COL Capital : DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION THE ACQUISITION OF EQUITY INTERESTS IN YANGPU ZHAOHE INDUSTRIAL CO. LTD. (in PDF)

12853-COL Ann_E.indd

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 Bermuda with limited liability)

(Stock Code: 383)

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION THE ACQUISITION OF EQUITY INTERESTS IN YANGPU ZHAOHE INDUSTRIAL CO. LTD.

On 28 December 2015 (after trading hours), Vendor I and Jiatai Construction entered into the Agreement I, pursuant to which Jiatai Construction, a wholly-owned subsidiary of the Company, has conditionally agreed to acquire and Vendor I has conditionally agreed to sell 10.2% of the registered capital held by Vendor I in Yangpu Zhaohe for a consideration of RMB50,000,000 (approximately HK$59,250,000). On the same day, Vendor II and Jiatai Construction entered into the Agreement II, pursuant to which Jiatai Construction has conditionally agreed to acquire and Vendor II has conditionally agreed to sell 8.16% of the registered capital held by Vendor II in Yangpu Zhaohe for a consideration of RMB40,000,000 (approximately HK$47,400,000). After completion of the Acquisitions, Yangpu Zhaohe will become a direct wholly-owned subsidiary of Jiatai Construction.

Pursuant to Rule 14.22 of the Listing Rules, the transactions as contemplated under the Agreement I and the Agreement II will be aggregated and as the highest of the applicable percentage ratios is greater than 5% but less than 25%, as calculated under Rule 14.07 of the Listing Rules, the transactions as contemplated under the Agreement I and the Agreement II when aggregated will constitute a discloseable transaction for the Company and are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

Vendor I is a substantial shareholder of Yangpu Zhaohe, an indirect non wholly-owned subsidiary of the Company. Therefore, Vendor I is a connected person of the Company under the Listing Rules and the transaction as contemplated under the Agreement I also constitutes a connected transaction of the Company under the Listing Rules. As the applicable percentage ratios are more than 0.1% but less than 5%, the transaction as contemplated under the Agreement I is subject to the reporting and announcement requirements, but is exempt from the circular (including independent financial advice) and independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

Date: 28 December 2015 (after trading hours)

Parties:

1. Vendor I; and

   
   

2. Jiatai Construction.

   
   

   Vendor I is a substantial shareholder of Yangpu Zhaohe, an indirect non wholly-owned subsidiary of the Company and is therefore a connected person of the Company under the Listing Rules.

   
   

   Acquisition of equity interest in Yangpu Zhaohe:

   
   

   Jiatai Construction has conditionally agreed to acquire and Vendor I has conditionally agreed to sell 10.2% of the registered capital of Yangpu Zhaohe held by Vendor I. Upon the completion of transaction as contemplated under the Agreement I, together with the Agreement II, i.e. the completion of relevant filings with the competent authorities in the PRC, Yangpu Zhaohe will become a wholly-owned subsidiary of Jiatai Construction.

   
   

   Consideration:

   
   

   The consideration for the transaction as contemplated under the Agreement I is RMB50,000,000 (approximately HK$59,250,000), which was negotiated by Jiatai Construction and Vendor I on an arm's length basis and determined by taking into consideration of, among others, (i) the recent operating performance and asset value of Tongren Group (Yangpu Zhaohe owns as to 72.5% equity interest in Tongren and has a shareholder loan of RMB100 million to Tongren which are the sole assets of Yangpu Zhaohe), (ii) Tongren Group's ownership of three operating and well- established integrated hospitals (i.e. two Class III integrated hospitals namely the Nanjing Tongren Hospital (南京同仁醫院) and the Kunming Tongren Hospital (昆明同仁醫院) and one Class II integrated hospital namely the Yunnan Xinxinhua Hospital (雲南新新華醫院)) and two pieces of land for medical and health purposes situated at Nanjing and Kunming, PRC respectively, (iii) the experienced management and medical specialists team of Tongren Group, (iv) the future prospect of Tongren Group and (v) the original investment cost of RMB25,000,000 being 10.2% of the registered capital of Yangpu Zhaohe contributed by Vendor I in 2008.

   
   

   Having considered the factors taken into account by the parties in arriving at the consideration after arm's length negotiation as mentioned above and the factors set out in the paragraph headed "Reasons for and Benefits of the Acquisitions", the Directors are of the view that the consideration under the Agreement I is fair and reasonable and in the interests of the Company and its Shareholders as a whole.

   Pursuant to the Agreement I, Jiatai Construction shall pay the consideration in cash to Vendor I within 3 months after the registration of the transfer of the 10.2% registered capital of Yangpu Zhaohe with the relevant authorities. It is expected that the consideration would be funded from internal resources and/or borrowings of the Group.

   
   

   Condition precedent:

   
   

   The transaction as contemplated under the Agreement I will be subject to the condition precedent that the Company has obtained the necessary approval in respect of the Agreement I and the transactions contemplated thereunder (if applicable).

   
   

   Completion:

   
   

   Registration of the transfer of the 10.2% registered capital of Yangpu Zhaohe with relevant authorities shall take place within 5 business days after the fulfillment of the condition precedent. The Agreement I and the Agreement II are not interconditional.

   
   

   THE AGREEMENT II

   
   

   Date: 28 December 2015 (after trading hours)

   
   

   Parties:

   
   

3. Vendor II; and

   
   

4. Jiatai Construction.

To the best of the Director's knowledge, information and belief and having made all reasonable enquiries, Vendor II and its ultimate beneficial owners are Independent Third Parties.

Acquisition of equity interest in Yangpu Zhaohe:

Jiatai Construction has conditionally agreed to acquire and Vendor II has conditionally agreed to sell 8.16% of the registered capital of Yangpu Zhaohe held by Vendor II. Upon the completion of transaction as contemplated under the Agreement II, together with the Agreement I, i.e. the completion of relevant filings with the competent authorities in the PRC, Yangpu Zhaohe will become a wholly-owned subsidiary of Jiatai Construction.

The total consideration for the transaction as contemplated under the Agreement II is RMB40,000,000 (approximately HK$47,400,000), which was negotiated by Jiatai Construction and Vendor II on an arm's length basis and determined by taking into consideration of, among others, (i) the recent operating performance and asset value of Tongren Group (Yangpu Zhaohe owns as to 72.5% equity interest in Tongren and has a shareholder loan of RMB100 million to Tongren which are the sole assets of Yangpu Zhaohe), (ii) Tongren Group's ownership of three operating and well-established integrated hospitals (i.e. two Class III integrated hospitals namely the Nanjing Tongren Hospital (南京同仁醫院) and the Kunming Tongren Hospital (昆明同仁醫 院) and one Class II integrated hospital namely the Yunnan Xinxinhua Hospital (雲南新新華醫院)) and two pieces of land for medical and health purposes situated at Nanjing and Kunming, PRC respectively, (iii) the experienced management and medical specialists team of Tongren Group,

(iv) the future prospect of Tongren Group and (v) the original investment cost of RMB20,000,000 being 8.16% of the registered capital of Yangpu Zhaohe contributed by Vendor II in 2008.

Payment of consideration:

Pursuant to the Agreement II, Jiatai Construction shall pay the consideration in cash to Vendor II within 3 months after the registration of the transfer of the 8.16% registered capital of Yangpu Zhaohe with relevant authorities. It is expected that the consideration would be funded from internal resources and/or borrowings of the Group.

Condition precedent:

The transaction as contemplated under the Agreement II will be subject to the condition precedent that the Company has obtained the necessary approval in respect of the Agreement II and the transactions contemplated thereunder (if applicable).

Completion:

Registration of the transfer of the 8.16% registered capital of Yangpu Zhaohe with relevant authorities shall take place within 5 business days after the fulfillment of the condition precedent. The Agreement II and the Agreement I are not interconditional.