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.
DISCLOSEABLE TRANSACTION
The Board announces that the PRC Subsidiary and the Kaifeng Yuwangtai Government entered into the Letter of Intent I and the Letter of Intent II on 16 November 2011 and 18 April 2012, respectively, in relation to the development of phase I of the Project.
The transactions contemplated under the Letter of Intent II when aggregated with the transactions contemplated under the Letter of Intent I constitute a discloseable transaction for the Company pursuant to Rule 14.06(2) of the Listing Rules and is therefore subject to the requirements of reporting and announcement.
INTRODUCTION
The Board announces that the PRC Subsidiary and the Kaifeng Yuwangtai Government entered into the Letter of Intent I on 16 November 2011 and the Letter of Intent II on 18 April 2012, respectively, in relation to the development of phase I of the Project.
THE LETTER OF INTENT I AND THE LETTER OF INTENT II
Date : 16 November 2011 and 18 April 2012
Parties : (i) the PRC Subsidiary, an indirect wholly-owned subsidiary of the Company established in the PRC, which is engaged in investment holding business; and
(ii) the Kaifeng Yuwangtai Government, being the local government of Yuwangtai District, Kaifeng City, Henan Province, the PRC.
To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Kaifeng Yuwangtai Government and its ultimate beneficial owner(s) are third parties independent of and not connected with the Company and its connected person(s) (as defined in the Listing Rules).
- 1 - Scope of the The Project involves the development and construction of an Project: agricultural by-products international logistics centre in Kaifeng City, Henan Province, the PRC comprising, amongst other things, ice storage rooms, warehousing, agricultural by-products wholesale market, other ancillary facilities management and rental of properties.
Obligations of the The PRC Subsidiary shall obtain land use rights of the land(s) at parties: Yuwangtai District, Kaifeng City, Henan Province, the PRC for phase I of the Project by way of public tender and agree to make a prepayment of RMB54,986,400 in aggregate, being the sum of the Prepayment I and Prepayment II of RMB20,619,900 and RMB34,366,500 respectively, to the Kaifeng Yuwangtai Government for expropriation of 687.33 mu land for phase I of the Project. Both the Prepayment I and the Prepayment II will be used to set off the required land premium if the PRC Subsidiary obtains the relevant land use rights for the Project. If the PRC Subsidiary fails to obtain the land use rights for phase I of the Project, both the Prepayment I and the Prepayment II will be refunded to the PRC Subsidiary within twenty-one (21) days after the announcement of the result of the relevant public tender of the relevant land.
The Kaifeng Yuwangtai Government shall agree to apply both the Prepayment I and the Prepayment II only for the purpose of obtaining the necessary approvals and consents and the land expropriation for the Project.
REASONS FOR AND BENEFITS OF THE LETTER OF INTENT I AND THE LETTER OF INTENT II FOR THE COMPANY
The Group is principally engaged in property rental and property sale in respect of agricultural produce exchanges business in the PRC.
The Group has been operating agricultural produce exchange business in Yulin of Guangxi Zhuang Autonomous Region, Xuzhou of Jiangsu Province and Wuhan of Hubei Province, the PRC. The Directors consider that the entering into of the Letter of Intent I and the Letter of Intent II with the Kaifeng Yuwangtai Government provides the Group an opportunity to expand its agricultural produce exchange business into a new city/province in the PRC which is expected to benefit the Group’s business development.
The terms of the Letter of Intent I and the Letter of Intent II are determined after arm’s length negotiations between the parties. The Directors are of the view that the terms of the Letter of Intent I and the Letter of Intent II (including the determination of the Prepayment I and the Prepayment II, which is estimated on the basis of the expected funding requirements for the land expropriation and the land premium per mu for the phase I of the Project) are on normal commercial terms and fair and reasonable as far as the Company and the Shareholders are concerned and are in the interests of the Group and the Shareholders as a whole.
The Prepayment I and the Prepayment II were funded by internal resources available to the Group.
- 2 - GENERAL
As the applicable percentage ratio for the transactions contemplated under the Letter of Intent II when aggregated with the transactions contemplated under the Letter of Intent I is greater than 5% but less than 25% for the purpose of Rule 14.07 of the Listing Rules, the Letter of Intent I and the Letter of Intent II together constitutes a discloseable transaction for the Company pursuant to Rule 14.06(2) of the Listing Rules and is therefore subject to the requirements of reporting and announcement.
DEFINITIONS
In this announcement, unless the context requires otherwise, the following expressions have the meanings as set out below:
“Board” the board of the Directors
“Company” China Agri-Products Exchange Limited 中國農產品交易有限公 司, an exempted company incorporated in Bermuda with limited liability and whose shares are listed on the main board of the Stock Exchange
“Director(s)” the director(s) of the Company
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Kaifeng Yuwangtai 開 封 市 禹 王 台 區 人 民 政 府 (Kaifeng Yuwangtai District Government” Government #), being the local government of Yuwangtai District, Kaifeng City, Henan Province, the PRC
“Letter of Intent I” the letter of intent entered into between the PRC Subsidiary and the Kaifeng Yuwangtai Government dated 16 November 2011 in relation to the development of phase I of the Project
“Letter of Intent II” the letter of intent entered into between the PRC Subsidiary and the Kaifeng Yuwangtai Government dated 18 April 2012 in relation to the development of phase I of the Project
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“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 People’s Republic of China and Taiwan
# Denotes English translation of Chinese name and is provided for identification purpose only.
- 3 -
“PRC Subsidiary” 開封宏進農副產品批發市場有限公司 (Kaifeng Hong-Jin Agricultural By-products Wholesale Marketplace Limited #), an indirect wholly-owned subsidiary of the Company established in the PRC
“Prepayment I” RMB20,619,900, being the first prepayment payable by the PRC Subsidiary to the Kaifeng Yuwangtai Government pursuant to the Letter of Intent I for the development of phase I of the Project
“Prepayment II” RMB34,366,500, being the second prepayment payable by the PRC Subsidiary to the Kaifeng Yuwangtai Government pursuant to the Letter of Intent II for the development of phase I of the Project
“Project” the project contemplated under the Letter of Intent I and the Letter of Intent II in relation to the development of an agricultural by-products international logistics centre with 687.33 mu as to the phase I of the project located at 中國河南省開封市禹王台區南郊 鄉 310 國道兩側 (both sides of China National Highway 310, Nan Jiao Xiang, Yuwangtai District, Kaifeng City, Henan Province, the PRC #)
“RMB” Renminbi, the lawful currency of the PRC
“Shareholder(s)” the holder(s) of the ordinary share(s) of HK$0.01 each in the issued share capital of the Company
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“%” per cent.
By Order of the Board CHINA AGRI-PRODUCTS EXCHANGE LIMITED 中國農產品交易有限公司 Chan Chun Hong, Thomas Chairman and Chief Executive Officer
Hong Kong, 18 April 2012
# Denotes English translation of Chinese name and address and is provided for identification purpose only.
As at the date of this announcement, the Board comprises Mr. Chan Chun Hong, Thomas, Mr. Leong Weng Kin and Mr. Leung Sui Wah, Raymond, as executive Directors, Mr. Ng Yat Cheung, Mr. Lee Chun Ho and Ms. Lam Ka Jen, Katherine, as independent non-executive Directors.
- 4 -