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.

中國國際海運集裝箱(集團)股份有限公司

CHINAINTERNATIONALMARINECONTAINERS(GROUP)CO.,LTD.

(A company incorporated in the People's Republic of China)

(Stock Code: 2039)

DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTIONS

Reference is made to the announcements of the Company dated 24 August 2016, 11 November 2016, 25 November 2016 and 29 March 2018 and the circular of the Company dated 18 May 2018 in respect of, among other things, the continuing connected transactions under the Existing Framework Agreement and the Supplementary Agreement entered into between the Company and COSCO SHIPPING on 11 November 2016 and 29 March 2018.

As the Existing Framework Agreement and the Supplementary Agreement will expire on 31 December 2019, and the Group expects to continue carrying out from time to time transactions of a similar nature to those under the Existing Framework Agreement and the Supplementary Agreement, on 30 October 2019, the Company entered into the New Framework Agreement with COSCO SHIPPING to set the new annual caps for the years ending 31 December 2020, 2021 and 2022.

HONG KONG LISTING RULES IMPLICATIONS

COSCO SHIPPING is an indirect holding company of Long Honour Investments Limited and COSCO Container Industries Limited, which are substantial Shareholders of the Company. COSCO SHIPPING, through Long Honour Investments Limited and COSCO Container Industries Limited, holds 22.71% of the issued share capital of the Company as at the date of this announcement. Accordingly, under Chapter 14A of the Hong Kong Listing Rules, COSCO SHIPPING and its subsidiaries, each being an associate of Long Honour Investments Limited and COSCO Container Industries Limited, are connected persons of the Company and the transactions contemplated under the New Framework Agreement constitute continuing connected transactions of the Company.

On 30 October 2019, the Board has considered and approved the Resolution Regarding the Continuing Connected Transactions/Ordinary Related-party Transactions with COSCO SHIPPING Development Co., Ltd. at the tenth Board meeting in 2019. As non-executive Directors, Mr. LIU Chong and Mr. MING Dong, hold positions in COSCO SHIPPING and its associates, they are considered to have material interests in the Continuing Connected Transactions (including the New Annual Caps), and therefore have abstained from voting on the relevant Board resolution. Save as disclosed above, none of the Directors has a material interest in the approval of the Continuing Connected Transactions (including the New Annual Caps) contemplated under the New Framework Agreement.

1

As one or more applicable percentage ratios (within the meaning of the Hong Kong Listing Rules) in respect of the proposed Annual Caps under the New Framework Agreement are more than 5% but all less than 25%, the proposed Annual Caps constitute discloseable transactions and non-exempt continuing connected transactions of the Company which shall be subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules, and the reporting, announcement, circular and independent Shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules.

The Company will convene the Shareholders' meeting as and when appropriate. As Long Honour Investments Limited and COSCO Container Industries Limited are the wholly-owned subsidiaries of COSCO SHIPPING, they, therefore, have a material interest in the resolution of entering into the New Framework Agreement. Thus, Long Honour Investments Limited and COSCO Container Industries Limited will abstain from voting on the relevant resolution in the Shareholders' meeting. The Directors, including independent non-executive Directors but excluding the Directors who abstain from voting, are of the view that the New Framework Agreement is determined on normal commercial terms on arm's length basis in the ordinary and usual course of business of the Group with terms which are fair and reasonable, and in the interest of the Company and the Shareholders as a whole.

A circular containing, among other things, the details of the New Framework Agreement will be despatched to the Shareholders no later than 19 November 2019.

BACKGROUND

Reference is made to the announcements of the Company dated 11 November 2016, 25 November 2016 and 29 March 2018 and the circular of the Company dated 18 May 2018 in respect of the continuing connected transactions under the Existing Framework Agreement and the Supplementary Agreement entered into between the Company and COSCO SHIPPING on 11 November 2016 and 29 March 2018.

As the Existing Framework Agreement and the Supplementary Agreement will expire on 31 December 2019, on 30 October 2019, the Company entered into the New Framework Agreement with COSCO SHIPPING to continue the Continuing Connected Transactions thereunder and set the new annual caps for the years ending 31 December 2020, 2021 and 2022.

NEW FRAMEWORK AGREEMENT

On 30 October 2019, the Company and COSCO SHIPPING entered into the New Framework Agreement in relation to the renewal of the Continuing Connected Transactions under the New Framework Agreement. Each transaction under the New Framework Agreement will be conducted in the ordinary and usual course of business of the Group and will continue to be agreed on an arm's length basis with terms which are fair and reasonable to the Group.

2

Principal terms of the New Framework Agreement

Date

30 October 2019

Parties

  1. The Company (for itself and on behalf of its subsidiaries) as supplier; and
  2. COSCO SHIPPING (for itself and on behalf of its subsidiaries) as purchaser.

Nature of the transaction

The Group agreed to supply commodities, including but not limited to containers, to the COSCO SHIPPING Group in accordance with the New Framework Agreement. Subject to the provisions of the New Framework Agreement, relevant members of the COSCO SHIPPING Group will enter into specific agreements separately with relevant members of the Group to set out the specific terms and conditions in respect of the supply of commodities.

Pricing Policies

In accordance with the New Framework Agreement, the pricing policies and basis of the Continuing Connected Transactions between the Company and COSCO SHIPPING Group are:

  1. where the bidding process is required, the bidding price shall prevail.
    Such pricing policy is used in the supply of commodities, including but limited to containers, by the Group to the COSCO SHIPPING Group when a bidding process is adopted by the COSCO SHIPPING Group and where members of the Group may be invited by the COSCO SHIPPING Group to participate in the bidding process. In general, not less than three suppliers are invited for each bidding process and factors including pricing, product quality, level of services and qualification of suppliers are comprehensively considered by the COSCO SHIPPING Group in selecting the successful supplier(s). The bidding price is proposed by the business department of the relevant member of the Group, as bidder, with reference to factors such as the historical prices and future trends of relevant commodities, prices of similar commodities offered to third parties, production cost, raw material prices and production capacity, subject to its management's approval.
  2. where there is no bidding process, the price shall be determined with reference to the market price (including the comparable local, domestic or international market price) based on the commodities' type and quality. The respective business departments of the Group and COSCO SHIPPING Group shall collect the market price information through independent third parties such as industry associations; or

3

Such pricing policy is used in the supply of containers and others by the Group to the COSCO SHIPPING Group when no bidding process is adopted by the COSCO SHIPPING Group. The parties will negotiate and determine the relevant commodity price with reference to the comparable market prices. In this regard, the business department of the Group updates the comparable market prices from time to time by collecting (i) market information published

by independent industry associations and institutes, such as China Container Industry Association (中國集裝箱行業協會), Shanghai Shipping Freight Exchange Co., Ltd. (上海航 運運價交易有限公司), Chinese Shipping.com (中華航運網), and Clarksons, and (ii) publicly

disclosed pricing information of the Group's competitors, and reports the market prices to its management as a pricing determination reference. In addition, the operation department of the Group reviews the profit contribution of different customers by carrying out periodic comprehensive analysis in respect of the profitability of similar commodities provided to different customers, including the COSCO SHIPPING Group and independent third parties. The result of such analysis will be obtained by the business department as a reference when adjusting pricing determination.

  1. where neither of the above prices is applicable nor where it is practicable to apply the above pricing policies, the Group will negotiate with the COSCO SHIPPING Group on arm's length basis after considering the cost, technology, quality and volume of the commodities and the historical prices of the relevant commodities which the prices and terms will not be less favorable to the Group than those of similar commodities offered by the Group to independent third parties.
    In the less probable event where it is not practicable to offer a bidding process and where comparable market price is not available, the Group will negotiate with the COSCO SHIPPING Group on arm's length basis after considering the costs of major raw materials (such as steel and paint), manufacturing technology, product quality, product volume and the historical prices of the relevant commodities. In such cases, the Group will conduct customer analysis to compare and evaluate the prices and terms of similar commodities supplied to different customers, including the COSCO SHIPPING Group and other independent third parties, to ensure that the prices and terms of the commodities supplied to the COSCO SHIPPING Group will not be less favorable to the Group than those of similar commodities offered by the Group to independent third parties. Since the commodities supplied by the Group are competitive products in open markets, as of the date of this announcement, commodities supplied by the Group to the COSCO SHIPPING Group have been priced by using the pricing methods stated in (1) and (2) above.

The Group adopts the same pricing policies as mentioned above when supplying commodities to the COSCO SHIPPING Group and to other independent third parties. To ensure the Continuing Connected Transactions will be conducted on normal commercial terms, at prices and terms no less favourable to the Group than those of similar commodities offered by the Group to independent third parties, and are fair and reasonable and in the interests of the Group and the Shareholders as a whole, the Group regularly reviews and monitors the gross profit margins of the commodities supplied by the Group to different customers, including the COSCO SHIPPING Group, and compares them against the industry's norm.

In order to ensure the Continuing Connected Transactions will be conducted on normal commercial terms and in the interests of the Group and the Shareholders as a whole, the Group regularly reviews and monitors the gross profit margins of the commodities supplied by the Group and compares them against the industry's benchmarks. The Group also conducts monthly reviews of the profit level of the commodities supplied to the COSCO SHIPPING Group.

4

Payments

Payments will be made in accordance with the terms in the specific agreements to be entered into between relevant members of the COSCO SHIPPING Group and the relevant members of the Group under the New Framework Agreement.

Generally, the Group will offer a credit term of not more than 60 days from inspection upon delivery but may from time to time adjust such terms taking into account of generally accepted market terms. Payments shall be made by telegraphic transfer, bank draft or other payment methods generally acceptable in the industry.

Term and Termination

The New Framework Agreement is valid for three years commencing from 1 January 2020 to 31 December 2022 (both dates inclusive).

During the term of the New Framework Agreement, the parties may, upon giving not less than three months' prior written notice to the other party, terminate any specific agreements under the New Framework Agreement or the New Framework Agreement.

HISTORICAL TRANSACTION AMOUNTS UNDER THE EXISTING FRAMEWORK AGREEMENT

Set out below were the historical transaction amounts for the supply of commodities to the COSCO SHIPPING Group from the Group under the Existing Framework Agreement for the two years ended 31 December 2017 and 2018 and for the nine months ended 30 September 2019, which did not exceed the approved annual caps as set out in the announcement of the Company dated 11 November 2016:

(Unit: RMB' 000)

For the year

For the year

For the nine

ended 31

ended 31

months ended 30

December 2017

December 2018

September 2019

Historical transaction amounts

785,052

1,385,531

82,852

5

NEW ANNUAL CAPS AND BASIS FOR DETERMINING THE NEW ANNUAL CAPS

The amounts of the New Annual Caps in respect of the Continuing Connected Transactions for the three years ending 31 December 2020, 2021 and 2022 are set out as below:

(Unit: RMB' 000)

For the year

For the year

For the year

ending 31

ending 31

ending 31

December 2020

December 2021

December 2022

New Annual Caps

2,300,000

2,700,000

3,000,000

Basis for Determining the New Annual Caps

The New Annual Caps have been negotiated and determined by the parties with reference to, among other things, the following factors:

  1. the historical transaction amounts for the sales of commodities under the Existing Framework Agreements by the Group to the COSCO SHIPPING Group for the year of 2017 and 2018 and from January to September 2019;
  2. the estimated demand of the Group's commodities of the COSCO SHIPPING Group for the years of 2020, 2021 and 2022 derived from the expected development of the global economy, the international trade and cargo transportation; and
  3. the estimated price fluctuation of commodities, such as containers, caused by the price change of raw materials.

REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS

The COSCO SHIPPING Group is principally engaged in diversified leasing businesses such as vessel leasing, container leasing and other sector-related leasing as well as manufacturing of containers and financial investments. The Group has established long-term reliable business relationship with COSCO SHIPPING Group, including but not limited to Florens Container Holdings Limited. Entering into the New Framework Agreement and continuing to carry out the Continuing Connected Transactions are in line with the actual needs for the operation and development of the Group's principal businesses, including the container manufacturing business, which will not prejudice the interests of the Company and the Shareholders of, especially the minority Shareholders, nor adversely affect the independence of the Company. Conducting such transactions will not give rise to reliance of the principal businesses of the Company on related parties. The price and terms with respect to the commodities supplied by the Group to the COSCO SHIPPING Group under the New Framework Agreement shall be determined under a fair and reasonable basis and not be less favorable to the Group than those of similar commodities supplied by the Group to independent third parties.

The Directors (including the independent non-executive Directors but excluding the Directors who have to abstain from voting) consider that the New Framework Agreement was entered into on normal commercial terms on arm's length basis in the ordinary and usual course of business of the Group with terms which are fair and reasonable, and in the interest of the Company and the Shareholders as a whole.

6

INTERNAL CONTROL MEASURES

The Company has established a series of measures and policies, including contract policies, connected transaction management measures and internal control assessment management measures, to ensure that the Continuing Connected Transactions will be conducted in accordance with the New Framework Agreement. The Company's auditing and monitoring department will conduct irregular internal assessments on the internal control measures of the Company to ensure that the internal control measures in respect of the Continuing Connected Transactions remain comprehensive and effective, and report the assessment results to the audit committee under the Board, the Board itself and the supervisory committee. The Company's external auditors will conduct an annual audit on the Company's internal control measures and an annual review on the Continuing Connected Transactions pursuant to the requirements under the Hong Kong Listing Rules.

GENERAL INFORMATION OF THE PARTIES TO THE CONTINUING CONNECTED TRANSACTIONS

The Company is a joint stock company with limited liability established in the PRC, the H Shares and A Shares of which are listed on the Main Board of the Hong Kong Stock Exchange and the Shenzhen Stock Exchange, respectively. The Group is principally engaged in the manufacture of containers, road transportation vehicles, energy, chemical and liquid food equipment, offshore engineering, logistics service, airport equipment, etc.

COSCO SHIPPING is a joint stock company with limited liability established under the laws of the PRC, the H Shares of which are listed on the Main Board of the Hong Kong Stock Exchange and the A Shares of which are listed on the Shanghai Stock Exchange. The COSCO SHIPPING Group is principally engaged in shipping and industry-related leasing businesses, manufacturing of containers and provision of investment and financial services.

HONG KONG LISTING RULES IMPLICATIONS

COSCO SHIPPING is an indirect holding company of Long Honour Investments Limited and COSCO Container Industries Limited, substantial shareholders of the Company. COSCO SHIPPING, through Long Honour Investments Limited and COSCO Container Industries Limited, holds 22.71% of the issued share capital of the Company as at the date of this announcement. Accordingly, under Chapter 14A of the Hong Kong Listing Rules, COSCO SHIPPING and its subsidiaries, each being an associate of Long Honour Investments Limited and COSCO Container Industries Limited, are connected persons of the Company and the transactions contemplated under the New Framework Agreement constitute continuing connected transactions of the Company.

On 30 October 2019, the Board has considered and approved the Resolution Regarding the Continuing Connected Transactions/Ordinary Related-party Transactions with COSCO SHIPPING Development Co., Ltd. in the tenth Board meeting in 2019. As non-executive Directors, Mr. LIU Chong and Mr. MING Dong, hold positions in COSCO SHIPPING and its associates, they are considered to have material interests in the Continuing Connected Transactions (including the New Annual Caps), and therefore have abstained from voting on the relevant Board resolution. Save as disclosed above, none of the Directors has a material interest in the approval of the Continuing Connected Transactions (including the New Annual Caps) contemplated under the New Framework Agreement.

7

As one or more applicable percentage ratios (within the meaning of the Hong Kong Listing Rules) in respect of the proposed Annual Caps under the New Framework Agreement are more than 5% but all less than 25%, the proposed Annual Caps constitute discloseable transactions and non-exempt continuing connected transactions of the Company which shall be subject to the reporting and announcement requirements under Chapter 14 of the Hong Kong Listing Rules, and the reporting, announcement, circular and independent Shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules. The Company will convene the Shareholders' meeting as and when appropriate. As Long Honour Investments Limited and COSCO Container Industries Limited are the wholly-owned subsidiaries of COSCO SHIPPING, they, therefore, have a material interest in the resolution of entering into the New Framework Agreement. Thus, Long Honour Investments Limited and COSCO Container Industries Limited will abstain from voting on the relevant resolution in the Shareholders' meeting. The Directors, including independent non-executive Directors but excluding the Directors who have to abstain from voting, are of the view that the New Framework Agreement is determined on normal commercial terms on arm's length basis in the ordinary and usual course of business of the Group with terms which are fair and reasonable, and in the interest of the Company and the Shareholders as a whole.

A circular containing, among other things, the details of the New Framework Agreement will be despatched to the Shareholders no later than 19 November 2019.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

"associate(s)"

"Board"

"Company"

has the meaning ascribed thereto under the Hong Kong Listing Rules

the board of Directors of the Company

China International Marine Containers (Group) Co., Ltd. (中國 國際海運集裝箱(集團)股份有限公司), a joint stock company

with limited liability incorporated in the PRC under the Company Law of the PRC in January 1980, the H shares of which are listed on the Hong Kong Stock Exchange and the A shares of which are listed on the Shenzhen Stock Exchange

"connected person(s)"

has the meaning ascribed thereto under the Hong Kong Listing

Rules

"Continuing Connected

the transactions contemplated under the New Framework

Transactions"

Agreement

"COSCO SHIPPING"

COSCO SHIPPING Development Co., Ltd., a joint stock

company with limited liability established under the laws

of the PRC and known as China Shipping Container Lines

Company Limited (中海集裝箱運輸股份有限公司) prior to 18

November 2016, the H Shares of which are listed on the Hong

Kong Stock Exchange and the A Shares of which are listed on

the Shanghai Stock Exchange

8

"COSCO SHIPPING Group" "Director(s)"

"Existing Framework Agreement"

"Supplementary Agreement"

"New Framework Agreement"

"Annual Cap(s)"

"Group"

"Hong Kong"

"Hong Kong Listing Rules"

"Hong Kong Stock Exchange" "independent third party(ies)" "PRC"

COSCO SHIPPING and its subsidiaries

the director(s) of the Company

the framework agreement dated 11 November 2016 entered into between the Company and COSCO SHIPPING in relation to the supply of commodities such as containers by the Group to COSCO SHIPPING Group which commenced from 1 January 2017, and expire on 31 December 2019

the supplementary agreement dated 29 March 2018 entered into between the Company and COSCO SHIPPING in relation to the supply of commodities such as containers by the Group to COSCO SHIPPING Group which will expire on 31 December 2019

the framework agreement dated 30 October 2019 entered into between the Company and COSCO SHIPPING in relation to the supply of commodities such as containers by the Group to COSCO SHIPPING Group which will commence from 1 January 2020 and expire on 31 December 2022

the new annual transaction cap(s) for each of the three years ending 31 December 2022 under the Continuing Connected Transactions between the Group and the COSCO SHIPPING Group

the Company and its subsidiaries

the Hong Kong Special Administrative Region of the People's Republic of China

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

The Stock Exchange of Hong Kong Limited

parties who are not the connected persons of the Company

the People's Republic of China, which for the purposes of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the People's Republic of China and Taiwan

9

"RMB"

"Shareholder(s)"

"Shenzhen Listing Rules"

"Substantial Shareholder(s)"

"%"

Renminbi, the lawful currency of the PRC

the holder(s) of the Share(s) of the Company

the Rules Governing the Listing of Stocks of the Shenzhen Stock Exchange

has the meaning ascribed thereto under the Hong Kong Listing Rules

per cent

The announcement will be published available on the website of the Company (http://www.cimc.com) and the HKEX website of the Hong Kong Stock Exchange (http://www.hkexnews.hk).

By order of the Board

China International Marine Containers (Group) Co., Ltd.

Yu Yuqun

Company Secretary

Hong Kong, 30 October 2019

As at the date of this announcement, the Board of the Company comprises Mr. Wang Hong (Chairman), Mr. Liu Chong (Vice Chairman), Mr. HU Xianfu and Mr. MING Dong as nonexecutive directors; Mr. MAI Boliang as an executive director; and Mr. HE Jiale, Mr. PAN Zhengqi and Ms. LUI FUNG Mei Yee, Mabel as independent non-executive directors.

10

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CIMC - China International Marine Containers (Group) Co. Ltd. published this content on 30 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2019 14:16:02 UTC