COSCO SHIPPING Development Co., Ltd. — Capital/Financing Update 2012

Mar 30, 2012

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.

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock code: 02866)

ANNOUNCEMENT ON CONNECTED TRANSACTION

On 26 March 2012, the Company entered into the Entrusted Loan Agreement with China Shipping and CS Finance Company whereby China Shipping entrusted CS Finance Company to provide a loan in the amount of RMB2,000,000,000 (equivalent to approximately HK$2,469,200,000) to the Company.

As China Shipping and CS Finance Company are connected persons of the Company, the Entrusted Loan Agreement constitutes a connected transaction of the Company. As the Entrusted Loan is provided for the benefit of the Company on normal commercial terms (or better to the Company) and no security over the assets of the Company is granted in respect of the Entrusted Loan, the Entrusted Loan is exempted from the reporting, announcement and independent shareholders’ approval requirements under the Listing Rules. Nevertheless, the Company is required by the applicable PRC rules and regulations to issue an announcement to disclose the Entrusted Loan and as such, the Company sets out below details of the Entrusted Loan Agreement for the information of potential investors and Shareholders.

INTRODUCTION

On 26 March 2012, the Company entered into the Entrusted Loan Agreement with China Shipping and CS Finance Company whereby the Company obtained an Entrusted Loan from China Shipping. The loan was made by way of China Shipping entrusting CS Finance Company to provide a loan in the amount of RMB2,000,000,000 (equivalent to approximately HK$2,469,200,000) to the Company.

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ENTRUSTED LOAN AGREEMENT

Parties

Lender:

China Shipping, the controlling shareholder of the Company holding approximately 47.03% of the issued share capital of the Company as at the date of this announcement

Borrower:

the Company

Entrusted Party:

CS Finance Company

Loan amount

Pursuant to the Entrusted Loan Agreement, China Shipping entrusted CS Finance Company to provide a loan in the amount of RMB2,000,000,000 (equivalent to approximately HK$2,469,200,000) to the Company.

Main contents and payment terms

Pursuant to the Entrusted Loan Agreement, China Shipping entrusted CS Finance Company to provide loan to the Company, receive interests and principal. It may also supervise the application of the loan through CS Finance Company.

The Entrusted Loan has a term of three years commencing from 26 March 2012 and ending on 26 March 2015. The sum of the loan is RMB2,000,000,000 (equivalent to approximately HK$2,469,200,000) and the lending interest rate is 5.02%, which is lower than the benchmark rate of 6.65% published by the People’s Bank of China in the corresponding period. Based on the amount of the Entrusted Loan of RMB2,000,000,000, the total interest expense would be RMB301,200,000 (equivalent to approximately HK$371,861,520).

The interest of the loan is composed of two parts: in respect of the first part, the interest rate is 0.3% and the interest amount is RMB6,000,000 per annum (equivalent to approximately HK$7,407,600 per annum), which is payable on 26 March 2012, 26 March 2013 and 26 March 2014 respectively; in respect of the second part, the interest rate is 4.72% and the interest amount is RMB94,400,000 per annum (equivalent to approximately HK$116,546,240 per annum), which is payable on 26 March 2013, 26 March 2014 and 26 March 2015 respectively.

The Company shall repay the principal after three years. CS Finance Company, as an entrusting party, will charge an one-off administrative fee of RMB600,000 (equivalent to approximately HK$740,760), which shall be payable by the Company. Terms of the Entrusted Loan Agreement has been arrived at after arm’s length negotiations and are based on normal commercial terms.

PURPOSE OF THE TRANSACTION AND IMPACT ON THE COMPANY

The Company provided the loan of RMB2,000,000,000 (equivalent to approximately HK$2,469,200,000) to China Shipping to meet the liquidity requirements.

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The Company shall pay the interest of the Entrusted Loan mainly out of its transportation income.

The Entrusted Loan is considered as a financial support provided to the Company by China Shipping in the capacity of a controlling shareholder of the Company. The purpose of the loan is to ease the problem of liquidity insufficiency of the Company in short term and lower the Company’s finance cost. As China has recently changed its policies with respect to the liquidity and capital requirements of banks and therefore, banks have adopted more stringent approach in the grant of loans, the Company would face more difficulties in raising new loans from banks. The Board believes that the Entrusted Loan could increase the Company’s cash flow and accordingly mitigate the pressure on capital availability, enabling the Company to enhance its ability to continue as a going concern.

As such, the Directors (including the independent non-executive Directors) are of the opinion that the Entrusted Loan, which could lower the Company’s finance cost, is open, fair and just and in the interests of the Company and the Shareholders as a whole.

INFORMATION ON THE PARTIES AND LISTING RULES IMPLICATIONS

The Group is principally engaged in the operation and management of international and domestic container and marine transportation.

China Shipping, a PRC state-owned enterprise and the controlling shareholder of the Company, is a large shipping conglomerate involved in import and export business, trading, coastal and ocean cargo transportation, dry bulk cargo transportation, supply of food for vessels, management of docks and other services in relation to the above, and operates in different regions of the PRC and across the world.

As at the date of this announcement, China Shipping is interested in approximately 47.03% of the existing issued share capital of the Company and is therefore its controlling shareholder. As such, China Shipping is a connected person of the Company within the meaning of the Listing Rules.

CS Finance Company is a company established in Shanghai, the PRC pursuant to an investment agreement that the Company entered into with China Shipping and its subsidiaries. According to such investment agreement, CS Finance Company will provide the Group with a range of financial services including (i) deposit services; (ii) loan services; (iii) settlement services; and (iv) other financial services as approved by CBRC. As CS Finance Company is a subsidiary of China Shipping, CS Finance Company is also a connected person of the Company.

As China Shipping and CS Finance Company are connected persons of the Company, the Entrusted Loan constitutes a connected transaction of the Company. As the Entrusted Loan is provided for the benefit of the Company on normal commercial terms (or better to the Company) and no security over the assets of the Company is granted in respect of the Entrusted Loan, the Entrusted Loan is exempted from the reporting, announcement and independent shareholders’ approval requirements under the Listing Rules. Nevertheless, the Company is required by the applicable PRC rules and regulations to issue an announcement to disclose the Entrusted Loan and as such, the Company sets out in the above details of the Entrusted Loan Agreement for the information of potential investors and Shareholders.

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DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

“Board”	the board of Directors
“CBRC”	China Banking Regulatory Commission
“China Shipping”	China Shipping (Group) Company (中國海運（集團）總公司)*
“Company”	China Shipping Container Lines Company Limited (中海集裝箱運輸股份
	有限公司), a joint stock limited company established in the PRC, the H
	shares of which are listed on the Stock Exchange, and the A Shares of
	which are listed on the Shanghai Stock Exchange
“CS Finance Company”	China Shipping Finance Company Limited (中海集團財務有限責任公司*),
	a limited liability company established in Shanghai, the PRC
“Directors”	directors of the Company
“Entrusted Loan”	the entrusted loan pursuant to the Entrusted Loan Agreement
“Entrusted Loan	the agreement dated 26 March 2012 entered into between China
Agreement”	Shipping, the Company and CS Finance Company in relation
	to China Shipping entrusting CS Finance Company to make a
	RMB2,000,000,000 (equivalent to approximately HK$2,469,200,000)
	loan to the Company
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of the Hong Kong Special
	Administrative Region of the PRC
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“PRC”	The People’s Republic of China
“RMB”	Renminbi, the lawful currency of the PRC

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“Shareholder(s)”

holders of share(s) of the Company

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

By Order of the Board China Shipping Container Lines Company Limited Ye Yumang

Company Secretary

Shanghai, the People’s Republic of China 30 March 2012

The Board as at the date of this announcement comprises of Mr. Li Shaode, Mr. Xu Lirong, Mr. Zhang Guofa, Mr. Huang Xiaowen and Mr. Zhao Hongzhou, being executive Directors, Mr. Zhang Jianhua, Mr. Lin Jianqing, Mr. Wang Daxiong, Mr. Zhang Rongbiao and Mr. Xu Hui, being nonexecutive Directors, and Mr. Shen Kangchen, Mr. Jim Poon (also known as Pan Zhanyuan), Mr. Shen Zhongying, Mr. Wu Daqi and Ms. Zhang Nan, being independent non-executive Directors.

The exchange rate adopted in this announcement for illustration purpose only is RMB1.00 = HK$1.2346. Such conversion should not be construed as a representation that the currency could actually be converted into HK$ at that rate.

• The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name and under the English name “China Shipping Container Lines Company Limited”.

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