shougang

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The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this
announcement, makes no representation as to its accuracy or completeness and expressly disclaims
any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any
part of the contents of this announcement.
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SHOUGANG CONCORD INTERNATIONAL ENTERPRISES COMPANY LIMITED
(Incorporated in Hong Kong with limited liability)
(Stock Code: 697)
DISCLOSEABLE TRANSACTION
The Board wishes to announce that on 31 January 2008, the Company and the Vendor entered into
the Share Purchase Agreement, pursuant to which the Vendor agreed to sell and the Company
agreed to purchase the Sale Shares, representing approximately 9.74% of the existing issued
ordinary share capital of Mount Gibson, at AUD2.60 per Sale Share.
On the same day, the Company and the Vendor also entered into an Option Agreement pursuant to
which the Company will be granted an option to acquire the Option Shares, representing
approximately 9.98% of the existing issued ordinary share capital of Mount Gibson at an aggregate
option price of AUD2.60 per Option Share, subject to the terms and conditions of the Option
Agreement.
The transactions under the Acquisition and the Option are subject to conditions outlined below and
constitute a discloseable transaction for the Company under Rule 14.06 of the Listing Rules. A
circular containing, amongst other things, further details relating to the Acquisition and the Option
will be despatched to the Shareholders as soon as practicable.
THE SHARE PURCHASE AGREEMENT
Date of the agreement
31 January 2008
Parties to the agreement
(1) the Vendor, a company incorporated in Cyprus and is principally engaged in production of
iron ore and steel; and
(2) the Company
To the best of the Directors�f knowledge, information and belief, having made all reasonable enquiry,
the Vendor and its ultimate beneficial owners are independent third parties not connected with the
Company or any of its subsidiaries or any of their respective directors, chief executive or substantial
shareholders or any of their respective associates.
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Assets to be acquired
Pursuant to the Share Purchase Agreement, the Company will acquire 77,436,215 shares in the
issued share capital of Mount Gibson. The Sale Shares represent approximately 9.74% of the
existing issued ordinary share capital of Mount Gibson.
A brief summary of the financial information of Mount Gibson, extracted from the 2007 Annual
Report of Mount Gibson is set out below:
For the year ended
30 June 2007
For the year ended
30 June 2006
AUD�f000 AUD�f000
Consolidated profits before tax 60,974 19,124
Consolidated profits after tax 47,765 23,479
The audited consolidated total asset and net asset of Mount Gibson as at 30 June 2007 were
approximately AUD692,500,000 and AUD454,309,000 respectively. The market value of Mount
Gibson, based on the closing price of AUD2.62 per share of Mount Gibson on 25 January 2008,
being the last trading day for the shares of Mount Gibson prior to entering into of the Share
Purchase Agreement and the Option Agreement was AUD2,082,184,271.
Consideration
The consideration for the acquisition of the Sale Shares is AUD2.60 per Sale Share. The aggregate
consideration of the Acquisition amounts to AUD201,334,159 (equivalent to HK$1,379,138,989)
and was determined after arm�fs length negotiation with reference to the closing market price of
AUD2.62 per share of Mount Gibson on 25 January 2008, being the last trading day for the shares
of Mount Gibson prior to entering into of the Share Purchase Agreement and the Option Agreement.
The consideration will be satisfied by internal resources of the Group and is payable in full in cash
at the Share Purchase Completion.
Conditions
Completion of the Acquisition is conditional upon the fulfillment of the following conditions:
(1) if, and to the extent, required by the Listing Rules, a resolution or resolutions (as the case
may be) being passed at a meeting of the members of the Company approving:
(a) the terms of the Share Purchase Agreement and the acquisition of the Sale Shares by
the Company; and
(b) the terms of the Option Agreement and the entering into of such agreement by the
Company; and
(2) the Treasurer of the Commonwealth of Australia:
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(a) ceasing to be empowered to make an order under Part II of the Foreign Acquisitions
and Takeovers Act 1975 (Cwlth) in respect of the acquisitions contemplated by the
Share Purchase Agreement and the Option Agreement; or
(b) giving the Company advice in writing of a decision by the Treasurer of the
Commonwealth Government of Australia that he has no objection to the acquisitions
contemplated by the Share Purchase Agreement and the Option Agreement, without
any condition that the Company reasonably considers to be unacceptable,
whichever first occurs.
If all of the conditions above have not been satisfied, or otherwise waived by the parties in writing,
on or before 31 March 2008 (or such later date as may be agreed by the parties), then unless
otherwise agreed by the parties in writing, the Share Purchase Agreement will terminate as from
that date.
Completion
Subject to the satisfaction or waiver of the conditions of the Share Purchase Agreement, Share
Purchase Completion will take place on the 5th Business Day after the Share Purchase Agreement
has ceased to be conditional or as otherwise agreed by the parties in writing.
THE OPTION AGREEMENT
Date of the agreement
31 January 2008
Parties to the agreement
(1) the Vendor; and
(2) the Company.
Terms of the Option
Pursuant to the Option Agreement, the Vendor will grant an option to the Company to acquire the
79,333,682 shares in the issued share capital of Mount Gibson at any time during the Exercise
Period at the Option Exercise Price of AUD2.341 per Option Share.
The Option Shares represent approximately 9.98% of the existing issued ordinary share capital of
Mount Gibson.
Option Price
The Company is required to pay an Option Fee of AUD20,547,423.63 (approximately
HK$140,749,851.87), equivalent to AUD0.259 per Option Share, at the Share Purchase Completion.
The Option Fee was determined after arm�fs length negotiation at approximately 10% of the closing
market price of AUD2.62 per share of Mount Gibson on 25 January 2008, which is comparable to
the normal initial deposit paid for acquisition of assets. However, if the conditions to the Share
Purchase Agreement are not satisfied or waived, the Share Purchase Completion will not occur and
the Option Fee will not be paid. The Option Exercise Price is AUD2.341 per Option Share, which
together with the Option Fee is equivalent to the aggregate option price of AUD2.60 per Option
Share, which was determined after arm�fs length negotiation with reference to the closing market
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price of AUD2.62 per share of Mount Gibson on 25 January 2008, being the last trading day for the
shares of Mount Gibson prior to entering into of the Share Purchase Agreement and the Option
Agreement.
The Company will comply with the relevant requirements of the Listing Rules upon the exercise of
the Option.
Conditions of the Option Agreement
The granting of the Option is conditional on the Share Purchase Completion.
Mount Gibson
Established in Perth in 1996, Mount Gibson is a public company incorporated in Australia, the
ordinary shares of which are listed on the Australian Stock Exchange. Mount Gibson owns and
operates the 3 Mtpa Tallering Peak iron ore mine in the Midwest region of Western Australia, and
the 4 Mtpa Koolan Island iron ore mine just off the Kimberley coast of Western Australia. It also
owns the Extension Hill DSO (Direct Shipping Ore) Hematite Project in the Mount Gibson Range
in Western Australia.
According to the latest available information of Mount Gibson published on the website of the
Australian Securities Exchange (and assuming no ordinary shares are issued by Mount Gibson
thereafter and assuming also no change in shareholdings by the other shareholders set out below),
the shareholding structure of the Mount Gibson before and after the Share Purchase Completion are
as follows:
Before the Share Purchase Completion
After the Share Purchase Completion
APAC Resources
Limited
Vendor Other shareholders
Mount Gibson
20.2% 19.7% 60.1%
APAC Resources
Limited
Vendor the Company Other
shareholders
Mount Gibson
20.2% 10.0% 9.7% 60.1%
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After the Share Purchase Completion and exercise of the Option Shares
Investment in Mount Gibson will be classified as financial assets at fair value in the accounts of the
Company, after the Share Purchase Completion and after the Share Purchase Completion and
exercise of the Option Shares pursuant to the Option Agreement, respectively.
Reason for the transaction
The Group is principally engaged in the manufacture, sale and trading of steel products, shipping
operations and electricity generation.
In order to strengthen the Group�fs position in the manufacture and sale of steel products in the PRC,
the Board believes that the investment in Mount Gibson, which holds mining tenements to iron ore,
is in the interest of the Shareholders as it would secure a long-term and stable source of supply of
raw materials for the Group�fs steel manufacturing operation.
The Directors (including the independent non-executive Directors) consider that the Share Purchase
Agreement and the Option Agreement have been made on normal commercial terms and that such
terms are fair and reasonable so far as the Company and the Shareholders are concerned and that the
entering into of the Share Purchase Agreement and the Option Agreement is in the interest of the
Company and the Shareholders as a whole.
GENERAL
The transactions contemplated under the Acquisition and the Option constitute a discloseable
transaction for the Company under Rule 14.06 of the Listing Rules. A circular containing, amongst
other things, further details relating to the Acquisition and the Option will be despatched to the
Shareholders as soon as practicable.
DEFINITIONS
In this announcement, the following expressions have the following meanings unless otherwise
requires:
�gAcquisition�h the acquisition of the Sale Shares by the Company from the Vendor
in accordance with the terms of the Share Purchase Agreement
�gAUD�h Australian dollar, the lawful currency of Australia
APAC Resources
Limited
the Company Other shareholders
Mount Gibson
20.2% 19.7% 60.1%
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�gassociate�h has the meaning ascribed to it under the Listing Rules
�gBoard�h the board of directors of the Company
�gBusiness Day�h a day other than a Saturday, Sunday or public holidays on which
banks are open for business in the cities of Melbourne, London,
Moscow and Hong Kong
�gCompany�h Shougang Concord International Enterprises Company Limited, a
company incorporated in Hong Kong, the securities of which are
listed on the Stock Exchange
�gDirector(s)�h the director(s) of the Company
�gExercise Period�h the period starting on the date that is 368 days after the Share
Purchase Completion and ending on the day falling 398 days after
that day
�gGroup�h the Company and its subsidiaries
�gHong Kong�h the Hong Kong Special Administrative Region of the PRC
�gHK$�h Hong Kong dollar, the lawful currency of Hong Kong
�gListing Rules�h the Rules Governing the Listing of Securities on the Stock Exchange
�gMount Gibson�h Mount Gibson Iron Limited, an Australian company the shares of
which are listed on the Australian Securities Exchange
�gmtpa�h million tones per annum
�gOption�h the option granted by the Vendor to the Company to purchase the
Option Shares in accordance with the terms of the Option
Agreement
�gOption Agreement�h the agreement dated 31 January 2008, entered into between the
Vendor and the Company in respect of the Option
�gOption Exercise Price�h AUD2.341 per Option Share (as may be adjusted under the terms of
the Option Agreement), being the price the Company has to pay to
the Vendor for the exercise of the Option under the Option
Agreement
�gOption Fee�h a fee equivalent to AUD0.259 per Option Share payable by the
Company to the Vendor at the Share Purchase Completion
�gOption Shares�h 79,333,682 ordinary shares in the issued share capital of Mount
Gibson to be sold by the Vendor to the Company in accordance with
the terms of the Option Agreement
�gPRC�h the People�fs Republic of China
�gSale Shares�h 77,436,215 ordinary shares in the issued share capital of Mount
Gibson to be sold by the Vendor to the Company in accordance with
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the terms of the Share Purchase Agreement
�gShareholder(s)�h holder(s) of Shares
�gShare Purchase
Completion�h
completion of the Acquisition
�gShare Purchase
Agreement�h
the agreement dated 31 January 2008, entered into between the
Vendor and the Company in respect of the Acquisition
�gShares�h ordinary shares of HK$0.20 each in the share capital of the
Company
�gStock Exchange�h The Stock Exchange of Hong Kong Limited
�gVendor�h Gazmetall Holdings (Cyprus) Limited, a company incorporated in
Cyprus
�g%�h per cent.
For illustration purposes, amounts in AUD in this announcement have been translated into HK$ at
AUD1 = HK$6.85.
By Order of the Board
Shougang Concord International Enterprises Company Limited
Cao Zhong
Managing Director
Hong Kong, 31 January 2008
As at the date of this announcement, the Board comprises Mr. Wang Qinghai (Chairman), Mr. Cao
Zhong (Managing Director), Mr. Chen Zhouping (Deputy Managing Director), Mr. Zhang Wenhui
(Deputy Managing Director), Mr. Luo Zhenyu (Deputy Managing Director), Mr. Ip Tak Chuen,
Edmond (Non-executive Director), Mr. Leung Shun Sang, Tony (Non-executive Director), Ms. Kan
Lai Kuen, Alice (Independent Non-executive Director), Mr. Wong Kun Kim (Independent Nonexecutive
Director) and Mr. Leung Kai Cheung (Independent Non-executive Director).