News Content
CSCL completes sale of subsidiaries CS Yangshan and Zhengjin
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.
On 22 November 2013, the Company listed the CS Yangshan Equity Interests (being the entire 100% equity interests in CS Yangshan) on SUAEE for open bidding by public bidders in compliance with the relevant laws and regulations on transfer of state-owned equity interests in the PRC. CS Logistics successfully bid the CS Yangshan Equity Interests through SUAEE and on 3 January 2014, the Company entered into the CS Yangshan Equity Transfer Agreement with CS Logistics with respect to the CS Yangshan Disposal at a consideration of RMB305,411,200.38 (approximately HK$387,872,224.48). The equity transaction certificate by SUAEE with respect to the CS Yangshan Disposal has been issued and the CS Yangshan Equity Transfer Agreement has become effective on 6 January 2014. Upon completion of the CS Yangshan Disposal, the Company will cease to have any interest in CS Yangshan.
On 22 November 2013, the Company listed the Zhengjin Equity Interests (being the entire
100% equity interests in Zhengjin) on SUAEE for open bidding by public bidders in compliance with the relevant laws and regulations on transfer of state-owned equity interests in the PRC. CS Investment successfully bid the Zhengjin Equity Interests through SUAEE and on 3 January
2014, the Company entered into the Zhengjin Equity Transfer Agreement with CS Investment with respect to the Zhengjin Disposal at a consideration of RMB372,723,032.33 (approximately HK$473,358,251.06). The equity transaction certificate by SUAEE with respect to the Zhengjin Disposal has been issued and the Zhengjin Equity Transfer Agreement has become effective on
6 January 2014. Upon completion of the Zhengjin Disposal, the Company will cease to have any interest in Zhengjin.
CS Logistics and CS Investment are subsidiaries of China Shipping, the controlling shareholder of the Company. Accordingly, both CS Logistics and CS Investment are connected persons of the Company under the Listing Rules and each of the CS Yangshan Disposal and the Zhengjin Disposal constitutes a connected transaction of the Company under the Listing Rules. Since the applicable percentage ratios relating to the Disposals are more than 0.1% but less than 5%, the Disposals are exempted from the independent shareholders' approval requirements but are subject to the relevant reporting and announcement requirements under the Listing Rules.
1
i. the CS yangShan equity tranSfer agreeMent a. date
3 January 2014
B. parties
(i) the Company, as vendor; and
(ii) CS Logistics, as purchaser.
C. Consideration
RMB305,411,200.38 (approximately HK$387,872,224.48), of which:
(i) RMB91,620,000 (approximately HK$116,357,400), which has been paid by CS Logistics to the bank account designated by SUAEE as deposit when CS Logistics submitted its bid for the CS Yangshan Equity Interests, shall be converted as part payment of the total consideration for the CS Yangshan Equity Interests on the date of the CS Yangshan Equity Transfer Agreement; and
(ii) the remaining consideration of RMB213,791,200.38 (approximately HK$271,514,824.48) shall be paid by CS Logistics to the bank account designated by the Company within one working day from the date of the CS Yangshan Equity Transfer Agreement.
The consideration for the CS Yangshan Equity Interests was determined by reference to the bidding price submitted by CS Logistics to SUAEE when it bid for the CS Yangshan Equity Interests. As part of the listing requirements of SUAEE, the Company instructed China Tong
Cheng Asset Appraisal Co., Ltd. (r:fWlWJrlfrtffF!0PJ), an independent professional
property valuer, to prepare a valuation report on CS Yangshan, which adopted the asset-based
method and was made available to the public bidders for assessment of the value of the CS Yangshan Equity Interests. The appraised net asset value of CS Yangshan as at 30 September
2013 was RMB305.4112 million (approximately HK$387.8722 million).
d. other Material terms
According to the terms of the CS Yangshan Equity Transfer Agreement, it shall come into effect upon (i) execution of the CS Yangshan Equity Transfer Agreement by the Company and CS Logistics; and (ii) issuance of the equity transaction certificate by SUAEE with respect to the CS Yangshan Disposal. In view of the execution of the CS Yangshan Equity Transfer Agreement on 3 January 2014 and the issuance of the equity transaction certificate by SUAEE with respect to the CS Yangshan Disposal on 6 January 2014, the CS Yangshan Equity Transfer Agreement has come into effect on 6 January 2014.
CS Logistics and the Company shall complete the transfer of ownership of the CS Yangshan Equity Interests within 20 working days from the effective date of the CS Yangshan Equity Transfer Agreement. The Company and CS Logistics shall also cooperate with CS Yangshan to complete the registration process to record the change in ownership of the CS Yangshan Equity Interests within 20 working days from the effective date of the CS Yangshan Equity Transfer Agreement.
Upon completion of the CS Yangshan Disposal, CS Yangshan will cease to be a subsidiary of the Company.
2
ii. the Zhengjin equity tranSfer agreeMent a. date
3 January 2014
B. parties
(i) the Company, as vendor; and
(ii) CS Investment, as purchaser.
C. Consideration
RMB372,723,032.33 (approximately HK$473,358,251.06), of which:
(i) RMB111,810,000 (approximately HK$141,998,700), which has been paid by CS Investment to the bank account designated by SUAEE as deposit when CS Investment submitted its bid for the Zhengjin Equity Interests, shall be converted as part payment of the total consideration for the Zhengjin Equity Interests on the date of the Zhengjin Equity Transfer Agreement; and
(ii) The initial consideration of RMB111,816,909.70 (approximately HK$142,007,475.32), being 30% of the total consideration for the Zhengjin Equity Interests, shall be paid by CS Investment. CS Investment shall pay RMB6,909.70 (approximately HK$8775.32), being the initial consideration less the deposit, to the bank account designated by the Company within one working day from the date of the Zhengjin Equity Transfer Agreement. The remaining consideration for the Zhengjin Equity Interests, being RMB260,906,122.63 (approximately HK$331,350,775.74), shall be paid to the Company within six months from the date of the Zhengjin Equity Transfer Agreement. CS Investment shall provide guarantee by way of a letter of credit and shall pay the interest for the deferred payment period according to the benchmark loan interest rate of the People's Bank of China for the same period. Such interest shall be paid within six months from the date of the Zhengjin Equity Transfer Agreement.
The consideration for the Zhengjin Equity Interests was determined by reference to the bidding price submitted by CS Investment to SUAEE when it bid for the Zhengjin Equity Interests. As part of the listing requirements of SUAEE, the Company instructed Vocational
International (Beijing) Asset Appraisal Co., Ltd. (lX5/iif( :liOlilil!JrlfrtffF!0PJ),
an independent professional property valuer, to prepare a valuation report on Zhengjin, which
adopted the asset-based method and was made available to the public bidders for assessment of the value of the Zhengjin Equity Interests. The appraised net asset value of Zhengjin as at
15 November 2013 was RMB372.7230 million (approximately HK$473.3582 million).
3
d. other Material terms
According to the terms of the Zhengjin Equity Transfer Agreement, it shall come into effect upon (i) execution of the Zhengjin Equity Transfer Agreement by the Company and CS Investment; and (ii) issuance of the equity transaction certificate by SUAEE with respect to the Zhengjin Disposal. In view of the execution of the Zhengjin Equity Transfer Agreement on 3 January 2014 and the issuance of the equity transaction certificate by SUAEE with respect to the Zhengjin Disposal on 6 January 2014, the Zhengjin Equity Transfer Agreement has become effective on 6 January 2014.
CS Investment and the Company shall complete the transfer of ownership of the Zhengjin Equity Interests within 20 working days from the effective date of the Zhengjin Equity Transfer Agreement. The Company and CS Investment shall also cooperate with Zhengjin to complete the registration process to record the change in ownership of the Zhengjin Equity Interests within 20 working days from the effective date of the Zhengjin Equity Transfer Agreement.
Upon completion of the Zhengjin Disposal, Zhengjin will cease to be a subsidiary of the
Company.
iii. reaSonS for and BenefitS of the diSpoSalS
The Board is of the view that, each of the CS Yangshan Disposal and the Zhengjin Disposal is to optimise the structure of the Company's assets and each of the CS Yangshan Disposal and the Zhengjin Disposal is necessary for the overall development strategy of the Company.
At the Board meeting held on 21 November 2013, the Directors approved (i) the CS Yangshan Disposal would be carried out by way of listing the CS Yangshan Equity Interests on SUAEE for open bidding by public bidders, at the consideration reasonably assessed by reference to the appraised net asset value of CS Yangshan Equity Interests as at 30 September 2013; (ii) the Zhengjin Disposal would be carried out by way of listing the Zhengjin Equity Interests on SUAEE for open bidding by public bidders, at the consideration reasonably assessed by reference to the appraised net asset value of Zhengjin Equity Interests as at 15 November
2013; and (iii) the authorisation for the management of the Company to deal with matters relating to the Disposals.
The Board (including the independent non-executive directors of the Company) considers that as each of the CS Yangshan Disposal and the Zhengjin Disposal was carried out through open bidding process on SUAEE with the consideration assessed by reference to the appraised net asset value prepared by an independent third party professional property valuer, the terms of each of the CS Yangshan Disposal and the Zhengjin Disposal are fair and reasonable, in the interests of the Company and the shareholders of the Company as a whole.
Each of the following Directors, namely Mr. Li Shaode, Mr. Xu Lirong, Mr. Zhang Guofa, Mr. Huang Xiaowen, Mr. Zhao Hongzhou, Mr. Wang Daxiong, Ms. Su Min, Mr. Ding Nong, Mr. Chen Jihong and Mr. Zhang Rongbiao, who are also directors or senior managers of China Shipping or its subsidiaries, has a material interest in the Disposals. However, as the identity of the winning party was unknown at the Board meeting held on 21 November 2013 and the Board has authorised the management of the Company to deal with matters relating to the Disposals, none of the Directors have abstained from voting on the Board resolutions in relation to the Disposals on 21 November 2013.
4
iV. inforMation on CS yangShan and Zhengjin a. CS yangshan
CS Yangshan was established on 8 November 2006 as a limited liability company in the PRC with a registered capital of RMB239,000,000. It is principally engaged in pile-up, transfer, distribution, assembly and dismantlement of containers, precooling of frozen containers, remodification, repair, renewing and cleaning of containers, relevant services for loading and unloading of goods, ordinary process and package and consultation, the leasing of container and warehouse.
In accordance with the PRC Generally Accepted Accounting Principles, the audited profits/ (loss) (before and after taxation and extraordinary items) of CS Yangshan for the financial years ended 31 December 2011 and 31 December 2012 are set out as follows:
year ended 31 december 2011 year ended 31 december 2012
Profit/(loss) before taxation and extraordinary items
RMB(7,954,096.96) (approximately
HK$(10,101,703.14))
RMB(264,910.47) (approximately
HK$(336,436.30))
Profit/(loss) after taxation and extraordinary items
RMB(7,949,069.08) (approximately
HK$(10,095,317.73))
RMB67,970.61 (approximately HK$86,322.67)
The book value of the net assets of CS Yangshan as at 30 September 2013 w as RMB215,638,231.19 (approximately HK$273,860,553.61). The net gain from the CS Yangshan Disposal (i.e. the difference between the consideration for the CS Yangshan Equity Interests and the book value of the net assets of CS Yangshan as at 30 September 2013) will be RMB89,772,969.19 (approximately HK$114,011,670.87). The Company intends to use the proceeds arising from the CS Yangshan Disposal to supplement the Company's working capital.
As a result of the CS Yangshan Disposal, the gross profit of the Company for 2014 will be increased by approximately RMB90 million, and the revenue and cash flow of the Company for the current period will also be enhanced.
5
B. Zhengjin
Zhengjin was established on 1 November 2013 as a limited liability company in the PRC with a registered capital of RMB80,000,000. It is principally engaged in management of supply chain and investment and provision of corporate management consultation services.
As Zhengjin was only established on 1 November 2013, audited net profits/(losses) (both before and after taxation and extraordinary items) of Zhengjin for the financial years ended
31 December 2011 and 31 December 2012 are not available.
The book value of the net assets of Zhengjin as at 15 November 2013 was RMB372,726,700 (approximately HK$473,362,909). The net loss from the Zhengjin Disposal (i.e. the difference between the consideration for the Zhengjin Equity Interests and the book value of the net assets of Zhengjin as at 15 November 2013) will be RMB3,700 (approximately HK$4,699). The Company intends to use the proceeds arising from the Zhengjin Disposal to supplement the Company's working capital.
As a result of the Zhengjin Disposal, the gross profit of the Company for 2014 will be increased by approximately RMB200 million, and the revenue and cash flow of the Company for the current period will also be enhanced.
V. inforMation on the CoMpany, CS logiStiCS and CS inVeStMent a. the Company
The Company is principally engaged in the operation and management of international and domestic container marine transportation.
B. CS logistics
CS Logistics is principally engaged in shipping logistics, freight agency, storage and transportation.
C. CS investment
CS Investment is principally engaged in investment in corporates, management of real estate interests for China Shipping and its subsidiaries, international trading and provision of relevant consultation services.
Vi. iMpliCation under the liSting ruleS
CS Logistics and CS Investment are subsidiaries of China Shipping, the controlling shareholder of the Company. Accordingly, both CS Logistics and CS Investment are connected persons of the Company under the Listing Rules and each of the CS Yangshan Disposal and the Zhengjin Disposal constitutes a connected transaction of the Company under the Listing Rules. Since the applicable percentage ratios relating to the Disposals are more than 0.1% but less than 5%, the Disposals are exempted from the independent shareholders' approval requirements but are subject to the relevant reporting and announcement requirements under the Listing Rules.
Source: China Shipping Container Lines Co Ltd
On 22 November 2013, the Company listed the CS Yangshan Equity Interests (being the entire 100% equity interests in CS Yangshan) on SUAEE for open bidding by public bidders in compliance with the relevant laws and regulations on transfer of state-owned equity interests in the PRC. CS Logistics successfully bid the CS Yangshan Equity Interests through SUAEE and on 3 January 2014, the Company entered into the CS Yangshan Equity Transfer Agreement with CS Logistics with respect to the CS Yangshan Disposal at a consideration of RMB305,411,200.38 (approximately HK$387,872,224.48). The equity transaction certificate by SUAEE with respect to the CS Yangshan Disposal has been issued and the CS Yangshan Equity Transfer Agreement has become effective on 6 January 2014. Upon completion of the CS Yangshan Disposal, the Company will cease to have any interest in CS Yangshan.
On 22 November 2013, the Company listed the Zhengjin Equity Interests (being the entire
100% equity interests in Zhengjin) on SUAEE for open bidding by public bidders in compliance with the relevant laws and regulations on transfer of state-owned equity interests in the PRC. CS Investment successfully bid the Zhengjin Equity Interests through SUAEE and on 3 January
2014, the Company entered into the Zhengjin Equity Transfer Agreement with CS Investment with respect to the Zhengjin Disposal at a consideration of RMB372,723,032.33 (approximately HK$473,358,251.06). The equity transaction certificate by SUAEE with respect to the Zhengjin Disposal has been issued and the Zhengjin Equity Transfer Agreement has become effective on
6 January 2014. Upon completion of the Zhengjin Disposal, the Company will cease to have any interest in Zhengjin.
CS Logistics and CS Investment are subsidiaries of China Shipping, the controlling shareholder of the Company. Accordingly, both CS Logistics and CS Investment are connected persons of the Company under the Listing Rules and each of the CS Yangshan Disposal and the Zhengjin Disposal constitutes a connected transaction of the Company under the Listing Rules. Since the applicable percentage ratios relating to the Disposals are more than 0.1% but less than 5%, the Disposals are exempted from the independent shareholders' approval requirements but are subject to the relevant reporting and announcement requirements under the Listing Rules.
1
i. the CS yangShan equity tranSfer agreeMent a. date
3 January 2014
B. parties
(i) the Company, as vendor; and
(ii) CS Logistics, as purchaser.
C. Consideration
RMB305,411,200.38 (approximately HK$387,872,224.48), of which:
(i) RMB91,620,000 (approximately HK$116,357,400), which has been paid by CS Logistics to the bank account designated by SUAEE as deposit when CS Logistics submitted its bid for the CS Yangshan Equity Interests, shall be converted as part payment of the total consideration for the CS Yangshan Equity Interests on the date of the CS Yangshan Equity Transfer Agreement; and
(ii) the remaining consideration of RMB213,791,200.38 (approximately HK$271,514,824.48) shall be paid by CS Logistics to the bank account designated by the Company within one working day from the date of the CS Yangshan Equity Transfer Agreement.
The consideration for the CS Yangshan Equity Interests was determined by reference to the bidding price submitted by CS Logistics to SUAEE when it bid for the CS Yangshan Equity Interests. As part of the listing requirements of SUAEE, the Company instructed China Tong
Cheng Asset Appraisal Co., Ltd. (r:fWlWJrlfrtffF!0PJ), an independent professional
property valuer, to prepare a valuation report on CS Yangshan, which adopted the asset-based
method and was made available to the public bidders for assessment of the value of the CS Yangshan Equity Interests. The appraised net asset value of CS Yangshan as at 30 September
2013 was RMB305.4112 million (approximately HK$387.8722 million).
d. other Material terms
According to the terms of the CS Yangshan Equity Transfer Agreement, it shall come into effect upon (i) execution of the CS Yangshan Equity Transfer Agreement by the Company and CS Logistics; and (ii) issuance of the equity transaction certificate by SUAEE with respect to the CS Yangshan Disposal. In view of the execution of the CS Yangshan Equity Transfer Agreement on 3 January 2014 and the issuance of the equity transaction certificate by SUAEE with respect to the CS Yangshan Disposal on 6 January 2014, the CS Yangshan Equity Transfer Agreement has come into effect on 6 January 2014.
CS Logistics and the Company shall complete the transfer of ownership of the CS Yangshan Equity Interests within 20 working days from the effective date of the CS Yangshan Equity Transfer Agreement. The Company and CS Logistics shall also cooperate with CS Yangshan to complete the registration process to record the change in ownership of the CS Yangshan Equity Interests within 20 working days from the effective date of the CS Yangshan Equity Transfer Agreement.
Upon completion of the CS Yangshan Disposal, CS Yangshan will cease to be a subsidiary of the Company.
2
ii. the Zhengjin equity tranSfer agreeMent a. date
3 January 2014
B. parties
(i) the Company, as vendor; and
(ii) CS Investment, as purchaser.
C. Consideration
RMB372,723,032.33 (approximately HK$473,358,251.06), of which:
(i) RMB111,810,000 (approximately HK$141,998,700), which has been paid by CS Investment to the bank account designated by SUAEE as deposit when CS Investment submitted its bid for the Zhengjin Equity Interests, shall be converted as part payment of the total consideration for the Zhengjin Equity Interests on the date of the Zhengjin Equity Transfer Agreement; and
(ii) The initial consideration of RMB111,816,909.70 (approximately HK$142,007,475.32), being 30% of the total consideration for the Zhengjin Equity Interests, shall be paid by CS Investment. CS Investment shall pay RMB6,909.70 (approximately HK$8775.32), being the initial consideration less the deposit, to the bank account designated by the Company within one working day from the date of the Zhengjin Equity Transfer Agreement. The remaining consideration for the Zhengjin Equity Interests, being RMB260,906,122.63 (approximately HK$331,350,775.74), shall be paid to the Company within six months from the date of the Zhengjin Equity Transfer Agreement. CS Investment shall provide guarantee by way of a letter of credit and shall pay the interest for the deferred payment period according to the benchmark loan interest rate of the People's Bank of China for the same period. Such interest shall be paid within six months from the date of the Zhengjin Equity Transfer Agreement.
The consideration for the Zhengjin Equity Interests was determined by reference to the bidding price submitted by CS Investment to SUAEE when it bid for the Zhengjin Equity Interests. As part of the listing requirements of SUAEE, the Company instructed Vocational
International (Beijing) Asset Appraisal Co., Ltd. (lX5/iif( :liOlilil!JrlfrtffF!0PJ),
an independent professional property valuer, to prepare a valuation report on Zhengjin, which
adopted the asset-based method and was made available to the public bidders for assessment of the value of the Zhengjin Equity Interests. The appraised net asset value of Zhengjin as at
15 November 2013 was RMB372.7230 million (approximately HK$473.3582 million).
3
d. other Material terms
According to the terms of the Zhengjin Equity Transfer Agreement, it shall come into effect upon (i) execution of the Zhengjin Equity Transfer Agreement by the Company and CS Investment; and (ii) issuance of the equity transaction certificate by SUAEE with respect to the Zhengjin Disposal. In view of the execution of the Zhengjin Equity Transfer Agreement on 3 January 2014 and the issuance of the equity transaction certificate by SUAEE with respect to the Zhengjin Disposal on 6 January 2014, the Zhengjin Equity Transfer Agreement has become effective on 6 January 2014.
CS Investment and the Company shall complete the transfer of ownership of the Zhengjin Equity Interests within 20 working days from the effective date of the Zhengjin Equity Transfer Agreement. The Company and CS Investment shall also cooperate with Zhengjin to complete the registration process to record the change in ownership of the Zhengjin Equity Interests within 20 working days from the effective date of the Zhengjin Equity Transfer Agreement.
Upon completion of the Zhengjin Disposal, Zhengjin will cease to be a subsidiary of the
Company.
iii. reaSonS for and BenefitS of the diSpoSalS
The Board is of the view that, each of the CS Yangshan Disposal and the Zhengjin Disposal is to optimise the structure of the Company's assets and each of the CS Yangshan Disposal and the Zhengjin Disposal is necessary for the overall development strategy of the Company.
At the Board meeting held on 21 November 2013, the Directors approved (i) the CS Yangshan Disposal would be carried out by way of listing the CS Yangshan Equity Interests on SUAEE for open bidding by public bidders, at the consideration reasonably assessed by reference to the appraised net asset value of CS Yangshan Equity Interests as at 30 September 2013; (ii) the Zhengjin Disposal would be carried out by way of listing the Zhengjin Equity Interests on SUAEE for open bidding by public bidders, at the consideration reasonably assessed by reference to the appraised net asset value of Zhengjin Equity Interests as at 15 November
2013; and (iii) the authorisation for the management of the Company to deal with matters relating to the Disposals.
The Board (including the independent non-executive directors of the Company) considers that as each of the CS Yangshan Disposal and the Zhengjin Disposal was carried out through open bidding process on SUAEE with the consideration assessed by reference to the appraised net asset value prepared by an independent third party professional property valuer, the terms of each of the CS Yangshan Disposal and the Zhengjin Disposal are fair and reasonable, in the interests of the Company and the shareholders of the Company as a whole.
Each of the following Directors, namely Mr. Li Shaode, Mr. Xu Lirong, Mr. Zhang Guofa, Mr. Huang Xiaowen, Mr. Zhao Hongzhou, Mr. Wang Daxiong, Ms. Su Min, Mr. Ding Nong, Mr. Chen Jihong and Mr. Zhang Rongbiao, who are also directors or senior managers of China Shipping or its subsidiaries, has a material interest in the Disposals. However, as the identity of the winning party was unknown at the Board meeting held on 21 November 2013 and the Board has authorised the management of the Company to deal with matters relating to the Disposals, none of the Directors have abstained from voting on the Board resolutions in relation to the Disposals on 21 November 2013.
4
iV. inforMation on CS yangShan and Zhengjin a. CS yangshan
CS Yangshan was established on 8 November 2006 as a limited liability company in the PRC with a registered capital of RMB239,000,000. It is principally engaged in pile-up, transfer, distribution, assembly and dismantlement of containers, precooling of frozen containers, remodification, repair, renewing and cleaning of containers, relevant services for loading and unloading of goods, ordinary process and package and consultation, the leasing of container and warehouse.
In accordance with the PRC Generally Accepted Accounting Principles, the audited profits/ (loss) (before and after taxation and extraordinary items) of CS Yangshan for the financial years ended 31 December 2011 and 31 December 2012 are set out as follows:
year ended 31 december 2011 year ended 31 december 2012
Profit/(loss) before taxation and extraordinary items
RMB(7,954,096.96) (approximately
HK$(10,101,703.14))
RMB(264,910.47) (approximately
HK$(336,436.30))
Profit/(loss) after taxation and extraordinary items
RMB(7,949,069.08) (approximately
HK$(10,095,317.73))
RMB67,970.61 (approximately HK$86,322.67)
The book value of the net assets of CS Yangshan as at 30 September 2013 w as RMB215,638,231.19 (approximately HK$273,860,553.61). The net gain from the CS Yangshan Disposal (i.e. the difference between the consideration for the CS Yangshan Equity Interests and the book value of the net assets of CS Yangshan as at 30 September 2013) will be RMB89,772,969.19 (approximately HK$114,011,670.87). The Company intends to use the proceeds arising from the CS Yangshan Disposal to supplement the Company's working capital.
As a result of the CS Yangshan Disposal, the gross profit of the Company for 2014 will be increased by approximately RMB90 million, and the revenue and cash flow of the Company for the current period will also be enhanced.
5
B. Zhengjin
Zhengjin was established on 1 November 2013 as a limited liability company in the PRC with a registered capital of RMB80,000,000. It is principally engaged in management of supply chain and investment and provision of corporate management consultation services.
As Zhengjin was only established on 1 November 2013, audited net profits/(losses) (both before and after taxation and extraordinary items) of Zhengjin for the financial years ended
31 December 2011 and 31 December 2012 are not available.
The book value of the net assets of Zhengjin as at 15 November 2013 was RMB372,726,700 (approximately HK$473,362,909). The net loss from the Zhengjin Disposal (i.e. the difference between the consideration for the Zhengjin Equity Interests and the book value of the net assets of Zhengjin as at 15 November 2013) will be RMB3,700 (approximately HK$4,699). The Company intends to use the proceeds arising from the Zhengjin Disposal to supplement the Company's working capital.
As a result of the Zhengjin Disposal, the gross profit of the Company for 2014 will be increased by approximately RMB200 million, and the revenue and cash flow of the Company for the current period will also be enhanced.
V. inforMation on the CoMpany, CS logiStiCS and CS inVeStMent a. the Company
The Company is principally engaged in the operation and management of international and domestic container marine transportation.
B. CS logistics
CS Logistics is principally engaged in shipping logistics, freight agency, storage and transportation.
C. CS investment
CS Investment is principally engaged in investment in corporates, management of real estate interests for China Shipping and its subsidiaries, international trading and provision of relevant consultation services.
Vi. iMpliCation under the liSting ruleS
CS Logistics and CS Investment are subsidiaries of China Shipping, the controlling shareholder of the Company. Accordingly, both CS Logistics and CS Investment are connected persons of the Company under the Listing Rules and each of the CS Yangshan Disposal and the Zhengjin Disposal constitutes a connected transaction of the Company under the Listing Rules. Since the applicable percentage ratios relating to the Disposals are more than 0.1% but less than 5%, the Disposals are exempted from the independent shareholders' approval requirements but are subject to the relevant reporting and announcement requirements under the Listing Rules.
Source: China Shipping Container Lines Co Ltd
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