YUZHOU GROUP HOLDINGS COMPANY 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 the Cayman Islands with limited liability)
(Stock Code: 01628) DISCLOSEABLE TRANSACTIONS - DEEMED DISPOSAL OF EQUITY INTEREST IN A NON-WHOLLY OWNED SUBSIDIARY JOINT VENTURE AGREEMENT
On 31 October 2014, Hong Kong Fung Chow (a wholly-owned subsidiary of the Company), Xiamen Hepingli Hotel and Pingan Trust entered into the Joint Venture Agreement, pursuant to which Pingan Trust agreed to make a capital contribution of RMB500 million to Yuzhou Properties (Hefei) Eastern Town. Upon completion of the Capital Increase, the equity interest of Hong Kong Fung Chow in Yuzhou Properties (Hefei) Eastern Town will be diluted from 90% to 65% and Yuzhou Properties (Hefei) Eastern Town will be held as to 65% by Hong Kong Fung Chow, as to
7.2% by Xiamen Hepingli Hotel and as to 27.8% by Pingan Trust.
As the equity interest of Hong Kong Fung Chow in Yuzhou Properties (Hefei) Eastern Town will be diluted from 90% to 65% following completion of the Capital Increase, the Capital Increase will constitute a deemed disposal of the Group's equity interest in Yuzhou Properties (Hefei) Eastern Town under Rule 14.29 of the Listing Rules.
As one or more of the applicable percentage ratios in respect of the Capital Increase exceed
5% but below 25%, such transactions constitute discloseable transactions of the Company under Chapter 14 of the Listing Rules, which are subject to the reporting and announcement requirements but exempt from independent shareholders' approval requirement under the Listing Rules.
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JOINT VENTURE AGREEMENTDate: 31 October 2014
Parties: | (1) | Hong Kong Fung Chow; |
(2) | Xiamen Hepingli Hotel; and | |
(3) | Pingan Trust. |
To the best of the Directors' knowledge, information and belief after having made all reasonable enquiry, save for being a shareholder of a non-wholly owned subsidiary of the Company, each of Xiamen Hepingli Hotel and Pingan Trust and their respective ultimate beneficial owners are third parties independent of the Company and connected persons of the Company.
Nature of Transaction
Pursuant to the Joint Venture Agreement, the registered capital of Yuzhou Properties (Hefei) Eastern Town will be increased from RMB1,300 million to RMB1,800 million and Pingan Trust will inject RMB500 million into Yuzhou Properties (Hefei) Eastern Town as registered capital of Yuzhou Properties (Hefei) Eastern Town by instalments within one year after completion of relevant filing for the registration of changes of equity interests in Yuzhou Properties (Hefei) Eastern Town as contemplated under the Joint Venture Agreement.
Other key terms of the Joint Venture Agreement include, among others:
Business: The business of Yuzhou Properties (Hefei) Eastern Town shall be property development and management of the land parcel E1311 located at Feidong County, Hefei, Anhui Province, the PRC.
Duration: Yuzhou Properties (Hefei) Eastern Town shall have a term of 30 years, commencing from the date of issue of its business license, unless otherwise terminated in accordance with the terms of the Joint Venture Agreement.
Board representation: The board of directors of Yuzhou Properties (Hefei) Eastern Town shall consist of three members, with two being nominated by Hong Kong Fung Chow and one being nominated by Pingan Trust. The chairman of the board shall be a director nominated by Hong Kong Fung Chow.
Registered capital: The registered capital of Yuzhou Properties (Hefei) Eastern Town shall not be reduced unless the capital requirement for the property development project in Feidong County, Hefei, Anhui Province, the PRC and the size of the project have been changed and such registered capital reduction shall be approved by the board of directors of Yuzhou Properties (Hefei) Eastern Town and relevant authorities.
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The terms of the Joint Venture Agreement and the capital contribution amount were arrived at after arm's length negotiation among the parties to the Joint Venture Agreement with reference to the capital requirement for the development of the property in Feidong County, Hefei, Anhui Province, the PRC.
APPLICATION OF THE CAPITALThe capital contribution of RMB500 million to be made by Pingan Trust will be applied by Yuzhou Properties (Hefei) Eastern Town to develop of the property in Feidong County, Hefei, Anhui Province, the PRC.
REASONS FOR AND BENEFITS OF THE TRANSACTION
The Company believes that the transactions contemplated under the Joint Venture Agreement are beneficial to the Company and its shareholders, which will provide a source of capital for the Group to develop its property in Feidong County, Hefei, Anhui Province, the PRC and improve debt and asset structure of the Group. Following completion of the Capital Increase, Hong Kong Fung Chow will still hold 65% equity interest in Yuzhou Properties (Hefei) Eastern Town and will continue to benefit from the future growth and success of the property development project in Feidong County, Hefei, Anhui Province, the PRC.
The Directors (including the independent non-executive Directors) consider the terms of the Joint Venture Agreement to be fair and reasonable and in the interests of the Company and its shareholders as a whole. None of the Directors has a material interest in the transactions contemplated under the Joint Venture Agreement or is required to abstain from voting from the Board resolutions for considering and approving the same pursuant to the articles of association of the Company.
Yuzhou Properties (Hefei) Eastern Town is an indirectly non-wholly-owned subsidiary of the Company established under the laws of the PRC with limited liability on 19 November 2013 and is principally engaged in the business of property development.
Yuzhou Properties (Hefei) Eastern Town is currently held as to 90% by Hong Kong Fung Chow and
10% by Xiamen Hepingli Hotel. Upon completion of the Capital Increase, Yuzhou Properties (Hefei) Eastern Town will be held as to 65% by Hong Kong Fung Chow, 7.2% by Xiamen Hepingli Hotel and 27.8% by Pingan Trust.
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Based on the financial statements of Yuzhou Properties (Hefei) Eastern Town prepared under the
HK GAAP, (i) the net asset value of Yuzhou Properties (Hefei) Eastern Town as at 30 September
2014 was approximately RMB1,293,637,000; (ii) its net loss (before taxation) for the financial years ended 31 December 2013 were approximately RMB653,000; and (iii) its net loss (after taxation) for the financial years ended 31 December 2013 were approximately RMB653,000.
Following completion of the Capital Increase, the equity interest of Hong Kong Fung Chow in Yuzhou Properties (Hefei) Eastern Town will be diluted from 90% to 65%. Yuzhou Properties (Hefei) Eastern Town will continue to be a subsidiary of the Company and its financial results will continue to be consolidated with the Group's results.
It is expected that the net asset value of the Group will be increased by approximately RMB1,591,000 following completion of the Capital Increase and the Capital Increase would not have any significant impact on the Group's consolidated income statement.
The Group is principally engaged in the development of high end residential, retail and commercial properties. Hong Kong Fung Chow is a company incorporated in Hong Kong with limited liability and is an indirectly wholly-owned subsidiary of the Company. Hong Kong Fung Chow is an investment company principally engaged in the business of property development and management.
Xiamen Hepingli Hotel is a company established under the laws of the PRC and is principally engaged in the business of hotel operation and management.
Pingan Trust is a trust company established under the laws of the PRC in April 1996 and is a subsidiary of Pingan Insurance (Group) Company of China Ltd., whose shares are listed on the Stock Exchange and the Shanghai Stock Exchange. Pingan Trust is principally providing individuals and institutional clients with trust wealth management products, investment and financing services as well as a wide range of wealth management services.
As the equity interest of Hong Kong Fung Chow in Yuzhou Properties (Hefei) Eastern Town will be diluted from 90% to 65% following completion of the Capital Increase, the Capital Increase will constitute a deemed disposal of the Group's equity interest in Yuzhou Properties (Hefei) Eastern Town under Rule 14.29 of the Listing Rules.
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DEFINITIONS
In this announcement, the following expressions shall have the following meanings unless the context requires otherwise:
"Board" the board of Directors
"Capital Increase" the increase in the registered capital of Yuzhou Properties (Hefei) Eastern Town and the capital injection of RMB500 million by Pingan Trust into Yuzhou Properties (Hefei) Eastern Town pursuant to the Joint Venture Agreement
"Company" Yuzhou Properties Company Limited( �J-t!flix�:1�%PJ ), an exempted company incorporated in the Cayman Islands on 23
April 2008 with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"connected person(s)" shall have the meaning ascribed to it under the Listing Rules
"Director(s)" director(s) of the Company
"Group" the Company and its subsidiaries
"Hong Kong Fung Chow" Hong Kong Fung Chow Investment Limited( 'i'lltl'Jllt�:1
�%PJ ), a company incorporated in Hong Kong with limited
liability and a wholly owned subsidiary of the Company
"Joint Venture Agreement" a Joint Venture Agreement dated 31 October 2014 entered into between Hong Kong Fung Chow, Xiamen Hepingli Hotel and Pingan Trust in relation to, among others, the Capital Increase
"Listing Rules" the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited
"Pingan Trust" Pingan Trust Co., Ltd.*( .If':{�fft:1�'Sf%PJ ), a company established under the laws of the PRC
"PRC" the People's Republic of China (excluding, for the purpose of this announcement, the Hong Kong Special Administrative Region of the People's Republic of China, the Macao Special Administrative Region of the People's Republic of China and Taiwan)
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"PRC GAAP" the Generally Accepted Accounting Principles of the PRC "RMB" Renminbi, the lawful currency of the PRC
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Xiamen Hepingli Hotel" Xiamen Hepingli Hotel Co., Ltd.*( 1 ;f.If_!gg$:1�%PJ ), a company established under the laws of the PRC
"Yuzhou Properties (Hefei) Eastern Town"
Yuzhou Properties (Hefei) Eastern Town Co., Ltd.*( �J'i:ill(it
H )if�:1�%PJ ), a company established under the laws of the
PRC with limited liability on 19 November 2013 and a non-wholly
owned subsidiary of the Company
"%" per cent.
* for identification purpose only
By order of the Board
Yuzhou Properties Company Limited Lam Lung OnChairman
Hong Kong, 31 October 2014
As at the date of this announcement, the executive Directors of the Company are Mr. Lam Lung On (Chairman), Ms. Kwok Ying Lan, Mr. Lin Longzhi and Mr. Lin Conghui, and independent non-executive Directors of the Company are Mr. Gu Jiande, Mr. Lam Kwong Siu and Mr. Wee Henny Soon Chiang.
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