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

The Board is pleased to announce that, on 7 August 2020, Fortune Leopard, being a wholly-owned SPV of the Company, entered into the Fortune Leopard Memorandum of Agreement and the Fortune Leopard Bareboat Charter with Ray Fount, pursuant to which Fortune Leopard has agreed to (i) purchase a vessel from Ray Fount at a consideration of US$34,370,000; and (ii) lease back the same vessel to Ray Fount at an estimated charterhire to be payable by Ray Fount of approximately US$37,847,000 (including estimated lease interest of approximately US$8,777,000).

In addition, on 26 June 2020, Fortune Grit, being a wholly-owned SPV of the Company, entered into the Fortune Grit Memorandum of Agreement and the Fortune Grit Bareboat Charter with Ray Delight, pursuant to which Fortune Grit has agreed to (i) purchase a vessel from Ray Delight at a consideration of US$36,600,000; and (ii) lease back the same vessel to Ray Delight at an estimated charterhire to be payable by Ray Delight of approximately US$40,224,000 (including estimated lease interest of approximately US$9,267,000).

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Each of the Fortune Leopard Transaction and the Fortune Grit Transaction does not, on a stand-alone basis, constitute a notifiable transaction of the Company under Rule 14.07 of the Listing Rules. However, as the Fortune Leopard Transaction and the Fortune Grit Transaction were entered into by Fortune Leopard and Fortune Grit, being the Company's wholly-owned SPVs, with Ray Fount and Ray Delight, both of which are ultimately owned by the same individual, respectively, within 12 months, the Fortune Leopard Transaction and the Fortune Grit Transaction shall be aggregated as a series of transactions of the Company pursuant to Rule 14.22 of the Listing Rules. Pursuant to Chapter 14 of the Listing Rules, as the highest applicable percentage ratio of the Fortune Leopard Transaction and the Fortune Grit Transaction, on an aggregate basis, is more than 5% but less than 25%, the Fortune Leopard Transaction and the Fortune Grit Transaction 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.

1. INTRODUCTION

The Board is pleased to announce that, on 7 August 2020, Fortune Leopard, being a wholly-owned SPV of the Company, entered into the Fortune Leopard Memorandum of Agreement and the Fortune Leopard Bareboat Charter with Ray Fount, pursuant to which Fortune Leopard has agreed to (i) purchase a vessel from Ray Fount at a consideration of US$34,370,000; and (ii) lease back the same vessel to Ray Fount at an estimated charterhire to be payable by Ray Fount of approximately US$37,847,000 (including estimated lease interest of approximately US$8,777,000).

In addition, on 26 June 2020, Fortune Grit, being a wholly-owned SPV of the Company, entered into the Fortune Grit Memorandum of Agreement and the Fortune Grit Bareboat Charter with Ray Delight, pursuant to which Fortune Grit has agreed to (i) purchase a vessel from Ray Delight at a consideration of US$36,600,000; and (ii) lease back the same vessel to Ray Delight at an estimated charterhire to be payable by Ray Delight of approximately US$40,224,000 (including estimated lease interest of approximately US$9,267,000).

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

Dates

26 June 2020 and 7 August 2020

Parties

Buyers/Owners Fortune Grit and Fortune Leopard, being the Company's wholly- owned SPVs

Sellers/Charterers Ray Delight and Ray Fount, both of which are companies incorporated in the British Virgin Islands and ultimately owned by Jiang Wenjuan（江文娟）

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

Subject Matter

The Charterers have agreed to sell the Vessels to Fortune Grit and Fortune Leopard at the Consideration, which is expected to be settled with the internal funds of Fortune Grit and Fortune Leopard as well as bank borrowings. At the same time, Fortune Grit and Fortune Leopard have agreed to lease back the Vessels to the Charterers at a total estimated charterhire to be payable by the Charterers of approximately US$78,071,000 (including estimated lease interest of approximately US$18,044,000). Upon expiration of the Charter Period, the Charterers are obliged to purchase the Vessels from Fortune Grit and Fortune Leopard at a consideration as agreed by the parties under the Bareboat Charters.

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Vessels

The Vessels are two 55,600-DWT product oil/chemical tankers, and are of an aggregate value of US$70,970,000, which is equivalent to the aggregate shipbuilding price of the Vessels pursuant to the relevant shipbuilding contracts.

One of the Vessels has been delivered in June 2020, and the other Vessel is expected to be delivered by in August 2020.

Charter Period

The Charter Period shall be a period of 120 months commencing from the respective Delivery Dates.

Charterhire and Interest

Pursuant to the Bareboat Charters, Fortune Grit and Fortune Leopard have agreed to lease back the Vessels to the Charterers at a total estimated charterhire to be payable by the Charterers of approximately US$78,071,000 (including estimated lease interest of approximately US$18,044,000), which shall be payable by the Charterers in 120 payments.

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 Charterers and Fortune Grit and Fortune Leopard, 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.

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Guarantee and Other Security

In connection with the transactions contemplated under the Memorandums of Agreement and the Bareboat Charters, the following guarantee and security documents have been entered into:

1. a deed of charterer assignment entered into by each of the Charterers as assignor and the respective Owners as assignee, pursuant to which the Charterers have assigned to the Owners absolutely and unconditionally all their rights, title and interest to and in, and all the benefits of, among others, the shipbuilding contracts;
2. two deeds of corporate guarantee entered into by the Corporate Guarantor in favor of each of the Owners, pursuant to which the Corporate Guarantor has irrevocably and unconditionally guaranteed, among others, the punctual performance by the Charterers of all their obligations under the Memorandums of Agreement and the Bareboat Charters;
3. a deed of charge entered into by each of Chargor A and Chargor B as chargor and the respective Owners as chargee, pursuant to which Chargor A and Chargor B have charged by way of first fixed charge to the respective Owners their respective shares in the Charterers and all their respective present and future rights, title and interest in or to the shares of the Charterers;
4. a deed of charge over account entered into by each of the Charterers as chargor and the respective Owners as chargee, pursuant to which the Charterers have charged by way of first floating charge to the Owners the earnings account, all their present and future rights, title and interest in or to the earnings account and all moneys standing to the credit of the earnings account;

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1. a deed of manager's undertaking given by each of the Managers, pursuant to which the Managers have irrevocably and unconditionally assigned to the Owners all of their rights, title and interest in and to, and all the benefits of, all the insurances in respect of the Vessels;
2. a deed of manager's undertaking given by the Sub-manager in favour of each of the Owners, pursuant to which the Sub-manager has irrevocably and unconditionally assigned to the Owners all of its rights, title and interest in and to, and all the benefits of, all the insurances in respect of the Vessels;
3. a deed of subordination entered into by the Subordinated Creditor, each of the Charterers and the respective Owners, pursuant to which the Subordinated Creditor and the Charterers have, among others, undertaken with each other and with the Owners that, so long as any secured obligation is outstanding, the subordinated indebtedness shall be subordinated and the payment of it shall be deterred to all rights, claims and actions which the Owners may have against the Charterers in respect of the secured obligations; and
4. two deeds of personal guarantee entered into by the Personal Guarantors in favor of each of the Owners, pursuant to which the Personal Guarantors (as joint and several guarantors) have irrevocably and unconditionally guaranteed, among others, the punctual performance by the Charterers of all their obligations under the Bareboat Charters of up to US$5,000,000.

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 Grit and Fortune Leopard 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 interest 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 Grit and Fortune Leopard

Fortune Grit and Fortune Leopard, which were incorporated under the laws of Hong Kong, are wholly-owned SPVs of the Company and are principally engaged in ship leasing business.

Information of the Charterers

Ray Delight and Ray Fount are companies incorporated in the British Virgin Islands and are ultimately owned by Jiang Wenjuan（江文娟）. Ray Delight and Ray Fount are principally engaged in shipping business.

5. LISTING RULES IMPLICATIONS

Each of the Fortune Leopard Transaction and the Fortune Grit Transaction does not, on a stand-alone basis, constitute a notifiable transaction of the Company under Rule

14.07 of the Listing Rules. However, as the Fortune Leopard Transaction and the Fortune Grit Transaction were entered into by Fortune Leopard and Fortune Grit, being the Company's wholly-owned SPVs, with Ray Fount and Ray Delight, both of which are ultimately owned by the same individual, respectively, within 12 months, the Fortune Leopard Transaction and the Fortune Grit Transaction shall be aggregated as a series of transactions of the Company pursuant to Rule 14.22 of the Listing Rules. Pursuant to Chapter 14 of the Listing Rules, as the highest applicable percentage ratio of the Fortune Leopard Transaction and the Fortune Grit Transaction, on an aggregate basis, is more than 5% but less than 25%, the Fortune Leopard Transaction and the Fortune Grit Transaction 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"

"Board"

"Chargor A"

"Chargor B"

"Charterers"

"Charter Period"

"Company"

the Fortune Grit Bareboat Charter and the Fortune Leopard Bareboat Charter

the board of Directors

Panasia Global Investment Limited, a company incorporated in the British Virgin Islands with limited liability

Amber Pacific Shipping Limited, a company incorporated in the British Virgin Islands with limited liability

Ray Delight and Ray Fount

a period of 120 months commencing from the respective Delivery Dates

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"	US$70,970,000, subject to any adjustment pursuant to the
	terms and conditions of the shipbuilding contracts in relation
	to the Vessels
"Corporate	Amber Pacific Shipping Limited, a company incorporated in
Guarantor"	the British Virgin Islands with limited liability

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"Delivery Dates" the dates on which (i) the Charterers obtain title to the Vessels under the relevant shipbuilding contracts; (ii) Fortune Grit and Fortune Leopard obtain title to the Vessels under the Memorandums of Agreement; and (iii) the Charterers accept delivery of the Vessels under the Bareboat Charters

"Director(s)"

"DWT"

"Fortune Grit"

the director(s) of the Company

deadweight tonnage

Fortune Grit Shipping Limited, a company incorporated under the laws of Hong Kong with limited liability and a wholly-owned SPV of the Company

"Fortune Grit	the bareboat charter entered into between Fortune Grit and
Bareboat Charter"	Ray Delight on 26 June 2020
"Fortune Grit	the memorandum of agreement entered into between Fortune
Memorandum of	Grit and Ray Delight on 26 June 2020
Agreement"
"Fortune Grit	the transactions contemplated under the Fortune Grit
Transaction"	Memorandum of Agreement and the Fortune Grit Bareboat
	Charter
"Fortune Leopard"	Fortune Leopard Shipping Limited, a company incorporated
	under the laws of Hong Kong with limited liability and a
	wholly-owned SPV of the Company
"Fortune Leopard	the bareboat charter entered into between Fortune Leopard
Bareboat Charter"	and Ray Fount on 7 August 2020
"Fortune Leopard	the memorandum of agreement entered into between Fortune
Memorandum of	Leopard and Ray Fount on 7 August 2020
Agreement"

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"Fortune Leopard	the transactions contemplated under the Fortune Leopard
Transaction"	Memorandum of Agreement and the Fortune Leopard
	Bareboat Charter
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the
	People's Republic of China
"Independent Third	any entity or person who, as far as the Directors are
Party"	aware after having made all reasonable enquiries, is not a
	connected person of the Company within the meaning under
	the Listing Rules
"Listing Rules"	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited, as amended, supplemented
	or otherwise modified from time to time
"Managers"	Fleet Ship Management Inc., a company incorporated in the
	British Virgin Islands with limited liability, and Goldwin
	Shipping Limited（金威船務有限公司）, a company
	incorporated in Hong Kong with limited liability
"Memorandums of	the Fortune Grit Memorandum of Agreement and the Fortune
Agreement"	Leopard Memorandum of Agreement
"Owners"	Fortune Grit and Fortune Leopard
"Personal	Jiang Wenjuan（江文娟）, Cheng Hui（程輝）and Cheng Bo
Guarantors"	Ki Catherine（程寶琦）
"Ray Delight"	Ray Delight Shipping Limited, a company incorporated in
	the British Virgin Islands with limited liability
"Ray Fount"	Ray Fount Shipping Limited, a company incorporated in the
	British Virgin Islands with limited liability

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"SPV(s)"

"Stock Exchange"

"Sub-manager"

"Subordinated Creditor"

"US$"

"Vessels"

"%"

Hong Kong, 7 August 2020

special purpose vehicle(s)

The Stock Exchange of Hong Kong Limited

Fleet Management Limited, a company incorporated in Hong Kong with limited liability

Amber Pacific Shipping Limited, a company incorporated in the British Virgin Islands with limited liability

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

two 55,600-DWT product oil/chemical tankers

per cent

By order of the Board

CSSC (Hong Kong) Shipping Company Limited

Zhong Jian

Chairman

As at the date of this announcement, the Board comprises Mr. Zhong Jian and Mr. Hu Kai as executive Directors, Mr. Li Wei 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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