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whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this
announcement.
(a joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 2328)
CONNECTED TRANSACTION
ESTABLISHMENT OF REINSURANCE COMPANY
On 16 April 2015, the Company and PICC Group entered into the Promoters’ Agreement,
pursuant to which the two parties agreed to jointly establish the Reinsurance Company by
way of promotion and the Company shall subscribe for 49% of the share capital of the
Reinsurance Company with an amount of RMB490 million.
Pursuant to the relevant provisions of the Listing Rules, the Transaction constitutes a
connected transaction of the Company. As none of the applicable percentage ratios for the
Transaction exceeds the 5% threshold under Rule 14A.76 of the Listing Rules, the
Transaction is only subject to the reporting and announcement requirements and is exempt
from the independent shareholders’ approval requirement under Chapter 14A of the Listing
Rules.
INTRODUCTION
On 16 April 2015, the Company and PICC Group entered into the Promoters’ Agreement,
pursuant to which the two parties agreed to jointly establish the Reinsurance Company by
way of promotion and the Company shall subscribe for 49% of the share capital of the
Reinsurance Company with an amount of RMB490 million.
PROMOTERS’ AGREEMENT
1. Date of signing
16 April 2015
2. Parties
(1) the Company
(2) PICC Group
3. Reinsurance Company
Pursuant to the Promoters’ Agreement, the Reinsurance Company shall be a joint stock
limited liability company incorporated in the PRC, with one billion shares at par value of
RMB1.0 each and registered capital of RMB1 billion. PICC Group and the Company shall
subscribe for 51% and 49% of the share capital of the Reinsurance Company, respectively.
The Reinsurance Company shall be an independent legal person, which shall be responsible
for its own liabilities out of its own assets. The business scope of the Reinsurance Company
shall be: (1) reinsurance business relating to life insurance and property insurance, including
domestic reinsurance business, domestic retrocession business and overseas reinsurance
business; (2) insurance funds application business permitted under the PRC laws and
regulations; and (3) other business approved by the CIRC and relevant authorities of the PRC.
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The establishment of the Reinsurance Company is subject to the approval of the CIRC and
other regulatory authorities.
4. Capital contribution and payment
The subscription price per share of the Reinsurance Company shall be RMB1.0, which is
equivalent to its par value. The Company shall subscribe for 49% of the share capital of the
Reinsurance Company, representing 490 million shares, with a capital contribution amount of
RMB490 million. PICC Group shall subscribe for 51% of the share capital of the Reinsurance
Company, representing 510 million shares, with a capital contribution amount of RMB510
million. The capital contributions shall be paid up in cash by the two parties upon the
establishment of the Reinsurance Company.
Upon the establishment of the Reinsurance Company, the audited establishment expenses as
approved by its inaugural meeting shall be borne by the Reinsurance Company. No other
establishment expenses are expected to be incurred; or, if any, will be borne by the two parties
to the agreement based on their respective capital contribution proportions.
The capital contributions to be made by the Company and PICC Group under the Promoters’
Agreement have been determined after arm’s length negotiations between the two parties,
with reference to the estimated operating capital requirement of the Reinsurance Company.
The capital contribution and other establishment expenses (if any) borne by the Company will
be paid by the Company out of its internal resources.
GENERAL INFORMATION
Information on the Company
The Company is a joint stock limited liability company incorporated in the PRC, whose H
shares are listed on the Hong Kong Stock Exchange. The Company is principally engaged in
property insurance, accidental injury insurance, short-term health insurance and the related
reinsurance business as well as investment and funds application business in the PRC.
Information on PICC Group
PICC Group is a joint stock limited liability company incorporated in the PRC, whose H
shares are listed on the Hong Kong Stock Exchange. PICC Group is principally engaged in
the investment and the holding of shares of listed corporations, insurance institutions and
other financial institutions, the supervision and management of various domestic and overseas
business of its controlled enterprises and the policy-guided insurance business that is
authorised or appointed by the PRC.
REASONS FOR AND BENEFITS OF THE TRANSACTION
The Transaction will be beneficial to the Company in seizing development opportunities in
the reinsurance market, reducing the capital requirements relating to reinsurance credit risk,
satisfying the overseas reinsurance needs of its clients and cultivating its new sources of
business growth. The Board, including the Independent Non-executive Directors, is of the
view that the Transaction is entered into on normal commercial terms, the terms of the
Transaction are fair and reasonable and in the interests of the Company and its shareholders
as a whole.
LISTING RULES IMPLICATIONS
PICC Group is the controlling shareholder of the Company, holding approximately 69% of
the issued share capital of the Company. Pursuant to the Listing Rules, PICC Group is a
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connected person of the Company. Accordingly, the Transaction constitutes a connected
transaction of the Company. As Mr. Wu Yan, Mr. Wang Yincheng, Ms. Yu Xiaoping and Mr.
Li Tao, all being Directors, hold positions in PICC Group, all of them have abstained from
voting on the board resolution for considering and approving the Transaction. Save as
disclosed above, no other Directors were required to abstain from voting on the board
resolution for considering and approving the Transaction or are regarded as having a material
interest in the Transaction.
As none of the applicable percentage ratios for the Transaction exceeds the 5% threshold
under Rule 14A.76 of the Listing Rules, the Transaction is only subject to the reporting and
announcement requirements and is exempt from the independent shareholders’ approval
requirement under Chapter 14A of the Listing Rules.
DEFINITIONS
In this announcement, the following expressions shall have the following meanings unless the
context otherwise requires:
“Board”
the board of directors of the Company
“CIRC”
China Insurance Regulatory Commission
“Company”
PICC Property and Casualty Company Limited
“connected person”
has the meaning as defined in the Listing Rules
“Directors”
directors of the Company
“Hong Kong Stock
Exchange”
The Stock Exchange of Hong Kong Limited
“Listing Rules”
the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited
“PICC Group”
The People’s Insurance Company (Group) of China Limited
“Promoters’ Agreement”
the Promoters’ Agreement on PICC Reinsurance Company
Limited entered into between the Company and PICC Group
on 16 April 2015
“Reinsurance Company”
PICC Reinsurance Company Limited, a joint stock limited
liability company to be established by PICC Group and the
Company pursuant to the Promoters’ Agreement
“PRC”
the People’s Republic of China
“RMB”
Renminbi, the lawful currency of the PRC
“Transaction”
the establishment of the Reinsurance Company by PICC Group
and the Company jointly by way of promotion pursuant to the
Promoters’ Agreement
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By Order of the Board
Zhang Xiaoli
Secretary of the Board
Beijing, the PRC, 16 April 2015
On the date of this announcement, the Chairman of the Board is Mr. Wu Yan (executive director), the Vice Chairman is Mr.
Guo Shengchen (executive director), the non-executive directors are Mr. Wang Yincheng, Ms. Yu Xiaoping and Mr. Li Tao,
Mr. Wang He is an executive director and the independent non-executive directors are Mr. Ding Ningning, Mr. Liao Li and
Mr. Lin Hanchuan.
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