CSSC Hong Kong Shipping : DISCLOSEABLE TRANSACTIONS IN RELATION TO THE SALE AND LEASEBACK OF FOUR VESSELS

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.

CSSC (Hong Kong) Shipping Company Limited

中國船舶（香港）航運租賃有限公司

(Incorporated in Hong Kong with limited liability)

(Stock code: 3877)

DISCLOSEABLE TRANSACTIONS

IN RELATION TO

THE SALE AND LEASEBACK OF FOUR VESSELS

The Board is pleased to announce that, on 6 March 2020, Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha, being the Company's wholly-owned SPVs, have entered into the Memorandums of Agreement and the Bareboat Charters with, among others, the Charterer, pursuant to which Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha have agreed to (i) purchase the Vessels from the Charterer at the Consideration; and (ii) lease back the Vessels to the Charterer at a total estimated charterhire to be payable by the Charterer of approximately US$102,760,000 (including estimated lease interest of approximately US$62,556,000).

Pursuant to Chapter 14 of the Listing Rules, as the highest applicable percentage ratio of the transactions contemplated under the Memorandums of Agreement and the Bareboat Charters is more than 5% but less than 25%, the transactions contemplated under the Memorandums of Agreement and the Bareboat Charters constitute discloseable transactions of the Company and are subject to the notification and announcement requirements under Chapter 14 of the Listing Rules but are exempt from the shareholders' approval requirement.

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1. INTRODUCTION

The Board is pleased to announce that, on 6 March 2020, Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha, being the Company's wholly-owned SPVs, have entered into the Memorandums of Agreement and the Bareboat Charters with, among others, the Charterer, pursuant to which Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha have agreed to (i) purchase the Vessels from the Charterer at the Consideration; and (ii) lease back the Vessels to the Charterer at a total estimated charterhire to be payable by the Charterer of approximately US$102,760,000 (including estimated lease interest of approximately US$62,556,000).

2. DETAILS OF THE MEMORANDUMS OF AGREEMENT AND THE BAREBOAT CHARTERS

Date

6 March 2020

Parties

Buyers/Owners Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha, being the Company's wholly-owned SPVs

Seller/Charterer Sinokor Merchant Marine Co., Ltd., which is ultimately owned by Sinokor Co., Ltd. (a company incorporated in the Republic of Korea and its ultimate beneficial owner is Mr. Tae Soon Chung) and is a marine transportation services provider

To the best of the Directors' knowledge, information and belief, and having made all reasonable enquiries, the Charterer and its ultimate beneficial owner are Independent Third Parties.

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Subject Matter

The Charterer has agreed to sell the Vessels to Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha at the Consideration, which is expected to be settled with the internal funds of Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha as well as bank borrowings. At the same time, Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha have agreed to lease back the Vessels to the Charterer at a total estimated charterhire to be payable by the Charterer of approximately US$102,760,000 (including estimated lease interest of approximately US$62,556,000). Upon expiration of the Charter Period, the Charterer is obliged to purchase the Vessels from Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha at a consideration as agreed by the parties under the Bareboat Charters.

Vessels

The Vessels are four 1,080-TEU container vessels, and are of an aggregate value of US$72,400,000, which is equivalent to the aggregate shipbuilding price of the Vessels pursuant to the relevant shipbuilding contracts.

All the Vessels are expected to be delivered by the end of 2021. In particular, one of the Vessels is expected to be delivered by September 2021, two of the Vessels are expected to be delivered by November 2021, and one of the Vessels is expected to be delivered by December 2021.

Charter Period

The Charter Period shall be a period of 144 months commencing from the respective Delivery Dates.

Charterhire and Interest

Pursuant to the Bareboat Charters, Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha have agreed to lease back the Vessels to the Charterer at a total estimated charterhire to be payable by the Charterer of approximately US$102,760,000 (including estimated lease interest of approximately US$62,556,000), which shall be payable by the Charterer in 144 payments.

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The terms of the Memorandums of Agreement and the Bareboat Charters (including the purchase price of the Vessels, the charterhire, the charterhire interest and other expenses thereunder) were determined after arm's length negotiation between the Charterer and Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha, with reference to (i) the aggregate shipbuilding price of the Vessels pursuant to the relevant shipbuilding contracts; and (ii) the prevailing market price of comparable financial leasing services in the industry.

Charterer's Assignment

In connection with the transactions contemplated under the Memorandums of Agreement and the Bareboat Charters, four deeds of assignment in respect of the Vessels are expected to be entered into by the Charterer as assignor and the respective Owners as assignees, pursuant to which the Charterer will, among other things, assign absolutely and unconditionally to the respective Owners all of its right, title and interest in certain assigned property, including policies and contracts of insurance in respect of the Vessels.

3. REASONS FOR AND BENEFITS OF ENTERING INTO THE MEMORANDUMS OF AGREEMENT AND THE BAREBOAT CHARTERS

The Memorandums of Agreement and the Bareboat Charters were entered into by Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha during their ordinary course of business. The Directors believe that entering into the Memorandums of Agreement and the Bareboat Charters will strengthen the Group's leasing business and is consistent with the Group's overall business development strategies.

The Directors are of the view that the terms of the Memorandums of Agreement and the Bareboat Charters are fair and reasonable and are in the interests of the Company and its shareholders as a whole.

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4. INFORMATION OF PARTIES

Information of the Company

The Company is a shipyard-affiliated leasing company and is principally engaged in the provision of leasing services.

Information of Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha

Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha, which were incorporated under the laws of the Republic of the Marshall Islands, are wholly-owned SPVs of the Company and are principally engaged in ship leasing business.

Information of the Charterer

Sinokor Merchant Marine Co., Ltd. is a company incorporated under the laws of the Republic of Korea and is principally engaged in the business of marine transportation. The Charterer is ultimately owned by Sinokor Co., Ltd., which is a company incorporated in the Republic of Korea and is principally engaged in shipping business. The ultimate beneficial owner of Sinokor Co., Ltd. is Mr. Tae Soon Chung.

5. LISTING RULES IMPLICATIONS

Pursuant to Chapter 14 of the Listing Rules, as the highest applicable percentage ratio of the transactions contemplated under the Memorandums of Agreement and the Bareboat Charters is more than 5% but less than 25%, the transactions contemplated under the Memorandums of Agreement and the Bareboat Charters constitute discloseable transactions of the Company and are subject to the notification and announcement requirements under Chapter 14 of the Listing Rules but are exempt from the shareholders' approval requirement.

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6. DEFINITIONS

In this announcement, unless the context requires otherwise, the following expressions shall have the following meanings:

"Bareboat Charters"the bareboat charters entered into by and among, each of Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha and the Charterer on 6 March 2020 with respect to the Vessels

"Board"

"Charter Period"

"Charterer"

"Company"

the board of Directors

a period of 144 months commencing from the respective Delivery Dates

Sinokor Merchant Marine Co., Ltd., a company incorporated under the laws of the Republic of Korea with limited liability

CSSC (Hong Kong) Shipping Company Limited（中 國船舶（香港）航運租賃有限公司）, a company incorporated under the laws of Hong Kong with limited liability on 25 June 2012, the shares of which are listed on the Main Board of the Stock Exchange (stock code: 3877)

"Consideration"

"Delivery Dates"

US$76,000,000, subject to any adjustment pursuant to the terms and conditions of the shipbuilding contracts in relation to the Vessels

the dates on which Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha obtain title to the Vessels under the Memorandums of Agreement and the dates of the delivery of the Vessels by the respective Owners to the Charterer under the respective Bareboat Charters

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"Director(s)"

"Fortune Changsha"

"Fortune Lanzhou"

"Fortune Lasa"

"Fortune Nanning"

"Group"

"Hong Kong"

"Independent Third Party"

"Listing Rules"

the director(s) of the Company

Fortune Changsha Shipping Limited, a company incorporated under the laws of the Republic of the Marshall Islands with limited liability and a wholly- owned SPV of the Company

Fortune Lanzhou Shipping Limited, a company incorporated under the laws of the Republic of the Marshall Islands with limited liability and a wholly- owned SPV of the Company

Fo r t u n e L a s a S h i p p i n g L i m i t e d , a c o m p a ny incorporated under the laws of the Republic of the Marshall Islands with limited liability and a wholly- owned SPV of the Company

Fortune Nanning Shipping Limited, a company incorporated under the laws of the Republic of the Marshall Islands with limited liability and a wholly- owned SPV of the Company

the Company and its subsidiaries

the Hong Kong Special Administrative Region of the People's Republic of China

any entity or person who, as far as the Directors are aware after having made all reasonable enquiries, is not a connected person of the Company within the meaning under the Listing Rules

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

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"Memorandums of Agreement"

"Owners"

"SPV(s)"

"Stock Exchange"

"TEU"

"US$"

"Vessels"

"%"

Hong Kong, 6 March 2020

the memorandums of agreement entered into between each of Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha and the Charterer on 6 March 2020 with respect to the Vessels

Fortune Lanzhou, Fortune Lasa, Fortune Nanning and Fortune Changsha, being the Company's wholly-owned SPVs

special purpose vehicle(s)

The Stock Exchange of Hong Kong Limited

twenty foot equivalent unit

United States dollars, the lawful currency of the United States of America

four 1,080-TEU container vessels

per cent

By order of the Board

CSSC (Hong Kong) Shipping Company Limited

Yang Li

Chairman

As at the date of this announcement, the Board comprises Mr. Yang Li and Mr. Hu Kai as executive Directors, Mr. Li Wei, Mr. Zhong Jian and Mr. Zou Yuanjing as non-executive Directors, and Dr. Wong Yau Kar David, Mdm. Shing Mo Han Yvonne and Mr. Li Hongji as independent non-executive Directors.

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