CITIC Limited — M&A Activity 2014

Nov 12, 2014

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.

This announcement does not constitute an offer to buy, or the solicitation of an offer to sell or subscribe for, any securities or an invitation to enter into an agreement to do any such things, nor is it calculated to invite any offer to buy, sell or subscribe for any securities.

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VOLUNTARY ANNOUNCEMENT

INTRODUCTION

This is a voluntary announcement made by the board of directors (the “ Board ”) of CITIC Limited (the “ Company ”) in relation to a proposed transaction of one of its indirectly-owned subsidiaries, CITIC Environment (International) Company Limited (“ CITIC ”).

CKM (Cayman) Company Limited (the “ Offeror ”), a company jointly owned by each of CITIC and KKR China Water Investment Holdings Limited (“ KKRCW ”), proposes to acquire at least a majority stake in United Envirotech Ltd. (“ UEL ”) by way of (a) a voluntary conditional offer (“ Offer ”) for all the issued and paid-up ordinary shares in the capital of UEL other than those already owned, controlled or agreed to be acquired by the Offeror, and (b) a comparable offer for all the convertible bonds that KKRCW holds as sole bondholder (“ CB Offer ”). After the close of the Offer and the CB Offer, the Offeror intends to subscribe for further shares in UEL by way of a private placement (“ Placement ”) for an aggregate subscription amount of approximately S$50 million (equivalent to approximately HK$299 million), S$100 million (equivalent to approximately HK$599 million) or S$150 million (equivalent to approximately HK$898 million) (as the case may be), subject to certain conditions precedent being satisfied (including but not limited to UEL shareholders’ approval for the Placement). For the purposes of this announcement, the Offer, the CB Offer and the Placement shall collectively be referred to as the “ Proposed Transaction ”.

The offer price for each UEL share will be S$1.65 (equivalent to approximately HK$9.88) (the “ Offer Price ”). At the Offer Price, the Offer values the share capital of UEL on a fully diluted basis at approximately S$1,901 million (equivalent to approximately HK$11,384 million). After taking into account (i) the irrevocable undertakings received by the Offeror from certain undertaking shareholders who have agreed to accept settlement of Offer by way

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of cash and/or shares of the Offeror, and (ii) the minimum subscription amount of S$50 million pursuant to the Placement, the maximum consideration for the Proposed Transaction is expected to be approximately S$1,256 million (equivalent to approximately HK$7,521 million).

The Offer and the CB Offer are made on a pre-conditional basis, whereby the pre-conditions of the Offer and the CB Offer include the satisfaction by the Offeror of various filing and approval processes with the relevant authorities of the People’s Republic of China (“ PRC ”) which are necessary pursuant to the laws and regulations of the PRC in connection with the Proposed Transaction.

RATIONALE FOR THE PROPOSED TRANSACTION

It is the intention of the Company to develop its business in the environmental protection sector and its investment in UEL provides a unique opportunity for the Company to invest in a leading membrane-based water and wastewater treatment and reclamation solution provider with businesses mainly in the PRC’s chemical, petrochemical and industrial park sectors.

Pursuant to the Proposed Transaction, the Company will obtain an indirect controlling interest in UEL and the Offeror intends to maintain the listing status of UEL on the Singapore Exchange Securities Trading Limited (“ SGX-ST ”). It is noted that with an increasing number of state-owned enterprises being involved in water and wastewater treatment business in the PRC, the market is becoming more competitive. To increase the competitiveness of UEL, it is envisaged that the Company will leverage on its business network and resources in the PRC to support UEL’s business development strategy and growth plans. It is also the vision of the Company to continue to invest in the water and environmental protection industry in the PRC and to develop UEL as the Company’s flagship for its water and wastewater treatment sector. The Company also plans to use UEL as a strategic platform and new source of revenue in the water and environmental protection industry.

INFORMATION ON THE PARTIES

The Offeror is an exempted company with limited liability incorporated under the laws of the Cayman Islands on September 30, 2014. Its principal activities are those of an investment holding company.

CITIC is a wholly-owned subsidiary of CITIC Environment Protection Co. Ltd. (“ CITIC EP ”), which in turn is an indirect wholly-owned subsidiary of the Company. CITIC EP specialises in investment, operation and management of projects in the environmental protection sector. It has a number of investments and has successfully managed water and wastewater treatment, waste disposal, industrial and municipal energy-saving projects.

KKRCW is an indirect wholly-owned subsidiary of KKR China Water Holdings I Limited, which in turn is approximately 93.2% held by KKR Asian Fund L.P.. The investment manager for KKR Asian Fund L.P. is Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “ KKR ”). KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds.

UEL is a company registered in Singapore and is listed on the Main Board of the SGX-ST. UEL is a leading membrane-based water and wastewater treatment and reclamation solution

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provider with businesses mainly in the PRC’s chemical, petrochemical and industrial park sectors. Its principal activities include design, fabrication, installation and commissioning of water and wastewater systems using its proprietary advanced membrane technologies such as the Membrane Bioreactor (“ MBR ”) technology. UEL has designed and built several of the largest industrial wastewater treatment plants in Asia using the MBR technology.

For more detailed information relating to the Proposed Transaction, please refer to the announcements published on the website of the SGX-ST at www.sgx.com.

CAUTIONARY STATEMENT

As the Proposed Transaction is subject to certain conditions being satisfied or waived (as the case may be), shareholders and potential investors of the Company should note that there is no certainty or assurance that the Offer and the CB Offer will eventually be made or that the Proposed Transaction will eventually be carried out. This announcement does not amount to a firm intention to make an offer under Rule 3.5 of the Singapore Code on Take-overs and Mergers.

As the Proposed Transaction may or may not proceed, the Board would like to remind shareholders and potential investors of the Company to exercise caution when dealing in the shares or other securities of the Company, and to refrain from taking any action which may be prejudicial to their interests. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor, accountant or other professional adviser.

Unless otherwise specified, amounts denominated in S$ have been converted, for the purpose of illustration only, into HK$ in this announcement at the following rates: S$1.00: HK$5.9882).

By Order of the Board CITIC Limited Chang Zhenming Chairman

Hong Kong, 12 November 2014

As at the date of this announcement, the executive directors of the Company are Messrs Chang Zhenming (Chairman), Wang Jiong, Dou Jianzhong and Zhang Jijing; the non-executive directors of the Company are Mr Yu Zhensheng, Mr Yang Jinming, Ms Cao Pu and Mr Liu Zhongyuan; and the independent non-executive directors of the Company are Messrs Alexander Reid Hamilton, Francis Siu Wai Keung and Dr Xu Jinwu.

Important Notice:

This announcement does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor is it a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable laws and regulations. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in any such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.

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