Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B) Announcement No. 2020-36
ADAMA Ltd.
Announcement on the Completion of Buyback and
Cancellation of the Compensation Shares
The Company and all members of its board of directors hereby confirm that all
information disclosed herein is true, accurate and complete with no false or
misleading statement or material omission.
Special Notice:
1. The buyback and cancellation of the Compensation Shares (as defined hereunder)
involved a single shareholder. The total number of shares repurchased and cancelled was
102,432,280, accounting for 4.19% of the Company’s total share capital prior to the
shares’ buyback and cancellation.
2. The Compensation Shares were repurchased and cancelled by the Company at a
total price of RMB 1. The Company has completed the cancellation procedures at the
China Securities Depository and Clearing Corporation Limited Shenzhen Branch on July
13, 2020.
I. Corporate Procedures for the Compensation
The 25th Meeting of the 8th Session of the Board of Directors of ADAMA Ltd.
(hereinafter referred to as the “Company”) held on April 27, 2020 deliberated and
adopted the Proposal on the Overall Achievement of the Committed Performance
included in the Major Assets Restructuring Project and the Planned Compensation to the
Company by the Obligors, the Proposal on the Share Buyback and Cancellation and the
Decrease of the Registered Capital of the Company, and the Proposal on Revisions to the
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Articles of Association of the Company and relevant Rules of Procedures. The 2019
Annual General Meeting held on May 20, 2020 reviewed and approved the aforesaid
three proposals. For details, please refer to Announcement on the Resolutions of the 25th
Meeting of the 8th Session of the Board of Directors (Announcement No.2020-21),
Announcement on the Overall Achievement of the Committed Performance Included in
the Major Assets Restructuring and the Planned Compensations to the Company by the
Obligors (Announcement No.2020-25) and Announcement on the Resolutions of the
2019 Annual General Meeting (Announcement No.2020-31).
II. The Completion of Buyback and Cancellation of the Compensation Shares
1. Share Compensation Plan
1.1 Compensation for Performance Commitment
Within the context of the acquisition of ADAMA Agricultural Solutions Ltd.
(hereinafter referred to as “Solutions”) by the Company, the Company entered into a
Performance Compensation Agreement and two supplementary agreements (hereinafter
together “the Performance Compensation Agreement” ) with China National
Agrochemical Co., Ltd. (hereinafter referred to as “CNAC”) , then the 100% owner of
Solutions. CNAC made a commitment that Solutions’ adjusted aggregated net profit for
the 2017-2019 period attributed to the Company shall not be lower than USD 543.4137
million (USD 147.675 million, 173.3219 million and 222.4168 million in 2017, 2018 and
2019, respectively).
According to the audit report on the difference between the actual and committed net
profit of Solutions issued by Deloitte (special general partnership) (De Shi Bao (He) Zi
(18) No.E00079, (19) No.E00044, (20) No.E00020), the aggregated adjusted actual net
profit of Solutions for the 2017-2019 period was USD 512.6756 million, implying a
shortfall of USD 30.7381 million, a 94.34%t completion rate of the committed
performance.
According to the Performance Compensation Agreement，the number of shares to be
compensated by the obligor shall be calculated as follows:
（1）Total cumulative compensation amount at the end of the current period = (the
cumulative committed net profit amount as of the end of the current period USD
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543.4137 million – the cumulative actual net profit amount as of the end of the current
period USD 512.6756 million) ÷ the total committed net profit during the compensation
period USD 543.4137 million × RMB 18,471,006,998.16 (the consideration of the target
asset of the transaction).
（2）the number of shares to be compensated for the current year = the total amount
of accumulated compensation at the end of the current period RMB 1,044,809,249.77 ÷
10.20 yuan per share (the price of per share issued by the Company to CNAC for
acquiring its share equity in Solutions) – the cumulative number of shares already
compensated (0 shares).
According to the above formula, the number of shares to be returned to the
Company as compensation is 102,432,280 (“Compensation Shares”). The cumulative
cash dividend distributed during the profit compensation period generated from the
Compensation Shares shall be returned to the Company.
1.2 Asset Impairment Compensation
According to the Audit Report on the Impairment Test of the Target Asset at the
Expiry of the Major Asset Restructuring Compensation Period (De Shi Bao (He) Zi (20)
No. E00021) issued by Deloitte (Special General Partnership), there is no impairment on
Solutions value at December 31st, 2019. Therefore, compensation on impairment is not
triggered in accordance with the Performance Compensation Agreement.
2. The Price of Buyback and Cancellation of Compensation Shares
According to the Performance Compensation Agreement ， the Company will
buyback the Compensation Shares from the obligor in consideration of 1 RMB and
deregister these shares accordingly.
3. Relevant Information on the Reduction of Registered Capital and Credit
Notice Announcement
On May 21, 2020, the Company disclosed the Announcement on the Share Buyback
and Cancellation and the Reduction of Registered Capital and Creditor Notice
(Announcement No.2020-32) on the website of Juchao Information
(http://www.cninfo.com.cn), which disclosed “After the share buyback and cancellation
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of the above shares, the Company’s total share capital will be reduced from
2,446,553,582 shares to 2,344,121,302 shares, and the registered capital will be reduced
from RMB 2,446,553,582 to RMB 2,344,121,302 consequently”. Within 45 days after the
issuance of the above announcement, the Company did not receive any creditor’s request
for clearing off debts or providing corresponding guarantees.
4. Details of the Buyback and Cancellation of the Compensation Shares
On January 5th, 2020, CNAC and Syngenta Group Co., Ltd. (hereinafter referred to
as the “Syngenta Group”) entered into an Equity Transfer Agreement, according to which
CNAC shall transfer 1,810,883,039 shares (74.02% of the total equity of the Company)
to Syngenta Group free of charge (hereinafter referred to as “the Equity Transfer”). The
Equity Transfer was approved by the CSRC following exemption of Syngenta Group’s
tender offer obligations, and the transferred shares were registered under the name of
Syngenta Group on June 16, 2020. In accordance with the Commitment Letter on
Performance Compensation signed by Syngenta Group, Syngenta Group has undertaken
to fulfill CNAC’s relevant compensation obligations under the Performance
Compensation Agreement after the completion of the Equity Transfer.
The Company repurchased the 102,432,280 shares from Syngenta Group in
accordance with related regulations, and completed the cancellation procedures for those
shares on July 13, 2020.
Additionally, and in accordance with the Performance Compensation Agreement, as
of the reporting date of this announcement, Syngenta Group has returned to the Company,
by way set-off from the dividend for 2019, an amount of RMB 17,618,352, equal to the
cumulative cash dividends distributed during the profit compensation period generated
from the Compensation Shares.
III. The Company’s Share Capital Structure Prior and After the Compensation
Shares Buyback and Cancellation
Unit：Share
Increase /
Prior to the Change Decrease After the Change
Nature of Shares
（+，-）
Amount Proportion Shares Amount Proportion
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Buyback
I. Restricted
1,810,887,539 74.02% -102,432,280 1,708,455,259 72.88%
shares
a. State-owned
legal person’s 1,810,883,039 74.02% -102,432,280 1,708,450,759 72.88%
shares
b. Shares held
by domestic 4,500 0 -- 4,500 0
investors
i. Shares held
by domestic -- -- -- -- --
legal person
ii. Shares held
by domestic
4,500 0 -- 4,500 0
natural
person
II. Shares not
subject to
635,666,043 25.98% -- 635,666,043 27.12%
trading
moratorium
a. RMB
ordinary 468,616,702 19.15% -- 468,616,702 19.99%
shares
b. Domestically
listed foreign 167,049,341 6.83% -- 167,049,341 7.13%
shares
III. Total shares 2,446,553,582 100.00% -102,432,280 2,344,121,302 100.00%
This announcement is hereby made.
The Board of Directors of ADAMA Ltd.
July 15, 2020
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