China Tongfu: CNNC plans to transfer all of its approximately 106.7 million shares of domestic capital stock to China Baoyuan Investment for free.
China Tongfu announced that it has received a notification from its controlling shareholder, China National Nuclear Corporation (CNNC), regarding the transfer of its entire holding of approximately 106.7 million shares of the company's domestic stock (representing approximately 33.35% of the total issued share capital as of the date of this announcement) to China Baoyuan Investment Co., Ltd. (the transferee) as part of an internal restructuring within the CNNC group. The transferee and the company are both controlled by CNNC and are its direct and indirect subsidiaries, respectively. The transferee is a wholly-owned subsidiary of CNNC, a limited company established in China, dedicated to implementing CNNC's long-term strategic development in the application of nuclear technology. Its business covers most areas of nuclear technology application, forming an industrial chain from technology, products to service applications. By integrating research and development, production, sales, and services, the transferee has consolidated its leading position in the nuclear technology industry and medical applications. Since the company's listing on the Main Board of the Hong Kong Stock Exchange in 2018, the transferee has been a shareholder of the company, holding approximately 0.44% of the issued share capital (domestic shares) as of the date of this announcement. Upon completion of the proposed transfer, the transferee will become the direct controlling shareholder of the company, while CNNC will remain the ultimate controlling shareholder.
According to the announcement released by China Tongfu (01763) on the Zhitong Finance APP, the company has received a notification from its controlling shareholder, China National Nuclear Corporation (CNNC, together with its subsidiaries referred to as CNNC Group), stating that as part of the internal restructuring of the group, CNNC intends to transfer all of its approximately 106.7 million shares of the company's domestic stock (referred to as the relevant shares, accounting for approximately 33.35% of the total issued share capital of the company as of the date of this announcement) to China Baoyuan Investment Co., Ltd. (the transferee) without consideration (proposed non-cash transfer). The transferee and the company are both controlled by CNNC and are subsidiaries directly or indirectly held by CNNC.
The transferee is a wholly-owned subsidiary of CNNC, a limited company established in China, dedicated to implementing the medium- to long-term strategic development of CNNC's nuclear technology application industry. Its business covers most areas of nuclear technology application, forming an industrial chain from technology, products to service applications. By integrating research and development, production, sales, and services, the transferee has consolidated its leading position in the nuclear technology industry and medical application field. Since the company's listing on the Main Board of the Stock Exchange of Hong Kong in 2018, the transferee has been a shareholder of the company, holding approximately 0.44% of the total issued share capital of the company as of the date of this announcement (domestic shares).
Upon completion of the proposed non-cash transfer, the transferee will become the direct controlling shareholder of the company, while CNNC will remain the ultimate controlling shareholder of the company.
The transferee has applied for and the Securities and Futures Commission of Hong Kong has granted a waiver pursuant to Rule 26.1, Note 6(a) of the Takeovers Code (based on the fact that CNNC and the transferee are both part of the same group consisting of a parent company and its subsidiaries, i.e., CNNC Group), exempting the transferee from the obligation to make a mandatory general offer triggered by the proposed non-cash transfer of the relevant shares to the transferee under Rule 26.1(a) of the Takeovers Code. Therefore, the proposed non-cash transfer of the relevant shares to the transferee will not impose an obligation on the transferee to make a general offer for the company's shares.
The directors of the company note that the proposed non-cash transfer is still at a preliminary stage and its implementation is uncertain. The company will issue further announcements regarding the proposed non-cash transfer in accordance with the Listing Rules at the appropriate time and fulfill its information disclosure obligations in a timely manner in accordance with relevant laws and regulations.
