CITIC Limited — Capital/Financing Update 2011

Mar 11, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

==> picture [180 x 119] intentionally omitted <==

(Incorporated in Hong Kong with limited liability) (Stock Code: 00267)

CONNECTED TRANSACTION

==> picture [48 x 46] intentionally omitted <==

DISPOSAL OF PROPERTY

The Board announces that on 11 March 2011, the Vendor, a co-operative joint venture of CITIC Pacific which is treated as a non-wholly owned subsidiary for accounting purpose, entered into the Pre-sale Contract with the Purchaser, pursuant to which the Vendor agreed to sell the Property to the Purchaser for a consideration of RMB84,468,736 (approximately HK$99,673,108).

The Purchaser is a wholly owned subsidiary of CITIC Group, which is the controlling shareholder of CITIC Pacific. Accordingly, the Purchaser is a connected person of CITIC Pacific and the Disposal constitutes a connected transaction for CITIC Pacific under Chapter 14A of the Listing Rules. Since the applicable percentage ratios in respect of the Disposal are more than 0.1% but less than 5%, the Disposal is subject to the reporting and announcement requirements, but are exempt from the independent shareholders’ approval requirements, under the Listing Rules.

INTRODUCTION

The Board announces that on 11 March 2011, the Vendor, a co-operative joint venture of CITIC Pacific which is treated as a non-wholly owned subsidiary for accounting purpose, entered into the Pre-sale Contract with the Purchaser, pursuant to which the Vendor agreed to sell the Property to the Purchaser for a consideration of RMB84,468,736 (approximately HK$99,673,108).

• 1 -

THE PRE-SALE CONTRACT

Date:

11 March 2011

Parties:

==> picture [48 x 37] intentionally omitted <==

• Vendor : Wanning Renhe Development Company Limited (萬寧仁和發展有限公司), a non-wholly owned subsidiary of CITIC Pacific

• Purchaser : CITIC International Contracting Inc. (中信國華國際工程承包有限責任公司), a wholly owned subsidiary of CITIC Group (being the controlling shareholder of CITIC Pacific)

Asset to be disposed of:

The Property located at Shenzhou Peninsula, Wanning City, Hainan Province, the PRC, further information of which is set out in the paragraph headed "Information about the Property" below.

Consideration:

The consideration payable by the Purchaser for acquisition of the Property amounts to RMB84,468,736 (approximately HK$99,673,108), payable in the following manner:

• (i) RMB42,234,368 (approximately HK$49,836,554), representing 50% of the consideration, shall be paid within 15 days after signing of the Pre-sale Contract; and

• (ii) the remaining balance of RMB42,234,368 (approximately HK$49,836,554), representing 50% of the consideration, shall be paid before 31 March 2011.

The consideration is subject to adjustment prior to Delivery pending the determination of the final gross floor area of the Property as stated in the relevant property registration certificate.

The consideration was based on RMB12,800 per square metre of estimated gross floor area of 6,599.12 square metres, and was determined after arm's length negotiations between the Vendor and the Purchaser with reference to the estimation of the current market value of the Property having considered the price of similar properties in the neighbourhood of the Property.

If the Purchaser fails to pay the consideration within the prescribed time as set out above but pays the consideration within the 90 days period after such prescribed time, the Purchaser is liable to a penalty charge of 0.05% of the consideration payable by the Purchaser per day.

If the Purchaser fails to pay the consideration within 90 days after the prescribed time, the Vendor shall have the right to terminate the Pre-sale Contract and to request the Purchaser to pay a penalty charge of 10% of the aggregate consideration. After deducting the penalty charge, the Vendor shall refund the balance of any consideration (“Refund Balance”) paid by

• 2 -

the Purchaser to the Purchaser within 30 days of the cancellation of the Pre-sale Contract registration. Late refund will be subject to a penalty charge of 0.02% of the Refund Balance per day. If the Purchaser wishes to continue to perform the Pre-sale Contract, subject to consent by the Vendor, the Pre-sale Contract shall continue to be performed and the Purchaser shall pay a penalty charge to the Vendor of 0.05% of the payable consideration per day.

Delivery of the Property:

The Vendor shall deliver the Property to the Purchaser before 31 December 2011. On the Delivery of the Property to the Purchaser, among other things, (i) relevant inspection approval and the actual area measurement report shall have been obtained; and (ii) the municipal infrastructure and other facilities shall have satisfied the requirements as set out in the Pre-sale Contract (collectively, the “ Specifications ”).

If the Vendor fails to deliver the Property to the Purchaser or if any Specifications have not been met before 31 December 2011, the Vendor is liable for a penalty charge of 0.05% of the aggregate amount paid by the Purchaser to the Vendor per day between the day following 31 December 2011 and the actual date of Delivery of the Property which shall be paid within 30 days from the actual date of Delivery of the Property, provided that there are not more than 90 days between the day following 31 December 2011 and the actual date of Delivery of the Property.

If the Vendor fails to deliver the Property to the Purchaser or if any Specifications have not been met within 90 days from 31 December 2011, the Purchaser shall have the right to terminate the Pre-sale Contract and all moneys paid by the Purchaser pursuant to the Pre-sale Contract shall be returned to the Purchaser by the Vendor, and the Vendor is also liable for a penalty charge of 10% of the aggregate amount paid by the Purchaser to the Vendor. If the Purchaser agrees not to terminate the Pre-sale Contract notwithstanding the late Delivery of the Property, the Vendor shall be liable for a penalty charge of 0.05% of the aggregate amount paid by the Purchaser to the Vendor per day between the day following 31 December 2011 and the actual date of Delivery of the Property which shall be paid within 30 days from the actual date of Delivery of the Property.

USE OF PROCEEDS

Prior to the completion of construction, the Vendor shall only use the proceeds from the Disposal for the purchase of construction materials and equipments, payments for the construction works and tax payments, and shall maintain such proceeds in a controlled bank account stated in the relevant permit from the relevant PRC authority for the pre-sale of the Property.

INFORMATION ABOUT THE PROPERTY

Upon completion of construction, the Property (which forms part of the Project) will be a twelve-storey residential building located at Shenzhou Peninsula, Wanning City, Hainan Province, the PRC with an estimated gross floor area of 6,599.12 square metres. The Vendor has obtained the relevant permit from the relevant PRC authority for the pre-sale of the Property.

• 3 -

The land of the Project was acquired by the Vendor on 25 January 2007. Under the terms of the co-operative joint venture contract, CITIC Pacific is entitled to 80% of the distributable profit of the joint venture. Subject to the adjustment to the consideration upon the determination of the final gross floor area of the Property, and based on the management’s current estimation of the development costs, the net profit of the Disposal attributable to CITIC Pacific is estimated to be approximately RMB18 million (approximately HK$21 million).

REASONS FOR AND BENEFITS OF THE DISPOSAL

Taking into account the expected volatility in the China property market in the coming year due to rising interest rates and changes in the property policy of the PRC Government and that the Purchaser is willing to acquire the Property which comprises of an entire building in one go at a reasonable market price, CITIC Pacific considers that the Disposal is attractive. Given that the Disposal of the whole building comprises of 60 units, the Vendor’s administrative cost and marketing expenses will be saved compared to marketing each unit to individual purchaser. As the Vendor will receive the consideration by 31 March 2011, the Vendor’s cash flow for the Project will be improved.

The Directors (including the independent non-executive Directors) consider the terms of the Pre-sale Contract to be on normal commercial terms, fair and reasonable and in the interests of CITIC Pacific and its shareholders as a whole.

None of the Directors has a material interest in the Disposal. Accordingly, none of them is required to abstain from voting on the Board resolutions for considering and approving the Disposal.

GENERAL

The Group is engaged in a diversified range of businesses in Hong Kong and the PRC, including the manufacturing of special steel, iron ore mining, property development and investment, basic infrastructure (such as power generation, tunnels and communications) and marketing and distribution.

The Purchaser is principally engaged in the engineering contracting business.

LISTING RULES IMPLICATIONS

The Purchaser is a wholly owned subsidiary of CITIC Group, which is the controlling shareholder of CITIC Pacific. Accordingly, the Purchaser is a connected person of CITIC Pacific and the Disposal constitutes a connected transaction for CITIC Pacific under Chapter 14A of the Listing Rules. Since the applicable percentage ratios in respect of the Disposal are more than 0.1% but less than 5%, the Disposal is subject to the reporting and announcement requirements, but are exempt from the independent shareholders’ approval requirements, under the Listing Rules.

• 4 -

DEFINITIONS

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

“Board” the board of Directors; “CITIC Group” CITIC Group (中國中信集團公司), a state-owned enterprise established under the laws of the PRC and the controlling shareholder of CITIC Pacific; “CITIC Pacific” CITIC Pacific Limited ( 中信泰富有限公司 ), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange; “connected person” has the meaning ascribed to it by the Listing Rules; “controlling shareholder” has the meaning ascribed to it by the Listing Rules; “Delivery” the delivery of the Property by the Vendor to the Purchaser pursuant to the Pre-sale Contract; “Directors” the directors of CITIC Pacific; “Disposal” the sale of the Property by the Vendor to the Purchaser pursuant to the Pre-sale Contract; “Group” CITIC Pacific and its subsidiaries; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; “Hong Kong” the Hong Kong Special Administrative Region of the PRC; “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange; “percentage ratio(s)” has the meaning ascribed to it by the Listing Rules; “PRC” the People’s Republic of China; “Pre-sale Contract” the commodity house pre-sale contract dated 11 March 2011 between the Vendor and the Purchaser in respect of the Disposal; “Project” the residential project named Sunbury ( 朝陽海岸 ) which consists of 11 blocks of residential buildings (including the Property) located at Shenzhou Peninsula, Wanning City, Hainan Province, the PRC (中國海南省萬寧市神州半島);

• 5 -

“Property”

the twelve-storey residential building (T5A), which is one of the 11 blocks of residential buildings of the Project;

“Purchaser”

CITIC International Contracting Inc. (中信國華國際工程承包 有限責任公司), a wholly owned subsidiary of CITIC Group;

“RMB”

Renminbi, the lawful currency of the PRC;

“Stock Exchange”

The Stock Exchange of Hong Kong Limited;

“subsidiary”

has the meaning ascribed to it by the Listing Rules; and

“Vendor”

Wanning Renhe Development Company Limited (萬寧仁和發 展有限公司), a co-operative joint venture of CITIC Pacific which is treated as 99.9% owned subsidiary for accounting purpose in which CITIC Pacific is entitled to 80% of the distributable profit.

By Order of the Board CITIC Pacific Limited Ricky Choy Wing Kay Company Secretary

Hong Kong, 11 March 2011

In this announcement, the conversions of RMB into HK$ have been made at a rate of RMB1.00 to HK$1.18. Such conversions are for reference only and should not be construed as representations that the RMB amount could be converted into HK$ at that or any other rates.

As at the date hereof, the executive directors of CITIC Pacific are Messrs Chang Zhenming (Chairman), Zhang Jijing, Carl Yung Ming Jie, Vernon Francis Moore, Li Shilin, Liu Jifu, Milton Law Ming To, Wang Ande and Kwok Man Leung; the non-executive directors of CITIC Pacific are Messrs Willie Chang, André Desmarais, Ju Weimin, Yin Ke and Peter Kruyt (alternate director to Mr André Desmarais); and the independent non-executive directors of CITIC Pacific are Messrs Alexander Reid Hamilton, Hansen Loh Chung Hon and Norman Ho Hau Chong.

• 6 -