China Resources Gas : CONTINUING CONNECTED TRANSACTIONS FRAMEWORK LOAN AGREEMENTS 2019

December 18, 2019 at 07:06 am EST

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

(Incorporated in Bermuda with limited liability)

(Stock Code: 1193)

CONTINUING CONNECTED TRANSACTIONS

FRAMEWORK LOAN AGREEMENTS 2019

Reference is made to the announcement of the Company dated 22nd December, 2016 in relation to, among other things, the entering of the Framework Loan Agreements 2016. As the Framework Loan Agreements 2016 will expire on 31st December, 2019, the Company has entered into new lending arrangements whereby the annual caps are renewed taking into account of the Group's operational scale and cash levels.

As applicable size test percentage ratios exceed 0.1% but are less than 5% in respect of the continuing connected transactions under the Framework Loan Agreements 2019, the transactions are only subject to the reporting, annual review and announcement requirements but are exempted from the Independent Shareholders' approval requirement of the Listing Rules.

BACKGROUND

THE FRAMEWORK LOAN AGREEMENTS 2019

Offshore Framework Loan Agreement 2019

Parties:	CRH and the Company.
Date of agreement:	18th December, 2019.
Date of commencement	1st January, 2020.
of agreement:
Term of the agreement:	Three years ending 31st December, 2022, unless extended for a
	further period.
Lenders:	The Company and any of its subsidiaries which has become
	a party to the Offshore Framework Loan Agreement 2019
	by acceding to its terms, but excluding any entity which is
	established in the PRC.
Borrowers:	CRH, any China Resources Group listed company and any of
	their subsidiaries, which has become a party to the Offshore
	Framework Loan Agreement 2019 by acceding to its terms, but
	excluding any entity which is established in the PRC and any
	member of the Group. Each borrower may borrow in Hong Kong
	dollars, RMB or United States dollars.
Guarantor(s) for loans made	CRH (except where the borrower is CRH) and, in the case of
by the Group:	an advance to a subsidiary of a China Resources Group listed
	company, that China Resources Group listed company.
Aggregate amounts to be	The maximum aggregate amount outstanding lent by the Group
advanced:	under both of the Framework Loan Agreements 2019 is not
	permitted to exceed the amounts set out under the section
	below headed "Annual lending caps under the Framework Loan
	Agreements 2019".
Repayment date:	The repayment date for an advance made under the Offshore
	Framework Loan Agreement 2019 shall be no later than six
	months after the date of advance.

Interest rate in respect of Hong Kong dollar advances:

The rate per annum as determined by the relevant lender and the borrower as being the aggregate of (i) the relevant HIBOR for such a Hong Kong dollar advance; and (ii) a margin (which must not be a negative number). The interest rate shall not be less than the higher of (i) the rate at which CRH or a corporate borrower of similar standing is able to borrow Hong Kong dollars in an amount equal to the relevant advance from a bank or a financial institution for the relevant period and (ii) the deposit rate which the lender could have obtained from a bank or a financial institution for such relevant amount and period.

Interest rate in respect of United States dollar advances:

Interest rate in respect of RMB advances:

Guarantee:

Early repayment:

Basis of lending:

The rate per annum as determined by the relevant lender and the borrower as being the aggregate of (i) the relevant LIBOR for such a United States dollar advance; and (ii) a margin (which must not be a negative number). The interest rate shall not be less than the higher of (i) the rate at which CRH or a corporate borrower of similar standing is able to borrow United States dollars in an amount equal to the relevant advance from a bank or a financial institution for the relevant period and (ii) the deposit rate which the lender could have obtained from a bank or a financial institution for such relevant amount and period.

The rate per annum as determined by the relevant lender and the borrower with respect to an advance (which must not be a negative number). The interest rate shall not be less than the higher of (i) the rate at which CRH or a corporate borrower of similar standing is able to borrow RMB in Hong Kong in an amount equal to the relevant advance from a bank or a financial institution for the relevant period and (ii) the deposit rate in Hong Kong which the lender could have obtained from a bank or a financial institution for such relevant amount and period.

The guarantors will unconditionally and irrevocably guarantee to the relevant lender the due and punctual performance by the borrower (when the guarantor is CRH) or by the borrower which is the guarantor's subsidiary (when the guarantor is a China Resources Group listed company) of the borrower's obligations to that lender in connection with that lender's advance(s) to the borrower made under the Offshore Framework Loan Agreement 2019. For this purpose, each guarantor which is a China Resources Group listed company will enter into a deed of guarantee before its subsidiary is permitted to obtain an advance under the Offshore Framework Loan Agreement 2019.

Both a lender and a borrower may by giving ten business days' written notice require the repayment or prepayment of the advance, as the case may be, together with accrued interest.

All advances will be made at the sole discretion of the lender. No security over the assets of the borrower will be provided. All advances will become immediately repayable on demand upon the occurrence of an acceleration event which includes non-payment by the borrower; breaches of the agreement by the borrower which have not been rectified in the specified period; cross-default in a material amount; the enforcement of security; insolvency; dissolution; repudiation; CRH ceasing directly or indirectly to be the single largest shareholder of the relevant borrower; or on the occurrence of a material adverse change as stated in the Offshore Framework Loan Agreement 2019 in respect of the relevant borrower.

Onshore Framework Loan Agreement 2019

Parties:	CRC and the Company.
Date of agreement:	18th December, 2019.
Date of commencement	1st January, 2020.
of agreement:
Term of the agreement:	Three years ending 31st December, 2022, unless extended for a
	further period.
Lenders:	Any PRC established subsidiary of the Company, which has
	become a party to the Onshore Framework Loan Agreement 2019
	by acceding to its terms.
Borrowers:	CRC, and any PRC established subsidiary of CRC or a China
	Resources Group listed company, which has become a party to
	the Onshore Framework Loan Agreement 2019 by acceding to its
	terms, but excluding China Resources Bank of Zhuhai Co., Ltd
	(珠海華潤銀行股份有限公司), China Resources SZITIC Trust
	Co., Ltd (華潤深國投信託有限公司), and any subsidiary of the
	Company. Each borrower may borrow in RMB.
Guarantor:	CRC (except where the borrower is CRC).
Aggregate amounts to	The maximum aggregate amount outstanding lent by the Group
be advanced:	under both of the Framework Loan Agreements 2019 is not
	permitted to exceed the amounts set out under the section
	below headed "Annual lending caps under the Framework Loan
	Agreements 2019".
Repayment date:	The repayment date for an advance made under the Onshore
	Framework Loan Agreement 2019 shall be no later than six
	months after the date of advance.
Interest rate:	The interest rate will be a rate per annum as determined by the
	relevant lender and the borrower. The interest rate shall be no
	less than the higher of (i) the rate at which CRC or a corporate
	borrower of similar standing is able to borrow in RMB in an
	amount equal to the relevant advance from a bank or a financial
	institution for the relevant period and (ii) the deposit rate which
	the lender could have obtained from a bank or a financial
	institution for such relevant amount and period.
Guarantee:	CRC unconditionally and irrevocably guarantees to the relevant
	lenders the due and punctual performance of all borrowers'
	obligations under the Onshore Framework Loan Agreement 2019.

Best endeavours:	If an advance is to be made pursuant to the Onshore Framework
	Loan Agreement 2019 to a borrower which is a subsidiary of
	a China Resources Group listed company, prior to making that
	advance, such China Resources Group listed company shall
	sign a deed of undertaking and undertake that if CRC makes a
	payment to a lender in connection with the Onshore Framework
	Loan Agreement 2019 due to a breach by the China Resources
	Group listed company's subsidiary borrower, then the China
	Resources Group listed company will use its best endeavours to
	procure that borrower shall have sufficient funds to, and does,
	promptly reimburse CRC. This may include such China Resources
	Group listed company making payments by way of gift or capital
	contribution or shareholder loan to the borrower (to the extent
	permitted by PRC law).
Early repayment:	Both a lender and a borrower may by giving ten business days'
	written notice require the repayment or prepayment of the
	advance, as the case may be, together with accrued interest.
Basis of lending:	All advances will be made at the sole discretion of the lender.
	No security over the assets of the borrower will be provided. All
	advances will become immediately repayable on demand upon the
	occurrence of an acceleration event which includes non-payment
	by the borrower; breaches of the agreement by the borrower which
	have not been rectified in the specified period; cross-default
	in a material amount; the enforcement of security; insolvency;
	dissolution; repudiation; CRC ceasing directly or indirectly to be
	the single largest shareholder of the relevant borrower; or on the
	occurrence of a material adverse change as stated in the Onshore
	Framework Loan Agreement 2019 in respect of the relevant
	borrower.

Annual lending caps under the Framework Loan Agreements 2019

The annual lending caps for the maximum aggregate amount which can be lent by the Group on any single day (inclusive of interest received and anticipated to be received rounded to the nearest million) under both of the Framework Loan Agreements 2019 have been determined after assessing the maximum amount of exposure at any time which the Group is prepared to assume under the Framework Loan Agreements 2019 in the context of its estimated temporarily surplus cash resources and the historical amount lent by the Group as set out below.

Set out below are the maximum aggregate amount of advances outstanding on any single day lent by the Group under the Framework Loan Agreements 2016 (inclusive of interest received and receivable) during each of the years ended 31st December, 2017, 2018 and the eleven months ended 30th November, 2019:

			For the eleven
	For the year ended	months ended
	31st December,	30th November,
	2017	2018	2019
	RMB million	RMB million	RMB million
Maximum daily aggregate amount outstanding
during the year/period	1,506	1,306	1,646

The proposed annual lending caps for the Group on any single day for the term of the Framework Loan Agreements 2019 and a comparison of these caps with the Group's other deposits, cash and bank balances and with the size of the Group using the highest of the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules are as follows:

			Unaudited
			consolidated
			other deposits,
Annual lending cap on		cash and bank
any single day for the year ending	balances as at	Highest
	31st December,		30th June,	applicable
2020	2021	2022	2019	percentage ratio
RMB million	RMB million	RMB million	HK$ million	%
2,000	2,000	2,000	11,877	2.84

Such maximum daily amount is applicable for each day during the relevant year, and such maximum daily amount is calculated on an individual basis as outstanding at the end of each day during the relevant year without aggregating with the daily amount incurred on the days before.

Financial condition of the guarantors

All advances to any member of the China Resources Group will be guaranteed by (i) CRC; (ii) CRH; or (iii) CRH and a China Resources Group listed company, depending on the relevant Framework Loan Agreements 2019 and the identity of the borrower. Both CRC and CRH are regarded as borrowers of undoubted standing in their own markets. CRC is a bond issuer in the PRC and its principal long term credit rating is AAA according to an independent rating agency, China Lianhe Credit Rating Co., Ltd. The summary of the consolidated financial positions of CRC and CRH are as follows:

	CRH	CRC
	2017	2018	2017	2018
	Audited	Audited	Audited	Audited
	HK$ billion	HK$ billion	RMB billion	RMB billion
Total assets	1,330	1,523	1,234	1,458
Cash and bank balances	138	161	132	157
Equity attributable to the shareholders
of the company	275	292	200	215
Profit attributable to the
shareholders of the company	21	34	22	23
Cash flow from operation	62	94	40	69

LISTING RULES IMPLICATIONS

By virtue of CRC being the controlling shareholder of CRH, which in turn holds a controlling interest in the Company, CRC and CRH are connected persons to the Company as defined under the Listing Rules.

As the applicable size test percentage ratios exceed 0.1% but are less than 5% in respect of the continuing connected transactions under the Framework Loan Agreements 2019, the transactions are only subject to the reporting, annual review and announcement requirements but are exempted from the Independent Shareholders' approval requirement of the Listing Rules.

Mr. Wang Chuandong, Mr. Chen Ying, Mr. Wang Yan, Madam Wan Suet Fei and Mr. Jing Shiqing, being members of the senior management of CRH, were considered to have material interest in the transactions under the Framework Loan Agreements 2019 and have therefore abstained from voting on the relevant board resolutions approving the Framework Loan Agreements 2019 and the transactions contemplated thereunder. Save as disclosed above, none of the other directors of the Company has any material interest in the transactions under the Framework Loan Agreements 2019, and none of them abstained from voting on the relevant board resolutions approving the Framework Loan Agreements 2019 and the transactions contemplated thereunder.

REASONS FOR AND BENEFITS OF THE PROPOSALS

The Framework Loan Agreements 2019 provide the Company with greater flexibility in the management of its surplus cash resources by enabling it to lend a portion of its surplus cash resources and those of its subsidiaries to other China Resources Group companies, including CRC and CRH. The annual lending caps for the maximum aggregate amount which can be lent by the Group on any single day have been determined after assessing the maximum amount of exposure at any time which the Group is prepared to assume under the Framework Loan Agreements 2019 in the context of its estimated temporary surplus cash resources as well as the historical amount lent by the Group as set out on page 5 of this announcement.

The directors of the Company (including independent non-executive directors of the Company) consider the Framework Loan Agreements 2019 were negotiated on an arm's length basis and are on normal commercial terms, and the relevant terms and annual caps are fair and reasonable and in the interests of the Company and its shareholders as a whole.

INFORMATION OF CRC, CRH AND THE COMPANY

CRC

CRC, a borrower and guarantor under the Onshore Framework Loan Agreement 2019, is the holding company of CRH.

CRH

CRH, a borrower and guarantor under the Offshore Framework Loan Agreement 2019, is principally engaged in five key sectors of businesses, namely, consumer products, healthcare, urban construction and operation, energy services and technology and finance.

The Company

The Company is an investment holding company and principally engaged in downstream city gas distribution business including piped natural gas distribution, natural gas filling stations operation and sales of gas appliances in the PRC.

The total assets, other deposit, cash and bank balance and turnover of the Group for each of the years ended 31st December, 2017 and 2018 and the six months ended 30th June, 2019 are as illustrated in the table below:

	As at 30th	As at 31st	As at 31st
	June,	December,	December,
	2019	2018	2017
	Unaudited	Audited	Restated
	HK$ billion	HK$ billion	HK$ billion
Total assets	78.6	73.6	68.8
Other deposit, cash and bank balance	11.9	10.4	10.4
Turnover for the year/period	28.2	51.2	39.8

DEFINITIONS

In this announcement the following words have the following meanings, unless the context requires otherwise.

"China Resources Group"	means CRC, CRH and their respective subsidiaries
"China Resources Group	any company (or companies) in the China Resources Group,
listed company	which is (or are) listed on the Main Board of the Stock Exchange
(or companies)"	as at the date of this announcement, other than the Company
"Company"	China Resources Gas Group Limited (華潤燃氣控股有限公司),
	a company incorporated in Bermuda with limited liability, the
	shares of which are listed on the Stock Exchange (Stock code:
	1193)
"connected person(s)"	has the meaning ascribed thereto under the Listing Rules
"continuing connected	has the meaning ascribed thereto under the Listing Rules
transactions"
"controlling shareholder"	has the meaning ascribed thereto under the Listing Rules
"CRC"	China Resources Inc. ( 華潤股份有限公司), a joint stock
	limited liability company incorporated in the PRC, which is an
	intermediate holding company of CRH and the banking and trust
	activities in which the China Resources Group has an interest
"CRH"	China Resources (Holdings) Company Limited (華潤（集團）有
	限公司), a company incorporated in Hong Kong with limited
	liability and the intermediate holding company of the China
	Resources Group in Hong Kong, holding all the China Resources
	Group's material interests apart from its banking and trust
	activities
"Framework Loan	the Offshore Framework Loan Agreement 2016 and the Onshore
Agreements 2016"	Framework Loan Agreement 2016
"Framework Loan	the Offshore Framework Loan Agreement 2019 and the Onshore
Agreements 2019"	Framework Loan Agreement 2019
"Group"	the Company and its subsidiaries
"HIBOR"	the Hong Kong Inter-Bank Offered Rate
"Hong Kong"	the Hong Kong Special Administrative Region, the People's
	Republic of China
"Independent Shareholders"	shareholders of the Company other than CRH and its associates,
	as defined in the Listing Rules

"LIBOR"	the London Inter-Bank Offered Rate, or in case LIBOR is not
	available, a substituted rate generally available in the market
	and generally accepted by market participants as a reference
	lending rate, which rate shall be chosen by the relevant parties to
	replace LIBOR for the purposes of the Offshore Framework Loan
	Agreement 2019
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Offshore Framework	the Framework Loan Agreement and Guarantee for advances in
Loan Agreement 2016"	Hong Kong Dollar, Renminbi and United States Dollar entered
	into by CRH and the Company on 22nd December, 2016
"Offshore Framework	the Framework Loan Agreement and Guarantee for advances in
Loan Agreement 2019"	Hong Kong Dollar, Renminbi and United States Dollar entered
	into by CRH and the Company on 18th December 2019
"Onshore Framework	the Framework Loan Agreement and Guarantee for advances in
Loan Agreement 2016"	RMB entered into by CRC and the Company on 22nd December,
	2016
"Onshore Framework	the Framework Loan Agreement and Guarantee for advances in
Loan Agreement 2019"	RMB entered into by CRC and the Company on 18th December
	2019
"PRC"	the People's Republic of China, and for the purpose of this
	announcement, excluding Hong Kong, Macau and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Stock Exchange"	The Stock Exchange of Hong Kong Limited

For illustrative purpose of this announcement only, unless otherwise stated herein, conversion of HK$ into RMB is made at the rate of RMB1.00 = HK$1.11.

By the order of the Board

China Resources Gas Group Limited

SHI Baofeng

Executive Director & Chief Executive Officer

Hong Kong, 18th December, 2019

As at the date of this announcement, the Directors of the Company are Mr. Shi Baofeng and Mr. Ge Bin, being Executive Directors; Mr. Wang Chuandong, Mr. Chen Ying, Mr. Wang Yan, Madam Wan Suet Fei and Mr. Jing Shiqing, being Non-executive Directors; and Mr. Wong Tak Shing, Mr. Yu Hon To, David, Mr. Yang Yuchuan and Mr. Hu Xiaoyong, being Independent Non-executive Directors.

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China Resources Gas Group Ltd. published this content on 18 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 December 2019 12:05:10 UTC

Market Closed - Hong Kong S.E. Other stock markets 04:08:22 2024-05-10 am EDT			5-day change	1st Jan Change
27.2 ^HKD	+2.64%		+10.12%	+6.25%

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Mar. 29	China Resources Gas Group Posts Higher Profit, Revenue in 2023	MT

China Resources Gas Posts 10% Profit Growth For 2023	May. 02	MT
China Resources Gas Group Posts Higher Profit, Revenue in 2023	Mar. 28	MT
China Resources Gas Group Limited Proposes Final Dividend for the Year Ended December 31, 2023, Payable on July 17, 2024	Mar. 28	CI
China Resources Gas Group Limited Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 28	CI
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Tianjin Jinran Public's Chairman to Step Down	Jan. 18	MT
China Resources Gas' Vice Chairman Steps Down; Replacement Announced	Dec. 08	MT
China Resources Gas Group Limited Announces Executive Changes, Effective 1 January 2024	Dec. 08	CI
China Resources Gas Group Limited Announces Management Changes	Dec. 08	CI
China Resources Gas Group Limited Announces Changes of Directors and Members of Board Committees	23-09-27	CI
China Resources Gas' Profit Climbs 16.4% in H1	23-08-28	MT
China Resources Gas reports 6.9% rise in H1 sales	23-08-25	RE
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China Resources Gas Group Limited Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-25	CI
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China Resources Gas Group Limited Approves the Final Dividend for the Year Ended 31 December 2022	23-05-25	CI
Chongqing Gas Swings to Loss in Q1	23-05-01	MT
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China Resources Gas Group Limited Reports Earnings Results for the Full Year Ended December 31, 2022	23-03-31	CI
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	1st Jan change	Capi.
CHINA RESOURCES GAS GROUP LIMITED	+6.25%	8.06B
THE HONG KONG AND CHINA GAS CO LTD	+5.02%	15B
KUNLUN ENERGY COMPANY LIMITED	+14.06%	8.9B
ENN NATURAL GAS CO.,LTD.	+11.00%	7.96B
GRUPO ENERGÍA BOGOTÁ S.A. E.S.P.	+32.63%	5.98B
NEW FORTRESS ENERGY INC.	-28.62%	5.52B
SOUTHWEST GAS HOLDINGS, INC.	+20.57%	5.47B
UGI CORPORATION	+1.26%	5.22B
BROOKFIELD INFRASTRUCTURE CORPORATION	-1.56%	4.97B
ITALGAS S.P.A.	+2.70%	4.65B

China Resources Gas Group Limited

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1193

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China Resources Gas : CONTINUING CONNECTED TRANSACTIONS FRAMEWORK LOAN AGREEMENTS 2019

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