Cosco Pacific Increases Stake at Quingdao Port

2017-02-14

The Transaction contemplated under the Transaction Agreement is subject to Shareholders’ approval and satisfaction or waiver of conditions precedent. There is no assurance that the Transaction will take place or as to when it may take place. Shareholders and potential investors in the Company should therefore exercise caution when dealing in the securities of the Company.

1. THE TRANSACTION AGREEMENT The Acquisition and the Disposal

Pursuant to the Transaction Agreement entered into between SCSTD (a wholly-owned subsidiary of the Company) and QPI on 20 January 2017, SCSTD conditionally agreed to subscribe for 1,015,520,000 non-circulating domestic shares in QPI at a total consideration of RMB5,798,619,200 (equivalent to RMB5.71 per share), of which RMB3,198,650,840 will be settled by the transfer of a 20% equity interest in QQCT to QPI and the remaining RMB2,599,968,360 will be settled in cash. QQCT is currently owned as to 49%, 31% and 20% by PTS Holdings Limited, QPI and SCSTD respectively.

QPI has informed the Company that it currently intends to seek approval of its shareholders for the conduct of a placing, pursuant to which not more than 243,000,000 new H shares are proposed to be issued, and such placing of H shares is expected to occur before the Subscription Shares are issued. Based on the issued share capital of QPI as at the date of the Transaction Agreement and assuming that there are no other changes to the issued share capital of QPI before completion of the Acquisition (other than the issue of such new H shares, assuming that it occurs at or before completion of the Acquisition), the Subscription Shares will represent approximately 16.82% of the issued share capital of QPI (as enlarged by the issue of the Subscription Shares and such new H shares), and the Group’s shareholding in QPI will increase from approximately 2.01% as at the date of the Transaction Agreement to approximately 18.41%. Under the Transaction Agreement, QPI warrants that, as at the Acquisition Completion Date, on the basis of completion of the Acquisition and the QPI H Share Placing, the Subscription Shares will represent not less than 16.82% of the then issued share capital of QPI (as enlarged by the issue of the Subscription Shares and such H shares).

The consideration for the Disposal was determined through arm’s length negotiations between the parties based on the valuation of QQCT as at 30 June 2016 (being RMB15,993,254,200) set out in the valuation report prepared in accordance with the requirements of applicable PRC laws by a qualified PRC valuer. The consideration for the Acquisition was determined through arm’s length negotiations between the parties, taking into account, among other things, (1) the trading prices of the shares of other port companies listed on the Stock Exchange; and (2) the current operations and business prospects of QPI.

Conditions precedent to the Transaction Agreement taking effect

Full Report

Source: Cosco Pacific Ports

Source from : Port News

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