Connected Transaction
February 28 2007 - 2:00AM
UK Regulatory
RNS Number:9962R
MTR Corporation Ltd
28 February 2007
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this announcement, makes no representation as to its accuracy or completeness
and expressly disclaims any liability whatsoever for any loss howsoever arising
from or in reliance upon the whole or any part of the contents of this
announcement.
MTR CORPORATION LIMITED
(the "Company")
(Incorporated in Hong Kong with limited liability)
(Stock code: 66)
TSEUNG KWAN O TOWN LOT NO. 72, Area 56,
TSEUNG KWAN O, SAI KUNG, NEW TERRITORIES
CONNECTED TRANSACTION
+------------------------------------------------------------------------------+
|On 26th February, 2007, the Company accepted an offer from the Government to |
|allow the Company to proceed with the proposed development in Area 56 subject |
|to the Company's acceptance of Government's assessment of the Land Premium |
|(being HK$3,345,230,000, the payment of which will be funded by the Developer)|
|and of the particulars and conditions of the Land Grant. The offer was made by|
|the Government on 15th January, 2007. |
| |
|As the Government is a controlling shareholder of the Company and therefore a |
|connected person of the Company, the Transaction is a connected transaction |
|for the Company under Rule 14A.13 of the Listing Rules. As disclosed in the |
|announcement of the Company dated 13th January, 2005, the Stock Exchange has |
|granted the Waiver to the Company from the requirements under Chapter 14A of |
|the Listing Rules which would otherwise apply to connected transactions |
|between the Company and the Government subject to the conditions described |
|below under the heading "General". Had the Waiver not been granted, the |
|Transaction would have been subject to the announcement, the reporting and the|
|independent shareholders' approval requirements under Chapter 14A of the |
|Listing Rules. |
| |
|This announcement is made in accordance with the conditions of the Waiver and |
|Rule 14A.47 of the Listing Rules. Details of the Transaction will be disclosed|
|in the next annual report of the Company in accordance with Rule 14A.45 of the|
|Listing Rules. |
+------------------------------------------------------------------------------+
Acceptance of Government's Offer and the Land Grant
On 26th February, 2007, the Company accepted an offer from the Government to
allow the Company to proceed with the proposed development in Area 56 subject to
the Company's acceptance of Government's assessment of the Land Premium (being
HK$3,345,230,000, the payment of which will be funded by the Developer) and of
the particulars and conditions of the Land Grant. The offer was made by the
Government on 15th January, 2007.
Under the terms of the Government's offer, a binding contract between the
parties arises when Government receives the Company's acceptance. The Company
delivered the acceptance to Government on 26th February, 2007. The Land Grant,
which will contain particulars and conditions of the land grant by private
treaty of Area 56, is expected to be executed within three calendar months from
that date. It is proposed that the development in Area 56 will be a mixed-use
development comprising hotel, office, residential, commercial and car parking
accommodations with a total gross floor area of not more than 168,537 square
metres. The Company is required to pay to the Government the Land Premium, which
has been assessed by the Government to be HK$3,345,230,000, by reference to the
full market value of Area 56, ignoring the presence of the railway. The Company
is required to pay (a) a deposit equal to 10% of the Land Premium on 26th
February, 2007 and (b) the remaining balance of the Land Premium when the Land
Grant is executed. The payment of the Land Premium will be funded by the
Developer.
Reasons for accepting Government's offer
The Company has accepted Government's offer and proposes to execute the Land
Grant in order to be allowed to proceed with the proposed development in Area
56. On the basis that the assessed Land Premium is considered to be in line with
current market values, and having regard to all of the terms and conditions of
the Government's offer, the Directors (including the independent non-executive
Directors) believe that the terms of Government's offer and the Land Grant are
fair and reasonable and in the interests of the shareholders of the Company as a
whole.
General
As the Government is a controlling shareholder of the Company and therefore a
connected person of the Company, the Transaction is a connected transaction for
the Company under Rule 14A.13 of the Listing Rules. As disclosed in the
announcement of the Company dated 13th January, 2005, the Stock Exchange has
granted the Waiver to the Company from the requirements under Chapter 14A of the
Listing Rules which would otherwise apply to connected transactions between the
Company and the Government involving land and land interests subject to certain
conditions. Under the Waiver, the Company is required to make an announcement of
the Transaction in accordance with Rule 14A.47 of the Listing Rules and to
disclose details of the Transaction in its next annual report in accordance with
Rule 14A.45 of the Listing Rules. The Company is also required under the Waiver
to make the Transaction subject to the approval of the Board, with the Directors
appointed by the Government under section 8 of the Mass Transit Railway
Ordinance (Cap. 556 of the Laws of Hong Kong) and any Director who holds a
position in the Government being required to abstain from voting. Accordingly,
Mr. Frederick Ma Si-hang, the Secretary for the Environment, Transport and Works
and the Commissioner for Transport disclosed their interest in the Transaction
and they each abstained from voting on the relevant Board resolutions. Had the
Waiver not been granted, the Transaction would have been subject to the
announcement, the reporting and the independent shareholders' approval
requirements under Chapter 14A of the Listing Rules.
This announcement is made in accordance with the conditions of the Waiver and
Rule 14A.47 of the Listing Rules. Details of the Transaction will be disclosed
in the next annual report of the Company in accordance with Rule 14A.45 of the
Listing Rules.
Principal activities of the Company
The principal activities of the Company and its subsidiaries are (a) the
operation of a mass transit railway system, (b) property development at
locations relating to the railway system, (c) related commercial activities, (d)
the monitoring of the appointed operator in their operation of the Ngong Ping
360 tourism facilities, (e) the design and construction of Tseung Kwan O South
Station as an extension of the Tseung Kwan O Line, (f) the planning and
construction of future extensions to the railway system and other related
infrastructure projects, (g) consultancy services, (h) investment in Octopus
Holdings Limited, a subsidiary of the Company, which has business activities
both in Hong Kong and overseas including the operation of a smart card system by
its subsidiary, Octopus Cards Limited, for the collection of payments for both
transport and non-transport applications in Hong Kong, (i) equity investments
and long term operation and maintenance contracts outside of Hong Kong, (j)
property management, shopping centre investment and railway related property
development business in the Mainland of China, and (k) the investment in, and
construction of, Beijing Metro Line 4, in which the Company has a 49% equity
interest, for future operations under a 30 year concession agreement with the
Beijing Municipal Government.
Definitions
"Area 56" means Tseung Kwan O Town Lot No.72, Area 56,
Tseung Kwan O, Sai Kung, New Territories;
"Board" means the board of Directors;
"Developer" means Lansmart Limited, which was the
successful tenderer in the tender to develop
Area 56;
"Directors" means members of the board of directors of
the Company;
"Government" means the Government of Hong Kong;
"HK$" means Hong Kong dollars, the lawful currency
of Hong Kong;
"Hong Kong" means the Hong Kong Special Administrative
Region of the People's Republic of
China;
"Land Grant" means the particulars and conditions of the
land grant by private treaty of Area 56
to be entered into between the Company and
the Government;
"Land Premium" means the land premium for Area 56;
"Listing Rules" means the Rules Governing the Listing of
Securities on The Stock Exchange of Hong
Kong Limited;
"Stock Exchange" means The Stock Exchange of Hong Kong
Limited;
"Transaction" means the Company's acceptance of an offer
from the Government to allow the Company
to proceed with the proposed development in
Area 56 subject to the Company's
acceptance of Government's assessment of the
Land Premium and of the particulars
and conditions of the Land Grant; and
"Waiver" means the waiver granted by the Stock
Exchange to the Company from the
requirements under Chapter 14A of the
Listing Rules (subject to certain
conditions).
By Order of the Board
Leonard Bryan Turk
Secretary
Hong Kong, 27th February, 2007
Members of the Board: Dr. Raymond Ch'ien Kuo-fung (Chairman)**, Chow Chung-kong
(Chief Executive Officer), Professor Cheung Yau-kai*, David Gordon Eldon*,
Christine Fang Meng-sang*, Edward Ho Sing-tin*, Lo Chung-hing*, T. Brian
Stevenson*, Frederick Ma Si-hang (Secretary for Financial Services and the
Treasury)**, Secretary for the Environment, Transport and Works (Dr. Sarah Liao
Sau-tung)** and Commissioner for Transport (Alan Wong Chi-kong)**
Members of the Executive Directorate: Chow Chung-kong, Russell John Black,
William Chan Fu-keung, Thomas Ho Hang-kwong, Lincoln Leong Kwok-kuen, Francois
Lung Ka-kui, Andrew McCusker and Leonard Bryan Turk
* independent non-executive Directors
** non-executive Directors
This announcement is made in English and Chinese. In the case of any
inconsistency, the English version shall prevail.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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