connected transaction acquisition of equity interest in zhong he zhong

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.
(formerly known as CATIC Shenzhen Holdings Limited (深圳中航集團股份有限公司) )
(a joint stock company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 00161)
CONNECTED TRANSACTION
ACQUISITION OF EQUITY INTEREST
IN ZHONG HE ZHONG
On 8 January 2015, RED Company (a wholly-owned subsidiary of the Company) entered
into the Share Transfer Agreement with CATIC Building (an indirect subsidiary of AVIC
Shenzhen, the controlling Shareholder), pursuant to which RED Company has conditionally
agreed to acquire 20% equity interest in Zhong He Zhong from CATIC Building for a
consideration of RMB6,032,200 (equivalent to approximately HK$7,540,250).
As at the date of this announcement, RED Company and CATIC Building holds 40% and
20% equity interest in Zhong He Zhong respectively. The remaining 40% equity interest
was held by Independent Third Parties.
Upon Completion, RED Company will hold 60% equity interest in Zhong He Zhong.
CATIC Building is indirectly wholly-owned by CATIC Property, which is in turn whollyowned by AVIC Real Estate. AVIC Real Estate is a non-wholly owned subsidiary of AVIC
Shenzhen (which is a controlling Shareholder). Hence, CATIC Building is a connected
person of the Company.
Accordingly, the Acquisition constitutes a connected transaction of the Company under
Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios are
more than 0.1% but less than 5%, the Acquisition is subject to reporting and announcement
requirements but exempt from the independent shareholders’ approval under Chapter 14A
of the Listing Rules.
INTRODUCTION
On 8 January 2015, RED Company (a wholly owned subsidiary of the Company) entered
into the Share Transfer Agreement with CATIC Building (an indirect subsidiary of AVIC
Shenzhen, the controlling Shareholder), pursuant to which RED Company has conditionally
agreed to acquire 20% equity interest in Zhong He Zhong from CATIC Building for a
consideration of RMB6,032,200 (equivalent to approximately HK$7,540,250).
–1–
THE SHARE TRANSFER AGREEMENT
Date
8 January 2015
Parties
Vendor:
CATIC Building
Purchaser:
RED Company
CATIC Building is indirectly wholly-owned by CATIC Property, which is in turn whollyowned by AVIC Real Estate. AVIC Real Estate is a non-wholly owned subsidiary of AVIC
Shenzhen (which is a controlling Shareholder). Hence, CATIC Building is a connected person
of the Company.
Asset to be acquired
20% equity interest in Zhong He Zhong held by CATIC Building free from encumbrances,
pledge, guarantee and liabilities.
Pursuant to the Share Transfer Agreement, RED Company will be entitled to or responsible
for all rights, obligations and liabilities in the Subject Interest accrued from 8 January 2015.
Financial information of Zhong He Zhong
Based on the audited accounts of Zhong He Zhong prepared according to PRC accounting
standards, the net assets value of Zhong He Zhong as at 31 December 2013 was approximately
RMB71,434,423 (equivalent to approximately HK$89,293,029).
The audited turnover, profit before and after taxation and extraordinary items of Zhong He
Zhong prepared in accordance with PRC accounting standards for the two financial years
ended 31 December 2012 and 2013 are set out as follows:
For the financial year
ended 31 December
2013
2012
(RMB)
(RMB)
(approximately) (approximately)
Turnover
Profit before taxation and extraordinary items
Profit after taxation and extraordinary items
129,184,381
10,764,631
8,059,653
87,702,583
7,765,142
5,783,630
Furthermore, the appraised net asset value of Subject Interest of Zhong He Zhong as at
31 December 2013 according to the Valuation Report was RMB6,097,200 (equivalent to
approximately HK$7,621,500).
The original cost to the Subject Interest paid by CATIC Building was RMB1,510,000.
–2–
Consideration
The consideration of the Acquisition is RMB6,032,200 (equivalent to approximately
HK$7,540,250), which shall be paid by RED Company to CATIC Building by the following
two installments:
(1)
RMB3,016,100 shall be paid within 10 working days after 8 January 2015 (the “First
Installment”); and
(2)
RMB3,016,100 shall be paid within 10 working days upon completion of the change
of registration with the Administration for Industry and Commerce of the PRC (the
said change shall be completed within 10 working days upon payment of the First
Installment),
RED Company intends to settle the above consideration with internal resources.
The consideration of the Acquisition was determined with reference to an independent
valuation of the Subject Interest by the Valuer adopting the asset-based method. Pursuant to
the Valuation Report, the appraised value of the Subject Interest as at 31 December 2013 was
RMB6,097,200 (equivalent to approximately HK$7,621,500). Taking into account the said
valuation and the reasons and benefits as stated in the paragraph below headed “Reasons for
and benefits of the entering into of the Share Transfer Agreement”, the Board considers that
the consideration of the Acquisition is fair and reasonable and the terms and conditions of
the Share Transfer Agreement are in the interests of the Company and the Shareholders as a
whole.
COMPLETION
Upon Completion, RED Company will hold 60% equity interest in Zhong He Zhong and
CATIC Building will cease to hold any equity interest in Zhong He Zhong.
INFORMATION OF RED COMPANY
RED Company is a company established in the PRC with limited liability and a wholly-owned
subsidiary of the Company. It is principally engaged in research and development of energy
equipment, energy management contract and engineering project management.
INFORMATION OF THE GROUP
The Company is an investment holding company. The Group is principally engaged in the
manufacturing and sales of high-tech electronic products, retails and high-end consumer
products, real estate and hotel, trading and logistics, and resources investment and
development.
–3–
INFORMATION OF CATIC BUILDING
CATIC Building is a domestic company incorporated in the PRC and is indirectly wholly
owned by CATIC Property, which is a wholly-owned subsidiary of AVIC Real Estate.
The principal business activities of CATIC Building include development of buildingautomatization technology, electronic software development, water heating system, sale of
building equipments and facilities, safety system design, maintenance and installations.
INFORMATION OF ZHONG HE ZHONG
Zhong He Zhong is a company established in the PRC with limited liability and is principally
engaged in the sales of energy-saving products and energy management contracting. As at the
date of this announcement, RED Company, CATIC Building, Jin Si Fang Investment (Beijing)
Company Limited (金四方投資（北京）有限公司), and Shijiazhuang Fangqiu Trading
Company Limited (石家莊方遒貿易有限公司) hold 40%, 20%, 17.4% and 22.6% equity
interest in Zhong He Zhong respectively. Each of Jin Si Fang Investment (Beijing) Company
Limited (金四方投資（北京）有限公司) and Shijiazhuang Fangqiu Trading Company Limited
(石家莊方遒貿易有限公司) is an Independent Third Party.
REASONS FOR AND BENEFIT OF THE ENTERING INTO OF THE SHARE
TRANSFER AGREEMENT
Through the Acquisition, CATIC Building will no longer own any equity interest in Zhong He
Zhong. The Acquisition will enhance the Group’s control in Zhong He Zhong, which will in
turn benefit the Group by facilitating the governance structure and enhancing the efficiency
in decision-making process and business operation of Zhong He Zhong. Upon Completion,
Zhong He Zhong will cease to be a connected subsidiary of the Company under Chapter 14A
of the Listing Rules. In light of the satisfactory operation and financial performance of Zhong
He Zhong and the increased shareholding of the Group in Zhong He Zhong pursuant to the
Acquisition, the Directors consider that the Group will be further benefited from the future
financial results of Zhong He Zhong.
The Directors (including the independent non-executive Directors) consider that the terms of
the Share Transfer Agreement are fair and reasonable and on normal commercial terms and
that the entering into of the Share Transfer Agreement is in the interest of the Company and
the Shareholders as a whole.
Further, none of the Directors has material interest in the Share Transfer Agreement or is
required to abstain from voting on the Board resolutions in relation to the Share Transfer
Agreement.
IMPLICATIONS UNDER THE LISTING RULES
CATIC Building is indirectly wholly-owned by CATIC Property, which is in turn whollyowned by AVIC Real Estate. AVIC Real Estate is a non-wholly owned subsidiary of AVIC
Shenzhen (which is a controlling Shareholder). Hence, CATIC Building is a connected person
of the Company under the Listing Rules.
–4–
Accordingly, the Acquisition constitutes a connected transaction of the Company under
Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios are
more than 0.1% but less than 5%, the Acquisition is subject to reporting and announcement
requirements but exempt from the independent shareholders’ approval under Chapter 14A of
the Listing Rules.
DEFINITIONS
The following words and phrases used in this announcement have the same meanings assigned:
“Acquisition”
the proposed acquisition of the Subject Interest pursuant to
the Share Transfer Agreement
“AVIC International”
AVIC International Holding Corporation (中國航空技術國
際控股有限公司), a limited liability company established in
the PRC, and a controlling shareholder of the Company
“AVIC Real Estate”
AVIC Real Estate Company Limited (中航地產股份有限
公司), formerly known as Shenzhen CATIC Real Estate
C o . , L t d . (深圳中航地產股份有限公司) a n d S h e n z h e n
Nanguang (Group) PLC (深圳市南光（集團）股份有限公司),
a joint stock limited company incorporated in the PRC with
limited liability, whose A shares are listed on the Shenzhen
Stock Exchange. AVIC Real Estate is a non-wholly owned
subsidiary of AVIC Shenzhen as AVIC Shenzhen holds
approximately 20.62% interest in AVIC Real Estate and the
Company (which is a non-wholly owned subsidiary of AVIC
Shenzhen) holds approximately 22.35% interest in AVIC
Real Estate
“AVIC Shenzhen”
AVIC International Shenzhen Company Limited (中國航空
技術深圳有限公司), a limited liability company established
in the PRC, a controlling shareholder of the Company, and
as at the date of this announcement, its entire equity interest
was owned by AVIC International
“Board”
the board of Directors
“CATIC Building”
CATIC Building Technology Company Limited (深圳市中航
樓宇科技有限公司), a limited liability company established
in the PRC and an indirect wholly-owned subsidiary of
CATIC Property
“CATIC Property”
Shenzhen CATIC Property Management Company Limited
(深圳市中航物業管理有限公司), a wholly-owned subsidiary
of AVIC Real Estate
–5–
“Company”
AVIC International Holdings Limited (中航國際控股股份
有限公司) (formerly known as CATIC Shenzhen Holdings
Limited (深圳中航集團股份有限公司)), a joint stock limited
company established in the PRC with limited liability, the H
shares of which are listed on the Stock Exchange
“Completion”
completion of the Acquisition contemplated under the Share
Transfer Agreement
“connected person”
has the meaning ascribed to it under the Listing Rules
“Directors”
the directors of the Company
“Group”
the Company and its subsidiaries
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“Independent
Third Party(ies)”
any person or company and their respective ultimate
beneficial owner(s) which are third parties independent of
the Company and its connected persons
“Listing Rules”
Rules Governing the Listing of Securities on the Stock
Exchange
“PRC”
the People’s Republic of China
“RED Company”
AVIC International Renewable Energy Development
Company Limited (中航國際新能源發展有限公司), a
company established in the PRC with limited liability and a
wholly-owned subsidiary of the Company
“Shareholder(s)”
holder(s) of Shares
“Shares”
shares of the Company
“Share Transfer
Agreement”
a conditional share transfer agreement entered into between
RED Company and CATIC Building on 8 January 2015 in
relation to the Acquisition
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Subject Interest”
20% equity interest in Zhong He Zhong held by CATIC
Building
“subsidiary(ies)”
has the meaning ascribed thereto in section 2 of the
Companies Ordinance (Chapter 622 of the Laws of Hong
Kong)
–6–
“Valuation Report”
a valuation report issued by the Valuer on 21 July 2014 in
relation to the valuation of the Subject Interest
“Valuer”
China United Assets Appraisal Group (中聯資產評估集團有
限公司), a certified public valuer and an Independent Third
Party
“Zhong He Zhong”
Zhong He Zhong (Beijing) Guang Dian Technology
C o m p a n y L i m i t e d (中和中（北京）光電科技有限公司) ,
a company established in the PRC with limited liability
in April 2005 and a non-wholly owned subsidiary of the
Company
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong
“RMB”
Renminbi, the lawful currency of the PRC
“%”
per cent
By order of the Board
AVIC International Holdings Limited
Wu Guang Quan
Chairman
Shenzhen, the PRC, 8 January 2015
As at the date of this announcement, the Board comprises a total of 9 Directors, Mr. Wu
Guang Quan, Mr. You Lei, Mr. Lai Wei Xuan, Mr. Pan Lin Wu, Mr. Chen Hong Liang and
Mr. Liu Jun as executive Directors; and Ms. Wong Wai Ling, Mr. Wu Wei and Mr. Wei Wei as
independent non-executive Directors.
If there is any inconsistency between the Chinese names of PRC entities, departments,
facilities or titles mentioned in this announcement and their English translations, the Chinese
version shall prevail.
Unless otherwise specified in this announcement, amounts denominated in RMB into Hong
Kong dollars at HK$1.00 to RMB0.80 for illustration purpose only. No representation has
been made by the Company that any amount have been, could have been or could be converted
at the above rate or at any other rates or at all.
–7–

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