GOLDEN EAGLE RETAIL GROUP LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
金鷹商貿集團有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code : 3308)On 14 December 2015, Golden Eagle International Group and Golden Eagle (China) entered into the Management Agreement, pursuant to which Golden Eagle (China) and its subsidiaries are delegated with the tasks of managing the daily operation of the Street Shop Properties.
GEICO, through Golden Eagle International Retail Group Limited (one of its wholly-owned subsidiaries), is now indirectly holding approximately 73.9% of the entire issued share capital of the Company and is accordingly a controlling shareholder of the Company. GEICO is in turn wholly-owned by The 2004 RVJD Family Trust, the family trust of Mr. Wang.
Golden Eagle International Group is indirectly wholly-owned by GEICO and is accordingly an associate of GEICO and the connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the entering into of the Management Agreement constituted continuing connected transaction of the Company.
The Directors anticipate that all the applicable ratios in respect of the Management Agreement calculated on an annual basis are more than 0.1% but less than 5%, the entering into of the Management Agreement and the transactions contemplated thereunder is subject to the announcement, reporting and annual review requirements but exempt from Independent Shareholders' approval requirements pursuant to Chapter 14A of the Listing Rules.
MANAGEMENT AGREEMENT DATED 14 DECEMBER 2015Engaging party: 南京金鷹國際集團有限公司 (Nanjing Golden Eagle
International Group Co., Ltd.), being an indirect wholly-owned subsidiary of GEICO
Service provider: 金鷹國際商貿集團（中國）有限公司 (Golden Eagle
International Retail Group (China) Co., Ltd.), being an indirect wholly-owned subsidiary of the Company
GEICO, through Golden Eagle International Retail Group Limited (one of its wholly-owned subsidiaries), is now indirectly holding approximately 73.9% of the entire issued share capital of the Company and is accordingly a controlling shareholder of the Company. GEICO is in turn wholly-owned by The 2004 RVJD Family Trust, the family trust of Mr. Wang.
Golden Eagle International Group is indirectly wholly-owned by GEICO and is accordingly an associate of GEICO and a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the entering into of the Management Agreement constituted a continuing connected transaction of the Company.
Golden Eagle (China) and its subsidiaries are delegated with the tasks of managing the daily operation of the Street Shop Properties which are being owned, or will be owned by Golden Eagle International Group and its subsidiaries from time to time. As at the date of this announcement, these properties mainly include standalone non-specialty street shops with aggregate leasable area of approximately 225,375 square meters held for lease in the cities of Nanjing, Taizhou, Yancheng, Suqian, Danyang, Kunshan and Ma'anshan which are all located at the prime shopping districts in the proximity of the chain stores being operated by the Group in the same city, namely Nanjing Xianlin Store, Taizhou Store, Yancheng Outlet Store, Yancheng Julonghu Store, Suqian Store, Danyang Store, Kunshan Store and Ma'anshan Store.
The major services to be provided under the Management Agreement include:-
providing professional technical support for introducing suitable tenants to the Street Shop Properties and executing the related tenancy agreements;
providing professional advice on the floor planning and interior design of the Street Shop Properties and assisting in enhancing the operation efficiency of the leasable area of the Street Shop Properties;
providing professional support and advice on promotion and advertising activities, in particular, the promotional sales, festival activities, public relation design and functions etc. in the Street Shop Properties;
providing necessary technical support for recruitment and training of staff and improving the human resources system in the Street Shop Properties;
providing professional advice to enhance the accounting, financial budgeting and operational analysis systems of the Street Shop Properties;
providing professional advice and support to enhance information technology management system of the Street Shop Properties, including the improvement of the operation for all computers, network and related facilities, security system for computer data and providing training for technicians; and
being solely responsible for the operations and management of the Street Shop Properties, including review of contracts and approval of expenses.
The initial term of the Management Agreement is taken to be commenced from 22 November 2015 and ends on 31 December 2017. The parties may agree to renew for a term of further three years upon expiry of the said initial term.
During the term of the Management Agreement, the Management Fee payable by Golden Eagle International Group and its subsidiaries to Golden Eagle (China) and its subsidiaries shall be calculated as follows:-
the Management Fee payable to Golden Eagle (China) and its subsidiaries during the period between 22 November 2015 to 31 December 2016 shall be equivalent to 50% of the net rental income derived from the leasing operation of the Street Shop Properties after deducting the property tax, business tax and other relevant taxes (including, the value-added tax which may be imposed by the PRC government in the future) (the "Net Rental Income") during the said period (the "Initial Management Fee"); and
the Management Fee payable to Golden Eagle (China) from 1 January 2017 onwards shall be equivalent to the aggregate amount of:
20% of the portion of the Net Rental Income derived from the leasing operation of the Street Shop Properties of the immediate preceding year (the "Base Management Fee"); and
50% of the excess portion of the Net Rental Income (if any) generated during each financial year, which exceeds the Net Rental Income generated in the immediate preceding year (the "Incremental Management Fee").
The Initial Management Fee and the Base Management Fee receivable by Golden Eagle (China) and its subsidiaries shall be calculated with reference to the management accounts of the respective Street Shop Properties quarterly while the Incremental Management Fee receivable by Golden Eagle (China) and its subsidiaries shall be calculated with reference to the management accounts of the respective Street Shop Properties after the end of each financial year.
The Initial Management Fee and the Base Management Fee shall be payable by Golden Eagle International Group and its subsidiaries to Golden Eagle (China) and its subsidiaries quarterly in arrears within 15 days after the end of the relevant quarter and the Incremental Management Fee shall be payable within 1 month after the end of the relevant financial year.
Golden Eagle International Group and its subsidiaries shall bear the daily operation expenses including employee and welfare expenses, utilities expenses, property management fees, maintenance fees etc incurred during the operation of the Street Shop Properties.
The Management Fee in respect of the Management Agreement was arrived at after arm's length negotiations and with reference to the scope of services to be provided by Golden Eagle (China) and its subsidiaries. In the event that Golden Eagle (China) and its subsidiaries incurred additional management costs and expenses for the enhancement of operation performance of Street Shop Properties in the course of providing services under the Management Agreement, and such amount exceeds the Management Fee as stipulated under the Management Agreement, both Golden Eagle International and Golden Eagle (China) shall discuss for the increase of Management Fee.
Based on the understanding of the Group, the Management Fee will be settled in cash from the internal resources of Golden Eagle International Group and its subsidiaries.
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