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Rego Interactive Co., Ltd — Capital/Financing Update 2020
Aug 7, 2020
50588_rns_2020-08-07_5c26ea8a-8634-4534-8e01-a78ce7a6861f.pdf
Capital/Financing Update
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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: 1065)
DISCLOSEABLE TRANSACTION ANNOUNCEMENT ON THE ESTABLISHMENT OF PROJECT COMPANY FUNDED BY THE COMPANY
Joint Venture Contract
On 7 August 2020, the Board reviewed and approved the establishment of a Project Company through funding by the Company to carry out the Project. Accordingly, the Company intends to sign a Joint Venture Contract with Wanli Real Estate Company to establish the Project Company through joint funding and implement the Project. The Project is implemented in phases of investment and step-by-step construction. The total estimated investment amount of the Project is approximately RMB1,638,259,500, of which, the total investment amount in the first phase of the Project is RMB453,319,500 (the total land cost including the first, second and third phases is RMB60,000,000), the investment amount in the second phase is RMB592,470,000 and the investment amount in the third phase is RMB592,470,000.
According to the agreement of the Joint Venture Contract, the registered capital of the Project Company is RMB136,300,000, of which the Company contributes RMB69,513,000, accounting for 51% of the registered capital of the Project Company; Wanli Real Estate Company contributes RMB66,787,000, accounting for 49% of the registered capital of the Project Company. Both parties contribute in cash. The difference between the registered capital of the Project Company and the funds required for the Project will be resolved by the Project Company through bank loans, financing lease or any other means, and the Company and Wanli Real Estate Company will provide financing guarantees for the Project Company in proportion to its shareholding. After the Establishment, the Project Company will become a subsidiary of the company.
Implications of the Listing Rules
Since one or more applicable percentage ratios of the Establishment exceed 5% but less than 25%, in terms of total capital commitment made by the Company under the Joint Venture Contract, the Establishment constitutes a discloseable transaction of the Company according to Chapter 14 of the Listing Rules. Therefore, according to Chapter 14 of the Listing Rules, the Establishment shall only be subject to the reporting and announcement requirements, but it is exempt from the Shareholders’ approval requirements.
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To the best knowledge, information and belief of the Directors, and after making all reasonable inquiries, except for those disclosed in this Announcement, Wanli Real Estate Company and its ultimate beneficial owners are third parties independent of the Company and its connected persons.
As at the date of the announcement, Wanli Real Estate Company is the holding company of Dongying Runli Company, which is a substantial shareholder of Shandong New Environment Company, an indirect subsidiary of the Company (being an insignificant subsidiary of the Company pursuant to Rule 14A.09 of the Listing Rules). Therefore, Wanli Real Estate Company is not a connected person of the Company under Chapter 14A of the Listing Rules, and the Establishment does not constitute a connected transaction of the Company under Chapter 14A of the Listing Rules.
INTRODUCTION
On 7 August 2020, the Board reviewed and approved the establishment of a Project Company through funding by the Company to carry out the Project. Accordingly, the Company intends to sign a Joint Venture Contract with Wanli Real Estate Company to establish the Project Company through joint funding and implement the Project.
BASIC INFORMATION OF THE PROJECT
The Project site is located in Binhai New Area, the agricultural high-tech industry demonstration zone in the Yellow River Delta in Shandong Province, with an estimated area of 358 mu. The main subject matter of the Project is a rigid landfill and supporting facilities. The main construction contents include landfill storage cell engineering, rain awning and hoisting mechanical engineering, anti-seepage engineering, leachate drainage engineering, road engineering, rainwater drainage engineering, pumps room, temporary storage, leachate treatment workshop, pretreatment workshop and office laboratory building, etc.
The core of the Project is a landfill storage cell with a total of 2,400, a total designed storage capacity of 600,000 cubic meters and an estimated service life of 10 years. The Project is implemented in phases of investment and step-by-step construction. The total estimated investment of the Project is approximately RMB1,638,259,500. The Project is divided into three phases. The first phase is the construction of a 120,000 cubic meter landfill and corresponding supporting facilities, with the estimated investment amount of RMB453,319,500 (the total land cost including the first, second and third phases is RMB60,000,000); the second phase is the construction of a 240,000 cubic meter landfill and temporary storage, with the estimated investment amount of RMB592,470,000; and the third phase is the construction of a 240,000 cubic meter landfill and temporary storage, with the estimated investment amount of RMB592,470,000. The construction period of the first, second and third phases of the Project is 1 year, with the estimated operation period being 10 years and the closure maintenance period based on preliminary design being 39 years.
The treatment and disposal objects of the Project are hazardous wastes (including waste salt and hazardous wastes containing heavy metals, etc.) in the surrounding areas of Binhai New Area, the agricultural high-tech industry demonstration zone in the Yellow River Delta in Shandong Province. The disposal categories cover 20 main categories in the Directory of National Hazardous Wastes (2016 Edition).
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The collection of hazardous waste for the Project intends to adopt the market-oriented operation. The Project Company intends to sign a contract with the waste-producing unit to collect and treat hazardous waste and charge disposal fees based on the transfer volume and unit price. During the maintenance period, the Project Company obtains income through nursery cultivation, plant leasing and catalyst treatment.
JOINT VENTURE CONTRACT
The following is the summary of the main terms of the Joint Venture Contract:
(1) Parties
-
(a) the Company; and
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(b) Wanli Real Estate Company.
(2) Business Scope
The business scope of the Project Company intends to include the operation and maintenance of hazardous waste treatment and disposal facilities, business management and technical development, technical consultation, technical support and other supporting services, subject to the final approval of the industrial and commercial registration authorities.
The joint venture period of the Project Company is 50 years. During the joint venture period, the Project Company will be responsible for the investment, construction, operation and maintenance of the Project.
(3) Total Investment Amount and Registered Capital
The total estimated investment amount of the Project is approximately RMB1,638,259,500. According to the agreement of the Joint Venture Contract, the registered capital of the Project Company is RMB136,300,000, of which the Company contributes RMB69,513,000, accounting for 51% of the registered capital of the Project Company; Wanli Real Estate Company contributes RMB66,787,000, accounting for 49% of the registered capital of the Project Company. Both parties contribute in cash. After the Project Company is established, it will become a subsidiary of the Company.
The total registered capital of the Project Company of RMB136,300,000 was determined by the Company and Wanli Real Estate Company with reference to the Project Company’s estimated capital needs at the current stage of the Project.
The difference between the registered capital of the Project Company and the funds required for the Project will be resolved by the Project Company through bank loans, financing lease or any other means, and the Company and Wanli Real Estate Company will provide financing guarantees for the Project Company in proportion to its shareholding.
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(4) Governance structure
According to the Joint Venture Contract, the Project Company has established a board of directors consisting of 5 directors, of which the Company appoints 3 directors (including the chairman), and Wanli Real Estate Company appoints 2 directors. The Project Company has established a board of supervisors consisting of 3 supervisors, of which the Company appoints 1 supervisor (including the chairman of the board of supervisors), Wanli Real Estate Company appoints 1 supervisor, and another one is an employee supervisor. The general manager of the Project Company is recommended by Wanli Real Estate Company and appointed by the board of the Project Company. The Company and Wanli Real Estate jointly recommend persons with appropriate qualifications to serve as the senior management of the Project Company, and the chief financial officer is recommended by the Company.
(5) Profit distribution
The net profit of the Project Company after various expenses and taxation are deducted will be distributed according to the proportion of investment in the Project Company by the Company and Wanli Real Estate Company.
INFORMATION ABOUT THE COMPANY AND WANLI REAL ESTATE COMPANY
The Company is mainly engaged in the investment, construction, design, management, operation, technical consultation and supporting services of sewage and tap water and other water treatment facilities; design, construction, management, construction and management of municipal infrastructure; road franchising, technical consultation and supporting services for the southeast half ring of the central ring road in Tianjin; development and operation of environmental protection technology and environmental protection products and equipment; lease of self-owned building, etc.
Wanli Real Estate Company is a company incorporated with limited liability according to the laws of the PRC. Its business scope covers real estate development, sales, landscaping engineering, municipal engineering, lease of buildings, etc.
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REASONS AND BENEFITS FOR THE ESTABLISHMENT AND THE IMPLEMENTATION OF THE PROJECT
The Project is a rigid disposal facility for hazardous waste landfill constructed with new national regulations and high standards. It realizes standardized disposal of hazardous wastes in a safe and efficient method at the terminal. The construction of the Project complies with the requirements of national industrial policies and promotes ecological environmental governance and social green development. The Project meets the requirements of the Group’s Thirteenth Five-Year development plan and strategy, with outstanding demonstration and driving effects. It is useful for further exploring emerging business areas, building the entire industry chain and comprehensive regional service capabilities, implementing technical talent reserves, and creating a comprehensive environmental service provider.
In addition, with good knowledge of local industry, Wanli Real Estate Company and the Company can achieve resource complementarity through giving full play to their respective advantages, which will facilitate their important roles in project operation and future business.
The Directors (including independent non-executive directors) are of the view that the design scale of the Project is moderate and reasonable with sound market prospects, and the investment, construction and operation of the Project are feasible. After the completion of the Project, the Company expects to achieve better economic benefits, which is in line with the long-term interests of the Company.
The terms of the Joint Venture Contract are determined by the parties after arm’s length negotiation. Based on the above, the Directors (including independent non-executive directors) are of the view that the terms of the Joint Venture Contract are on normal commercial terms, fair and reasonable and in the interests of the Group and its Shareholders as a whole.
IMPLICATIONS OF THE LISTING RULES
Since one or more applicable percentage ratios of the Establishment exceed 5% but less than 25%, in terms of total capital commitment made by the Company under the Joint Venture Contract, the Establishment constitutes a discloseable transaction of the Company according to Chapter 14 of the Listing Rules. Therefore, according to Chapter 14 of the Listing Rules, the Establishment shall only be subject to the reporting and announcement requirements, but it is exempt from the Shareholders’ approval requirements.
To the best knowledge, information and belief of the Directors, and after making all reasonable inquiries, except for those disclosed in this Announcement, Wanli Real Estate Company and its ultimate beneficial owners are third parties independent of the Company and its connected persons.
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As at the date of the announcement, Wanli Real Estate Company is the holding company of Dongying Runli Company, which is a substantial shareholder of Shandong New Environment Company, an indirect subsidiary of the Company (being an insignificant subsidiary of the Company pursuant to Rule 14A.09 of the Listing Rules). Therefore, Wanli Real Estate Company is not a connected person of the Company under Chapter 14A of the Listing Rules, and the Establishment does not constitute a connected transaction of the Company under Chapter 14A of the Listing Rules.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
| “Board” | the board of Directors |
|---|---|
| “China” or “PRC” | the People’s Republic of China, but for the purposes of |
| this announcement, excluding Hong Kong, Macau Special | |
| Administrative Region of the PRC and Taiwan | |
| “connected person(s)”, | has the respective meaning ascribed thereto under the Listing |
| “substantial shareholder(s)”, | Rules |
| “holding company” and | |
| “subsidiary(ies)” | |
| “Director(s)” | the directors of the Company (including independent non- |
| executive directors) | |
| “Directory of National | Directory of National Hazardous Wastes (2016 Edition) as revised |
| Hazardous Wastes | and released by the Ministry of Environmental Protection of the |
| (2016 Edition)” | People’s Republic of China, National Development and Reform |
| Commission and the Ministry of Public Security | |
| “Dongying Runli Company” | Dongying Runli Garden Municipal Co., Ltd.* (東營市潤鋫園林 |
| 市政有限公司), a limited liability company incorporated under | |
| the laws of the PRC, holding 49% of the shares of Shandong New | |
| Environment Company and is also an 52%-owned subsidiary of | |
| Wanli Real Estate Company | |
| “Hong Kong “ | the Hong Kong Special Administrative Region of the PRC |
| “Joint Venture Contract” | a joint venture contract which the Company intends to enter |
| into with Wanli Real Estate Company to establish the Project | |
| Company through joint funding for the implementation of the | |
| project | |
| “Listing Rules” | the Rules Governing the Listing of Securities on the Stock |
| Exchange | |
| “percentage ratio(s)” | has the meaning ascribed thereto under the Listing Rules (as |
| applicable to a transaction) |
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“Project Company”
| “Project Company” | the project company to be funded and established by the |
| Company and Wanli Real Estate Company in accordance with the | |
| Joint Venture Contract, which is intended to be named Dongying | |
| Tianchi Environmental Technology Co., Ltd.* (東營天馳環保科 | |
| 技有限公司), subject to the final approval of the industrial and | |
| commercial registration authorities | |
| “RMB” or “Renminbi” | Renminbi, the lawful currency of the PRC |
| “Shandong Company” | Shandong Chuangye Environmental Technology Development |
| Co., Ltd.* (山東創業環保科技發展有限公司), a limited liability | |
| company incorporated under the laws of the PRC, which is a | |
| 55%-owned subsidiary of the Company | |
| “Shandong New | Shandong Chuangye New Environmental Service Co., Ltd.* |
| Environment Company” | (山東創業新環境服務有限公司), a limited liability company |
| incorporated under the laws of the PRC, which is a 51%-owned | |
| subsidiary of Shandong Company and an indirect subsidiary of | |
| the Company | |
| “Shareholders” | holders of Shares |
| “Share(s)” | the ordinary shares in the existing share capital of the Company |
| with a nominal value of RMB1.00 each | |
| “Stock Exchange” | The Stock Exchange of Hong Kong Limited |
| “Company” | Tianjin Capital Environmental Protection Group Company |
| Limited, a joint stock company incorporated in the PRC with | |
| limited liability, the A shares and H shares of which are listed on | |
| the Shanghai Stock Exchange and Stock Exchange, respectively | |
| “Establishment” | The Company and Wanli Real Estate Company jointly funded |
| the establishment of the Project Company in accordance with the | |
| Joint Venture Contract | |
| “Group” | the Company and its subsidiaries |
| “Project” | the project which the Project Company intends to adopt the |
| mature and reliable shielded landfill technology at home and | |
| abroad to construct a comprehensive material ecology disposal | |
| center in Binhai New District, an agricultural high-tech industry | |
| demonstration zone in the Yellow River Delta in Shandong | |
| Province, which integrates collection, transportation, storage, | |
| pretreatment and landfill |
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“Wanli Real Estate Company”
Shandong Wanli Real Estate Co., Ltd.[*] (山東萬里置業有限公司), a company incorporated in the PRC with limited liability, holding 52% of the shares of Dongying Runli Company
“%”
percentage
By order of the Board Chairman Liu Yujun
- Tianjin, China 7 August 2020
As of the date of this announcement, the Board consists of three executive Directors: Mr. Liu Yujun, Ms. Wang Jing and Mr. Niu Bo; three non-executive Directors: Mr. Gu Wenhui, Mr. Han Wei and Mr. Si Xiaolong; and three independent non-executive Directors: Mr. Di Xiaofeng, Mr. Guo Yongqing and Mr. Wang Xiangfei.
- For identification purpose only
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