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AOWEI HOLDING LIMITED
奧威控股有限公司
(incorporated in the British Virgin Islands and continued in the Cayman Islands with limited liability)
(Stock Code: 1370)
CONNECTED TRANSACTION
TENANCY AGREEMENT
TENANCY AGREEMENT
On 30 December 2019, Aowei Group (as landlord) and Laiyuan Aowei, a subsidiary of the Company (as tenant) entered into the Tenancy Agreement in relation to the premises, the details of which are set out more particularly below.
IMPLICATIONS UNDER THE LISTING RULES
In accordance with IFRS 16 "Leases", the Company will recognise the value of the right-of-use assets in connection with the leases of the premises under the Tenancy Agreement in its consolidated statement of financial position. Accordingly, the rental transaction contemplated under the Tenancy Agreement will be regarded as acquisition of asset for the purpose of the Listing Rules.
As Mr. Li Yanjun is one of the Directors and controlling shareholders of the Company, Mr. Li Yanjun is a connected person of the Company. Given that 99% of the equity interest in Aowei Group is held by Mr. Li Yanjun, Aowei Group is an associate of Mr. Li Yanjun, and accordingly a connected person of the Company. The transaction contemplated under the Tenancy Agreement thus constitutes a connected transaction.
Since the applicable percentage ratios (as defined under the Listing Rules) in respect of the value of the right-of-use of the premises under the Tenancy Agreement exceed 0.1% but are less than 5%, the transaction contemplated under the Tenancy Agreement is subject to reporting and announcement requirements but is exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.
TENANCY AGREEMENT
On 30 December 2019, Aowei Group (as landlord) and Laiyuan Aowei, a subsidiary of the Company (as tenant) entered into the Tenancy Agreement in relation to the premises, the details of which are set out more particularly below.
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Key Terms of the Tenancy Agreement
Date | : | 30 December 2019 |
Parties | : | (i) Aowei Group, as landlord; and |
(ii) Laiyuan Aowei (a subsidiary of the Company), as tenant. | ||
Premises | : | 17th Floor, Tower C, Central World Trade Center, No. 6A Jianguomenwai |
Avenue, Beijing (北京市建國門外大街甲6號中環世貿C座17層) | ||
Term | : | 3 years from 1 January 2020 to 31 December 2022 (both days inclusive) |
Gross floor area | : | approximately 1,214 square metres |
Rent | : | RMB3,900,000 per year |
The value of the right-of-use assets recognised by the Company under the Tenancy Agreement amounted to approximately RMB11.3 million.
INFORMATION ON THE GROUP AND LAIYUAN AOWEI
The Company is an investment holding company. The Group is principally engaged in two major businesses, namely (i) the exploration, mining, processing and trading of iron ore products and major products including iron ores, preliminary concentrates and iron ore concentrates, and (ii) the provision of hospital management services. The Group owns and operates three mines in Hebei Province, which has the largest steel production and iron ore consumption volumes in the PRC.
Laiyuan Aowei is a company established in the PRC and principally engaged in investment consulting, economic and trade consulting, business management consulting, corporate image planning and sale of mineral products.
INFORMATION ON AOWEI GROUP
Aowei Group is an investment holding company and based in Hebei Province. Aowei Group is a company established in the PRC on 4 December 1996, owned by Mr. Li Yanjun and his brother, Mr. Li Xiaojun, with equity holding of 99% and 1%, respectively. Aowei Group and its PRC operating subsidiaries are principally engaged in the hotel management.
REASONS FOR AND BENEFITS OF ENTERING INTO THE TENANCY AGREEMENT
The premises under the Tenancy Agreement are used as office for the tenant in the ordinary course of business. The terms of the Tenancy Agreement are arrived at after arm's length negotiation and the rent is with reference to the prevailing market rent of similar comparable properties in the nearby areas. The Directors (including independent non-executive Directors but excluding Mr. Li Yanjun and Mr. Li Ziwei who abstained from voting at the Board resolution) considered that the terms of the Tenancy Agreement are entered into on normal commercial terms, in the ordinary and usual course of business of the Group and are fair and reasonable and in the interests of the Company and its shareholders as a whole.
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IMPLICATIONS UNDER THE LISTING RULES
In accordance with IFRS 16 "Leases", the Company will recognise the value of the right-of-use assets in connection with the leases of the premises under the Tenancy Agreement in its consolidated statement of financial position. Accordingly, the rental transaction contemplated under the Tenancy Agreement will be regarded as acquisition of assets for the purpose of the Listing Rules.
As Mr. Li Yanjun is one of the Directors and controlling shareholders of the Company, Mr. Li Yanjun is a connected person of the Company. Given that 99% of the equity interest in Aowei Group is held by Mr. Li Yanjun, Aowei Group is an associate of Mr. Li Yanjun, and accordingly a connected person of the Company. The transaction contemplated under the Tenancy Agreement thus constitutes connected transaction.
Since the applicable percentage ratios (as defined under the Listing Rules) in respect of the value of the right-of-use of the premises under the Tenancy Agreement exceed 0.1% but are less than 5%, the transaction contemplated under the Tenancy Agreement is subject to reporting and announcement requirements but is exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.
DEFINITION
"Aowei Group"
"associate" "Board" "Company"
"connected person(s)" "Director(s)" "Group"
"Hong Kong"
"IFRS"
"Laiyuan Aowei"
Hebei Aowei Industrial Group Co., Ltd.* (河北奧威實業集團有限公
司), a company established in the PRC on 4 December 1996, which is owned by Mr. Li Yanjun and his brother, Mr. Li Xiaojun, with equity holding of 99% and 1%, respectively
has the meaning ascribed to it in the Listing Rules
board of Directors
Aowei Holding Limited (奧威控股有限公司) (formerly known as Hengshi Mining Investments Limited (恆實礦業投資有限公司)), a
company incorporated in the British Virgin Islands and continued in the Cayman Islands with limited liability and the shares of which are listed on the Stock Exchange
has the meaning ascribed to it in the Listing Rules
director(s) of the Company
the Company and its subsidiaries
the Hong Kong Special Administrative Region of the PRC
International Financial Reporting Standards
Laiyuan County Aowei Mining Investments Co., Ltd (Beijing Office)* (淶源縣奧威礦業投資有限公司北京分公司), an indirect
wholly-owned subsidiary of the Company
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"Listing Rules"
"PRC"
"RMB"
"Shareholder(s)"
"Stock Exchange"
"Tenancy Agreement"
"%"
the Rules Governing the Listing of Securities on the Stock Exchange
the People's Republic of China, which for the purposes of this announcement only, excluding Hong Kong, Taiwan and Macau Special Administrative Region of the PRC, unless otherwise specified
Renminbi, the lawful currency of the PRC
holder(s) of shares of the Company
The Stock Exchange of Hong Kong Limited
the tenancy agreement dated 30 December 2019 entered into between Aowei Group as landlord and Laiyuan Aowei as tenant
per cent.
By order of the Board
Aowei Holding Limited
Mr. Li Yanjun
Chairman
Beijing, the People's Republic of China, 30 December 2019
As at the date of this announcement, the executive Directors of the Company are Mr. Li Yanjun, Mr. Li Ziwei, Mr. Sun Jianhua, Mr. Jin Jiangsheng and Mr. Tu Quanping and the independent non-executive Directors are Mr. Ge Xinjian, Mr. Meng Likun and Mr. Kong Chi Mo.
- For identification purposes only
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