Obtained qualification certificates to facilitate the public procurement platform
HONG KONG, Nov. 30, 2012 /PRNewswire/ -- The board of directors of China Public Procurement Limited (HKEx stock code: 1094, the "Company" or "CPP") announced that the Company and its PRC partner, Guocai Science & Technology Company Limited, have entered into various agreements: (1) the PRC Partner entered into the Chongqing Cooperation Agreement with the Chongqing Procurement Centre on 23 November 2012 in relation to the enhancement and establishment of electronic public procurement platform and procurement services system of the Chongqing Procurement Centre; (2) the PRC Partner entered into the Acquisition Agreement to which it agreed to acquire entire equity interest in Tianheng Tendering Co., Ltd ("Tianheng Tendering") on 20 November 2012; (3) Gongcai Network Technology Company Limited ("the CPP Subsidiary"), the PRC Partner and Shenzhen Tiantianfu Technology Company Limited ("Shenzhen Tiantianfu") entered into the Payment Services Agreement in relation to the grant of the exclusive operating right to provide the Third Party Payment Services for the China Public Procurement Online Platform (the "Platform") to Shenzhen Tiantianfu on 26 November 2012; (4) the CPP Subsidiary, the PRC Partner, Guoxin Century and Harbin Huaqiang entered into the Certification Services Agreement in relation to the grant of the exclusive operating right to provide the Certification Services of the Platform to the JV Company to be established by PRC Partner, Guoxin Century and Harbin Huaqiang on 27 November 2012; (5) the CPP Subsidiary, the PRC Partner and Guocai (Beijing) Technology Company Limited ("EJV") entered into a supplemental agreement to the Promotion Agreement and a supplemental agreement to the Service Agreement on 29 November 2012.
(1)Chongqing Cooperation Agreement
The PRC Partner agreed, among others, (i) to cooperate with the Chongqing Procurement Centre to enhance the existing electronic public procurement platform of the Chongqing Municipal Government; and (ii) to set up a branch at the place of operation of the Chongqing Procurement Centre for the operation and maintenance of the electronic public procurement platform, subject to the approval of the Chongqing Procurement Centre and its regulatory authority. The Chongqing Procurement Centre agreed, among others: (i) to cooperate with the PRC Partner in the development, integration and optimisation of the software and hardware for electronic public procurement; (ii) to prepare for the development of electronic public procurement in the Chongqing Procurement Centre, including the obtaining of regulatory approval for relevant development proposals, establishing the management system and the business model of the electronic public procurement platforms and providing advisory services in relation to the improvement of such platforms; (iii) to maintain the normal operation of the electronic public procurement platform in terms of their management; (iv) to support and supervise the development of the market-oriented services of the PRC Partner; and (v) to provide assistance to the PRC Partner in its activities relating to the government procurement business.
(2)Acquisition Agreement
Pursuant to the Acquisition Agreement, Tianheng Tendering is principally engaged in the tendering business and the provision of tender consultancy services, construction survey and design consultancy services, construction supervision consultancy services and market information consultancy services in the PRC. It has obtained the various procurement agency and tendering agency qualifications in the PRC, including (i) Grade A Qualification Certificate for Procurement Agency Institute of the PRC Government; (ii) Grade A Qualification Certificate for Tendering Agency Institute of the Investment Project of the Central Government; and (iii) Qualification Certificate for Construction Tendering Agency Institute (Grade B). Pursuant to the Acquisition Agreement, the vendor of the Acquisition Agreement warrants that it will facilitate the application for the upgrading of the abovementioned Qualification Certificate for Construction Tendering Agency Institute from Grade B to Grade A and also the extension of such certificate which will be effective for three years after completion of the Acquisition Agreement. The acquisition of interest of the entire equity interest in Tianheng Tendering by the PRC Partner can complement the development of the China Public Procurement Online Platform which is jointly developed and operated through the cooperation of our Group and the PRC Partner.
(3)Payment Services Agreement
Pursuant to the Payment Services Agreement, the CPP Subsidiary and the PRC Partner agreed to grant the exclusive operating right to Shenzhen Tiantianfu at the consideration of RMB30 million. Shenzhen Tiantianfu agreed to provide, among others, (i) payment services for the users of the China Public Procurement Online Platform; (ii) interface and upgrade services of the payment system of such platform; (iii) online transaction routing services of commercial banks in the PRC; and (iv) services relating to the platform access software for clients. The PRC Partner shall be entitled to 10% of the annual net profit after tax of Shenzhen Tiantianfu arising from the Exclusive Operating Right pursuant to the Payment Services Agreement.
(4)Certification Services Agreement
Pursuant to the Certification Services Agreement, the PRC Partner, Guoxin Century and Harbin Huaqiang agreed to establish the JV Company, whose registered capital shall be contributed as to 25% by the PRC Partner and as to 75% jointly by Guoxin Century and Harbin Huaqiang. The CPP Subsidiary and the PRC Partner agreed to grant the Exclusive Operating Right to the JV Company at the consideration of RMB30 million, which shall be jointly paid by Guoxin Century and Harbin Huaqiang. The JV Company will be responsible for, among others, (i) through its provision of the legal certification services and verification services, gathering and collating the suppliers' information such as their qualifications, capabilities, credibility, lawfulness and reputation, building and maintaining a database for such information and establishing standards for its verification and legal certification services; and (ii) cooperating with a reputable law firm nominated by the JV Company to issue legal certification and verification reports based on the suppliers' capabilities in the database as mentioned above.
Guoxin Century is principally engaged in software development and technology promotion in the PRC. Harbin Huaqiang is principally engaged in building of computer network system, sale of computer and related equipments and construction of electrical and electrothermal automation in the PRC. The obligations of Guoxin Century and Harbin Huaqiang under the Certification Services Agreement include:
(5) Supplemental agreement to Promotion Agreement and supplemental agreement to Service Agreement
Pursuant to the Promotion Agreement, the PRC Partner agreed to appoint the EJV and the EJV agreed to act as the exclusive agent of the PRC Partner to recruit suppliers for the Platform and provide necessary services to the suppliers on the Platform. Pursuant to the Service Agreement, the PRC Partner agreed to engage the EJV and the EJV agreed to provide (i) all necessary capital, knowhow, equipment and human resources in relation to the building and setting up of the Platform; and (ii) technical support in relation to the operation of the Platform. In return, the EJV is entitled to receive a service fee which equals to in aggregate 100% of the gross revenue received by the PRC Partner from its business.
About China Public Procurement Limited
China Public Procurement Limited is listed on the Main Board of The Stock Exchange of Hong Kong (stock code: 1094). The Group is principally engaged in the development of the public procurement services which involves the provision of procurement services to general public and government in the PRC, and the development of EMC service.
