Wharf Holdings : Wheelock / Wharf Joint Announcement : Acceptance of Basic Terms Offer in Relation to Surrender of KPP83 and Re-Grant of Ocean Terminal Lot - Discloseable Transaction
06/04/2012| 09:22pm US/Eastern
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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.
WHEELOCK AND COMPANY LIMITED THE WHARF (HOLDINGS) LIMITED
(Incorporated in Hong Kong with limited liability)
(Incorporated in Hong Kong with limited liability)
Stock Code: 20 Stock Code: 4
JOINT ANNOUNCEMENT
ACCEPTANCE OF BASIC TERMS OFFER IN RELATION TO SURRENDER OF
KPP 83 AND RE-GRANT OF OCEAN TERMINAL LOT
DISCLOSEABLE TRANSACTION
The boards of directors of Wheelock and Wharf wish to
announce that, on 4 June 2012, Wharf Realty, a wholly-owned
subsidiary of Wharf (which in turn is a listed subsidiary of
Wheelock), accepted an offer from the Government for the
surrender of KPP 83 and re-grant of the Ocean Terminal Lot
for a lease term of 21 years from the date of the relevant
conditions of exchange which are expected to be executed on
or before 12 June 2012. The land premium for the re-grant of
the Ocean Terminal Lot payable under the conditions of
exchange is HK$7.9 billion and an annual rent will be payable
at 3% of the rateable value of the Ocean Terminal Lot.
For each of Wheelock and Wharf, the applicable percentage
ratios are more than 5% but less than 25% for the purpose of
Rule 14.07 of the Listing Rules. As such, the Land Exchange
Transaction constitutes a discloseable transaction for each
of Wheelock and Wharf and is subject to the reporting and
announcement requirements but exempt from the independent
shareholders' approval requirement under Chapter 14 of
the Listing Rules.
ACCEPTANCE OF GOVERNMENT'S BASIC TERMS OFFER
On 4 June 2012, Wharf Realty, a wholly-owned subsidiary of
Wharf (which in turn is a listed subsidiary of Wheelock),
accepted an offer from the Government for the surrender of
KPP 83 and re-grant of the Ocean Terminal Lot for a lease
term of 21 years from the date of the relevant conditions of
exchange which are expected to be executed on or before 12
June 2012. The land premium for the re-grant of the Ocean
Terminal Lot payable under the conditions of exchange is
HK$7.9 billion and an annual rent will be payable at 3% of
the rateable value of the Ocean Terminal Lot. The rateable
value of KPP 83 for the financial year from April 2012 to
March
2013 is approximately HK$491 million.
1
Wheelock and Wharf - Joint Announcement
(4 June 2012)
Under the terms of the Government's basic terms offer, a
binding contract in relation to the Land Exchange Transaction
between the parties would be constituted on the receipt by
the Government of Wharf Realty's acceptance. Wharf
Realty delivered the acceptance to the Government on 4 June
2012.
Wharf Realty has paid a deposit equivalent to 10% of the land
premium, while the remaining balance will be payable on or
before 12 June 2012. The annual rent at 3% of the rateable
value of the Ocean Terminal Lot will be payable on a
quarterly basis. The consideration for the Land Exchange
Transaction was assessed by the Government and agreed by
Wharf Realty after arm's length negotiation, and will be
funded by Wharf Group partly by its internal resources and
partly by bank and other borrowings.
INFORMATION ON THE OCEAN TERMINAL LOT
The Ocean Terminal Lot will have a total area of about 31,750
square meters, and the permitted gross floor area of
building(s) erected or to be erected thereon shall not be
more than 85,672 square meters or less than 50,808 square
meters.
For the financial year ended 31 December 2011, the before and
after taxation net rental income generated from "Ocean
Terminal" (taking into account all related disbursements
such as expenses for managing the property and allowances to
maintain it in a condition to command its rent but excluding
expenses as a result of revaluation deficit of the property)
are approximately HK$701 million and approximately HK$587
million respectively.
For the financial year ended 31 December 2010, the before and
after taxation net rental income generated from "Ocean
Terminal" (taking into account all related disbursements
such as expenses for managing the property and allowances to
maintain it in a condition to command its rent but excluding
expenses as a result of revaluation deficit of the property)
are approximately HK$555 million and approximately HK$464
million respectively.
REASONS FOR AND BENEFITS OF THE LAND EXCHANGE TRANSACTION
By entering into the Land Exchange Transaction, the Wheelock
Group and the Wharf Group will be able to continue its
operation of "Ocean Terminal" on the Ocean Terminal
Lot, which is contiguous with Wharf's flagship asset, Harbour
City, upon expiry of the lease of KPP 83 on
16 June 2012. The directors of Wheelock and Wharf therefore
believe that the Land Exchange Transaction is beneficial to
Wheelock and Wharf. Furthermore, the directors of both
Wheelock and Wharf believe that the terms of the Land
Exchange Transaction are fair and reasonable and in the
interests of Wheelock and Wharf and their respective
shareholders as a whole.
REGULATORY ASPECTS
For each of Wheelock and Wharf, the applicable percentage
ratios are more than 5% but less than 25% for the purpose of
Rule 14.07 of the Listing Rules. As such, the Land Exchange
Transaction constitutes a discloseable transaction for each
of Wheelock and Wharf and is subject to the reporting and
announcement requirements but exempt from the independent
shareholders' approval requirement under Chapter 14 of
the Listing Rules.
2
Wheelock and Wharf - Joint Announcement
(4 June 2012)
GENERAL
The Government is a third party independent of both Wheelock
and Wharf and their respective connected persons.
The principal business activities of the Wheelock Group and
the Wharf Group are ownership of properties for development
and letting, investment holding, container terminals as well
as communications, media and entertainment.
As at the date of this announcement, the board of directors
of Wheelock comprises Mr. Peter K. C. Woo, Mr. Stephen T. H.
Ng, Mr. Stewart C. K. Leung, Mr. Paul Y. C. Tsui and Mr.
Ricky K. Y. Wong, together with four independent
non-executive directors, namely, Mr. Alexander S. K. Au, Mr.
Herald L. F. Lau, Mr. Kenneth W. S. Ting and Mr. Glenn S.
Yee, and the board of directors of Wharf comprises Mr. Peter
K. C. Woo, Mr. Stephen T. H. Ng, Mr. Andrew O. K. Chow, Ms.
Doreen Y. F. Lee, Mr. T. Y. Ng and Mr. Paul Y. C. Tsui,
together with six independent non-executive directors,
namely, Hon. Paul M. P. Chan, Professor Edward K. Y. Chen,
Dr. Raymond K. F. Ch'ien, Hon. Vincent K. Fang, Mr. Hans
Michael Jebsen and Mr. James E. Thompson.
TERMS USED IN THIS ANNOUNCEMENT
Unless the context otherwise requires, capitalised terms used
in this announcement shall have the following meanings: -
"Government" the Government of Hong
Kong
"HK$" Hong Kong dollars, the lawful currency
of Hong Kong
"Hong Kong" the Hong Kong Special
Administrative Region of the
People's Republic of China
"KPP 83" the portion of sea bed registered in the Land
Registry as Kowloon Permanent Pier No.83 on which "Ocean
Terminal" is currently erected
"Land Exchange Transaction" Wharf
Realty's acceptance of the basic terms offer from the
Government for the surrender of KPP 83 and re-grant of the
Ocean Terminal Lot to Wharf Realty by way of in-situ land
exchange
"Listing Rules" the Rules Governing the
Listing of Securities on the
Stock Exchange
"Ocean Terminal Lot" the lot to be registered
in the Land Registry as Kowloon Inland Lot No. 11178 which
the Government has agreed to grant to Wharf Realty by way of
in-situ land exchange upon its surrender of KPP 83
3
Wheelock and Wharf - Joint Announcement
(4 June 2012)
"Stock Exchange" The Stock Exchange of Hong
Kong Limited
"Wharf" The Wharf (Holdings) Limited (stock
code: 4), a listed subsidiary of Wheelock incorporated in
Hong Kong with limited liability, the shares of which are
listed on the Stock Exchange
"Wharf Group" Wharf together with its
subsidiaries
"Wheelock" Wheelock and Company Limited
(stock code: 20), a company incorporated in Hong Kong with
limited liability, the shares of which are listed on the
Stock Exchange
"Wheelock Group" Wheelock together with its
subsidiaries
"Wharf Realty" Wharf Realty Limited, a
wholly-owned subsidiary of Wharf incorporated in Hong Kong
with limited liability
By order of the directors of By order of the directors of
WHEELOCK AND COMPANY LIMITED THE WHARF (HOLDINGS) LIMITED
Wilson W. S. Chan Wilson W. S. Chan
Company Secretary Company Secretary
Hong Kong, 4 June 2012
4
Wheelock and Wharf - Joint Announcement
(4 June 2012)
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