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. AVIC Joy Holdings (HK) Limited 幸 福 控 股( 香 港 )有 限 公 司 (Incorporated in Hong Kong with limited liability) (Stock Code: 260) VERY SUBSTANTIAL ACQUISITION Financial Adviser to AVIC Joy Holdings (HK) Limited SALE AND PURCHASE AGREEMENT On 6 January 2015 (after trading hours), the Vendor and the Company entered into the Sale and Purchase Agreement at a consideration RMB1,566,032,890 (equivalent to approximately HK$1,957,541,113) which shall be satisfied in cash with internal resources and bank financing. LISTING RULES IMPLICATIONS As one of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Acquisition exceeds 100%, the Acquisition constitutes a very substantial acquisition of the Company under Rule 14.06(5) of the Listing Rules and will accordingly be subject to the requirements of reporting, announcement and the shareholders’ approval requirements under Chapter 14 of the Listing Rules. The EGM will be held to consider and, if thought fit, pass the ordinary resolution(s) to approve the Acquisition. To the best of the knowledge of the Directors, no Shareholder has a material interest in the Acquisition and therefore, no Shareholder is required to abstain from voting at the EGM in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder. A circular, containing further details of, among others, the Acquisition, a valuation report on the Property, the unaudited pro forma financial information of the enlarged Group and the notice convening the EGM, is expected to be despatched to the Shareholders on or before 31 January 2015 as additional time is required to prepare for the pro forma financial information of the enlarged Group and the valuation report of the Property. 1 Completion of the Acquisition is subject to the satisfaction of the conditions precedent in the Sale and Purchase Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares. The Board is pleased to announce that on 6 January 2015 (after trading hours), the Vendor and the Company entered into the Sale and Purchase Agreement, pursuant to which the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Property. SALE AND PURCHASE AGREEMENT Date 6 January 2015 Parties Vendor: Shanghai Yin Hui Real Estate Development Co., Ltd. Purchaser: the Company or its wholly-owned subsidiaries To the best of the Directors’ knowledge, information and belief, having made all reasonable enquires, the Vendor and its ultimate beneficial owners are Independent Third Parties. Assets to be acquired The Property is comprised of: (i) the Building with office units on basement 1 and level 2-10, and retail units on ground floor; and (ii) the Parking Spaces with 145 car parking spaces on basement 1-3. The Vendor conditionally agreed to grant to the Purchaser a 30-year free exclusive usage right of a pier for seaplane berthing next to the Building (subject to obtaining approvals from relevant PRC governmental authorities) upon Completion. Upon Completion, the naming rights and usage rights of the advertising space of the Building will also be transferred to the Purchaser. 2 Consideration The Consideration is RMB1,566,032,890 (equivalent to approximately HK$1,957,541,113). The Consideration will be settled by the Purchaser in two installments in the following manner: (a) F i r s t i n s t a l l m e n t o f R M B 4 4 3 , 0 3 2 , 8 9 0 ( e q u iva l e n t t o a p p r o x i m a t e l y HK$553,791,113) shall be settled in cash within 10 Business Days after obtaining the Shareholders’ approval at the EGM; and (b) Second installment of the remaining balance of RMB1,123,000,000 (equivalent to approximately HK$1,403,750,000) shall be payable in cash after receiving the bank financing, which shall not be later than 10 March 2015. The Company intends to finance the Acquisition with the Group’s internal resources and bank financing. Based on the unaudited management accounts of the Group as at 30 November 2014, the Company has sufficient internal resources to satisfy the first installment of the Consideration. The Company is currently in negotiation with the banks and has not secured any bank financing as at the date of this announcement, and Completion is conditional upon the successful financing of the second installment of the Consideration. The Consideration was determined after arm’s length negotiations between the Vendor and the Purchaser, and was determined with reference to a preliminary valuation report on the Property prepared by an independent professional valuer engaged by the Company, with an appraised value of approximately RMB1,590,000,000 (equivalent to approximately HK$1,987,500,000) using direct comparison method. Upon full settlement of the Consideration, the Vendor shall deliver the possession of the Property to the Purchaser within 8 Business Days. Conditions precedent Completion is conditional upon the satisfaction of the following conditions: (i) the Purchaser having obtained the Shareholders’ approval at the EGM under the Listing Rules in relation to the Acquisition; (ii) the Purchaser having completed the financing of the Property; (iii) a valuation report issued by an independent professional valuer engaged by the Company which confirms the fair market value of the Property at no less than RMB1,566,032,890 (equivalent to approximately HK$1,957,541,113); and (iv) the Company having obtained relevant satisfactory documents from Shanghai government to use the pier for seaplane berthing on or before 10 February 2015. 3 Completion shall take place within 30 Business Days after fulfillment of the above conditions. In the event that (i) the above conditions cannot be fulfilled on or before the Long Stop Date (unless with consent from both the Vendor and the Purchaser); or (ii) the Purchaser fails to settle the first installment within 10 Business Days after the agreed time for payment or the second installment within 15 Business Days after 10 March 2015, the Vendor shall refund the entire amount received from the Purchaser (after deducting the transaction cost and tax incurred which is responsible by the Purchaser). The Sale and Purchase Agreement shall lapse and cease to be of any effect on the parties to the Sale and Purchase Agreement, in which case none of the parties shall have any claim against the other party for costs, damages, compensation or otherwise (save in respect of any prior breach of the Sale and Purchase Agreement). INFORMATION OF THE PROPERTY AND THE USAGE RIGHT OF THE PIER As at the date of this announcement, the Property is owned by the Vendor and is located at the north bund of Huangpu River opposite of Lujiazui financial and trade zone, with address at 18 Gong Ping Road, Shanghai, the PRC. The Property is comprised of the Building with office units on level basement 1 and level 2-10 and retail units on ground floor and the Parking Spaces with 145 car parking spaces on basement 1-3, which together with an aggregate gross floor area of 16,352.29 sq.m.. Upon Completion, the Purchaser will be granted a 30-year free exclusive usage right of a pier for seaplane berthing next to the Building (subject to obtaining approvals from relevant PRC governmental authorities) and the Company expects to incur an annual management fee of approximately RMB1 million. The construction of the Property has been completed in 2014 and the Property has obtained all the relevant certificates and licences. As at the date of this announcement, the Property was vacant and has not been used or leased by the Vendor or any other parties. The Group intends to lease out most of the gross floor area of the Building to third parties. INFORMATION OF THE VENDOR The Vendor is a project company which engages in property development in Shanghai. It principally carries out commercial and office property development and operation in the western portion of Hui Shan Pier, Hongkou District, Shanghai, a sino-foreign joint venture company with limited liability established under the laws of the PRC and a 50% non-wholly owned subsidiary of Franshion Properties (China) Limited, a company incorporated in Hong Kong, whose shares are listed on the Main Board of the Stock Exchange (stock code: 817). The remaining balance of the 50% interest of the Vendor is owned by 上海國際港務(集團)股份有限公司 (Shanghai International Port (Group) Co., Ltd.*), an entity affiliated with the Shanghai Municipal Government and listed on the Shanghai Stock Exchange (stock code: 600018). 4 REASONS FOR AND BENEFITS OF THE ACQUISITION As at the date of this announcement, the Group is engaged in the operation of compressed natural gas and liquefied petroleum gas refueling stations, management and operation of light-emitting diode energy management contracts, provision of finance lease and loan services and class 1 land development in the PRC. As stated in the annual report of the Company for the year ended 31 December 2013, the Group will continue to look for ways for more effective deployment of its resources and identify investment opportunities to broaden its earnings base and to enhance Shareholders value. As disclosed in the announcement of the Company dated 3 December 2014, the Company was in the course of certain preliminary and exploratory discussions with few counterparties over certain potential investment or business opportunities, including but not limited to a possible investment in a commercial building in Shanghai, the PRC. The Acquisition will enable the Group to diversify its business and broaden the income stream of the Group through property leasing and the potential appreciation in value of the Property amongst the commercial properties in Shanghai. In addition, taking advantage of the prime location of the Property and the potential to use the pier for seaplane berthing, the Acquisition provides a supplementary business opportunity to the Group to develop seaplane business with its seaplane operation centre in the Building. As at the date of this announcement, the management of the Company has no concrete plan for the development of the seaplane business. In the event that the management of the Company determines to develop the seaplane business which is subject to, among other things, obtaining the approvals from relevant PRC governmental authorities to use the pier for seaplane berthing, it is expected that capital expenditure will be mainly incurred for the purchase of seaplanes for, inter alia, tourism and business travel. Having considered, including but not limited to, (i) the location of the Property; (ii) the prospect of the commercial property market in Shanghai; (iii) the expected rental income to be generated from the Property; (iv) the preliminary valuation of the Property; (v) the potential appreciation in value of the Property; and (vi) possibility of using the pier for seaplane berthing, the Directors consider that the terms of the Sale and Purchase Agreement are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS As one of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Acquisition exceeds 100%, the Acquisition constitutes a very substantial acquisition of the Company under Rule 14.06(5) of the Listing Rules and will accordingly be subject to the requirements of reporting, announcement and the shareholders’ approval requirements under Chapter 14 of the Listing Rules. 5 The EGM will be held to consider and, if thought fit, pass the ordinary resolution(s) to approve the Acquisition. To the best of the knowledge of the Directors, no Shareholder has a material interest in the Acquisition and therefore, no Shareholder is required to abstain from voting at the EGM in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder. A circular, containing further details of, among others, the Acquisition, a valuation report on the Property, the unaudited pro forma financial information of the enlarged Group and the notice convening the EGM, is expected to be despatched to the Shareholders on or before 31 January 2015 as additional time is required to prepare for the pro forma financial information of the enlarged Group and the valuation report of the Property. Completion of the Acquisition is subject to the satisfaction of the conditions precedent in the Sale and Purchase Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares. DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the following meanings: “Acquisition” the acquisition of the Property subject to the terms and conditions of the Sale and Purchase Agreement “Board” the board of Directors “Building” an office building located at Block B, Tower 17, International Shipping Service Center, No. 18 Gong Ping Road, Shanghai, the PRC “Business Day(s)” any day (other than a Saturday, Sunday or public holiday) in Hong Kong on which banks in Hong Kong are open generally for normal banking business “Company” AVIC Joy Holdings (HK) Limited, a company incorporated in Hong Kong with limited liability whose shares are listed on the Main Board of the Stock Exchange “Completion” completion of the Acquisition, being within 30 Business Days after the fulfillment of all the conditions precedent as set out in the Sale and Purchase Agreement 6 “connected person(s)” with meanings ascribed to it under the Listing Rules “Consideration” the sale and purchase price of the Property of RMB1,566,032,890 (equivalent to approximately HK$1,957,541,113) pursuant to the Sale and Purchase Agreement “Directors” the directors of the Company “EGM” the extraordinary general meeting of the Company to be convened to consider, and if thought fit, approve the Acquisition “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Independent Third Party(ies)” party(ies) who is/are third parties independent of the Company and its connected persons “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Long Stop Date” 31 March 2015 (or any other date as agreed between the Vendor and the Purchaser) “Parking Spaces” a total of 145 car parking spaces located on basement 1-3 of the Building “PRC” the People’s Republic of China which for the purpose of this announcement, shall exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan “Property” being the Building and the Parking Spaces with an aggregate gross floor area of 16,352.29 sq.m. “Purchaser” the Company or its wholly-owned subsidiaries “Sale and Purchase Agreement”the agreement dated 6 January 2015 entered into between the Purchaser and the Vendor in relation to the acquisition of the Property “Share(s)” ordinary share(s) in the issued share capital of the Company 7 “Shareholder(s)” holder(s) of Share(s) in issue “Stock Exchange” The Stock Exchange of Hong Kong Limited “Vendor” 上 海 銀 滙 房 地 產 發 展 有 限 公 司 (Shanghai Yin Hui Real Estate Development Co., Ltd.*), a sino-foreign joint venture company with limited liability established under the laws of the PRC and a 50% non-wholly owned subsidiary of Franshion Properties (China) Limited, a company incorporated in Hong Kong, whose shares are listed on the Main Board of the Stock Exchange (stock code: 817). The remaining balance of the 50% interest of the Vendor is owned by 上海國際 港 務(集 團)股 份 有 限 公 司 (Shanghai International Port (Group) Co., Ltd.*), an entity affiliated with the Shanghai Municipal Government and listed on the Shanghai Stock Exchange (stock code: 600018) “%” per cent “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC and the exchange rate between RMB and HK$ for the purpose of this announcement is RMB1 = HK$1.25 “sq.m.” square metres By order of the Board AVIC Joy Holdings (HK) Limited Ji Hui Chief Executive Officer Hong Kong, 6 January 2015 As of the date of this announcement, the Board comprises nine Directors, of which Mr. Ji Guirong (Chairman) is the non-executive Director; Mr. Ji Hui (Chief Executive Officer), Mr. Zang Zheng, Mr. Zhang Chuanjun, Mr. Xiao Wei and Mr. Wang Xiaowei are the executive Directors; Mr. Hu Xiaowen, Mr. Gong Changhui and Mr. Wu Meng are the independent non-executive Directors. * For identification purpose only 8
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