HK Bourse: Announcement From China Beidahuang Industry Group Holdings Ltd.


 
    Following is the related link: 
http://www.hkexnews.hk/listedco/listconews/sehk/2016/0810/LTN20160810926.pdf 
 
 
 
 
  STRATEGIC CO-OPERATION FRAMEWORK AGREEMENT 
 
 THE STRATEGIC CO-OPERATION FRAMEWORK AGREEMENT 
 
 The Board is pleased to announce that on 10 August 2016, the Company and Party A 
 entered into the Strategic Co-operation Framework Agreement pursuant to which the parties 
 shall co-operate and explore the Project Activities in the PRC by way of joint venture 
 arrangements. 
 
 
 The Board wishes to emphasis that the parties have not yet commenced the formal 
 negotiation about the terms of the relevant joint venture arrangements. Subject to 
 negotiation, the relevant joint venture arrangements may or may not be materialized 
 eventually. Accordingly, Shareholders and potential investors of the Company are 
 advised to exercise caution when dealing in the Shares. 
 
 
This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and 
the inside information provisions under Part XIVA of the Securities and Futures Ordinance 
(Chapter 571 of the Laws of Hong Kong). 
 
 
 
 
                                                    1 
 
INTRODUCTION 
 
The Board is pleased to announce that on 10 August 2016, the Company and Party A entered 
into the strategic co-operation framework agreement ("Strategic Co-operation Framework 
Agreement"), pursuant to which the parties shall co-operate and explore the Project Activities 
in the PRC by way of joint venture arrangements. 
 
 
THE STRATEGIC CO-OPERATION FRAMEWORK AGREEMENT 
 
Date 
 
 
10 August 2016 
 
 
The Parties 
 
 
(1)    The Company; and 
 
 
(2)    Party A. 
 
 
To the best of the Directors ' knowledge, information and belief and having made all 
reasonable enquiries, Party A and its ultimate governing body and/or beneficial owners are 
third parties independent of the Company and its connected persons (as defined in the Listing 
Rules). 
 
 
Subject Matter 
 
 
Pursuant to the Strategic Co-operation Framework Agreement, the parties agreed to establish 
long term strategic co-operating partner relationship with each other to venture into the 
Project Activities based on the principles of complementary competitive edges, aligned 
development strategies and win-win partner relationship. Based on the Strategic Co-operation 
Framework Agreement, the parties shall negotiate the terms of the relevant joint venture 
arrangements in respect of each feasible project item covered by the Project Activities 
strictly in accordance with their respective internal assessment procedures and the regulatory 
requirements of the PRC government. 
 
 
 
 
                                              2 
 
 
 
 
 
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Information of the Group and Party A 
 
The Group is principally engaged in sale and distribution of wine, liquor and green food 
products; wholesaling and retailing of staple food, cooking oil, alcohol and beverage, frozen 
and fresh food; participation in public-private partnership projects in the PRC; and the leasing 
of logistic facilities in Hong Kong. 
 
Party A is a limited company incorporated in the PRC and principally engaged in the business 
activities as the lead contractor of foundation works for building construction, development 
and sale of properties, investment in and construction of town building projects, and 
management of construction projects. Party A has registered capital of RMB1 billion and is 
a wholly-owned subsidiary of Shanxi Construction Engineering (Group) Corporation* 
             which is, by scale, the largest integrated construction group in 
                             , 
Shanxi of the PRC. 
 
REASONS FOR AND BENEFITS OF THE STRATEGIC CO-OPERATION 
FRAMEWORK AGREEMENT 
 
In order to diversify the business of the Group for maximizing returns to the Shareholders, 
the Group has been actively seeking various development and investment opportunities. 
As announced by the Company on 3 January 2016, 26 January 2016 and 1 March 2016, 
the Company has started to actively explore and participate in PPP projects in the PRC. In 
operating and completing the PPP projects, the Company needs strong support from reliable 
contractors with solid construction and management expertise in foundation works. By 
entering into the Strategic Co-operation Framework Agreement and subject to the relevant 
joint venture arrangements, the Company can secure the full support of Party A, which is a 
reputable contractor with nationally recognized leading status and professional expertise in 
construction and management of foundation and building works, to ensure that the Company 
is able to complete the PPP projects according to contracts with state-owned entities. Party A 
can also secure more business opportunities in contractual construction and building works 
under PPP model. As PPP projects are the main project items under the Project Activities 
and have an estimated life span of 5 to 8 years, by developing, operating and investing in 
the Project Activities with Party A, it is expected that the Group can derive steady, mid-term 
continuous revenue stream from these activities. 
 
The Directors are of the view that subject to the relevant joint venture arrangements between 
the Group and Party A being materialized, the Company and its Shareholders can benefit 
from the return of the Project Activities initiated by the Strategic Co-operation Framework 
Agreement. 
 
 
                                               3 
 
GENERAL 
 
The Board wishes to emphasis that the parties have not yet commenced the formal 
negotiation about the terms of the relevant joint venture arrangements for each project 
item under the Project Activities. Subject to negotiation, the relevant joint venture 
arrangements may or may not be materialized eventually. Accordingly, Shareholders and 
potential investors of the Company are advised to exercise caution when dealing in the 
Shares. 
 
 
Further announcement in respect of the above possible joint venture arrangements will be 
made by the Company in accordance with the applicable requirements of the Listing Rules as 
and when appropriate. 
 
 
DEFINITION 
 
In this announcement, unless the context otherwise requires, the following expressions shall 
have the following respective meanings: 
 
"Board"                         the board of Directors 
 
"Company"                       China Beidahuang Industry Group Holdings Limited, a 
                                company incorporated in the Cayman Islands with limited 
                                liability, whose Shares are listed on the main board of the 
                                Stock Exchange 
 
"Directors"                     directors of the Company 
 
"Group"                         the Company and its subsidiaries 
 
"Hong Kong"                     the Hong Kong Special Administrative Region of the PRC 
 
"Listing Rules"                 the Rules Governing the Listing of Securities on the Stock 
                                Exchange 
 
 
                                Shanxi Construction Development Co., Ltd.* 
 
"Party A" 
                                 a company established in the PRC with 
                                                  , 
                                limited liability 
 
 
 
                                             4 
 
 
 
 
 
 

 
 
"PRC"                                  the People's Republic of China 
 
"PPP"                                  public-private partnership 
 
"Project Activities"                   include (among others) (a) exploration and completion of 
                                       PPP projects in the PRC; (b) investment in and construction 
                                       of good quality projects and exploration of property 
                                       development projects in the PRC; (c) investment in town 
                                       building projects involving reconstruction of old towns and 
                                       shanty towns in the PRC; and (d) formation of a supply- 
                                       chain management company to provide quality building 
                                       materials to projects operated jointly by the Company and 
                                       Party A at reasonable price to achieve cost minimization and 
                                       profit maximization for the projects 
 
"Shareholders"                         holders of the Shares 
 
"Shares"                               ordinary shares of HK$0.10 each in the share capital of the 
                                       Company 
 
"Stock Exchange"                       The Stock Exchange of Hong Kong Limited 
 
 
 
Source: Hong Kong Exchanges & Clearing