Gloen Exchange announced on November 2nd at the China National Cereals and Oils Holding Co., Ltd. (2.83, 0.01, 0.36%) (00606.HK), at the extraordinary general meeting held at 10:00 on November 2, 2018, due to the first and second The resolutions have been approved by the independent shareholders of the company and some of the conditions precedent of the COFCO International Master Agreement and the Capital Increase Agreement as disclosed in the Circular have been fulfilled. The COFCO International Master Agreement and the Capital Increase Agreement are subject to the fulfillment of a number of conditions and may not be implemented.

The above-mentioned COFCO International Master Agreement involves the company's wholly-owned subsidiary Zhongchangsheng, COFCO Oil Second Company and COFCO Oil, and intends to acquire the entire share capital of each COFCO International Target Company for a total consideration of RMB 1.341 billion (subject to adjustment) in US dollars. Two cash payments. After the delivery of the COFCO International Master Agreement, COFCO International Target Company will become a wholly-owned subsidiary of the company.

The capital increase agreement involves the company's wholly-owned subsidiary COFCO (Dongguan) having the condition to invest RMB 620 million in COFCO Trading (Guangdong) to subscribe for its newly registered capital of approximately RMB 598 million, equivalent to COFCO Trading (Guangdong) in the Capital Increase Agreement. After the settlement, 75.264% of the registered capital was expanded. After the completion of the capital increase agreement, COFCO Trading (Guangdong) will become a subsidiary of the company.

According to the previous announcement, COFCO International Target Company includes COFCO International Singapore, Great Wall Investments, Sino Agri-Trade and related entities held by Hong Kong Mingfa (ie Qinzhou Dayang, Mingfa International, Longkou Xinlong and Chongqing Xinyi). It has four oilseed processing plants located in Chongqing, Longkou, Shandong Province, Taixing, Jiangsu Province and Qinzhou, Guangxi Zhuang Autonomous Region.

COFCO International Target Company is principally engaged in the business of soybean crushing and soy oil refining and trading. The total annual production capacity (assuming 300 days of operation per year) is as follows: pressing: about 2.7 million tons of leap year; refining: about 830,000 tons. For the years ended December 31, 2016 and 2017, the revenue of COFCO International Target Company was RMB 6.617 billion and RMB 7.486 billion respectively; the after-tax profit was RMB -145 million and RMB 353 million, respectively.

COFCO Trading (Guangdong) is mainly engaged in the storage and handling of a variety of food, oilseeds, edible oils and fats, and the relevant port terminal facilities are under construction. The port is expected to be operational by 2020. Upon completion of the construction, the port is expected to have an annual throughput of approximately 2.9 million tons and an annual storage capacity of approximately 220,000 tons.

The reasons for exercising some COFCO international options are: first, the industry's profitability has recovered in the past few years, second, downstream demand continues to grow, third, industry consolidation continues to advance, large-scale enterprise advantages are highlighted; fourth, continue to promote corporate strategy Planning; Fifth, sales continued to grow at a high level, and the operating rate reached a historical high. Further development required capacity scale support; sixth, solving competitive business problems.

The benefits of the transaction, one is to enhance the company's industry position and consolidate its competitive advantage: after the completion of the transaction, the company's annual soybean crushing capacity will increase from about 12.93 million tons to about 15.63 million tons, assuming the COFCO International Target Company The acquisition took place on December 31, 2017. Compared with self-built expansion, the acquisition of COFCO International Target Company will enable the company to expand production capacity in a faster way and at a lower cost, in order to enhance its position in the industry and consolidate its competitive advantage.

Second, to assist in the development of small-package edible oil business: the transaction will enhance the company's bulk oil supply capacity, providing a variety of stable, high-quality sources for high value-added small package products. In addition, the transaction will provide support for small-package edible oil sales in the supply chain and storage facilities, helping the company achieve its business goal of doubling the sales of small-package edible oil in two to four years.

Third, improve the production capacity layout, shorten the supply radius, and improve the customer service level: the transaction will improve the national layout of the company's oilseed processing capacity, enhance business choice flexibility, better grasp market opportunities, and create trade opportunities. The company will increase the crushing capacity in Chongqing and northern Shandong provinces to better cover the surrounding market areas, effectively shorten the sales distance and save logistics costs. Customer demand and market information feedback will also be more rapid, improving product freshness and customer service.

Fourth, release potential synergies: share operational capabilities: take advantage of the company's oilseed processing business in risk management and control, industrial chain operations, etc. After the completion of these transactions, it is expected to focus on improving the competitiveness and performance of COFCO's target companies. The coordinated growth of the Group's business scale and return capability.

Enhance the capacity utilization rate of COFCO's target company's plants: The capacity utilization rate of COFCO's target plants in 2017 is about 60%. After the transaction is completed, the management will focus on improving the operational capabilities of these plants and strengthening their synergy with the company's existing plants to increase their capacity utilization.

Shared logistics resources: The same regional crushing plant can combine shipping orders and share transportation facilities such as ferries, reducing procurement costs and making logistics more efficient and faster. Shared management team to optimize labor costs: The same management team can operate between adjacent plants to optimize administrative costs and increase efficiency. Share sales channels and enhance market influence: It can integrate and expand sales channels and expand market share.

Announced that at the extraordinary general meeting held at 10:00 am on November 2, 2018, as the first and second resolutions were approved by the independent shareholders of the Company, the COFCO International Master Agreement and the Capital Increase Agreement disclosed in the Circular Some of the prerequisites have been fulfilled. The COFCO International Master Agreement and the Capital Increase Agreement are subject to the fulfillment of a number of conditions and may not be implemented.

The above-mentioned COFCO International Master Agreement involves the company's wholly-owned subsidiary Zhongchangsheng, COFCO Oil Second Company and COFCO Oil, and intends to acquire the entire share capital of each COFCO International Target Company for a total consideration of RMB 1.341 billion (subject to adjustment) in US dollars. Two cash payments. After the delivery of the COFCO International Master Agreement, COFCO International Target Company will become a wholly-owned subsidiary of the company.

The capital increase agreement involves the company's wholly-owned subsidiary COFCO (Dongguan) having the condition to invest RMB 620 million in COFCO Trading (Guangdong) to subscribe for its newly registered capital of approximately RMB 598 million, equivalent to COFCO Trading (Guangdong) in the Capital Increase Agreement. After the settlement, 75.264% of the registered capital was expanded. After the completion of the capital increase agreement, COFCO Trading (Guangdong) will become a subsidiary of the company.

According to the previous announcement, COFCO International Target Company includes COFCO International Singapore, Great Wall Investments, Sino Agri-Trade and related entities held by Hong Kong Mingfa (ie Qinzhou Dayang, Mingfa International, Longkou Xinlong and Chongqing Xinyi). It has four oilseed processing plants located in Chongqing, Longkou, Shandong Province, Taixing, Jiangsu Province and Qinzhou, Guangxi Zhuang Autonomous Region.

COFCO International Target Company is principally engaged in the business of soybean crushing and soy oil refining and trading. The total annual production capacity (assuming 300 days of operation per year) is as follows: pressing: about 2.7 million tons of leap year; refining: about 830,000 tons. For the years ended December 31, 2016 and 2017, the revenue of COFCO International Target Company was RMB 6.617 billion and RMB 7.486 billion respectively; the after-tax profit was RMB -145 million and RMB 353 million, respectively.

COFCO Trading (Guangdong) is mainly engaged in the storage and handling of a variety of food, oilseeds, edible oils and fats, and the relevant port terminal facilities are under construction. The port is expected to be operational by 2020. Upon completion of the construction, the port is expected to have an annual throughput of approximately 2.9 million tons and an annual storage capacity of approximately 220,000 tons.

The reasons for exercising some COFCO international options are: first, the industry's profitability has recovered in the past few years, second, downstream demand continues to grow, third, industry consolidation continues to advance, large-scale enterprise advantages are highlighted; fourth, continue to promote corporate strategy Planning; Fifth, sales continued to grow at a high level, and the operating rate reached a historical high. Further development required capacity scale support; sixth, solving competitive business problems.

The benefits of the transaction, one is to enhance the company's industry position and consolidate its competitive advantage: after the completion of the transaction, the company's annual soybean crushing capacity will increase from about 12.93 million tons to about 15.63 million tons, assuming the COFCO International Target Company The acquisition took place on December 31, 2017. Compared with self-built expansion, the acquisition of COFCO International Target Company will enable the company to expand production capacity in a faster way and at a lower cost, in order to enhance its position in the industry and consolidate its competitive advantage.

Second, to assist in the development of small-package edible oil business: the transaction will enhance the company's bulk oil supply capacity, providing a variety of stable, high-quality sources for high value-added small package products. In addition, the transaction will provide support for small-package edible oil sales in the supply chain and storage facilities, helping the company achieve its business goal of doubling the sales of small-package edible oil in two to four years.


Third, improve the production capacity layout, shorten the supply radius, and improve the customer service level: the transaction will improve the national layout of the company's oilseed processing capacity, enhance business choice flexibility, better grasp market opportunities, and create trade opportunities. The company will increase the crushing capacity in Chongqing and northern Shandong provinces to better cover the surrounding market areas, effectively shorten the sales distance and save logistics costs. Customer demand and market information feedback will also be more rapid, improving product freshness and customer service.

Fourth, release potential synergies: share operational capabilities: take advantage of the company's oilseed processing business in risk management and control, industrial chain operations, etc. After the completion of these transactions, it is expected to focus on improving the competitiveness and performance of COFCO's target companies. The coordinated growth of the Group's business scale and return capability.

Enhance the capacity utilization rate of COFCO's target company's plants: The capacity utilization rate of COFCO's target plants in 2017 is about 60%. After the transaction is completed, the management will focus on improving the operational capabilities of these plants and strengthening their synergy with the company's existing plants to increase their capacity utilization.

Shared logistics resources: The same regional crushing plant can combine shipping orders and share transportation facilities such as ferries, reducing procurement costs and making logistics more efficient and faster. Shared management team to optimize labor costs: The same management team can operate between adjacent plants to optimize administrative costs and increase efficiency. Share sales channels and enhance market influence: It can integrate and expand sales channels and expand market share.