MAJOR TRANSACTION: LEASE OF THE PREMISES TO A THIRD PARTY

Transcription

1 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. (Incorporated in Bermuda with limited liability) (Stock Code: 00057) MAJOR TRANSACTION: LEASE OF THE PREMISES TO A THIRD PARTY The Board announces that after trading hours on 21 August 2015, the Landlord, an indirect wholly-owned subsidiary of the Company, and the Lessee: (1) entered into the Factory Lease Agreement, pursuant to which the Landlord has agreed to lease to the Lessee the Factory Premises for a fixed term of three years at a monthly rent of RMB845,574.40; and (2) entered into the Quarters Lease Agreement, pursuant to which the Landlord has agreed to lease to the Lessee the Quarters Premises for a term of three years at a monthly rent of RMB18,000. IMPLICATIONS UNDER THE LISTING RULES As the Lease Agreements have significant impact on the operations of the Group, the entering into of the Lease Agreements is classified as a transaction of the Company for the purpose of Chapter 14 of the Listing Rules. As one of the relevant percentage ratios (as defined under the Listing Rules) in respect of the Lease Agreements is more than 25% but less than 75%, the Lease Agreements constitute a major transaction of the Company under the Listing Rules and is subject to reporting, announcement and shareholders approval requirements of the Listing Rules. Pursuant to Rule of the Listing Rules, written shareholders approval may be accepted in lieu of holding a general meeting if (1) no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the transaction; and (2) the written shareholders approval has been obtained from a shareholder or a closely allied group of shareholders who together hold more than 50% of the voting rights at that general meeting to approve the transaction

2 So far as the Company is aware having made all reasonable enquiries, no Shareholder is required to abstain from voting in the general meeting of the Company for approving the Lease Agreements. The Company has obtained an approval in writing from Chen Hsong Investments Limited, which holds 398,013,620 Shares, representing approximately 63.12% of the issued share capital of the Company as at the date of this announcement, in lieu of an approval from the Shareholders at the general meeting of the Company pursuant to Rule of the Listing Rules. A circular containing, among other things, further details of Lease Agreements and information required under the Listing Rules will be despatched to the Shareholders on or before 14 September 2015 for their information. The Board announces that after trading hours on 21 August 2015, the Landlord and the Lessee entered into the Factory Lease Agreement and the Quarters Lease Agreement. The principal terms of each of the Factory Lease Agreement and the Quarters Lease Agreement are set out below. FACTORY LEASE AGREEMENT The principal terms of the Factory Lease Agreement are summarised as follows: Date : 21 August 2015 Lessor : The Landlord, an indirect wholly-owned subsidiary of the Company and is principally engaged in property holding and management. Lessee : The Lessee, a limited liability company established in the PRC and is principally engaged in trading and exporting of consumer products. Property : The Factory Premises. To the best of the Directors knowledge, information and belief having made all reasonable enquiry, each of the Lessee and its ultimate beneficial owner(s) is an Independent Third Party. Gross floor area : A total of approximately 42,896.8 square metres. Use : Warehousing and logistics services centre. Term : A fixed term of three years commencing from 10 August 2015 and ending on 9 August 2018 (both days inclusive)

3 Rent : A rent of RMB23 per square metre per month for the ground floor and a rent of RMB15 per square metre per month for the first floor (in aggregate, equivalent to a monthly rent of RMB845, (equivalent to approximately HK$1,026,358)), inclusive of tax but exclusive of management fees, electricity, water charges and all other charges and outgoings. In the event that the tax reform of replacing business tax with value-added tax ( VAT Reform ) took place and has been implemented by the PRC Government to cover property lease contracts during the term of the Factory Lease Agreement, the monthly rent will be adjusted to RMB875, (equivalent to approximately HK$1,062,281). The monthly rent is payable on or before the 10th day of each calendar month. Rent free period : First three months from the commencement date of the term of the Factory Lease Agreement. Management fee : From 10 September 2015 onwards, the Lessee shall pay to the Lessor a monthly management fee of RMB38, (equivalent to approximately HK$46,861). In the event that the VAT Reform took place and has been implemented by the PRC Government to cover property lease contracts during the term of the Factory Lease Agreement, the monthly management fee will be adjusted to RMB39, (equivalent to approximately HK$48,501). Electricity charges : Under the Factory Lease Agreement, the Lessee shall be responsible for the corresponding electricity charges incurred during the term of the Factory Lease Agreement. In addition, the Lessee shall pay to the Lessor a base tariff of RMB9,600 (equivalent to approximately HK$11,652) per month regardless of electricity usage. Security deposit : RMB3,382, (equivalent to approximately HK$4,105,433), equivalent to 4 months of rent

4 QUARTERS LEASE AGREEMENT The principal terms of the Quarters Lease Agreement are summarised as follows: Date : 21 August 2015 Lessor : The Landlord. Lessee : The Lessee. Property : The Quarters Premises. Use : Workers quarters. Term : A term of three years commencing from 1 September 2015 and ending on 31 August 2018 (both days inclusive). Either party to the Quarters Lease Agreement may give 3 months prior written notice to early terminate the Quarters Lease Agreement before the expiry of the term. Under the Quarters Lease Agreement, in the event that the Factory Lease Agreement is early terminated for whatever reason, the Quarters Lease Agreement shall automatically terminate at the same time. Rent : A rent of RMB500 per room per month (equivalent to a monthly rent of RMB18,000 (equivalent to approximately HK$21,848)), inclusive of tax but exclusive of electricity, water charges and all other charges and outgoings. In the event that the VAT Reform took place and has been implemented by the PRC Government to cover property lease contracts during the term of the Quarters Lease Agreement, the monthly rent will be adjusted to RMB18,630 (equivalent to approximately HK$22,613). The monthly rent is payable on or before the 10th day of each calendar month. Security deposit : RMB36,000 (equivalent to approximately HK$43,697), equivalent to 2 months of rent

5 REASONS FOR AND BENEFITS OF THE LEASES The Group is principally engaged in the manufacturing and sale of plastic injection moulding machines and related products. The Chen Hsong Industrial Park (Shenzhen), located in Pingshan New District, Shenzhen, PRC, is the flagship production, sale and distribution and research and development facilities of the Group. In view of the fact that the Factory Premises and the Quarters Premises are currently unused, the Directors consider that the entering into of the Lease Agreements will allow the Group to have a steady rental income from the Factory Premises and the Quarters Premises and at the same time to increase the utilisation rate of factory buildings in the Chen Hsong Industrial Park (Shenzhen). The receipt of rental income will enhance the working capital of the Group and return to the Shareholders, which is in the best interests of the Company and its shareholders as a whole. The terms of each of the Lease Agreements were determined after arm s length negotiations between the parties thereto and are on normal commercial terms. The monthly rental under each of the Lease Agreements was determined with reference to the Rental Directive announced by the Government of the Pingshan New District for the first half of 2015, and taking into account the size of the Premises, environmental and facility support services provided by the Landlord as the owner and property manager of the Premises, and demand and supply of similar properties in the Pingshan New District, where the Premises are located. In light of the reasons above, the Directors are of the view that the Leases are in the interests of the Company and that the terms of the Lease Agreements are fair and reasonable and in the interests of the Shareholders as a whole. IMPLICATIONS UNDER THE LISTING RULES As the Lease Agreements have significant impact on the operations of the Group, the entering into of the Lease Agreements is classified as a transaction of the Company for the purpose of Chapter 14 of the Listing Rules. As one of the relevant percentage ratios (as defined under the Listing Rules) in respect of the Lease Agreements is more than 25% but less than 75%, the Lease Agreements in aggregate constitute a major transaction of the Company under the Listing Rules and is subject to reporting, announcement and shareholders approval requirements of the Listing Rules. Pursuant to Rule of the Listing Rules, written shareholders approval may be accepted in lieu of holding a general meeting if (1) no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the transaction; and (2) the written shareholders approval has been obtained from a shareholder or a closely allied group of shareholders who together hold more than 50% of the voting rights at that general meeting to approve the transaction

6 So far as the Company is aware having made all reasonable enquiries, no Shareholder is required to abstain from voting in the general meeting of the Company for approving the Lease Agreements. The Company has obtained an approval in writing from Chen Hsong Investments Limited, which holds 398,013,620 Shares, representing approximately 63.12% of the issued share capital of the Company as at the date of this announcement, in lieu of an approval from the Shareholders at the general meeting of the Company pursuant to Rule of the Listing Rules. A circular containing, among other things, further details of the Lease Agreements and information required under the Listing Rules will be despatched to the Shareholders on or before 14 September 2015 for their information. DEFINITIONS In this announcement, the following expressions have the meanings set out below unless the context requires otherwise: Board Company connected person(s) Director(s) Factory Lease Agreement Factory Premises Group HK$ Hong Kong Independent Third Party the board of Directors Chen Hsong Holdings Limited, an exempted company incorporated in Bermuda with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange has the meaning ascribed to it under the Listing Rules the director(s) of the Company the lease agreement dated 21 August 2015 and entered into between the Landlord and the Lessee in respect of the lease of the Factory Premises the portion of the ground floor and the whole floor of the first floor of the factory building 13-B situated at the Chen Hsong Industrial Park (Shenzhen), Pingshan New District, Shenzhen, PRC the Company and its subsidiaries Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC a third party independent of the Company and the connected persons of the Company - 6 -

7 Landlord Leases Lease Agreements Lessee Listing Rules PRC Premises Quarters Lease Agreement Quarters Premises RMB Share(s) Shareholder(s) Stock Exchange 震雄工業園 ( 深圳 ) 有限公司 (in English, for identification only, Chen Hsong Industrial Park (Shenzhen) Co., Ltd.), an indirect wholly-owned subsidiary of the Company the lease of the Factory Premises and the Quarters Premises under the Factory Lease Agreement and the Quarters Lease Agreement collectively, the Factory Lease Agreement and the Quarters Lease Agreement 深圳市創元佳益商貿有限公司 (in English, for identification only, Shenzhen Chuangyuan Jiayi Trading Co., Ltd.), a limited liability company established in the PRC the Rules Governing the Listing of Securities on the Stock Exchange the People s Republic of China, which for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan collectively, the Factory Premises and the Quarters Premises the lease agreement dated 21 August 2015 and entered into between the Landlord and the Lessee in respect of the lease of the Quarters Premises 36 rooms at the fifth floor of the worker quarters building situated at the Chen Hsong Industrial Park (Shenzhen), Pingshan New District, Shenzhen, PRC Renminbi, the lawful currency of the PRC ordinary share(s) of HK$0.10 each in the capital of the Company holder(s) of the Share(s) The Stock Exchange of Hong Kong Limited - 7 -

8 In this announcement, amounts quoted in RMB have been converted into HK$ at a rate of RMB1 to HK$ Suchexchangeratehasbeenused,whereapplicable,forthepurposesofillustrationonly and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates at all. Hong Kong, 21 August 2015 On behalf of the Board CHEN HSONG HOLDINGS LIMITED Alice Sin Ping LIP Company Secretary As at the date of this announcement, the executive directors of the Company are Dr. Chen CHIANG, Ms. Lai Yuen CHIANG, Mr. Chi Kin CHIANG, Mr. Stephen Hau Leung CHUNG and Mr. Sam Hon Wah NG; and the independent non-executive directors of the Company are Mr. Johnson Chin Kwang TAN, Mr. Anish LALVANI, Mr. Bernard Charnwut CHAN and Mr. Michael Tze Hau LEE