Central Development Holdings Limited — Proxy Solicitation & Information Statement 2016

Dec 7, 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Resources and Transportation Group Limited , you should at once hand this circular and the accompanying proxy form to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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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)

PROPOSED AMENDMENTS TO THE TERMS AND CONDITIONS OF THE 2018 CONVERTIBLE BONDS PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL AND NOTICE OF EGM

The notice convening the EGM of the Company to be held at 17th Floor, China Railway South Headquarters Building, No.3333 Zhongxin Road (Shenzhen Bay Section), Nanshan District, Shenzhen, PRC (中國深圳市南山區中心路3333號（深圳灣段）中鐵南方總部大廈17 樓), on Friday, 23 December 2016 at 11:00 a.m. is set out on pages 15 to 17 of this circular.

A proxy form for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the proxy form and return the same to the Company’s branch share registrar in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjourned meeting (as the case may be) if you so wish.

8 December 2016

CONTENTS

		Pages
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**Letter from **	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix I	– Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15

– i –

DEFINITIONS

In this circular, the following expressions have the meanings set out below unless the context requires otherwise:

• “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

• “Associates”

• has the meaning ascribed to it under the Listing Rules

• “Board”

• the board of Directors

• “Bondholder”

• China Life Insurance (Overseas) Company Limited, a company incorporated in the People’s Republic of China 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 (i) the Amendment Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate; and (ii) the proposed increase in authorised share capital of the Company

– 1 –

DEFINITIONS

• “Executive”

• the Executive Director of the Corporate Finance Division of the SFC or any delegates of the Executive Director

• “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

• “Latest Practicable Date”

• 5 December 2016, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular

• “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 circular, excludes Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan

• “Proposed Amendments”

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

• “SFC”

• the Securities and Futures Commission

• “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

– 2 –

DEFINITIONS

“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 "Takeovers Code" Hong Kong Code on Takeovers and Mergers “%” per cent

– 3 –

LETTER FROM THE BOARD

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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)

Directors Executive Directors

Mr. Cao Zhong (Chairman) Mr. Fung Tsun Pong (Vice-Chairman) Mr. Jiang Tao (Chief Executive Officer) Mr. Tsang Kam Ching, David (Finance Director) Mr. Gao Zhiping Mr. Duan Jingquan

Registered Office

Sterling Trust (Cayman) Limited Whitehall House 238 North Church Street P.O. Box 1043 George Town Grand Cayman, KY1-1102 Cayman Islands

Non-Executive Director

Mr. Suo Suo Stephen

Independent Non-Executive Directors

Mr. Yip Tak On Mr. Jing Baoli Mr. Bao Liang Ming Mr. Xue Baozhong

Head office and Principal Place of Business Room 1801-07, 18/F China Resources Building 26 Harbour Road Wanchai Hong Kong

8 December 2016

To the Shareholders:

Dear Sirs or Madams,

PROPOSED AMENDMENTS TO THE TERMS AND CONDITIONS OF THE 2018 CONVERTIBLE BONDS, PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL AND NOTICE OF EGM

Reference is made to the announcement of the Company dated 18 November 2016 in relation to the Proposed Amendments and the proposed increase in authorised share capital of the Company. The purpose of this circular is to provide you with further information regarding the Proposed Amendments and the proposed increase in authorised share capital of the Company together with the notice of the EGM.

– 4 –

LETTER FROM THE BOARD

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

INTRODUCTION

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 Latest Practicable Date, none of the 2018 Convertible Bonds have been redeemed nor converted, the outstanding amount of the 2018 Convertible Bonds is HK$700 million 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 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 the Latest Practicable Date, 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.

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LETTER FROM THE BOARD

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

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:

• (a) the Proposed Amendments; and

• (b) listing on the Stock Exchange of the 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.

As at the Latest Practicable Date, except for condition (ii)(a), none of the above conditions precedent have been completely satisfied.

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 Bonds) 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);

• 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); and

• v. a premium of approximately 36.99% to the closing price of HK$0.146 per Share as quoted on the Stock Exchange as at the Latest Practicable Date.

– 6 –

LETTER FROM THE BOARD

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 Latest Practicable Date and approximately 34.14% of the issued share capital of the Company as enlarged by the issue and allotment of the Conversion Shares.

Conversion restrictions

Pursuant to the terms of the Subscription Agreement, no conversion rights attaching to the 2018 Convertible Bonds shall be exercised and the Company shall not issue any Shares and the relevant 2018 Convertible Bonds shall continue until redeemed on maturity Date if and to the extent that upon such issue, the shareholding in the Company held by the public shall be less than 25% or the minimum prescribed percentage as set out in the Listing Rules from time to time (“ Minimum Public Float Restriction ”).

Pursuant to the terms of the Amendment Agreement, in addition to the Minimum Public Float Restriction, no conversion rights attaching to the 2018 Convertible Bonds shall be exercised and the Company shall not issue any Shares and the relevant 2018 Convertible Bonds shall continue until redeemed on maturity date if and to the extent that upon such issue, a change in control under the Takeovers Code is triggered (the “ Change of Control Restriction ”, together with the Minimum Public Float Restriction, the “ Restrictions ”).

Taking into account the Restrictions, please refer to note (j) and note (k) of the notes to the shareholding structure table under the paragraph headed “EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY” in this letter in relation to the Bondholder’s shareholding upon conversion of the 2018 Convertible Bonds.

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.

– 7 –

LETTER FROM THE BOARD

EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The table below sets out (i) the existing shareholding structure of the Company as at the Latest Practicable Date; (ii) the shareholding structure of the Company upon full conversion of the 2018 Convertible Bonds; (iii) the shareholding structure of the Company upon full conversion of all outstanding convertible securities of the Company; and (iv) the shareholding structure of the Company upon full conversion of all outstanding convertible securities of the Company taking into account the Restrictions:

Name Cao Zhong_(Note a) Fung Tsun Pong(Note b) Tsang Kam Ching, David (Note c) Miao Zhenguo(Note d) Bondic International Holdings Limited(Note e) Turbo View Investment Limited(Note f) Bondholder Strait Capital Service Limited (“Strait Capital”)(Note g) Strait CRTG Fund, L.P. (“Strait Fund”)(Note h) Subtotal of Strait Capital and Strait Fund Cross-Strait Capital Limited (Note i)_ Other public shareholders Subtotal of public shareholders	As at the Latest Practicable Date No. of Shares % 982,125,000 14.54 958,345,610 14.19 7,581,224 0.11 717,500,000 10.63 650,000,000 9.63 375,000,000 5.55 50,000,000 0.74 – – – – – – – – 3,011,844,136 44.61 4,086,844,136 60.53 6,752,395,970 100.00	Immediately upon full conversion of the 2018 Convertible Bonds No. of Shares % 982,125,000 9.58 958,345,610 9.35 7,581,224 0.07 717,500,000 7.00 650,000,000 6.34 375,000,000 3.66 3,550,000,000 (Note j) 34.63 – – – – – – – – 3,011,844,136 29.37 4,754,344,136 46.37 10,252,395,970 100.00	Immediately upon full conversion of all outstanding convertible securities (Note m) No. of Shares % 982,125,000 5.30 958,345,610 5.17 7,581,224 0.04 717,500,000 3.88 650,000,000 3.51 375,000,000 2.02 4,297,663,551 (Note l) 23.19 4,000,000,000 21.59 3,500,000,000 18.89 7,500,000,000 (Note k) 40.48 29,906,542 0.16 3,011,844,136 16.25* 4,784,250,678 25.82 18,529,966,063 100.00	Immediately upon full conversion of all outstanding convertible securities taking into account the Restrictions (Note m and Note n) No. of Shares % 982,125,000 6.23 958,345,610 6.08 7,581,224 0.05 717,500,000 4.55 650,000,000 4.13 375,000,000 2.38 4,297,663,551 (Note l) 27.28 2,519,934,731 15.99 2,204,942,890 14.00 4,724,877,621 (Note k) 29.99 29,906,542 0.19 3,011,844,136 19.12* 4,784,250,678 30.37 15,754,843,684 100.00	Immediately upon full conversion of all outstanding convertible securities taking into account the Restrictions (Note m and Note n) No. of Shares % 982,125,000 6.23 958,345,610 6.08 7,581,224 0.05 717,500,000 4.55 650,000,000 4.13 375,000,000 2.38 4,297,663,551 (Note l) 27.28 2,519,934,731 15.99 2,204,942,890 14.00 4,724,877,621 (Note k) 29.99 29,906,542 0.19 3,011,844,136 19.12* 4,784,250,678 30.37 15,754,843,684 100.00
					29.99 0.19 19.12
					30.37
					100.00

• denotes shareholdings that are counted towards the public float.

– 8 –

LETTER FROM THE BOARD

Notes:

• a. Mr. Cao Zhong, the chairman of the Company and an executive Director is interested in 33,800,000 Shares personally and 948,325,000 Shares through Champion Rise International Limited, a company wholly owned by him. In addition, as at the Latest Practicable Date, HK$400 million of the convertible bonds held by Strait Capital as mentioned in note g below has been charged in favour of Leftover Most Holdings Limited, a company wholly-owned by Mr. Cao Zhong (“ Charged Bonds ”). Accordingly, Mr. Cao Zhong is also deemed to be interested in the Charged Bonds.

• b. Mr. Fung Tsun Pong, the vice chairman of the Company and an executive Director, holds 310,590,610 Shares personally and 647,755,000 Shares through Ocean Gain Limited, a company wholly owned by him.

• c. Mr. Tsang Kam Ching, David is an executive Director.

• d. Mr. Miao Zhenguo holds 693,000,000 Shares personally and 24,500,000 Shares through Goldtex Group Limited, a company wholly owned by him. To the best of the information knowledge and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, Mr. Miao is a third party independent of the Company.

• e. Bondic International Holdings Limited is wholly owned by Mr. Cheung Chung Kiu. To the best of the information knowledge and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, Mr. Cheung is a third party independent of the Company.

• f. Turbo View Investment Limited is wholly owned by Mr. Gao Xiao Rui. To the best of the information knowledge and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, Mr. Gao is a third party independent of the Company.

• g. Strait Capital is the holder of HK$800,000,000 convertible bonds issued on 10 February 2015 by the Company which is convertible into 4,000,000,000 Shares at HK$0.20 per Share.

• h. Strait Fund being a Cayman Islands exempted limited partnership, is an investment fund managed by Strait Capital. Strait Fund is interested in HK$700,000,000 convertible bonds issued on 10 February 2015 by the Company which is convertible into 3,500,000,000 Shares at HK$0.20 per Share.

• i. Cross-Strait Capital Limited is interested in HK$32,000,000 convertible bonds issued by the Company on 10 February 2015, which is convertible into 29,906,542 Shares at HK$1.07 per Share.

• j. Taking into account the Restrictions, assuming only the 2018 Convertible Bonds will be converted, the Bondholder will not be allowed to convert equal or more than 2,821,087,775 Shares, representing not more than 30% of the then enlarged share capital of the Company in order to not trigger a change in control of the Company (taking into account the 50,000,000 Shares held by the Bondholder as at the Latest Practicable Date).

• k. Strait Fund is managed by Strait Capital, so the interest of Strait Capital and Strait Fund would need to be aggregated when considering whether there is a change of control of the Company. The Convertible bonds held by Strait Fund and Strait Capital are also subject to a change of control restriction under the amended terms as disclosed in the announcements dated 13 June 2016 and 10 August 2016, and the circulars of the Company dated 29 June 2016 and 23 August 2016. In the hypothetical situation that the Bondholder, Strait Capital and Strait Fund convert their respective convertible bonds simultaneously, subject to the Restrictions, each of Strait Capital and Strait Fund will not be allowed to convert equal or more than 2,519,934,731 Shares and 2,204,942,890 Shares respectively, which is in aggregate not more than 4,724,877,621 Shares, representing not more than 30% of the then enlarged share capital of the Company in order to not trigger a change in control of the Company.

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LETTER FROM THE BOARD

• l. In addition to the 2018 Convertible Bonds, the Bondholder is interested in HK$800,000,000 convertible bonds issued on 10 February 2015 by the Company which is convertible into 747,663,551 Shares at HK$1.07 per Share.

• m. The above table is for illustration purpose only and has not taken into account the effect of the exercise of the rights of share options issued by the Company.

• n. Although the Company believes that it is unlikely that all outstanding convertible securities will be converted simultaneously, the Company notes that, in the hypothetical scenario where all outstanding convertible securities were converted simultaneously (i.e. under the fourth column in the table above), each of the Bondholder, Strait Capital and Strait Fund will become associated companies (as defined under the Code on Takeovers and Mergers (the “ Takeovers Code ”)) of each other and will be presumed to be acting in concert.

The Company understands that it is not the intention of the abovementioned bondholders to co-operate with each other to obtain control of the Company, and so considers that the presumption of acting in concert does not apply. However, if the Executive rules that the abovementioned bondholders are acting in concert, then the Company will not be bound to issue any convertible bonds when the Restrictions under the Proposed Amendments becoming effective upon approval by the Shareholders.

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.

– 10 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, the Company’s outstanding convertible bonds are as follows:

Bondholder Bondholder Cross-Strait Capital Limited Bondholder Strait Capital Service Limited Strait CRTG Fund, L.P.	Principal amount HK$ 800,000,000 32,000,000 700,000,000 800,000,000 700,000,000 3,032,000,000	Outstanding balance (principal and interest) at Latest Practicable Date Maturity date HK$ 800,000,000 10 February 2016 34,468,571 10 February 2016 805,639,345 12 February 2018* 887,407,993 24 January 2017 776,654,595 24 January 2017 3,304,170,504

* subject to the Shareholders approving the Proposed Amendments, the maturity date will be changed to 24 January 2017.

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. The Board acknowledges that bringing the maturity date of the 2018 Convertible Bonds forward accelerates the payment obligations of the Company. At the meetings of bondholders held by the Board, at the request of the Bondholder and also having considered upon the Proposed Amendments becoming effective, the terms (including the respective conversion price and maturity date) of all the outstanding convertible bonds will become aligned, which would facilitate negotiations between all bondholders and the Company on any debt restructuring and repayment schedules which must take into account the interests of all bondholders. The Board considers that the change in maturity date and the Proposed Amendments, when taken as a whole, is in the interest of the Company and Shareholders as a whole.

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.

– 11 –

LETTER FROM THE BOARD

In addition to bringing the conversion price of the 2018 Convertible Bonds closer to the market trading price of the Shares, the Company has undertaken various measures including (i) holding meetings with the bondholders on restructuring of the bonds; and (ii) entering into amendment agreements with Strait Fund and Strait Capital as disclosed in the announcements dated 13 June 2016 and 10 August 2016, and the circulars of the Company dated 29 June 2016 and 23 August 2016 with respect to their respective bondholding. The Company notes that the maturity date of the 2018 Convertible Bonds (as amended by the Amendment Agreement) is 24 January 2017.

Having considered the Company's liability position as shown in the table above and its available financial resources, the Company considers it is infeasible to fulfil such cash requirements and plans to use the proceeds from the proposed disposal of its 86.87% equity interest of Inner Mongolia Zhunxing Heavy Haul Expressway Company Limited (內蒙古准興重載高速公路有限責任公司) (the “ Disposal* ”) for the repayment of the principal amount of the Company’s loans and borrowings (including amounts owed to the bondholders) together with accrued interests. On 28 June 2016, the Company entered into a letter of intent with a potential purchaser, details of which are disclosed in the announcement of the Company dated 28 June 2016, in relation to the potential Disposal. As at the Latest Practicable Date, the final terms and conditions of the agreement of the proposed Disposal are still under negotiation. The proposed Disposal will be subject to the results of financial due diligence work to be performed on Zhunxing and the approvals by the government authorities. If the proposed disposal is materialised, the Group’s cashflow will be strengthened and have sufficient reserve of cash to meet its liquidity requirement in the short and long term. The above steps were taken with a view of strengthening the Group’s cashflows and improving the overall financial position of the Group. Despite the imminent maturity date of the Company's outstanding convertible bonds, no definitive agreements have been entered into for deferring repayment of the 2018 Convertible bonds or other outstanding convertible bonds. However, in the meetings of bondholders with the Company conducted from time to time, the bondholders have been informed and understand that the Company's intended repayment method via the proposed Disposal. The Board is carrying out, with the assistance of financial advisers, an overall review of the financial position of the Group and the Group's capital and debt structure, and exploring different avenues for strengthening the Group's cashflows including the possibility of further fund raising, re-sculpting the debt payment profile to better match revenues and other debt restructuring, realization of assets including the toll road, and divestment of other assets. The Company will keep the Shareholders updated by making further announcement(s). As at the Latest Practicable Date, the proposed Disposal remains as the most viable means for the Company to raise cash to settle the outstanding loans and borrowings. It is expected that, if the proposed Disposal cannot materialise before the maturity dates as stated in the table above, there will be further liaisons with the convertible bond holders to agree on a repayment proposal and timetable acceptable to all bondholders. As disclosed on page 6 of the interim results announcement of the Company dated 24 November 2016 for the six months ended 30 September 2016, the Company’s default on its repayment obligations under the 2018 Convertible Bonds or any of the other outstanding convertible bonds will trigger the remaining balances of the convertible bonds and non-convertible debt securities to become also repayable on demand. In aggregate, the carrying amount of these convertible bonds and non-convertible debt securities which are immediately repayable was HK$4,332,777,000 as at 30 September 2016.

– 12 –

LETTER FROM THE BOARD

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

As at the Latest Practicable Date, 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.

EGM

The EGM will be convened and held for the Shareholders to consider and, if thought fit, to approve the resolutions in relation to the Amendment Agreement, the Proposed Amendments, the allotment and issue of the Conversion Shares under the Specific Mandate and the proposed increase in the authorised share capital of the Company, by way of poll.

Given the Bondholder is interested in approximately 0.74% of the issued share capital of the Company as at the Latest Practicable Date, the Bondholder is deemed to have an interest in the Proposed Amendments. As such, the Bondholder together with its associates will abstain from voting in respect of the resolution relating to the Proposed Amendments and transactions contemplated thereunder at the EGM. Except as disclosed above, to the best of the information, knowledge and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholder has a material interests in the Proposed Amendments and/or the proposed increase in authorised share capital of the Company. Therefore, no Shareholder is required to abstain from voting on the resolution for the proposed increase in authorised share capital of the Company.

The notice convening the EGM of the Company to be held at 17th Floor, China Railway South Headquarters Building, No.3333 Zhongxin Road (Shenzhen Bay Section), Nanshan District, Shenzhen, PRC (中國深圳市南山區中心路3333號（深圳灣段）中鐵南方總 部大廈17樓) on Friday, 23 December 2016, at 11:00 a.m. is set out on pages 15 to 17 of this circular.

A form of proxy for use by the Shareholders at the EGM is enclosed. Whether or not you intend to attend and vote at the EGM in person, you are requested to read the notice of EGM and complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meetings should you so wish.

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LETTER FROM THE BOARD

CLOSURE OF THE SHAREHOLDERS’ REGISTER

For the purpose of determining the list of Shareholders who are entitled to attend and vote at the EGM, the Shareholders’ register of the Company will be closed from Thursday, 22 December 2016 to Friday, 23 December 2016, both days inclusive. No transfer of shares of the Company will be registered during that period. In order to qualify to attend and vote at the EGM, all instruments of transfer together with the relevant share certificate(s) must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Wednesday, 21 December 2016.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

RECOMMENDATION

With reference to the paragraph “ REASONS AND BENEFITS OF THE PROPOSED AMENDMENTS ” above, the Board considers that the terms of the Amendment Agreement including the Proposed Amendments are fair and reasonable and the entering into Amendment Agreement is in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant ordinary resolution as set out in the notice of EGM.

The Directors also consider that the proposed increase in authorised share capital of the Company is in the interests of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of the relevant ordinary resolution as set out in the notice of the EGM.

ADDITIONAL INFORMATION

In the event of inconsistency, the English text of this circular and the accompanying form of proxy shall prevail over their respective Chinese texts.

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

Chairman

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APPENDIX I

NOTICE OF EGM

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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)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of China Resources and Transportation Group Limited (the “ Company ”) will be held at 17th Floor, China Railway South Headquarters Building, No.3333 Zhongxin Road (Shenzhen Bay Section), Nanshan District, Shenzhen, PRC (中國深圳市南山區中心路3333號（深圳灣段）中 鐵南方總部大廈17樓), on Friday, 23 December 2016 at 11:00 a.m. for the purpose of considering the following ordinary resolutions:

Capitalised terms used herein without definition shall have the same meanings as in the circular issued by the Company on 8 December 2016 (the “ Circular ”), unless the context otherwise requires.

ORDINARY RESOLUTIONS

(1) PROPOSED AMENDMENTS TO THE TERMS AND CONDITIONS OF THE 2018 CONVERTIBLE BONDS

“ THAT

• 1 (a) The entering into of the Amendment Agreement, a copy of which is produced to the meeting marked “A” and initialled by the Chairman of the EGM for the purpose of identification, be and is hereby approved, confirmed and ratified, and all the transactions contemplated thereunder, including the Proposed Amendments, be and are hereby approved, confirmed and ratified;

• (b) subject to the Stock Exchange having approved the Proposed Amendments and the Listing Committee granting approval for the listing of, and permission to deal in, the Conversion Shares, the Board be and is hereby granted a Specific Mandate for the allotment and issue of not more than 3,500,000,000 Conversion Shares upon exercise of the conversion rights attaching to the 2018 Convertible Bonds, and that the Specific Mandate shall supersede the Original Specific Mandate; and

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APPENDIX I

NOTICE OF EGM

• (c) any one director of the Company be and is hereby generally and unconditionally authorised to do all such further acts and things and to sign and execute all such other or further documents (if any) and to take all such steps which in his opinion may be necessary, appropriate, desirable or expedient to implement and/or give effects to the transactions contemplated under the Amendment Agreement including but not limited to the execution of any deeds or the affixation of any seal or the issue of any certificate.”

(2) AUTHORISED SHARE CAPITAL

“ THAT:

• (a) the authorised share capital of the Company increased from HK$3,000,000,000, divided into 15,000,000,000 shares of HK$0.20 each (“ Shares ”), to HK$4,000,000,000 by the creation of an additional 5,000,000,000 new Shares (the “ Increase of Authorised Share Capital ”); and

• (b) any director of the Company be and is hereby authorised to do all such acts and things and execute all such documents which he/she may consider necessary, desirable or expedient for the purpose of, or in connection with, the implementation of and giving effect to the Increase of Authorised Share Capital including to complete and effect any required filings or reports.”

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

Hong Kong, 8 December 2016

Principal place of business:

Room 1801-07,

18/F., China Resources Building,

26 Harbour Road, Wanchai, Hong Kong

Notes:

(a) The register of members of the Company will be closed from Thursday, 22 December 2016 to Friday, 23 December 2016, both days inclusive. No transfer of shares of the Company will be registered during that period. In order to qualify to attend and vote at the EGM, all instruments of transfer together with the relevant share certificate(s) must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Wednesday, 21 December 2016.

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APPENDIX I

NOTICE OF EGM

• (b) A member entitled to attend and vote at the above meeting is entitled to appoint one or more than one proxies to attend and vote on his behalf. A proxy need not be a member of the Company but must be present in person to represent the member.

• (c) If the appointer is a corporation, the form of proxy must be under its common seal, or under the hand of an officer or attorney duly authorized on its behalf.

• (d) In order to be valid, a form of proxy must be deposited at the Company’s Hong Kong branch share registrar, Tricor Progressive Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. The completion and delivery of the form of proxy will not preclude a member from attending and voting at the meeting if he so wishes. In the event that he attends the meeting after having lodged the form of proxy, the form of proxy will be deemed to have been revoked.

• (e) Where there are joint registered holders of any Share, any one of such persons may vote at the meeting, either personally or by proxy, in respect of such Shares as if he was solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such Share shall alone be entitled to vote and will be accepted to the exclusion of other joint registered holders in respect hereof.

• (f) The EGM is expected not to exceed half an hour, and all member and proxies shall be responsible for their own travelling expenses.

As at the date of this notice, the board of directors of the Company 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.

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