Dida Inc. — Capital/Financing Update 2012

Jun 15, 2012

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take 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.

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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)

CONNECTED TRANSACTION CONSTRUCTION OF A NEW VESSEL

On 15 June 2012, Yinhua Shipping, a non-wholly owned subsidiary of the Company, entered into the Agreement with the Vendor for the construction of the Bulk Vessel for the transportation of coal and other dry bulk cargo. The total Consideration for the construction of the Bulk Vessel is RMB182,800,000 (equivalent to approximately HK$222,595,560).

Since China Shipping is the controlling shareholder of the Company and that the Vendor is a wholly-owned subsidiary of China Shipping, the Transaction contemplated under the Agreement is a connected transaction for the Company under the Listing Rules.

14.58(3) 14.60(1) 14A.56(1)

14A.56(2)

The entering into of the Agreement shall, for the purpose of the Listing Rules, be aggregated with the Previous Agreement for the construction of a Tanker for the transportation of crude oil and refined oil between CS Development (Hong Kong) and the Vendor signed on 13 January 2012, details of which were set out in the Company’s announcement dated 13 January 2012.

As the applicable percentage ratios in respect of the Transactions (as aggregated) are more than 0.1% but less than 5%, the Transactions are subject only to the reporting and announcement requirements under Rule 14A.45 to Rule 14A.47 of the Listing Rules but do not require the approval by the Independent Shareholders.

Particulars of the Agreement are set forth below, and will also be disclosed in the Company’s 2012 annual report.

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The Agreement

On 15 June 2012, Yinhua Shipping, a non-wholly owned subsidiary of the Company, entered into the Agreement with the Vendor for the construction of the Bulk Vessel for the transportation of coal and other dry bulk cargo. The total Consideration for the construction of the Bulk Vessel is RMB182,800,000 (equivalent to approximately HK$222,595,560). The Consideration is determined by reference to the market price for the past 6 months of bulk vessels of tonnage between 40,000 dead weight tons and 60,000 dead weight tons with similar specifications.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendor is a wholly-owned subsidiary of China Shipping. Since China Shipping is the controlling shareholder of the Company, the Transaction contemplated under the Agreement is a connected transaction for the Company under the Listing Rules.

The 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 4 instalments at various stages of the construction of the Bulk Vessel:

• (i) for the first instalment, to pay 20% of the Consideration within 10 business days after the Agreement becomes effective after signing and receipt of the relevant invoice from the Vendor;

• (ii) for each of the second and third instalment, to pay 20% of the Consideration within 10 business days after the receipt of the relevant invoice and related construction documents issued by the Vendor based on the construction phase of the Bulk Vessel; and

• (iii) for the final instalment, to pay 40% of the Consideration (and relevant adjustments applicable pursuant to the Agreement) within 5 business days after the delivery of the Bulk Vessel and the receipt of all documentation in relation to completion of the Bulk Vessel by the Vendor.

The expected delivery date for the Bulk Vessel under the Agreement is on or before 30 September 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 30 days, there will be a reduction in the price of the Bulk Vessel based on a daily reduction rate of RMB30,000 (equivalent to approximately HK$36,531). If the delay exceeds 180 days, Yinhua Shipping has the right to cancel the Agreement and accept a refund with interest from the Vendor, or negotiate a new price for the Bulk Vessel. Under the Agreement, delay will be permitted on account of force majeure events.

There will be other downward adjustments in the Consideration 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, Yinhua Shipping has the right to refuse the acceptance of the Bulk Vessel and accept a refund with interest from the Vendor, or negotiate a new price for the Bulk Vessel.

Financing Terms

The construction of the Bulk Vessel will be funded by the Yinhua Shipping as to approximately 70% of the Consideration by bank borrowings and approximately 30% of the Consideration by internal financial resources.

The financing of the Consideration by way of bank borrowings is expected to increase the Group’s level of borrowings. Taking into account the Company’s capital and shareholders’ base, the Company 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 and China Shipping

The business scope of the Group includes coastal, ocean and Yangtze River cargo transportation, chartering, cargo agency and cargo transportation agency. Yinhua Shipping is in the business of domestic dry bulk cargo transportation.

The business scope of China Shipping includes import and export businesses, 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. The Vendor is in the business of shipbuilding and ship repairing.

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Reasons for entering into the Agreement

In view of the reasonable cost of constructing the Bulk Vessel, the Directors are of the view that the construction and ownership of the Bulk Vessel 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.

Listing Rules Requirements

Since China Shipping is the controlling shareholder of the Company and the Vendor is a wholly-owned subsidiary of China Shipping, the Transaction contemplated under the Agreement is a connected transaction for the Company under the Listing Rules.

The entering into of the Agreement shall, for the purpose of the Listing Rules, be aggregated with the Previous Agreement for the construction of a Tanker for the transportation of crude oil and refined oil between CS Development (Hong Kong) and the Vendor signed on 13 January 2012, details of which were set out in the Company’s announcement dated 13 January 2012.

As the applicable percentage ratios in respect of the Transactions (as aggregated) are more than 0.1% but less than 5%, the Transactions are subject only to the reporting and announcement requirements under Rule 14A.45 to Rule 14A.47 of the Listing Rules but do not require the approval by the Independent Shareholders.

The terms and conditions of the Transaction have been negotiated on an arm’s length basis and are on normal commercial terms. The Board (including the independent non-executive Directors) considers the terms of the Transaction to be on normal commercial terms, fair and reasonable and in the ordinary and usual course of the Group’s business, and are in the interests of the Company and the Shareholders as a whole. The following Directors, Mr. Li Shaode, Mr. Xu Lirong, Mr. Lin Jianqing, Mr. Wang Daxiong and Mr. Zhang Guofa, being the senior management of China Shipping, have a material interest in the Transaction, and have abstained from voting on the relevant Board resolution approving the Transaction.

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

“Agreement” the agreement dated 15 June 2012, which is entered into between Yinhua Shipping and the Vendor for the construction of one Bulk Vessel

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“Board”

the board of directors of the Company

• “Bulk Vessel”

a bulk vessel of 47,500 dead weight tons

• “China Shipping”

  • China Shipping (Group) Company* (中國海運(集團)總 公司), a PRC state-owned enterprise and the controlling shareholder of the Company, holding 46.36% of the registered capital of the Company as at the date of this announcement

• “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

• “Consideration” RMB182,800,000 (equivalent to approximately HK$222,595,560)

• “CS Development (Hong Kong)”

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

• “Directors”

  • directors of the Company

• “Group”

  • the Company and its subsidiaries

• “H Shares”

  • H shares of par value RMB1.00 each in the share capital of the Company, being overseas listed foreign invested shares

• “HK$”

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

• “Independent Shareholder(s)”

  • the Shareholders other than China Shipping and its associates (as defined in the Listing Rules)

• “Listing Rules”

  • the Rules Governing the Listing of Securities on the Stock Exchange

• “PRC”

  • The People’s Republic of China

• “Previous Agreement”

• the agreement dated 13 January 2012, which is entered into between CS Development (Hong Kong) and the Vendor for the construction of one Tanker for the transportation of crude oil and refined oil

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“Shareholder(s)” holders of share(s) of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Tanker” a tanker of 110,000 dead weight tons

• “Transaction” the construction of the Bulk Vessel pursuant to the terms of the Agreement

• “Vendor” China Shipping Industrial (Jiangsu) Co., Ltd.* (中海工 業(江蘇）有限公司）, being a company established under the laws of the PRC and which is a wholly-owned subsidiary of China Shipping

• “Yinhua Shipping” Shanghai Yinhua Shipping Co., Ltd* (上海銀樺航運有 限公司）, a non-wholly owned subsidiary of the Company

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

Company Secretary

• Shanghai, the People’s Republic of China 15 June 2012

The exchange rate adopted in this announcement for illustration purpose only is RMB1.00 = HK$1.2177. Such conversion should not be construed as a representation that the currency could actually be converted into HK$ at that rate or at all.

As at the date of this announcement, the Board of Directors of the Company comprises of Mr. Li Shaode, Mr. Xu Lirong, 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, Mr. Lu Wenbin and Mr. Wang Wusheng as independent non-executive Directors.

• For identification purpose only

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