CK Hutchison : JOINT ANNOUNCEMENT - SUPPLEMENTAL AGREEMENTS TO THE CKI AGREEMENT AND THE PAH AGREEMENT

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(Incorporated in Bermuda with limited liability)	(Incorporated in Hong Kong with limited liability)
(Stock Code: 1038)	(Stock Code: 6)

JOINT ANNOUNCEMENT

SUPPLEMENTAL AGREEMENTS TO THE CKI AGREEMENT AND

THE PAH AGREEMENT

As disclosed in the August 2018 Joint Announcement, the Economic Benefits Agreements relate to the Economic Benefits Amounts payable by CKH Sub to each of CKA Sub, CKI Sub and PAH Sub, respectively. The Economic Benefits Amounts payable by CKH Sub to each of CKI Sub and PAH Sub under the respective Economic Benefits Agreement refer to the sums (in US dollars) equal to the Relevant Percentage of each of CKI Sub (being 30%) and PAH Sub (being 20%) of the Economic Benefits.

The CKHH Board, the CKI Board and the PAH Board jointly announce that on 31 July 2019 (after trading hours), the CKI Supplemental Agreement and the PAH Supplemental Agreement were entered into to amend and restate the CKI Agreement and the PAH Agreement, respectively, each with effect from the Amendment Effective Date, on the terms of and subject to the conditions set out in the CKI Supplemental Agreement and the PAH Supplemental Agreement, respectively.

The Amendment is subject to the satisfaction (or, where applicable, waiver) of the conditions summarised below and, with effect from the Amendment Effective Date, the Amendment will provide certain ancillary protections in relation to the Relevant Subsidiary's interest in the Economic Benefits Amounts under the existing terms of the Relevant Agreement.

For CKI, the transactions contemplated by the CKI Agreement are considered to be a long- term investment for CKI Sub and the CKI Supplemental Agreement will further solidify its interest in the Relevant Businesses with effect from the Amendment Effective Date.

For PAH, the PAH Agreement offers stable cash return based on the performance of the Relevant Businesses which include a number of assets in which the PAH Group already has existing direct exposure. The PAH Supplemental Agreement will provide further safeguard on the PAH Group's interest in the Relevant Businesses with effect from the Amendment Effective Date.

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For CKHH, the Supplemental Agreements will serve to streamline the existing operation of each Relevant Agreement for CKHH and CKH Sub with effect from the Amendment Effective Date.

The implications of the relevant Supplemental Agreements for each of CKI and PAH under the Listing Rules are summarised as follows:

For CKI

The CKI Supplemental Agreement constitutes a variation of the terms of the connected transaction of CKI as disclosed in the August 2018 Joint Announcement, and the variation may be regarded as material. This announcement is made for information of shareholders and other investors pursuant to the Note under Rule 14A.35 of the Listing Rules.

For PAH

The PAH Supplemental Agreement constitutes a variation of the terms of the connected transaction of PAH as disclosed in the August 2018 Joint Announcement, and the variation may be regarded as material. This announcement is made for information of shareholders and other investors pursuant to the Note under Rule 14A.35 of the Listing Rules.

Reference is made to the August 2018 Joint Announcement relating to the Economic Benefits Agreements, including the CKI Agreement and the PAH Agreement. Unless otherwise defined in this Announcement, capitalised terms used in this Announcement shall have the same meanings as those defined in the August 2018 Joint Announcement.

The CKHH Board, the CKI Board and the PAH Board jointly announce that on 31 July 2019 (after trading hours), CKH Sub and CKHH (as guarantor of CKH Sub) entered into a Supplemental Agreement with each of (i) CKI Sub and (ii) PAH Sub, pursuant to which the Amendment will be made to (i) the CKI Agreement and (ii) the PAH Agreement respectively, with effect from the Amendment Effective Date.

1. SUPPLEMENTAL AGREEMENTS

The CKI Supplemental Agreement and the PAH Supplemental Agreement are separate agreements relating to the CKI Agreement and the PAH Agreement, respectively, and are not conditional upon each other. The principal terms of both of the Supplemental Agreements, which are substantially the same (unless otherwise stated below), are summarised as follows:

Conditions

The Amendment is subject to the satisfaction (or, where applicable, waiver) of the conditions that all consents, approvals, permits, authorisations, clearances or consultation (as the case may be) that each of CKH Sub, the Relevant Subsidiary and CKHH reasonably considers necessary pursuant to applicable laws, regulations or rules of any government authority for its execution, implementation and completion of the relevant Supplemental Agreement (including any transactions, documents and arrangements contemplated under or ancillary to the relevant Supplemental Agreement) have been obtained, and have not been revoked or withdrawn.

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The Amendment to the Relevant Agreement will take effect on the date confirmed by CKH Sub and the Relevant Subsidiary following the satisfaction (or, where applicable, waiver) of the above conditions.

If any of the above conditions has not been waived by CKH Sub or the Relevant Subsidiary (as the case may be) or has not been satisfied by 31 December 2019 (or such other date as the parties may agree), being the Supplemental Long Stop Date, the relevant Supplemental Agreement will automatically terminate with immediate effect (unless the parties agree otherwise in writing) and the Relevant Agreement (in the form as originally executed on 31 August 2018) will remain valid and effective.

Amendment and restatement of the Relevant Agreements

The principal terms of the Amendment, which will be made to each Relevant Agreement with effect from the Amendment Effective Date, are set out below:

1. Exercise of Voting Rights of a Voting Right Company

CKHH will undertake to the Relevant Subsidiary that it will (amongst other things), subject to any restrictions imposed by and requirements of any applicable laws and regulations, procure that:

1. in respect of any Voting Right Company (being certain of the Relevant Companies and Intermediate Companies):
2. 1. CKII will exercise the Relevant Subsidiary's Relevant Percentage (being 30% in the case of CKI Sub and 20% in the case of PAH Sub) of its voting rights at any general meeting of a Voting Right Company in accordance with the written instructions of the Relevant Subsidiary; and
   2. if CKHH receives written notification from the Relevant Subsidiary that the passing of any proposed resolution in writing of shareholder(s) of a Voting Right Company is disagreed with by the Relevant Subsidiary, CKII will request the Voting Right Company that the proposed resolution not be passed by way of resolution in writing and shall request the Voting Right Company to convene a general meeting to consider such proposed resolution;
3. CKII will, upon the written request of the Relevant Subsidiary, exercise its power as shareholder of any Voting Right Company to request that a general meeting of the Voting Right Company be convened to consider such resolution(s) proposed by the Relevant Subsidiary (being resolution(s) which any shareholder of the Voting Right Company is entitled to propose to shareholders for consideration) and set out in the written notice to CKII;
4. CKII will, upon the written request of the Relevant Subsidiary, procure that there will be appointed on the board of directors of the relevant Voting Right Company (other than 1822604 Alberta Ltd.) such person(s) nominated by the Relevant Subsidiary as director(s) of such Voting Right Company which represent the Relevant Subsidiary's Relevant Percentage (rounded down to the nearest whole number) of the total number of directors on such board following the appointment; and
5. CKII will promptly notify the Relevant Subsidiary of the scheduled date of any meeting of the board of directors of any Voting Right Company to be held.

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1. Undertakings given by CKHH to the Relevant Subsidiary in relation to distributions and operation of Subject Group Companies

As disclosed in the section headed "2. Economic Benefits Agreements - (b) Distributions and Operation of Relevant Businesses" in the August 2018 Joint Announcement, in the Relevant Agreement, CKHH has given undertakings to the Relevant Subsidiary in relation to certain aspects of the distributions and operation of the Subject Group Companies.

Following the Amendment Effective Date and until such time CKHH (without taking into account voting power through CKI) is not able to exercise, or control the exercise of, more than 50% of the voting power at general meetings of the relevant Subject Group Companies, the existing undertakings given by CKHH to the Relevant Subsidiary in the Relevant Agreement will continue to apply.

As stated in the August 2018 Joint Announcement, CKHH has guaranteed to the Relevant Subsidiary the performance by CKH Sub of its obligations, covenants and undertakings under the Relevant Agreement (including the payment obligation of CKH Sub in respect of the Economic Benefits Amounts) and such guarantee obligation will continue to be valid notwithstanding the Amendment.

1. Exclusion and Termination

As explained in the section headed "2. Economic Benefits Agreements - (c) Termination" in the August 2018 Joint Announcement, the Relevant Subsidiary is entitled to terminate the Relevant Agreement and to the payment of a sum equivalent to the consideration paid by the Relevant Subsidiary under the Relevant Agreement if the aggregate relevant Economic Benefits Amounts paid and payable to the Relevant Subsidiary from the Effective Date until 31 December 2023 is less than the Relevant Agreed Sum.

Following the Amendment Effective Date and until such time CKHH (without taking into account voting power through CKI) is not able to exercise, or control the exercise of, more than 50% of the voting power at general meetings of the relevant Agreed Companies (or 25% in the case of 1822604 Alberta Ltd.), the existing termination right as described above will continue to apply.

However, at such time when CKHH (without taking into account voting power through CKI) is not able to exercise, or control the exercise of, more than 50% of the voting power at general meetings of the relevant Agreed Companies (or 25% in the case of 1822604 Alberta Ltd.), instead of the entitlement to terminate the Relevant Agreement in its entirety, the parties have agreed to provide flexibility for the other Agreed Companies (that is, the Specified Companies) to be excluded by the Relevant Subsidiary from the scope of the Relevant Agreement (the "Exclusion Right") if the aggregate Economic Benefits Amounts derived from the Specified Companies from the Effective Date until 31 December 2023 is less than a certain minimum amount. The minimum amount triggering the Exclusion Right and the amount of payment to which the Relevant Subsidiary is entitled upon exercise of the Exclusion Right will be calculated by reference to the Specified Companies concerned, with each of the aggregate of the minimum amount triggering the Exclusion Right and the aggregate amount of payment to which the Relevant Subsidiary is entitled upon exercise not to exceed the Relevant Agreed Sum and the Relevant Consideration, respectively, as originally set out in the Relevant Agreement.

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Upon any exercise of the Exclusion Right, all rights and obligations of the Relevant Subsidiary, CKH Sub and CKHH under the Relevant Agreement in connection with the Specified Companies (and any other Intermediate Companies or Subject Group Companies directly or indirectly held thereby or attributable thereto) will cease immediately, save and except, among other things, the then accrued rights and obligations of the parties.

The Relevant Subsidiary will only be entitled to exercise the Exclusion Right once. If the Exclusion Right is exercised in respect of all the Agreed Companies, the Relevant Agreement will be terminated.

Except as provided in the relevant Supplemental Agreement, the other terms of the Relevant Agreement will remain in full force and effect.

2. INFORMATION ON CKII AND THE RELEVANT BUSINESSES

CKII is a wholly-owned investment holding subsidiary of CKH, which in turn is a wholly- owned subsidiary of CKHH.

CKII (through the Intermediate Companies) holds shareholding interests in the Relevant Businesses, which are infrastructure businesses comprising interests in (a) Park'N Fly, the largest off-airport car park provider in Canada, of which CKII holds an indirect interest of 50%,

1. Northumbrian Water, one of the 10 regulated water and sewerage companies in England and Wales, of which CKII holds an indirect interest of 40%, (c) Australian Gas Networks, one of Australia's largest distributors of natural gas, of which CKII holds an indirect interest of 27.51%, (d) Wales & West Gas Networks, a gas distribution network that serves Wales and the South West of England, of which CKII holds an indirect interest of 30%, (e) UK Rails, one of the three major rolling stock operating companies in the United Kingdom, of which CKII holds an indirect interest of 50% and (f) Dutch Enviro Energy, the largest energy-from-waste company in the Netherlands, of which CKII holds an indirect interest of 35%.

Based on the respective unaudited consolidated management financial statements of each of CKII and of GML (an intermediate investment holding company which holds certain Relevant Companies, and which became a subsidiary of CKII during 2018) for the financial years ended 31 December 2017 and 31 December 2018 prepared in accordance with the Hong Kong Financial Reporting Standards, the combined unaudited consolidated profit before and after taxation of CKII and GML for the financial year ended 31 December 2017 were approximately HK$1,999 million and approximately HK$1,998 million, respectively, and the combined unaudited consolidated profit before and after taxation of CKII and GML for the financial year ended 31 December 2018 were approximately HK$1,836 million and approximately HK$1,835 million, respectively.

Based on the unaudited consolidated management financial statements of CKII for the year ended 31 December 2018 prepared in accordance with the Hong Kong Financial Reporting Standards, the unaudited consolidated net asset value of CKII (inclusive of GML) as at 31 December 2018 was approximately HK$23,024 million.

3. INFORMATION ON THE CKI GROUP

The principal activities of the CKI Group are development, investment and operation of infrastructure businesses in Hong Kong, Mainland China, the United Kingdom, Continental Europe, Australia, New Zealand and Canada.

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