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.
中國遠洋控股股份有限公司 China COSCO Holdings Company Limited * (a joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock code: 1919)
DISCLOSEABLE AND CONNECTED TRANSACTION — COSCO KHI SHIPBUILDING AGREEMENTS DISCLOSEABLE TRANSACTIONS — CSSC SHIPBUILDING AGREEMENTS AND CSIC SHIPBUILDING AGREEMENTS On 9 September 2015: (i) the Group entered into the DACKS Shipbuilding Agreements, pursuant to which DACKS have agreed to build, launch, equip and complete at the shipyard of DACKS and to sell and deliver to the relevant First COSCO Entities two 19,000 TEU container vessels at an aggregate consideration of US$270,600,000; (ii) the Group entered into the NACKS Shipbuilding Agreements, pursuant to whcih NACKS have agreed to build, launch, equip and complete at the shipyard of NACKS and to sell and deliver to the relevant First COSCO Entities four 19,000 TEU container vessels, at an aggregate consideration of US$541,200,000; (iii) the Group entered into the CSSC Shipbuilding Agreements, pursuant to which China Shipbuilding Trading and Waigaoqiao Shipbuilding have agreed to build, launch, equip and complete at the shipyard of Waigaoqiao Shipbuilding and to sell and deliver to the Second COSCO Entities three 19,000 TEU container vessels at an aggregate consideration of US$418,500,000; and
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(iv) the Group entered into the CSIC Shipbuilding Agreements, pursuant to which CSOC and Dalian Shipbuilding have agreed to build, launch, equip and complete at the premise of Dalian Shipbuilding and to sell and deliver to the Third COSCO Entities two 19,000 TEU container vessels at an aggregate consideration of US$279,000,000. As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the COSCO KHI Shipbuilding Agreements exceed 5% but are all below 25%, the entering into of the COSCO KHI Shipbuilding Agreements constitutes a discloseable transaction of the Company subject to the announcement requirement under Chapter 14 of the Listing Rules. In addition, DACKS is an indirect subsidiary of COSCO (the controlling shareholder of the Company) and NACKS is an associate of COSCO in which COSCO holds an indirect 50% equity interest and hence both DACKS and NACKS are connected persons of the Company. As such, the entering into of the COSCO KHI Shipbuilding Agreements also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules, which is subject to the reporting, announcement and independent shareholders’ approval requirements. As one or more of the applicable percentage ratios in respect of the CSSC Shipbuilding Agreements, exceed 5% but are all below 25%, the entering into of the CSSC Shipbuilding Agreements constitutes a discloseable transaction for the Company subject to the announcement requirement under Chapter 14 of the Listing Rules. As one or more of the applicable percentage ratios in respect of the CSIC Shipbuilding Agreements, exceed 5% but are all below 25%, the entering into of the CSIC Shipbuilding Agreements constitutes a discloseable transaction for the Company subject to the announcement requirement under Chapter 14 of the Listing Rules. DISCLOSEABLE AND CONNECTED TRANSACTION SHIPBUILDING AGREEMENTS Date 9 September 2015 Parties (a) First COSCO Entities (as buyers); and (b) DACKS and NACKS (as sellers). — 2 —
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COSCO
KHI
Subject matter Pursuant to the DACKS Shipbuilding Agreements, DACKS have agreed to build, launch, equip and complete at the shipyard of DACKS and to sell and deliver to the relevant First COSCO Entities two 19,000 TEU container vessels at an aggregate consideration of US$270,600,000. Pursuant to the NACKS Shipbuilding Agreements, NACKS have agreed to build, launch, equip and complete at the shipyard of NACKS and to sell and deliver to the relevant First COSCO Entities four 19,000 TEU container vessels, at an aggregate consideration of US$541,200,000. Consideration and payment terms The consideration for each 19,000 TEU container vessel is US$135,300,000 and the aggregate consideration for the purchase of six 19,000 TEU container vessels is US$811,800,000. The consideration is subject to adjustment in the event of: (i) delay in delivery of any vessel; (ii) deficiency in the actual speed of any vessel; (iii) excessive fuel consumption of any vessel; (iv) deficiency in the actual deadweight of any vessel; or (v) deficiency in the number of TEU containers of any vessel. Under each of the DACKS Shipbuilding Agreements and NACKS Shipbuilding Agreements, the relevant First COSCO Entity shall pay the consideration of US$135,300,000 in installments in accordance with construction progress of the relevant type vessel. Condition precedent The COSCO KHI Shipbuilding Agreements shall become effective upon, among other things, the approval of the Independent Shareholders at an extraordinary general meeting of the Company. Delivery Delivery of the six 19,000 TEU container vessels is scheduled to be made in 2018, subject to the advancement and delay of time for delivery clauses in each of the COSCO KHI Shipbuilding Agreements.
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IMPLICATIONS UNDER THE LISTING RULES As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the COSCO KHI Shipbuilding Agreements exceed 5% but are all below 25%, the entering into of the COSCO KHI Shipbuilding Agreements constitutes a discloseable transaction of the Company subject to the announcement requirement under Chapter 14 of the Listing Rules. In addition, DACKS is an indirect subsidiary of COSCO (the controlling shareholder of the Company) and NACKS is an associate of COSCO in which COSCO holds an indirect 50% equity interest and hence both DACKS and NACKS are connected persons of the Company. As such, the entering into of the COSCO KHI Shipbuilding Agreements also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules, which is subject to the reporting, announcement and independent shareholders’ approval requirements. DISCLOSEABLE TRANSACTIONS CSSC SHIPBUILDING AGREEMENTS Date 9 September 2015 Parties (a) Second COSCO Entities (as buyers); and (b) China Shipbuilding Trading and Waigaoqiao Shipbuilding (as sellers). Subject matter Pursuant to the CSSC Shipbuilding Agreements, China Shipbuilding Trading and Waigaoqiao Shipbuilding have agreed to build, launch, equip and complete at the shipyard of Waigaoqiao Shipbuilding and to sell and deliver to the Second COSCO Entities three 19,000 TEU container vessels at an aggregate consideration of US$418,500,000. Consideration and payment terms The consideration for each 19,000 TEU container vessel is US$139,500,000 and the aggregate consideration for the purchase of three 19,000 TEU container vessels is US$418,500,000. — 4 —
The consideration is subject to adjustment in the event of: (i) delay in delivery of any vessel; (ii) deficiency in the actual speed of any vessel; (iii) excessive fuel consumption of any vessel; (iv) deficiency in the actual deadweight of any vessel; (v) deficiency in the number of TEU containers of any vessel; or (vi) or deficiency in the number of 14 tonne container loading of any vessel. Under each of the CSSC Shipbuilding Agreements, the relevant Second COSCO Entity shall pay the consideration of US$139,500,000 in installments in accordance with construction progress of the relevant vessel. Condition precedent The CSSC Shipbuilding Agreements shall be effective upon, among other things, the approval of the Shareholders at an extraordinary general meeting of the Company. Delivery Delivery of the three 19,000 TEU container vessels is scheduled to be made in 2018, subject to the advancement and delay of time for delivery clauses in each of the CSSC Shipbuilding Agreements. IMPLICATIONS UNDER THE LISTING RULES As one or more of the applicable percentage ratios in respect of the CSSC Shipbuilding Agreements, exceed 5% but are all below 25%, the entering into of the CSSC Shipbuilding Agreements constitutes a discloseable transaction for the Company subject to the announcement requirement under Chapter 14 of the Listing Rules. CSIC SHIPBUILDING AGREEMENTS Date 9 September 2015 Parties (a) Third COSCO Entities (as buyers); and (b) CSOC and Dalian Shipbuilding (as sellers). Subject matter Pursuant to the CSIC Shipbuilding Agreements, CSOC and Dalian Shipbuilding have agreed to build, launch, equip and complete at the premise of Dalian Shipbuilding and to sell and deliver to the Third COSCO Entities two 19,000 TEU container vessels at an aggregate consideration of US$279,000,000. — 5 —
Consideration and payment terms The consideration for each container vessel is US$139,500,000 and the aggregate consideration for the purchase of two 19,000 TEU container vessels is US$279,000,000. The consideration is subject to adjustment in the event of: (i) delay in delivery of any vessel; (ii) deficiency in the actual speed of any vessel; (iii) excessive fuel consumption of any vessel; (iv) deficiency in the actual deadweight of any vessel; (v) deficiency in the number of TEU containers of any vessel; or (vi) deficiency in the number of 14 tonne container loading of any vessel. Under each of the CSIC Shipbuilding Agreements, the relevant Third COSCO Entity shall pay the consideration of US$139,500,000 in installments in accordance with construction progress of the relevant vessel. Condition precedent The CSIC Shipbuilding Agreements shall become effective upon, among other things, the approval of the Shareholders at an extraordinary general meeting of the Company. Delivery Delivery of the two 19,000 TEU container vessels is scheduled to be made in 2018, subject to the advancement and delay of time for delivery clauses in each of the CSIC Shipbuilding Agreements. IMPLICATIONS UNDER THE LISTING RULES As one or more of the applicable percentage ratios in respect of the CSIC Shipbuilding Agreements, exceed 5% but are all below 25%, the entering into of the CSIC Shipbuilding Agreements constitutes a discloseable transaction for the Company subject to the announcement requirement under Chapter 14 of the Listing Rules. REASONS FOR AND BENEFITS OF ENTERING INTO THE SHIPBUILDING AGREEMENTS The Company entered into the Shipbuilding Agreements in order to improve the shipping capacity of the fleets of container vessels of the Company and upgrade the fleets. The consideration payable by the Group under the Shipbuilding Agreements was arrived at after arm’s length negotiations between the parties. The consideration was determined principally based on the prevailing market price for the purchase of similar vessels. — 6 —
The Company will finance the consideration payable under the Shipbuilding Agreements from internal resources and bank borrowings. DIRECTORS’ CONFIRMATION Mr. Ma Zehua, Mr. Li Yunpeng, Ms. Sun Yueying, Mr. Sun Jiakang, Mr. Ye Weilong, Mr. Wang Yuhang, Mr. Wan Min and Mr. Jiang Lijun are Directors nominated by COSCO and have therefore abstained from voting on the relevant resolution of the Board approving the transactions under the COSCO KHI Shipbuilding Agreements pursuant to the articles of association of the Company. Save as disclosed above, none of the Directors has a material interest in the transactions under the Shipbuilding Agreements. Other than the abovementioned Directors, the remaining Directors are the independent non-executive Directors who will express their view after receiving advice from the Independent Financial Adviser in respect of the COSCO KHI Shipbuilding Agreements. The Directors (including independent non-executive Directors) consider that the terms of the CSSC Shipbuilding Agreements and CSIC Shipbuilding Agreements are fair and reasonable, and in the interests of the Group and the Shareholders as a whole. INFORMATION ABOUT THE GROUP The Company was established in the PRC on 3 March 2005. The Group provides a wide range of container shipping, dry bulk shipping, terminal and container leasing services covering the whole shipping value chain for both international and domestic customers. INFORMATION ABOUT THE PARTIES TO THE SHIPBUILDING AGREEMENTS Each of the COSCO Entities is a single-vessel holding company incorporated in Hong Kong and a wholly-owned subsidiary of COSCO Asset Management. COSCO Asset Management is a company incorporated in Hong Kong and a wholly-owned subsidiary of the Company. It is principally engaged in asset management and investment holdings. DACKS is a company established in the PRC and an indirect subsidiary of COSCO. It is principally engaged in the business of design, manufacturing, sales and repairing of ships (excluding military ships). — 7 —
NACKS is a company established in the PRC and an associate of COSCO, indirectly held as to 50% by COSCO and 50% by KHI. It is principally engaged in the business of manufacturing, sales and repairing of ships (including trial-run for self-built ships). COSCO and its subsidiaries are principally engaged in the businesses of marine transportation, which includes shipping, logistics, ship building and repairing, terminal operations, ship financing and trading, as well as the operation of container vessels, dry bulk carriers, oil tankers and specialized cargo ships. To the best of the knowledge of the Directors, China Shipbuilding Trading is a company established in the PRC principally engaged in military products trading, international marketing of civilian vessels, import of technologies, equipment and materials, export of electromechanical products such as marine equipment and international engineering contracting. It is the major platform for foreign trade and cooperation of CSSC. To the best of the knowledge of the Directors, Waigaoqiao Shipbuilding is a company established in the PRC principally engaged in shipbuilding and offshore engineering business. It is a subsidiary of CSSC. To the best of the knowledge of the Directors, CSOC is a company established in the PRC principally engaged in international marketing of civilian ships, the import of technology, equipment and materials, the export of electromechanical products such as shipping facilities and international engineering contracting. It is the major platform for foreign trade and cooperation of CSIC. To the best of the knowledge of the Directors, Dalian Shipbuilding is a company established in the PRC principally engaged in the business of development, design, manufacturing, repairing, renovation and sales of ships, offshore engineering and ancillary equipment. It is a wholly-owned subsidiary of CSIC. To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, each of China Shipbuilding Trading, Waigaoqiao Shipbuilding, CSOC, Dalian Shipbuilding and their respective ultimate beneficial owners is an independent third party and not a connected person (as defined in the Listing Rules) of the Company.
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SHAREHOLDERS’ APPROVAL FOR THE CSSC SHIPBUILDING AGREEMENTS AND THE CSIC SHIPBUILDING AGREEMENTS Pursuant to the relevant requirements of the Shanghai Listing Rules and the articles of association of the Company, if the aggregate consideration under a series of shipbuilding agreements completed within a consecutive 12-month period exceeds 50% of the audited net asset value of the Group under its latest audited financial statements, the entering into of such shipbuilding agreements shall require approval of Shareholders at a general meeting of the Company. As the applicable percentage ratios in respect of CSSC Shipbuilding Agreements and CSIC Shipbuilding Agreements are all below 25% respectively, the CSSC Shipbuilding Agreements and the CSIC Shipbuilding Agreements are not subject to shareholders’ approval under Chapter 14 of the Listing Rules. However, pursuant to the above-mentioned requirements of the Shanghai Listing Rules, an ordinary resolution will be proposed at the EGM to consider, and if thought fit, approve the CSSC Shipbuilding Agreements and the CSIC Shipbuilding Agreements. EXTRAORDINARY GENERAL MEETING The EGM will be held by the Company for the Shareholders to consider, and if thought fit, passing the ordinary resolutions to approve, inter alia, the COSCO KHI Shipbuilding Agreements and the CSSC Shipbuilding Agreements and the CSIC Shipbuilding Agreements. In accordance with the Listing Rules, COSCO and its associates, being connected persons of the Company and having a material interest in the COSCO KHI Shipbuilding Agreements, which together hold 5,318,082,844 A Shares and 81,179,500 H Shares, representing approximately 52.85% of the issued share capital of the Company as of the date of this announcement, will abstain from voting at the EGM on the resolution to approve the COSCO KHI Shipbuilding Agreements. Save as disclosed above, to the best of the knowledge, information and belief of the Directors and having made all reasonable enquires, none of the Shareholders has any material interest in the COSCO KHI Shipbuilding Agreements and the CSSC Shipbuilding Agreements and the CSIC Shipbuilding Agreements and accordingly, none of the Shareholders is required to abstain from voting on the relevant resolutions to be proposed at the EGM. An Independent Board Committee comprising all independent non-executive Directors has been established to advise the Independent Shareholders in respect of terms of the COSCO KHI Shipbuilding Agreements. The Company has appointed the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard. — 9 —
A circular containing, among other things, further details of the COSCO KHI Shipbuilding Agreements, a letter of advice from the Independent Board Committee and a letter of recommendation from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the COSCO KHI Shipbuilding Agreements will be dispatched to the Shareholders on or before 2 October 2015. A notice of the EGM is expected to be despatched to the Shareholders on or around 11 September 2015. DEFINITIONS “19,000 TEU”
the actual capacity of the vessels varying from 19,000 TEU to 20,000 TEU
“associate”
has the meaning ascribed thereto in the Listing Rules
“Board”
the board of Directors
“China Shipbuilding Trading”
China Shipbuilding Trading Company Limited* (中國船 舶工業貿易公司), a company established in the PRC and the major platform for the foreign trade and cooperation of CSSC
“Company”
China COSCO Holdings Company Limited* (中國遠洋 控股股份有限公司), a joint stock limited company incorporated in the PRC with limited liability, the H Shares of which are listed on the Stock Exchange and the A Shares of which are listed on the Shanghai Stock Exchange
“COSCO”
China Ocean Shipping (Group) Company* (中國遠洋運 輸(集團)總公司), a Chinese state-owned enterprise, the controlling Shareholder currently owning an aggregate of 52.85% of the total registered capital of the Company (including A Shares and H Shares)
“COSCO Asset Management”
COSCO Asset Management Limited (中遠資產管理有限 公司), a company incorporated under the laws of Hong Kong and a wholly-owned subsidiary of the Company
“COSCO Entities”
the First COSCO Entities, the Second COSCO Entities and the Third COSCO Entities
“COSCO KHI Shipbuilding Agreements”
collectively, the DACKS Shipbuilding Agreements and the NACKS Shipbuilding Agreements
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“CSIC”
China Shipbuilding Industry Corporation* (中國船舶重 工集團公司), a company established in the PRC
“CSIC Shipbuilding Agreements”
the shipbuilding agreements dated 9 September 2015 entered into between the Third COSCO Entities as buyers and CSOC and Dalian Shipbuilding as sellers for the construction and sale of two 19,000 TEU container vessels
“CSOC”
China Shipbuilding & Offshore International Co., Ltd.* (中國船舶重工國際貿易有限公司), a company established in the PRC and a subsidiary of CSIC
“CSSC”
China State Shipbuilding Corporation* (中國船舶工業 集團公司), a company established in the PRC
“CSSC Shipbuilding Agreements”
the shipbuilding agreements dated 9 September 2015 entered into between the Second COSCO Entities as buyers and China Shipbuilding Trading and Waigaoqiao Shipbuilding as sellers for the construction and sale of three 19,000 TEU container vessels
“DACKS”
Dalian COSCO KHI Ship Engineering Co., Ltd* (大連 中遠川崎船舶工程有限公司), a company established in the PRC and an indirect subsidiary of COSCO
“DACKS Shipbuilding Agreements”
the shipbuilding agreements dated 9 September 2015 entered into between the relevant First COSCO Entities as buyers and DACKS as seller for the construction and sale of two 19,000 TEU container vessels
“Dalian Shipbuilding”
Dalian Shipbuilding Industry Co., Ltd.* (大連船舶重工 集團有限公司), a company established in the PRC and a wholly-owned subsidiary of CSIC
“Director(s)”
director(s) of the Company
“DWT”
deadweight tons
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“EGM”
the extraordinary general meeting of the Company to be held at Conference Room, 47th Floor, COSCO Tower, 183 Queen’s Road, Central, Hong Kong and Conference Centre, Ocean Plaza, 158 Fuxingmennei Avenue, Xicheng District, Beijing, the PRC on Wednesday, 28 October 2015 at 2:30 p.m. for the Shareholders to consider and approve the COSCO KHI Shipbuilding Agreements and the CSSC Shipbuilding Agreements and the CSIC Shipbuilding Agreements
“First COSCO Entities”
COSCO Grand Shipping Limited, COSCO Magnificence Shipping Limited, COSCO Valiance Shipping Limited, COSCO Achievement Shipping Limited, COSCO Endeavour Shipping Limited and COSCO Legend Shipping Limited, all of which are single-vessel holding companies incorporated in Hong Kong and wholly-owned subsidiaries of COSCO Asset Management, and hence wholly-owned subsidiaries of the Company
“Group”
the Company and its subsidiaries
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“Independent Board Committee”
the independent committee of the Board comprising Dr. FAN HSU Lai Tai, Rita, Mr. KWONG Che Keung, Gordon, Mr. Peter Guy BOWIE and Mr. YANG, Liang Yee Philip, all being independent non-executive Directors
“Independent Financial Adviser”
Platinum Securities Company Limited, a licensed corporation under the SFO licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the COSCO KHI Shipbuilding Agreements
“Independent Shareholders”
Shareholders other than COSCO and its associates
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“KHI”
Kawasaki Heavy Industries, incorporated in Japan
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“NACKS”
Nantong COSCO KHI Ship Engineering Co., Ltd* (南通 中遠川崎船舶工程有限公司), a company established in the PRC and a company owned as to 50% by COSCO and as to 50% by KHI
“NACKS Shipbuilding Agreements”
the shipbuilding agreements dated 9 September 2015 entered into between the relevant First COSCO Entities as buyers and NACKS as seller for the construction and sale of four 19,000 TEU container vessels
“PRC”
the People’s Republic of China
“RMB”
Renminbi, the lawful currency of the PRC
“Second COSCO Entities”
COSCO Creation Shipping Limited, COSCO Wisdom Shipping Limited and COSCO Explorer Shipping Limited, all of which are single-vessel holding companies incorporated in Hong Kong and wholly-owned subsidiaries of COSCO Asset Management, and hence wholly-owned subsidiaries of the Company
“SFO”
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Shanghai Listing Rules”
the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange
“Share(s)”
ordinary share(s) (including A share(s) and H share(s) of the Company) of RMB1.00 each in the issued share capital of the Company
“Shareholder(s)”
holder(s) of the Shares
“Shipbuilding Agreements”
the COSCO KHI Shipbuilding Agreements, the CSSC Shipbuilding Agreements and the CSIC Shipbuilding Agreements
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
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Ltd.,
a
company
“TEU”
twenty-foot equivalent unit, a standard unit of measurement of the volume of a container with a length of 20 feet, height of 8 feet and 6 inches and width of 8 feet
“Third COSCO Entities”
COSCO Luck Shipping Limited and COSCO Happiness Shipping Limited, both of which are single-vessel holding companies incorporated in Hong Kong and wholly-owned subsidiaries of COSCO Asset Management, and hence wholly-owned subsidiaries of the Company
“US$”
United States dollars, the lawful currency of the United States of America
“Waigaoqiao Shipbuilding”
Shanghai Waigaoqiao Shipbuilding Company Limited* (上海外高橋造船有限公司), a company established in the PRC and a subsidiary of CSSC
“%”
per cent By Order of the Board China COSCO Holdings Company Limited Guo Huawei Company Secretary
Beijing, the People’s Republic of China 9 September 2015 As at the date of this announcement, the directors of the Company are Mr. MA Zehua 2 (Chairman), Mr. LI Yunpeng 1 (Vice Chairman), Ms. SUN Yueying 2 , Mr. SUN Jiakang 1 , Mr. YE Weilong 1 , Mr. WANG Yuhang 2 , Mr. WAN Min 2 , Mr. JIANG Lijun 1 (President), Dr. FAN HSU Lai Tai, Rita 3 , Mr. KWONG Che Keung, Gordon 3 , Mr. Peter Guy BOWIE 3 and Mr. YANG, Liang Yee Philip 3 . 1
Executive director
2
Non-executive director
3
Independent non-executive director
* For identification purpose only
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