19th Jan 2006 07:00
MTR Corporation Ltd19 January 2006 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 AB OF TSEUNG KWAN O TOWN LOT NO.70, AREA 86, TSEUNG KWAN O, SAI KUNG, NEW TERRITORIES DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION +------------------------------------------------------------------------------+|On 18th January, 2006, the Company accepted an offer from the Government to ||allow the Company to proceed with the proposed development on Site AB subject ||to the Company's acceptance of Government's assessment of premium for Site AB ||(being HK$8,061,470,000, which will be borne by the Developer of Site AB) and ||of the terms of the Modification Letter and ancillary terms and conditions. || ||This transaction is a discloseable transaction under Chapter 14 of the Listing||Rules and is subject to the requirements for the publication of an ||announcement and the distribution and publication of a circular in accordance ||with Rules 14.34 and 14.38, respectively, of the Listing Rules. || ||As the Government is a controlling shareholder of the Company and therefore a ||connected person of the Company, the transaction is also 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". || ||This announcement is made in accordance with Chapter 14 of the Listing Rules, ||the conditions of the Waiver and Rule 14A.47 of the Listing Rules. Details of ||the transaction will be disclosed in the circular to be distributed and ||published in accordance with Rule 14.38 of the Listing Rules on or about 8th ||February, 2006 and 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 18th January, 2006, the Company accepted an offer from the Government toallow the Company to proceed with the proposed development on Site AB subject to(a) the Company's acceptance of Government's assessment of premium for Site ABand of the terms of the Modification Letter, and (b) ancillary terms andconditions. Under the terms of Government's offer, a binding contract betweenthe parties arises when Government receives the Company's acceptance. TheCompany delivered the acceptance to Government on 18th January, 2006. TheModification Letter is to be executed within three calendar months from thatdate. The Modification Letter contains details relating to the arrangements forthe implementation of the proposed development on Tseung Kwan O Town Lot No.70.It is proposed that the original Site A and Site B of Tseung Kwan O Town LotNo.70 will be amalgamated into one site to be renamed Site AB. The ModificationLetter fixes the boundary of Site AB, defers the expiry dates of the buildingcovenant periods, revises the requirements relating to the Governmentaccommodation, requires the Company to make payments in respect of noisemitigation measures and sets out the development parameters. The entire sitearea of Tseung Kwan O Town Lot No.70 is approximately 326,751 square metres andthis has not been altered since the Conditions of Grant and will not be alteredby the Modification Letter. A new Tseung Kwan O South station will be situatedwithin the Tseung Kwan O Town Lot No.70. The total gross floor area of thedevelopment on Site AB will be not less than 185,818 square metres and not morethan 309,696 square metres. Site AB will include residential accommodation, akindergarten and parking spaces. The Company is required to pay to theGovernment the premium for Site AB, which was assessed by the Valuation Sectionof the Lands Department of the Government to be HK$8,061,470,000, by referenceto the full market value of Site AB, ignoring the presence of the railway. Thevalue of Site AB, by reference to the premium assessed, was HK$8,061,470,000 asat 18th January, 2006. The Company is required to pay the premium for Site AB inone lump sum within 3 calendar months from 18th January, 2006. The premium willbe paid by the Developer of Site AB. Reasons for accepting Government's offer and executing the relevantdocumentation The Company has accepted Government's offer and has executed relevantdocumentation and proposes to execute the Modification Letter in order to beallowed to proceed with the proposed development on Site AB. On the basis thatthe assessed premium for Site AB is considered to be in line with current marketvalues, and having regard to all of the terms and conditions of the Government'soffer, the Directors (including the independent non-executive Directors) believethat the terms of Government's offer and the relevant documentation (includingthe Modification Letter) are fair and reasonable and in the interests of theshareholders of the Company as a whole. General This announcement is made in accordance with Chapter 14 of the Listing Rules,the conditions of the Waiver and Rule 14A.47 of the Listing Rules. Discloseable Transaction The transaction is a discloseable transaction under Chapter 14 of the ListingRules and is subject to the requirements for the publication of an announcementand the distribution and publication of a circular in accordance with Rules14.34 and 14.38, respectively, of the Listing Rules. The Company will send acircular to its shareholders and the Stock Exchange and arrange for itspublication within 21 days after the publication of this announcement. Connected Transaction As the Government is a controlling shareholder of the Company and therefore aconnected person of the Company, the transaction is also a connected transactionfor the 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 of Directors, withthe Directors appointed by the Government under section 8 of the Mass TransitRailway Ordinance (Cap. 556) and any Director who holds a position in theGovernment being required to abstain from voting. Accordingly, Mr. Frederick MaSi-hang (represented by his alternate director, Mr. Martin McKenzie Glass), theSecretary for the Environment, Transport and Works and the Commissioner forTransport disclosed their interest in the transaction at the meeting of theBoard of Directors on 10th January, 2006 and they each abstained from voting onthe relevant Board resolutions. Details of the transaction will be disclosed in the circular to be distributedand published in accordance with Rule 14.38 of the Listing Rules on or about 8thFebruary, 2006 and in next annual report of the Company in accordance with Rule14A.45 of the Listing 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 construction and operation of the Tung Chung Cable Car Project and relatedtourist development, (e) the planning and construction of future extensions tothe railway system and other related infrastructure projects, (f) consultancyservices, (g) the operation of a smart card system by Octopus Cards Limited, and(h) equity investments and long term operation and maintenance contracts outsideof Hong Kong. Definitions "Conditions of means the particulars and conditions for the grant of anGrant" 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 a modification letter dated 19th April, 2005; "Developer" means Rich Asia Investments Limited, which was the successful tenderer in the tender to develop Site AB; "Development means the agreement to be entered into between the CompanyAgreement" and the Developer in respect of the development of Site AB; "Directors" means members of the board of directors of the Company; "Government" means the Government of the Hong Kong Special Administrative Region of the People's Republic of China; "Listing Rules" means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; "Modification means the further modification letter to be entered intoLetter" between the Company and the Government in relation to the Conditions of Grant; "Site AB" means Site AB 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; 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) which, for the avoidance of doubt, and as discussed in the announcement of the Company dated 24 October 2005, has been updated by the Stock Exchange to reflect the adjustments relating to Octopus Cards Limited discussed in that announcement, such that the Waiver which previously related to Octopus Cards Limited now also relates to (i) transactions between the Company and Octopus Holdings Limited, Octopus Cards Limited and their respective subsidiaries and (ii) transactions between Kowloon-Canton Railway Corporation and Octopus Holdings Limited, Octopus Cards Limited and their respective subsidiaries. By Order of the Board Leonard Bryan Turk Secretary Hong Kong, 18th January, 2006 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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