Cheung Kong Infrastructure : Connected Transaction And Discloseable Transaction - Formation Of A Joint Venture In Connection With The Proposed Acquisition Of All Of The Stapled Securities In Issue Of The Target Which Are Listed On The Australian Securities Exchange By Way Of Schemes (PDF)

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.

The CKPH Board, the CKHH Board, the CKI Board and the PAH Board jointly announce that on 14 January 2017, a consortium comprising CKPH, CKI and PAH entered into the Consortium Formation Agreement, pursuant to which, subject to the obtaining of the necessary Independent Shareholders' Approvals, the relevant Consortium Members will, among other things, indirectly fund the Acquisition according to the Respective Proportions or Revised Respective Proportions (as the case may be) and enter into the Shareholders' Agreement.

In addition, in connection with the Acquisition, Bidco, the Target and the Consortium Members (as guarantors of Bidco's obligations under the Scheme Implementation Agreement) have entered into the Scheme Implementation Agreement on 14 January 2017. The Scheme Implementation Agreement is not conditional on completion of the Joint Venture Transaction but is conditional upon the fulfilment of certain conditions as set out below.

The implications of the Joint Venture Transaction on each of CKPH, CKI, PAH and CKHH under the Listing Rules are as follows:

1. As one or more of the applicable percentage ratios of CKPH based on the Maximum Financial Commitment of the CKPH Group under the Joint Venture Transaction exceeds 5% but is less than 25%, the Joint Venture Transaction constitutes a discloseable transaction for CKPH and is subject to CKPH's compliance with the announcement and notification requirements, but is not subject to the shareholders' approval requirement, under Chapter 14 of the Listing Rules.

   As at the date of this announcement, Mr. Li Ka-shing, Mr. Li Tzar Kuoi, Victor and the Trust currently directly and/or indirectly hold an aggregate of approximately 30.43% of the issued share capital of CKPH and an aggregate of approximately 30.16% of the issued share capital of CKHH. CKHH has been deemed by the Stock Exchange to be a connected person of CKPH under the Listing Rules. As CKHH currently holds approximately 71.93% of the issued share capital of CKI, CKI may also be regarded as a connected person of CKPH by virtue of it being a subsidiary of CKHH. Therefore, the Joint Venture Transaction as between CKPH and CKI also constitutes a connected transaction for CKPH under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios of CKPH based on the Maximum Financial Commitment of the CKPH Group under the Joint Venture Transaction exceeds 5%, the Joint Venture Transaction as between CKPH and CKI is subject to CKPH's compliance with the announcement, reporting and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

2. As one or more of the applicable percentage ratios of CKI based on the Maximum Financial Commitment of the CKI Group under the Joint Venture Transaction exceeds 5% but is less than 25%, the Joint Venture Transaction constitutes a discloseable transaction for CKI and is subject to CKI's compliance with the announcement and notification requirements, but is not subject to the shareholders' approval requirement, under Chapter 14 of the Listing Rules.

   Given Mr. Li Ka-shing, Mr. Li Tzar Kuoi, Victor (who is a director of CKI) and the Trust have been deemed as a group of connected persons by the Stock Exchange and they currently directly and/or indirectly hold an aggregate of approximately 30.43% of the issued share capital of CKPH, CKPH may be regarded as a connected person of CKI under the Listing Rules. Therefore, the Joint Venture Transaction as between CKPH and CKI also constitutes a connected transaction for CKI under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios of CKI based on the Maximum Financial Commitment of the CKI Group under the Joint Venture Transaction exceeds 5%, the Joint Venture Transaction as between CKPH and CKI is subject to CKI's compliance with the announcement, reporting and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

3. As one or more of the applicable percentage ratios of PAH based on the Maximum Financial Commitment of the PAH Group under the Joint Venture Transaction exceeds 5% but is less than 25%, the Joint Venture Transaction constitutes a discloseable transaction for PAH and is subject to PAH's compliance with the announcement and notification requirements, but is not subject to the shareholders' approval requirement, under Chapter 14 of the Listing Rules.

   CKI currently holds approximately 38.87% of the issued shares of PAH. As a substantial shareholder of PAH, CKI is a connected person of PAH under Chapter 14A of the Listing Rules. Further, given that Mr. Li Ka-shing, Mr. Li Tzar Kuoi, Victor (who is a director of PAH) and the Trust have been deemed as a group of connected persons by the Stock Exchange and they currently directly and/or indirectly hold an aggregate of approximately 30.43% of the issued share capital of CKPH, CKPH may also be regarded as a connected person of PAH under the Listing Rules. Therefore, the Joint Venture Transaction as between CKPH (or, CKPH and CKI) on the one hand and PAH on the other hand also constitutes a connected transaction for PAH under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios of PAH based on the Maximum Financial Commitment of the PAH Group under the Joint Venture Transaction exceeds 5%, the Joint Venture Transaction as between CKPH (or, CKPH and CKI) on the one hand and PAH on the other hand is subject to PAH's compliance with the announcement, reporting and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

4. For CKHH, CKPH has been deemed by the Stock Exchange to be its connected person under the Listing Rules. Accordingly, the entry into of the Joint Venture Transaction by CKI, which is a subsidiary of CKHH, with CKPH constitutes a connected transaction for CKHH under the Listing Rules. As one or more of the applicable percentage ratios of CKHH based on the Maximum Financial Commitment of the CKI Group under the Joint Venture Transaction exceed 0.1% but all of the applicable percentage ratios are less than 5%, the Joint Venture Transaction is subject to CKHH's compliance with the reporting and announcement requirements, but is exempt from the independent shareholders' approval requirement, under Chapter 14A of the Listing Rules.

If the Independent Shareholders' Approval of CKPH (referred to in (a) above) and/or the Independent Shareholders' Approval of CKI (referred to in (b) above) are not obtained, but the Independent Shareholders' Approval of PAH (referred to in (c) above) is obtained, the Joint Venture Transaction will proceed between CKPH and PAH as to 80% and 20%, respectively.

If the Independent Shareholders' Approvals of both CKPH (referred to in (a) above) and CKI (referred to in (b) above) are obtained, but the Independent Shareholders' Approval of PAH (referred to in (c) above) is not obtained, the Joint Venture Transaction will proceed between CKPH and CKI as to 60% and 40%, respectively.

If the necessary Independent Shareholders' Approvals in respect of both of CKI's participation and PAH's participation in the Joint Venture Transaction are not obtained, the Joint Venture Transaction will not proceed and Bidco will, as an indirect wholly-owned subsidiary of CKPH and subject to the Schemes becoming effective, proceed with the Acquisition. In such case, the Acquisition will constitute a discloseable transaction for CKPH as one or more of the applicable percentage ratios of CKPH based on the Scheme Consideration and the transaction costs under the Scheme Implementation Agreement will exceed 5% but will be less than 25%, and the Acquisition would be subject to CKPH's compliance with the announcement and notification requirements, but would not be subject to the shareholders' approval requirement, under Chapter 14 of the Listing Rules.

1. INTRODUCTION

   The CKPH Board, the CKHH Board, the CKI Board and the PAH Board jointly announce that on

   14 January 2017, a consortium comprising CKPH, CKI and PAH entered into the Consortium Formation Agreement, pursuant to which, subject to the obtaining of the necessary Independent Shareholders' Approvals, the relevant Consortium Members will, among other things, indirectly fund the Acquisition according to the Respective Proportions or Revised Respective Proportions (as the case may be) and enter into the Shareholders' Agreement.

   In addition, in connection with the Acquisition, Bidco, the Target and the Consortium Members (as guarantors of Bidco's obligations under the Scheme Implementation Agreement) have entered into the Scheme Implementation Agreement on 14 January 2017.

   The major terms of the Joint Venture Transaction and the Scheme Implementation Agreement relating thereto are set out below.

2. JOINT VENTURE TRANSACTION
3. The Consortium Formation Agreement

   On 14 January 2017, the Consortium Members, CKI Holdco, PAH Holdco and the Consortium Midcos entered into the Consortium Formation Agreement with, among others, JV Co and Bidco in order to govern the funding and operation of JV Co and Bidco, subject to the obtaining of the necessary Independent Shareholders' Approvals. As of the date of this announcement, each Consortium Midco is wholly owned by CKPH Holdco. In turn, JV Co is owned by Midco 1 as to 40%, Midco 2 as to 40% and Midco 3 as to 20%, respectively.

   The principal terms of the Consortium Formation Agreement are as follows:

4. Participation of the Consortium Members - Independent Shareholders' Approvals sought prior to the Funding Date

   It is currently expected that the respective meetings of the shareholders of each of CKPH, CKI and PAH for obtaining the necessary Independent Shareholders' Approvals will be held in advance of the Funding Date.

   In the event that, prior to the Funding Date:

5. the necessary Independent Shareholders' Approvals of both CKPH and CKI are obtained, CKI, through CKI Holdco, will contribute nominal equity to Midco 2 through a subscription of shares in Midco 2, or through a subscription of shares in, and provision of shareholders loans to, Midco 2, and Midco 2 will utilise such equity contribution to redeem, cancel or buy-back any existing shares held in it by CKPH Holdco, such that Midco 2 will become a wholly-owned subsidiary of CKI Holdco; and/or

6. the Independent Shareholders' Approval of PAH is obtained, irrespective of whether or not the Independent Shareholders' Approval of CKPH and/or CKI in respect of CKI's participation in the Joint Venture Transaction is/are obtained, PAH, through PAH Holdco, will contribute nominal equity to Midco 3 through a subscription of shares in Midco 3, or through a subscription of shares in, and provision of shareholders loans to, Midco 3, and Midco 3 will utilise such equity contribution to redeem, cancel or buy-back any existing shares held in it by CKPH Holdco, such that Midco 3 will become a wholly-owned subsidiary of PAH Holdco.

If the necessary Independent Shareholders' Approvals in respect of both CKI's participation and PAH's participation are not obtained, CKI and PAH will not contribute any equity into Midco 2 and Midco 3 as set out above, and the Joint Venture Transaction will not proceed. However, the obligations of Bidco under the Scheme Implementation Agreement remain unaffected and, subject to the Schemes becoming effective, the Acquisition will proceed, with the CKPH Group acquiring 100% of the Target via its ownership of all of the Consortium Midcos.

If the necessary Independent Shareholders' Approvals are obtained in respect of both CKI's and PAH's participation in the Joint Venture Transaction, each Consortium Midco (which will be wholly-owned by the respective Consortium Members) will contribute its Respective Proportion or Revised Respective Proportion (as appropriate) of funding to JV Co, by subscribing for additional shares in, and/or providing shareholder loans to, JV Co, which will provide back-to-back funding down to Bidco to satisfy the Scheme Consideration and the transaction costs.

Please refer to the section headed "3. Scheme Implementation Agreement" below for further details.