China State Construction International Holdings Limited announced that References are made to the announcement issued by the Company dated 10 September 2021, and the circular of the Company dated 22 October 2021, in relation to, among other things, the Previous Framework Agreement entered into between the Company and China State Construction Engineering Corporation Limited (CSCECL) which will expire on 31 December 2024. It is contemplated that the Group will continue to cooperate with the CSCECL Group to enter into the Construction Main Contracts as joint venture main contractor. As the Previous Framework Agreement is due to expire on 31 December 2024, on 4 November 2024, the Company and CSCECL entered into the New Framework Agreement to renew the Previous Framework Agreement for a term of three years commencing from 1 January 2025 and ending on 31 December 2027.
It is expected that the award of the Construction Main Contracts will generally be subject to a tendering process or such other prescribed contract award process as may be implemented by the relevant third-party developer/owner client in order to determine the contract sum of the relevant Construction Main Contracts. The cooperation between the Group and the CSCECL Group as contemplated by the New Framework Agreement will continue to take the form of contractual joint venture in accordance with customary terms in the construction industry whereby the Group and the CSCECL Group will cooperate to implement the relevant Construction Main Contracts as joint venture main contractor. Upon a successful tender (or such other contract award process), the relevant Construction Main Contract shall be awarded by the relevant third-party developer/owner client to the Group and the CSCECL Group as joint venture main contractor.
The New Framework Agreement does not anticipate the formation of any joint venture company, nor the acquisition or disposal of any entities. The contractual joint ventures as contemplated under the New Framework Agreement are joint ventures/joint operations arrangement between members of the Group and the CSCECL Group, which are transactions of a revenue nature conducted in the ordinary and usual course of business of the Group, on an arm's length basis and on normal commercial terms. These contractual joint ventures are expected to be categorized as "joint ventures/joint operations" in the financial statements of the Company.
