Brilliance China Automotive Holdings Limited (OTC Bulletin Board: BCAHY; HKEx: 1114)...

Wed Nov 19, 2008 12:54pm EST

* Reuters is not responsible for the content in this press release.

Brilliance China Automotive Holdings Limited (OTC Bulletin Board: BCAHY; HKEx:
1114) Announces the Continuing Connected Transactions and Connected and Major
Transactions: Provision of Financial Assistance To/By Connected Person
BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITED (Incorporated in Bermuda with
limited liability) (Stock Code: 1114)

HONG KONG, Nov. 19 /PRNewswire-FirstCall/ --
    The Group has entered into relevant framework agreements and/or the
regional agent agreement with connected persons including JinBei and Liaoning
Zheng Guo (and/or their respective associates) so as to continue to conduct
the Continuing Connected Transactions for a period of three years commencing
from 1 January 2009 to 31 December 2011.
Xing Yuan Dong and JinBei (and its subsidiaries) will provide cross
guarantees to each other's banking facilities in the amount of RMB500 million
for a period of one year commencing from 1 January 2009 to 31 December 2009.
    Each of JinBei, its subsidiaries and associated companies (other than
Shenyang Automotive) and Liaoning Zheng Guo is a connected person of the
Company within the meaning of the Listing Rules.  Accordingly, the purchases
of materials and automotive components, the sale of automobiles, materials and
automotive components, the entering into of the regional agent agreement and
the provision of Financial Assistance by/to the Group to/by JinBei, its
subsidiaries and associated companies (other than Shenyang Automotive) or
Liaoning Zheng Guo constitute connected transactions under Chapter 14A of the
Listing Rules.  The Financial Assistance also constitutes major transactions
under Chapter 14 of the Listing Rules.  Therefore, all of the Continuing
Connected Transactions and the Financial Assistance are subject to approval by
Shareholders/Independent Shareholders (as the case may be) in the Special
General Meeting taken by way of a poll.
    The Independent Board Committee has been established to advise the
Shareholders and/or the Independent Shareholders (as the case may be) as to
(i)
the Proposed Caps; (ii) the Continuing Connected Transactions; and (iii) the
Financial Assistance.
    An independent financial adviser will be appointed to advise the
Independent Board Committee and the Shareholders and/or the Independent
Shareholders (as the case may be) in respect of the Proposed Caps, the
Continuing Connected Transactions and the Financial Assistance.
    Huachen is considered to be interested in the regional agent agreement and
Huachen and its associates will abstain from voting on the ordinary
resolutions to be proposed at the Special General Meeting in respect of the
entering into of regional agent agreement and the relevant Proposed Cap.
    Given that no connected person which is a party to the Continuing
Connected Transactions (save for the regional agent agreement) and Financial
Assistance is a Shareholder, all Shareholders (save for Huachen and its
associates which are not eligible to vote for the regional agent agreement and
the relevant Proposed Cap) are eligible to vote on the ordinary resolutions to
be proposed at the Special General Meeting in respect of the Proposed Caps,
the Continuing Connected Transactions and the Financial Assistance.
    A circular containing, amongst other things, details of the Continuing
Connected Transactions, the Proposed Caps and the Financial Assistance, letter
from the Independent Board Committee and the letter from the Independent
Financial Adviser and a notice to Shareholders convening the Special General
Meeting to approve (i) the Proposed Caps; (ii) the Continuing Connected
Transactions; and (iii) the Financial Assistance will be dispatched to
Shareholders as soon as practicable.
    I. THE CONTINUING CONNECTED TRANSACTIONS
    Background of the Continuing Connected Transactions
    The Group is engaged in the manufacture and sale of minibuses and
automotive components and sedans.  During the course of its business, the
Group acquires materials and automotive components from certain connected
persons and sells automobiles, materials and automotive components to certain
connected persons, on an ongoing basis.
    The Continuing Connected Transactions
    A. Purchases of materials and automotive components by members of the
       Group (including Shenyang Automotive) from JinBei and its subsidiaries
       and associated companies (other than Shenyang Automotive)

       A1. Purchases of materials and automotive components by Shenyang
           Automotive from JinBei and its subsidiaries and associated
           companies (other than Shenyang Automotive)

           Vendors: JinBei and its subsidiaries and associated companies
                           (other than Shenyang Automotive), including but
                           not limited to, Jin Ya Drive Shaft Company
                           Limited, Shenyang JinBei Jiangsen Automobile
                           Internal Accessories Company Limited, Shenyang
                           JinBei Automobile Manufacture Company Limited,
                           Tieling Brilliance Rubber Products Company
                           Limited, Shanghai Minth Accessories Company
                           Limited, Shenyang JinBei Henglong Autosteering
                           System Company Limited, Shenyang JinBei Kwang Jin
                           Auto System Company Limited and Shenyang JinBei
                           Jinheng Automotive Safety Systems Company Limited
           Purchaser:      Shenyang Automotive, a 51% owned subsidiary of the
                           Company
           Agreement:      On 19 November 2008, Shenyang Automotive and JinBei
                           entered into a framework agreement in relation to
                           the purchases of materials and automotive
                           components by Shenyang Automotive from JinBei and
                           its subsidiaries and associated companies (other
                           than Shenyang Automotive) for a period of three
                           years commencing from 1 January 2009 to 31 December
                           2011
           Pricing policy: The materials and automotive components are to be
                           provided to Shenyang Automotive by JinBei and its
                           subsidiaries and associated companies (other than
                           Shenyang Automotive) on terms which are no less
                           favourable than the terms which can be obtained by
                           Shenyang Automotive from independent third parties
                           for purchase of materials and automotive components
                           of comparable quality and quantity.  The price will
                           be agreed upon between the parties for each
                           transaction by reference to the aforementioned
                           pricing policy through arm's length negotiations

       A2. Purchases of materials and automotive components by Xing Yuan Dong
           from JinBei and its subsidiaries and associated companies (other
           than Shenyang Automotive)

           Vendors:        JinBei and its subsidiaries and associated
                           companies (other than Shenyang Automotive),
                           including but not limited to, Shenyang JinBei
                           Jiangsen Automobile Internal Accessories Company
                           Limited, Tieling Brilliance Rubber Products Company
                           Limited and Shenyang JinBei Henglong Autosteering
                           System Company Limited
           Purchaser:      Xing Yuan Dong, a wholly-owned subsidiary of the
                           Company
           Agreement:      On 19 November 2008, Xing Yuan Dong and JinBei
                           entered into a framework agreement in relation to
                           the purchases of materials and automotive
                           components by Xing Yuan Dong from JinBei and its
                           subsidiaries and associated companies (other than
                           Shenyang Automotive) for a period of three years
                           commencing from 1 January 2009 to 31 December 2011
           Pricing policy: The materials and automotive components are to be
                           provided to Xing Yuan Dong by JinBei and its
                           subsidiaries and associated companies (other than
                           Shenyang Automotive) on terms which are no less
                           favourable than the terms which can be obtained by
                           Xing Yuan Dong from independent third parties for
                           purchase of materials and automotive components of
                           comparable quality and quantity.  The price will be
                           agreed upon between the parties for each
                           transaction by reference to the aforementioned
                           pricing policy through arm's length negotiations

       A3. Purchases of materials and automotive components by Dongxing
           Automotive from JinBei and its subsidiaries and associated
           companies (other than Shenyang Automotive)

           Vendors:        JinBei and its subsidiaries and associated
                           companies (other than Shenyang Automotive),
                           including but not limited to, Shenyang JinBei
                           Jiangsen Automobile Internal Accessories Company
                           Limited, Tieling Brilliance Rubber Products Company
                           Limited, Shenyang JinBei Jinheng Automotive Safety
                           Systems Company Limited and Shanghai Minth
                           Accessories Company Limited
           Purchaser:      Dongxing Automotive, a wholly-owned subsidiary of
                           the Company
           Agreement:      On 19 November 2008, Dongxing Automotive and JinBei
                           entered into a framework agreement in relation to
                           the purchases of materials and automotive
                           components by Dongxing Automotive from JinBei and
                           its subsidiaries and associated companies (other
                           than Shenyang Automotive) for a period of three
                           years commencing from 1 January 2009 to 31 December
                           2011
           Pricing policy: The materials and automotive components are to be
                           provided to Dongxing Automotive by JinBei and its
                           subsidiaries and associated companies (other than
                           Shenyang Automotive) on terms which are no less
                           favourable than the terms which can be obtained by
                           Dongxing Automotive from independent third parties
                           for purchase of materials and automotive components
                           of comparable quality and quantity.  The price will
                           be agreed upon between the parties for each
                           transaction by reference to the aforementioned
                           pricing policy through arm's length negotiations

       A4. Purchases of materials and automotive components by Ningbo Yuming
           from JinBei and its subsidiaries and associated companies (other
           than Shenyang Automotive)

           Vendors:        JinBei and its subsidiaries and associated
                           companies (other than Shenyang Automotive),
                           including but not limited to Shanghai Minth
                           Accessories Company Limited
           Purchaser:      Ningbo Yuming, a wholly-owned subsidiary of the
                           Company
           Agreement:      On 19 November 2008, Ningbo Yuming and JinBei
                           entered into a framework agreement in relation to
                           the purchases of materials and automotive
                           components by Ningbo Yuming from JinBei and its
                           subsidiaries and associated companies (other than
                           Shenyang Automotive) for a period of three years
                           commencing from 1 January 2009 to 31 December 2011
           Pricing policy: The materials and automotive components are to be
                           provided to Ningbo Yuming by JinBei and its
                           subsidiaries and associated companies (other than
                           Shenyang Automotive) on terms which are no less
                           favourable than the terms which can be obtained by
                           Ningbo Yuming from independent third parties for
                           purchase of materials and automotive components of
                           comparable quality and quantity.  The price will be
                           agreed upon between the parties for each
                           transaction by reference to the aforementioned
                           pricing policy through arm's length negotiations

    B. Sale of automobiles, materials and automotive components by members of
       the Group to connected persons

       B1. Sale of automobiles and automotive components by Shenyang
           Automotive to JinBei and its subsidiaries and associated companies
           (other than Shenyang Automotive)

           Vendor:         Shenyang Automotive, a 51% owned subsidiary of the
                           Company
           Purchasers:     JinBei and its subsidiaries and associated
                           companies (other than Shenyang Automotive),
                           including but not limited to, Shenyang JinBei
                           Automobile Manufacture Company Limited and Tieling
                           Brilliance Rubber Products Company Limited
           Agreement:      On 19 November 2008, Shenyang Automotive and JinBei
                           entered into a framework agreement in relation to
                           the sale of automobiles and automotive components
                           by Shenyang Automotive to JinBei and its
                           subsidiaries and associated companies (other than
                           Shenyang Automotive) for a period of three years
                           commencing from 1 January 2009 to 31 December 2011
           Pricing policy: The automobiles and automotive components are to be
                           provided to JinBei and its subsidiaries and
                           associated companies (other than Shenyang
                           Automotive) by Shenyang Automotive on terms which
                           are no less favourable than the terms which can be
                           obtained by Shenyang Automotive from independent
                           third parties for sale of automobiles and
                           automotive components of comparable quality and
                           quantity.  The price will be agreed upon between
                           the parties for each transaction by reference to
                           the aforementioned pricing policy through arm's
                           length negotiations

       B2. Sale of materials and automotive components by Shenyang Jindong to
           JinBei and its subsidiaries and associated companies (other than
           Shenyang Automotive)

           Vendor:         Shenyang Jindong, a 75.50% owned subsidiary of the
                           Company
           Purchasers:     JinBei and its subsidiaries and associated
                           companies (other than Shenyang Automotive),
                           including but not limited to Tieling Brilliance
                           Rubber Products Company Limited
           Agreement:      On 19 November 2008, Shenyang Jindong and JinBei
                           entered into a framework agreement in relation to
                           the sale of materials and automotive components by
                           Shenyang Jindong to JinBei and its subsidiaries and
                           associated companies (other than Shenyang
                           Automotive) for a period of three years commencing
                           from 1 January 2009 to 31 December 2011
           Pricing policy: The materials and automotive components are to be
                           provided to JinBei and its subsidiaries and
                           associated companies (other than Shenyang
                           Automotive) by Shenyang Jindong on terms which are
                           no less favourable than the terms which can be
                           obtained by Shenyang Jindong from independent third
                           parties for sale of materials and automotive
                           components of comparable quality and quantity.  The
                           price will be agreed upon between the parties for
                           each transaction by reference to the aforementioned
                           pricing policy through arm's length negotiations

       B3. Liaoning Zheng Guo acts as regional agent for Shenyang Automotive

           Agent:          Liaoning Zheng Guo, which is owned as 75% by
                           Huachen and 25% by Zhuhai Brilliance
           Principal:      Shenyang Automotive, a 51% owned subsidiary of the
                           Company
           Agreement:      On 19 November 2008, Shenyang Automotive entered
                           into a regional agent agreement with Liaoning Zheng
                           Guo pursuant to which Liaoning Zheng Guo is to act
                           as a regional agent of the whole range of
                           automobiles manufactured by Shenyang Automotive in
                           certain areas such as Jinan, Qingdao, Wuhan, Hefei,
                           Chengdu, Kunming, Nanjing, Suzhou, Hangzhou,
                           Wenzhou, Shanghai, Changsha, Fuzhou, Guangzhou,
                           Shenzhen and Nanning for a period of three years
                           commencing from 1 January 2009 to 31 December 2011
           Pricing policy: Shenyang Automotive will sell automobiles to
                           Liaoning Zheng Guo on terms which are no less
                           favourable to Shenyang Automotive than those
                           offered to other authorised agents of Shenyang
                           Automotive

    The framework agreements and the regional agent agreement only set out the
overriding and major terms of the transactions to be carried out by relevant
parties.  Details of the terms and conditions (including payment mode and
payment terms) will be dealt with in the purchase orders to be placed by the
relevant purchaser, which will be in line with the company policies adopted by
the relevant vendor from time to time and may be varied in accordance with
prevailing market situation.
    Requirements of the Listing Rules
    JinBei owns 39.1% of the equity interests of Shenyang Automotive, a 51%
owned subsidiary of the Company.  Being a substantial shareholder of a
subsidiary of the Company, JinBei is considered as a connected person of the
Company under the Listing Rules.  The subsidiaries and associated companies of
JinBei are associates of JinBei within the meaning of the Listing Rules and
are accordingly considered as connected persons of the Company.  Therefore,
transactions between members of the Group (including Shenyang Automotive) on
one part and JinBei and its subsidiaries and associated companies (other than
Shenyang Automotive) on the other part constitute connected transactions under
the Listing Rules.
    Liaoning Zheng Guo is held as to 75% by Huachen and as to 25% by Zhuhai
Brilliance (which in turn is held as to 90% by Huachen and is engaged in the
business of investment holdings).  Huachen is currently interested in
approximately 39.41% of the issued share capital of the Company.  Accordingly,
Liaoning Zheng Guo is an associate of Huachen and a connected person of the
Company.  The regional agent agreement constitutes a continuing connected
transaction for the Company.
    Transactions between the Group and each of JinBei and Liaoning Zheng Guo
constitute connected transactions under Rule 14A.13(1)(a) of the Listing Rules
and should be subject to reporting, announcement and independent shareholders'
approval requirements as set out in Rule 14A.35 of the Listing Rules.
    Huachen is considered to be interested in the regional agent agreement and
Huachen and its associates will abstain from voting on the ordinary
resolutions to be proposed at the Special General Meeting in respect of the
entering into of the regional agent agreement and the relevant Proposed Cap.
    Given that no connected person which is a party to the Continuing
Connected Transactions (save for the regional agent agreement) and Financial
Assistance is a Shareholder, all Shareholders (save for Huachen and its
associates which are not eligible to vote for the regional agent agreement and
the relevant Proposed Cap) are eligible to vote on the ordinary resolutions to
be proposed at the Special General Meeting in respect of the Proposed Caps,
the Continuing Connected Transactions and the Financial Assistance.
    II. PROPOSED CAPS AND HISTORICAL FIGURES
    Approved Caps and historical figures
    The following table sets out the Approved Caps and the actual sales /
purchases of the Continuing Connected Transactions during the three financial
years ended/ending 31 December 2008:-

    Continuing                Major              For the financial year
    Connected                 type of           ended/ending 31 December
    Transactions              products                   2006
                                                               Actual sales /
                                             Approved Cap        purchases
                                              (RMB '000)        (RMB '000)

    A. Purchases of materials and automotive components by members of the
     Group (including Shenyang Automotive) from JinBei and its subsidiaries
     and associated companies (other than Shenyang Automotive)

    A1.  Purchases of
     materials and
     automotive components
     by Shenyang Automotive   Seats,
     from JinBei and its      steering
     subsidiaries and         systems, fuel
     associated companies     pumps and
     (other than Shenyang     driving
     Automotive)              shafts           230,000            719,016

    A2.  Purchases of
     materials and
     automotive components
     by Xing Yuan Dong from
     JinBei and its           Axles, torsion
     subsidiaries and         bars, gear
     associated companies     boxes , seats
     (other than Shenyang     and rubber
     Automotive)              products         280,000            145,825

    A3.  Purchases of
     materials and
     automotive components
     by Dongxing Automotive
     from JinBei and its
     subsidiaries and
     associated companies
     (other than Shenyang     Rubber
     Automotive)              products           4,000             16,701

    A4.  Purchases of
     materials and
     automotive components
     by Ningbo Yuming from
     JinBei and its           Inside
     subsidiaries and         cutting,
     associated companies     outside
     (other than Shenyang     cutting and
     Automotive)              moulding           5,000             10,334

    B. Sale of automobiles, materials and automotive components by members of
     the Group to connected persons

    B1.  Sale of automobiles
     and automotive
     components by
     Shenyang Automotive to
     JinBei and its
     subsidiaries and
     associated companies     Press
     (other than              parts/
      Shenyang Automotive)    steels            85,000            166,284

    B2. Sale of materials
     and automotive
     components by            Matching
     Shenyang Jindong to      components,
     JinBei and its           including
     subsidiaries and         reinforcement
     associated               panel of right
     companies                hand side front
     (other than              wheel mudguard
     Shenyang Automotive)     wing                  --                 --

    B3. Liaoning Zheng Guo
     acts as
     regional agent for
     Shenyang Automotive   Automobiles              --                 --




    Continuing                Major              For the financial year
    Connected                 type of           ended/ending 31 December
    Transactions              products                   2007
                                                               Actual sales /
                                             Approved Cap        purchases
                                              (RMB '000)        (RMB '000)

    A. Purchases of materials and automotive components by members of the
     Group (including Shenyang Automotive) from JinBei and its subsidiaries
     and associated companies (other than Shenyang Automotive)

    A1.  Purchases of
     materials and
     automotive components
     by Shenyang Automotive   Seats,
     from JinBei and its      steering
     subsidiaries and         systems, fuel
     associated companies     pumps and
     (other than Shenyang     driving
     Automotive)              shafts         1,550,000          1,146,671

    A2.  Purchases of
     materials and
     automotive components
     by Xing Yuan Dong from
     JinBei and its           Axles, torsion
     subsidiaries and         bars, gear
     associated companies     boxes , seats
     (other than Shenyang     and rubber
     Automotive)              products         320,000            305,340

    A3.  Purchases of
     materials and
     automotive components
     by Dongxing Automotive
     from JinBei and its
     subsidiaries and
     associated companies
     (other than Shenyang     Rubber
     Automotive)              products          18,000             17,718

    A4.  Purchases of
     materials and
     automotive components
     by Ningbo Yuming from
     JinBei and its           Inside
     subsidiaries and         cutting,
     associated companies     outside
     (other than Shenyang     cutting and
     Automotive)              moulding          16,000              2,209

    B. Sale of automobiles, materials and automotive components by members of
     the Group to connected persons

    B1.  Sale of automobiles
     and automotive
     components by
     Shenyang Automotive to
     JinBei and its
     subsidiaries and
     associated companies     Press
     (other than              parts/
      Shenyang Automotive)    steels           330,000            320,509

    B2. Sale of materials
     and automotive
     components by            Matching
     Shenyang Jindong to      components,
     JinBei and its           including
     subsidiaries and         reinforcement
     associated               panel of right
     companies                hand side front
     (other than              wheel mudguard
     Shenyang Automotive)     wing               1,100                397

    B3. Liaoning Zheng Guo
     acts as
     regional agent for
     Shenyang Automotive      Automobiles    1,800,000          1,119,095




    Continuing                Major              For the financial year
    Connected                 type of           ended/ending 31 December
    Transactions              products                   2008
                                                               Actual sales /
                                             Approved Cap        purchases
                                              (RMB '000)        (RMB '000)
                                                               (For the six
                                                                  months
                                                                 ended 30
                                                                 June 2008)

    A. Purchases of materials and automotive components by members of the
     Group (including Shenyang Automotive) from JinBei and its subsidiaries
     and associated companies (other than Shenyang Automotive)

    A1.  Purchases of
     materials and
     automotive components
     by Shenyang Automotive   Seats,
     from JinBei and its      steering
     subsidiaries and         systems, fuel
     associated companies     pumps and
     (other than Shenyang     driving
     Automotive)              shafts         2,000,000            405,159

    A2.  Purchases of
     materials and
     automotive components
     by Xing Yuan Dong from
     JinBei and its           Axles, torsion
     subsidiaries and         bars, gear
     associated companies     boxes , seats
     (other than Shenyang     and rubber
     Automotive)              products         420,000             53,900

    A3.  Purchases of
     materials and
     automotive components
     by Dongxing Automotive
     from JinBei and its
     subsidiaries and
     associated companies
     (other than Shenyang     Rubber
     Automotive)              products          22,000             10,959

    A4.  Purchases of
     materials and
     automotive components
     by Ningbo Yuming from
     JinBei and its           Inside
     subsidiaries and         cutting,
     associated companies     outside
     (other than Shenyang     cutting and
     Automotive)              moulding          19,000                 --

    B. Sale of automobiles, materials and automotive components by members of
     the Group to connected persons

    B1.  Sale of automobiles
     and automotive
     components by
     Shenyang Automotive to
     JinBei and its
     subsidiaries and
     associated companies     Press
     (other than              parts/
      Shenyang Automotive)    steels           420,000             72,283

    B2. Sale of materials
     and automotive
     components by            Matching
     Shenyang Jindong to      components,
     JinBei and its           including
     subsidiaries and         reinforcement
     associated               panel of right
     companies                hand side front
     (other than              wheel mudguard
     Shenyang Automotive)     wing               1,100                397

    B3. Liaoning Zheng Guo
     acts as
     regional agent for
     Shenyang Automotive      Automobiles    5,000,000          1,227,532

    The Approved Caps for the year ending 31 December 2008 were based on a
sales forecast for that year, which in turn was based on exceptionally good
sales results achieved in the year ended 31 December 2007.  However, up to 30
June 2008, due to various adverse factors such as economic downturn, actual
sales of automobiles were substantially below forecast.  Therefore, actual
sales/purchases in respect of the Continuing Connected Transactions for the
year ending 31 December 2008 will be less than the Approval Caps for the year
ending 31 December 2008.
    Proposed Caps
    The following table sets out the Proposed Caps of the Continuing Connected
Transactions during the three financial years ending 31 December 2011:-

    Continuing         Major type of        For the year ending 31 December
    Connected          products               2009        2010        2011
    Transactions                        Proposed Cap Proposed Cap Proposed Cap
                                           (RMB '000)  (RMB '000)  (RMB '000)

    A.  Purchases of materials and automotive components by members of the
        Group (including Shenyang Automotive) from JinBei and its subsidiaries
        and associated companies (other than Shenyang Automotive)

    A1.  Purchases of
     materials and
     automotive
     components by
     Shenyang
     Automotive from
     JinBei and its
     subsidiaries and
     associated         Seats, steering
     companies (other   systems, fuel
     than Shenyang      pumps and driving
     Automotive)        shafts              1,168,000   1,573,000   1,947,000


    A2.  Purchases of
     materials and
     automotive
     components by Xing
     Yuan Dong from
     JinBei and its
     subsidiaries and
     associated         Torsion bars, gear
     companies (other   box assembly,
     than Shenyang      seats and rubber
     Automotive)        products              145,000     171,000     208,000


    A3.  Purchases of
     materials and
     automotive
     components by
     Dongxing
     Automotive from
     JinBei and its
     subsidiaries and   Sealing sticks,
     associated         main decelerators,
     companies (other   seat assembly and
     than Shenyang      interior display
     Automotive)        board                  38,000      53,000      66,000


    A4.  Purchases of
     materials and
     automotive
     components by
     Ningbo Yuming from
     JinBei and its
     subsidiaries and
     associated
     companies (other
     than Shenyang      Side windows and
     Automotive)        luggage racks           5,300       5,800       6,400

    B.  Sale of automobiles, materials and automotive components by members
        the Group to connected persons

    B1.  Sale of
     automobiles and
     automotive
     components by
     Shenyang
     Automotive to
     JinBei and its
     subsidiaries and
     associated
     companies (other   Steels, steel
     than Shenyang      panels and
     Automotive)        moulding              226,000     297,000     370,000


    B2. Sale of
     materials and
     automotive
     components by      Matching
     Shenyang Jindong   components,
     to JinBei and its  including
     subsidiaries and   reinforcement
     associated         panel of right
     companies (other   hand side front
     than Shenyang      wheel mudguard
     Automotive)        wing                    1,029       1,029       1,029


    B3. Liaoning Zheng
     Guo acts as
     regional agent for
     Shenyang
     Automotive        Automobiles          1,890,000   1,890,000   1,890,000


    Basis in determining the Proposed Caps
    In determining the Proposed Caps for the Continuing Connected Transactions
for the three financial years ending 31 December 2011, the Board has based
their estimates on the sales forecast of relevant years. Important and
objective assumptions and factors, though not exhaustive but were arrived at
after due and careful consideration of data currently in hand, are set out as
below:
    -- the anticipated growth of the automobile industry in the PRC in the
       three financial years ending 31 December 2011 compared to 2008 which
       will lead to an increase in demand for the existing models of minibuses
       and sedans manufactured by the Group;
    -- the scheduled launch of new models of minibuses and sedans and new
       range of automobiles in the coming three financial years ending 31
       December 2011;
    -- the anticipated sales of minibuses and sedans in the coming three
       financial years ending 31 December 2011, particularly the marketing
       strategy of the Group to increase its market share in the domestic
       sedan market in the PRC;
    -- the intended increase in the export of minibuses and sedans to overseas
       markets such as Europe, Egypt, Russia and South Africa in the coming
       financial years ending 31 December 2011 which will lead to increase in
       the purchases and sales volume of materials and automotive components
       between the members of the Group and the connected parties;
    -- changes in product mix in response to market demand which will result
       in changes in the types of materials and automotive components used and
       the monetary value of the purchases of such materials and automotive
       components from the connected parties;
    -- expected substantial increase in purchases of main decelerators by
       Dongxing Automotive from JinBei and its subsidiaries and associated
       companies (other than Shenyang Automotive) (Continuing Connected
       Transaction A.3); and
    -- from 2009 onwards, planned purchases of side windows and luggage racks
       by Ningbo Yuming from JinBei and its subsidiaries and associated
       companies (other than Shenyang Automotive) (Continuing Connected
       Transaction A.4).


    It is expected that the launch of the new models of existing products and
new range of products and the anticipated increase in sales of minibuses and
sedans in the coming three financial years as compared to 2008 will lead to an
increase in production of minibuses and sedans and accordingly, an increase in
demand for materials and automotive components, the subject of the Continuing
Connected Transactions. Materials purchased will be used to produce automotive
components, and automotive components purchased will be used for further
processing into core automotive components. The automotive components will be
used in the production of automobiles by Shenyang Automotive.
    III. FINANCIAL ASSISTANCE
    On 19 November 2008, an agreement for provision of cross guarantees in
respect of banking facilities in the amount of RMB500 million is entered into
between Xing Yuan Dong and JinBei (and its subsidiaries).
    The banking facilities, that will be granted to each of Xing Yuan Dong and
JinBei, will be for a term of one year commencing from 1 January 2009 to 31
December 2009. In the event of the cross guarantees are to be extended for
more than one year along with the renewal of the banking facilities, the
Company has to comply with all the relevant requirements under Chapter 14A of
the Listing Rules. No fee is payable or charged and no securities will be
taken or provided in relation to the provision of the cross guarantees.
    Pursuant to such agreement, Xing Yuan Dong and JinBei (and its
subsidiaries) will provide cross guarantees to each other's banking facilities
in the amount of RMB500 million.
    JinBei is a connected person of the Company. The provision of the cross
guarantees between Xing Yuan Dong and JinBei (and its subsidiaries) constitute
connected transactions under Rule 14A.13(2)(a)(i), Rule 14A.13(2)(b)(i) and
Rule 14A.13(3) of the Listing Rules and are subject to the reporting,
announcement and independent shareholders' approval requirements under Rule
14A.63 of the Listing Rules. As the percentage ratios for the Financial
Assistance is more than 25% but less than 100%, the Financial Assistance also
constitutes major transactions under Chapter 14 of the Listing Rules and has
to be subject to the approval of the Shareholders. Given that no connected
person which is a party to the Financial Assistance is a Shareholder, all
Shareholders are eligible to vote on the ordinary resolution to be proposed at
the Special General Meeting in respect of the Financial Assistance.
    IV. REASONS FOR THE CONTINUING CONNECTED TRANSACTIONS AND THE FINANCIAL
ASSISTANCE
    Reasons for the Continuing Connected Transactions
    The Group is engaged in the manufacture and sale of minibuses and
automotive components and sedans. The manufacture and sale of minibuses and
sedans by the Group is carried out by Shenyang Automotive, a 51% owned
subsidiary of the Company. The other subsidiaries of the Company are mainly
engaged in the manufacture and sale of automotive components in the PRC, and
some of such automotive components are sold to Shenyang Automotive for use in
its assembly process as an automobile manufacturer. All the Continuing
Connected Transactions are carried out in the ordinary course of business of
the Group and will continue to be carried out in the three financial years
ending 31 December 2011. Accordingly, the Board considers it appropriate to
seek Shareholders' and/or Independent Shareholders' approval (as the case may
be) for the Continuing Connected Transactions and the Proposed Caps for each
of the three financial years ending 31 December 2011.
    The Group purchases raw materials and basic automotive components in its
ordinary course of business to be used in the manufacturing of automotive
components and for processing into core automotive components for use in
automobile manufacturing. The Group will continue to purchase raw materials
and automotive components from the JinBei Group where the price offered by
such companies are more favourable than other suppliers in order to control
the costs of production of automobiles produced by the Group.
    After processing the raw materials and the basic automotive components,
the Group sells the processed automotive components to Shenyang Automotive and
the JinBei Group which, as automobile manufacturers, will use the processed
automotive components in their assembly process.
    In addition, the Group also purchases engines and other core automotive
components from the connected persons so as to ensure the quality of the core
automotive components and also to ensure the technology used in the production
of such core automotive components remained within the control of the Group.
It is believed that control over such core automotive components will enable
the Group to exercise more effective control over the quality of the
automobiles produced by the Group.
    In light of the manufacturing flow of the Group described above, the
Continuing Connected Transactions are entered into for the following reasons:
    Control over quality and technology -- Most of the automotive components
supplied by the JinBei Group were specifically designed for use in the
manufacture of the Group's minibuses and sedans. Shenyang Automotive is a 51%
owned subsidiary of the Company and JinBei is the joint venture partner of the
Company in Shenyang Automotive. On 29th December, 2003, the Company entered
into agreements in relation to the proposed acquisition of an indirect 40.1%
interest in JinBei, the joint venture partner of Shenyang Automotive and a
supplier of automotive components for the Group's minibuses and sedans. JinBei
is an A-share company listed on the Shanghai Stock Exchange. As a result of
JinBei's share reform, which took place in August 2006, all issued shares of
JinBei were converted into tradable shares on the Shanghai Stock Exchange. The
Company's prospective 40.1% interest in JinBei consequently was reduced to
33.05%. Upon obtaining the approvals from the relevant government authorities
and completion of the proposed acquisition, the Company's effective interests
in Shenyang Automotive will increase from 51.0% to approximately 63.9%. The
shareholding arrangements enable the Group to control the quality of the
products of Shenyang Automotive and JinBei and the technology used in the
production of the required automotive components. As such core automotive
components will be used in the production of automobiles of the Group, such
control will enable the Group to exercise more effective control over the
quality of the automobiles produced by the Group. Therefore, the purchases
from the JinBei Group are necessary for the Group to continue to carry out its
business of automobile manufacturing.
    Proximity -- The JinBei Group has been one of the major suppliers of
automotive components to the Group for use in the manufacture of minibuses and
sedans. The manufacturing facilities of the JinBei Group and the Group are
both located in Shenyang, the PRC. The close proximity of the manufacture
facilities of the Group and the JinBei Group means that the Group will be able
to obtain the required materials and automotive components at a lower cost in
a timely manner in terms of procurement lead time and transportation cost,
compared to other suppliers. Based on the experience of the Directors in  the
industry, the purchases of materials and automotive components from
manufacturers closed to the production facilities is a key means of cost
reduction in the PRC automotive industry.
    Centralization of purchases -- Instead of having each member of the Group
purchasing the materials and automotive components required for use in their
production, the Group centralized the purchases of materials and automotive
components which are purchased in batches. This is because the need of an
automotive component manufacturer and automobile manufacturer to purchase
materials and automotive components depends on the expected demand for
automobiles in the market and also fluctuation in prices for such materials
and automotive components. Since it is difficult to predict with any degree of
accuracy over a long period of time, in the interest of efficient inventory
planning and to avoid incurring unnecessary costs by ordering materials and
automotive components which are not in need, the best practice of the
automobile industry advocates shorter, rather than longer supply cycles. In
line with industrial practice, the Group usually orders materials and
automotive components in batches. Centralization of purchases of materials and
automotive parts enables the Group to enjoy a better price for bulk purchases.
    With the appointment of Liaoning Zheng Guo as the regional sales agent in
certain areas such as Jinan, Qingdao, Wuhan, Hefei, Chengdu, Kunming, Nanjing,
Suzhou, Hangzhou, Wenzhou, Shanghai, Changsha, Fuzhou, Guangzhou, Shenzhen and
Nanning, the Group can co-ordinate the sales amongst the Group's authorised
agents in a more efficient manner so as to enhance the sales capability of its
authorised agents. Instead of dealing with a number of small authorised
agents,
the Group sells to Liaoning Zheng Guo which then co-ordinates the sales to the
smaller authorized agents, which is in line with the sales model for
international automobile manufacturers. The Group has benefited from the
reduced administrative costs and enhanced sales capability of its authorised
agents as the Group is able to sell more automobiles through its authorised
agents at lower costs and hence increase its sales and profitability.
    In the premises, the executive Directors and the non-executive Director
consider the Continuing Connected Transactions to be in the interest of the
Group and that the terms of the framework agreements and the regional agent
agreement governing the Continuing Connected Transactions to be fair and
reasonable in so far as the Shareholders are concerned.
    Reasons for the Financial Assistance
    With the tightening of the lending regulations of the banks in the PRC, it
is becoming a common practice for banks in the PRC to request for either
guarantee or securities to secure banking facilities granted to borrowers.
JinBei's banking facilities will be utilized by JinBei as working capital to
improve the quality of the automotive components currently produced by the
JinBei Group and the expansion of its product range and production facilities.
Since the JinBei is one of the suppliers of the Group, the Directors believe
that the Group will be able to benefit from the improved quality of the
automotive components manufactured by the JinBei Group and with the
anticipated launch of the new models of minibuses and sedans, the Group will
also be able to benefit from the improvement in production facilities and
increase in product range of the JinBei Group.
Xing Yuan Dong is one of the subsidiaries of Group engaged in the
manufacturing of automotive components. Xing Yuan Dong's banking facilities
secured by the guarantees provided by JinBei will be utilized by Xing Yuan
Dong to improve its production facilities in order to support the scheduled
launch of new models of minibuses and sedans.
    At the 2007 SGM, the Shareholders have approved the provision of cross
guarantees in respect of the provision of cross guarantees in respect of
banking facilities in the amount of RMB500 million between Xing Yuan Dong and
JinBei (and its subsidiaries) for the period from 1 January 2008 to 31
December 2008. As the agreement for provision of cross guarantees will expire
by 31 December 2008 and for reasons set out above, the parties intend to
extend the agreement for another financial year to until 31 December 2009.
    In the premises, the executive Directors and the non-executive Director
consider the provision of the Financial Assistance to and from the connected
person of the Company to be in the interest of the Group and that the terms of
the agreement in relation to the provision of the cross guarantees to be fair
and reasonable in so far as the Shareholders are concerned.
    V. GENERAL
    Each of JinBei, its subsidiaries and associated companies (other than
Shenyang Automotive) and Liaoning Zheng Guo is a connected person of the
Company within the meaning of the Listing Rules. Accordingly, the purchases of
materials and automotive components, the sale of automobiles, materials and
automotive components, the entering into of the regional agent agreement and
the provision of Financial Assistance by/to the Group to/by JinBei, its
subsidiaries and associated companies (other than Shenyang Automotive) or
Liaoning Zheng Guo constitute connected transactions under Chapter 14A of the
Listing Rules. The Financial Assistance also constitutes major transactions
under Chapter 14 of the Listing Rules. Therefore, all of the Continuing
Connected Transactions and the Financial Assistance are subject to approval by
Shareholders/Independent Shareholders (as the case may be) in the Special
General Meeting taken by way of a poll.
    The Independent Board Committee has been established to advise the
Shareholders and/or the Independent Shareholders (as the case may be) as to
(i)
the Proposed Caps; (ii) the Continuing Connected Transactions; and (iii) the
Financial Assistance.
    An independent financial adviser will be appointed to advise the
Independent Board Committee and the Shareholders and/or the Independent
Shareholders (as the case may be) in respect of the Proposed Caps, the
Continuing Connected Transactions and the Financial Assistance.
    Huachen is considered to be interested in the regional agent agreement and
Huachen and its associates will abstain from voting on the ordinary
resolutions to be proposed at the Special General Meeting in respect of the
entering into of the regional agent agreement and the relevant Proposed Cap.
    Given that no connected person which is a party to the Continuing
Connected Transactions (save for the regional agent agreement) and Financial
Assistance is a Shareholder, all Shareholders (save for Huachen and its
associates which are not eligible to vote for the regional agent agreement and
the relevant Proposed Cap) are eligible to vote on the ordinary resolutions to
be proposed at the Special General Meeting in respect of the Proposed Caps,
the Continuing Connected Transactions and the Financial Assistance.
    A circular containing, amongst other things, details of the Continuing
Connected Transactions, the Proposed Caps and the Financial Assistance, the
letter from the Independent Board Committee and the letter from the
Independent Financial Adviser and a notice to Shareholders convening the
Special General Meeting to approve (i) the Proposed Caps; (ii) the Continuing
Connected Transactions; and (iii) the Financial Assistance will be dispatched
to Shareholders as soon as practicable.
    VI. DEFINITIONS
    In this announcement, unless otherwise defined, terms used herein shall
have the following meanings:
    "2007 SGM"              the special general meeting of the Company held on
                            16 November 2007 to approve, inter alia, the
                            financial assistance to/by connected persons;

    "Approved Caps"         the estimated annual monetary values of the
                            Continuing Connected Transactions for the three
                            financial years ending 31 December 2008 which have
                            been approved by Shareholders and/or Independent
                            Shareholders (as the case may be) in general
                            meetings;

    "associated company"    an entity, including an unincorporated entity such
                            as a partnership, over which one has significant
                            influence and that is neither a subsidiary nor an
                            interest in a joint venture;

    "associates"            has the meaning ascribed thereto in the Listing
                            Rules;

    "Board"                 the board of Directors;

    "Companies Ordinance"   Companies Ordinance (Chapter 32 of the Laws of
                            Hong Kong);

    "Company"               Brilliance China Automotive Holdings Limited, an
                            exempted company incorporated in Bermuda with
                            limited liability, whose securities are listed on
                            the Stock Exchange;

    "connected persons"     has the meaning ascribed thereto in the Listing
                            Rules;

   "Continuing Connected
     Transactions"          the transactions between members of the Group and
                            the connected persons as set out in the paragraph
                            headed "The Continuing Connected Transactions" in
                            this announcement;

    "Directors"             the directors of the Company;

    "Dongxing Automotive"   Shenyang Brilliance Dongxing Automotive Component
                            Co., Ltd., a wholly foreign owned enterprise
                            established in the PRC on 17 March 1999 and a
                            wholly-owned subsidiary of the Company. The
                            principal activities of Dongxing Automotive are
                            the manufacture and trading of automotive
                            components and remodelling minibuses and sedans in
                            the PRC;

    "Financial Assistance"  the financial assistance provided to/by the Group
                            by/to connected person as set out in the paragraph
                            headed "The Financial Assistance" in this
                            announcement;

    "Group"                 the Company and its subsidiaries;

    "Huachen"               Huachen Automotive Group Holdings Company Limited,
                            the controlling shareholder of the Company which
                            as at the date of this announcement is interested
                            in approximately 39.41% of the issued share
                            capital of the Company;

    "Independent Board
     Committee"             the independent committee of Board, comprising Mr.
                            Xu Bingjin, Mr. Song Jian and Mr. Jiang Bo, all of
                            whom are independent non-executive Directors,
                            formed to advise the Shareholders and/or the
                            Independent Shareholders (as the case may be) as
                            to (i) the Proposed Caps; (ii) the Continuing
                            Connected Transactions; and (iii) the Financial
                            Assistance;

    "Independent Financial
     Adviser"               an independent financial adviser to be appointed
                            for the purpose of advising the Independent Board
                            Committee and the Shareholders and/or Independent
                            Shareholders (as the case may be) as to (i) the
                            Proposed Caps; (ii) the Continuing Connected
                            Transactions; and (iii) the Financial Assistance;

    "Independent
     Shareholders"          Shareholders other than Huachen and its
associates;

    "JinBei"                Shenyang JinBei Automotive Company Limited, a
                            company incorporated in the PRC on 14 May 1984
                            whose shares are listed on the Shanghai Stock
                            Exchange and holder of the 39.1% equity interests
                            in Shenyang Automotive;

    "JinBei Group"          JinBei and its subsidiaries and, for the purpose
                            of this announcement, shall include associated
                            companies but exclude Shenyang Automotive;

    "Liaoning Zheng Guo"    Liaoning Zheng Guo Investment Development Company
                            Limited, a company incorporated in the PRC on 10
                            October 1996. Liaoning Zheng Guo is currently
                            owned as to 75% by Huachen and 25% by Zhuhai
                            Brilliance;

    "Listing Rules"         the Rules Governing the Listing of Securities on
                            the Stock Exchange;

    "Ningbo Yuming"         Ningbo Yuming Machinery Industrial Co., Ltd., a
                            wholly foreign owned joint venture established in
                            the PRC on 14 August 1993. Ningbo Yuming is
                            currently a wholly foreign owned enterprise in the
                            PRC and a wholly owned subsidiary of the Company.
                            The principal activities of Ningbo Yuming are the
                            manufacture and sale of automotive components in
                            the PRC;

    "PRC"                   The People's Republic of China and for the sole
                            purpose of this announcement shall exclude Hong
                            Kong, Macau Special Administrative Region of the
                            PRC and Taiwan;

    "Proposed Caps"         the estimated annual monetary values of the
                            Continuing Connected Transactions for the three
                            financial years ending 31 December 2011;

    "RMB"                   Renminbi, the lawful currency of the PRC;

    "Shareholder(s)"        holder(s) of Shares;

    "Shares"                shares at par value of US$0.01 each in the share
                            capital of the Company;

    "Shenyang Automotive"   Shenyang Brilliance JinBei Automobile Co., Ltd.,
                            a Sino-foreign equity joint venture established in
                            the PRC on 19 July 1991 and a subsidiary of the
                            Company whose equity interests are owned as to 51%
                            by the Company and as to 39.1% by JinBei. The
                            principal activities of Shenyang Automotive are
                            the manufacture, assembly and sale of minibuses
                            and sedans as well as automotive components in the
                            PRC;

    "Shenyang Jindong"      Shenyang Jindong Development Co., Ltd., an equity
                            joint venture established in the PRC on 18 April
                            2002 in which the Company has an effective equity
                            interest of 75.50%. The principal activities of
                            Shenyang Jindong are trading of automotive
                            components;

    "Special General
     Meeting"               the special general meeting of the Company to be
                            convened for the purpose of considering, and if
                            thought fit, approving (i) the Proposed Caps; (ii)
                            the Continuing Connected Transactions; and (iii)
                            the Financial Assistance;

    "Stock Exchange"        The Stock Exchange of Hong Kong Limited;

    "subsidiary"            has the meaning ascribed thereto under the
                            Companies Ordinance;

    "US$"                   United States dollars, the lawful currency of the
                            United States of America;

    "Xing Yuan Dong"        Shenyang XingYuanDong Automobile Component Co.,
                            Ltd., a wholly foreign owned enterprise
                            established in the PRC on 12 October 1998 and a
                            wholly-owned subsidiary of the Company. The
                            principal activities of Xing Yuan Dong are the
                            manufacture and trading of automotive components
                            in the PRC; and

    "Zhuhai Brilliance"     Zhuhai Brilliance Holdings Company Limited, a
                            company incorporated in the PRC on 7 April 1999
                            and is a 90% owned subsidiary of Huachen.


    As at the date of this announcement, the Board comprises four executive
Directors, Mr. Wu Xiao An (also known as Mr. Ng Siu On) (Chairman), Mr. Qi
Yumin (Chief Executive Officer), Mr. He Guohua and Mr. Wang Shiping; one
non-executive Director, Mr. Lei Xiaoyang; and three independent non-executive
Directors, Mr. Xu Bingjin, Mr. Song Jian and Mr. Jiang Bo.
                            By order of the Board
                 Brilliance China Automotive Holdings Limited
                                  Wu Xiao An
                          (also known as Ng Siu On)
                                   Chairman

Hong Kong, 19 November 2008
    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
    For further information, please contact:

    Lisa Ng
     Brilliance China Automotive Holdings Limited
     Tel: +852-2523-7227

    Carol Lau
     Weber Shandwick in Hong Kong
     Tel:  +852-2533-9981

SOURCE  Brilliance China Automotive Holdings Limited

Lisa Ng of Brilliance China Automotive Holdings Limited, +852- 2523-7227, or
Carol Lau of Weber Shandwick, +852-2533-9981, for Brilliance China Automotive
Holdings Limited
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