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.
PROSPERITY INTERNATIONAL HOLDINGS (H.K.) LIMITED
昌 興 國 際 控 股（香 港）有 限 公 司*
(Incorporated in Bermuda with limited liability)
(Stock Code: 803)
CONNECTED TRANSACTION
IN RELATION TO THE SALE OF IRON ORE
On 8 January 2015, Prosperity Macao, an indirect wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with Singapore Jinteng, pursuant to which Prosperity Macao agreed to sell 105,000 metric tonnes of iron ore to Singapore Jinteng at the aggregate Consideration of approximately US$7.13 million (approximately HK$55.61 million).
Prosperity Macao is an indirect wholly-owned subsidiary of the Company. Nanjing IS owns more than 10% interest in the Company and is a substantial shareholder of the Company. Since Nanjing IS controls the exercise of 30% or more of the voting powers at the general meetings of Nanjing United and Singapore Jinteng is an indirect non-wholly owned subsidiary of Nanjing United, Singapore Jinteng is therefore an associate of Nanjing IS and hence a connected person of the Company under Chapter 14A of the HK Listing Rules. Therefore, the Sale and Purchase Agreement constitutes a connected transaction for the Company under the HK Listing Rules.
As one or more of the applicable percentage ratios in respect of the Transaction exceed
0.1% but all the applicable percentage ratios are less than 5%, the Transaction is subject to the reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the HK Listing Rules. Details of the Transaction are required to be disclosed by way of this announcement and will be included in the next annual report and accounts of the Company in accordance with the HK Listing Rules.
* For identification purpose only
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INTRODUCTION
On 8 January 2015, Prosperity Macao, an indirect wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with Singapore Jinteng, pursuant to which Prosperity Macao agreed to sell 105,000 metric tonnes of iron ore to Singapore Jinteng at the aggregate Consideration of approximately US$7.13 million (approximately HK$55.61 million).
THE SALE AND PURCHASE AGREEMENT
The principal terms of the Sale and Purchase Agreement are set out below:
Date: 8 January 2015
Parties: (1) Prosperity Materials Macao Commercial Offshore Limited
(as the Vendor)
(2) Singapore Jinteng International Ptd. Ltd. (as the Purchaser)
The Products: 105,000 metric tonnes of iron ore of such specification as set out in the Sale and Purchase Agreement, to be delivered by the Vendor to the port of Beilun/Rizhao/Qingdao/Shanghai, PRC at the Purchaser's option.
Consideration: US$67.95 (approximately HK$530.01) per dry metric tonne (with adjustments as set out in the Sale and Purchase Agreement), inclusive of freight charges and other direct costs. The aggregate Consideration of approximately US$7.13 million (approximately HK$55.61 million) shall be paid by the Purchaser by an irrevocable letter of credit.
Condition: The Sale and Purchase Agreement is unconditional.
REASONS FOR AND BENEFITS OF THE TRANSACTION
Iron ore trading is one of the principal businesses of the Group. The Sale and Purchase Agreement will enable Prosperity Macao to continue its existing trading arrangement with the Nanjing IS Group. The Sale and Purchase Agreement is of revenue nature and has been entered into in the ordinary and usual course of business of the Group. The Consideration was arrived at after an arm's length negotiation between the Vendor and the Purchaser, taking into account the prevailing market price of the iron ore.
The Directors (including all the independent non-executive Directors) take the view that the Sale and Purchase Agreement is on normal commercial terms, the terms of which are fair and reasonable and that the Transaction is in the interests of the Company and the Shareholders as a whole. None of the Directors has abstained from voting at the relevant meeting of the Board to approve the Transaction.
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FINANCIAL EFFECTS OF THE TRANSACTION
The original acquisition costs of the Products are US$65.95 (approximately HK$514.41) per dry metric tonne. The Group expects to record a gain of US$2 (approximately HK$15.6) per dry metric tonne as a result of the Transaction, which is calculated by reference to the Consideration less the costs and expenses associated with the Transaction. The Group intends to apply the proceeds of the sale as general working capital of the Group.
INFORMATION OF THE GROUP AND THE PURCHASER
The Group is principally engaged in (i) the trading of cement and clinker; (ii) the investment in granite material production; (iii) the mining and trading of iron ore; and (iv) the real estate investments and development in the PRC.
Prosperity Macao is a limited liability company incorporated in Macau and an indirect wholly-owned subsidiary of the Company. Prosperity Macao is principally engaged in the trading of iron ore.
Singapore Jinteng is a limited liability company incorporated under the laws of Singapore. Singapore Jinteng is principally engaged in the trading of iron ore.
IMPLICATIONS OF THE TRANSACTION UNDER THE HK LISTING RULES
Prosperity Macao is an indirect wholly-owned subsidiary of the Company. Nanjing IS owns more than 10% interest in the Company and is a substantial shareholder of the Company. Since Nanjing IS controls the exercise of 30% or more of the voting powers at the general meetings of Nanjing United and Singapore Jinteng is an indirect non-wholly owned subsidiary of Nanjing United, Singapore Jinteng is therefore an associate of Nanjing IS and hence, a connected person of the Company under Chapter 14A of the HK Listing Rules. Therefore, the Sale and Purchase Agreement constitutes a connected transaction for the Company under the HK Listing Rules.
As one or more of the applicable percentage ratios in respect of the Transaction exceed 0.1% but all the applicable percentage ratios are less than 5%, the Transaction is subject to the reporting and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the HK Listing Rules. Details of the Transaction are required to be disclosed by way of this announcement and will be included in the next annual report and accounts of the Company in accordance with the HK Listing Rules.
DEFINITIONS
In this announcement, the following expressions shall have the following meanings:
''associate'' has the meaning ascribed to it in the HK Listing Rules
''Board'' the board of Directors
''Company'' Prosperity International Holdings (H.K.) Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange (Stock code: 803)
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''connected person'' has the meaning ascribed to it in the HK Listing Rules
''connected transaction'' has the meaning ascribed to it in the HK Listing Rules
''Consideration'' the consideration for the sale and purchase of the Products, being US$67.95 (approximately HK$530.01) per dry metric tonne (with adjustments as set out in the Sale and Purchase Agreement)
''Directors'' the directors of the Company, and a ''Director'' means any one of them
''Group'' the Company and its subsidiaries from time to time
''HK Listing Rules'' The Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited
''HK$'' Hong Kong dollars, the lawful currency of Hong Kong
''Hong Kong'' The Hong Kong Special Administrative Region of the PRC
''Macau'' The Macau Special Administrative Region of the PRC
''Nanjing IS'' 南京鋼鐵集團有限公司 (Nanjing Iron and Steel Group Co., Ltd.*), a company incorporated under the laws of PRC
''Nanjing IS Group'' Nanjing IS and its subsidiaries from time to time
''Nanjing United'' 南京南鋼鋼鐵聯合有限公司 (Nanjing Nangang Iron & Steel United Co., Ltd.*), a company incorporated under the laws of PRC
''percentage ratios'' the percentage ratios under Rule 14.07 of the HK Listing
Rules
''PRC'' The People's Republic of China
''Products'' 105,000 metric tonnes iron ore to be sold by the Vendor to the Purchaser on the terms of the Sale and Purchase Agreement
''Prosperity Macao'' or the ''Vendor''
''Sale and Purchase
Agreement''
Prosperity Materials Macao Commercial Offshore Limited, a limited liability company incorporated in Macau and an indirect wholly-owned subsidiary of the Company
the sale and purchase agreement dated 8 January 2015 entered into between Prosperity Macao as vendor and Singapore Jinteng as purchaser in respect of the Transaction
''Share(s)'' ordinary share(s) of HK$0.01 each in the share capital of the Company
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''Shareholder(s)'' holders of the Share(s)
''Singapore Jinteng'' or the ''Purchaser''
Singapore Jinteng International Pte. Ltd., a limited liability company incorporated under the laws of Singapore
''Stock Exchange'' The Stock Exchange of Hong Kong Limited
''Transaction'' the sale and purchase of the Products on the terms of the
Sale and Purchase Agreement
''US$'' United States dollars, the lawful currency of the United
States of America
''%'' per cent
By order of the Board
Prosperity International Holdings (H.K.) Limited
Wong Ben Koon
Chairman
Hong Kong, 8 January 2015
As at the date of this announcement, the executive Directors are Mr. Wong Ben Koon (Chairman), Mr. Zhu Kai (Deputy Chairman), Dr. Mao Shuzhong (Chief Executive Officer), Mr. Wu Likang, Ms. Gloria Wong and Mr. Kong Siu Keung. The non-executive Director is Mr. Liu Yongshun and the independent non-executive Directors are Mr. Yuen Kim Hung, Michael, Mr. Yung Ho, Mr. Chan Kai Nang and Mr. Ma Jianwu.
For the purposes of this announcement, unless otherwise specified, conversions of US$ into HK$ are based on the approximate exchange rate of US$1 to HK$7.8 for the purposes of illustration only. No representation is made that any amount into HK$ and US$ could have been or could be converted at the above rate or at any other rates.
* For identification purpose only
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