Aowei Holding Limited — Capital/Financing Update 2014

Mar 31, 2014

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim 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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HENGSHI MINING INVESTMENTS LIMITED 恒實礦業投資有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1370)

DISCLOSABLE AND CONNECTED TRANSACTION ACQUISITION OF 10% EQUITY INTERESTS IN JIHENG MINING

THE ACQUISITION

The Board announces that on 31 March 2014, Aowei Mining, an indirect wholly-owned subsidiary of the Company, entered into the Equity Transfer Agreement with Laiyuan Jiantou, pursuant to which the Company will acquire the 10% equity interests in Jiheng Mining from Laiyuan Jiantou at a total consideration of RMB118.0 million payable to Laiyuan Jiantou.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Aowei Mining is interested in 90% of the total issued share capital of Jiheng Mining, and Aowei Mining is also an indirect wholly-owned subsidiary of the Company. Laiyuan Jiantou is interested in 10% of the total issued share capital of Jiheng Mining. Therefore, Laiyuan Jiantou is a connected person of the Company under Chapter 14A of the Listing Rules. Therefore, the Acquisition constitutes a connected transaction of the Company.

As the relevant percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Acquisition exceed 5% but are less than 25%, the Acquisition also constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Acquisition is therefore subject to the approval by the Independent Shareholders.

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SHAREHOLDERS’ MEETING WAIVER

No Shareholder has any material interest in the Acquisition, no Shareholder would be required to abstain from voting at a general meeting of the Company (if one was convened) convened to approve the Acquisition. Pursuant to the Rule 14A.43 of the Listing Rules, the Company has obtained a written approval (in lieu of holding a general meeting of the Company) regarding the Acquisition from Mr. Li Yanjun and Mr. Leung Hongying Li Ziwei, being the holders of 1,125,000,000 Shares, representing approximately 74.6% of the issued share capital of the Company as at the date of this announcement. Accordingly, no extraordinary general meeting of the Company will be convened for the purposes of considering and approving the Acquisition.

The Company expects that a circular containing, among other things, (i) details of the Equity Transfer Agreement; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from TC Capital to the Independent Board Committee and the Independent Shareholders; and (iv) other information as required under the Listing Rules will be despatched to the Shareholders as soon as possible.

On 31 March 2014, Aowei Mining, an indirect wholly-owned subsidiary of the Company, entered into the Equity Transfer Agreement with Laiyuan Jiantou, pursuant to which the Company will acquire the 10% equity interests in Jiheng Mining from Laiyuan Jiantou at a total consideration of RMB118.0 million payable to Liayuan Jiantou. The principal terms of the Equity Transfer Agreement are summarised as follows.

THE EQUITY TRANSFER AGREEMENT

Date

31 March 2014

Parties

Transferor: Laiyuan Jiantou Transferee: Aowei Mining

Interests to be acquired

The interests to be acquired are the 10% interests in Jiheng Mining owned by Laiyuan Jiantou. Following the completion of the Acquisition, Jiheng Mining will become a wholly-owned subsidiary the Company.

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Consideration

The consideration of RMB118.0 million has been determined through arm’s length negotiations taking into consideration, among other things, the following factors: (1) financial information of Jiheng Mining for the year 2013, including but not limited to its net profit, turnover, assets and liabilities; (2) the evaluation of Jiheng Mining’s mining interests by Aowei Mining, as a shareholder of Jiheng Mining holding 90% of its equity interests and a majority of the seats on its board of directors; and (3) the listed floor prices for the transfer determined by Laiyuan Jiantou through procedures for the tender, auction or open listing of equity interests.

Payment

The Transferee shall settle a total consideration of RMB118.0 million in two installments: (i) 30% of the total consideration (i.e. RMB35.4 million) shall be paid on the execution date of the Equity Transfer Agreement; (ii) the remaining consideration (i.e. RMB82.6 million) shall be paid before 16 May 2014.

INFORMATION OF JIHENG MINING

Jiheng Mining was established with a registered capital of RMB50.0 million in the PRC in August 2010 with 90% equity interests owned by Aowei Mining and 10% by Laiyuan Jiantou. The original purchase cost of the 10% state-owned equity interests in Jiheng Mining owned by Lianyuan Jiantou is RMB20 million, of which 5% was transferred from Laiyuan Nonferrus Metal with a consideration of RMB20 million and the remaining 5% was transferred from Laiyuan Nonferrus Metal with a consideration of nil on January 23, 2014 with relevant governmental approvals duly obtained. Jiheng Mining is principally engaged in iron ore mining and the selection and production of iron ore concentrates.

According to the unaudited management accounts of Jiheng Mining prepared under International Financial Reporting Standards issued by International Accounting Standards Board, the total assets, total liabilities and net assets of Jiheng Mining as at 31 December 2013 amounted to RMB1,054,104,000, RMB517,169,000 and RMB536,935,000, respectively. Net profit before and after taxation amounted to RMB84,657,000 and RMB63,440,000, respectively, for the year 2012 and RMB374,681,000 and RMB280,989,000, respectively, for the year 2013.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The terms of the Equity Transfer Agreement have been arrived at through arm’s length negotiations between Laiyuan Jiantou and Aowei Mining. The Directors (including the independent non-executive directors) are of the view that the terms of the Equity Transfer Agreement are entered into on the basis of normal commercial terms and are fair, reasonable and in the interest of the Company and its Shareholders as a whole. The Acquisition will give Aowei Mining full control of Jiheng Mining, which will enhance the efficiency of Aowei Mining in implementing business decisions and developing strategies relating to Jiheng Mining, as well as streamline the administrative procedures of Jiheng Mining.

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IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Aowei Mining is interested in 90% of the total issued share capital of Jiheng Mining. Aowei Mining is also an indirect wholly-owned subsidiary of the Company. Laiyuan Jiantou is interested in 10% of the total issued share capital of Jiheng Mining. Therefore, Laiyuan Jiantou is a connected person of the Company under Chapter 14A of the Listing Rules. Therefore, the Acquisition constitutes a connected transaction of the Company. As the relevant percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Acquisition exceed 5% but are less than 25%, the Acquisition also constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules. The Acquisition is therefore subject to the approval by the Independent Shareholders.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, none of the Directors are in any way materially interested in the Acquisition.

SHAREHOLDERS’ MEETING WAIVER

No Shareholder has any material interest in the Acquisition and no Shareholder would be required to abstain from voting at a general meeting of the Company (if one was convened) convened to approve the Acquisition. Pursuant to the Rule 14A.43 of the Listing Rules, the Company has obtained a written approval (in lieu of holding a general meeting of the Company) regarding the Acquisition from Mr. Li Yanjun and Mr. Leung Hongying Li Ziwei, being the holders of 1,125,000,000 Shares, representing approximately 74.6% of the issued share capital of the Company as at the date of this announcement. Accordingly, no extraordinary general meeting of the Company will be convened for the purposes of considering and approving the Acquisition.

The Company expects that a circular containing, among other things, (i) details of the Equity Transfer Agreement; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from TC Capital, the independent financial adviser, to the Independent Board Committee and the Independent Shareholders; and (iv) other information as required under the Listing Rules will be despatched to the Shareholders as soon as possible.

GENERAL INFORMATION

Information of the Company

The Company is based in Hebei Province and is primarily engaged in the business of iron ore mining and processing. It currently owns and operates four iron ore mines, namely, Gufen Mine, Wang’ergou Mine, Shuanmazhuang Mine and Zhijiazhuang Mine, all of which are located in Laiyuan County, Hebei Province.

Information of Aowei Mining

Aowei Mining was established in the PRC in June 2011 and an indirect wholly-owned subsidiary of the Company. Acting principally as a subsidiary holding company, it holds and manages Jingyuancheng Mining, Xinxin Mining and Jiheng Mining.

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Information of Laiyuan Jiantou

Laiyuan Jiantou was established in the PRC in August 2005 and is currently holding 10% interests in Jiheng Mining. Laiyuan Jiantou is engaged in investments in the development of various industries including mining, electricity supply, water conservancy, transportation, environmental protection, tourism, commerce, servicing, agriculture, forestry and livestock.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

“Acquisition”	the Acquisition of 10% interests in Jiheng Mining from
	Laiyuan Jiantou by Aowei Mining pursuant to the Equity
	Transfer Agreement
“Board”	the board of Directors
“PRC”	the People’s Republic of China which, for the purpose
	of this announcement, excludes the Hong Kong Special
	Administrative Region, the Macau Special Administrative
	Region and Taiwan
“Company”	Hengshi Mining Investments Limited, an exempted company
	with limited liability established in the Cayman Islands
	whose issued shares are listed on The Stock Exchange of
	Hong Kong Limited
“Aowei Mining” or	Laiyuan County Aowei Mining Investments Co., Ltd. (淶
“Transferee”	源縣奧威礦業投資有限公司), a company established in
	the PRC on 8 June 2011 and an indirect wholly-owned
	subsidiary of the Company acting principally as a subsidiary
	holding company
“Connected persons”	has the meaning ascribed to it under the Listing Rules
“Directors”	the Directors of the Company
“Equity Transfer Agreement”	the Equity Transfer Agreement entered into between Aowei
	Mining and Laiyuan Jiantou on 31 March 2014
“Group”	the Company and its subsidiaries
“Jiheng Mining”	Laiyuan County Jiheng Mining Co., Ltd. (淶源縣冀恒礦業有
	限公司), a limited liability company established in the PRC
	on 16 August 2010 and an indirect wholly-owned subsidiary
	of the Company.

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“Laiyuan Jiantou” or Laiyuan County Construction and Investment Co., Ltd. “Transferor” (淶源縣建設投資有限公司), a limited liability company established in the PRC and an independent third party “Laiyuan Nonferrous Metal” Hebei Iron and Steel Group Laiyuan Nonferrous Metals Co., Ltd. (河北鋼鐡集團淶源有色金屬有限公司), a limited liability company established in the PRC, which is an Independent Third Party

“Listing Rules “ Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “RMB” Renminbi, the lawful currency of the PRC “Shareholders “ holders of shares in the Company

“Subsidiary” or “subsidiaries” has the meaning ascribed to it under the Listing Rules “TC Capital” TC Capital Asia Limited, a corporation licensed to carry on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

By order of the Board Hengshi Mining Investments Limited Mr. Li Yanjun Chairman

Beijing, 31 March 2014

As at the date of this announcement, the executive directors of the Company are Mr. Li Yanjun, Mr. Leung Hongying Li Ziwei, Mr. Xia Guoan, Mr. Sun Jianhua, Mr. Huang Kai and Mr. Tu Quanping and the independent non-executive directors of the Company are Mr. Ge Xinjian, Mr. Meng Likun and Mr. Kong Chi Mo.

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