Dida Inc. — Proxy Solicitation & Information Statement 2014

Jun 23, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular, you should consult appropriate independent advisers.

If you have sold all your shares in China Shipping Development Company Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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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)

PROPOSAL ON DOWNWARD ADJUSTMENT TO THE CONVERSION PRICE OF THE CONVERTIBLE BONDS

A letter from the Board is set out on pages 4 to 8 of this circular.

A notice convening the extraordinary general meeting of the Company to be held at 2:30p.m. on Tuesday, 12 August 2014 at 3rd Floor, Parkview Hotel, 555 Dingxiang Road, Pudong New Area, Shanghai, The People’s Republic of China is set out on pages N-1 to N-3 of this circular. Whether or not you are able to attend the above meeting, please complete and return the enclosed proxy form in accordance with the instructions printed thereon as soon as practicable and in any event by not less than 24 hours before the time appointed for the holding of the meeting or any adjournment thereof (i) in case of holders of H Shares, to the Company’s Hong Kong branch share registrar, Hong Kong Registrars Limited at 17M/F, Hopewell Centre,183 Queen’s Road East, Wanchai, Hong Kong, (ii) in case of holders of A shares, to the Office of the Secretary to the Board of Directors of the Company at 7th Floor, 670 Dong Da Ming Road, Shanghai, the People’s Republic of China. Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting or at any adjourned meetings should you so wish.

23 June 2014

CONTENT

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	N-1

— i —

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“A Share(s)” PRC-listed domestic shares of RMB1.00 each in the share capital of the Company which are listed on the Shanghai Stock Exchange and traded in RMB “Board” the board of Directors 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, and the A Shares of which are listed in Shanghai Stock Exchange “Convertible Bonds” the convertible corporate bonds convertible into new A Shares of an aggregate amount of not more than RMB 3.95 billion, issued by the Company in the PRC “Director(s)” director(s) of the Company “EGM” the extraordinary general meeting of the Company for 2014 to be held at 2:30 p.m. on Tuesday, 12 August 2014 for considering the matters as set out in this circular “Group” the Company and its subsidiaries “HK$” or “HK dollars” Hong Kong dollars, the lawful currency of Hong Kong “H Share(s)” overseas listed foreign shares of RMB1.00 each in the share capital of the Company which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars “Hong Kong” The Hong Kong Special Administrative Region of the PRC “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited “Latest Practicable Date” 19 June 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

“PRC” the People’s Republic of China, but for the purposes of this circular only, excluding Hong Kong, the Macau Special Administrative Region and Taiwan

— 1 —

	DEFINITIONS
“RMB” or “Renminbi”	Renminbi, the lawful currency of the PRC
“Share(s)”	the ordinary share(s) of the Company, including A Share(s)
	and H Share(s)
“Shareholder(s)”	holder(s) of the A Share(s) and/or H Shares
“Prospectus”	Prospectus in relation to the public offering of A Share
	Convertible Bonds of the Company

— 2 —

EXPECTED TIMETABLE

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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Date|of|despatch|of|this|circular|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|Monday,|23|June|2014|
|Last|date|for|returning|the|reply|slips|for|the|EGM .|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|Wednesday,|23|July|2014|
|Latest|time|for|lodging|proxy|forms|for|the|EGM|.|.|.|.|.|.|.|2:30|p.m.|on|Monday,|11|August|2014|
|Time|and|date|of|EGM|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|.|2:30|p.m.|on|Tuesday,|12|August|2014|

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— 3 —

LETTER FROM THE BOARD

23 June 2014

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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)

Executive Directors: Xu Lirong (Chairman) Zhang Guofa (Vice Chairman) Su Min Huang Xiaowen Ding Nong Liu Xihan Yu Zenggang Han Jun Qiu Guoxuan

Registered Office: Room A-1015, No. 188 Ye Sheng Road China (Shanghai) Free Trade Port Area

Principal place of business in Hong Kong: 20/F., Alexandra House 18 Chater Road Central, Hong Kong

Independent Non-Executive Directors:

Zhang Jun Wang Wusheng Lin Junlai Ruan Yongping Ip Sing Chi

To the Shareholders

Dear Sir/Madam,

PROPOSAL ON DOWNWARD ADJUSTMENT TO THE CONVERSION PRICE OF THE CONVERTIBLE BONDS

1. INTRODUCTION

Reference is made to the announcement of the Company dated 31 January 2011 and 10 June 2014, its circular dated 16 February 2011 and its overseas regulatory announcement dated 1 August 2011 in respect of its issue of convertible bonds in the aggregate amount of RMB3.95 billion.

The purpose of this circular is to provide the Shareholders with further information on the proposal on downward adjustment to the conversion price of the Convertible Bonds, and to seek approval of the Shareholders in the upcoming EGM with respect to the proposal.

— 4 —

LETTER FROM THE BOARD

2. PROPOSAL ON DOWNWARD ADJUSTMENT TO THE CONVERSION PRICE OF THE CONVERTIBLE BONDS

With the approval of the Shanghai Stock Exchange (Shangzhengfazi [2011] No.32), the Convertible Bonds have been listed on the Shanghai Stock Exchange since 12 August 2011. Pursuant to the relevant provisions in the Prospectus, during the term of the Convertible Bonds, if the closing price of the Company’s A shares is lower than 90% of the prevailing conversion price in any 10 trading days out of any 30 consecutive trading days, the Board of the Company may bring forth a proposal on downward adjustment to the conversion price for the Shareholders to consider and seek their approval at a general meeting. Such proposal is subject to the approval by two-thirds of the participating Shareholders with voting rights at such general meeting. Shareholders who hold the Convertible Bonds shall abstain from voting. The adjusted conversion price shall be no less than (1) the average trading price of the Company’s A shares for the 20 trading days prior to the Shareholders’ meeting, (2) the average trading price of the A shares of the Company on the trading day immediately before the general meeting, (3) the net asset value per share of the Company based on the latest audited financial statement, as well as (4) the nominal value per share of the Company.

As at the Latest Practicable Date, the closing price of the Company’s A shares had been lower than 90% of the prevailing conversion price of RMB8.60 for 10 trading days out of the previous 30 consecutive trading days and as such, the condition for downward adjustment to the conversion price of the Convertible Bonds has been satisfied.

Given the downward adjustment to the conversion price of the Convertible Bonds will accelerate the conversion of the Convertible Bonds into the A shares of the Company, improve the Group’s debt to asset ratio, optimize the capital structure and reducing its financing costs, at the Board meeting held on 10 June 2014, the Board reviewed and approved the proposal to downward adjust the conversion price of the Convertible Bonds in accordance with the relevant provisions in the Prospectus. The proposal will be submitted to the Shareholders for final approval at the EGM. The adjusted conversion price of the Convertible Bonds is proposed to be the highest of (1) the average trading price of the Company’s A shares for the 20 trading days immediately prior to the EGM, (2) the average trading price of the A shares of the Company on the trading day immediately before the EGM, (3) the net asset value per share of the Company based on the latest audited financial statement, as well as (4) the nominal value per share of the Company. If the prevailing conversion price is lower than any of the aforesaid indicators on the date of EGM held for the consideration of this proposal, no adjustment will be required. For illustration purpose only, using the Latest Practicable Date as a reference date, the adjusted conversion price would be RMB6.24, being the highest of (1) the average trading price of the Company’s A shares for the 20 trading days immediately prior to the Latest Practicable Date, (2) the average trading price of the A shares of the Company on the trading date immediately before the Latest Practicable Date, (3) the net asset value per share of the Company based on the Group’s latest audited consolidated financial statements, as well as (4) the nominal value per share of the Company.

— 5 —

LETTER FROM THE BOARD

If all of the outstanding Convertible Bonds are converted pursuant to the adjusted conversion price, then the Shareholders will be diluted as a result of the increase in the Company’s total issued A shares.

Assuming no further shares will be issued or repurchased from the Latest Practicable Date until conversion, the following table sets out the dilution effect based on the outstanding amount of Convertible Bonds as at the Latest Practicable Date on the shareholding of the Shareholders as at the Latest Practicable Date:

			Upon full
			conversion of
			the Convertible
			Bonds based on
		Upon full	the adjusted
		conversion of the	conversion price of
		Convertible Bonds	RMB6.24 calculated
		based on	by reference
	As at the Latest	conversion price of	to the Latest
	Practicable Date	RMB8.60	Practicable Date
Total issued H shares	1,296,000,000	1,296,000,000	1,296,000,000
Total issued A Shares	2,108,556,216	2,567,854,587	2,741,563,586
Total issued share capital	3,404,556,216	3,863,854,587	4,037,563,586
(A shares and H shares)
Public shareholders	1,826,056,216	2,072,401,913	2,165,571,119 shares
(shares held and % as a	shares (53.64%)	shares (53.64%)	(53.64%)
proportion to the total
issued share capital of the
Company)

The Company is required by the Prospectus, applicable PRC rules and regulations to seek the approval of its Shareholders at the EGM.

3. CLOSURE OF REGISTER OF MEMBERS

The H Share register of the Company will be closed from Saturday, 12 July 2014 to Tuesday, 12 August 2014 (both days inclusive), during which no transfer of H Shares will be effected. Anyholders of H Shares of the Company, whose names appear on the Company’s register of members at the close of business on Tuesday, 12 August 2014 are entitled to attend and vote at the EGM after completing the registration procedures for attending the meeting. For the holders of H Shares, in order to be entitled to attend and vote at the EGM, their share transfer documents must be lodged with the Company’s H share registrar not later than 4:30 p.m. on Friday, 11 July 2014. Shareholders holding A Share Convertible Bonds shall abstain from voting.

— 6 —

LETTER FROM THE BOARD

The address of the share registrar (for share transfer) for the Company’s H Shares is as follows:

Hong Kong Registrars Limited Rooms 1712-1716 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong

Holders of H Shares, who intend to attend the EGM, must complete the reply slips for attending the EGM and return them to the Office of the Secretary to the Board of Directors of the Company not later than 20 days before the date of the EGM, i.e. no later than Wednesday, 23 July 2014. Details of the Office of the Secretary to the Board of Directors of the Company are as follows:

7th Floor, 670 Dong Da Ming Road, Shanghai, The People’s Republic of China Postal Code: 200080 Tel: 86(21) 6596 6666 Fax: 86(21) 6596 6160

4. EGM

The EGM will be held at 2:30 p.m. on Tuesday, 12 August 2014 at 3rd Floor, Parkview Hotel, 555 Dingxiang Road, Pudong New Area, Shanghai, The People’s Republic of China. A notice of the EGM is set out on pages N-1 to N-3 of this circular.

A proxy form for use at the EGM is enclosed. Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed proxy form (for use at the EGM) in accordance with the instructions printed thereon as soon as possible to the Company’s Hong Kong H share registrar and transfer office, Hong Kong Registrars Limited, 17M/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (in case of holders of H Shares) or the Office of the Secretary to the Board of Directors of the Company at 7th Floor, 670 Dong Da Ming Road, Shanghai, the PRC (in case of holders of A Shares) but in any event not less than 24 hours before the time appointed for the holding of the EGM (or any adjournment thereof). Completion and return of the said proxy form will not preclude you from attending and voting in person at the EGM or at any adjourned meeting should you so wish.

A reply slip in relation to attendance of the EGM is enclosed. If you are eligible and intend to attend the EGM, please complete and return the enclosed reply slip in accordance with the instructions printed thereon on or before Wednesday, 23 July 2014.

— 7 —

LETTER FROM THE BOARD

5. RECOMMENDATION

The Directors consider that the resolution to approve the downward adjustment to the conversion price of the Convertible Bonds is in the interests of the Company and the Shareholders as a whole, and recommend the Shareholders to approve the proposed resolution at the EGM.

Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

Yours faithfully,

China Shipping Development Company Limited Xu Lirong Chairman

— 8 —

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

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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)

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

Notice is hereby given that the extraordinary general meeting (the “ EGM ”) of China Shipping Development Company Limited (the “ Company ”) will be held at 2:30p.m. on Tuesday, 12 August 2014 at 3rd Floor, Parkview Hotel, 555 Dingxiang Road, Pudong New Area, Shanghai, The People’s Republic of China to consider and, if thought fit, pass the following special resolution:

Special Resolution

1. To approve the downward adjustment to the conversion price of A Share convertible bonds of China Shipping Development Company Limited, details of which are set out in the Company’s circular dated 23 June 2014.

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

23 June 2014 Shanghai The People’s Republic of China

Notes:

• (A) The H Share register of the Company will be closed from Saturday, 12 July 2014 to Tuesday, 12 August 2014 (both days inclusive), during which no transfer of H Shares will be effected. Any holders of H Shares of the Company, whose names appear on the Company’s register of members at the close of business on Tuesday, 12 August 2014 are entitled to attend and vote at the EGM after completing the registration procedures for attending the meeting. For the holders of H Shares, in order to be entitled to attend and vote at the EGM, their share transfer documents must be lodged with the Company’s H share registrar not later than 4:30p.m. on Friday, 11 July 2014.

— N-1 —

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

The address of the share registrar (for share transfer) for the Company’s H Shares is as follows:

Hong Kong Registrars Limited Rooms 1712-1716 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong

• (B) Holders of H Shares, who intend to attend the EGM, must complete the reply slips for attending the EGM and return them to the Office of the Secretary to the Board of Directors of the Company not later than 20 days before the date of the EGM, i.e. no later than Wednesday, 23 July 2014.

Details of the Office of the Secretary to the Board of Directors of the Company are as follows:

7th Floor, 670 Dong Da Ming Road, Shanghai, The People’s Republic of China Postal Code: 200080 Tel: 86(21) 6596 6666 Fax: 86(21) 6596 6160

• (C) Each holder of H Shares who has the right to attend and vote at the EGM is entitled to appoint in writing one or more proxies, whether that proxy is a shareholder or not, to attend and vote onhis behalf at the EGM.

• (D) The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing. If that instrument is signed by an attorney of the appointor, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified.

• (E) For holders of H Shares, the form of proxy, and if the form of proxy is signed by a person under a power of attorney or other authority on behalf of the appointor, a notarially certified copy of that power of attorney or other authority, must be delivered to the Company’s H share registrar, Hong Kong Registrars Limited, 17M Floor, Hopewell Centre 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time appointed for holding the EGM (or any adjournment thereof) in order for such documents to be valid.

• (F) Each holder of A Shares is entitled to appoint in writing one or more proxies, whether a shareholder or not, to attend and vote on its behalf at the EGM. Notes (C) to (D) also apply to holders of A Shares, except that the proxy form or other documents of authority must be delivered to the Office of the Secretary to the Board of Directors, the address of which is set out in Note (B) above, not less than 24 hours before the time appointed for holding the EGM (or any adjournment thereof) in order for such documents to be valid.

— N-2 —

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

• (G) If a proxy attends the EGM on behalf of a shareholder, he should produce his identity card and the instrument signed by the appointor of the proxy or his legal representative, which specifies the date of its issuance. If the legal representative of a shareholder which is a legal person attends the EGM, such legal representative should produce his identity card and valid documents evidencing his capacity as such legal representative. If a shareholder which is a legal person appoints a company representative other than its legal representative to attend the EGM, such representative should produce his identity card and an authorisation instrument affixed with the seal of that shareholder (which is a legal person) and duly signed by its legal representative.

• (H) The EGM is expected to last for an hour. Shareholders attending the EGM are responsible for their own transportation and accommodation expenses.

• (I) As at the date of this notice, the Board of Directors of the Company comprises Mr. Xu Lirong, Mr. Zhang Guofa, Ms. Su Min, Mr. Huang Xiaowen, Mr. Ding Nong, Mr. Liu Xihan, Mr. Yu Zenggang, Mr. Han Jun and Mr. Qiu Guoxuan as executive Directors, Mr. Zhang Jun, Mr. Wang Wusheng, Mr. Lin Junlai, Mr. Ruan Yongping and Mr. Ip Sing Chi as independent non-executive Directors.

— N-3 —