b6e25985-88d7-4ef4-a6c1-d70b05678ac3.pdf
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.
ANNOUNCEMENT
INSIDE INFORMATION
DISCLOSEABLE TRANSACTION
DISPOSAL OF 50% EQUITY INTEREST IN SHANXI HUAXING
In compliance with the relevant laws and regulations on transfer of state-owned equity interests in the PRC, the Company listed the Shanxi Huaxing Interest on SUAEE from 25 November 2015 to 23 December 2015 for public tender. Shenzhen CR Yuanta, being the only bidder, won the bid for the acquisition of Shanxi Huaxing Interest on 24 December 2015. As such, upon completion of the public tender, the Board announces that the Company entered into the Equity Transfer Agreement with Shenzhen CR Yuanta on the same day. Pursuant to the Equity Transfer Agreement, the Company agreed to sell and Shenzhen CR Yuanta agreed to acquire the Shanxi Huaxing Interest.
As the applicable percentage ratio (as defined in the Hong Kong Listing Rules) exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Hong Kong Listing Rules.
INTRODUCTION
This announcement is made by the Company pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.09 of the Listing Rules.
Reference is made to the announcements of the Company dated 25 November 2015 and 8 December 2015 in relation to the proposed disposal of the 50% equity interest in Shanxi Huaxing by the Company by way of public tender.
In compliance with the relevant laws and regulations on transfer of state-owned equity interests in the PRC, the Company listed the Shanxi Huaxing Interest on SUAEE from 25 November 2015 to 23 December 2015 for public tender. Shenzhen CR Yuanta, being the only bidder, won the bid for the acquisition of Shanxi Huaxing Interest on 24 December 2015. As such, upon completion of the public tender, the Board announces that the Company entered into the Equity Transfer Agreement with Shenzhen CR Yuanta on the same day. Pursuant to the Equity Transfer Agreement, the Company agreed to sell and Shenzhen CR Yuanta agreed to acquire the Shanxi Huaxing Interest.
EQUITY TRANSFER AGREEMENT
Date
24 December 2015
Parties
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the Company, as the seller; and
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Shenzhen CR Yuanta, as the purchaser.
Consideration
The consideration is RMB2,351,478,800, being the initial bidding price of Shanxi Huaxing, which is determined with reference to the relevant requirements of SUAEE and the appraised value of Shanxi Huaxing as set out in the Valuation Report prepared by CUAAG based on the income approach as at the Benchmark Date.
As the discounted cash flow method was applied in the aforesaid Valuation Report prepared by CUAAG, the calculations of the appraised value of Shanxi Huaxing as set out in the Valuation Report is regarded as a profit forecast under Rule 14.61 of the Hong Kong Listing Rules. Further announcement will be made by the Company within 15 business days after publication of this announcement in compliance with Rule 14.60A and Rule 14.62 of the Hong Kong Listing Rules.
Settlement and Payment of the Consideration
The consideration shall be paid by Shenzhen CR Yuanta in cash in two instalments:
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First instalment: RMB705,443,640, representing 30% of the consideration payable, shall be paid to SUAEE before 29 December 2015. SUAEE shall transfer such sum to the Company on the Effective Date.
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Second instalment: RMB1,646,035,160, representing 70% of the consideration payable, shall be paid to the Company within one year after the Effective Date.
Shenzhen CR Yuanta shall pay interests to the Company with respect to the second instalment of the consideration. Pursuant to the Equity Transfer Agreement, the interest rate payable by Shenzhen CR Yuanta shall be the one-year benchmark lending rates of the People's Bank of China.
Conditions Precedents
The Equity Transfer Agreement is effective upon:
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the Equity Transfer Agreement having been signed by the legal representative or authorized representative of each parties with the company seal affixed;
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the shareholders' approval having been obtained by the Company; and
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if necessary, the approval(s) by the relevant governing authorities of Shenzhen CR Yuanta having been obtained.
Completion
The completion of the Equity Transfer Agreement shall take place on the Effective Date.
The parties shall cooperate so as to complete the relevant registrations of transfer of the 50% equity interest in Shanxi Huaxing with the competent business registration authority within 90 working days after the Effective Date.
REASONS FOR AND BENEFITS OF THE TRANSACTION
The Directors consider that the disposal of the Shanxi Huaxing Interest could allow the Group to introduce strategic investors for the joint investment and cooperation in the establishment of a new pattern for the integrated development of coal, electricity and aluminium in light of the overall strategic arrangement of the Company to develop the Shanxi aluminium recycle industrial park.
The Directors (including the independent non-executive Directors) are of the view that the transaction contemplated under the Equity Transfer Agreement is made on normal commercial terms and the terms contained therein are fair and reasonable, and are in the interest of the Group and the Shareholders as a whole.
USE OF PROCEEDS FROM THE TRANSACTION
After deducting expenses related to the Equity Transfer Agreement, there will be net proceeds of approximately of RMB2.35 billion and the Company intends to utilize the net proceeds towards permanent replenishment of liquidity required for the operation of the Company.
POSSIBLE FINANCIAL EFFECT OF THE TRANSACTION
The gains expected to accrue to the Company from the disposal of the Shanxi Huaxing Interest (before deducting taxes and other expenses payable by the Company in respect of the disposal), being the difference between the consideration and the carrying amount of the Company's investment (excluding any profit recognized or loss incurred by the underlying interests before they are acquired by the Company, if any) at the date of 30 September 2015, are approximately RMB1.2 billion.
Upon the completion of the Equity Transfer Agreement, Shanxi Huaxing will cease to be a subsidiary of the Group. Accordingly, the financial results and position of Shanxi Huaxing will cease to be consolidated into the financial statements of the Group.
IMPLICATIONS UNDER THE LISTING RULES
As the applicable percentage ratio (as defined in the Hong Kong Listing Rules) exceeds 5% but is less than 25%, the Disposal constitutes a discloseable transaction of the Company under Chapter 14 of the Hong Kong Listing Rules.
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the purchaser of the Shanxi Huaxing Interest, being CR Yuanta, is an independent third party to the Company.
The Directors (including the independent non-executive Directors) are of the view that the Disposal is made on normal commercial terms and the terms contained therein are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.
INFORMATION OF SHANXI HUAXING
Shanxi Huaxing is a limited liability company established by the Company in the PRC on 5 July 2010 with a registered capital of RMB1.85 billion. As at the date of this announcement, Shanxi Huaxing was owned as to 60% by the Company and 40% by Chalco Hong Kong, a wholly-owned subsidiary of the Company. Shanxi Huaxing is principally engaged in bauxite mining and alumina production.