Discloseable Transaction of the Company Under Chapter 14 of the Listing Rules and Is Subject to the Reporting and Announcement Requirements As Provided Thereunder
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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 from or in reliance upon the whole or any part of the contents of this announcement. (Stock Code: 0832) DISCLOSEABLE TRANSACTION THE COOPERATION AGREEMENT On 18 September 2013, CCRE China, an indirect wholly-owned subsidiary of the Company, Tianhe Investment and Henan Huihua entered into the Cooperation Agreement. The Cooperation Agreement sets out their rights and obligations with respect to the joint development of the Land Development Project, and in connection therewith, the parties agreed that, among other things, CCRE China shall be responsible for providing the Initial Capital required for the initial stage of the Land Development Project is the sum of RMB500 million. As at the date of this announcement, Henan Huihua is a jointly-controlled entity owned as to 51% and 49% by CCRE China and Tianhe Investment, respectively. There will be no change to the equity holding of Tianhe Investment upon completion of the Transaction as contemplated under the Cooperation Agreement. IMPLICATIONS UNDER THE LISTING RULES As one or more of the applicable percentage ratios in respect of the Transaction as contemplated under the Cooperation Agreement exceeds 5% but less than 25%, the Transaction constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements as provided thereunder. – 1 – BACKGROUND On 16 March 2012, CCRE China and the People’s Government of Huiji District, Zhengzhou City entered into a letter of intent of cooperation pursuant to which, among other things, Henan Huihua was established by CCRE China and Tianhe Investment (which is established and wholly-owned by the People’s Government of Huiji District, Zhengzhou City) for the purpose of the Land Development Project. As at the date of this announcement, Henan Huihua has a registered and paid-up capital of RMB104.1 million which is held by CCRE China and Tianhe Investment as to 51% and 49%, respectively. For the reason as set out in the paragraph headed ‘‘Information about the Group, CCRE China, Tianhe Investment and Henan Huihua’’ below, Henan Huihua is currently accounted for as a jointly-controlled entity of the Company. On 18 September 2013, CCRE China, Tianhe Investment and Henan Huihua entered into the Cooperation Agreement which sets out their rights and obligations with respect to the joint development of the Land Development Project. THE COOPERATION AGREEMENT Date: 18September2013 Parties: (1) CCRE China, an indirect wholly-owned subsidiary of the Company (2) Tianhe Investment (3) Henan Huihua, a jointly-controlled entity owned as to 51% and 49% by CCRE China and Tianhe Investment, respectively To the best knowledge, information and belief of the Directors having made all reasonable enquiries, Tianhe Investment and its ultimate beneficial owner as well as Henan Huihua are Independent Third Parties. Subject matter: 1. Scope of the Land Development Project The Land Development Project involves the joint development of the Land by the parties to the Cooperation Agreement by carrying out certain ‘‘first class’’ land development works and rendering the Land suitable for residential and commercial uses. The said ‘‘first class’’ development works shall include but not limited to the resumption of the Land as part of the PRC Government’s reserve of State-owned land, the demolition of the existing properties erected on the Land, the relocation of the existing residents and the construction of infrastructure systems and public facilities. – 2 – 2. Capital required for the Land Development Project It is estimated that the total amount of capital required for the Land Development Project will be approximately RMB10 billion. CCRE China shall be responsible for providing the Initial Capital required for the initial stage of the Land Development Project in the sum of RMB500 million by means of shareholder’s loans and in accordance with the progress of the ‘‘first class’’ land development works. The payment shall be made by CCRE China into a designated bank account of Henan Huihua jointly authorised by CCRE China and Tianhe Investment. The Initial Capital will be financed by the internal resources of the Group. Up to the date of this announcement, the Group already paid approximately RMB200 million to Henan Huihua by its internal resources. It is expected that further payments of approximately RMB300 million will be made to Henan Huihua by the end of October 2013. Irrespective of whether the Group will obtain the land use right of the Land or not in the future, CCRE China will be reimbursed for the Initial Capital as discussed in item 4 below. 3. Roles and responsibilities of the parties to the Cooperation Agreement CCRE China shall be responsible for, among other things, the provision of financial resources and manpower to Henan Huihua in connection with the Land Development Project and participating in the listing for sale of the land use right of the Land. Tianhe Investment shall be responsible for, among other things, monitoring, decision making and coordination in relation to the Land Development Project to ensure successful implementation thereof. Henan Huihua shall be responsible for, among other things, carrying out the ‘‘first class’’ development works. 4. Listing for sale of the Land The Land is currently under the collective land use right of the occupants thereon. Upon completion of the Land Development Project, the land use right of the Land will be owned by the PRC Government. Pursuant to the Cooperation Agreement, CCRE China shall participate in the listing for sale process endeavouring to obtain the land use right of the Land. The base price of the Land will be the higher of (i) the Development Costs; and (ii) the appraised value of the Land. The Development Costs, as determined by an independent auditing institution jointly selected by CCRE China and Tianhe Investment and in accordance with the relevant PRC laws and regulations and accounting standards, will be approved by the People’s Government of Zhengzhou City. – 3 – If the Land were to be sold to CCRE China at the listing for sale process, CCRE China shall be responsible for the payment of the Land Price. Where the Land Price is equivalent to the base price, the Land Price shall be reimbursed to Henan Huihua on the actual Development Costs it incurs and for its repayment to CCRE China of the Initial Capital and other capital contributed by CCRE China into Henan Huihua. Where the Land Price exceeds the base price, the premium shall be paid to Henan Huihua for distribution thereof to CCRE China and Tianhe Investment in proportion to the amount of their actual capital contribution. If the Land were to be sold to a third party at the listing for sale process, the Land Price shall be reimbursed to Henan Huihua on the actual Development Costs it incurs and for its repayment to CCRE China of the Initial Capital and other capital contributed by CCRE China into Henan Huihua while any premium shall be paid to Henan Huihua for distribution thereof to CCRE China and Tianhe Investment in accordance with the relevant PRC laws and regulations and the articles of association of Henan Huihua. INFORMATION ABOUT THE LAND AND THE LAND DEVELOPMENT PROJECT The Land extends across three villages under the territory of Huayuankou Town, Huiji District, Zhengzhou City with a total area of approximately 9,900 mu. The Land is currently occupied by the villagers of the properties erected on the Land and is under the collective land use right of the villagers. On 16 March 2012, CCRE China and the People’s Government of Huiji District, Zhengzhou City entered into a letter of intent of cooperation pursuant to which, among other things, Henan Huihua was established by CCRE China and Tianhe Investment (which is established and wholly-owned by the People’s Government of Huiji District, Zhengzhou City) for the purpose of the Land Development Project. On 18 September 2013, CCRE China, Tianhe Investment (which is established and wholly- owned by the People’s Government of Huiji District, Zhengzhou City) and Henan Huihua entered into the Cooperation Agreement to lay down the rights and obligations with respect to the joint development of the Land Development Project. The Land Development Project is implemented by the People’s Government of Huiji District, Zhengzhou City and involves the joint development of the Land by the parties to the Cooperation Agreement by carrying out certain ‘‘first class’’ land development works and rendering the Land suitable for residential and commercial uses. The said ‘‘first class’’ development works shall include but not limited to the resumption of the Land as part of the PRC Government’s reserve of State-owned land, the demolition of the existing properties erected on the Land, the relocation of the existing residents and the construction of infrastructure systems and public facilities. INFORMATION ABOUT THE GROUP, CCRE CHINA, TIANHE INVESTMENT AND HENAN HUIHUA The Group is principally engaged in the real estate development and sales in Henan Province, the PRC. – 4 – CCRE China is a limited liability company established in the PRC. It is an indirect wholly- owned subsidiary of the Company and is mainly engaged in real estate development and sales and real estate investment in Henan Province, the PRC. Tianhe Investment is a limited liability company established in the PRC. It is a wholly- owned subsidiary of the People’s Government of Huiji District, Zhengzhou City and is principally engaged in investment holding. Henan Huihua is a limited liability company established in the PRC.