REASONS FOR AND BENEFITS OF THE TRANSACTIONS As a subsidiary of the Communications Group, Zhejiang Information fully understands the Group’s business and operating needs, and maintains effective communication to provide more quality services to the Group. Zhejiang Information has the relevant qualifications and experience to provide the expressway mechanical and electrical system maintenance services to LongLiLiLong Co. In addition, LongLiLiLong Co went through a tender process and obtained the relevant quotations from other independent service providers to select the service provider. Zhejiang Information finally won the respective tender. The transactions contemplated under the Expressway Mechanical and Electrical System Maintenance Agreements are and will be conducted in the ordinary and usual course of business of the Group, and the consideration paid by LongLiLiLong Co to Zhejiang Information will not be higher than the average market price and will not be less favourable than those provided by other independent service providers to LongLiLiLong Co for similar services. Given the above, the Directors (including the independent non-executive Directors) are of the view that the terms of the Expressway Mechanical and Electrical System Maintenance Agreements are on normal commercial terms, in the ordinary and usual course of business of the Group and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS IN RELATION TO THE EXPRESSWAY MECHANICAL AND ELECTRICAL SYSTEM MAINTENANCE AGREEMENTS As at the date of this announcement, Zhejiang Information is a 65.85% owned subsidiary of Communications Group. Therefore, Zhejiang Information is a connected person of the Company and as a result, the transactions under the Expressway Mechanical and Electrical System Maintenance Agreements constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Pursuant to Rule 14A.81 to Rule 14A.83 of the Listing Rules, the respective transactions contemplated under the Expressway Mechanical and Electrical System Maintenance Agreements are required to be aggregated with the respective transactions contemplated under the Previous Agreements which were transactions entered into with the same connected person. As the applicable percentage ratios in respect of the transactions contemplated under the Expressway Mechanical and Electrical System Maintenance Agreements, after aggregating the Previous Agreements, are more than 0.1% but less than 5%, the Expressway Mechanical and Electrical System Maintenance Agreements 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. Xx. Xx Xxxxxxx, Xx. Xxx Xxxxxxx, Xx. Xxxx Xxxxxxx and Mr. Xxx Xx, being Directors, are deemed to have material interests in the Expressway Mechanical and Electrical System Maintenance Agreements as they are also employed by the Communications Group as at the date of Board meeting on April 30, 2021 and have abstained from voting on the relevant Board resolutions. Other than those Directors mentioned above, none of the Directors have a material interest in the transactions contemplated under the Expressway Mechanical and Electrical System Maintenance Agreements, and none are required to abstain from voting on the relevant resolutions of the Board. INFORMATION ON THE PARTIES LongLiLiLong Co is a limited liability company established under the law of PRC on April 8, 2005. LongLiLiLong Co is principally engaged in the operation and management of toll collection business of the LongLiLiLong Expressways located in Zhejiang Province, the PRC, with a total length of 222.2 kilometres. As of the date of this Announcement, LongLiLiLong Co is a wholly owned subsidiary of the Company. Jiaogong Maintenance is an indirect subsidiary of Communications Group which was established under the laws of the PRC on January 18, 2006. Jiaogong Maintenance is principally engaged in the road construction projects and toll road maintenance. Zhejiang Shunchang is an indirect subsidiary of Communications Group which was established under the laws of the PRC on November 11, 2003. Zhejiang Shunchang is principally engaged in the road construction projects and toll road maintenance. Zhejiang Information is a subsidiary of Communications Group which was established under the laws of the PRC on July 22, 2004. Zhejiang Information is principally engaged in research and development, manufacturing and sales of intelligent transportation and information technology products, road tolling, communication and surveillance systems, provision of technical advisory services for electrical and mechanical systems of tunnels, professional technical support services and engineering, procurement and construction services.
REASONS FOR AND BENEFITS OF THE TRANSACTION The Group is principally engaged in the development, sale, lease, investment and management of properties and assets management. Each of Merchants Nanjing, Jiangsu Poly, Wuhan Fanyue, Nanjing Yiju and Nanjing New Hope would benefit from the cooperation in order to exert their strengths, generate synergistic effect and enhance their investment portfolio in the property market in the PRC, which would improve the capital efficiency and effectiveness, reduce the investment risks and thus a greater return could be created for the Shareholders. The terms of the Cooperation Agreement have been arrived at after arm’s length negotiations between the parties. The Directors (including the independent non-executive Directors) have confirmed that the Acquisition and the terms of the Cooperation Agreement (including the financing and profit distribution arrangements) and the transactions contemplated thereunder are fair and reasonable, on normal commercial terms and in the interests of the Company and its Shareholders as a whole.
