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.
DONGFENG MOTOR GROUP COMPANY LIMITED*
東風汽車集團股份有限公司
(a joint stock company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 489)
CONNECTED TRANSACTION
JOINT VENTURE WITH DONGFENG MOTOR
FORMATION OF THE JOINT VENTURE COMPANY
In October 2014, the Company entered into the Joint Venture Agreement with DFM and
Dongfeng Industry for the formation of the Joint Venture Company to develop, manufacture and
sell special purpose vehicles and economical commercial vehicles.
The Board is pleased to announce that, on 25 March 2015, DFM and the Joint Venture
Company entered into the Share Transfer Agreement. According to the Share Transfer
Agreement, DFM agreed to transfer 50% equity interest in DF Shenyu to the Joint Venture
Company, as capital contribution of RMB11,036,000 to the Joint Venture Company, representing
3.21% of the Registered Capital.
IMPLICATIONS UNDER THE LISTING RULES
As DFM holds 66.86% equity interest in the Company, DFM is a connected person of the
Company under the Listing Rules. The Joint Venture Agreement entered into by the Company,
among others, with DFM constitutes a connected transaction under the Listing Rules. As all the
applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in respect of the
Joint Venture Agreement are less than 0.1%, the Joint Venture Agreement is exempt from the
reporting and announcement requirements, as well as the circular (including independent
financial advice) and the independent shareholders’ approval requirements of Chapter 14A of
the Listing Rules.
As the Company holds 75.08% equity interest in the Joint Venture Company, the Joint Venture
Company is a subsidiary of the Company. A subsidiary of the Company entered into the Share
Transfer Agreement with DFM, a connected person of the Company, which constitutes a
connected transaction under the Listing Rules. As certain of the applicable percentage ratios
stipulated under Rule 14.07 of the Listing Rules in respect of the Share Transfer Agreement
exceed 0.1% but are less than 5%, the Share Transfer Agreement is subject to the reporting
and announcement requirements set out in Rules 14A.35, 14A.49, 14A.68 and 14A.71 of the
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Listing Rules, and are exempt from the circular (including independent financial advice) and the
independent shareholders’ approval requirements of Chapter 14A of the Listing Rules.
FORMATION OF THE JOINT VENTURE COMPANY
In October 2014, the Company, DFM and Dongfeng Industry entered into the Joint Venture
Agreement, pursuant to which the parties agreed to establish the Joint Venture Company. The
Joint Venture Company will be a limited liability company established in accordance with the
PRC laws and regulations, including the Company Law of the PRC.
Purpose of the Joint Venture Company
The Joint Venture Company is committed to the business of special purpose vehicles, special
vehicles and economical commercial vehicles. The Joint Venture Company shall optimise
resources and improve management to develop the business on special vehicles and special
purpose vehicles, and build up new brands of commercial vehicles to develop the business of
economical commercial vehicles. The Joint Venture Company will research, manufacture and
sell products demanded at home and abroad, to strengthen the coordination of resources
between the shareholders, improve its profitability, and achieve sustainable development.
Scope of Business
The business scope of the Joint Venture Company shall be research and development,
manufacture, procurement and sales of economical truck and chassis, buses and chassis,
special vehicles / special-purpose vehicles (including construction vehicles), automobile parts,
import and export business, as well as technical consulting, technology services, after-sale
services in relation to the business scope of the Joint Venture Company.
Register Capital and Capital Commitment
The Joint Venture Company shall have a registered capital of RMB343,314,200 (“Registered
Capital”). The details of capital commitment to be made by the Shareholders are as follows:
Shareholder
Capital Commitment
(RMB)
Means of
Contribution
Shareholding
DFM
11,036,000
Equity
3.21%
the Company
257,759,900
Equity and asset
75.08%
Dongfeng Industry
74,518,300
Equity and asset
21.71%
Total
343,314,200
---
100%
Any change to the Registered Capital (including any increase, reduction or transfer) shall be
subject to the approval of the shareholders’ meeting (which comprising all the Shareholders)
and registration at the registrar.
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Composition of the board of directors of the Joint Venture Company
The board of directors of the Joint Venture Company shall comprise five directors, with one
director to be nominated by DMF, two directors to be nominated by the Company, one director
to be nominated by Dongfeng Industry and one director to be nominated by the employees of
the Joint Venture Company.
Composition of the senior management of the Joint Venture Company
The Joint Venture Company shall have one general manager and several deputy general
managers, to be appointed by the board of directors of the Joint Venture Company. In particular,
the general manager shall be nominated by the Company and each of DFM and Dongfeng
Industry is entitled to nominate one deputy general manager.
Composition of the supervisory committee of the Joint Venture Company
The supervisory committee of the Joint Venture Company shall comprise three members with
one member to be nominated by DFM, one member to be nominated by Dongfeng Industry and
one member to be nominated by the employees of the Joint Venture Company.
Implications under the Listing Rules
As DFM holds 66.86% equity interest in the Company, DFM is a connected person of the
Company under the Listing Rules. The Joint Venture Agreement entered into by the Company,
among others, with DFM constitutes a connected transaction under the Listing Rules.
As all the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in
respect of the Joint Venture Agreement are less than 0.1%, the Joint Venture Agreement is
exempt from the reporting and announcement requirements, as well as the circular (including
independent financial advice) and the independent shareholders’ approval requirements of
Chapter 14A of the Listing Rules.
SHARE TRANSFER AGREEMENT
The Board is pleased to announce that, on 25 March 2015, DFM and the Joint Venture
Company entered into the Share Transfer Agreement. According to the Share Transfer
Agreement, DFM agreed to transfer 50% equity interest in DF Shenyu to the Joint Venture
Company, as capital contribution of RMB11,036,000 to the Joint Venture Company, representing
3.21% of the Registered Capital.
KEY TERMS OF THE SHARE TRANSFER AGREEMENT
Date: 25 March 2015
Parties:
(1)
Dongfeng Motor Corporation (as the transferor); and
(2)
Dongfeng Special Purpose Commercial Vehicle Co., Ltd (as the transferee)
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Consideration
The appraised value of the 50% equity interest of DF Shenyu (the “Equity Interest”) is
RMB34,698,200, as determined by the valuation conducted by ZhongHe Appraisal Co., Ltd (中
和資產評估有限公司). The parties agreed that DFM will transfer the Equity Interest to the Joint
Venture Company, as capital contribution of RMB11,036,000 to the Joint Venture Company,
representing 3.21% of the Registered Capital.
Completion
Matters relating to completion of the Equity Interest transfer and the adjustment arrangements
of the Equity Interest during the transition period, shall in compliance with the agreement in
relation to Dongfeng Special Purpose Commercial Vehicle Co., Ltd. transition arrangements
among the Shareholders including DFM.
The parties agreed that the articles of association of DF Shenyu shall be amended after transfer
of the Equity Interest. The parties shall apply for regulatory approval (if any) and submit the
filings and registration procedures related to this transfer within 30 working days after the date
of the Share Transfer Agreement.
REASONS FOR THE JOINT VENTURE COMPANY AND THE SHARE TRANSFER
AGREEMENT
The Directors consider that the Joint Venture Company will meet the increasing demand for
special purpose vehicles in the PRC. By entering into the Joint Venture Agreement and the
formation of the Joint Venture Company, the Company and DFM will establish a long term
partnership based on mutual trust to expand the Company’s business of special vehicles,
special-purpose vehicles and economical commercial vehicles. The Joint Venture Company will
asssit to concentrate the Company’s resources and have the relevant subsidiaries under
centralised management and planning, to strive to enhance the “DONGFENG” brand value and
position.
The Directors (including the independent non-executive Directors) believe that the terms of the
Joint Venture Agreement are fair and reasonable and on normal commercial terms and the
entering into the Joint Venture Agreement and the transaction contemplated thereunder are in
the interests of the Company’s shareholders as a whole.
IMPLICATIONS UNDER THE LISTING RULES
As the Company holds 75.08% equity interest in the Joint Venture Company, the Joint Venture
Company is a subsidiary of the Company. A subsidiary of the Company entered into the Share
Transfer Agreement with DFM, a connected person of the Company, which constitutes a
connected transaction under the Listing Rules.
As certain of the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in
respect of the Share Transfer Agreement exceed 0.1% but are less than 5%, the Share Transfer
Agreement is subject to the reporting and announcement requirements set out in Rules 14A.35,
14A.49, 14A.68 and 14A.71 of the Listing Rules, and are exempt from the circular (including
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independent financial advice) and the independent shareholders’ approval requirements of
Chapter 14A of the Listing Rules.
None of the Directors has a material interest in the Share Transfer Agreement and matters
described herein. Accordingly, none of the Directors is required to abstain from voting on the
relevant board resolution.
INFORMATION ON THE COMPANY
The Company is principally engaged in the manufacture of commercial vehicles (including
trucks and buses), passenger vehicles (including basic passenger cars, MPVs and SUVs),
engines and other auto parts. The Company is also engaged in other automotive-related
businesses including vehicle and vehicle manufacturing equipment import/export businesses
and the manufacture of vehicle manufacturing equipment, auto finance businesses, insurance
agency businesses and used car businesses.
INFORMATION ON DFM
Dongfeng Motor Corporation （ 東 風 汽 車 公 司 ） has a wide coverage of business scope,
engaged in the manufacture, sales and R&D of whole serial commercial vehicles, passenger
vehicles, auto parts and components, vehicle manufacturing equipments and auto related
business. DFM is the parent company of the Company, which holds a 66.86% equity interest in
the Company.
INFORMATION ON DF INDUSTRY
Dongfeng (Shiyan) Industry Corporation（東風（十堰）實業公司）is principally engaged in
modification of automobile, manufacture of auto parts and components; processing of metallic
structure; installation of hydro power equipment; motor vehicle transportation, commercial
vehicles delivery, automobiles (excluding passenger vehicles with 9 seats of less) and
accessories, hardware and tools, chemical products (excluding hazardous materials and
chemicals subject to national restrictions), sales of building materials, sewing, printing,
repairing, car rental, sales and manufacture of agricultural vehicles, mini-cars and bus.
INFORMATION ON DF SHENYU
Dongfeng Shenyu Vehicle Co., Ltd.（東風神宇車輛有限公司）is principally engaged in R&D,
manufacture, modification and sales of agricultural vehicles and agricultural machinery of
Dongfeng Shenyu; technological consultation, after-sale services; modification and sales of
automobiles; R&D, manufacture and sales of auto parts and components and car assembly;
R&D, manufacture, sales, technological consultation, after-sale service of general machinery;
sales and manufacture of radiators and castings; machinery processing; manufacture of
automobiles (limited to authorized products of DFM); surface treatments of auto parts and
components; sales of steel; imports and exports of goods; imports and exports of technology;
leasing of plants and facilities.
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DEFINITIONS
“Board”
means the board of Directors of the Company;
“Company” or “DFG”
Dongfeng Motor Group Company Limited（東風汽車集團股
份有限公司）, a joint stock limited company incorporated in
the PRC with limited liability and the H Shares of which are
listed on the Hong Kong Stock Exchange;
“Dongfeng Industry”
Dongfeng (Shiyan) Industry Corporation （東風（十堰）實業
公司）, a Industry company incorporated in the PRC;
“DFM”
Dongfeng Motor Corporation（東風汽車公司）, the parent
company of the Company, which holds a 66.86% equity
interest in the Company;
“Director(s)”
the director(s) of the Company;
“Hong Kong”
Hong Kong Special Administrative Region of the People’s
Republic of China;
“Share Transfer
Agreement”
an agreement dated 25 March 2015 entered into between
DFM and the Joint Venture Company in relation to the 50%
equity interest in DF Shenyu;
“Joint Venture
Dongfeng Special Purpose Commercial Vehicle Co., Ltd.（東
Company”
風特種商用車有限公司）, a limited company incorporated in
the PRC;
“Joint Venture
Agreement”
the agreement entered into among the Company, DFM and
Dongfeng Industry in October 2014 in relation to the Joint
Venture Company;
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock
Exchange;
“PRC”
the People’s Republic of China, but for the purposes of this
announcement only, excludes Hong Kong, Macau and
Taiwan;
“Registered Capital”
the registered capital of the Joint Venture Company;
“RMB”
Renminbi, the lawful currency of the PRC;
“Shareholder(s)”
the shareholder(s) of the Joint Venture Company;
“Stock Exchange”
The Stock Exchange of Hong Kong Limited; and
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“%”
per cent.
By order of the Board of Directors
XU PING
Chairman
Wuhan, the PRC, 25 March 2015
As at the date of this announcement, Mr. Xu Ping, Mr. Zhu Fushou, and Mr. Li Shaozhu are the
executive directors of the Company, Mr. Tong Dongcheng, Mr. Ouyang Jie, Mr. Liu Weidong and
Mr. Zhou Qiang are the non-executive directors of the Company and Mr. Ma Zhigeng, Mr.
Zhang Xiaotie, Mr. Cao Xinghe and Mr. Chen Yunfei are the independent non-executive
directors of the Company.
* For identification purposes only
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