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.
SINOTRANS SHIPPING LIMITED
中外運航運有限公司
（Incorporated in Hong Kong with limited liability)
(Stock Code: 368)
DISCLOSEABLE TRANSACTION
AND
PROVISION OF FINANCIAL ASSISTANCE
On 4 November 2014, the Company entered into the Confirmations with the Bank
pursuant to which the Bank agreed to grant the Participation to the Company by way
of entering into the Participation Agreements at a total consideration of
US$33,220,515.34 (equivalent to approximately HK$259,120,000) with effect from
10 November 2014. Following the amendment of the Facility Agreements in relation
to the Total Committed Loans, the Company intends to elevate its interests under the
Participation Agreements, following completion of which, the rights and the
obligations in respect of the Total Committed Loan will be novated from the Bank to
the Company and the Company will become the lender of the Total Committed Loan
to the Borrowers.
As one of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules
in respect of the Participation is more than 5% but less than 25%, the Participation
constitutes a discloseable transaction for the Company under Chapter 14 of the
Listing Rules.
THE CONFIRMATIONS
Date
4 November 2014
Parties
(1)
the Bank; and
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(2)
the Company
To the best of the Directors’ knowledge, information and belief, having made all reasonable
enquiries, the Bank and the Borrowers (together with their respective ultimate beneficial
owners) are third parties independent of the Company and not connected persons of the
Company.
Subject Matter
On 4 November 2014, the Company entered into the Confirmations with the Bank pursuant to
which the Bank agreed to grant the Participation to the Company by way of entering into the
Participation Agreements at a total consideration of US$33,220,515.34 (equivalent to
approximately HK$259,120,000) with effect from 10 November 2014. Following the
amendment of the Facility Agreements in relation to the Total Committed Loans, the
Company intends to elevate its interests under the Participation Agreements, following
completion of which, the rights and the obligations in respect of the Total Committed
Loan will be novated from the Bank to the Company and the Company will become the
lender of the Total Committed Loan to the Borrowers.
Principal terms and conditions
Pursuant to the terms of the Confirmations, the Company shall enter into the Participation
Agreements with the Bank. The principal terms and conditions of the Participation
Agreements are summarized as follows:
The Total
Committed Loan to
be provided by the
Company
Consideration to be
paid to the Bank
: US$37,750,585.61
HK$294,455,000)
(equivalent
to
approximately
: US$33,220,515.34
(equivalent
to
approximately
HK$259,120,000), which was determined with reference to
the face value of the Total Committed Loan and the internal
rate of return thereon following the arm’s length negotiations
between the parties and will be settled on 10 November
2014(or such other date mutually agreed upon by the Bank
and the Company)
Interest rate on the : 3-month LIBOR plus 0.47% per annum and 3-month LIBOR
Total
Committed
plus 0.7% per annum, to be received by the Company from
Loan
the Bank (following receipt by the Bank under the Facility
Agreements) under the Participation Agreement A and the
Participation Agreement B, respectively
Final maturity
: Ranging from 6 October 2020 to 16 September 2021 (the
“Maturity Date”)
Participation Effective : 10 November 2014
Date
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REASONS FOR AND BENEFITS OF THE PARTICIPATION
In addition to acquiring an interest in the Total Committed Loan under the Participation
Agreements at a discount to its face value, the Directors considered that the Participation
will utilize the Company’s cash and bank balance at a better return given that the inte rnal
rate of return (calculated with reference to the 3-month LIBOR as at the 4 November 2014
and the discount to the face value of the Total Committed Loan) to be received under the
Participation Agreements will be approximately 3.6%, which is higher than the
Company’s interest income from the existing time deposits placed with the banks in Hong
Kong.
The Directors consider that the Participation is a financial assistance provided by the
Company to the Borrowers within the meaning Chapter 14 of the Listing Rules. The
Directors (including the independent non-executive Directors) considered that the terms
of the Confirmations and the transactions contemplated thereunder are entered into after
arm’s length negotiation between the Company and the Bank, are fair and reasonable and
in the interests of the Shareholders as a whole.
None of the Directors has a material interest in the transactions contemplated under the
Confirmations. Accordingly, no Directors are required to abstain from voting on the
relevant Board resolutions to approve the Confirmations and the transactions
contemplated thereunder.
INFORMATION OF THE BANK
The Bank is an authorized financial institution in Hong Kong.
INFORMATION OF THE BORROWERS
To the best of the Directors’ knowledge, information and belief, each of the Borrowers is
an investment holding company.
GENERAL INFORMATION OF THE GROUP
The Company was incorporated in Hong Kong and the Shares are listed on the Main
Board of the Stock Exchange. Our Group is one of China’s largest shipping companies in
terms of self-owned dry bulk fleet size. We own, manage and operate a modern dry bulk
fleet and a container fleet on a worldwide scale. The primary focus and core business of
the Group is dry bulk vessel chartering, which involves the chartering of self -owned
vessels for the transportation of dry bulk cargo, such as iron ore, coal, grain and steel
products, along major global trade routes.
LISTING RULES IMPLICATIONS
As one of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in
respect of the Particpation is more than 5% but less than 25%, the Participation constitutes
a discloseable transaction for the Company under Chapter 14 of the Listing Rules.
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ADDITIONAL INFORMATION TO BE DISCLOSED
It is contemplated that the loans may be further restructured. The Board will publish
further announcement to update the Shareholders as soon as such restructuring becomes
materialized.
DEFINITIONS
In this announcement, the following expressions have the following meanings unless the
context requires otherwise:
“Agate Shipping”
Agate Shipping Inc., a company incorporated under the
laws of the Republic of Panama;
“Bank”
Bank of America, N.A.;
“Board”
board of directors of the Company;
“Borrowers”
comprising Agate Shipping, Crystal Shipping, Nappa
Shipping and Napoleon Shipping;
“Company”
Sinotrans Shipping Limited, a company incorporated
in Hong Kong with limited liability, whose shares are
listed on the main board of the Stock Exchange;
“Confirmations”
the two Loan Market Association trade confirmations
(bank debt) dated 4 November 2014 entered into between
the Bank and the Company;
“connected person”
has the meaning ascribed to it under the Listing Rules;
“Crystal Shipping”
Crystal Shipping Inc., a company incorporated under the
laws of the Republic of Panama;
“Director(s)”
director(s) of the Company;
“Facility Agreements”
the loan agreement dated 21 December 2007 entered into
between, among others, Nappa Shipping and Napoleon
Shipping as borrowers and certain syndicated banks as
lenders and the loan agreement dated 16 May 2007
entered into between, among others, Agate Shipping and
Crystal Shipping as borrowers and certain syndicated
banks as lenders;
“Group”
the Company and its subsidiaries;
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”
Hong Kong Special Administrative Region of the PRC;
“Loans”
the loans in an aggregate amount of US$374,800,000
(equivalent to approximately HK$2,923,440,000) made
by certain syndicated banks to the Borrowers under the
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AC TIV E 204226 637 v.7
Facility Agreements;
“LIBOR”
London Interbank Offered Rate
“Listing Rules”
the Rules Governing the Listing of Securities on the
Stock Exchange;
“Nappa Shipping”
Nappa Shipping Inc., a company incorporated under the
laws of the Republic of Panama;
“Napoleon hipping”
Napoleon Shipping Inc., a company incorporated under
the laws of the Republic of Panama;
“Participation”
the participation in the funding of the Loans by the
Company in the amount of the Total Committed Loan in
accordance with the terms of the Participation
Agreements;
“Participation Agreements”
the Participation Agreement A and the Participation
Agreement B;
“Participation Agreement A”
the Loan Market Association funded participation
(par/distressed) agreement to be entered into on or about
6 November 2014 between the Company as participant
and the Bank as grantor in respect of the Participation of
an aggregate amount of US$16,791,803.45 (equivalent to
approximately HK$130,976,000) due and owing by
Agate Shipping and Crystal Shipping;
“Participation Agreement B”
the Loan Market Association funded participation
(par/distressed) agreement to be entered into on or about
6 November 2014 between the Company as participant
and the Bank as grantor in respect of the Participation of
an aggregate amount of US$20,958,782.16 (equivalent to
approximately HK$163,479,000) due and owing by
Nappa Shipping and Napoleon Shipping;
“PRC”
the People’s Republic of China, which for the purpose of
this announcement, excludes Hong Kong, the Macau
Special Administrative Region and Taiwan;
“Shareholders”
holders of the Shares;
“Shares”
ordinary share(s) of the Company;
“Stock Exchange”
The Stock Exchange of Hong Kong Limited;
“Total Committed Loan”
the loans in an aggregate amount of US$37,750,585.61
(equivalent to approximately HK$294,455,000) made by
the Bank to the Borrowers which are the subject of the
Participation Agreements;
“US$”
United States dollars, the lawful currency of the USA;
“USA”
United States of America; and
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“%”
per cent.
By order of the Board
Sinotrans Shipping Limited
HUEN Po Wah
Company Secretary
Hong Kong, 5 November 2014
As at the date of this announcement, the executive Directors are Mr. Li Hua and Ms. Feng
Guoying; the non-executive Directors are Mr. Li Zhen (Chairman) and Mr. Tian Zhongshan; and
the independent non-executive Directors are Mr. Tsang Hing Lun, Mr. Lee Peter Yip Wah and Mr.
Zhou Qifang.
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