untitled

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.



(Incorporated in Hong Kong with limited liability)

(Stock Code: 668)


DISCLOSEABLE TRANSACTION IN RELATION TO
  1. THE SALE AND PURCHASE AGREEMENT;
  2. THE FINANCE LEASE AGREEMENT; AND
  3. THE CONSULTANCY AGREEMENT


  1. The Board announces that on 15 January 2016, the JV Company, an indirect non-wholly owned subsidiary of the Company, in which 77.58% of its equity interest is held by the Group, entered into the Sale and Purchase Agreement with Sixian Hospital, an Independent Third Party, pursuant to which the JV Company agreed to purchase the Machinery and Equipment from Sixian Hospital at a total consideration of RMB30,000,000.00 (equivalent to approximately HK$35.4 million).


  2. The Board further announces that on 15 January 2016, the JV Company entered into the Finance Lease Agreement with Sixian Hospital, pursuant to which the Machinery and Equipment would be leased back to Sixian Hospital for a term of five years. The obligation of the Sixian Hospital under the Finance Lease Agreement is secured by the guarantee provided by the Guarantor.


  3. The Board further announces that on 15 January 2016, the JV Company entered into the Consultancy Agreement with Sixian Hospital whereby the JV Company has agreed to provide consultancy service to Sixian Hospital in relation to, inter alia, machinery and equipment financial leasing and Sixian Hospital has agreed to pay a fee of RMB1,200,000.00 (equivalent to approximately HK$1.42 million) to the JV Company.


The transactions contemplated under the (1) Sale and Purchase Agreement; (2) the Finance Lease Agreement; and (3) the Consultancy Agreement form a transaction which constitutes a discloseable transaction for the Company pursuant to Rule 14.06(2) of the Listing Rules.


The Board announces that the JV Company, an indirect non-wholly owned subsidiary of the Company, in which 77.58% of its equity interest is held by the Group, had entered into (1) Sale and Purchase Agreement; (2) the Finance Lease Agreement; and (3) the Consultancy Agreement for sale and lease back arrangements in relation to the Machinery and Equipment with Sixian Hospital on 15 January 2016.

  1. SALE AND PURCHASE AGREEMENT


    The Board announces that the JV Company and Sixian Hospital entered into the Sale and Purchase Agreement on 15 January 2016. The principal terms of the Sale and Purchase Agreement are set out below.


    Sale and Purchase Agreement


    Date


    15 January 2016


    Parties


    Purchaser: the JV Company

    Vendor: Sixian Hospital


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


    Subject matter of the sale and purchase


    The Machinery and Equipment comprised certain machinery and equipment including medical equipment such as X-ray machine, anesthesia machine, and monitoring equipment owned by Sixian Hospital.


    Consideration


    Pursuant to the Sale and Purchase Agreement, the JV Company purchased the Machinery and Equipment from Sixian Hospital for a total consideration of RMB30,000,000.00 (equivalent to approximately HK$35.4 million), which shall be leased back to Sixian Hospital in accordance with the Finance Lease Agreement. The book asset value of the Machinery and Equipment is RMB30,000,000.00 (equivalent to approximately HK$35.4 million).


    Pursuant to the Sale and Purchase Agreement, the JV Company shall, within 25 working days after the fulfillment of all the following conditions, make the first payment of RMB5,000,000.00 (equivalent to approximately HK$5.90 million) as part of the consideration to Sixian Hospital:


    1. The JV Company having received "Payment Notice 1" from Sixian Hospital;


    2. The JV Company having received the ordinary value-added tax (VAT) invoice in the amount of RMB5,000,000.00 (equivalent to approximately HK$5.90 million) payable by the JV Company;


    3. The JV Company having received the acceptance of the leased asset issued by Sixian Hospital; and

    4. The JV Company having confirmed the receipt of the effective documents as stated in the Finance Lease Agreement.


      5. Pursuant to the Sale and Purchase Agreement, the JV Company shall, within 25 working days after the fulfillment of all the following conditions, make the second payment of RMB25,000,000.00 (equivalent to approximately HK$29.5 million) as balance of the consideration to Sixian Hospital:-


      1. The JV Company having received "Payment Notice 2" from Sixian Hospital; and


      2. The JV Company having received the ordinary value-added tax (VAT) invoice in the amount of RMB25,000,000.00 (equivalent to approximately HK$29.5 million) payable by the JV Company.


      The consideration in respect of the sale and purchase of the Machinery and Equipment was funded by internal resources of the Group and was determined after arm's length negotiations between the parties to the Sale and Purchase Agreement by reference to the prevailing market price of the Machinery and Equipment.


    5. FINANCE LEASE AGREEMENT


      6. The Board announces that the JV Company and Sixian Hospital entered into the Finance Lease Agreement on 15 January 2016. The principal terms of the Finance Lease Agreement are set out below.


      Finance Lease Agreement


      Date


      15 January 2016


      Parties


      Lessor: the JV Company

      Lessee: Sixian Hospital


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


      Lease back arrangements


      Pursuant to the Finance Lease Agreement, the JV Company agreed to lease the Machinery and Equipment back to Sixian Hospital for a term of five years commencing from the day the JV Company makes the first payment to Sixian Hospital in accordance with the Sale and Purchase Agreement.

      Subject matter of the lease back


      The Machinery and Equipment comprised certain machinery and equipment including medical equipment such as X-ray machine, anesthesia machine, and monitoring equipment owned by Sixian Hospital.


      Lease payments


      Pursuant to the Finance Lease Agreement, the amount of lease rent to be paid by Sixian Hospital to the JV Company was calculated based on the principal lease cost and the lease interest rate. The total principal lease cost under the Finance Lease Agreement was RMB30,000,000.00 (equivalent to approximately HK$35.4 million).


      The lease rent is calculated at the actual interest rate of 8.57% per annum during the lease term, subject to the adjustment pursuant to the adjustment of the interest rate published by the People's Bank of China. Based on the aforementioned interest rate, the total lease rent payable by Sixian Hospital under the Finance Lease Agreement will be RMB37,200,580.00 (equivalent to approximately HK$43.9 million) subject to the adjustment of the interest rate. In accordance with the Finance Lease Agreement, the lease rent will be payable by Sixian Hospital every three months in twenty installments.


      In the event that Sixian Hospital fails to pay any sum payable under the Finance Lease Agreement when due, default interest may be charged for each day of late repayment, if more than one day of late repayment, at the rate of 0.1% per day of any sum payable.


      Sixian Hospital shall pay a refundable interest-free deposit of RMB3,000,000.00 (equivalent to approximately HK$3.54 million) to the JV Company as a guarantee of its obligation under the Finance Lease Agreement within two workings days after the JV Company makes the first payment in accordance to the Sale and Purchase Agreement. Such deposit shall be used to offset any default of repayment of Sixian Hospital. If there is no default of repayment of Sixian Hospital, such deposit may be used to offset part of the payment of the last installment payable by Sixian Hospital.


      The lease rent was determined after arm's length negotiations between the parties to the Finance Lease Agreement by reference to the principal amounts of the lease and the prevailing market interest rate for finance leases of comparable machines and equipment.


      Lessee's option to purchase


      The legal title of the Machinery and Equipment under the Finance Lease Agreement will be vested in the JV Company throughout the lease period. At the end of the lease period and subject to payment by Sixian Hospital of all amounts due under the Finance Lease Agreement, Sixian Hospital will have the right to purchase the Machinery and Equipment as specified in the Finance Lease Agreement at a nominal purchase price of RMB100.00 (equivalent to approximately HK$118.00).

    Dowell Property Holdings Limited issued this content on 2016-01-15 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-15 10:22:11 UTC

    Original Document: http://dowellproperty.todayir.com/attachment/2016011518020100002412581_en.pdf