10th Jan 2008 09:53
Standard Chartered PLC10 January 2008 The following is the text of a regulatory announcement made in Hong Kong on 10January 2008: "STANDARD CHARTERED PLC CONTINUING CONNECTED TRANSACTIONS The Group has in the past entered into certain continuing connected transactionsfor the Leasing of Premises with CapitaCommercial Trust ("CCT"). CCT is anassociate of Temasek, which is a substantial shareholder of the Company, and istherefore a connected person of the Company. The Company and HSBC InstitutionalTrust Services (Singapore) Limited as trustee of CCT have on 10 January 2008entered into the Framework Agreement to set out certain principles and themaximum aggregate annual value upon which such continuing connected transactionswill continue for the three years ending 11 January 2011. The Directors (including the independent non-executive Directors) are of theview that such continuing connected transactions have been and will, whenconducted in accordance with the Framework Agreement, be conducted in theordinary course of business of the Group, on normal commercial terms, and arefair and reasonable and in the interests of the shareholders of the Company as awhole. It is expected that the value of such continuing connected transactions will notexceed the maximum aggregate annual value as provided for in the FrameworkAgreement and as detailed in this announcement. Accordingly under the ListingRules, the Company only needs to include details of the continuing connectedtransactions in its annual reports and such transactions are not subject toindependent shareholders' approval. Background The Group has in the past entered into continuing connected transactions withCCT for the Leasing of Premises. Since CCT is an associate of Temasek, which is a substantial shareholder of theCompany, CCT is therefore a connected person of the Company and the Leasing ofPremises constitutes continuing connected transactions for the Company. TheCompany and HSBC Institutional Trust Services (Singapore) Limited as trustee ofCCT have on 10 January 2008 entered into the Framework Agreement to set outcertain principles and the maximum aggregate annual value upon which suchcontinuing connected transactions will continue for the three years ending 11January 2011. Leasing of Premises In relation to the Leasing of Premises, for the years ended 31 December 2006 and2007, the rental and licence fees paid under relevant leases and licencesamounted to USD6,445,142 and USD7,617,709, respectively. Pursuant to theFramework Agreement, the Group will continue to enter into leases and licenceagreements with CCT from time to time in connection with the Leasing of Premisesand rental and licence fees to be paid under such leases and licence agreementsare and will be negotiated on an arm's length basis based on normal commercialterms and at the prevailing market rates. The Framework Agreement provides thatsuch leases and licence agreements and/or the rent and other fees payable undersuch leases and licence agreements will not exceed a term of three years. Underthe Framework Agreement, the Company and HSBC Institutional Trust Services(Singapore) Limited as trustee of CCT have agreed that for the three yearsending 11 January 2009, 11 January 2010 and 11 January 2011, the maximumaggregate annual value to be paid under such leases and licences shall notexceed SGD70 million (equivalent to approximately USD49 million as at the dateof this announcement). The maximum aggregate annual value has been calculatedbased on a significant increase in the rental rate in line with current marketconditions following a recent rent review with CCT, an expansion by the Companyof occupied space during 2007, and projections by the Company of new space thatcould be secured between 2008 and 2010. The rental and licence fees will bepaid in cash on a monthly basis with no term of arrangement for payment on adeferred basis. Reasons for the Leasing of Premises The Group is a provider of banking services in Asia (including Singapore),Africa and the Middle East. CCT which leases the premises to the Group is aSingapore-listed commercial real estate investment trust which owns and investsin real estate and real estate-related assets which are income producing andused, or predominantly used, for commercial purposes. It is managed byCapitaCommercial Trust Management Limited, an indirect wholly-owned subsidiaryof CapitaLand Limited, one of the largest listed real estate companies in Asia.As a provider of banking services in Singapore, the Group needs to lease andobtain licences for premises for use as offices and bank branches. The Directors(including the independent non-executive Directors) are of the view that theLeasing of Premises under the Framework Agreement will be conducted in theordinary course of business of the Group, are on normal commercial terms, andare fair and reasonable and in the interests of the shareholders of the Companyas a whole. Requirements of the Listing Rules The Leasing of Premises under the Framework Agreement would be treated ascontinuing connected transactions under Chapter 14A of the Listing Rules. It isexpected that, with respect to each of the Leasing of Premises, all applicableratio tests referred to in Rule 14.07 of the Listing Rules would, on an annualbasis, be less than 2.5 per cent. Accordingly, the Framework Agreement is onlysubject to the reporting and announcement requirements set out in Rules 14A.45to 14A.47 and is exempt from the independent shareholders' approval requirementsof Chapter 14A of the Listing Rules. Details of the Framework Agreement will beincluded in the Company's annual reports for the years 2008 to 2010. The Companywill re-comply with Rules 14A.35(3) and (4) of the Listing Rules if theabovementioned maximum aggregate annual value is exceeded or if the FrameworkAgreement is renewed with a material change to its terms. Principal Business Activities of the Company and CCT The Company, listed on both the London Stock Exchange and the Hong Kong StockExchange, ranks among the top 25 companies in the FTSE-100 by marketcapitalisation. The London-headquartered group has operated for over 150 yearsin some of the world's most dynamic markets, leading the way in Asia, Africa andthe Middle East. Its income and the number of employees have more than doubledover the last five years primarily as a result of organic growth andsupplemented by acquisitions. Standard Chartered aspires to be the best international bank in its markets bybeing the right partner for its stakeholders and leading by example. The Groupnow employs over 60,000 people, representing some 100 nationalities, in morethan 1,400 branches located in over 50 countries. The Group generates more than90 per cent of its profits from Asia, Africa and the Middle East, with balancedincome derived from both Wholesale and Consumer Banking. CapitaCommercial Trust is Singapore's first commercial real estate investmenttrust which owns and invests in real estate and real estate-related assets whichare income producing and used, or predominantly used, for commercial purposes.Its portfolio comprises nine prime properties in Singapore's Central BusinessDistrict and Downtown Core with an asset value of SGD4.7 billion (approximatelyUSD3.3 billion) as at 30 September 2007. CapitaCommercial Trust is managed by anexternal manager, CapitaCommercial Trust Management Limited, which is anindirect wholly-owned subsidiary of CapitaLand Limited, one of the largestlisted real estate companies in Asia. Terms Used in this Announcement"associate" has the meaning given in Chapter 1 of the Listing Rules."CapitaCommercial Trust" or CapitaCommercial Trust, a real estate investment trust whose units are listed on"CCT" the Singapore Exchange Securities Trading Limited."Company" Standard Chartered PLC."connected person" has the meaning ascribed to it under the Listing Rules."connected transactions" and have the meaning given in Chapter 14A of the Listing Rules."continuing connectedtransactions""Directors" directors of the Company."Framework Agreement" the agreement entered into by the Company and HSBC Institutional Trust Services (Singapore) Limited as trustee of CapitaCommercial Trust in relation to the Leasing of Premises."Group" the Company and its subsidiaries."Leasing of Premises" leasing of premises (both existing and potential future space) by the Group from CapitaCommercial Trust for use as offices and bank branches."Listing Rules" the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited."ratio tests" has the meaning given in Chapter 14 of the Listing Rules."SGD" Singapore dollars, the lawful currency of Singapore."substantial shareholder" has the meaning given in Chapter 1 of the Listing Rules."Temasek" Temasek Holdings (Private) Limited."USD" US dollars, the lawful currency of the United States of America. By order of the Board Annemarie Durbin Group Company Secretary Hong Kong, 10 January 2008" For further details please contact: Standard Chartered Stephen Atkinson, Head of Investor RelationsTel: +44 (0) 20 7280 [email protected] Arijit De, Head of Media RelationsTel: +44 (0) 20 7280 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Standard Chartered