china lng group limited 中國天然氣集團有限公司 - HKEXnews

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LR14.58 (1)

LR13.52 (Note 5)

CHINA LNG GROUP LIMITED 中國天然氣集團有限公司 * (incorporated in the Cayman Islands with limited liability) (Stock Code: 931)

LR13.51A

DISCLOSEABLE TRANSACTION: PROPOSED FORMATION OF A JOINT VENTURE The Board is pleased to announce that on 27 July 2015, the Company entered into the JV Agreement with Huaqiang Natural Gas in relation to the formation of the JV Company in the PRC to be principally engaged in the development and operation of oil-to-gas conversion and LNG refueling facilities on floating barges, development of LNG related technologies, operation of LNG refueling stations, trading of gas ignition equipment and the development and utilisation of new energy sources. The Parties intend to develop and operate oil-to-gas conversion and LNG refueling facilities on floating barges in the Yangtze River Delta through the JV Company. Pursuant to the JV Agreement, the registered capital of the JV Company shall be RMB100 million, which will be contributed as to RMB60 million by the Company through China LNG Investments, a wholly-owned subsidiary of the Company which is being established, and RMB40 million by Huaqiang Natural Gas, representing 60% and 40% of the total registered capital of the JV Company respectively. LISTING RULES IMPLICATIONS As one or more than one of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the transaction contemplated under the JV Agreement exceeds 5% and all of the percentage ratios are less than 25%, the transaction contemplated under the JV Agreement constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements but is exempt from the independent shareholders’ approval requirement under Chapter 14 of the Listing Rules.

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LR14.60 (1)

INTRODUCTION The Board is pleased to announce that on 27 July 2015, the Company entered into the JV Agreement with Huaqiang Natural Gas in relation to the formation of the JV Company in the PRC to be principally engaged in the development and operation of oil-to-gas conversion and LNG refueling facilities on floating barges, development of LNG related technologies, operation of LNG refueling stations, trading of gas ignition equipment, and the development and utilisation of new energy sources. The Parties intend to develop and operate oil-to-gas conversion and LNG refueling facilities on floating barges in the Yangtze River Delta through the JV Company. THE JV AGREEMENT Date

LR14.58(3)

27 July 2015 Parties (1) Company; and (2) Huaqiang Natural Gas. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, Huaqiang Natural Gas and its ultimate beneficial owner(s) are third parties independent of and not connected with the Company and its connected persons.

LR14.58(3)

Formation The Parties agreed that JV Company will be established in the Shanghai Free-Trade Zone. The JV Company will be owned as to 60% by the Company through China LNG Investments, a wholly-owned subsidiary of the Company which is being established, and 40% by Huaqiang Natural Gas.

LR14.60(2)

Business scope The JV Company will be principally engaged in the development and operation of oil-to-gas conversion and LNG refueling facilities on floating barges, development of LNG related technologies, operation of LNG refueling stations, trading of gas ignition equipment and the development and utilisation of new energy sources. Capital contribution and further financing

LR14.58(4) LR14.58(5) LR14.58(6)

Pursuant to the JV Agreement, the registered capital of the JV Company shall be RMB100 million, which will be contributed as to RMB60 million by the Company through China LNG Investments, a whollyowned subsidiary of the Company which is being established, and RMB40 million by Huaqiang Natural Gas. Further capital contributions shall be made by the China LNG Investments and Huaqiang Natural Gas as considered necessary in meeting the capital requirements of the JV Company and shall be made in accordance with their respective equity interests in the JV Company. 2

The Group intends to finance its share of the capital contribution to the JV Company of RMB60 million solely by internal resources. Board composition The board of directors of the JV Company will comprise seven directors, of which four directors will be appointed by China LNG Investments and three directors will be appointed by Huaqiang Natural Gas. The chairman of the board of directors of the JV Company will be appointed by China LNG Investments and the sole vice chairman will appointed by Huaqiang Natural Gas. Financial impact on the Group The initial investment in the JV Company is expected to be approximately RMB200 million, of which RMB100 million shall be contributed by China LNG Investments and Huaqiang Natural Gas as registered capital of the JV company and a further investment of RMB100 million may be made by China LNG Investments and Huaqiang Natural Gas by means of shareholders’ loans or financed by bank loans if necessary. Upon the establishment of the JV Company, China LNG Investments and Huaqiang Natural Gas will be entitled to share the profit of the JV Company in proportion to their respective equity interests in the JV Company. INFORMATION ABOUT THE PARTIES

LR14.58(2)

The Group is principally engaged in trading of securities, property investment and development of the LNG business. Huaqiang Natural Gas is principally engaged in the production, transportation and trading of compressed natural gas and LNG, and the operation of industrial natural gas refueling stations. Huaqiang Natural Gas also possesses the relevant license and expertise in the field of developing oil-to-gas conversion and LNG refueling facilities on floating barges. REASONS FOR AND BENEFITS OF ENTERING INTO THE JV AGREEMENT Through various policy initiatives in recent years, the PRC government has been encouraging the use of low carbon emission energy source for various different industries. Despite the fact that LNG is an efficient, clean and low-carbon emission energy source, the shipping industry in the PRC is still dominated by diesel powered vessels. The Directors therefore are optimistic about the prospect of LNG and natural gas in the shipping market. In addition to possessing the relevant expertise in the LNG industry, Huaqiang Natural Gas also operates a large ship building facility, which is strategically located in North-western end of the Yangtze River Delta.

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LR14.58(8)

Further, the Ministry of Transport of the PRC (“MOT”) intends to build 30,000 LNG powered vessels to replace existing diesel powered vessels operating in the inland rivers of PRC by year 2020. Annual consumption of LNG refueling by ship owners may therefore reach RMB50 billion as estimated by MOT. The Directors believe that forming a joint venture with Huaqiang Natural Gas will allow the Group to benefit from the expertise of Huaqiang Natural Gas and solidify the Group’s position in the LNG industry. As Huaqiang Natural Gas is the only LNG refueling ship builder capable of meeting the newly implemented national standards for LNG refueling ships in the PRC, the cooperation with Huaqiang Natural Gas gives the Group a head start in development of the LNG vessel conversion and the LNG refueling market. The Directors consider that the transaction contemplated under the JV Agreement is in the ordinary and usual course of business of the Group and the terms of the JV Agreement are based on normal commercial terms and are fair and reasonable and in the interests of the Company and its shareholders as a whole. LISTING RULES IMPLICATIONS As one or more than one of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the transaction contemplated under the JV Agreement exceeds 5% and all of the percentage ratios are less than 25%, the transaction contemplated under the JV Agreement constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements but is exempt from the independent shareholders’ approval requirement under Chapter 14 of the Listing Rules. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: “Board”

the board of Directors

“China LNG Investments”

港能投資（上海）有限公司 (China LNG Investments (Shanghai) Limited*), a wholly-owned subsidiary of the Company which is being established in the PRC with limited liability

“Company”

China LNG Group Limited, a company incorporated in the Cayman Islands with limited liability whose Shares are listed and traded on the main board of the Stock Exchange

“Directors”

the directors of the Company

“Group”

the Company and its subsidiaries

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LR14.58(8)

“Huaqiang Natural Gas”

華強天然氣發展集團有限公司 (Huaqiang Natural Gas Development Group Limited*), a company established in the PRC with limited liability

“JV Agreement”

the agreement entered into by the Company and Huaqiang Natural Gas in respect of the formation of the JV Company by China LNG Investments and Huaqiang Natural Gas

“JV Company”

a company to be established in the PRC with limited liability in accordance with the terms and conditions of the JV Agreement

“Listing Rules”

Rules Governing the Listing of Securities on the Stock Exchange

“LNG”

liquefied natural gas

“Parties”

the parties to the JV Agreement, being the Company and Huaqiang Natural Gas

“PRC”

The People’s Republic of China, for the purpose of this announcement, excludes the Hong Kong Special Administrative Region of the PRC, the Macao Special Administrative Region of the PRC and Taiwan

“RMB”

Renminbi, the lawful currency of the PRC

“Shanghai Free-Trade Zone”

中國（上海）自由貿易試驗區 (China (Shanghai) Pilot Free-Trade Zone*)

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“%”

per cent. By order of the Board China LNG Group Limited Kan Che Kin, Billy Albert Chairman

Hong Kong, 27 July 2015

As at the date of this announcement, the executive Directors are Mr. Kan Che Kin, Billy Albert, Mr. Chen Li Bo, Ms. Li Shu Han, Eleanor Stella and Mr. Li Kai Yien, Arthur Albert; the non-executive Directors are Mr. Simon Murray and Dr. Lam, Lee G.; the independent non-executive Directors are Mr. Li Siu Yui, Mr. Ip Woon Lai and Mr. Lam Lum Lee. *

For identification purposes only

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