TSINGTAO BREWERY COMPANY LIMITED
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this
announcement, makes no representation as to its accuracy or completeness and expressly disclaims
any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any
part of the contents of this announcement.
TSINGTAO BREWERY COMPANY LIMITED
(a joint stock limited company established in the People's Republic of China)
PROPOSED ISSUE OF A SHARES
The Board announces that the Company intends to apply to the relevant PRC authorities for the
issue of not more than approximately 100 million new A Shares to institutional and public investors
in the PRC and the listing of such A Shares on the Shanghai Stock Exchange. The net proceeds
from the A Share Issue is intended to be used to finance:?
i) the acquisition of a 75 per cent. equity interest in Carlsbrew Brewery (Shanghai) Limited;
ii) the acquisition of a 62.64 per cent. interest in the registered capital of Beijing Asia Shuang He
Sheng Five Star Beer Co. Ltd. and a 54 per cent. interest in the registered capital of Beijing Three
Ring Asia Pacific Company Limited;
iii) technological transformation projects for Tsingtao Brewery Centre, the draught beer
production line of Tsingtao Brewery (Xi'an) Limited Liability Company and of Tsingtao Brewery
Factory No. 2, Tsingtao Brewery (Ma'anshan) Co. Ltd., Tsingtao Brewery (Zhuhai) Co. Ltd. and
Tsingtao Brewery (Sanshui) Co. Ltd.; and
iv) an investment of RMB10 million in the establishment of electronic sales networks for the
Company.
The balance of the fund required for above projects will be financed by bank borrowings and other
means.
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TSINGTAO BREWERY COMPANY LIMITED
The A Share Issue will be subject to approval by shareholders at the EGM and the relevant PRC
authorities.
The A Share Issue will facilitate the financing of the above-mentioned projects. After completion of
the above projects or the commencement of production, it is expected that the scale of production
and market share of the Company will be further enhanced, the use of high technology in its
production process will be increased and the Company's marketing management as well as its
equity-debt ratio will also be improved, hence achieving sound economic results.
Save as disclosed herein, the Board confirms that it is not aware of any matter discloseable under
the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a
price sensitive nature.
1. A Share Issue
The Company intends to apply to the relevant PRC authorities for the issue of not more than
approximately 100 million new A Shares to institutional and public investors in the PRC and the
listing of such A Shares on the Shanghai Stock Exchange.
All natural persons and legal person investors (except those restricted by the PRC laws and
regulations) that have A Shares stock trading accounts with the Shanghai Stock Exchange would be
eligible to subscribe for such shares.
Resolutions to authorise the board in determining the issue price and pricing process of A Shares
will be considered at the EGM. It is intended that a "book-building" process will be conducted to
determine an appropriate issue price for the A Share Issue at the time of issue. Therefore, the total
amount of the proceeds of the A Share Issue cannot be determined at the moment.
The net proceeds from the A Share Issue is intended to be used to finance:?
i) the acquisition of a 75 per cent. equity interest in Carlsbrew Brewery (Shanghai) Limited;
ii) the acquisition of a 62.64 per cent. interest in the registered capital of Beijing Asia Shuang He
Sheng Five Star Beer Co. Ltd. and a 54 per cent. interest in the registered capital of Beijing Three
Ring Asia Pacific Company Limited;
iii) technological transformation projects for Tsingtao Brewery Centre, the draught beer
production line of Tsingtao Brewery (Xi'an) Company and of Tsingtao Brewery Factory No. 2,
Tsingtao Brewery (Ma'anshan) Co. Ltd., Tsingtao Brewery (Zhuhai) Co. Ltd. and Tsingtao Brewery
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TSINGTAO BREWERY COMPANY LIMITED
(Sanshui) Co. Ltd.; and
iv) an investment of RMB10 million in the establishment of electronic sales networks for the
Company.
The balance of the fund required for above projects will be financed by bank borrowings and other
means.
The A Share Issue will be subject to approval by shareholders at the EGM and the relevant PRC
authorities. Further announcement will be made as and when necessary.
2. Acquisition of Shares in Carlsbrew Brewery (Shanghai) Limited
It is intended that the Company will invest RMB153,750,000 for the acquisition of a 75 per cent.
equity interest in Carlsbrew Brewery (Shanghai) Limited with a view to increasing beer production
capacity to 100,000 tonnes per year and making it the primary production base of the Company in
Shanghai and the peripheral areas. For details of the acquisition, please refer to the announcement
of the Company dated 10th August, 2000.
3. Acquisition of Interests in Two Brewery Companies (both of which are
Sino-Foreign Equity Joint Venture Companies Established in the PRC)
The Company intends to invest RMB186,240,000 in the acquisition of a 62.64 per cent. interest in
the registered capital of Beijing Asia Shuang He Sheng Five Star Beer Co. Ltd. and a 54 per cent.
interest in the registered capital of Beijing Three Ring Asia Pacific Company Limited with a view
to making it a precursor and the primary production base in Bejing's beer market. It is believed that
by utilizing the brewing technology of Tsingtao Beer and hence improving the production
technology of "Five Star" and "Yunhu" Beer, an annual production capacity of 300,000 tonnes of
Tsingtao Beer can be achieved. For details of the acquisition, please refer to the announcement of
the Company dated 21st August, 2000.
4. Six Technological Transformation Projects
4.1 Technological transformation project for Tsingtao Brewery Centre-the Company intends to
invest RMB470,000,000 (which comprises loans with the interest subsidy of the State in the sum of
RMB330,000,000 and funds raised from the proposed A Share Issue in the sum of
RMB140,000,000) in the project. It is a project approved by the State Economic and Trade
Commission in accordance with its policy of encouraging key enterprises to develop interest
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subsidized loans with the issuance of state treasury bonds. After completion of the construction and
the commencement of production, it is expected that the production capacity can reach 200,000
tonnes of Tsingtao beer per year.
4.2 Technological transformation project for the production line of Tsingtao Brewery Factory No.
2-Investment in the project will amount to RMB68,000,000, and the project is scheduled to be
completed in 2001. After the commencement of production, it is expected that an annual production
capacity of 35,000 tonnes of draught beer can be attained.
4.3 Technological transformation project for phase one of the draught beer production line of
Tsingtao Brewery (Xi'an) Limited Liability Company with an annual productivity of 50,000
tonnes-based on the Company's equity interest of 57 per cent., an investment of RMB120,000,000
will be required. After completion of the project, the leading edge of the Company in the
North-west China market will be further enhanced.
4.4 Phase one technological transformation project for Tsingtao Brewery (Ma'anshan) Co. Ltd.
with an annual production capacity of 100,000 tonnes of beer-It is intended that RMB77,000,000
will be invested in the project. After the phase one transformation which will be completed by
September 2001, it is expected that the annual production capacity can reach 50,000 tonnes of beer,
which can then meet the demand of the peripheral areas of Ma'anshan.
4.5 Technological transformation project for Tsingtao Brewery (Zhuhai) Co. Ltd. with an annual
production capacity of 150,000 tonnes of beer-the Company intends to invest RMB58,000,000 in
the project. After the transformation, it is believed that the annual production capacity will increase
from the present capacity of 40,000 tonnes to 150,000 tonnes.
4.6 Technological transformation project for Tsingtao Brewery (Sanshui) Co. Ltd. with an annual
production capacity of 200,000 tonnes of beer-In accordance with the respective equity proportion
of the parties involved, the Company intends to invest RMB90,000,000 in the project. Together
with the investment of RMB30,000,000 which will be made by EVG Enterprises Inc. (Canada), the
total investment for the project will amount to RMB120,000,000. The aim is to increase the
Company's market share in the South China market.
5. Investment in the Setting up of an Electronic Sales Network for the
Company
The Company intends to invest RMB10,000,000 in the setting up of an electronic sales network
system in order to introduce, on the basis of its existing sales network which covers all the domestic
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TSINGTAO BREWERY COMPANY LIMITED
markets, internationally advanced technology for the system where physical distribution of
materials and settlement of funds can be processed on the network, and also to develop B2B
e-commerce. It is believed that after completion of the project, the area for the stocking and storage
of finished products of the Company will be reduced, hence speeding up the flow of the products as
well as reducing the transportation cost and the wastage in physical distribution, and ultimately
increasing cost effectiveness.
6. Reasons for and Benefits of the A Share Issue
The A Share Issue will facilitate the financing of the above-mentioned projects. After completion of
the above projects or the commencement of production, it is expected that the scale of production
and market share of the Company will be further enhanced, the use of high technology in its
production process will be increased and the Company's marketing management as well as its
equity-debt ratio will also be improved, hence achieving sound economic results. The A Share Issue
will not have any adverse impact on the Company and its shareholders.
7. Change in Share Capital
The share capital structure of the Company before and after completion of the proposed issue of not
more than approximately 100 million new A Shares will be as follows:
Before A Share Issue
Class of Shares
Number of Shares %
Non listed Shares
i. Promoter shares 399,820,000
44.42
(State shares)
ii. PRC legal person 53,330,000
5.93
shares
Total
non-listed 453,150,000
shares
Listed Shares
i. A shares (PRC 100,000,000
11.11
listed RMB
denominated
ordinary shares)
ii.
H
shares 346,850,000
38.54
(overseas listed
foreign shares)
Total listed shares 446,850,000
Total Shares
900,000,000
100.00
After A Share Issue
Number of Shares %
39.98
53,330,000
5.33
453,150,000
8. Extraordinary General Meeting
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399,820,000
5
200,000,000
20.00
346,850,000
34.69
546,850,000
1,000,000,000
100.00
TSINGTAO BREWERY COMPANY LIMITED
An EGM will be convened on Monday, 6th November, 2000 at 9 a.m. at the conference room of
Tsingtao Brewery Factory No.1, No. 56 Dengzhou Road, Qingdao, Shangdong Province, the PRC
at which resolutions to approve the A Share Issue and the consequential amendments to the Articles
of Association of the Company as well as to authorise the board to deal with matters in relation to
the A Share Issue will be proposed.
In accordance with the Articles of Association of the Company, the register of members of the
Company has to be closed 30 days before the holding of any general meeting of the Company. The
Company has decided to close its register of H shareholders from 9th October, 2000 to 6th
November, 2000 both days inclusive, during which period no transfer of H shares will be
registered.
9. General
The Circular containing, inter alia, details of the A Share Issue together with the notice of the EGM
and the related attendance confirmation slip and proxy form will be dispatched to the Shareholders
as soon as practicable.
Save as disclosed herein, the Board confirms that it is not aware of any matter discloseable under
the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a
price sensitive nature.
10. Definitions
Terms used in this announcement:
"A Shares"
"A Share Issue"
"Board"
"Circular"
"Company"
"Directors"
"EGM"
the domestic shares of RMB1.00 each in the share capital of the Company
the proposed issue of new A Shares
the board of Directors of the Company
the circular to Shareholders
Tsingtao Brewery Company Limited
the directors of the Company
the extraordinary general meeting of the Company to be held on 6th
November, 2000
"Listing Agreement" the listing agreement entered into between the Company and the SEHK in
accordance with appendix 7 of the Rules Governing the Listing of Securities
on the SEHK
"PRC"
the People's Republic of China
"RMB"
Renminbi, the lawful currency of the PRC
"SEHK"
The Stock Exchange of Hong Kong Limited
"Shareholders"
the shareholders of the Company
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TSINGTAO BREWERY COMPANY LIMITED
By Order of the Board
Tsingtao Brewery Company Limited
Zhang Xue Ju/Yuan Lu
Joint Company Secretaries
Qingdao, the PRC,19th September, 2000
Please also refer to the published version of this announcement in the i Mail dated20/9/2000.
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