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ZHEJIANG EXPRESSWAY CO LD - Spin-off and Separate Listing

Friday, November 16, 2012 10:35 AM


Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

                            Zhejiang Expressway Co., Ltd.
                (A joint stock limited company incorporated in the 
                  People's Republic of China with limited liability)
                                  (Stock code: 0576)
          DEEMED DISPOSAL OF INTEREST IN SUBSIDIARY IN RELATION TO PROPOSED
        SPIN-OFF AND SEPARATE LISTING OF SPINCO ON THE SHANGHAI STOCK EXCHANGE

This announcement is made pursuant to Rule 13.09(1) of the Listing Rules.

The Board proposes to spin-off SpinCo, an indirectly-owned subsidiary of the Company which carries on the Group's securities related business (including but not limited to securities brokerage, investment banking, proprietary trading and asset management) in the PRC, and to seek a separate listing of its shares as A Shares on the Shanghai Stock Exchange. The Company will submit a proposal in relation to the Proposed Spin-off to the Stock Exchange for approval pursuant to Practice Note 15 of the Listing Rules as soon as practicable.

The Proposed Spin-off, should it materialise, will constitute a deemed disposal of the Company's indirect equity interest in SpinCo under Rule 14.29 of the Listing Rules. The Proposed Spin-off, if it proceeds, may or may not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules, and the Company will strictly comply with the relevant requirements under Chapter 14 of the Listing Rules in due course. It is expected that, immediately upon completion of the Proposed Spin-off, the Company will continue to be the controlling shareholder of SpinCo.

The exact details of the Proposed Spin-off will be finalised by the shareholders of SpinCo at a later stage.

Shareholders and public investors should note that there is no assurance as to whether or when the Proposed Spin-off will proceed, or whether it will be completed successfully. As the Proposed Spin-off may or may not proceed, Shareholders and public investors are advised to exercise caution when dealing in the securities of the Company.

Further announcements will be made by the Company as and when appropriate in compliance with the Listing Rules.

INTRODUCTION

This announcement is made pursuant to Rule 13.09(1) of the Listing Rules.

The Board proposes to spin-off SpinCo, an indirectly-owned subsidiary of the Company which carries on the Group's securities related business (including but not limited to securities brokerage, investment banking, proprietary trading and asset management) in the PRC, and to seek a separate listing of its shares as A Shares on the Shanghai Stock Exchange.

PROPOSED SPIN-OFF

Pursuant to the Proposed Spin-off, it is intended that SpinCo will issue new shares and seek listing of the same as A Shares on the Shanghai Stock Exchange. Since the proposed issue of new shares by SpinCo will result in a reduction of the Company's indirect shareholding interest in SpinCo, under Rule 14.29 of the Listing Rules, the Proposed Spin-off will constitute a deemed disposal by the Company. The exact details of the Proposed Spin-off, including the size and structure of the new share issuance, the offer price and proceeds to be raised, will be finalised by the shareholders of SpinCo at a later stage, and will depend upon, amongst other factors, the prevailing market conditions. The expected timetable is also not yet finalised as at the date of this announcement. Further announcements will be made by the Company upon finalisation of the details of the Proposed Spin-off.

Immediately upon completion of the Proposed Spin-off, the Company is expected to continue to be the controlling shareholder of SpinCo.

Factors affecting the Proposed Spin-off will include compliance with all applicable regulatory requirements, including obtaining approval from the Stock Exchange pursuant to Practice Note 15, the CSRC and other relevant regulatory authorities, suitable market conditions at the relevant time and other conditions which may not be foreseen.

The Proposed Spin-off, if it proceeds, may or may not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules, and the Company will strictly comply with the relevant requirements under Chapter 14 of the Listing Rules in due course.

INFORMATION OF THE COMPANY, THE GROUP AND SPINCO

The Company is an infrastructure company principally engaged in investing in, developing and operating high-grade roads. The Group also carries on certain other businesses such as automobile servicing, operation of gas stations and billboard advertising along expressways, as well as the securities related business carried on by SpinCo.

SpinCo is a joint stock limited company incorporated in the PRC on 9 May 2002 and is an indirectly-owned subsidiary of the Company. As at the date of this announcement, it is engaged in securities related business (including but not limited to securities brokerage, investment banking, proprietary trading and asset management).

REASONS FOR AND BENEFITS OF THE PROPOSED SPIN-OFF

The Board believes that the Proposed Spin-off would be in the interests of the Group as it would enable the market to appraise and assess the value of the Group more effectively and provide a separate fund raising platform for SpinCo, which will allow SpinCo to develop new businesses and become more competitive and will in turn benefit the Group.

UTILISATION OF PROCEEDS

The net proceeds to be raised from the Proposed Spin-off is proposed to be utilised to increase the net capital and expand the business of SpinCo.

APPLICATION TO THE RELEVANT AUTHORITIES

Under Practice Note 15 of the Listing Rules, the Proposed Spin-off will require the approval from, among others, the Stock Exchange. In this regard, the Company will submit a proposal in relation to the Proposed Spin-off to the Stock Exchange as soon as practicable for consideration and approval pursuant to Practice Note 15 of the Listing Rules.

GENERAL

As of the date of this announcement, SpinCo has not submitted any listing application to the CSRC/Shanghai Stock Exchange. The decisions of the board and/or the shareholders of SpinCo to proceed with the Proposed Spin-off are dependent upon, among others, the market conditions during the period leading up to the Proposed Spin-off. There is also no assurance that the Proposed Spin-off, including the separate listing of the shares of SpinCo on the Shanghai Stock Exchange, will take place or as to when it may take place.

Shareholders and public investors should note that there is no assurance as to whether or when the Proposed Spin-off will be approved by the Stock Exchange or proceed, or whether it will be completed successfully. As the Proposed Spin-off may or may not proceed, Shareholders and public investors are advised to exercise caution when dealing in the securities of the Company.

Further announcements will be made by the Company as and when appropriate in compliance with the Listing Rules.

DEFINITIONS

In this announcement, unless the context indicates or specifies otherwise, the following defined expressions have the following meanings:

"A Share(s)"          domestic share(s) issued by companies and listed on a
                      stock exchange in the PRC
"Board"               The Board of directors of the Company3
 
"Company"             Zhejiang Expressway Co., Ltd, a joint stock limited company
                      incorporated in the PRC with limited liability
"CSRC"                China Securities Regulatory Commission
"Group"               the Company and its subsidiaries
"Listing Rules"       The Rules Governing the Listing of Securities on The Hong 
                      Kong Stock Exchange
"Proposed Spin-off"   the proposed spin-off and separate listing of SpinCo on
                      the Shanghai Stock Exchange
"PRC"                 People's Republic of China
"Shanghai Stock       The Shanghai Stock Exchange
 Exchange"   
         
"Shareholder(s)"      holder(s) of the share(s) of the Company
"SpinCo"              Zheshang Securities Co., Ltd, a joint stock limited company 
                      incorporated in the PRC on 9 May 2002 and is an 
                      indirectly-owned subsidiary of the Company in which the 
                      Company indirectly controls an approximate 71% shareholding
                      interest
"Stock Exchange"      The Stock Exchange of Hong Kong Limited
"subsidiary(ies)"     bears the meaning ascribed to it under the Listing Rules
                                                       On behalf of the Board
                                                   ZHEJIANG EXPRESSWAY CO., LTD.
                                                           Zhan Xiaozhang
                                                             Chairman

Hangzhou, PRC, 16 November, 2012

As at the date of this announcement, the executive directors of the Company are: Mr. ZHAN Xiaozhang, Ms. LUO Jianhu and Mr. DING Huikang; the non-executive directors of the Company are: Messrs. LI Zongsheng, WANG Weili and WANG Dongjie; and the independent non-executive directors of the Company are: Messrs. ZHANG Junsheng, ZHOU Jun and PEI Ker-Wei.

(Source: PR Newswire )
(Source: Quotemedia)

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