CHINA AGRI-INDUSTRIES HOLDINGS LIMITED 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.
This is an announcement made by the Company in connection with certain matters relating to the Non-Competition Deed pursuant to the disclosure obligations set out in the section headed 'Relationship with COFCO and COFCO International' in the prospectus of the Company dated 8 March 2007.
The Company has completed its annual review of the COFCO Biochemical Option. No final and definitive decision has been made as to whether the Company will exercise the COFCO Biochemical Option.
Background
Reference is made to the announcement dated 9 May 2007 on which the board of directors (the 'Board') of China Agri-Industries Holdings Limited (the 'Company') announced that the option of the Company (the 'COFCO Biochemical Option') to acquire from COFCO Corporation ('COFCO') interest in COFCO Biochemical (Anhui) Co., Ltd. ('COFCO Biochemical', formerly known as Anhui BBCA Biochemical Co., Ltd.) became effective on 3 April 2007. The COFCO Biochemical Option was granted under the non-competition deed executed by the Company, COFCO and COFCO (Hong Kong) Limited in favour of the Company on 16 February 2007 (the 'Non-Competition Deed'). As described in the prospectus of the Company dated 8 March 2007, any decision to exercise options under the Non-Competition Deed shall be voted on solely by the independent non-executive directors of the Company (the 'INEDs') and be decided by majority vote of the INEDs. As of the date of this announcement, COFCO holds approximately 15.76% equity interest in COFCO Biochemical.
References are also made to the Company's announcement dated 16 March 2012 in relation to the extension of the COFCO Biochemical Option for three years starting from 3 April 2012, and the announcement dated 12 December 2014 in relation to the extension of the COFCO Biochemical Option for further three years starting from 3 April 2015 to 2 April 2018.
Non-exercise of the COFCO Biochemical Option at the Current Time
On 13 November 2015, the INEDs considered whether or not to exercise the COFCO Biochemical Option. The INEDs reviewed relevant information of the COFCO Biochemical Option, which they reasonably believe to be sufficient in forming their opinion.
The Board hereby announces that the INEDs unanimously resolved that, for the time being, it is not in the interests of the Company and its shareholders as a whole to make a definitive decision whether or not to exercise the COFCO Biochemical Option.
The INEDs' decision was made on the following premise:
According to the requirements stipulated in the 'Implementation Opinions on Relocation of the Key Biochemical Enterprises from Urban Area to Industrial Park from the People's Government of
Bengbu City under the Bengbu Municipal Committee of the Communist Party of China' (中共蚌埠 市委蚌埠市人民政府關於重點生物化工企業退市進園的實施意見), Bengbu City has planned to
relocate key biochemical enterprises in Bengbu City to industrial park within 3 to 5 years. COFCO Biochemical is one of the four relocating enterprises in the first batch. It would be relocated to an industrial park for the proposed establishment of the COFCO Biotechnology Industrial Park. At present, COFCO Biochemical is in negotiation with the Bengbu Municipal Government on the relocation proposal, but has not yet entered into any specific agreement. As the relocation may last for more than three years, the business scope of COFCO Biochemical may be restructured, and it will cause uncertainty on the choice of products and operation of COFCO Biochemical.
The Company has accordingly decided not to exercise the COFCO Biochemical Option for the time being. The INEDs will continue to review such option on an annual basis and the Company will disclose the decision and reason(s) for such decision by way of announcement.
For the avoidance of doubt, the Board wishes to emphasise no final and definitive decision has been made as to whether the Company will exercise the COFCO Biochemical Option in future.
By Order of the Board
China Agri-Industries Holdings Limited CHI JingtaoChairman
Hong Kong, 13 November 2015
As at the date of this announcement, the Board comprises: Mr. CHI Jingtao as chairman of the Board and executive director; Mr. YUE Guojun and Mr. SHI Bo as executive directors; Mr. NING Gaoning, Mr. YU Xubo and Mr. MA Wangjun as non-executive directors; and Mr. LAM Wai Hon, Ambrose, Mr. Patrick Vincent VIZZONE and Mr. ONG Teck Chye as independent non-executive directors.
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