Singamas Container Announces Disposal Of Qidong Singamas, Qingdao Pacific, Among Others

The Board announces that on 6 May 2019, the Company, as the vendor, the Purchaser and the Target Companies, entered into the Agreement, pursuant to which, the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Interests at a consideration of RMB 3,800 million in cash (subject to adjustments).

IMPLICATIONS UNDER THE LISTING RULES
As one or more of the relevant applicable percentage ratios set forth under Rule 14.07 of the Listing Rules in respect of the Disposal are 75% or more, the Disposal constitutes a very substantial disposal for the Company and is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules. The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Disposal, the Agreement and the transactions contemplated thereunder. A circular containing, among other things, further information relating to the Disposal and the notice convening the EGM and other information as required under the Listing Rules is expected to be despatched to the Shareholders on or before 30 June 2019, as the Company expects that it will require more time to collate the financial information to be included in the circular.

Closing of the Disposal is conditional upon the satisfaction (or, where applicable, waiver) of, among other things, the conditions set out in the section headed ‘‘Conditions Precedent’’ in this announcement, including the approval of the Agreement and the transactions contemplated thereunder by the Shareholders at the EGM and the Agreement not having been terminated. Accordingly, the Disposal may or may not proceed as contemplated or at all. Shareholders and potential investors are therefore advised to exercise caution when dealing in the securities of the Company.

THE DISPOSAL
The Board announces that on 6 May 2019, the Company, as the vendor, the Purchaser and the Target Companies, have entered into the Agreement, pursuant to which, the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Interests.

(a) Asset to be disposed of

As at the date of this announcement, the Company directly or indirectly owns the Sale Interests, being 100% of the equity interest in each of the Target Companies. Pursuant to the Agreement, the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Interests at the Consideration. The Target Companies are engaged in the businesses including manufacturing of dry freight, specialised and refrigerated containers, provision of terminal services and provision of technical and development services of container manufacturing in the PRC.

(b) Consideration, payment terms and adjustments

Consideration
The Consideration as agreed between the Company and the Purchaser shall be RMB 3,800 million (equivalent to approximately US$565 million) in cash (subject to adjustments as set out in the Agreement, as described in the paragraph headed “Adjustments” below). The Consideration was determined after arm’s length negotiations between the Company and the Purchaser after taking into account the net asset value of the Target Companies, the business development and prospects of the Target Companies in the medium to long term and the reasons for and benefit of the Disposal as described below. In determining the basis of the Consideration, the Company has considered other valuation methodologies such as the income approach. However, given (i) the Group’s past cyclical financial performance; (ii) the industry is subject to seasonal factors; and (iii) the Group’s business is an asset intensive business, the Company considers the net asset value method a fairer and more reasonable approach in determining the Consideration. The Directors consider that the Consideration is fair and reasonable and in the interest of the Company and its Shareholders as a whole.
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Source: Singamas