BEIJING PROPERTIES (HOLDINGS) LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.
BEIJING PROPERTIES (HOLDINGS) LIMITED北京建 設（ 控股 ）有限公司
(Incorporated in Bermuda with limited liability)
(Stock Code: 925) DISCLOSEABLE TRANSACTION AND CONTINUED CONNECTED TRANSACTIONS RELATING TO SUPPLEMENTAL AGREEMENT ON DEPOSIT SERVICES AND NOTICE OF SPECIAL GENERAL MEETING Independent Financial Adviser to the Independent Board Committee and the independent shareholders of the Company Grand Vinco Capital Limited(A wholly-owned subsidiary of Vinco Financial Group Limited)
A letter from the Board is set out on pages 4 to 11 of this circular. A letter from the Independent Board Committee is set out on pages 12 to 13 of this circular. A letter from Vinco Capital is set out on pages 14 to 25 of this circular.
The special general meeting of the Company ("SGM") will be held at 66th Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on 8 August 2016 (Monday) at 11:00 am. A notice convening the SGM is set out on pages 32 to 34 of this circular.
A form of proxy for the SGM is enclosed. Whether or not you are able to attend the meeting, you are advised to read the notice and to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon, to the Company's share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM (or any adjourned meeting thereof). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM (or at any adjourned meeting thereof) should you so wish.
22 July 2016
Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Letter from the Independent Board Committee 12 Letter from Grand Vinco Capital Limited 14 Appendix - General Information 26 Notice of Special General Meeting 32In this circular, the following expressions have the following meanings unless the context requires otherwise:
"associate" has the meaning ascribed to it under the Listing Rules
"BE Group" Beijing Enterprises Group Company Limited（北京北 控集團有限公司）, a company incorporated in the PRC with limited liability and is a substantial shareholder of the Company
"BG Finance" Beijing Enterprises Group Finance Co., Ltd.（ 北京控股集 團財務有限公司）, a company incorporated in the PRC with limited liability and is an associate of BE Group
"Board" the board of Directors
"Company" Beijing Properties (Holdings) Limited (stock code: 925), a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange
"connected person" has the meaning ascribed to it under the Listing Rules
"Deposit Services" the deposit services to be provided by BG Finance to the Group under the Deposit Services Master Agreement and/or the Supplemental Agreement
"Deposit Services Master Agreement"
the deposit services master agreement entered into between the Company and BG Finance on 29 June 2015
"Director(s)" the director(s) of the Company
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the PRC
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Independent Board Committee"
the independent committee of the Board, the members of which consist of all the independent non-executive Directors, formed for the purposes of advising the Independent Shareholders with respect to the Supplemental Agreement, the Revised Caps and the transactions contemplated thereunder
"Independent Shareholders" Shareholders other than BE Group and its associates
"Latest Practicable Date" 18 July 2016, being the latest practicable date prior to
printing of this circular for ascertaining certain information contained herein
"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange
"PRC" the People's Republic of China
"Revised Caps" the maximum daily balance of deposits placed by the Company (including the corresponding interest accrued thereon) on any given day during the three financial years ending 31 December 2018 under the Supplemental Agreement
"RMB" Renminbi, the lawful currency of the PRC
"SFO" the Securities and Futures Ordinance (chapter 571 of the Laws of Hong Kong)
"SGM" the special general meeting of the Company to be convened to consider and, if thought fit, approve the Supplemental Agreement and the Revised Caps and the transactions contemplated therein, including any adjournment thereof
"Share(s)" share(s) of HK$0.10 each in the share capital of the Company
"Shareholder(s)" holder(s) of the Shares
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"subsidiaries" has the meaning ascribed to it under the Listing Rules "substantial shareholder" has the meaning ascribed to it under the Listing Rules
"Supplemental Agreement" the supplemental agreement entered into between the
Company and BG Finance on 6 June 2016 in relation to the revision of certain provisions of the Deposit Services Master Agreement
"Vinco Capital" Grand Vinco Capital Limited, wholly-owned subsidiary of Vinco Financing Group Limited (stock code: 8340), a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activity under the SFO and the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders in relation to the reasonableness and fairness of the terms of the Supplemental Agreement, the Revised Caps and the transactions contemplated thereunder
"%" per cent
For the purpose of illustration in this circular, figures in Renminbi are translated into Hong Kong dollars at the approximate exchange rate of RMB0.86353 to HK$1.0000. In addition, all the English translation of certain Chinese names or words in this circular is included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words.
BEIJING PROPERTIES (HOLDINGS) LIMITED北京建 設（ 控股 ）有限公司
(Incorporated in Bermuda with limited liability)
(Stock Code: 925)Executive Directors:
Mr. Qian Xu (Chairman)
Mr. Hu Yebi (Vice Chairman)
Mr. Zhao Jiansuo Mr. Siu Kin Wai Mr. Yu Luning Mr. Ang Renyi
Mr. Wan Lee Cham Mr. Dong Qilin Mr. Li Changfeng
Independent Non-executive Directors:
Mr. Goh Gen Cheung Mr. Zhu Wuxiang Mr. James Chan
Mr. Song Lishui
Mr. Chan Yuk Cheung
Registered Office: Clarendon House 2 Church Street
Hamilton HM 11 Bermuda
Head office and principal place of business in Hong Kong:
66th Floor Central Plaza
18 Harbour Road Wanchai, Hong Kong
22 July 2016
To the Shareholders
Dear Sir or Madam,
DISCLOSEABLE TRANSACTION AND CONTINUED CONNECTED TRANSACTIONS RELATING TO SUPPLEMENTAL AGREEMENT ON DEPOSIT SERVICES AND NOTICE OF SPECIAL GENERAL MEETING INTRODUCTIONReference is made to the Company's announcement dated 6 June 2016 in relation to the Supplemental Agreement on Deposit Services.
The utilisation of Deposit Services by the Group under the Supplemental Agreement constitutes continuing connected transactions under the Listing Rules. Further, the utilisation of Deposit Services under the Supplemental Agreement also constitutes the provision of financial assistance and thus a discloseable transaction under Chapter 14 of the Listing Rules.
The purpose of this circular is to provide you with, among other things, (i) further information on the Supplemental Agreement and the Revised Caps, (ii) the recommendation from the Independent Board Committee to the Independent Shareholders, (iii) the letter of advice from Vinco Capital, the independent financial adviser, to the Independent Board Committee and the Independent Shareholders, and (iv) the notice of the SGM.
BACKGROUNDReference is made to the announcement of the Company dated 29 June 2015 in relation to Deposit Services Master Agreement. The Company entered into the Supplemental Agreement with BG Finance in relation to revision of the existing annual caps on Deposit Services.
THE SUPPLEMENTAL AGREEMENTDate: 6 June 2016 (after trading hours)
Parties: (1) The Company
(2) BG Finance
Further information about BG Finance is set out in the paragraph headed "Information of the Company and BG Finance" below.
Subject matterPursuant to the Supplemental Agreement, the parties have agreed to revise each of the annual caps in relation to the Deposit Services for the three financial years ending 31 December 2018 to HK$750 million. Save as the said revision, all other terms of the Deposit Services Master Agreement shall remain unchanged. The Supplemental Agreement shall be effective from the date of obtaining the Independent Shareholders' approval at the SGM.
TermThe term of the Deposit Services Master Agreement shall be extended to 31 December 2018. Subject to the compliance with the Listing Rules and/or upon the expiration of such revised term, the Deposit Services Master Agreement may be renewed, varied or modified by the Company and BG Finance by agreement in writing.
Deposit interestsThe rate at which interest will accrue on any deposit placed by the Group with BG Finance under the Deposit Services Master Agreement will not be lower than the following:
the basis interest rate announced by the People's Bank of China for the same type of deposits for the same period;
interest rates offered by independent commercial banks in Hong Kong and the PRC to the Group for the same type of deposits for the same period; and
the interest rates offered by BG Finance to other members of BE Group for the same type of deposits.
In view of the terms of the Deposit Services Master Agreement for determining the deposit interest rates, the deposit interest rates are fair and reasonable, and that the Deposit Services are in the interest of the Group.
Revised CapsThe cumulative daily outstanding deposits balance placed by the Group with BG Finance (including any interest accrued thereon) during the four financial years ending 31 December 2018 will not exceed the following annual caps:
Existing Caps Revised CapsEquivalent to HK$ million
Equivalent to HK$ million
For the period from 29 June 2015 to
31 December 2015 250 -
For the financial year ending 31 December 2016 250 750
For the financial year ending 31 December 2017 250 750
For the financial year ending 31 December 2018 - 750
In determining the Revised Caps for the Deposit Services for the three years ending 31 December 2018, the Company has taken into account of the following: (i) the historical maximum daily balance of deposit the Company placed with BG Finance, and (ii) the reference to the latest Group's cash and cash equivalents available. The amount of the historical maximum daily balance of deposits placed by the Group during the period from 29 June 2015 to the Latest Practicable Date was HK$247,696,353 (including interests and principal) which is capped by the existing caps. As at 30 June 2016, the amount of cash and bank balances of the Group was approximately HK$2,177 million.
Comparatively, the deposit interest rates offered by BG Finance is much better than the independent commercial banks. Therefore, the Group would like to place more available cash into BG Finance in order to better utilize its available cash on hands and increase the gain of interest income. The portion of the Group's latest cash and bank balances is approximately 34.45%, the Group considers that it is the acceptable level placing the available cash into BG Finance.
Internal Controls and Risk Management MeasuresThe Company will adopt the following internal control and risk management control measures on the Deposit Services:
the Group utilises the services of the BG Finance on a voluntary, non-exclusive basis and is not obliged to engage the BG Finance for Deposit Services. The BG Finance is merely one of the financial institutions which provide services to the Group;
before placing a deposit with BG Finance, the treasury department of Group will check the interest rates offered by BG Finance against those provided by at least two to three major independent commercial banks that have established business relationship with the Group through phone or email, with the aim to ensure that the deposit interest rate is not lower than the then applicable interest rate for the same deposit services from other independent domestic commercial banks in the PRC and Hong Kong;
the treasury department of the Group will report to the Chief Financial Officer who will take the best interest rates between the BG Finance and the commercial banks;
the treasury department of the Group will closely monitor the aggregate amounts of deposits placed with BG Finance to ensure that the total balance is less than the Revised Caps at all times;
the treasury department of the Group will report the total balance to the Chief Financial Officer of the Company in a monthly manner; and
the treasury department of the Group will request BG Finance to provide it with sufficient information on various financial indicators and annual financial statements so that the Company is able to monitor and review the financial conditions of BG Finance. According to Deposit Services Master Agreement, BG Finance must notify the Company on any judicial, legal or regulatory procedures or investigations having material effect on its financial conditions. If the Company considers that any material
adverse changes have occurred in the financial conditions of BG Finance, the Company will adopt appropriate measures (including early withdrawal of deposits or suspend the placement of further deposits) to safeguard the interests of the Company.
REASONS FOR AND BENEFITS OF THE ENTERING INTO THE SUPPLEMENTAL AGREEMENTThe Directors have been monitoring the amount of the Deposit Services and as of the Latest Practicable Date, the existing annual cap for the Deposit Services in respect of 2015 has not been exceeded. At the Latest Practicable Date, the daily balance of deposits the Group placed with BG Finance is equivalent to about HK$226,158,100. The Group has not been exceeded the existing annual cap for the Deposit Services from 1 January 2016 to the Latest Practicable Date. The total assets of the Group increased from approximately HK$9,912 million as at 30 June 2015 to approximately HK$11,467 million as at 31 December 2015. As at 31 December 2015, the Group's deposits at BG Finance amounted to approximately HK$247,696,353. In view of the continuous expansion in the operational scale of the Group, it is expected that the Group will continue and deploy more deposit services at BG Finance. The Board has decided to adopt the Revised Caps for each of the three years ending 31 December 2016, 2017 and 2018 in order to provide greater flexibility in the management of the Group's cash resources.
The Group has to maintain deposits and other bank balances with financial institutions in Hong Kong and the PRC from time to time as part of its treasury activities and in order to satisfy its business needs in the ordinary and usual course of business.
The Deposit Services are conducted on normal commercial terms and the deposit interest rates offered by BG Finance to the Group are equal to or more favourable to the Group than those offered by independent commercial banks in Hong Kong and the PRC to the Group for comparable deposits. The Deposit Services Master Agreement provides the Group with a new means of financing but also improves the efficiency of the use of its funds through higher interest income and lower costs of financing. The Group is also in a better position to manage the security of its funds since BG Finance is not considered to be exposed to any significant capital risk.
For the avoidance of doubt, the Deposit Services Master Agreement does not preclude the Group from using the services of other financial institutions. The Group still has the freedom to select any major and independent commercial banks in Hong Kong and the PRC as its financial services providers as it thinks fit and appropriate for the benefit of the Group.
Mr. Jiang Xinhao, a former executive Director, is a director of BG Finance and has abstained from voting on the relevant board resolution of the Company approving the Supplement Agreement in June 2016. Save as above, none of the Directors has material interest in the Supplemental Agreement, no Director has abstained from voting on the relevant board resolutions of the Company.
The Directors (including the independent non-executive Directors) consider that the Supplemental Agreement is entered into in the ordinary and usual course of business of the Group on normal commercial terms and that the terms of the Supplemental Agreement (together with the Revised Caps) are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.
INFORMATION OF THE COMPANY AND BG FINANCE The CompanyThe Company is a company incorporated in Bermuda with limited liability whose shares are listed on the main board of the Stock Exchange. The Company is an investment company and the holding company of the Group. The Group is principally engaged in investment in, development and operation of logistics, commercial, residential and industrial properties, provision of logistics services, including leasing of warehouse facilities and provision of related management services.
BG FinanceBG Finance is incorporated in the PRC with limited liability. BE Group beneficially owns not less than 30% equity interest in BG Finance, BG Finance is an associate of BE Group. Its establishment as a non-bank financial services institute has been approved by China Banking Regulatory Commission. BG Finance acts as a platform of BE Group for provision of intragroup facilities through financial products including deposit-taking, money-lending and custodian services, etc.
IMPLICATIONS OF THE LISTING RULESAs the Company's ultimate controlling shareholder BE Group owns not less than 30% equity interest in BG Finance, BG Finance is an associate of BE Group and is therefore a connected person of the Company. The Deposit Services under the Supplemental Agreement will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
As each of the relevant percentage ratios (except for the profits ratio which is not applicable) for the utilization of Deposit Services under the Supplemental Agreement is higher than 5% but less than 25% on an annual basis, the utilisation of Deposit Services under the Supplemental Agreement constitutes non-exempt continuing connected transactions under Rule 14A.35 of the Listing Rules and is subject to the reporting, annual review, announcement and the independent shareholders' approval requirements under Rule 14A.48 of the Listing Rules.
Further, the utilisation of Deposit Services under the Supplemental Agreement constitutes the provision of financial assistance under Rule 14.04(1)(e) of the Listing Rules and thus a discloseable transaction under Chapter 14 of the Listing Rules.
An Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Deposit Services under the Supplemental Agreement. Independent financial advisers have been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Agreement and the Revised Caps.
SGMSet out on pages 32 to 34 of this circular is a notice convening the SGM which will be held at 66/F., Central Plaza, 18 Harbour Road, Wanchai, Hong Kong at 11:00 a.m. on 8 August 2016, Monday at which resolutions will be proposed to approve, among others, the Supplemental Agreement, the Revised Caps and the transactions contemplated thereunder.
The Supplemental Agreement and the Revised Caps are subject to, among other things, the approval by the Independent Shareholders at the SGM to be taken by way of a poll. The BE Group (including its associates) shall abstain from voting for the relevant resolution at the SGM due to their interests in the concerned transactions. Other than the above, no other Shareholders have material interest in the above transactions and will abstain from voting at the SGM. As at the Latest Practicable Date, the BE Group (including its associates) controls or is entitled to control over the entire voting right in respect of 4,549,486,560 Shares (representing about 67.23% of the issued share capital of the Company). Therefore, a total of 4,549,486,560 Shares (representing approximately 67.23% of the issued share capital of the Company) shall abstain from voting at the SGM. There is (i) no voting trust or other agreement or arrangement or understanding entered into by or binding upon BE Group (including its associates); and (ii) no obligation or entitlement of BE Group (including its associates) as at the Latest Practicable Date, whereby it has or may have temporarily or permanently passed control over the exercise of the voting right in respect of its Shares to a third party, either generally or on a case-by-case basis.
A form of proxy for the SGM is enclosed. Whether or not you propose to attend the SGM, you are requested to complete the form of proxy and return the same to Tricor Tengis Limited, the Company's branch share registrar in Hong Kong, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time appointed for the meeting (or any adjourned meeting). Completion and delivery of the form of proxy will not preclude you from attending and voting at the meeting (or any adjourned meeting) if you so wish.
Beijing Properties (Holdings) Limited published this content on 21 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 July 2016 16:06:03 UTC.
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