BLOOMAGE BIOTECHNOLOGY CORP LTD 
By 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.
Bloomage BioTechnology Corporation Limited(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 00963) CONTINUING CONNECTED TRANSACTION NEW PROPERTY LEASING AGREEMENT TERMINATION OF THE OLD PROPERTY LEASING AGREEMENT
Reference is made to the announcement dated 28 May 2012 of the Company in relation to the Old Property Leasing Agreement entered into between Bloomage Hyinc and Bloomage Property, pursuant to which Bloomage Hyinc leased from Bloomage Property (i) Property A for a term from 1 January 2012 to 31 December
2013; and (ii) Property B for a term from 26 August 2012 to 31 December 2013.
The Board announces that on 18 January 2013, Bloomage Hyinc and Bloomage Property entered into the Termination Agreement I and the Termination Agreement II, pursuant to which the parties agreed to terminate the lease for Property A with effect from 30 April 2013 and agreed and confirmed to terminate the lease for Property B with effect from 15 December 2012, respectively.
Pursuant to the Termination Agreement I and the Termination Agreement II, neither party is required to pay any penalty or compensation to any other party in respect of the termination of the lease for Property A and Property B, respectively.
The Board further announces that on 18 January 2013, Bloomage Hyinc and Bloomage Property entered into the New Property Leasing Agreement, pursuant to which Bloomage Hyinc leases from Bloomage Property the Property C as office for a term from 1 January 2013 to 31 December 2015.
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Bloomage Property is ultimately owned as to 98.02% by Ms. Zhao, a controlling shareholder of the Company, the chairman of the Company and an executive Director and as such, Bloomage Property is a connected person to the Company. Accordingly, the New Property Leasing Agreement constitutes a continuing connected transaction of the Company.
As none of the applicable percentage ratios (other than the profits ratio) for the lease for Property A and the New Property Leasing Agreement in aggregate, on an annual basis, exceeds the 5% threshold under Rule 14A.34 of the Listing Rules, the New Property Leasing Agreement is only subject to the reporting, annual review and announcement requirements and is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
Reference is made to the announcement dated 28 May 2012 of the Company in relation to the Old Property Leasing Agreement entered into between Bloomage Hyinc and Bloomage Property, pursuant to which Bloomage Hyinc leased from Bloomage Property (i) Property A for a term from 1 January 2012 to 31 December
2013; and (ii) Property B for a term from 26 August 2012 to 31 December 2013.
The Board announces that on 18 January 2013, Bloomage Hyinc and Bloomage Property entered into the Termination Agreement I and the Termination Agreement II, pursuant to which the parties agreed to terminate the lease for Property A with effect from 30 April 2013 and agreed and confirmed to terminate the lease for Property B with effect from 15 December 2012, respectively.
Pursuant to the Termination Agreement I and the Termination Agreement II, neither party is required to pay any penalty or compensation to any other party in respect of the termination of the lease for Property A and Property B, respectively.
Bloomage Property (as leasor).
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Pursuant to the New Property Leasing Agreement, Bloomage Hyinc leases from
Bloomage Property the Property C as office with a gross area of approximately
1,371.11 square metres for a term from 1 January 2013 to 31 December 2015. Bloomage Hyinc shall pay the rent quarterly at a rate of RMB1,563,065.4 (i.e. RMB380 per square metre per month) and is responsible for the related utility charges and monthly management fees at the rate of RMB29 per square metre.
Bloomage Hyinc shall also pay an amount of RMB1,682,351.97 as warranty money to Bloomage Property within three working days after execution of the New Property Leasing Agreement. If Bloomage Hyinc commits any breach causing any damages or expenses or if there is any unpaid rental, Bloomage Property has right to deduct such damages, expenses and unpaid rental from the warranty money. However, if no such damages, expenses or unpaid rental is deducted, the warranty money will be fully refunded to Bloomage Hyinc without interest upon expiry of the lease period.
The annual caps for the rental payable by Bloomage Hyinc under the New Property
Leasing Agreement are set out as follows:
Year ending 31 December 2013 RMB6,252,261.60
(approximately HK$7,718,841.48)
Year ending 31 December 2014 RMB6,252,261.60
(approximately HK$7,718,841.48)
Year ending 31 December 2015 RMB6,252,261.60
(approximately HK$7,718,841.48)
The rental under the New Property Leasing Agreement had been determined by Bloomage Hyinc and Bloomage Property after arm's length negotiation with reference to the prevailing market rates for comparable properties in the relevant neighborhood.
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Owing to the continuous development of the Group, additional office spaces are required to meet the Group's operation need. The rental has been determined by Bloomage Hyinc and Bloomage Property with reference to the prevailing market rental of comparable properties in the area where Property C situated.
The Board, including all the independent non-executive Directors, is of the view that the Transaction is conducted in the ordinary and usual course of business of the Group and on normal commercial terms, the terms of the New Property Leasing Agreement and the proposed annual caps are fair and reasonable and in the interests of the Company and its shareholders as a whole.
The Group is principally engaged in the development, manufacture and sale of a diversified range of hyaluronic acid products. Bloomage Hynic is principally engaged in the sale of bio-chemical products and medical instruments.
Bloomage Property is principally engaged in leasing and sale of properties, property management and public parking services.
Bloomage Property is ultimately owned as to 98.02% by Ms. Zhao, a controlling shareholder of the Company, the chairman of the Company and an executive Director and as such, Bloomage Property is a connected person to the Company. Accordingly, the New Property Leasing Agreement constitutes a continuing connected transaction of the Company.
As none of the applicable percentage ratios (other than the profits ratio) for the lease for Property A and the New Property Leasing Agreement in aggregate, on an annual basis, exceeds the 5% threshold under Rule 14A.34 of the Listing Rules, the New Property Leasing Agreement is only subject to the reporting, annual review and announcement requirements and is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
Except for Ms. Zhao, no Directors have any material interests in the Transaction and thus no Directors except for Ms. Zhao have abstained from voting on the Board resolutions for considering and approving the New Property Leasing Agreement and its proposed annual caps.
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In this announcement, the following expressions have the following meanings unless the context otherwise requires:
"Bloomage Hyinc" (Beijing Bloomage Hyinc
Technology Company Limited) (formerly known as
), a company established
in the PRC and an indirectly wholly-owned subsidiary of the Company
"Bloomage Property" (Beijing Bloomage Central Property Management Co., Ltd.), a company established in the PRC and ultimately owned as to
98.02% by Ms. Zhao
"Board" board of Directors
"Company" Bloomage BioTechnology Corporation Limited (1:.
), a limited company incorporated in
the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange
"connected person(s)" has the same meaning as ascribed to this term under the
Listing Rules
"controlling
shareholder(s)"
has the same meaning as ascribed to this term under the
Listing Rules
"Director(s)" the director(s) of the Company
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the
People's Republic of China
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Listing Rules" the Rules Governing the Listing of Securities on the
Stock Exchange
"Ms. Zhao" Ms. Zhao Yan (Mi
