Central Development Holdings Limited - Capital/Financing Update 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.

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase, or subscribe for any securities of the Company.

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CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TWENTY ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (3) PROPOSED CHANGE IN BOARD LOT SIZE; (4) PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE; AND (5) RESUMPTION OF TRADING

Financial adviser to the Company

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VMS Securities Limited

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Underwriters to the Rights Issue

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VMS Securities Limited

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Mr. Cao Zhong Mr. Fung Tsun Pong

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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PROPOSED SHARE CONSOLIDATION

The Board proposes to put forward a proposal to the Shareholders to effect the Share Consolidation which involves the consolidation of every twenty (20) issued and unissued Existing Shares of par value of HK$0.01 each into one (1) Consolidated Share of par value of HK$0.20 each.

As at the date of this announcement, the authorised share capital of the Company is HK$700,000,000 divided into 70,000,000,000 Existing Shares of HK$0.01 each, of which 27,009,583,895 Existing Shares have been issued and are fully paid or credited as fully paid. Assuming no further Existing Shares will be issued or repurchased between the date of this announcement and the date of the EGM, immediately after the Share Consolidation becoming effective and before completion of the Rights Issue, the authorised share capital of the Company will become HK$700,000,000 divided into 3,500,000,000 Consolidated Shares of HK$0.20 each, of which 1,350,479,194 Consolidated Shares (which are fully paid or credited as fully paid) will be in issue.

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

The Board further proposes to, subject to the Share Consolidation becoming effective, increase the authorised share capital of the Company from HK$700,000,000 divided into 3,500,000,000 Consolidated Shares to HK$3,000,000,000 divided into 15,000,000,000 Consolidated Shares by the creation of an additional 11,500,000,000 new Consolidated Shares of HK$0.20 each, which will rank pari passu in all respects with each other.

PROPOSED CHANGE IN BOARD LOT SIZE

The Board proposes to change the board lot size for trading on the Stock Exchange from 100,000 Existing Shares to 5,000 Consolidated Shares upon the Share Consolidation becoming effective.

PROPOSED RIGHTS ISSUE

The Board proposes, subject to, amongst others, the Share Consolidation and the Increase in Authorised Share Capital becoming effective, to implement the Rights Issue on the basis of four (4) Rights Shares for every one (1) Consolidated Share held on the Record Date at the Subscription Price of HK$0.20 per Rights Share, to raise not less than approximately HK$1,080.4 million and not more than approximately HK$1,812.6 million before expenses by way of the issue of not less than 5,401,916,776 Rights Shares and not more than 9,063,216,776 Rights Shares.

The Company will provisionally allot to the Qualifying Shareholders four (4) Rights Shares in nil-paid form for every one (1) Consolidated Share in issue and held on the Record Date. The Rights Issue will not be available to the Non-Qualifying Shareholders.

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The estimated net proceeds of the Rights Issue will be not less than approximately HK$1,046.5 million and not more than approximately HK$1,778.7 million, which are intended to be applied towards: (i) the repayment of the Company’s existing loans and borrowings, (ii) the interest payments of the Outstanding CBs and other borrowings, (iii) the establishment of a joint venture with CNOOC Oil & Petrochemicals Company Limited（中海石油煉化有限責任公司）(“ CNOOC ”) for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC, and (iv) the construction and installation of new compressed natural gas (“ CNG ”) and/or liquefied natural gas (“ LNG ”) dispensing stations in the PRC.

Irrevocable Undertakings

As at the date of this announcement, (a) Mr. Cao and Champion Rise, a company wholly owned by him, hold 3,128,500,000 of the Company Existing Shares in aggregate (representing approximately 11.58% of the existing issued share capital of the Company); and (b) Mr. Fung and Ocean Gain, a company wholly owned by him, hold 3,071,662,449 Existing Shares in aggregate (representing approximately 11.37% of the existing issued share capital of the Company), have unconditionally and irrevocably undertaken respectively to the Company and the Underwriters, among other things, that each of Mr. Cao, Champion Rise, Mr. Fung and Ocean Gain will remain as the beneficial owners of such Shares until and including the Record Date and will accept their respective Rights Shares, being their full entitlements under the Rights Issue.

Underwriting Agreement

The Rights Issue is fully underwritten by the Underwriters. Pursuant to the Underwriting Agreement, Mr. Cao and Mr. Fung have jointly and severally (in addition to their respective obligation under the Irrevocable Undertakings) conditionally agreed to underwrite the first 400,000,000 Untaken Shares, whereas VMS Securities has conditionally agreed to underwrite the remaining Untaken Shares, subject to the terms and conditions set out in the Underwriting Agreement, in particular the fulfillment of the conditions precedent contained therein. Details of the major terms and conditions of the Underwriting Agreement are set out in the section headed “The Underwriting Agreement” in this announcement.

The Consolidated Shares will be dealt in on an ex-rights basis from Friday, 6 November 2015. Dealings in the Rights Shares in the nil-paid form will take place from Thursday, 19 November 2015 to Thursday, 26 November 2015 (both dates inclusive). If the conditions of the Rights Issue are not fulfilled or waived (as applicable) or the Underwriting Agreement is terminated or rescinded by the Underwriters, the Rights Issue will not proceed.

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Any Shareholders or other persons contemplating selling or purchasing Rights Shares in their nil-paid form during the period from Thursday, 19 November 2015 to Thursday, 26 November 2015 (both dates inclusive) who are in any doubt about their position are recommended to consult their professional advisers. Any Shareholders or other persons dealing in the Existing Shares or the Consolidated Shares up to the date when the conditions of the Rights Issue are fulfilled or waived (as applicable) (and the date on which the Underwriters’ right of termination or rescission of the Underwriting Agreement ceases) and any persons dealing in the nil-paid Rights Shares during the period from Thursday, 19 November 2015 to Thursday, 26 November 2015 (both dates inclusive) will accordingly bear the risk that the Rights Issue could not become unconditional or does not proceed.

IMPLICATIONS UNDER THE LISTING RULES

In accordance with Rule 7.19(6) of the Listing Rules, as the Rights Issue will increase the issued share capital of the Company by more than 50%, the Rights Issue is subject to the approval of the Shareholders at the EGM by way of poll. Pursuant to Rule 7.19(6)(a) of the Listing Rules, the Rights Issue must be made conditional on approval by the Shareholders in general meeting by a resolution on which any controlling Shareholders and their associates or, where there are no controlling Shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the Rights Issue.

As at the date of this announcement, the Company does not have any controlling Shareholder. Mr. Cao, the chairman and an executive Director, together with his associate are interested in 3,128,500,000 Existing Shares, representing approximately 11.58% of the existing issued share capital of the Company, Mr. Fung, an executive Director, together with his associate are interested in 3,071,662,449 Existing Shares, representing approximately 11.37% of the existing issued share capital of the Company and Mr. Tsang Kam Ching, David, an executive Director, holds 51,624,499 Existing Shares, representing approximately 0.19% of the existing issued share capital of the Company. Save for Mr. Cao’s, Mr. Fung’s and Mr. Tsang Kam Ching, David’s interests, none of the Directors and the chief executive of the Company and their respective associates hold any Existing Shares. Mr. Cao, Mr. Fung, Mr. Tsang Kam Ching, David and their respective associates, together with parties acting in concert with any of them (if any), will abstain from voting in favour at the EGM to approve the Rights Issue in compliance with Rule 7.19(6)(a) of the Listing Rules.

As at the date of this announcement, VMS Securities as one of the Underwriters, and its associates are interested in 466,000,000 Existing Shares and the 5th Convertible Bonds. As such, VMS Securities and its associates will abstain from voting at the EGM to approve the Rights Issue.

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ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee has been established to make recommendations to the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement. An Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard. The Independent Board Committee will formulate its views with respect to the terms of the Rights Issue and the Underwriting Agreement after obtaining and considering the advice of the Independent Financial Adviser. The advice of the Independent Board Committee and the Independent Financial Adviser and other relevant information will be set out in the Circular.

GENERAL

The EGM will be convened and held for the Shareholders/Independent Shareholders (as the case may be) to consider and, if thought fit, approve the Share Consolidation, the Increase in Authorised Share Capital and the Rights Issue (including the Underwriting Agreement) and the transactions contemplated thereunder. The Circular containing, among other things, (i) further details of the Share Consolidation, the Increase in Authorised Share Capital, the change in board lot size and the Rights Issue; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement; and (iv) the notice convening the EGM will be despatched to the Shareholders on or before Monday, 19 October 2015.

Subject to the approval of the Rights Issue by the Independent Shareholders at the EGM and the Share Consolidation and the Increase in Authorised Share Capital becoming effective, the Prospectus Documents will be despatched to the Qualifying Shareholders on or before Tuesday, 17 November 2015 and the Prospectus will be despatched to the Non-Qualifying Shareholders for information only.

PROPOSED SHARE CONSOLIDATION

Effects of the Share Consolidation

As at the date of this announcement, the authorised share capital of the Company is HK$700,000,000 divided into 70,000,000,000 Existing Shares of HK$0.01 each, of which

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27,009,583,895 Existing Shares have been issued and are fully paid or credited as fully paid. Assuming no further Existing Shares will be issued or repurchased between the date of this announcement and the date of the EGM, immediately after the Share Consolidation becoming effective and before completion of the Rights Issue, the authorised share capital of the Company will become HK$700,000,000 divided into 3,500,000,000 Consolidated Shares of HK$0.20 each, of which 1,350,479,194 Consolidated Shares (which are fully paid or credited as fully paid) will be in issue. The Consolidated Shares will rank pari passu in all respects with each other and the Share Consolidation will not result in any change in the relative rights of the Shareholders.

Any fractional Consolidated Share to which an individual Shareholder is entitled to will not be issued by the Company to such Shareholder, but will be aggregated, sold (if a premium, net of expenses, can be obtained) and retained for the benefit of the Company. Any fractional Consolidated Share in the issued share capital of the Company arising from the Share Consolidation will be cancelled.

Save for the necessary expenses for the implementation of the Share Consolidation which are expected to be insignificant in the context of the net asset value of the Company, the implementation of the Share Consolidation will not alter the underlying assets, business operation, management or financial position of the Company or the interests and rights of the Shareholders.

Application for Listing of the Consolidated Shares

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Consolidated Shares. Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

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Conditions and expected effective date of the Share Consolidation

The Share Consolidation is conditional upon the satisfaction of the following conditions:

(a) the passing of an ordinary resolution by the Shareholders approving the Share Consolidation at the EGM; and
(b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Consolidated Shares in issue.

Assuming the above conditions are fulfilled, it is expected that the Share Consolidation will become effective on Thursday, 5 November 2015.

Reasons for the Share Consolidation

The Share Consolidation will increase the nominal value of the Shares and will reduce the total number of Existing Shares currently in issue. As such, it is expected that the Share Consolidation will bring about a corresponding upward adjustment in the trading price of the Shares and reduce the overall transaction costs of dealing in the Consolidated Shares. This will provide flexibility for equity fund raising of the Company in the future and facilitate the Rights Issue. Accordingly, the Board is of the view that the Share Consolidation is beneficial to the Company and the Shareholders as a whole.

Free exchange of Share certificates and Trading Arrangement

Subject to the Share Consolidation becoming effective, Shareholders may, from Thursday, 5 November 2015 to Friday, 11 December 2015 (both days inclusive), submit certificates for the Existing Shares to the Registrar for exchange, at the expense of the Company, for certificates for the Consolidated Shares. Thereafter, certificates for the Existing Shares will be accepted for exchange only on payment of a fee of the higher of HK$2.50 or such other amount as may from time to time be specified by the Stock Exchange for each certificate issued or cancelled. Certificates for the Existing Shares will continue to be good evidence of legal title and may be exchanged for certificates for the Consolidated Shares at any time at the expense of the Shareholders. The colour of the new share certificates for the Consolidated Shares will be announced by the Company in due course.

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New Shares issuable

As at the date of this announcement, the Company has no outstanding options, convertible securities or warrants which confer right to subscribe for or convert or exchange into the Shares or Consolidated Shares except those set out below:

	Number of	Number of
	new Existing	new Consolidated
Description	Shares issuable	Shares issuable
		(Note)
1st Convertible Bonds	4,000,000,000	200,000,000
2nd Convertible Bonds	3,500,000,000	175,000,000
3rd Convertible Bonds	4,000,000,000	200,000,000
4th Convertible Bonds	3,500,000,000	175,000,000
5th Convertible Bonds	800,000,000	40,000,000
6th Convertible Bonds	160,000,000	8,000,000
Unlisted Warrants	2,000,000,000	100,000,000
Outstanding Share Options	346,500,000	17,325,000

Note:

The number of Consolidated Shares issuable upon the Share Consolidation becoming effective has not taken into account the adjustment (if any) to the conversion and exercise price of the Outstanding CBs, the Unlisted Warrants and the Outstanding Share Options, respectively, as a result of the Rights Issue. All the Outstanding CBs with terms cater for future adjustment mechanisms under certain circumstances were approved by the Shareholders under specific mandates. Any adjustment on the number of Shares to be issued for the Outstanding CBs as a result of the Rights Issue represents an extension but not alteration of the terms approved by the Shareholders under the specific mandates. As a result, no shareholders’ approval is necessary for the above adjustment (if any).

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

As at the date of this announcement, the authorised share capital of the Company is HK$700,000,000 divided into 70,000,000,000 Existing Shares of HK$0.01 each, of which 27,009,583,895 Existing Shares have been allotted and issued as fully paid or credited as fully paid. Upon the Share Consolidation becoming effective, on the basis that the Company does not allot and issue any further Existing Shares prior thereto, the authorised share capital of the Company shall remain at HK$700,000,000 divided into 3,500,000,000 Consolidated Shares of HK$0.20 each, of which 1,350,479,194 Consolidated Shares will be in issue.

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The Board further proposes to increase the authorised share capital of the Company from HK$700,000,000 divided into 3,500,000,000 Consolidated Shares to HK$3,000,000,000 divided into 15,000,000,000 Consolidated Shares of HK$0.20 each by creating an additional 11,500,000,000 new Consolidated Shares of HK$0.20 each. Such additional Consolidated Shares will rank pari passu in all respects with each other. The proposed Increase in Authorised Share Capital of the Company is subject to the approval of the Shareholders by way of an ordinary resolution at the EGM and subject to the Share Consolidation becoming effective. As none of the Shareholder has any material interest in the Increase in Authorised Share Capital, no Shareholder is required to abstain from voting for such resolution at the EGM.

PROPOSED CHANGE IN BOARD LOT SIZE

The Board proposes to change the board lot size for trading on the Stock Exchange from 100,000 Existing Shares to 5,000 Consolidated Shares upon the Share Consolidation becoming effective. Based on the closing price of the Existing Shares of HK$0.058 per Existing Share as quoted on the Stock Exchange as at the Last Trading Day and the existing board lot size of 100,000 Existing Shares, the prevailing board lot value is HK$5,800. On the basis of the aforesaid closing price and the new board lot size of 5,000 Consolidated Shares, the new board lot value would be HK$5,800. The monetary value of each board lot will remain unchanged as a result of the change in board lot size.

Odd lots arrangements and matching services

In order to alleviate the difficulties arising from the existence of odd lots of the Consolidated Shares, the Company will procure an arrangement with an agent to stand in the market to provide matching services for the odd lots of the Consolidated Shares on a best effort basis. Further details in respect of the odd lots arrangement and new share certificates will be set out in the Circular.

PROPOSED RIGHTS ISSUE

The Rights Issue is proposed to take place after and is conditional upon the Share Consolidation and the Increase in Authorised Share Capital becoming effective.

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Issue statistics

Basis of the Rights Issue : Four (4) Rights Shares for every one (1) Consolidated Share held on the Record Date
Subscription Price : HK$0.20 per Rights Share
Number of Shares in issue as at the date of this announcement
: 27,009,583,895 Existing Shares (equivalent to 1,350,479,194 Consolidated Shares assuming the Share Consolidation and the Increase in Authorised Share Capital become effective)
Minimum number of Rights Shares
: 5,401,916,776 Rights Shares (assuming no further new Shares are issued (other than the Rights Shares) and no repurchase of Shares on or before the Record Date)
Maximum number of Rights Shares
: 9,063,216,776 Rights Shares (assuming new Shares are issued on or before the Record Date upon full exercise of all Outstanding Share Options and Unlisted Warrants and the conversion of all Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares on or before the Record Date)
Minimum number of : 6,752,395,970 Consolidated Shares (assuming no new Consolidated Shares in Shares are issued (other than the Rights Shares) on or before issue upon completion the Record Date and no repurchase of Shares upon of the Rights Issues completion of the Rights Issue), details are set out in the table under the section headed “Shareholding Structure of the Company”
Maximum number of : 11,329,020,970 Consolidated Shares (assuming new Shares Consolidated Shares in are issued on or before the Record Date upon full exercise of issue upon completion all Outstanding Share Options and Unlisted Warrants and of the Rights Issues the conversion of all Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares upon completion of the Rights Issue), details are set out in the table under the section headed “Shareholding Structure of the Company”

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Amount to be raised : Not less than approximately HK$1,080.4 million and not more than approximately HK$1,812.6 million
Right of excess : Qualifying Shareholders may apply for Rights Shares in applications excess of their provisional allotment

Assuming no new Shares (other than the Rights Shares) are issued on or before the Record Date and no repurchase of Shares upon completion of the Rights Issue, the minimum number of 5,401,916,776 Rights Shares to be issued pursuant to the terms of the Rights Issue represents approximately 400% of the Company’s existing issued share capital immediately after the Share Consolidation and the Increase in Authorised Share Capital becoming effective and approximately 80% of the Company’s issued share capital as enlarged by the issue of the Rights Shares (assuming no new Shares are issued on or before the Record Date and no repurchase of Shares upon completion of the Rights Issue).

Assuming new Shares are issued on or before the Record Date upon full exercise of all Outstanding Share Options and Unlisted Warrants and the conversion of all Outstanding CBs, but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares upon completion of the Rights Issue, the maximum number of 9,063,216,776 Rights Shares to be issued pursuant to the terms of the Rights Issue represent approximately 671% of the Company’s existing issued share capital immediately after the Share Consolidation and the Increase in Authorised Share Capital becoming effective and approximately 80% of the Company’s issued share capital as enlarged by the issue of the Rights Shares (assuming new Shares are issued on or before the Record Date upon full exercise of all Outstanding Share Options, Unlisted Warrants and the conversion of all Outstanding CBs, but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares upon completion of the Rights Issue).

Qualifying Shareholders

To qualify for the Rights Issue, a Shareholder must:

(i) be registered as a member of the Company at the close of business on the Record Date; and
(ii) be a Qualifying Shareholder.

In order to be registered as members of the Company at the close of business on the Record Date, transfer documents (together with the relevant share certificates) must be lodged with the Registrar no later than 4:30 p.m. on Monday, 9 November 2015.

The Company expects to despatch the Prospectus Documents to Qualifying Shareholders on or before the Posting Date. Subject to the advice of the Company’s legal advisers in the relevant jurisdictions and to the extent reasonably practicable and legally permitted, the Company will send copies of the Prospectus to Non-Qualifying Shareholders for their information only but will not send any PAL or EAF to them.

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Closure of register of members

The register of members of the Company will be closed from Tuesday, 10 November 2015 to Monday, 16 November 2015 (both dates inclusive) for determining the entitlements to the Rights Issue. No transfer of Consolidated Shares will be registered during this period.

Basis of provisional allotments

The basis of the provisional allotment shall be four (4) Rights Shares (in nil-paid form) for every one (1) Consolidated Share held by the Qualifying Shareholders as at the close of business on the Record Date.

Application for all or any part of a Qualifying Shareholder’s provisional allotment shall be made by completing a PAL and lodging the same with remittance for the Rights Shares being applied for with the Registrar by 4:00 p.m. on Tuesday, 1 December 2015.

Rights of Overseas Shareholders

The Prospectus Documents are not intended to be registered under the applicable securities legislation of any jurisdiction other than Hong Kong. The Company will comply with Rule 13.36(2)(a) of the Listing Rules and make enquiries regarding the feasibility of extending the offer of the Rights Shares to Overseas Shareholders. If, based on the legal opinions provided by the legal advisers to the Company, the Directors consider that it is necessary or expedient not to offer the Rights Shares to Overseas Shareholders on account either of the legal restrictions under the laws of the relevant place(s) or the requirements of the relevant regulatory body or stock exchange in such place(s), the Rights Issue will not be extended to such Overseas Shareholders.

The Company will send the Prospectus to the Non-Qualifying Shareholders for their information only, without any PAL and EAF. Arrangements will be made for the Rights Shares which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders to be sold in the market in their nil-paid form as soon as practicable after dealings in the Rights Shares in their nil-paid form commence and before dealings in the Rights Shares in their nil-paid form end. The proceeds of such sale, less expenses, of more than HK$100 will be paid to the Non-Qualifying Shareholders pro rata to their shareholdings held at the Record Date. In light of the administrative costs, the Company will retain individual amounts of HK$100 or less for its own benefit.

Any unsold entitlement of Non-Qualifying Shareholders to the Rights Shares, and any Rights Shares provisionally allotted but not accepted by the Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares, will be made available for excess applications by Qualifying Shareholders under the EAF(s).

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue subject to the results of the enquiries made by the Board pursuant to Rule 13.36(2)(a) of the Listing Rules. Accordingly, Overseas Shareholders should exercise caution when dealing in the Shares.

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Subscription Price

The Subscription Price is HK$0.20 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares and, where applicable, application for excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(a) a discount of approximately 82.8% to the equivalent closing price of HK$1.16 per Consolidated Share based on the closing price of HK$0.058 per Existing Share as quoted on the Stock Exchange on the Last Trading Day after taking into account the effect of the Share Consolidation;
(b) a discount of approximately 49.0% to the theoretical ex-rights price of approximately HK$0.392 per Consolidated Share based on the closing price of HK$0.058 per Existing Share as quoted on the Stock Exchange on the Last Trading Day after taking into account the effect of the Share Consolidation; and
(c) a discount of approximately 82.5% to the equivalent average closing price of HK$1.144 per Consolidated Share based on the average closing price per Existing Share as quoted on the Stock Exchange for the five consecutive trading days up to and including the Last Trading Day after taking into account the effect of the Share Consolidation.

The Subscription Price was determined after arm’s length negotiations between the Company and the Underwriters with reference to the market price of the Existing Shares prior to the Last Trading Day and the prevailing market conditions and taking into account the effect of the Share Consolidation. The Directors (other than the members of the Independent Board Committee who will form their view after receiving and considering the advice from the Independent Financial Adviser) consider that the terms of the Rights Issue, including the Subscription Price which has been set at a discount to the recent closing prices of the Existing Shares with an objective of encouraging the existing Shareholders to take up their entitlements so as to participate in the potential growth of the Company in the future, are fair and reasonable and in the best interests of the Company and the Shareholders as a whole. The net price per Rights Share upon full acceptance of the provisional allotment of all the Rights Shares will be approximately HK$0.194.

Status of the Rights Shares

The Rights Shares, when allotted and fully paid, will rank pari passu in all respects with the Consolidated Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which may be declared, made or paid on or after the date of allotment of the Rights Shares.

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Share certificates and refund cheques for the Rights Issue

Subject to fulfilment of the conditions of the Rights Issue, share certificates for all fully-paid Rights Shares are expected to be sent on or before Wednesday, 9 December 2015 by ordinary post to the allottees, at their own risk, to their registered addresses. Refund cheques in respect of wholly or partially unsuccessful applications for the excess Rights Shares (if any) are expected to be posted on or before Wednesday, 9 December 2015 by ordinary post to the applicants, at their own risk, to their registered addresses.

Fractions of Rights Shares

No fractional entitlements to the Rights Shares shall be issued to the Shareholders. All fractions of the Rights Shares shall be rounded down to the nearest whole number of Rights Shares and aggregated and, if a premium (net of expenses) can be achieved, sold in the market by the Company. Any unsold fractions of the Rights Shares will be made available for excess application by the Qualifying Shareholders.

Application for excess Rights Shares

Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements of the Non-Qualifying Shareholders, any Rights Shares provisionally allotted but not accepted and any unsold fractions of Rights Shares not provisionally allotted.

Application for excess Rights Shares can be made only by duly completing and signing the EAF (in accordance with the instructions printed therein) and lodging the same with a separate remittance for the excess Rights Shares being applied for with the Registrar by 4:00 p.m. on Tuesday, 1 December 2015.

The Board will allocate the excess Rights Shares (if any) at their discretion on a pro rata basis in proportion to the number of excess Rights Shares being applied for under each application subject to availability of excess Rights Shares and on the principle that preference will be given to applications for topping-up odd lot holdings to whole lot holdings where it appears to the Board that such applications are not made with the intention to abuse such mechanism. No preference will be made to Rights Shares comprised in applications by PAL or the number of Consolidated Shares held by the Qualifying Shareholders.

Shareholders with Shares held by a nominee (or which are held in CCASS) should note that the Board will consider the nominee (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Accordingly, such Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to the relevant beneficial owners individually.

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Shareholders with Shares held by a nominee (or which are held in CCASS) are advised to consider whether they would like to arrange for the registration of their relevant Shares under the names of the beneficial owners prior to the Record Date for the purpose of the Rights Issue. Shareholders and investors should consult their professional advisers if they are in doubt as to their status.

Application for listing

The Company will apply to the Listing Committee of the Stock Exchange for the listing of and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange, the Rights Shares in both their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Shareholders should seek advice from their stockbrokers or other professional advisers for details of those settlement arrangements and how such arrangements will affect their rights and interests.

Dealings in the Rights Shares in both their nil-paid and fully-paid forms, which are registered in the branch register of members of the Company in Hong Kong will be subject to the payment of stamp duty, Stock Exchange trading fee, transaction levy, investor compensation levy or any other applicable fees and charges in Hong Kong.

THE UNDERWRITING AGREEMENT

On 9 September 2015 (after trading hours), the Underwriters and the Company entered into the Underwriting Agreement in respect of the underwriting arrangement for the Rights Issue. The principal terms of the Underwriting Agreement are as follows:

Date : 9 September 2015 Underwriters : (1) Mr. Cao (2) Mr. Fung (3) VMS Securities

– 15 –

Total number of : The Underwriters have conditionally agreed pursuant to the Rights Shares being Underwriting Agreement to underwrite the Rights Shares underwritten not subscribed by the Qualifying Shareholders on a fully underwritten basis, being not less than 4,161,884,288 Rights Shares and not more than 7,823,184,288 Rights Shares, subject to the terms and conditions of the Underwriting Agreement
Commission : 2% of the aggregate subscription price in respect of the Underwritten Shares to be underwritten by VMS Securities (for avoidance of doubt, it shall mean the maximum number of the Underwritten Shares to be underwritten by VMS Securities, regardless whether or not it is called upon to subscribe or procure subscribers for any such Underwritten Shares)

No commission will be paid to Mr. Cao and Mr. Fung

The terms of the Underwriting Agreement (including the commission rate) were determined after arm’s length negotiation between the Company and the Underwriters by reference to the existing financial position of the Group, the size of the Rights Issue, and the current and the expected market condition. The Board (other than the members of the Independent Board Committee who will form their view after reviewing and considering the advice from the Independent Financial Adviser) considers that the terms of the Underwriting Agreement, including the commission rate, are fair and reasonable so far as the Company and the Shareholders are concerned.

The Underwriters

As at the date of this announcement, (a) Mr. Cao and Champion Rise, a company wholly owned by him, hold 3,128,500,000 Existing Shares in aggregate (representing approximately 11.58% of the existing issued share capital of the Company); and (b) Mr. Fung and Ocean Gain, a company wholly owned by him, hold 3,071,662,449 Existing Shares in aggregate (representing approximately 11.37% of the existing issued share capital of the Company). As such, Mr. Cao, Mr. Fung and their respective associate are substantial shareholders (as defined under the Listing Rules) of the Company.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, VMS Securities and its associates are third parties independent of and not connected persons of the Company and its connected persons. As at the date of this announcement, VMS Securities and its associates are interested in 466,000,000 Existing Shares (representing approximately 1.73% of the existing issued share capital of the Company and the 5th Convertible Bonds).

– 16 –

The Underwritten Shares

Pursuant to the Underwriting Agreement, the Underwriters have conditionally agreed to underwrite not less than 4,161,884,288 Rights Shares and not more than 7,823,184,288 Rights Shares, on a fully underwritten basis, as follow;

(i) Mr. Cao and Mr. Fung shall, jointly and severally, underwrite up to 400,000,000 Untaken Shares, on a pro rata basis in equal proportion and in the event that there is any fractional Untaken Share arising from the allocation between Mr. Cao and Mr. Fung, such fractional Untaken Share shall be taken up by VMS Securities; and
(ii) VMS Securities shall underwrite all the remaining balance of the Untaken Shares that are not taken up by Mr. Cao and Mr. Fung pursuant to (i) above up to (a) a minimum of 3,761,884,288 Rights Shares (assuming no further new Shares are issued (other than the Rights Shares) and no repurchase of Shares on or before the Record Date) and (b) a maximum of 7,423,184,288 Rights Shares (assuming new Shares are issued on or before the Record Date upon full exercise of Outstanding Share Options and Unlisted Warrants and full conversion of the Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares on or before the Record Date).

For the avoidance of doubt, if the Untaken Shares available under the Rights Issue are less than 400,000,000, Mr. Cao and Mr. Fung shall take up all such Untaken Shares before VMS Securities.

Termination of the Underwriting Agreement

If, prior to the Latest Time for Termination, one or more of the following events or matters shall occur, arise, exist, or come into effect:

(1) In the reasonable opinion of the Underwriters, the success of the Rights Issue would be materially and adversely affected by:
(a) the introduction of any new regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the reasonable opinion of the Underwriters, materially and adversely affect the business or the financial or trading position of the Group as a whole or is materially adverse in the context of the Rights Issue after the signing of the Underwriting Agreement; or

– 17 –

(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring after the signing of the Underwriting Agreement or continuing after the signing of the Underwriting Agreement), of a political, military, financial, economic or other nature, or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of the Underwriters, materially and adversely affect the business or the financial or trading position of the Group as a whole; or
(c) any materially adverse change after the signing of the Underwriting Agreement in the business or in the financial or trading position of the Group as a whole; or
(d) any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out occurred after the signing of the Underwriting Agreement which would, in the reasonable opinion of the Underwriters, materially and adversely affect the business or the financial or trading position of the Group as a whole; or
(e) the commencement by any third party of any litigation or claim against any member of the Group after the signing of the Underwriting Agreement which, in the reasonable opinion of the Underwriters, is or might be material to the Group taken as a whole; or
(f) there occurs or comes into effect the imposition of any moratorium, suspension or material restriction on trading in the Shares or Consolidated Shares (as the case may be) generally on the Stock Exchange due to exceptional financial circumstances or otherwise; or
(2) there is any material adverse change in market conditions (including, without limitation, a change in fiscal or monetary policy or foreign exchange or currency markets, suspension or restriction of trading in securities, imposition of economic sanctions, on Hong Kong, the PRC or other jurisdiction relevant to the Group or any member of the Group and a change in currency conditions for the purpose of this event includes a change in the system under which the value of the Hong Kong currency is pegged with that of the currency of the United States of America) occurs which, in the reasonable opinion of the Underwriters, makes it inexpedient or inadvisable to proceed with the Rights Issue; or

– 18 –

(3) the Circular, the Prospectus and all amendments and supplements thereto when published contain information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or the Takeovers Code or any applicable regulations) which has not prior to the date hereof been publicly announced or published by the Company and which may, in the reasonable opinion of the Underwriters, is material to the Group as a whole and is likely to affect materially and adversely the success of the Rights Issue.

The Underwriters shall be entitled, by notice in writing to the Company served prior to the Latest Time for Termination, to terminate the Underwriting Agreement.

The Underwriters shall be entitled by notice in writing to rescind the Underwriting Agreement if prior to the Latest Time for Termination:

(1) any material breach of any representations, warranties or undertakings contained in the Underwriting Agreement comes to the knowledge of the Underwriters; or
(2) any Specified Event comes to the knowledge of the Underwriters.

Upon giving of notice of termination or rescission pursuant to the Underwriting Agreement, all obligations of the Underwriters under the Underwriting Agreement shall cease and terminate and none of the parties to the Underwriting Agreement shall have any claim against any other parties in respect of any matter or thing arising out of or in connection with the Underwriting Agreement save that all costs and other all out-of-pocket expenses which have been properly incurred by the Underwriters in connection with the Rights Issue and its associated transactions (excluding the underwriting commission, sub-underwriting fees and related expenses) shall be borne by the Company. If the Underwriters exercise such right, the Rights Issue will not proceed.

Conditions of the Rights Issue

The Rights Issue is conditional upon the following conditions being fulfilled or waived (as appropriate):

(1) the passing of the necessary resolution(s) (i) by the Shareholders at the EGM to approve the Share Consolidation and the Increase in Authorised Share Capital; and (ii) by the Independent Shareholders at the EGM to approve the Rights Issue and the transactions contemplated thereunder by no later than the Record Date;
(2) the Share Consolidation and Increase in Authorised Share Capital having become effective;

– 19 –

(3) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked listing of and permission to deal in the Consolidated Shares and the Rights Shares (in their nil-paid and fully-paid forms) by no later than the Prospectus Posting Date;
(4) the filing and registration of the Prospectus Documents (together with any other documents required by applicable law or regulation to be annexed thereto) with the Registrar of Companies in Hong Kong by no later than the Prospectus Posting Date;
(5) the posting of the Prospectus Documents to the Qualifying Shareholders by no later than the Prospectus Posting Date;
(6) the Underwriting Agreement not being terminated or rescinded by the Underwriters pursuant to the terms hereof on or before the Latest Time for Termination;
(7) there being no Specified Event occurred prior to the Latest Time for Termination;
(8) there being no breach of the undertakings and obligations of the Company under the terms of the Underwriting Agreement;
(9) there being no breach of the undertakings and obligations of the Underwriters under the terms of the Underwriting Agreement;
(10) delivery to the Underwriters on or before the date of the Underwriting Agreement the original Irrevocable Undertakings duly executed by each of Champion Rise, Ocean Gain, Mr. Cao and Mr. Fung; and
(11) compliance with and performance by each of Champion Rise, Ocean Gain, Mr. Cao and Mr. Fung of all of their respective undertakings and obligations in accordance with the terms of the Irrevocable Undertakings.

The conditions precedent set out in paragraphs (1) to (6) and (11) are incapable of being waived by the Underwriters and the Company. The Underwriters may waive the conditions precedent set out in paragraph (7), (8) and (10) in whole or in part by written notice to the Company. The Company may waive the condition precedent set out in paragraph (9) in whole or in part by written notice to the Underwriters.

– 20 –

If the conditions precedent set out in the above paragraphs are not satisfied and/or waived in whole or in part by the Underwriters by the Latest Time for Termination (or the relevant dates set out in the Underwriting Agreement) or such other date and time as the Underwriters may agree with the Company in writing, the Underwriting Agreement shall terminate (save in respect of the provisions in relation to payment of costs and expenses incurred by the Underwriters, indemnity, notices and governing law and any rights or obligations which have accrued under the Underwriting Agreement prior to such termination), all liabilities of the parties of the Underwriting Agreement shall lapse and no party will have any claim against any other party for costs, damages, compensation or otherwise, and the Rights Issue will not proceed. The Irrevocable Undertakings shall lapse upon the termination of the Underwriting Agreement.

IRREVOCABLE UNDERTAKINGS

As at the date of this announcement, (a) Mr. Cao and Champion Rise, a company wholly owned by him, hold 3,128,500,000 Existing Shares in aggregate (representing approximately 11.58% of the existing issued share capital of the Company); and (b) Mr. Fung and Ocean Gain, a company wholly owned by him, hold 3,071,662,449 Existing Shares in aggregate (representing approximately 11.37% of the existing issued share capital of the Company), have unconditionally and irrevocably undertaken respectively to the Company and the Underwriters that, among other things, he/it:

(a) will remain as the beneficial owner of the Shares as set out above at the close of business on the Record Date;
(b) will subscribe for the Rights Shares to which he/it will be provisionally allotted pursuant to the Rights Issue, representing their respective full entitlement under the Rights Issue, by lodging the duly completed and signed PAL in respect of all such Rights Shares with payment in full therefor with the Registrar before the Latest Time for Acceptance in accordance with the terms of the Prospectus Documents; and
(c) shall not, during the period from the date of the respective Irrevocable Undertaking to (and including) the Record Date, transfer or otherwise dispose of the Shares or acquire any Shares or any interests therein (except by taking up the Rights Shares under their respective entitlement), unless with the prior written consent of the Company and the Underwriters.

– 21 –

EXPECTED TIMETABLE

The expected timetable for the Share Consolidation, the change in board lot size and the Rights Issue is set out below. The expected timetable is subject to change, and any such change will be announced in a separate announcement by the Company as and when appropriate.

2015

(Hong Kong time)

==> picture [483 x 507] intentionally omitted <==

----- Start of picture text -----

||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Expected|date|of|dispatch|of|the|Circular|together|with|
|notice|of|EGM|and|proxy|form|for|EGM|. . . . . . . . . . . . . . . . . . .|Monday,|19|October|2015|
|Latest|time|for|lodging|proxy|forms|
|for|the|EGM|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|11:00|a.m.|on|
|Monday,|2|November|2015|
|Latest|time|for|lodging|transfer|of|Shares|to|be|qualified|
|for|attendance|at|the|EGM|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|4:30|p.m.|on|
|Monday,|2|November|2015|
|Register|of|members|of|the|Company|closes|
|(both|dates|inclusive)|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|From|Tuesday,|3|November|to|
|Wednesday,|4|November|2015|
|Record|Date|for|the|EGM|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|Wednesday,|4|November|2015|
|Expected|date|and|time|of|the|EGM|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|11:00|a.m.|on|
|Wednesday,|4|November|2015|
|Announcement|of|the|poll|result|of|the|EGM|. . . . . . . . . . . . .|Wednesday,|4|November|2015|
|Register|of|members|of|the|Company|re-opens|. . . . . . . . . . . . . .|Thursday,|5|November|2015|
|Effective|date|of|the|Share|Consolidation|. . . . . . . . . . . . . . . . . .|Thursday,|5|November|2015|
|Commencement|of|dealings|in|the|
|Consolidated|Shares|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|9:00|a.m.|on|
|Thursday,|5|November|2015|

----- End of picture text -----

– 22 –

Original counter for trading in the Existing Shares
(in board lots of 100,000 Existing Shares) to be closed . . . . . . . . . . . . . . . . . . 9:00 a.m. on
Thursday, 5 November 2015
Temporary counter for trading in Consolidated Shares
in board lots of 5,000 Consolidated Shares
(in form of existing share certificates) to be opened . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on
Thursday, 5 November 2015
First day of free exchange of existing share certificates
of the Existing Shares into new share certificates
for the Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 5 November 2015
Last day of dealing in the Consolidated Shares
on cum-rights basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 5 November 2015
First day of dealings in the Consolidated Shares
on ex-rights basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 6 November 2015
Latest time for lodging transfer of the Shares
in order to be qualified for the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on
Monday, 9 November 2015
Closure of register of members to determine
the eligibility of the Rights Issue (both dates inclusive) . Tuesday, 10 November 2015 to
Monday, 16 November 2015
Record Date for the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 16 November 2015
Register of members of the Company re-opens . . . . . . . . . . . . . Tuesday, 17 November 2015
Prospectus Documents expected to be despatched . . . . . . . . . . . Tuesday, 17 November 2015
First day of dealings in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on
Thursday, 19 November 2015

– 23 –

==> picture [483 x 650] intentionally omitted <==

----- Start of picture text -----

|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|Designated|broker|starts|to|stand|in|the|market|
|to|provide|matching|services|for|the|sale|and|
|purchase|of|odd|lots|of|Consolidated|Shares|. . . . . . . . . . . . . . . . . . . . . . . . . . . .|9:00|a.m.|on|
|Thursday,|19|November|2015|
|Original|counter|for|trading|in|Consolidated|Shares|
|(in|new|board|lots|of|5,000|Consolidated|Shares|
|in|the|form|of|new|share|certificates|for|
|Consolidated|Shares)|reopens|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|9:00|a.m.|on|
|Thursday,|19|November|2015|
|Parallel|trading|in|Consolidated|Shares|
|(in|form|of|new|share|certificate|and|
|existing|share|certificate)|commences|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|9:00|a.m.|on|
|Thursday,|19|November|2015|
|Latest|time|for|splitting|in|nil-paid|Rights|Shares|. . . . . . . . . . . . . . . . . . . . . . . . .|4:30|p.m.|on|
|Monday,|23|November|2015|
|Last|day|of|dealings|in|nil-paid|
|Rights|Shares|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|4:00|p.m.|on|
|Thursday,|26|November|2015|
|Latest|time|for|acceptance|of,|and|payment|for,|
|the|Rights|Shares|and|application|for|
|excess|Rights|Shares|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|4:00|p.m.|on|
|Tuesday,|1|December|2015|
|Latest|time|for|termination|of|the|
|Underwriting Agreement|. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .|4:00|p.m.|on|
|Friday,|4|December|2015|
|Announcement|of|results|of|the|Rights|Issue|. . . . . . . . . . . . . . . .|Tuesday,|8|December|2015|
|Refund|cheques|for|wholly|and|partially|
|unsuccessful|applications|for|excess|Rights|Shares|
|expected|to|be|posted|on|or|before|. . . . . . . . . . . . . . . . . . . . .|Wednesday,|9|December|2015|

----- End of picture text -----

– 24 –

Certificates for the Rights Shares expected to be despatched on or before . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 9 December 2015 Parallel trading in Consolidated Shares (in form of new and existing share certificate) ends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 9 December 2015

Temporary counter for trading in Consolidated Shares in board lots of 5,000 Consolidated Shares (in form of existing share certificates) to be closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 9 December 2015 Designated broker ceases to stand in the market to provide matching services for the sale and purchase of odd lots of Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 9 December 2015

Dealings in fully-paid Rights Shares commence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 10 December 2015 Free exchange of existing share certificates for new share certificates ends . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 11 December 2015

– 25 –

SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediately upon the Share Consolidation becoming effective; and (iii) after Share Consolidation becoming effective and immediately after completion of the Rights Issue:

Scenario 1:

Assuming no further issue of new Shares or repurchase of Shares on or before the Record Date:

After Share Consolidation becoming effective and immediately after completion of the Rights Issue	After Share Consolidation becoming effective and immediately after completion of the Rights Issue	After Share Consolidation becoming effective and immediately after completion of the Rights Issue
Assuming all Shareholders have taken up Rights Shares Shares % 33,800,000 0.50 748,325,000 11.08 310,590,610 4.60 457,325,000 6.77 12,906,125 0.19 1,562,946,735 23.14 5,072,949,235 75.13 116,500,000 1.73 6,752,395,970 100.00	Assuming the Underwriters have taken up all the Rights Shares (assuming no Qualifying Shareholders except for Mr. Cao, Mr. Fung, Champion Rise and Ocean Gain take up 1,240,032,488 Rights Shares pursuant to the Irrevocable Undertakings) Shares % 233,800,000 3.46 748,325,000 11.08 510,590,610 7.56 457,325,000 6.77 2,581,225 0.04 1,952,621,835 28.91 1,014,589,847 15.03 3,785,184,288 56.06 6,752,395,970 100.00
		28.91 15.03 56.06
		100.00

If the existing shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their shareholding will decrease from 77.05% to 15.42%, representing about 80% dilution to their existing shareholdings.

– 26 –

Scenario 2:

Assuming Shares are issued upon the exercise of the subscription rights attached to the Unlisted Warrants in full, and the exercise of Share Options and the conversion rights attached to the Outstanding CBs in full and no other issue or repurchase of Shares on or before the Record Date:

After Share Consolidation becoming effective and immediately after completion of the Rights Issue	After Share Consolidation becoming effective and immediately after completion of the Rights Issue	After Share Consolidation becoming effective and immediately after completion of the Rights Issue
Assuming all Shareholders have taken up Rights Shares Shares % 33,800,000 0.30 748,325,000 6.60 310,590,610 2.74 457,325,000 4.04 19,906,125 0.18 1,569,946,735 13.86 4,790,449,235 42.28 2,157,500,000 19.04 1,875,000,000 16.55 619,625,000 5.47 316,500,000 2.80 11,329,020,970 100.00	Assuming the Underwriters have taken up all the Rights Shares (assuming no Qualifying Shareholders except for Mr. Cao, Mr. Fung, Champion Rise and Ocean Gain take up 1,240,032,488 Rights Shares pursuant to the Irrevocable Undertakings) Shares % 233,800,000 2.06 748,325,000 6.60 510,590,610 4.51 457,325,000 4.04 3,981,225 0.04 1,954,021,835 17.25 958,089,847 8.46 431,500,000 3.81 375,000,000 3.31 123,925,000 1.09 7,486,484,288 66.08 11,329,020,970 100.00
		17.25 8.46 3.81 3.31 1.09 66.08
		100.00

If the existing shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their shareholding will decrease from 77.05% to 9.21%, representing about 88% dilution to their existing shareholdings.

– 27 –

Notes:

Mr. Cao Zhong, Mr. Fung Tsun Pong and Mr. Tsang Kam Ching, David are executive Directors.
Champion Rise is wholly owned by Mr. Cao Zhong.
Ocean Gain is wholly owned by Mr. Fung Tsun Pong.
In circumstances where the Rights Issue were to become unconditional and VMS Securities as its capacity as one of the Underwriters was obliged to take up all its commitment to the relevant number of Underwritten Shares in accordance with the Underwriting Agreement, VMS Securities and its associates’ interest would extend to a maximum stake of approximately 66.08% in the share capital of the Company as enlarged by the issue of the Rights Shares. VMS Securities’ underwriting commitment would extend to a maximum stake of approximately 65.52% in the share capital of the Company as enlarged by the issue of the Rights Shares. VMS Securities procures that it and its sub-underwriters (i) will be a third party independent of, not acting in concert with and will not be connected with the Directors, chief executive or substantial Shareholders of the Company or their respective associates; and (ii) will not, together with party(ies) acting in concert with each of them or their respective associates, hold in aggregate 30% or more of the voting rights of the Company immediately upon completion of the Rights Issue.
VMS Securities has, on 9 September 2015, sub-underwritten all its Underwritten Shares to the sub-underwriters. As at the date of this announcement, VMS Securities and each of the sub-underwriters is independent third party of the Company. Under the sub-underwriting agreements, VMS Securities has sole discretion to allocate the Untaken Shares among the sub-underwriters. Under the scenario where maximum number of Rights Shares will be issued, public float will be about 36% immediately upon completion of the Rights Issue, which ensure that the Company will maintain the minimum public float requirement in compliance with Rule 8.08 of the Listing Rules. Theoretically, public float can be maintained in all scenarios.
Holders of the Outstanding CBs presented in this table represent holders of the Outstanding CBs other than China Life, Strait Capital, Strait Fund and an associate of VMS Securities.

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

The Group is principally engaged in expressway operations, trading and storage of petroleum and related products, compressed natural gas stations operations and timber operations. The gross proceeds from the Rights Issue will be not less than approximately HK$1,080.4 million (assuming no further Shares will be issued or repurchased on or before the Record Date) but not more than approximately HK$1,812.6 million (assuming all the Outstanding CBs, Unlisted Warrants and the Outstanding Share Options are converted and exercised in full before Record Date). The estimated net proceeds of the Rights Issue will be not less than approximately HK$1,046.5 million (assuming no further Shares will be issued or repurchased on or before the Record Date) but not more than approximately HK$1,778.7 million (assuming all the Outstanding CBs, Unlisted Warrants and the Outstanding Share Options are converted and exercised in full before Record Date) which are intended to be used in the following manner:

(i) approximately HK$780.0 million will be applied to repay the principal amount of Company’s loans and borrowings;

– 28 –

(ii) approximately HK$166.5 million will be applied to the interest payments of the Outstandings CBs and other borrowings;
(iii) approximately HK$60.0 million will be applied to invest in a new investment opportunity including the establishment of a joint venture with CNOOC for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC;
(iv) approximately HK$40.0 million will be applied to the construction and installation of new compressed natural gas and/or liquefied natural gas dispensing stations in the PRC; and
(v) any amount above the minimum net proceeds will be applied to repay the remaining principal amount of the debts.

The Directors are of the view that the Rights Issue would facilitate the repayment of the loans and borrowings of the Group, which will improve the financial position of the Group and lower the interest expense of the Group. The Rights Issue will also allow the Group to capture and materialise the identified investment opportunities (with details as set out below) and strengthen the capital base of the Group.

Use of Proceeds

Details of the loans and borrowings of the Group to be due by end of September 2016 are as follow:

Debts Straight bonds Convertible bonds Bank borrowings Total	Aggregate debts amount (HK$’million) Maturity date Interest rate 592 December 2015 9% 500 March 2016 9% 500 September 2016 9% 992 February 2016 9% 1,023 By September 2016 5.41% – 12% 3,607

– 29 –

The conversion price (before Share Consolidation) for all the convertible bonds is HK$0.2. Comparing with the closing price of HK$0.058 (before Share Consolidation) as at the Last Trading Date, all the convertible bonds are deep out-of-the money which are unlikely to be converted to Shares and have to be repaid by their maturity date. According to the above table, a total of HK$3,607 million will be due in the next 12 months if there is no extension of the repayment date. The Board has been actively negotiating with the debts holders on the possibility of extending the repayment date. Based on the current discussions, the Board expects that approximately HK$780 million of the debts have to be repaid without further delay. It is not in the interest of the Company to default its debt obligations. Also, repayments of the above debts by using the proceeds of the Rights Issue not only save interest payments but also improves the overall financial position of the Group, which facilitates the Company’s on-going financial planning. Therefore, the Board considers that it is essential to raise funds to repay the HK$780 million debts.

Based on the latest repayment schedule of the outstanding debts, management account, recent business plans and the cash flow forecast for the next 12 months, the Board expects that after taking into account the operating net cash inflow from the Group’s operations, the Company’s funding needs in the upcoming 12 months will be approximately HK$3,000 million, which mainly represents the principal and interest due for the outstanding straight bonds and convertible bonds of HK$2,954 million. The above expectation is based on the key assumptions that (i) all straight bonds and convertible bonds falling due will not be able to be extended, (ii) no other long term funds can be raised by way of other fund raising alternatives and (iii) the Group’s operating results and cash flow will not have significant changes compared to the preceding year.

The Board has been actively negotiating with the debts holders on the possibility of extending the repayment date. Based on the recent discussions, the Board estimates that a minimum of approximately HK$780 million of the principal and approximately HK$166.5 million of the interest payments will have to be repaid in the coming 5 months without delay. If additional funding can be raised above the minimum proceeds generated from the Rights Issue, it will also be applied to repay the remaining debts. The Board considers that it is crucial to cater for the above throat-cutting funding needs before it can take a next step to negotiate further with holders of the remaining debts falling due in the remaining 7 months. The Board considers that by repaying the above debts and interest, it will improve its gearing ratio and the overall financial position and relieve its interest burden, and thus facilitate it to negotiate with the debts holders for rescheduling the remaining debts.

Apart from the Rights Issue which cater for most of the imminent funding needs in the coming 5 months, the Board has been and will be in its best endeavor sourcing further funding for debt repayments purpose, in the remaining 7 months.

– 30 –

The possible ways to satisfy its remaining funding needs in the remaining 7 months includes debts payment rescheduling and further fund raisings alternatives. The Company maintains good relationship with its debt holders. As disclosed in the announcements dated 14 August 2015 and 28 August 2015, the Company has successfully restructured a number of convertible bonds to extend the repayment dates. Settling the debts by using the proceeds sourced from the Rights Issue will lubricate the negotiation process. The Board considers that only when the Rights Issue becomes materialized it can further formulate and finalize its strategy in satisfying its remaining funding needs in the remaining 7 months. Having said that, preliminarily, besides debts payment rescheduling, the Company has been considering the possibility of other equity fund raising alternatives (e.g. private placement) subject to the completion of the Rights Issue. The Company will make further announcement in this regard in accordance with the Listing Rules as and when appropriate. More information on the working capital sufficiency will be disclosed in the Circular.

As disclosed in the Company’s announcement dated 16 January 2015, Shenzhenshi Qianhai Zitong Clean Energy Company Limited (深圳市前海資通清潔能源有限公司), which is an 85% indirectly owned subsidiary of the Company in the PRC, has entered into a legally-binding letter of intent dated 16 January 2015 with CNOOC in relation to, among other things, the establishment of a joint venture for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant (“ POX Project ”) under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC.

Hydrogen, being an essential reducing agent in oil refining process, is mainly utilized in the hydro-desulfurization, hydrocracking and hydrofining processes in the chemical processing industry. To fulfill the environmental requirements of the PRC, the oil quality standard of diesel has been increasingly elevated. Hydrocracking and hydrofining in oil refining process are the main stages to produce high quality clean energy, and both stages require mass usage of hydrogen. The urge to enhance the oil quality upgrade within the chemical processing industry has resulted in high demand of hydrogen supply. Currently, the annual oil refining capacity in the PRC has reached approximately 600 million tons per year, and by the year of 2020, it is expected to reach 750 million tons per year. By that time, the hydrogen demand in the chemical processing industry is expected to reach over 10 million tons per year.

– 31 –

Currently, domestic refineries in the PRC usually use the natural gas conversion/partial oxidation method or the light/heavy oil catalytic conversion method for production of hydrogen. China is a country with rich coal resources but limited gas resources. Given an increasing demand of hydrogen, limited supply and high price of natural gas resources and related policy control, the coal-to-hydrogen partial oxidation method of hydrogen production provides a lower cost and cleaner solution for hydrogen production in the PRC. Costs of hydrogen production by other methods are currently over RMB20,000 per ton, while the cost of hydrogen production by using the coal-to-hydrogen partial oxidation method is estimated to be lowered by 30% to 40%.

As disclosed in the Company’s announcements dated 28 August 2014 and 18 September 2014, the Company has entered into framework agreements with PetroChina Guangdong Marketing Company and PetroChina Henan Marketing Company under which the Company has obtained first rights for the installation and operation of electric vehicle charging and CNG and/or LNG dispensing stations (“ CNG/LNG Projects ”) in over 1,100 gas stations of PetroChina Guangdong in Guangdong province, the PRC and 840 gas stations of PetroChina Henan in Henan province, the PRC, respectively.

Both the POX Project and CNG/LNG Projects are still in the preliminary stage of design and research phase. Detailed development plan and funding needs are as below:

(a) The construction of POX Project will have three phases with each phase last for 2 years. It is expected that the construction of the first phase will start in early 2016 and the operation will start in early 2018. The HK$60 million sourced from the Rights Issue will be applied as initial working capital and for detailed design process for the first phase. The management of the Company estimates that the total funding requirement for the first phase will be approximately RMB4,690 million over the next two years. The funding needs for the project company is expected to be satisfied by long term bank loans to be borrowed at the project company level. As the plant for the POX Project in Huizhou will be jointly-owned and jointly-operated by CNOOC, a state-owned enterprise in the PRC, the Board expects that the project company, with CNOOC as one of the venturers, can easily secure the funding through long term bank loans at a competitive low interest rate.
(b) From the Group’s experience in the construction and operations of CNG/LNG dispensing stations, it is estimated that the construction cost for a CNG/LNG dispensing station in the PRC will be approximately RMB5 million to RMB6 million. Based on the estimation of future operation capacity, the management of the Company plans to establish 6 CNG/LNG dispensing stations in the coming year which will cost approximately HK$40 million and have to be financed by the proceeds generated from the Rights Issue.

– 32 –

Given the opportunity to cooperate with CNOOC and PetroChina marketing branches, the Company aims at achieving effective provision of resources to the market and thereby realizing the strategic development objective of the Group, and thus the Board is full of confidence in the Group’s energy business prospects.

Reasons for Rights Issue

After due and careful consideration, the Board considers that the current structure of the Rights Issue, as a form of equity financing available for all the existing shareholders to participate, is the best, if not the only alternative which the terms are acceptable to both the Company and the Underwriters in light of the Group’s current circumstance.

There is about HK$1,046.5 million imminent funding needs for the Group after the Board’s assessment over its financial and operation position. The Group has taken various steps to address the funding needs of the Company. The Company has negotiated and agreed with holders of certain convertible bonds, namely, Li Ka Shing (Canada) Foundation, Dr. Lo Ka Shui, Grand Version Investments Limited and Guotai Junan Investments (Hong Kong) Limited (“ GJHK ”), to extend the maturity dates of the outstanding convertible bonds held by them. In this connection, Mr. Cao has agreed to provide personal guarantees in respect of such convertible bonds other than the convertible bonds held by GJHK.

The Group is in heavy debts. The Board considers that debt raising (including bank financing) would not be an option as it would worsen the gearing and debt position of the Group.

The Board has also considered other non-pre-emptive equity fund raising possibilities, such as placing. Due to the relatively large fund raising amount, the placing agents did not come up with reasonable terms that are acceptable to the Company.

The pre-emptive nature of the Rights Issue allows the Qualifying Shareholders to maintain their respective pro-rata shareholding through their participating in the Rights Issue. The Rights Issue allows the Qualifying Shareholders who participate to (a) increase its interests in the shareholding of the Company by (i) acquiring additional rights entitlement in the open market (subject to the availability); and/or (ii) applying through excess applications for rights shares or (b) decrease its interests in the shareholding of the Company by disposing of their rights entitlements in the open market (subject to availability). Also, the Rights Issue has been fully underwritten and thus, the Group’s target funding in need will be secured. In light of the above, the Board considers that the Rights Issue is the fairest equity financing to the existing shareholders.

The Board has approached not less than three third-party underwriters. Among them, VMS Securities offers the most reasonable terms which are acceptable to the Company.

– 33 –

The Board is minded to set the subscription price at a level which is compelling and acceptable to the existing shareholders for them to maintain their existing shareholding through subscribing the Rights Issue. The Subscription Price is at HK$0.20 per Rights Shares which is about 82% discount to the equivalent closing price of HK$1.16 per Consolidated Share as at the Last Trading Day. The relative high discount is targeted to attract more of the existing shareholders to subscribe for the Rights Shares, which is common in many similar exercises in the market.

With the funding needs amount as estimated by the Board together with the purposive subscription price, the Board comes up with the resulting 4-for-1 Rights Issue. If the existing shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their aggregate shareholding will decrease from 77.05% to 9.21%, resulting a maximum of 88% dilution to their existing shareholdings as illustrated in scenario 2 under the section headed “Shareholding Structure of the Company” in this announcement. In light of the relative low subscription price at HK$0.20 per Rights Shares, the Board considers that the Rights Issue is attractive to the existing shareholders and expects that they will subscribe for their respective entitlements to maintain their existing shareholding. The Board expects that the actual dilution effect will be lower than the above theoretical maximum dilution effect.

Based on the above, in particular the pre-emptive nature of the Rights Issue with the availability of excess application, the Board considers that the terms of the Rights Issue are fair and reasonable and in the best interest of the Shareholders. The Rights Issue will be subject to the Independent Shareholders’ approval. Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders on the fairness of the Rights Issue. Independent Board Committee will then give their view after considering Independent Financial Adviser’s view at circular stage.

– 34 –

FUND RAISING ACTIVITIES INVOLVING ISSUE OF SECURITIES IN THE PAST 12 MONTHS

Actual use of proceeds as at the date of

Date of the date of announcements Description Net proceeds Intended use of proceeds this announcement 28 November 2014 Issue of 9% Approximately (i) To set-off against HK$3,092 (i) HK$3,092 million convertible bonds due HK$3,192 million million of the total principal was used for in 2016 and 2018 amount of set-off (a) part under specific mandate of the 9% (a) part of the 9% convertible bonds convertible bonds due in 2015; (b) due 2015, which all of the matured on 3 convertible bonds September 2015; due on 24 October 2016 and (c) all of (b) all of the convertible the convertible bonds due on 24 bonds due on 3 October 2016; and October 2017; and (c) all of the convertible (ii) HK$100 million bonds due on 3 was used for October 2017 (note) repayment of borrowings and accrued interest (ii) The remaining HK$100 million is to be used as general working capital of the Group 28 September 2014 Issue of 9% convertible Approximately To refinance the HK$600 million 9% Used as intended bonds due in 2017 HK$600 million convertible bonds due in 2014, under general mandate which matured on 29 September (note) 2014

Note: The convertible bond due in 2017 under the general mandate was subsequently offset by the convertible bond due in 2018 which was approved by Shareholders under the specific mandate granted in the general meeting held on 28 January 2015.

Save for the above, the Company has not conducted any equity fund raising activities in the past 12 months immediately preceding the date of this announcement.

– 35 –

ADJUSTMENTS TO THE SUBSCRIPTION PRICE AND/OR NUMBER OF SHARES UNDER THE SHARE OPTIONS, THE CONVERSION PRICE UNDER THE CONVERTIBLE BONDS AND THE SUBSCRIPTION PRICE UNDER THE UNLISTED WARRANTS

The Share Consolidation and the Rights Issue may lead to adjustments to the subscription price and/or the number of Consolidated Shares to be issued under the Outstanding Share Options, the conversion price of the Outstanding CBs and the subscription price under the Unlisted Warrants pursuant to their respective terms. The Company will inform holders of the aforesaid securities and the Shareholders of such adjustments by announcement, if and when necessary.

LISTING RULES IMPLICATIONS

Under the Listing Rules, Mr. Cao is the chairman of the Company and an executive Director, Mr. Fung is an executive Director and each of them and their respective associates are substantial Shareholders of the Company. Accordingly, the entering into of the Underwriting Agreement between the Company, Mr. Cao and Mr. Fung is a connected transaction under the Listing Rules. Pursuant to Rule 14A.92(2) of the Listing Rules, provided that Rule 7.21 of the Listing Rules has been complied with, the transaction(s) under the Underwriting Agreement will be exempted from the reporting, announcement and Independent Shareholders’ approval requirements. Also, no underwriting commission will be paid to both Mr. Cao and Mr. Fung. As such, no commission and fee payable by the Company to the connected person for the underwriting arrangement is subject to connected transaction requirements under the Listing Rules.

As at the date of this announcement, the Company does not have any controlling shareholder. Mr. Cao together with Champion Rise in aggregate interested in 3,128,500,000 Existing Shares, representing approximately 11.58% of the existing issued share capital of the Company, Mr. Fung, together with Ocean Gain in aggregate interested 3,071,662,449 Existing Shares, representing approximately 11.37% of the existing issued share capital of the Company and Mr. Tsang Kam Ching, David, an executive Director, holds 51,624,499

– 36 –

Existing Shares, representing approximately 0.19% of the existing issued share capital of the Company. Save for Mr. Cao’s, Mr. Fung’s and Mr. Tsang Kam Ching, David’s interests, none of the Directors and the chief executive of the Company and their respective associates hold any Shares. Mr. Cao, Mr. Fung, Mr. Tsang Kam Ching, David and their respective associates together with parties acting in concert with any of them, will abstain from voting at the EGM to approve the Rights Issue in compliance with Rule 7.19(6)(a) of the Listing Rules.

As at the date of this announcement, VMS Securities, and its associates are interested in 466,000,000 Existing Shares and the 5th Convertible Bonds. VMS Securities, as one of the Underwriters, has an interest in the Rights Issue. As such, VMS Securities and its associates will abstain from voting at the EGM to approve the Rights Issue.

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising all the independent non-executive Directors has been established to make recommendations to the Independent Shareholders in respect of the Rights Issue. In this regard, the Company has appointed Veda Capital Limited as the Independent Financial Adviser (the appointment of which has been approved by the Independent Board Committee) to advise the Independent Board Committee and the Independent Shareholders as to whether the Rights Issue and the Underwriting Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on how to vote. The Independent Board Committee will formulate its views with respect to the terms of the Rights Issue and the Underwriting Agreement after obtaining and considering the advice of the Independent Financial Adviser. The advice of the Independent Board Committee and the Independent Financial Adviser and other relevant information will be set out in the Circular.

GENERAL

– 37 –

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange had been halted from 9:00 a.m. on 10 September 2015 pending the release of this announcement. Application has been made to the Stock Exchange for resumption of trading in the Shares with effect from 9:00 a.m. on 30 September 2015.

WARNING OF THE RISKS OF DEALING IN EXISTING SHARES, CONSOLIDATED SHARES AND RIGHTS SHARES

– 38 –

DEFINITION

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

“1st Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$800 million to be issued by the Company, which will mature on 10 February 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“2nd Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$700 million to be issued by the Company, which will mature on 12 February 2018, details of which were set out in the Company’s announcement dated 28 November 2014
“3rd Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$800 million to be issued by the Company, which will mature on 24 October 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“4th Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$700 million to be issued by the Company, which will mature on 24 October 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“5th Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$160 million to be issued by the Company, which will mature on 10 February 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“6th Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$32 million to be issued by the Company, which will mature on 10 February 2016, details of which were set out in the Company’s announcement dated 28 November 2014

– 39 –

“associate(s)”

has the meaning ascribed thereto under the Listing Rules

“Board”

the board of Directors

“Business Day(s)”
a day (excluding Saturday and Sunday and any day on which a tropical cyclone warning no. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 4:00 p.m. or on which a “black” rainstorm warning is hoisted or remains in effect between 9:00 a.m. and 4:00 p.m.) on which licensed banks in Hong Kong are open for general business
“CCASS”
the Central Clearing and Settlement System established and operated by HKSCC
“Champion Rise” Champion Rise International Limited, a company wholly owned by Mr. Cao Zhong which is interested in 2,993,300,000 Existing Shares as at the date of this announcement
“China Life” China Life Insurance (Overseas) Company Limited, a Company incorporated in the People’s Republic of China with limited liability
“Circular”
the circular to be despatched to the Shareholders giving details of the Share Consolidation, the Increase in Authorised Share Capital, the change in board lot size and the Rights Issue and containing the notice of the EGM
“Company”
China Resources and Transportation Group Limited a company incorporated in Cayman Islands with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange (stock code: 269)
“Consolidated Share(s)”
ordinary share(s) of HK$0.20 each in the issued and unissued capital of the Company upon the Share Consolidation becoming effective
“Director(s)”
the director(s) of the Company

– 40 –

“EAF(s)” the form(s) of application for use by the Qualifying Shareholders who wish to apply for excess Rights Shares, in such usual form as may be agreed between the Company and the Underwriters
“EGM” the extraordinary general meeting of the Company to be convened and held to consider and, if thought fit, approve the Share Consolidation, the Increase in Authorised Share Capital and the Rights Issue (including the Underwriting Agreement) and the transactions contemplated thereunder
“Existing Share(s)” the ordinary share(s) of HK$0.01 each in the existing share capital of the Company, before the Share Consolidation becoming effective
“Group” the Company and its subsidiaries “HKSCC” Hong Kong Securities Clearing Company Limited “HK$” Hong Kong dollar, the lawful currency of Hong Kong

“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

“Increase in Authorised subject to the Share Consolidation becoming effective, the Share Capital” increase in the authorised share capital of the Company from HK$700,000,000 divided into 3,500,000,000 Consolidated Shares to HK$3,000,000,000 divided into 15,000,000,000 Consolidated Shares by the creation of an additional 11,500,000,000 new Consolidated Shares
“Independent Board Committee”
the committee of the Board comprising all independent non-executive Directors established for the purpose of giving recommendations to the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement
“Independent Financial Adviser”
Veda Capital Limited, a corporation licensed to carry on type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), an independent financial adviser appointed by the Company for the purpose of giving recommendations to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement

– 41 –

“Independent Shareholder(s)”
“Irrevocable Undertakings”
“Joint Gain”
“Last Trading Day”
“Latest Time for Acceptance”
“Latest Time for Termination”
“Listing Rules”
“Mr. Cao”
any Shareholder other than controlling Shareholders (as defined in the Listing Rules) and their associates or, where there are no controlling Shareholders, any Shareholder other than the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates and any Shareholder (including the Underwriters) who is involved or interested in the Rights Issue, the Underwriting Agreement and the transactions contemplated thereunder
the irrevocable undertaking to be given by each of Champion Rise, Ocean Gain, Mr. Cao and Mr. Fung, dated 9 September 2015 in favour of the Company and the Underwriters
Joint Gain Holdings Limited, a company incorporated in the British Virgin Islands
9 September 2015, being the last trading day of the Shares on the Stock Exchange before the release of this announcement
4:00 p.m. on Tuesday, 1 December 2015 or such other time or date as may be agreed between the Company and the Underwriters, being the latest time for acceptance of the offer of and payment for the Rights Shares
4:00 p.m. on Friday, 4 December 2015, being the third Business Day after (but excluding) the Latest Time for Acceptance, or such other time or date as may be agreed between the Company and the Underwriters
the Rules Governing the Listing of Securities on the Stock Exchange
Mr. Cao Zhong, the chairman of the Company and executive Director, who is legally and beneficially interested in 3,128,500,000 Existing Shares representing approximately 11.58% of the existing issued share capital of the Company as at the date of this announcement

– 42 –

“Mr. Fung”

“Non-Qualifying Shareholder(s)”
“Ocean Gain”
“Outstanding CBs”
“Outstanding Share Options”
“Overseas Shareholder(s)”
“PAL(s)”
“Posting Date”
Mr. Fung Tsun Pong, an executive Director, who is legally and beneficially interested in 3,071,662,449 Existing Shares, representing approximately 11.37% of the existing issued share capital of the Company as at the date of this announcement
those Overseas Shareholder(s) whom the Directors, based on legal advice provided by the Company’s legal advisers, consider it necessary or expedient not to offer the Rights Shares to such Shareholders on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place
Ocean Gain Limited, a company wholly owned by Mr. Fung which is interested in 1,829,300,000 Existing Shares as of the date of this announcement
the 1st Convertible Bonds, 2nd Convertible Bonds, 3rd Convertible Bonds, 4th Convertible Bonds, 5th Convertible Bonds and 6th Convertible Bonds
the outstanding share options to subscribe for an aggregate of 346,500,000 Existing Shares under the Share Option Scheme, which could be exercisable on or before the Record Date
Shareholder(s) whose name(s) appear(s) on the register of members of the Company at the close of business on the Record Date and whose address(es) as shown on such register is (are) outside Hong Kong
the renounceable provisional allotment letter(s) proposed to be issued to the Qualifying Shareholders in connection with the Rights Issue
Tuesday, 17 November 2015 or such other date as the Underwriters may agree in writing with the Company, being the date of despatch of the Prospectus Documents to the Qualifying Shareholders or the Prospectus for information only to the Non-Qualifying Shareholders

– 43 –

“PRC” the People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan
“Prospectus” the prospectus to be despatched to the Shareholders containing details of the Rights Issue
“Prospectus Documents” the Prospectus, the PAL and the EAF
“Qualifying Shareholder(s)” Shareholder(s), other than the Non-Qualifying Shareholders, whose name(s) appear(s) on the register of members of the Company on the Record Date
“Record Date” Monday, 16 November 2015, being the date by reference to which entitlements of the Shareholders to participate in the Rights Issue will be determined (or such other date as the Underwriters may agree in writing with the Company)
“Registrar” the Company’s branch share registrar and transfer office in Hong Kong, Tricor Progressive Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong
“Rights Issue” the proposed issue by way of rights of four (4) Rights Shares for every one (1) Consolidated Share in issue and held on the Record Date at the Subscription Price on the terms and subject to the conditions in the Underwriting Agreement and to be set out in the Prospectus Documents
“Rights Share(s)”
not less than 5,401,916,776 Rights Shares but not more than 9,063,216,776 Rights Shares to be issued and allotted under the Rights Issue
“Share(s)” the Existing Share(s) and/or the Consolidated Share(s), as the case may be
“Share Consolidation”
the consolidation of every twenty (20) issued and unissued Existing Shares of par value of HK$0.01 each into one Consolidated Share of par value of HK$0.20 each

– 44 –

“Shareholder(s)”

the holder(s) of issued Shares

“Share Options Scheme”
the share option scheme of the Company adopted pursuant to the ordinary resolution passed by the Shareholder on 16 July 2004 which became effective on 16 July 2004 (as amended on 28 August 2014)
“Specified Event”
an event occurring or matter arising on or after the date of the Underwriting Agreement and prior to the Latest Time for Termination which render any of the warranties contained in the Underwriting Agreement untrue, inaccurate or misleading
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Strait Capital”
Strait Capital Service Limited, a company incorporated in the Cayman Islands with limited liability, which is the general partner of Strait Fund
“Strait Fund” Strait CRTG Fund, L.P., a Cayman Islands exempted limited partnership, which is an investment fund managed by Strait Capital
“Subscription Price” HK$0.20 per Rights Share
“Underwriters”
VMS Securities, Mr. Cao and Mr. Fung
“Underwriting Agreement”
the underwriting agreement dated 9 September 2015 entered into between the Underwriters and the Company in relation to the underwriting arrangement in respect of the Rights Issue
“Underwritten Shares”
not less than 4,161,884,288 Rights Shares and not more than 7,823,184,288 Rights Shares, subject to the terms and conditions of the Underwriting Agreement

– 45 –

“Unlisted Warrants”

the conditional warrants issued by the Company with rights to subscribe for a fixed number of 2,000,000,000 Existing Shares or 100,000,000 Consolidated Shares upon completion of the Share Consolidation, under general mandate granted in the general meeting held on 8 August 2012, at HK$0.48 per Share (subject to adjustment) until 20 December 2015 pursuant to the agreement dated 20 December 2012 entered into between the Company and Joint Gain, were set out in the Company’s announcement dated 20 December 2012
“Untaken Shares”
any of the Underwritten Shares which have not been taken up by Qualifying Shareholders by the Latest Time for Acceptance
“VMS Securities”
VMS Securities Limited, a licensed corporation to carry out business in type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Cap 571 of the laws of Hong Kong)
“%”

per cent

By order of the Board

China Resources and Transportation Group Limited Cao Zhong Chairman

Hong Kong, 29 September 2015

As at the date of this announcement, the Board of Directors of the Company comprises five executive Directors, namely Messrs Cao Zhong, Fung Tsun Pong, Duan Jingquan, Tsang Kam Ching, David and Gao Zhiping; a non-executive Director Mr. Suo Suo Stephen; and three independent non-executive Directors, namely Messrs Yip Tak On, Jing Baoli and Bao Liang Ming.

– 46 –

AI assistant

Central Development Holdings Limited — Capital/Financing Update 2015

49236_rns_2015-09-29_2c726aba-f02a-4d5d-ab37-811a529a462b.pdf

CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(Stock Code: 269)

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (3) PROPOSED CHANGE IN BOARD LOT SIZE; (4) PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE; AND (5) RESUMPTION OF TRADING

Financial adviser to the Company

Underwriters to the Rights Issue

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

PROPOSED SHARE CONSOLIDATION

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

PROPOSED CHANGE IN BOARD LOT SIZE

PROPOSED RIGHTS ISSUE

Irrevocable Undertakings

Underwriting Agreement

IMPLICATIONS UNDER THE LISTING RULES

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

GENERAL

PROPOSED SHARE CONSOLIDATION

Effects of the Share Consolidation

Application for Listing of the Consolidated Shares

Conditions and expected effective date of the Share Consolidation

Reasons for the Share Consolidation

Free exchange of Share certificates and Trading Arrangement

New Shares issuable

Note:

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

PROPOSED CHANGE IN BOARD LOT SIZE

Odd lots arrangements and matching services

PROPOSED RIGHTS ISSUE

Issue statistics

Qualifying Shareholders

Closure of register of members

Basis of provisional allotments

Rights of Overseas Shareholders

Subscription Price

Status of the Rights Shares

Share certificates and refund cheques for the Rights Issue

Fractions of Rights Shares

Application for excess Rights Shares

Application for listing

THE UNDERWRITING AGREEMENT

The Underwriters

The Underwritten Shares

Termination of the Underwriting Agreement

Conditions of the Rights Issue

IRREVOCABLE UNDERTAKINGS

EXPECTED TIMETABLE

SHAREHOLDING STRUCTURE OF THE COMPANY

Scenario 1:

Scenario 2:

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

Use of Proceeds

Reasons for Rights Issue

FUND RAISING ACTIVITIES INVOLVING ISSUE OF SECURITIES IN THE PAST 12 MONTHS

ADJUSTMENTS TO THE SUBSCRIPTION PRICE AND/OR NUMBER OF SHARES UNDER THE SHARE OPTIONS, THE CONVERSION PRICE UNDER THE CONVERTIBLE BONDS AND THE SUBSCRIPTION PRICE UNDER THE UNLISTED WARRANTS

LISTING RULES IMPLICATIONS

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

GENERAL

RESUMPTION OF TRADING

WARNING OF THE RISKS OF DEALING IN EXISTING SHARES, CONSOLIDATED SHARES AND RIGHTS SHARES

DEFINITION

“Mr. Fung”

“Unlisted Warrants”

By order of the Board

China Resources and Transportation Group Limited Cao Zhong Chairman

Hong Kong, 29 September 2015

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