GREAT WALL MOTOR COMPANY 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.
GREAT WALL MOTOR COMPANY LIMITED*(a joint stock company incorporated in the People's Republic of China with limited liability)
(Stock code: 2333) CONNECTED TRANSACTION DISPOSAL OF SUBSIDIARY THE DISPOSALThe Board is pleased to announce that on 10 June 2015, the Company entered into the Equity Transfer Agreement with Bochuang Urban Development, pursuant to which the Company agreed to sell and Bochuang Urban Development agreed to acquire 100% of the equity interest in Clean Heat Supplying, a wholly-owned subsidiary of the Company, at a consideration of RMB192,088,700.
HONG KONG LISTING RULES IMPLICATION
As at the date of this announcement, Innovation Great Wall, a substantial shareholder of the Company, holds 56.04% of the issued share capital of the Company, while Baoding Wangsheng holds 62.854% equity interest in Innovation Great Wall, and Bochuang Urban Development is a wholly-owned subsidiary of Baoding Wangsheng and is also an associate of Mr. Wei Jian Jun, chairman of the Company. Therefore, Bochuang Urban Development is a connected person of the Company. The transaction contemplated under the Equity Transfer Agreement constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.
Given that the applicable percentage ratios (other than the profit ratio) as set out in Rule 14.08 of the Hong Kong Listing Rules in respect of the Disposal is more than 0.1% but less than 5%, the connected transaction contemplated under the Equity Transfer Agreement is subject to the reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.
The Board is pleased to announce that on 10 June 2015, the Company entered into the Equity Transfer Agreement with Bochuang Urban Development, pursuant to which the Company agreed to sell and Bochuang Urban Development agreed to acquire 100% of the equity interest in Clean Heat Supplying, a wholly-owned subsidiary of the Company, at a consideration of RMB192,088,700.
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EQUITY TRANSFER AGREEMENT Date10 June 2015
Parties to the Equity Transfer Agreement
Vendor: The Company
Purchaser: Bochuang Urban Development
Subject to the terms of the Equity Transfer Agreement, the Company agreed to sell and Bochuang
Urban Development agreed to acquire the entire equity interest in Clean Heat Supplying.
The consideration of the disposal of Clean Heat Supplying is RMB192,088,700, which shall be payable by Bochuang Urban Development to the Company in cash and shall be fully settled within
90 days after the execution of the Equity Transfer Agreement.
The consideration was determined after arm's length negotiations between the Parties with reference to the operational condition of Clean Heat Supplying and the assessed value of Clean Heat Supplying of RMB192,088,700 as at the Valuation Date (30 April 2015) based on the valuation report prepared by Beijing Northern Yashi Assets Appraisal Co., Ltd. ( )j( JfS:'f.ftl'liWt'i;ff
&:il1f01§ ), a qualified valuer in the PRC which is independent of and not connected with the
Group and Bochuang Urban Development, for the purpose of ascertaining a fair value of Clean Heat
Supplying using the cost approach.
Scope of valuation: In respect of the total assets and liabilities of Clean Heat Supplying as at 30
April 2015.
Conclusion of valuation: As at 30 April 2015, the Valuation Date, the audited total book assets, total liabilities and net assets of Clean Heat Supplying were RMB236,175,300, RMB60,900,400 and RMB175,274,900, respectively, while the assessed values of its total assets, total liabilities and net assets were RMB252,989,100, RMB60,900,400 and RMB192,088,700, respectively, representing an appreciation in value of RMB16,813,800 or an appreciation rate of 9.59%.
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The results of valuation are as follows:
Unit: in RMB ten thousand
Carrying value Assessed value Increase/ decrease Changes (%) Item A B C=B-A D=C/Ax100%
Total current assets 1 3,075.84 3,075.84 - - Total non-current assets 2 20,541.69 22,223.07 1,681.38 8.19
Including: Long-term equity
investments 3 - - Investment properties 4 - -
Fixed assets 5 14,524.31 15,636.78 1,112.46 7.66
Including: Buildings 6 9,353.51 9,582.37 228.86 2.45
Equipment 7 5,170.81 6,054.41 883.60 17.09
Construction in progress 8 218.91 222.46 3.55 1.62
Intangible assets 9 5,294.29 5,859.66 565.37 10.68
Including: Intangible assets
- land use rights 10 5,286.04 5,851.45 565.41 10.70
Other non-current assets 11 504.17 504.17 - -
Current liabilities 13 4,073.36 4,073.36 - - Non-current liabilities 14 2,016.68 2,016.68 - - Total liabilities 15 6,090.04 6,090.04 - - Net assets 16 17,527.49 19,208.87 1,681.38 9.59
Conditions Precedent
Completion is conditional upon the satisfaction of the following conditions precedent:
The transaction is approved by the Board and the registration of change with the Administration for Industry and Commerce in accordance with the applicable requirements under the laws and regulations of the PRC is completed.
Completion shall take place after all the conditions of the Equity Transfer Agreement have been fulfilled or such other date as shall be agreed between the Parties.
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INFORMATION RELATING TO CLEAN HEAT SUPPLYINGIn accordance with the PRC Generally Accepted Accounting Principles, the unaudited total asset value and net asset value of Clean Heat Supplying for the two financial years immediately preceding the Disposal and the audited total asset value and net asset value of Clean Heat Supplying as at 30 April 2015 are set out as below:
Unit: in RMB ten thousand
Financial indicators | 30 April 2015 (audited) | 31 December 2014 (unaudited) | 31 December 2013 (unaudited) |
Total asset value | 23,617.53 | 23,564.26 | 22,557.34 |
Net asset value | 17,527.49 | 17,774.87 | 14,011.28 |
In accordance with the PRC Generally Accepted Accounting Principles, the unaudited operating income, the profits (both before and after taxation) of Clean Heat Supplying for the two financial years immediately preceding the Disposal and the period from January 2015 to April 2015 are set out as below:
Unit: in RMB ten thousand
Financial indicators January 2015 to April 2015 January 2014 to December 2014 January 2013 to December 2013 (unaudited) (unaudited) (unaudited)
Operating income 1,721.60 3,601.86 1,634.13
Total profit (profit before taxation) 468.96 367.69 -25.74
Net profit (profit after taxation) 351.72 263.59 12.95
Upon Completion, the Company will no longer have any interest in Clean Heat Supplying and Clean Heat Supplying will cease to be a subsidiary of the Company. Therefore, the assets, liabilities and financial results of Clean Heat Supplying will no longer be consolidated into the consolidated financial statements of the Company. It is expected that the Company will not have any material gain or loss upon completion of the Disposal. The proceeds from the Disposal will be used as working capital of the Group.
REASONS FOR AND BENEFITS OF THE DISPOSAL
The principal business of Clean Heat Supplying is production and supply of heat, construction of heat supply system, maintenance of facilities, design of heat supply system and sale of ashes. The Directors believe that the Disposal will enable the Company to better focus on its principal business.
The Directors, including the independent non-executive Directors, are of the view that the Equity Transfer Agreement was entered into on normal commercial terms, and that the terms thereof are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
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INFORMATION OF THE PARTIES INVOLVED (i) Information relating to the Company
The Company is an integrated automobile manufacturer and together with its subsidiaries, the
Group also engages in the production and sales of certain automotive parts and components.
Bochuang Urban Development is principally engaged in infrastructure construction and management of parks, corporate management and planning services, management of municipal facility projects, wholesale and retail of mechanical equipment, leasing of self-owned properties, real estate development and operation as well as sales of building materials.
IMPLICATION UNDER THE HONG KONG LISTING RULES
As at the date of this announcement, Innovation Great Wall, a substantial shareholder of the Company, holds 56.04% of the issued share capital of the Company, while Baoding Wangsheng holds 62.854% equity interest in Innovation Great Wall, and Bochuang Urban Development is a wholly-owned subsidiary of Baoding Wangsheng and is also an associate of Mr. Wei Jian Jun, chairman of the Company. Therefore, Bochuang Urban Development is a connected person of the Company. The transaction contemplated under the Equity Transfer Agreement constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.
Given that the applicable percentage ratios (other than the profit ratio) as set out in Rule 14.08 of the Hong Kong Listing Rules in respect of the Disposal is more than 0.1% but less than 5%, the connected transaction contemplated under the Equity Transfer Agreement is only subject to the reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.
As Bochuang Urban Development is an associate of Mr. Wei Jian Jun, a director of the Company, Mr. Wei Jian Jun, who has a material interest in the transaction as contemplated under the Equity Transfer Agreement, had abstained from voting on the board resolution in relation to the Equity Transfer Agreement.
In this announcement, the following terms have the following meanings unless the context requires otherwise:
"associate(s)" has the meaning as defined in the Hong Kong Listing Rules; "Baoding Wangsheng" Baoding Wangsheng Investment Company Limited ( f*JErnI�
�ft;ff&01§ ), holds 62.854% equity interest in Innovation Great
Wall;
"Board" the board of Directors;
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"Bochuang Urban
Development"
Bochuang Urban Development Company Limited ( f:iì�rntirrf lJi;ff&01§ ), a company established under the laws of the PRC, is a wholly-owned subsidiary of Baoding Wangsheng and therefore is a connected person (as defined under the Hong Kong Listing Rules) of the Company;
"Clean Heat Supplying" Xushui Clean Heat Supplying Company Limited ( �j(f-4ifi��
;ff&01§ ), a wholly-owned subsidiary of the Company, which was
incorporated in the PRC on 20 July 2012;
"Company" Great Wall Motor Company Limited ( ��4:�5t5t;ff&01§ ); "Completion" completion of the transaction contemplated under the Equity
Transfer Agreement; "Director(s)" the director(s) of the Company;
"Disposal" the disposal of the entire equity interest in Clean Heat Supplying to Bochuang Urban Development by the Company pursuant to the Equity Transfer Agreement;
"Equity Transfer Agreement" the equity transfer agreement dated 10 June 2015 entered into between the Company and Bochuang Urban Development in relation to the Disposal;
"Group" Great Wall Motor Company Limited and its subsidiaries;
"Hong Kong Listing Rules" the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited as amended from time to time;
"Innovation Great Wall" Baoding Innovation Great Wall Asset Management Company Limited ( f*JEiì ��ftl'l ;ff&01§ ) a substantial shareholder of the Company holding approximately 84.86% of the A Shares of the Company, which accounts for 56.04% of the issued share capital of the Company;
"Parties" the parties to the Equity Transfer Agreement, namely the Company and Bochuang Urban Development; and "Party" means any one of them;
"PRC" the People's Republic of China; "Purchaser" Bochuang Urban Development;
"RMB" Renminbi yuan, the lawful currency of the PRC;
"Shareholder(s)" holder(s) of the Company's Shares;
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"Shares" ordinary share(s) of RMB1.00 each in the share capital of the
Company; "Valuation Date" 30 April 2015; "Vendor" the Company; and "%" percentage
This announcement is published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk), the Shanghai Stock Exchange (www.sse.com.cn) and the official website of the Company (www.gwm.com.cn).
By order of the Board
Company Secretary
Baoding, the PRC, 10 June 2015
As at the date of this announcement, members of the Board comprise:
Executive Directors: Mr. Wei Jian Jun, Mr. Liu Ping Fu, Ms. Wang Feng Ying, Mr. Hu Ke Gang and Ms. Yang Zhi Juan.
Non-executive Directors: Mr. He Ping and Mr. Niu Jun.
Independent Non-executive Directors: Mr. Wong Chi Hung, Stanley, Mr. Lu Chuang, Mr. Liang
Shang Shang and Mr. Ma Li Hui.
* For identification purpose only
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