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.
CHINA MENGNIU DAIRY COMPANY LIMITED
中 國 蒙 牛 乳 業 有 限 公 司*
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 2319)
CONNECTED TRANSACTION
DISPOSAL OF 48.66% EQUITY INTEREST IN
INNER MONGOLIA AIYANGNIU TECHNOLOGY LIMITED*
DISPOSAL OF 48.66% EQUITY INTEREST IN THE TARGET COMPANY
On March 15, 2022, the Sellers, the Purchaser and the Target Company entered into the Equity Transfer Agreement, pursuant to which the Sellers agreed to sell and the Purchaser agreed to purchase a total of 75.00% equity interest in the Target Company for a total consideration of RMB287,774,900. Pursuant to the Equity Transfer Agreement, Inner Mongolia Mengniu (a subsidiary of the Company) and COFCO Trust Company Limited agreed to dispose of 48.66% and 11.79% equity interest in the Target Company for a consideration of RMB186,711,100 and RMB45,221,700 respectively.
Upon Completion, Inner Mongolia Mengniu's equity interest in the Target Company will decrease from 73.66% to 25.00% and the Target Company will cease to be a subsidiary of the Company. The remaining 75.00% equity interest in the Target Company will be owned by the Purchaser.
LISTING RULES IMPLICATIONS
As at the date of this announcement, COFCO Corporation is deemed to be interested in 23.15% of the total issued share capital of the Company and is a substantial shareholder of the Company and thus a connected person of the Company under Rule 14A.07(1) of the Listing Rules. COFCO Trust Company Limited is a subsidiary of COFCO Corporation and thus a connected person of the Company under Rule 14A.07(4) of the Listing Rules.
- 1 -
Inner Mongolia Mengniu (a subsidiary of the Company) and COFCO Trust Company Limited (a connected person of the Company) entered into the Equity Transfer Agreement with the Purchaser in relation to the disposal of their equity interest in the same company (the Target Company) to the same party (the Purchaser). Completions of the sales and purchases of the equity interest in the Target Company for all the Sellers are inter-conditional in nature and expected to take place at the same time. As such, the Purchaser may be regarded as a ''deemed connected person'' of the Company in respect of the Equity Transfer Agreement pursuant to Rule 14A.20 of the Listing Rules. Accordingly, the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.
As the largest applicable percentage ratio in respect of the aggregate of the disposals of equity interest in the Target Company by Inner Mongolia Mengniu and by COFCO Trust contemplated under the Equity Transfer Agreement is more than 0.1% but less than 5%, the connected transaction under the Equity Transfer Agreement is subject to the reporting, announcement and annual review requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
As completion of the transactions contemplated under the Equity Transfer Agreement is subject to the fulfillment of certain conditions precedent, the Disposal may or may not proceed to completion. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.
DISPOSAL OF 48.66% EQUITY INTEREST IN THE TARGET COMPANY
On March 15, 2022, the Sellers, the Purchaser and the Target Company entered into the Equity Transfer Agreement, pursuant to which the Sellers agreed to sell and the Purchaser agreed to purchase a total of 75.00% equity interest in the Target Company for a total consideration of RMB287,774,900. Pursuant to the Equity Transfer Agreement, Inner Mongolia Mengniu (a subsidiary of the Company) and COFCO Trust Company Limited agreed to dispose of 48.66% and 11.79% equity interest in the Target Company for a consideration of RMB186,711,100 and RMB45,221,700 respectively.
Upon Completion, Inner Mongolia Mengniu's equity interest in the Target Company will decrease from 73.66% to 25.00% and the Target Company will cease to be a subsidiary of the Company. The remaining 75.00% equity interest in the Target Company will be owned by the Purchaser.
- 2 -
THE EQUITY TRANSFER AGREEMENT
Key terms of the Equity Transfer Agreement are summarized as below:
Date | March 15, 2022 | |||
Parties | Sellers (as the sellers) | |||
Purchaser (as the purchaser) | ||||
Target Company (as the target company) | ||||
Subject Matter | Sale of an aggregate of 75.00% equity interests in the Target | |||
Company by the Sellers to the Purchaser for a total | ||||
consideration of RMB287,774,900, details of which are set out | ||||
below: | ||||
Selling equity | ||||
interest in | ||||
the Target | ||||
Seller | Company | Consideration | ||
(RMB) | ||||
Inner Mongolia Mengniu | 48.66% | 186,711,100 | ||
天津眾牧諮詢服務中心 | ||||
（有限合夥） | 12.77% | 48,990,400 | ||
COFCO Trust Company | ||||
Limited | 11.79% | 45,221,700 | ||
內蒙古晟蒙創業投資基金 | ||||
中心（有限合夥） | 1.78% | 6,851,700 | ||
Total | 75.00% | 287,774,900 |
Consideration and The total consideration payable by the Purchaser is
settlement RMB287,774,900 and are payable in cash in two tranches in the following manner:
- RMB258,997,410, being 90% of the total consideration, within five (5) PRC Business Days upon the fulfillment or waiver of the relevant conditions precedent; and
- RMB28,777,490, being the remaining 10% of the total consideration, within five (5) PRC Business Days upon the fulfillment or waiver of the relevant conditions precedent.
- 3 -
Please refer to the sub-section headed ''Conditions Precedent to | |
Completion'' for the details of the conditions precedent for each | |
tranche. | |
Basis of Consideration | The consideration was determined after arm's length |
negotiations between the Purchaser and the Sellers after taking | |
into account: (1) the business prospect of the Target Company; | |
and (ii) the apprised fair value of the entire equity interest in the | |
Target Company of RMB388,320,323 as at December 31, 2021. | |
The valuation was carried out by an independent valuer using | |
the market approach. | |
Conditions Precedent | Completion is subject to customary conditions precedent as |
to Completion | stipulated in the Equity Transfer Agreement. |
In respect of the first tranche payment, the conditions precedent | |
include but are not limited to: | |
(i) all approvals, consents and filings necessary for the | |
transactions under the Equity Transfer Agreement have | |
been obtained by the Parties; | |
(ii) the Equity Transfer Agreement and the transactions | |
thereunder being approved by the independent | |
shareholders of Modern Dairy; | |
(iii) all transaction documents being duly signed by the Parties; | |
and | |
(iv) a new memorandum and articles of association being duly | |
adopted by the Target Company. | |
In respect of the second tranche payment: the updated | |
Value-added Telecommunications Business License (增值電信業 | |
務經營許可證) of the Target Company being approved by the | |
Ministry of Industry and Information Technology of the PRC | |
(中華人民共和國工業和信息化部). | |
Completion | Completion will take place on the day on which the Purchaser |
pays the first tranche payment. | |
Upon Completion, the Target Company will be owned as to | |
75.00% by the Purchaser and 25.00% by Inner Mongolia | |
Mengniu. |
- 4 -
Termination | The Equity Transfer Agreement will be terminated in certain | |
circumstances as set out in the Equity Transfer Agreement, | ||
including but not limited to: | ||
(i) | if the Target Company is unable to obtain the updated | |
Value-added Telecommunications Business License (增值電 | ||
信業務經營許可證) within 5 months (or such longer period | ||
as agreed by the Parties) after the business registration | ||
records of the Target Company has been updated to reflect | ||
the Completion and filed with the competent governmental | ||
body; and | ||
(ii) | if the Purchaser fails to pay the second tranche payment | |
within fifteen (15) PRC Business Days after its due date. |
In the event of a termination, the Purchaser shall cooperate with the Target Company and each Seller to restore the shareholding, corporate governance structure of the Target Company to the structure as of the date of signing the Equity Transfer Agreement and update the Value-added Telecommunications Business License (增值電信業務經營許可證) as applicable. The Sellers shall refund the first tranche payment in one lump sum to the bank account designated by the Purchaser within such period as specified in the Equity Transfer Agreement as a result of the restoration.
INFORMATION ON THE TARGET COMPANY
The Target Company was established in the PRC in 2015 and is principally engaged in the operation of animal husbandry e-commerce platform, animal husbandry service cloud platform, animal husbandry service business, sale of feedstuffs, additives and veterinary medicine, and trade consulting of agricultural and livestock products in the PRC. As at the date of this announcement, Inner Mongolia Mengniu owns 73.66% of the equity interests in the Target Company.
- 5 -
This is an excerpt of the original content. To continue reading it, access the original document here.