CMPort Formed Two Joint Ventures In Connection With Investment

In The Djibouti International Free Trade Zone

China Merchants Port Holdings Company Limited(The Company) is pleased to announce that on 16 January 2017, The Company has entered into agreements regarding the formation of two Joint venture companies, in connection with the proposed investment in the Djibouti International Free Trade Zone (“DIFTZ”). One of them is a Joint Venture formed for the purpose of investing in and financing the development rights to develop commercial and infrastructure projects within the DIFTZ (“Asset Joint Venture”), the other Joint Venture is established for the purpose of operating and managing of certain commercial and infrastructure projects within the DIFTZ (“O&M Joint Venture”).

The Asset Joint Venture is formed by The Company, CMID (a subsidiary of China Merchants Group) and Cheer Signal (a wholly-owned subsidiary of China Merchants Shekou Industrial Zone), with each possess 40%, 40% and 20% interest respectively. The Asset Joint Venture mentioned will form a Djibouti Asset Company with Great Horn (a subsidiary of Djibouti Ports & Free Zones Authority) and Port of Dalian Group Co., Ltd.(“PDA”), for the purpose of investing in and financing the development rights to develop commercial and infrastructure projects within the DIFTZ.

 The O&M Joint Venture is formed by The Company, CMID, Cheer Signal, PDA and IZP (China) Network Technologies Co., Ltd. (“IZP”),with each possess 26.7%, 26.7%, 13.3% and 25% interests respectively. The O&M Joint Venture aforementioned will establish a Djibouti O&M Company with Great Horn, for the purpose of operating and managing the DIFTZ and certain commercial and infrastructure projects within the DIFTZ.

The Company has, in recent years, been actively exploring and capturing available opportunities overseas in order to effectively add new growth drivers to its existing and sustainably growing ports business. The Port of Djibouti lies strategically at the mouth of Red Sea thus making it an ideal transshipment hub for maritime cargoes passing in and out of East Africa, offers long-term growth potential as the economic momentum in the proximity intensifies over time. The Company has over the years invested into the Port of Djibouti, including its acquisition of a 23.5% interest in Port De Djibouti S.A. in December 2012. Complementing The Company's investment in Port De Djibouti, The Company, Great Horn, DPFZA,CMID, CMSIZ, PDA and IZP entered into the Investment Agreement on 15 November 2016 in relation to the proposed investment and development of the Djibouti International Free Trade Zone. The Investment Agreement sets out the framework in accordance with which the parties are to cooperate and to set up the relevant vehicles to jointly implement the design, phased development, construction and operation of the DIFTZ.

The investment and development of the DIFTZ will largely promote economic development of Djibouti and is a replication of the China Merchants Group’s “Port-Zone-City” development model which has demonstrated huge success in Shekou. We believes that Djibouti’s ports development (including Port De Djibouti S.A.) will also benefit from such a project.