C&D Property Management Group Co., Ltd — M&A Activity 2015

Aug 24, 2015

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.

CHINA SANDI HOLDINGS LIMITED 中 國 三 迪 控 股 有 限 公 司

(incorporated in Bermuda with limited liability) (Stock code: 00910)

INSIDE INFORMATION IN RELATION TO A LETTER OF INTENT FOR A PROPOSED ACQUISITION

This announcement is made pursuant to Rule 13.09 of the Listing Rules and Part XIVA of the SFO.

The Board is pleased to announce that on 24 August 2015, the Company, as the purchaser, entered into the Letter of Intent with the Vendors in relation to the proposed acquisition of a part of or the entire equity interests in the Target Company by the Company from the Vendors. The Target Group is principally engaged in the business of exploration and production of coalbed methane and provision of related technical services and consultation services. It is the operator of a coalbed methane exploitation project in Taiyuan, Shanxi Province.

The Proposed Acquisition, if materialised, may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. The Company will comply with the disclosure and/or approval requirements under the Listing Rules should the Proposed Acquisition become materialised.

As at the date of this announcement, no formal agreement in relation to the Proposed Acquisition has been entered into. As the Proposed Acquisition may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

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This announcement is made pursuant to Rule 13.09 of the Listing Rules and Part XIVA of the SFO.

The Board is pleased to announce that on 24 August 2015, the Company, as the purchaser, entered into the Letter of Intent with the Vendors in relation to the proposed acquisition of a part of or the entire equity interests in the Target Company by the Company from the Vendors.

LETTER OF INTENT

Details of the Letter of Intent are set out below:

Date

24 August 2015

Parties

Purchaser : the Company

Vendors : 山南天源投資中心 (Shannan Tianyuan Investment Centre); and 山南盛源投資中心 (Shannan Shengyuan Investment Centre).

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Vendors and their respective ultimate beneficial owners is an independent third party to the Company and its connected persons.

Subject matter of the interests proposed to be acquired

It is proposed that the Company, as the purchaser, may acquire a part of or the entire equity interests in the Target Company from the Vendors. As at the date of the Letter of Intent, Shannan Tianyuan and Shannan Shengyuan own 78.66% and 11.78% of the equity interests in the Target Company respectively.

Earnest Deposit

Pursuant to the Letter of Intent, the Company shall pay the Earnest Deposit in the amount of RMB95,600,000 (equivalent to approximately HK$114,720,000) and RMB14,400,000 (equivalent to approximately HK$17,280,000) to Shannan Tianyuan and Shannan Shengyuan, respectively.

In respect of the Earnest Deposit, the Company and the Vendors agree as follows:

• (a) a Vendor shall refund the Earnest Deposit that it has received from the Company within 3 days after its receipt of a written notice from the Company indicating that (i) it is not satisfied with the results of the Due Diligence Review; or (ii) it decides not to proceed with the Proposed Acquisition further with that Vendor;

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• (b) a Vendor shall refund the Earnest Deposit that it has received from the Company within 3 days after the expiration of the Exclusivity Period or such later date as may be agreed by the parties, if no Definitive Agreement has been entered into between the Purchaser and that Vendor before the expiration of such period or such later date as may be agreed by the parties;

• (c) if the Company and the Vendors enter into the Definitive Agreement(s), the Earnest Deposit paid to Shannan Tianyuan and Shannan Shengyuan, respectively, shall be applied towards satisfaction of part of the purchase price payable by the Company to them, respectively, under the Definitive Agreement(s); and

• (d) if the Company and one of the Vendors enter into the Definitive Agreement(s), the Earnest Deposit paid to such Vendor shall be applied towards satisfaction of part of the purchase price payable by the Company to such Vendor under the Definitive Agreement(s).

Exclusivity

The Vendors have granted to the Company an exclusive period commencing from the date of the Letter of Intent to 31 March 2016 (both days inclusive) (or such longer period as may be agreed by the parties) for the Company to exclusively negotiate the Proposed Acquisition with the Vendors. During the Exclusive Period, each of the Vendors (i) shall not directly or indirectly contact or negotiate with any parties other than the Company or persons specified by the Company in relation to the Proposed Acquisition or any other transactions that are of a similar nature (‘‘Transactions’’); (ii) shall not reach any consensus or cooperate, agree or sign any legal documents with any third parties in respect of the Transactions; and (iii) immediately notify the Company in writing if any of the employees, agents, representatives, senior management or associates of each Vendor shall receive any offer or inquiry from any third parties in respect of the Transactions.

Due diligence and transaction structure

The Company may during the Exclusive Period conduct Due Diligence Review in order to facilitate its decision as to whether or not to proceed with the Proposed Acquisition. The transaction structure under the Definitive Agreement(s), including but not limited to the parties to the Proposed Acquisition and the portion of the equity interests to be acquired, may be adjusted according to the results of the Due Diligence Review, the relevant legal requirements and the negotiation between the parties. The Company may designate any of its affiliates to enter into the Definitive Agreement(s) with the Vendors in respect of the Proposed Acquisition.

Lapse of the Letter of Intent

The Letter of Intent shall lapse at the earliest of the following to occur: (i) the Company notifies the Vendors in writing of the termination of the Letter of Intent; (ii) the Company and the Vendors mutually agree to terminate the Letter of Intent; or (iii) the parties enter into the Definitive Agreement(s) within the Exclusive Period (or such other period as may be agreed by the parties).

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No binding obligation to proceed with the Proposed Acquisition

The Letter of Intent does not impose any obligation on the Company or the Vendors to proceed with the Proposed Acquisition. Should the parties decide to proceed with the Proposed Acquisition, the parties shall set out the terms of the Proposed Acquisition in the Definitive Agreement(s).

INFORMATION OF THE TARGET GROUP

The Target Group is principally engaged in the business of exploration and production of coalbed methane and provision of related technical services and consultation services. Gujiao Guosheng has entered into a coalbed methane exploration and production sharing contract with the exploration rights holder of the Gujiao Project. Pursuant to such contract, Gujiao Guosheng is appointed as the operator of the Gujiao Project and it is responsible for the exploration and production of coalbed methane with an area of approximately 552 square kilometres within the registration plot in return for sharing the revenue derived from the sales of coalbed methane. As at the date of this announcement, an area of approximately 190 square kilometres of the Gujiao Project is in the development stage, with production facilities under construction. According to the project confirmation documents provided by the Target Group filing with the National Energy Administration, the proved geological reserve of coalbed methane within the area of approximately 190 square kilometres is 13.3 billion cubic metres, with a designated production capacity of approximately 500 million cubic metres per annum.

GENERAL

The Proposed Acquisition, if materialised, may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. The Company will comply with the disclosure and/or approval requirements under the Listing Rules should the Proposed Acquisition become materialised.

As at the date of this announcement, no formal agreement in relation to the Proposed Acquisition has been entered into. As the Proposed Acquisition may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

DEFINITIONS

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

‘‘Board’’	the board of Directors
‘‘Company’’	China Sandi Holdings Limited, a company incorporated in
	Bermuda with limited liability and the Shares of which are
	listed on the Stock Exchange
‘‘Definitive Agreement(s)’’	the final and binding agreement(s) to be executed between
	any of the Vendors and the Company in respect of the
	acquisition of equity interests in the Target Company

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‘‘Directors’’

the directors of the Company

• ‘‘Due Diligence Review’’

• due diligence review to be conducted by the Company on the Target Group

• ‘‘Earnest Deposit’’

• a refundable deposit in the total amount of RMB110,000,000 (equivalent to approximately HK$132,000,000) payable to the Vendors by the Company pursuant to the Letter of Intent

• ‘‘Exclusive Period’’

• the period commencing from the date of the Letter of Intent to 31 March 2016 (both days inclusive) (or such longer period as may be agreed by the parties) during which the Company shall be entitled to negotiate the Proposed Acquisition with the Vendors exclusively pursuant to the Letter of Intent

• ‘‘Gujiao Guosheng’’ 古交市國盛恒泰煤層氣開發利用有限公司 (Gujiao Guosheng Hengtai Coalbed Methane Exploitation Co., Ltd*), a company established in the PRC with limited liability which is wholly owned by the Target Company

• ‘‘Gujiao Project’’ the coalbed methane exploitation project located at 山西省 太原市西側沁水盆地北部的西山煤田 (Xishan coal field, north part of Qinshui basin, west side of Taiyuan city, Shanxi Province*) with an exploration area of approximately 552 square kilometres within the coal methane exploration registration plot at Gujiao zone, Shanxi Province

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’

• the Hong Kong Special Administrative Region of the PRC

• ‘‘Letter of Intent’’

• the letter of intent dated 24 August 2015 entered into between the Company and the Vendors in relation to the Proposed Acquisition

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘PRC’’

• the People’s Republic of China which for the purposes of this announcement excludes Taiwan, Hong Kong and the Macau Special Administrative Region

• ‘‘Proposed Acquisition’’

• the proposed acquisition of a part of or the entire equity interests in the Target Company by the Company from the Vendors

• ‘‘RMB’’

• Renminbi, the lawful currency of the PRC

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• ‘‘SFO’’ Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ‘‘Shannan Shengyuan’’ 山南盛源投資中心 (Shannan Shengyuan Investment Centre*), a limited liability partnership established in the PRC

• ‘‘Shannan Tianyuan’’ 山南天源投資中心 (Shannan Tianyuan Investment Centre*), a limited liability partnership established in the PRC

• ‘‘Shares’’ ordinary shares of HK$0.01 each in the share capital of the Company

• ‘‘Shareholder(s)’’ the shareholder(s) of the Company ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Target Company’’ 江蘇國盛恒泰能源發展有限公司 (Jiangsu Guosheng Hengtai Energy Development Co., Ltd*), a company established in the PRC with limited liability which as at the date of this announcement is owned as to 78.66% by Shannan Tianyuan and 11.78% by Shannan Shengyuan

• ‘‘Target Group’’ the Target Company and Gujiao Guosheng ‘‘Vendors’’ Shannan Tianyuan and Shannan Shengyuan ‘‘%’’ per cent.

Note: The figures in RMB are converted into HK$ at the rate of RMB1.0:HK$1.2 and the figures throughout this announcement for indicative purpose only.

By order of the Board

China Sandi Holdings Limited Guo Jiadi Chairman

Hong Kong, 24 August 2015

As at the date of this announcement, the Board comprises Mr. Guo Jiadi, Ms. Amika Lan E Guo and Mr. Lin Jianbin, being the executive Directors and Dr. Wong Yun Kuen, Mr. Chan Yee Ping, Michael, Mr. Yu Pak Yan, Peter, Mr. Zheng Jinyun and Mr. Zheng Yurui, being the independent non-executive Directors.

• For identification purpose only

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