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.
常茂生物化學工程股份有限公司
Changmao Biochemical Engineering Company Limited*
(a joint stock limited company incorporated in the People's Republic of China) (Stock Code: 954)
DISCLOSEABLE TRANSACTION
IN RELATION TO
CONSTRUCTION WORKS FOR THE DALIAN NEW PLANT
CONSTRUCTION CONTRACT
The Board wishes to inform the Shareholders that on 23 April 2021, Changmao Dalian and the Contractor entered into the Construction Contract for the construction works for phase 1 of the maleic anhydride industrial chain project in the Dalian New Plant at a consideration of RMB80,000,000, subject to adjustments arising from the changes in construction works or fluctuations in the public price of labour and materials in Liaoning Province or Dalian City, if any.
LISTING RULES IMPLICATIONS
As some of the applicable percentage ratios calculated in accordance with Rule 14.07 of the Listing Rules in respect of the transaction contemplated under the Construction Contract is more than 5% but less than 25%, the transaction contemplated under the Construction Contract constitutes a discloseable transaction for the Company, and is therefore subject to the reporting and announcement requirement under the Listing Rules.
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The Board wishes to inform the Shareholders that on 23 April 2021, Changmao Dalian and the Contractor entered into the Construction Contract for the construction works for phase 1 of the maleic anhydride industrial chain project in the Dalian New Plant at a consideration of RMB80,000,000, subject to adjustments arising from the changes in construction works or fluctuations in the public price of labour and materials in Liaoning Province or Dalian City, if any.
THE CONSTRUCTION CONTRACT
A summary of the principal terms of the Construction Contract is set out as follows:
Date: | 23 April 2021 | |
Parties: | (i) | 常 茂 （ 大 連 ） 新 材 料 有 限 公 司 |
(Changmao (Dalian) New Material Company Limited*), | ||
a wholly-owned subsidiary of the Company | ||
(ii) | 中建安裝集團有限公司 (China Construction Industrial | |
& Energy Engineering Group Co., Ltd*) (the Contractor) | ||
Scope of work: | Construction works of the phase 1 of the maleic anhydride | |
industrial chain project in the Dalian New Plant, including | ||
main unit of maleic anhydride production line and related | ||
equipment such as blower room, molding workshop, freezing | ||
station and fumaric acid workshop. |
The whole Construction Project is expected to be completed by 30 August 2021.
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Consideration: | The | Consideration of the Construction Contract is |
RMB80,000,000, subject to adjustments arising from the | ||
changes in construction works or fluctuations in the public | ||
price of labour and materials in Liaoning Province or Dalian | ||
City, if any. | ||
The Consideration was the bid price submitted by the | ||
Contractor and accepted by the Group after a selective | ||
tendering process. The Construction Contract was awarded to | ||
the Contractor after an objective evaluation by the Group on | ||
the experience and competency of the Contractor, the | ||
expected scope and complexity of the construction works to | ||
be carried out, the costs of material and labour costs estimated | ||
to be incurred, and the prevailing market prices for carrying | ||
out construction works of comparable scale and complexity. | ||
Payment terms: | (i) | 10% of the Consideration shall be paid to the Contractor |
as a prepayment (the "Prepayment") after the | ||
Construction Project budget is confirmed; | ||
(ii) | 70% of the Consideration (in addition to the Prepayment) | |
shall be paid to the Contractor upon the main part of the | ||
Construction Project is completed and ready for the | ||
equipment installation; | ||
(iii) | Up to 85% of the Consideration (including the | |
Prepayment) shall be paid to the Contractor upon the | ||
main part of the Construction Project is completed and | ||
has passed the acceptance checking; | ||
(iv) | Up to 97% of the Consideration (including the | |
Prepayment) shall be paid to the Contractor upon | ||
independent audit on the Construction Project has been | ||
completed; | ||
(v) | The remaining 3% of the Consideration will be held up | |
as retention monies and shall be paid to the Contractor | ||
two years after the acceptance of the Construction | ||
Project. |
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REASONS FOR AND BENEFIT OF THE ACQUISITION
The Group is principally engaged in the production and sales of organic acid products.
Reference is made to the announcements by the Company dated 24 June 2020, 28 September 2020, 2 December 2020 and 9 April 2021 (the "Announcements"). As disclosed in the Announcements, due to the changes in government's policies, the Company has to relocate part of its production plant and its office premises in the Binjiang Area of Changzhou City. As such, the Group entered into the Construction Contract to construct a new plant in Dalian for the purpose of relocating certain production lines in its original production plant in the Binjiang Area of Changzhou City to the Dalian New Plant and expanding the production capacity of its existing products. The expansion will enhance the Group's production through the addition of production facilities, and thus is expected to benefit the operations and development of the Group.
The Consideration will be satisfied in cash by the Group's internal resources.
The Directors are of the view that the terms of the Construction Contract are fair and reasonable and in the interests of the Company and its Shareholders as a whole.
INFORMATION OF THE COMPANY AND CHANGMAO DALIAN
The Company is a joint stock limited company incorporated in the PRC and is principally engaged in the production and sales of organic acid products.
Changmao Dalian, a wholly-owned subsidiary of the Company, is a limited liability company incorporated in the PRC and is principally engaged in the production of organic acid products.
INFORMATION OF THE CONTRACTOR
As far as the Company is aware and after making reasonable enquiries, the Contractor is engaged in engineering design, construction, manufacturing and investment in buildings, petrochemical and industrial complexes, and public infrastructures. To the best of the Directors' knowledge, information and belief, and having made all reasonable enquiries, the Contractor and its ultimate beneficial owner(s) are third parties
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independent of the Company and its connected persons as at the date of this announcement.
IMPLICATIONS UNDER THE LISTING RULES
As some of the applicable percentage ratios calculated in accordance with Rule 14.07 of the Listing Rules in respect of the transaction contemplated under the Construction Contract is more than 5% but less than 25%, the transaction contemplated under the Construction Contract constitutes a discloseable transaction for the Company, and is therefore subject to the reporting and announcement requirement under the Listing Rules.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following terms shall have the meanings ascribed to them below:
"Board"
"Changmao
Dalian"
"Company"
the board of the Directors
常茂（大連）新材料有限公司 （Changmao (Dalian) New Material Company Limited*), a wholly-ownedsubsidiary of the Company
常 茂 生 物 化 學 工 程 股 份 有 限 公 司 (Changmao
Biochemical Engineering Company Limited*), a joint stock | |
limited company incorporated in the PRC with the H Shares | |
currently listed on the Main Board of the Stock Exchange | |
(Stock Code: 954) | |
"connected | has the meaning ascribed to that term under the Listing Rules |
person(s)" |
"Consideration"
"Construction
Contract"
the consideration of RMB80,000,000 for the Construction Project payable in cash by Changmao Dalian
the construction contract dated 23 April 2021 entered into between Changmao Dalian and the Contractor in respect of the Construction Project
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"Construction | The construction works of the phase 1 of the maleic |
Project" | anhydride industrial chain project in the Dalian New Plant |
"Contractor" | 中建安裝集團有限公司 (China Construction Industrial & |
Energy Engineering Group Co., Ltd*) | |
"Dalian Plant" | the new plant of the Group located at Changxingdao |
Economic and Technological Development Zone, Dalian | |
City, Liaoning Province, the PRC | |
"Director(s)" | director(s) of the Company |
"Group" | the Company and its subsidiaries |
"Listing Rules" | the Rules Governing the Listing of Securities on the Stock |
Exchange | |
"PRC" | the People's Republic of China |
"RMB" | Renminbi, the lawful currency of the PRC |
"Shareholder(s)" | shareholder(s) of the Company |
"Stock | The Stock Exchange of Hong Kong Limited |
Exchange" | |
"%" | per cent. |
By order of the Board of | |
Changmao Biochemical Engineering Company Limited* | |
Rui Xin Sheng | |
Chairman |
The PRC, 26 April 2021
*For identification purpose
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As at the date hereof, Mr. Rui Xin Sheng (Chairman) and Mr. Pan Chun are the executive Directors, Mr. Zeng Xian Biao, Mr. Yu Xiao Ping, Mr. Wang Jian Ping and Ms. Leng Yi Xin are the non-executive Directors, Prof. Ouyang Ping Kai, Ms. Wei Xin and Ms. Au Fung Lan are the independent non-executive Directors.
This announcement will be published on the "Listed Company Information" page of the Stock Exchange's website at www.hkexnews.hk and on the Company's website at www.cmbec.com.hk.
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