Stock Code: 000055, 200055 Stock ID: Fangda Group, Fangda B Announcement No. 2010-40
China Fangda Group Co., Ltd.
Announcement on relocating the proposed energy saving curtain wall and photoelectric curtain wall expanding projects financed by the share placing, and adding of new executing entity
The members of the Board and the Company acknowledge being responsible for the truthfulness, accuracy, and completeness of the announcement. Not any false record, misleading statement or significant omission carried in this announcement.
I. Profile of the relocating of the proposed energy saving curtain wall and photoelectric curtain wall expanding projects financed by the share placing, and adding of new executing entity
As approved by document 证监许可[2010]720 号 issued by China Securities Regulatory Commission, China Fangda Group (“Fangda Group” or “the Company” hereinafter) issued 47.9452 million A shares privately with rate of RMB7.30 per share. After deducting of promotion fees, the actual proceed was RMB335,385,071.73.
According to the “China Fangda Group - Feasibility Report of the Projects to be Financed by Private Share Issuing in 2009 (Supplementary Version March 2010)” adopted at the 16th meeting of the 5th term of Board, the executing entity of the Energy Saving and Photoelectric Curtain Wall Productivity Expanding Project was Shenzhen Fangda Decoration Engineering Co., Ltd. (Fangda Decoration), where the executing entity of the PSD Productivity Expanding Project was Shenzhen Fangda Automatic System Co., Ltd. (Fangda Automatic), and both of the projects were located in Nanchang City. To satisfy the needs of business development, the Company is planning to relocate these projects to Dongguan Guangdong, and put Dongguan Fangda New Material Co., Ltd. the new executing entity of the projects. Namely Fangda Decoration, and Dongguan Fangda New Material Co., Ltd. will be the two executing entities of the project, in which Dongguan Fangda New Material will be in charge of the construction of production base and production businesses.
The 24th meeting of the 5th term of Board was held in the meeting room on the 5th floor of the Company on November 22, 2010, at which the proposal to relocate the proposed project financed by the share placing, and adding of new executing entity was approved by the Board.
II. Causation and influences of relocating the project and adding of executing entity
(I) More rational business layoutFrom the view of overall business layout, the Company has already established its Northeast Semiconductor Base in Shenyang, and Fangda New Material Technology Zone in Nanchang – the midland city. Relocating of the above projects to Dongguan Guangdong will make the Company a more powerful production base in Southern China and rational layout from the overall view.
(II) Reduce remote management, lower the costs
Dongguan city is located in mid-southern Guangdong, center of Pearl River Delta, middle of Guangzhou-Hong Kong economical corridor. It is to the north of Hong Kong and Shenzhen, to the south of Guangzhou, and with mature transportation, information, infrastructure systems. It takes less than one hour driving from the headquarter of the Company, which give convenient to management.
(III) Support of local authorities
The projects will be relocated to the national high-tech industrial zone of Dongguan City, and meeting with the national policies for both of them are low-carbon and energy-saving industries.
(IV) Influence of the changes
Relocating of the energy-saving curtain wall and photoelectric curtain wall expanding projects and adding of executing entity won’t change the orientation of investment and construction program, and won’t make impairment on the shareholders’ benefits.
These change will make the projects more rational to the Company’s real needs, increase capital efficiency, and maximize the interests of the shareholders.
III. Capital arrangement after the relocating and change of executing entity
The energy-saving and photoelectric curtain wall production expanding project was scheduled for RMB210 million financed by share placing. As of November 17, 2010, the proceeds from share placing specially for these projects has been used by RMB14,158,583.09, including RMB2,944,250.09 used to replace the Company’s own capital paid for equipment purchasing in advance, RMB11,214,333.00 used to support the working capital, and there is a balance of RMB4,269,032.00 for payment of equipment of energy-saving curtain wall and photoelectric curtain wall project. Upon this time of change, the Company is planning to put the construction funds of RMB162,780,000.00, which was originally allocated to the projects, to Dongguan Fangda New Material Co., Ltd.; upon completion of the construction, the equipment capital of RMB5,180,290.00 under Fangda Decoration will be transferred to Dongguan Fangda New Material Co., Ltd. The balances of proceeds of RMB28,785,667 interests will be used as working capital of the expanding projects under Fangda Decoration.
Upon this change, the investment on the energy-saving and photoelectric curtain wall expanding projects will still be RMB210 million financed by share placing, andthe investment for PSD expanding project will still be RMB125,385,071.73.
IV. Opinions of the independent directors, the Supervisory Committee, and the Sponsor of share placing on the changes
The independent directors issued the following opinions on the relocating and change of executive entity of the two projects: The proposal is meeting with the benefit of the Company’s development, and the whole shareholders’ interests as well. The content and procedures are complying with the Guide for Standard Operation of Main Board Companies – Shenzhen Stock Exchange. This will increase the profitability of the Company, and there is no change on investment orientation and no impairing of the shareholders’ interests. Thus we a in favor of this proposal of relocation and change of executive entity of the two projects.
The Supervisory Committee’s opinion: The proposal is meeting with the benefit of the Company’s development, and the whole shareholders’ interests as well. The content and procedures are complying with the Guide for Standard Operation of Main Board Companies – Shenzhen Stock Exchange. This will increase the profitability of the Company, and there is no change on investment orientation and no impairing of the shareholders’ interests. Thus we a in favor of this proposal of relocation and change of executive entity of the two projects.
Zhongshan Securities Co., Ltd. – the sponsor, issued the opinion as: Relocating of the projects and adding of executive entity won’t substantially influence the operation of the proposed projects, which were proposed to be financed by the share placing proceeds, neither change of investment orientation nor harm the shareholders’ interests. It is complying with the Guide for Standard Operation of Main Board Companies – Shenzhen Stock Exchange. The Sponsor deems that the proposal of change shall only be executed upon approval of the Shareholders’ Meeting.
V. Documents for Reference
1. Resolutions of the 24th meeting of the 5th term of Board – China Fangda Group Co., Ltd.
2. Special statement of the Independent Directors on the relocating of projects and adding of executive entity.
3. Special statement of the Supervisory Committee on the relocating of projects and adding of executive entity.
4. Special statement of inspection on the relocating of projects and adding of executive entity of China Fangda Group Co., Ltd. by Zhongshan Securities Co., Ltd.
The above is for the attention of the shareholders.
China Fangda Group Co., Ltd.
The Board of Directors
November 24, 2010
