Controlling Shareholder Sells 4.84% Stake

On 13 Oct 2008, China Yaohua Glass Group Co., Ltd., the controlling shareholder of Qinhuangdao Yaohua Glass Co., Ltd. (600716), sold 27 mln tradable shares of the company, equal to a 4.84% stake, via the bulk trading system of the Shanghai Stock Exchange. This action makes it the first state-owned shareholder to sell a stake via the bulk trading system, approved by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), since the 1 Jul 2007 implementation of the Interim Measures for the Administration of State-owned Shareholders’ Transfer of Their Shares of Listed Companies. The company announced the transaction on 15 Oct 2008 after it received a notice the previous day from Yaohua Group.

In compliance with Article 8 of the Interim Measures, state-owned shareholders must submit an application to the SASAC for approval of a transfer of its holdings in a listed company via the securities trading system if it features the following two characteristics:

1) The total capital stock of the listed company is more than 1 billion shares; and,
2) The proportion of net shares cumulatively transferred within three consecutive accounting years by the state-controlled shareholder is less than 5% of the total capital stock of the listed company.

The company's total capital stock is around 557 mln shares and Yaohua Group has sold a 9.03% stake in the company in the past year. As such, the aforementioned 4.84% stake sale must be submitted to the SASAC for approval. Additionally, pursuant to Article 11 of the Interim Measures, when a state-owned shareholder performs a bulk transaction, the transfer price should not be lower than the weighted average transaction price of the listed company’s shares on the same day. Yaohua Group sold the shares at RMB 4.68 per share on 13 Oct 2008, when the company's average stock price was RMB 4.67.


Source: Shanghai Securities News

Date: 15 Oct 2008

CN01/BJ/JL/NK/MM