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MarketScreener Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Hong Kong Exchanges and Clearing Limited    0388   HK0388045442

HONG KONG EXCHANGES AND CLEARING LIMITED

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Hong Kong Exchanges and Clearing : POSSIBLE DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO PARTICIPATION IN A CONSORTIUM TO ACQUIRE NOT MORE THAN 10% INTEREST IN CCCC DREDGING GROUP CO., LTD.*

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08/23/2019 | 11:53am EDT

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 遠 海 運 控 股 股 份 有 限 公 司

COSCO SHIPPING Holdings Co., Ltd.*

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1919)

POSSIBLE DISCLOSEABLE AND CONNECTED TRANSACTION

IN RELATION TO

PARTICIPATION IN A CONSORTIUM TO ACQUIRE

NOT MORE THAN 10% INTEREST IN

CCCC DREDGING GROUP CO., LTD.*

THE CONSORTIUM AGREEMENT

Shanghai Terminal (a wholly-owned subsidiary of COSCO SHIPPING Ports and hence a non-wholly owned subsidiary of the Company) proposed to enter into the Consortium Agreement with COSCO SHIPPING Tianjin and one or more Other Investors, pursuant to which the Consortium would seek to acquire a maximum of 5,519,895,784 CCCC Dredging Shares (representing approximately 40% of the enlarged issued share capital of CCCC Dredging) from CCCC on an equity exchange in the PRC by way of participation in a public tender process. Under the Consortium Agreement, if the Consortium is successful in the Tender Process, Shanghai Terminal, COSCO SHIPPING Tianjin and the Other Investor(s) will acquire 1,379,973,946 CCCC Dredging Shares (representing approximately 10% of the enlarged issued share capital of CCCC Dredging), 689,986,973 CCCC Dredging Shares (representing approximately 5% of the enlarged issued share capital of CCCC Dredging) and the balance of the CCCC Dredging Sale Shares respectively. If the number of CCCC Dredging Sale Shares is less than 2,069,960,919 (representing approximately 15% of the enlarged issued share capital of CCCC Dredging), the number of CCCC Dredging Shares which Shanghai Terminal and COSCO SHIPPING Tianjin will respectively acquire will be agreed between them and specified in the Consortium Agreement. Therefore, Shanghai Terminal will acquire not more than 1,379,973,946 CCCC Dredging Shares (representing approximately 10% of the enlarged issued share capital of CCCC Dredging). Unless agreed otherwise by all members of the Consortium, the consideration for the Joint Acquisition will not exceed RMB2.47 per CCCC Dredging Share. Accordingly, the consideration payable by Shanghai Terminal will not exceed approximately RMB3,409 million.

1

As at the date of this announcement, no binding sale and purchase agreement has been entered into between members of the Consortium and CCCC in relation to the Joint Acquisition. Upon successful bidding by the Consortium in the Tender Process, members of the Consortium will enter into a formal sale and purchase agreement with CCCC to implement the Joint Acquisition.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios for the transactions under the Consortium Agreement under Listing Rules exceeds 5% but is less than 25% (assuming that 1,379,973,946 CCCC Dredging Shares are to be acquired by Shanghai Terminal at a consideration of RMB2.47 per CCCC Dredging Share, and if the Consortium is successful in its bidding in the Tender Process), the transactions under the Consortium Agreement will constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules subject to the reporting and announcement requirements.

As COSCO SHIPPING Tianjin is a wholly-owned subsidiary of COSCO SHIPPING (a controlling Shareholder), it is a connected person of the Company. Accordingly, the transactions under the Consortium Agreement will also constitute a connected transaction of the Company, and are therefore also subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

The Company proposed that the Consortium Agreement be entered into after approvals of the independent shareholders of the Company and COSCO SHIPPING Ports have been obtained.

The EGM will be convened by the Company for the Independent Shareholders to consider, and if thought fit, passing the ordinary resolution in relation to the transactions under the Consortium Agreement. A notice of the EGM is expected to be despatched to the Shareholders on 24 August 2019.

After the terms and conditions of the Tender Process have been announced on an equity exchange in the PRC, the Company will make a further announcement. In addition, a circular containing, among other information, (i) further details of the Consortium Agreement and the ST Acquisition; (ii) the recommendation from the Independent Board Committee; and (iii) the advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders is expected to be despatched to the Shareholders within 15 business days after the date of this announcement, i.e. on or before 13 September 2019.

2

As the entering into of the Consortium Agreement will be subject to the approval of independent shareholders of COSCO SHIPPING Ports and the approval of the Independent Shareholders, the Consortium Agreement may or may not be entered into. Further, the ST Acquisition may or may not materialise depending on whether the Consortium is successful in the Tender Process. There is no assurance that the ST Acquisition will take place or as to when it may take place. Shareholders and potential investors in the Company should exercise caution when dealing in the securities of the Company.

THE CONSORTIUM AGREEMENT

Shanghai Terminal proposed to enter into the Consortium Agreement after the approvals of the independent shareholders of the Company and COSCO SHIPPING Ports of the transactions under the Consortium Agreement have been obtained.

Parties

  1. Shanghai Terminal, a wholly-owned subsidiary of COSCO SHIPPING Ports and hence a non-wholly owned subsidiary of the Company
  2. COSCO SHIPPING Tianjin, a wholly-owned subsidiary of COSCO SHIPPING (a controlling Shareholder)
  3. One or more Other Investors. As at the date of this announcement, the identities of the Other Investors are yet to be confirmed. To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Other Investors and their ultimate beneficial owners will be third parties independent of the Company and connected persons of the Company.

Joint Acquisition

According to the announcement dated 18 June 2019 and the circular dated 10 July 2019 of CCCC, (i) the controlling shareholder of CCCC would acquire certain CCCC Dredging Shares from CCCC and subscribe for certain new CCCC Dredging Shares both at a consideration of RMB2.47 per CCCC Dredging Share; and (ii) CCCC proposed to further transfer not more than 5,519,895,784 CCCC Dredging Shares to third parties at the floor purchase price of RMB2.47 per CCCC Dredging Share on an equity exchange in the PRC by way of public tender, representing not more than 40% of the enlarged issued share capital of CCCC Dredging, upon completion of which the controlling shareholder of CCCC and its subsidiaries (including CCCC) would hold 60% in aggregate of the enlarged issued share capital of CCCC Dredging.

3

The Consortium will seek to acquire a maximum of 5,519,895,784 CCCC Dredging Shares (representing approximately 40% of the enlarged issued share capital of CCCC Dredging) from CCCC on an equity exchange in the PRC by way of participation in a public tender process. Under the Consortium Agreement, if the Consortium is successful in the Tender Process, Shanghai Terminal, COSCO SHIPPING Tianjin and the Other Investor(s) will acquire 1,379,973,946 CCCC Dredging Shares (representing approximately 10% of the enlarged issued share capital of CCCC Dredging), 689,986,973 CCCC Dredging Shares (representing approximately 5% of the enlarged issued share capital of CCCC Dredging) and the balance of the CCCC Dredging Sale Shares respectively. If the number of CCCC Dredging Sale Shares is less than 2,069,960,919 (representing approximately 15% of the enlarged issued share capital of CCCC Dredging), the number of CCCC Dredging Shares which Shanghai Terminal and COSCO SHIPPING Tianjin will respectively acquire will be agreed between them and specified in the Consortium Agreement. Therefore, Shanghai Terminal will acquire not more than 1,379,973,946 CCCC Dredging Shares (representing approximately 10% of the enlarged issued share capital of CCCC Dredging). The proposed Joint Acquisition and the Consortium Agreement have been approved by the Board on 23 August 2019.

As at the date of this announcement, no binding sale and purchase agreement has been entered into between the members of the Consortium and CCCC in relation to the Joint Acquisition. Upon successful bidding by the Consortium in the Tender Process, members of the Consortium will enter into a formal sale and purchase agreement with CCCC to implement the Joint Acquisition.

Proposed consideration

Unless agreed otherwise by all members of the Consortium, the consideration for the Joint Acquisition will not exceed RMB2.47 per CCCC Dredging Share. Accordingly, the consideration payable by Shanghai Terminal will not exceed approximately RMB3,409 million, which will be funded by the internal resources and/or external financing (including bank borrowings) of COSCO SHIPPING Ports Group. The consideration will be payable in accordance with the terms and conditions of the Tender Process and the sale and purchase agreement to be entered into with CCCC by members of the Consortium.

The maximum consideration of RMB2.47 per CCCC Dredging Share is equal to the floor purchase price to be set by CCCC for the Tender Process as referred to above, which is also equal to the price per CCCC Dredging Share payable by the controlling shareholder of CCCC for its acquisition of and subscription of CCCC Dredging Shares as referred to above. As stated in the announcement of CCCC dated 18 June 2019, the price per CCCC Dredging Share, being RMB2.47 (rounded up to 2 decimal places), was calculated by dividing the appraised net assets value of CCCC Dredging

4

as at 31 December 2018 of RMB28,969.953 million as set out in the valuation report prepared by China Tong Cheng Assets Appraisal Co. Ltd. (中通誠資產評估有限公

  • ), which is a qualified valuer in the PRC, using the asset-based approach, by the total number of CCCC Dredging Shares in issue as at the date of such announcement (i.e. 11,775,447,964 shares). According to the circular of CCCC dated 10 July 2019, such valuation was based on the assumption that the distribution of dividends of RMB4,080.96 million by CCCC Dredging approved on 30 April 2019 had been implemented by 31 December 2018.

The proposed maximum consideration for the ST Acquisition was determined taking into account, among other things, (1) the abovementioned valuation; (2) the future prospects of CCCC Dredging; and (3) the synergy between CCCC Dredging and COSCO SHIPPING Ports Group.

Information of CCCC Dredging

  1. Dredging is an enterprise established under the laws of the PRC and a subsidiary of CCCC. The scope of CCCC Dredging's business mainly includes capital dredging, maintenance dredging, environmental dredging, and reclamation, as well as supporting projects related to dredging and land reclamation.

Set out below is certain consolidated financial information of CCCC Dredging and its subsidiaries (prepared in accordance with the China Accounting Standards for Business Enterprises) for the two financial years ended 31 December 2017 and 31 December 2018 and the three months ended 31 March 2019 and as at 31 December 2018 and 31 March 2019.

For the

For the

For the

three months

financial year

financial year

ended 31 March

ended 2017

ended 2018

2019

RMB' 000

RMB' 000

RMB' 000

(audited)

(audited)

(unaudited)

Net profit before taxation

2,518,693

1,552,583

158,221

Net profit after taxation

1,955,036

1,266,919

81,459

As at 31

As at 31

December 2018

March 2019

RMB' 000

RMB' 000

(audited)

(unaudited)

Net assets

32,789,879

33,797,519

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

HKEx - Hong Kong Exchanges and Clearing Ltd. published this content on 23 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 August 2019 15:52:03 UTC

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Financials (HKD)
Sales 2019 16 340 M
EBIT 2019 11 538 M
Net income 2019 9 535 M
Finance 2019 51 058 M
Yield 2019 2,96%
P/E ratio 2019 30,4x
P/E ratio 2020 26,9x
EV / Sales2019 14,6x
EV / Sales2020 9,55x
Capitalization 289 B
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Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 267,16  HKD
Last Close Price 230,20  HKD
Spread / Highest target 37,3%
Spread / Average Target 16,1%
Spread / Lowest Target -8,77%
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Charles Xiaojia Li CEO & Ex-Officio Executive Director
May Lung Cha Chairman
Chi Kin Tai Joint Chief Operating Officer & Head-Clearing
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