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: 00057)
DISCLOSEABLE TRANSACTION:
LEASE OF THE LAND TO A THIRD PARTY
The Board announces that on 2 October 2019, the Lessor, an indirect wholly-owned subsidiary of the Company, and the Lessee entered into the Lease Agreement, pursuant to which the Lessor has agreed to lease to the Lessee the Land for a fixed term of 53 months and 9 days commencing from 1 October 2019 and ending on 9 March 2024 (both days inclusive) and a renewal term of 2 years from 10 March 2024 to 9 March 2026 (both days inclusive) subject to Lessor's right of early termination at a monthly rent (inclusive of 5% PRC value-added tax but exclusive of management fee, electricity, water charges and all other charges and outgoings) of RMB91,091 (equivalent to approximately HK$100,983) (during the period from 1 October 2019 to 30 September 2022), RMB96,556.46 (equivalent to approximately HK$107,042) (during the period from 1 October 2022 to 30 September 2025) and the amount to be mutually agreed by the parties (during the period from 1 October 2025 to 9 March 2026).
The Lessor has entered into the Previous Lease Agreements with the Lessee in February and May of 2019 respectively. As at least one of the applicable percentage ratios as defined under the Listing Rules in respect of the Lease (together with the Previous Lease Agreements in aggregate) exceeds 5% but all applicable percentage ratios are lower than 25%, the Lease (together with the Previous Lease Agreements in aggregate) constitutes a discloseable transaction of the Company pursuant to Chapter 14 of the Listing Rules and is subject to notification and announcement requirements pursuant to Chapter 14 of the Listing Rules.
The Board announces that on 2 October 2019, the Lessor and the Lessee entered into the Lease Agreement, the principal terms of which are set out below.
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LEASE AGREEMENT | ||
Date | : | 2 October 2019 |
Lessor | : The Lessor, an indirect wholly-owned subsidiary of the | |
Company and is principally engaged in property holding and | ||
management. | ||
Lessee | : The Lessee, a limited liability company established in the | |
PRC and is principally engaged in production, research and | ||
sales of indoor cleaning equipment, water purification | ||
equipment and air purification equipment. | ||
To the best of the Directors' knowledge, information and | ||
belief having made all reasonable enquiry, each of the | ||
Lessee and its ultimate beneficial owner(s) is an | ||
Independent Third Party. | ||
Land | : A piece of land adjacent to the factory building 13-B | |
situated at the Chen Hsong Industrial Park (Shenzhen), | ||
Pingshan New District, Shenzhen, PRC having a total area | ||
of approximately 8,281 square metres | ||
Use | : | Car Park and Open Storage |
Term | : A fixed term of 53 months and 9 days commencing from | |
1 October 2019 and ending on 9 March 2024 (both days | ||
inclusive) and a renewal term of 2 years commencing from | ||
10 March 2024 and ending on 9 March 2026 (both days |
inclusive), subject to Lessor's right of early termination by giving Lessee 3 months' written notice.
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Rent | : A monthly rent of RMB91,091 (equivalent to approximately |
HK$100,983) (during the period from 1 October 2019 to | |
30 September 2022); RMB96,556.46 (equivalent to | |
approximately HK$107,042) (during the period from | |
1 October 2022 to 30 September 2025) and the amount to be | |
mutually agreed by the parties (during the period from | |
1 October 2025 to 9 March 2026). | |
The rent is inclusive of 5% PRC value-added tax but | |
exclusive of management fee, electricity, water charges and | |
all other charges and outgoings. | |
Management fee | : The Lessee shall pay to the Lessor a monthly management fee |
of RMB4,140.50 (equivalent to approximately HK$4,590), | |
inclusive of tax. | |
Electricity and | : The Lessee shall be responsible for the corresponding |
water charges | electricity and water charges incurred during the Term of the |
Lease Agreement. | |
Security deposit | : RMB182,182 (equivalent to approximately HK$201,967), |
equivalent to 2 months of rent. |
REASONS FOR AND BENEFITS OF THE LEASE
The Group is principally engaged in the manufacturing and sale of plastic injection moulding machines and related products.
The Chen Hsong Industrial Park (Shenzhen) in Pingshan New District, Shenzhen, PRC, where the Land is located, is the flagship production, sale and distribution, research and development facilities, property management and leasing of the Group. The Directors consider that the entering into of the Lease Agreement will allow the Group to have a steady rental income from the Land and at the same time to increase the utilisation rate of lands of the Chen Hsong Industrial Park (Shenzhen). The receipt of the rental income will enhance the working capital of the Group and return to the Shareholders, which is in the interests of the Company and its shareholders as a whole.
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The terms of the Lease Agreement were determined after arm's length negotiations between the parties thereto and are on normal commercial terms.
In light of the reasons above, the Directors are of the view that the Lease is in the interests of the Company and that the terms of the Lease Agreement are fair and reasonable and in the interests of the Shareholders as a whole.
PREVIOUS LEASE AGREEMENTS
The Lessor has entered into the Previous Lease Agreements with the Lessee in February and May of 2019 respectively. Please refer to the announcements respectively dated 15 February 2019 and 30 May 2019 of the Company for details.
IMPLICATIONS UNDER THE LISTING RULES
As at least one of the applicable percentage ratios as defined under the Listing Rules in respect of the Lease (together with the Previous Lease Agreements in aggregate) exceeds 5% but all applicable percentage ratios are lower than 25%, the Lease (together with the Previous Lease Agreements in aggregate) constitutes a discloseable transaction of the Company pursuant to Chapter 14 of the Listing Rules and is subject to notification and announcement requirements pursuant to Chapter 14 of the Listing Rules.
DEFINITIONS
In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:
"Board" | the board of Directors |
"Company" | Chen Hsong Holdings Limited, an exempted company |
incorporated in Bermuda with limited liability, the Shares of | |
which are listed on the Main Board of the Stock Exchange | |
"connected person" | has the meaning ascribed to it under the Listing Rules |
"Director(s)" | the director(s) of the Company |
"Group" | the Company and its subsidiaries |
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"HK$" | Hong Kong dollars, the lawful currency of Hong Kong |
"Hong Kong" | the Hong Kong Special Administrative Region of the |
People's Republic of China | |
"Independent Third Party" | a third party independent of the Company and the connected |
persons of the Company | |
"Land" | a piece of land adjacent to the factory building 13-B situated |
at the Chen Hsong Industrial Park (Shenzhen), Pingshan | |
New District, Shenzhen, PRC having a total area of | |
approximately 8,281 square metres | |
"Lease" | the lease of the Land under the Lease Agreement |
"Lease Agreement" | the lease agreement dated 2 October 2019 and entered into |
between the Lessor and the Lessee in respect of the lease of | |
the Land | |
"Lessee" | 深圳市旭泰淨水設備有限公司 (in English, for identification |
only, Shenzhen Yuk Tai Water Purification Equipment Co., | |
Ltd.), a limited liability company established in the PRC | |
"Lessor" | 震雄工業園(深圳)有限公司 (in English, for identification |
only, Chen Hsong Industrial Park (Shenzhen) Co., Ltd.), an | |
indirect wholly-owned subsidiary of the Company | |
"Listing Rules" | the Rules Governing the Listing of Securities on the Stock |
Exchange | |
"PRC" | the People's Republic of China, which for the purpose of |
this announcement, excludes Hong Kong, the Macau Special | |
Administrative Region of the People's Republic of China | |
and Taiwan |
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"Previous Lease Agreements" | Collectively: |
(1) the lease agreement dated 15 February 2019 entered | |
into between the Lessor and the Lessee in respect of | |
the lease of the ground floor and the first floor of the | |
factory building 13-B situated at the Chen Hsong | |
Industrial Park (Shenzhen), Pingshan New District, | |
Shenzhen, PRC for a fixed term of 5 years | |
commencing from 10 March 2019 and ending on 9 | |
March 2024 (both days inclusive) for a monthly rent of | |
RMB1,609,715.16 (1st-3rd year of Rental Period); | |
RMB1,770,686.68 (4th-5th year of Rental Period and | |
1st year of Renewal Period, if applicable); and | |
RMB1,947,755.34 (2nd year of Renewal Period, if | |
applicable) inclusive of 5% PRC value-added tax but | |
exclusive of management fee, electricity, water | |
charges and all other charges and outgoings; | |
and | |
(2) the lease agreement dated 30 May 2019 entered into | |
between the Lessor and the Lessee in respect of the | |
piece of land located at the eastern side of the factory | |
building 13-B situated at the Chen Hsong Industrial | |
Park (Shenzhen), Pingshan New District, Shenzhen, | |
PRC having a total area of approximately 71,000 | |
square metres for a term of 10 years commencing from | |
1 June 2019 and ending on 31 May 2029 (both days | |
inclusive) subject to Lessor's right of early termination | |
by giving Lessee 3 months' written notice for a | |
monthly rent of RMB497,000 (1st-3rd year of Rental | |
Period); RMB526,820 (4th-6th year of Rental Period). | |
The monthly rent for the 7th-10th year of Rental | |
Period is to be mutually agreed by the parties. The rent | |
is inclusive of 5% PRC value-added tax but exclusive | |
of management fee, electricity, water charges and all | |
other charges and outgoings. | |
"RMB" | Renminbi, the lawful currency of the PRC |
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"Share(s)" | ordinary share(s) of HK$0.10 each in the capital of the |
Company | |
"Shareholder(s)" | holder(s) of the Share(s) |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited |
In this announcement, amounts quoted in RMB have been converted into HK$ at a rate of RMB1 to HK$1.1086. Such exchange rate has been used, where applicable, for the purposes of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates at all.
By Order of the Board
CHEN HSONG HOLDINGS LIMITED
Chi Ngai CHAN
Company Secretary
Hong Kong, 2 October 2019
As at the date of this announcement, the executive directors of the Company are Ms. Lai Yuen CHIANG and Mr. Stephen Hau Leung CHUNG ; and the independent non-executive directors of the Company are Mr. Johnson Chin Kwang TAN, Mr. Anish LALVANI, Mr. Bernard Charnwut CHAN and Mr. Michael Tze Hau LEE.
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Chen Hsong Holdings Limited published this content on 02 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 October 2019 10:08:08 UTC