Brilliance China Automotive Holdings Limited Announcement
HONG KONG, Oct. 19, 2004 /Xinhua-PRNewswire-FirstCall/ -- The following was released today by Brilliance China Automotive Holdings Limited :
Brilliance China Automotive Holdings Limited
(Incorporated in Bermuda with limited liability)
(Stock Code: 1114)
Connected Transaction
Acquisition of Further Interest in a Subsidiary
On 19th October, 2004, Beston, a wholly owned subsidiary of the Company, entered into the Share Transfer Agreement with Madam Chen in relation to the acquisition of a 49% interest in Ningbo Yuming from Madam Chen for a consideration of RMB10 million (equivalent to approximately HK$9.4 million).
Madam Chen, being the holder of a 49% interest in Ningbo Yuming, a subsidiary of the Company, is a connected person of the Company within the meaning of the Listing Rules.
Accordingly, the Share Transfer Agreement and the Transfer contemplated therein constitutes a connected transaction for the Company under Rule 14A.32 of the Listing Rules and is subject to the reporting and announcement requirements in Chapter 14A of the Listing Rules.
The Share Transfer Agreement
The following is a summary of the principal terms of the Share Transfer Agreement:
Date: 19th October, 2004
Parties: (1) Madam Chen, a connected person of the Company within
the meaning of the Listing Rules, as the seller; and
(2)Beston, a wholly owned subsidiary of the Company, as
the purchaser.
Subject
matter: 49% interest in Ningbo Yuming.
Consideration: The consideration for the acquisition of the 49% interest
in Ningbo Yuming is RMB10 million (equivalent to
approximately HK$9.4 million). The consideration was
determined after arm's length negotiations by reference to
the unaudited net asset value of Ningbo Yuming in the
amount of RMB34,329,200 as at 31st August, 2004
(equivalent to approximately HK$32.4 million) taking into
account that the 49% interest represented a minority stake
in Ningbo Yuming, a company controlled by the Company.
The consideration will be paid by Beston to Madam Chen in
one lump sum on or before 30th November, 2004 provided
that in the event the Transfer is not approved by the
relevant authorities within 15 days of the payment, Madam
Chen shall repay the consideration to Beston without
interest within 7 days upon receipt of a written notice
from Beston. The consideration will be funded by internal
resources of the Group and no deposit has been paid by
Beston upon the signing of the Share Transfer Agreement.
Completion: The Transfer is subject to the approval by the relevant
authorities in the PRC. Completion of the Transfer will
occur upon approval of the Transfer by the PRC authorities.
Ningbo Yuming is a wholly foreign-owned joint venture established in the PRC on 14th August, 1993. Since the establishment of Ningbo Yuming, Beston has been interested in 51% of its registered capital. Beston has contributed to US$1,275,000 (equivalent to approximately HK$9.9 million) of the registered capital of Ningbo Yuming, in proportion to its equity interest, which was funded by internal resources of the Company. Beston has no current capital commitment towards Ningbo Yuming. As at the date of this announcement, the equity interest of Ningbo Yuming is owned as to 51% by Beston and as to 49% by Madam Chen as at the date of this announcement. Upon completion of the Transfer contemplated under the Share Transfer Agreement, Ningbo Yuming will become a wholly owned subsidiary of the Company. The registered capital of Ningbo Yuming is US$2,500,000 (equivalent to approximately HK$19,500,000). The term of Ningbo Yuming is 50 years from 14th August, 1993. The board of directors of Ningbo Yuming currently comprises seven directors, of which three directors were nominated by Madam Chen. The three directors nominated by Madam Chen, including Madam Chen, will be replaced upon completion of the Transfer.
The principal activities of Ningbo Yuming are the manufacture and sale of automotive component parts in the PRC. Madam Chen became the holder of the 49% interest in Ningbo Yuming on 2nd April 2002. To the best knowledge of the Directors, the 49% interest in Ningbo Yuming was acquired by Madam Chen from the previous 49% shareholder at a consideration of US$1,225,000 (equivalent to approximately HK$9.56 million).
The net asset value of Ningbo Yuming audited in accordance with PRC accounting standards for the two years ended 31st December, 2003 were approximately RMB126 million and RMB77.2 million, respectively.
The net profits (both before and after taxation and extraordinary items) of Ningbo Yuming audited in accordance with PRC accounting standards, for the two years ended 31st December, 2003 were:
For the year ended For the year ended
31st December, 2002 31st December, 2003
RMB RMB Net profits before taxation and extraordinary items 58,623,760.6 55,948,529.9 Net profits after taxation and extraordinary items 48,803,691.4 46,235,579.2 Reasons for the Transfer
The Group is engaged in the manufacture and sale of automobiles, including minibuses, sedans and automotive components, in the PRC.
Ningbo Yuming is engaged in the manufacture and sale of automotive components in the PRC and is one of the suppliers of automotive components to the Group. The production plant of Ningbo Yuming is located at Ningbo City, the PRC employing approximately 180 workers. As an automobile manufacturer, it is important to ensure that the automotive components used are of a high quality. As Ningbo Yuming will become a wholly owned subsidiary of the Company upon completion of the Transfer, the Company will be able to exercise complete control over the production procedure and the quality of its products. The Directors believe that the capacity of the Group to have a stable supply of high quality automotive components will reinforce and consolidate the Group's position as a leading minibus manufacturer and further strengthen its competitive position in the sedan market of the PRC.
The Directors (including the independent non-executive Directors) are of the view that the Share Transfer Agreement is on normal commercial terms and its terms are fair and reasonable and in the interests of the shareholders of the Company as a whole.
General
As Madam Chen is a connected person of the Company within the meaning of the Listing Rules, the Share Transfer Agreement and the Transfer contemplated there under constitutes a connected transaction for the Company under Rule 14A.32 of the Listing Rules and is subject to the reporting and announcement requirements in Chapter 14A of the Listing Rules.
Definitions
In the announcement, unless the context requires otherwise, terms used herein shall have the following meanings:
"Beston" Beston Asia Investment Limited, a company incorporated in
the British Virgin Islands and a wholly owned subsidiary
of the Company;
"Board" The board of Directors;
"Madam Chen" Madam Chen Qiuling, the holder of a 49% interest in
Ningbo Yuming and a connected person of the Company
within the meaning of the Listing Rules;
"Company" Brilliance China Automotive Holdings Limited, an exempted
company incorporated in Bermuda with limited liability,
whose securities are listed on the Stock Exchange and the
New York Stock Exchange Inc.;
"Director(s)" The director(s) of the Company;
"Group" The Company and its subsidiaries;
"Hong Kong" The Hong Kong Special Administrative Region of the PRC;
"Listing Rules" The Rules Governing the Listing of Securities on the
Stock Exchange;
"Ningbo Yuming" (Ningbo Yuming Machinery Industrial Co.,
Ltd.), a wholly foreign-owned joint venture established
in the PRC and a 51%-owned subsidiary of the Company;
"PRC" The People's Republic of China which, for the sole
purpose of this announcement, excludes Hong Kong, the
Macau Special Administrative Region and Taiwan;
"Share Transfer
Agreement" the share transfer agreement dated 19th October, 2004
entered into between Madam Chen as the seller and Beston
as the purchaser, in relation to the sale and purchase of
a 49% interest in Ningbo Yuming, as more particularly
described in the paragraph headed "The Share Transfer
Agreement" in this announcement;
"Stock Exchange" The Stock Exchange of Hong Kong Limited;
"Transfer" The transfer of a 49% interest in Ningbo Yuming by Madam
Chen to Beston pursuant to the Share Transfer Agreement;
"HK$" Hong Kong dollars, the lawful currency of Hong Kong;
"RMB" Renminbi, the lawful currency of the PRC; and
"US$" United States dollars, the lawful currency of the United
States of America.
* for identification purposes only
For the purpose of this announcement, HK$1.00 is taken to be equal to RMB1.06; andUS$1.00 is taken to be equal to HK$7.80.
As at the date of this announcement, the Board comprises: Executive Directors: Mr. Wu Xiao An (also known as Mr. Ng Siu On) (Chairman) Mr. Hong Xing (Vice Chairman) Mr. Su Qiang (also known as Mr. So Keung) Mr. He Tao (also known as Mr. Ho To) Mr. Yang Mao Zeng Non-executive Directors: Mr. Wu Yong Cun Mr. Lei Xiaoyang Independent non-executive Directors: Mr. Xu Bingjin Mr. Song Jian Mr. Jiang Bo By order of the Board Brilliance China Automotive Holdings Limited Wu Xiao An (also known as Ng Siu On) Chairman Hong Kong, 19th October, 2004
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.