Annual Report 2016
91
Report of the Directors
Connected Transactions
(continued)
(17) On 15 July 2016, Sun Matrix Holdings Limited (a wholly owned subsidiary of the Company) as purchaser entered into the
following three inter-conditional sale and purchase agreements (the “Agreements”) regarding the acquisition of the entire
interest in Onwise Holdings Limited (“OH”), Glory Success Inc. (“GS”), Trafalgar Trading International Limited (“TT”) and
related shareholders’ loans at a total cash consideration of HK$326.0 million (the “Acquisitions”):
(i)
an agreement with King Choi Company Limited (“King Choi”) as vendor and Cheung Hung Development (Holdings)
Limited (“Cheung Hung”) as King Choi’s guarantor regarding the acquisition of the entire issued share capital of OH
and related shareholder’s loans at an aggregate cash consideration of HK$163.0 million;
(ii)
an agreement with Eagle Step Investment Limited (“Eagle Step”) as vendor and Mr. Ho Chi-Kin, Simon as Eagle Step’s
guarantor regarding the acquisition of the entire issued share capital of GS and related shareholder’s loans at an
aggregate cash consideration of HK$81.5 million; and
(iii) an agreement with King Host Development Limited (“King Host”) as vendor and Mr. Ho David as King Host’s guarantor
regarding the acquisition of the entire issued share capital of TT and related shareholder’s loans at an aggregate cash
consideration of HK$81.5 million.
Each of OH, GS and TT owns 50.0%, 25.0% and 25.0% interest respectively in Broad Reach Company Limited (“Broad Reach”)
which is the registered owner of a vacant land situated at No. 21 Luk Hop Street, Kowloon. The Acquisitions is consistent
with the core business strategies of the Group. Upon completion of the Acquisitions on 28 July 2016, OH, GS, TT and Broad
Reach became indirect wholly owned subsidiaries of the Company.
For reasons stated above, CTF is a connected person of the Company. Therefore, King Choi is a connected person of the
Company by virtue of being a wholly owned subsidiary of Cheung Hung which is an associate of CTF and the acquisition of
OH constitutes a connected transaction for the Company under the Listing Rules. As Cheung Hung indirectly owned 50.0%
interest in Broad Reach, the acquisitions of GS and TT also constitute connected transactions for the Company pursuant to
Rule 14A.28 of the Listing Rules. Details of the Acquisitions were set out in the announcement of the Company dated 15 July
2016.
(18) On 18 August 2016, the Company and CTF were awarded a tender by
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ऎଉಥତ˾ਕุΥЪਜ၍ଣ҅
(Authority of
Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone) to acquire the land use rights of Plots T201-0092,
Block 01, Unit No. 2, Guiwan Area, Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, Shenzhen,
Guangdong Province, the PRC (the “Land”) at a consideration of RMB4,207.2 million (equivalent to approximately HK$4,922.4
million) for the development of a financial and commercial complex on the Land (the “Project”). Immediately thereafter on
the same day, the Company and CTF entered into a heads of agreement (“Heads of Agreement”) relating to the joint venture
for the Project. Pursuant to the Heads of Agreement, Sky Treasure Development Limited (the “HK JV Company”), the issued
shares of which are owned as to 70.0% and 30.0% by a wholly owned subsidiary of CTF and a wholly owned subsidiary of
the Company (through NWCL) respectively, will establish a wholly foreign owned enterprise with limited liability in the PRC
(“PRC JV Entity”, together with the HK JV Company, the “Joint Venture Entities”). It is expected that the total investment in
the PRC JV Entity will be RMB8.0 billion (equivalent to approximately HK$9.4 billion), of which RMB4.5 billion (equivalent to
approximately HK$5.3 billion) will be its registered capital. The total investment of the PRC JV Entity (other than any part for
which bank financing is successfully obtained by the Joint Venture Entities) will respectively be contributed by CTF and the
Company to the PRC JV Entity through the HK JV Company in the proportion of 70:30. Immediately after completion of the
formation of the Joint Venture Entities, the effective interest of CTF and the Company in the PRC JV Entity will be 70.0% and
30.0% respectively. The Heads of Agreement sets out, among other things, the manner of formation of the Joint Venture
Entities, the management of the Joint Venture Entities and certain rights and obligations of the shareholders of the Joint
Venture Entities and their financial commitments to the Joint Venture Entities. Details of the Heads of Agreement were set
out in the announcement of the Company dated 18 August 2016.
For reasons stated above, CTF is a connected person of the Company. Therefore, the entering into of the Heads of
Agreement and the establishment of the joint venture thereunder constitute a connected transaction for the Company
under the Listing Rules.
