Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k)
December 09 2020 - 06:05AM
Edgar (US Regulatory)
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2020
Commission File Number: 1-12158
Sinopec Shanghai Petrochemical Company
Limited
(Translation of registrant’s name into
English)
No. 48 Jinyi Road, Jinshan District,
Shanghai, 200540
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 ☒ Form
40-F ☐
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted
by Regulation S-T Rule
101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted
by Regulation S-T Rule
101(b)(7): ☐
SIGNATURES
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.
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SINOPEC SHANGHAI PETROCHEMICAL COMPANY
LIMITED |
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| Date: December 8, 2020 |
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By: |
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/s/ Wu Haijun
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Name: |
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Wu Haijun |
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Title: |
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Chairman of the Board of
Directors |
Exhibit 99.1
(A joint stock limited company incorporated in
the People’s Republic of China)
(Stock Code: 00338)
Announcement
Continuing Connected Transaction
Reference is made to the continuing connected transaction
announcement of the Company published on 27 December 2019 in
relation to the oil tanks lease agreement entered into among the
Company, the Baishawan Branch and Sinopec Reserve which will expire
on 31 December 2020. The Agreement to be entered into between
the Company, the Baishawan Branch and Sinopec Reserve was
considered and approved at the 4th meeting of the tenth session of
the board of directors of the Company held on 8 December 2020.
The Agreement will be signed before 31 December 2020.
Sinopec Reserve is a wholly-owned subsidiary of the Sinopec Group,
the controlling shareholder of the Company as defined under the
Hong Kong Listing Rules and the de facto controller of the Company
as defined under the Shanghai Listing Rules. As a wholly-owned
subsidiary of Sinopec Group, Sinopec Reserve is a related party of
the Company under the Shanghai Listing Rules and a connected person
of the Company under the Hong Kong Listing Rules. The Agreement
constitutes an ordinary related party transaction under the
Shanghai Listing Rules and a continuing connected transaction under
the Hong Kong Listing Rules.
In accordance with Rule 14A.76(2) of the Hong Kong Listing Rules,
as one or more of the applicable percentage ratios (as defined in
the Hong Kong Listing Rules) in respect of the Annual Caps for the
Agreement will exceed 0.1% but will be less than 5%, the
transaction under the Agreement is subject to the reporting and
announcement requirements, but is exempted from the circular and
independent Shareholders’ approval requirements under Chapter 14A
of the Hong Kong Listing Rules.
1
Pursuant to the Agreement, the Baishawan Branch will provide
storage services to the Company, including the lease of Oil Tanks
with a total volume of 950,000 cubic meters for the year ending
31 December 2023 with an annual storage fees of
RMB114.00 million (inclusive of value-added tax).
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CONNECTED PERSON AND CONNECTED RELATIONSHIP
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As the Baishawan Branch is a branch office of Sinopec Reserve and
is not a separate legal entity, the Agreement shall be binding
upon, and all rights and obligations thereunder shall be ultimately
assumed by Sinopec Reserve. Sinopec Reserve is a wholly-owned
subsidiary of Sinopec Group, the controlling shareholder of the
Company as defined under the Hong Kong Listing Rules and the de
facto controller of the Company as defined under the Shanghai
Listing Rules. As a wholly-owned subsidiary of Sinopec Group,
Sinopec Reserve is a related party of the Company under the
Shanghai Listing Rules and a connected person of the Company under
the Hong Kong Listing Rules. The Agreement constitutes an ordinary
related party transaction under the Shanghai Listing Rules and a
continuing connected transaction under the Hong Kong Listing
Rules.
The general information of Sinopec Reserve is set out below:
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| Name of enterprise: |
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Sinopec Petroleum Reserve Company Limited |
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| Type of enterprise: |
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Limited liability company |
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| Place of incorporation: |
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No. 22 Chaoyangmen North Street, Chaoyang
District, Beijing, the PRC |
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| Principal place of business: |
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No. 22 Chaoyangmen North Street, Chaoyang
District, Beijing, the PRC |
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| Legal representative: |
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Ren Jiajun |
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| Registered capital: |
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RMB51,428,518,200 |
Sinopec Reserve primarily engages in the wholesale distribution of
refined oil: gasoline and kerosene, crude oil wholesaling, the
sales and storage of crude oil, import and export business,
investment and construction of petroleum storage facilities, and
lease of machinery and equipment.
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| 3. |
THE STORAGE SERVICE AGREEMENT
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The key terms of the Agreement are as follows:
Parties
The Company, the Baishawan Branch (to provide storage services),
and Sinopec Reserve (to supervise and manage the strict
implementation of rules under the Agreement by the Baishawan Branch
and to assist the Company on renting Oil Tanks and related
matters).
Subject Matter and Term
The Agreement is expected to be signed before 31 December
2020.
Under the Agreement, the Baishawan Branch shall provide storage
services to the Company for a three-year term, which will commence
on 1 January 2021 and expire on 31 December 2023.
Maintenance Expenses
The Baishawan Branch shall be responsible for the related expenses
of daily repair and maintenance.
Storage Fees
The storage fees payable by the Company to the Baishawan Branch in
2021, 2022 and 2023 shall be RMB114.00 million (value-added
tax inclusive) each year. The Company shall pay the storage fees
quarterly and check the amounts with the Baishawan Branch before
the 20th day of the second month in each quarter.
Historical Transaction Amounts
The aggregate annual amounts paid to the Baishawan Branch for the
three years ended 31 December 2018, 2019 and 2020 under the
previous agreements were RMB53.96 million (exclusive of
value-added tax), RMB82.00 million (inclusive of value-added
tax) and RMB109.00 million (inclusive of value-added tax),
respectively.
Annual Caps
The aggregate annual amounts payable to the Baishawan Branch for
the years ending 31 December 2021, 2022 and 2023 shall not
exceed RMB114.00 million (inclusive of value-added tax) each
year.
While determining the Annul Caps, the Company and Sinopec Reserve
took reference to the rents payable by the third parties to Sinopec
Reserve for storage service. After comparison, the Company took the
view that the aggregate rents payable under the Agreement for each
100,000 m3 oil
tank would not be higher than those payable by the third parties to
Sinopec Reserve.
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REASONS FOR AND BENEFITS OF ENTERING INTO THE
AGREEMENT
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The Company has reinforced its production and management in recent
years in order to maximize returns. The conclusion of the Agreement
will enable it to simplify the process of temporary adjustment in
crude oil deployment and transportation in accordance with its
operational needs and ensure the stable operation of its
facilities. At the same time, the Agreement can increase the
Company’s flexibility of crude oil deployment, and provide it
greater room for optimizing crude oil feedstock.
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IMPLICATION UNDER THE HONG KONG LISTING RULES AND
THE SHANGHAI LISTING RULES
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The Agreement concurrently constitutes an ordinary related party
transaction under the Shanghai Listing Rules and a continuing
connected transaction under the Hong Kong Listing Rules. In
accordance with Rule 14A.76(2) of the Hong Kong Listing Rules, as
one or more of the applicable percentage ratios (as defined in the
Hong Kong Listing Rules) in respect of the Annual Caps for the
Agreement will exceed 0.1% but will be less than 5%, the
transaction under the Agreement is subject to the reporting and
announcement requirements, but is exempted from the circular and
independent Shareholders’ approval requirements under Chapter 14A
of the Hong Kong Listing Rules.
At the 4th meeting of the tenth session of the Board on
8 December 2020, the Board approved the Agreement. None of the
Directors has a material interest (as defined in the Hong Kong
Listing Rules) in the Agreement. Under the Shanghai Listing Rules,
Mr. Wu Haijun and Mr. Xie Zhenglin were deemed interested
in the Agreement as they worked in the companies which were related
parties of the Company. Therefore, they abstained from voting at
the Board meeting.
The Board (including the independent non-executive Directors) takes the view
that the terms of the Agreement and the Annual Caps for the year
ending 31 December 2023 are fair, reasonable and on normal
commercial terms. They are entered into in the usual and ordinary
course of business and are in the interests of the Company and its
Shareholders as a whole.
The independent non-executive Directors, namely
Ms. Li Yuanqin, Mr. Tang Song, Mr. Chen Haifeng,
Mr. Yang Jun and Mr. Gao Song gave the following
independent opinions on the Agreement:
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The transaction complies with the relevant laws,
regulations and regulatory documents within and outside the PRC and
the relevant provisions of the articles of association of the
Company;
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| (2) |
At the time of voting on the relevant resolution, the
Directors who were deemed interested under the Shanghai Listing
Rules, namely Mr. Wu Haijun and Mr. Xie Zhenglin,
abstained from voting and the voting process complied with the
relevant laws, regulations and regulatory documents within and
outside the PRC and the relevant provisions of the articles of
association of the Company;
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| (3) |
The transaction is entered into on normal commercial
terms in the ordinary and usual course of business and the terms of
the Agreement (including the Annual Caps) are fair and reasonable
to the Company. It will not damage the interests of the Company and
its minority shareholders and the terms in it are in the interests
of the Shareholders as a whole; and
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The execution of the transaction under the Agreement
by the Company with the Baishawan Branch and Sinopec Reserve shall
be approved.
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In accordance with the Shanghai Listing Rules, the relevant
information in relation to the Agreement was submitted to the
independent non-executive
Directors for review and approval before approval by the Board. The
independent non-executive
Directors agreed to submit the relevant resolution to the Board for
consideration.
Located at Jinshanwei in the southwest of Shanghai, the Company is
a highly integrated petrochemical enterprise which mainly processes
crude oil into a broad range of synthetic fibres, resins and
plastics, intermediate petrochemical products and petroleum
products.
In this announcement, unless the context otherwise requires the
following expressions have the following meanings:
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| “Annual Cap(s)” |
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The maximum aggregate annual value(s) |
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| “Baishawan Branch” |
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The Baishawan branch of Sinopec Reserve, a branch
office of Sinopec Reserve established under the PRC laws |
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| “Board” |
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The board of directors of the Company |
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| “Sinopec Group” |
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China Petrochemical Corporation, a limited
liability enterprise incorporated in the PRC (owned by the whole
people) |
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| The “Company” or “Company” |
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Sinopec Shanghai Petrochemical Company Limited, a
company incorporated in the PRC and listed on the Main Board of the
Hong Kong Stock Exchange (stock code: 00338) as well as in Shanghai
(stock code: 600688) and New York (stock code: SHI) |
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| “Director(s)” |
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The director(s) of the Company, including
independent non-executive
directors |
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| “Hong Kong” |
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Hong Kong Special Administrative Region of the
PRC |
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| “Hong Kong Listing Rules” |
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The Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited |
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| “Hong Kong Stock Exchange” |
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The Stock Exchange of Hong Kong Limited |
5
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| “Oil Tanks” |
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Eight oil tanks with a total volume of 950,000
cubic meters and related ancillary facilities, houses and buildings
located in Baishawan, Dushangang Town, Pinhu District, Zhejiang
Province, the PRC, which are owned by the Baishawan Branch |
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| “Agreement” |
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The storage service agreement to be entered into
between the Company, the Baishawan Branch and Sinopec Reserve for
the lease of the Oil Tanks by the Baishawan Branch to the
Company |
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| “PRC” or “China” |
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The People’s Republic of China and, for the
purpose of this announcement, excluding the Hong Kong and Macao
Special Administrative Regions as well as Taiwan |
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| “RMB” |
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Renminbi, the lawful currency of the PRC |
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| “Shanghai Listing Rules” |
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The listing rules of the Shanghai Stock
Exchange |
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| “Shareholder(s)” |
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The shareholder(s) of the Company |
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| “Sinopec Reserve” |
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Sinopec Petroleum Reserve Company Limited |
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By Order of the Board
Sinopec Shanghai Petrochemical Company Limited
Huang Fei
Joint Company Secretary
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Shanghai, the PRC, 8 December 2020
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