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.

*

(Incorporated in Bermuda with limited liability)

(Stock code: 1045)

CONTINUING CONNECTED TRANSACTIONS

Reference is made to the announcement dated 11 September 2017 and the circular dated 24 October 2017 in relation to the Existing Transponder and Communication Services Master Agreement entered into between CSCC and the Company. As the Existing Transponder and Communication Services Master Agreement will expire in December 2020 and in view of the need to maintain the provision of services to customers and to strengthen the benefits of synergy between the parties, on 29 September 2020, the Company entered into the CCT Agreement with CSCC in respect of, amongst other things, the provision of satellite transmission service, value-added service for satellite telecommunication and other related professional and management services between the Group and CSCC and/or its associates for the next three years on terms and conditions stipulated in the CCT Agreement.

CASC and its associates are interested in aggregate approximately 52.78% interests in APT International, which in turn is a substantial shareholder of the Company holding approximately 51.9% of the issued share capital of the Company as at the date of this announcement. Furthermore, CASC and its associates (including a subsidiary of CSCC) are interested in an aggregate of approximately 2.90% of the issued share capital of the Company as at the date of this announcement. CSCC, being a subsidiary of CASC, is therefore a connected person of the Company. Accordingly, the CCT Agreement and the transactions contemplated thereunder constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios in respect of the Caps are more than 5%, the Non-exempt Continuing Connected Transactions and the Caps are subject to the reporting, announcement, annual review and independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

*  For identification purpose only

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The SGM will be convened for the Independent Shareholders to approve the CCT Agreement, the Non-exempt Continuing Connected Transactions and the Caps by poll.

A circular containing, among others, (a) further information on the CCT Agreement, the Non-exempt Continuing Connected Transactions and the Caps; (b) the letter of advice from the independent financial adviser to the independent board committee of the Company and Independent Shareholders; (c) the recommendation from the independent board committee of the Company and (d) a notice of the SGM is expected to be dispatched to the Shareholders on or before 22 October 2020 in accordance with the Listing Rules.

INTRODUCTION

Reference is made to the announcement dated 11 September 2017 and the circular dated 24 October 2017 in relation to the Existing Transponder and Communication Services Master Agreement entered into between CSCC and the Company. As the Existing Transponder and Communication Services Master Agreement will expire in December 2020 and in view of the need to maintain the provision of services to customers and to strengthen the benefits of synergy between the parties, on 29 September 2020, the Company entered into the CCT Agreement with CSCC in respect of, amongst other things, the provision of satellite transmission service, value-added service for satellite telecommunication and other related professional and management services between the Group and CSCC and/or its associates for the next three years on terms and conditions stipulated in the CCT Agreement.

THE CCT AGREEMENT

Date: 29 September 2020

Parties:

The Company

CSCC

Duration:

From 1 January 2021 to 31 December 2023, subject to renewal by

negotiation between the parties

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Service provided:

Subject to the terms and conditions of the CCT Agreement, the Company and CSCC have agreed to provide to each other the following services:

  1. Based on the actual requirements of CSCC or its associates, the Company or its subsidiaries shall use its satellite resources, telecommunication facilities and industry experience to provide the following services of the Group to CSCC or its associates: (i) satellite transmission service, (ii) value-added service for satellite telecommunication; and (iii) other related professional and management services for satellite and telecommunication, including but not limited to consultancy services in relation to satellite project construction and services in relation to orbital position coordination and authorization services (the "Company's Satellite Services").
  2. Based on the actual requirements of the Company or its subsidiaries, CSCC or its associates shall use its satellite resources, telecommunication facilities and industry experience to provide the following services of CSCC or its associates to the Company or its subsidiaries: (i) satellite transmission service, (ii) value-added service for satellite telecommunication; and (iii) other related professional and management services for satellite and telecommunication, including but not limited to consultancy services in relation to satellite project construction and services in relation to orbital position coordination and authorization services (the "CSCC's Satellite Services").

Service fees and pricing basis:

Pursuant to the CCT Agreement, in respect of the Company's Satellite Services or the CSCC's Satellite Services provided by the Company (or its subsidiaries) and CSCC (or its associates) to the other party, the Company (or its subsidiaries) and CSCC (or its associates) shall enter into Specific Contracts which set out the specific terms including the technical requirements or service fees in accordance with the guidelines set out in the CCT Agreement.

Service fees payable for (a) the use of the Company's Satellite Services provided by the Company or its subsidiaries to CSCC or its associates; or (b) the use of the CSCC's Satellite Services provided by CSCC or its associates to the Company or its subsidiaries and the commercial terms in the Specific Contracts shall be determined:

  1. based on market-oriented, fair and reasonable principles;
  2. based on normal commercial terms or better;
  3. in accordance with the Company's or CSCC's (as the case maybe) prevailing pricing policy or CSCC's or the Company's (as the case maybe) prevailing procurement policy.

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The prevailing pricing policy and procurement policy of the Company and CSCC will be reviewed regularly by the respective party and if necessary to ensure that it is consistent with market-oriented, fair and reasonable principles. Determination of the service fees in respect of the provision of the Company's Satellite Services or the CSCC's Satellite Services by the Company or CSCC to the other party shall comply with the internal control procedures of the respective party to ensure that the agreed price and the terms must be in accordance with normal commercial terms or better.

Under normal circumstances, the parties shall also agree the payment terms based on the principle of fairness and reasonableness and on normal commercial terms in the Specific Contracts. Such payment terms may include monthly, quarterly or annual payments or lump-sum payment arrangements.

Based on the estimates by the Company and CSCC, (i) the aggregate transaction amounts in respect of the Company's Satellite Services provided by the Company or its subsidiaries to CSCC or its associates under the CCT Agreement for each of the three financial years ending 31 December 2023 will be HK$530 million, HK$530 million and HK$530 million respectively; and (ii) the aggregate transaction amounts in respect of the CSCC's Satellite Services provided by CSCC or its associates to the Company or its subsidiaries under the CCT Agreement for each of the three financial years ending 31 December 2023 will be HK$210 million, HK$260 million and HK$310 million respectively.

Condition:

The CCT Agreement is conditional upon the approval by the Independent Shareholders at the SGM. It will take effect as from 1 January 2021 and will expire on 31 December 2023, subject to negotiation for renewal by both parties.

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APT Satellite Holdings Limited published this content on 29 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 September 2020 10:54:03 UTC