Hong Kong Stock 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.
ZHEJIANG EXPRESSWAY CO., LTD.
(A joint stock limited company incorporated in
the People's Republic of China
with limited liability)
(Stock code: 0576)
CONNECTED
TRANSACTION
INDEPENDENT FINANCIAL ADVISER AGREEMENT
THE INDEPENDENT FINANCIAL ADVISER
AGREEMENT
On May 12, 2017, Zheshang
Securities, an indirect non wholly-owned subsidiary of the Company,
entered into the Independent Financial Adviser Agreement with
Zhejiang Communications Technology (formerly known as Jiangshan
Chemical), a non wholly-owned subsidiary of the controlling
shareholder of the Company, and Dongxing Securities, an independent
third party, pursuant to which Zhejiang Communications Technology
agreed to appoint Zheshang Securities and Dongxing Securities, as
joint independent financial advisers, to provide financial advisory
services with respect to its Substantial Assets Transaction.
LISTING RULES IMPLICATIONS
As at the date of this announcement, Communications Group is a
controlling shareholder of the Company. Zhejiang Communications
Technology is a non wholly-owned subsidiary of Communications
Group. Therefore, Zhejiang Communications Technology is a connected
person of the Company and as a result, the transaction under the
Independent Financial Adviser Agreement constitutes a connected
transaction for the Company under Chapter 14A of the Listing
Rules.
As the applicable percentage ratios in respect of the
transaction contemplated under the Independent Financial Adviser
Agreement are more than 0.1% but less than 5%, the Independent
Financial Adviser Agreement is subject to the reporting,
announcement and annual review requirements but exempt from the
independent Shareholders' approval requirement under Chapter 14A of
the Listing Rules.
Information with respect to the Independent Financial Adviser
Agreement will be disclosed in the Company's annual report for the
year ended December 31, 2017.
THE INDEPENDENT FINANCIAL ADVISER
AGREEMENT
On May 12, 2017, Zheshang
Securities, an indirect non wholly-owned subsidiary of the Company,
entered into the Independent Financial Adviser Agreement with
Zhejiang Communications Technology (formerly known as Jiangshan
Chemical), a non wholly-owned subsidiary of the controlling
shareholder of the Company, and Dongxing Securities, an independent
third party, pursuant to which Zhejiang Communications Technology
agreed to appoint Zheshang Securities and Dongxing Securities, as
joint independent financial advisers, to provide financial advisory
services with respect to its Substantial Assets Transaction.
Principal terms of the Independent Financial Adviser Agreement
are set out below:
Date: |
May 12, 2017 |
|
|
Parties: |
(1) Zhejiang Communications
Technology;
(2) Zheshang Securities; and
(3) Dongxing Securities |
|
|
Underlying transaction: |
Zhejiang Communications Technology's acquisition of
the 100.00% equity interests in Zhejiang Communications Engineering
and raising counterpart funds (the "Substantial Assets
Transaction"). |
|
|
Term: |
From May 12, 2017 to the date of completion of the
Substantial Assets Transaction |
|
|
Scope of services: |
Zheshang Securities and Dongxing Securities agreed to
provide financial advisory services with respect to the Substantial
Assets Transaction as joint independent financial advisers,
including but not limited to conducting due diligence, issuing the
independent financial advisers report and filing relevant documents
with the China Securities Regulatory Commission. |
|
|
Consideration: |
RMB24,000,000,
of which Zheshang Securities and Dongxing
Securities will be paid 80% and 20% respectively |
|
|
Basis of consideration: |
The consideration was determined based on the price
tendered during the bidding process. The tenderers with the lowest
price would be selected and appointed as the independent financial
advisers for the Substantial Assets Transaction. |
|
|
Payment: |
The consideration is
paid in three installments: (i) RMB1,000,000 within
five working days after disclosure of Substantial Assets
Transaction plans, (ii) RMB15,000,000 within five working days
after completion of business registration of the assets under the
Substantial Assets Transaction, and (iii) RMB8,000,000 upon
completion of financing of the Substantial Assets Transaction. |
|
|
Governing law: |
PRC law |
Due to the inadvertence of the management, the Independent
Financial Adviser Agreement was discovered only during the annual
review process of the connected transactions entered into for the
financial year ended 2017. As the applicable percentage ratios in
respect of the transaction contemplated under the Independent
Financial Adviser Agreement are more than 0.1% but less than 5%,
thus, such transaction is subject to the reporting, annual review
and announcement requirements, but exempt from independent
shareholders' approval requirements.
Failure to disclose this transaction constitutes a breach of the
Listing Rules. The Company will take steps to strengthen its
internal control measures to monitor connected transactions going
forward, in order to avoid repeating similar breach. In this
regard, the Company will review the internal communication and
reporting system and practice with the relevant departments and
staff, particularly over the reporting of potential connected
transactions.
REASONS FOR AND BENEFITS OF THE
TRANSACTIONS
Financial advisory services is one of the major business of
Zheshang Securities. The income generated from financial advisory
services accounted for a significant proportion of Zheshang
Securities' total revenue in the past few years. By entering into
the Independent Financial Adviser Agreement, Zheshang Securities
was able to earn the advisory fees and participate in a transaction
which had significant influence in the PRC capital market, thus
strengthening its position as a leader in the financial services
market in Zhejiang.
Given the above, the Directors (including the independent
non-executive Directors) are of the view that the terms of the
Independent Financial Adviser Agreement are on normal commercial
terms, in the ordinary and usual course of business of the Company
and are fair and reasonable and in the interests of the Company and
the Shareholders as a whole.
LISTING RULES IMPLICATIONS
As at the date of this announcement, Communications Group is a
controlling shareholder of the Company. Zhejiang Communications
Technology is a non wholly-owned subsidiary of Communications
Group. Therefore, Zhejiang Communications Technology is a connected
person of the Company and as a result, the transaction under the
Independent Financial Adviser Agreement constitute connected
transactions for the Company under Chapter 14A of the Listing
Rules.
As the applicable percentage ratios in respect of the
transaction contemplated under the Independent Financial Adviser
Agreement are more than 0.1% but less than 5%, the Independent
Financial Adviser Agreement is subject to the reporting,
announcement and annual review requirements but exempt from the
independent Shareholders' approval requirement under Chapter 14A of
the Listing Rules.
Information with respect to the Independent Financial Adviser
Agreement will be disclosed in the Company's annual report for the
year ended December 31, 2017.
None of the Directors have a material interest in the
transaction contemplated under the Independent Financial Adviser
Agreement and none are required to abstain from voting on the
relevant Board resolutions.
INFORMATION ON THE PARTIES
The Company is a joint stock company established under the laws
of the PRC with limited liability on 1 March
1997, the H Shares of which are listed on the Main Board of
the Stock Exchange. It is principally engaged in investing in,
developing and operating high-grade roads in the PRC. The Group
also carries on certain other businesses such as securities
brokerage, investment banking, asset management, margin financing
and securities lending through Zheshang Securities.
Zheshang Securities is a joint stock company established under
the laws of the PRC with limited liability on 9 May 2002, the shares of which are listed on the
Shanghai Stock Exchange (stock code: 601878). As at the date of
this announcement, Zheshang Securities is owned as to 46.93% by the
Company indirectly. Zheshang Securities is principally engaged in
the provision of securities broking services, margin financing and
securities lending services, securities underwriting and
sponsorship services, asset management, advisory services and
proprietary trading.
Zhejiang Communications Technology is a joint stock company
established under the laws of the PRC with limited liability on
23 November 1998, the shares of which
are listed on the Shenzhen Stock Exchange (stock code: 002061). As
at the date of this announcement, Zhejiang Communications
Technology is owned as to 60.24% by Communications Group directly,
and therefore Zhejiang Communications Technology is an associate of
the Company. Zhejiang Communications Technology is principally
engaged in production, development and sales of chemical products
as well as engineering construction services.
DEFINITIONS
In this announcement, unless the context specifies otherwise,
the following defined expressions have the following meanings:
"associate" |
has the meaning ascribed to it under the Listing
Rules |
|
|
"Board" |
the board of Directors |
|
|
"Communications Group" |
Zhejiang Communications Investment Group Co., Ltd.*,
a wholly state-owned enterprise established in
the PRC, and the controlling shareholder of the Company |
|
|
"Company" |
Zhejiang Expressway Co., Ltd., a joint stock limited
company incorporated in the PRC with limited liability |
|
|
"connected person" |
has the meaning ascribed to it under the Listing
Rules |
|
|
"controlling shareholder" |
has the meaning ascribed to it under the Listing
Rules |
|
|
"Director(s)" |
the directors of the Company |
|
|
"Dongxing Securities" |
Dongxing Securities Corporation Limited, a company
incorporated in the PRC and the shares of which are listed on the
Shanghai Stock Exchange (stock code: 601198) |
|
|
"Group" |
the Company and its subsidiaries |
|
|
"H Shares" |
overseas listed foreign shares in the share capital of
the Company with a nominal value of RMB1 per share, which are
listed on the Main Board of the Stock Exchange |
|
|
"Hong Kong" |
the Hong Kong Special Administrative Region of the
PRC |
|
|
"Independent Financial Adviser Agreement" |
the independent financial adviser agreement dated May
12, 2017 entered into among Zhejiang Communications Technology,
Zheshang Securities and Dongxing Securities, pursuant to which
Zhejiang Communications Technology agreed to appoint Zheshang
Securities and Dongxing Securities, as joint independent financial
advisers, to provide financial advisory services with respect to
its Substantial Assets Transaction |
|
|
"independent third party" |
has the meaning ascribed to it under the Listing
Rule |
|
|
"Jiangshan Chemical" |
Zhejiang Jiangshan Chemical Co., Ltd.*,
subsequently changed its name to Zhejiang Communications Technology
on December 22, 2017 |
|
|
"Listing Rules" |
Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited |
|
|
"percentage ratio" |
has the meaning ascribed to it under Rule 14.04(9) of
the Listing Rules |
|
|
"PRC" |
the People's Republic of China (for the purpose of
this announcement, excludes Hong Kong, Macau and Taiwan) |
|
|
"RMB" |
Renminbi, the lawful currency of the PRC |
|
|
"Shareholder(s)" |
holder(s) of the share(s) of the Company |
|
|
"Stock Exchange" |
The Stock Exchange of Hong Kong Limited |
|
|
"subsidiary(ies)" |
has the meaning ascribed to it under the Listing
Rules |
|
|
"Substantial Assets Transaction" |
the acquisition of 100.00% equity interests in
Zhejiang Communications Engineering and raising counterpart funds
by Zhejiang Communications Technology |
|
|
"%" |
per cent. |
|
|
"Zhejiang Communications
Engineering" |
Zhejiang Communications Engineering Group Co., Ltd.*,
a company incorporated in the PRC and a non wholly-owned subsidiary
of Communications Group |
|
|
"Zhejiang Communications
Technology" |
Zhejiang Communications Technology Co., Ltd., a
company incorporated in the PRC and a non wholly-owned subsidiary
of Communications Group |
|
|
"Zheshang Securities" |
Zhejiang Zheshang Securities Co., Ltd., a limited
liability company incorporated in the PRC and an indirect non
wholly-owned subsidiary of the Company |
|
|
* English names
for reference only |
By Oder of the
Board
Zhejiang Expressway Co., Ltd.
ZHAN
Xiaozhang
Chairman
Hangzhou, the PRC, March 16, 2018
As at the date of this announcement,
the executive directors of the Company are: Mr. ZHAN Xiaozhang, Mr.
CHENG Tao and Ms. LUO Jianhu; the non-executive directors of the
Company are: Mr. WANG Dongjie and Mr. DAI Benmeng; and the
independent non-executive directors of the Company are: Mr. ZHOU
Jun, Mr. PEI Ker-Wei and Ms. LEE Wai Tsang, Rosa.