CMON Limited — Capital/Financing Update 2011

Apr 27, 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.

瀋陽公用發展股份有限公司 Shenyang Public Utility Holdings Company Limited

(a joint stock limited company incorporated in the People’s Republic of China)

(Stock code: 747)

Financial Adviser to the Company

Karl Thomson Financial Advisory Limited

MAJOR DISPOSAL AND RESUMPTION OF TRADING

THE DISPOSAL

The Board is pleased to announce that on 26 April 2011, after the trading hours, the Company entered into the Disposal Agreement with the Purchaser, whereby the Purchaser has conditionally agreed to purchase and the Company has conditionally agreed to sell the Disposal Company at the Consideration of RMB231,084,081.

As the Disposal constitutes a major disposal of the Company pursuant to the Listing Rules, the Disposal is subject to the Shareholders’ approval by way of poll at the EGM.

A circular containing, amongst other things, further details of the Disposal, the financial information of the Group, other general information of the Company and the notice of the EGM will be dispatched to the Shareholders on or before 20 May 2011.

SUSPENSION AND RESUMPTION OF TRADING

Trading in the H-Shares on the Stock Exchange was suspended at the request of the Company with effect from 9:00 a.m. on 27 April 2011 pending the release of this announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the H-Shares with effect from 9:00 a.m. on 28 April 2011.

– 1 –

THE DISPOSAL AGREEMENT

Date: 26 April 2011

Parties:

Vendor: Shenyang Public Utility Holdings Company Limited

Purchaser: Shanghai Buotou Zongrenzong Environmental Science and Technology Company Limited* (上海博投眾人眾環保科技有限公司)

The Purchaser is a limited company incorporated in the PRC and principally engaged in the research, development and sale of environmental products.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner(s) are Independent Third Parties.

Consideration

The Consideration for the Disposal shall be of RMB231,084,081. The Consideration was arrived at after arm’s length negotiations among the parties to the Disposal Agreement with reference to the audited net asset value of the 70% shareholding interests in the Disposal Company amounted to RMB110,712,430 owned by the Company as at 31 December 2010 and the shareholders’ loan of RMB120,371,651.

The Consideration shall be satisfied in the following manner:–

• (a) a refundable deposit of RMB30 million shall be paid by the Purchaser in seven days upon entering into the Disposal Agreement; and

• (b) the balance of RMB201,084,081 shall be paid by the Purchaser to the Company in six months upon signing the Disposal Agreement.

Asset to be disposed of

Pursuant to the Disposal Agreement, the Company has conditionally agreed to sell and the Purchaser has conditionally agreed to acquire 70% of the issued share capital of the Disposal Company. As of the date of this announcement, the Disposal Company is owned as to 70% by the Company and 30% by Mr. Li. The sole asset of the Disposal Company is a property located in Zhuhai, the PRC with a gross floor area of 71,000 square meters. The Property has been leased to the Zhuhai Experimental School Attached to the Peking University* （珠海北 大附屬實驗學校） for a rental income of RMB3,000,000 per annum.

– 2 –

Conditions precedent

Completion of the Disposal Agreement is conditional upon satisfaction of all of the following conditions:

1. the Disposal being approved by the Board;

2. the Disposal being approved by the Shareholders at the EGM;

3. the Disposal Company obtains the change of business registration and the document of business registration shows the Purchaser holding 70% of the issued share capital of the Disposal Company; and

4. the Consideration being paid by the Purchaser.

Completion

Completion shall take place when all conditions precedent to the Disposal Agreement being fulfilled and in any case, no later than six months from the date of the Disposal Agreement or other date as the Company and Purchaser may agree in writing.

INFORMATION OF THE GROUP

As at the date of this announcement, the Group is principally engaged in property development, educational investment and cemetery development in the PRC.

Set out below summaries the financial information of the Disposal Company for the two years ended 31 December 2009 and 2010

	For the year ended 31 December	For the year ended 31 December
	2010	2009
	(audited)	(audited)
	RMB	RMB
Revenue	3,000,000	3,000,000
Profit (loss) before taxation and extraordinary items	3,146,869	(1,812,975)
Profit (loss) after taxation and extraordinary items	2,846,869	(1,512,975)

As of 31 December 2010, the net asset value of the Disposal Company is RMB158,160,615.

GAIN ON THE DISPOSAL

Based on the audited net asset value amounted to RMB110,712,430 of the 70% shareholding in the Disposal Company as owned by the Company as at 31 December 2010 and the shareholders’ loan of RMB120,371,651, there is neither loss or gain from the Disposal based on the size of the Consideration.

– 3 –

The Group tends to utilize RMB200 million for future business development of the remaining Group and the balance of RMB31 million will be utilized for the general working capital of the remaining Group.

REASONS FOR THE DISPOSAL

Based on the annual rental income generated from the Property of RMB3 million and the fair market value of the Property of approximately RMB298,000,000 based on the valuation report issued by an independent valuer, the return from the Disposal Company before expenses is approximately 1%, which is lower than other projects held by the Group. In light of the low return, the management proposed to cash in the investment in the Disposal Company. With more liquid capitals in hand, the Company will be able to identify other investment opportunities with higher returns to enhance the value of the Company and its Shareholders.

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

LISTING RULES IMPLICATION OF THE DISPOSAL

As certain applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the Disposal exceed 25% but less than 75%, the Disposal constitutes a major disposal for the Company under the Listing Rules. Accordingly, the Disposal is subject to the Shareholders’ approval at the EGM.

A circular containing, amongst other things, further details of the Disposal, the financial information of the Group, other general information of the Company and the notice of the EGM will be dispatched to the Shareholders on or before 20 May 2011.

SUSPENSION AND RESUMPTION OF TRADING

Trading in the H-Shares on the Stock Exchange was suspended at the request of the Company with effect from 9:00 a.m. on 27 April 2011 pending the release of this announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the H-Shares with effect from 9:00 a.m. on 28 April 2011.

– 4 –

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following respective meanings.

“Board”	the board of Directors
“Company”	Shenyang Public Utility Holdings Company Limited
“connected person”	has the meaning ascribed to it in the Listing Rules
“Consideration”	the consideration of the Disposal, being RMB231,084,081
“Disposal”	the disposal of the Disposal Company by the Company to the
	Purchaser pursuant to the Disposal Agreement
“Disposal Company”	Zhuhai Beida Education and Science Park Company Limited*
	（珠海北大教育科學園有限公司）
“Disposal Agreement”	the sale and purchase agreement dated 26 April 2011 entered
	into between the Company and the Purchaser in relation to the
	Disposal
“Director(s)”	means the directors of the Company
“EGM”	an extraordinary general meeting of the Company to be
	convened and held to approve the Disposal, the Disposal
	Agreement and the transactions contemplated thereunder
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“H-Share(s)”	Ordinary share(s) of RMB1 each in the share capital of the
	Company
“Independent Third	the independent third party(ies) who is/are, to the best of the
Party(ies)”	Directors’ knowledge, information and belief having made
	all reasonable enquiry, independent of the Company and its
	connected persons (as defined under the Listing Rules)
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Mr. Li”	Mr. Li Zhaoxing*(黎照興), a shareholder of the Disposal
	Company holding 30% of the total issued share capital as at the
	date of this announcement

– 5 –

“PRC” the People’s Republic of China “Property” a property in Zhuhai, the PRC, being the sole asset of the Disposal Company “Purchaser” Shanghai Buotou Zongrenzong Environmental Science and Technology Company Limited* (上海博投眾人眾環保科技有 限公司) “Sale Shares” the shares to be disposed of by the Company pursuant to the Disposal Agreement, being 70% of the issued share capital of the Disposal Company “Shareholder(s)” holder(s) of the H-Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “RMB” Renminbi, the lawful currency of the PRC “%” per cent

By Order of the Board Shenyang Public Utility Holdings Company Limited An Mu Zong Chairman

Shenyang, PRC, 27 April 2011

As at the date of this announcement, the executive directors of the Company are Mr. An Mu Zong, Mr. Wang Zai Xing, Mr. Alex Chow Ka Wo and Mr. Wang Hui, the non executive Directors are Mr. Lin Dong Hui and Mr. Bao Yi Qiang and the independent non-executive Directors are Mr. Cai Lian Jun, Mr. Wong Kai Tat and Mr. Chan Ming Sun Jonathan.

* for identification purpose only

– 6 –