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 Noble Agri Option. No final and definitive decision has been made as to whether the Company will exercise the Noble Agri Option.
Background
On 16 February 2007, China Agri-Industries Holdings Limited (the 'Company'), COFCO Corporation and COFCO (Hong Kong) Limited ('COFCO (HK)') entered into a non-competition deed in favour of the Company (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.
Reference is made to the Company's announcement dated 1 April 2014 (the 'Announcement') in connection with the acquisition of the equity interest in Noble Agri Limited ('Noble Agri') by COFCO (HK) (the 'Acquisition').
Reference is also made to the Company's announcement dated 14 October 2014 on which the Board of Directors of the Company (the 'Board') announced that as the Acquisition was settled on 14 October 2014, the option for the Company to acquire the Competing Business, as defined in the Announcement, in Noble Agri and its subsidiaries in the People's Republic of China (the 'Noble Agri Option') became effective on 14 October 2014 in accordance with the Non-Competition Deed and its schedule thereof.
Pursuant to the Non-Competition Deed, the decision as to whether or not to exercise the Noble Agri Option shall be voted on solely by the INEDs and be decided by majority votes of the INEDs. The INEDs will review the Noble Agri Option and decide whether to exercise the same on an annual basis. A final and definitive decision as to whether to exercise the Noble Agri Option will be made by the INEDs on the fifth anniversary (being the last year of the option period) of the Noble Agri Option having become effective, if such decision has not been made before such time. If for any reason further time after the fifth anniversary is deemed necessary for the proper evaluation of the Noble Agri Option, the decision to extend would be voted on solely by the INEDs and be decided by majority votes of the INEDs.
Non-exercise of the Noble Agri Option at the Current Time
On 3 December 2015, the INEDs considered whether or not to exercise the Noble Agri Option. The INEDs reviewed relevant information of the Noble Agri 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 Noble Agri Option.
The INEDs' decision was made on the following premise:
The oilseeds crushing market remains challenging as the imbalance between supply and demand forces in the industry can hardly be alleviated in the short term given the current macroeconomic pressures. At this stage, the Company is dedicated to intensive organic growth by laying a solid foundation for its operations and management. For the benefit of the Company and its shareholders as a whole, the Company will closely observe the potential changes in the industry and on the market and choose a more appropriate time to decide whether to exercise the Noble Agri Option.
The Company has accordingly decided not to exercise the Noble Agri Option for the time being. The INEDs will continue to review the Noble Agri 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 Noble Agri Option in future.
By Order of the Board
China Agri-Industries Holdings Limited CHI JingtaoChairman
Hong Kong, 3 December 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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