should consult your licensed securities dealer, bank manager, solicitor, professional accountant or
other professional adviser.
If you have sold or transferred all your shares in KWG Property Holding Limited, you should
at once hand this circular to the purchaser, the transferee or to the bank, licensed securities
dealer or other agent through whom the sale or the transfer was effected for onward transmission
to the purchaser or the transferee.
KWG PROPERTY HOLDING LIMITED
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1813)
DISCLOSEABLE TRANSACTION
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
23 November 2007
Page
Definitions ......................................................... 1
Letter from the Board ................................................ 3
Appendix – General information..................................
| 7 |
| CONTENTS |
| –i– |
In this circular, the following expressions shall have the following meanings, unless the
context otherwise requires:
“Acquisition” Acquisition of the Properties pursuant to the terms of
the Land Grant Contracts
“Announcement” an announcement of the Company dated 2 November
2007
“associate” has the meaning ascribed to it under the Listing Rules
“Board” the board of Directors
“Business Day” a day (excluding Saturday or Sunday) where banks in
the PRC are generally open for business
“Company” KWG Property Holding Limited, a company
incorporated in the Cayman Islands with its Shares
listed on the Stock Exchange
“connected person” has the meaning ascribed thereto under the Listing
Rules
“Directors” the directors of the Company
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollar, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the
PRC
“Land Grant Contracts” the land grant contracts dated 27 July 2007 between the
Project Co and the land bureau of Chengdu in respect
of the Properties
“Latest Practicable Date” 21 November 2007, being the latest practicable date
prior to the printing of this circular for the purpose of
ascertaining certain information contained herein
“Listing Rules” the Rules Governing the Listing of Securities on the
Stock Exchange
“PRC” The People’s Republic of China which, for the purpose
of this announcement, excludes Hong Kong, the Macau
Special Administrative Region and Taiwan
DEFINITIONS
–1–
“Project Co” Chengdu Zhongtianying Real Estate Development
Limited, a limited liability company established in the
PRC on 6 December 2006 and a wholly owned
subsidiary of the Company
“Properties” 3 pieces of land located in Chengdu, the PRC with a
total area of approximately 200,561.12 square metres
“RMB” Renminbi, the lawful currency of the PRC
“SFO” the Securities and Futures Ordinance (Chapter 571 of
the Laws of Hong Kong)
“Shareholder(s)” Holder(s) of the Shares
“Share(s)” share(s) of HK$0.10 each in the capital of the
Company
“Stock Exchange”
In this circular, amounts denominated in RMB have been converted into HK$ at the
rate of RMB1.00 = HK$1.0078575.
DEFINITIONS
–2–
KWG PROPERTY HOLDING LIMITED
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1813)
Executive Directors:
Kong Jian Min
Kong Jian Tao
Kong Jian Nan
Li Jian Ming
Tsui Kam Tim
Independent non-executive Directors:
Lee Ka Sze, Carmelo
Dai Feng
Tam Chun Fai
Registered office:
Cricket Drive
Hutchins Drive
Grand Cayman KY1-1111
Cayman Islands
Principal place of business
in Hong Kong:
Room 6407, 64th Floor
Central Plaza
18 Harbour Road
Wanchai, Hong Kong
23 November 2007
To the Shareholders:
Dear Sir or Madam,
DISCLOSEABLE TRANSACTION
INTRODUCTION
The Board announced on 2 November 2007 that the Company has on 20 July 2007
successfully tendered for the Properties in Chengdu at the total land premium of
RMB3,622,792,455 (equivalent to approximately HK$3,651,258,546.71).
The purpose of this circular is to give you details of, among other things, the
Transaction.
LETTER FROM THE BOARD
–3–
THE ACQUISITION
Date:
27 July 2007
Parties involved in the Land Grant Contracts:
1. The Project Co; and
2. The land bureau of Chengdu is a PRC governmental authority and the Properties are
state-owned land. To the best of the Directors’ knowledge, information and belief
having made all reasonable enquiry, the land bureau of Chengdu is an independent
third party and not a connected person of the Company or any of its subsidiaries or any
of their respective directors, chief executive and substantial shareholders or any
associates of any of them.
Subject matter:
On 20 July 2007, the Project Co has successfully tendered for the Properties in
Chendgu at the total land premium of RMB3,622,792,455, which is determined after a
public bidding process and the Board considers that the consideration is fair and reasonable
having taking into account the location and development potential of the Properties. The
consideration will be satisfied by cash by the internal resources of the Group and is payable
as to RMB1,086,837,737 (equivalent to approximately HK$1,095,377,564.51) upon the
signing of the Land Grant Contracts, with the balance payable in stages and the final
balance of the land premium is payable before January 2008.
As at the Latest Practicable Date, the total amount paid for the Properties was
RMB2,254,324,377 and only the title of one piece of land, namely
( Group 1, Hongguang Village, Group 1 Yuanheping
Village Gaoxinqu) Fengshouqu, South part of Xinqu, Gaoxinqu Chengdu has been vested in
the Project Co. Title of the remaining Properties will vest in the Project Co upon payment of
the balance of the land premium pursuant to the Land Grant Contracts.
On 27 July 2007, the Project Co entered into the Land Grant Contracts with the land
bureau of Chengdu. About 20% of the Properties with land cost of approximately RMB720
million will be held for investment and the balance of the Properties will be developed for
sale. Out of the 20%, 11% of the Properties will be used for shopping mall and 9% of the
Properties will be used for hotels. Such percentages were determined with reference to the
estimated gross floor area. Further announcement will be made by the Company if there is
any change to such percentages and the Company will recomply with the relevant
requirement under the Listing Rules when necessary.
As the consideration will be satisfied by the internal resources of the Group, there will
be a decrease in bank and cash balances to the extent the consideration paid. The
Acquisition is not expected to have any material effect on the Group’s net asset value and
earnings.
LETTER FROM THE BOARD
–4–
THE PROPERTIES
The Properties consist of 3 pieces of bare land located in the PRC, details of which are
set out as follows:
Location of the site
Area of the
plot
Approved
purposes of
the relevant
plot
Term of land
use right
granted Consideration
( )
(Group 1, Hongguang Village,
Group 1 Yuanheping Village
Gaoxinqu) Fengshouqu, South part
of Xinqu, Gaoxinqu Chengdu)
Approximately
13,857.17
square
metres
Residential and
commercial
Residential –
70 years
Commercial –
40 years
RMB201,622,260
(
) (Group 9 Qinghe
Village, Groups 3, 7, 8 Yuanrenhe
Village, Gaoxinqu) No.30
Renhepianqu, South part of Xinqu,
Gaoxinqu, Chengdu
Plot A:
Approximately
78,961.88
square
metres
Plot B:
Approximately
36,787.59
square
metres
Plot A:
Residential
Plot B:
Cultural and
entertainment,
government
office and
commercial
Residential –
70 years
Commercial –
40 years
RMB2,074,809,190
( )
(Group 2, Group 3, Group 8
Yuanrenhe Village, Gaoxinqu)
No.38 Renhepianqu, South part of
Xinqu, Gaoxinqu, Chengdu
Plot A:
Approximately
43,501.68
square
metres
Plot B:
Approximately
27,452.80
square
metres
Plot A:
Residential
Plot B:
Cultural and
entertainment,
government
office and
commercial
Residential –
70 years
Commercial –
40 years
RMB1,346,361,1005
Note English translation of the Chinese names of the Properties
The Properties are for residential, commercial and hotel development project. It is the
current plan that the Project will comprise office buildings, residential units, hotels and
shopping malls.
REASONS AND BENEFITS FOR THE ACQUISITION
The Board believes that the Acquisition will increase the land bank of the Group,
enhance the Group’s position in the PRC property market and provide the Group with a
better opportunity for project development in Chengdu, the PRC. The Directors are of the
view that the Acquisition has been made on normal commercial terms and that such terms
are fair and reasonable so far as the Company and the Shareholders are concerned and that
the Acquisition is in the interest of the Company and the Shareholders as a whole.
LETTER FROM THE BOARD
–5–
GENERAL
The principal activity of the Company is investment holding and its subsidiaries are
principally engaged in the property development and investment, and property management
in the PRC.
The Project Co is a subsidiary of the Company, currently with a registered capital of
RMB20 million. The Project Co is engaged in the development of the Properties.
IMPLICATIONS UNDER THE LISTING RULES
The Acquisition constitutes a discloseable transaction for the Company under Rule
14.06(2) of the Listing Rules.
Your attention is drawn to the general information set out in the appendix to this
circular.
Yours faithfully
For and on behalf of
KWG PROPERTY HOLDING LIMITED
Kong Jian Min
Chairman
LETTER FROM THE BOARD
–6–
1. RESPONSIBILITY STATEMENT
This circular includes particulars given in compliance with the Listing Rules for the
purpose of giving information with respect to the Company. The Directors collectively and
individually accept full responsibility for the accuracy of the information contained in this
circular and confirm, having made all reasonable enquiries, that to the best of their
knowledge and belief there are no other facts the omission of which would make any
statement herein misleading.
2. DISCLOSURE OF INTERESTS
As at the Latest Practicable Date, no Directors or chief executive of the Company, save
as disclosed below, had or was deemed to have any interests or short positions in the shares,
underlying shares and debentures of the Company or any of its associated corporations
(within the meaning of Part XV of the SFO) which were required to be notified to the
Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO
(including interests and short positions which they are deemed or taken to have under such
provisions of the SFO) or which were required, pursuant to section 352 of the SFO to be
entered in the register referred to therein or which were required, pursuant to the Model
Code for Securities Transactions by Directors of Listed Companies, to be notified to the
Company and the Stock Exchange:
Interests in the Company
Name of Director
Long position/
short position
Nature of
interests
Approximate
number of
shares held
Percentage
of
shareholding
(Note 1)
Kong Jian Min
(Notes 2 and 3)
Long Position Interest of a
controlled
corporation
1,687,500,000 65.10%
Kong Jian Tao
(Notes 2 and 3)
Long Position Interest of a
controlled
corporation
1,687,500,000 65.10%
Kong Jian Nan
(Notes 2 and 3)
Long Position Interest of a
controlled
corporation
1,687,500,000 65.10%
Notes:
1. Share(s) of HK$0.10 each in the capital of the Company.
2. Kong Jian Min, Kong Jian Tao and Kong Jian Nan hold 76.5% of issued share capital of Plus Earn
Consultants Limited (“Plus Earn”), 15% of issued share capital of Plus Earn and 8.5% of issued share
capital of Plus Earn respectively. Therefore, Kong Jian Min, Kong Jian Tao and Kong Jian Nan
(collectively, the “Kong Family”) are deemed to be interested in 1,612,500,000 shares in the
Company through the interest in Plus Earn.
APPENDIX GENERAL INFORMATION
–7–
3. Kong Jian Min, Kong Jian Tao and Kong Jian Nan hold 76.5% of issued share capital of Right Rich
Consultants Limited (“Right Rich”), 15% of issued share capital of Right Rich and 8.5% of issued
share capital of Right Rich respectively. Therefore, the Kong Family are deemed to be interested in
75,000,000 shares in the Company through the interest in Right Rich.
Interests in the associated corporations of the Company
Name of Director Associated Corporations
Number of
shares
Approximate
percentage of
shareholding
in associated
corporations
Kong Jian Min Plus Earn 765 76.50%
Kong Jian Tao Plus Earn 150 15.00%
Kong Jian Nan Plus Earn 85 8.50%
None of the Directors or proposed directors is a director or employee of a company
which has an interest in the Shares which would fall to be disclosed under the provisions of
Division 2 and 3 of Part XV of the SFO.
3. SUBSTANTIAL SHAREHOLDERS
Save as disclosed below, as at the Latest Practicable Date, according to the list of
substantial shareholders extracted from the website of the Stock Exchange
(www.hkex.com.hk), the following companies or persons had an interest or short position in
the shares and the register of interests kept by the Company under section 336 of the SFO
and so far as is known to the Directors, no other person other than a Director whose
interests are disclosed above, had an interest or short position in the shares and underlying
shares of the Company which would fall to be disclosed to the Company under the
provisions of Divisions 2 and 3 of Part XV of the SFO, or, was, directly or indirectly,
interested in 10% or more of the nominal value of any class of share capital carrying rights
to vote in all circumstances at general meeting of any other member of the Group or had
any option in respect of such capital:
Name Capacity
Number of
shares
Percentage of
issued share
capital
Plus Earn Beneficial owner 1,612,500,000 62.20%
Kong Jian Min Interests held by
controlled corporation
1,687,500,000 65.10%
SSF Swift Holdings
Limited
Beneficial owner 187,500,000 7.20%
APPENDIX GENERAL INFORMATION
–8–
Name Capacity
Number of
shares
Percentage of
issued share
capital
Morgan Stanley Real
Estate Special
Situations Fund
111, L.P.
Interests held by
controlled corporation
187,500,000 7.20%
Morgan Stanley Real
Estate Special
Situations Fund
III-GP, L.L.C.
Interests held by
controlled corporation
187,500,000 7.20%
MSRESS III Manager,
LLC
Interests held by
controlled corporation
187,500,000 7.20%
Notes:
1. Kong Jian Min owns 76.50% interests in Plus Earn and Right Rich. He is deemed to be interested in
1,687,500,000 shares of the Company which were held by Plus Earn and Right Rich.
2. MSRESS III Manager, L.L.C. (“MSRESS”) owns the entire interest in Morgan Stanley Real Estate
Special Situations III-GP, L.L.C (“Morgan Stanley Situations GP”). Morgan Stanley Situations GP
owns less than 1% interest in Morgan Stanley Real Estate Special Situations Fund III, L.P. (“Morgan
Stanley Situations Fund”) which in turn Morgan Stanley Situations Fund owns the entire interest in
SSF Swift Holdings Limited (“SSF Swift”). Accordingly, Morgan Stanley Situations Fund and
Morgan Stanley Situations GP are deemed to be interested in 187,500,000 shares of the Company
which are held by SSF Swift.
4. SERVICE CONTRACTS
Each of Mr. Kong Jian Min, Mr. Kong Jian Tao, Mr. Kong Jian Nan and Mr. Li Jian
Ming being the executive Directors has entered into a service contract with the Company for
a term of 3 years commencing from 3 July 2007, the date of listing, and Mr. Tsui Kam Tim,
being the executive Directors, has entered into a service contract with the Company for a
term of 3 years commencing from 7 November 2007. All of these service contracts may be
terminated by not less than 3 months’ notice in writing served by either party on the other.
Each of independent non-executive Directors has entered into a service contract with
the Company for a term of 1 year commencing from 3 July 2007, the date of listing, which
may be terminated by not less than 3 months’ notice in writing served by either party on the
other.
As at the Latest Practicable Date, none of the Directors had any existing or proposed
service contracts with any member of the Group or any associated company of the Company
(excluding contracts expiring or determinable within one year without payment of
compensation other than statutory compensation).
APPENDIX GENERAL INFORMATION
–9–
5. LITIGATION
No member of the Group was engaged in any litigation or arbitration proceedings of
material importance as at the Latest Practicable Date and there was no litigation or claim of
material importance known to the Directors to be pending or threatened against any member
of the Group.
6. COMPETING INTEREST
As at the Latest Practicable Date, in so far as the Directors are aware, none of the
Directors or their respective associates (as defined in the Listing Rules) had any interest in a
business which competes or is likely to compete with the business of the Group, which is
required to be disclosed under Rule 8.10 of the Listing Rules.
7. MISCELLANEOUS
(a) The company secretary of the Company is Mr. Cheung Wing Leung, who is a
solicitor of Hong Kong.
(b) The qualified accountant of the Company is Mr. Tsui Kam Tim, who is a member
of The Hong Kong Institute of Certified Public Accountants.
(c) The registered office of the Company is at Cricket Square, Hutchins Drive, Grand
Cayman KY1-1111, Cayman Islands and the principal place of business in the
Hong Kong is at Room 6407, 64th Floor, Central Plaza, 18 Harbour Road,
Wanchai, Hong Kong.
(d) The Hong Kong branch share registrar and the transfer office of the Company in
Hong Kong is Computershare Hong Kong Investor Services Limited, Shops
1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong
Kong.
(e) The English text of this circular shall prevail over the Chinese text in case of any
inconsistency.
APPENDIX GENERAL INFORMATION
–10–
