Report of Foreign Issuer (6-k)
March 07 2018 - 6:10AM
Edgar (US Regulatory)
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2018
Commission File Number: 001-31994
Semiconductor Manufacturing International Corporation
(Translation of registrant’s name into English)
18 Zhangjiang Road
Pudong New Area, Shanghai 201203
People’s Republic of China
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
☒
Form 20-F
☐
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:
☐
Yes
☒
No
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
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.
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Semiconductor Manufacturing International Corporation
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Date: March 6, 2018
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By:
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/s/ Dr. Gao Yonggang
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Name:
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Dr. Gao Yonggang
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Title:
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Executive Director, Chief Financial Officer and Joint Company Secretary
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If
you
are
in
any
doubt
as to any
aspect
of
this circular,
you
should consult
a
stockbroker
or
other registered dealer in securities,
bank
manager,
solicitor,
professional
accountant
or
other
professional
adviser.
If you have sold or transferred all your shares in Semiconductor Manufacturing International Corporation (the ‘‘Company’’), you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).
Hong Kong
Exchanges and Clearing Limited
and The
Stock Exchange
of Hong Kong
Limited take
no
responsibility
for
the
contents
of
this circular, 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
circular.
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)
(1)
DISCLOSEABLE
AND
CONNECTED
TRANSACTIONS
IN RELATION TO PROPOSED CAPITAL CONTRIBUTION AND DEEMED DISPOSAL OF EQUITY INTEREST IN SMSC
AND
(2)
NOTICE
OF
EXTRAORDINARY GENERAL
MEETING
Independent Financial Adviser to
the Independent Board Committee and the Independent Shareholders
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
A
letter from
the
Independent Board Committee
to the
Independent Shareholders
is set out on
pages 14
to
15
of this
circular.
A
letter from Messis Capital Limited,
the
Independent Financial
Adviser,
containing
its
advice
to the
Independent Board Committee
and
the
Independent
Shareholders,
is
set
out
on
pages
16
to
24
of
this
circular.
The
notice convening
the
EGM
to be
held
at 18
Zhangjiang
Road, Pu
Dong
New
Area, Shanghai, People’s Republic
of
China
on 27
March 2018 at
9 :
00 a.m. (the
‘‘EGM’’) is
contained
in
this
circular.
Shareholders
are
advised
to
read
the
notice
and to
complete
and
return
the
enclosed
form
of
proxy
for
use
at
the
EGM
in
accordance
with
the
instructions
printed
thereon.
Whether you are able to attend the EGM or not, please complete and return the enclosed form of proxy to the branch share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. The completion and delivery of a form of proxy will not preclude you from attending and voting at the EGM in person should you wish. Only Shareholders of record on 27 March 2018 are entitled to attend and vote at the EGM.
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*
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For identification purpose only
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6 March 2018
CONTENTS
–
i
–
DEFINITIONS
In this circular, the following expressions have the following meanings unless the context requires otherwise:
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‘‘Board’’
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the
board
of
Directors
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‘‘Capital
Contribution’’
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the
capital contribution
to
the
registered capital
of
SMSC
by the
parties
to
the
Joint Venture Agreement
and the
Capital
Contribution Agreement which
will
result
in
the
increase
in
the
registered capital
of
SMSC from
US$210 million
to
US$3.5 billion
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‘‘Capital Contribution Agreement’’
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the capital contribution agreement entered into among SMIC Holdings, SMIC Shanghai, China IC Fund and Shanghai IC Fund on 30 January 2018 in relation to Capital Contribution
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‘‘China
IC
Fund’’
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國家集成電路產業投資基金股份有限公司
(China
Integrated
Circuit Industry Investment
Fund
Co., Ltd.*)
,
a
company
established under the laws of the PRC
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‘‘Company’’
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Semiconductor Manufacturing International Corporation
(
中 芯
國際集成電路製造有限公司
*)
,
a
company
incorporated
in
the
Cayman Islands
with
limited liability,
the
shares
of
which
are
listed
on
the main
board
of
the
Stock Exchange
and
the
American depositary shares
of
which
are
listed
on the
New
York Stock Exchange,
Inc.
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‘‘connected
person(s)’’
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has the same
meaning
as
ascribed
to it
under
the
Listing
Rules
‘‘Director(s)’’
the
director(s)
of
the
Company
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‘‘EGM’’
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the
extraordinary general meeting
of the
Company proposed
to be
held
to
approve, among other things,
the
Joint Venture Agreement,
the
Capital
Contribution
Agreement
and
the
transactions contemplated
thereunder
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‘‘Group’’
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the
Company
and its
subsidiaries
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‘‘HK$’’
|
Hong
Kong
dollars,
the
lawful currency
of
Hong
Kong
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‘‘Hong
Kong’’
|
the
Hong
Kong
Special
Administrative
Region
of
the
PRC
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‘‘IFRS’’
|
International Accounting Standards, International
Financial
Reporting Standards, amendments
and the
related
interpretations issued
by
the
international
Accounting Standards
Board
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‘‘Independent Board Committee’’
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the
independent committee
of the
Board that consists
of
all
independent non-executive Directors
who
have
no
direct
or
indirect interest
in
the
Joint Venture Agreement
or the
Capital Contribution Agreement, other than, where applicable, being
a
Shareholder
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–
1
–
DEFINITIONS
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‘‘Independent Financial Adviser’’ or ‘‘Messis Capital’’
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Messis Capital Limited, a licensed corporation to carry out type
1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO and being the independent financial adviser appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Joint Venture Agreement, the Capital Contribution Agreement and the transactions contemplated under these agreements
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‘‘Independent Shareholders’’
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the
Shareholders
who are not
required under
the
Listing Rules
to
abstain
from
voting
at
the EGM to
approve
the
Joint Venture Agreement,
the
Capital Contribution Agreement
and
the
transactions contemplated thereunder, which shall
include
Shareholders other
than
Xinxin (Hongkong) Capital
Co.,
Limited
and
other associates
of
China
IC
Fund (as
defined
in
the
Listing
Rules)
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‘‘Joint Venture Agreement’’
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the
joint
venture
agreement
entered
into
among
SMIC
Holdings,
SMIC
Shanghai, China
IC
Fund and
Shanghai
IC
Fund
on 30
January 2018
in
relation
to
the
Capital
Contribution
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‘‘Latest Practicable Date’’
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27 February 2018, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
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‘‘Listing
Rules’’
|
the
Rules Governing
the
Listing
of
Securities
on
The
Stock
Exchange
of
Hong Kong
Limited
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‘‘Ordinary
Share(s)’’
|
the
ordinary Share(s)
of
US$0.004 each
in
the
share capital
of
the Company
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‘‘PRC’’
|
the
People’s Republic
of
China,
but for the
purposes
of
this circular only, excludes
Hong
Kong, Macau
Special
Administrative Regions
of the
People’s Republic
of
China
and Taiwan
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‘‘SFO’’
|
the
Securities
and
Futures Ordinance (Chapter
571
of
the
Laws
of
Hong
Kong)
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‘‘Shanghai IC Fund’’
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上海集成電路產業投資基金股份有限公司
(Shanghai Integrated Circuit Industry Investment Fund Co., Ltd*), a company
established under the laws of the PRC and is owned as to approximately 10.53% by China IC Fund
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‘‘Shareholders’’
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holder(s)
of
issued
Shares
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‘‘Shares’’
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shares
of
all
classes
in
the
capital
of
the
Company (including
but not
limited
to
Ordinary Shares
and
preferred shares)
and
warrants
and
other securities which carry a right
to
subscribe
for
or
purchase
shares
of
the
Company
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–
2
–
DEFINITIONS
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‘‘SMIC
Holdings’’
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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
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‘‘SMIC
Shanghai’’
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中芯國際集成電路製
造
（
上
海
）
有限公司
(Semiconductor
Manufacturing International
(Shanghai) Corporation*),
a
wholly
foreign-owned
enterprise
established
in
the PRC
and
a
wholly-owned subsidiary
of
the
Company
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‘‘SMSC’’
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中芯南方集成電路製造有限公司
(Semiconductor
Manufacturing
South China Corporation*),
a
Chinese-foreign joint
venture
established under
the laws of the PRC and
a
wholly-owned
subsidiary
of
the
Company whose registered capital prior
to
the
Capital Contribution
is
US$210 million,
of
which 73.8%
is
owned
by
SMIC Shanghai
and
26.2%
is
owned
by
SMIC Holdings
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‘‘Stock
Exchange’’
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The
Stock
Exchange
of
Hong
Kong
Limited
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‘‘U.S.’’ or ‘‘United States’’
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the
United States
of
America,
its
territories,
its
possessions
and
all
areas subject
to
its
jurisdiction
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‘‘US$’’
|
United States dollar,
the
lawful currency
of the
United States
of
America
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‘‘%’’
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per
cent.
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*
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For
identification
purposes
only
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–
3
–
LETTER FROM THE BOARD
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)
Executive Directors:
Zhou Zixue
(Chairman)
Zhao HaiJun
(Co-Chief Executive
Officer)
Liang Mong Song
(Co-Chief Executive Officer)
Gao Yonggang
(Chief Financial Officer and Joint Company Secretary)
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
Carman I-Hua
Chang
Shang-yi
Chiang
Jason Jingsheng
Cong
Registered Office:
PO Box 309, Ugland House Grand Cayman, KY1-1104 Cayman Islands
Principal Place
of
Business:
18
Zhangjiang
Road
PuDong
New
Area
Shanghai
201203
People’s Republic of China
6 March 2018
To the Shareholders
Dear Sir or Madam,
(1)
DISCLOSEABLE
AND
CONNECTED
TRANSACTIONS
IN RELATION TO PROPOSED CAPITAL CONTRIBUTION AND DEEMED DISPOSAL OF EQUITY INTEREST IN SMSC
AND
(2) NOTICE OF EXTRAORDINARY GENERAL MEETING
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*
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For
identification
purpose
only
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–
4
–
LETTER FROM THE BOARD
INTRODUCTION
The
purpose
of
this circular
is to
provide
you
with information
on
the
businesses
to
be
transacted
at
the EGM
in
respect
of,
among other matters,
the
Joint Venture Agreement
and the
Capital Contribution Agreement
in
relation
to
the
proposed Capital
Contribution
and
deemed disposal
of
equity interest
in
SMSC
and any
transactions
contemplated
hereunder.
Reference
is
made
to
the
Company’s announcement dated
30
January
2018
in
relation
to
the
proposed Capital Contribution
to
and
deemed disposal
of
equity interest
in
SMSC
pursuant
to
the
Joint Venture Agreement
and the
Capital Contribution Agreement
entered
into among SMIC Holdings,
SMIC
Shanghai, China
IC
Fund
and
Shanghai
IC
Fund.
The
principal terms
of
the
Joint Venture Agreement
and the
Capital Contribution
Agreement
are set out as
follows:
SUMMARY OF PRINCIPAL TERMS OF THE JOINT VENTURE AGREEMENT
Date:
30 January 2018
Parties:
To
the best of the
Directors’ knowledge, information
and
belief
and
having
made
all
reasonable enquiry, Shanghai
IC
Fund and its
ultimate beneficial owners (other than
China
IC
Fund)
are
third
parties
independent
of
the
Company
and
its
connected
persons.
Business Scope of SMSC
SMSC will
principally engage
in
wafer manufacturing, wafer probing
and
bumping,
technology development, design service, mask manufacturing, assembly
and
final testing
of
integrated circuits
and
sales
of
self-manufactured products.
SMSC
is
expected
to
establish
and
build
up
large-scale manufacturing capacity focusing
on
14
nanometer
and
below
process
and
manufacturing technologies
and aims
to
reach
a
manufacturing capacity
of
35,000 wafers
per
month after
the
completion
of
the
first phase
of
development.
–
5
–
LETTER FROM THE BOARD
Total Investment and Registered Capital
The parties will contribute in aggregate US$3.5 billion by nature of registered capital contribution in the following manner:
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(a)
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SMIC
Holdings
has
committed
to
contribute US$1.5985 billion,
representing
45.67%
of
the
enlarged
registered
capital
of
SMSC
after
the
Capital
Contribution.
US$55 million
has
been contributed prior
to
entering into
the
Joint Venture Agreement
and
US$1.5435 billion
is
outstanding;
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(b)
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SMIC
Shanghai
has
committed
to
contribute US$155 million, which
has
been
fully
contributed
prior
to
entering
into
the
Joint
Venture
Agreement,
representing
4.43%
of
the
enlarged registered capital
of
SMSC
after
the
Capital
Contribution;
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(c)
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China
IC
Fund has
committed
to
contribute US$946.5 million, which
is
outstanding, representing 27.04%
of
the
enlarged registered capital
of
SMSC
after
the
Capital Contribution;
and
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(d)
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Shanghai
IC
Fund has
committed
to
contribute US$800 million, which
is
outstanding, representing 22.86%
of the
enlarged registered capital
of
SMSC
after
the
Capital
Contribution.
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The
consideration
was
arrived
at
after arm’s length negotiation among
the
parties
with
reference
to
the net
asset value, future business prospects
and
development potential
of
SMSC. According
to
the
unaudited accounts
of
SMSC,
as
at
31
December 2017,
SMSC has
total assets
and
total equity
of
approximately US$209.0 million
and
US$202.8
million,
respectively.
The
assets
of
SMSC are
mainly inter-group balances
and
cash,
and
hence
the
consideration
of
US$3.5 billion
was
also determined with reference
to
the
future
business
prospects
and
development potential
of
SMSC. SMSC
is
a
12-inch wafer
fab
with
advanced
process capability built
in
line
with
the
schedule
of
the
Company’s
14
nanometre
and
below
advanced technology
node
research
and
development
and mass
production.
The
14
nanometre technology could
be
applied
on
mainstream mobile platforms, automotive, Internet
of
Things
and
cloud computing, which
are
also
fast
growing
applications.
According
to
the
Company’s development plan,
the
12-inch wafer
fab
will
be
built
by
joint
venture partnership
with
China
IC
Fund
and
Shanghai
IC
Fund and the
Company
could
speed
up the
introduction
of
advanced manufacturing process
and
products. Majority
of
the
amount
of
the
Capital Contribution will
be
utilised
as
the
capital expenditure
in
accordance
with the
development
plan and
allow
the
Group
to
develop
the
high-end
and fast
growing
product stream, which would bring more growth opportunities
to
the
Group
and is
essential
to
maintain
the
Group’s competitiveness.
The
total investment
for
SMSC,
as
indicated
in
the
Joint Venture Agreement,
is
estimated
to be
US$10.24 billion. While
the
parties
are
only
obliged
to
make contribution
to
the
registered capital
of
SMSC
in
an
aggregate amount
of
US$3.5 billion,
the
difference between
the
total investment
of
US$10.24 billion
and
enlarged registered capital
of
SMSC after
the
Capital Contribution
is
intended
to be
funded
through SMSC’s internal cash flow, shareholders’ further contribution
to
the
registered
capital
of
SMSC
or
debt
financing
and the
parties
to
the
Joint Venture Agreement
are
not
legally bound
to
contribute such difference between
the
total investment
and the
registered
capital
of
SMSC.
–
6
–
LETTER FROM THE BOARD
Each party shall complete
30% of its
outstanding contributions prior
to 30
June
2018, complete
30%
of
its
outstanding contributions prior
to 31
December 2018,
and
complete
the
remaining
40%
of
the
contributions
prior
to
30
June
2019
(the
‘‘Time
Frame’’).
Notwithstanding the above, the capital contribution by China IC Fund is subject to the following conditions (‘‘Condition Precedent’’):
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(i)
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receipt
of
the
written approval from
the
competent government authority(ies)
in
Shanghai, pursuant
to
which
a
government subsidy lasting
for not less than
five years with
an
amount each year
not less than
4% of
the
total capital
contribution
of
China
IC
Fund shall
be
granted
to
SMSC;
and
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(ii)
|
the
validity
of
the
investment
period
of
China
IC
Fund
(after
which
China
IC
fund
cannot
make
capital contribution
to
SMSC).
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The parties have further agreed that if China IC Fund fails to make Capital Contribution in accordance with the Time Frame, due to (i) the Condition Precedent is not satisfied or only satisfied within one month prior to the any deadline of the Time Frame; or
(ii) the expiry of the investment period of China IC Fund, the failure by China IC Fund to make its Capital Contribution will not constitute a breach of the Joint Venture Agreement. However, if the Condition Precedent is satisfied within one month prior to any deadline of the Time Frame, or beyond any such deadline (but within the investment period of China IC Fund), China IC Fund shall make the relevant capital contribution in accordance with the Joint Venture Agreement within one month after the satisfaction of the Condition Precedent. If China IC Fund fails to make capital contribution due to the Condition Precedent cannot be met on or before 25 August 2019, and/or if China IC Fund is unable to make capital contribution due to the expiry of its investment period, such failure to make capital contribution will not constitute a breach by China IC Fund, and the parties will further negotiate and amend the Joint Venture Agreement and the articles of association of SMSC as well as other relevant legal documents.
The
cash capital contribution
by
SMIC Holdings
will
be
funded
by
the
internal
cash
flow.
The
proceeds
of the
Capital Contribution will
be
used
by
SMSC
as
capital expenditure
and
working
capital.
Composition of the Board and the Supervisory Board of SMSC and General Management
The
board
of
directors
of
SMSC
will comprise
five
directors.
SMIC
Holdings
and
SMIC
Shanghai together
are
entitled
to
appoint three directors
in
total
and each
of
China
IC
Fund
and
Shanghai
IC
Fund
is
entitled
to
appoint
one
director.
SMIC
Holdings
and
SMIC
Shanghai together
are
entitled
to
nominate
the
chairman
of
the
board
of
directors
of
SMSC,
who will also act as the
legal representative
of
SMSC.
The
supervisory board
of SMSC will
comprise three members. China
IC
Fund
will
appoint
one
member
who will
also
be
the
chairman
of the
supervisory board. Each
of
Shanghai
IC
Fund
and
the
employees
of
SMSC
will
be
entitled
to
appoint
one
member.
The Company will be responsible for managing the daily operations of SMSC.
–
7
–
LETTER FROM THE BOARD
Pre-Emptive Rights of Shareholders
Pursuant
to
the
Joint Venture Agreement,
in
case
of
any
proposed transfer
of
equity
interest
to
third party(ies), subject
to
certain exceptions,
each
of
the
parties
to
the
Joint
Venture
Agreement
shall
have
a
pre-emptive
right
to
subscribe
for
the
equity
interest
which
any
party
to
the
Joint Venture Agreement intends
to
transfer
to
any
third party,
on
pro
rata basis among
the
remaining non-transfer parties
and
on
terms
not
harsher than terms
of
transfer
to
third party(ies).
The
party(ies)
that
intend
to
transfer shares
to
third party(ies)
are
required
to
notify
the
non-transfer parties
to
such proposed transfer
of
equity interest.
The
Company
will
comply
with the
applicable requirements under Chapter
14
and/or Chapter
14A
of
the
Listing Rules
when the
Company exercises
its
pre-emptive right
to
subscribe
for the
equity interest
in
SMSC.
In
case
of
any
further contribution
to
the
registered capital
of
SMSC, each party shall
be
entitled
to
a
pro rata
portion
of
such
proposed registered capital contribution equivalent
to
the
respective percentage
of the
registered capital
then
owned
by
each
of
the
parties immediately prior
to
the
proposed
registered capital
contribution.
Other Terms
The term
of
operation
of
SMSC will
be 50
years from
the
date
of its
establishment.
The
parties will decide whether
to
extend
the
term
of
operation
of SMSC
at
least
six
months prior
to
the
expiry
date of the
term
of
operation, subject
to
the
approval
of
the
relevant
PRC
authorities.
The
Joint Venture Agreement will, after being agreed
and
signed
by
the
parties,
together with
the
transactions contemplated thereunder,
be
subject
to
the
approval
by
Independent Shareholders
at
the EGM.
Upon obtaining
the
regulatory approvals
and the
approval
by
the
Independent Shareholders
at the
EGM,
the
Joint Venture Agreement
will
become effective
and
binding
on
the
parties.
The
obligations
of
the
parties under
the
Joint Venture Agreement
are
subject
to
compliance with applicable
laws
(including those
of
regulatory authorities (including
but not
limited
to the
Stock Exchange
and the New
York
Stock Exchange,
Inc.)).
–
8
–
LETTER FROM THE BOARD
SUMMARY OF PRINCIPAL TERMS OF THE CAPITAL CONTRIBUTION AGREEMENT
Date:
30 January 2018
Parties:
To
the best of the
Directors’ knowledge, information
and
belief
and
having
made
all
reasonable enquiry, Shanghai
IC
Fund and its
ultimate beneficial owners (other than
China
IC
Fund)
are
third parties independent
of the
Company
and the
connected persons
of
the Company.
Subscription of Registered Capital
The
registered
capital
of
SMSC
will
increase
from
US$210
million
to
US$3.5
billion.
In
respect
of
the
increase
of
US$3.29
billion,
the
parties
have
agreed
that
SMIC
Holdings
will
contribute
the
amount
of
US$1.5435 billion
in cash
while China
IC
Fund
and
Shanghai
IC
Fund
will
contribute
the
RMB
equivalent
of
US$946.5
million
and
US$800
million
in
cash
(calculated
at
the
middle
exchange
rate
of
RMB
to
US$
as
announced
by
the
People’s
Bank
of
China
on
the
date
of
the
contribution),
respectively.
Other Terms
The
Capital Contribution Agreement will, after being agreed
and
signed
by
the
parties,
together with
the
transactions contemplated thereunder,
be
subject
to
the
approval
by
the
Independent Shareholders
at the EGM.
Upon obtaining
the
regulatory approvals
and
approval
by
the
Independent Shareholders
at the EGM, the
Capital
Contribution
Agreement
will
become effective
and
binding
on
the
parties.
GENERAL INFORMATION ABOUT SMSC
SMSC was
established
on 1
December 2016. According
to
the
unaudited accounts
of
SMSC
prepared
in
accordance
with
IFRS,
as
at
31
December 2017,
SMSC has
total assets
and
total equity
of
approximately US$209.0 million
and
US$202.8 million, respectively.
The net
profit/(loss) (before taxation
and
extraordinary items)
of
SMSC for the
year
ended
31
December 2017
is
approximately US$(115,240)
and the net
profit/(loss) (after
taxation
and
extraordinary items)
of
SMSC for the year
ended
31
December
2017
is
approximately
US$(115,240).
SMSC
will
continue
to
be
a
subsidiary
of
the
Company
following
completion
of
the
transactions contemplated under
the
Joint Venture Agreement
and the
Capital
Contribution Agreement.
The
deemed disposal
as
a
result
of
the
Capital Contribution
will
not
result
in
the
recognition
of
any
gain
or
loss
in
profit
or
loss
of
the
Group.
–
9
–
LETTER FROM THE BOARD
REASONS FOR AND BENEFITS OF THE CAPITAL CONTRIBUTION
SMSC
is
a
12-inch wafer
fab with
advanced process capability built
in
line
with
the
schedule
of
the
Company’s
14
nanometre
and
below advanced technology node
research
and
development
and
mass production. China
IC
Fund
and
Shanghai
IC
Fund
mainly
invest
in
the
value chain
of
integrated circuit industry
via
various approaches, primarily
in
integrated circuit
chip
manufacturing
as
well
as
chip designing, packaging
test
and
equipment
and
materials.
The
12-inch wafer
fab will
be
built
by
joint venture
partnership
with
China
IC
Fund
and
Shanghai
IC
Fund and the
Company could speed
up the
introduction
of
advanced manufacturing process
and
products
with the
support
of
the
government industry funds.
This
will also relieve
the
Company from spending large amount
of
cash
investment
caused
by
the
expansion
of
advanced
production
capacity.
The
Company believes
that
such partnership
with
China
IC
Fund and
Shanghai
IC
Fund through
the
Joint Venture Agreement
and the
Capital Contribution Agreement
and
transactions contemplated thereunder
are
in
the
interests
of the
Company
and
the
Shareholders
as
a
whole
and
beneficial
to the
sustainable development
of
the
Company.
The
Directors (excluding independent non-executive Directors whose
view will
be
given after taking into account
the
advice
from the
Independent Financial Adviser) consider that
it is
in
the best
interests
of the
Company
and the
Shareholders
as
a
whole
to
enter into
the
Joint Venture Agreement
and the
Capital Contribution Agreement
and the
transactions
contemplated thereunder;
the
terms
of
the
Joint Venture Agreement
and the
Capital
Contribution Agreement
are
fair
and
reasonable;
and the
entering into
of the
Joint Venture Agreement
and the
Capital Contribution Agreement
and the
transactions
contemplated
thereunder
are
on
normal commercial terms
or
better
and
in
the
ordinary
and
usual course
of
business.
IMPLICATIONS OF THE LISTING RULES
As
China
IC
Fund
held
approximately 15.05%
of
the
issued share capital
of
the
Company through
its
wholly-owned subsidiary, Xinxin (Hongkong) Capital
Co.,
Limited
as
at
the
Latest Practicable Date,
it is a
connected person
of the
Company under
the
Listing
Rules.
The
transactions contemplated under
the
Joint Venture Agreement
and the
Capital Contribution Agreement constitute connected transactions
of
the
Company under Chapter
14A
of
the
Listing
Rules.
Pursuant to the Joint Venture Agreement and the Capital Contribution Agreement, as a result of the Capital Contribution, the Company’s equity interest in SMSC, through SMIC Holdings and SMIC Shanghai, will decrease from 100% to 50.1%, which constitutes a deemed disposal for the Company under Chapter 14 of the Listing Rules.
As
certain applicable percentage ratios stipulated under
Rule
14.07
of
the
Listing Rules
in
respect
of
the
Joint Venture Agreement
and the
Capital Contribution Agreement
exceed
5%
but
are
less
than
25%,
the
transactions
contemplated
under
the
Joint
Venture Agreement
and the
Capital Contribution Agreement constitute discloseable transactions
of
the
Company under Chapter
14
of the
Listing Rules,
and
a
non-exempt
connected
transaction subject
to
reporting, announcement
and the
Independent
Shareholders’
approval requirements
of
Chapter
14A
of
the
Listing
Rules.
–
10
–
LETTER FROM THE BOARD
In accordance with the Listing Rules, the Independent Board Committee has been established to advise and provide recommendation to the Independent Shareholders on the Joint Venture Agreement, the Capital Contribution Agreement and the transactions contemplated thereunder and to advise the Independent Shareholders on how to vote.
Messis Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the Joint Venture Agreement, the Capital Contribution Agreement and the transactions contemplated thereunder.
The
letter
from the
Independent Board Committee
to
the
Independent Shareholders
is
set out
on
pages
14
to
15
of
this circular.
The
letter
from
Messis Capital
to the
Independent
Board Committee
and the
Independent Shareholders
is
set out
on
pages
16 to
24 of
this
circular.
INFORMATION ABOUT
THE
PARTIES
The Company, SMIC Holdings and SMIC Shanghai
The
Company
is
one of the
leading semiconductor foundries
in
the
world
and the
largest
and
most advanced foundry
in
the PRC. The
Company provides integrated circuit foundry
and
technology services
at
0.35-micron
to
28-nanometer. Headquartered
in
Shanghai,
the PRC, the
Company
has a
300mm wafer fabrication facility (fab)
and a
200mm mega-fab
in
Shanghai;
a
300mm mega-fab
and a
second majority owned 300mm
fab
under development
for
advance nodes
in
Beijing; 200mm
fabs
in
Tianjin
and
Shenzhen.
The
Company also
has
marketing
and
customer service offices
in
the
United States, Europe, Japan,
and
Taiwan,
and a
representative office
in
Hong Kong.
SMIC
Shanghai
is
a
wholly- owned subsidiary
of the
Company established
in
the PRC. SMIC
Holdings,
as
a
multinational company’s regional headquarters,
was
formed
in
2015
and
is
a
wholly- owned subsidiary
of
the
Company.
China IC Fund
China IC Fund, incorporated in September 2014, mainly invests in the value chain of integrated circuit industry via various approaches, primarily in integrated circuit chip manufacturing as well as chip designing, packaging test and equipment and materials. Fund investors include CDB Capital, China National Tobacco Corporation, Beijing Yizhuang International Investment and Development Co., Ltd., China Mobile Communications Corporation, Shanghai Guosheng (Group) Co., Ltd., Beijing Purple Communications Technology Group Ltd and Sino IC Capital Co., Ltd.
–
11
–
LETTER FROM THE BOARD
Shanghai IC Fund
Shanghai
IC
Fund
is
currently
the
largest local integrated circuit industry investment fund
in
Shanghai,
the
investors
of
which include, among others, Shanghai
S&T
Venture
Capital (Group)
Co.,
Ltd.,
SAIC
Capital Co., Ltd., China
IC
Fund, Shanghai
Guo
Sheng
Group Co., Ltd.
and
Shanghai International Group.
The
fund’s investment focuses
on the
integrated circuit manufacturing industry
and
extends
to
the
entire industry chain.
The
fund
aims to
invest
and
build industrial
star
enterprises
and
enhance corporate value
and
accelerate
the
coordinated
development
of
integrated
circuit
industry
chain.
GENERAL INFORMATION
At
the
EGM,
an
ordinary resolution will
be
proposed
to
the
Independent Shareholders
to
approve, among others,
the
Joint Venture Agreement,
the
Capital
Contribution
Agreement
and
any
transactions
contemplated
thereunder.
As
China
IC
Fund
is a
connected person
of the
Company,
its
wholly-owned
subsidiary
Xinxin (Hongkong) Capital Co., Ltd.
and
other associates
(as
defined
in
the
Listing
Rules)
of
China
IC
Fund
will
abstain from voting
on
the
ordinary resolutions
to
approve
the
Joint Venture Agreement
and the
Capital Contribution Agreement.
As at
the
Latest Practicable Date, Xinxin (Hongkong) Capital
Co.,
Limited
was
holding 740,000,000 Shares
and
representing
approximately
15.05%
of
the
total
issued
share
capital
of
the
Company.
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
relevant resolutions
at the
EGM.
No Director is considered to have a material interest in the Joint Venture Agreement or the Capital Contribution Agreement which would have required the Director to abstain from voting at the Board meeting authorising the Joint Venture Agreement and the Capital Contribution Agreement.
Your attention is drawn to the general information set out in Appendix I to this circular.
RECOMMENDATION
The
Board (including
the
independent non-executive Directors) considers that
it
is
in
the best
interests
of the
Company
and the
Shareholders
as
a
whole
to
enter into
the
Joint Venture Agreement
and the
Capital Contribution Agreement;
the
terms
of
the
Joint Venture Agreement
and the
Capital Contribution Agreement
are fair and
reasonable;
and
the
entering into
of the
Joint Venture Agreement,
the
Capital Contribution Agreement
and
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. Accordingly,
the
Independent Board Committee recommends
the
Independent Shareholders
to
vote
in
favour
of
the
ordinary resolution
to
be
proposed
at the EGM
to
approve
the
Joint Venture Agreement,
the
Capital Contribution Agreement
and the
transactions contemplated
thereunder.
–
12
–
LETTER FROM THE BOARD
EXTRAORDINARY GENERAL MEETING
The
voting
at
the EGM
will
be
taken
by
a
poll.
The
Company
will make
an
announcement
of
the poll
results
in
accordance
with the
relevant requirements under
the
Listing Rules
as
soon
as
possible.
To
the
best knowledge, information
and
belief
of
the
Directors, having made
all
reasonable enquiries, there
is
(i)
no
voting trust
or
other agreement
or
arrangement
or
understanding entered
into
by or
binding upon
any
Shareholders;
and
(ii)
no
obligation
or
entitlement
of
any
Shareholder
as
at
the
Latest Practicable Date, whereby it/he
has
or
may
have temporarily
or
permanently passed control over
the
exercise
of
the
voting right
in
respect
of
its/his
Shares
to
a
third
party,
either
generally
or
on
a
case-by-case
basis.
A
form
of
proxy
for
the
EGM
is
enclosed
with
this
circular.
Whether
or
not
you
intend
to be
present
at
the EGM, you are
requested
to
complete
the form
of
proxy
and
return
it
to
the
branch share registrar
of the
Company, Computershare Hong
Kong
Investor Services
Limited,
at
Hopewell
Centre,
17M
Floor,
183
Queen’s
Road
East,
Wanchai,
Hong
Kong
in
accordance
with
the
instructions
printed
thereon
not
less
than
48
hours
before
the
time
fixed
for the EGM. The
completion
of
a
form
of
proxy will
not
preclude
you from
attending
and
voting
at the EGM in
person.
For
determining
the
entitlement
to
attend
and
vote
at
the EGM, the
register
of
members
of
the
Company
will
be
closed
from
Thursday,
22
March
2018
to
Tuesday,
27
March 2018,
both
days inclusive, during which period
no
transfer
of
the
Shares will
be
registered.
In
order
to be
eligible
to
attend
and
vote
at
the EGM, all
properly
completed
transfer forms accompanied
by
the
relevant share certificates must
be
lodged
with the
branch share registrar
of
the
Company, Computershare
Hong
Kong Investor Services Limited,
at
Shops 1712–1716,
17th
Floor, Hopewell Centre,
183
Queen’s
Road
East, Wanchai, Hong Kong
by no
later than
4 :
30
p.m.
on
Wednesday,
21
March 2018.
All
persons
who are
registered holders
of the
Shares
on 27
March 2018,
the
record
date
of
the EGM,
will
be
entitled
to
attend
and
vote
at
the
EGM.
|
|
|
|
|
By Order of the Board
Semiconductor Manufacturing International Corporation Gao Yonggang
Executive Director, Chief Financial Officer and Joint Company Secretary
|
Shanghai, 6 March 2018
–
13
–
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
Set out below is the text of the letter of recommendation, prepared for incorporation in LR14A.70(6) this circular, from the Independent Board Committee to the Independent Shareholders.
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)
6 March 2018
To the Independent Shareholders
Dear Sir or Madam,
DISCLOSEABLE AND CONNECTED TRANSACTIONS
IN RELATION TO PROPOSED CAPITAL CONTRIBUTION AND DEEMED DISPOSAL OF EQUITY INTEREST IN SMSC
We
refer
to
the
circular
dated
6
March 2018
(the
‘‘Circular’’)
issued
by
the
Company
to
the
Shareholders
of
which
this
letter forms part. Unless
the
context otherwise
requires,
capitalised terms
used
in
this
letter shall
have the same
meanings given
to them
in
the Circular.
We
have been appointed
by
the
Board
to
advise
the
Independent Shareholders
as
to
whether
the
terms
of the
Joint Venture Agreement
and the
Capital Contribution
Agreement
are
fair
and
reasonable,
and
whether
the
entering into
of
the
Joint Venture Agreement
and
the
Capital Contribution Agreement
is on
normal commercial terms
or
better,
in
the
ordinary
and
usual course
of
business
of
the
Company
and
in
the
interests
of the
Company
and the
Shareholders
as a
whole
and
to
advise
the
Independent Shareholders
on
how
to
vote,
taking
into
account
the
recommendations
of
Messis
Capital.
Messis Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Joint Venture Agreement and the Capital Contribution Agreement are fair and reasonable, and whether the entering into of the Joint Venture Agreement and the Capital Contribution Agreement is on normal commercial terms or better, in the ordinary and usual course of business of the Company and in the interests of the Company and the Shareholders as a whole and to advise the Independent Shareholders on how to vote on the
relevant resolution. Details
of
its
advice, together
with the
principal factors
and
reasons taken
into
consideration
in
arriving
at
such
advice,
are set out
on
pages
16 to 24 of
the Circular.
|
*
|
For
identification
purpose
only
|
–
14
–
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
We,
having taken
into
account
the
advice
of
Messis Capital, consider
that the
terms
of
the
Joint Venture Agreement
and the
Capital Contribution Agreement
are fair
and
reasonable,
and the
entering into
of
the
Joint Venture Agreement
and the
Capital
Contribution Agreement
is on
normal commercial terms
or
better,
in
the
ordinary
and
usual course
of
business
of
the
Company
and
in
the
interests
of
the
Company
and the
Shareholders
as a
whole. Accordingly,
we
recommend
the
Independent Shareholders
to
vote
in
favour
of
the
ordinary resolution
to
be
proposed
at the EGM. Your
attention
is
also
drawn
to
the
letter
from the
Board
set out on
pages
4
to 13
of the
Circular
and the
additional
information
set
out
in
the
Appendix
I
to
the
Circular.
|
|
|
|
|
Yours faithfully,
Independent Board Committee
Lip-Bu Tan, William Tudor Brown,
Carman I-Hua Chang,
Shang-yi Chiang, Jason Jingsheng Cong
Independent Non-Executive Directors
|
–
15
–
LETTER FROM MESSIS CAPITAL
The
following
is
the full text of the
letter
from the
Independent Financial Adviser
which
sets
out its
advice
to
the
Independent Board Committee
and the
Independent Shareholders
for
inclusion
in
this
circular.
6 March 2018
The
Independent Board Committee
and the
Independent Shareholders
of
Semiconductor Manufacturing International
Corporation
Dear Sir/Madam,
DISCLOSEABLE AND CONNECTED TRANSACTIONS
IN RELATION TO PROPOSED CAPITAL CONTRIBUTION AND DEEMED DISPOSAL OF EQUITY INTEREST IN SMSC
INTRODUCTION
We
refer
to
our
appointment
as the
Independent Financial Adviser
to
advise
the
Independent Board Committee
and the
Independent Shareholders
in
relation
to
the
Joint Venture Agreement
and the
Capital Contribution Agreement. Details
of
which
are set out
in
the
letter
from the
Board
(the
‘‘Letter
from the
Board’’)
contained
in
the
circular
of
the
Company dated
6
March 2018 issued
to the
Shareholders
(the
‘‘Circular’’), of
which this letter forms part. Terms used
in
this
letter shall have
the same
meanings
as
those defined
in
the
Circular, unless otherwise
specified.
Reference
is
made
to
the
Company’s announcement dated
30
January
2018
in
relation
to
the
proposed Capital Contribution
to
and
deemed disposal
of
equity interest
in
SMSC
pursuant
to
the
Joint Venture Agreement
and the
Capital Contribution Agreement
entered
into
among
SMIC
Holdings, SMIC Shanghai, China
IC Fund and
Shanghai
IC
Fund.
As
China
IC
Fund
held
approximately 15.05%
of
the
issued share capital
of
the
Company through
its
wholly-owned subsidiary, Xinxin (Hongkong) Capital
Co.,
Limited
as
at
the
Latest Practicable Date,
it is a
connected person
of the
Company under
the
Listing
Rules.
The
transactions contemplated under
the
Joint Venture Agreement
and the
Capital Contribution Agreement constitute connected transactions
of
the
Company under Chapter
14A
of
the
Listing
Rules.
Pursuant to the Joint Venture Agreement and the Capital Contribution Agreement, as a result of the Capital Contribution, the Company’s equity interest in SMSC, through SMIC Holdings and SMIC Shanghai, will decrease from 100% to 50.1%, which constitutes a deemed disposal for the Company under Chapter 14 of the Listing Rules.
–
16
–
LETTER FROM MESSIS CAPITAL
As
certain applicable percentage ratios stipulated under
Rule
14.07
of
the
Listing Rules
in
respect
of
the
Joint Venture Agreement
and the
Capital Contribution Agreement
exceed
5%
but are less
than
25%, the
transactions contemplated under
the
Joint Venture Agreement
and the
Capital Contribution Agreement constitute discloseable transactions
of
the
Company under Chapter
14
of the
Listing Rules,
and
a
non-exempt
connected
transaction subject
to
reporting, announcement
and the
Independent
Shareholders’
approval requirements
of
Chapter
14A
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
Joint Venture Agreement,
the
Capital Contribution Agreement
and the
transactions contemplated thereunder
and to
advise
the
Independent Shareholders
on
how
to
vote.
We,
Messis Capital Limited, have been appointed
as the
Independent Financial Adviser
to
advise
the
Independent Board Committee
and the
Independent Shareholders
as to
whether
the
terms
of
(i) the
Joint Venture Agreement;
and (ii) the
Capital Contribution
Agreement
are
on
normal commercial terms
and
in
the
ordinary
and
usual course
of
business
of the
Group,
and
fair
and
reasonable
so
far
as
the
Independent Shareholders
are
concerned
and
is
in
the
interests
of
the
Company
and the
Shareholders
as a
whole.
OUR INDEPENDENCE
As at the Latest Practicable Date, we did not have any relationship with or interest in the Company or any other parties that could reasonably be regarded as relevant to our independence. In the last two years, we have acted as the independent financial adviser to the independent board committee and the independent shareholders of the Company for the following transactions:
Date of the relevant circular/
announcement and/or our
|
letter
of
advice
|
Nature
of
the
transactions
|
|
|
|
|
7
June
2016
|
(1)
Continuing
connected
transactions
in
relation
to
centralised fund management agreement;
(2)
discloseable
transaction
and
connected
transaction
in
relation
to
proposed capital contribution
and
deemed disposal
of
equity
interest
in
a
joint
venture
in
Beijing,
the
PRC;
and
(3)
non-exempt connected transactions
—
proposed grant
of
restricted
share
units
to
directors
and
chief
executive
officer
|
|
|
|
|
26
July
2016
|
Major transaction
and
continuing connected transaction
in
relation
to
framework
agreement
|
|
|
|
|
18
November
2016
|
(
1) Continuing connected transactions in relation to framework agreement; and (2) non-exempt connected transactions — proposed grant of restricted share units to directors and chief executive officer
|
–
17
–
LETTER FROM MESSIS CAPITAL
|
|
|
|
24
May
2017
|
Non-exempt connected transactions — proposed grants
of
restricted share units to directors and former chief executive officer
|
|
|
|
|
31
July
2017
|
Connected transactions — provisions
of
guarantees
|
|
|
|
|
13
September
2017
|
(1)
Major transaction
and
connected transaction
—
proposed capital contribution
in
a
joint venture
in
Beijing,
the
PRC;
(2)
non-exempt connected transactions
—
proposed grant
of
restricted share units
to
former chief executive officer;
and (3)
non-exempt
connected
transactions
—
proposed grant
of
restricted share units
to
chief executive officer
and
director
|
|
|
|
|
18
January
2018
|
Discloseable
and
continuing
connected
transactions
in
relation to framework agreement
|
Apart
from
normal professional fees paid
or
payable
to
us
in
connection
with
the
previous appointments mentioned above
as
well
as
this appointment
as the
Independent Financial Adviser,
no
arrangement exist whereby
we
have received
or
will
receive
any
fees
or
benefits
from the
Company
or
any
other parties
that
could reasonably
be
regarded
as
relevant
to our
independence. Accordingly,
we
consider
that the
aforementioned previous appointment would
not
affect
our
independence,
and that we are
independent pursuant
to
Rule
13.84
of
the
Listing
Rules.
BASIS OF OUR OPINION
In
formulating
our
opinion
and
recommendation,
we
have considered, among other things,
(i) the
Joint Venture Agreement;
(ii) the
Capital Contribution Agreement;
and
(iii)
other information
as
set out
in
the
Circular.
We
have
also
relied
on all
relevant information, opinions
and
facts supplied
and
represented
by the
Company,
the
Directors
and the
management
of
the
Company.
We
have
assumed
that all such
information, opinions,
facts
and
representations contained
or
referred
to in
the
Circular,
for
which
the
Company
is
fully responsible,
were true and
accurate
in
all
respects
as at
the date
hereof
and may
be
relied
upon.
We
have
no
reason
to
doubt
the
truth, accuracy
and
completeness
of
the
information
and
representations provided
to us by
the
Company,
and the
Company
has
confirmed that
no
material facts have been withheld
or
omitted
from the
information provided
and
referred
to
in
the
Circular,
which
would
make
any
statement
therein
misleading.
We
consider that
we
have
reviewed sufficient information currently available
to
reach
an
informed view
and
to
justify
our
reliance
on
the
accuracy
of
the
information contained
in
the
Circular
so
as to
provide
a
reasonable basis
for our
recommendation.
We
have
not,
however, carried
out
independent verification
of
the
information provided
by
the
Directors
and the
representatives
of the
Company,
nor
have
we
conducted
any
form
of
in-depth
investigation into
the
businesses, affairs, operations, financial position
or
future prospects
of
the
Company
or
any
of
its
subsidiaries.
–
18
–
LETTER FROM MESSIS CAPITAL
PRINCIPAL FACTORS AND REASONS CONCERNED
In
considering whether
the
terms
of
(i) the
Joint Venture Agreement;
and (ii)
the
Capital Contribution Agreement
are
fair
and
reasonable
in so
far as the
Independent Shareholders
are
concerned,
we
have taken
into
account
the
principal factors
and
reasons
set out
below:
Background of the Joint Venture Agreement and the Capital Contribution Agreement
Reference
is
made
to
the
Company’s announcement dated
30
January 2018.
As
at
even
date,
SMIC
Holdings,
SMIC
Shanghai, China
IC
Fund
and
Shanghai
IC
Fund entered
into the
Joint Venture Agreement
and the
Capital Contribution
Agreement
pursuant
to
which
SMIC
Holdings, China
IC
Fund and
Shanghai
IC
Fund
agreed
to
make cash contribution
to
the
Registered Capital
of SMSC
in
the
amount
of
US$1.5435 billion, US$946.5 million
and
US$800 million, respectively.
As
a result
of the
Capital Contribution:
(i) the
Registered Capital
of
SMSC
will increase
from
US$210 million
to
US$3.5 billion;
(ii) the
Company’s equity interest
in
SMSC,
through
SMIC
Holdings
and SMIC
Shanghai,
will
decrease
from
100%
to
50.1%;
and
(iii)
SMSC will be
owned
as to
27.04%
and
22.86%
by
China
IC
Fund
and
Shanghai
IC
Fund,
respectively.
SMSC was
established
on
1
December 2016. According
to
the
unaudited accounts
of
SMSC
prepared
in
accordance
with
IFRS,
as
at 31
December 2017,
SMSC has
total
assets
and
total equity
of
approximately US$209.0 million
and
US$202.8
million,
respectively.
The net
loss
of
SMSC for the year
ended
31
December
2017
is
approximately US$115,240.
SMSC will
continue
to be
a
subsidiary
of
the
Company following completion
of the
transactions contemplated under
the
Joint Venture Agreement
and the
Capital Contribution Agreement.
The
deemed disposal
as
a
result
of
the
Capital Contribution will
not
result
in
the
recognition
of
any
gain
or
loss
in
profit
or
loss
of
the
Group.
The
Company
is
one of the
leading semiconductor foundries
in
the
world
and the
largest
and most
advanced foundry
in
the PRC. The
Company provides
integrated
circuit foundry
and
technology services
at
0.35-micron
to
28-nanometer.
Headquartered
in
Shanghai,
the PRC, the
Company
has a
300mm wafer fabrication facility (fab)
and a
200mm mega-fab
in
Shanghai;
a
300mm mega-fab
and a
second
majority owned 300mm
fab
under development
for
advance nodes
in
Beijing;
and
200mm
fabs
in
Tianjin
and
Shenzhen.
The Company
also has
marketing
and
customer service offices
in
the
United States, Europe, Japan,
and
Taiwan,
and a
representative office
in
Hong
Kong.
SMIC
Shanghai
is
a
wholly-owned subsidiary
of
the
Company established
in
the PRC.
SMIC Holdings,
as
a
multinational company’s regional headquarters,
was
formed
in
2015
and
is
a
wholly-owned
subsidiary
of
the
Company.
China
IC
Fund
, incorporated
in
September 2014, mainly invests
in
the
value
chain
of
integrated circuit industry
via
various approaches, primarily
in
integrated
circuit
chip
manufacturing
as
well
as
chip
designing, packaging
test and
equipment
and
materials.
Fund
investors
include
CDB
Capital,
China
National
Tobacco
Corporation, Beijing Yizhuang International Investment and Development Co., Ltd., China Mobile Communications Corporation, Shanghai Guosheng (Group) Co., Ltd., Beijing Purple Communications Technology Group Ltd and Sino IC Capital Co., Ltd.
–
19
–
LETTER FROM MESSIS CAPITAL
Shanghai
IC
Fund
is
currently
the
largest local integrated circuit
industry
investment fund
in
Shanghai
,
the
investors
of
which include, among others, Shanghai
S&T
Venture Capital (Group)
Co.,
Ltd.,
SAIC
Capital Co., Ltd., China
IC
Fund, Shanghai
Guo
Sheng Group
Co., Ltd. and
Shanghai International Group.
The
fund’s
investment focuses
on the
integrated circuit manufacturing industry
and
extends
to
the
entire industry chain.
The
fund aims
to
invest
and
build industrial star enterprises
and
enhance corporate value
and
accelerate
the
coordinated development
of
integrated
circuit industry
chain.
Reasons for and benefit of the Joint Venture Agreement and the Capital Contribution Agreement
According
to
the
Letter from
the
Board,
SMSC
is
a 12-inch wafer
fab
with
advanced process capability built
in
line
with the
schedule
of the
Company’s
14
nanometre
and
below advanced technology node research
and
development
and
mass production. China
IC Fund and
Shanghai
IC
Fund mainly invest
in
the
value chain
of
integrated circuit industry
via
various approaches, primarily
in
integrated circuit
chip
manufacturing
as
well
as
chip designing, packaging
test and
equipment
and
materials
along
the
industry chain.
The
12-inch wafer
fab will
be
built
by
joint
venture
partnership
with
China
IC
Fund
and
Shanghai
IC
Fund
and the
Company could
speed
up
the
introduction
of
advanced manufacturing process
and
products.
This will
also
relieve
the
Company
from
spending large amount
of
cash investment caused
by
the
expansion
of
advanced production capacity.
The
proceeds
of
the
Capital
Contribution
will
be
used
by
SMSC
as
capital
expenditure
and
working
capital.
For due
diligence purpose,
we
have conducted research
on
the
background
of
the
IC
industry. According
to
information published
by
SEMI
in
July 2017 (the
‘‘SEMI
Publication’’), the PRC
is
the
largest consumer
of
semiconductors
in
the
world,
but
the
demand
is
mainly satisfied through imports.
SEMI
(www.semi.org),
is
a
global industry association
of
companies
that
provide equipment, materials
and
services
for
the
manufacture
of
semiconductors
and
other related micro
and
nano-technologies.
SEMI
also provides market research reports
for the
semiconductor equipment, materials,
and LED
industries. According
to the SEMI
Publication,
in
2015,
the
PRC’s
IC
production amounted
to
US$13.2 billion, while
the PRC
IC
market
demand
approximated
to
US$104 billion.
It is
expected
that
in
2020,
the
PRC’s
IC
production
would approximate
to
US$26.9 billion, while
the
PRC’s forecasted
IC
demand
is
expected
to
reach US$149 billion, indicating
a wide gap
between local
IC
supply
and
demand.
In
addition,
we
have
reviewed
the
feasibility report
in
relation
to
the
construction
plan
of
SMSC (the ‘‘Feasibility
Report’’).
The
Feasibility Report
was
prepared
by
a
consulting company
(the
‘‘Consultant’’),
which
is
based
in
the PRC
and
has
presence
in
over 30
major cities across
the
PRC.
The
Consultant
is
mainly
engaged
in
the
engineering consulting, engineering design
and main
contracting business,
and
is
involved
in
industries
such
as
electronic,
high-end
manufacturing
and
infrastructure.
We
noted
from the
Feasibility Report that,
the
14
nanometre technology could
be
applied
on
mainstream mobile platforms, automotive, Internet
of
Things
and
cloud computing, which
are
also
the fast
growing applications
as
stated
in
the
SEMI
Publication. Moreover, according
to
the
Feasibility Report,
the
16/14
nanometre
products’ market share
by
revenue
in
the
global pure play foundry market
is
expected
to
grow
from
approximately
6%
in
2016
to
22%
in
2019.
Having considered
the
above factors,
we
consider that
the
Capital
Contribution
allows
the
Group
to
develop
the
high-end
and fast
growing product stream, which
in
our
view,
–
20
–
LETTER FROM MESSIS CAPITAL
would bring
more
growth opportunities
to
the
Group
and
essential
to
maintain
the
Group’s competitiveness,
and the
entering into
the
Joint Venture Agreement
and the
Capital Contribution Agreement
is
fair and
reasonable
and
is in
the
interests
of the
Company
and the
Shareholders
as
a
whole.
Effect of the capital injection on the shareholding structure
Pursuant to the Joint Venture Agreement and the Capital Contribution Agreement, SMIC Holdings, China IC Fund and Shanghai IC Fund agreed to make cash contribution to the Registered Capital of SMSC in the amount of US$1.5435 billion, US$946.5 million and US$800 million, respectively.
Immediately prior
to the
completion
of the
Joint Venture Agreement
and
the
Capital Contribution Agreement,
SMSC
is an
indirect wholly-owned subsidiary
of
the
Company
and
is
owned
as to
approximately 26.2%
by SMIC
Holdings
and
73.8%
by
SMIC
Shanghai.
The
shareholding structure
of
SMSC immediately prior
to
the
completion
of
the
Joint Venture Agreement
and the
Capital Contribution Agreement
is
set out
below
for
illustration
purpose:
|
|
SMIC Holdings
|
|
SMIC Shanghai
|
|
|
|
26.20%
|
|
|
|
73.80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SMSC
|
|
|
(Registered capital: US$210 million)
Note:
SMIC Holdings and SMIC Shanghai are wholly-owned subsidiaries of the Company.
–
21
–
LETTER FROM MESSIS CAPITAL
Immediately after completion of the Joint Venture Agreement and the Capital Contribution Agreement, SMSC will be owned as to 45.67% by SMIC Holdings, 4.43% by SMIC Shanghai, 27.04% by China IC Fund and 22.86% by Shanghai IC Fund.
|
|
SMIC Holdings
|
|
SMIC Shanghai
|
|
|
China IC Fund
|
|
Shanghai IC Fund
|
|
|
|
|
45.67%
|
|
|
4.43%
|
|
|
27.04%
|
|
|
22.86%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SMSC
|
|
|
|
|
(Registered capital: US$3.5 billion)
Note:
SMIC Holdings and SMIC Shanghai are wholly-owned subsidiaries of the Company.
As demonstrated above, the equity interest of the Company through its wholly- owned subsidiaries in SMSC will be diluted from 100% to 50.1%.
Deemed Disposal
As
stated
in
the
Letter
from the
Board,
SMSC was
established
on 1
December 2016
and
according
to
the
unaudited accounts
of
SMSC,
as at
31
December 2017,
SMSC has
total assets
and
total equity
of
approximately US$209.0 million
and
US$202.8 million, respectively.
The net
loss
of
SMSC for the
year ended
31
December
2017
is
approximately US$115,240.
SMSC will
continue
to be a
subsidiary
of
the
Company following
the
Capital
Contribution.
We
have obtained
the
management accounts
of
SMSC and
noted
that the
assets were mainly inter-group receivables
and
cash with
no
fixed assets.
We
consider that
the
deemed disposal
is
merely incidental
to
the
Capital Contribution,
the
purpose
of
which
is
the
development
of SMSC
and
therefore,
is
fair and
reasonable
in so
far as the
Independent Shareholders
are
concerned.
Principal terms of the Joint Venture Agreement
Business Scope of SMSC
SMSC will be principally engaged in wafer manufacturing, wafer probing and bumping,
technology
development, design service, mask manufacturing, assembly and final testing of integrated circuits and sales of self-manufactured products.
Composition of the Board and the Supervisory Board of SMSC and General Management
The
board
of
directors
of
SMSC
will
comprise
five
directors. SMIC Holdings
and SMIC
Shanghai together
are
entitled
to
appoint three directors
in
total
and
each
of
China
IC
Fund
and Shanghai
IC
Fund
is
entitled
to
appoint
one
director.
SMIC
Holdings
and SMIC
Shanghai together
are
entitled
to
nominate
the
chairman
of the
board
of
directors
of
SMSC,
who
will
also
act
as
the
legal
representative
of
SMSC.
–
22
–
LETTER FROM MESSIS CAPITAL
The supervisory board of SMSC will comprise three members. China IC Fund will appoint one member who will also be the chairman of the supervisory board. Each of Shanghai IC Fund and the employees of SMSC will be entitled to appoint one member.
The Company will be responsible for managing the daily operations of SMSC. We consider such compositions reflect the shareholding of each investor in SMSC and are therefore, fair and reasonable.
Principal terms of the Capital Contribution Agreement
Subscription of Registered Capital
The
registered
capital
of
SMSC
will
be
increased
from
US$210
million
to
US$3.5
billion.
In
respect
of
the
increase
of
US$3.29
billion,
the
parties
have
agreed
that
SMIC
Holdings
will
contribute
the
amount
of
US$1.5435
billion
in
cash
while
China
IC
Fund
and
Shanghai
IC
Fund will contribute
the RMB
equivalent
of
US$946.5 million
and
US$800 million
in
cash
(calculated
at
the
middle exchange
rate of RMB
to
US$ as
announced
by
the
People’s
Bank
of
China
on
the date of the
contribution),
respectively.
As
stated
in
the
Letter
from the
Board,
the
consideration
of
the
Capital
Contribution
was
arrived
at
after arm’s length negotiation among
the
parties
with
reference
to
the net
asset value, future business prospects
and
development potential
of
SMSC.
The
assets
of
SMSC
are
mainly inter-group balances
and
cash,
and
hence
the
consideration
of
US$3.5 billion
are also
determined
with
reference
to
the
future
business prospects
and
development potential.
As
stated
in
the
Feasibility Report,
a
large investment amount totalling
up
to
approximately US$10.2 billion would
be
required, with over
95%
of
the
investment being
for the
procurement
and
installation
of
equipment.
As
discussed
with the
management
of
the
Company,
the
balance
of
the
investment amount required could
be
satisfied through SMSC’s internal cash
flow,
shareholders’ further contribution
to
the
registered capital
of
SMSC
or
debt
financing
and the
parties
to
the
Joint Venture Agreement
are not
legally bound
to
contributing
such difference between
the
total investment
and the
registered capital
of
SMSC.
Given
the
immense investment required,
we
consider
that such
contribution could speed
up
the
introduction
of
advanced manufacturing process
to
SMSC’s advanced wafer
fab
and
products while striking
a
balance between maintaining
a
majority interest
in
SMSC
and
minimising
the
capital
outlay
of
the
Group.
Financial effect of the Capital Contribution
Following completion
of the
transactions contemplated under
the
Joint Venture Agreement
and the
Capital Contribution Agreement, SMSC will continue
to
be
a subsidiary
of
the
Company.
As
such,
the
results
of
operations
and
financial position
of SMSC will
continue
to be
consolidated
in
the
Group’s financial statements. Therefore,
it is
expected that
the
Capital Contribution would
not
have material impact
to
the
financial performance
and
financial conditions
of the
Group.
–
23
–
LETTER FROM MESSIS CAPITAL
RECOMMENDATION
We consider the Capital Contribution and the deemed disposal to be a strategic corporate action of the Group, which is not in the usual and ordinary course of business of the Group. Notwithstanding the above, based on the information and representations provided and opinions given by the Board and having taken into account the above principal factors and reasons, we are of the view that the terms of the Joint Venture Agreement and the Capital
Contribution
Agreement and the transactions contemplated thereunder are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolutions in connection with the Joint Venture Agreement, the Capital Contribution Agreement and the transactions contemplated thereunder at the EGM.
|
|
|
|
|
Yours
faithfully,
For and on behalf of
Messis Capital Limited
Wallace Cheung
Director
|
|
Note:
|
Mr. Wallace Cheung is a licensed person registered with the Securities and Future Commission of Hong Kong and a responsible officer of Messis Capital Limited to carry out type 6 (advising on corporate finance) regulated activities under the SFO and has over 7 years of experience in the corporate finance industry.
|
–
24
–
|
APPENDIX I
|
GENERAL INFORMATION
|
RESPONSIBILITY STATEMENT
This circular,
for
which
the
Directors collectively
and
individually accept
full
responsibility, includes particulars given
in
compliance with
the
Listing Rules
for
the
purpose
of
giving information
with
regard
to the
Company.
The
Directors, having made
all
reasonable enquiries, confirm
that
to
the best
of
their knowledge
and
belief
the
information
contained
in
this circular
is
accurate
and
complete
in
all
material respects
and
not
misleading
or
deceptive,
and
there
are no
other matters
the
omission
of
which would
make
any
statement
herein
or
this
circular
misleading.
DISCLOSURE OF INTERESTS
|
(a)
|
Directors’ Interests in Securities of the Company
|
As at
the
Latest Practicable Date,
the
interests
or
short positions
of
the
Directors
and
the
chief executive officer
in
the
Shares, underlying Shares
and
debentures
of
the
Company
or
any
of
its
associated corporation (within
the
meaning
of
Part
XV
of the
SFO),
which
were
notified
to
the
Company
and the
Stock Exchange pursuant
to
Divisions
7
and
8
of
Part
XV
of the SFO
(including interests
or
short positions which they
are
taken
or
deemed
to
have under such provisions
of the
SFO),
and as
recorded
in
the
register required
to
be
kept under section
352 of the SFO
or as
otherwise notified
to
the
Company
and the
Stock
Exchange pursuant
to
the
Model Code
for
Securities Transactions
by
Directors
of
Listed
Issuers
were
as
follows:
|
|
|
|
|
|
|
|
|
|
Derivatives
|
|
|
|
|
Name of Director
|
|
Long/Short Position
|
|
Nature of Interests
|
Number of Ordinary Shares held
|
|
Share Options
|
|
Other
|
|
Total
Interests
|
|
Percentage of aggregate interests to total issued share capital of the Company
|
|
|
|
|
|
|
|
(Note 22)
|
|
(Note 22)
|
|
(Note 22)
|
|
(Note 22)
|
|
(Note 1)
|
|
|
Co-Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhao HaiJun
|
|
Long Position
|
|
Beneficial Owner
|
|
49,311
|
|
|
1,875,733
|
|
|
1,687,500
|
|
|
3,612,544
|
|
|
0.073
|
%
|
|
|
|
|
|
|
|
|
|
(Note 2)
|
|
(Note 3)
|
|
|
|
|
|
|
|
|
Liang Mong Song
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhou Zixue
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
|
2,521,163
|
|
|
1,080,498
|
|
|
3,601,661
|
|
|
0.073
|
%
|
|
|
|
|
|
|
|
|
|
(Note 4)
|
|
(Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gao Yonggang
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
|
1,964,003
|
|
|
85,505
|
|
|
2,049,508
|
|
|
0.042
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tzu-Yin Chiu
|
|
Long Position
|
|
Beneficial Owner
|
|
3,519,361
|
|
|
9,603,588
|
|
|
3,351,477
|
|
|
16,474,426
|
|
|
0.335
|
%
|
|
|
|
|
|
|
|
|
|
(Note 8)
|
|
(Note 9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chen Shanzhi
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
|
477,187
|
|
|
162,656
|
|
|
639,843
|
|
|
0.013
|
%
|
|
|
|
|
|
|
|
|
|
(Note 10)
|
|
(Note 11)
|
|
|
|
|
|
|
|
|
Zhou Jie
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Ren Kai
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Lu Jun
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Tong Guo Hua
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
|
187,500
|
|
|
187,500
|
|
|
375,000
|
|
0.008
|
%
|
|
|
|
|
|
|
|
|
|
(Note 12)
|
|
(Note 13)
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent Non-executive Directors
|
|
|
Lip-Bu Tan
|
|
Long Position
|
|
Beneficial Owner
|
|
115,439
|
|
|
591,426
|
|
|
62,500
|
|
|
769,365
|
|
|
0.016
|
%
|
|
William Tudor Brown
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Carmen I-Hua Chang
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
|
488,730
|
|
—
|
|
|
488,730
|
|
|
0.010
|
%
|
|
Shang-yi Chiang
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
|
187,500
|
|
|
187,500
|
|
|
375,000
|
|
|
0.008
|
%
|
|
Jason Jingsheng Cong
|
|
Long Position
|
|
Beneficial Owner
|
—
|
|
|
187,500
|
|
|
187,500
|
|
|
375,000
|
|
|
0.008
|
%
|
–
25
–
|
APPENDIX I
|
GENERAL INFORMATION
|
Notes:
|
|
(1)
|
Based on 4,917,796,161 Ordinary Shares in issue as at the Latest Practicable Date.
|
|
|
(2)
|
These options comprise: (a) options which were granted to Dr. Zhao on 11 June 2013 to purchase 1,505,854 Ordinary Shares at a price of HK$6.40 per Ordinary Share pursuant to the 2004 Stock Option Plan and will expire on the earlier of 10 June 2023 or 90 days after termination of his service, (b) options which were granted to Dr. Zhao on 7 September 2017 to purchase 1,687,500 Ordinary Shares at a price of HK$7.9 per Ordinary Share pursuant to the 2014 Stock Option Plan and will expire on the earlier of 6 September 2027 or 90 days after termination of his service as a Chief Executive Officer. As of the Latest Practicable Date, 1,317,621 of these options has been exercised.
|
|
|
(3)
|
On 7 September 2017, Dr. Zhao was granted an award of 1,687,500 Restricted Share Units (each representing the right to receive one Ordinary Share) pursuant to the 2014 Equity Incentive Plan. These RSUs will vest over one year commencing on the date on which Dr. Zhao commenced his term of office as chief executive officer. These RSUs are subject to the Independent Shareholders’ approval at the EGM. As of the Latest Practicable Date, none of these RSUs has been exercised.
|
|
|
(4)
|
On 20 May 2015, Dr. Zhou was granted options to purchase 2,521,163 Ordinary Shares at a price of HK$8.30 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options will expire on the earlier of 19 May 2025 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(5)
|
On 20 May 2015, Dr. Zhou was granted an award of 1,080,498 Restricted Share Units (each representing the right to receive one Ordinary Share) pursuant to the 2014 Equity Incentive Plan. These RSUs, 25% of which will vest on each anniversary of 6 March 2015, shall fully vest on 6 March 2019. As of the Latest Practicable Date, 540,249 Restricted Share Units were vested.
|
|
|
(6)
|
These options comprise: (a) options which were granted to Dr. Gao on 24 May 2010 to purchase 314,531 Ordinary Shares at a price of HK$6.4 per Ordinary Share pursuant to the 2004 Stock Option Plan and will expire on the earlier of 23 May 2020 or 120 days after termination of his service as a Director to the Board, (b) options which were granted to Dr. Gao on 17 June 2013 to purchase 1,360,824 Ordinary Shares at a price of HK$6.24 per Ordinary Share pursuant to the 2004 Stock Option Plan and will expire on the earlier of 16 June 2023 or 120 days after termination of his service as a Director to the Board, (c) options which were granted to Dr. Gao on 12 June 2014 to purchase 288,648 Ordinary Shares at a price of HK$6.4 per Ordinary Share pursuant to the 2014 Stock Option Plan and will expire on the earlier of 11 June 2024 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(7)
|
On 17 November 2014, Dr. Gao was granted an award of 291,083 Restricted Share Units pursuant to the 2014 Equity Incentive Plan, consisting of (a) 240,145 Restricted Share Units, 25% of which vest on each anniversary of 17 June 2013 and which shall fully vest on 17 June 2017; and (b) 50,938 Restricted Share Units, 25% of which vest on each anniversary of 1 March 2014 and which shall fully vest on 1 March 2018. As the Latest Practicable, a total of 205,578 Restricted Share Units were vested, and were settled in cash.
|
|
|
(8)
|
These options comprise: (a) On 8 September 2011, Dr. Chiu was granted options to purchase 8,698,753 Ordinary Shares at a price of HK$4.55 per Ordinary Share pursuant to the 2004 Stock Option Plan. These options will expire on the earlier of 7 September 2021 or 120 days after termination of his service as a Director to the Board. (b) On 25 May 2016, options to purchase 703,106 shares at a price of HK$6.42 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chiu. These options are vested immediately and will expire on the earlier of 24 May 2026 or 120 days after termination of his service as a Director to the Board. (c) On 12 September 2016, options to purchase 150,252 shares at a price of HK$8.72 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chiu. These options are vested immediately and will expire on the earlier of 11 September 2026 or 120 days after termination of his service as a Director to the Board. (d) On 5 April 2017, options to purchase 2,109,318 shares at a price of HK$9.834 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chiu. These options are vested immediately and will expire on the earlier of 4 April 2027 or 120 days after termination of his service as a Director to the Board. (e) On 22 May 2017, options to purchase 1,054,659 shares at a price of HK$8.48 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chiu. These options are vested on 30 June 2017 and will expire on the earlier of 29 June 2027 or 120 days after termination of his service as a Director to the Board. (f) On 7 September 2017, options to purchase 187,500 shares at a price of HK$7.9 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chiu. These options are vested on 24 June 2017 and will expire on the earlier of 23 June 2027 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, 3,300,000 of these options have been exercised.
|
–
26
–
|
APPENDIX I
|
GENERAL INFORMATION
|
|
|
(9)
|
These restricted share units comprise: (a) On 25 May 2016, 703,106 Restricted Share Units were granted to Dr. Chiu pursuant to the 2014 Equity Incentive Plan. Dr. Chiu’s Restricted Share Units are vested immediately. (b) On 12 September 2016, 150,252 Restricted Share Units were granted to Dr. Chiu pursuant to the 2014 Equity Incentive Plan. Dr. Chiu’s Restricted Share Units are vested immediately. (c) On 5 April 2017, 2,109,318 Restricted Share Units were granted to Dr. Chiu pursuant to the 2014 Equity Incentive Plan. Dr. Chiu’s Restricted Share Units are vested immediately. (d) On 22 May 2017, 1,054,659 Restricted Share Units were granted to Dr. Chiu pursuant to the 2014 Equity Incentive Plan. Dr. Chiu’s Restricted Share Units are vested on 30 June 2017 and subject to the Independent Shareholders’ approved at the EGM. (e) On 7 September 2017, 187,500 Restricted Share Units were granted to Dr. Chiu pursuant to the 2014 Equity Incentive Plan. These RSUs will vest over a period of three years at the rate of 33%, 33% and 34% on each anniversary of 24 June 2017, shall fully vest on 24 June 2020 and are subject to the Independent Shareholders’ approval at the EGM. As of the Latest Practicable Date, 853,358 Restricted Share Units were exercised.
|
|
|
(10)
|
These options comprise: (a) On 24 May 2010, Dr. Chen was granted options to purchase 314,531 Ordinary Shares at a price of HK$6.4 per Ordinary Share pursuant to the 2004 Stock Option Plan. These options will expire on the earlier of 23 May 2020 or 120 days after termination of his service as a Director to the Board. (b) On 25 May 2016, options to purchase 98,958 shares at a price of HK$6.42 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chen. These options are vested immediately and will expire on the earlier of 24 May 2026 or 120 days after termination of his service as a Director to the Board. (c) On 12 September 2016, options to purchase 1,198 shares at a price of HK$8.72 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chen. These options are vested immediately and will expire on the earlier of 11 September 2026 or 120 days after termination of his service as a Director to the Board. (d) On 5 April 2017, options to purchase 62,500 shares at a price of HK$9.834 per Ordinary Share pursuant to the 2014 Stock Option Plan were granted to Dr. Chen. These options are vested immediately and will expire on the earlier of 4 April 2027 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(11)
|
These restricted share units comprise: (a) On 25 May 2016, 98,958 Restricted Share Units were granted to Dr. Chen pursuant to the 2014 Equity Incentive Plan. Dr. Chen’s Restricted Share Units are vested immediately. (b) On 12 September 2016, 1,198 Restricted Share Units were granted to Dr. Chen pursuant to the 2014 Equity Incentive Plan. Dr. Chen’s Restricted Share Units are vested immediately. (c) On 5 April 2017, 62,500 Restricted Share Units were granted to Dr. Chen pursuant to the 2014 Equity Incentive Plan. Dr. Chen’s Restricted Share Units are vested immediately. As of the Latest Practicable Date, none of these RSUs has been exercised.
|
|
|
(12)
|
On 5 April 2017, Dr. Tong was granted options to purchase 187,500 Ordinary Shares at a price of HK$9.834 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options will expire on the earlier of 4 April 2027 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(13)
|
On 5 April 2017, Dr. Tong was granted an award of 187,500 Restricted Share Units (each representing the right to receive one Ordinary Share) pursuant to the 2014 Equity Incentive Plan. These RSUs, over a period of three years at the rate of 33%, 33% and 34% of which will vest on each anniversary of 14 February 2017, shall fully vest on 14 February 2020. As of the Latest Practicable Date, none of these RSUs has been exercised.
|
|
|
(14)
|
These options comprise: (a) options granted to Mr. Tan on 17 February 2009 to purchase 100,000 Ordinary Shares at a price of HK$2.7 per Ordinary Share pursuant to the 2004 Stock Option Plan, which will expire on the earlier of 16 February 2019 or 120 days after termination of Mr. Tan’ service as a Director to the Board, (b) options granted to Mr. Tan on 23 February 2010 to purchase 313,487 Ordinary Shares at a price of HK$7.7 per Ordinary Share pursuant to the 2004 Stock Option Plan, which will expire on the earlier of 22 February 2020 or 120 days after termination of Mr. Tan’s service as a Director to the Board, (c) options granted to Mr. Tan on 25 May 2016 to purchase 114,583 Shares at a price of HK$6.42 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options are vested immediately and will expire on the earlier of 24 May 2026 or 120 days after termination of his service as a Director to the Board, (d) options granted to Mr. Tan on 12 September 2016 to purchase 856 Shares at a price of HK$8.72 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options are vested immediately and will expire on the earlier of 11 September 2026 or 120 days after termination of his service as a Director to the Board, and (e) options granted to Mr. Tan on 5 April 2017 to purchase 62,500 shares at a price of HK$9.834 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options are vested immediately and will expire on the earlier of 4 April 2027 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(15)
|
These restricted share units comprise: (a) On 25 May 2016, 114,583 Restricted Share Units were granted to Mr. Tan pursuant to the 2014 Equity Incentive Plan. Mr. Tan’s Restricted Share Units are vested immediately. (b) On 12 September 2016, 856 Restricted Share Units were granted to Mr. Tan pursuant to the 2014 Equity Incentive Plan. Mr. Tan’s Restricted Share Units are vested immediately. (c) On 5 April 2017, 62,500 Restricted Share Units were granted to Mr. Tan pursuant to the 2014 Equity Incentive Plan. Mr. Tan’s Restricted Share Units are vested immediately. As of the Latest Practicable Date, 115,439 Restricted Share Units were exercised.
|
–
27
–
|
APPENDIX I
|
GENERAL INFORMATION
|
|
|
(16)
|
On 6 September 2013, Mr. Brown was granted options to purchase 449,229 Ordinary Shares at a price of HK$5.62 per Ordinary Share pursuant to the 2004 Stock Option Plan. These options will expire on the earlier of 5 September 2023 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, 449,229 of these options have been exercised.
|
|
|
(17)
|
On 17 November 2014, Ms. Chang was granted options to purchase 488,730 Ordinary Shares at a price of HK$8.5 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options will expire on the earlier of 16 November 2024 or 120 days after termination of her service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(18)
|
On 5 April 2017, Dr. Chiang was granted options to purchase 187,500 Ordinary Shares at a price of HK$9.834 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options will expire on the earlier of 4 April 2027 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(19)
|
On 5 April 2017, Dr. Chiang was granted an award of 187,500 Restricted Share Units (each representing the right to receive one Ordinary Share) pursuant to the 2014 Equity Incentive Plan. These RSUs, over a period of three years at the rate of 33%, 33% and 34% of which will vest on each anniversary of 20 December 2016, shall fully vest on 20 December 2019. As of the Latest Practicable Date, none of these RSUs has been exercised.
|
|
|
(20)
|
On 5 April 2017, Dr. Cong was granted options to purchase 187,500 Ordinary Shares at a price of HK$9.834 per Ordinary Share pursuant to the 2014 Stock Option Plan. These options will expire on the earlier of 4 April 2027 or 120 days after termination of his service as a Director to the Board. As of the Latest Practicable Date, none of these options has been exercised.
|
|
|
(21)
|
On 5 April 2017, Dr. Cong was granted an award of 187,500 Restricted Share Units (each representing the right to receive one Ordinary Share) pursuant to the 2014 Equity Incentive Plan. These RSUs, over a period of three years at the rate of 33%, 33% and 34% of which will vest on each anniversary of 14 February 2017, shall fully vest on 14 February 2020. As of the Latest Practicable Date, none of these RSUs has been exercised.
|
|
|
(22)
|
These interests have been adjusted upon the share consolidation on the basis of every ten Ordinary Shares of US$0.0004 each into one Ordinary Share of US$0.004 each taking effect from 7 December 2016.
|
|
(b)
|
Substantial
Shareholders
|
Save
as
disclosed below,
the
Directors
are not
aware that there
was any
party who,
as
at
the
Latest Practicable Date,
had an
interest
or
short position
in
the
Shares
and
underlying Shares
of
the
Company which would
fall
to
be
disclosed under Divisions 2
and
3
of
Part
XV of
the
SFO,
or
who was
directly
or
indirectly interested
in
10%
or
more
of
the
nominal value
of
any
class
of
share capital carrying rights
to
vote
in
all
circumstances
at
general meetings
of the
Company
and its
subsidiaries:
|
|
|
|
|
|
|
|
|
|
Derivatives
|
|
|
|
|
Name of Shareholder
|
|
Nature of interest
|
|
Long/Short Position
|
Number of Ordinary Shares held
|
|
Percentage of Ordinary Shares Held
to Total Issues Share
Capital of the Company
|
|
Derivatives
|
|
Total
Interests
|
|
Percentage
Total Interests to Total Issues
Share Capital of the Company
|
|
|
|
|
|
|
|
(Note 5)
|
|
(Note 5)
|
|
(Note 5)
|
|
(Note 5)
|
|
(Note 1)
|
|
|
Datang Telecom Technology & Industry Holdings Co., Ltd.
|
|
Interest of corporation controlled
|
|
Long
Position
|
|
797,996,122
(Note 2)
|
|
|
16.23%
|
|
|
—
|
|
|
797,996,122
|
|
|
16.23%
|
|
|
China Integrated Circuit Industry Investment Fund Co., Ltd.
|
|
Interest of corporation controlled
|
|
Long
Position
|
|
740,000,000
(Note 3)
|
|
15.05%
|
|
—
|
|
|
740,000,000
|
|
|
15.05%
|
|
Notes:
|
|
(1)
|
Based
on
4,917,796,161
Ordinary
Shares
in
issue
as
at
the
Latest
Practicable
Date.
|
|
|
(2)
|
All
such
Ordinary Shares
are held
by
Datang Holdings (Hongkong) Investment Company
Limited
which
is
a
wholly-owned
subsidiary
of
Datang
Telecom
Technology
&
Industry
Holdings
Co.,
Ltd.
|
–
28
–
|
APPENDIX I
|
GENERAL INFORMATION
|
|
|
(3)
|
All
such
Ordinary Shares
are held
by
Xinxin (Hongkong) Capital
Co., Ltd,
a
wholly-owned
subsidiary
of
China Integrated Circuit Industry Investment
Fund Co.,
Ltd.
|
MATERIAL CHANGES
As at
the
Latest Practicable Date,
the
Directors were
not
aware
of
any
material adverse changes
in
the
financial
and
trading position
of the
Group since
31
December 2016,
the
date
of
the
latest published audited accounts
of
the
Group.
LITIGATION AND CLAIMS
As at the Latest Practicable Date, the Directors were not aware of any litigation or claims of material importance pending or threatened against any member of the Group.
DIRECTORS’ INTEREST IN SERVICE CONTRACTS
None
of the
Directors
has
entered into a service contract
with any
member
of
the
Group (excluding contracts expiring
or
determinable within
one
year without payment
of
compensation (other
than
statutory
compensation)).
OTHER INTERESTS OF THE DIRECTORS
As at the Latest Practicable Date:
|
|
(a)
|
none
of the
Directors
had any
direct
or
indirect interest
in
any
assets which have been, since
31
December 2016,
the
date
of
the latest published audited accounts
of the
Company, acquired
or
disposed
of
by or
leased
to
any
member
of
the
Group,
or
are
proposed
to
be
acquired
or
disposed
of
by or
leased
to
any
member
of the
Group;
|
|
|
(b)
|
save for the
fact that
Dr.
Chen Shanzhi,
a
non-executive Director,
is
currently
the
senior vice president
of
Datang Telecom Technology
&
Industry Holdings Co., Ltd.,
a
substantial shareholder
of
the
Company
and Dr.
Tong
Guo Hua,
a
non-
executive Director
of
the
Company,
is
currently
the
president
and
an
executive
director
of
Datang Telecom Technology
&
Industry Holdings
Co.,
Ltd.,
a
substantial shareholder
of
the
Company, none
of
the
Directors
was
a
director
or
employee
of
a
company which
had
an
interest
or
short position
in
the
Shares
or
underlying Shares which would fall
to
be
disclosed
to
the
Company
and the
Stock
Exchange
under
provisions
of
Divisions
2
and
3
of
Part
XV
of
the
SFO;
|
|
|
(c)
|
none
of
the
Directors
was
materially interested
in
any
contract
or
arrangement entered
into
by
any
member
of
the
Group
which
is
subsisting
as
at
the
date
of
this
circular
and
which
is
significant
in
relation
to
the
business
of
the
Group;
and
|
|
|
(d)
|
none
of
the
Directors
and
their associates
had any
competing interest,
in
a
business which competes
or
is
likely
to
compete either directly
or
indirectly,
with
the
business
of
the
Group.
|
–
29
–
|
APPENDIX I
|
GENERAL INFORMATION
|
EXPERT AND CONSENT
The
following
is
the
qualification
of the
Independent Financial Adviser which
has
given opinions
or
advice contained
in
this
circular:
|
Name
|
Qualification
|
|
|
|
|
Messis
Capital
|
A
licensed corporation
to
carry
out type
1
(dealing
in
securities) and type 6 (advising on corporate finance) regulated activities under the SFO
|
Messis Capital
has
given
and has not
withdrawn
its
written consent
to
the
issue
of
this
circular
with the
inclusion
of
its
statements, letter, report
and
opinion
(as the case may
be)
as
set out
in
this circular
and
references
to its name
in
the
form
and
context
in
which they
are
included.
As at the Latest Practicable Date, Messis Capital was not beneficially interested in the share capital of any member of the Group and did not have any right, whether legally enforceable or not, to subscribe for or nominate persons to subscribe for securities of any member of the Group.
As at the Latest Practicable Date, Messis Capital did not have any direct or indirect interest in any assets which have been, since 31 December 2016, the date of the latest published audited accounts of the Company, acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.
The letter from Messis Capital dated 6 March 2018 is set out on pages 16 to 24 for incorporation herein.
MISCELLANEOUS
The Company has two joint company secretaries, Dr. Gao Yonggang and Dr. Liu Wei.
Dr. Gao graduated from Nankai University with a PhD in management. He is the chief financial officer of the Company. Dr. Gao is also a Fellow of the Institute of Chartered Accountants in Australia, and a Founding Member and director of The Hong Kong Independent Non-Executive Director Association.
Dr. Liu
graduated from
the
Northwest University
of
China,
the
Chinese University
of
Political Science
and Law and the
University
of
Cambridge with
a
bachelor
in
Chinese literature,
a
master degree
in
law and a PhD
in
law
respectively.
Dr. Liu has PRC
lawyer qualification
and
is
a
solicitor qualified
to
practice
law
in
Hong Kong and
England
and Wales.
The registered office of the Company is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and the head office of the Company is 18 Zhangjiang Road, PuDong New Area, Shanghai 201203, People’s Republic of China.
–
30
–
|
APPENDIX I
|
GENERAL INFORMATION
|
This circular
has
been prepared
in
both
English
and
Chinese.
In
the
case
of
inconsistency,
the
English
text
of
this
circular
shall
prevail
over
the
Chinese
text.
DOCUMENTS AVAILABLE
FOR
INSPECTION
Copies of the following documents will be available for inspection at Suite 3003, 30th Floor, 9 Queen’s Road Central, Hong Kong during normal business hours on any weekday, excluding public holidays, from 8 March 2018 to 27 March 2018 (both days inclusive):
|
|
(a)
|
the
memorandum
and
articles
of
association
of
the
Company;
|
|
|
(b)
|
the
Joint Venture
Agreement;
|
|
|
(c)
|
the
Capital Contribution
Agreement;
|
|
|
(d)
|
the
letter
from the
Independent Board Committee,
the
text
of
which
is set out
in
this
circular;
|
|
|
(e)
|
the
letter
of
advice from Messis Capital
to
the
Independent Board Committee
and
the
Independent
Shareholders,
the
text
of
which
is
set
out
in
this
circular;
|
|
|
(f)
|
the
written
consent
of
Messis
Capital
referred
to
in
this
appendix;
and
|
–
31
–
NOTICE OF EXTRAORDINARY GENERAL MEETING
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)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE
IS
HEREBY GIVEN
THAT
an
extraordinary general meeting (‘‘EGM’’)
of
Semiconductor Manufacturing International Corporation
(the
‘‘Company’’) will
be
held
at
18
Zhangjiang Road, PuDong
New
Area, Shanghai, People’s Republic
of
China
on 27
March 2018
at
9 :
00 a.m. for the
purpose
of
transacting
the
following businesses:
ORDINARY RESOLUTION
To consider and, if thought fit, to pass with or without modification the following ordinary resolution:
|
|
(a)
|
the
joint venture agreement dated
30
January 2018 (the
‘‘Joint
Venture
Agreement’’)
entered
into
among
SMIC
Holdings Corporation
(‘‘SMIC
Holdings’’),
Semiconductor Manufacturing International (Shanghai) Corporation
(‘‘SMIC
Shanghai’’),
China Integrated Circuit
Industry
Investment
Fund Co., Ltd.
(‘‘China IC
Fund’’)
and
Shanghai
Integrated
Circuit Industry Investment Fund
Co.,
Ltd.
(‘‘Shanghai
IC
Fund’’)
in
relation
to
the
proposed capital contribution (the
‘‘Capital
Contribution’’)
to
the
registered capital
of
Semiconductor Manufacturing South
China
Corporation
(‘‘SMSC’’), a
copy
of the
Joint Venture Agreement
having
been
produced
to
the EGM
marked
‘‘A’’
and
signed
by
the
chairman
of
the EGM for
identification purpose,
and the
transactions
contemplated
thereunder
be
and
are
hereby
approved,
confirmed
and
ratified;
|
|
|
(b)
|
the
capital contribution agreement
(the
‘‘Capital
Contribution
Agreement’’)
dated
30
January
2018
entered
into
among
SMIC
Holdings,
SMIC
Shanghai,
China
IC
Fund
and
Shanghai
IC
Fund
in
relation
to
the
Capital Contribution,
a
copy
of
the
Capital Contribution Agreement having
been
produced
to the EGM
marked
‘‘B’’
and
signed
by
the
chairman
of
the EGM for
identification purpose,
and the
transactions contemplated thereunder
be and
are
hereby
approved,
confirmed
and
ratified;
and
|
|
*
|
For
identification
purpose
only
|
–
32
–
NOTICE OF EXTRAORDINARY GENERAL MEETING
|
|
(c)
|
any
director(s)
of the
Company
be
and
is/are hereby authorised,
for and
on
behalf
of the
Company,
to
enter into
any
agreement, deed
or
instrument and/
or
to
execute
and
deliver
all
such documents and/or
do
all
such acts
on
behalf
of the
Company
as
he/she
may
consider necessary, desirable
or
expedient
for the
purpose
of,
or in
connection with
(i) the
implementations
and
completion
of the
Joint Venture Agreement,
the
Capital Contribution Agreement
and
transactions contemplated thereunder; and/or
(ii) any
amendment,
variation
or
modification
of
the
Joint Venture Agreement,
the
Capital
Contribution
Agreement
and the
transactions contemplated thereunder upon such
terms
and
conditions
as
the
board
of
directors
of
the
Company
may
think
fit.’’
|
|
|
|
|
|
By Order of the Board
Semiconductor Manufacturing International Corporation Gao Yonggang
Executive Director, Chief Financial Officer and Joint Company Secretary
|
Shanghai, 6 March 2018
Principal place of business:
18 Zhangjiang Road PuDong New Area Shanghai 201203
People’s Republic of China
Registered office:
PO Box 309, Ugland House Grand Cayman, KY1-1104 Cayman Islands
As
at the date
of
this
notice,
the
Board comprises
four
executive Directors, namely
Dr. Zhou
Zixue (Chairman),
Dr.
Zhao HaiJun (Co-Chief Executive Officer),
Dr.
Liang
Mong
Song (Co-Chief Executive Officer)
and Dr. Gao
Yonggang (Chief Financial Officer
and
Joint Company Secretary);
six
non-executive Directors, namely
Dr.
Tzu-Yin Chiu
(Vice
Chairman),
Dr.
Chen Shanzhi,
Mr. Zhou
Jie,
Mr. Ren
Kai,
Mr.
Lu
Jun and Dr.
Tong
Guohua;
and
five independent non-executive Directors, namely
Mr.
Lip-Bu Tan,
Mr.
William
Tudor Brown,
Ms.
Carmen I-Hua Chang,
Dr.
Shang-yi Chiang
and Dr.
Jason
Jingsheng
Cong.
Notes:
|
1.
|
A
member entitled
to
attend
and
vote
at
the EGM
convened
by
the
above notice
is
entitled
to
appoint
a
proxy
or,
if
such
member
is
a
holder
of
more than
one
share, more than
one
proxy
to
attend
and
vote instead
of
such member. Where
a
member appoints
more than one
proxy
the
instrument
of
proxy shall state which proxy
is
entitled
to
vote
on
a
poll.
A
proxy
need
not
be
a
member
of
the
Company.
|
–
33
–
NOTICE OF EXTRAORDINARY GENERAL MEETING
|
2.
|
To
be
valid,
a
form
of
proxy
must
be
delivered
to
the
Company’s branch
share
registrar, Computershare
Hong Kong
Investor Services Limited,
at
17M
Floor, Hopewell Centre,
183
Queen’s Road East, Wanchai, Hong Kong,
not less than
48
hours before
the
meeting
or
adjourned meeting
(or 24
hours before
a
poll
is
taken,
if
the
poll
is
not
taken
on the same day
as
the
meeting
or
adjourned meeting).
If
a
form
of
proxy
is
signed under
a
power
of
attorney,
the
power
of
attorney
or
other
authority
relied
on
to
sign
it
(or
an
office copy)
must
be
delivered
to the
Company’s branch share registrar
with the form
of
proxy, except
that the
power
of
attorney which
has
already
been registered with
the
Company need
not
be so
delivered. Completion
and
return
of
a
form
of
proxy
will not
preclude
a
member from attending
in
person
and
voting
at the EGM
or
any
adjournment
thereof
should
he
so
wish.
|
|
3.
|
The
register
of
members
of the
Company
will
be
closed from Thursday,
22
March 2018
to
Tuesday,
27
March 2018, both days inclusive, during which period
no
transfer
of
shares
in
the
Company
(‘‘Shares’’)
will
be
registered.
In
order
to be
eligible
to
attend
and
vote
at
the EGM, all
properly completed transfer forms accompanied
by
the
relevant share certificates must
be
lodged with
the
branch share registrar
of
the
Company, Computershare
Hong Kong
Investor Services Limited,
at
Shops 1712–1716, 17th Floor, Hopewell Centre,
183
Queen’s Road East, Wanchai, Hong Kong
by
no
later
than
4 :
30
p.m.
on
Wednesday,
21
March 2018.
All
persons
who are
registered
holders
of
the
Shares
on 27
March 2018,
the
record date
of
the EGM,
will
be
entitled
to
attend
and
vote
at
the
EGM.
|
|
4.
|
Shareholders
are
advised
to
read
the
circular
of
the
Company dated
6
March
2018
which contains information concerning
the
resolutions
to be
proposed
at
the
EGM.
|
|
5.
|
The
voting
at
the
meeting
will
be
taken
by
a
poll.
|
–
34
–
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)
FORM
OF
PROXY
FOR USE
AT
THE
EXTRAORDINARY
GENERAL MEETING
TO BE
HELD
ON 27
MARCH
2018
I/We
(Note 1)
of
being the registered holder(s) of
(Note
2
)
shares, par value of US$0.004 each, in the share capital of SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION (the ‘‘Company’’), HEREBY APPOINT THE CHAIRMAN OF THE MEETING or
(Notes
3
to
5,
inclusive)
of
to act as my/our proxy to attend and vote for me/us at the Extraordinary General Meeting of the Company to be held at 18 Zhangjiang Road, Pu Dong New Area, Shanghai, People’s Republic of China on Tuesday, 27 March 2018 at 9 : 00 a.m. and at any adjournment thereof (and to exercise all rights conferred on proxies under law, regulation and the articles of association of the Company)
(Note
6)
.
I/We wish my/our proxy to vote as indicated below in respect of the resolution (with or without amendments) to be proposed at the meeting. Please indicate how you wish your vote(s) to be cast on a poll by ticking the appropriate box next to the resolution
(Note
7)
.
|
ORDINARY RESOLUTION
|
FOR
|
AGAINST
|
|
1
|
(a)
|
To approve, confirm and ratify the joint venture agreement dated 30 January 2018 (the ‘‘Joint Venture Agreement’’) entered into among SMIC Holdings Corporation (‘‘SMIC Holdings’’), Semiconductor Manufacturing International (Shanghai) Corporation (‘‘SMIC Shanghai’’), China Integrated Circuit Industry Investment Fund Co., Ltd. (‘‘China IC Fund’’) and Shanghai Integrated Circuit Industry Investment Fund Co., Ltd. (‘‘Shanghai IC Fund’’) in relation to the proposed capital contribution (the ‘‘Capital Contribution’’) to the registered capital of Semiconductor Manufacturing South China Corporation (‘‘SMSC’’) and the transactions contemplated thereunder;
|
|
|
|
|
(b)
|
To approve, confirm and ratify the capital contribution agreement (the ‘‘Capital Contribution Agreement’’) dated 30 January 2018 entered into among SMIC Holdings, SMIC Shanghai, China IC Fund and Shanghai IC Fund in relation to the Capital Contribution and the transactions contemplated thereunder;
|
|
|
|
|
(c)
|
To authorise any director of the Company, for and on behalf of the Company, to enter into any agreement, deed or instrument and/or to execute and deliver all such documents and/or do all such acts on behalf of the Company as he/she may consider necessary, desirable or expedient for the purpose of, or in connection with (i) the implementations and completion of the Joint Venture Agreement, the Capital Contribution Agreement and transactions contemplated thereunder; and/or (ii) any amendment, variation or modification of the Joint Venture Agreement, the Capital Contribution Agreement and the transactions contemplated thereunder upon such terms and conditions as the board of directors of the Company may think fit.
|
|
|
The full text of the resolution is set out in the Notice of Extraordinary General Meeting of the Company dated 6 March 2018.
|
Dated
this
day
of
,
2018
|
Shareholder’s
signature
(Note
8)
|
Notes:
|
1.
|
Full
name(s)
and
address(es)
to
be
inserted
in
BLOCK
CAPITALS.
The
names
of
all
joint
holders
should
be
stated.
|
|
2.
|
Please insert the number of shares registered in your name(s). If no number is inserted, this form of proxy will be deemed to relate to all the shares in the share capital
of
the
Company
registered
in
your
name(s).
|
|
3.
|
Please insert the name and address in BLOCK CAPITALS of the proxy desired. IF NO NAME IS INSERTED, THE CHAIRMAN OF THE MEETING WILL ACT AS YOUR
PROXY.
|
|
4.
|
If you are a shareholder who is
entitled
to attend and vote at the meeting, you are entitled to appoint a proxy or, if you are holding more than one share, proxies to
attend
instead
of
you
and
to
vote
on
your
behalf
on
a
poll.
|
|
5.
|
As a matter of law, you have the right to appoint separate proxies to represent respectively such number of the shares you hold as you may specify in this form of
proxy.
You
are
entitled
to
appoint
proxies
of
your
own
choice.
|
|
6.
|
The
person
appointed
as
proxy
may
exercise
all
the
rights
conferred
on
proxies
under
law,
regulation
or
the
articles
of
association
of
the
Company.
|
|
7.
|
IMPORTANT: IF YOU WISH TO VOTE FOR THE RESOLUTION, TICK THE BOX MARKED ‘‘FOR’’ BESIDE THE RESOLUTION. IF YOU WISH TO VOTE AGAINST THE RESOLUTION, TICK THE BOX MARKED ‘‘AGAINST’’ BESIDE THE RESOLUTION. Failure to complete any or all boxes will entitle your proxy to cast his votes on the resolution at his discretion. Your proxy will also be entitled to vote or abstain from voting at his
discretion
on other business
(including
amendments
to
the
resolution
which
may
be
properly
put
to
the
meeting).
|
|
8.
|
The instrument
appointing
a proxy shall be in writing and shall be
executed
under the hand of the
appointor
or of his attorney duly authorized in
writing,
or, if the
appointor
is
a
corporation
under
the
hand
of
an
officer
or
attorney
duly
authorized
on
its
behalf.
|
|
9.
|
Where there are joint registered holders of any share, any one of such person may sign this form of proxy and vote at any meeting, either
personally
or
by
proxy, in respect of such shares as if he were solely entitled thereto. The vote of the senior joint registered holder who tenders a vote, whether in person or by
proxy,
will be accepted to the
exclusion
of the votes of the other joint registered holders and for this purpose
seniority
will be determined by the order in
which the
names
stand
in
the
register
of
members
in
respect
of
the
joint
shareholding.
|
|
10.
|
To be valid, this form of proxy must be completed and deposited at the Company’s Hong Kong share registrar, Computershare Hong Kong Investor
Services
Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time for
holding
the meeting or
any
adjourned meeting
thereof.
|
|
11.
|
Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any
adjourned
meeting if you so wish and in such event,
the
form
of
proxy
will
be
deemed
to
be
so
revoked.
|
|
12.
|
The
proxy
need
not
be
a
member
of
the
Company
but
must
attend
the
meeting
in
person
to
represent
you.
|
|
13.
|
ANY
ALTERATION
MADE
IN
THIS
FORM
OF
PROXY
MUST
BE
INITIALLED
BY
THE
PERSON
WHO
SIGNS
IT.
|
|
*
|
for identification purpose
only
|
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