Dida Inc. — Capital/Financing Update 2011

Oct 26, 2011

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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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED 中海發展股份有限公司

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

(Stock Code: 1138)

DISCLOSEABLE TRANSACTION CONSTRUCTION OF NEW VESSEL

On 25 October 2011, Tianjin Zhonghai Huarun, the Company’s subsidiary, entered into an agreement with the Vendors for the construction of a bulk vessel of 76,000 dead weight tons. The total consideration for the construction of the bulk vessel is approximately RMB229,300,000 (equivalent to approximately HK$279,753,553).

14.58(3) 14.60(1)

The entering into of the Agreement (which, for the purpose of the Listing Rules, will be aggregated with the Previous Agreements for the construction of (i) four bulk vessels of 180,000 dead weight tons each between CS Development Hong Kong, CSTC and Jiangnan Changxing Heavy Industry signed on 22 November 2010; (ii) two bulk vessels of 82,000 dead weight tons each between Puyuan Shipping, CSTC and Guangzhou Longxue Shipyard signed on 26 November 2010; and (iii) eight tankers of 48,000 dead weight tons each between the Company, CSSC and Guangzhou Shipyard signed on 29 November 2010 (details of which are disclosed in the Company’s announcements dated 22, 26 and 29 November 2010, respectively)), constitutes a discloseable transaction of the Company under the Listing Rules.

The Agreement

On 25 October 2011, Tianjin Zhonghai Huarun, the Company’s subsidiary, entered into the Agreement with the Vendors for the construction of a bulk vessel of 76,000 dead weight tons. The total consideration for the construction of the bulk vessel is approximately RMB229,300,000 (equivalent to approximately HK$279,753,553). The consideration is determined by reference to the market price of bulk vessels ranging in sizes from 60,000 to 80,000 dead weight tons during the past 6 months.

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For the purpose of the Listing Rules, the transaction contemplated by the Agreement will be aggregated with the Previous Agreements for the construction of (i) four bulk vessels of 180,000 dead weight tons each between CS Development Hong Kong, CSTC and Jiangnan Changxing Heavy Industry signed on 22 November 2010; (ii) two bulk vessels of 82,000 dead weight tons each between Puyuan Shipping, CSTC and Guangzhou Longxue Shipyard signed on 26 November 2010; and (iii) eight tankers of 48,000 dead weight tons each between the Company, CSSC and Guangzhou Shipyard signed on 29 November 2010 (details of which are disclosed in the Company’s announcements dated 22, 26 and 29 November 2010, respectively). Accordingly, the entering into of the Agreement constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. There are no other transactions in the past 12 months which require aggregation under the Listing Rules.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendors and their ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined in the Listing Rules).

The Directors (including the independent non-executive Directors) consider that the terms of the Agreement are determined on an arm’s length basis, on normal commercial terms and fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Terms of the Agreement

The price of the Bulk Vessel will be payable in RMB. Relevant payments under the Agreement will be payable in 5 instalments at various stages of the construction of the Bulk Vessel:

• (i) for the first instalment, to pay 4% of the price within 5 business days after the Agreement is signed and 16% of the price before 31 March 2012;

• (ii) for each of the second, third and fourth instalments, to pay 20% of the price within 10 business days of the receipt of the relevant invoice issued by the Vendors; and

• (iii) for the final instalment, to pay 20% of the price (and relevant adjustments applicable pursuant to the Agreement) within 20 business days of the receipt of all documentation in relation to completion of the Bulk Vessel by the Vendors.

The expected delivery date for the Bulk Vessel is on or before 31 January 2013.

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The Agreement provides that there will be no adjustment in the price of the Bulk Vessel if the delivery is delayed for a period not exceeding 30 days. If the delay exceeds such period of time but does not exceed 180 days, there will be a reduction in the price of the Bulk Vessel of RMB25,000 (equivalent to approximately HK$30,501) per day. Under the Agreement, delay will be permitted on account of force majeure events.

If the delay exceeds 180 days, unless the parties agree otherwise, Tianjin Zhonghai Huarun has the right to refuse to accept delivery of the Bulk Vessel in which case all payments paid under the Agreement together with interests will be refunded to Tianjin Zhonghai Huarun, or Tianjin Zhonghai Huarun can accept the Bulk Vessel with a reduction of not more than RMB3,750,000 (equivalent to HK$4,575,124).

There will be other downward adjustments in price of the Bulk Vessel if its performance (such as speed, fuel consumption rate, tonnage) exceeds or falls below certain agreed criteria (as the case may be). However, should the relevant performance exceeds or falls below certain agreed benchmark, Tianjin Zhonghai Huarun has the right to refuse delivery of the Bulk Vessel and accept a refund with interest from the Vendors, or negotiate a lower price for the Bulk Vessel.

Financing Terms

The construction of the Bulk Vessel under the Agreement will be funded by the Group as to approximately 80% of the price by bank borrowings and approximately 20% of the price by internal financial resources.

The financing by way of bank borrowings is expected to increase the Group’s level of borrowings. Taking into account the Group’s capital and Shareholders’ base, the Group considers that bank borrowing is the best means of financing for the construction of the Bulk Vessel. The Directors believe that in light of the Group’s fleet expansion plan, it is fair and reasonable and in the interest of the Company and the Shareholders as a whole to finance the transaction with such bank borrowings.

Information about the Group

The business scope of the Group include: coastal, ocean and Yangtze River cargo transportation, chartering, cargo agency and cargo transportation agency.

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Reasons for entering into the Agreement

Tianjin Zhonghai Huarun is a shipping company owned by the Company as to 51% and Huarun Electricity Group as to 49%. The current annual shipping volume of the vessels of Tianjin Zhonghai Huarun is approximately 14% of the coal expected to be transported to Huarun Electricity Group for the full year 2011 as informed by Huarun Electricity Group. After the delivery of the vessels which are currently in construction, the annual shipping volume will increase to approximately 30% of the coal expected to be transported to Huarun Electricity Group for the full year 2011 as informed by Huarun Electricity Group.

According to the mid-to-long term development plans of Tianjin Zhonghai Huarun, it is expected to increase its proportion of annual shipping volume for transporting the coal to be transported to Huarun Electricity Group. In order to ensure the delivery of Huarun Electricity Group’s coal taking into account the increasing demand, it is important for the Group to increase the shipping capacity of Tianjin Zhonghai Huarun as soon as possible.

In view of the reasonable cost of constructing the Bulk Vessels, the Directors are of the view that the construction and ownership of the Bulk Vessels is low risk, efficient, and will increase the competitiveness of the Group in the shipping market. This will also enable the Group to take advantage of the business opportunities in the shipping market, enjoy economies of scale, and improve its operating efficiency and profitability. After the delivery of the Bulk Vessel, the annual shipping volume of Tianjin Zhonghai Huarun is expected to reach approximately 50% of the coal expected to be transported to Huarun Electricity Group for the full year 2011 as informed by Huarun Electricity Group.

Definitions

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

“Agreement”

an agreement dated 25 October 2011 entered into between the Vendors and Tianjin Zhonghai Hairun for the construction of the Bulk Vessel

“Bulk Vessel” bulk vessel of 76,000 dead weight tons to be constructed pursuant to the Agreement

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• “China Shipping”

• China Shipping (Group) Company * (中國海運(集團)總 公司), is a conglomerate and state-authorized investment institution directly administered by the central government of China. China Shipping holds approximately 46.36% of the issued share capital of the Company and is the controlling shareholder of the Company

• “Company”

• China Shipping Development Company Limited* (中海發展股份有限公司), a joint stock limited company established in the PRC, the H shares of which are listed on The Stock Exchange of Hong Kong Limited

• “CS Development Hong China Shipping Development (Hong Kong) Marine Co., Kong” Limited* (中海發展(香港)航運有限公司), a whollyowned subsidiary of the Company

• “CSITC”

• China Shipbuilding International Trading Company Limited* (中船國際貿易有限公司), a Chinese company engaging in the international sale of vessels and a subsidiary of CSSC. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, CSITC and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined in the Listing Rules)

• “CSSC”

• China State Shipbuilding Corporation* (中國船舶工業 集團公司), a conglomerate and state-authorized investment institution directly administered by the central government of China owning shipbuilding and ship repairing yards, research and design institutes, marine-related equipment manufacturers and trading firms in China, the parent company of CSITC, CSTC, Jiangnan Shipyard, Jiangnan Changxing Heavy Industry, Guangzhou Shipyard and Guangzhou Longxue Shipyard

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“CSTC”

• “Directors”

• “Group”

• “Guangzhou Longxue Shipyard”

• “Guangzhou Shipyard”

• “HK$”

China Shipbuilding Trading Company Limited* (中國船舶工業貿易公司), a Chinese company engaging in the trading, import, export and agency of ships and shipping related technology and services and a subsidiary of CSSC. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, CSTC and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined in the Listing Rules)

• directors of the Company

• the Company and its subsidiaries

• CSSC Guangzhou Longxue Shipbuilding Company Limited* (廣州中船龍穴造船有限公司), a shipyard in China and a subsidiary of CSSC, with 10% of its equity interest held by China Shipping. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, save for China Shipping’s 10% equity interest in Guangzhou Longxue Shipyard, Guangzhou Longxue Shipyard and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined in the Listing Rules)

• Guangzhou Shipyard International Company Limited* (廣州廣船國際股份有限公司), a shipyard in China and a subsidiary of CSSC. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Guangzhou Shipyard and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined in the Listing Rules)

• Hong Kong dollars, the lawful currency of the Hong Kong Special Administrative Region of the PRC

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• “Jiangnan Changxing Heavy Industry”

• Shanghai Jiangnan Changxing Heavy Industry Company Limited* (上海江南長興重工有限責任公司), a shipyard in China and a subsidiary of CSSC. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Jiangnan Changxing Heavy Industry and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined in the Listing Rules)

• “Jiangnan Shipyard”

• Jiangnan Shipyard (Group) Company Limited* (江南造 船(集團)有限責任公司), a shipyard in China and a subsidiary of CSSC. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Jiangnan Shipyard and its ultimate beneficial owners are independent third parties not connected with the Company and its connected persons (as defined in the Listing Rules)

• “Listing Rules”

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “PRC”

• The People’s Republic of China

• “Previous Agreements”

• (i) the four agreements dated 22 November 2010, each of which was entered into between CS Development Hong Kong, CSTC and Jiangnan Changxing Heavy Industry; (ii) the two agreements dated 26 November 2010, each of which was entered into between Puyuan Shipping, CSTC and Guangzhou Longxue Shipyard; (iii) the eight agreements dated 29 November 2010, each of which was entered into between the Company, CSSC and Guangzhou Shipyard, for the construction of four bulk vessels, two bulk vessels and eight tankers, respectively, details of which are disclosed in the Company’s announcements dated 22, 26 and 29 November 2010, respectively

• “Puyuan Shipping” Zhonghai Puyuan Shipping Co., Limited* (中海浦遠航 運有限公司), a non-wholly owned subsidiary of CS Development Hong Kong

• “RMB”

• Renminbi, the lawful currency of the PRC

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“Shareholder(s)”

holders of share(s) of the Company

“Tianjin Zhonghai Huarun”

Tianjin Zhonghai Huarun Marine Co., Limited* (天津中 海華潤航運有限公司), a non-wholly-owned subsidiary of the Company

“Vendors”

CSITC and Jiangnan Shipyard

By Order of the Board of Directors China Shipping Development Company Limited Yao Qiaohong

Company Secretary

Shanghai, the People’s Republic of China 26 October 2011

As at the date of this announcement, the Board of Directors of the Company comprises of Mr. Li Shaode, Mr. Lin Jianqing, Mr. Wang Daxiong, Mr. Zhang Guofa, Mr. Yan Zhichong and Mr. Qiu Guoxuan as executive Directors, Mr. Zhu Yongguang, Mr. Zhang Jun and Mr. Lu Wenbin as independent non-executive Directors.

The exchange rate adopted in this announcement for illustration purpose only is HK$1.00=RMB0.81965. Such conversion should not be construed as a representation that the currency could actually be converted into HK$ at that rate or at all.

• For identification purpose only

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