SINGAMAS CONTAINER 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.
勝 獅 貨 櫃 企 業 有 限 公 司 SINGAMAS CONTAINER HOLDINGS LIMITED (Incorporated in Hong Kong with limited liability)
(Stock code: 716) CONTINUING CONNECTED TRANSACTION RENEWAL OF TENANCY AGREEMENT
The Board announces that on 31 December 2014, the Renewed Tenancy Agreement was entered into between SCSL, a wholly-owned subsidiary of the Company, as tenant and PIL China, a wholly-owned subsidiary of PIL, the controlling and substantial Shareholder of the Company, as landlord, for the renewal of the Transactions.
PIL, a company in which Mr. Teo Siong Seng and Mr. Teo Tiou Seng are directors and shareholders, is the controlling and substantial Shareholder of the Company, as defined under the Listing Rules. Accordingly, PIL is a connected person of the Company and PIL China is an associate of PIL under the Listing Rules.
The Renewed Tenancy Agreement involves transactions, which will occur on a recurring basis over a period of time; accordingly, the Transactions constitute a continuing connected transaction of the Company under the Listing Rules.
As one or more of the applicable percentage ratios (other than profit ratio which shall not apply) calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Annual Cap for the Transactions is more than 0.1% but all of them are less than 5%, under Rule
14A.76 of the Listing Rules, the Transactions therefore constitutes a continuing connected transaction which is only subject to the annual reporting, announcement and annual review requirements and is exempt from the Shareholders' approval requirement under Chapter
14A of the Listing Rules.
PIL China, a wholly-owned subsidiary of PIL, the controlling and substantial Shareholder of the Company, had entered into a tenancy agreement with SCSL, a wholly-owned
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subsidiary of the Company pursuant to which PIL China leased the Property to SCSL for a period of eight and half months commencing from 15 April 2014 to 31 December 2014 at a monthly rental of RMB427,332.72 (equivalent to approximately US$68,924.63) (exclusive of management fee and all other outgoings) with a rental free period from 15
April 2014 to 15 August 2014 (the "Initial Tenancy"). As none of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of total transaction amounts for the Initial Tenancy would exceed the 0.1% thresholds, these transactions were not subject to any annual reporting, announcement, annual review and Shareholders' approval requirements under the Listing Rules.
The lease under the Initial Tenancy will expire on 31 December 2014. On 31 December
2014, SCSL entered into the Renewed Tenancy Agreement with PIL China for the renewal of the Initial Tenancy for a further term of three years commencing from 1
January 2015 to 31 December 2017, both dates inclusive. The details of the Renewed
Tenancy Agreement are set out below:
The Principal Terms of the Renewed Tenancy Agreement
Date : 31 December 2014
Landlord : PIL China
Tenant : SCSL
Premises : 5/F & 6/F, Block 5, PIL Building, No. 18 Gong Ping Road, Hongkou
District, Shanghai 200082, PRC
Area : A total gross floor area of approximately 2,161.43 square metres
Term : Three years commencing from 1 January 2015 to 31 December 2017, both dates inclusive. SCSL is required to serve a written request three months in advance of the expiry date of the Renewed Tenancy Agreement to PIL China requesting for tenancy renewal (if any)
Rental: RMB 427,332.72 (equivalent to approximately US$68,924.63) (exclusive of management fee and all other outgoings) per month (subject to revision according to market level but not more than 10% increment in each of the two years starting 1 January 2016 and 1
January 2017)
Management
Fee:
RMB71,327.19 (equivalent to approximately US$11,504.39) per month directly paid to a property management company, an
independent third party of the Company
Deposit: RMB 641,314.29 (equivalent to approximately US$103,437.79) (representing one (1) month's rental plus three (3) months'
management fee)
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The Annual Cap of RMB5,127,992.64, RMB5,640,791.90 and RMB6,204,871.09 (equivalent to approximately US$827,095.59, US$909,805.15 and US$1,000,785.66) for the three financial years ending 31 December 2015, 2016 and 2017 has been determined with reference to the total rental (on the assumption that there will be a 10% increment in the rental in each of the two years starting 1 January 2016 and 1 January 2017) payable by SCSL under the Renewed Tenancy Agreement.
REASONS FOR AND BENEFITS OF ENTERING INTO THE RENEWED TENANCY AGREEMENT
The rental payable under the Renewed Tenancy Agreement is at prevailing market rates and is fair and reasonable. The Renewed Tenancy Agreement has been entered into by both parties after arm's length negotiation upon normal commercial terms. The entering of the Renewed Tenancy Agreement will ensure a suitable office space of SCSL. It is considered that SCSL will reap cost savings by continuing to rent the Property.
Based on the above reasons, the Directors (including the independent non-executive Directors) are of the opinion that the terms of the Renewed Tenancy Agreement has been entered into in the ordinary and usual course of business of the Group on normal commercial terms (or terms no less favourable to the Group than terms available to independent third parties) and that the terms of the Renewed Tenancy Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
The Board has approved the Renewed Tenancy Agreement. Mr. Teo Siong Seng, Mr. Teo Tiou Seng, Mr. Kuan Kim Kin and Mr. Tan Chor Kee (who are directors of both PIL and the Company) have voluntarily abstained from voting on the Board resolutions approving the Transactions.
LISTING RULES IMPLICATIONS
PIL China is a wholly-owned subsidiary of PIL and SCSL is a wholly-owned subsidiary of the Company. PIL, a company in which Mr. Teo Siong Seng and Mr. Teo Tiou Seng are directors and shareholders, is the controlling and substantial Shareholder of the Company, as defined under the Listing Rules. Accordingly, PIL is a connected person of the
Company and PIL China is an associate of PIL under the Listing Rules.
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The Renewed Tenancy Agreement involves transactions, which will occur on a recurring basis over a period of time; accordingly, the Transactions constitute a continuing connected transaction of the Company under the Listing Rules.
As one or more of the applicable percentage ratios (other than profit ratio which shall not apply) calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Annual Cap for the Transactions is more than 0.1% but all of them are less than 5%, under Rule
14A.76 of the Listing Rules, the Transactions therefore constitutes a continuing connected transaction which is only subject to the annual reporting, announcement and annual review requirements and is exempt from the Shareholders' approval requirement under Chapter
14A of the Listing Rules.
The Company is an investment holding company incorporated in Hong Kong and the activities of the Group include manufacturing dry freight containers, collapsible flatrack containers, open top containers, bitutainers, refrigerated containers, 53' US domestic containers, tank containers, other specialised containers and container parts; provision of logistics services, including operating container depots, container terminals and container logistics.
PIL is an operator of container liner services and other logistics related services incorporated in Singapore.
SCSL is a company incorporated in PRC and engaged in the provision of technical and development services of container manufacturing.
PIL China is a shipping agent incorporated in PRC.
"associates" has the same meaning as given to it in the Listing Rules
"Annual Cap" the aggregate maximum amount of RMB5,127,992.64, RMB5,640,791.90 and RMB6,204,871.09 (equivalent to approximately US$827,095.59, US$909,805.15 and US$1,000,785.66) for the Transactions, being the total rental payable by SCSL for three years commencing from 1 January
2015 to 31 December 2017 pursuant to the Renewed Tenancy
Agreement;
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"Board" the board of Directors
"Company" Singamas Container Holdings Limited, a company incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board of the Stock Exchange (Stock code : 716)
"connected person" has the same meaning as given to it in the Listing Rules
"continuing connected
transaction"
has the same meaning as given to it in the Listing Rules
"Director(s)" "Group"
"Hong Kong"
the director(s) of the Company
the Company together with its subsidiaries
Hong Kong Special Administrative Region of the PRC
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange
"PIL"
"PIL China"
Pacific International Lines (Private) Limited, a company incorporated in the Republic of Singapore and in which Messrs. Teo Siong Seng and Teo Tiou Seng, are directors and shareholders, is the controlling and substantial Shareholder of the Company, as defined under the Listing Rules
Pacific International Lines (China) Ltd., a company incorporated in the PRC and is a wholly owned-subsidiary of PIL
"PRC"
"Property"
"RMB"
the People's Republic of China and for the purpose of this announcement, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan
the premises located at 5/F & 6/F, Block 5, PIL Building, No.
18 Gong Ping Road, Hongkou District, Shanghai 200082, PRC with a total gross floor area of approximately 2,161.43 square metres held by PIL China
Renminbi, the lawful currency of PRC
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"SCSL" Singamas Container Holdings (Shanghai) Limited, a company incorporated in the PRC and is a wholly-owned subsidiary of the Company
"Shareholders" shareholders of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Renewed Tenancy
Agreement"
the tenancy agreement dated 31 December 2014 entered into between PIL China and SCSL for a term of three years commencing from 1 January 2015 to 31 December 2017, both
dates inclusive
"Transactions" the transactions contemplated under the Renewed Tenancy
Agreement
"US$" United States dollars, the lawful currency of US "%" per cent.
By order of the Board Singamas Container Holdings Limited Teo Siong Seng
Chairman and Chief Executive Officer
Hong Kong, 31 December 2014
The Directors, as at the date of this announcement, are Mr. Teo Siong Seng, Mr. Chan Kwok Leung and Mr. Teo Tiou Seng as executive Directors; Mr. Kuan Kim Kin and Mr. Tan Chor Kee as non-executive Directors; and Mr. Cheng Fu Kwok, David, Mr. Lau Ho Kit, Ivan, Mr. Ong Ka Thai and Mr. Yang, Victor as independent non-executive Directors.
For the purposes of illustration only and unless otherwise specified, conversion of RMB into US$ is based on the exchange rate of US$1.00 = RMB 6.20. Such conversion should not be construed as a representation that the amounts in question have been, could have been or could
be converted at that particular rate or at all.
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