Cosco to take major stake in CCCC Dredging

Shanghai Terminal (a wholly-owned subsidiary of the Company) proposed to enter into the Consortium Agreement with COSCO SHIPPING Tianjin and one or more Other Investors, pursuant to which the Consortium would seek to acquire a maximum of 5,519,895,784 CCCC Dredging Shares (representing approximately 40% of the enlarged issued share capital of CCCC Dredging) from CCCC on an equity exchange in the PRC by way of participation in a public tender process. Under the Consortium Agreement, if the Consortium is successful in the Tender Process, Shanghai Terminal, COSCO SHIPPING Tianjin and the Other Investor(s) will acquire 1,379,973,946 CCCC Dredging Shares (representing approximately 10% of the enlarged issued share capital of CCCC Dredging), 689,986,973 CCCC Dredging Shares (representing approximately 5% of the enlarged issued share capital of CCCC Dredging) and the balance of the CCCC Dredging Sale Shares respectively. If the number of CCCC Dredging Sale Shares is less than 2,069,960,919 (representing approximately 15% of the enlarged issued share capital of CCCC Dredging), the number of CCCC Dredging Shares which Shanghai Terminal and COSCO SHIPPING Tianjin will respectively acquire will be agreed between them and specified in the Consortium Agreement. Therefore, Shanghai Terminal will acquire not more than 1,379,973,946 CCCC Dredging Shares (representing approximately 10% of the enlarged issued share capital of CCCC Dredging). Unless agreed otherwise by all members of the Consortium, the consideration for the Joint Acquisition will not exceed RMB2.47 per CCCC Dredging Share. Accordingly, the consideration payable by Shanghai Terminal will not exceed approximately RMB3,409 million.

 

As at the date of this announcement, no binding sale and purchase agreement has been entered into between members of the Consortium and CCCC in relation to the Joint Acquisition. Upon successful bidding by the Consortium in the Tender Process, members of the Consortium will enter into a formal sale and purchase agreement with CCCC to implement the Joint Acquisition.

 

IMPLICATIONS UNDER THE LISTING RULES

 

As the highest of the applicable percentage ratios for the transactions under the Consortium Agreement exceeds 25% but is below 100% (assuming that 1,379,973,946 CCCC Dredging

Shares are to be acquired by Shanghai Terminal at a consideration of RMB2.47 per CCCC Dredging Share, and if the Consortium is successful in its bidding in the Tender Process), they will constitute a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to the announcement and shareholders’ approval requirements.

 

As COSCO SHIPPING Tianjin is a wholly-owned subsidiary of COSCO SHIPPING (which is in turn the ultimate controlling shareholder of the Company), it is a connected person of the Company. Accordingly, the transactions under the Consortium Agreement will also constitute a connected transaction of the Company, and is therefore also subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

 

As COSCO SHIPPING is also a controlling shareholder of COSCO SHIPPING Holdings, which is in turn an intermediate controlling shareholder of the Company, COSCO SHIPPING Tianjin is also a connected person of COSCO SHIPPING Holdings and accordingly the transactions under the Consortium Agreement will constitute a connected transaction of COSCO SHIPPING Holdings and is subject to approval of the independent shareholders of COSCO SHIPPING Holdings.

 

Accordingly, the Company proposed that the Consortium Agreement be entered into after Independent Shareholders’ approval and approval of the independent shareholders of COSCO SHIPPING Holdings have been obtained. After the terms and conditions of the Tender Process have been announced on the equity exchange, the Company will make a further announcement. In addition, a circular containing, among other information, (a) further details of the Consortium Agreement and the ST Acquisition; (b) the recommendation from the Independent Board Committee; (c) the advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders; and (d) a notice convening the SGM is expected to be despatched within 15 business days after the date of this announcement, i.e. on or before 13 September 2019.

 

As the entering into of the Consortium Agreement will be subject to Independent Shareholders’ approval and approval of the independent shareholders of COSCO SHIPPING Holdings, the Consortium Agreement may or may not be entered into. Further, the ST Acquisition may or may not materialise depending on whether the Consortium is successful in the Tender Process. There is no assurance that the ST Acquisition will take place or as to when it may take place. Shareholders and potential investors in the Company should exercise caution when dealing in the securities of the Company.

 

Source:COSCO Shipping Ports

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