Bloks Group Limited — Capital/Financing Update 2018

Dec 5, 2018

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.

Concord New Energy Group Limited 協合新能源集團有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 182)

DISCLOSEABLE TRANSACTION

FINANCE LEASE ARRANGEMENT

The Company is pleased to announce that on 5 December 2018 (after trading hours), Kangbao Concord (as lessee), Haotai New Energy (as supplier) and China Resources (as purchaser and lessor) entered into the Finance Lease Arrangement, pursuant to which (i) China Resources has agreed to purchase the Equipment from Haotai New Energy, at the consideration in the amount of RMB254,230,000 (equivalent to approximately HK$287,279,900); and (ii) China Resources has agreed to lease the Equipment to Kangbao Concord for a term of 10 years, to be payable in 40 quarterly installments, at an estimated total lease payments in the amount of approximately RMB352,667,856 (equivalent to approximately HK$398,514,677).

As the highest percentage ratio (as defined under the Listing Rules) in respect of the transaction contemplated under the Finance Lease Arrangement exceeds 5% but is less than 25%, the Finance Lease Arrangement constitutes a discloseable transaction of the Company and thus is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

FINANCE LEASE ARRANGEMENT

The Company is pleased to announce that on 5 December 2018 (after trading hours), Kangbao Concord (as lessee), Haotai New Energy (as supplier) and China Resources (as purchaser and lessor) entered into the Finance Lease Arrangement, pursuant to which (i) China Resources has agreed to purchase the Equipment from Haotai New Energy, at the consideration in the amount of RMB254,230,000 (equivalent to approximately HK$287,279,900); and (ii) China Resources has agreed to lease the Equipment to Kangbao Concord for a term of 10 years, to be payable in 40 quarterly installments, at an estimated total lease payments in the amount of approximately RMB352,667,856 (equivalent to approximately HK$398,514,677). All Equipment under the Finance Lease Arrangement are/will be used by the Group for the operation of a wind power project of the Group in Hebei Province, the PRC. The Group will book all the Equipment as its fixed assets in its financial statements pursuant to the Hong Kong Financial Reporting Standards, as part of the purchase price of the Equipment due to China Resources is still outstanding, the legal titles of the Equipment shall be rested with China Resources. Details of the Finance Lease Arrangement are summarized as follows:

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(i) Principal terms of the Sale and Purchase Agreement

The principal terms of the Sale and Purchase Agreement are set out below:

Date of agreement 5 December 2018 Parties to the Lessor and purchaser: China Resources; agreement Lessee: Kangbao Concord; and Supplier: Haotai New Energy Subject assets The Equipment Consideration payable The consideration shall be settled by China Resources by two by the lessor to the installments. The first installment (RMB203,384,000) is expected supplier to be settled by the middle of December 2018, subject to, among other things, the execution of the Finance Lease Agreement, the Other Security Agreements and the relevant ancillary documents and the completion of the filings and registration procedure at the relevant authorities. China Resources shall be entitled to terminate the Sale and Purchase Agreement if such conditions have not been satisfied on or before 180 days from the date of the Sale and Purchase Agreement. The second installment (RMB50,846,000) is expected to be settled by the end of December 2018 subject to, among other things, the issuance of the confirmation on the quality of the Equipment by Kangbao Concord to China Resources and the payment of the second installment of the security deposit and the first installment of the handling fee by Kangbao Concord to China Resources.

Basis of the The consideration is determined after arm’s length negotiations with consideration reference to the purchase price payable to Haotai New Energy for the Equipment.

To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, China Resources and its ultimate beneficial owner(s) are third parties independent to the Company and its connected persons.

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(ii) Principal terms of the Finance Lease Agreement

The principal terms of the Finance Lease Agreement are set out below:

Date of agreement 5 December 2018 Parties to the Lessor: China Resources; and agreement Lessee: Kangbao Concord

Period of the lease term 10 years (commenced in the middle of December 2018)

Total lease amount RMB352,667,856 (equivalent to approximately HK$398,514,677) payable by the lessee (being the sum of the lease cost of RMB254,230,000, the to the lessor handling fee of RMB15,253,800 and the aggregate interest of RMB83,184,056), which is payable in 40 quarterly installments. Handling fee payable RMB15,253,800 (equivalent to approximately HK$17,236,794), by the lessee to the which shall be fully settled by Kangbao Concord to China Resources lessor by 12 installments (together with the lease cost and interest) before the end of the fifth anniversary from the commencement of the lease terms.

Security deposit RMB7,626,900 (equivalent to approximately HK$8,618,397), payable by the lessee which is payable by Kangbao Concord to China Resources by to the lessor two installments upon the settlement of each installment of the consideration by China Resources and will be used as the final payment of the remaining lease amount. Basis to determine the The lease amount is agreed between China Resources and Kangbao lease payment Concord with reference to the consideration paid by China Resources in respect of the Equipment and the prevailing market interest rate of comparable equipment finance leases.

Adjustment to the Interest (which forms part of the total lease amount) is subject to interest under the adjustment with reference to the benchmark interest rate for RMB Finance Lease loans with maturity of more than 5 years as promulgated by the Agreement People’s Bank of China from time to time.

Lessee’s option to purchase the Equipment

Payment term The legal ownership of the Equipment will be rested in China Resources throughout the lease term. Upon the end of the lease term, provided that Kangbao Concord has fulfilled all of its obligations under the Finance Lease Agreement, Kangbao Concord has the option to purchase the Equipment at a consideration of RMB100.

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(iii) Other Security Agreements

In order to secure Kangbao Concord’s obligations under the Finance Lease Arrangement, the following security documents have also been executed on 5 December 2018 (after trading hours):

• Guarantee Agreement Century Concord has entered into a guarantee agreement in favour of China Resources (the “Guarantee Agreement”), pursuant to which Century Concord has agreed to provide an irrevocable guarantee for all the debts of the Kangbao Concord under the Finance Lease Agreement.

• Electricity Fee Pledge Kangbao Concord has entered into a pledge agreement in favour of Agreement China Resources (the “Electricity Fee Pledge Agreement”), pursuant to which Kangbao Concord has agreed to pledge its gains from the receivable in electricity fee to China Resources, to secure its obligations under the Finance Lease Agreement.

• Share Pledge Agreement Hebei Youhua has entered into the share pledge agreement in favour of China Resources (the “Share Pledge Agreement”), pursuant to which Hebei Youhua has agreed to pledge all its equity interest in Kangbao Concord to China Resources, to secure the obligations of Kangbao Concord under the Finance Lease Agreement.

REASONS FOR AND BENEFIT OF THE TRANSACTION

The entering into of the Finance Lease Arrangement is in the ordinary and usual course of business of the Group. The Directors are of the view that under the Finance Lease Arrangement, the Group will obtain financial resources and gain access to certain equipment as required for its operations. The terms under the Finance Lease Arrangement have been agreed after arm’s length negotiation among the relevant parties. The Directors consider the terms of the Finance Lease Arrangement are on normal commercial terms, fair and reasonable and are in the interests of the Company and the shareholders of the Company as a whole.

INFORMATION OF THE PARTIES TO THE FINANCE LEASE ARRANGEMENT

China Resources is a company incorporated in the PRC which is principally engaged in the business of finance leasing. To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, China Resources and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

The Company is principally engaged in (i) investing in wind and solar power projects; and (ii) offering professional technical services and integrated solutions to the wind and solar power generation projects.

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Kangbao Concord is a wholly-owned subsidiary of the Company, and is principally engaged in the wind power plant investment and operation in the PRC.

Haotai New Energy is a wholly-owned subsidiary of the Company, and is principally engaged in the trading of equipment for wind power and new energy.

LISTING RULES IMPLICATIONS

As the highest percentage ratio (as defined under the Listing Rules) in respect of the transaction contemplated under the Finance Lease Arrangement exceeds 5% but is less than 25%, the Finance Lease Arrangement constitutes a discloseable transaction of the Company and thus is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

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

• “Board” the board of Directors “China Resources” China Resources Leasing Co. Ltd.（華潤租賃有限公司）* , a company incorporated in the PRC with limited liability and a third party independent of the Company and its connected persons, which is also the purchaser under the Sale and Purchase Agreement and the lessor under Finance Lease Agreement

• “Company” Concord New Energy Group Limited（協合新能源集團有限公司 *）(Stock code: 182), a company incorporated in Bermuda with limited liability, the ordinary shares of which are listed on the Main Board of the Stock Exchange

• “Century Concord” Century Concord Wind Power Investment Co., Ltd.（協合風電投資有限* 公司）, a company incorporated in the PRC with limited liability, and a wholly-owned subsidiary of the Company and is principally engaged in wind and solar power projects investment

• “Director(s)” the director(s) of the Company “Equipment” certain machinery and equipment for the Group’s operation of a wind power project in Hebei Province, the PRC as stipulated under the Sale and Purchase Agreement

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• “Finance Lease the agreement entered into between the Kangbao Concord and China Agreement” Resources dated 5 December 2018, including all ancillary agreements attached thereto in respect of the lease of the Equipment, as described in the section headed “Finance Lease Arrangement” in this announcement

• “Finance Lease the transactions contemplated under the Finance Lease Agreement, the Arrangement” Sale and Purchase Agreement and the Other Security Agreements

• “Group” the Company and its subsidiaries

• “Haotai New Energy” Haotai New Energy Equipment Co. Ltd.（浩泰新能源裝備有限公司）* , a company incorporated in the PRC with limited liability and a whollyowned subsidiary of the Company, the supplier under the Sale and Purchase Agreement

• “Hebei Youhua”

• Hebei Youhua New Energy Development Co., Ltd.*（河北優華新能源開發 有限公司）, a company incorporated in the PRC with limited liability and a wholly-owned subsidiary of the Company and is principally engaged in wind power projects investment

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Kangbao Concord” Kangbao Concord Xuwulin Wind Power Co., Ltd.（康保協合徐五林風力* 發電有限公司）, a company incorporated in the PRC with limited liability and a wholly-owned subsidiary of the Company, which is the lessee under the Sale and Purchase Agreement and the Finance Lease Agreement

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

• “Other Security the security documents, including the Guarantee Agreement, the Electricity Agreements” Fee Pledge Agreement and the Share Pledge Agreement, to secure Kangbao Concord’s obligations under the Finance Lease Arrangement, as stated in the section headed “Finance Lease Arrangement — Other Security Agreements” in this announcement

• “PRC” The People’s Republic of China

• “RMB” Renminbi, the lawful currency of the PRC

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“Sale and Purchase

Agreement”

• the agreement entered into among China Resources, Haotai New Energy and Kangbao Concord dated 5 December 2018 pursuant to which China Resources agreed to purchase the Equipment from Haotai New Energy to fulfill China Resources’s obligations under the Finance Lease Agreement

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

For illustration purpose, the exchange rate of RMB1 = HK$1.13 is applied in this announcement.

For and on behalf of

Concord New Energy Group Limited Liu Shunxing Chairman

Hong Kong, 5 December 2018

As at the date of this announcement, the Board comprises Mr. Liu Shunxing (Chairman), Ms. Liu Jianhong (Vice Chairperson), Mr. Yu Weizhou (Chief Executive Officer), Mr. Niu Wenhui, Mr. Gui Kai and Dr. Shang Li (all of above are executive Directors), Mr. Wu Shaohua (who is a non-executive Director) and Mr. Yap Fat Suan, Henry, Dr. Jesse Zhixi Fang , Ms. Huang Jian and Mr. Zhang Zhong (who are independent non-executive Directors)

• For identification purposes only

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