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 Hong Kong with limited liability)
(Stock Code: 966)
CONNECTED TRANSACTION
CAPITAL CONTRIBUTION TO A NON WHOLLY-OWNED SUBSIDIARY
On 23 December 2009, the Company entered into the conditional Capital Contribution Agreement with
TPG, TPI and ICBC (Asia). It has been proposed that the registered capital of TPI will be increased from
RMB1,570,000,000 to RMB2,070,000,000 by an additional registered capital of RMB500,000,000, to be
contributed by TPG, the Company and ICBC (Asia) in proportion to their respective shareholdings in TPI.
As at the date of this announcement, ICBC (Asia) has yet to decide whether it will participate in the Capital
Contribution. Pursuant to the Capital Contribution Agreement, TPG and the Company have conditionally
agreed to contribute to the registered capital in TPI, in cash, (i) RMB187,500,000 and RMB250,250,000
respectively; and (ii) (if ICBC (Asia) does not participate in the Capital Contribution) additional amounts of
RMB26,663,335 and RMB35,586,665 respectively, the aggregate of which is equal to the amount of the
ICBC (Asia) Contribution, such that the registered capital of TPI will be increased by RMB500,000,000 in
total. TPI is a non wholly-owned subsidiary of the Company, in which the Company holds a 50.05% equity
interest as at the date of this announcement. Upon completion of the Capital Contribution, the respective
shareholdings of TPG, the Company and ICBC (Asia) in TPI will remain to be 37.50%, 50.05% and 12.45%,
respectively if the ICBC (Asia) Contribution is made by ICBC (Asia). In the event that ICBC (Asia) gives up
its rights to participate in the Capital Contribution, TPG and the Company will make the Additional Capital
Contribution subject to the conditions and on the terms of the Capital Contribution Agreement. Upon
completion of the Capital Contribution and Additional Capital Contribution, each of TPG, the Company and
ICBC (Asia) will be directly interested in 38.79%, 51.77% and 9.44%, respectively, of the equity interests in
TPI.
TPG, the ultimate holding company of the Company, directly holds a 37.50% equity interest in TPI. TPG
and TPI are therefore connected persons of the Company under the Listing Rules. Accordingly, the transaction
contemplated under the Capital Contribution Agreement constitutes a connected transaction of the Company.
As the applicable percentage ratios in relation to the Capital Contribution and the Additional Capital
Contribution, in aggregate, represent more than 0.1% but less than 2.5%, the Capital Contribution Agreement
and the transactions contemplated thereunder are subject to the reporting and announcement requirements
but exempt from the independent shareholders’ approval requirement under the Listing Rules.
–1–
The Board announces that the Company entered into the Capital Contribution Agreement on 23 December
2009. It has been proposed that the registered capital of TPI will be increased from RMB1,570,000,000 to
RMB2,070,000,000 by an additional registered capital of RMB500,000,000, to be contributed by TPG, the
Company and ICBC (Asia) in proportion to their respective shareholdings in TPI. The total Capital Contribution
of RMB500,000,000 has been determined with reference to the solvency requirement under the relevant
regulations in the PRC and the anticipated business expansion of TPI. As at the date of this announcement,
ICBC (Asia) has yet to decide whether it will participate in the Capital Contribution.
1.
THE CAPITAL CONTRIBUTION AGREEMENT
Date :
23 December 2009
Parties :
(1)
TPG, the ultimate holding company of the Company;
(2)
the Company;
(3)
ICBC (Asia); and
(4)
TPI, a non wholly-owned subsidiary of the Company and established in the PRC, in
which the Company holds a 50.05% equity interest as at the date of this announcement.
Pursuant to the Capital Contribution Agreement, TPG and the Company have agreed, conditional upon
fulfillment of the Conditions to contribute, in cash, the following respective amounts as additional registered
capital:
Amount of Additional Registered
Capital Agreed to be Contributed
(RMB)
Name of the Shareholder
TPG
Company
187,500,000
250,250,000
Total amount
437,750,000
If ICBC (Asia) participates in the Capital Contribution, it will contribute RMB62,250,000 to TPI in
proportion to its shareholding in TPI and the total Capital Contribution will be RMB500,000,000.
In the event that ICBC (Asia) decides to give up its rights to participate in the Capital Contribution and
the Conditions are fulfilled, TPG and the Company have agreed, after the obtaining of relevant approvals
from the Ministry of Finance of the PRC and the CIRC in respect of the Capital Contribution and the
Additional Capital Contribution, to contribute the following respective amounts of Additional Capital
Contribution in proportion to their respective shareholdings in TPI (without taking into consideration the
shareholding of ICBC (Asia) in TPI):
Amount of Additional Registered
Capital Agreed to be Contributed
(RMB)
Name of the Shareholder
TPG
Company
26,663,335
35,586,665
Total amount
62,250,000
–2–
The amount of additional registered capital in the sum of RMB250,250,000 and (where applicable)
RMB35,586,665 to be contributed by the Company into TPI will be funded by the internal resources of
the Group.
Conditions for the payment of the Capital Contribution
Payment of the Capital Contribution is conditional upon:
(i)
compliance with the relevant requirements of the Listing Rules by the Company in relation to the
Capital Contribution Agreement and the transactions contemplated thereunder; and
(ii)
obtaining the approval of the Ministry of Finance of the PRC in respect of the Capital Contribution.
The parties have agreed to use their best endeavours to procure that the Conditions are fulfilled on or
before the Payment Long Stop Date, failing which, the Capital Contribution Agreement shall terminate
and be of no effect and no party shall have any claim against the other, save in respect of any antecedent
breach.
Payments
Payment of the Capital Contribution shall take place on or before the Payment Long Stop Date after
fulfillment of all of the Conditions.
Payment of the Additional Capital Contribution shall be conditional upon the approval of the Capital
Contribution and the Additional Capital Contribution by the Ministry of Finance of the PRC and CIRC
and shall take place within 30 business days after the receipt by TPG and the Company of a notification
from ICBC (Asia) giving up its right to participate in the Capital Contribution or such later date as TPG,
the Company and TPI may agree.
Completion
TPI shall be responsible for the completion of all necessary procedures and arrangements required for
completion of the transactions contemplated under the Capital Contribution Agreement on or before the
Completion Long Stop Date.
2.
SHAREHOLDING STRUCTURE OF TPI BEFORE AND AFTER COMPLETION
As at the date of this announcement, the shareholders of TPI and their respective shareholding interests
in TPI are as follows:
Name of the Shareholder
TPG
Company
ICBC (Asia)
Total
–3–
Amount of
Registered and
Paid-Up Capital
(RMB)
Percentage of
Shareholding
Interests
(%)
588,750,000
785,785,000
195,465,000
37.50
50.05
12.45
1,570,000,000
100.00
Immediately after completion of the Capital Contribution (assuming that ICBC (Asia) participates in the
Capital Contribution), the percentage of equity interests held by TPG, the Company and ICBC (Asia)
will be as follows:
Amount of
Registered and
Paid-Up capital
(RMB)
Percentage of
Shareholding
Interests
(%)
TPG
Company
ICBC (Asia)
776,250,000
1,036,035,000
257,715,000
37.50
50.05
12.45
Total
2,070,000,000
100.00
Name of the Shareholder
Assuming that ICBC (Asia) does not participate in the Capital Contribution and immediately after
completion of the Additional Capital Contribution, the percentage of equity interests held by TPG and
the Company will increase while that held by ICBC (Asia) will decrease. The following table shows the
shareholding structure of TPI after completion of the Capital Contribution and the Additional Capital
Contribution by TPG and the Company:
Amount of
Registered and
Paid-up Capital
(RMB)
Percentage of
Shareholding
Interests
(%)
TPG
Company
ICBC (Asia)
802,913,335
1,071,621,665
195,465,000
38.79
51.77
9.44
Total
2,070,000,000
100.00
Name of the Shareholder
3.
FINANCIAL INFORMATION OF TPI
Based on the audited accounts of TPI for the year ended 31 December 2008, the audited net asset value of
TPI was RMB327.39 million. The audited net loss of TPI before taxation and extraordinary items for the
financial years ended 31 December 2007 and 2008 in accordance with Hong Kong Financial Reporting
Standards was approximately RMB89.71 million and RMB515.05 million, respectively. The audited net
loss of TPI after taxation and extraordinary items for the financial year ended 31 December 2008 in
accordance with Hong Kong Financial Reporting Standards was approximately RMB557.94 million (2007:
loss of approximately RMB141.88 million).
4.
REASONS FOR ENTERING INTO THE CAPITAL CONTRIBUTION AGREEMENT
The Capital Contribution Agreement will provide the capital needed to bolster the solvency position of
TPI. Although TPI is currently incurring operational losses due to difficult operating conditions, the
Directors continue to be optimistic on the long-term prospects for the PRC property and casualty insurance
industry. The Directors believe that the Capital Contribution and (where applicable) the Additional Capital
Contribution will allow TPI to further strengthen and improve upon its operations, and to best position
itself in a challenging market that continues to have vast potential over the long run.
–4–
The Directors (including the independent non-executive Directors) believe that the Capital Contribution
Agreement was entered into on normal commercial terms and believe that the terms and the rationale
behind the Capital Contribution are fair and reasonable so far as the Shareholders are concerned and is in
the interests of the Company and the Shareholders as a whole.
The principal activity of the Company is investment holding. The principal activities of the Group are the
underwriting of all classes of global reinsurance business, direct life insurance business in the PRC and
direct property and casualty insurance business in the PRC and Hong Kong. The Group also carries on
asset management, insurance intermediaries and pension businesses and, to support its insurance activities,
holds money market, fixed income, equity and property investments.
The principal activities of TPG and its subsidiaries are insurance business and securities broking, and the
holding of various investments.
The principal activities of TPI are direct property and casualty insurance business in the PRC.
5.
LISTING RULES
As at the date of this announcement, TPG, the ultimate holding company of the Company, is directly
interested in 37.50% of the equity interests of TPI, a non wholly-owned subsidiary of the Company, TPG
and TPI are therefore connected persons of the Company under the Listing Rules. Accordingly, the
transactions contemplated under the Capital Contribution Agreement constitute connected transactions
of the Company. As the applicable percentage ratios in relation to the Capital Contribution and the
Additional Capital Contribution, in aggregate, represent more than 0.1% but less than 2.5%, the Capital
Contribution Agreement and the transactions contemplated thereunder are subject to the reporting,
announcement but exempt from independent shareholders’ approval requirement under the Listing Rules.
6.
DEFINITIONS
In this announcement, the following terms have the following meanings:
“Additional Capital
Contribution”
the contribution of the additional registered capital into TPI in the
aggregate amount of RMB62,250,000, equivalent to the amount of the
ICBC (Asia) Contribution in the event of ICBC (Asia) giving up its right
to participate in the Capital Contribution, of which, RMB26,663,335 will
be contributed by TPG and RMB35,586,665 will be contributed by the
Company in addition to their respective amount of Capital Contribution
“associate(s)”
has the meaning ascribed to it under the Listing Rules
“Board”
the board of Directors of the Company
“Capital Contribution”
the contribution of the additional registered capital in the aggregate amount
of RMB500,000,000 (if ICBC (Asia) participates in the Capital
Contribution) or RMB437,750,000 (if ICBC (Asia) does not participate
in the Capital Contribution) into TPI by TPG (as to RMB187,500,000)
and the Company (as to RMB250,250,000) pursuant to the Capital
Contribution Agreement and (if ICBC (Asia) participates in the Capital
Contribution) ICBC (Asia) (as to RMB62,250,000) in proportion to their
respective shareholdings in TPI
–5–
“Capital Contribution
Agreement”
the conditional agreement dated 23 December 2009 entered into amongst
TPG, the Company, ICBC (Asia) and TPI relating to the Capital
Contribution
“CIRC”
China Insurance Regulatory Commission, the primary regulator of the
insurance sector in the PRC
“Company”
China Taiping Insurance Holdings Company Limited, a company
incorporated in Hong Kong with limited liability, the shares of which are
listed on the main board of the Stock Exchange as at the date of this
announcement
“Completion Long Stop Date” within 30 days after payment of the Capital Contribution and the
Additional Capital Contribution, as the case may be or such later date as
may be agreed amongst TPG, the Company and TPI
“Conditions”
the conditions precedent for the payment of the Capital Contribution as
set out in the paragraph headed “Conditions for the payment of the Capital
Contribution”
“Directors”
the directors of the Company
“Group”
the Company and its subsidiaries
“Hong Kong”
the Hong Kong Special Administrative Region of the PRC
“ICBC (Asia)”
Industrial and Commercial Bank of China (Asia) Limited, a licensed bank
incorporated in Hong Kong and whose shares are listed on the main board
of the Stock Exchange
“ICBC (Asia) Contribution”
the contribution of additional registered capital into TPI in an amount of
RMB62,250,000 by ICBC (Asia) in proportion to its shareholding in TPI
if ICBC (Asia) participates in the Capital Contribution
“Independent Shareholders”
shareholders of the Company other than TPG and TPI and their respective
associates (as defined in the Listing Rules)
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“Payment Long Stop Date”
30 April 2010 (or such later date as TPG, the Company and TPI may
agree in writing)
“PRC”
the People’s Republic of China, and for the purpose of this announcement,
excludes Taiwan, Hong Kong and the Macau Special Administrative
Region of the PRC
“Shareholders”
shareholders of the Company
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
–6–
“TPG”
China Taiping Insurance Group Co., a limited company established in
the PRC and the ultimate holding company of the Company, which is
holding an effective interest of approximately 53.39% in the Company as
at the date of this announcement
“TPI”
Taiping General Insurance Co. Ltd., a limited liability company
established in the PRC and a subsidiary of the Company owned as to
50.05% by the Company, 37.50% by TPG and 12.45% by ICBC (Asia)
as at the date of this announcement
“RMB”
Renminbi, the lawful currency of the PRC
“%”
per cent
By order of the board of
China Taiping Insurance Holdings Company Limited
NG Yu Lam Kenneth
Executive Director & Chief Executive Officer
Hong Kong, 23 December 2009
As at the date of this announcement, the board of the Company is comprised of 11 directors, of which
Mr. LIN Fan, Mr. SONG Shuguang, Mr. XIE Yiqun, Mr. HE Zhiguang, Mr. NG Yu Lam Kenneth,
Mr. SHEN Koping Michael and Mr. LAU Siu Mun Sammy are executive directors, Mr. LI Tao is a non-executive
director and Dr. WU Jiesi, Mr. CHE Shujian and Mr. LEE Kong Wai Conway are independent non-executive
directors.
This announcement is posted on the website of The Stock Exchange of Hong Kong Limited at www.hkexnews.hk
and on the website of the Company at www.ctih.cntaiping.com.
–7–