COSCO SHIPPING : THE ACQUISITION OF SHARES OFQD INTERNATIONAL AND DISPOSAL OF QINGDAO Q...

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中 遠 海 運 控 股 股 份 有 限 公 司

(Formerly known as 中國遠洋控股股份有限公司China COSCO Holdings Company Limited*)

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

The Board is pleased to announce that on 20 January 2017, SCSTD (a wholly-owned subsidiary of COSCO SHIPPING Ports and therefore an indirect non-wholly owned subsidiary of the Company) and QPI entered into the Transaction Agreement pursuant to which SCSTD has conditionally agreed to subscribe for 1,015,520,000 non-circulating domestic shares in QPI at a total consideration of RMB5,798,619,200 (equivalent to RMB5.71 per share), of which RMB3,198,650,840 will be settled by the transfer of 20% equity interest in QQCT to QPI and the remaining RMB2,599,968,360 will be settled in cash. QQCT is currently owned as to 49%, 31% and 20% by PTS Holdings Limited, QPI and SCSTD respectively.

QPI has informed COSCO SHIPPING Ports that it currently intends to seek approval of its shareholders for the conduct of a placing, pursuant to which not more than 243,000,000 new H shares are proposed to be issued, and such placing of H shares is expected to occur before the Subscription Shares are issued. Based on the issued share capital of QPI as at the date of the Transaction Agreement and assuming that there are no other changes to the issued share capital of QPI before completion of the Acquisition (other than the issue of such new H shares, assuming that it occurs at or before completion of the Acquisition), the Subscription Shares will represent approximately 16.82% of the issued share capital of QPI (as enlarged by the issue of the Subscription Shares and such new H shares), and the COSCO SHIPPING Ports Group's shareholding in QPI will increase from approximately 2.01% as at the date of the Transaction Agreement to approximately 18.41%. Under the Transaction Agreement, QPI warrants that, as at the Acquisition Completion Date, on the basis of completion of the Acquisition and the QPI H Share Placing, the Subscription Shares will represent not less than 16.82% of the then issued share capital of QPI (as enlarged by the issue of the Subscription Shares and such H shares).

The highest applicable percentage ratio (as defined under Rule 14.07 of the Listing Rules) in respect of the Disposal and the Acquisition exceeds 5% and is lower than 25% respectively. Accordingly, the Transaction constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

The Board is pleased to announce that on 20 January 2017, SCSTD (a wholly-owned subsidiary of COSCO SHIPPING Ports and therefore an indirect non-wholly owned subsidiary of the Company) and QPI entered into the Transaction Agreement pursuant to which SCSTD has conditionally agreed to subscribe for 1,015,520,000 non-circulating domestic shares in QPI at a total consideration of RMB5,798,619,200 (equivalent to RMB5.71 per share), of which RMB3,198,650,840 will be settled by the transfer of 20% equity interest in QQCT to QPI and the remaining RMB2,599,968,360 will be settled in cash. QQCT is currently owned as to 49%, 31% and 20% by PTS Holdings Limited, QPI and SCSTD respectively.

QPI has informed COSCO SHIPPING Ports that it currently intends to seek approval of its shareholders for the conduct of a placing, pursuant to which not more than 243,000,000 new H shares are proposed to be issued, and such placing of H shares is expected to occur before the Subscription Shares are issued. Based on the issued share capital of QPI as at the date of the Transaction Agreement and assuming that there are no other changes to the issued share capital of QPI before completion of the Acquisition (other than the issue of such new H shares, assuming that it occurs at or before completion of the Acquisition), the Subscription Shares will represent approximately 16.82% of the issued share capital of QPI (as enlarged by the issue of the Subscription Shares and such new H shares), and the COSCO SHIPPING Ports Group's shareholding in QPI will increase from approximately 2.01% as at the date of the Transaction Agreement to approximately 18.41%. Under the Transaction Agreement, QPI warrants that, as at the Acquisition Completion Date, on the basis of completion of the Acquisition and the QPI H Share Placing, the Subscription Shares will represent not less than 16.82% of the then issued share capital of QPI (as enlarged by the issue of the Subscription Shares and such H shares).

The consideration for the Disposal was determined through arm's length negotiations between the parties based on the valuation of QQCT as at 30 June 2016 (being RMB15,993,254,200) set out in the valuation report prepared in accordance with the requirements of applicable PRC laws by a qualified PRC valuer. The consideration for the Acquisition was determined through arm's length negotiations between the parties, taking into account, among other things, (1) the trading prices of the shares of other port companies listed on the Stock Exchange; and (2) the current operations and business prospects of QPI.

The Transaction Agreement takes effect upon satisfaction of the following conditions precedent:

1. the Transaction Agreement having been signed by the legal representative or authorised representative of each party and with the company seal of each party affixed;

2. the Acquisition, the Disposal and the QPI H Share Placing having been approved at the board of directors' meeting, shareholders' meeting and shareholders' class meeting of QPI (if applicable);

3. the appropriate internal decision-making procedure for the Acquisition and the Disposal having been completed by SCSTD in accordance with its articles of association, and the Acquisition and the Disposal having been approved at all the board of directors' meeting, shareholders' meeting and/or shareholders' class meeting of each SCSTD Controller (if applicable);

4. the Acquisition, the Disposal and the QPI H Share Placing having been approved or agreed to by competent State-owned assets regulatory authorities;

5. the Ministry of Commerce of the PRC having approved the Notification of Concentrations of Business Operators in respect of the Disposal;

6. the parties and SCSTD Controllers having each obtained or made all necessary consents, approvals and filings of or with any relevant government or regulatory authority in the PRC, Hong Kong or elsewhere (if applicable) in relation to the entering into and performance of the Transaction Agreement; and

7. all applicable approvals, confirmations and formalities in relation to the Acquisition, the Disposal and the QPI H Share Placing having been obtained or completed by the parties from or with relevant governing departments and organisations (including but not limited to the governing department of the Ministry of Commerce, securities regulatory authorities, foreign exchange regulatory authorities and SCSTD's banks).

After the Effective Date, the parties shall jointly procure the fulfilment of the following conditions precedent to implementation:

1. the valuation report in relation to the Disposal having been filed;

2. the transfer of the QQCT Equity in relation to the Disposal having been validly approved by the effective resolutions passed by all the directors of QQCT; PTS Holdings Limited having issued a written declaration agreeing to the transfer of the QQCT Equity and waiver of pre-emptive right in relation to the Disposal;

3. in order to reflect the transfer of the QQCT Equity in relation to the Disposal, the joint venture agreement and articles of association of QQCT having been formally amended by the shareholders (which amendments shall include replacement of SCSTD's right to appoint two directors on the board of directors of QQCT with QPI's right) and such amendments to the joint venture agreement and the articles of association, or the new joint venture agreement and articles of association, having been validly approved by resolutions passed by all the directors of QQCT; and

4. there being no unremedied material breach, except where the non-defaulting party agrees to implement the Disposal notwithstanding thereof.