This Document Is Important and Requires Your Immediate Attention
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in doubt as to any aspect of the Proposal, this Scheme Document or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant, or other professional adviser. If you have sold or transferred all your shares in China Agri-Industries Holdings Limited, you should at once hand this Scheme Document and the accompanying forms of proxy to the purchaser or transferee or to the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Scheme Document, make no representation as to their 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 Scheme Document. This Scheme Document appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of COFCO (Hong Kong) Limited or China Agri-Industries Holdings Limited. COFCO (HONG KONG) LIMITED 中糧集團(香港)有限公司 (Incorporated in Hong Kong with limited liability) (Incorporated in Hong Kong with limited liability) (Stock Code: 606) (1) PROPOSAL FOR THE PRIVATISATION OF CHINA AGRI-INDUSTRIES HOLDINGS LIMITED BY COFCO (HONG KONG) LIMITED BY WAY OF A SCHEME OF ARRANGEMENT (UNDER SECTION 673 OF THE COMPANIES ORDINANCE) AND (2) PROPOSED WITHDRAWAL OF LISTING OF CHINA AGRI-INDUSTRIES HOLDINGS LIMITED Financial Adviser to COFCO (HONG KONG) LIMITED Independent Financial Adviser to the Independent Board Committee Unless the context otherwise requires, capitalised terms used in this Scheme Document (including this cover page) are defined in the section headed “Definitions” of this Scheme Document. A letter from the Board is set out in Part IV of this Scheme Document. A letter from the Independent Board Committee containing its advice to the Independent Shareholders and Optionholders in relation to the Proposal and the Option Offer is set out in Part V of this Scheme Document. A letter from Somerley, being the Independent Financial Adviser, containing its advice to the Independent Board Committee in relation to the Proposal and the Option Offer is set out in Part VI of this Scheme Document. An Explanatory Statement regarding the Scheme is set out in Part VII of this Scheme Document. The actions to be taken by the Shareholders and the Optionholders are set out in Part II of this Scheme Document. Notices convening the Court Meeting to be held at 10:00 a.m. on Friday, 6 March 2020 and the General Meeting to be held at 10:30 a.m. (or, if later, immediately after the conclusion or adjournment of the Court Meeting) on Friday, 6 March 2020 are set out in Appendix IV and Appendix V to this Scheme Document respectively. Whether or not you are able to attend the Court Meeting and/or the General Meeting or any adjournment thereof in person, you are strongly urged to complete and sign the enclosed pink form of proxy in respect of the Court Meeting and the enclosed white form of proxy in respect of the General Meeting, in accordance with the instructions printed thereon and to lodge them at the office of the Share Registrar at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event no later than the respective times and dates as stated under Part II – Actions to be taken of this Scheme Document. Completion and return of the forms of proxy for the Court Meeting and/or the General Meeting will not preclude you from attending and voting in person at the relevant meeting or any adjournment thereof, should you so wish. In the event that you attend and vote at the relevant meeting or any adjournment thereof after having lodged your forms of proxy, the returned forms of proxy shall be deemed to have been revoked by operation of law. This Scheme Document is issued jointly by COFCO (Hong Kong) Limited and China Agri-Industries Holdings Limited. The English language text of this Scheme Document, the Option Offer Letter and the Forms of Acceptance shall prevail over their respective Chinese versions for the purpose of interpretation. 14 February 2020 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION NOTICE TO US HOLDERS OF SCHEME SHARES AND SHARE OPTIONS The Proposal is being made to cancel the securities of a company incorporated in Hong Kong by means of a scheme of arrangement provided for under the Companies Ordinance and is subject to Hong Kong disclosure requirements, which are different from those of the United States. The financial information included in the relevant documentation, including this Scheme Document, has been prepared in accordance with Hong Kong Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules of the US Securities Exchange Act of 1934, as amended. Accordingly, the Proposal is subject to the disclosure requirements and practices applicable in Hong Kong to schemes of arrangement, which differ from the disclosure requirements of the US tender offer and proxy solicitation rules. The receipt of cash pursuant to the Proposal by a US holder of Scheme Shares as consideration for the cancellation of its Scheme Shares pursuant to the Proposal or by a US Optionholder as consideration for the cancellation of its Share Options pursuant to the Proposal may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each holder of Scheme Shares or Share Options is urged to consult his/her/its independent professional adviser immediately regarding the tax consequences of the Proposal applicable to him/her/it. US holders of Scheme Shares and Share Options may encounter difficulty enforcing their rights and any claims arising out of the US federal securities laws, as the Offeror and the Company are located in a country outside the United States and some or all of their officers and directors may be residents of a country other than the United States. US holders of Scheme Shares or Share Options may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, US holders of Scheme Shares or Share Options may encounter difficulty compelling a non-US company and its affiliates to subject themselves to a US court’s judgement. NOTICE REGARDING THE PROFIT FORECAST Shareholders and potential investors should be aware that this Scheme Document does not meet the standard required by Rule 10 of the Takeovers Code as the Profit Forecast was not reported on as required by Rule 10 of the Takeovers Code. Shareholders and potential investors of the Company are advised to exercise caution in placing reliance on this Scheme Document and wait for the issue by the Company of the announcement containing the reports on the Profit Forecast to be prepared by Deloitte Touche Tohmatsu and the Independent Financial Adviser and the views of the Independent Financial Adviser and the Independent Board Committee, in assessing the merits and demerits of the Proposal and dealing in the securities of the Company. Shareholders and potential investors of the Company are also advised to read carefully the above announcement before deciding on whether and, if so how, to vote at the Court Meeting and the General Meeting. –i– CONTENTS Page PART I — DEFINITIONS ................................... 1 PART II — ACTIONS TO BE TAKEN .......................... 9 PART III — EXPECTED TIMETABLE ......................... 13 PART IV — LETTER FROM THE BOARD ..................... 17 PART V — LETTER FROM THE INDEPENDENT BOARD COMMITTEE ................................. 25 PART VI — LETTER FROM THE INDEPENDENT FINANCIAL ADVISER ..................................... 27 PART VII — EXPLANATORY STATEMENT ..................... 76 APPENDIX I — FINANCIAL INFORMATION RELATING TO THE GROUP ................................... I-1 APPENDIX II — GENERAL INFORMATION ........................ II-1 APPENDIX III — SCHEME OF ARRANGEMENT ..................... III-1 APPENDIX IV — NOTICE OF COURT MEETING .................... IV-1 APPENDIX V — NOTICE OF GENERAL MEETING .................. V-1 APPENDIX VI — PROPERTY VALUATION REPORT .................. VI-1 APPENDIX VII — FORM OF OPTION OFFER LETTER ................ VII-1 –ii– PART I DEFINITIONS In this Scheme Document, the following expressions have the meanings set out below, unless the context requires otherwise: “acting in concert” has the meaning ascribed to it in the Takeovers Code and “concert party” shall be construed accordingly “Announcement” the announcement dated 27 November 2019 issued jointly by the Offeror and the Company in relation to the Proposal “Announcement Date” 27 November 2019, being the date of the Announcement “Beneficial Owner(s)” beneficial owner(s) of the Shares registered in the name of a Registered Owner(s) “Board” the board of directors of the