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(Stock Code: 1313)
VOLUNTARY ANNOUNCEMENT A JOINT VENTURE IN XINZHOU MUNICIPALITY OF SHANXI PROVINCE
This is a voluntary announcement made by China Resources Cement Holdings Limited (the “Company”).
The board of directors (the “Board”) of the Company is pleased to announce that on 23 December 2010, China Resources Cement Investments Limited (“CR Cement Investments”), a wholly owned subsidiary of the Company has entered into an equity transfer agreement with 山 西中能國際貿易有限公司 (Shanxi Zhongneng International Trading Limited*) and 山西鑫能物 貿有限公司 (Shanxi Xinneng Material Trading Limited*), both are independent third parties, for acquiring 52.4% equity interest in 山西耀華水泥有限公司 (Shanxi Yaohua Cement Limited*) (the “Joint Venture”) at the consideration of RMB90.72 million. After the equity transfer, Shanxi Zhongneng International Trading Limited will hold 47.6% equity interest in the Joint Venture.
The Joint Venture has been established by Shanxi Zhongneng International Trading Limited (originally holding 70% equity interest) and Shanxi Xinneng Material Trading Limited (originally holding 30% equity interest) on 6 April 2007 with a registered capital of RMB60 million, which has been fully paid up in cash. The business scope of the Joint Venture is production and sale of cement products.
On the same date, CR Cement Investments has also entered into a new joint venture contract and new articles of association (the “New JV Documents”) with Shanxi Zhongneng International Trading Limited. Pursuant to the New JV Documents, CR Cement Investments is required to inject RMB220 million into the registered capital of the Joint Venture in cash. Immediately after the capital injection, the registered capital of the Joint Venture will be increased to RMB280 million, the total amount of investment of the Joint Venture will be increased to RMB800 million, CR Cement Investments and Shanxi Zhongneng International Trading Limited will hold 89.8% and 10.2% equity interest in the Joint Venture respectively.
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The total consideration to be invested by the Company for ultimately holding 89.8% equity interest in the Joint Venture will be RMB310.72 million, which will be satisfied in cash using the Company’s internal resources.
The Joint Venture will build a 4500 ton per day NSP clinker production line (equivalent to annual production capacity of approximately 1.4 million tons) and 2 cement grinding lines with total annual production capacity of 2 million tons in Xinzhou, Shanxi Province, which are expected to commence operation by the end of 2012. The Board believes that the establishment of the Joint Venture will complement the Company’s long term expansion plan and strengthen its market position in Shanxi Province after the acquisition of another production plant in Shanxi Province earlier this year, details of which can be referred to the Company’s announcement dated 1 June 2010.
The aforesaid equity transfer and capital injection on an aggregate basis does not constitute a notifiable transaction for the Company pursuant to Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The Board considers that the aforesaid equity transfer and capital injection are on normal commercial terms and that such terms are fair and reasonable and in the interests of the Company and its shareholders as a whole.
By order of the Board CHINA RESOURCES CEMENT HOLDINGS LIMITED ZHOU Junqing Chairman
Hong Kong, 23 December 2010
As at the date of this announcement, the executive directors of the Company are Madam ZHOU Junqing, Mr. ZHOU Longshan and Mr. LAU Chung Kwok Robert; the non-executive directors of the Company are Mr. DU Wenmin and Mr. WEI Bin; and the independent non-executive directors of the Company are Mr. IP Shu Kwan, Stephen, Mr. XU Yongmo, Madam ZENG Xuemin and Mr. LAM Chi Yuen.
* for identification purpose only
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