Bloks Group Limited — Capital/Financing Update 2024

Jun 14, 2024

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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Concord New Energy Group Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 182)

DISCLOSEABLE TRANSACTION FINANCE LEASE ARRANGEMENT

The Board is pleased to announce that after trading hours on 14 June 2024, the Lessee and the Financier agreed on the Finance Lease Arrangement by way of entering into the Finance Lease Agreement, pursuant to which the Financier shall purchase the Equipment from the Lessee at a purchase price of RMB315 million, and shall lease the Equipment back to the Lessee for the Lease Period in consideration of the Lessee paying to the Financier the quarterly Lease Payments.

LISTING RULES IMPLICATIONS

As the highest Applicable Percentage Ratio in respect of the Finance Lease Arrangement exceeds 5% but is less than 25%, the Finance Lease Arrangement constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is thus subject to the notification and publication requirements under Chapter 14 of the Listing Rules. As the Previous Finance Lease Arrangement was entered into within a 12-month period before the date of the Finance Lease Agreement, the transactions contemplated under the Finance Lease Arrangement and the Previous Finance Lease Arrangement shall be aggregated under Chapter 14 of the Listing Rules resulting in a highest Applicable Percentage Ratio on an aggregated basis exceeding 5% but less than 25%. Hence, the Finance Lease Arrangement is not required to be reclassified by aggregating with the Previous Finance Lease Arrangement.

INTRODUCTION

The Board is pleased to announce that after trading hours on 14 June 2024, the Lessee and the Financier agreed on the Finance Lease Arrangement by way of entering into the Finance Lease Agreement. Details of the Finance Lease Arrangement are set out below.

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FINANCE LEASE AGREEMENT

Date:

14 June 2024

Parties:

• (i) the Financier as the purchaser and the lessor of the Equipment; and

• (ii) the Lessee as the seller and the lessee of the Equipment.

Subject Assets:

The Equipment, which shall be purchased by the Financier from the Lessee and then leased back to the Lessee from the Financier.

Purchase Price and Completion:

The Purchase Price payable by the Financier to the Lessee for the purchase of the Equipment shall be RMB315 million, which was determined after arm’s length negotiation between the Lessee and the Financier with reference to the book value of the Equipment as recorded in the accounts of the Group and the amount of financing needs of the Group. The Purchase Price shall be payable after the fulfilment of the following conditions:

• (a) the Financier having received the payment application issued by the Lessee, with the date of payment application not later than 20 November 2024;

• (b) all the agreements contemplated under the Finance Lease Arrangement (including the Security Documents) having been entered into and becoming effective, and all the relevant procedures for them having been completed;

• (c) the Financier having received the security deposit due and payable under the Finance Lease Agreement in full;

• (d) the Lessee having purchased insurance which meets the requirements of the Financier in respect of the Equipment;

• (e) as at the payment of the Purchase Price, there being no material changes to the fiscal, taxation or financial policies or governmental capital supervision measures in respect of financial industry nor material increase in market financing cost;

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• (f) the Financier having received a valuation report on the Equipment prepared by an assessment agency acceptable to the Financier, confirming that the Purchase Price is not higher than the valuation of the Equipment; and

• (g) all other conditions or relevant procedures as required by the Finance Lease Agreement having been satisfied or performed.

It is expected that the Purchase Price will be paid by the end of June 2024.

Lease Period:

Lease Payments and Interest Rate:

A period of 15 years commencing from the date of payment of the Purchase Price.

The Lessee shall pay the quarterly Lease Payments to the Financier during the Lease Period.

The total Lease Payments represent the Purchase Price plus interest attributable to the Finance Lease Arrangement to be determined based on the following applicable interest rate.

The applicable interest rate for the Lease Payments is a floating interest rate equal to the relevant over-5-year LPR as may be announced from time to time minus 0.2%. The relevant LPR for the first Lease Payment is the over-5-year LPR announced on 20 May 2024, being 3.95%, which gives rise to an applicable interest rate of 3.75% for the first quarterly Lease Payment. The applicable interest rate will be adjusted annually on the anniversary of the date of payment of the first Lease Payment, which will, after adjustment, equal to the over-5-year LPR in the 1-month period before the date of adjustment minus 0.2%. Assuming the applicable interest rate was 3.75% throughout the Lease Period, the total Lease Payments would be approximately RMB406.38 million.

The Lease Payments and the applicable interest rate were determined after arm’s length negotiation between the Lessee and the Financier with reference to the prevailing market cost of finance lease of the Equipment.

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Security Documents:

As security for the due performance of all the Lessee’s obligations under the Finance Lease Agreement, the Company, the Lessee and Shenyang Xingda shall, in favour of the Financier, execute the security documents (the “ Security Documents ”) consisting of (i) the guarantee given by the Company; (ii) the pledge given by the Lessee in respect of its electricity incomes arising from the operation of the Power Plant; and (iii) the pledge given by Shenyang Xingda in respect of its entire shareholding interest in the Lessee. The Security Documents and the Finance Lease Agreement have no material adverse effect on the operation and management of the Group’s businesses.

Security Deposit:

To secure the due performance of the Lessee’s obligations under the Finance Lease Agreement, the Lessee shall pay to the Financier a security deposit of RMB6.3 million, being 2% of the Purchase Price.

Handling Fee:

Nil.

Buyback Option: Upon the expiry of the Lease Period, the Lessee has the option to buy back the Equipment from the Financier at a consideration of RMB100.

PREVIOUS FINANCE LEASE ARRANGEMENT

On 20 February 2024, Xishui Juhe, a wholly-owned subsidiary of the Group, entered into a finance lease arrangement with the Financier, pursuant to which the Financier shall purchase certain photovoltaic power equipment of the power plant at a purchase price of RMB190 million from the lessee for the purposes of leasing such photovoltaic power equipment to the lessee for a lease period of 15 years in consideration of the lessee paying to the Financier quarterly lease payments to be determined with reference to an applicable interest rate for that finance lease arrangement, which is a floating interest rate equal to the over-5-year LPR announced on 20 December 2023 (being 4.2%) minus 0.3%, resulting in an applicable interest rate of 3.9%. Assuming the applicable interest rate being 3.9% throughout such lease period, the total lease payments would be approximately RMB274.32 million. RMB3.8 million shall be paid by Xishui Juhe to the Financier as security deposit. Upon the expiry of such lease period, the lessee has the option to buy such photovoltaic power equipment at RMB100. The principal terms are materially the same as the Finance Lease Arrangement.

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REASONS FOR AND BENEFIT OF THE FINANCE LEASE ARRANGEMENT

The entering into of the Finance Lease Arrangement is in the ordinary and usual course of business of the Group, which allows the Group to obtain financial resources and gain access to certain equipment as required for its operations. The Directors consider that the terms of the Finance Lease Arrangement are on normal commercial terms, fair and reasonable and are in the interests of the Shareholders as a whole. The unaudited book value of the Equipment as at 31 May 2024 was approximately RMB315 million. According to the Hong Kong Financial Reporting Standards, the transaction contemplated under the Finance Lease Arrangement will not give rise to any disposal gain or loss to be recorded by the Group.

INTENDED USE OF PROCEEDS

The Company will generate a net disposal proceed of approximately RMB315 million under the Finance Lease Arrangement, which will be used as general working capital to finance the business operation and activities of the Group.

INFORMATION ON THE PARTIES TO THE FINANCE LEASE AGREEMENT

The Company is an investment holding company. The Group 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.

The Lessee is a wholly-owned subsidiary of the Company and is principally engaged in the operation of wind power generation projects in the PRC.

The Financier is principally engaged in the business of finance leasing. Insofar as the Company is aware, the Financier is wholly-owned by China Merchants Group Limited*（招商局集團有限公司）, which is a company wholly-owned by the State-owned Assets Supervision and Administration Commission of the State Council of the PRC. To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, the Financier and its ultimate beneficial owners are third parties independent of the Company and its connected persons.

LISTING RULES IMPLICATIONS

As the highest Applicable Percentage Ratio in respect of the Finance Lease Arrangement exceeds 5% but is less than 25%, the Finance Lease Arrangement constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is thus subject to the notification and publication requirements under Chapter 14 of the Listing Rules. As the Previous Finance Lease Arrangement was entered into within a 12-month period before the date of the Finance Lease Agreement, the transactions contemplated under the Finance Lease Arrangement and the Previous Finance Lease Arrangement shall be aggregated under Chapter 14 of the Listing Rules resulting in a highest

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Applicable Percentage Ratio on an aggregated basis exceeding 5% but less than 25%. Hence, the Finance Lease Arrangement is not required to be reclassified by aggregating with the Previous Finance Lease Arrangement.

DEFINITIONS

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

“Applicable Percentage	have the meanings ascribed to them under the Listing Rules;
Ratio”, “connected
person(s)” and
“subsidiary(ies)”
“Board”	board of Directors;
“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;
“Director(s)”	the director(s) of the Company;
“Equipment”	certain wind power equipment used for the Power Plant (including
	wind turbines, main transformer, power cables and other wind
	power equipment);
“Finance Lease Agreement”	the finance lease agreement dated 14 June 2024 between the Lessee
	and the Financier for the acquisition of the Equipment by the
	Financier from the Lessee and the leasing of the Equipment back to
	the Lessee from the Financier;
“Finance Lease Arrangement”	the transaction contemplated under the Finance Lease Agreement;
“Financier”	China Merchants Financial Leasing (Tianjin) Co., Ltd.* (招商局融
	資租賃（天津）有限公司), a company established in the PRC with
	limited liability;
“Group”	the Company and its subsidiaries;
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC;
“Lease Payment(s)”	the quarterly lease payment(s) payable by the Lessee to the
	Financier under the Finance Lease Agreement during the Lease
	Period for the leasing of the Equipment;

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“Lease Period”	a period of 15 years, in which the Lessee shall lease the Equipment
	from the Financier;
“Lessee”	Fuxin Mongol Autonomous County Xingda Wind Power Co., Ltd.*
	(阜新蒙古族自治縣興達風力發電有限公司), a company
	established in the PRC with limited liability and a wholly-owned
	subsidiary of the Company;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“LPR”	the loan prime rate (貸款市場報價利率) announced by the National
	Interbank Funding Center (全國銀行間同業拆借中心) from time to
	time;
“MW”	Megawatt;
“Power Plant”	the 50MW wind power plant project operated by the Lessee in
	Fuxin City, Liaoning Province, the PRC（中國遼寧省阜新市）;
“PRC”	the People’s Republic of China, which, for the purposes of this
	announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan;
“Previous Finance Lease	the previous finance lease arrangement set out in the paragraph
Arrangement”	headed “Previous Finance Lease Arrangement” in this
	announcement;
“Purchase Price”	the purchase price payable to the Lessee by the Financier for the
	acquisition of the Equipment;
“RMB”	Renminbi, the lawful currency of the PRC;
“Shareholder(s)”	holder(s) of the shares of the Company;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Shenyang Xingda”	Shenyang Xingda New Energy Co., Ltd.* (瀋陽興達新能源有限公
	司), a company established in the PRC with limited liability and a
	wholly-owned subsidiary of the Company;

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“Xishui Juhe”

Xishui Juhe Photovoltaic Power Co., Ltd.* (浠水聚合光伏發電有 限公司), a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company; and

“%”

per cent.

For and on behalf of

Concord New Energy Group Limited Liu Shunxing Chairman

Hong Kong, 14 June 2024

As at the date of this announcement, the Board comprises Mr. Liu Shunxing (Chairman), Ms. Liu Jianhong (Vice Chairperson), Mr. Gui Kai (Chief Executive Officer), Mr. Niu Wenhui, Mr. Zhai Feng, Ms. Shang Jia and Mr. Chan Kam Kwan, Jason (all of above are executive Directors), Mr. Wang Feng (who is a non-executive Director) and Dr. Jesse Zhixi Fang, Ms. Li Yongli, Ms. Huang Jian and Mr. Zhang Zhong (who are independent non-executive Directors).

• For identification purposes only

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