Aug 3, 2015 - business handover procedures as stipulated in the Sale and Purchase ... percentage ratio(s) as set out in
Hong Kong Exchange and Clearing Limited and The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims 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 Cayman Islands with limited liability)
(Stock code: 1129)
VOLUNTARY ANNOUNCEMENT ACQUISITION OF THE ENTIRE EQUITY INTEREST OF BAOJI CITY ELECTRIC POWER DEVELOPMENT CO., LIMITED This is a voluntary announcement made by the Company. On 3 August 2015 (after trading hours), the Purchaser, an indirect wholly-owned subsidiary of the Company, and the Vendors entered into the Sale and Purchase Agreement, pursuant to which the Vendors have conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the entire equity interest in the Target Company, at a total consideration of RMB12.23 million (equivalent to approximately HK$15.29 million).
INTRODUCTION This is a voluntary announcement made by the Company. On 3 August 2015 (after trading hours), the Purchaser, an indirect wholly-owned subsidiary of the Company, and the Vendors entered into the Sale and Purchase Agreement, pursuant to which the Vendors have conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the entire equity interest in the Target Company, at a total consideration of RMB12.23 million (equivalent to approximately HK$15.29 million). Upon Completion, the Target Company will become an indirectly wholly owned subsidiary of the Company.
THE SALE AND PURCHASE AGREEMENT Date 3 August 2015 Parties Purchaser:
Greenspring (Nanjing) Recycling Resources Investment Co., Ltd.*
Vendors:
Mr. Yu and Mr. Li
* For identification purpose only 1
Assets to be acquired Pursuant to the Sale and Purchase Agreement, the Purchaser has conditionally agreed to purchase and the Vendors have conditionally agreed to sell, the entire equity interest of the Target Company. Consideration The Consideration, being RMB12.23 million (equivalent to approximately HK$15.29 million) of which approximately RMB7.34 million (equivalent to approximately HK$9.18 million) shall be payable to Mr. Yu for the acquisition of his 60% interest in the Target Company and approximately RMB4.89 million (equivalent to approximately HK$6.11 million) shall be payable to Mr. Li for the acquisition of his 40% interest in the Target Company. The Consideration shall be satisfied in the following manner: (i)
50% of the Consideration or approximately RMB6.12 million (equivalent to approximately HK$7.65 million), shall be payable within 5 business days upon the presentation of payment notice and confirmation by the Vendors confirming that the Vendors have obtained approval from relevant government authorities in approving the Acquisition and they have successfully opened the relevant bank account to receive the Consideration;
(ii)
20% of the Consideration or approximately RMB2.45 million (equivalent to approximately HK$3.06 million), shall be payable within 5 business days upon the presentation of payment notice and confirmation by the Vendors confirming that the Vendors have completed all business handover procedures as stipulated in the Sale and Purchase Agreement including but not limited to handing over the Target Company’s official seal; and
(iii) 30% of the Consideration or approximately RMB3.66 million (equivalent to approximately HK$4.58 million), shall be payable within 3 months by the Purchaser after the Vendors have completed the following pre-conditions: (a) the 100% equity interest in the Target Company have been registered under the name of the Purchaser and the issuance of Target Company’s foreign-investment enterprise business licenses; (b) all completion procedures have been completed; and (c) the outstanding debt balance of the Target Company amounted to RMB3.63 million have been fully recovered. The Consideration was determined after arm’s length negotiations between the Purchaser and the Vendors and shall be satisfied by internal resources of the Company.
INFORMATION OF THE VENDORS, THE PURCHASER AND THE TARGET COMPANY Information of the Vendors The Vendors in aggregate are the beneficial owners of the entire equity interest of the Target Company as at the date of the Sale and Purchase Agreement. Upon Completion, the Vendors will cease to be the beneficial owners of the Target Company.
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To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, the Vendors and its ultimate beneficial owners are third parties independent of the Company and its connected persons. Information of the Target Company The Target Company is a company incorporated in the PRC and its principal activities includes new energy and renewable energy development, investment and associated technical research and consulting service, energy saving technical research and application. Projects of the Target Company includes (i) the operation of landfill gas power generator plant located in Baoji City landfill site, Shaanxi Province, the PRC and (ii) the operation of landfill gas emission-reduction plant which converts landfill gas into natural gas and electricity also located in Baoji City landfill site, Shaanxi Province, the PRC. Information of the Purchaser The Purchaser is a company incorporated in the PRC and is an indirect wholly-owned subsidiary of the Company. The Purchaser is principally engaged in investment holdings.
REASONS FOR THE ACQUISITION The Group engages in the (i) provision of water supply and sewage treatment services; (ii) construction of water supply and sewage treatment infrastructure; and (iii) investment and operation of new energy and renewable energy projects. The Group tapped into the investment and operation of new energy and renewable energy business in 2013 and incorporated the Purchaser which is the investment entity of the Group in the new energy companies. As at the date of this announcement, the Group has 7 existing garbage resources power generating projects under full operation. In order to further enhance its business presences and investment portfolio in the new energy and renewable energy business, the Group had been seeking investment opportunities to further invest in such business sector. The Board is of the view that the Acquisition represents a valuable business opportunity for the Group to further develop in the new energy and renewable energy business and will, in the long run, enhance the Group’s investment portfolio.
LISTING RULES IMPLICATIONS This announcement is made by the Company on a voluntary basis. None of the applicable percentage ratio(s) as set out in Rule 14.07 of the Listing Rules in respect of the Acquisition exceeds 5%, the Acquisition therefore does not constitute a notifiable transaction of the Company or any connected transaction under Chapter 14A of the Listing Rules.
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DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the following meanings: “Acquisition”
the acquisition of the entire equity interest in the Target Company by the Purchaser from the Vendors pursuant to the Sale and Purchase Agreement
“associate(s)”
has the meaning ascribed thereto under the Listing Rules
“Board”
the board of Directors
“Company”
China Water Industry Group Limited (stock code: 1129), a company incorporated in Cayman Islands with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange
“Completion”
completion of the Acquisition
“connected person(s)”
has the same meaning ascribed thereto under the Listing Rules
“Consideration”
the aggregate consideration of RMB12.23 million (equivalent to approximately HK$15.29 million) for the Acquisition payable to Mr. Yu and Mr. Li according to their respective interest in the Target Company
“Director(s)”
director(s) of the Company
“Group”
the Company and its subsidiaries
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“Mr. Yu” or “Vendor”
Mr. Yu Gong Hung*,（ 魚江鴻）, the beneficial owner of 60% interest of the Target Company as at the date of the Sale and Purchase Agreement
“Mr. Li” or “Vendor”
Mr. Li Hoi Gong*,（ 李海剛）, the beneficial owner of 40% interst of the Target Company as at the date of the Sale and Purchase Agreement
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“Purchaser”
Greenspring (Nanjing) Recycling Resources Investment Co., Ltd.*,（ 青 泓（ 南 京 ）再 生 資 源 投 資 有 限 公 司 ）, a company incorporated in the PRC and an indirect wholly-owned subsidiary of the Company
“PRC”
the People ’ s Republic of China, which for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan
“RMB”
Renminbi, the lawful currency of the PRC
“Sale and Purchase Agreement”
the sale and purchase agreement dated 3 August 2015 entered into between the Purchaser and Vendors in relation to the acquisition of the entire equity interest in the Target Company
“Shareholder(s)”
holder(s) of Share(s)
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Target Company”
Baoji City Electric Power Development Co., Ltd*, 寶雞市易飛明 達電力發展有限公司, a company incorporated in the PRC
“HK$”
Hong Kong dollar, the lawful currency of Hong Kong
“Vendors”
Mr. Yu and Mr. Li
“%” or “per cent.”
percentage or per centum
Unless otherwise defined, for the purpose of this announcement and for the purpose of illustration only, RMB amounts have been translated using the following rates: RMB1.00:HK$1.25. Such translations should not be construed as a representation that the amounts in question have been, could have been or could be converted at any particular rate or at all. By Order of the Board China Water Industry Group Limited Wang De Yin Chairman and Chief Executive Officer Hong Kong, 3 August 2015 As at the date of this announcement, the Board comprises five executive Directors, namely Mr. Wang De Yin, Mr. Liu Feng, Mr. Lin Yue Hui, Ms. Chu Yin Yin, Georgiana and Ms. Deng Xiao Ting; and three independent non-executive Directors, namely Mr. Wong Siu Keung, Joe, Mr. Li Jian Jun and Mr. Guo Chao Tian.
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