UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of January 2024
Commission file number: 001-39278
Kingsoft Cloud Holdings Limited
(Exact Name of Registrant as Specified in Its
Charter)
Building D, Xiaomi Science and Technology Park,
No. 33 Xierqi Middle Road,
Haidian District
Beijing, 100085, the People’s Republic
of China
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F x Form
40-F ¨
EXHIBIT INDEX
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Kingsoft Cloud Holdings Limited |
|
|
|
Date: January 11, 2024 |
By: |
/s/ Haijian He |
|
|
Name: Haijian He |
|
|
Title: Chief Financial Officer and Director |
Exhibit 99.1
Kingsoft Cloud to Hold Extraordinary General
Meeting on February 8, 2024
BEIJING, January 11, 2024 (GLOBE NEWSWIRE) -- Kingsoft Cloud Holdings
Limited (“we,” “Kingsoft Cloud” or the “Company”) (NASDAQ: KC and HKEX: 3896), a leading independent
cloud service provider in China, today announced that it will hold an extraordinary general meeting of the Company’s shareholders
(the “EGM”) at 10:00 a.m., Hong Kong time on February 8, 2024 at Chongxian Hall, 2nd Floor, Conference Building, Taishan Hotel,
No. 8 Anning Beili, Xisanqi, Haidian District, Beijing, PRC for the purposes of considering and, if thought fit, passing with or without
amendments, each of the proposed resolutions as set forth in the notice of the EGM (the “EGM Notice”). The EGM Notice, a circular
in relation to the EGM and the form of proxy for the EGM are attached as Exhibit 99.2, 99.3 and 99.4, respectively, to the current report
on Form 6-K furnished by the Company to the U.S. Securities and Exchange Commission (the “SEC”) today (the “Report”).
Holders of record of ADSs who wish to exercise their voting rights for the underlying ordinary shares must give voting instructions to
The Bank of New York Mellon, the depositary of the ADSs. The form of voting instruction card for holders
of ADSs is attached as Exhibit 99.5 to the Report. The EGM Notice, circular, form of proxy and form of voting instruction card are also
available on the Company’s website at http://ir.ksyun.com.
Safe Harbor Statement
This report contains forward-looking statements.
These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,”
“future,” “intends,” “plans,” “believes,” “estimates” and similar statements.
Among other things, the Business Outlook, and quotations from management in this report, as well as Kingsoft Cloud’s strategic and
operational plans, contain forward-looking statements. Kingsoft Cloud may also make written or oral forward-looking statements in its
periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements
made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to
statements about Kingsoft Cloud’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent
risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking
statement, including but not limited to the following: Kingsoft Cloud’s goals and strategies; Kingsoft Cloud’s future business
development, results of operations and financial condition; relevant government policies and regulations relating to Kingsoft Cloud’s
business and industry; general economic and business conditions in China; and assumptions underlying or related to any of the foregoing.
Further information regarding these and other risks is included in Kingsoft Cloud’s filings with the SEC. All information provided
in this press release and in the attachments is as of the date of this press release, and Kingsoft Cloud does not undertake any obligation
to update any forward-looking statement, except as required under applicable law.
About Kingsoft Cloud Holdings Limited
Kingsoft Cloud Holdings Limited (NASDAQ: KC and HKEX:3896) is a leading
independent cloud service provider in China. With extensive cloud infrastructure, cutting-edge cloud-native products based on vigorous
cloud technology research and development capabilities, well-architected industry-specific solutions and end-to-end fulfillment and deployment,
Kingsoft Cloud offers comprehensive, reliable and trusted cloud service to customers in strategically selected verticals.
For more information, please visit: http://ir.ksyun.com.
For investor and media inquiries, please contact:
Kingsoft Cloud Holdings Limited
Nicole Shan
Tel: +86 (10) 6292-7777 Ext. 6300
Email: ksc-ir@kingsoft.com
Exhibit 99.2
Hong Kong Exchanges and Clearing
Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, 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 notice.
Kingsoft Cloud Holdings Limited
金山雲控股有限公司
(Incorporated in the Cayman
Islands with limited liability)
(Stock Code: 3896)
(Nasdaq Stock Ticker: KC)
NOTICE OF THE EXTRAORDINARY
GENERAL MEETING
NOTICE
IS HEREBY GIVEN that an Extraordinary General Meeting (the “EGM”) of Kingsoft Cloud Holdings Limited (the
“Company”) will be held at 10:00 a.m., Hong Kong time on February 8, 2024 at Chongxian Hall, 2nd Floor, Conference
Building, Taishan Hotel, No. 8 Anning Beili, Xisanqi, Haidian District, Beijing, PRC for the purposes of considering and, if thought
fit, passing with or without amendments, the following resolutions of the Company (unless otherwise indicated, capitalized terms used
in this notice shall have the same meanings as those defined in the circular of the Company dated January 12, 2024):
Ordinary Resolutions
| 1. | “THAT the terms of Secured Loan Facility under the Loan Facility Framework Agreement entered
into by the Company and Kingsoft Corporation on December 4, 2023, and the proposed Annual Caps be and hereby approved and confirmed.” |
| 2. | “THAT any one executive director of the Company be and is hereby authorized to |
(i) determine
the relevant commercial terms arising from the Loan Facility Framework Agreement in respect of Secured Loan Facility, (ii) sign or
execute such other documents or supplement agreements or deeds in respect of the Secured Loan Facility on behalf the Company, (iii) do
all such things and take all such actions as he may consider necessary or desirable for the purpose of giving effect to the Loan Facility
Framework Agreement in respect of the Secured Loan Facility and completing relevant transactions.”
SHARES
RECORD DATE AND ADSS RECORD DATE
The Board
has fixed the close of business on January 9, 2024, Hong Kong time, as the record date of Shares (the “Shares Record Date”).
Holders of record of the Company’s Shares (as of the Shares Record Date) are entitled to attend and vote at the EGM and any adjourned
meeting thereof.
Holders of
record of American depositary shares (the “ADSs”) as of the close of business on January 9, 2024, New York Time
(the “ADSs Record Date”, together with the Shares Record Date, the “Record Dates”), must give voting
instructions to The Bank of New York Mellon, the depositary of the ADSs (the “Depositary”), if the ADSs are held by
a holder on the books and records of the Depositary, or by instructing a bank, brokerage, or other securities intermediary, if the ADSs
are held by any of them on behalf of a holder, as the case may be.
ATTENDING THE EGM
Only holders
of record of Shares as of the Shares Record Date are entitled to attend and vote at the EGM.
PROXY FORMS AND ADS VOTING
CARDS
A holder
of Shares as of the Shares Record Date may appoint proxy(ies) to exercise his or her rights at the EGM. A holder of ADSs as of the ADSs
Record Date will need to instruct The Bank of New York Mellon, the depositary of the ADSs, as to how to vote underlying Shares represented
by the ADSs, if the ADSs are held by a holder on the books and records of the Depositary, or by instructing a bank, brokerage, or other
securities intermediary as to how to vote underlying Shares represented by the ADSs, if the ADSs are held by any of them on behalf of
a holder, as the case may be. Please refer to the proxy form (for holders of Shares) or ADS voting card (for holders of ADSs).
Holders of
record of the Company’s Shares on the Company’s register of members as of the Shares Record Date are cordially invited to
attend the EGM in person. Your vote is important. You are urged to complete, sign, date, and return the accompanying proxy form to us
(for holders of Shares) or your voting instructions to The Bank of New York Mellon (for holders of the ADSs), if your ADSs are held on
the books and records of the Depositary, or to the relevant bank, brokerage, or other securities intermediary, if your ADSs are held by
any of them on your behalf, as the case may be as promptly as possible and before the prescribed deadline if you wish to exercise your
voting rights. We must receive the proxy form by no later than 10:00 a.m., Hong Kong time, on February 6, 2024 at 17/F, Far East
Finance Centre, 16 Harcourt Road, Hong Kong to ensure your representation at the EGM; and The Bank of New York Mellon must receive your
voting instructions by the time and date specified in the ADS voting instruction card to enable the votes attaching to the Shares represented
by your ADSs to be cast at the EGM.
|
By order of the Board |
|
Kingsoft Cloud
Holdings Limited Mr. Zou Tao |
|
Executive Director,
Vice Chairman of the Board and acting Chief Executive Officer |
Hong Kong, January 12, 2024
As at the date of this notice,
the board of directors of the Company comprises Mr. Lei Jun as Chairman and non-executive director, Mr. Zou Tao as Vice Chairman
and executive director, Mr. He Haijian as executive director and Dr. Qiu Ruiheng as non-executive director, and Mr. Yu
Mingto, Mr. Wang Hang and Ms. Qu Jingyuan as independent non-executive directors.
Exhibit 99.3
THIS
CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION |
If
you are in any doubt as to any aspect of this circular or as to the action to be taken, you
should consult a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional
adviser.
If
you have sold or transferred all your shares in Kingsoft Cloud Holdings Limited, you should at once hand this circular, together with
the enclosed form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the
sale or transfer was effected for transmission to the purchaser or transferee.
Hong
Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular,
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 circular.
Kingsoft
Cloud Holdings Limited
金山雲控股有限公司
(Incorporated
in the Cayman Islands with limited liability)
(Stock
Code: 3896)
(Nasdaq
Stock Ticker: KC)
(I) CONTINUING CONNECTED TRANSACTIONS ENTERING INTO THE
LOAN FACILITY FRAMEWORK AGREEMENT; AND |
(II) NOTICE OF EXTRAORDINARY GENERAL MEETING |
Independent
Financial Adviser to
the
Independent Board Committee and the Independent Shareholders
A
letter from the Board is set out on pages 4 to 17 of this circular.
A
notice convening the EGM to be held at Chongxian Hall, 2nd Floor, Conference Building, Taishan Hotel, No. 8 Anning Beili, Xisanqi,
Haidian District, Beijing, PRC on February 8, 2024 at 10:00 a.m., Hong Kong time are set out on pages 35 to 36 of this circular.
A form of proxy for use at the EGM is also enclosed. Such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk)
and the Company (https://ir.ksyun.com).
Holders
of record of the Company’s Shares on the Company’s register of members as of the close of business on the Shares Record Date
(Hong Kong time) are cordially invited to attend the EGM in person. Holders of the Company’s ADSs as of the close of business on
the ADSs Record Date (New York time) are cordially invited to submit your voting instructions to The Bank of New York Mellon, if your
ADSs are held on the books and records of the Depositary, or by instructing a bank, brokerage, or other securities intermediary if your
ADSs are held by any of them on your behalf, as the case may be. Whether or not you propose to attend and vote at the said meeting, please
complete, sign, date, and return the accompanying proxy form to the Company’s share registrar in Hong Kong, Tricor Investor Services
Limited (for holders of Shares) or your voting instructions to The Bank of New York Mellon, if your ADSs are held on the books and records
of the Depositary, or to the relevant bank, brokerage, or other securities intermediary, if your ADSs are held by any of them on behalf
your behalf, as the case may be (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise
your voting rights. Tricor Investor Services Limited must receive the proxy form by no later than 10:00 a.m., Hong Kong time, on February 6,
2024 at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong to ensure your representation at the EGM; and The Bank of New York
Mellon must receive your voting instructions by the time and date specified in the ADS voting instruction card to enable the votes attaching
to the Shares represented by your ADSs to be cast at the EGM.
Hong
Kong, January 12, 2024
Pages
DEFINITIONS |
1 |
|
|
LETTER
FROM THE BOARD |
4 |
| I. | INTRODUCTION |
4 |
| | |
|
| II. | THE LOAN FACILITY FRAMEWORK AGREEMENT |
5 |
| | |
|
| III. | PROPOSED ANNUAL CAPS AND LISTING RULES IMPLICATIONS |
12 |
| | |
|
| IV. | REASONS FOR AND BENEFITS OF ENTERING INTO THE LOAN FACILITY
FRAMEWORK AGREEMENT |
13 |
| | |
|
| V. | INTERNAL CONTROL MEASURES |
14 |
| | |
|
| VI. | INFORMATION ON THE PARTIES |
15 |
| | |
|
| VII. | THE EGM AND PROXY ARRANGEMENT |
15 |
| | |
|
| VIII. | RECOMMENDATIONS |
16 |
| | |
|
| IX. | MISCELLANEOUS |
17 |
LETTER
FROM THE INDEPENDENT BOARD COMMITTEE |
18 |
|
|
LETTER
FROM GRAM CAPITAL |
19 |
APPENDIX |
– |
GENERAL
INFORMATION |
32 |
NOTICE
OF THE EXTRAORDINARY GENERAL MEETING |
35 |
“ADS(s)” | American Depositary
Shares, each representing 15 Shares; |
“ADSs
Record Date” |
January 9, 2024
(New York time); |
|
|
“Annual
Caps” |
the proposed
maximum amount available for drawdown under the Secured Loan Facility for each financial year of 2024 and 2025; |
|
|
“associate(s)” |
has the meaning
ascribed to it under the Listing Rules; |
|
|
“Board” |
the board of
the Directors; |
“Company” | Kingsoft Cloud
Holdings Limited, an exempted company with limited liability incorporated in the Cayman Islands
on January 3, 2012, the ADSs of which were listed on the Nasdaq Global Market in May 2020
and the ordinary Shares of which were listed on the Mainboard of the Stock Exchange in December 2022; |
“connected
person(s)” |
has
the meaning ascribed to it under the Listing Rules; |
|
|
“Depositary” |
The Bank of
New York Mellon, the depositary for our ADSs program; |
|
|
“Director(s)” |
the director(s) of
the Company; |
“EGM” | the extraordinary
general meeting of the Company to be convened on February 8, 2024 at 10:00 a.m. (Hong
Kong time) to consider and, if thought fit, approve, among other things, the Secured Loan
Facility under the Loan Facility Framework Agreement entered into by the Company and Kingsoft
Corporation on December 4, 2023, and the proposed Annual Caps; |
“Group” | the Company,
its subsidiaries and the consolidated affiliated entities from time to time; |
“Hong
Kong” |
Hong
Kong Special Administrative Region of the People’s Republic of China; |
|
|
“Independent
Board Committee” |
a board committee
of the Company, comprising all the independent non-executive Directors; |
“Independent
Financial Adviser” or “Gram Capital” |
Gram
Capital Limited, a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the Securities
and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), being the independent financial adviser to the Independent Board Committee
and the Independent Shareholders in respect of the Asset Charge Provisions under the Loan Facility Framework Agreement, the Secured
Loan Facility, and Annual Caps; |
“Independent
Shareholders” |
the
Shareholders who are not required to abstain from voting on the resolutions to approve the Asset Charge Provisions under the Loan
Facility Framework Agreement, the Secured Loan Facility and relevant proposed Annual Caps at the EGM; |
|
|
“Kingsoft
Corporation” |
Kingsoft Corporation
Limited, an exempted limited liability company incorporated in the British Virgin Islands on March 20, 1998 and discontinued
in the British Virgin Islands and continued into the Cayman Islands on November 15, 2005, with its shares listed on the Stock
Exchange; |
|
|
“Kingsoft
Corporation Group” |
Kingsoft Corporation
and its subsidiaries; |
|
|
“Latest
Practicable Date” |
January 8,
2024, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein; |
|
|
“Listing
Rules” |
the Rules Governing
the Listing of Securities on the Stock Exchange (as amended from time to time); |
|
|
“Loan
Facility” |
a loan facility
in the principal amount of not exceeding RMB1.5 billion under the Loan Facility Framework Agreement, comprising the Unsecured Loan
Facility (if relevant conditions are fulfilled) and the Secured Loan Facility; |
|
|
“Loan
Facility Framework Agreement” |
the loan facility framework agreement dated December 4, 2023 entered
into between Kingsoft Corporation and the Company in relation to the provision of the Loan Facility; |
|
|
“Model
Code” |
the Model Code
for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules; |
“Nasdaq” |
the
Nasdaq Global Select Market; |
“PRC”
or “China” |
the
People’s Republic of China which, for the purpose of this circular only, excluding Hong Kong, the Macau Special Administrative
Region of the People’s Republic of China and Taiwan; |
|
|
“RMB” |
Renminbi, the
lawful currency of the PRC; |
|
|
“RSU(s)” |
restricted stock
unit(s) of the Company; |
|
|
“Secured
Loan Facility” |
a secured loan
facility in the principal amount of not exceeding RMB1.5 billion under the Loan Facility Framework Agreement; |
“SFO” | Securities
and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time; |
“Share(s)” | ordinary
share(s) in the share capital of the Company with a par value of US$0.001 each; |
“Shares
Record Date” |
January 9, 2024
(Hong Kong time); |
|
|
“Shareholder(s)” |
the shareholder(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; |
|
|
“Unsecured
Loan Facility” |
upon satisfaction
of all relevant conditions, an unsecured loan facility in the principal amount of not exceeding RMB500 million under the Loan Facility
Framework Agreement; |
|
|
“working
day(s)” |
statutory working
day(s) in PRC; |
|
|
“%” |
per cent. |
Kingsoft
Cloud Holdings Limited
金山雲控股有限公司
(Incorporated
in the Cayman Islands with limited liability)
(Stock
Code: 3896)
(Nasdaq
Stock Ticker: KC)
Non-executive
Directors: |
Registered
Office: |
Mr. Lei
Jun (Chairman of the Board) |
Cricket
Square, Hutchins Drive |
Dr. Qiu Ruiheng |
P.O. Box 2681 |
|
Grand Cayman KY1-1111 |
Executive Directors: |
Cayman
Islands |
Mr. Zou
Tao (Vice Chairman of the Board) |
|
Mr. He
Haijian |
Headquarter and Principal
Place of Business in China: |
|
|
Independent Non-executive
Directors: |
Building
D, Xiaomi Science |
Mr. Yu Mingto |
and Technology Park |
Mr. Wang Hang |
No. 33 Xierqi Middle Road |
Ms. Qu Jingyuan |
Haidian District |
|
Beijing, 100085 |
|
PRC |
|
|
Principal Place of Business
in Hong Kong: |
|
5/F, Manulife Place |
|
348 Kwun Tong Road |
|
Kowloon, Hong Kong |
January 12,
2024
To the Shareholders
Dear Sir/Madam,
(I)
CONTINUING CONNECTED TRANSACTIONS
ENTERING
INTO THE LOAN FACILITY FRAMEWORK AGREEMENT;
AND
(II) NOTICE OF EXTRAORDINARY GENERAL MEETING
Reference
is made to the announcement of the Company dated December 4, 2023, in respect of entering into of the Loan Facility Framework Agreement.
The
purpose of this circular is to provide the Shareholders with information on, among other things, (i) the Loan Facility Framework
Agreement and the proposed Annual Caps, (ii) the recommendations from the Independent Board Committee in respect of the Loan Facility
Framework Agreement, (iii) the letter of advice from Gram Capital to the Independent Board Committee and Independent Shareholders
in respect of the Loan Facility Framework Agreement, and (iv) a notice to convening the EGM.
II. | THE LOAN FACILITY FRAMEWORK AGREEMENT |
The
summary of the principal terms of the Loan Facility Framework Agreement are as follows:
Date |
: |
December 4, 2023 |
|
|
|
Parties |
: |
(I) the Company; and |
|
|
|
|
|
(II) Kingsoft
Corporation |
|
|
|
Total
amount and drawdown of Loan Facility |
: |
In
the principal amount of up to RMB1.5 billion. |
|
|
|
|
|
Such principal
amount was determined after arm’s-length negotiations with Kingsoft Corporation, taking into account the Group’s need
to further invest capital expenditure in computing power equipment by 2024 in order to support its business expansion plan. |
|
|
|
|
|
Upon
fulfillment of the underlying conditions for drawdown in accordance with the terms of the Loan Facility Framework Agreement, the
Company (or any of its designated subsidiaries acting as a borrower) (the “Borrower”) may apply for drawdown by serving
a written notice upon Kingsoft Corporation (or any of its designated subsidiaries acting as a lender) (the “Lender”)
within ten (10) working days prior to the relevant drawdown date. Subject to the terms of the Loan Facility Framework Agreement,
the Lender and the Borrower shall separately enter into specific loan agreement(s) and the corresponding security document(s) (if
and when involved) for the relevant drawdown(s). |
|
|
|
Purpose
of Loan Facility |
: |
Unless
otherwise consented by the Lender in writing in prior, the Loan Facility shall be used for capital expenditure on equipment procurement
as stipulated in the Loan Facility Framework Agreement, or for repayment of outstanding principal amount under the Loan Facility. |
Term of Loan
Facility |
: |
(I) |
other than a drawdown to be made pursuant to the Unsecured
Loan Facility (as detailed below), which shall then bear a repayment term of not more than ten (10) months as one of the conditions,
each individual qualified loan made pursuant to the Loan Facility Framework Agreement shall bear a repayment term of not more than 18
months since the date of relevant drawdown; and |
|
|
|
|
|
(II) |
in any event, all outstanding drawdown amount together with any interests
accrued thereon shall be fully repaid by the Borrower by December 31, 2025 (the “Final Maturity Date”). |
Conditions precedent for drawdown |
: |
Under the Loan Facility
Framework Agreement, each drawdown shall be subject to the fulfillment of the following conditions: |
| (I) | the
representation and warranties made by the Borrower being true, complete, accurate and not
misleading; |
| (II) | the
Borrower having served written loan notice upon the Lender within ten (10) working days
prior to the relevant drawdown date during the Facility Period; |
| (III) | the
Borrower having entered into and duly performed its obligations under the Loan Facility Framework
Agreement and the relevant corporate guarantee, and no occurrence of any continuous event
of default or events leading to accelerated repayment; |
| (IV) | in
respect of each applicable drawdown, the relevant member(s) of Group and the relevant
member(s) of the Kingsoft Corporation Group having entered into the relevant specific
loan agreement and charge over assets (if and when involved) and the delivery thereof; |
| (V) | parties
having obtained all applicable approvals or complied with disclosure procedures as required
by applicable stock exchange listing rules (if any); |
| (VI) | having
complied with the applicable requirements of the Listing Rule by the Parties; and |
| (VII) | no
occurrence of events having material adverse impact on the Borrower on or before the provision
of the Loan Facility. |
Security for the Loan Facility |
: |
Subsidiary guarantee |
|
With respect to the
relevant Loan Facility under the Loan Facility Framework Agreement and the relevant specific loan agreement, (i) in the event
that the Borrower is a subsidiary of the Company in the PRC, all the subsidiaries of the Company in the PRC (other than such Borrower)
shall provide corporate guarantee, on a joint and several basis, for the due performance of such Borrower’s obligations under
the relevant specific loan agreement in accordance with the terms of the relevant corporate guarantee to be entered into by the relevant
subsidiaries of the Company in the PRC; and (ii) in the event that the Borrower is an offshore subsidiary of the Company, all
the offshore subsidiaries of the Company (other than such Borrower) shall provide corporate guarantee, on a joint and several basis,
for the due performance of such Borrower’s obligations under the relevant specific loan agreement in accordance with the terms
of the relevant corporate guarantee to be entered into by the relevant offshore subsidiaries of the Company. Further, the Company
shall undertake to Kingsoft Corporation that it will deploy resources in a manner permitted under the applicable laws and regulations
to procure the repayment of all outstanding Loan Facility under the Loan Facility Framework Agreement in full. |
|
Parties agreed that,
with respect to the first drawdown of the Loan Facility pursuant to the Loan Facility Framework Agreement, no charge over fixed assets
on the part of the Borrower is required, on condition that such first drawdown shall: |
| (I) | amount up to RMB500 million; |
| (II) | be made on or before
January 31, 2024; and |
| (III) | have a repayment term
of not more than ten (10) months. |
|
Secured
Loan Facility |
|
|
|
In the event that any drawdown
to be made under the Loan Facility does not satisfy the above conditions as Unsecured Loan Facility, the Group shall create charge
over its fixed assets as specified in the Agreement in favour of Kingsoft Corporation for such relevant drawdown in the below manner: |
|
| (I) | for
any accrued drawdown amount (including such next immediate drawdown amount) within RMB500
million, the Group shall execute the relevant charge over its fixed assets in favour of the
Kingsoft Corporation and complete the registration of such charge (if required) by no later
than February 29, 2024, and the value of such charged fixed assets shall not be less
than 120% of such then next immediate drawdown amount; or |
| (II) | for
any accrued drawdown amount (including such next immediate drawdown amount) exceeding RMB500
million, the Group shall execute the relevant charge over its fixed assets in favour of the
Kingsoft Corporation and complete the registration of such charge (if required) before such
next immediate drawdown, and the value of such charged fixed assets shall not be less than
120% of the then next immediate drawdown amount. |
|
|
As agreed by the parties,
the above-mentioned fixed assets to be charged over shall refer to the computing power equipment procured or to be procured by the
Group. |
|
|
|
|
In the event that the value of
any charged fixed asset is significantly impaired due to market conditions, depreciation or other reasons, the Borrower shall provide
further satisfactory collateral in accordance with the terms of the Loan Facility Framework Agreement and the relevant charge over
fixed assets. |
|
Release
of Charged Fixed Assets |
|
|
|
Upon repayment of any portion
of the Loan Facility, the Borrower may apply to the Lender to release the corresponding charged fixed assets under the Fixed Asset
Charge Arrangements (as defined below). However, the parties also agreed that, in any event: |
| (I) | before
all outstanding loan amount under the Unsecured Loan Facility are fully repaid, the value
of the fixed assets so remain charged should not be less than: (then aggregate outstanding
drawdown amount – outstanding drawdown amount under the Unsecured Loan Facility) x
120%; and |
| (II) | after
all outstanding drawdown amount under the Unsecured Loan Facility are fully repaid, the value
of the fixed assets so remain charged should not be less than: then aggregate outstanding
drawdown amount x 120%. |
| | For
the avoidance of doubt and sake of due compliance with Listing Rules by the Company,
the charge of fixed asset arrangements mentioned above on the part of the Borrower (the “Fixed
Asset Charge Arrangements”) and any reference thereto under the Loan Facility Framework
Agreement are subject to the obtaining by the Company of all applicable approvals and discharge
of disclosure obligations as required by the Listing Rules. |
| | As
agreed by the parties, in the event that the Company fails to acquire the relevant shareholders’
approvals for the said Fixed Asset Charge Arrangements on or before February 29, 2024,
the Lender will be entitled to deducting the amount initially available for drawdown in association
with the Fixed Asset Charge Arrangements under the Loan Facility. |
Interest rate |
: |
Under the Loan Facility Framework Agreement, subject to the
terms of the specific loan agreement, interest shall accrue on the principal amount of the relevant Loan Facility from the drawdown date,
being the date of the relevant drawdown amount remitted to the Borrower in accordance with the terms of the specific loan agreement,
at the following rates: |
| (I) | The
interest rate for a loan of less than one year shall be a fixed lending rate of 3.75% per
annum. |
| (II) | The
interest rate for a loan of more than one year shall be the higher of: (i) the Loan
Prime Rate (LPR) for loans of more than one year (inclusive) and less than five years (if
any) published by the People’s Bank of China (PBOC) applicable on the date of drawdown
plus 60 basis points (1 basis point = 0.01%) and (ii) a
fixed lending rate of 4.05% per annum. |
|
The interest shall be accrued
daily based on a 360-day year commencing from the relevant drawdown date, and shall be paid on a quarterly basis. |
|
|
|
The interest rate arrangement
was agreed upon between the Company and Kingsoft Corporation with reference to the interest rate range of past commercial practice
of similar loans obtained from independent banks/financial institutions, and the LPR published by PBOC from time to time, after arm’s-length
negotiations taking into account of the Group’s financing costs. |
|
|
|
In particular, prior to entering
into the Loan Facility Framework Agreement, the Company had enquired into certain independent banks, but was told of their unwillingness
to offer facilities (i) with interest rates not higher than those offered by Kingsoft Corporation; or (ii) secured by computing
power equipment. The Company was also given to understand from such independent banks that, whether or not security is provided would
not impact their position on setting interest rates of a loan facility with varying terms. |
|
For details of the
fairness and reasonableness of the above interest rates, please refer to the section headed “Letter from Gram Capital”
of this circular. |
|
|
|
In view of the above against the
imminent business expansion and capital expenditure needs facing the Group and with reference to the terms previously offered by
independent banks, the Board considers the interest rates under the Loan Facility Framework Agreement are on normal commercial terms
and are fair and reasonable. |
Repayment |
: |
Subject to the terms of the Loan Facility Framework Agreement,
the Borrower shall repay the outstanding drawdown amount under the relevant specific loan agreement together with the interest accrued
thereon in full on the maturity date as provided in the specific loan agreement, and in any event, the Borrower shall repay all outstanding
drawdown amount together with interest accrued thereon under the Loan Facility Framework Agreement on the Final Maturity Date. |
|
The bank account for
operating receivables of the Borrower shall be functioned as the designated account under supervision, maintaining a fund balance
not less than the total amount of interest accrued on the drawdown made by the Borrower. The Lender shall oversee the Borrower’s
operating receivables in such account to ensure the Borrower’s business operates soundly and possesses ample debt repayment
capability. Detailed matters pertaining to the designated account under supervision by the Lender shall be subject to separate account
supervision agreement to be entered into between the Lender and Borrower. |
|
|
|
For the avoidance of doubt, such
supervision arrangement is not a form of guarantee prescribed by the relevant PRC laws, but a contractual relationship subsisted
between the Borrower and the Lender throughout the Facility Period. |
III. | PROPOSED ANNUAL CAPS AND LISTING RULES IMPLICATIONS |
As
at the Latest Practicable Date, Kingsoft Corporation directly held as to 37.40% of the Company, thus is a connected person of the Company.
Accordingly, the entering into of Loan Facility Framework Agreement and the transaction(s) contemplated thereunder constitutes continuing
connected transactions for the purpose of Chapter 14A of the listing Rules.
There
was no historical transaction in relation to the provision of any loan facility between the Company and Kingsoft Corporation which was
secured by the assets of the Group.
Fully exempt continuing
connected transaction(s) – Unsecured Loan Facility
Pursuant
to the Loan Facility Framework Agreement, the Group will not be required to provide any security for the drawdown made pursuant to the
Unsecured Loan Facility, as long as the applicable conditions are met. For details, see the relevant descriptions in the section headed
“II. THE LOAN FACILITY FRAMEWORK AGREEMENT” above in this circular. As the transaction(s) contemplated thereunder will
be conducted on normal commercial terms or better, it will constitute continuing connected transaction(s) but is fully exempted
under Rule 14A.90 of the Listing Rules, including the requirement to set annual caps.
Non-exempt continuing
connected transaction(s) – Secured Loan Facility
The
proposed Annual Caps for the Secured Loan Facility under the Loan Facility Framework Agreement for each financial year of 2024 and 2025
are set out below:
| Financial
year ending
December 31, | |
| 2024 | | |
| 2025 | |
| RMB
billion | | |
| RMB
billion | |
Maximum
drawdown amount under the Secured Loan Facility under the Loan Facility Framework
Agreement | 1.5 | | |
| 1.5 | |
The
proposed Annual Caps were determined after considering, among other things, (i) the needs for sufficient working capital due to
increase in demand for computing power equipment procurement as a result of the expansion of business of the Group as further
detailed in the section headed “IV. REASONS FOR AND BENEFITS OF ENTERING INTO THE LOAN FACILITY FRAMEWORK AGREEMENT” of
this circular below; (ii) the total principal amount of Loan Facility under the Loan Facility Framework Agreement provided by
the Kingsoft Corporation Group; and (iii) the Group’s internal financial assessment of its repayment
abilities.
As
one or more of the applicable percentage ratios in respect of the Secured Loan Facility (to be effected through the Fixed Asset Charge
Arrangements) under the Loan Facility Framework Agreement are higher than 5%, the transactions in relation to the Secured Loan Facility
constitute continuing connected transactions of the Company and therefore are subject to the reporting, annual review, announcement and
Independent Shareholder’s approval requirements under Chapter 14A of the Listing Rules.
IV. | REASONS FOR AND BENEFITS OF ENTERING INTO THE LOAN FACILITY
FRAMEWORK AGREEMENT |
The
terms of the Loan Facility Framework Agreement, including the applicable interest rate, are entered into after arm’s length negotiations
between the parties and taking into account, among others, the prevailing market interest rates and practices. Besides, entering into
the Loan Facility Framework Agreement enables the Group to secure scalable, stable and reliable funding support to meet its business
expansion needs.
The
Group has been experiencing rapid growth in AI business, which provides healthy recurring revenue and profit. As the Group continues
to see strong and highly visible market opportunities and revenue upside with committed client order backlog in the space, this Loan
Facility of RMB1.5 billion empowers the Group with additional financial resources to continue to grow the business supporting 2024 revenue
through computing power equipment procurement and R&D. Additionally, the Group expects that the Loan Facility will strengthen its
cash position without equity dilution to existing Shareholders, diversify its funding channels, as well as optimize the Group’s
capital structure which is expected to lower its weighted average cost of capital.
As
of the Latest Practicable Date, the Company had drawn down RMB500 million under the Loan Facility, being the entire amount available
under the Unsecured Loan Facility. After obtaining the Independent Shareholders’ favorable voting at the EGM, the Group anticipates
to make further drawdown of RMB1 billion by the end of 2024 to align with its business plan of further investing capital expenditure
in computing power equipment.
The
Directors (including the members of the Independent Board Committee, having considered the advice from the Independent Financial Adviser)
are of the view that the transactions under the Loan Facility Framework Agreement are on normal commercial terms, and the terms of the
Loan Facility Framework Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
Mr. Lei
Jun and Mr. Zou Tao (the “Abstained Directors”) are considered to have material interests by virtue of their
respective employment relationship and senior management positions held in Kingsoft Corporation Group. Accordingly, both Mr. Lei
Jun and Mr. Zou Tao have abstained from voting on the relevant Board resolution to approve the Loan Facility Framework Agreement
and Annual Caps.
V. | INTERNAL CONTROL MEASURES |
In
order to ensure the terms of the relevant specific loan agreement are on normal commercial terms and fair and reasonable to the Company
and Shareholders and are no less favourable to the Group than terms offered available to or from independent third parties (as defined
under the Listing Rules), the Company has formulated the following internal control policies and adopted the following internal control
measures:
| (I) | with regard
to any amount drawn down under the Secured Loan Facility, the Company expects that, in all
times, the corresponding total value of its fixed assets remain charged pursuant thereto
shall not exceed 120% of the then aggregate outstanding drawdown amount, and the Company
will adopt a proactive and dynamical approach in monitoring any drawdown amount repaid thereunder
and apply to the Lender to release the corresponding charged fixed assets thereto on a timely
basis; |
| (II) | the designated
staff of the finance department of the Company will closely monitor the outstanding loan
balances to be repaid and report the latest status of the loans granted to the finance department
of the Company on a monthly basis to ensure that the outstanding loan balances will not exceed
the proposed Annual Caps; |
| (III) | the finance
department of the Company will report to the senior management on a monthly basis and the
Directors (including the independent non-executive Directors) on a half-yearly basis in relation
to the transaction status; |
| (IV) | the finance
department of the Company will, before the signing of each individual loan agreement under
the Loan Facility Framework Agreement: (a) check the benchmark lending interest rate
published by PBOC; and (b) compare the interest rate of the individual loan with at
least two major commercial banks or financial institutions to confirm the interest rate charged
by the Lender is in line with the market rates and the individual loan agreements are entered
into on normal commercial terms; |
| (V) | the Company’s
external auditor will conduct an annual review of the transactions entered into under the
Loan Facility Framework Agreement to ensure that the transactions amount is within the proposed
Annual Caps and the transactions is in accordance with the terms set out in the Loan Facility
Framework Agreement; |
| (VI) | the Company’s
finance department will set an alert alarm when the aggregated outstanding drawdown balances
is about to reach the proposed Annual Cap. In case that the aggregated principal amount of
the Loan Facility is expected to exceed the proposed Annual Caps, the Company could timely
recomply with the requirements under Chapter 14A of the Listing Rules; and |
| (VII) | the Company’s
independent non-executive Directors will conduct an annual review of the status of the transactions
contemplated under the Loan Facility Framework Agreement to ensure that the Company has complied
with its internal approval process and the relevant requirements under the Listing Rules. |
VI. | INFORMATION ON THE PARTIES |
Information of the
Company
The
Company was incorporated under the laws of the Cayman Islands on January 3, 2012 as an exempted company with limited liability.
The Company’s ADSs, each of which represents 15 Shares, were listed on Nasdaq under the symbol of “KC” on May 8,
2020. The Company’s Shares were listed on the Main Board of the Hong Kong Stock Exchange under the stock code “3896”
and stock short name “KINGSOFT CLOUD” on December 30, 2022.
The
Company is a leading independent cloud service provider in China. With its full commitment to cloud service, it is dedicated to mobilizing
our resources to enable its customers to successfully embrace the benefits of cloud solutions, to pursue their digital transformation
strategies, and to create business value.
Information of Kingsoft
Corporation
Kingsoft
Corporation is a company continued in the Cayman Islands with limited liability, whose shares are listed on the Stock Exchange (Stock
Code: 3888). Kingsoft Corporation is principally engaged in the design, research and development, and sales and marketing of the office
software products and services of WPS Office; and research and development of games, and the provision of PC games and mobile games services.
| VII. | THE EGM AND PROXY ARRANGEMENT |
The
EGM will be held at Chongxian Hall, 2nd Floor, Conference Building, Taishan Hotel, No. 8 Anning Beili, Xisanqi, Haidian District,
Beijing, PRC on February 8, 2024. The EGM will commence at 10:00 a.m., Hong Kong time.
The
notice of the EGM is set out on pages 35 to 36 of this circular. The notice serves as the notice of general meeting required under
Rule 13.71 of the Listing Rules. The notice is also available for viewing on the websites of the Stock Exchange (www.hkexnews.hk)
and the Company (http://ir.ksyun.com).
Holders
of record of the Company’s Shares on the Company’s register of members as of the close of business on the Shares Record Date
(Hong Kong time) are cordially invited to attend the EGM in person. Holders of the Company’s ADSs as of the close of business on
the ADSs Record Date (New York time) are cordially invited to submit your voting instructions to The Bank of New York Mellon, if your
ADSs are held on the books and records of the Depositary, or by instructing a bank, brokerage, or other securities intermediary, if your
ADSs are held by any of them on your behalf, as the case may be. Whether or not you propose to attend and vote at the said meeting, please
complete, sign, date, and return the accompanying proxy form to the Company’s share registrar in Hong Kong, Tricor Investor Services
Limited (for holders of Shares) or your voting instructions to The Bank of New York Mellon, if your ADSs are held on the books and records
of the Depositary, or to the relevant bank, brokerage, or other securities intermediary, if your ADSs are held by any of them on your
behalf, as the case may be (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise
your voting rights. Tricor Investor Services Limited must receive the proxy form by no later than 10:00 a.m., Hong Kong time, on February 6,
2024 at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong to ensure your representation at the EGM; and The Bank of New York
Mellon must receive your voting instructions by the time and date specified in the ADS voting instruction card to enable the votes attaching
to the Shares represented by your ADSs to be cast at the EGM.
Pursuant
to Rule 17.05A of the Listing Rules, trustees holding unvested Shares of the share schemes of the Company, whether directly or indirectly,
shall abstain from voting on matters that require Shareholders’ approval under the Listing Rules, unless otherwise required by
law to vote in accordance with the beneficial owner’s direction and such a direction is given. As at the Latest Practicable Date,
the number of unvested Shares held by the trustee of the share schemes of the Company was 62,952,615.
To
the best knowledge and belief of the Directors having made all reasonable enquiries, save for (i) the aforesaid trustee holding
such number of unvested Shares for the share schemes of the Company; and (ii) Kingsoft Corporation, holding directly as to 37.40%
of the Company as at the Latest Practicable Date, and its associates (if any of them held Share(s) in the Company on or before the
Shares Record Date), who has material interest in the transactions contemplated under the Loan Facility Framework Agreement, none of
the Shareholders is required to abstain from voting on the resolutions at the EGM.
Pursuant
to Rule 13.39(4) of the Listing Rules, any vote by shareholders at a general meeting must be taken by poll except where the
chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted only
by a show of hands. Therefore, the resolutions to be proposed at the EGM will be voted by way of poll. An announcement on the poll results
will be published after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.
The
Directors (excluding the Abstained Directors, but including the members of the Independent Board Committee whose views have been set
out in the section headed “Letter from the Independent Board Committee” of this circular after taking into account the advice
of Gram Capital) are of the view that the terms of Secured Loan Facility under the Loan Facility Framework Agreement and the proposed
Annual Caps are (i) entered into in the ordinary and usual course of business of the Company; and (ii) on normal commercial
terms, fair and reasonable, and in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors (other
than the Abstained Directors) recommend the Independent Shareholders to vote in favor of all resolutions in relation to the foregoing
at the forthcoming EGM.
Your
attention is also drawn to (i) the letter from the Independent Board Committee on page 18 of this circular containing the recommendation
of the Independent Board Committee to the Independent Shareholders; and (ii) the letter from Gram Capital on pages 19 to 31
of this circular containing its advice to the Independent Board Committee and the Independent Shareholders and the principal factors
and reasons taken into account by Gram Capital in arriving at its advice. Your attention is also drawn to the additional information
set out in the Appendix to this circular.
|
By
order of the Board |
|
Kingsoft
Cloud Holdings Limited Mr. Zou Tao |
|
Executive
Director, Vice Chairman of the Board and acting Chief Executive Officer |
LETTER
FROM THE INDEPENDENT BOARD COMMITTEE |
Kingsoft
Cloud Holdings Limited
金山雲控股有限公司
(Incorporated
in the Cayman Islands with limited liability)
(Stock
Code: 3896)
(Nasdaq
Stock Ticker: KC)
January 12,
2024
To the Independent
Shareholders
Dear Sir/Madam,
CONTINUING
CONNECTED TRANSACTIONS
ENTERING
INTO THE LOAN FACILITY FRAMEWORK AGREEMENT
We
refer to the circular of the Company dated January 12, 2024 (the “Circular”) to its Shareholders of which this
letter forms a part. Terms defined in the circular shall have the same meanings in this letter unless the context otherwise requires.
We
have been appointed by the Board as the Independent Board Committee to advise you in relation to (i) whether the terms of Secured
Loan Facility under the Loan Facility Framework Agreement and the proposed Annual Caps are fair and reasonable and in the interests of
the Company and the Shareholders as a whole; and (ii) how to vote on the resolution regarding the Secured Loan Facility and the
proposed Annual Caps, taking into account the recommendations from Gram Capital.
Your
attention is drawn to the section headed “Letter from the Board” and to the advice of Gram Capital in its capacity as the
Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of whether the terms of
the Secured Loan Facility and the proposed Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders
as a whole, as set out in the section headed “Letter from Gram Capital” as well as other additional information set out in
other parts of this circular.
Having
taken into account the advice of, and the principal factors and reasons considered by Gram Capital in relation thereto as stated in
its letter, we consider that the terms of Secured Loan Facility under the Loan Facility Framework Agreement and the proposed Annual
Caps are (i) entered into in the ordinary and usual course of business of the Company; and (ii) on normal commercial
terms, fair and reasonable, and in the best interests of the Company and the Shareholders as a whole. Accordingly, we recommend the
Independent Shareholders to vote in favor of the ordinary resolutions to be proposed at the EGM in respect of the Secured Loan
Facility and the proposed Annual Caps.
|
Yours
faithfully, |
|
For and on
behalf of the Independent Board Committee |
|
Mr. Yu
Mingto |
|
Mr. Wang
Hang |
|
Ms. Qu
Jingyuan |
|
Independent
non-executive Directors |
Set
out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and
the Independent Shareholders in respect of the Transactions for the purpose of inclusion in this circular.
|
Room
1209, 12/F.
Nan
Fung Tower
88
Connaught Road Central/
173
Des Voeux Road Central
Hong Kong
12
January 2024
|
To:
The independent board committee and the independent shareholders of Kingsoft Cloud Holdings Limited
Dear Sirs,
CONTINUING
CONNECTED TRANSACTIONS
ENTERING
INTO THE LOAN FACILITY FRAMEWORK AGREEMENT
INTRODUCTION
We
refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders
in respect of the transactions contemplated under the Loan Facility Framework Agreement (the “Transactions”), details
of which are set out in the letter from the Board (the “Board Letter”) contained in the circular dated 12 January 2024
issued by the Company to the Shareholders (the “Circular”), of which this letter forms part. Terms used in this letter
shall have the same meanings as defined in the Circular unless the context requires otherwise.
On
4 December 2023, the Company and Kingsoft Corporation entered into the Loan Facility Framework Agreement, pursuant to which Kingsoft
Corporation agreed to provide the Loan Facility of up to RMB1.5 billion to the Company during the period commencing from 5 December 2023
and ending at 31 December 2025 (i.e. Facility Period).
With
reference to the Board Letter, the Transactions (in particular, the Secured Loan Facility) constitute continuing connected transactions
of the Company and are subject to the reporting, annual review, announcement and Independent Shareholder’s approval requirements
of Chapter 14A of the Listing Rules.
The
Independent Board Committee comprising Mr. Yu Mingto, Mr. Wang Hang and Ms. Qu Jingyuan (all being independent non-executive
Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Transactions are on normal
commercial terms and are fair and reasonable; (ii) whether the Transactions are in the interests of the Company and the Shareholders
as a whole and conducted in the ordinary and usual course of business of the Group; and (iii) how the Independent Shareholders should
vote in respect of the resolutions to approve the Transactions at the EGM. We, Gram Capital Limited, have been appointed as the Independent
Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.
INDEPENDENCE
As
at the Latest Practicable Date, we were not aware of any relationships or interests between Gram Capital and the Company during the past
two years immediately preceding the Latest Practicable Date, or any other parties that could be reasonably regarded as hindrance to Gram
Capital’s independence to act as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders.
BASIS OF OUR OPINION
In
formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information,
opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the
Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely
and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date.
We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably
made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld
or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the
opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors’
representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning
the Transactions. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view
for our opinion in compliance with Rule 13.80 of the Listing Rules.
The
Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance
with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable
enquiries, confirm that, to the best of their knowledge and belief, the information contained in the Circular is accurate and complete
in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement
in the Circular or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any
part of the Circular, save and except for this letter of advice.
We
consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion.
We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, Kingsoft Corporation
or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a
result of the Transactions. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the
information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including
any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this
opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition,
nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the
Company.
Lastly,
where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility
of Gram Capital to ensure that such information has been correctly extracted from the relevant sources.
PRINCIPAL FACTORS
AND REASONS CONSIDERED
In
arriving at our opinion in respect of the Transactions, we have taken into consideration the following principal factors and reasons:
A. | Background of the Transactions |
Information
on the Group
With
reference to the Board Letter, the Company is a leading independent cloud service provider in China. With its full commitment to cloud
service, it is dedicated to mobilizing its resources to enable customers to successfully embrace the benefits of cloud solutions, to
pursue their digital transformation strategies, and to create business value.
Set
out below are the consolidated financial information of the Group for the two years ended 31 December 2022 as extracted from the
Company’s annual report for the year ended 31 December 2022 (the “2022 Annual Report”) and nine months
ended 30 September 2023 (“9M2023”) (with comparative figures) as extracted from the Company’s announcement
dated 21 November 2023 in relation to the Group’s unaudited financial results for 9M2023 (the “9M2023 Announcement”):
|
|
For
the year
ended
31 December
2022 |
|
|
For
the year
ended
31 December
2021 |
|
|
Change
from
2021 to 2022 |
|
|
|
RMB’000 |
|
|
RMB’000 |
|
|
% |
|
|
|
(audited) |
|
|
(audited) |
|
|
|
|
Total
revenues |
|
|
8,180,107 |
|
|
|
9,060,784 |
|
|
|
(9.72 |
) |
–
Public cloud services |
|
|
5,360,282 |
|
|
|
6,159,085 |
|
|
|
(12.97 |
) |
–
Enterprise cloud services |
|
|
2,816,976 |
|
|
|
2,897,817 |
|
|
|
(2.79 |
) |
–
Others |
|
|
2,849 |
|
|
|
3,882 |
|
|
|
(26.61 |
) |
| |
For
the year
ended 31
December
2022 | | |
For
the year
ended
31 December
2021 | | |
Change
from
2021 to 2022 | |
| |
RMB’000 | | |
RMB’000 | | |
% | |
| |
(audited) | | |
(audited) | | |
| |
Gross
profit | |
| 429,538 | | |
| 351,288 | | |
| 22.28 | |
Net
loss | |
| (2,688,388 | ) | |
| (1,591,756 | ) | |
| 68.89 | |
| |
For
the nine
months ended
30 September
2023 | | |
For
the nine
months ended
30 September
2022 | | |
Change
from
2022 to 2023 | |
| |
| RMB’000 | | |
| RMB’000 | | |
| % | |
| |
| (unaudited) | | |
| (unaudited) | | |
| | |
Total
revenues | |
| 5,325,011 | | |
| 6,049,094 | | |
| (11.97 | ) |
–
Public cloud services | |
| 3,329,775 | | |
| 4,015,989 | | |
| (17.09 | ) |
–
Enterprise cloud services | |
| 1,993,662 | | |
| 2,031,058 | | |
| (1.84 | ) |
–
Others | |
| 1,574 | | |
| 2,047 | | |
| (23.11 | ) |
Gross
profit | |
| 597,031 | | |
| 267,581 | | |
| 123.12 | |
Net
loss | |
| (1,896,811 | ) | |
| (2,166,731 | ) | |
| (12.46 | ) |
As
depicted from the table above and with reference to the 2022 Annual Report, the Group’s total revenue decreased by approximately
9.72% from the year ended 31 December 2021 (“FY2021”) to the year ended 31 December 2022 (“FY2022”),
mainly due to proactive scale-down of content delivery network services within public cloud services, and more stringent project selection
of enterprise cloud services. Despite the aforesaid decrease in the Group’s revenue, the Group’s gross profit increased by
approximately 22.28% from FY2021 to FY2022, primarily caused by optimization of revenue mix and effective cost controls. The Group’s
loss increased by approximately 68.89% from FY2021 to FY2022. With reference to the 2022 Annual Report, such increase was due to the
increase of workforce optimization related compensations, credit loss, Hong Kong listing expenses, share awards expenses of Camelot Technology
Co., Ltd. (a subsidiary of the Company), exchange rates changes, as partially offset by increased gross profit as mentioned above.
As
depicted from the table above and with reference to the 9M2023 Announcement, the Group’s total revenue decreased by approximately
11.97% from the nine months ended 30 September 2022 (“9M2022”) to 9M2023, mainly due to proactive scale-down
of services for content delivery network customers, and phasing-out of loss-making clients. Despite the aforesaid decrease in the Group’s
revenue, the Group’s gross profit increased by approximately 123.12% from 9M2022 to 9M2023, mainly due to the Group’s strategic
adjustment of revenue mix, optimized enterprise cloud project selection and efficient cost control measures, showing the Group’s
strong commitment to improving the Group’s profitability and delivering high-quality and sustainable development. The Group’s
loss reduced by approximately 12.46% from 9M2022 to 9M2023, mainly due to the increased gross profit as mentioned above, reduction in
selling and marketing expenses, reduction in research and development (“R&D”) expenses, impairment of long-lived
assets and foreign exchange changes.
With
reference to the Company’s interim report for the six months ended 30 June 2023 (the “2023 Interim Report”)
and 9M2023 Announcement, the Group will continue to promote high-quality and sustainable development by upholding the principle of “building
success based on technology and innovation” to solidify its core capabilities, and continuously improve its profitability. The
Company also expects to deepen its strategic planning and engagement with Xiaomi Corporation and Kingsoft Corporation in their comprehensive
artificial intelligence (“AI”) cloud demand to capture market opportunities, maintain the healthy trajectory of continued
profitability improvement, and generate value for the Shareholders.
Information
on Kingsoft Corporation
With
reference to the Board Letter, Kingsoft Corporation is a company continued in the Cayman Islands with limited liability, whose shares
are listed on the Stock Exchange (stock code: 3888). Kingsoft Corporation is principally engaged in the design, R&D, and sales and
marketing of the office software products and services of WPS Office; and R&D of games, and the provision of personal computer games
and mobile games services. Kingsoft Corporation is a controlling Shareholder.
Reasons
for and benefits of the Transactions
With reference
to the Board Letter:
| (i) | Entering
into the Loan Facility Framework Agreement enables the Group to secure scalable, stable and
reliable funding support to meet its business expansion needs. |
| (ii) | The Group
has been experiencing rapid growth in AI business, which provides healthy recurring revenue
and profit. As the Group continues to see strong and highly visible market opportunities
and revenue upside with committed client order backlog in the space, the Loan Facility of
RMB1.5 billion empowers the Group with additional financial resources to continue to grow
the business supporting 2024 revenue through computing power equipment procurement and R&D. |
| (iii) | The
Group expects that the Loan Facility will strengthen its cash position without equity dilution
to existing Shareholders, diversify its funding channels, as well as optimize the Group’s
capital structure which is expected to lower its weighted average cost of capital. |
With
reference to the 9M2023 Announcement, the Group’s cash and cash equivalents were approximately RMB2.6 billion as at 30 September 2023.
Upon our enquiry, the Directors advised us that:
| (i) | According
to the 9M2023 Announcement, the Group’s bank loans were approximately RMB0.9 billion
(all of them are current liabilities) as at 30 September 2023. The Group intends to
reserve cash for repayment of the aforesaid bank loans. |
| (ii) | According
to the 2023 Interim Report and the 9M2023 Announcement, the Group’s net cash used in
operating activities was approximately RMB206 million for the six months ended 30 June 2023
and net cash generated from operating activities was approximately RMB20 million only for
the three months ended 30 September 2023. The Group intends to reserve approximately
RMB0.7 billion for the Group’s daily operation. |
| (iii) | Substantial
amount of the Group’s cash and cash equivalents as at 30 September 2023 were subsequently
used for the Group’s capital expenditure on fixed assets including computing power
equipment procurement during October and November 2023. |
| (iv) | The Group
intends to further invest capital expenditure of at least RMB1.5 billion in computing power
equipment procurement by the end of 2024. |
We
noted from the 2022 Annual Report and 2023 Interim Report that the Group has been investing in its infrastructure to upgrade its computing
power and storage capabilities, in order to deliver higher-quality cloud service and enhance the economies of scale. The Group purchases
servers, network equipment and network resources, and leases data centers from industry-leading suppliers to ensure the reliability and
availability of the Group’s network infrastructure. The Group’s purchases of property and equipment under its consolidated
statement of cash flows were approximately RMB0.7 billion for FY2021, approximately RMB1.4 billion for FY2022 and approximately RMB0.1
billion for the six months ended 30 June 2023. The Group owned around 110,000 servers as at 31 December 2022 and 101,000 servers
as at 30 June 2023. As advised by the Directors, such decrease in servers number was mainly due to removal/cessation of old model
servers. The Group will purchase servers to maintain and enhance its capacity.
For
our due diligence purpose, we obtained the Group’s business plan in relation to the aforesaid further investment capital expenditure
of at least RMB1.5 billion) in computing power equipment procurement by the end of 2024.
Given
the above, the Loan Facility of RMB1.5 billion will facilitate the Group’s business development.
We
also enquired into the Directors regarding the Group’s feasibility of obtaining further borrowings from independent banks/financial
institutions. The Directors advised us the following:
| (i) | the Group’s
outstanding bank loans were approximately RMB0.9 billion as at 30 September 2023. Based
on the Company’s communications with certain independent banks, obtaining further unsecured
loan from the banks may be subject to lengthy negotiations and bank approval procedures and
the banks are not willing to offer facility secured by computing power equipment (similar
arrangement with the Loan Facility); and |
| (ii) | obtaining
secured loan facility from other independent financial institutions may involve higher interest
rates. |
Having
considered the above factors, we consider that the Transactions are conducted in the ordinary and usual business of the Group and in
the interests of the Company and the Shareholders as a whole.
B. | Principal Terms of the Transactions |
The
following table tabulates a summary of the major terms of the Transactions, details of which are set out under the section headed “II.
THE LOAN FACILITY FRAMEWORK AGREEMENT” in the Board Letter:
Date
4 December 2023
Parties
Total
amount and drawdown of Loan Facility
In
the principal amount of up to RMB1.5 billion. Upon fulfillment of the underlying conditions for drawdown in accordance with the terms
of the Loan Facility Framework Agreement, the Company (or any of its designated subsidiaries acting as a borrower) may apply for drawdown
by serving a written notice upon Kingsoft Corporation (or any of its designated subsidiaries acting as a lender) within 10 working days
prior to the relevant drawdown date. Subject to the terms of the Loan Facility Framework Agreement, the Lender and the Borrower shall
separately enter into specific loan agreement(s) and the corresponding security document(s) (if and when involved) for the
relevant drawdown(s).
Purpose
of Loan Facility
Unless
otherwise consented by the Lender in writing in prior, the Loan Facility shall be used for capital expenditure on equipment procurement
as stipulated in the Loan Facility Framework Agreement, or for repayment of outstanding principal amount under the Loan Facility.
Term
of Loan Facility
| (i) | Other
than a drawdown to be made pursuant to the Unsecured Loan Facility, which shall then bear
a repayment term of not more than 10 months as one of the conditions, each individual qualified
loan made pursuant to the Loan Facility Framework Agreement shall bear a repayment term of
not more than 18 months since the date of relevant drawdown; and |
| (ii) | in any
event, all outstanding drawdown amount together with any interests accrued thereon shall
be fully repaid by the Borrower by December 31, 2025 (i.e. Final Maturity Date). |
Interest
rate
Under
the Loan Facility Framework Agreement, subject to the terms of the specific loan agreement, interest shall accrue on the principal amount
of the relevant Loan Facility from the drawdown date, being the date of the relevant drawdown amount remitted to the Borrower in accordance
with the terms of the specific loan agreement, at the following rates:
| (i) | The interest
rate for a loan of less than one year shall be a fixed lending rate of 3.75% per annum (the
“1-year Interest Rate”). |
| (ii) | The interest
rate for a loan of more than one year (the “Over 1-year Interest Rate”)
shall be the higher of: (i) the loan prime rate (“LPR”) for loans
of more than one year (inclusive) and less than five years (if any) published by the People’s
Bank of China (“PBOC”) applicable on the date of drawdown plus 60 basis
points (1 basis point = 0.01%) and (ii) a fixed lending rate of 4.05% per annum. |
The
interest shall be accrued daily based on a 360-day year commencing from the relevant drawdown date, and shall be paid on a quarterly
basis.
The
above interest rate arrangement (the “Interest Rate Arrangement”) was agreed upon between the Company and Kingsoft
Corporation with reference to the factors as set out under the sub-section headed “II. THE LOAN FACILITY FRAMEWORK AGREEMENT –
Interest rate” of the Board Letter.
As
aforementioned, the Group’s bank loans were approximately RMB0.9 billion as at 30 September 2023. Based on the information
provided by the Company, the terms of such bank loans were one year or less, with interest rates ranged from 3.5% to 4.1% (the “Independent
Banks Interest Range”). As advised by the Directors, the Group did not have any secured bank loan since 30 September 2023.
As
advised by the Directors, based on the Company’s communications with certain independent banks, creating charge over the Group’s
computing power equipment (similar arrangement with the Loan Facility) may not reduce interest rates of loan facility (not to mention
that they are not willing to offer such kind of secured loan facility as aforementioned). In addition, obtaining secured loan facility
or similar financing from other independent financial institutions may involve higher interest rates (based on the Company’s preliminary
communication with an independent financial institution, the interest rate offered is 5.8% for finance lease in respect of the Group’s
computing power equipment to be purchased).
As
published by the PBOC on 20 December 2023, LPR is 3.45% for loans of more than one year (inclusive) and less than five years. According
to the Interest Rate Arrangement, the implied Over 1-year Interest Rate will be 4.05%.
Having
considered the above and that both of the 1-year Interest Rate and the implied Over 1-year Interest Rate are within the Independent Banks
Interest Range, we are of the view that the Interest Rate Arrangement to be justifiable.
Security
for the Loan Facility
Details
of security for the Loan Facility are set out in the sub-section headed “Security for the Loan Facility” under the section
headed “II. THE LOAN FACILITY FRAMEWORK AGREEMENT” of the Board Letter.
We
noticed that, in the event that any drawdown to be made under the Loan Facility does not satisfy the conditions as Unsecured Loan Facility
(the “Unsecured Conditions”), the Group shall create charge over its fixed assets as specified in the Loan Facility
Framework Agreement (i.e. computing power equipment) in favour of Kingsoft Corporation for such relevant drawdown in the below manner:
| (i) | for any
accrued drawdown amount (including such next immediate drawdown amount) within RMB500 million,
the Group shall execute the relevant charge over its fixed assets in favour of the Kingsoft
Corporation and complete the registration of such charge (if required) before 29 February 2024,
and the value of such charged fixed assets shall not be less than 120% of such then next
immediate drawdown amount; or |
| (ii) | for any
accrued drawdown amount (including such next immediate drawdown amount) exceeding RMB500
million, the Group shall execute the relevant charge over its fixed assets in favour of the
Kingsoft Corporation and complete the registration of such charge (if required) before such
next immediate drawdown, and the value of such charged fixed assets shall not be less than
120% of the then next immediate drawdown amount. |
In
the event that the value of any charged fixed asset is significantly impaired due to market conditions, depreciation or other reasons,
the Borrower shall provide further satisfactory collateral in accordance with the terms of the Loan Facility Framework Agreement and
the relevant charge over fixed assets.
Upon
our enquiry, the Directors advised us that the purpose of the “120% value fixed assets charge” is to secure the Lender in
view of possible impairment and/or depreciation of the charged assets. With reference to the Board Letter, one of the Group’s internal
control measures in respect of the Transactions is that “In all times, the corresponding total value of its fixed assets remain
charged pursuant thereto shall not exceed 120% of the then aggregate outstanding drawdown amount, and the Company will adopt a proactive
and dynamical approach in monitoring any drawdown amount repaid thereunder and apply to the Lender to release the corresponding charged
fixed assets thereto on a timely basis”.
As
also advised by the Directors, the Group will comply with the following articles of Civil Code of the PRC as published by The State Council
of the PRC when creating charge over the Group’s fixed assets in relation to the Loan Facility:
| (i) | Article 401
– Where, prior to the due date of performance of an obligation, the mortgagee reaches
an agreement with the mortgagor under which the mortgaged property belongs to the creditor
in the event that the debtor fails to perform the obligation due, the mortgagee, regardless,
may only have priority to be paid from the mortgaged property in accordance with law. |
| (ii) | Article 410
– Where a debtor fails to perform his obligation due or an event upon which a mortgage
is to be enforced as agreed upon by the parties occurs, the mortgagee may, upon agreement
with the mortgagor, have the priority right to appraise and accept the mortgaged property,
or apply the proceeds obtained from auction or sale of the mortgaged property to satisfy
his claim against the mortgagor. Where the agreement is detrimental to the interests of other
creditors, the other creditors may request the people’s court to rescind the agreement.
Where a mortgagee and a mortgagor fail to reach an agreement on the methods of enforcing
the mortgage, the mortgagee may request the people’s court to have the mortgaged property
sold at auction or in a sale. The appraisal or sale of the mortgaged property shall be based
on the market price thereof. |
| (iii) | Article 413
– Where the appraised value of a mortgaged property or the proceeds obtained from auction
or sale of it is in excess of the amount of the obligation owed, the excessive portion shall
belong to the mortgagor, while any deficiency shall be satisfied by the debtor. |
Despite
that the provisions in relation to security for the Loan Facility involves “120% value fixed assets charge”, the Lender will
not obtain value/proceeds exceeding the amount of the Borrower’s repayment obligation (i.e. the default loan/interest) through
charged assets enforcement (in case of default) based on the above articles of Civil Code of the PRC.
In
light of the above, we consider the provisions in relation to security for the Loan Facility to be acceptable.
The table
below sets out the Annual Caps.
| |
For
the year
ending
31 December
2024 | | |
For
the year
ending
31 December
2025 | |
| |
RMB’billion | | |
RMB’billion | |
Maximum drawdown amount under the Secured
Loan Facility under the Loan Facility Framework Agreement | |
| 1.5 | | |
| 1.5 | |
With
reference to the Board Letter, the Annual Caps were determined after considering the factors set out under the section headed “III.
PROPOSED ANNUAL CAPS AND LISTING RULES IMPLICATIONS” of the Board Letter.
We noted that:
| (i) | The Loan Facility limit is RMB1.5 billion. |
| (ii) | In the
event that any drawdown to be made under the Loan Facility does not satisfy the Unsecured
Conditions, the Group shall create charge over its fixed assets as specified in the Loan
Facility Framework Agreement in favour of Kingsoft Corporation for such relevant drawdown
(i.e. such loan will be secured loan). |
With
reference to the Board Letter, the Company had drawn down RMB500 million under the Loan Facility (being the entire amount available under
the Unsecured Loan Facility) as at the Latest Practicable Date. As advised by the Directors, the aforesaid drawdown satisfied the Unsecured
Conditions. Nevertheless, should the aforesaid drawdown fail to satisfy the Unsecured Conditions in future (e.g. extension of repayment
term to more than 10 months), the Group shall create charge over its fixed assets for aforesaid drawdown and it will become secured loan.
Given the
above, we consider the Annual Caps to be fair and reasonable.
Having
considered the above principal terms of the Transactions, we consider that the terms of the Transactions (including the Annual Caps)
are on normal commercial terms and are fair and reasonable.
| D. | Listing
Rules Implication |
The
Directors confirmed that the Company shall comply with the requirements of Rules 14A.53 to 14A.59 of the Listing Rules pursuant
to which (i) the maximum value of the Transactions must be restricted by the Annual Caps; (ii) the terms of the Transactions
must be reviewed by the independent non-executive Directors annually; (iii) details of independent non-executive Directors’
annual review on the terms of the Transactions must be included in the Company’s subsequent published annual reports. Furthermore,
it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, among other
things, whether anything has come to their attention that causes them to believe that the Transactions (i) have not been approved
by the Board; (ii) were not entered into, in all material respects, in accordance with the relevant agreement governing the transactions;
and (iii) have exceeded the Annual Caps. In the event
that the maximum amounts of the Transactions are anticipated to exceed the Annual Caps, or that there is any proposed material amendment
to the terms of the Transactions, as confirmed by the Directors, the Company shall comply with the applicable provisions of the Listing
Rules governing continuing connected transaction.
With
the stipulation of the above requirements for continuing connected transactions pursuant to the Listing Rules, we are of the view that
there are adequate measures in place to monitor the Transactions and hence the interest of the Independent Shareholders would be safeguarded.
RECOMMENDATION
Having
taken into account that above factors and reasons, we are of the opinion that (i) the terms of the Transactions are on normal
commercial terms and are fair and reasonable; and (ii) the Transactions are conducted in the ordinary and usual course of
business of the Group and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the
Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant ordinary resolutions to be
proposed at the EGM to approve the Transactions and we recommend the Independent Shareholders to vote in favour of the resolutions
in this regard.
|
Yours
faithfully, |
|
For and
on behalf of Gram Capital Limited Graham Lam |
|
Managing
Director |
| Note: | Mr. Graham Lam is a licensed
person registered with the Securities and Futures Commission and a responsible officer of Gram Capital Limited to carry out Type 6 (advising
on corporate finance) regulated activity under the SFO. He has over 25 years of experience in investment banking industry. |
APPENDIX |
GENERAL
INFORMATION |
I. | RESPONSIBILITY STATEMENT |
This
circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance
with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable
enquiries, confirm that, to the best of their knowledge and belief, the information contained in this circular is accurate and complete
in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement
in this circular or this circular misleading.
II. | DIRECTORS’ INTERESTS OR SHORT POSITIONS IN EQUITY
SECURITIES |
As
of the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the Shares,
underlying Shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO), which
were required (a) to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of
the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) to
be recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO; or (c) as otherwise notified
to the Company and the Hong Kong Stock Exchange pursuant to the Model Code were as follows:
Interest in Shares
and Underlying Shares of the Company
| |
| |
| | |
Number | | |
Approximate | |
| |
| |
| | |
of
Shares | | |
Percentage
of | |
| |
| |
| | |
underlying | | |
Shareholding
of | |
| |
| |
| | |
Outstanding | | |
the
Issued Share | |
| |
| |
Number
of | | |
Options/RSUs | | |
Capital
of the | |
Name | |
Nature
of Interest | |
Issued
Shares | | |
Granted | | |
Company(2) | |
| |
| |
| | |
| | |
(%) | |
Mr.
Lei Jun(3) | |
Interest in
controlled | |
| | | |
| | | |
| | |
corporation | |
| |
| 466,161,000 | (L) | |
| Nil | | |
| 12.25 | |
Mr. Zou Tao | |
Beneficial
interest | |
| 2,000,000 | (L) | |
| Nil | | |
| 0.05 | |
Mr. He Haijian | |
Beneficial
interest | |
| 2,007,000 | (L) | |
| 6,355,482 | (L)(4) | |
| 0.22 | |
Notes:
(1) | The letter “L” denotes a long position in the Shares. |
(2) | Calculated on basis of the total number of issued shares of the Company
as of the Latest Practicable Date. |
(3) | Mr. Lei Jun has the majority voting
power in Xiaomi Corporation and is deemed to be interested in those Shares held by Xiaomi Corporation
under the SFO. |
(4) | Represents the beneficial interest in
(i) 6,340,000 Shares underlying the outstanding RSUs granted to him under the 2013 Share Award
Scheme; and (ii) 15,482 Shares underlying the outstanding share options granted to him under the
2013 Share Option Scheme. |
APPENDIX |
GENERAL
INFORMATION |
Save
as disclosed above, none of the Directors or chief executive of the Company and their associates, had interest or short positions in
shares, underlying shares or debentures of the Company or its associated corporations as at the Latest Practicable Date.
III. | OTHER INTERESTS OF THE DIRECTORS |
Save as otherwise
disclosed, as at the Latest Practicable Date,
| (a) | none of
the Directors had any direct or indirect interest in any assets which have been, since December 31,
2022, the date of the latest published audited accounts of the Company, acquired or disposed
of by or leased to any member of the Group, or are proposed to be acquired or disposed of
by or leased to any member of the Group; |
| (b) | save for
Abstained Directors, each serving as a director of Kingsoft Corporation, none of the Directors
was a director or employee of a company which had an interest or short position in the Shares
or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange
under provisions of Divisions 2 and 3 of Part XV of the SFO; |
| (c) | none of
the Directors had entered, or proposed to enter, into a service contract with any member
of the Group, excluding contracts expiring or determinable by the Group within one year without
payment of compensation (other than statutory compensation); |
| (d) | none of
the Directors and their respective associate(s) was interested in any business which
competes or is likely to compete, either directly or indirectly, with the business of the
Group and requires disclosure under Rule 8.10 of the Listing Rules; and |
| (e) | none of
the Directors was materially interested in any contract or arrangement entered into by any
member of the Group subsisting as at the Latest Practicable Date which was significant in
relation to the business of the Group taken as a whole. |
At
the Latest Practicable Date, Gram Capital has given and has not withdrawn its written consent to the issue of this circular with the
inclusion of its letter and references to its name in the form and context in which it appears.
APPENDIX |
GENERAL
INFORMATION |
The
following are the qualifications of Gram Capital, who has given its opinions or advice which are contained in this circular:
Name |
Qualifications |
|
|
Gram
Capital |
A licensed corporation
to carry out Type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of
the Laws of Hong Kong) |
As
at the Latest Practicable Date, Gram Capital did not have any shareholding in any member of the Group or the right (whether legally enforceable
or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group. As at the Latest Practicable
Date, Gram Capital did not have any direct or indirect interest in any assets which have been, since December 31, 2022, being the
date to which the latest published audited accounts of the Group were made up, acquired or disposed of by or leased to, or were proposed
to be acquired or disposed of by or leased to any member of the Group.
V. | MATERIAL ADVERSE CHANGE |
The
Directors confirm that there was no material adverse change in the financial or trading position of the Group since December 31,
2022, the date to which the latest published audited consolidated financial statements of the Group were made up.
Copies
of the following documents will be published on the websites of the Stock Exchange’s and the Company’s for display for a
period of not less than 14 days before the date of the EGM:
| (a) | the Loan Facility Framework Agreement; |
| (b) | the letter from the Independent Board
Committee, the text of which is set out on page 18 of this circular; |
| (c) | the letter from Gram Capital, the text
of which is set out on pages 19 to 31 of this circular; and |
| (d) | the written consent of Gram Capital
Limited. |
In
the event of inconsistency, the English text of this circular shall prevail over the Chinese text.
NOTICE
OF THE EXTRAORDINARY GENERAL MEETING |
Kingsoft
Cloud Holdings Limited
金山雲控股有限公司
(Incorporated
in the Cayman Islands with limited liability)
(Stock
Code: 3896)
(Nasdaq
Stock Ticker: KC)
NOTICE
IS HEREBY GIVEN that an Extraordinary General Meeting (the “EGM”) of Kingsoft
Cloud Holdings Limited (the “Company”) will be held at 10:00 a.m., Hong Kong time on February 8, 2024 at Chongxian
Hall, 2nd Floor, Conference Building, Taishan Hotel, No. 8 Anning Beili, Xisanqi, Haidian District, Beijing, PRC for the purposes
of considering and, if thought fit, passing with or without amendments, the following resolutions of the Company (unless otherwise indicated,
capitalized terms used in this notice shall have the same meanings as those defined in the circular of the Company dated January 12,
2024):
Ordinary
Resolutions
| 1. | “THAT
the terms of Secured Loan Facility under the Loan Facility Framework Agreement entered
into by the Company and Kingsoft Corporation on December 4, 2023, and the proposed Annual
Caps be and hereby approved and confirmed.” |
| 2. | “THAT
any one executive director of the Company be and is hereby authorized to (i) determine
the relevant commercial terms arising from the Loan Facility Framework Agreement in respect of Secured Loan Facility, (ii) sign
or execute such other documents or supplement agreements or deeds in respect of the Secured Loan Facility on behalf the Company, (iii) do
all such things and take all such actions as he may consider necessary or desirable for the purpose of giving effect to the Loan Facility
Framework Agreement in respect of the Secured Loan Facility and completing relevant transactions.” |
SHARES
RECORD DATE AND ADSS RECORD DATE
The
Board has fixed the close of business on January 9, 2024, Hong Kong time, as the record date of Shares (the “Shares Record
Date”). Holders of record of the Company’s Shares (as of the Shares Record Date) are entitled to attend and vote at the
EGM and any adjourned meeting thereof.
Holders
of record of American depositary shares (the “ADSs”) as of the close of business on January 9, 2024, New York
Time (the “ADSs Record Date”, together with the Shares Record Date, the “Record Dates”), must give
voting instructions to The Bank of New York Mellon, the depositary of the ADSs (the “Depositary”), if the ADSs are
held by a holder on the books and records of the Depositary, or by instructing a bank, brokerage, or other securities intermediary, if
the ADSs are held by any of them on behalf of a holder, as the case may be.
NOTICE
OF THE EXTRAORDINARY GENERAL MEETING |
ATTENDING THE EGM
Only
holders of record of Shares as of the Shares Record Date are entitled to attend and vote at the EGM.
PROXY FORMS AND ADS
VOTING CARDS
A
holder of Shares as of the Shares Record Date may appoint proxy(ies) to exercise his or her rights at the EGM. A holder of ADSs as of
the ADSs Record Date will need to instruct The Bank of New York Mellon, the depositary of the ADSs, as to how to vote underlying Shares
represented by the ADSs, if the ADSs are held by a holder on the books and records of the Depositary, or by instructing a bank, brokerage,
or other securities intermediary as to how to vote underlying Shares represented by the ADSs, if the ADSs are held by any of them on
behalf of a holder, as the case may be. Please refer to the proxy form (for holders of Shares) or ADS voting card (for holders of ADSs).
Holders
of record of the Company’s Shares on the Company’s register of members as of the Shares Record Date are cordially invited
to attend the EGM in person. Your vote is important. You are urged to complete, sign, date, and return the accompanying proxy form to
us (for holders of Shares) or your voting instructions to The Bank of New York Mellon (for holders of the ADSs), if your ADSs are held
on the books and records of the Depositary, or to the relevant bank, brokerage, or other securities intermediary, if your ADSs are held
by any of them on your behalf, as the case may be as promptly as possible and before the prescribed deadline if you wish to exercise
your voting rights. We must receive the proxy form by no later than 10:00 a.m., Hong Kong time, on February 6, 2024 at 17/F, Far
East Finance Centre, 16 Harcourt Road, Hong Kong to ensure your representation at the EGM; and The Bank of New York Mellon must receive
your voting instructions by the time and date specified in the ADS voting instruction card to enable the votes attaching to the Shares
represented by your ADSs to be cast at the EGM.
|
By
order of the Board |
|
Kingsoft
Cloud Holdings Limited Mr. Zou Tao |
|
Executive
Director, Vice Chairman of the Board and acting Chief Executive Officer |
Hong Kong, January 12,
2024
Exhibit 99.4
Kingsoft
Cloud Holdings Limited
金山云控股有限公司
(Incorporated
in the Cayman Islands with limited liability)
(Stock
Code: 3896)
(Nasdaq
Stock Ticker: KC)
FORM OF
PROXY FOR THE EXTRAORDINARY GENERAL MEETING
TO BE HELD ON THURSDAY, FEBRUARY 8, 2024
(or
any adjournment(s) or postponement(s) thereof)
I/We,(Note
1)
of
being the registered holder(s) of
shares(Note 2) of US$0.001 each in the share capital of the above-named Company (the “Company”),
HEREBY APPOINT THE CHAIRMAN OF THE MEETING(Note 4) or
of
as my/our proxy to attend the Extraordinary General Meeting (“EGM”) (and any adjourned meeting) of the Company
to be held at Chongxian Hall, 2nd Floor, Conference Building, Taishan Hotel, No. 8 Anning Beili, Xisanqi, Haidian District, Beijing,
China on Thursday, February 8, 2024 at 10:00 a.m., Hong Kong time for the purposes of considering and, if thought fit, passing the resolutions
as set out in the notice convening the said meeting and at such meeting (and at any adjournment thereof) to vote for me/us and in my/our
name(s) in respect of the resolutions as indicated below.
ORDINARY
RESOLUTIONS |
FOR(Notes
5 & 6) |
AGAINST(Notes
5 & 6) |
ABSTAIN(Notes
5 & 6) |
1. |
THAT
the terms of Secured Loan Facility under the Loan Facility Framework Agreement
entered into by the Company and Kingsoft Corporation on December 4, 2023, and the proposed Annual Caps be and hereby approved
and confirmed. |
|
|
|
2. |
THAT
any one executive director of the Company be and is hereby authorized to
(i) determine the relevant commercial terms arising from the Loan Facility Framework Agreement in respect of Secured Loan Facility,
(ii) sign or execute such other documents or supplement agreements or deeds in respect of the Secured Loan Facility on behalf
the Company, (iii) do all such things and take all such actions as he may consider necessary or desirable for the purpose of
giving effect to the Loan Facility Framework Agreement in respect of the Secured Loan Facility and completing relevant transactions. |
|
|
|
Dated | this day
of 2024. |
Signature(Note
7): |
|
Notes:
| 1. | Full name(s) and
address(es) to be inserted in BLOCK CAPITALS. |
| 2. | Please insert
the number of shares of the Company registered in your name(s). If no number is inserted,
this form of proxy will be deemed to relate to all the shares of the Company registered in
your name(s). |
| 3. | Any member of
the Company entitled to attend and vote at the meeting is entitled to appoint another person
as his/her/its proxy to attend and vote instead of him/her/it. The proxy need not be a member
of the Company but must attend the meeting in person to represent the member. |
| 4. | If any proxy
other than the Chairman is preferred, strike out the words “THE CHAIRMAN OF THE
MEETING” here inserted and insert the name and address of the proxy desired in
the space provided. A member of the Company who is the holder of two or more shares may appoint
more than one proxy to attend and vote on his/her/its behalf at the meeting provided that
if more than one proxy is so appointed, the appointment shall specify the number and class
of shares in respect of which each such proxy is so appointed. IF NO NAME IS INSERTED,
THE CHAIRMAN OF THE MEETING WILL ACT AS YOUR PROXY. ANY ALTERATION MADE TO THIS FORM OF
PROXY MUST BE INITIALLED BY THE PERSON WHO SIGNS IT. |
| 5. | IMPORTANT:
IF YOU WISH TO VOTE FOR A RESOLUTION, PLEASE TICK (“✔”)
THE BOX MARKED “FOR.” IF YOU WISH TO VOTE AGAINST A RESOLUTION, PLEASE TICK (“✔”)
THE BOX MARKED “AGAINST.” IF YOU WISH TO ABSTAIN FROM VOTING, PLEASE TICK (“✔”)
THE BOX MARKED “ABSTAIN”. If
no direction is given, your proxy will vote or abstain at his/her discretion. Your proxy
will also be entitled to vote at his/her discretion on any resolution properly put to the
EGM other than those referred to in the notice convening the EGM. If you mark the box “abstain”,
it will mean that your proxy will abstain from voting and, accordingly, your vote will not
be counted either for or against the relevant resolution. |
| 6. | All resolutions
will be put to vote by way of poll at the meeting. Every member of the Company present in
person (in the case of a member being a corporation, by its duly authorized representative)
or by proxy shall have one vote for every fully paid share of which he/she/it is the holder.
A person entitled to more than one vote on a poll need not use all his/her votes or cast
all the votes he/she uses in the same way and in such cases, please state the relevant number
of shares in the appropriate box(es) above. |
| 7. | This form of
proxy must be signed by you or your attorney duly authorized in writing or, in the case of
a corporation, must be either executed under its common seal or under the hand of an officer
or attorney or other person duly authorized. |
| 8. | To be valid,
this form of proxy together with the power of attorney (if any) or other authority (if any)
under which it is signed or a certified copy thereof, must be deposited at the Company’s
Branch Share Registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre,
16 Harcourt Road, Hong Kong not less than 48 hours before the time appointed for holding
this meeting (i.e. not later than 10:00 a.m. on Tuesday, February 6, 2024) or the
adjourned meeting. |
| 9. | In the case
of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy,
will be accepted to the exclusion of votes of the other joint holder(s) and for this
purpose seniority will be determined by the order in which the names of the joint holders
stand in the Register of Members of the Company in respect of the joint holding. |
| 10. | Completion
and delivery of the form of proxy will not preclude you from attending and voting at the
meeting and, in such event, the form of proxy shall be deemed to be revoked. |
| 11. | We refer to
the circular (the “Circular”) and notice of the EGM of the Company dated
January 12, 2024. Unless otherwise indicated, the capitalized terms used in this notice
shall have the same meaning as those defined in the Circular and the notice of the EGM. The
description of the resolutions is by way of summary only. The full text appears in the notice
of the EGM. |
PERSONAL
INFORMATION COLLECTION STATEMENT
Your
supply of your and your proxy’s (or proxies’) name(s) and address(es) is on a voluntary basis for the purpose of processing
your request for the appointment of a proxy (or proxies) and your voting instructions for the EGM of the Company (the “Purposes”).
We may transfer your and your proxy’s (or proxies’) name(s) and address(es) to our agent, contractor, or third party
service provider who provides administrative, computer and other services to us for use in connection with the Purposes and to such parties
who are authorised by law to request the information or are otherwise relevant for the Purposes and need to receive the information.
Your and your proxy’s (or proxies’) name(s) and address(es) will be retained for such period as may be necessary to
fulfil the Purposes. Request for access to and/or correction of the relevant personal data can be made in accordance with the provisions
of the Personal Data (Privacy) Ordinance and any such request should be in writing by mail to Tricor Investor Services Limited at 17/F,
Far East Finance Centre, 16 Harcourt Road, Hong Kong for the attention of Privacy Compliance Officer.
Exhibit
99.5 | Extraordinary General Meeting of
Kingsoft Cloud Holdings Limited
Date: February 8, 2024
See Voting Instruction On Reverse Side.
Please make your marks like this: x Use pen only
• Mark, sign and date your Voting Instruction Form.
• Detach your Voting Instruction Form.
• Return your Voting Instruction Form in the
postage-paid envelope provided.
MAIL
Please separate carefully at the perforation and return just this portion in the envelope provided.
_____________________________________ __________________________
Please Sign Here Please Date Above
_____________________________________ __________________________
Please Sign Here Please Date Above
Authorized Signatures - This section must be
completed for your instructions to be executed.
Extraordinary General Meeting of
Kingsoft Cloud Holdings Limited
to be held on February 8, 2024
For Holders as of January 9, 2024
All votes must be received by 12:00 p.m., Eastern Standard Time, on January 31, 2024.
Copyright © 2024 Mediant Communications Inc. All Rights Reserved
EVENT #
CLIENT #
PROXY TABULATOR FOR
KINGSOFT CLOUD HOLDINGS LIMITED
P.O. BOX 8016
CARY, NC 27512-9903
Agenda
1. THAT the terms of Secured Loan Facility under the Loan Facility
Framework Agreement entered into by the Company and Kingsoft
Corporation on December 4, 2023, and the proposed Annual Caps
be and hereby approved and confirmed.
2. THAT any one executive director of the Company be and is
hereby authorized to (i) determine the relevant commercial terms
arising from the Loan Facility Framework Agreement in respect of
Secured Loan Facility, (ii) sign or execute such other documents or
supplement agreements or deeds in respect of the Secured Loan
Facility on behalf the Company, (iii) do all such things and take all
such actions as he may consider necessary or desirable for the
purpose of giving effect to the Loan Facility Framework Agreement
in respect of the Secured Loan Facility and completing relevant
transactions.
Directors
Recommend
For Against Abstained |
| Kingsoft Cloud Holdings Limited
Instructions to The Bank of New York Mellon, as Depositary
(Must be received prior to 12:00 p.m., Eastern Standard Time, on January 31, 2024)
The undersigned registered holder of American Depositary Receipts hereby
requests and instructs The Bank of New York Mellon, as Depositary, to endeavor, in so
far as practicable, to vote or cause to be voted the amount of shares or other Deposited
Securities represented by such Receipt of Kingsoft Cloud Holdings Limited registered in
the name of the undersigned on the books of the Depositary as of the close of business
January 9, 2024 at the Extraordinary General Meeting of the Shareholders of Kingsoft
Cloud Holdings Limited to be held on February 8, 2024 in Beijing, People’s Republic of China.
NOTE:
1.
Please direct the Depositary how it is to vote by marking an X in the appropriate box opposite the
resolution.
PROXY TABULATOR FOR
KINGSOFT CLOUD HOLDINGS LIMITED
P.O. BOX 8016
CARY, NC 27512-9903 |
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