Washington, D.C. 20549
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
☐
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
Semiconductor Manufacturing International Corporation
|
|
|
|
|
|
|
|
|
|
Date: December 07, 2017
|
|
By:
|
|
/s/ Dr. Gao Yonggang
|
|
|
|
|
|
Name:
|
|
Dr. Gao Yonggang
|
|
|
|
|
|
Title:
|
|
Executive Director, Chief Financial Officer and Joint Company Secretary
|
– 1 –
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.
SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
中 芯 國 際 集 成 電 路 製 造 有 限 公 司
*
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 981)
CONTINUING CONNECTED TRANSACTIONS AND DISCLOSEABLE TRANSACTIONS
IN
RELATION
TO
FRAMEWORK
AGREEMENT
|
|
|
FRAMEWORK AGREEMENT
The Company announces that on 6 December 2017, the Company and SMNC had entered into the Framework Agreement in relation to the supply of goods, rendering of or receiving services, leasing of assets, transfer of assets, provision of technical authorisation or licensing and provision of guarantee. The Framework Agreement is for a term of three years commencing on 1 January 2018 and ending on 31 December 2020.
LISTING RULES IMPLICATIONS
As at
the date
of
this
announcement,
China
IC
Fund holds
approximately 15.06% interest in
the
Company through
its
wholly-owned subsidiary, Xinxin (Hongkong) Capital Co., Limited. Accordingly,
it is a
connected person
of
the
Company
at
the
issuer level pursuant
to
the
Listing Rules.
As at
the date
of
this
announcement,
the
registered capital
of
SMNC
is
held
as to
approximately
51% and 32%
by
the Group and China
IC
Fund,
respectively.
SMNC
is
therefore
a
connected subsidiary
of
the
Company
as
defined
under Rule 14A.16
of
the
Listing
Rules
and
thus
a
connected
person
of
the
Company
under
the
Listing
Rules.
As
one
or
more
of
the
applicable percentage ratios
in
respect
of
the
Annual
Caps for Type
I
CCT, Type
II
CCT, Type III CCT, Type
IV
CCT and Type
VI
CCT
(collectively,
‘‘Specific
Non-Exempt
CCT’’)
is 5% or
more but less than 25%, such
transactions
will
constitute non- exempt continuing connected transactions
under
Chapter
14A
of
the
Listing Rules. Accordingly,
the
Framework Agreement
and the
Specific Non-Exempt
CCT are
subject to
the
reporting, announcement
and
Independent Shareholders’ approval requirements of Chapter
14A
of
the
Listing
Rules.
As
the
applicable percentage ratios
in
respect
of
the
Annual
Caps for Type
V
CCT are
more
than 0.1% but less than 5%, such
transactions
are
subject
to
the
reporting, announcement
and
annual review requirements,
but
exempt
from the
Independent Shareholders’ approval requirement
under
Chapter
14A
of
the
Listing
Rules.
|
– 2 –
|
|
|
As
the
applicable percentage ratios
in
respect
of
the
Annual
Caps for Type
IV
CCT are
more
than
5%
but less than 25%, the Type
IV
CCT also
constitute disclosable transactions
of
the Company
and are
subject
to
the
reporting
and
announcement requirements
under
Chapter
14
of
the
Listing
Rules.
In
accordance
with the
Listing Rules,
the
Independent
Board
Committee
has
been established
to
advise
and
provide recommendation
to
the
Independent Shareholders
on
the
Framework Agreement
and the
Specific Non-Exempt
CCT
(including
the
Annual Caps)
and
to
advise
the
Independent
Shareholders
on
how
to
vote.
Messis Capital Limited
has been
appointed
by
the
Company
as
the
Independent Financial Adviser
to
advise
the
Independent
Board
Committee
and the
Independent Shareholders on
the
Framework
Agreement
and
the
Continued
Connected
Transactions.
GENERAL
At the EGM, ordinary resolutions will be proposed to the Independent Shareholders to approve the Framework Agreement and the Specific Non-Exempt CCT.
As
China
IC
Fund
is a
connected person
of the
Company,
its
wholly-owned subsidiary Xinxin (Hongkong) Capital
Co.,
Limited
and its other
associates
(as
defined
in
the
Listing Rules)
will
abstain
from
voting
on
the
ordinary resolution
to
approve
the
Framework Agreement
and any
transactions contemplated thereunder.
Apart from
Xinxin (Hongkong) Capital
Co.,
Limited
and other
associates
of
China
IC
Fund,
no
other
Shareholder
will
be
required
to
abstain
from
voting
on
the
resolutions
at
the
EGM.
The Company expects to dispatch a circular on or before 5 January 2018 as time is needed to finalise the contents therein to the Shareholders. The circular contains, among other things,
(i)
further details
on the
Framework Agreement;
(ii)
a
letter
from the
Independent Board Committee
to
the
Independent Shareholders;
(iii)
a
letter from
the
Independent Financial Adviser containing
its
advice
to
the
Independent
Board
Committee
and the
Independent Shareholders;
and (iv)
a
notice convening
the
EGM.
|
FRAMEWORK AGREEMENT
Reference
is
made
to
the
Company’s announcement
dated
30
September
2016, the
circular
dated
18
November
2016 and the
extraordinary general meeting
poll
results announcement
dated
6 December
2016
in
relation
to the
execution
of
a framework agreement
(the
‘‘2016
Framework
Agreement’’) dated
30
September
2016
between
the
Company
(on
behalf
of
itself
and its
subsidiaries,
other than SMNC) and SMNC (on
behalf
of
itself and its
subsidiaries)
in
relation
to
the supply
of
goods and
services, leasing
of
assets, transfer
of
assets
and
provision
of
technical
authorisation
or
licensing
among
the
parties.
As the term of the 2016 Framework Agreement will end on 31 December 2017, the Company announces that on 6 December 2017, the Company and SMNC entered into the Framework Agreement in relation to the supply of goods, rendering of or receiving services, leasing of assets, transfer of assets, provision of technical authorisation or licensing and provision of guarantee. The Framework Agreement has a term of three years commencing on 1 January 2018 and ending on 31 December 2020.
– 3 –
Summary of Principal Terms of the Framework Agreement
|
Execution
date:
|
|
6
December
2017
|
|
|
|
|
|
Effective
period:
|
|
Commencing
on
1 January
2018 and
ending
on 31
December 2020.
Two
months before
the expiry date
of
the
Framework Agreement, the parties
will
consider
whether
to
renew
the
Framework
Agreement.
|
|
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|
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|
Parties:
|
|
(i) the
Company
on
behalf
of
itself
and
its
subsidiaries
(other
than
SMNC); and
|
|
|
|
|
|
|
|
(ii) SMNC
on
behalf
of
itself
and
its
subsidiaries,
if
any.
|
Continuing Connected Transactions
Types of transactions
The Continuing Connected Transactions set out in the Framework Agreement will include the following:
|
|
1.
|
Purchase
and sale
of
spare
parts,
raw
materials, photomasks
and
finished
products;
|
|
|
|
2.
|
Rendering
of or
receiving services, including, without limitation,
(a)
processing and
testing
service;
(b)
sales
service;
(c)
overseas market promotion
and
customer service; (d) procurement service;
(e)
research, development
and
experiment support service; (f) comprehensive administration, logistics, production management
and
IT
service;
and
(g) water,
electricity,
gas
and
heat
provision
service;
|
|
|
|
3.
|
Leasing
of
assets,
such
as
plant, office premises
and
equipment;
|
|
|
|
5.
|
Provision
of
technical authorisation
or
licensing
by
Group
A
to
Group
B, as
well
as
the sharing
of
research
and
development
costs
in
relation
to
28-nanometer
technologies;
and
|
|
|
|
6.
|
Provision
of
guarantee
by
Group
A
for
SMNC’s
financing
activities.
|
|
Pricing of the Continuing Connected Transactions
The price of the Continuing Connected Transactions will be determined in accordance with the following general principles (in ascending order):
|
|
(1)
|
the
price
prescribed
or
approved
by
state
or
local
price
control
department
(if
any);
|
|
|
|
(2)
|
a
reasonable
price
in
accordance
with
the
industry
guided
price;
|
|
|
|
(3)
|
the
comparable
local market
price,
which shall
be
determined
after arm’s length
negotiation between
both
parties
with
reference
to (a)
the market price
charged
by
independent
third
parties
for
comparable product
or
services
at
the same time
and in
the
same
region;
and (b) the
lowest quotation
that the
purchaser
can
obtain
by
way
of
public tender;
|
|
|
|
(4)
|
where there i
s no c
omparable local market price, t
he price based o
n t
he p
rinciple o
f c
ost p
lus a
fair and r
easonable profit r
ate, being the a
ggregate s
um o
f (
a) t
he a
ctual reasonable c
ost;
a
nd
(
b)
a f
air
a
nd
r
easonable
p
rofit
r
ate;
|
|
– 4 –
|
|
(5)
|
where none
of
the above
general pricing principles
are
applicable,
the price
determined
by
other
reasonable
means
as
agreed
upon
by
both
parties
on
the
condition
that the
relevant
costs
are
identifiable
and are
allocated
to
each party
involved
on
a
fair and
equitable basis.
|
|
Where general pricing principles (2) to (5) apply, to the extent possible, each of Group A and Group B will obtain at least two quotations or tenders from independent third parties before agreeing upon the applicable price.
As
to
the
price
prescribed
by
the state
or
local price
control department, state-prescribed fees
apply
to
water
and
electricity,
which
are
relevant
to
the cost
of
such
services
and
are determined
by
prices published
from time
by
time
by
the
relevant
PRC
government authority.
Under the
Pricing
Law
of
the PRC,
the
PRC
government
may
implement
a
state-prescribed
or
guidance
price
for
specific
goods and
services
if
necessary,
and such price will
be
promulgated
in
accordance
with
the
requirements
of
relevant laws, regulations
or
administrative
rules from
time
to
time.
If
any
state-prescribed
price
or
guidance
price
becomes available
to
the Continuing Connected Transactions
in
the
future,
the
parties
will
execute
such price first
in accordance
with
pricing
principle
(1)
above.
Based
on
the above
general principles
and
the
actual
circumstances
when
entering
into
the Framework Agreement,
the
parties further agree
to the
following specific pricing policies for
the
Continuing Connected Transactions.
If
any
particular Continuing Connected Transaction
is
not
covered
by
the
following policies,
or
any
of
the
following policies
is no
longer applicable,
the
parties
will use the above
general principles
to
determine
the price for
the relevant
transaction.
|
Types of Continuing Connected
|
|
Pricing
policy
|
|
Transactions
|
|
|
I.
Purchase
and sale
of
goods
|
1.
Purchase
and sale
of
spare
parts between
Group
A
and Group
B
|
|
The market price of spare parts, with the relevant transportation fees borne by the purchaser, with reference to market price (see general pricing principle (3) above)
|
|
|
|
|
|
2.
Purchase
and sale
of
raw
materials between
Group
A
and Group
B
|
|
The market price of raw materials, with the relevant transportation fees borne by the purchaser, with reference to market price (see general pricing principle (3) above)
|
|
|
|
|
|
3.
Purchase
of
photomasks
by
Group
B
from Group
A
|
|
With
reference
to
market
price (see
general pricing principle
(3)
above)
|
|
|
|
|
|
4.
Sales
of
finished products by
Group
B
to
Group
A,
which
will resell
such
finished products to third-party
customers
|
|
With
reference
to
market
price (see
general pricing principle
(3)
above)
|
– 5 –
|
Types of Continuing Connected
|
|
Pricing
policy
|
|
Transactions
|
|
|
II.
Rendering
of or
receiving
services
|
1.
Mutual rendering
of
processing
and
testing service
due
to
Group
A
and Group B’s
production
capacity limits
of
certain
types
of
products
|
|
With
reference
to
market
price (see
general pricing principle
(3)
above)
|
|
|
|
|
|
2.
Provision
of
sales
service
by
Group
A
to
Group
B
|
|
Cost plus a fair and
reasonable profit
rate
in
line
with the
industry
(see
general pricing principle (4)
based
on
allocation
of
the sales
expenses according
to
the
revenue
from
the
sales plus a
subsequent profit
rate
of
8%
|
|
|
|
|
|
3.
Rendering
of
overseas market promotion
and
customer service
by
Group
A
to
Group
B
|
|
Cost plus a fair and
reasonable profit
rate
in
line
with the
industry
(see
general pricing principle (4) above),
based
on
allocation
of
the sales
expenses according
to
the
revenue
from
the
sales plus a
subsequent profit
rate
of
8%
|
|
|
|
|
|
4.
Rendering
of
procurement service
by
Group
A
to
Group
B
|
|
Cost plus a fair and
reasonable profit
rate
in
line
with the
industry
(see
general pricing principle (4) above),
based
on
allocation
of
procurement department expenses according
to
working hours
or
workload
plus a
subsequent profit
rate
of
5%
|
|
|
|
|
|
5.
Provision
of
research, development
and
experiment support service by
Group
A
to
Group
B
|
|
With
reference
to
market
price (see
general pricing principle
(3)
above)
|
|
|
|
|
|
6.
Rendering
of
comprehensive administration, logistics, production management
and
IT
service
by
Group
A
to
Group
B
|
|
Cost plus a fair and
reasonable profit
rate
in
line
with the
industry
(see
general pricing principle (4) above),
based
on
allocation
of
labour
cost
and relevant resources consumption according
to
the proportion
of
working
hours
or
workload
plus a
subsequent profit
rate
of
5%,
or
with
reference to market
price
provided
by
independent third
parties
|
|
|
|
|
|
7.
Provision
of
water, electricity, gas
and
heat
by
Group
A
to
Group
B
|
|
The
price
prescribed
or
approved
by
state
or
local
price
control department
(if
any)
(see
general pricing principle
(1)
above)
or
with
reference
to
market price (see
general pricing principle (3) above)
|
|
|
|
|
– 6 –
|
Types of Continuing Connected
|
|
Pricing
policy
|
|
Transactions
|
|
|
III.
Leasing
of
assets
|
1.
Leasing
of
plant and office
by
Group
A
to
Group
B
|
|
With
reference
to
market
price (see
general pricing principle
(3)
above)
|
|
|
|
|
|
2.
Mutual leasing
of
equipment
|
|
With
reference
to
market
price (see
general
pricing principle (3) above)
|
IV.
Transfer
of
assets
|
1.
Mutual
transfer
of
equipment
|
|
With
reference
to
market
price (see
general
pricing principle (3) above)
|
V.
Provision
of
technical authorisation
or
licensing
|
|
|
|
|
1.
Provision
of
technical authorisation
or
licensing
by
the Company
to
SMNC
|
|
With
reference
to
market
price (see
general pricing principle
(3)
above)
|
|
|
|
|
|
2.
Sharing
of
research and development
costs
in
relation to 28-nanometer
technologies
|
|
The price
determined
by
other
reasonable means
as
agreed
upon
by
both
parties
(see
general pricing principle
(5)
above)
|
VI.
Provision
of
guarantee
for
financing activities
|
1.
Provision
of
guarantee
by
Group
A
for Group B’s
financing
activities
|
|
With
reference
to
market
price (see
general pricing principle
(3)
above)
|
Considering
the
general principles
and the
detailed pricing policies,
the
Directors (excluding
the
independent non-executive Directors)
are
of
the view that the
methods
and
procedures are sufficient
to
ensure
that the
Continuing Connected Transactions
will
be
conducted
on
normal commercial
terms
or
better
and not
prejudicial
to
the
interests
of
the
Company
and
its minority
Shareholders.
Payment
The
consideration
of
the
Continuing Connected Transactions
will
be
paid
in
accordance with
the
relevant implementation agreement
to be
entered into
for
each
transaction
and
will
be
funded
by
the
relevant parties’ internal resources.
The
Company
will
monitor closely
as
an
ongoing process
the
relevant transactions
to
ensure
the
Annual
Caps for each type
of Continuing Connected Transactions
are not
exceeded.
Other Terms
The terms
of
the
Framework Agreement
are
subject
to
compliance
with
applicable
laws
and regulations including
the
requirements
of
any
regulatory authorities (including
but
not
limited
to
the
Stock
Exchange
and
the
New
York
Stock
Exchange,
Inc.).
– 7 –
THE ANNUAL CAPS AND BASIS OF
DETERMINATION
Historical Transaction Amounts
The historical transaction amounts between Group A and Group B for the transactions contemplated under the 2016 Framework Agreement are as follows:
|
Nature of Continuing Connected Transactions
|
|
Continuing Connected Transactions For the Year Ended 31 December
2016
(1)
|
|
Transactions For the Year Ended 31 December
2016
(2)
|
|
From
1 January 2017
to 31 October
2017
(3)
|
|
|
|
(US$
million)
|
|
(US$
million)
|
|
(US$
million)
|
|
|
|
|
|
|
|
|
|
Type I CCT
|
|
168.7
|
|
249.8
|
|
406.1
|
|
Type II CCT
|
|
23.8
|
|
87.6
|
|
30.5
|
|
Type III CCT
|
|
0.4
|
|
0.9
|
|
0.6
|
|
Type IV CCT
|
|
—
|
|
—
|
|
—
|
|
Type V CCT
|
|
69.1
|
|
69.1
|
|
—
|
Note:
|
|
(1)
|
Representing
the
amounts
of
transactions constituting continuing connected transactions
(as
defined
in
the
Listing
Rules)
upon
the
completion
of
Capital
Contribution
on
30
June
2016.
|
|
|
|
(2)
|
Representing
the
amounts
of
all
transactions between Group
A
and
Group
B
for the year
ended
31
December
2016.
|
|
Guarantees Provided by the Company to SMNC
The Company has also provided guarantees in respect of certain rental payable by SMNC with respect to its operating lease of equipment to support SMNC’s daily operation and business development. As at 31 December 2016 and 31 October 2017, the total amount of financial liabilities of SMNC in respect of which the Company provided guarantee was approximately US$59.4 million and US$220 million, respectively.
Annual Caps
The Annual Caps for the Continuing Connected Transactions between the parties are set out below:
|
|
|
For the year ending 31 December
|
|
Nature of Continuing Connected Transactions
|
|
2018
(US$ million)
|
|
2019
(US$ million)
|
|
2020
(US$ million)
|
|
|
|
|
|
|
|
|
|
Type I CCT
|
|
900
|
|
1,100
|
|
1,500
|
|
Type II CCT
|
|
100
|
|
150
|
|
200
|
|
Type III CCT
|
|
200
|
|
200
|
|
200
|
|
Type IV CCT
|
|
200
|
|
200
|
|
200
|
|
Type V CCT
|
|
100
|
|
100
|
|
100
|
|
Type VI CCT
|
|
1,000
|
|
1,000
|
|
1,000
|
– 8 –
In
arriving
at
the
Annual
Caps, the
Company
has
considered various factors including
since
its establishment
in
June
2013,
SMNC
had
grown and
expanded
its
business operations significantly.
It is
expected
that SMNC will
continue
to
increase
its
manufacturing capacity
as
well
as
work
closely
with its
existing
28nm
and
40nm
customers
and
develop
new
clients and products.
The
Company
has
also
considered
the
historical transaction amounts between the Company
and SMNC
in
respect
of
t
he
Continuing Connected Transactions,
and
reasonable factors
such
as
the
expected occurrences
of
Continuing Connected Transactions
in
light
of
current market conditions
of
the
semiconductor industry
and the
technological capability and future business
plan
s
of
the
Company.
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS
Apart from provision of guarantee for financing activities, the Continuing Connected Transactions under the Framework Agreement is in substance a continuation of the transactions carried out under the 2016 Framework Agreement.
SMNC
operates
a
12-inch
wafer
fab
with
advanced process capability.
As
the
market demand
for
advanced process continue
to
surge,
the
Company
has been
allocating
and will
continue to allocate majority
of
its
advanced
node
manufacturing
to
SMNC
to
ensure future
wafer production
needs
of the
Company
are
met.
The
Company believes
that
advancement
in
technology
is
one
of
the key
growth factors. With respect
to
advanced
nodes
of
28nm and 40nm, which
is
one
of
the
development focuses
of
the Group,
the Group
recorded
a
revenue growth
of
more than 90%
in
2016
as
compared
to
the
year
of
2015, and more than 30%
during
the
first three
quarters
of
2017
as
compared
to
the corresponding period
in
2016. The
continuous cooperation
with SMNC,
throughout the various
steps
in
production
as
reflected
in
the
Continuing Connected Transactions,
helps
the Company
to
meet
demand
from its
customers
and
to
attain
higher
profitability, especially for
the
advanced
nodes.
The
business partnership between
the
Company
and SMNC has
helped
to
eliminate some duplicated efforts
on
introducing
and
manufacturing advanced
nodes for
IC
design houses, therefore reducing
the time
to
market
and some
overhead expenses
for
both parties. With the
expansion
of
its
capacity
and
continuous innovation,
the
Company believes
that
it
will
be
able
to
enhance
its
position
in
the
industry
and
benefit
from
the
increase
in
its
economies
of
scale.
As
SMNC had been
continuously expanding
its
manufacturing capacity,
the
Company can therefore leverage SMNC’s manufacturing capacity
to
expand
the
Company capacity
based
on
its
advanced technology
in
a
capital-efficient
manner.
The
Directors (excluding
the
independent non-executive Directors
whose view will
be
given
after
taking
into
account
the advice from the
Independent Financial Adviser)
are
of the
view
that
the
terms
of
the
Framework Agreement including
the
Annual
Caps are fair
and reasonable,
and the
entering
into
of
the
Framework Agreement
and the
Continuing Connected Transactions contemplated thereunder
are
on
normal
commercial
terms
or
better,
in
the ordinary
and usual
course
of
business
of
the Group and
in the
interests
of the
Company and
the
Shareholders
as
a
whole.
IMPLICATIONS UNDER THE LISTING RULES
As at
the date
of
this
announcement,
China
IC
Fund holds
approximately 15.06% interest
in
the
Company through
its
wholly-owned subsidiary, Xinxin (Hongkong) Capital
Co.,
Limited. Accordingly,
it is a
connected person
of
the
Company
at
the issuer level
pursuant
to
the Listing Rules.
As at the
date
of
this
announcement,
the
registered capital
of
SMNC
is
held
as
to
approximately
51% and 32%
by
the Group and China
IC
Fund,
respectively.
SMNC
is therefore
a
connected subsidiary
of
the
Company
as
defined
under Rule
14A.16
of
the
Listing
Rules and thus
a
connected person
of
the
Company
under the
Listing Rules.
– 9 –
As
one
or
more
of
the
applicable percentage ratios
in
respect
of
the
Annual
Caps for Type
I
CCT, Type
II
CCT, Type III CCT, Ty
pe
IV
CCT and Type
VI
CCT
(collectively,
‘‘Specific
Non-Exempt
CCT’’)
is
5% or
more but less than 25%, such
transactions
will
constitute non- exempt continuing connected transactions
under
Chapter
14A
of
the
Listing Rules. Accordingly,
the
Framework Agree
ment
and
the
Specific Non-Exempt
CCT are
subject to
the
reporting, announcement
and
Independent Shareholders’ approval requirements
of
Chapter
14A
of
the
Listing Rules.
As
the
applicable percentage ratios
in
respect
of
the
Annual
Caps for Type
V
CCT are
more
than 0.1% but less than 5%, such
transactions
are
subject
to
the
reporting, announcement and
annual
review requirements,
but
exempt
from
the
Independent Shareholders’ approval requirement
under
Chapter
14A
of
the
Listing
Rules.
As
the
applicable percentage ratios
in
respect
of the
Annual
Caps
for
Type
IV
CCT are
more
than
5%
but less than 25%, the Type
IV
CCT also
constitute disclosable transactions
of
the Company
and are
subject
to
the
reporting
and
announcement requirements
under
Chapter 14
of
the
Listing
Rules.
In
accordance
with
the
Listing Rules,
the
Independent
Board
Committee
has been
established
to
advise
and
provide recommendation
to
the
Independent Shareholders
on
the
Framework Agreement
and the
Specific Non-Exempt
CCT
(including
the
Annual
Caps) and
to
advise the Independent Shareholders
on
how
to
vote.
Messis Capital Limited has been appointed by the Company as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on the Framework Agreement and the Continuing Connected Transactions.
GENERAL
At
the EGM,
ordinary resolutions
will
be
proposed
to
the
Independent Shareholders to approve
the
Framework Agreement
and the
Specific Non-Exempt
CCT
(including
the
Annual Caps).
As
China
IC
Fund
is a
connected person
of
the
Company,
its
wholly-owned subsidiary Xinxin (Hongkong) Capital
Co.,
Limited
and its other
associates
(as
defined
in
the
Listing Rules) will abstain
from
voting
on the
ordinary resolution
to
approve
the
Framework Agreement
and
any transactions contemplated thereunder.
Apart from
Xinxin (Hongkong) Capital
Co.,
Limited
and other
associates
of
China
IC
Fund,
no
other
Shareholder
will
be
required
to
abstain from voting
on
the
resolutions
at
the
EGM.
The
Company expects
to
dispatch
a
circular
on or
before
5
January
2018
as
time
is
needed to finalise
the
contents therein
to
the
Shareholders.
The
circular contains, among
other
things, (i) further details
on
the
Framework Agreement;
(ii) a
letter
from the
Independent Board Committee
to
the
Independent Shareholders; (iii)
a
letter
from the
Independent Financial Adviser containing
its
advice
to the
Independent
Board
Committee
and the
Independent Shareholders;
and (iv) a notice
convening
the
EGM.
No
Director
was
considered
to
have
a
material interest
in
the
Framework Agreement
on
the
date
of
the Board
meeting authorising
the
Framework Agreement
which would have
required
the
Director
to
abstain
from
voting
at
the
relevant
Board
meeting.
– 10 –
INFORMATION
ABOUT THE
PARTIES
Information on the Company
The
Company
is
one
of
the
leading semiconductor foundries
in
the world and the
largest and
most
advanced foundry
in
mainland China.
SMIC
provides integrated circuit
(IC)
foundry and technology services
on
process
nodes from 0.35
micron
to 28
nanometer. Headquartered in Shanghai, China,
SMIC has
an
international manufacturing
and
service
base.
In
China, SMIC
has a 300mm wafer
fabrication facility
(fab) and a 200mm
fab in
Shanghai;
a 300mm fab and a
majority-owned
300mm fab for
advanced
nodes
in
Beijing;
200mm fabs
in
Tianjin and Shenzhen;
and
a
majority-owned joint-venture
300mm
bumping
facility
in
Jiangyin; additionally,
in
Italy SMIC has a
majority-owned
200mm fab. SMIC also has
marketing
and
customer service offices
in
the U.S.,
Europe, Japan,
and
Taiwan,
and a
representative office
in
Hong
Kong.
Information on SMNC
SMNC
is
a joint
venture company established
in
the PRC
pursuant
to
the
joint
venture agreement
dated 3 June 2013, the equity
capital
of
which
is
owned
as to
12.5%
by
SMIC Beijing,
13%
by
the
Company,
25.5%
by
SMIC
Holdings
and 32%
by
China
IC
Fund.
The remaining equity capital
of
SMNC
is
owned
by
ZDG,
IDIMC, Beijing
Semi Fund and
E-Town Capital
and none
of
them owns 10%
or
more equity
capital
of
SMNC. SMNC
is
primarily engaged
in
manufacturing
and
trading
of
semiconductor
products.
– 11 –
DEFINITIONS
In this announcement the following words have the following meanings unless the context requires otherwise:
|
‘‘Annual
Caps’’
|
|
the
proposed
annual
caps
for
the
period
ending
31
December,
2018, 2019 and 2020
in
relation
to
each type
of
Continuing Connected Transaction
which are more fully set out
in
the section headed
‘‘The
Annual
Caps and Basis
of
Determination
— Annual Caps’’ above;
|
|
|
|
|
|
‘‘associates’’
|
|
shall have the
meaning assigned
to it
under the
Listing Rules;
|
|
|
|
|
|
‘‘Beijing
Semi
Fund’’
|
|
北京集成電路製造和裝備股權投資中心（
有限合夥
）
(Beijing
Semiconductor Manufacturing
and
Equipment Equity
Investment Center (Limited Partnership)*), a company established under the laws of the PRC;
|
|
|
|
|
|
‘‘Board’’
|
|
the board
of
Directors;
|
|
|
|
|
|
‘‘China
IC
Fund’’
|
|
國
家集
成
電路
產
業投資
基
金股
份
有限
公司
(China Integrated
Circuit Industry Investment Fund Co., Ltd.*), a company established under the laws of the PRC;
|
|
|
|
|
|
‘‘Company’’
|
|
Semiconductor Manufacturing International Corporation
(
中芯國際集成電路製造有限公司
*)
,
a
company
incorporated
in
the Cayman Islands
with
limited liability,
the
shares
of
which
are listed
on
the main board
of
the Stock
Exchange
and
the American depositary shares
of
which are
listed
on the
New
York Stock
Exchange,
Inc.;
|
|
|
|
|
|
‘‘Continuing Connected Transactions’’
|
|
the
non-exempt continuing connected
transactions contemplated
under
the
Framework Agreement which includes
Type I CCT, Type
II
CCT, Type
III
CCT, Type
IV
CCT, Type V CCT and Type
VI
CCT;
|
|
|
|
|
|
‘‘Director(s)’’
|
|
the
director(s)
of the
Company;
|
|
|
|
|
|
‘‘E-Town
Capital’’
|
|
北京亦莊國際投資發展有限公司
(Beijing
E-Town
International Investment
&
Development
Co.,
Ltd.*),
a
limited liability
company established under the laws of the PRC;
|
|
|
|
|
|
‘‘EGM’’
|
|
the
extraordinary
general
meeting
of
the
Company
proposed
to
be
held
to
approve,
among other
things,
the
Framework Agreement
and
the
Specific Non-Exempt
CCT;
|
|
|
|
|
|
‘‘Framework
Agreement’’
|
|
the
framework agreement entered
into
between
the
Company
and SMNC on 6 December 2017 in relation to Continuing Connected Transactions;
|
|
|
|
|
|
‘‘Group’’
|
|
the
Company
and its
subsidiaries;
|
|
|
|
|
|
‘‘Group
A’’
|
|
the
Company and/or
its
subsidiaries (other
then SMNC and
its
subsidiaries);
|
|
|
|
|
|
‘‘Group
B’’
|
|
SMNC
and/or
its
subsidiaries;
|
– 12 –
|
|
|
|
|
‘‘Hong
Kong’’
|
|
the
Hong
Kong
Special
Administrative
Region
of
the
PRC;
|
|
|
|
|
|
‘‘IDIMC’’
|
|
北京工業發展投資管理有限公司
(Beijing
Industrial
Developing Investment Management
Co.,
Ltd.*),
a
company
established
under the laws of the PRC;
|
|
|
|
|
|
‘‘Independent Board Committee’’
|
|
the
independent committee
of
the Board that
consists
of
all independent non-executive Directors
who have
no
direct or indirect interest
in
the
Framework Agreement
other
than,
where
applicable,
being a
Shareholder;
|
|
|
|
|
|
‘‘Independent Financial Adviser’’
|
|
Messis Capital Limited, a licensed cooperation
to
carry
out
type
1 (dealing
in
securities)
and
type
6 (advising
on
corporate finance) regulated activities
under the
Securities
and
Futures Ordinance
(Cap. 571
of
the Laws
of
Hong
Kong),
and being
the independent financial adviser appointed
by the
Company to advise
the
Independent
Board
Committee
and the
Independent Shareholders
in
respect
of
the
Framework Agreement
and
the Continuing Connected
Transactions;
|
|
|
|
|
|
‘‘Independent
Shareholders’’
|
|
in
relation
to the
Framework Agreement, Shareholders
other
than Xinxin (Hongkong) Capital Co., Limited and other associates of China IC Fund;
|
|
|
|
|
|
‘‘Listing
Rules’’
|
|
the Rules
Governing
the
Listing
of
Securities
on
The
Stock
Exchange of Hong Kong Limited;
|
|
|
|
|
|
‘‘PRC’’
|
|
the
People’s Republic
of
China (for the
purposes
of
this announcement excluding
Hong Kong, Macau
Special Administrative Region
of
the
People’s Republic
of
China
and Taiwan);
|
|
|
|
|
|
‘‘Shareholder(s)’’
|
|
the
holder(s)
of
the
Share(s);
|
|
|
|
|
|
‘‘Shares’’
|
|
ordinary shares
of
par value
US$0.004
each
in
the
capital
of
the Company listed
on
the Stock
Exchange;
|
|
|
|
|
|
‘‘SMIC
Beijing’’
|
|
中芯國際集成電路製造
（
北京
）
有限公司
(Semiconductor
Manufacturing
International (Beijing) Corporation*), a wholly foreign-owned enterprise established under the laws of the PRC and a wholly- owned subsidiary of the Company;
|
|
|
|
|
|
‘‘SMIC
Holdings’’
|
|
中
芯國
際
控股
有
限公
司
(SMIC
Holdings Corporation*),
a limited liability company established under the laws of the PRC and a wholly-owned subsidiary of the Company;
|
|
|
|
|
|
‘‘SMNC’’
|
|
中芯北方集成電路製造
（
北京
）
有限公司
(Semiconductor
Manufacturing
North China
(Beijing) Corporation*),
a
company
established
under
the laws
of
the
PRC
pursuant
to the
joint
venture agreement
dated
3
June
2013;
|
|
|
|
|
|
‘‘Specific Non-Exempt CCT’’
|
|
Type I CCT, Type II CCT, Type III CCT, Type IV CCT and Type VI CCT;
|
– 13 –
|
|
|
|
|
‘‘Stock
Exchange’’
|
|
The
Stock
Exchange
of
Hong
Kong
Limited;
|
|
|
|
|
|
‘‘Type
I
CCT’’
|
|
the
transactions contemplated
under the
Framework
Agreement in relation to purchase and sale of goods;
|
|
|
|
|
|
‘‘Type
II
CCT’’
|
|
the
transactions contemplated
under the
Framework
Agreement in relation to rendering of or receiving services;
|
|
|
|
|
|
‘‘Type
III
CCT’’
|
|
the
transactions contemplated
under the
Framework
Agreement in relation to leasing of assets;
|
|
|
|
|
|
‘‘Type
IV
CCT’’
|
|
the
transactions contemplated
under the
Framework
Agreement in relation to transfer of assets;
|
|
|
|
|
|
‘‘Type
V
CCT’’
|
|
the
transactions contemplated
under the
Framework
Agreement in relation to provision of technical authorisation or licensing;
|
|
|
|
|
|
‘‘Type
VI
CCT’’
|
|
the
transactions contemplated
under the
Framework Agreement
in
relation
to
provision
of
guarantee;
|
|
|
|
|
|
‘‘U.S.’’
or
‘‘United
States’’
|
|
the
United States
of
America;
|
|
|
|
|
|
‘‘US$’’
|
|
United
States
dollar,
the
lawful
currency
of
the
United
States;
|
|
|
|
|
|
‘‘ZDG’’
|
|
中
關村
發
展集
團
股份有
限
公
司
(Zhongguancun Development Group*),
a
company established
under
the
laws
of in
the
PRC; and
|
|
|
|
|
|
‘‘%’’
|
|
per
cent.
|
By order of the Board
Semiconductor Manufacturing International Corporation
Gao Yonggang
Executive
Director,
Chief
Financial
Officer
and
Joint
Company
Secretary
– 14 –
Shanghai, 7 December 2017
As at the date of this announcement, the directors of the Company are:
Executive Directors
Zhou Zixue (Chairman)
Zhao HaiJun (Co-Chief Executive Officer)
Liang Mong Song (Co-Chief Executive Officer)
Gao Yonggang (Chief Financial Officer)
Non-executive Directors
Tzu-Yin Chiu (Vice Chairman)
Chen Shanzhi
Zhou Jie
Ren Kai
Lu Jun
Tong Guohua
Independent Non-executive Directors
Lip-Bu Tan
William Tudor Brown
Carmen I-Hua Chang
Shang-yi Chiang Jason
Jingsheng Cong
*
For
identification purposes
only
– 15 –