CMON Limited — Capital/Financing Update 2019

Jan 24, 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

瀋陽公用發展股份有限公司 Shenyang Public Utility Holdings Company Limited

(a joint stock limited company incorporated in the People’s Republic of China)

(Stock code: 747)

DISCLOSEABLE TRANSACTION INVOLVING ACQUISITION OF SHARES OF CHAOZHOU RURAL CREDIT UNION

THE SHARE ACQUISITION

On 24 January 2019 (after trading hours), the Purchaser, being a wholly-owned subsidiary of the Company has entered into the Share Purchase Agreements with the Vendors, pursuant to which the Purchaser has agreed to acquire for an aggregate number of 25,720,335 Sale Shares at the consideration of RMB48,271,031.55. The Sale Shares represent approximately 9.42% of the issued share capital of Chaozhou Rural Credit Union as at the date of the Share Purchase Agreements.

THE PREVIOUS SHARE ACQUISITION

Furthermore, on 3 January 2019, the Purchaser entered share purchase agreements with the independent third parties in relation to the acquisition of 8,700,000 shares of Chaozhou Rural Credit Union at a consideration of RMB15,660,000.

Prior to the completion of Current Share Acquisition and the Previous Share Acquisition, the Purchaser held 25,300,000 shares of Chaozhou Rural Credit Union. Upon the completion of Current Share Acquisition and the Previous Share Acquisition, the Purchaser will hold an aggregate number of 59,720,335 shares of Chaozhou Rural Credit Union, representing an approximately 21.87% of the issued share capital of Chaozhou Rural Credit Union.

LISTING RULES IMPLICATIONS

As the Group entered into the Previous Share Acquisition within a 12-month period prior to and inclusive of the date of the Current Share Acquisition, the Current Share Acquisition and the Previous Share Acquisition shall be aggregated as a series of transaction for the Company pursuant to Rule 14.22 of the Listing Rules. The entering into of the Previous Share Acquisition and the Current Share Acquisition (in aggregate) constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

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THE SHARE ACQUISITION

Date

24 January 2019

Parties

• Purchaser: Zhongfang Chaozhou Investment Development Company Limited* 中房潮州 投資開發有限公司, a limited company incorporated under the laws of the PRC and a wholly owned subsidiary of the Company

• Vendors: Zhou Wengao, Luo Yiyu, Luo Ciliang, Yu Chusheng, Chen Yanjuan, Lin Yingjian, Lin Hongzhen, Huang Meimin, Lijun, Chen Wei, Peng Qian, Huang Yong, Lin Chengdong, Xie Fang, Lv Shangmin, Lu Sulong, He Qinghua, Zhang Qingping and Deng Yuping together refer to as the “Vendors”

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, Each of the Vendors is third party independent of the Company and its connected persons (as defined in Chapter 14A of the Listing Rules).

Shares to be acquired

Pursuant to the Share Purchase Agreements, the Purchaser has agreed to acquire and the Vendors have agreed to sell an aggregate number of 25,720,335 Sale Shares. The Sale Shares, representing approximately 9.42% of the issued share capital of Chaozhou Rural Credit Union, will be sold free from all encumbrances together with all rights including but not limited to any dividend or other distribution declared, made or paid at any time on or after Completion.

Upon Completion, the Purchaser shall has right to convert the Sale Shares into the shares of Chaozhou Rural Commercial Bank upon the relevant applications for the formation of Chaozhou Rural Commercial Bank have been approved by the China Banking and Insurance Regulatory Commission.

Consideration

The consideration for the Sale Shares of RMB48,271,031.55 shall be paid by the Purchaser within 3 months upon signing the Share Purchase Agreements. The average consideration per Sale Share is approximately RMB1.85. The Consideration was determined after taking into account the valuation on the equity value of the Sale Shares and will be satisfied by internal resources of the Company.

Completion

The Completion is conditional to the settlement of the Consideration by the Purchaser and the completion of the registration of share transfer within 3 months upon signing the Share Purchase Agreements.

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Upon Completion, the Company will hold 21.87% equity interest in Chaozhou Rural Credit Union.

INFORMATION ON CHAOZHOU RURAL CREDIT UNION

Chaozhou Rural Credit Union 潮州市區農村信用合作聯社 is the legal representative of a domestic enterprise 內資企業法人 established under the laws of the PRC with principal business including the business subject to the approval of the China Banking Regulatory Commission in accordance with relevant laws, administrative regulations and other provisions, the scope of business as listed out in the approval documents shall prevail (financial permit number: 00247973).

As disclosed in the announcement dated 27 December 2018 of Guangzhou Rural Commercial Bank Co., Ltd. (Stock Code: 01551.HK) (the “ Bank ”), the Bank has announced to participate, as a major strategic investor, in merger and restructuring of the Chaozhou Rural Credit Union, Chao’an Rural Credit Union and Raoping Rural Credit Union into Chaozhou Rural Commercial Bank, in response to the plans of the Guangdong provincial government, local government authorities, regulatory bodies and the Guangdong Rural Credit Union in promoting the restructuring rural credit union into rural commercial banks. The Bank has executed the transaction documents with other promotors and the preparatory committee of Chaozhou Rural Commercial Bank, details of which are set out in the announcement of the Bank dated 27 December 2018. The formation of Chaozhou Rural Commercial Bank is subject to approval of the China Banking and Insurance Regulatory Commission.

Based on the valuation on the equity interest of Chaozhou Rural Credit Union conducted by an independent valuer, the equity value per share of Chaozhou Rural Credit Union as of 30 November 2018 was approximately RMB1.87. The audited profit before and after taxation of Chaozhou Rural Credit Union for each of the two years ended 31 December 2016 and 2017 are set out below:

	For the year ended	31 December
	2016	2017
	(RMB)	(RMB)
Profit before taxation	33,963,393.31	14,274,391.49
Profit after taxation	25,706,614.17	9,168,329.90

THE PREVIOUS SHARE ACQUISITION

On 3 January 2019, the Purchaser entered share purchase agreements with the independent third parties in relation to the acquisition of 8,700,000 shares of Chaozhou Rural Credit Union at a consideration of RMB15,660,000, representing 3.19% of the total issued share of Chaozhou Rural Credit Union. Since the percentage ratios under the Listing Rules in respect of the Previous Share Acquisition is less than 5%, the Previous Share Acquisition did not constitute any notifiable transaction of the Company under Chapter 14 of the Listing Rules.

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REASONS FOR AND BENEFITS OF THE SHARE ACQUISITION

As at the date of this announcement, the Group is principally engaged in infrastructure and construction business in the PRC.

The Directors aim to seek investment opportunities to maximise the return to the Shareholders. As disclosed in the above section, the business of Chaozhou Rural Credit Union is profit making. Furthermore, it is currently undergoing a restructuring plan in order to merge with other unions to form a rural commercial bank in Chaozhou. Having considered the future prospect of Chaozhou Rural Credit Union, the Directors believe that the Share Acquisition would enable the Group to generate a reasonable and stable dividend income and to capture future potential capital gain.

Taking into account the benefits of the Share Acquisition, the Directors are of the view that the Share Acquisition is in the interest of the Group and the terms and conditions of the Share Purchase Agreements are on normal commercial terms, which are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As the Group entered into the Previous Share Acquisition within a 12-month period prior to and inclusive of the date of the Current Share Acquisition, the Current Share Acquisition and the Previous Share Acquisition shall be aggregated as a series of transaction for the Company pursuant to Rule 14.22 of the Listing Rules. The entering into of the Previous Share Acquisition and the Current Share Acquisition (in aggregate) constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following respective meanings.

“Board	the board of Directors
“Business Days”	a day (excluding Saturday, Sunday and any other public
	holidays) on which banks in the PRC are generally open for
	settlement business
“Company”	Shenyang Public Utility Holdings Company Limited
“Connected person(s)”	has the same meaning ascribed to it in the Listing Rules
“Consideration”	the total consideration of RMB48,271,031.55 for the Sale
	Shares to be paid by the Purchaser to the Vendors pursuant to
	the Share Purchaser Agreements

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“Chaozhou Rural	Chaozhou Rural Commercial Bank Co., Ltd. (潮州農村商業銀
Commercial Bank”	行股份有限公司), to be established based on the merger and
	restructuring of the Chaozhou Rural Credit Union, the Chao’an
	Rural Credit Union and the Raoping Rural Credit Union
	(temporary name, subject to the approval of China Banking
	and Insurance Regulatory Commission and verification of
	Administration for Industry and Commerce)
“Director(s)”	means the directors of the Company
“Domestic Share(s)”	domestic share(s) with a nominal value of RMB1 each in the
	share capital of the Company which are subscribed for in RMB
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“H-Share(s)”	overseas listed foreign ordinary share(s) in share capital of the
	Company, with a nominal value of RMB1 each, all of which are
	listed on the main board of the Stock Exchange, and subscribed
	for and traded in Hong Kong dollars
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China
“Previous Share	8,700,000 shares of Chaozhou Rural Credit Union being
Acquisition”	acquired by the Purchaser on 3 January 2019
“Purchaser”	Zhongfang Chaozhou Investment Development Company
	Limited*中房潮州投資開發有限公司, a limited company
	incorporated under the laws of the PRC and a wholly owned
	subsidiary of the Company
“Sale Shares”	25,720,335 Sale Shares, representing approximately 9.42% of
	the issued share capital of Chaozhou Rural Credit Union as at
	the date of the Share Purchase Agreements
“Share Acquisition/Current	Acquisition of 25,720,335 shares of Chaozhou Rural Credit
Share Acquisition”	Union by the Purchaser from the Vendors pursuant to the Share
	Purchase Agreements
“Share(s)”	H-Share(s) and Domestic Share(s)

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“Share Purchase 19 share purchase agreements dated 24 January 2019 entered Agreements” into between the Purchaser and each of the Vendors in relation to the Share Acquisition “Shareholder(s)” holder(s) of the H-Shares and the Domestic Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “RMB” Renminbi, the lawful currency of the PRC “Vendors” 19 individuals, namely Zhou Wengao, Luo Yiyu, Luo Ciliang, Yu Chusheng, Chen Yanjuan, Lin Yingjian, Lin Hongzhen, Huang Meimin, Lijun, Chen Wei, Peng Qian, Huang Yong, Lin Chengdong, Xie Fang, Lv Shangmin, Lu Sulong, He Qinghua, Zhang Qingping and Deng Yuping “%” per cent

* For identification purpose only

By Order of the Board Shenyang Public Utility Holdings Company Limited Zhang Jing Ming Chairman

Shenyang, the PRC, 24 January 2019

As at the date of this announcement, the executive directors of the Company are Mr. Zhang Jing Ming, Mr. Deng Xiao Gang and Mr. Leng Xiao Rong, the non-executive directors are Mr. Yin Zong Chen and Mr. Ye Zhi E and the independent non-executive directors are Mr. Chan Ming Sun Jonathan, Mr. Guo Lu Jin and Ms. Gao Hong Hong.

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