CITIC Limited — Capital/Financing Update 2013

Oct 29, 2013

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.

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CITIC Pacific Limited 中信泰富有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00267)

DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO DISPOSAL OF PROPERTY TO CITIC BANK

The Board announces that on 29 October 2013, Shanghai Xintai, an indirect non-whollyowned subsidiary of CITIC Pacific, entered into the Framework Agreement with CITIC Bank, pursuant to which Shanghai Xintai agreed to sell and CITIC Bank agreed to purchase the Property for a consideration of RMB2,500 million (equivalent to approximately HK$3,150 million).

CITIC Bank is a subsidiary of CITIC Group Corporation, which is the controlling shareholder of CITIC Pacific. Accordingly, CITIC Bank is a connected person of CITIC Pacific. As the highest applicable percentage ratio in respect of the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable and connected transaction for CITIC Pacific. The Disposal is subject to the reporting, announcement and the Independent Shareholders’ approval requirements under the Listing Rules. CITIC Group Corporation and its associates are required to abstain from voting on the resolution approving the transactions contemplated under the Framework Agreement.

A circular containing, among other things, (i) further details of the Framework Agreement and the transactions contemplated therein; (ii) recommendations from the Independent Board Committee to the Independent Shareholders; (iii) the advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; together with (iv) a notice convening an extraordinary general meeting of CITIC Pacific at which resolutions will be proposed for the approval of the transactions contemplated under the Framework Agreement, will be sent to the Shareholders as soon as practicable and is expected to be despatched to the Shareholders within 15 business days after publication of this announcement, i.e. on or before 19 November 2013.

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INTRODUCTION

The Board announces that on 29 October 2013, Shanghai Xintai, an indirect non-whollyowned subsidiary of CITIC Pacific, entered into the Framework Agreement with CITIC Bank, pursuant to which Shanghai Xintai agreed to sell and CITIC Bank agreed to purchase the Property for a consideration of RMB2,500 million (equivalent to approximately HK$3,150 million).

SUMMARY OF THE FRAMEWORK AGREEMENT

Date: 29 October 2013

Parties:

• (1) Shanghai Xintai, an indirect non-wholly-owned subsidiary of CITIC Pacific, as the seller

• (2) CITIC Bank, a subsidiary of CITIC Group Corporation (being the controlling shareholder of CITIC Pacific), as the purchaser

Asset to be disposed of:

The Property to be constructed at Lot 66/19, Block 503, Shanggangxincunjiedao, Pudong New Area, Shanghai, PRC, further information of which is set out in the paragraph headed “Information about the Property” below.

Conditions to effectiveness of the Framework Agreement

The Framework Agreement shall become effective upon the independent shareholders of CITIC Pacific having approved the Disposal.

Pursuant to the Framework Agreement, Shanghai Xintai and CITIC Bank shall enter into the Escrow Agreement in relation to the use of funds in the Escrow Account within seven days after the Framework Agreement becomes effective.

Consideration

The consideration payable by CITIC Bank for acquisition of the Property amounts to RMB2,500 million (equivalent to approximately HK$3,150 million), payable in the following manner:

• (i) RMB625 million (equivalent to approximately HK$788 million), representing 25% of the consideration, shall be paid into the Escrow Account within 10 working days after the Framework Agreement, the Escrow Agreement or analogous legal documentation having become effective (whichever is later);

• (ii) RMB1,375 million (equivalent to approximately HK$1,733 million), representing 55% of the consideration, shall be paid into the Escrow Account within 15 working days after CITC Bank has received a completion acceptance report and a written

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notice in respect of completion of construction of the main structure of the Property issued by the supervision company engaged by Shanghai Xintai;

• (iii) RMB125 million (equivalent to approximately HK$158 million), representing 5% of the consideration, shall be paid into the Escrow Account within 15 working days after CITIC Bank has received a written notice from Shanghai Xintai in respect of completion of the Property;

• (iv) RMB250 million (equivalent to approximately HK$315 million), representing 10% of the consideration, shall be paid into the Escrow Account within 45 working days after CITIC Bank has received a written notice of completion of inspection of the Property from Shanghai Xintai or within 15 working days after Shanghai Xintai has dealt with the rectification request (if any) raised by CITIC Bank and CITIC Bank has accepted the rectification by way of written confirmation, whichever is later; and

• (v) the remaining balance of RMB125 million (equivalent to approximately HK$158 million), representing 5% of the consideration, shall be paid into an account designated by Shanghai Xintai within 15 working days after CITIC Bank has received the property registration certificate in respect of the Property issued in the name of CITIC Bank.

The consideration is subject to adjustment upon the determination of the final gross floor area of the Property (excluding the underground parking spaces) as stated in the relevant property registration certificate. In the event that the total gross floor area of the Property (excluding the underground parking spaces) as stated in the relevant property registration certificate is less than 47,815m[2] (being the estimated gross floor area of the commercial and office development and the underground commercial and culture entertainment development) and the difference is greater than 0.8%, Shanghai Xintai shall return to CITIC Bank the amount corresponding to the portion of shortfall in gross floor area which exceeds 0.8% and which is calculated on the basis of RMB50,000 (equivalent to approximately HK$63,000) per m[2] and such amount can be deducted directly from the balance of the consideration payable to Shanghai Xintai. No adjustment to the consideration will be made if (a) the gross floor area of the commercial and office development and the underground commercial and culture entertainment development, or the total gross floor area of the Property (excluding the underground parking spaces) as stated in the relevant property registration certificate is greater than 47,815m[2] ; or (b) the total gross floor area of the Property (excluding the underground parking spaces) as stated in the relevant property registration certificate is less than 47,815m[2] and the difference is less than 0.8% (inclusive of 0.8%).

The consideration was determined after arm’s length negotiations between Shanghai Xintai and CITIC Bank with reference primarily to the indicative valuation of the Property prepared by DTZ Debenham Tie Leung Limited, an independent professional valuer, being RMB2,495 million (equivalent to approximately HK$3,144 million) as at 31 August 2013.

In the event that (a) Shanghai Xintai fails to transfer the Property to CITIC Bank; or (b) CITIC Bank fails to pay all or any part of the consideration to Shanghai Xintai; or (c) any party terminates the Framework Agreement without the prior consent of the other party, the defaulting party shall pay a penalty being 10% of the aggregate consideration to the nondefaulting party.

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Delivery of the Property

It is expected that Shanghai Xintai shall deliver the Property to CITIC Bank before 30 June 2016, by which time, among other things, (a) the Property shall have satisfied the requirements as set out in the Framework Agreement; and (b) Shanghai Xintai and CITIC Bank shall have entered into the formal property sale and purchase agreement in respect of the Property.

To the extent Shanghai Xintai requires project financing for the purpose of completing the construction of the Property, CITIC Bank has the first right to offer such project financing under the same terms which may be available to Shanghai Xintai from other third parties.

Shanghai Xintai expects to enter into further agreements with CITIC Bank in due course to comply with relevant PRC regulatory requirements to complete the formalities in connection with the transfer of the underground parking spaces (being part of the Property).

Use of proceeds

Unless otherwise agreed by CITIC Bank, Shanghai Xintai shall use the proceeds from the Disposal maintained in the Escrow Account for payments for expenses in connection with the construction works. Upon completion of the Property and acceptance of delivery by CITIC Bank, all remaining funds from the Escrow Account will be released to Shanghai Xintai. The Group expects to use the balance of such proceeds as working capital and to fund new projects should the opportunity arises.

Information about the Property

Upon completion of the construction (which is currently expected to be in 2016), the Property will be a fifteen-storey commercial and office development and a four-level underground commercial and culture entertainment development with an estimated total gross floor area of 47,815m[2] located at Shanggangxincunjiedao, Pudong New Area, Shanghai, PRC.

As disclosed in the announcement of CITIC Pacific dated 20 November 2012, CITIC Pacific acquired 99.2% equity interest in Shanghai Xintai which owns two pieces of land located in Area B of Shanghai World Expo site, of which the Land forms part, by way of capital injection. According to the land use right contract signed with Shanghai Municipal Planning and Land Resources Administration Bureau, the permitted use of the Land is that it may only be used for sale or lease to CITIC Group Corporation’s companies. The Disposal is therefore in compliance with the permitted use of the Land.

The original acquisition cost attributable to the Land of CITIC Pacific was approximately RMB972 million (equivalent to approximately HK$1,225 million). According to the preliminary valuation prepared by DTZ Debenham Tie Leung Limited, an independent professional valuer, the indicative value of the Property as at 31 August 2013 (as if the Property has completed construction) was valued at RMB2,495 million (equivalent to approximately HK$3,144 million). As the Property is in a preliminary stage of development and completion of the construction of the Property is currently expected to be in 2016, the book value of the Property (being the original acquisition cost attributable to the Land and related construction costs for the Property to be built on it) was approximately RMB1,022 million (equivalent to approximately HK$1,288 million) as at 30 September 2013.

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Subject to the adjustment to the consideration upon the determination of the final gross floor area of the Property (excluding the underground parking spaces) as stated in the relevant property registration certificate, and based on the management’s current estimation of the construction and development costs of the Property and the original acquisition cost attributable to the Land of approximately RMB972 million (equivalent to approximately HK$1,225 million), the Group is expected to record an estimated profit attributable to CITIC Pacific of approximately RMB330 million (equivalent to approximately HK$416 million) upon completion of the Disposal.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Property is located in the Shanghai World Expo site and CITIC Pacific understands that Shanghai Government has plans to develop such site as a new prime business district of Shanghai. Taking into account CITIC Pacific’s own requirements for office and commercial space, the expected return on investment in the Property, and that effectively the transaction provides full financing for the construction of the Property together with an economic gain upon completion of construction, CITIC Pacific considers that the Disposal represents a good opportunity to cement the realisation of such gain.

The Directors (excluding the independent non-executive Directors whose opinion will be given after receiving advice from the Independent Financial Adviser) consider the terms of the Framework Agreement are fair and reasonable and in the interests of CITIC Pacific and the Shareholders as a whole.

None of the Directors has material interest in the Framework Agreement. Accordingly, none of them is required to abstain from voting on the board resolutions for considering and approving the Framework Agreement. However, so as to avoid the perception of a conflict of interest, Mr. Chang Zhenming who is a director of both CITIC Pacific and CITIC Bank abstained from voting on the relevant board resolution to approve the Framework Agreement.

GENERAL

Shanghai Xintai is an indirect non-wholly-owned subsidiary of CITIC Pacific. It is principally engaged in property development and investment and provision of property management services.

The Group’s operational focus is on the PRC, both the mainland and Hong Kong. Its major businesses are special steel, iron ore mining and property development in the PRC. Other businesses include energy and civil infrastructure. CITIC Pacific also holds a controlling interest in Dah Chong Hong Holdings Limited and 41.45% interest in CITIC Telecom International Holdings Limited.

CITIC Bank is a national commercial bank in the PRC providing a full range of financial products and services to customers nationwide, with corporate banking, personal banking and treasury capital market operations being its principal business activities.

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LISTING RULES IMPLICATIONS

CITIC Bank is a subsidiary of CITIC Group Corporation, which is the controlling shareholder of CITIC Pacific. Accordingly, CITIC Bank is a connected person of CITIC Pacific. As the highest applicable percentage ratio in respect of the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable and connected transaction for CITIC Pacific. The Disposal is subject to the reporting, announcement and the Independent Shareholders’ approval requirements under the Listing Rules. CITIC Group Corporation and its associates are required to abstain from voting on the resolution approving the transactions contemplated under the Framework Agreement.

The Independent Board Committee, comprising Messrs Alexander Reid Hamilton, Gregory Lynn Curl, Francis Siu Wai Keung and Dr. Xu Jinwu, being all the independent nonexecutive Directors, has been established to advise the Independent Shareholders as to whether the terms of the Disposal are fair and reasonable and whether the Disposal is in the interests of CITIC Pacific and the Shareholders as a whole, after taking into account the recommendations of the Independent Financial Adviser. CITIC Pacific has appointed the Independent Financial Adviser to make recommendations to the Independent Board Committee and the Independent Shareholders as to whether the terms of the Disposal are fair and reasonable and whether the Disposal is in the interests of CITIC Pacific and the Shareholders as a whole.

A circular containing, among other things, (i) further details of the Framework Agreement and the transactions contemplated therein; (ii) recommendations from the Independent Board Committee to the Independent Shareholders; (iii) the advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; together with (iv) a notice convening an extraordinary general meeting of CITIC Pacific at which resolutions will be proposed for the approval of the transactions contemplated under the Framework Agreement, will be sent to the Shareholders as soon as practicable and is expected to be despatched to the Shareholders within 15 business days after publication of this announcement, i.e. on or before 19 November 2013.

DEFINITIONS

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

“associate(s)” has the meaning ascribed to it by the Listing Rules; “Board” the board of Directors; “business day” any day on which the Stock Exchange is open for the business of dealing in securities; “CITIC Bank” China CITIC Bank Corporation Limited (中信銀行股 份有限公司 ), a joint stock limited company incorporated in the PRC with limited liability, the shares of which are listed on the Stock Exchange;

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“CITIC Construction”

“CITIC Group Corporation”

“CITIC Pacific”

“connected person”

“Directors”

• “Disposal”

“Escrow Account”

“Escrow Agreement”

“Framework Agreement”

• “Group”

• “HK$”

“Hong Kong”

CITIC Construction Co., Ltd. * (中信建設有限責任 公司), a limited liability company established in the PRC, an indirect wholly-owned subsidiary of CITIC Group Corporation;

• 中國中信集團有限公司 (CITIC Group Corporation), a wholly state-owned enterprise established under the laws of the PRC, which indirectly owned approximately 57.51% shareholding interest in CITIC Pacific as at the date of this announcement;

• 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;

has the meaning ascribed to it by the Listing Rules;

the directors of CITIC Pacific;

the sale of the Property by Shanghai Xintai to CITIC Bank pursuant to the Framework Agreement;

• a bank account maintained by Shanghai Xintai with CITIC Bank for receiving funds in respect of the Property under the supervision of CITIC Bank;

• the escrow agreement in relation to the use of funds in the Escrow Account to be entered into between Shanghai Xintai and CITIC Bank within seven days after the Framework Agreement becomes effective;

• the framework agreement entered into between Shanghai Xintai and CITIC Bank on 29 October 2013 in relation to the Disposal;

CITIC Pacific and its subsidiaries;

• Hong Kong dollars, the lawful currency of Hong Kong;

the Hong Kong Special Administrative Region of the PRC

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“Independent Board Committee” a committee of the Board, comprising all the independent non-executive Directors, namely Messrs Alexander Reid Hamilton, Gregory Lynn Curl, Francis Siu Wai Keung and Dr. Xu Jinwu, constituted to make recommendations to the Independent Shareholders on the fairness and reasonableness of the terms of the Disposal; “Independent Financial Adviser” Somerley Limited, an independent financial adviser to make recommendations to the Independent Board Committee and the Independent Shareholders in relation to the Disposal; “Independent Shareholders” Shareholders other than CITIC Group Corporation and its associates; “Land” a piece of land (B03B-03) located at Lot 66/19, Block 503, Shanggangxincunjiedao, Pudong New Area, Shanghai, PRC, with a site area of 9,163m[2] ; “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange; “m[2] ” square meters; “percentage ratio(s)” has the meaning ascribed to it by the Listing Rules; “PRC” the People’s Republic of China; “Property” the commercial and office development with an estimated gross floor area of 45,815m[2] , the underground commercial and culture entertainment development with an estimated gross floor area of 2,000m[2] and approximately 400 underground parking spaces; “RMB” Renminbi, the lawful currency of the PRC; “Shareholder(s)” the shareholder(s) of CITIC Pacific; “Shanghai Xintai” Shanghai Xintai Property Company Limited * (上海信 泰置業有限公司 ), a limited liability company established in the PRC which is owned as to 99.2% by Yangzhou Xintai and as to 0.8% by CITIC Construction, and an indirect non-wholly-owned subsidiary of CITIC Pacific; “Stock Exchange” The Stock Exchange of Hong Kong Limited; “subsidiary(ies)” has the meaning ascribed to it by the Listing Rules;

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“working day”

any day on which commercial banks in the PRC are open for business;

“Yangzhou Xintai”

Yangzhou Xintai Property Development Company Limited * (揚州信泰房地產開發有限公司), a limited liability company established in the PRC, an indirect wholly-owned subsidiary of CITIC Pacific; and

“%”

per cent.

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

Hong Kong, 29 October 2013

* for identification purposes only

In this announcement, the conversions of RMB into Hong Kong dollars have been made at a rate of RMB1 to HK$1.26. Such conversions are for reference only and should not be construed as representations that the RMB amount could be converted into HK$ amount.

As at the date of this announcement, the executive Directors are Messrs Chang Zhenming (Chairman), Zhang Jijing, Vernon Francis Moore and Liu Jifu; the non-executive Directors are Messrs André Desmarais, Ju Weimin, Yin Ke, Carl Yung Ming Jie, and Peter Kruyt (alternate director to Mr André Desmarais); and the independent non-executive Directors are Messrs Alexander Reid Hamilton, Gregory Lynn Curl, Francis Siu Wai Keung and Dr. Xu Jinwu.

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