Central Development Holdings Limited — Capital/Financing Update 2016

Nov 18, 2016

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 liabilities 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 only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

==> picture [176 x 62] intentionally omitted <==

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)

PROPOSED AMENDMENTS TO THE TERMS AND CONDITIONS OF THE 2018 CONVERTIBLE BONDS

AND

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

Reference is made to the announcements of the Company dated 28 November 2014 and 6 November 2015, and the circular of the Company dated 9 January 2015 in relation to, among other things, the issue of the 2018 Convertible Bonds.

As at the date of this announcement, none of the 2018 Convertible Bonds have been redeemed nor converted and the conversion price of the 2018 Convertible Bonds is HK$1.07 per Conversion Share taking into account the intervening adjustments since the issue of the 2018 Convertible Bonds.

The Board announces that on 18 November 2016, the Company and the Bondholder entered into the Amendment Agreement.

– 1 –

THE AMENDMENT AGREEMENT

Date

18 November 2016

Parties

the Company and the Bondholder

The Bondholder is a wholly-owned subsidiary of China Life Insurance (Group) Company. Its main business covers insurance, investment, and provident fund service in Hong Kong and Macau.

As at date of the Amendment Agreement, the Bondholder holds 50,000,000 Shares representing approximately 0.74% of the issued share capital of the Company, the 2016 Convertible Bonds and the 2018 Convertible Bonds. Save for the aforesaid, to the best knowledge, information and belief of the Directors, having made all reasonable enquiries, each of the Bondholder and its ultimate beneficial owners is a third party independent of the Company and connected persons of the Company.

The Proposed Amendments

Pursuant to Amendment Agreement, the Company and the Bondholder agreed to amend certain terms and conditions of the 2018 Convertible Bonds as follows:

• i. the maturity date for the 2018 Convertible Bonds will be amended from 12 February 2018 to 24 January 2017;

• ii. the conversion price, which was originally HK$0.20 per ordinary share of HK$0.01 each and is currently HK$1.07 per Share as a result of intervening adjustments since the issue of the 2018 Convertible Bonds, will be reset at HK$0.20 per Share; and

• iii. provisions will be added to make clear that no transfer or conversion of 2018 Convertible Bonds is permitted to the extent it triggers a change in control under the Hong Kong Code on Takeovers and Mergers.

Except as disclosed above, there are no other amendments to the terms of the 2018 Convertible Bonds.

– 2 –

Conditions precedent

The Proposed Amendments are subject to the following conditions precedent:

• i. the Shareholders in the EGM approving the Proposed Amendments; and

• ii. the Stock Exchange approving the Proposed Amendments including the listing on the Stock Exchange of Conversion Shares arising from conversion of the 2018 Convertible Bonds.

In the event that the conditions precedent set out above are not satisfied by 20 December 2016, the Amendment Agreement will terminate and cease to be of any effect and neither party thereto shall have any claim against the other party for any costs, damages, compensation or otherwise in respect of the Amendment Agreement other than in respect of antecedent breaches thereof.

Adjusted conversion price per Conversion Share

The adjusted conversion price of HK$0.20 per Conversion Share represents:

• i. a discount of 81.31% to the original conversion price (taking into account the intervening adjustments since the issue of the 2018 Convertible Bond) of HK$1.07 per Conversion Share;

• ii. a premium of 57.48% to the closing price of HK$0.127 per Share as quoted on the Stock Exchange on 18 November 2016 (the date of the Amendment Agreement);

• iii. a premium of 55.28% to the average closing price of approximately HK$0.129 per Share as quoted on the Stock Exchange for the last five trading days up to and including 18 November 2016 (the date of the Amendment Agreement); and

• iv. a premium of 52.09% to the average closing price of approximately HK$0.132 per Share as quoted on the Stock Exchange for the last ten trading days up to and including 18 November 2016 (the date of the Amendment Agreement).

Assuming the conversion rights attaching to the 2018 Convertible Bonds are exercised in full at the adjusted conversion price of HK$0.20 per Conversion Share, 3,500,000,000 Conversion Shares will fall to be issued to the Bondholder, representing approximately 51.83% of the issued capital of the Company as at the date of this announcement and approximately 34.14% of the issued share capital of the Company as enlarged by the issue and allotment of the Conversion Shares.

– 3 –

Specific Mandate to issue the Conversion Shares

On 28 January 2015, Shareholders granted an Original Specific Mandate to the Directors for the allotment and issue of new Shares upon exercise of the conversion rights attached to the 2018 Convertible Bonds. Due to the additional number of new Shares that will be issued pursuant to the proposed change to lower the conversion price, the Conversion Shares will be issued under a revised Specific Mandate which will supersede the Original Specific Mandate and is subject to the approval of the Shareholders at the EGM.

Ranking

The Conversion Shares, when fully paid, issued and allotted, will rank pari passu in all respects with all Shares in issue as at the date of issue of the Conversion Shares.

Listing application for the Conversion Shares

An application will be made by the Company to the Stock Exchange for the granting of the listing of, and the permission to deal in the Conversion Shares.

LISTING RULES IMPLICATION

Pursuant to Rule 28.05 of the Listing Rules, any alterations in the terms of convertible debt securities after issue must be approved by the Stock Exchange, except where the alterations take effect automatically under the existing terms of such convertible debt securities.

The Company has obtained the approval of the Stock Exchange in respect of the Proposed Amendments subject to obtaining the Shareholders’ approval on the Proposed Amendments.

REASONS AND BENEFITS OF THE PROPOSED AMENDMENTS

The Group is principally engaged in expressway operations, trading of petroleum and related products, compressed natural gas stations operations and timber operations.

The Board considers that the amendment of conversion price will incentivise the Bondholder to convert all or part of the 2018 Convertible Bonds not previously converted by bringing it closer to the current market level of the share price. The agreement to shorten the conversion period was agreed between the Bondholder and the Company to align the interest of the Bondholder with Strait Capital Service Limited and Strait CRTG Fund, L.P., both of which amended the maturity date of their respective convertible bonds to 24 January 2017 as disclosed in the announcements of the Company dated 13 June 2016 and 10 August 2016. Based on the above, the Board is of the view that the terms of the Amendment Agreement and 2018 Convertible Bonds (as amended by the Amendment Agreement) are fair and reasonable and are in the interest of the Company and its shareholders as a whole.

– 4 –

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

As at the date of this announcement, the existing authorised share capital of the Company is HK$3,000,000,000, divided into 15,000,000,000 Shares of HK$0.20 each, of which 6,752,395,970 Shares have been issued and credited as fully paid up in the amount of HK$1,350,479,194.

In order to ensure that the authorised share capital of the Company will be sufficient for the issue of the conversion shares upon full conversion of the existing convertible bonds of the Company and any potential issue of new Shares in the future, the Board proposes to increase the Company’s authorised share capital from HK$3,000,000,000 to HK$4,000,000,000 by the creation of additional 5,000,000,000 new Shares.

GENERAL

The entering into of the Amendment Agreement, the Proposed Amendments, the allotment and issue of the Conversion Shares under the Specific Mandate and the proposed increase in authorised share capital are subject to Shareholders’ approval at the EGM. A circular containing further information regarding the Proposed Amendments and the proposed increase in authorised share capital together with the notice of the EGM is expected to be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

DEFINITIONS

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

• “2016 Convertible Bonds”

  • the 9% convertible bonds in the aggregate principal amount of HK$800 million issued by the Company to the Bondholder, details of which are set out in the Company’s announcement dated 28 November 2014

• “2018 Convertible Bonds” the 9% convertible bonds in the aggregate principal amount of HK$700 million issued by the Company, details of which are set out in the Company’s announcement dated 28 November 2014

• “Amendment Agreement” the amendment agreement dated 18 November 2016 entered into between the Company and the Bondholder in relation to the Proposed Amendments

• “Board” the board of Directors

– 5 –

“Bondholder” China Life Insurance (Overseas) Company Limited, a company incorporated in the PRC with limited liability “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)

“connected person(s)” has the meaning ascribed to it under the Listing Rules “Conversion Share(s)” the new Shares to be issued upon the exercise of the conversion rights attached to the 2018 Convertible Bonds “Director(s)” the director(s) of the Company “EGM” the extraordinary general meeting of the Company to be convened and held to consider, and if thought fit, to approve the Amendment Agreement and the transactions contemplated therein, including the grant of the Specific Mandate and the proposed increase in authorised share capital of the Company “Group” the Company and its subsidiaries “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 “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Original Specific Mandate” the specific mandate to allot and issue new Shares granted to the Board pursuant to the ordinary resolution number 3(b) at the extraordinary general meeting of the Company held on 28 January 2015 “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

– 6 –

“Proposed Amendments”

the proposed amendments to the 2018 Convertible Bonds pursuant to the terms of the Amendment Agreement

• “Share(s)” ordinary share(s) of HK$0.20 each in the share capital of the Company

• “Shareholder(s)”

the holder(s) of issued Shares

• “Specific Mandate” the specific mandate proposed to be granted to the Directors at the EGM to allot, issue and deal with the Shares to be allotted upon conversion of the 2018 Convertible Bonds

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subscription Agreement” the subscription agreement dated 28 November 2014 entered into between the Company and the Bondholder in relation to the subscription of the 2018 Convertible Bonds

“%” per cent

By order of the Board China Resources and Transportation Group Limited Cao Zhong Chairman

Hong Kong, 18 November 2016

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

– 7 –