DRAGON CROWN GROUP HOLDINGS LIMITED 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.
龍翔集團控股有限公司
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 0935)The Board is pleased to announce that on 28 January 2016 (after trading hours), OHKIL, an indirect wholly-owned subsidiary of the Company entered into the Equity Purchase Agreement with SDOHK and WSDP for the Proposed Transaction of 50% equity interest in the Target Company for a total cash consideration of RMB60.85 million (equivalent to approximately HK$73.02 million).
OHKIL and SDOHK have also entered into a Shareholders' Agreement for the management and administration of the affairs of the Target Company and Weifang Liquid Terminal with effect from the granting of approval of the Approval Authority. Pursuant to the terms of the Shareholders Agreement, OHKIL and SDOHK shall each hold 50% of the registered capital of the Target Company and both parties will contribute RMB110.00 million (equivalent to approximately HK$132.00 million) to the registered capital of the Target Company in equal shares within 30 days after the issuance of the new business license of the Target Company. The Target Company is principally engaged in the construction, management and operation of Weifang Liquid Terminal at Weifang Port.
As at least one of the applicable percentage ratios calculated in accordance with the Listing Rules in relation to the Proposed Transaction together with the Capital Contribution are more than 5% but less than 25%, these transactions constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules.
The Board is pleased to announce that on 28 January 2016 (after trading hours), OHKIL, an indirect wholly-owned subsidiary of the Company entered into the Equity Purchase Agreement with SDOHK and WSDP for the Proposed Transaction of 50% equity interest in the Target Company for a total cash consideration of RMB60.85 million (equivalent to approximately HK$73.02 million).
Date: 28 January 2016SDOHK and WSDP as sellers
As at the date of these agreements, SDOHK and WSDP owns 99% and 1% equity interest of the Target Company, respectively.
To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, the sellers are third parties independent of and not connected with Company and its connected persons.
Pursuant to the Equity Purchase Agreement, SDOHK and WSDP will transfer 49% and 1% equity interest of the Target Company, respectively to OHKIL.
The Consideration for the Proposed Transaction paid to SDOHK and WSDP is RMB59.63 million (equivalent to approximately HK$71.56 million) and RMB1.22 million (equivalent to approximately HK$1.46 million), respectively. Pursuant to the Equity Purchase Agreement, the Consideration shall be paid by OHKIL in cash or immediately available funds to SDOHK and WSDP in the following manner:
To SDOHK:
a deposit in the sum of RMB5.00 million (equivalent to approximately HK$6.00 million) has been paid; and
the remaining balance in the sum of RMB54.63 million (equivalent to approximately HK$65.56 million) within 20 days after the Closing Date.
To WSDP:
1. a sum of RMB1.22 million (equivalent to approximately HK$1.46 million) within 20 days after the Closing Date.
It is expected the Consideration will be financed by the internal resources, the bank facilities and/or fund raisings of the Group.
The Consideration was arrived at after arm's length negotiations between the parties to the Equity Purchase Agreement with reference to a valuation of 100% equity interests in the Target Company of RMB101.70 million (equivalent to approximately HK$122.04 million) as at 31 August 2015 prepared by an independent valuer adopting the asset-based approach.
The Company has provided a guarantee in favour of SDOHK and WSDP in respect of the performance of OHKIL's obligations under the Equity Purchase Agreement, the Shareholders' Agreement and the articles of association of the Target Company.
Closing is subject to the fulfilment or waiver of the following conditions precedent:
the Transaction Documents are approved by and filed with the Approval Authority (if such approval is required) and the approval does not result in any material change to any of the provisions of the Transaction Documents including any further material conditions imposed on the Parties;
the registration formalities relating to the Proposed Transaction with the Registration Authority under the Equity Purchase Agreement have been completed;
no material adverse change (or effect) has taken place since the date of this Equity Purchase Agreement and prior to the Business License Issuance Date;
the sellers' warranties remain true and accurate in all material respects and not misleading in any material respect prior to the Business License Issuance Date;
no order or judgement of any court or governmental, statutory or regulatory body having been issued or made prior to the Business License Issuance Date, and no legal or regulatory requirements remaining to be satisfied, which have the effect of making unlawful or otherwise resulted in any prohibition or restriction or delay in performance of the Equity Purchase Agreement and the completion of the Proposed Transaction; and
the new business license of the Target Company recording OHKIL as a shareholder holding 50% equity interests in the Target Company has been issued.
The Conditions Precedent are required to be fulfilled or waived on or before the Business License Issuance Date. Unless otherwise agreed by the Parties in writing, if the Conditions Precedent have not been satisfied (or as the case may be, waived) on or before 5:00 p.m. on 30 June 2016, or such later date that the parties have agreed in writing, any party may terminate the Equity Purchase Agreement.
OHKIL and SDOHK have also entered into a Shareholders' Agreement for the management and administration of the affairs of the Target Company and Weifang Liquid Terminal with effect from the granting of approval by the Approval Authority of the articles of association of the Target Company. Each of OHKIL and SDOHK shall nominate three Directors to the board of the Target Company.
Pursuant to the terms of the Shareholders' Agreement, OHKIL and SDOHK shall each hold 50% of the registered capital of the Target Company and both parties will contribute RMB110.00 million (equivalent to approximately HK$132.00 million) in total to the registered capital of the Target Company in equal shares within 30 days after the issuance of the new business license of the Target Company.
OHKIL and SDOHK further agree that as of the date of the Shareholders' Agreement, SDOHK has provided shareholder's loans in the total amount of RMB100.00 million (equivalent to approximately HK$120.00 million) to the Target Company, of which RMB60.00 million (equivalent to approximately HK$72.00 million) was charged with annual interest at the rate of 6.40% per annum while the remaining RMB40.00 million (equivalent to approximately HK$48.00 million) was charged with annual interest at the rate of 6.00% per annum. OHKIL agrees to provide the same amount of shareholder's loan in the sum of RMB100.00 million (equivalent to approximately HK$120.00 million) under the same terms as SDOHK to the Target Company within 60 days after the issuance of new business license of the Target Company which officially records OHKIL as a shareholder holding 50% equity interests in the Target Company.
OHKIL and SDOHK agrees, and shall procure, that the 2.5 km embankment currently constructed and owned by the Target Company shall be transferred to WSDP as shared infrastructure of the whole Weifang Port area after the issuance of the new business license of the Target Company and the completion of the construction of and check and acceptance by competent authorities (if needed) of the embankment. The transfer price shall be the fair value of the embankment as at 31 August 2015 determined by the valuer and confirmed by both OHKIL and SDOHK. Prior to activating the said embankment transfer transaction, the Target Company and WSDP shall enter into a 30-year agreement in order to ensure the Target Company and its clients are entitled to full and free access of the road that is built along the embankment (or the complete length of the embankment deemed to be extended in the future) on condition that the Target Company fulfils its obligation to pay WSDP an annual charge of RMB4.45 million (equivalent to approximately HK$5.34 million) (price adjustment allowable every 3 years in consideration of the maintenance cost incurred).
Save as disclosed above, OHKIL is not required to provide any funding under the Shareholders' Agreement. Only when the shareholders of the Target Company unanimously agree that funding shall be provided for the expansion of bulk liquid handling and storage terminal, such funding shall be provided on such terms as the shareholders unanimously agree.
The Proposed Transaction will enable the Group to become investors in Weifang Liquid Terminal, which is a state-of-the-art terminal project that is dedicated to meet the highest safety requirements for bulk oil and chemicals storage and distribution in Weifang Port. It is located at a gateway to North-eastern Asian economic powerhouses such as South Korea and Japan and a strategic interchange between Bohai Economic Basin and Yangtze Economic Basin.
Dragon Crown Group Holdings Ltd. issued this content on 28 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 10:44:13 UTC
Original Document: http://iis.quamnet.com/media/IRAnnouncement/935/EN_US/002420982-0.PDF
