MAJOR TRANSACTION - CONSTRUCTION OF VESSELS
10 May 2011
On 9th May 2011, the Purchasers, four indirect wholly owned subsidiaries of the Company, respectively entered into the Further Shipbuilding Contracts with Samsung for the construction of the Further Vessels for a total consideration of approximately US$544 million (equivalent to approximately HK$4,243.2 million).
Each of the relevant percentage ratios under Rule 14.07 of the Listing Rules of the Transaction contemplated under the Further Shipbuilding Contracts is more than 5% but is less than 25% and the Transaction constitutes a discloseable transaction for the Company. The Transaction and the March Transaction, when aggregated, is more than 25% but less than 75% of the applicable percentage ratios under Rule 14.07 of the Listing Rules, and constitutes a major transaction of the Company and is subject to the approval of the Shareholders at a general meeting under Rules 14.08 and 14.33 of the Listing Rules.
To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, no existing Shareholder has any interest in the Major Transaction and no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Major Transaction. As at the date of this announcement, 426,416,088 Shares, representing approximately 68.14% of the issued share capital of the Company, are held indirectly by Thelma, which in turn is held by Artson (56.36%) and Hanberry (43.64%) as trustees. The voting rights of such 426,416,088 Shares are held by the Company’s Chairman, Mr. Tung Chee Chen, through his wholly owned company, THTI. In accordance with Rule 14.44 of the Listing Rules, the Company has obtained a written approval from THTI approving the Major Transaction in lieu of holding a general meeting of the Company. As such, no general meeting of the Company will be required to be convened to approve the Major Transaction.
A circular containing, amongst other things, the information required under the Listing Rules in relation to the Major Transaction will be despatched to the Shareholders on or before 30th May 2011.
Background
Reference is made to the announcement dated 23rd March 2011 in relation to the March Transaction contemplated under the Shipbuilding Contracts which constitutes a discloseable transaction for the Company under the Listing Rules.
On 9th May 2011, the Purchasers respectively entered into the Further Shipbuilding Contracts with Samsung, a Korean shipbuilder, for the construction of the Further Vessels for a consideration of approximately US$136 million (equivalent to approximately HK$1,060.8 million) for each Further Vessel and a total consideration of approximately US$544 million (equivalent to approximately HK$4,243.2 million) for the Further Vessels.
Finance Terms
The Company is presently arranging bank financing for the Further Vessels and expects that finance for about 70% of the purchase price of each Further Vessel, with the financing guaranteed by the Company, will be finalised in the near future with the balance of the purchase price to be funded from internal resources. Should such bank finance not be arranged, the full purchase price of each Further Vessel would come from internal resources.
Contract Terms
The terms of the Further Shipbuilding Contracts (including the consideration for each Further Vessel) were determined on an arm’s length basis and on normal commercial terms (based on price comparable to market price (as published by brokers), payment terms and delivery dates that meet the Company’s requirement and agreed between a willing buyer and a willing seller) and the Directors, including the Independent Non-Executive Directors, consider them to be fair and reasonable and to be in the interests of the Company and the Shareholders as a whole based on their experience in the container shipping industry. The contract price of each Further Vessel is payable in cash in five equal instalments. The first instalment is payable within five business days after signing of the respective Further Shipbuilding Contracts and receipt of the respective refundment guarantees and the last instalment is payable upon delivery of each Further Vessel, the other instalments are based on progress intervals on the construction of each Further Vessel. The Further Vessels are expected to be delivered in year 2013 and year 2014 respectively.
General
To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Samsung, a public listed company in Korea, is a third party independent of the Company and the connected persons of the Company as defined in the Listing Rules, and the Company and the connected persons of the Company are unaware who Samsung’s ultimate beneficial owner is. The principal business activities of Samsung are shipbuilding, offshore facilities construction, wind power facilities construction, engineering & construction. The principal business of the Group is container transport and logistics services. The Further Shipbuilding Contracts have been entered into for the purposes of improving the quality of service which the Group provides to its customers. It is the view of the Directors that ownership of the Further Vessels will improve both the operating efficiency and profitability of the Group. The Group’s fixed assets will increase following delivery of the Further Vessels, whilst current assets will decrease and long-term liabilities will increase depending on the proportion of the purchase price funded from internal resources and external finance.
Listing Rules Implications For The Company
Each of the relevant percentage ratios under Rule 14.07 of the Listing Rules of the Transaction contemplated under the Further Shipbuilding Contracts is more than 5% but is less than 25%. The Transaction constitutes a discloseable transaction for the Company under the Listing Rules. The Transaction and the March Transaction, when aggregated, is more than 25% but is less than 75% of the applicable percentage ratios under Rule 14.07 of the Listing Rules, and constitutes a major transaction of the Company and is subject to the approval of the Shareholders at a general meeting under Rules 14.08 and 14.33 of the Listing Rules.
To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, no existing Shareholder has any interest in the Major Transaction and no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Major Transaction. As at the date of this announcement, 426,416,088 Shares, representing approximately 68.14% of the issued share capital of the Company, are held indirectly by Thelma, which in turn is held by Artson (56.36%) and Hanberry (43.64%) as trustees. The voting rights of such 426,416,088 Shares are held by the Company’s Chairman, Mr. Tung Chee Chen, through his wholly owned company, THTI. In accordance with Rule 14.44 of the Listing Rules, the Company has obtained a written approval from THTI approving the Major Transaction in lieu of holding a general meeting of the Company. As such, no general meeting of the Company will be required to be convened to approve the Major Transaction.
A circular containing, amongst other things, the information required under the Listing Rules in relation to the Major Transaction will be despatched to the Shareholders on or before 30th May 2011.
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