China Energy Development Holdings Limited — Proxy Solicitation & Information Statement 2009

Jun 12, 2009

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Energy Development Holdings Limited, you should at once hand this circular, together with the enclosed form of proxy to the purchaser or transferee or to the bank, a licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 228)

MAJOR TRANSACTION AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

A letter from the board of directors of China Energy Development Holdings Limited is set out on pages 4 to 10 of this circular.

The notice convening the extraordinary general meeting of China Energy Development Holdings Limited to be held at Falcon Room II, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Tuesday, 30 June 2009 at 11:00 a.m. is set out on pages 16 to 17 of this circular. Whether or not you are able to attend the extraordinary general meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit at the Company’s Hong Kong branch share registrar, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the extraordinary general meeting or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the extraordinary general meeting or any adjourned meeting (as the case may be) should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

15 June 2009

* For identification purposes only

CONTENTS

		Page
DEFINITIONS..............................................................................................................................		1
LETTER FROM THE	BOARD..................................................................................................	4
APPENDIX I —	FINANCIAL INFORMATION ON THE GROUP.........................	11
APPENDIX II —	GENERAL INFORMATION.............................................................	12
NOTICE OF EXTRAORDINARY GENERAL MEETING...................................................		16

– i –

DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

• “Announcement” the announcement dated 26 May 2009 issued by the Company in relation to the Disposal

• “Board” the board of Directors “Company” China Energy Development Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Stock Exchange (stock code: 00228)

• “Completion” the completion of the sale and purchase of the Sale Shares and Sale Loans under the Disposal Agreements

• “Completion Date” the third business day after fulfillment or waiver (if applicable) of all the conditions precedent immediately prior to Completion) or such other date as the Vendor and the Purchaser may agree in writing

• “Consideration” the consideration payable by the Purchaser to the Vendor for the Disposal

• “Directors” the directors of the Company “Disposal” the disposal of the Sale Shares and the Sale Loans by the Vendor to the Purchaser pursuant to the Disposal Agreements

• “Disposal Agreements” collectively Dragongem Agreement, Jing Hua Agreement and More Development Agreement

• “Disposed Group” a group of companies consisting of Dragongem, Jing Hua and More Development

• “Dragongem” Dragongem Development Limited, a company incorporated in Hong Kong and wholly and beneficially owned by the Vendor

• “Dragongem Agreement” the conditional sale and purchase agreement dated 22 May 2009 and entered into between the Purchaser and the Vendor in relation to the disposal of Dragongem Sale Shares

• “Dragongem Sale Shares” an aggregate of 100 ordinary shares of HK$1.00 each in Dragongem, representing the entire issued ordinary shares of Dragongem, to be sold by the Vendor to the Purchaser pursuant to Dragongem Agreement

– 1 –

DEFINITIONS

“EGM”	the extraordinary general meeting to be held by the Company to
	consider and, if thought fit, approve the Disposal Agreements and the
	Disposal
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Independent	any person who himself is, and (in the case of corporate entity) its
Third Party(ies)”	ultimate beneficial owners are, to the best of the Directors’ knowledge,
	information and belief, having made all reasonable enquiries, third
	parties independent of the Company and the connected person (as
	defined in the Listing Rules) of the Company
“Jing Hua”	Jing Hua (Allied) Limited, a company incorporated in Hong Kong
	and wholly and beneficially owned by the Vendor
“Jing Hua Agreement”	the conditional sale and purchase agreement dated 22 May 2009 and
	entered into between the Purchaser and the Vendor in relation to the
	disposal of Jing Hua Sale Shares and Jing Hua Sale Loan

• “Jing Hua Sale Loan” all the interests, benefits and rights of and in the shareholders’ loans owed by Jing Hua to the Vendor as at the date of Jing Hua Agreement in the amount of HK$3,845,615.30

• “Jing Hua Sale Shares” an aggregate of 10,000 ordinary shares of HK$1.00 each in Jing Hua, representing the entire issued ordinary shares of Jing Hua, to be sold by the Vendor to the Purchaser pursuant to Jing Hua Agreement

• “Latest Practicable Date” 11 June 2009 being the latest practicable date for the purpose of ascertaining certain information contained in this circular prior to its publication

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Long Stop Date” on or before 31 July 2009 or such other date as may be agreed in writing between the Purchaser and the Vendor

• “More Development” More Development Limited, a company incorporated in Hong Kong and wholly and beneficially owned by the Vendor

– 2 –

DEFINITIONS

• “More Development the conditional sale and purchase agreement dated 22 May 2009 and Agreement” entered into between the Purchaser and the Vendor in relation to the disposal of More Development Sale Shares and More Development Sale Loan

• “More Development all the interests, benefits and rights of and in the shareholders’ loans Sale Loan” owed by More Development to the Vendor as at the date of More Development Agreement in the amount of HK$5,169,985.86

• “More Development an aggregate of 100 ordinary shares of HK$1.00 each in More Sale Shares” Development, representing the entire issued ordinary shares of More Development, to be sold by the Vendor to the Purchaser pursuant to More Development Agreement

• “Purchaser” Speedy Fortune Limited, an Independent Third Party “Sale Loans” collectively Jing Hua Sale Loan and More Development Sale Loan “Sale Shares” collectively Dragongem Sale Shares, Jing Hua Sale Shares and More Development Sale Shares

• “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Shares” ordinary shares of HK$0.05 each in the capital of the Company “Shareholder(s)” holder(s) of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Vendor” Hon Po International Limited, a company incorporated in the British Virgin Island and a wholly-owned subsidiary of the Company

• “%” per cent.

– 3 –

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 228)

Executive Directors: Registered Office: Mr. Chan Wai Keung (Chairman & Chief Executive Officer) Cricket Square Mr. Chan Shi Yung Hutchins Drive Mr. Chui Kwong Kau P. O. Box 2681 Mr. Wang Xiang Jun Grand Cayman KY1-1111 Cayman Islands

Independent Non-executive Directors:

Mr. Chang Kin Man Mr. Ip Wing Lun Ms. Li Yuen Yu, Alice

Head office and principal place of business in Hong Kong: Unit 3607, 36th Floor, West Tower, Shun Tak Centre No. 168-200 Connaught Road Central Hong Kong

15 June 2009

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

As disclosed in the Announcement, on 22 May 2009 (after trading hours), the Vendor, a whollyowned subsidiary of the Company, entered into the Disposal Agreements with the Purchaser, an Independent Third Party, whereby the Vendor has agreed to sell, and the Purchaser has agreed to purchase, the Sale Shares and the Sale Loans for an aggregate consideration of HK$9,025,801.16, which shall be settled in cash upon Completion. The Sale Shares represent the entire issued ordinary shares of Dragongem, Jing Hua and More Development and the Sale Loans represent all amounts due to the Vendor by each of Jing Hua and More Development as at the date of the Disposal Agreements.

* For identification purposes only

– 4 –

LETTER FROM THE BOARD

The Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the approval of the Shareholders at the EGM. As no Shareholder has any interest in the Disposal which is different from other Shareholders, no Shareholder is required to abstain from voting in respect of the proposed ordinary resolution to approve the Disposal Agreements at the EGM.

The purpose of this circular is to provide you with details of the Disposal Agreements and to give you a notice of EGM at which an ordinary resolution will be proposed for the Shareholders to consider and if thought fit, approve the Disposal Agreements and the Disposal.

THE DISPOSAL AGREEMENTS

Date

22 May 2009

Parties

Vendor: Hon Po International Limited

Purchaser: Speedy Fortune Limited

The Purchaser is principally engaged in investment holding. To the best of the information, knowledge and belief of the Directors having made all reasonable enquiry, some of the ultimate beneficial shareholders of the Purchaser are also directors of Dragongem, Jing Hua and More Development. However, as none of them hold more than 30% of the shareholding of the Purchaser, the Purchaser is an Independent Third Party.

Assets to be disposed

The assets to be disposed comprise of the Sale Shares, representing the entire issued ordinary shares of each of Dragongem, Jing Hua and More Development, and the Sale Loans, representing all amounts due to the Vendor by each of Jing Hua and More Development as at the Completion Date.

Consideration

The aggregate Consideration of HK$9,025,801.16 comprises of: (a) HK$100 payable on Dragongem Sale Shares; (b) HK$10,000 payable on Jing Hua Sale Shares and HK$3,845,615.30 payable on Jing Hua Sale Loan; and (c) HK$100 payable on More Development Sale Shares and HK$5,169,985.86 payable on More Development Sale Loan. The Consideration shall be paid by the Purchaser to the Vendor in cash upon Completion.

– 5 –

LETTER FROM THE BOARD

The Consideration was arrived at after arm’s length negotiations between the parties with reference to (a) the audited consolidated net liabilities of the Disposed Group as at 31 December 2008 of approximately HK$2,162,000 and (b) the face value of the Sale Loans of HK$9,015,601.16 as at 30 April 2009.

In the event that the aggregate amount of the Sale Loans as at the Completion Date is more than or less than HK$9,015,601.16, the Consideration shall be adjusted by increasing or reducing (as the case may be) the amount of the Consideration payable by the Purchaser to the Vendor upon Completion on a dollar-for-dollar basis.

In light of the above, the Directors (including the independent non-executive Directors) consider that the Consideration is fair and reasonable.

Conditions Precedent

Completion is conditional upon the following conditions being fulfilled and remaining fulfilled or waived by the Purchaser as at Completion:

• (a) the passing of the necessary resolution(s) by the shareholders of the Company (other than those (if any) who are required to abstain from voting under the Listing Rules) at a general meeting of the Company to approve and ratify the Vendor’s entry into of the Disposal Agreements and the performance of the transactions contemplated thereunder in accordance with the Listing Rules;

• (b) the warranties in the Disposal Agreements remaining true and accurate in all material respects and not misleading in any material respect at Completion as if repeated at Completion and at all times between the date of the Disposal Agreements and Completion; and

• (c) all necessary statutory governmental and regulatory obligations having been complied with and all necessary regulatory authority in Hong Kong, governmental and third party consents and approvals (including those person entitled to any pre-emption rights) and waivers for the purposes of the transactions contemplated under the Disposal Agreements having been obtained without any conditions (or subject to other conditions reasonably acceptable to the Parties).

If any of the above conditions precedent has not been fulfilled (or waived by the Purchaser) on or before the Long Stop Date, either the Vendor or the Purchaser shall be entitled to rescind the Disposal Agreements by giving written notice to the other and the provisions of the Disposal Agreements shall from such date have no further force and effect and no party to the Disposal Agreements shall have any liability (without prejudice to the rights of the parties in respect of any antecedent breaches).

As at the Latest Practicable Date, none of the above conditions has been fulfilled.

– 6 –

LETTER FROM THE BOARD

Completion

Completion shall take place on or before the Completion Date or such other date as may be agreed by Vendor and the Purchaser in writing subject to the satisfaction or waiver of the above conditions precedent.

INFORMATION ON THE COMPANY AND THE GROUP

The Company is principally engaged in investment holding. The current principal activities of the Group include operating a chain of Chinese restaurants in Hong Kong. The natural gas business in Macau was disposed by the Company on 12 December 2008 as disclosed in the Company’s announcement dated 15 December 2008. However, the Company still maintains its long-term confidence on natural gas and natural resources industries and is looking for investment opportunities in these industries.

INFORMATION ON THE DISPOSED GROUP

Dragongem is a company incorporated in Hong Kong and is wholly and beneficially owned by the Vendor. Dragongem is principally engaged in operating a Chinese restaurant in Hong Kong. Dragongem is the legal and beneficial owner of the entire issued share capital of Wisetex Development Limited (“Wisetex”) and Vice Bo Investments Limited (“Vice Bo”) which are investment holding companies. Wisetex and Vice Bo are the legal and beneficial owners of 32.97% and 34.06% of the entire issued capital of Oriental Team Investments Limited (“Oriental Team”) respectively. Oriental Team is a dormant company.

Jing Hua is a company incorporated in Hong Kong and is wholly and beneficially owned by the Vendor. Jing Hua is principally engaged in operating a Chinese restaurant in Hong Kong. Jing Hua is the legal and beneficial owner of the entire issued share capital of Jing Hua Restaurant Limited, which is a dormant company.

More Development is a company incorporated in Hong Kong and is wholly and beneficially owned by the Vendor. More Development is principally engaged in investment holding. More Development is the legal and beneficial owner of the entire issued share capital of Bestcase Hong Kong Limited, which is principally engaged in operating a Chinese restaurant in Hong Kong.

– 7 –

LETTER FROM THE BOARD

FINANCIAL INFORMATION ON THE DISPOSED GROUP

The following are the audited consolidated financial information on the Disposed Group for the two years ended 31 December 2007 and 2008 which were prepared in accordance with the accounting policies of Hong Kong Financial Reporting Standards and are extracted from the audited consolidated financial statements of the Disposed Group:

	For the year ended	For the year ended
	31 December 2008	31 December 2007
	HK$’000	HK$’000
Turnover	145,000	154,000
(Loss)/profit before taxation	(3,881)	6,795
(Loss)/profit after taxation	(3,881)	6,795
Net (liabilities)/assets	(2,162)	1,719
Total assets	27,842	35,623

As at 31 December 2008, the audited consolidated net liabilities of the Disposed Group was approximately HK$2,162,000.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Hong Kong economy had a negative growth in the first quarter of 2009. The year of 2009 will also be a difficult year for the Group to operate the Chinese restaurant business. The Chinese restaurant business continues to face the high price of raw material, demand from the customers to reduce price and the intensive competitive market in Hong Kong. Having considered the loss making position of these three Chinese restaurants for the financial year of 2008 and the fact that the leases for 2 of the 3 disposed restaurants are up for renewal in June/July 2009, the Board considers that (i) the Disposal would provide a good opportunity for the Group to discontinue the business of these three Chinese restaurants and will enable the Group to avoid any further losses that will possibly be incurred by the Disposed Group in view of the uncertain operating environment in Hong Kong; (ii) it enables the Group to focus its resources in the remaining profit making Chinese restaurants; (iii) the Disposal would also provide additional cash and allow the Group to redeploy its resources to other investment opportunities and (iv) no further capital injection will be required for disposed companies. The Board is therefore of the opinion that the Disposal represents a good opportunity for the Company to dispose the Disposed Group. Following the Disposal, the Group will continue to operate two profitable Chinese restaurants in Tokawan and Hung Hom. The unaudited revenue derived from the remaining two restaurants for the first three months of 2009 was approximately HK$22 million. Furthermore, these two restaurants contributed approximately 40% of the total gross revenue (ie. approximately HK$97 million) of the Group for the period ended 31 December 2008.

– 8 –

LETTER FROM THE BOARD

The Directors (including the independent non-executive Directors) are of the view that the terms of the Disposal Agreements are on normal commercial terms, which are fair and reasonable and the entering into of the Disposal Agreements is in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECT OF THE DISPOSAL

The Directors estimates that upon Completion, the Group is expected to record a gain from the Disposal of approximately HK$2,170,000, representing the difference between the proceeds of the par value ordinary shares from the Disposal of approximately HK$10,000 and the audited consolidated net liabilities of the Disposed Group attributable to the Group of approximately HK$2,160,000 as at 31 December 2008. The total assets and total liabilities of the Group would decrease by approximately HK$27,840,000 and HK$30,000,000 respectively.

Upon Completion, the Disposed Group will cease to be a subsidiary of the Company and its financial results will not be consolidated into the Group’s financial statements.

USE OF PROCEEDS

The Directors expect that the net proceeds from the Disposal of approximately HK$8,600,000 (after deducting all relevant fees and expenses) will be used for general working capital of the Group.

FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Chinese restaurant business continue to face the intensive competitive market and uncertain operating environment in Hong Kong. The Group will continue to manage this business segment with a cautious approach and will not pour any significant financial resources into this segment.

The Directors consider that upon Completion, the Group’s financial and cash position can be further strengthened.

Apart from the Chinese restaurant business, the Directors are constantly reviewing potential investment opportunities that would offer high and stable returns, including but not limited to investments in natural gas and natural resources industries.

As at the Latest Practicable Date, the Company has already entered into a sale and purchase agreement in relation to acquisition of the right in drilling, exploration, exploitation and production of oil and/or natural gas in the PRC (the “Acquisition”). Details of the Acquisition have been disclosed in the announcement of the Company dated 4 February 2009. The Acquisition has not yet completed up to the Latest Practicable Date.

The Board believes that the Acquisition is an attractive investment opportunity for the Group which will create value for the Shareholders.

– 9 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

The Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the approval of the Shareholders at the EGM. As no Shareholder has any interest in the Disposal which is different from other Shareholders, no Shareholder is required to abstain from voting in respect of the proposed ordinary resolution to approve the Disposal Agreements at the EGM.

EXTRAORDINARY GENERAL MEETING

Set out on pages 16 to 17 of this circular is a notice convening the EGM to consider and, if thought fit, to approve the Disposal Agreements and the transactions contemplated therein. A form of proxy for use at the EGM is enclosed herewith and such form of proxy is also published on the website of the Stock Exchange (www.hkexnews.hk).

Whether or not you intend to attend and vote at such meeting, you are requested to complete and return the enclosed form of proxy to the Company’s Hong Kong branch share registrar, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon 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 adjournment thereof should you so wish.

RECOMMENDATION

The Directors consider that the Disposal contemplated under the Disposal Agreements is in the interests of the Company and the Shareholders as a whole and that the terms of the Disposal Agreements are fair and reasonable and on normal commercial terms. Therefore, the Directors recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information contained in the appendices to this circular.

By Order of the Board China Energy Development Holdings Limited Chan Wai Keung Chairman

– 10 –

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

1. INDEBTEDNESS STATEMENT

As at the close of business on 30 April 2009, being the latest practicable date for the purpose of ascertaining certain information relating to this indebtedness statement, the Group had no outstanding bank borrowings.

The Group did not have, at the Latest Practicable Date, any mortgages, charges, debentures, loan capital issued and outstanding or agreed to be issued, debt securities, bank overdrafts, loans or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptance or acceptance credits or guarantees or other material contingent liabilities.

The Directors confirm that there has been no material change in the indebtedness and contingent liabilities of the Group since the close of business on 30 April 2009.

2. WORKING CAPITAL

As disclosed in the Company’s annual report dated 24 April 2009, the net assets of the Group as at 31 December 2008 was approximately HK$421,476,000.

After due and careful enquiry and taking into account the internal resources of the Group and the estimated net proceeds of approximately HK$8,600,000 (after deducting all relevant fees and expenses) from the Disposal, the Directors are of the opinion that the Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this circular.

3. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2008, being the date to which the latest published audited financial statements of the Group were made up.

– 11 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DIRECTORS’ INTERESTS IN SECURITIES

As at the Latest Practicable Date, none of the Directors and chief executives and their associates has any interests or short position in shares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “Model Code”), to be notified to the Company and the Stock Exchange.

3. SUBSTANTIAL SHAREHOLDERS INTERESTS

So far as is known to the Directors or chief executive of the Company, the Company had not been notified of any other interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would fall to be disclosed under provisions of Division 2 and 3 of Part XV of the SFO, or any persons (other then the Directors and chief executive of the Company) who, as at the Latest Practicable Date, was directly and indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member the Group.

4. SERVICE CONTRACT

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which does not expire or is not terminable by such member of the Group within one year without payment of compensation (other than statutory compensation).

5. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Group.

– 12 –

GENERAL INFORMATION

APPENDIX II

6. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective associates were considered to have interest in any business which competes or may compete, either directly or indirectly, with the business of the Group or have or may have any other conflicts of interest with the Group pursuant to the Listing Rules.

7. INTEREST IN CONTRACTS AND ASSETS

No contract or arrangement in which any of the Directors is materially interested and which is significant in relation to the business of the Group subsisted as at the Latest Practicable Date.

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2008 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

8. MATERIAL CONTRACTS

Within the two years immediately preceding the date of this circular, the following are contracts (not being contracts entered into in the ordinary course of business) entered into by the members of the Group which are or may be material:

• (a) a conditional sale and purchase agreement dated 24 September 2007 and entered into between Joy Even International Limited (“Joy Even”) and Mr. Wang Jian Guo (“Mr. Wang”) in relation to the acquisition of a 51% equity interest in the registered capital of each of Bu Tuo County Wu Zhou Minerals Limited Liability Company and Hui Li County Wan Feng Mining Limited Liability Company at an aggregate consideration of RMB498 million (the “First Acquisition Agreement”);

• (b) a deed of variation dated 24 January 2008 and entered into between Joy Even and Mr. Wang in relation to the extension of the long-stop date under the First Acquisition Agreement;

• (c) a deed of termination dated 31 July 2008 and entered into between Joy Even and Mr. Wang in relation to the termination of the First Acquisition Agreement;

• (d) a sale and purchase agreement dated 28 October 2008 and entered into between Newstar Assets Management Limited, Silverwise Limited (“Silverwise”) and the Company in relation to the disposal of the entire issued share capital of each of Achieve Smart Finance Limited (“Achieve Smart”) and Bright Horizon Worldwide Inc. (“Bright Horizon”) and all amounts of the shareholders’ loans owing by each of Achieve Smart and Bright Horizon to Silverwise at an aggregate consideration of HK$76,093,061.88;

– 13 –

APPENDIX II

GENERAL INFORMATION

• (e) a conditional sale and purchase agreement dated 22 January 2009 and entered into among the Company, Totalbuild Limited, China Era Energy Power Investment (Hong Kong) Limited and Mr. Wang Guoju in relation to the acquisition of the entire issued share capital of Zhong Guo Nian Dai Energy Investment (Hong Kong) Limited at an aggregate consideration of not less than HK$2 billion and not more than HK$10 billion; and

• (f) the Disposal Agreements.

9. MISCELLANEOUS

• (a) The registered office of the Company is at Cricket Square, Hutchins Drive, P. O. Box 2681, Grand Cayman KY1-1111, Cayman Islands. The head office of the Company and its principal place of business in Hong Kong is at Unit 3607, 36th Floor, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong.

• (b) The secretary of the Company is Mr. Wong Siu Keung, Joe who is an associate member of Hong Kong Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants.

• (c) The principal share registrar and transfer office of the Company is Butterfield Fund Services (Cayman) Limited at Butterfield House, 68 Fort Street, P O Box 705, Grand Cayman KY1-1107, Cayman Islands.

• (d) The Hong Kong branch share registrar of the Company is Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (e) The English texts of this circular shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the principal place of business of the Company at Unit 3607, 36th Floor, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong, up to and including the Latest Practicable Date:

• (a) the memorandum of association and bye-laws of the Company;

• (b) the annual report of the Company for the year ended 31 December 2007 and 31 December 2008;

• (c) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix;

– 14 –

GENERAL INFORMATION

APPENDIX II

• (d) a copy of each of the circulars issued by the Company pursuant to the requirements set out in Chapter 14 and/or 14A of the Listing Rules since 31 December 2008 (being the date to which the latest published audited consolidated financial statements of the Company was made);

• (e) the Disposal Agreements; and

• (f) this circular.

– 15 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [378 x 55] intentionally omitted <==

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 228)

NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting of China Energy Development Holdings Limited (the “Company”) will be held at Falcon Room II, Luk Kwok Hotel, 72 Gloucester Road, Wanchai, Hong Kong on Tuesday, 30 June 2009 at 11:00 a.m. to consider and, if thought fit, transact the following ordinary business:

ORDINARY RESOLUTION

“ THAT (i) the conditional sale and purchase agreement dated 22 May 2009 and entered into between Ho Po International Limited (“Hon Po”) as vendor and Speedy Fortune Limited (“Speedy Fortune”) as purchaser in relation to the disposal of the entire issued ordinary shares in Dragongem Development Limited (the “Dragongem Agreement”); (ii) the conditional sale and purchase agreement dated 22 May 2009 and entered into between Hon Po as vendor and Speedy Fortune as purchaser in relation to the disposal of the entire issued ordinary shares in Jing Hua (Allied) Limited and all amounts of the shareholders’ loan in the sum of HK$3,845,615.30 as at the date of the agreement (the “Jing Hua Agreement”); and (iii) the conditional sale and purchase agreement dated 22 May 2009 and entered into between Hon Po as vendor and Speedy Fortune as purchaser in relation to the disposal of the entire issued ordinary shares in More Development Limited and all amounts of the shareholders’ loan in the sum of HK$5,169,985.86 as at the date of the agreement (the “More Development Agreement”) (the Dragongem Agreement, the Jing Hua Agreement and the More Development Agreement collectively referred to as the “Disposal Agreements”) (copies of the Disposal Agreements having been produced to the Meeting and marked “A” and initialed by the Chairman of the Meeting for the purpose of identification) and the transactions contemplated thereby be and are hereby approved, confirmed and ratified and that any one director of the Company be and is hereby authorised to do such acts and things, to sign and execute all such further documents and to take such steps as they may consider necessary, appropriate, desirable or expedient to give effect to or in connection with the Disposal Agreements or any transactions contemplated under the Disposal Agreements.”

By order of the Board China Energy Development Holdings Limited Chan Wai Keung Chairman

Hong Kong, 15 June 2009

* For identification purposes only

– 16 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Registered Office: Cricket Square Hulchins Drive P. O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Unit 3607, 36th Floor, West Tower, Shun Tak Centre No. 168-200 Connaught Road Central Hong Kong

Notes:

• (1) A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or, if he is the holder of more than one share, more proxies to attend and, vote in his stead. A proxy need not be a member of the Company. In order to be valid, the form of proxy must be deposited at the Company’s Hong Kong branch share registrar, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or adjourned meeting.

• (2) In the case of joint holders of shares in the Company, the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holders, seniority being determined by the order in which names stand in the register of members of the Company.

• (3) Completion and return of the form of proxy will not preclude members from attending and voting in person at the extraordinary general meeting or any adjournment and in such event, the instrument appointing a proxy shall be deemed to be revoked.

• (4) As at the date of this notice, the board of directors of the Company comprises Mr. Chan Wai Keung, Mr. Chan Shi Yung, Mr. Chui Kwong Kau, and Mr. Wang Xiang Jun as executive directors; and Mr. Chang Kin Man, Mr. Ip Wing Lun and Ms. Li Yuen Yu, Alice as independent non-executive directors.

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