Orient Asset or on the next working day; 2nd installment in the amount of RMB50 million on the first working day after the first anniversary after the Asset Securitization Scheme is established; 3rd installment in the amount of RMB40 million on the first working day after the second anniversary after the Asset Securitization Scheme is established; 4th installment in the amount of RMB30 million on the first working day after the third anniversary after the Asset Securitization Scheme is established; and 5th installment in the amount of RMB20 million on the first working day after the fourth anniversary after the Asset Securitization Scheme is established. Waiver of the Right of Purchase or the Right of First Refusal will not discharge Future Land Holdings from the obligation to pay the Preferential Rights Premium. If Future Land Holdings exercises the Right of Purchase upon the ROP Exercise Day, Future Land Holdings does not need to pay the 4th and 5th installments of the Preferential Rights Premium in the total amount of RMB50 million. If Future Land Holdings exercise the Right of First Refusal during the fourth year after the Asset Securitization Scheme is established, Future Land Holdings does not need to pay the 5th installment of the Preferential Rights premium in the amount of RMB20 million. The Preferential Rights Premium, the ROP Exercise Price and the ROFR Exercise Price were determined and agreed between the parties after arm s length negotiations based on normal commercial terms, with reference to the Consideration under the Acquisition Agreement. The Preferential Rights Premium will be satisfied by the Company s internal resources. Termination of Asset Securitization Scheme After acquiring all the Securities under the Asset Securitization Scheme, Future Land Holdings has the right to request Orient Asset to terminate the Asset Securitization Scheme and transfer the Property back to Future Land Holdings. FINANCIAL EFFECT OF THE ACQUISITION AGREEMENT The unaudited gain before tax from the Disposal is estimated to be approximately RMB373,291, representing the difference between the Consideration of RMB1, million and the carrying value of the Target Company of RMB1,049,446,709 as of May 31, The net proceeds from the Disposal after expenses are expected to be approximately RMB1,048 million (including the repayment of the Seller s Loan), which will be used by the Group for development of the Group s real estate projects and general working capital purpose. Upon Completion, the Target Company will cease to be a subsidiary of the Company. INFORMATION ON THE GROUP The Group is principally engaged in the business of property development, property investment and commercial property management in the PRC. Future Land Holdings is a subsidiary of the Company with its A shares listed on the SSE. The Seller is a wholly-owned subsidiary of Future Land Holdings. 5

6 INFORMATION ON ORIENT ASSET Orient Asset is a company incorporated in the PRC with limited liability whose principal business is asset management in the PRC. To the best of the knowledge, information and belief of the Directors and having made all reasonable enquires, Orient Asset (including its ultimate beneficial owners) is third party independent of the Company and its connected persons. INFORMATION ON THE TARGET COMPANY AND THE PROPERTY The Target Company is incorporated in the PRC with limited liability and is an investment holding company for the purpose of holding the Property, the particulars of which are as follows: Property name: Property title certificate number: Site location: Total property area: Land use: Qingpu Injoy Plaza ( ) Hu Fang Di Qing Zi (2016) No ( (2016) ) Interchange of Dianshanhu Road and Caoying Road, Qingpu District, Shanghai ( ) 46,309.7 sq.m. of site area, 132, sq.m. of construction area and 86,348.8 sq.m. of commercial and office building area other commercial and service purposes The Property was held by Shanghai Jinjun before it was transferred to the Target Company in March The Target Company is an investment holding company incorporated for the purpose of the Property. The audit of the Target Company is currently being conducted and the net profits (before and after tax) attributable to the Target Company for the two years ended December 31, 2015 will be included in the circular in relation the Preferential Rights Agreement to be despatched by the Company. REASONS FOR THE DISPOSAL AND THE PREFERENTIAL RIGHTS AGREEMENT The Disposal and the Preferential Rights Agreement represent an opportunity for the Company to optimize its fixed assets portfolio. After the Completion, the Property will continue to be operated under the Group s brand name of Injoy, which will help maintain the Company s presence and position in the market. The positive cash flow generated from the Disposal will strengthen the Company s financial position and finance the Company s future real estate development projects. As the same time, the Preferential Rights Agreement gives the Company the flexibility to reacquire the Property in the future, depending on the property market situation and the Company s development strategy. The Company will achieve cash inflow through transfer of the Property to Orient Asset for the Asset Securitization Scheme. For the Group s commercial properties, the payback period will be shortened and the asset turnover will be improved. This will benefit the asset structure, enhance the capital utilization and strengthen commercial operation capacity of the Company, which is a new asset light business model for the Company s commercial properties. In view of the above, the Directors consider that the terms of the Acquisition Agreement and the Preferential Rights Agreement are fair and reasonable, on normal commercial terms and in the interest of the Company and the Shareholders as a whole. 6

7 IMPLICATIONS UNDER THE LISTING RULES The applicable percentage ratios (as defined in Rule of the Listing Rules) in respect of the Disposal and the Acquisition Agreement exceed 5% but are less than 25% and the applicable percentage ratios (as defined in Rule of the Listing Rules) in respect of the Preferential Rights Agreement exceed 25% but are less than 100%. Pursuant to Rule of the Listing Rules, since the underlying subject of the Preferential Rights Agreement is also the Property, and the Disposal and the Preferential Rights Agreement will be regarded as one transaction involving both an acquisition and a disposal. The Disposal and the Preferential Rights Agreement will be classified by reference to the highest of the percentage ratios of the Disposal and the Preferential Rights Agreement, being a major transaction, and subject to the reporting, announcement and shareholders approval requirements under Chapter 14 of the Listing Rules applicable to major transaction. Only the Preferential Rights Agreement will be subject to the circular content requirements under Chapter 14 of the Listing Rules applicable to major transaction. GENERAL To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, none of the Shareholders nor any of their respective associates has any material interest in the Disposal and the Preferential Rights Agreement and therefore none of them is required to abstain from voting if a general meeting is to be convened for the approval of the Disposal and the Preferential Rights Agreement. The Company has obtained a written approval for the Disposal and the Preferential Rights Agreement in lieu of holding a general meeting in accordance with Rule of the Listing Rules from Wealth Zone Hong Kong Investments Limited, the beneficial owner of 4,105,450,000 Shares with voting rights of approximately 72.56% as at the date of this announcement. Wealth Zone Hong Kong Investments Limited has the right to vote at the extraordinary general meeting (if convened) to approve such transactions. As such, the Company is not required to convene a general meeting for the purpose of approving the Disposal and the Preferential Rights Agreement as permitted under Rule of the Listing Rules. A circular in relation to the Preferential Rights Agreement containing, among other things, the accountant s report of the Target Company, the valuation report of the Property and other information as required by the Listing Rules will be despatched to the Shareholders on or before July 14, 2016 in accordance with the Listing Rules. Future Land Holding Announcement Future Land Holdings also made the Future Land Holding Announcement headlined Announcement on Asset Disposal dated June 23, 2016 in relation to the Asset Securitization Scheme. The Future Land Holding Announcement was published in Chinese on the website of the SSE ( on June 22,

8 DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the following meanings: Acquisition Agreement Asset Securitization Scheme associate(s) Board Company Completion Adjustment Completion Audit Completion connected person(s) Consideration Director(s) Disposal Future Land Holdings Future Land Holdings Announcement Group the acquisition agreement dated June 22, 2016 entered into between Orient Asset and the Seller in respect of the Disposal; the asset securitization scheme to be incorporated and managed by Orient Asset as the administrator to securitize the Property by issuing Securities in the amount of RMB1.05 billion to Security Holders; has the meaning ascribed thereto in the Listing Rules; the board of Directors; Future Land Development Holdings Limited, a company incorporated in the Cayman Islands with limited liability whose shares are listed on the Stock Exchange; the adjustment to distribute the pre-paid rental revenue of the Property for the rental period before the Reference Date of Completion Audit (such date excluded) and the rental period after the Reference Date of Completion Audit (such date included) to the Seller and Orient Asset respectively based on the Completion Audit; the audit on the Target Company to be conducted by an accounting firm jointly engaged by the Seller and Orient Asset for the purpose of the Completion Adjustment; completion of the Acquisition Agreement; has the meaning ascribed thereto in the Listing Rules; the consideration for the Disposal under the Acquisition Agreement, being RMB1, million, being RMB million in cash and the repayment of the Seller s Loan in the amount of RMB700 million; the director(s) of the Company; the disposal of the Sale Interest by the Seller to Orient Asset pursuant to the Acquisition Agreement; Future Land Holdings Co., Ltd.* ( ), a subsidiary of the Company with its A shares listed on the SSE (stock code: ); an announcement headlined Announcement on Asset Disposal dated June 23, 2016 published by Future Land Holdings in relation to the Asset Securitization Scheme on the website of the SSE on June 22, 2016; the Company and its subsidiaries; 8

9 Hong Kong Listing Rules the Hong Kong Special Administrative Region of the PRC; the Rules Governing the Listing of Securities on the Stock Exchange; Orient Asset Shanghai Orient Securities Asset Management Company Limited* ( ), a company established in the PRC with limited liability; PRC PRC GAAP Preferential Rights Agreement Preferential Rights Premium Property Right of First Refusal Right of Purchase RMB ROFR Exercise Period ROFR Exercise Price Reference Date of Completion Audit ROP Exercise Day ROP Exercise Price The People s Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan; the generally accepted accounting principles adopted in the PRC; the preferential rights agreement dated June 22, 2016 entered into between Orient Asset and Future Land Holdings; the preferential rights premium to be paid by Future Land Holdings to Orient Asset pursuant to the Preferential Rights Agreement; Qingpu Injoy Plaza ( ), with 46,309.7 sq.m. of site area, 132, sq.m. of construction area and 86,348.8 sq.m. of commercial and office building area, located at Interchange of Dianshanhu Road and Caoying Road, Qingpu District, Shanghai ( ); the right of first refusal granted to Future Land Holdings under the Preferential Rights Agreement to acquire the Securities during the ROFR Exercise Period; the right of purchase granted by Orient Asset to Future Land Holdings to have the exclusive right to acquire all the Securities under the Asset Securitization Scheme at the ROP Exercise Price of RMB1.1 billion upon the ROP Exercise Day; Renminbi, the lawful currency of the PRC; the fourth and fifth years after the Asset Securitization Scheme is established (the last day excluded); RMB1.1 billion; the reference date for the Completion Audit to be agreed by the Seller and Orient Asset; the third anniversary after the Asset Securitization Scheme is established; RMB1.1 billion; 9

10 Sale Interest Securities Security Holders Seller Seller s Loan Shanghai Jinjun Share(s) Shareholder(s) SSE Stock Exchange Target Company HK$ the 100% equity interest in the Target Company; securities in the amount of RMB1.05 billion to be issued by Orient Asset under the Asset Securitization Scheme to Security Holders, who will in return enjoy the economic benefits generated from the Property; the holders of the Securities; Shanghai Future Land Wanjia Real Estate Co., Ltd.* ( ), a company incorporated in the PRC with limited liability and a wholly-owned subsidiary of Future Land Holdings; the no-interest-bearing loan in the amount of RMB700 million owed by the Target Company to the Seller as at the date of this announcement; Shanghai Future Land Jinjun Real Estate Company Limited* ( ), a company incorporated in the PRC with limited and a subsidiary of Future Land Holdings; ordinary share(s) in the share capital of the Company with a par value of HK$0.001 each; the shareholder(s) of the Company; the Shanghai Stock Exchange; The Stock Exchange of Hong Kong Limited; Shanghai Diyu Commercial Operation Management Co., Ltd* ( ), a company incorporated in the PRC with limited liability and an investment holding company incorporated for the purpose of the Property; Hong Kong dollar(s), the lawful currency of Hong Kong; % per cent. By order of the Board Future Land Development Holdings Limited WANG Zhenhua Chairman PRC, June 22, 2016 As at the date of this announcement, the Directors are Mr. Wang Zhenhua, Mr. Lv Xiaoping, Mr. Lu Zhongming, Mr. Liu Yuanman and Mr. Chan Wai Kin as executive Directors, Mr. Wang Xiaosong as non-executive Director, and Mr. Chen Huakang, Mr. Zhu Zengjin and Mr. Zhong Wei as independent non-executive Directors. * Denotes English translation of a Chinese Company or entity or vice versa is provide for identification purpose only. 10