COSCO SHIPPING Development Co., Ltd. — Capital/Financing Update 2020

Aug 25, 2020

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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中遠海運發展股份有限公司 COSCO SHIPPING Development Co., Ltd.*

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

(Stock Code: 02866)

INSIDE INFORMATION

LETTER OF INTENT IN RELATION TO POTENTIAL DISPOSAL

This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The Board is pleased to announce that on 25 August 2020 (after trading hours), COSCO Container and Long Honour, together with Other Prospective Vendors, entered into the Letter of Intent with Shenzhen Capital Operation, as prospective purchaser, in relation to, among other things, the Potential Disposal.

The Potential Disposal, if materialises, may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. Further announcement(s) in respect of the Potential Disposal will be made by the Company as and when appropriate.

As the Potential Disposal is subject to the Definitive Agreement being entered into and may or may not proceed, the Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the announcement of the Company dated 18 August 2020 in relation to the Potential Disposal. The Board is pleased to announce that on 25 August 2020 (after trading hours), COSCO Container and Long Honour, together with Other Prospective Vendors, entered into the Letter of Intent with Shenzhen Capital Operation, as prospective purchaser, in relation to, among other things, the Potential Disposal.

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LETTER OF INTENT

The principal terms of the Letter of Intent are as follows:

Date

• 25 August 2020

Parties

• (1) COSCO Container, as prospective vendor;

• (2) Long Honour, as prospective vendor;

• (3) Other Prospective Vendors, as prospective vendors; and

• (4) Shenzhen Capital Operation, as prospective purchaser.

Subject matter

Pursuant to the Letter of Intent, among other things, COSCO Container and Long Honour intend to sell, and Shenzhen Capital Operation intends to purchase (by itself or through its nominee), an aggregate of 645,010,617 CIMC Shares, comprising 350,000,000 A shares and 295,010,617 H shares and representing approximately 17.98% of the total issued share capital of CIMC.

As at the date of this announcement, COSCO Container holds 783,230,302 CIMC Shares, comprising 518,606,212 A shares and 264,624,090 H shares and representing approximately 21.84% of the total issued share capital of CIMC, and Long Honour holds 30,386,527 H shares of CIMC, representing approximately 0.85% of the total issued share capital of CIMC.

Consideration

The parties agree the price per CIMC Share for the Potential Disposal shall, in principle, be not lower than the higher of:

• (1) the arithmetic average of the daily weighted average price of the CIMC Shares for the 30 trading days before the indicative announcement of CIMC in relation to the Potential Disposal, being approximately RMB8.57 per A share of CIMC and approximately HK$7.65 per H share of CIMC; and

• (2) the audited net asset value per CIMC Share for the latest financial year.

Accordingly, the price per CIMC Share for the Potential Disposal shall be determined based on the audited net asset value attributable to shareholders of the parent per CIMC Share as at 31 December 2019, being RMB9.83 per CIMC Share.

After the signing of the Letter of Intent, in the event of any ex-right events of CIMC including placing of shares and capitalisation of capital reserves, the number of CIMC Shares proposed to be transferred and the price per CIMC Share shall be adjusted accordingly, but the proportion of the share transfer and the total transfer price shall remain unchanged.

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The consideration for the transfer of the A shares of CIMC shall be payable in RMB and the consideration for the transfer of the H shares of CIMC shall be payable in either Hong Kong dollars or United States dollars.

Others

Subject to further negotiations between the Group and Shenzhen Capital Operation, the Potential Disposal may be conducted by way of transferring (i) all the issued shares of COSCO Container; and (ii) the H shares of CIMC held by Long Honour.

The Letter of Intent outlines the intention of the parties in relation to the Potential Disposal. The final terms of the Potential Disposal are subject to the terms of the Definitive Agreement.

If no Definitive Agreement is entered into between the parties within six months of the date of the Letter of Intent, each party is entitled to terminate the Letter of Intent by way of a written notice with no liability for breaches.

INFORMATION ON THE PARTIES

Information on the Group

The Company is a joint stock limited company established under the laws of the PRC with limited liability, the H Shares of which are listed on the Main Board of the Hong Kong Stock Exchange and the A Shares of which are listed on the Shanghai Stock Exchange.

The Group is principally engaged in shipping and industry-related leasing businesses, manufacturing of containers and provision of investment and financial services.

Long Honour is a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company. It is principally engaged in investment holding.

COSCO Container is a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company. It is principally engaged in investment holding.

Information on Shenzhen Capital Operation

Shenzhen Capital Operation is a company established in the PRC with limited liability and is primarily engaged in investment management, asset management, and establishment of various kind of entities. The ultimate beneficial owner of Shenzhen Capital Operation is the State-owned Assets Supervision and Administration Commission of Shenzhen.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, Shenzhen Capital Operation and its ultimate beneficial owner are third parties independent of the Company and its connected persons.

REASONS FOR AND BENEFITS OF ENTERING INTO LETTER OF INTENT

The Potential Disposal is in line with the strategic development needs of the Group and is expected to optimise the asset structure of the Group, thereby facilitating the development of the shipping leasing business, the container manufacturing business and the investment and related service business of the Group and the achievement of its strategic development objective in becoming an integrated supply chain financial service platform featuring shipping logistics.

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The Directors are of the view that the terms of the Letter of Intent, which were negotiated on an arm’s length basis, are fair and reasonable and the Potential Disposal is in the interests of the Company and the Shareholders as a whole.

GENERAL

The Potential Disposal, if materialises, may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. Further announcement(s) in respect of the Potential Disposal will be made by the Company as and when appropriate.

As the Potential Disposal is subject to the Definitive Agreement being entered into and may or may not proceed, the Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

DEFINITIONS

Unless the context requires otherwise, capitalised terms used in this announcement shall have the meanings as follows:

“A Share(s)”	the domestic share(s) in the ordinary share capital of the Company with
	a par value of RMB1.00 each, which are listed on the Shanghai Stock
	Exchange
“Board”	the board of directors of the Company
“CIMC”	China International Marine Containers (Group) Co., Ltd.#(中國國際海
	運集裝箱（集團）股份有限公司), a joint stock company incorporated
	in the PRC with limited liability, the H shares and A shares of which
	are listed on the Main Board of the Hong Kong Stock Exchange (Stock
	Code: 02039) and the Shenzhen Stock Exchange (Stock Code: 000039),
	respectively
“CIMC Share(s)”	the shares of CIMC
“Company”	COSCO SHIPPING Development Co., Ltd.* (中遠海運發展股份有
	限公司), a joint stock limited company incorporated in the PRC with
	limited liability, the H Shares and A shares of which are listed on the
	Main Board of the Hong Kong Stock Exchange (Stock Code: 2866) and
	the Shanghai Stock Exchange (Stock Code: 601866), respectively
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“COSCO Container”	COSCO Container Industries Limited, a company incorporated in
	the British Virgin Islands with limited liability and a wholly owned
	subsidiary of the Company
“Definitive Agreement”	the formal share transfer agreement in relation to the Potential Disposal
“Director(s)”	director(s) of the Company
“Letter of Intent”	the letter of intent dated 25 August among COSCO Container, Long
	Honour, other prospective vendors and Shenzhen Capital Operation in
	relation to, among other things, the Potential Disposal
“Group”	the Company and its subsidiaries

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“H Share(s)”	the overseas listed foreign shares in the ordinary share capital of the
	Company with a par value of RMB1.00 each, which are listed on Main
	Board of the Hong Kong Stock Exchange
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong Stock	The Stock Exchange of Hong Kong Limited
Exchange”
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange
	of Hong Kong Limited
“Long Honour”	Long Honour Investments Limited, a company incorporated in the
	British Virgin Islands with limited liability and a wholly owned
	subsidiary of the Company
“Other Prospective	Broad Rider Limited and Promotor Holdings Limited, each of which
Vendors”	and its respectively ultimate beneficial owner, to the best of the
	knowledge, information and belief of the Directors, having made all
	reasonable enquiries, are third parties independent of the Company and
	its connected persons
“Potential Disposal”	the potential disposal by the Group of certain of its equity interests in
	CIMC
“PRC”	the People’s Republic of China which, for the purpose of this
	announcement, excludes Hong Kong Administrative Region of the
	People’s Republic of China, the Macau Special Administrative Region
	of the People’s Republic of China and Taiwan
“RMB”	Renminbi, the lawful currency of the PRC
“Shareholder(s)”	holder(s) of the H Share(s) and A Share(s)
“Shenzhen Capital	Shenzhen Capital Operation Group Co. Ltd.#(深圳市資本運營集團有
Operation”	限公司), a company established in the PRC with limited liability

By order of the Board COSCO SHIPPING Development Co., Ltd. Cai Lei Joint Company Secretary

Shanghai, the People’s Republic of China 25 August 2020

As at the date of this announcement, the Board comprises Mr. Wang Daxiong, Mr. Liu Chong and Mr. Xu Hui, being executive directors, Mr. Feng Boming, Mr. Huang Jian and Mr. Liang Yanfeng, being non-executive directors, and Mr. Cai Hongping, Ms. Hai Chi Yuet, Mr. Graeme Jack, Mr. Lu Jianzhong and Ms. Zhang Weihua, being independent non-executive directors.

• The Company is a registered non-Hong Kong company as defined under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) and it is registered under its Chinese name and under the English name “COSCO SHIPPING Development Co., Ltd.”.

• For identification purpose only.

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