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: 81)
CONNECTED TRANSACTIONS
IN RELATION TO ACQUISITIONS OF OFFICE UNITS IN HEFEI
The Board announces that the Purchaser (a wholly-owned subsidiary of the Company) formalised a series of acquisitions of 18 office units located in Tower S1, Wanjin Garden, North of Longchuan Road, East of Xidi Road, Baohe District, Hefei, the PRC (i.e. the Properties) by entering into the SPAs on 8 March 2021 with the Vendor, at an aggregate consideration of RMB19,538,726.
The Vendor is a joint venture owned as to 45% by each of COGO Subsidiary (an indirect wholly-owned subsidiary of the Company) and CSGWI (an indirect wholly-owned subsidiary of CSC), respectively, and as to 10% by SAIF Subsidiary.
CSCEC is the ultimate holding company of COHL, which in turn is the controlling shareholder of both the Company and CSC by virtue of it being interested in approximately 38.32% of the number of shares of the Company in issue and approximately 64.79% of the issued share capital of CSC. Accordingly, the Vendor is a connected person of the Company and the entering into of the SPAs and the transactions contemplated thereunder constituted connected transactions for the Company under Chapter 14A of the Listing Rules.
As the highest applicable percentage ratio in respect of the SPAs and the transactions contemplated thereunder in aggregate exceeded 0.1% but was less than 5%, the entering into of the SPAs and the transactions contemplated thereunder were subject to the reporting and announcement requirements but exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
The SPAs follow a series of provisional agreements made in April 2020 on substantially the same terms. Upon full payment of the consideration in relation to the acquisitions in accordance with such provisional agreements in late December 2020, the acquisitions were eventually formalised by the entry into and registration of the SPAs in March 2021. In mid- March 2021, during the preparation of the annual results for the year ended 31 December 2020, the management of the Company was made aware that the highest applicable percentage ratio in respect of the provisional agreements leading to the SPAs, the SPAs and the transactions contemplated thereunder had marginally exceeded the 0.1% threshold and might constitute connected transactions for the Company under the Listing Rules. The Company deeply regrets its oversight which resulted in its non-compliance with the relevant connected transaction requirements under Chapter 14A of the Listing Rules and would like to stress that such non-compliance was inadvertent. To better identify and monitor small and potential connected transactions to prevent any similar incidents in the future, the Board resolved to take the remedial measures as set out in this announcement.
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INTRODUCTION
On 8 March 2021, the Purchaser (a wholly-owned subsidiary of the Company) entered into the SPAs (in total 18 of them) with the Vendor (a joint venture owned as to 45% by each of COGO Subsidiary (an indirect wholly-ownedsubsidiary of the Company) and CSGWI (an indirect wholly-ownedsubsidiary of CSC), respectively, and as to 10% by SAIF Subsidiary), pursuant to which the Purchaser has agreed to purchase and the Vendor has agreed to sell certain office units (i.e. the Properties) for an aggregate consideration of RMB19,538,726.
THE SPAs
The principal terms of each SPA are summarised as follows:
Date: | 8 March 2021 |
Vendor: | The Vendor, a joint venture indirectly owned as to 45% by each of the |
Company and CSC, respectively, and as to 10% by SAIF | |
Purchaser: | The Purchaser, a wholly-owned subsidiary of the Company |
Subject matter: | Respectively, units 901, 902, 903, 904, 905, 906, 907, 908 and 909 on |
Floor 9 and units 1001, 1002, 1003, 1004, 1005, 1006, 1007, 1008 and | |
1009 on Floor 10 of Tower S1, Wanjin Garden, North of Longchuan | |
Road, East of Xidi Road, Baohe District, Hefei, the PRC | |
Usage: | Office |
Payment term: | Full payment has been made on or before 28 December 2020. |
Delivery: | The Properties shall be delivered in accordance with the SPAs, after |
having passed all relevant completion inspections, and the relevant | |
user permit documents and the Filing Certificate for Completion of | |
Construction Works in Hefei City(合肥市建設工程竣工驗收查驗 | |
合格證明) having been obtained ("Delivery"). The Purchaser shall | |
complete the necessary title registration of the Properties in | |
accordance with PRC laws and regulations within 180 days of the | |
Delivery. Delivery of the Properties is expected to take place in the | |
second quarter of 2021. |
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Further details of the SPA for each Property
Unit: | 901 | 902 | 903 | 904 | 905 | 906 | 907 | 908 | 909 |
Gross floor area | 75.92 | 98.34 | 74.97 | 75.89 | 109.15 | 109.72 | 131.66 | 60.80 | 208.23 |
(in square metres): | |||||||||
Consideration | 805,284 | 1,016,541 | 772,819 | 801,171 | 1,152,297 | 1,130,884 | 1,363,707 | 611,566 | 2,115,094 |
(RMB): |
Unit: | 1001 | 1002 | 1003 | 1004 | 1005 | 1006 | 1007 | 1008 | 1009 |
Gross floor area | 75.92 | 98.34 | 74.97 | 75.89 | 109.15 | 109.72 | 131.66 | 60.80 | 208.23 |
(in square metres): | |||||||||
Consideration | 805,284 | 1,016,541 | 772,819 | 801,171 | 1,152,297 | 1,130,884 | 1,363,707 | 611,566 | 2,115,094 |
(RMB): |
Basis of determining the consideration
The consideration of the Properties was determined on an arm's length basis between the Purchaser and the Vendor, with reference to, among others, a valuation report prepared by an independent third party valuer in April 2020.
REASONS FOR AND BENEFITS OF ENTERING INTO THE SPAS
The Properties are the inventory from a development project owned by the Vendor (i.e. commercial and residential properties on a piece of land situated in the Baohe District, Hefei, the PRC). The Company has taken the opportunity to purchase for its own use the office premises which could fulfill the Company's needs as opposed to having to rent office premises in Hefei as is the current situation.
None of the Directors has any material interest in the transactions contemplated under the SPAs and no Director is required to abstain from voting on the Board resolution(s) approving the entering into of the SPAs and the transactions contemplated thereunder. However, Mr. Yan Jianguo, being the non-executive Director, chairman and non-executive director of CSC and chairman and president of COHL, was absent from the relevant Board meeting and did not vote on the Board resolution(s) approving the entering into of the SPAs and the transactions contemplated thereunder. Mr. Zhuang Yong, being the Chairman and executive Director and a director of COHL, has voluntarily abstained from voting on the Board resolution(s) approving the entering into of the SPAs and the transactions contemplated thereunder.
The Directors (including the independent non-executive Directors) are of the view that as far as the Shareholders are concerned, the transactions contemplated under the SPAs are in the ordinary and usual course of business of the Company, on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.
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LISTING RULES IMPLICATIONS
CSCEC is the ultimate holding company of COHL, which in turn is the controlling shareholder of both the Company and CSC by virtue of it being interested in approximately 38.32% of the number of shares of the Company in issue and approximately 64.79% of the issued share capital of CSC. The Vendor is a joint venture owned as to 45% by each of COGO Subsidiary (an indirect wholly-owned subsidiary of the Company) and CSGWI (an indirect wholly-owned subsidiary of CSC), respectively, and as to 10% by SAIF Subsidiary, and is accordingly a connected person of the Company. As such, the entering into of the SPAs and the transactions contemplated thereunder constituted connected transactions for the Company under Chapter 14A of the Listing Rules.
As the highest applicable percentage ratio in respect of the SPAs and the transactions contemplated thereunder in aggregate exceeded 0.1% but was less than 5%, the entering into of the SPAs and the transactions contemplated thereunder were subject to the reporting and announcement requirements but exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
INFORMATION ON THE PARTIES
The Vendor is a joint venture owned as to 45% by each of COGO Subsidiary (an indirect wholly-owned subsidiary of the Company) and CSGWI (an indirect wholly-owned subsidiary of CSC), respectively, and as to 10% by SAIF Subsidiary. It is principally engaged in the development of the commercial and residential properties in Hefei.
The Group is principally engaged in property investment and development, property leasing and investment holding. The Purchaser is principally engaged in property development and investment, and other operations.
CSC and its subsidiaries (excluding those listed on any stock exchange) are principally engaged in construction business, infrastructure investments and prefabricated constructions.
SAIF Subsidiary is a wholly-owned subsidiary of SAIF and is principally engaged in investment holding. SAIF is a limited partnership established in the Cayman Islands and is managed by two general partners, which are SAIF Grand Silver China Limited and XINGHE International Limited, respectively, both of which are principally engaged in investment holding. SAIF is principally engaged in investment in infrastructure assets, immovable property assets, management assets and capital market.
CSCEC is the ultimate holding company of COHL, which in turn is a controlling shareholder of CSC and the Company. CSCEC, together with its subsidiaries (excluding those listed on any stock exchange), is a conglomerate principally engaged in building construction, international contracting, real estate development and investment, infrastructure construction and investment and design and prospecting.
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REMEDIAL MEASURES
The SPAs follow a series of provisional agreements made in April 2020 on substantially the same terms. Upon full payment of the consideration in relation to the acquisitions in accordance with such provisional agreements in late December 2020, the acquisitions were eventually formalised by the entry into and registration of the SPAs in March 2021. In mid-March 2021, during the preparation of the annual results for the year ended 31 December 2020, the management of the Company was made aware that the highest applicable percentage ratio in respect of the provisional agreements leading to the SPAs, the SPAs and the transactions contemplated thereunder had marginally exceeded the 0.1% threshold and might constitute connected transactions for the Company under the Listing Rules.
On 22 March 2021, a meeting of the Board was convened to discuss the incident concerning the non-compliance with the Listing Rules in relation to the SPAs and the transactions contemplated thereunder and how it should be resolved and remedied to better monitor small and potential connected transactions in the future. The Company deeply regrets its oversight which resulted in its non-compliance with the relevant connected transaction requirements under Chapter 14A of the Listing Rules and would like to stress that such non-compliance was inadvertent. To better identify and monitor small and potential connected transactions to prevent any similar incidents in the future, the Board resolved to take the following remedial measures:
- the Company will provide further training to the Directors, senior management and relevant staff (including the legal representatives and directors of all PRC subsidiaries) in relation to the requirements under the Listing Rules, particularly those concerning connected transactions;
- the Company will re-circulate to the management and related departments of the Group the relevant Listing Rules and the Company's procedures regarding timely reporting to the senior management about potential connected transactions;
- the Company will review, strengthen and continue to monitor the relevant internal measures of the Group, including but not limited to contract reporting and signing procedures, to ensure that current and future transactions will be conducted in compliance with the applicable requirements under the Listing Rules (particularly those concerning connected transactions) and the relevant rules and regulations; and
- the Company has sought, and will seek legal advice and/or other professional advice from time to time as and when necessary to ensure proper compliance with the relevant requirements of the Listing Rules by the Group.
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DEFINITIONS
In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise:
"Board" | the board of Directors; |
"COGO Subsidiary" | Grand Will Asia Pacific Limited, a company |
incorporated in Hong Kong with limited liability, and | |
an indirect wholly-owned subsidiary of the Company; | |
"COHL" | China Overseas Holdings Limited 中國海外集團有限 |
公司, a company incorporated in Hong Kong with | |
limited liability, the controlling shareholder of both the | |
Company and CSC; | |
"Company" | China Overseas Grand Oceans Group Ltd., a company |
incorporated in Hong Kong with limited liability and | |
whose shares are listed on the Main Board of the Stock | |
Exchange (stock code: 81); | |
"connected person", | has the meaning ascribed to it under the Listing Rules; |
"controlling shareholder" and | |
"subsidiary(ies)" | |
"CSC" | China State Construction International Holdings |
Limited, a company incorporated in the Cayman | |
Islands with limited liability and whose shares are | |
listed on the Main Board of the Stock Exchange (stock | |
code: 3311); | |
"CSCEC" | 中國建築集團有限公司 (China State Construction |
Engineering Corporation), a state-owned corporation | |
organised and existing under the laws of the PRC, and | |
the ultimate holding company of COHL; | |
"CSGWI" | China State Grand Wealth Investments Limited, a |
company incorporated in Hong Kong with limited | |
liability, and an indirect wholly-owned subsidiary of | |
CSC; | |
"Delivery" | has the meaning as defined in the section headed "The |
SPAs" in this announcement; | |
"Director(s)" | the director(s) of the Company; |
"Hong Kong" | the Hong Kong Special Administrative Region of the |
PRC; |
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"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, Macao | |
Special Administrative Region and Taiwan; | |
"Properties" | collectively, units 901, 902, 903, 904, 905, 906, 907, |
908 and 909 on Floor 9 and units 1001, 1012, 1013, | |
1014, 1015, 1016, 1017, 1018 and 1009 on Floor 10 of | |
Tower S1, Wanjin Garden, North of Longchuan Road, | |
East of Xidi Road, Baohe District, Hefei, the PRC, and | |
"Property" shall be construed as each of the units | |
comprised in the Properties or any of them as the | |
context may require; | |
"Purchaser" | 中海宏洋地產(合肥)有限公司 (China Overseas |
Grand Oceans Properties (Hefei) Co., Ltd.*), a | |
company established in the PRC with limited liability | |
and an indirect wholly-owned subsidiary of the | |
Company; | |
"RMB" | Renminbi, the lawful currency of the PRC; |
"SAIF" | SAIF XINGHE Investment Fund L.P., a limited |
partnership established in the Cayman Islands, in | |
which CSC owned a 4.76% interest; | |
"SAIF Subsidiary" | SAIF XINGHE Hong Kong Limited, a company |
incorporated in Hong Kong with limited liability and a | |
wholly-owned subsidiary of SAIF; | |
"SPAs" | collectively, sale and purchase agreements for each of |
the units comprised in the Properties, and "SPA" shall | |
be construed as each of the SPAs or any of them as the | |
context may require; | |
"Shareholder(s)" | the shareholder(s) of the Company from time to time; |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited; and |
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"Vendor"中海宏洋海富(合肥)房地產開發有限公司
(China Overseas Grand Oceans Haifu (Hefei) Properties Development Co., Ltd.*), a company established in the PRC with limited liability, which is indirectly owned as to 45% by each of the Company and CSC, respectively, and as to 10% by SAIF.
* For identification purpose only
For and on behalf of
CHINA OVERSEAS GRAND OCEANS
GROUP LIMITED
Zhuang Yong
Chairman and Executive Director
Hong Kong, 1 April 2021
As at the date of this announcement, the Board comprises eight directors, of which three are executive directors, namely Mr. Zhuang Yong, Mr. Yang Lin and Mr. Paul Wang Man Kwan; two non-executive directors, namely Mr. Yan Jianguo and Mr. Billy Yung Kwok Kee, and three independent non-executive directors, namely Dr. Timpson Chung Shui Ming, Mr. Jeffrey Lam Kin Fung and Mr. Dantes Lo Yiu Ching.
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China Overseas Grand Oceans Group Ltd. published this content on 01 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 April 2021 11:31:04 UTC.