China Merchants Port : ANNOUNCEMENT - CONTINUING CONNECTED TRANSACTIONS -(1)DETERMINATION OF ANNUAL CAPS FOR LEASE AGREEMENTS AND MAN...

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(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

(Stock Code: 00144)

ANNOUNCEMENT

CONTINUING CONNECTED TRANSACTIONS

(1) DETERMINATION OF ANNUAL CAPS FOR LEASE AGREEMENTS

AND MANAGEMENT SERVICE AGREEMENTS

(2) DETERMINATION OF ANNUAL CAPS FOR TENANCY AGREEMENTS

(3) 2019 SHIP BERTHING SERVICES AGREEMENT

(4) 2019 COMPREHENSIVE SERVICES FRAMEWORK AGREEMENT

(5) 2019 CHIWAN SERVICES FRAMEWORK AGREEMENT AND DETERMINATION OF ANNUAL CAPS FOR PORT-RELATED SERVICES

AND

(6) 2019 FREIGHT OPERATION PROXY SERVICES AGREEMENT

DETERMINATION OF ANNUAL CAPS FOR LEASE AGREEMENTS AND MANAGEMENT SERVICE AGREEMENTS

Reference is made to the 2017 Announcement in relation to, inter alia, the Existing Euroasia Cooperation Agreement. The term of the Existing Euroasia Cooperation Agreement will expire on 31 December 2019. Further details of the Existing Euroasia Cooperation Agreement are set out in the 2017 Announcement.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set the annual cap in respect of the rental fees to be paid by CMCS to Euroasia under the Existing Euroasia Cooperation Agreement at HK$15,500,000 for the year ending 31 December 2019. Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the proposed annual cap for the rental fees to be paid under the Existing Euroasia Cooperation Agreement exceed 0.1% but are below 5%, the transaction is exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

Furthermore, the Group has also been leasing certain other properties and receiving management services from CMG Group and its associates pursuant to the Other Lease and Management Service Agreements. As the Existing Euroasia Cooperation Agreement and the Other Lease and Management Services are of similar nature or otherwise connected, the Other Lease and Management Service Agreements will be aggregated with the Existing Euroasia Cooperation Agreement and treated as if they were one transaction.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set an aggregate annual cap in respect of the annual aggregate maximum amount of rental and management service fees payable by the Group and its associates to the CMG Group and its associates for the year ending 31 December 2019 at RMB130,000,000 (equivalent to approximately HK$147,727,000). Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the proposed aggregate annual cap for the rental and management service fees payable by the Group and its associates to the CMG Group and its associates exceed 0.1% but are below 5%, these transactions are therefore exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

DETERMINATION OF ANNUAL CAPS FOR TENANCY AGREEMENTS

Reference is made to the announcement of the Company dated 21 November 2018. Shenzhen Chiwan has become a substantial shareholder and a fellow subsidiary of the Company and as a result, Shenzhen Chiwan Group became connected persons of the Company under the Listing Rules.

Prior to Shenzhen Chiwan becoming a connected person of the Company, the Shenzhen Chiwan Group has been leasing certain properties and receiving management services from the Group, including the leasing of an office space in Qianhai, Shenzhen under the Shenzhen Chiwan Tenancy Agreement entered into between Malai Storage, Chiwan Container Terminal, Mawan Port, Mawan Storage and Chiwan Port Container for a term of three years commenced on 1 January 2018 and ending on 31 December 2020.

Each of Chiwan Container Terminal, Mawan Port, Mawan Storage and Chiwan Port Container is subsidiary of Shenzhen Chiwan. Accordingly, each of Chiwan Container Terminal, Mawan Port, Mawan Storage and Chiwan Port Container is a connected person of the Company and the transactions contemplated under the Shenzhen Chiwan Tenancy Agreement constitute continuing connected transactions of the Company.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set an aggregate annual cap in respect of the rental income receivable by Malai Storage from members of the Shenzhen Chiwan Group at RMB9,460,000 (equivalent to approximately HK$10,750,000) for each of the two years ending 31 December 2019 and 2020. Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the proposed annual caps for the rental fees receivable by Malai Storage under the Shenzhen Chiwan Tenancy Agreement exceed 0.1% but are below 5%, these transactions are exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

Reference is also made to the 2017 Announcement and the announcement of the Company dated 5 February 2018 in relation to, inter alia, the determination and the revision of an aggregate annual cap in respect of the annual aggregate maximum amount of rental income receivable by members of the Group from the CMG Group and its associates under the Other Tenancy Agreements for the year ending 31 December 2018.

The Company expects that CMG Group and its associates will continue to lease properties from the Group and its associates. The applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of each of these transactions under the Other Tenancy Agreements, on a standalone basis, are less than 0.1% and therefore, these transactions, on a standalone basis, constitute de minimis continuing connected transactions pursuant to Rule 14A.76(1) of the Listing Rules and are fully exempt from the shareholders' approval, annual review and all disclosure requirements under Chapter 14A of the Listing Rules. However, as these transactions under the Shenzhen Chiwan Tenancy Agreement and the Other Tenancy Agreements are of similar nature or otherwise connected, these transactions will need to be aggregated as if they are one transaction.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set an aggregate annual cap in respect of the annual aggregate maximum amount of rental income receivable by members of the Group from the CMG Group and its associates (including members of the Shenzhen Chiwan Group) at RMB60,000,000 (equivalent to approximately HK$68,182,000) for the year ending 31 December 2019. Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the proposed annual cap for the aggregate rental income receivable by the Group and its associates from the CMG Group and its associates for the year ending 31 December 2019 exceed 0.1% but are below 5%, these transactions are exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

2019 SHIP BERTHING SERVICES AGREEMENT

On 17 December 2018, in view of the expiry of the 2018 Ship Berthing Services Agreement on 31 December 2018, CMCS and Yiu Lian entered into the 2019 Ship Berthing Services Agreement for a term of one year commencing on 1 January 2019 and ending on 31 December 2019.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set the annual cap in respect of the aggregate ship berthing fees payable under the 2019 Ship Berthing Services Agreement for the year ending 31 December 2019 at HK$14,500,000, which is the same as the annual cap for the 2018 Ship Berthing Services Agreement. Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the annual cap for the ship berthing fees payable under the 2019 Ship Berthing Services Agreement for the year ending 31 December 2019 exceed 0.1% but are below 5%, it is exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

2019 COMPREHENSIVE SERVICES FRAMEWORK AGREEMENT

On 17 December 2018, in view of the expiry of the 2016 Comprehensive Services Framework Agreement on 31 December 2018, Company and Sinotrans & CSC entered into the 2019 Comprehensive Services Framework Agreement for a term of three years commencing on 1 January 2019 and ending on 31 December 2021.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set the following annual caps: (i) in respect of the service fees for agency services payable by the Group to Sinotrans & CSC and its associates for each of the three years ending 31 December 2019, 2020 and 2021 as RMB8,000,000 (equivalent to approximately HK$9,100,000), RMB10,400,000 (equivalent to approximately HK$11,899,000) and RMB13,520,000 (equivalent to approximately HK$15,400,000), respectively and (ii) in respect of the service fees for agency services receivable by the Group from Sinotrans & CSC and its associates for each of the three years ending 31 December 2019, 2020 and 2021 as RMB50,000,000 (equivalent to approximately HK$56,800,000), RMB65,000,000 (equivalent to approximately HK$73,900,000) and RMB84,500,000 (equivalent to approximately HK$96,000,000). Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the annual caps for the service fees receivable for port-related services and the service fees payable for agency services exceed 0.1% but are below 5%, these transactions are exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

2019 CHIWAN SERVICES FRAMEWORK AGREEMENT AND DETERMINATION OF ANNUAL CAPS FOR PORT-RELATED SERVICES

On 17 December 2018, in view of the expiry of the 2018 Chiwan Services Framework Agreement on 31 December 2018, Shenzhen Chiwan and the Company entered into the 2019 Chiwan Services Framework Agreement for a term of one year commencing on 1 January 2019 and ending on 31 December 2019.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set the annual cap in respect of the service fees for port and freight forwarding services payable by the Group to Shenzhen Chiwan Group for the year ending 31 December 2019 as RMB30,000,000 (equivalent to approximately HK$34,100,000) and the annual cap in respect of the service fees for the provision of port and port-related services receivable by the Group from Shenzhen Chiwan Group for the year ending 31 December 2019 as RMB25,000,000 (equivalent to approximately HK$28,400,000). Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the annual caps for the service fees receivable for port-related services and the service fees payable for agency services exceed 0.1% but are below 5%, these transactions are exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

As the 2019 Comprehensive Services Framework Agreement and 2019 Chiwan Services Framework Agreement are of similar nature or otherwise connected, the port and port-related services provided by the Group to (i) Sinotrans & CSC and its associates and (ii) Shenzhen Chiwan Group will be aggregated and treated as if they were one transaction. Similarly, the port-related agency service provided by (i) Sinotrans & CSC and (ii) Shenzhen Chiwan Group and its associates to the Group will be aggregated and treated as if they were one transaction.

For the purpose of Rule 14A.53 of the Listing Rules, on 17 December 2018, the Directors resolved to set an aggregate annual cap in respect of the annual aggregate maximum amount of port-related agency service fees payable by the Group and its associates to the CMG Group and its associates for the year ending 31 December 2019 at RMB38,000,000 (equivalent to approximately HK$43,200,000) and an aggregate annual cap in respect of the annual aggregate maximum amount of port and port-related service fees receivable by the Group and its associates from the CMG Group and it associates for the year ending 31 December 2019 at RMB75,000,000 (equivalent to approximately HK$85,200,000). Such aggregate annual caps were determined with reference to (i) the port-related agency service fees payable under the 2019 Comprehensive Services Framework Agreement and 2019 Chiwan Services Framework Agreement for the year ending 31 December