voluntary announcement - China U-Ton Holdings Limited

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Jun 6, 2016 - turnkey contractor for construction or acquisition of the Metro and Access ... is exploring opportunities
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.

CHINA U-TON HOLDINGS LIMITED 中國優通控股有限公司 (incorporated in the Cayman Islands with limited liability) (Stock Code: 6168)

VOLUNTARY ANNOUNCEMENT BUSINESS UPDATES — IRU FRAME AGREEMENT AND FRAME CONSTRUCTION AGREEMENT The Board is pleased to announce that on 3 June 2016, U-Ton SA, a subsidiary indirectly owned as to 70% by the Company, and FibreCo, a company with limited liability duly registered in terms of the laws of South Africa, entered into the IRU Frame Agreement, pursuant to which U-Ton SA shall grant to FibreCo an exclusive and indefeasible right of use of a minimum of 6 pairs of fibre in the ducts and/or sub duct tubes of the Metro and Access Networks to be developed by U-Ton SA for a terms of 10 years commencing on the respective agreed dates for each of the Metro and Access Networks for a total project value of up to ZAR 200,000,000 (equivalently to approximately HK$ 99,633,000). On the same date, U-Ton SA and ZTE SA, a company with limited liability duly registered in terms of the laws of South Africa, entered into the non-binding Frame Construction Agreement, pursuant to which U-ton SA and ZTE SA agreed to explore the possibility of pursuing the implementation of development of the Metro and Access Networks, with an intent of U-Ton SA to engage ZTE SA as the turnkey contractor for construction or acquisition of the Metro and Access Networks on behalf of U-Ton SA utilising China U-Ton’s patented deployment technologies.

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THE IRU FRAME AGREEMENT U-Ton SA intended to construct optic fibre infrastructure in 20 metros and other fibre to the home (“FTTH”) networks in different phases across South Africa (the “Metro and Access Networks”). On 3 June 2016, U-Ton SA, a subsidiary indirectly owned as to 70% by the Company, and FibreCo, a company with limited liability duly registered in terms of the laws of South Africa, entered into the IRU Frame Agreement, pursuant to which U-Ton SA agreed to grant to FibreCo an exclusive and indefeasible right of use of a minimum of 6 pairs of optic fibre in the ducts and/or sub duct tubes of the Metro and Access Networks for a terms of 10 years commencing on the respective agreed dates for each of the Metro and Access Networks to be developed by U-Ton SA. In return, FibreCo agreed to pay as the consideration for a total project value of up to ZAR 200,000,000 (equivalent to approximately HK$ 99,633,000). As part of the IRU Frame Agreement, U-Ton SA also agreed to contract FibreCo, in a separate service agreement to be entered into, as its outsourced managed services provider to monitor and maintain the Metro and Access Networks. REASONS FOR ENTERING INTO THE IRU FRAME AGREEMENT The principal activities of the Group include deployment of optic fibres, low-voltage equipment integration services in the PRC and telecommunication application, and one of the business strategies is to explore telecommunication business opportunities through cooperation and acquisition. With South Africa as the first trail, the Group is exploring opportunities to expand its core business into other geographical areas and to participate in the business of fibre network operator. FibreCo is principally in the business of fibre network operator, which offers bespote high capacity, data transmission solutions to operators, service providers and enterprises in South Africa. The Company believes that the entering into of the IRU Frame Agreement with FibreCo, as the Group’s first attempt to provide its business in South Africa, provides a recurring source of revenue to the Group and sets a good start for the Group’s expansion of its business into South Africa. THE FRAME CONSTRUCTION AGREEMENT On 3 June 2016, U-Ton SA and ZTE SA, a company with limited liability duly registered in terms of the laws of South Africa, entered into the Frame Construction Agreement, pursuant to which U-Ton SA and ZTE SA agreed to establish a working group for purposes of discussing, investigating and evaluating the development of Metro and Access Networks for a period of 3 years. The Frame Construction Agreement is not binding and is intended only as an outline of the present understanding between U-ton SA and ZTE SA to explore the possibility of pursuing the implementation of subsequent development of Metro and Access Networks. — 2 —

If U-Ton SA decided to engage ZTE SA as the turnkey contractor for construction of the Metro and Access Networks on behalf of U-Ton SA utilising China U-Ton’s patented deployment technologies, U-Ton SA and ZTE SA shall enter into a separate definitive construction agreement. REASONS FOR ENTERING INTO THE FRAME CONSTRUCTION AGREEMENT ZTE SA is principally engaged in the business of manufacture and distribution of telecommunications and equipment, as well as provision of network solutions. The entering into the non-binding Frame Construction Agreement allows ZTE SA the opportunity to demonstrate to U-Ton SA the benefit of ZTE SA’s contribution, assistance and participation in the design, engineering, procurement and construction of the Metro Network Projects and affords U-Ton SA the opportunity to evaluate prior to deciding whether to engage ZTE SA for the development of Metro and Access Networks. As this is the Group’s first attempt to expand its business into South Africa, engagement of ZTE SA also provides local expertise of the construction industry in South Africa. GENERAL To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of FibreCo and ZTE SA and their respective ultimate beneficial owners (as the case may be) is independent of and not connected with the Company and its connected persons. All the terms and conditions of the IRU Frame Agreement and the Frame Construction Agreement are negotiations between the parties at arm’s length. The Directors believe that the terms of the Strategic Cooperation Framework Agreement are fair and reasonable and in the interests of the shareholders of the Company as a whole. The transactions contemplated under the IRU Frame Agreement and the Frame Construction Agreement are in the ordinary and usual course of business of the Group. The IRU Frame Agreement and the Frame Construction Agreement do not constitute a notifiable transaction under Chapter 14 of the Listing Rules. This announcement is disclosure on a voluntary basis by the company to provide its shareholders and potential investors with updated information in relation to the business development of the Group.

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DEFINITIONS Unless the context requires otherwise, the following words and phrases used in this announcement have the following meanings: “Board”

The board of Directors

“Company” or “China U-Ton”

China U-Ton Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the Main Board of the Stock Exchange

“connected person(s)”

has the meaning ascribed thereto in the Listing Rules

“Director(s)”

the director(s) of the Company

“FibreCo”

Fibreco Telecommunications (Pty) Limited, a company with limited liability duly registered in terms of the laws of South Africa

“Frame Construction Agreement”

the non-binding frame construction agreement dated 3 June 2016 entered into between U-Ton SA and ZTE SA in relation to the cooperation between U-Ton SA and ZTE SA

“Group”

the Company and its subsidiaries

“Hong Kong”

the Hong Kong Special Administrative Region of the PRC

“IRU Frame Agreement”

the indefeasible right of use frame dated 3 June 2016 entered into between U-Ton SA and Fibreco in relation to the grant of use of optic fibre by U-Ton SA to Fibreco

“Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

“Metro and Access Networks”

the optic fibre infrastructure in 20 metros and other FTTH networks in different phases across South Africa which the Group is intending to construct

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“PRC”

the People’s Republic of China, which for the purpose of this announcement, shall exclude Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

“South Africa”

the Republic of South Africa

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“U-Ton SA”

U-Ton South Africa Holdings (Pty) Limited, a company with limited liability duly registered in terms of the laws of South Africa, a subsidiary indirectly owned as to 70% by the Company and 30% by Miss Jiang Jing, the daughter of Mr. Jiang Changqing, Chairman and Executive Director of the Company

“ZAR”

South African Rand, the lawful currency of South Africa

“ZTE SA”

ZTE Corporation South Africa (Pty) Limited, a company with limited liability duly registered in terms of the laws of South Africa, and a subsidiary of ZTE Corporation (Stock code: 763)

“%”

per cent.

Hong Kong, 6 June 2016 By Order of the Board China U-Ton Holdings Limited Jiang Changqing Chairman and Executive Director As at the date of this announcement, the executive Directors of the Company are Mr. Jiang Changqing, Ms. Guo Aru and Mr. Li Qingli; the independent non-executive Directors of the Company are Mr. Meng Fanlin, Mr. Wang Haiyu and Ms. Li Xiaohui.

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