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.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00081) CONTINUING CONNECTED TRANSACTIONS CONTINUING CONNECTED TRANSACTIONS

On 20 October 2017, the Company and COPL entered into the New Projects Framework Agreement in relation to the Services to be provided by COPL Group to the Group for the New Projects after the Relevant COPL Transaction.

On 20 October 2017, the Company and COPL entered into the Prevailing Projects Framework Agreement to increase the caps and expand the scope for the Prevailing Projects under the Previous Framework Agreement and renew the transactions thereunder.

LISTING RULES IMPLICATIONS

COHL is the controlling shareholder of both the Company and COPL. COPL is hence a connected person of the Company under Chapter 14A of the Listing Rules and transactions under the (i) New Projects Framework Agreement and (ii) Prevailing Projects Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios for the (i) New Projects Services Caps and (ii) Prevailing Projects Services Caps are 0.1% or more but less than 5%, the transactions contemplated under the (i) New Projects Framework Agreement and (ii) Prevailing Projects Framework Agreement are subject to reporting and announcement requirements but are exempt from independent shareholders' approval requirement pursuant to Chapter 14A of the Listing Rules.

CONTINUING CONNECTED TRANSACTIONS

Reference is made to the circular of the Company dated 4 November 2016. The Group acquired from COLI Group certain property development projects in several emerging third tier cities in the PRC, the completion of which took place in December 2016. COPL Group is in contemplation of the Relevant COPL Transaction whereby upon its Completion, COPL Group is expected to provide the Services to the Group for the New Projects. On 20 October 2017, the Company and COPL entered into the New Projects Framework Agreement in relation to the Services to be provided by COPL Group to the Group for the New Projects after the Relevant COPL Transaction.

Reference is also made to the announcement of the Company dated 1 June 2015 in relation to (among others) the continuing connected transactions between the Group and COPL Group regarding the provision of property management services by COPL Group to the Group under the Previous Framework Agreement. The Directors expect that COPL Group will continue to participate in competitive tender to provide property management services to the Group, and it is expected that apart from the Services to be provided by COPL Group to the Group for the New Projects, there will be an increase in the Services between the Group and COPL Group for the Prevailing Projects. On 20 October 2017, the Company and COPL entered into the Prevailing Projects Framework Agreement to increase the caps and expand the scope for the Prevailing Projects under the Previous Framework Agreement and renew the transactions thereunder.

New Projects Framework Agreement

The principal terms of the New Projects Framework Agreement are summarised as follows:

Date

20 October 2017

Parties

  1. the Company

  2. COPL

Duration

Subject to the fulfillment of the conditions precedent to the New Projects Framework Agreement on or before 31 December 2017 (or such other date as the Parties may agree in writing), the New Projects Framework Agreement will commence on 1 January 2018 and end on 30 June 2020.

Terms

Pursuant to the New Projects Framework Agreement, any member of COPL Group upon Completion may provide the Services to the Group for the New Projects, subject to the New Projects Services Caps.

The Group will go through a tender process to select and appoint a service provider for the provision of Services to the Group.

Further details of the standard and systematic tender process of the Group is set out in the paragraph headed "Pricing Basis" below.

Conditions Precedent

The New Projects Framework Agreement (together with the New Projects Services Caps) are conditional upon (i) the Completion and (ii) the passing of the resolution by COPL's independent shareholders at COPL's general meeting approving the New Projects Framework Agreement and the New Projects Services Caps.

For the avoidance of doubt, the Prevailing Projects Framework Agreement and the New Projects Framework Agreement are not inter-conditional upon each other.

Historical Transaction Amount

The historical amount paid by the Group to COLI Group for Services provided for the New Projects for the seven months ended 31 July 2017 was RMB6,724,000 (equivalent to approximately HK$7,934,000).

Caps

The New Projects Services Caps for the two years ending 31 December 2018 and 2019 and the period commencing on 1 January 2020 and ending on 30 June 2020 are as follows:

For the year ending 31 December 2018 For the year ending 31 December 2019 For the period commencing on 1 January 2020 and ending on 30 June 2020

HK$47,800,000 HK$45,900,000 HK$25,800,000

Basis of determination of Caps

The New Projects Services Caps are calculated with reference to, among others, the following factors:

  1. the historical amount of RMB6,724,000 for the seven months ended 31 July 2017 (equivalent to approximately HK$7,934,000) paid by the Group to COLI Group in respect of the New Projects' Services.

  2. the estimated demand of the Group for New Projects' Services for the period from 1 January 2018 to 30 June 2020, estimated with reference to the existing contracts and future property development plans of the Group; and

  3. other factors such as, the Company's business plans and inflation.

The shareholders of the Company should note that the New Projects Services Caps represent the best estimate by the Directors of the amount of the relevant transactions based on the information currently available. The New Projects Services Caps bear no direct relationship to, nor should be taken to have any direct bearing to, the Group's financial or potential financial performance.

Prevailing Projects Framework Agreement

The principal terms of the Prevailing Projects Framework Agreement are summarised as follows:

Date

20 October 2017

Parties

  1. the Company

  2. COPL

Duration

Subject to the fulfillment of the conditions precedent to the Prevailing Projects Framework Agreement on or before 31 December 2017 (or such other date as the Parties may agree in writing), the Prevailing Projects Framework Agreement will commence on 1 January 2018 and end on 30 June 2020.

Terms

Pursuant to the Prevailing Projects Framework Agreement, any member of COPL Group may provide the Services to the Group for the Prevailing Projects, subject to the Prevailing Projects Services Caps.

The Group will go through a tender process to select and appoint a service provider for the provision of Services to the Group.

Further details of the standard and systematic tender process of Group is set out in the paragraph headed "Pricing Basis" below.

The Company and COPL agreed to terminate the Previous Framework Agreement upon the taking effect of the Prevailing Projects Framework Agreement. In the event that the Prevailing Projects Framework Agreement does not become effective, the Previous Framework Agreement will remain in full force and binding on the Company and COPL.

Conditions Precedent

The Prevailing Projects Framework Agreement (together with the Prevailing Projects Services Caps) are conditional upon the passing of the resolution by COPL's independent shareholders at COPL's general meeting approving the Prevailing Projects Framework Agreement and the Prevailing Projects Services Caps.

For the avoidance of doubt, the Prevailing Projects Framework Agreement and the New Projects Framework Agreement are not inter-conditional upon each other.

China Overseas Grand Oceans Group Ltd. published this content on 20 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 20 October 2017 16:16:08 UTC.

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