28th Feb 2007 07:00
MTR Corporation Ltd28 February 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) TSEUNG KWAN O TOWN LOT NO. 72, Area 56, TSEUNG KWAN O, SAI KUNG, NEW TERRITORIES CONNECTED TRANSACTION +------------------------------------------------------------------------------+|On 26th February, 2007, the Company accepted an offer from the Government to ||allow the Company to proceed with the proposed development in Area 56 subject ||to the Company's acceptance of Government's assessment of the Land Premium ||(being HK$3,345,230,000, the payment of which will be funded by the Developer)||and of the particulars and conditions of the Land Grant. The offer was made by||the Government on 15th January, 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 the Land Grant On 26th February, 2007, the Company accepted an offer from the Government toallow the Company to proceed with the proposed development in Area 56 subject tothe Company's acceptance of Government's assessment of the Land Premium (beingHK$3,345,230,000, the payment of which will be funded by the Developer) and ofthe particulars and conditions of the Land Grant. The offer was made by theGovernment on 15th January, 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 26th February, 2007. The Land Grant,which will contain particulars and conditions of the land grant by privatetreaty of Area 56, is expected to be executed within three calendar months fromthat date. It is proposed that the development in Area 56 will be a mixed-usedevelopment comprising hotel, office, residential, commercial and car parkingaccommodations with a total gross floor area of not more than 168,537 squaremetres. The Company is required to pay to the Government the Land Premium, whichhas been assessed by the Government to be HK$3,345,230,000, by reference to thefull market value of Area 56, ignoring the presence of the railway. The Companyis required to pay (a) a deposit equal to 10% of the Land Premium on 26thFebruary, 2007 and (b) the remaining balance of the Land Premium when the LandGrant is executed. The payment of the Land Premium will be funded by theDeveloper. Reasons for accepting Government's offer The Company has accepted Government's offer and proposes to execute the LandGrant in order to be allowed to proceed with the proposed development in Area56. On the basis that the assessed Land Premium is considered to be in line withcurrent market values, and having regard to all of the terms and conditions ofthe Government's offer, the Directors (including the independent non-executiveDirectors) believe that the terms of Government's offer and the Land Grant arefair and reasonable and in the interests of the shareholders of the Company as awhole. 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,Mr. Frederick Ma Si-hang, the Secretary for the Environment, Transport and Worksand the Commissioner for Transport disclosed their interest in the Transactionand they each abstained from voting on the relevant Board resolutions. Had theWaiver not been granted, the Transaction would have been subject to theannouncement, the reporting and the independent shareholders' approvalrequirements 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 a mass transit railway system, (b) property development atlocations relating to the railway system, (c) related commercial activities, (d)the monitoring of the appointed operator in their operation of the Ngong Ping360 tourism facilities, (e) the design and construction of Tseung Kwan O SouthStation as an extension of the Tseung Kwan O Line, (f) the planning andconstruction of future extensions to the railway system and other relatedinfrastructure projects, (g) consultancy services, (h) 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, (i) equity investmentsand long term operation and maintenance contracts outside of Hong Kong, (j)property management, shopping centre investment and railway related propertydevelopment business in the Mainland of China, and (k) 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 "Area 56" means Tseung Kwan O Town Lot No.72, Area 56, Tseung Kwan O, Sai Kung, New Territories; "Board" means the board of Directors; "Developer" means Lansmart Limited, which was the successful tenderer in the tender to develop Area 56; "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; "Land Grant" means the particulars and conditions of the land grant by private treaty of Area 56 to be entered into between the Company and the Government; "Land Premium" means the land premium for Area 56; "Listing Rules" means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; "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 in Area 56 subject to the Company's acceptance of Government's assessment of the Land Premium and of the particulars and conditions of the Land Grant; 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, 27th February, 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*, T. BrianStevenson*, Frederick Ma Si-hang (Secretary for Financial Services and theTreasury)**, Secretary for the Environment, Transport and Works (Dr. Sarah LiaoSau-tung)** 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:
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