Chu Kong Shipping Enterprises Grp : Announcements and Notices - Completion of Major and Connected Transaction and Continuing Connected Transactions

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any

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: 00560) COMPLETION OF MAJOR AND CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

Reference is made to the announcements of the Company dated 4 March 2016 and 24 March 2016 and the circular of the Company dated 29 March 2016 respectively, in which the Board announced that, among others, the Company entered into the Sun Kong Agreement with CKSE in relation to the Sun Kong Acquisition. The Board is pleased to announce that the Completion has taken place on 30 June 2016.

Prior to the Completion, Sun Kong Petroleum and its subsidiaries have been carrying out On-going Transactions with GNG Group. As GNG indirectly holds approximately 62.0% of the total number of issued shares of the Company, as at the date of this announcement, GNG is a connected person of the Company. Immediately after the Completion, Sun Kong Petroleum becomes a direct wholly-owned subsidiary of the Company. As a result, the On-going Transactions carried out by Sun Kong Petroleum and its subsidiaries with GNG Group subsequent to the Completion shall constitute Continuing Connected Transactions under Chapter 14A of the Listing Rules. As the Directors intend to maintain existing business relationships of Sun Kong Petroleum and its subsidiaries with GNG Group after the Completion so as to increase the Group's revenue and profit and promote the market development of Sun Kong Petroleum and its subsidiaries, the Company entered into the Master Fuel Supply Agreement with GNG to govern the terms and conditions of the Continuing Connected Transactions.

As one or more of the applicable Percentage Ratios of the maximum Annual Cap is expected to be more than 0.1% but less than 5% on an annual basis, the Continuing Connected Transactions are only subject to the reporting, annual review and announcement requirements and exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

1. BACKGROUND

   Reference is made to the announcements of the Company dated 4 March 2016 and 24 March 2016 and the circular of the Company dated 29 March 2016 respectively, in which the Board announced that, among others, the Company entered into the Sun Kong Agreement with CKSE in relation to the Sun Kong Acquisition. The Board is pleased to announce that the Completion has taken place on 30 June 2016.

   As at the date of this announcement, the Company entered into the Master Fuel Supply Agreement with GNG to govern the terms and conditions of the Continuing Connected Transactions.

2. CONTINUING CONNECTED TRANSACTIONS

   Master Fuel Supply Agreement

   Date:	30 June 2016
   Period:	From 30 June 2016 to 31 December 2018
   Parties:	(i) The Company (as supplier)
   (ii) GNG (as customer)
   Nature of Transaction:	Pursuant to the Master Fuel Supply Agreement, the Group agrees to supply diesel and lubricants to the passenger ferries and cargo vessels owned, chartered, operated or acted as agent by GNG Group in Hong Kong at the request of any member of GNG Group from time to time in accordance with its terms and the terms and conditions of the relevant fuel supply agreements to be entered into between members of the Group and members of GNG Group.
   Payment Terms:	GNG Group shall settle the purchase price of diesel and lubricants in arrears on a monthly basis in cash to the Group within 30 days after the balance has been confirmed between both parties.

   Pricing Policy:

   As regards the provision of diesel, depending on the term of supply and the size of customers, the pricing policy of the Group is briefly described as follows: As regards the provision of lubricants, the Group will charge on the basis of cost plus a prevailing market rate. The price of the diesel and lubricants offered by the Group to GNG Group will be on terms no more favorable than the terms available to the independent third parties. Both diesel and lubricants are supplied by the Group to GNG Group on substantially the same terms as they are supplied to other independent customers of the Group.

   • the aggregate sum of (i) the monthly average spot price for diesel as quoted in the Singaporean market and (ii) the handling fees charged by the diesel supplier(s) plus an operational handling fees;

   • the selling price is to be adjusted from time to time based on the trend of the change in selling price of diesel as quoted by one of the largest diesel suppliers in Hong Kong; or

   • based on the spot settlement price for diesel as quoted in the Singaporean market on the date preceding the supply of diesel, and with reference to the trends of the change in the Brent Crude Oil price and the selling price of diesel as quoted by one of the largest diesel suppliers in Hong Kong.

3. HISTORICAL TRANSACTION AMOUNTS

   The following table summarises the historical transaction amounts of the On-going Transactions conducted during the two financial years ended 31 December 2015 and for the five months ended 31 May 2016:

   For the financial year ended 31 December		For the five months ended 31 May
   2014	2015	2016
   HK$'000	HK$'000	HK$'000 (Note 1)
   On-going Transactions (Notes 2 and 3)	203,912	149,838	41,983

   Notes:

4. Based on the latest information available to the Company as at the date of this announcement, the historical transaction amounts for the On-going Transactions can only be calculated up to 31 May 2016 even though the Master Fuel Supply Agreement shall take effect on the date of Completion after 31 May 2016.

5. The On-going Transactions did not constitute continuing connected transactions of the Group under the Listing Rules, hence no annual caps were set for the transactions during such period.

6. The relevant transaction amounts were recorded as revenue in the audited accounts or the management accounts (as the case maybe) of Sun Kong Petroleum.

7. THE ANNUAL CAPS AND BASIS FOR THE ANNUAL CAPS

Annual Caps

The following table summarises the Annual Caps for the period commencing from 30 June 2016 and ending 31 December 2016 and the two financial years ending 31 December 2018:

For the period commencing from 30 June and ending 31 December	For the financial year ending 31 December
2016	2017	2018
HK$'000	HK$'000	HK$'000
Master Fuel Supply Agreement	65,000	93,000	95,000