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CHALIECO
中鋁國際工程股份有限公司
China Aluminum International Engineering Corporation Limited
(A joint stock limited company incorporated in the People's Republic of China with limited liability)
(Stock Code: 2068)
CONNECTED TRANSACTION ANNOUNCEMENT
ENTERING INTO ENTRUSTED LOAN AGREEMENT
The board of directors of China Aluminum International Engineering Corporation Limited (the "Company") announced that China Nonferrous Metals Processing Technology Co., Ltd. ("CNPT"), a subsidiary of the Company, entered into the Entrusted Loan Agreement with Luoyang Foyang Decoration Engineering Co., Ltd. ("Luoyang Foyang Company") and Chinalco Finance Company Limited ("Chinalco Finance") on 30 October 2019, pursuant to which CNPT entrusted Chinalco Finance to provide a loan of RMB30 million to Luoyang Foyang Company.
Details of the principal terms and conditions of the Entrusted Loan Agreement are set out below:
DATE OF AGREEMENT
30 October 2019
PARTIES
Luoyang Foyang Company, as the borrower
CNPT, as the principal
Chinalco Finance, as the lender
ENTRUSTED LOAN AMOUNT
RMB30 million.
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PURPOSE OF THE LOAN
To replenish working capital.
TERM OF LOAN
One year after the receipt of loan.
INTEREST RATE
Fixed interest rate, the interest rate during the term of the agreement is calculated at 5% per annum (determined in accordance with the benchmark loan interest rate stipulated by the People's Bank of China for the corresponding period plus 15%).
The settlement date falls on the 20th day of the last month of each quarter. Luoyang Foyang Company shall transfer the current interest to the designated account of Chinalco Finance before the expiration of the quarterly settlement date for Chinalco Finance to deduct the amount. For interest that cannot be paid on schedule, Chinalco Finance shall charge compound interest from Luoyang Foyang Company on the interest that cannot be paid on time according to the overdue penalty interest rate stipulated in the Entrusted Loan Agreement from the first day after the settlement date. The compound interest received is for the benefit of CNPT.
HANDLING FEE
Free of charge
PRINCIPAL REPAYMENT
Luoyang Foyang Company shall repay the principal amount upon expiration of the term of the Entrusted Loan Agreement. All repayments of Luoyang Foyang Company shall be repaid to CNPT through Chinalco Finance.
LOAN GUARANTEE
The guarantee for the entrusted loan under this agreement is entered into by CNPT, and Chinalco Finance does not assume any responsibility.
EARLY REPAYMENT OF LOAN
With the approval of Luoyang Foyang Company, CNPT may, for its own purposes, collect the loan in advance. With the approval of CNPT, Luoyang Foyang Company may, for its own purposes, repay the loan in advance. When Chinalco Finance receives a written confirmation from Luoyang Foyang Company and CNPT, it will undergo relevant procedures immediately. In respect of early repayment of the loan, Chinalco Finance will not return the handling fee of the entrusted loan received. After the entrusted loan is collected upon maturity, CNPT may designate a new entrusted loan project or withdraw the entrusted deposit.
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DEFAULT CLAUSES
If Luoyang Foyang Company fails to repay the principal and interest on the loan or to use the loan as agreed under the Entrusted Loan Agreement, Chinalco Finance will charge a penalty interest at default interest rate or penalty interest rate of loan misappropriation. The penalty interest rate of overdue loan shall be 50% higher than the interest rate agreed under the Entrusted Loan Agreement, while the penalty interest rate of loan misappropriation shall be 100% higher than the interest rate agreed under the Entrusted Loan Agreement. The aforesaid penalty interest will be calculated and collected by Chinalco Finance for the benefit of CNPT. Loans that are overdue and misappropriated at the same time will be charged with the default interest and the compound interest subject to the severity.
REASONS FOR AND BENEFITS OF ENTERING INTO THE ENTRUSTED LOAN AGREEMENT
As the renovation works for Chinalco Finance Financial Building undertaken by Luoyang Foyang Company, a subsidiary of CNPT (a subsidiary of the Company), were due to be completed by the end of the year as requested, under such tight schedule, CNPT entrusted Chinalco Finance in provision of loan to Luoyang Foyang Company for the Chinalco Finance Financial Building project specifically. Thus, finance demand of the operation fund will be effectively met and the project will be completed.
GENERAL INFORMATION
Information on the Company
The Company is a leading technology, engineering service and equipment provider in the non-ferrous metals industry in the PRC, capable of providing full business-chain integrated engineering solutions for various stages of the non-ferrous metals industry chain. The Group is primarily engaged in engineering design and consultancy, engineering and construction contracting, equipment manufacturing and trading.
Information on China Aluminum Group
China Aluminum Group is a state-owned enterprise incorporated under the laws of the PRC in 2001. China Aluminum Group is a Controlling Shareholder of the Company and directly and indirectly holds approximately 76.50% of the issued share capital of the Company. China Aluminum Group is principally engaged in mineral resources development, smelting and processing of non-ferrous metal, relevant trading and engineering and technical services.
Information on Luoyang Foyang Company
Luoyang Foyang Company is a company established under the laws of the PRC in 1964 with limited liability (sole proprietorship invested or held by non-natural person). It is principally engaged in industrial, construction, municipal, fire safety, environmental engineering consultation and pressure vessel design consultation. As at the date of this announcement, CNPT, a subsidiary of the Company, holds 51.22% of the equity interests in Luoyang Foyang Company, while Luoyang Institute, a subsidiary of China Aluminum Group, holds 39.03% of the equity interests in Luoyang Foyang Company.
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Information on CNPT
CNPT is a joint stock limited company incorporated in the PRC and a subsidiary in which the Company holds 73.50% equity interests. CNPT is principally engaged in the following businesses: the development, manufacture, design, production, sales, installation and commissioning (according to the relevant regulations of the State) of metallurgical equipment, firefighting equipment, environmental protection equipment and automatic control systems; engineering design of building, metallurgy, municipal public, intelligent building, firefighting and prevention and control of environmental pollution; general construction contracting; engineering consultancy and project cost consultancy; evaluation of environmental impact of construction projects; design of pressure conduit; maintenance and inspection of firefighting system and firefighting safety assessment; construction of firefighting engineering; construction of environmental protection engineering; installation of electrical and mechanical equipment (electrical facilities and special equipment exclusive); sales and maintenance of computer software, hardware and office supplies; the development and integration of network building and IT system; the design, development, consultancy and technical services of building intelligent system and security system; consultancy service of IT system; sales of non-ferrous metal products; import and export business (subject to the certificate of qualification); contracting for prospecting, consultation, design and supervision projects for overseas non-ferrous metal works and dispatch of workers required for the implementation of the aforesaid overseas projects.
Information on Chinalco Finance
Chinalco Finance is a limited liability company incorporated in the PRC in June 2011 with the approval of CBRC and is 100% owned by China Aluminum Group. The business scope of Chinalco Finance includes provision of finance services and financing consultancy services, credit attestation and related consultancy and agency services to group companies; provision of assistance to group companies in payment and receipt of transaction proceeds; provision of approved insurance agency services; provision of guarantee to group companies; provision of bills acceptance and discounting services to group companies; provision of intra-group entrustment loan services to group companies; provision of loans and financial leasing services to group companies; provision of intra-group transfer and settlement services to group companies and planning of clearing and settlement schemes; provision of deposit services to group companies; and inter-bank lending.
LISTING RULES IMPLICATIONS
As at the date of this announcement, China Aluminum Group directly and indirectly holds 76.50% of the existing issued share capital of the Company, and is a Controlling Shareholder of the Company and thus a connected person thereof. Chinalco Finance is a subsidiary of China Aluminum Group, and is therefore also a connected person of the Company. At the same time, Luoyang Institute, a subsidiary of China Aluminum Group, is a connected person at the issuer level of the Company, and holds 39.03% of the equity interests in Luoyang Foyang Company, while CNPT, a subsidiary of the Company, holds 51.22% of the equity interests in Luoyang Foyang Company. Therefore, for the purposes of Chapter 14A of the Listing Rules, Luoyang Foyang Company is a connected subsidiary and a commonly held entity of the Company, while the loan under the Entrusted Loan Agreement was not provided in the proportion of the equity interests in Luoyang Foyang Company directly held by CNPT. Accordingly, the Entrusted Loan Agreement and its transactions contemplated thereunder constitute the connected transactions of the Company under Chapter 14A of the Listing Rules.
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As each applicable percentage ratio of the transactions calculated pursuant to Chapter 14A of the Listing Rules exceeds 0.1% but less than 5%, the Entrusted Loan Agreement is subject to reporting and announcement requirements but are exempted from circular and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
CONFIRMATION FROM DIRECTORS
The Board has considered and passed the resolution of the above transaction. As Mr. WANG Jun and Mr. LI Yihua hold positions in China Aluminum Group and its subsidiaries and therefore have material interests in the Entrusted Loan Agreement and the transaction thereunder, they have abstained from voting on the above board resolution. Save as the above- mentioned persons, none of the other directors has material interests in the above-mentioned transaction.
The directors (including the independent non-executive directors) are of the view that, although the transaction contemplated under the Entrusted Loan Agreement was not conducted in the ordinary and usual course of business of the Group, the Entrusted Loan Agreement was entered into on normal commercial terms, and its terms are fair and reasonable and are in the interests of the Company and its shareholders as a whole.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:
"Board" | the board of Directors of the Company |
"China Aluminum Group" | Aluminum Corporation of China Limited (中國鋁業集團 |
有限公司), a state-owned enterprise incorporated under | |
the laws of the PRC and the Controlling Shareholder of the | |
Company | |
"CNPT" | China Nonferrous Metals Processing Technology Co., Ltd. |
(中色科技股份有限公司), a joint stock limited company | |
incorporated in the PRC and a subsidiary owned as to 73.5% | |
by the Company | |
"Chinalco Finance" | Chinalco Finance Company Limited, a limited liability |
company incorporated under the laws of the PRC, and a | |
wholly-owned subsidiary of China Aluminum Group | |
"Company" | China Aluminum International Engineering Corporation |
Limited | |
"connected person(s)" | has the meaning ascribed to it under the Listing Rules |
"connected transaction(s)" | has the meaning ascribed to it under the Listing Rules |
"Controlling Shareholder(s)" | has the meaning ascribed to it under the Listing Rules |
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"Entrusted Loan Agreement" | the entrusted loan agreement entered into among Luoyang |
Foyang Company, CNPT and Chinalco Finance on 30 | |
October 2019 in respect of the provision of a loan to | |
Luoyang Foyang Company from Chinalco Finance entrusted | |
by CNPT | |
"Group" | the Company and its subsidiaries as at the date of this |
announcement | |
"Listing Rules" | the Rules Governing the Listing of Securities on The Stock |
Exchange of Hong Kong Limited, as amended, supplemented | |
or otherwise modified from time to time | |
"Luoyang Foyang Company" | Luoyang Foyang Decoration Engineering Co., Ltd. (洛陽佛 |
陽裝飾工程有限公司), a company incorporated in the PRC | |
with limited liability (sole proprietorship invested or held | |
by non-natural person), and a subsidiary in which CNPT (a | |
subsidiary of the Company) holds 51.22% equity interests | |
"Luoyang Institute" | Luoyang Engineering & Research Institute for Nonferrous |
Metals Processing Co., Ltd. (洛陽有色金屬加工設計研究 | |
院有限公司), a company incorporated under the laws of | |
the PRC with limited liability (sole proprietorship invested | |
or held by non-natural person) and a subsidiary of China | |
Aluminum Group which is owned as to 100% by China | |
Aluminum Group | |
"RMB" | Renminbi, the lawful currency of the PRC |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited |
"subsidiary(ies)" | has the meaning ascribed to it under the Listing Rules |
By Order of the Board
China Aluminum International Engineering Corporation Limited
ZHANG Jian
Joint Company Secretary
Beijing, the PRC, 30 October 2019
As at the date of this announcement, the non-executive directors are Mr. WANG Jun and Mr. LI Yihua; the executive directors are Mr. WU Jianqiang, Mr. ZONG Xiaoping, Mr. WU Zhigang and Mr. ZHANG Jian; and the independent non-executive directors are Mr. GUI Weihua, Mr. CHEUNG Hung Kwong and Mr. FU Jun.
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