Sunshine Oilsands LTD. - Connected Transaction Formation of Joint Venture Project Company in China and Entering Into Project Cooperation Agreement

Source Press Release
Company Sunshine Oilsands Ltd. 
Tags Corporate Deals, Deals, Refining & Marketing Activities
Date February 28, 2019

By Order of the Board of Sunshine Oilsands Ltd.

Kwok Ping Sun

Executive Chairman

Hong Kong, February 28, 2019

Calgary, February 28, 2019

As at the date of this announcement, the Board consists of Mr. Kwok Ping Sun and Ms. Gloria Pui Yun Ho as executive directors; Mr. Michael John Hibberd, Mr. Hong Luo, Ms. Linna Liu and Ms. Xijuan Jiang as non-executive directors; and Mr. Raymond Shengti Fong, Mr. Jeff Jingfeng Liu, Ms. Joanne Yan and Mr. Yi He as independent non-executive directors.

*For identification purposes only

The Board of Directors (the “Board”) of Sunshine Oilsands Ltd. (the “Corporation” or “Sunshine”) (HKEX: 2012) wishes to announce the followings:

References are made to the announcement and the clarification announcement, both dated November 9, 2018 (Hong Kong time) (collectively, the “Announcements”) in relation to, among other matters, the formation of joint venture company in China. Unless defined otherwise, capitalized terms used herein shall have the same meanings as those defined in the Announcements.

On November 9, 2018 (Hong Kong time), the Board approved the formation of a joint venture company (the “JV Company”) in China between the Corporation and a company affiliated (the “Affiliate”) with Mr. Kwok Ping Sun (“Mr. Sun”), the Executive Chairman and a Substantial Shareholder (as defined under the Listing Rules) of the Corporation. Sunshine and the Affiliate will own 51% and 49% interests in the JV Company respectively.


On February 28, 2019 (Hong Kong time) / February 28, 2019 (Calgary time), the Corporation and the Affiliate entered into a project cooperation agreement (the “Project Cooperation Agreement”) with Chengde City People's Government (“Chengde City

Government”), Hebei Province, China, pursuant to which the formation of a joint venture project company (the “JV Project Company”) by the Corporation and the Affiliate was approved by the Chengde City Government (the “Transaction”). The Project Cooperation Agreement also approved the establishment of 50 high-endmulti-functional petrol stations (the “Multi-functional Petrol Stations”) in Chengde City in the next 3 years. The Multi- functional Petrol Stations will provide integrated services including petrol refueling, gas refueling, electric vehicle charging, smart operator-less car washing, convenience stores, business and casual catering, etc. Sunshine and the Affiliate will own 51% and 49% interests in the JV Project Company respectively.


The Board (including all Independent non-Executive Directors) believes that the formation of the JV Project Company for establishment of Multi-Functional Petrol Stations are in the interests of the Corporation and its Shareholders as a whole. Given that the Western Canadian Select (WCS) heavy oil pricing in North America has been far from a reasonable level due to demand and supply conditions, the Board believes that the establishment of Multi-functional Petrol Stations in China is expected to substantially increase the Corporation’s revenue, profit and operating cashflow. Strengthened financial position will also facilitate the Corporation in obtaining financing from banks and financial institutions.


The Affiliate is owned and controlled by Mr. Kwok Ping Sun, being the Executive Chairman and Substantial Shareholder (as defined under the Listing Rules) of the Corporation, and is therefore an associate of Mr. Sun. Hence, the proposed set up of the JV Project Company constitutes connected transaction for the Corporation under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the establishment of JV Project Company and Multi-functional Petrol Stations exceed 0.1% but are less than 5%, the Transaction will be subject to the annual review and disclosure requirements but exempt from the independent shareholders’ approval requirements as set out in Chapter 14A of the Listing Rules.

In future, should the Transaction involve provision of goods or services or financial assistance by Sunshine on a continuing or recurring basis and extends over a period of time, the Corporation will issue further announcements for re-classification of the transactions contemplated thereunder as continuing connected transactions. The Corporation further assures that it will fully comply with the requirements under the Listing Rules if the applicable percentage ratios set out in Rule 14.07 in respect of the transactions contemplated under Project Cooperation Agreement, in aggregate, within a 12-month period, trigger the reporting, announcements, annual review and/or independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Further independent shareholders’ approval will be sought to this end, if applicable and necessary.

Mr. Kwok Ping Sun, being the Executive Chairman and Substantial Shareholder of the Corporation, has abstained from voting on the resolution relating to the formation of the JV Project Company and the Multi-functional Petrol Stations as he owns and controls the Affiliate, which is the Corporation’s joint venture partner in the JV Project Company. Save as disclosed herein, none of the Directors has a material interest in the transactions contemplated under the formation of the JV Project Company and establishment Multi- functional Petrol Stations, and none of them has abstained from voting on the relevant Board resolutions.

The Board wishes to emphasize that the aforesaid JV Project Company formation may or may not proceed. In the event that any formal agreements or arrangements are entered into regarding the JV Project Company may constitute a notifiable transaction under the Listing Rules, the Corporation will make further announcement(s) as and when appropriate.

Shareholders and potential investors are required to exercise caution when dealing in the shares of the Corporation.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd