CMON Limited — Capital/Financing Update 2013

May 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.

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)

PLACING OF H-SHARES UNDER GENERAL MANDATE

Financial Adviser to the Company

Karl Thomson Financial Advisory Limited

PLACING OF H-SHARES UNDER GENERAL MANDATE

The Board is pleased to announce that on 29 May 2013 (after trading hours), the Company and the Placing Agent entered into the conditional Placing Agreement pursuant to which the Placing Agent has conditionally agreed to procure not less than six Placees, on a best efforts basis, to subscribe for and purchase of no more than 84,080,000 new Placing Shares.

The maximum number of 84,080,000 Placing Shares are to be allotted and issued under the General Mandate, representing (i) approximately 20.00% and 8.24%, respectively, of the existing issued H-Shares and the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 16.67% and 7.61%, respectively, of the issued H-Shares and the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares, assuming no further new Shares will be issued or repurchased before the Completion of the Placing.

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Upon the receipt by the Placing Agent of the Placing Confirmation Letter served by the Company, the Placing Price shall be determined by agreement between the Company and the Placing Agent and shall not be, unless otherwise agreed between the parties:

• (a) at a discount of more than 20% to the higher of:

• (i) the closing price of H-Shares as quoted on the Stock Exchange on the date on which the Placing Price is agreed; and

• (ii) the average closing price of H-Shares as quoted on the Stock Exchange during the 5 consecutive trading days immediately prior to the date on which the Placing Price is agreed.

• (b) less than the par value of RMB1 per each H-Share.

The discount of 20% has been determined after arm’s length negotiations between the Company and the Placing Agent. The Directors expect that it would take significant time to obtain the approval from the CSRC regarding the issue of new H-Shares before the Placing is executed. Therefore, the Directors consider that it will be in the best interest of the Company and the Shareholders to determine the Placing Price with reference to the prevailing market conditions at the time when the Placing is executed. The Board will make an announcement upon the Placing Price is determined pursuant to the Listing Rules.

The Placing Shares will be allotted and issued under the General Mandate and is conditional and subject to conditions as set out below under the heading “Conditions of the Placing”.

On the assumption that all the 84,080,000 Placing Shares are issued under the Placing with an minimum placing price of approximately HK$1.26 per Placing Share (calculated based on the par value for each H-Share in HK$) (Note), the estimated amount of net proceeds (after deducting all applicable costs and expenses, including commission, legal fees and levies) of approximately HK$105.14 million from the Placing is intended to be used as general working capital of the Group.

Since the Completion of the Placing is subject to the satisfaction of the conditions precedent in the Placing Agreement and is subject to the approvals from the relevant regulatory authorities, the Placing may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

PLACING OF NEW H-SHARES UNDER GENERAL MANDATE

The Board is pleased to announce that on 29 May 2013 (after trading hours), the Company and the Placing Agent entered into the conditional Placing Agreement pursuant to which the Placing Agent has conditionally agreed to procure not less than six Placees, on a best efforts basis, to subscribe for and purchase of no more than 84,080,000 new Placing Shares.

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THE PLACING AGREEMENT

Date

29 May 2013

Parties

• (i) The Company

• (ii) The Placing Agent

Placing

Pursuant to the Placing Agreement, the Placing Agent has agreed to act as the agent for the Company to procure, on a best efforts basis, professional, institutional and/or other investors to subscribe for no more than 84,080,000 Placing Shares. The Placing Shares comprise a maximum of 84,080,000 new H-Shares to be issued and allotted by the Company.

Placees

The Placing Shares will be allotted to not less than six Placees who and whose ultimate beneficial owners are to be Independent Third Parties. It is not expected that any individual Placee will become a substantial shareholder (as defined in the Listing Rules) of the Company immediately after the Placing.

Number of Placing Shares

The Placing Shares to be allotted and issued comprising a maximum of 84,080,000 new H-Shares, represented (i) approximately 20.00% and 8.24%, respectively, of the existing issued H-Shares and the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 16.67% and 7.61%, respectively, of the issued H-Shares and the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares, assuming no further new Shares will be issued or repurchased before the Completion of the Placing.

The Placing Shares are to be allotted and issued under the General Mandate and the issue of the Placing Shares will not be subject to further Shareholders’ approval. According to the General Mandate, the Directors are authorised to allot, issue and deal with each of the H-Shares and Domestic Shares with an aggregate nominal amount of up to but not exceeding 20% of the then aggregate nominal amount of H-Shares and Domestic Shares, respectively.

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As at the date of this announcement, no Shares have been allotted and issued pursuant to the General Mandate. The aggregate nominal value of the Placing Shares will be no more than RMB84,080,000 (equivalent to approximately HK$105,539,000 (Note)). The Placing Shares to be allotted and issued will utilize the General Mandate for H-Shares. The Company has not repurchased any Shares within the last 30 days prior to the date of this announcement.

Placing Price

Upon the receipt by the Placing Agent of the Placing Confirmation Letter served by the Company, the Placing Price shall be determined by agreement between the Company and the Placing Agent and shall not be, unless otherwise agreed between the parties:

• (a) at a discount of more than 20% to the higher of:

• i. the closing price of H-Shares as quoted on the Stock Exchange on the date on which the Placing Price is agreed; and

• ii. the average closing price of H-Shares as quoted on the Stock Exchange during the 5 consecutive trading days immediately prior to the date on which the Placing Price is agreed.

(b) less than the par value of RMB1 per each H-Share.

The discount of 20% has been determined after arm’s length negotiations between the Company and the Placing Agent. The Directors expect that it would take significant time to obtain the approval from the CSRC regarding the issue of new H-Shares before the Placing is executed. Therefore, the Directors consider that it will be in the best interest of the Company and the Shareholders to determine the Placing Price with reference to the prevailing market conditions at the time when the Placing is executed. The Directors believe that the terms of the Placing Agreement in respect of the Placing Price are fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Board will make an announcement upon the Placing Price is determined pursuant to the Listing Rules.

Ranking of the Placing Shares

The Placing Shares, when issued and fully paid, will rank pari passu in all respects among themselves and with the existing H-Shares in issue on the date of allotment and issue of Placing Shares.

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Conditions of Placing

The Completion is conditional upon the satisfaction of the following conditions:

• (i) the Stock Exchange granting or agreeing to grant the listing of and permission to deal in the Placing Shares (and such listing and permission not subsequently being revoked prior to the delivery of definitive share certificate(s) representing the Placing Shares);

• (ii) the CSRC granting the approval of the issue of the Placing Shares;

• (iii) each of parties to the Placing Agreement reaching an agreement on the Placing Price; and

• (iv) the obtaining of all other consents and approvals required for the Placing and the performance of the Placing Agreement from the relevant regulatory authorities in Hong Kong, the PRC and/or any other relevant jurisdictions, if applicable.

If any of such conditions are not fulfilled on or before 31 December 2013, or such later date as the Company and the Placing Agent may agree, the Placing Agreement and the obligations of the Company and the Placing Agent thereunder shall cease and terminate.

Termination

Notwithstanding anything contained in the Placing Agreement, the Placing Agent shall be entitled by notice to the Company given prior to 10:00 a.m. on the Completion Date to terminate the Placing Agreement if :-

• (a) there develops, occurs or comes into force:

• (i) the occurrence of any event, development or change (whether or not local, national or international or forming part of a series of events, developments or changes occurring or continuing before, on and/or after the date hereof) and including an event or change in relation to or a development of an existing state of affairs of a political, military, industrial, financial, economic, fiscal, regulatory or other nature, resulting in a material adverse change in, or which may result in a material adverse change in, political, economic, fiscal, financial, regulatory or stock market conditions and which in the reasonable opinion of the Placing Agent would materially adversely affect the success of the Placing; or

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• (ii) the imposition of any moratorium, suspension or material restriction on trading in securities generally on the Stock Exchange occurring due to exceptional financial circumstances or otherwise and which in the reasonable opinion of the Placing Agent, would materially adversely affect the success of the Placing; or

• (iii) any material adverse change in conditions of local, national or international securities markets occurs which in the reasonable opinion of the Placing Agent would materially and adversely affect the success of the Placing; or

• (iv) any new law or regulation or change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority in Hong Kong or any other jurisdiction relevant to the Group and if in the reasonable opinion of the Placing Agent any such new law or change may materially and adversely affect the business or financial prospects of the Group and/or the success of the Placing; or

• (v) a change or development occurs involving a prospective change of taxation or exchange control (or the implementation of exchange control) in Hong Kong, the PRC or elsewhere and if in the reasonable opinion of the Placing Agent, any such change or development would materially adversely affect the success of the Placing; or

• (vi) any litigation or claim being instigated against any member of the Group, which has or may have a material adverse effect on the business or financial position of the Group and which in the reasonable opinion of the Placing Agent would materially and adversely affect the success of the Placing; or

• (b) any material breach of any of the representations and warranties set out in the Placing Agreement comes to the knowledge of the Placing Agent or any event occurs or any matter arises on or after the date hereof and prior to the Completion Date which if it had occurred or arisen before the date hereof would have rendered any of such representations and warranties untrue or incorrect in any material respect or there has been a material breach by the Company of any other provision of the Placing Agreement; or

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• (c) there is any adverse change in the financial position of the Company which is material in the context of the Placing;

• (d) the trading of the Shares on the Stock Exchange has been suspended for more than ten consecutive trading days save for temporary suspension in connection with the Placing and/or the Placing Agreement;

then and in any such case, the Placing Agent may terminate the Placing Agreement without liability to the Company by giving notice in writing to the Company, provided that such notice is received prior to 10:00 a.m. on the Completion Date.

Use of Proceeds

On the assumption that all the 84,080,000 new Placing Shares are issued under the Placing with a minimum placing price of approximately HK$1.26 per New Placing H-Share (calculated based on the par value for each H-Share in HK$) (Note), the estimated amount of net proceeds (after deducting all applicable costs and expenses, including commission, legal fees and levies) of approximately HK$105.14 million from the Placing is intended to be used as general working capital of the Group.

Equity Fund Raising Activities in the Past 12 Months

The Company has not conducted any equity fund raising activity in the 12 months preceding the date of this announcement.

Reasons of the Placing

The Directors have considered various ways of fund raising activities and are of the opinion that the Placing will enlarge the shareholders’ base and capital bases of the Company as well as strengthening its financial position. Accordingly, the Directors consider that the Placing is in the interests of the Company and its Shareholders as a whole.

Application for Listing

Application will be made to the Stock Exchange to grant the listing of and permission to deal in the relevant Placing Shares.

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Shareholding Structure

The following table sets out the shareholding structure of the Company as at the date of this announcement and immediately after completion of the Placing assuming that all of the 84,080,000 new Placing Shares are subscribed or purchased in full, and assuming no further new Shares will be issued or repurchased before completion of the Placing:

Domestic Shares Shenzhen Jinma H Shares Public Shareholders Placees Total	As at the date of this announcement Number of Shares Approximate % of issued Shares 600,000,000 58.80 420,400,000 41.20 – – 1,020,400,000 100.00	Upon completion of the Placing Number of Shares Approximate % of issued Shares 600,000,000 54.32 420,400,000 38.06 84,080,000 7.61 1,104,480,000 100.00	Upon completion of the Placing Number of Shares Approximate % of issued Shares 600,000,000 54.32 420,400,000 38.06 84,080,000 7.61 1,104,480,000 100.00
			100.00

Since the Completion of the Placing is subject to the satisfaction of the conditions precedent in the Placing Agreement and is subject to the approvals from the relevant regulatory authorities, the Placing may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

• Note: The figures are calculated based on the exchange rate of RMB0.79667 to HK$1 as quoted by The People’s Bank of China as at 29 May 2013, being the date of this announcement.

DEFINITIONS

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

“associate”	has	the meaning ascribed to it under the Listing Rules
“Board	the	board of Directors

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• “Business Day”

• “Company”

• “Completion”

• “Completion Date”

• “connected person”

• “CSRC”

• “Director(s)”

• “Domestic Share(s)”

• “Domestic Shareholder”

• “General Mandate”

• “Group”

any day (excluding a Saturday, a Sunday or a public holiday) on which banks are generally open for business in Hong Kong

• Shenyang Public Utility Holdings Company Limited, a joint stock limited company incorporated in the PRC and whose H Shares are listed on the main board of the Stock Exchange

• completion of the conditions to Placing pursuant to the Placing Agreement

• the date falling three Business Days after the date upon the satisfaction of all the conditions for Completion by the respective parties or such other time and/or date as the Company and the Placing Agent may agree in writing

• has the meaning defined by the Listing Rules

• China Securities Regulatory Commission

• means the director(s) of the Company

• domestic share(s) with a nominal value of RMB1 each in the share capital of the Company which are subscribed for in RMB

• The holders of the Domestic Share(s)

• the general mandate granted to the Directors by the Shareholders at the annual general meeting of the Company held on 27 June 2012, pursuant to which the Directors are authorised to allot, issue and deal with each of the H-Shares and Domestic Shares with an aggregate nominal amount of up to but not exceeding 20% of the then aggregate nominal amount of H-Shares and Domestic Shares, respectively

• the Company and its subsidiaries

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• “H-Share(s)” overseas listed foreign ordinary shares in the share capital of the Company, with a nominal value of RMB1.00 each, all of which are listed on the main board of the Stock Exchange, and subscribed for and traded in Hong Kong dollars

• “H-Shareholders”

the holder of H-Shares

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Independent Third Party(ies)”

• the independent third party(ies) who is/are, to the best of the 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

• “Placee(s)” any individual(s), institutional or other professional investor(s) or any of their respective subsidiaries or associates procured by the Placing Agent to subscribe for any of the Placing Shares pursuant to the Placing Agreement

• “Placing” Placement of Placing Shares pursuant to the term of the Placing Agreement

• “Placing Agent”

• Karl-Thomson Securities Company Limited, a licenced corporation to carry on type 1 (dealing in securities) and type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)

• “Placing Agreement” the conditional placing agreement dated 29 May 2013 entered into between the Company and the Placing Agent in respect of the Placing

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“Placing Confirmation	a written notice the Company being issue to the Placing
Letter”	Agent enclosing copies of all the consents and approvals
	obtained by the Company from the relevant authorities
	regarding the Placing upon fulfilment of all the conditions
	for Completion (except condition (iii)) of the Placing
	Agreement
“Placing Price”	The placing price per Placing Share to be determined in
	accordance to the basis set out under the paragraph headed
	“Placing Price” of this announcement
“Placing Shares”	an aggregate of no more than 84,080,000 new H-Shares to
	be allotted and issued pursuant to the Placing under the
	Placing Agreement
“PRC”	the People’s Republic of China
“Share(s)”	H-Share(s) and Domestic Share(s)
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“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, the PRC, 29 May 2013

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

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