Zhejiang Expressway Connected Transaction - LED Lights Retrofit Agreement

 
TIDMZHEH 
 
Hong Kong Stock 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. 
 
                         ZHEJIANG EXPRESSWAY CO., LTD. 
 (A joint stock limited company incorporated in the People's Republic of China 
                            with limited liability) 
                              (Stock code: 0576) 
 
                            CONNECTED TRANSACTION 
                         LED LIGHTS RETROFIT AGREEMENT 
 
THE LED LIGHTS RETROFIT AGREEMENT 
 
On April 17, 2018, Jinhua Co, a wholly-owned subsidiary of the Company, entered 
into the LED Lights Retrofit Agreement with Zhejiang Information, a 
wholly-owned subsidiary of the controlling shareholder of the Company, pursuant 
to which the Company agreed to purchase LED lights retrofit services from 
Zhejiang Information. 
 
LISTING RULES IMPLICATIONS 
 
As at the date of this announcement, Communications Group is a controlling 
shareholder of the Company. Zhejiang Information is a wholly-owned subsidiary 
of Communications Group. Therefore, Zhejiang Information is a connected person 
of the Company and as a result, the transaction under the LED Lights Retrofit 
Agreement constitutes connected transaction for the Company under Chapter 14A 
of the Listing Rules. 
 
Pursuant to Rules 14A.81 and 14A.82 of the Listing Rules, as the transactions 
contemplated under the LED Lights Retrofit Agreement and the Previous 
Transactions were entered into with parties who are connected with one another 
and within a 12-month period, the LED Lights Retrofit Agreement and the 
Previous Transactions are required to be aggregated for the calculation of the 
relevant percentage ratios to determine the classification of the transactions. 
 
As the applicable percentage ratios in respect of the transactions contemplated 
under the LED Lights Retrofit Agreement, after aggregating the Previous 
Transactions, are more than 0.1% but less than 5%, the LED Lights Retrofit 
Agreement will be subject to the reporting, announcement and annual review 
requirements but exempt from the independent Shareholders' approval requirement 
under Chapter 14A of the Listing Rules. 
 
 
 
THE LED LIGHTS RETROFIT AGREEMENT 
 
On April 17, 2018, Jinhua Co, a wholly-owned subsidiary of the Company, entered 
into the LED Lights Retrofit Agreement with Zhejiang Information, a 
wholly-owned subsidiary of the controlling shareholder of the Company, pursuant 
to which the Company agreed to purchase LED lights retrofit services from 
Zhejiang Information. 
 
Principal terms of the LED Lights Retrofit Agreement are set out below: 
 
Date:                       April 17, 2018 
 
 
Parties:                    (1)    Jinhua Co, as the contract letting party; 
                            and 
 
 
                            (2)    Zhejiang Information, as the contractor 
 
Term:                       60 days since April 17, 2018 
 
 
Consideration:              RMB6,935,280 
 
 
Basis of consideration:     The consideration has been determined by public 
                            tender procedures which are open to other 
                            independent third party service providers. The 
                            factors for assessment include, but are not limited 
                            to, the tender prices, relevant experience in 
                            construction design, company reputation and quality 
                            of work and technological solutions. According to 
                            the evaluation of the assessment committee, 
                            Zhejiang Information successfully obtained the 
                            highest overall score among all the bidders. 
 
Payment:                    The consideration is paid in four installments: (i) 
                            20% to be paid within 15 working days after signing 
                            of the LED Lights Retrofit Agreement; (ii) 60% to 
                            be paid after acceptance of delivery and 
                            examination; (iii) 10% to be paid after the expiry 
                            of defect liability period; and (iv) 10% to be paid 
                            after the expiry of warranty period. 
 
Scope of services:          LED lights retrofit of Yankengjian Tunnel of Jinhua 
                            section of Ningbo-Jinhua Expressway, which 
                            includes, but not limited to, the procurement, 
                            installation and testing of the LED lights and 
                            ancillary facilities. 
 
Governing law:              PRC law 
 
 
 
 
 
 
REASONS FOR AND BENEFITS OF THE TRANSACTION 
 
Well-functioning lighting facilities are necessary for the safe operation of 
expressways, especially for tunnels. LED lights characterized by stable and 
energy efficient are regarded as ideal lighting facilities of tunnels. Zhejiang 
Information has the relevant qualifications and expertise to provide LED lights 
retrofit services to Jinhua Co. In addition, Jinhua Co has gone through the 
public tender process  in  accordance  with which Zhejiang Information 
successfully obtained the highest overall score among all the bidders. 
 
Given the above, the Directors (including the independent non-executive 
Directors) are of the view that the terms of the LED Lights Retrofit Agreement 
are on normal commercial terms, in the ordinary and usual course of business of 
the Company and are fair and reasonable and in the interests of the Company and 
 the  Shareholders  as  a whole. 
 
LISTING RULES IMPLICATIONS 
 
As at the date of this announcement, Communications Group is a controlling 
shareholder of the Company. Zhejiang Information is a wholly-owned subsidiary 
of Communications Group. Therefore, Zhejiang Information is a connected person 
of the Company and as a result, the transaction under the LED Lights Retrofit 
Agreement constitutes connected transaction for the Company under Chapter 14A 
of the Listing Rules. 
 
Pursuant to Rules 14A.81 and 14A.82 of the Listing Rules, as the transactions 
contemplated under the LED Lights Retrofit Agreement and the Previous 
Transactions were entered into with parties who are connected with one another 
and within a 12-month period, the LED Lights Retrofit Agreement and the 
Previous Transactions are required to be aggregated for the calculation of the 
relevant percentage ratios to determine the classification of the transactions. 
 
As the applicable percentage ratios in respect of the transactions contemplated 
under the LED Lights Retrofit Agreement, after aggregating the Previous 
Transactions, are more than 0.1% but less than 5%, the LED Lights Retrofit 
Agreement will be subject to the reporting, announcement and annual review 
requirements but exempt from the independent Shareholders' approval requirement 
under Chapter 14A of the Listing Rules. 
 
None of the Directors have a material interest in the transaction contemplated 
under the LED Lights Retrofit Agreement and none are required to abstain from 
voting on the relevant Board resolutions. 
 
INFORMATION ON THE PARTIES 
 
Jinhua Co is a directly wholly-owned subsidiary of the Company which was 
incorporated under the laws of the PRC with limited liability on September 30, 
2003. Jinhua Co is principally engaged in the construction, management, 
operation and maintenance of Jinhua section of Ningbo-Jinhua Expressway and 
ancillary services. 
 
Zhejiang Information is a wholly-owned subsidiary of Communications Group which 
was incorporated under the laws of the PRC with limited liability on July 22, 
2004. Zhejiang Information is principally engaged in the business of 
electromechanical system integration, intelligent transportation software and 
hardware research and development, and big data analysis operations within the 
highway sector. 
 
DEFINITIONS 
 
In this announcement, unless the context specifies otherwise, the following 
defined expressions have the following meanings: 
 
"associate"                      has the meaning ascribed to it under the 
                                 Listing Rules 
 
"Board"                          the board of Directors 
 
"Communications Group"           Zhejiang Communications Investment Group Co., 
                                 Ltd.*, a wholly 
                                 state-owned enterprise established in the PRC, 
                                 and the 
                                 controlling shareholder of the Company 
 
"Company"                        Zhejiang Expressway Co., Ltd., a joint s tock 
                                 l imited company 
                                 incorporated in the PRC with limited liability 
 
"connected person"               has the meaning ascribed to it under the 
                                 Listing Rules 
 
"controlling shareholder"        has the meaning ascribed to it under the 
                                 Listing Rules 
 
"Director(s)"                    the directors of the Company 
 
"Group"                          the Company and its subsidiaries 
 
"Hong Kong"                      the Hong Kong Special Administrative Region of 
                                 the 
                                 PRC 
 
"Jinhua Co"                      Zhejiang Jinhua Yongjin Expressway Co., Ltd.*, 
                                 a directly wholly-owned subsidiary of the 
                                 Company 
 
"LED"                            light-emitting diode 
 
"LED Lights Retrofit Agreement"  the LED lights retrofit agreement dated April 
                                 17, 2018 
                                 entered into between Jinhua Co and Zhejiang 
                                 Information, pursuant to which the Company 

                                 agreed to 
                                 purchase LED lights retrofit services from 
                                 Zhejiang 
                                 Information 
 
"Listing Rules"                  Rules Governing the Listing of Securities 
                                 on The 
                                 Stock Exchange of Hong Kong Limited 
 
"percentage ratio"               has the meaning ascribed to it under Rule 
                                 14.04(9) of 
                                 the Listing Rules 
 
"PRC"                            the People's Republic of China (for the 
                                 purpose of this 
                                 announcement, excludes Hong Kong, Macau and 
                                 Taiwan) 
 
"Previous Transactions"          the agreements entered into within a 12-month 
                                 period 
                                 prior to the date of the LED Lights Retrofit 
                                 Agreement 
                                 between or among the Group and Communications 
                                 Group's associates in relation to highway 
                                 operations 
                                 and maintenance services. For details, please 
                                 refer to 
                                 the announcements issued by the Company dated 
                                 December 22, 2017 and January 4, 2018 
                                 respectively. 
 
"RMB"                            Renminbi, the lawful currency of the PRC 
 
"Shareholder(s)"                 holder(s) of the share(s) of the Company 
 
"Stock Exchange"                 The Stock Exchange of Hong Kong Limited 
 
"subsidiary(ies)"                 has the meaning ascribed to it under the 
                                 Listing Rules 
 
"%"                              per cent. 
 
"Zhejiang Information"           Zhejiang Expressway Information Engineering 
                                 Technology Co., Ltd, a company incorporated in 
                                 the PRC and a 
                                 wholly-owned subsidiary of Communications 
                                 Group 
 
 
 
*    English names for reference only 
 
                                            On behalf of the Board 
                                                  ZHEJIANG EXPRESSWAY CO., LTD. 
                                                 YU Zhihong 
                                                Chairman 
 
Hangzhou, the PRC, April 17, 2018 
 
As at the date of  this announcement, the Chairman  of the Company is Mr. 
Yu Zhihong; the executive  Directors of the Company  are: Mr. CHENG Tao and 
Ms. LUO Jianhu; the  other non-executive Directors of  the Company are: Mr. 
DAI Benmeng, Mr. YU  Qunli and Mr. YU Ji;  and the  independent  non-executive 
 Directors  of  the  Company  are: Mr. PEI Ker-Wei, Ms. LEE Wai Tsang, Rosa and 
Mr. CHEN Bin. 
 
 
 
END 
 

(END) Dow Jones Newswires

April 17, 2018 08:18 ET (12:18 GMT)