KERRY LOGISTICS NETWORK LIMITED 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.
(Incorporated in the British Virgin Islands and continued into Bermuda as an exempted company with limited liability)
Stock Code 636
VOLUNTARY ANNOUNCEMENT FORMATION OF JOINT VENTURE IN INDONESIAThe Board wishes to announce that on 16 January 2015, KLN Singapore, a wholly‐ owned subsidiary of the Company, and the shareholders of PT Puninar, one of the largest logistics service providers in Indonesia, have agreed to form the Joint Venture. Through the Joint Venture, KLN Singapore will expand its integrated logistics business in Indonesia by investing in PT Puninar by way of a Sale, Purchase and Subscription Agreement and a Convertible Bond Subscription Deed. Upon completion of the Transaction, KLN Singapore will own an aggregate of 15% indirect interest in PT Puninar. Upon conversion of the Convertible Bond, KLN Singapore will
in total own a 40% indirect interest in PT Puninar.
THE SALE, PURCHASE AND SUBSCRIPTION AGREEMENT
Date16 January 2015
The AcquisitionPursuant to the Sale, Purchase and Subscription Agreement, KLN Singapore agreed to acquire and subscribe for certain shares in some of the shareholders of PT Puninar. Upon completion of the Acquisition, KLN Singapore will own in total a 15% indirect interest in PT Puninar through these shareholders.
ConsiderationThe price payable by KLN Singapore for the Acquisition is approximately US$16 million.
Call and Put OptionsIn the event that the Convertible Bond is not converted in accordance with the Convertible Bond Subscription Deed, the shareholders of PT Puninar have the option to purchase back from KLN Singapore, and KLN Singapore has the option to sell to the ultimate beneficial owners of the relevant shareholders of PT Puninar, such shares acquired and subscribed by KLN Singapore pursuant to the
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Sale, Purchase and Subscription Agreement for an amount equal to the Consideration.
Other Provisions
The Sale, Purchase and Subscription Agreement contains provisions such as warranties, indemnities and covenants which are usual and customary for a transaction of this nature and scale.
The Consideration and all other terms of the Sale, Purchase and Subscription Agreement were negotiated on an arm's length basis and were determined with reference to factors such as PT Puninar's market position and financial performance.
To the best of the Directors' knowledge, information and belief, and having made reasonable enquiries, such shareholders of PT Puninar and their respective ultimate beneficial owners are third parties independent of the Group and are not connected persons of the Group.
THE CONVERTIBLE BOND SUBSCRIPTION DEED
Date16 January 2015
The Convertible Bond
Pursuant to the Convertible Bond Subscription Deed, KLN Singapore agreed to subscribe for the Convertible Bond with the aggregate principal amount of approximately US$45 million. The maturity date of the Convertible Bond will be 30 April 2017 (the "Maturity Date"). KLN Singapore may at any time up to the date which is one month prior to the Maturity Date, convert all of the principal amount of the Convertible Bond it holds into issued shares in the ultimate beneficial owner of one of the shareholders of PT Puninar on a dollar for dollar basis (the "Bondholder Conversion Options"). The exercise of the Bondholder Conversion Options is subject to the achievement of certain key performance indicators by PT Puninar. Interests at the rate of 6% of the aggregate principal amount of the Convertible Bond per annum will be payable to KLN Singapore every three months accrued from the date of issuance of the Convertible Bond to the date upon which the Convertible Bond is converted or on the Maturity Date (as the case may be).
Upon completion of the Transaction and the conversion of the Convertible Bond, KLN Singapore will own an aggregate of 40% indirect interest in the total issued share capital of PT Puninar. Part of the Consideration and all subscription money of the Convertible Bond will be invested into PT Puninar to refinance its existing debt obligations and to expand its integrated logistics business. The Directors, including the independent non‐executive Directors, consider that the Transaction has been entered into in the ordinary and usual course of business of the Group on normal commercial terms, and is fair and reasonable and in the interests of the Company and its shareholders as a whole.
To the best of the Directors' knowledge, information and belief, and having made reasonable enquiries, such shareholder, its ultimate beneficial owner and PT Puninar are third parties independent of the Group and are not connected persons of the Group.
INFORMATION RELATING TO THE GROUP AND PT PUNINAR
The Group's core business encompasses integrated logistics, international freight forwarding and supply chain solutions. With head offices in Hong Kong, the Group has a far‐reaching global network that stretches across six continents, and includes one of the largest distribution network and hub operations in Greater China and the ASEAN region.
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PT Puninar is one of the largest logistics service providers in Indonesia with integrated multimodal transport by sea, air, and land with support from its multinational partners. It is a member of the Triputra Group, which is one of the largest conglomerates in Indonesia with a diversified business portfolio encompassing mining, agribusiness, finance, trading, rental services, logistics and manufacturing. As at the date of this announcement, PT Puninar and its subsidiaries manage a logistics facility portfolio of approximately 9.67 million square feet located in various cities in Indonesia, including Jakarta, Bandung, Jambi, Semarang, Balikpapan, as well as a truck fleet of more than 700 vehicles and 27 vessels.
REASONS FOR AND BENEFITS OF THE JOINT VENTURE
As the Group looks to acquire businesses to complement its current network and services, as well as develop new markets, the Board believes that the Joint Venture represents a unique opportunity to expand the Group's integrated logistics capabilities in South‐East Asia and connect globally. As Indonesia is one of the key countries in ASEAN, its economy and logistics industry will benefit significantly from the free flow of goods and services from the launch of the ASEAN Economic Community in 2015. The country has also seen a surge in consumption with significant economic activities in 2014 which has driven high demand for logistics market in the country. In particular, there is strong demand for quality inter‐island logistics services in Indonesia. These factors translate into immense growth opportunities for the logistics market in Indonesia. Through the Joint Venture, the Group and PT Puninar can attain a win‐win outcome by leveraging on each other's competitive strength, combining the Group's global logistics expertise and international freight forwarding network with PT Puninar's local capabilities and connections. This will give customers in Indonesia access to complete supply chain solutions and a globally integrated network.
In addition, PT Puninar will also be able to expand its international customer base. By enabling customers to optimize their supply chains with the Joint Venture's integrated logistics services and highly customized solutions, the Board believes the Group is well‐positioned to capture opportunities in the rapidly growing Indonesian logistics market with the Joint Venture. The Board also believes that the addition of capabilities in Indonesia will serve to enhance the Group's current service and its geographic offering to its clients and enable substantial benefits to accrue to all shareholders of both the Group and PT Puninar.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:
"Acquisition" the acquisition and subscription of certain shares in some of the shareholders of PT Puninar by KLN Singapore in accordance to the Sale, Purchase and Subscription Agreement
"ASEAN" the Association of Southeast Asian Nations
"Board" the board of Directors
"Company" Kerry Logistics Network Limited, incorporated in the British Virgin Islands and continued into Bermuda to become an exempted company with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"connected person(s)" has the meaning ascribed thereto under the Listing Rules
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"Consideration" the total consideration payable by KLN Singapore for the
Acquisition, being approximately US$16 million
"Convertible Bond" the convertible bond in principal amount of approximately US$45 million issued by the ultimate beneficial owner of one of the shareholders of PT Puninar to KLN Singapore pursuant to the Convertible Bond Subscription Deed
"Convertible Bond
Subscription Deed"
the subscription deed entered into between KLN Singapore, the ultimate beneficial owner of one of the shareholders of PT Puninar and PT Puninar in respect of the issuance of the Convertible Bond
"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
"Indonesia" the Republic of Indonesia
"Joint Venture" the joint venture between KLN Singapore and the shareholders of PT Puninar whereby KLN Singapore makes an indirect investment in PT Puninar by way of the Sale, Purchase and Subscription Agreement and the Convertible Bond Subscription Deed
"KLN Singapore" KLN (Singapore) Pte. Ltd., a wholly‐owned subsidiary of the Company, incorporated in Singapore under registration number 200720742N, whose registered office is at 3791
Jalan Bukit Merah, #08‐12, E‐Centre @ Redhill, Singapore
159471
"Listing Rules" the Rules Governing the Listing of Securities on The Stock
Exchange, as amended from time to time
"PT Puninar" PT Puninar Saranaraya, a company incorporated in Indonesia under registration number 09.01.1.82.16518, whose registered office is at Jl.Inspeksi Cakung Drain, Kel. Cilincing, Kec. Cilincing, Jakarta Utara, Indonesia
"Sale, Purchase and Subscription Agreement"
a sale, purchase and subscription agreement dated 16
January 2015 and entered into by, among others, KLN Singapore and certain shareholders of PT Puninar in relation to the Acquisition
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"subsidiary(ies)" has the meaning ascribed to it under the Listing Rules
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"Transaction" the completion of the Acquisition and the subscription of the
Convertible Bond by KLN Singapore
"Triputra Group" PT Triputra Investindo Arya and its subsidiaries
"US$" United States dollar(s), the lawful currency of the United
States of America
"%" percent
By Order of the Board
Kerry Logistics Network Limited
LEE Pui Nee
Company Secretary
Hong Kong, 16 January 2015
As at the date of this announcement, the Directors of the Company are: Executive Directors:
Mr YEO George Yong‐boon, Mr MA Wing Kai William, Mr ERNI Edwardo and Mr KUOK Khoon Hua
Non‐executive Director: Mr QIAN Shaohua
Independent Non‐executive Directors:
Ms WONG Yu Pok Marina, Mr WAN Kam To and Mr YEO Philip Liat Kok
This announcement is published on the websites of The Stock Exchange of Hong Kong Limited
(www.hkexnews.hk) and the Company (www.kerrylogistics.com).
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