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Brilliance China Automotive Holdings Limited


编辑:918 时间:2018-10-27


(OTC Bulletin Board: BCAHY; HKEx: 1114) Announces (1) Revision of Approved Caps for the Revised Continuing Connected Transactions;(2) New Continuing Connected Transaction; (3) Connected and Major Transaction - Provision of Financial Assistance to/by Connected Persons; (4) Amendment to Bye-Laws; and (5) Adoption of a New Set of Bye-Laws

HONG KONG, Oct. 3 /Xinhua-PRNewswire-FirstCall/ --

BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1114)

(1) REVISION OF APPROVED CAPS FOR THE REVISED CONTINUING

CONNECTED TRANSACTIONS;

(2) NEW CONTINUING CONNECTED TRANSACTION;

(3) CONNECTED AND MAJOR TRANSACTION - PROVISION OF FINANCIAL ASSISTANCE

TO/BY CONNECTED PERSONS;

(4) AMENDMENT TO BYE-LAWS; AND

(5) ADOPTION OF A NEW SET OF BYE-LAWS

Revision of Approved Caps for the Revised Continuing Connected Transactions

Reference is made to the 2007 SGM at which Shareholders approved, among others, the Revised Caps to the Relevant Continuing Connected Transactions, the Additional Continuing Connected Transactions and the New Caps. The Directors expected the actual monetary value of the following transactions to be carried out under the Revised Continuing Connected Transactions for the financial year ending 31 December 2007 and/or the financial year ending 31 December 2008 will exceed the Approved Caps:

-- purchases of materials and automotive components by each of AG游戏网站快三Shenyang

Automotive, Dongxing and ChenFa from JinBei and its subsidiaries and

associates (other than Shenyang Automotive);

-- purchases of materials and automotive components by each of ChenFa

and Shenyang Jindong from Shenyang Automotive;

-- sale of automobiles and automotive components by Shenyang Automotive

to JinBei and its subsidiaries and associates (other than Shenyang

Automotive); and

-- sale of materials and automotive components by each of ChenFa,

Shanghai Hidea and Shenyang Jindong to Shenyang Automotive.

Particulars of the Revised Continuing Connected Transactions, including the Proposed Caps for the two financial years ending 31 December 2008 are set out in the paragraph headed "The Proposed Caps" in this announcement.

New Continuing Connected Transaction

On 3 October 2007, Shenyang Automotive entered into the Regional Agent Agreement with Liaoning Zheng Guo pursuant to which Liaoning Zheng Guo is to act as a regional agent of Shenyang Automotive.

Liaoning Zheng Guo is held as to 75% by Huachen and as to 25% by Zhuhai Brilliance (which in turn is held as to 90% by Huachen). Huachen is currently interested in approximately 39.41% of the issued share capital of the Company. Accordingly, Liaoning Zheng Guo is an associate of Huachen and a connected person of the Company. The Regional Agent Agreement constitutes a continuing connected transaction for the Company.

Financial assistance to/by connected persons

Shenyang Automotive and Xing Yuan Dong will provide cross guarantees to each other's banking facilities in the amount of RMB2.0 billion and Xing Yuan Dong and JinBei will provide cross guarantees to each other's banking facilities in the amount of RMB500 million for a period of one year commencing from 1 January 2008 to 31 December 2008.

Amendment to the Bye-Laws and adoption of a new set of Bye-Laws

The Board proposed that subject to the approval of the Shareholders to be obtained at the Special General Meeting to amend certain bye-laws to reflect changes to the Bermuda Companies Act which came into effect on 29 December 2006 and also the amendments to the Listing Rules in relation to the abolition of publication of announcements in newspapers. In light of the voluminous amendments to the Bye-Laws, the Board also proposed to adopt a new set of Bye-Laws in substitution for the existing Bye-Laws.

General

Each of JinBei, its subsidiaries and associates (other than Shenyang Automotive) and Shenyang Automotive are connected persons of the Company within the meaning of the Listing Rules. Accordingly, the purchases of materials and automotive components, the sale of automobiles, materials and automotive components and the provision of financial assistance by/to the Group to/by JinBei, its subsidiaries and associates (other than Shenyang Automotive) and Shenyang Automotive constitute connected transactions under Chapter 14A of the Listing Rules. As the percentage ratios for the Financial Assistance is more than 25% but less than 100%, the Financial Assistance therefore also constitutes a major transaction under Chapter 14 of the Listing Rules.

An Independent Board Committee has been established to advise the Shareholders as to (i) the Proposed Caps; (ii) the New Continuing Connected Transaction and the Caps; and (iii) the Financial Assistance.

An independent financial adviser will be appointed to advise the Independent Board Committee and the Shareholders in respect of the Proposed Caps, the New Continuing Connected Transaction and the Caps and the Financial Assistance. Given that no connected person which is a party to the Revised Continuing Connected Transactions and Financial Assistance is a Shareholder, all Shareholders are eligible to vote on the ordinary resolutions to be proposed at the Special General Meeting in respect of the Proposed Caps and the Financial Assistance. Huachen is considered to be interested in the New Continuing Connected Transaction and Huachen and its associates will abstain from voting on the ordinary resolutions to be proposed at the Special General Meeting in respect of the New Continuing Connected Transaction and the Caps.

A circular containing, amongst other things, details of the Revised Continuing Connected Transactions, the Proposed Caps, the New Continuing Connected Transaction and the Caps, the Financial Assistance, the proposed amendment to the Bye-Laws and the adoption of a new set of Bye-Laws, letters from the Independent Board Committee and from the Independent Financial Adviser and a notice to Shareholders convening the Special General Meeting to approve (i) the Proposed Caps; (ii) the New Continuing Connected Transaction and the Caps (iii) the Financial Assistance; (iv) the proposed amendment to the Bye-Laws; and (v) the adoption of a new set of Bye-Laws, will be dispatched to Shareholders as soon as practicable.

I. THE CONTINUING CONNECTED TRANSACTIONS

1. Background

Reference is made to the Announcement dated 15 December 2006 and the circular issued by the Company dated 19 January 2007 in relation to, among others, the Relevant Continuing Connected Transactions, the Revised Caps, the Additional Continuing Connected Transactions and the New Caps.

The Group is engaged in the manufacture and sale of minibuses and automotive components and sedans. During the course of its business, the Group acquires materials and automotive components from certain connected persons and sells automobiles, materials and automotive components to certain connected persons, on an ongoing basis. JinBei is a company incorporated in the PRC with A-shares listed and traded on the Shanghai Stock Exchange. The principal business of the JinBei Group is the manufacture and sale of automobiles and automotive components in the PRC. Shenyang Automotive is a 51%-owned subsidiary of the Company and is principally engaged in the manufacture and sale of minibuses and Zhonghua sedans in the PRC.

At the 2007 SGM, the Shareholders approved the Revised Caps to the Relevant Continuing Connected Transactions, the Additional Continuing Connected Transactions and the New Caps.

The Directors expected the actual monetary value of the Revised Continuing Connected Transactions for the financial years ending 31 December 2007 and/or 31 December 2008 will exceed the Approved Caps. As the Revised Continuing Connected Transactions will be carried out under the 2005 Framework Agreements and the 2006 Framework Agreements, no new agreements will be entered into for the Revised Continuing Connected Transactions as a result of the revision of the Approved Caps.

2. The Revised Continuing Connected Transactions

The following are the particulars of the Revised Continuing Connected Transactions and the Approved Caps therefor:

Revised Continuing Approved maximum

Connected Transactions amounts in

and date RMB'000

of the framework Major type of for the financial

agreement products years ending

31 December

2007 2008

(a) Purchases of

materials and

automotive components

by members of the

Group (including

Shenyang Automotive)

from JinBei and its

subsidiaries and

associates (other

than Shenyang

Automotive)

i Purchases of Seats, 1,300,000 1,900,000

materials and steering

automotive components systems,

by Shenyang fuel pumps

Automotive from and driving

JinBei and its shafts

subsidiaries and

associates (other

than Shenyang

Automotive) pursuant

to the terms of the

2005 Framework

Agreement

ii Purchases of Rubber 18,000 18,000

materials and products

automotive components

by Dongxing from

JinBei and its

subsidiaries and

associates (other

than Shenyang

Automotive) pursuant

to the terms of the

2005 Framework

Agreement

iii Purchases of Driving 5,600 6,900

materials and shafts

automotive components

by ChenFa from JinBei

and its subsidiaries

and associates (other

than Shenyang

Automotive) pursuant

to the terms of the

2005 Framework

Agreement

(b) Purchases of

materials and

automotive components

by members of the

Group (other than

Shenyang Automotive)

from Shenyang

Automotive

i Purchases of Gear boxes 83,000 83,000

materials and

automotive components

by ChenFa from

Shenyang Automotive

pursuant to the terms

of the 2005 Framework

Agreement

ii Purchases of Automotive 1,500 1,700

materials and fitting,

automotive components including

by Shenyang Jindong center

from Shenyang control

Automotive pursuant locks, gear

to the terms of the oil, core

2006 Framework of front

Agreement heaters

(c) Sale of automobiles,

materials and

automotive components

by members of the

Group to connected

persons

i Sale of automobiles Press parts 280,000 387,000

and automotive

components by

Shenyang Automotive

to JinBei and its

subsidiaries and

associates (other

than Shenyang

Automotive) pursuant

to the terms of the

2005 Framework

Agreement

ii Sale of materials and Power 1,900,000 2,400,000

automotive components trains

by ChenFa to Shenyang

Automotive pursuant

to the terms of the

2005 Framework

Agreement

iii Sale of materials and Product 6,700 7,300

automotive components design

by Shanghai Hidea to

Shenyang Automotive

pursuant to the terms

of the 2006 Framework

Agreement

iv Sale of materials and Matching 43,000 47,000

automotive components components,

by Shenyang Jindong to including

Shenyang Automotive anti-impact

pursuant to the terms beam sub-

of the 2006 Framework assembly of

Agreement slide door,

back-plate

of anti-impact

beam of slide

door, mounting

plate of

antenna,

anti-impact

beam assembly

of left hand

side front

door

Pursuant to the framework agreements, the Revised Continuing Connected Transactions have been and will be carried out on terms which are no less favourable than the terms which can be obtained by the relevant members of the Group from independent third parties for products of comparable quality and quantity.

The following are the actual value of the Revised Continuing Connected Transactions entered into between the parties for the six months ended 30 June 2007 and the Approved Caps for the year ending 31 December 2007:

Approved Caps

in RMB'000 Actual amounts

for the in RMB'000

financial year for the

Revised Continuing ending six months ended

Connected Transactions 31 December 2007 30 June 2007

(a) Purchases of materials

and automotive

components by members of

the Group (including

Shenyang Automotive)

from JinBei and its

subsidiaries and

associates (other than

Shenyang Automotive)

i Purchases of materials 1,300,000 581,057

and automotive

components by Shenyang

Automotive from JinBei

and its subsidiaries and

associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework

Agreement

ii Purchases of materials 18,000 6,944

and automotive

components by Dongxing

from JinBei and its

subsidiaries and

associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework Agreement

iii Purchases of materials 5,600 3,313

and automotive

components by ChenFa

from JinBei and its

subsidiaries and

associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework

Agreement

(b) Purchases of materials

and automotive

components by members of

the Group (other than

Shenyang Automotive)

from Shenyang Automotive

i Purchases of materials 83,000 55,853

and automotive

components by ChenFa

from Shenyang Automotive

pursuant to the terms of

the 2005 Framework

Agreement

ii Purchases of materials 1,500 704

and automotive

components by Shenyang

Jindong from Shenyang

Automotive pursuant to

the terms of the 2006

Framework Agreement

(c) Sale of automobiles,

materials and automotive

components by members of

the Group to connected

persons

i Sale of automobiles and 280,000 131,036

automotive components by

Shenyang Automotive to

JinBei and its

subsidiaries and

associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework

Agreement

ii Sale of materials and 1,900,000 1,116,136

automotive components by

ChenFa to Shenyang

Automotive pursuant to

the terms of the 2005

Framework Agreement

iii Sale of materials and 6,700 6,685

automotive components by

Shanghai Hidea to

Shenyang Automotive

pursuant to the terms of

the 2006 Framework Agreement

iv Sale of materials and 43,000 21,103

automotive components by

Shenyang Jindong to

Shenyang Automotive

pursuant to the terms of

the 2006 Framework

Agreement

It is expected that the actual monetary value for the Revised Continuing Connected Transactions will not exceed the Approved Caps for the financial year ending 31 December 2007 by the time of the approval of the Proposed Caps by the Shareholders at the Special General Meeting, which will be convened and held before end of 2007.

II. THE PROPOSED CAPS

1. The Proposed Caps

The following are the Proposed Caps for the Revised Continuing Connected Transactions for the two financial years ending 31 December 2008:

Proposed estimated

maximum amounts

Revised Continuing in RMB'000

Connected Transactions for the financial years

ending 31 December

2007 2008

(a) Purchases of materials and

automotive components by

members of the Group

(including Shenyang

Automotive) from JinBei

and its subsidiaries and

associates (other than

Shenyang Automotive)

i Purchases of materials and 1,550,000 2,000,000

automotive components by

Shenyang Automotive from

JinBei and its subsidiaries

and associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework

Agreement

ii Purchases of materials and 18,000 22,000

automotive components by

Dongxing from JinBei and

its subsidiaries and

associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework

Agreement

iii Purchases of materials and 9,500 10,000

automotive components by

ChenFa from JinBei and its

subsidiaries and

associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework

Agreement

(b) Purchases of materials and

automotive components by

members of the Group

(other than Shenyang

Automotive) from Shenyang

Automotive

i Purchases of materials and 130,000 150,000

automotive components by

ChenFa from Shenyang

Automotive pursuant to the

terms of the 2005

Framework Agreement

ii Purchases of materials and 3,500 4,000

automotive components by

Shenyang Jindong from

Shenyang Automotive

pursuant to the terms of

the 2006 Framework

Agreement

(c) Sale of automobiles,

materials and automotive

components by members of

the Group to connected persons

i Sale of automobiles and 330,000 420,000

automotive components by

Shenyang Automotive to

JinBei and its subsidiaries

and associates (other than

Shenyang Automotive)

pursuant to the terms of

the 2005 Framework

Agreement

ii Sale of materials and 2,600,000 2,700,000

automotive components by

ChenFa to Shenyang

Automotive pursuant to the

terms of the 2005

Framework Agreement

iii Sale of materials and 40,000 85,000

automotive components by

Shanghai Hidea to Shenyang

Automotive pursuant to the

terms of the 2006 Framework

Agreement

iv Sale of materials and 45,000 50,000

automotive components by

Shenyang Jindong to Shenyang

Automotive pursuant to the

terms of the 2006 Framework

Agreement

2. Basis of the Proposed Caps

As stated in the circulars issued by the Company dated 23 January 2006 and 19 January 2007, in determining the value of the caps for the Revised Continuing Connected Transactions for the two financial years ending 31 December 2008, the Board had taken into account the following factors:

(a) the anticipated growth of the automobile industry in the PRC in the

two financial years ending 31 December 2008, which will lead to an

increase in demand for the existing models of minibuses and sedans

manufactured by the Group. In particular, the substantial growth

experienced in 2006 and the first half of 2007 and the anticipated

continuous growth of the automobile industry in the PRC in the two

financial years ending 31 December 2008;

(b) the scheduled launch of new models of minibuses and sedans and new

range of automobiles in the two financial years ending 31 December

2008. The favorable reception of the series of new models of

Zhonghua sedans and Granse minibuses by the market has led to a

substantial revision of the anticipated sales and accordingly the

volume of materials and automotive components required to meet the

expected demand. As stated in the 2006 Annual Report, Shenyang

Automotive sold 62,281 Zhonghua sedans in 2006, representing a 592%

increase from approximately 9,000 sedans sold in 2005. 26,496 units

of Zhonghua Zunchi model were sold in 2006, representing a 394%

increase from 2005, whereas the new Junjie model, which was launched

in March 2006, registered a sale of 35,367 units during 2006. Sales

of deluxe minibuses also recorded a 42.8% increase in volume during

2006. For the first six months of 2007, Shenyang Automotive sold

60,287 Zhonghua sedans, representing an increase of 210.8% compared

to the same period in 2006;

(c) the continued launch of new models of Zhonghua sedans and minibuses

in 2007 and 2008 will require new components which necessitate the

entering into of the Continuing Connected Transactions, including

the Revised Continuing Connected Transactions. The new Zhonghua

coupe was launched in late September 2007;

(d) the intended increase in the export of minibuses and sedans to

overseas markets such as Europe, Egypt and Russia in the financial

years 2007 and 2008 which will lead to increase in the purchases

and sales volume of materials and automotive components between the

members of the Group and the connected parties; and

(e) changes in product mix in response to market demand resulted in

changes in the types of materials and automotive components used and

the monetary value of the purchases of such materials and automotive

components from the connected parties.

III. THE NEW CONTINUING CONNECTED TRANSACTION

On 3 October 2007, Shenyang Automotive entered into the Regional Agent Agreement with Liaoning Zheng Guo pursuant to which Liaoning Zheng Guo is to act as a regional agent of the whole range of automobiles manufactured by Shenyang Automotive for Jinan, Qingdao, Wuhan, Hefei, Chengdu, Kunming, Ningjing, Suzhou, Hangzhou, Wenzhou, Shanghai, Changsa, Fuzhou, Guangzhou, Shenzhen and Naning for a term commencing after the approval of the Regional Agent Agreement by the Shareholders and expiring on 31 December 2008, with an option to renew for another term of 3 years exercisable by Shengyang Automotive. The Company will comply with all applicable Listing Rules requirements in the event Shenyang Automotive exercises the right to renew the Regional Agent Agreement. Shenyang Automotive will sell automobiles to Liaoning Zheng Guo on terms which are no less favourable to Shenyang Automotive than those offered to other authorised agents of Shenyang Automotive.

It is anticipated that the maximum monetary value of the sales by Shenyang Automotive to Liaoning Zheng Guo for the two financial years ending 31 December 2008 will be RMB1,800,000,000 and RMB5,000,000,000, respectively.

Huachen is engaged in the business of investment holdings. Liaoning Zheng Guo is a company incorporated in the PRC and is principally engaged in the business of trading and sale of automobiles and automobile parts and components. Liaoning Zheng Guo is held as to 75% by Huachen and as to 25% by Zhuhai Brilliance (which in turn is held as to 90% by Huachen and is engaged in the business of investment holdings). Huachen is currently interested in approximately 39.41% of the issued share capital of the Company. Accordingly, Liaoning Zheng Guo is an associate of Huachen and a connected person of the Company. The Regional Agent Agreement constitutes a continuing connected transaction for the Company.

IV. THE FINANCIAL ASSISTANCE

On 3 October 2007,

(a) an agreement for the provision of cross guarantee in respect of

banking facilities in the amount of RMB2.0 billion is entered into

between Shenyang Automotive and Xing Yuan Dong; and

(b) an agreement for provision of cross guarantee in respect of banking

facilities in the amount of RMB500 million is entered into between

Xing Yuan Dong and JinBei.

The banking facilities, that will be granted to each of Shenyang Automotive, Xing Yuan Dong and JinBei, will be for a term of one year commencing from 1 January 2008 to 31 December 2008. In the event the cross guarantees are to be extended for more than one year along with the renewal of the banking facilities, the Company will have to comply with all the relevant requirements under Chapter 14A of the Listing Rules. No fee is payable or charged and no securities will be taken or provided in relation to the provision of the cross guarantees.

Pursuant to such agreements, Shenyang Automotive and Xing Yuan Dong will provide cross guarantees to each other's banking facilities in the amount of RMB2.0 billion and Xing Yuan Dong and JinBei will provide cross guarantees to each other's banking facilities in the amount of RMB500 million. As a result of the increase in sale of automobiles, the volume of businesses of Shenyang Automotive and Xing Yuan Dong also increased resulting in the need for a higher amount of banking facilities to support their respective businesses.

Each of JinBei and Shenyang Automotive are connected persons of the Company. The provision of the cross guarantees between Shenyang Automotive and Xing Yuan Dong and the cross guarantees between Xing Yuan Dong and JinBei constitute connected transactions under Rule 14A.13(2)(a)(i), Rule 14A.13(2)(b)(i) and Rule 14A.13(3) of the Listing Rules and are subject to the reporting, announcement and independent shareholders' approval requirements under Rule 14A.63 of the Listing Rules. As the percentage ratios for the Financial Assistance is more than 25% but less than 100%, the Financial Assistance also constitutes a major transaction under Chapter 14 of the Listing Rules and has to be subject to the approval of the Shareholders. Given that no connected person which is a party to the Financial Assistance is a Shareholder, all Shareholders are eligible to vote on the ordinary resolution to be proposed at the Special General Meeting in respect of the Financial Assistance.

V. REASONS FOR THE REVISED CONTINUING CONNECTED TRANSACTIONS,

THE NEW CONTINUING CONNECTED TRANSACTION AND THE FINANCIAL

ASSISTANCE

Reasons for the Revised Continuing Connected Transactions and the New Continuing Connected Transaction

The Group is engaged in the manufacture and sale of minibuses and automotive components and sedans. The manufacture and sale of minibuses and sedans by the Group is carried out by Shenyang Automotive, a 51% owned subsidiary of the Company. The other subsidiaries of the Company are mainly engaged in the manufacture and sale of automotive components in the PRC, and some of such automotive components are sold to Shenyang Automotive for use in its assembly process as an automobile manufacturer. The Revised Continuing Connected Transactions and the New Continuing Connected Transaction are carried out in the ordinary and usual course of business of the Group.

The Group purchases raw materials and basic automotive components in its ordinary and usual course of business to be used in the manufacturing of automotive components and for processing into core automotive components for use in automobile manufacturing. The Group will purchase raw materials and automotive components from the JinBei Group and Shenyang Automotive where the price offered by such companies are more favourable than other suppliers in order to control the costs of automobiles produced by the Group.

In addition, the Group also purchases engines and other core automotive components from the connected persons so as to ensure the quality of the core automotive components, and also to ensure the technology used in the production of such core automotive components remained within the control of the Group. It is believed that control over such core automotive components will enable the Group to exercise more effective control over the quality of the automobiles produced by the Group.

As stated in the announcement made by the Company dated 16 December 2005, the Continuing Connected Transactions, including the Revised Continuing Connected Transactions, are entered into to enable the Group (i) to have more control over quality and technology of automotive components used in its production; (ii) to purchase materials and automotive components from manufacturers within close proximity to the production facilities to reduce cost and to enhance competitiveness of the Group; and (iii) to centralize the purchases of materials and automotive parts to enjoy better pricing of bulk purchases.

As a result of the various changes in the market conditions explained in the sub-paragraph headed "Basis of the Proposed Caps" above, particularly the encouraging sales performance of the Group's minibuses and Zhonghua sedans in 2006, which has recorded an increase of approximately 10.4% and 592%, respectively from the corresponding period in 2005, the Board considered it necessary to revise the Approved Caps for the Revised Continuing Connected Transactions. The need to revise the Approved Caps is further supported by the continued increase in sales of the Zhonghua sedans in the first six months of 2007.

With the appointment of Liaoning Zheng Guo as the regional sales agent for Jinan, Qingdao, Wuhan, Hefei, Chengdu, Kunming, Ningjing, Suzhou, Hangzhou, Wenzhou, Shanghai, Changsa, Fuzhou, Guangzhou, Shenzhen and Naning, the Group can co-ordinate the sales amongst the Group's authorised agents in a more efficient manner so as to enhance the sales capability of its authorised agents. Instead of dealing with a number of small authorised agents, the Group will be selling to Liaoning Zheng Guo which will then co-ordinate the sales to the smaller authorised agents, which is in line with the sales model for international automobile manufacturers. It is believed that the Group will benefit from the reduced administrative costs and enhanced sales capability of its authorised agents as the Group will be able to sell more automobiles through its authorised agents at lower costs and hence increase its sales and profitability.

In the premises, the Directors (including the independent non-executive Directors) consider the Revised Continuing Connected Transactions and the New Continuing Connected Transaction to be entered into in the ordinary and usual course of business and the terms of such transactions as governed by the framework agreements, the Proposed Caps and the Caps to be fair and reasonable in so far as the Shareholders are concerned.

Reasons for the Financial Assistance

With the tightening of the lending regulations of the banks in the PRC, it is becoming a common practice for banks in the PRC to request for either a guarantee or securities from a third party to secure banking facilities granted to borrowers. Shenyang Automotive is the subsidiary within the Group principally engaged in the manufacturing of automobiles and automotive components. Shenyang Automotive will utilize its banking facilities to finance the increase in demand for newly introduced model of sedans, the expansion of its production capacity in anticipation of the scheduled launch of new models of minibuses and sedans and the business strategy of increasing the market share of the Group in the domestic sedan market in the PRC.

JinBei's banking facilities will be utilized by JinBei as working capital to improve the quality and volume of the automotive components currently produced by the JinBei Group and the expansion of its product range and production facilities. Since members of the JinBei Group are suppliers of the Group, the Directors believe that the Group will be able to benefit from the improved quality of the automotive components manufactured by the JinBei Group and with the anticipated launch of the new models of minibuses and sedans, the Group will also be able to benefit from the improvement in production facilities and increase in product range of the JinBei Group.

Xing Yuan Dong is one of the subsidiaries of the Group engaged in the manufacturing of automotive components. Xing Yuan Dong's banking facilities secured by the guarantees provided by JinBei and Shenyang Automotive will be utilized by Xing Yuan Dong to improve its production facilities in order to support the substantial increase in production volume and the future launch of new models of minibuses and sedans.

At the 2007 SGM, the Shareholders have approved the provision of cross guarantee (i) in respect of banking facilities in the amount of RMB1.5 billion between Shenyang Automotive and Xing Yuan Dong for the period from 1 January 2007 to 31 December 2007; and (ii) the provision of cross guarantee in respect of banking facilities in the amount of RMB500 million between Xing Yuan Dong and JinBei for the period from 1 January 2007 to 31 December 2007, respectively. As the agreements for provision of cross guarantee will expire by 31 December 2007 and for reasons set out above, the parties intend to extend the agreement for another financial year to until 31 December 2008.

In the premises, the Directors (including the independent non-executive Directors) consider the provision of the financial assistance to and from the connected persons of the Company to be in the interest of the Group and that the terms of the agreements in relation to the provision of the cross guarantees to be fair and reasonable in so far as the Shareholders are concerned.

VI. PROPOSED AMENDMENT TO BYE-LAWS AND ADOPTION OF A NEW

SET OF BYE-LAWS

The Board proposed that subject to the approval of the Shareholders to be obtained at the Special General Meeting to amend certain bye-laws to reflect changes to the Bermuda Companies Act which came into effect on 29 December 2006 and also the amendments to the Listing Rules in relation to the abolition of publication of announcements in newspapers. In light of the voluminous amendments to the Bye-Laws, the Board also proposed to adopt a new set of Bye-Laws in substitution for the existing Bye-Laws.

VII. GENERAL

Each of JinBei, its subsidiaries and associates (other than Shenyang Automotive) and Shenyang Automotive are connected persons of the Company within the meaning of the Listing Rules. Accordingly, the purchases of materials and automotive components, the sale of automobiles, materials and automotive components and the provision of financial assistance by/to the Group to/by JinBei, its subsidiaries and associates (other than Shenyang Automotive) and Shenyang Automotive constitute connected transactions under Chapter 14A of the Listing Rules. The Financial Assistance also constitutes a major transaction under Chapter 14 of the Listing Rules.

An Independent Board Committee has been established to advise the Shareholders as to (i) the Proposed Caps; (ii) the New Continuing Connected Transaction and the Caps; and (iii) the Financial Assistance.

An independent financial adviser will be appointed to advise the Independent Board Committee and the Shareholders in respect of the Proposed Caps, the New Continuing Connected Transaction and the Caps and the Financial Assistance. Given that no connected person which is a party to the Revised Continuing Connected Transactions and Financial Assistance is a Shareholder, all Shareholders are eligible to vote on the ordinary resolutions to be proposed at the Special General Meeting in respect of the Proposed Caps and the Financial Assistance. Huachen is considered to be interested in the New Continuing Connected Transaction and Huachen and its associates will abstain from voting on the ordinary resolutions to be proposed at the Special General Meeting in respect of the New Continuing Connected Transaction and the Caps.

A circular containing, amongst other things, details of the Revised Continuing Connected Transactions, the Proposed Caps, the New Continuing Connected Transaction and the Caps, the Financial Assistance, the proposed amendment to the Bye-Laws and adoption of a new set of Bye-Laws, letters from the Independent Board Committee and from the Independent Financial Adviser and a notice to Shareholders convening the Special General Meeting to approve (i) the Proposed Caps; (ii) the New Continuing Connected Transaction and the Caps (iii) the Financial Assistance; (iv) the proposed amendment to the Bye-Laws; (v) the adoption of a new set of Bye-Laws, will be dispatched to Shareholders as soon as practicable.

VIII. DEFINITIONS

In this announcement, unless otherwise defined, terms used herein shall have the following meanings:

"2005 Framework Agreements" the framework agreements entered into

between members of the Group and the

connected persons on 16 December 2005

as set out in the sub-paragraph headed

"The Continuing Connected Transactions"

in the announcement made by the Company

dated 16 December 2005;

"2006 Annual Report" the annual report of the Company for

the year ended 31 December 2006;

"2006 Framework Agreements" the framework agreements entered into

between members of the Group and the

connected persons on 15 December 2006

as set out in the sub-paragraph headed

"The Additional Continuing Connected

Transactions" in the announcement made

by the Company dated 15 December 2006;

"2007 SGM" a special general meeting held on 12

February 2007 to approve, among others,

the Revised Caps of the Relevant

Continuing Connected Transactions, the

Additional Continuing Connected

Transactions and the New Caps and the

financial assistance to/by connected

persons;

"Additional Continuing the transactions between members of the

Connected Transactions" Group and the connected persons as set

out in the sub-paragraph headed "The

Additional Continuing Connected

Transactions" in the announcement made

by the Company dated 15 December 2006;

"Approved Caps" the Revised Caps and the New Caps as

approved by the Shareholders at the

2007 SGM;

"associates" has the meaning ascribed thereto in the

Listing Rules;

"Bermuda Companies Act" The Companies Act 1981 of Bermuda (as

amended);

"Board" the board of Directors;

"Bye-Laws" the bye-laws of the Company;

"Caps" the maximum annual monetary value of

the New Continuing Connected

Transaction for the two financial years

ending 31 December 2008;

"ChenFa" Shenyang ChenFa Automobile Component

Co., Ltd., a wholly foreign owned

enterprise established in the PRC on 19

June 2003 and a wholly-owned subsidiary

of the Company. The principal

activities of ChenFa are the

development, manufacture and sale of

power trains in the PRC;

"Company" Brilliance China Automotive Holdings

Limited, an exempted company

incorporated in Bermuda with limited

liability, whose securities are listed

on the Stock Exchange;

"connected persons" has the meaning ascribed thereto in the

Listing Rules;

"Continuing Connected the Relevant Continuing Connected

Transactions" Transactions and the Additional

Continuing Connected Transactions;

"Directors" the directors of the Company;

"Dongxing" Shenyang Brilliance Dongxing Automotive

Component Co., Ltd., a wholly foreign

owned enterprise established in the PRC

on 17 March 1999 and a wholly-owned

subsidiary of the Company. The

principal activities of Dongxing are

the manufacture and trading of

automotive components and remodeling

minibuses and sedans in the PRC;

"Financial Assistance" the financial assistance provided to/by

the Group by/to connected persons as

set out in the paragraph headed "The

Financial Assistance" in this

announcement;

"Group" the Company and its subsidiaries;

"Huachen" Huachen Automotive Group Holdings

Company Limited, the controlling

shareholder of the Company which as at

the date of this announcement is

interested in approximately 39.41% of

the issued share capital of the

Company;

"Independent Board the independent committee of Board,

Committee" comprising Mr. Xu Bingjin, Mr. Song

Jian and Mr. Jiang Bo, all of whom are

independent non-executive Directors,

formed to advise the Shareholders as to

(i) the Proposed Caps; (ii) the New

Continuing Connected Transaction and

the Caps; and (iii) the Financial

Assistance;

"Independent Financial an independent financial adviser to be

Adviser" appointed for the purpose of advising

the Independent Board Committee and the

Shareholders as to (i) the Proposed

Caps; (ii) the New Continuing Connected

Transaction and the Caps; and (iii) the

Financial Assistance;

"JinBei" Shenyang JinBei Automotive Company

Limited, a company incorporated in the

PRC on 14 May 1984 whose shares are

listed on the Shanghai Stock Exchange

and holder of the 39.1% equity

interests in Shenyang Automotive;

"JinBei Group" JinBei and its subsidiaries and

associates, other than Shenyang

Automotive;

"Liaoning Zheng Guo" Liaoning Zheng Guo Investment

Development Company Limited, a company

incorporated in the PRC on 10 October

1996. Liaoning Zheng Guo is currently

75% owned by Huachen and 25% by Zhuhai

Brilliance;

"Listing Rules" the Rules Governing the Listing of

Securities on the Stock Exchange;

"New Caps" the estimated maximum annual monetary

value of the Additional Continuing

Connected Transactions for the two

financial years ending 31 December 2008

as set out in the sub-paragraph headed

"The New Caps" in the announcement made

by the Company dated 15 December 2006;

"New Continuing Connected the continuing connected transactions

Transaction" between Shenyang Automotive and

Liaoning Zheng Guo as contemplated

under the Regional Agent Agreement;

"PRC" The People's Republic of China and for

the sole purpose of this announcement

shall exclude Hong Kong, Macau Special

Administrative Region and Taiwan;

"Proposed Caps" the revised maximum annual monetary

value of the Revised Continuing

Connected Transactions for the two

financial years ending 31 December 2008

as set out in the sub-paragraph headed

"The Proposed Caps" in this

announcement;

"RMB" renminbi, the lawful currency of the

PRC;

"Regional Agent Agreement" the distribution agreement dated 3

October 2007 entered into between

Shenyang Automotive and Liaoning Zheng

Guo in relation to the sale of

automobiles manufactured by Shenyang

Automotive;

"Relevant Continuing the transactions between members of the

Connected Transactions" Group and the connected persons as set

out in the paragraph headed "The

Relevant Continuing Connected

Transactions" in the announcement made

by the Company dated 15 December 2006;

"Revised Caps" the revised maximum annual monetary

value of the Relevant Continuing

Connected Transactions for the two

financial years ending 31 December 2008

as set out in the sub-paragraph headed

"The Revised Caps" in the announcement

dated 15 December 2006;

"Revised Continuing the transactions between members of the

Connected Transactions" Group and the connected persons as set

out in the sub-paragraph headed "The

Revised Continuing Connected

Transactions" in this announcement;

"Shanghai Hidea" Shanghai Hidea Auto Design Co., Ltd.,

an equity joint venture enterprise

established in the PRC on 16 April 2004

and in which the Company has an

effective equity interests of 63.25%.

The principal activities of Shanghai

Hidea are design of automobiles;

"Shareholder(s)" holder(s) of Shares of the Company;

"Shares" shares of US$0.01 each of the Company;

"Shenyang Automotive" Shenyang Brilliance JinBei Automobile

Co., Ltd, a sino-foreign equity joint

venture established in the PRC on 19

July 1991 and whose equity interests

are currently owned as to 51% by the

Company and as to 39.1% by JinBei. The

principal activities of Shenyang

Automotive are the manufacture,

assembly and sale of minibuses and

sedans as well as automotive components

in the PRC;

"Shenyang Jindong" Shenyang Jindong Development Co., Ltd.,

an equity joint venture established in

the PRC on 18 April 2002 in which the

Company has an effective equity

interest of 75.50%. The principal

activities of Shenyang Jindong are

trading of automotive components;

"Special General Meeting" the special general meeting of the

Company to be convened for the purpose

of considering, and if thought fit,

approving (i) the Proposed Caps; (ii)

the New Continuing Connected

Transaction and the Caps; (iii) the

Financial Assistance; (iv) the proposed

amendment to the Bye-Laws; and (v) the

adoption of a new set of Bye-Laws;

"Stock Exchange" The Stock Exchange of Hong Kong

Limited;

"US$" United States dollars, the lawful

currency of the United States of

America;

"Xing Yuan Dong" Shenyang XingYuanDong Automobile

Component Co., Ltd., a wholly foreign

owned enterprise established in the PRC

on 12 October 1998 and a wholly-owned

subsidiary of the Company. The

principal activities of Xing Yuan Dong

are the manufacture and trading of

automotive components in the PRC; and

"Zhuhai Brilliance" Zhuhai Brilliance Holdings Company

Limited, a company incorporated in the

PRC on 7 April 1999 and is a 90% owned

subsidiary of Huachen.

As at the date of this announcement, the Board comprises five executive Directors, Mr. Wu Xiao An (also known as Mr. Ng Siu On) (Chairman), Mr. Qi Yumin (Chief Executive Officer), Mr. He Guohua, Mr. Wang Shiping and Mr. Lei Xiaoyang (Chief Financial Officer); and three independent non-executive Directors, Mr. Xu Bingjin, Mr. Song Jian and Mr. Jiang Bo.

By order of the Board

Brilliance China Automotive Holdings Limited

Wu Xiao An

(also known as Ng Siu On)

Chairman

Hong Kong, 3 October 2007

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

For further information contact:

Lisa Ng

Brilliance China Automotive Holdings Limited

Tel: +852-2523-7227

Carol Lau

Weber Shandwick

Tel: +852-2533-9981

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