BEIJING ENTERPRISES 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.
(Incorporated in Hong Kong with limited liability)
(Stock Code: 392)
CONTINUING CONNECTED TRANSACTIONS
IN RELATION TO DEPOSIT SERVICES
References are made to the announcements dated 30 December 2016 and 19 October 2017 of the Company in relation to, inter alia, the 2017 Deposit Agreement and its Supplementary Agreement entered into between the Company and BE Group Finance, pursuant to which, the Group may, in its ordinary and usual course of business, place and maintain deposits with BE Group Finance on normal commercial terms from time to time during the period from 1 January 2017 to 31 December 2019.
The Board announces that as the 2017 Deposit Agreement and its Supplementary Agreement will expire on 31 December 2019, to regulate such transactions that will continue to take place, on 20 December 2019, the Company and BE Group Finance entered into the 2020 Deposit Agreement whereby the Company and BE Group Finance will continue to carry out the transactions under the 2017 Deposit Agreement and its Supplementary Agreement for three years from 1 January 2020 to 31 December 2022, with the terms and conditions substantially the same as those under the 2017 Deposit Agreement and its Supplementary Agreement.
As the Company's ultimate controlling shareholder, BE Group, owns not less than 30% equity interest in BE Group Finance, BE Group Finance is an associated company of BE Group and is therefore a connected person of the Company. The Deposit Services will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
As the highest of the percentage ratios as defined under Rule 14.07 of the Listing Rules (other than the profits ratio) in respect of the Deposit Services is more than 0.1% but is less than 5%, the Deposit Services are subject to the announcement, reporting and annual review requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
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BACKGROUND
The 2017 Deposit Agreement and its Supplementary Agreement
References are made to the announcements dated 30 December 2016 and 19 October 2017 of the Company in relation to, inter alia, the 2017 Deposit Agreement and its Supplementary Agreement entered into between the Company and BE Group Finance, pursuant to which, the Group may, in its ordinary and usual course of business, place and maintain deposits with BE Group Finance on normal commercial terms from time to time during the period from 1 January 2017 to 31 December 2019.
THE 2020 DEPOSIT AGREEMENT
The Board announces that as the 2017 Deposit Agreement and its Supplementary Agreement will expire on 31 December 2019, to regulate such transactions that will continue to take place, on 20 December 2019, the Company and BE Group Finance entered into the 2020 Deposit Agreement whereby the Company and BE Group Finance will continue to carry out the transactions under the 2017 Deposit Agreement and its Supplementary Agreement for three years from 1 January 2020 to 31 December 2022, with the terms and conditions substantially the same as those under the 2017 Deposit Agreement and its Supplementary Agreement.
Term
The term of the 2020 Deposit Agreement shall commence on 1 January 2020 and shall continue up to and including 31 December 2022. Upon the expiration of the 2020 Deposit Agreement, it may be renewed by the Company and BE Group Finance by agreement in writing.
Deposit interests
The rate at which interest will accrue on any deposit placed by the Group with BE Group Finance under the 2020 Deposit Agreement will not be lower than the following:
- the benchmark interest rate prescribed by the People's Bank of China for the same type of deposits of the same period;
- the interest rates offered by commercial banks in Hong Kong and the PRC to the Group for the same type of deposits of the same period; and
- the interest rates offered by BE Group Finance to other members of BE Group for the same type of deposits of the same period.
Annual caps
The cumulative daily outstanding deposits balance placed by the Group with BE Group Finance (including any interest accrued thereon) during the term of the 2020 Deposit Agreement will not exceed the following caps:
HK$ million | |
For the financial year ending 31 December 2020 | 2,230 |
For the financial year ending 31 December 2021 | 2,230 |
For the financial year ending 31 December 2022 | 2,230 |
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In determining the above caps, the Directors have taken into account factors including the treasury policy and business needs of the Group and the counterparty limits for BE Group Finance.
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS
The Group has to maintain deposits and other bank balances with financial institutions in Hong Kong and the PRC from time to time as part of its treasury activities and in order to satisfy its business needs in the ordinary and usual course of business.
The Deposit Services will be conducted on normal commercial terms and the deposit interest rates offered by BE Group Finance to the Group will be equal to or more favourable to the Group than those offered by commercial banks in Hong Kong and the PRC to the Group for comparable deposits. The 2020 Deposit Agreement is therefore expected not only to provide the Group with a new means of financing but also to improve the efficiency of the use of its funds through higher interest income and lower costs of financing. The Group also expects to be in a better position to manage the security of its funds since BE Group Finance is not considered to be exposed to any significant capital risk.
For the avoidance of doubt, the 2020 Deposit Agreement does not preclude the Group from using the services of other financial institutions. The Group still has the freedom to select any major and independent commercial banks in Hong Kong and the PRC as its financial services providers as it thinks fit and appropriate for the benefit of the Group.
None of the Directors has a material interest in the 2020 Deposit Agreement and none of them has abstained from voting on the relevant board resolutions of the Company approving the 2020 Deposit Agreement.
The Directors (including the independent non-executive Directors) consider that the 2020 Deposit Agreement is entered into in the ordinary and usual course of business of the Group on normal commercial terms and that the terms of the 2020 Deposit Agreement (together with the relevant annual caps) are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.
INFORMATION ON THE COMPANY AND BE GROUP FINANCE
The Company is incorporated in Hong Kong with limited liability and the shares of which are listed on the main board of the Stock Exchange (stock code: 392). The Group is an integrated public utilities operator with principal activities focusing on gas, water and environment, solid waste treatment and beer business.
BE Group Finance is incorporated in the PRC with limited liability. Its establishment as a non-bank financial institution has been approved by China Banking and Insurance Regulatory Commission. BE Group Finance acts as a platform for members of BE Group (including the Group) for provision of intra-group facilities through financial products including deposit-taking,money-lending and custodian services, etc. As at the date of this announcement, BE Group Finance is held as to 44.79% in aggregate by the Group, 6.69% by Beijing Enterprises Water Group Limited (an associated company of the Company) and 48.52% in aggregate by BE Group (the ultimate controlling shareholder of the Company) and its subsidiaries excluding the Group and Beijing Enterprises Water Group Limited.
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LISTING RULES IMPLICATIONS
As the Company's ultimate controlling shareholder, BE Group, owns not less than 30% equity interest in BE Group Finance, BE Group Finance is an associated company of BE Group and is therefore a connected person of the Company. The Deposit Services will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
As the highest of the percentage ratios as defined under Rule 14.07 of the Listing Rules (other than the profits ratio) in respect of the Deposit Services is more than 0.1% but is less than 5%, the Deposit Services are subject to the announcement, reporting and annual review requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following terms have the following meanings:
"associated company" | : | has the meaning ascribed to it under the Listing Rules |
"BE Group" | : | Beijing Enterprises Group Company Limited* (北京控股 |
集團有限公司), a company incorporated in the PRC with | ||
limited liability and is the ultimate controlling | ||
shareholder of the Company | ||
"BE Group Finance" | : | Beijing Enterprises Group Finance Co., Ltd., a company |
incorporated in the PRC with limited liability and is an | ||
associated company of BE Group | ||
"Board" | : | the board of Directors |
"Company" | : | Beijing Enterprises Holdings Limited, a company |
incorporated in Hong Kong with limited liability, the | ||
shares of which are listed on the main board of the Stock | ||
Exchange (stock code: 392) | ||
"connected person" | : | has the meaning ascribed to it under the Listing Rules |
"Deposit Services" | : | the deposit services to be provided by BE Group Finance |
to the Group under the 2020 Deposit Agreement | ||
"Directors" | : | the directors of the Company |
"Group" | : | the Company and its subsidiaries |
"HK$" | : | Hong Kong dollars, the lawful currency of Hong Kong |
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"Hong Kong" | : | the Hong Kong Special Administrative Region of the |
PRC | ||
"Listing Rules" | : | the Rules Governing the Listing of Securities on the |
Stock Exchange | ||
"PRC" | : | the People's Republic of China, and for the purpose of |
this announcement, excluding Hong Kong, the Macau | ||
Special Administrative Region of the People's Republic | ||
of China and Taiwan | ||
"Shareholder(s)" | : | the shareholder(s) of the Company |
"Stock Exchange" | : | The Stock Exchange of Hong Kong Limited |
"subsidiaries" | : | has the meaning ascribed to it under the Listing Rules |
"2017 Deposit | : | (i) the deposit services agreement entered into between |
Agreement and its | the Company and BE Group Finance on 30 December | |
Supplementary | 2016 for a term of three years from 1 January 2017 to 31 | |
Agreement" | December 2019; and (ii) the supplementary agreement to | |
the 2017 Deposit Agreement entered into between the | ||
Company and BE Group Finance on 19 October 2017, | ||
pursuant to which, the annual cap during the remaining | ||
term of the 2017 Deposit Agreement changed from | ||
HK$2,200,000,000 to HK$2,900,000,000 | ||
"2020 Deposit | : | the deposit services agreement entered into between the |
Agreement" | Company and BE Group Finance on 20 December 2019 | |
for the period from 1 January 2020 to 31 December 2022 | ||
"%" | : | per cent |
- For identification purposes only
By order of the Board
Beijing Enterprises Holdings Limited
HOU Zibo
Chairman and Chief Executive Officer
Hong Kong, 20 December 2019
As at the date of this announcement, the board of directors of the Company comprises Mr. HOU Zibo (Chairman and Chief Executive Officer), Mr. LI Yongcheng, Mr. ZHAO Xiaodong, Mr. E Meng, Mr. JIANG Xinhao and Mr. TAM Chun Fai as executive directors; Mr. WU Jiesi, Mr. LAM Hoi Ham, Dr. SZE Chi Ching, Dr. YU Sun Say and Mr. MA She as independent non-executive directors.
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Disclaimer
BEHL - Beijing Enterprises Holdings Ltd. published this content on 20 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 December 2019 08:50:02 UTC
