Zhejiang Expressway Connected Transaction - LED Lights Retrofit Agreement
April 17 2018 - 8:18AM
UK Regulatory
TIDMZHEH
Hong Kong Stock Exchanges and Clearing Limited and The Stock Exchange of Hong
Kong Limited take no responsibility for the contents of this announcement, make
no representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this announcement.
ZHEJIANG EXPRESSWAY CO., LTD.
(A joint stock limited company incorporated in the People's Republic of China
with limited liability)
(Stock code: 0576)
CONNECTED TRANSACTION
LED LIGHTS RETROFIT AGREEMENT
THE LED LIGHTS RETROFIT AGREEMENT
On April 17, 2018, Jinhua Co, a wholly-owned subsidiary of the Company, entered
into the LED Lights Retrofit Agreement with Zhejiang Information, a
wholly-owned subsidiary of the controlling shareholder of the Company, pursuant
to which the Company agreed to purchase LED lights retrofit services from
Zhejiang Information.
LISTING RULES IMPLICATIONS
As at the date of this announcement, Communications Group is a controlling
shareholder of the Company. Zhejiang Information is a wholly-owned subsidiary
of Communications Group. Therefore, Zhejiang Information is a connected person
of the Company and as a result, the transaction under the LED Lights Retrofit
Agreement constitutes connected transaction for the Company under Chapter 14A
of the Listing Rules.
Pursuant to Rules 14A.81 and 14A.82 of the Listing Rules, as the transactions
contemplated under the LED Lights Retrofit Agreement and the Previous
Transactions were entered into with parties who are connected with one another
and within a 12-month period, the LED Lights Retrofit Agreement and the
Previous Transactions are required to be aggregated for the calculation of the
relevant percentage ratios to determine the classification of the transactions.
As the applicable percentage ratios in respect of the transactions contemplated
under the LED Lights Retrofit Agreement, after aggregating the Previous
Transactions, are more than 0.1% but less than 5%, the LED Lights Retrofit
Agreement will be subject to the reporting, announcement and annual review
requirements but exempt from the independent Shareholders' approval requirement
under Chapter 14A of the Listing Rules.
THE LED LIGHTS RETROFIT AGREEMENT
On April 17, 2018, Jinhua Co, a wholly-owned subsidiary of the Company, entered
into the LED Lights Retrofit Agreement with Zhejiang Information, a
wholly-owned subsidiary of the controlling shareholder of the Company, pursuant
to which the Company agreed to purchase LED lights retrofit services from
Zhejiang Information.
Principal terms of the LED Lights Retrofit Agreement are set out below:
Date: April 17, 2018
Parties: (1) Jinhua Co, as the contract letting party;
and
(2) Zhejiang Information, as the contractor
Term: 60 days since April 17, 2018
Consideration: RMB6,935,280
Basis of consideration: The consideration has been determined by public
tender procedures which are open to other
independent third party service providers. The
factors for assessment include, but are not limited
to, the tender prices, relevant experience in
construction design, company reputation and quality
of work and technological solutions. According to
the evaluation of the assessment committee,
Zhejiang Information successfully obtained the
highest overall score among all the bidders.
Payment: The consideration is paid in four installments: (i)
20% to be paid within 15 working days after signing
of the LED Lights Retrofit Agreement; (ii) 60% to
be paid after acceptance of delivery and
examination; (iii) 10% to be paid after the expiry
of defect liability period; and (iv) 10% to be paid
after the expiry of warranty period.
Scope of services: LED lights retrofit of Yankengjian Tunnel of Jinhua
section of Ningbo-Jinhua Expressway, which
includes, but not limited to, the procurement,
installation and testing of the LED lights and
ancillary facilities.
Governing law: PRC law
REASONS FOR AND BENEFITS OF THE TRANSACTION
Well-functioning lighting facilities are necessary for the safe operation of
expressways, especially for tunnels. LED lights characterized by stable and
energy efficient are regarded as ideal lighting facilities of tunnels. Zhejiang
Information has the relevant qualifications and expertise to provide LED lights
retrofit services to Jinhua Co. In addition, Jinhua Co has gone through the
public tender process in accordance with which Zhejiang Information
successfully obtained the highest overall score among all the bidders.
Given the above, the Directors (including the independent non-executive
Directors) are of the view that the terms of the LED Lights Retrofit Agreement
are on normal commercial terms, in the ordinary and usual course of business of
the Company and are fair and reasonable and in the interests of the Company and
the Shareholders as a whole.
LISTING RULES IMPLICATIONS
As at the date of this announcement, Communications Group is a controlling
shareholder of the Company. Zhejiang Information is a wholly-owned subsidiary
of Communications Group. Therefore, Zhejiang Information is a connected person
of the Company and as a result, the transaction under the LED Lights Retrofit
Agreement constitutes connected transaction for the Company under Chapter 14A
of the Listing Rules.
Pursuant to Rules 14A.81 and 14A.82 of the Listing Rules, as the transactions
contemplated under the LED Lights Retrofit Agreement and the Previous
Transactions were entered into with parties who are connected with one another
and within a 12-month period, the LED Lights Retrofit Agreement and the
Previous Transactions are required to be aggregated for the calculation of the
relevant percentage ratios to determine the classification of the transactions.
As the applicable percentage ratios in respect of the transactions contemplated
under the LED Lights Retrofit Agreement, after aggregating the Previous
Transactions, are more than 0.1% but less than 5%, the LED Lights Retrofit
Agreement will be subject to the reporting, announcement and annual review
requirements but exempt from the independent Shareholders' approval requirement
under Chapter 14A of the Listing Rules.
None of the Directors have a material interest in the transaction contemplated
under the LED Lights Retrofit Agreement and none are required to abstain from
voting on the relevant Board resolutions.
INFORMATION ON THE PARTIES
Jinhua Co is a directly wholly-owned subsidiary of the Company which was
incorporated under the laws of the PRC with limited liability on September 30,
2003. Jinhua Co is principally engaged in the construction, management,
operation and maintenance of Jinhua section of Ningbo-Jinhua Expressway and
ancillary services.
Zhejiang Information is a wholly-owned subsidiary of Communications Group which
was incorporated under the laws of the PRC with limited liability on July 22,
2004. Zhejiang Information is principally engaged in the business of
electromechanical system integration, intelligent transportation software and
hardware research and development, and big data analysis operations within the
highway sector.
DEFINITIONS
In this announcement, unless the context specifies otherwise, the following
defined expressions have the following meanings:
"associate" has the meaning ascribed to it under the
Listing Rules
"Board" the board of Directors
"Communications Group" Zhejiang Communications Investment Group Co.,
Ltd.*, a wholly
state-owned enterprise established in the PRC,
and the
controlling shareholder of the Company
"Company" Zhejiang Expressway Co., Ltd., a joint s tock
l imited company
incorporated in the PRC with limited liability
"connected person" has the meaning ascribed to it under the
Listing Rules
"controlling shareholder" has the meaning ascribed to it under the
Listing Rules
"Director(s)" the directors of the Company
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of
the
PRC
"Jinhua Co" Zhejiang Jinhua Yongjin Expressway Co., Ltd.*,
a directly wholly-owned subsidiary of the
Company
"LED" light-emitting diode
"LED Lights Retrofit Agreement" the LED lights retrofit agreement dated April
17, 2018
entered into between Jinhua Co and Zhejiang
Information, pursuant to which the Company
agreed to
purchase LED lights retrofit services from
Zhejiang
Information
"Listing Rules" Rules Governing the Listing of Securities
on The
Stock Exchange of Hong Kong Limited
"percentage ratio" has the meaning ascribed to it under Rule
14.04(9) of
the Listing Rules
"PRC" the People's Republic of China (for the
purpose of this
announcement, excludes Hong Kong, Macau and
Taiwan)
"Previous Transactions" the agreements entered into within a 12-month
period
prior to the date of the LED Lights Retrofit
Agreement
between or among the Group and Communications
Group's associates in relation to highway
operations
and maintenance services. For details, please
refer to
the announcements issued by the Company dated
December 22, 2017 and January 4, 2018
respectively.
"RMB" Renminbi, the lawful currency of the PRC
"Shareholder(s)" holder(s) of the share(s) of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"subsidiary(ies)" has the meaning ascribed to it under the
Listing Rules
"%" per cent.
"Zhejiang Information" Zhejiang Expressway Information Engineering
Technology Co., Ltd, a company incorporated in
the PRC and a
wholly-owned subsidiary of Communications
Group
* English names for reference only
On behalf of the Board
ZHEJIANG EXPRESSWAY CO., LTD.
YU Zhihong
Chairman
Hangzhou, the PRC, April 17, 2018
As at the date of this announcement, the Chairman of the Company is Mr.
Yu Zhihong; the executive Directors of the Company are: Mr. CHENG Tao and
Ms. LUO Jianhu; the other non-executive Directors of the Company are: Mr.
DAI Benmeng, Mr. YU Qunli and Mr. YU Ji; and the independent non-executive
Directors of the Company are: Mr. PEI Ker-Wei, Ms. LEE Wai Tsang, Rosa and
Mr. CHEN Bin.
END
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April 17, 2018 08:18 ET (12:18 GMT)
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