Hanhua Financial Holding Co., Ltd. *

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. Hanhua Financial Holding Co., Ltd. * (A joint stock limited liability company incorporated in the People s Republic of China) (Stock Code: 3903) CONNECTED TRANSACTION ACQUISITION OF A FINANCIAL FACTORING COMPANY On 1 August 2014, the Company, Yu Shang Group and Chang Jiang Financial Holding (as original (and remaining) minority shareholder of the Target Company) entered into the S&P Agreement pursuant to which the Company has conditionally agreed to acquire, and Yu Shang Group has conditionally agreed to sell, the Sale Interests, being 90% of the equity interests in the Target Company, at an aggregate consideration of RMB270.0 million (approximately HK$337.5 million). The Consideration was arrived at based on arm s length negotiation between the Company and Yu Shang Group with reference to the original capital contribution of Yu Shang Group in respect of the Sale Interests, and is equivalent to the proportion of the approved total registered capital of the Target Company represented by the Sale Interests. The Target Company was newly established on 1 July 2014 and as of the date of this announcement, the Target Company is owned as to 90% and 10% by Yu Shang Group and Chang Jiang Financial Holding, a wholly-owned subsidiary of Yu Shang Group, respectively. The Target Company has been approved by the Chongqing Finance Bureau ( ) to engage in the financial factoring business, but has yet to commence any business operation. Following Completion, the Target Company will become a 90% non-wholly owned subsidiary of the Company, whilst the remaining 10% will continue to be held by Chang Jiang Financial Holding. As at the date of this announcement, Yu Shang Group is held as to 38.7% by Loncin Holdings, a Controlling Shareholder, and accordingly is a 30%-controlled company of Loncin Holdings and a connected person of the Company. Therefore, the Acquisition constitutes connected transaction of the Company under the Listing Rules. As the applicable Percentage Ratios for the Acquisition exceed 0.1% but are less than 5%, the Acquisition is subject to announcement and reporting requirements but is exempt from independent shareholders approval requirement. INTRODUCTION On 1 August 2014, the Company, Yu Shang Group and Chang Jiang Financial Holding entered into the S&P Agreement pursuant to which the Company has conditionally agreed to acquire, and Yu Shang Group has conditionally agreed to sell, the Sale Interests at the Consideration. 1

2 S&P AGREEMENT The principal terms of the S&P Agreement are as follows: Date: 1 August 2014 Parties: (a) The Company (as purchaser) (b) Yu Shang Group (as vendor) (c) Chang Jiang Financial Holding (as original (and remaining) minority shareholder of the Target Company) Sale Interests: Consideration: 90% of the equity interests in the Target Company RMB270.0 million (equivalent to approximately HK$337.5 million), which will be satisfied in full by payment in cash within three working days following fulfilment of the conditions precedent of the S&P Agreement (that is, the S&P Agreement becoming effective). Should the Company fail to effect full payment of the Consideration within the time specified above, the Company shall be liable to a late-payment penalty of 5% on any amount outstanding calculated on a daily basis from the date of signing of the S&P Agreement until the date of payment in full. The Consideration was arrived at based on arm s length negotiation between the Company and Yu Shang Group with reference to the original capital contribution of Yu Shang Group in respect of the Sale Interests, and is equivalent to the proportion of the approved total registered capital of the Target Company represented by the Sale Interests. The Consideration will be funded in full by the Company s internal resources. Conditions precedent: Completion of the S&P Agreements is conditional upon, inter alia, (a) signing of the S&P Agreements by duly authorized signatories and the parties thereto having obtained all necessary internal approvals and powers of attorney to approve the transaction(s) contemplated under the S&P Agreement; (b) passing of all necessary resolutions by the shareholders of the Target Company approving the transfer of the Sale Interests and having obtained from Chang Jiang Financial Holding a confirmation forfeiting its pre-emptive right as existing shareholder of the Target Company in respect of the Sale Interests; (c) Yu Shang Group having contributed the registered capital corresponding to the Sale Interests into the Target Company; and 2

3 (d) the Company having obtained all necessary authorizations, consents and approvals under applicable laws and regulations, its Articles of Association, applicable corporate rules and policies of the Company, the Listing Rules and such other regulatory requirements in relation to the Acquisition. Completion: The S&P Agreement shall become effective upon fulfillment of the conditions precedent of the S&P Agreement. Yu Shang Group and Chang Jiang Financial Holding have undertaken to complete registration with the relevant Administration of Industry and Commerce and all other relevant PRC regulatory filings (including, without limitation, the Chongqing Finance Bureau ( )) in relation to the Acquisition together with the Company within 15 days following the S&P Agreement becoming effective. The Acquisition is deemed to be completed upon completion of the aforesaid registration and filings. Following Completion, the Target Company will become a 90% nonwholly owned subsidiary of the Company, whilst the remaining 10% will continue to be held by Chang Jiang Financial Holding. FULFILLMENT OF CONDITIONS PRECEDENT As of the date of entering into of the S&P Agreement, all of the conditions precedent of the S&P Agreement have been fulfilled and the S&P Agreement has become effective. MANAGEMENT OF THE TARGET COMPANY The S&P Agreement stipulated that following Completion, (i) the board of directors of the Target Company shall comprise three directors, with two nominated by the Company and one nominated by Chang Jiang Financial Holding; (ii) the supervisory board of the Target Company shall comprise three supervisors, with one nominated by employees of the Target Company, one nominated by the Company and one nominated by Chang Jiang Financial Holding; and (iii) both the general manager and the financial controller of the Target Company shall be nominated by the Company and appointed by the board of directors of the Target Company. REASONS FOR AND BENEFITS OF THE ACQUISITION In considering the Acquisition, the Company has taken into account the following factors: as disclosed in the prospectus of the Company dated 3 June 2014, factoring business is one of the capital-based financing solutions businesses that the Group intends to introduce as part of the Group s strategies to further achieve its goal of becoming a premier diversified and integrated financial services company with a comprehensive product and service offering; the Target Company has already obtained the requisite approval to conduct financial factoring business, therefore the Acquisition would facilitate a more expedient commencement and development of the Group s factoring business in Chongqing area; Yu Shang Group has a strong shareholder base with over 60 shareholders, a majority of which are privately owned enterprises with established business presence in Chongqing, and it is considered that having Yu Shang Group retaining a minority interest (through Chang Jiang Financial Holding) in the Target Company may enable the Group to leverage their experience and business connections in Chongqing to better develop the Target Company s factoring business; 3

4 given that factoring business is an area that the Group intends to develop going forward, such Acquisition would resolve any future potential issue of competing business that may otherwise arise between the Company and the Target Company; and taking into account that the Target Company is a newly established company with no business operation or material assets, the Consideration represents only the proportionate registered capital of the Target Company constituting the Sale Interests. In light of the foregoing, the Company is of the view that the Acquisition represents a good business opportunity which will further diversify the Group s product offering in line with its business strategies. Mr. Tu, a non-executive Director and Controlling Shareholder and the chairman of the board and controlling shareholder of Yu Shang Group, and Mr. Duan, a non-executive Director and a director of Yu Shang Group, have abstained from the Board meeting in considering and approving the Acquisition. None of the other Directors ( Disinterested Directors ) has a material interest in the Acquisition. On the basis of the foregoing, the Disinterested Directors (including all independent non-executive Directors) considered the terms of the S&P Agreement to be of normal commercial terms, and the Acquisition to be fair and reasonable and in the interest of the Company and its shareholders as a whole. INFORMATION ABOUT THE TARGET COMPANY The Target Company was newly established on 1 July 2014 with a total approved registered capital of RMB300.0 million (equivalent to approximately HK$375.0 million) and as of the date of this announcement, the Target Company is owned as to 90% and 10% by Yu Shang Group and Chang Jiang Financial Holding, a wholly-owned subsidiary of Yu Shang Group, respectively. The Target Company has been approved by the Chongqing Finance Bureau ( ) to engage in the financial factoring business, with an approved business scope including factoring; accounts receivables clearance, management and collection; management of segregated sales accounts; guarantee of non-commercial bad debts relating to its business; client credit due diligence and related advisory service; re-factoring; and underwriting and sales of financial receivables. To the best of the management s understanding, the Target Company is the first and so far the only company in Chongqing to have obtained the relevant approval to conduct financial factoring business. As at the date of this announcement, the Target Company has yet to commence any business operation. INFORMATION ABOUT THE PARTIES TO THE S&P AGREEMENT The Company The Company is a leading, integrated, credit-based guarantee and SME financing solutions provider in China with an exclusive focus on SMEs and microenterprises across China. The Company offers a variety of credit-based financial solutions to service the financing and business needs of SMEs and microenterprises under two business lines: credit guarantee and SME lending. As of 31 March 2014, the Company was the largest credit guarantee company in terms of number of provinces covered by its credit guarantee network and the third-largest lender of micro and small loans in China in terms of number of provincial-level cities covered by its micro and small loan network. The Company has been listed on the Main Board of the Stock Exchange since 19 June It is one of the Company s business strategies to selectively expand into the direct offering of other capital-based financing solutions, such as factoring and financial leasing as and when considered appropriate. 4

5 Yu Shang Group Yu Shang Group is an investment holding company incorporated in the PRC, established upon the guidance of Chongqing City Chamber of Commerce ( ), focusing on investing in medium to large sized state-owned enterprises that are undergoing restructuring and SMEs in various industries, with a registered capital of approximately RMB3.1 billion. Yu Shang Group has a broad shareholder base, comprising 37 privately owned enterprises (generally with established business presence in Chongqing, including Loncin Holdings which is interested in approximately 38.7% of its equity interests) and 24 individuals. The approved business scope of Yu Shang Group includes investment business (excluding credit-based financial business), construction related business (with requisite licenses); sales of metals, construction materials and chemicals (excluding dangerous chemicals); and provision of business information and advisory services. Yu Shang Group is the sole shareholder of Chang Jiang Financial Holding which is, and will remain to be, a 10% minority shareholder of the Target Company following Completion. The approved business scope of Chang Jiang Financial Holding includes investment business; investment management; and investment advisory (excluding those restricted by relevant laws and regulations unless having requisite approvals). FINANCIAL EFFECTS OF THE ACQUISITION The Consideration was arrived at based on arm s length negotiation between the Company and Yu Shang Group with reference to the original capital contribution of Yu Shang Group in respect of the Sale Interests, and is equivalent to the proportion of the approved total registered capital of the Target Company represented by the Sale Interests. As such, the Acquisition is not expected to result in any material goodwill or material gain/loss (both before and after taxation and extraordinary items) in the financial results of the Group for the financial year in which Completion takes place. IMPLICATIONS UNDER THE LISTING RULES As at the date of this announcement, Yu Shang Group is held as to 38.7% by Loncin Holdings, a Controlling Shareholder, and accordingly is a 30%-controlled company of Loncin Holdings and a connected person of the Company. Therefore, the Acquisition constitutes connected transaction of the Company under the Listing Rules. As the applicable Percentage Ratios for the Acquisition exceed 0.1% but are less than 5%, the Acquisition is subject to announcement and reporting requirements but is exempt from independent shareholders approval requirement. 5

6 DEFINITIONS Acquisition associate Board Chang Jiang Financial Holding Company Completion connected person(s) connected transaction(s) Consideration Controlling Shareholder Director(s) Group HKD or HK$ Listing Rules Loncin Holdings Mr. Duan the acquisition of the Sale Interests by the Company pursuant to the S&P Agreement has the meaning ascribed to it in the Listing Rules the board of Directors Chongqing Chang Jiang Financial Holding Group Co., Limited ( ), a company incorporated in the PRC with limited liability and is a wholly-owned subsidiary of Yu Shang Group Hanhua Financial Holding Co., Ltd. (Stock Code: 3903) a joint stock company incorporated in the PRC with limited liability, the shares of which are listed on the Main Board of the Stock Exchange completion of the S&P Agreement pursuant to the terms and conditions therein has the meaning ascribed to it in the Listing Rules has the meaning ascribed to it in the Listing Rules the aggregate consideration for the Acquisition, being RMB270.0 million (approximately HK$337.5 million) has the meaning ascribed to it in the Listing Rules and as defined in the prospectus of the Company dated 3 June 2014 the director (s) of the Company the Company and its subsidiaries Hong Kong dollars, the lawful currency of the Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on the Stock Exchange Loncin Holdings Co., Ltd. ( ), a company incorporated in the PRC and a Controlling Shareholder, held as to 98% by Loncin Group Co., Ltd. ( ) which in turn is 98% owned by Mr. Tu Mr. Duan Xiaohua ( ), a non-executive Director 6

7 Mr. Tu Percentage Ratios PRC RMB Mr. Tu Jianhua ( ), a non-executive Director and a Controlling Shareholder has the meaning ascribed to it in Chapter 14 of the Listing Rules the People s Republic of China Renminbi, the lawful currency of the PRC S&P Agreement the share transfer agreement entered into on 1 August 2014 between the Company and Yu Shang Group in relation to the Acquisition Sale Interests SMEs Stock Exchange Target Company Yu Shang Group 90% of the equity interests of the Target Company forming the subject of the Acquisition, to be acquired by the Company from Yu Shang Group pursuant to the S&P Agreement small and medium-sized enterprises The Stock Exchange of Hong Kong Limited Chongqing Changjiang Financial Factoring Co., Ltd. * ( ), a company incorporated in the PRC with limited liability, owned as to 90% and 10% by Yu Shang Group and Chang Jiang Financial Holding respectively as at the date of this announcement Chongqing City Yu Shang Investment Holding Group Co., Limited * ( ), a company incorporated in the PRC with limited liability, and is approximately 38.7% owned by Loncin Holdings Amounts denominated in RMB in this announcement have been converted into HK$ at the rate of RMB0.80 = HK$1 for illustration purpose. Beijing, PRC, 1 August 2014 By order of the Board of Hanhua Financial Holding Co., Ltd. * Zhang Guoxiang Chairman of the Board As at the date of this announcement, the executive Directors are Mr. ZHANG Guoxiang and Mr. LIN Feng; the non-executive Directors are Mr. TU Jianhua, Mr. DUAN Xiaohua, Ms. LIU Jiaoyang, Ms. LIU Tingrong, Ms. WANG Fangfei, Mr. FENG Yongxiang, Mr. ZHOU Xinyu and Mr. LIU Bolin; and the independent non-executive Directors are Mr. BAI Qinxian, Mr. DENG Zhaoyu, Mr. QIAN Shizheng, Mr. NG Leung Sing and Mr. YUAN Xiaobin. * For identification purpose only 7