4 Feb 2016 15:49
ZHEJIANG EXPRESSWAY CO LD - Clarification Announcement Petroleum CoZHEJIANG EXPRESSWAY CO LD - Clarification Announcement Petroleum Co
PR Newswire
London, February 4
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ZHEJIANG EXPRESSWAY CO., LTD.(A joint stock limited company incorporated in the People's Republic of China with limited liability)(Stock code: 0576)
CLARIFICATION ANNOUNCEMENTIN RELATION TOCONTINUING CONNECTED TRANSACTION WITH PETROLEUM CO
Reference is made to the announcement of Zhejiang Expressway Co., Ltd. (the "Company") dated 28 January 2016 (the "Announcement") in relation to, among other things, the entering into of the Petroleum Supply Agreement between Development Co and Petroleum Co, which constitutes a continuing connected transaction for the Company under Chapter 14A of the Listing Rules. Unless otherwise stated, terms used in this announcement have the same meanings as defined in the Announcement.
The Board would like to clarify that, under the Petroleum Supply Agreement, petroleum supplied by Petroleum Co to Development Co will be charged at the prevailing market price, which is the highest benchmark retail price of petroleum as determined from time to time by the National Development and Reform Commission of the PRC (the "NDRC"), with a discount of no less than RMB260 per ton.
In determining the price and terms of the supply of petroleum by Petroleum Co under the Petroleum Supply Agreement and to ensure that the transactions thereunder will be conducted on normal commercial terms, the following factors were considered by Development Co:
(i) According to the historical data of Development Co, during the year of 2015, the average gross profit derived by Development Co from the sale of petroleum supplied by Petroleum Co was approximately RMB260 per ton. In order to maintain Development Co's profit margin from the sale of petroleum, the price of petroleum to be supplied by Petroleum Co under the Petroleum Supply Agreement was fixed at a discount of no less than RMB260 per ton to the highest benchmark retail price as determined by the NDRC.
(ii) Development Co had on multiple occasions consulted the price of petroleum charged by the three largest petroleum suppliers in the PRC, namely China National Petroleum Corporation, Sinopec Group and CNOOC Limited, which offered discount ranging from RMB200 to RMB280 per ton to the highest benchmark retail price as determined by the NDRC. Development Co had decided to enter into the Petroleum Supply Agreement with Petroleum Co due to its long-term business relationship with Petroleum Co and its stability and reliability in supplying petroleum. In addition, in consideration of the purchase of petroleum by Development Co pursuant to the Petroleum Supply Agreement, Petroleum Co agreed to provide day-to-day management services to the Service Stations and bear the costs and expenses arising therefrom pursuant to the Service Stations Management Agreement.
Save as disclosed in this announcement, all other information in the Announcement remains unchanged.
* English names for reference only.
On behalf of the Board ZHEJIANG EXPRESSWAY CO., LTD.ZHAN Xiaozhang Chairman
Hangzhou, PRC, 4 February 2016
As of the date of this announcement, the executive directors of the Company are: Mr.ZHAN Xiaozhang, Mr. CHENG Tao and Ms. LUO Jianhu; the non-executive directors of the Company are: Mr. WANG Dongjie, Mr. DAI Benmeng and Mr. ZHOU Jianping; and the independent non-executive directors of the Company are: Mr. ZHOU Jun, Mr. PEI Ker-Wei and Ms. LEE Wai Tsang Rosa.