21st Dec 2007 07:00
MTR Corporation Ltd21 December 2007 The Stock Exchange of Hong Kong Limited takes no responsibility for the contentsof this announcement, makes no representation as to its accuracy or completenessand expressly disclaims any liability whatsoever for any loss howsoever arisingfrom or in reliance upon the whole or any part of the contents of thisannouncement. MTR CORPORATION LIMITED (the "Company") (Incorporated in Hong Kong with limited liability) (Stock code: 66) SITE E OF THE REMAINING PORTION OF TSEUNG KWAN O TOWN LOT NO.70, AREA 86 TSEUNG KWAN O, SAI KUNG, NEW TERRITORIES CONNECTED TRANSACTION +------------------------------------------------------------------------------+|On 20th December, 2007, the Company accepted an offer from the Government to ||allow the Company to proceed with the proposed development on Site E subject ||to the Company's acceptance of the Government's assessment of the premium for ||Site E (being HK$3,335,000,000.00), the payment of which will be funded by the||Developer and of the terms of the Modification Letter and ancillary terms and ||conditions. The offer was made by the Government on 9th November, 2007. || ||As the Government is a controlling shareholder of the Company and therefore a ||connected person of the Company, the Transaction is a connected transaction ||for the Company under Rule 14A.13 of the Listing Rules. As disclosed in the ||announcement of the Company dated 13th January, 2005, the Stock Exchange has ||granted the Waiver to the Company from the requirements under Chapter 14A of ||the Listing Rules which would otherwise apply to connected transactions ||between the Company and the Government subject to the conditions described ||below under the heading "General". Had the Waiver not been granted, the ||Transaction would have been subject to the announcement, the reporting and the||independent shareholders' approval requirements under Chapter 14A of the ||Listing Rules. || ||This announcement is made in accordance with the conditions of the Waiver and ||Rule 14A.47 of the Listing Rules. Details of the Transaction will be disclosed||in the next annual report of the Company in accordance with Rule 14A.45 of the||Listing Rules. |+------------------------------------------------------------------------------+ Acceptance of Government's Offer and Modification Letter On 20th December, 2007, the Company accepted an offer from the Government toallow the Company to proceed with the proposed development on Site E subject to(a) the Company's acceptance of the Government's assessment of the premium ofSite E (being HK$3,335,000,000.00), the payment of which will be funded by theDeveloper and of the terms of the Modification Letter, and (b) ancillary termsand conditions. The offer was made by the Government on 9th November, 2007. Under the terms of the Government's offer, a binding contract between theparties arises when Government receives the Company's acceptance. The Companydelivered the acceptance to Government on 20th December, 2007. The ModificationLetter is to be executed within three calendar months from that date. TheModification Letter contains details relating to the arrangements for theimplementation of the proposed development on Site E and also on Tseung Kwan OTown Lot No.70 generally. The Modification Letter amends the building covenantperiod for Site E from "the later of on or before the 30th day of September,2013 or 66 calendar months from the date of payment of the Site E premium" to"78 calendar months from the date of payment of the Site E premium", defines thedevelopment parameters and the site boundary of Site E, increases the allowablebuilding height for all Sites except that of Site F, Site AB and Site M, reducesthe number of school sites and kindergarten classrooms, increases the minimumlocal open space and requires permitted works to be carried out within TheRemaining Portion of Tseung Kwan O Town Lot No.70. The total gross floor area ofthe development on Site E will be approximately 128,544 square metres. Site Ewill comprise residential accommodation, a kindergarten and parking spaces. Thepremium has been assessed by the Government to be HK$3,335,000,000.00, byreference to the full market value of Site E, ignoring the presence of therailway. The Company is required to pay a deposit of the premium (beingHK$1,000,000.00) to the Government on acceptance of the Government's offer andto pay the balance of the said premium (being HK$3,334,000,000.00) as demandedby the Government within three calendar months from the date of acceptance. Thepayment of the premium including the deposit will be funded by the Developer. Reasons for accepting Government's offer The Company has accepted Government's offer and proposes to execute theModification Letter in order to be allowed to proceed with the proposeddevelopment on Site E. On the basis that the assessed premium is considered tobe in line with current market values, and having regard to all of the terms andconditions of the Government's offer, the Directors (including the independentnon-executive Directors) believe that the terms of Government's offer and therelevant documentation (including the Modification Letter) are fair andreasonable and in the interests of the shareholders of the Company as a whole. General As the Government is a controlling shareholder of the Company and therefore aconnected person of the Company, the Transaction is a connected transaction forthe Company under Rule 14A.13 of the Listing Rules. As disclosed in theannouncement of the Company dated 13th January, 2005, the Stock Exchange hasgranted the Waiver to the Company from the requirements under Chapter 14A of theListing Rules which would otherwise apply to connected transactions between theCompany and the Government involving land and land interests subject to certainconditions. Under the Waiver, the Company is required to make an announcement ofthe Transaction in accordance with Rule 14A.47 of the Listing Rules and todisclose details of the Transaction in its next annual report in accordance withRule 14A.45 of the Listing Rules. The Company is also required under the Waiverto make the Transaction subject to the approval of the Board, with the Directorsappointed by the Government under section 8 of the Mass Transit RailwayOrdinance (Cap. 556 of the Laws of Hong Kong) and any Director who holds aposition in the Government being required to abstain from voting. Accordingly,Professor Chan Ka-keung, Ceajer (represented by his alternate director,Mr. Leung Cheuk-man), the Secretary for Transport and Housing (represented byher alternate director, the Permanent Secretary for Transport and Housing(Transport)) and the Commissioner for Transport disclosed their interest in theTransaction and they each abstained from voting on the relevant Boardresolutions. Had the Waiver not been granted, the Transaction would have beensubject to the announcement, the reporting and the independent shareholders'approval requirements under Chapter 14A of the Listing Rules. This announcement is made in accordance with the conditions of the Waiver andRule 14A.47 of the Listing Rules. Details of the Transaction will be disclosedin the next annual report of the Company in accordance with Rule 14A.45 of theListing Rules. Principal activities of the Company The principal activities of the Company and its subsidiaries are (a) theoperation of mass transit, suburban, intercity and freight railway systems, (b)property development at locations connected to the railway systems, (c) relatedcommercial activities, property management and leasing management of investmentproperties, property agency and Octopus Card Building Access Services, (d) theoperation of the 7-year London Overground Concession, in which the Company has a50% share, covering 60 route kilometres of commuter railway in London's outersuburbs, (e) the design and construction of Tseung Kwan O South Station as anextension of the Tseung Kwan O Line, (f) the planning and construction of futureextensions to the railway system and other related infrastructure projects, (g)the operation of the Tung Chung to Ngong Ping Cable Car System and The ThemeVillage in Ngong Ping, (h) consultancy services, (i) investment in OctopusHoldings Limited, a subsidiary of the Company, which has business activitiesboth in Hong Kong and overseas including the operation of a smart card system byits subsidiary, Octopus Cards Limited, for the collection of payments for bothtransport and non-transport applications in Hong Kong, (j) equity investmentsand long term operation and maintenance contracts outside of Hong Kong, (k)property management, shopping centre investment and railway related propertydevelopment business in the Mainland of China, and (l) the investment in, andconstruction of, Beijing Metro Line 4, in which the Company has a 49% equityinterest, for future operations under a 30 year concession agreement with theBeijing Municipal Government. Definitions "Conditions of Grant" means the particulars and conditions for the grant of an agreement for lease by private treaty of Tseung Kwan O Town Lot No.70 between the Government and the Company dated 16th May 2002 as varied or modified by modification letters dated 19th April 2005 and 13th April 2006 and as the same is affected by the Deed Poll; "Board" means the board of Directors; "Deed Poll" means the Deed Poll dated 16th November 2007 and registered at the Land Registry by Memorial No. 07112002850019 partitioning the lot into Section A and The Remaining Portion; "Developer" means Wealth Pine Investment Limited, which was the successful tenderer in the tender to develop Site E; "Directors" means members of the board of directors of the Company; "Government" means the Government of Hong Kong; "HK$" means Hong Kong dollars, the lawful currency of Hong Kong; "Hong Kong" means the Hong Kong Special Administrative Region of the People's Republic of China; "Modification Letter" means the further modification letter to be entered into between the Company and the Government in relation to the Conditions of Grant; "Listing Rules" means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; "Site AB", "Site F", have the same meanings as those used in the "Site M" and "Sites" Conditions of Grant as the same is affected by the Deed Poll; "Site E" means Site E of The Remaining Portion of Tseung Kwan O Town Lot No.70, Area 86, Tseung Kwan O, Sai Kung, New Territories; "Stock Exchange" means The Stock Exchange of Hong Kong Limited; "Transaction" means the Company's acceptance of an offer from the Government to allow the Company to proceed with the proposed development on Site E subject to the Company's acceptance of the Government's assessment of the premium of Site E and of the terms of the Modification Letter and ancillary terms and conditions; and "Waiver" means the waiver granted by the Stock Exchange to the Company from the requirements under Chapter 14A of the Listing Rules (subject to certain conditions). By Order of the Board Leonard Bryan Turk Secretary Hong Kong, 20 December, 2007 Members of the Board: Dr. Raymond Ch'ien Kuo-fung (Chairman)**, Chow Chung-kong(Chief Executive Officer), Professor Cheung Yau-kai*, David Gordon Eldon*,Christine Fang Meng-sang*, Edward Ho Sing-tin*, Lo Chung-hing*, Ng Leung-sing*,Abraham Shek Lai-him*, T. Brian Stevenson*, Professor Chan Ka-keung, Ceajer(Secretary for Financial Services and the Treasury)**, Secretary for Transportand Housing (Eva Cheng)** and Commissioner for Transport (Alan Wong Chi-kong)** Members of the Executive Directorate: Chow Chung-kong, Russell John Black,William Chan Fu-keung, Thomas Ho Hang-kwong, Lincoln Leong Kwok-kuen, FrancoisLung Ka-kui, Andrew McCusker and Leonard Bryan Turk * independent non-executive Directors ** non-executive Directors This announcement is made in English and Chinese. In the case of anyinconsistency, the English version shall prevail. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MTR.L