CMON Limited — Capital/Financing Update 2015

Dec 18, 2015

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)

ISSUANCE OF NEW DOMESTIC SHARES UNDER GENERAL MANDATE

ISSUANCE OF NEW DOMESTIC SHARES UNDER GENERAL MANDATE

The Board is pleased to announce that on 18 December 2015 (after trading hours), the Company entered into the Subscription Agreement I with the Subscriber I pursuant to which the Company has conditionally agreed to allot and issue 140,000,000 Subscription Shares to the Subscriber I at a price of RMB1 per Subscription Share; and on the same date, the Company entered into the Subscription Agreement II with the Subscriber II pursuant to which the Company has conditionally agreed to allot and issue 4,000,000 Subscription Shares to the Subscriber II at a price of RMB1 per Subscription Share.

An aggregate of 144,000,000 Subscription Shares are to be allotted and issued to the Subscribers, representing (i) approximately 20.00% and 11.76%, respectively, of the existing issued Domestic Shares and the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 16.67% and 10.52%, respectively, of the issued Domestic Shares and the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares, assuming no further new Shares will be issued or repurchased before the completion of the Subscription.

The Subscription price of RMB1 (equivalent to approximately HK$1.196 [(Note)] ) per Subscription Share represents (a) a premium of approximately 92.90% to the closing price of HK$0.62 per H-Share as quoted on the Stock Exchange on the date of the Subscription Agreements; (b) a premium of 94.80% to the average closing price of HK$0.614 per H-Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day; and (c) a premium of approximately 90.75% to the average closing price of approximately HK$0.627 per H-Share for the last ten consecutive trading days up to and including the Last Trading Day.

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To the best of the Directors’ knowledge, information and belief, and after making all reasonable enquiries, the Subscribers and their ultimate beneficial owners are Independent Third Parties and are not connected persons of the Company as defined under the Listing Rules.

The Subscription 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 Subscription”.

The net proceeds from the Subscription, after deducting relevant expenses, will be approximately RMB143,200,000 (equivalent to approximately HK$171,281,622 [(Note)] ). The Company intends to use such net proceeds for business development and general working capital of the Group.

Since the completion of the Subscription is subject to the satisfaction of the conditions precedent in the Subscription Agreements, the Subscription may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

THE SUBSCRIPTION AGREEMENTS

(1) Subscription Agreement I

Pursuant to the Subscription Agreement I, the Company has conditionally agreed to allot and issue 140,000,000 Subscription Shares to the Subscriber I at a price of RMB1 per Subscription Share.

Date

18 December 2015 (after trading hours)

Parties

Issuer: the Company Subscriber I: Shenzhen Jian Xin De Yong Investment Enterprise (Limited Partnership)* ( 深圳市建鑫德永投資企業（有限合夥）)

Subscriber I is a limited company incorporated in the PRC and is owned as to approximately 49.96% by CCB International (Shenzhen) Investment Co., Ltd. ( 建銀國 際（深圳）投資有限公司 ), approximately 49.96% by Shenzhen Jinma Holding Group Company Limited ( 深圳市金馬控股集團有限公司 ) and approximately 0.072% by CCB International Wealth Management (Shenzhen) Limited ( 建銀國際（深圳）資產管理有 限公司 ) respectively. In particular, each of Mr. Deng Xiao Gang and Mr. Huang Zhen Kun, the directors of the Company holds 5% equity interest of Shenzhen Jinma Holding Group Company Limited ( 深圳市金馬控股集團有限公司 ). However, neither Mr. Deng Xiao Gang nor Mr. Huang Zhen Kun are the controlling shareholder or director of Shenzhen Jinma Holding Group Company Limited.

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Save as disclosed above and to the best of the Directors’ knowledge, information and belief, and after making all reasonable enquiries, the Subscribers and its ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined in Chapter 14A of the Listing Rules).

(2) Subscription Agreement II

Pursuant to the Subscription Agreement II, the Company has conditionally agreed to allot and issue 4,000,000 Subscription Shares to the Subscriber II at a price of RMB1 per Subscription Share.

Date

18 December 2015 (after trading hours)

Parties

Issuer: the Company Subscriber II: Ms. Lin Ying Jie (林映潔女士) Ms. Lin Ying Jie currently holds 29,900,000 Domestic Shares, representing approximately 2.44% of the issued share capital of the Company as at the date of this announcement.

To the best of the Directors’ knowledge, information and belief, and after making all reasonable enquiries, Subscriber II is a third party independent of the Company and its connected persons (as defined in Chapter 14A of the Listing Rules).

Number of Subscription Shares

The Subscription Shares to be allotted and issued to the Subscribers comprising an aggregate of 144,000,000 new Domestic Shares, represented (i) approximately 20.00% and 11.76%, respectively, of the existing issued Domestic Shares and the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 16.67% and 10.52%, respectively, of the issued Domestic Shares and the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares, assuming no further new Shares will be issued or repurchased before the completion of the Subscription.

The Subscription Shares are to be allotted and issued under the General Mandate and the issue of the Subscription 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. As at the date of this announcement, no Shares have been allotted and issued pursuant to the General Mandate for Domestic Shares. The aggregate nominal value of the Subscription Shares will be RMB144,000,000 (equivalent to approximately HK$172,238,502 [(Note)] ). The Subscription Shares to be allotted and issued will fully utilize the General Mandate for Domestic Shares. The Company has not repurchased any Shares within the last 30 days prior to the date of this announcement.

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Subscription Price

The Subscription price of RMB1 (equivalent to approximately HK$1.196 [(Note)] ) per Subscription Share was arrived at after arm’s length negotiations between the Company and the Subscribers with reference to the par value and the prevailing market price of the Shares and represents:

• (a) A premium of approximately 92.90% to the closing price of HK$0.62 per H-Share as quoted on the Stock Exchange on the date of the Subscription Agreements;

• (b) a premium of 94.80% to the average closing price of HK$0.614 per H-Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day; and

• (c) a premium of approximately 90.75% to the average closing price of approximately HK$0.627 per H-Share for the last ten consecutive trading days up to and including the Last Trading Day.

The Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreements are fair and reasonable based on the current market conditions and that the Subscription is in the interests of the Company and the Shareholders as a whole.

Ranking of the Subscription Shares

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

Condition of the Subscription

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

• (1) the payment of the Subscription being made by the Subscribers to a bank account designated by the Company on or before 31 January 2016 upon the Subscription Agreements become effective;

• (2) the capital verification procedures being duly completed; and

• (3) the written consent issued by China Securities Depository and Clearing Company Limited (中國證券登記結算有限公司) regarding registration of new Domestic Shares (if any) having be obtained by the Company.

The Subscription Agreements will become effective upon (i) the Subscription Agreements are duly signed by the Company and the Subscribers; (ii) the passing of Board resolutions approving the Subscription Agreements and the transactions contemplated thereunder and the Subscription; (iii) the Company having obtained all the necessary consents and approvals required for the issuance of new Subscription Shares and the performance of Subscription Agreements from the relevant regulatory authorities in the PRC and/or any other relevant jurisdictions, if applicable.

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FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

During the past 12 months immediately preceding the date of this announcement, the Company has conducted the following equity fund raising activity:

			Intended
Date of		Net	use of
announcement	Event	proceeds	proceeds	Actual use of proceeds
29 May 2013,	Placing of	HK$103.6	general	Fully utilized as the capital
22 April 2015	84,080,000	million	working	for the development of credit
and 5 May 2015	H-Shares		capital of	business in Hong Kong
			the Group
22 May 2015	Placing of	RMB119.5	general	Fully utilized as to
and 9 June 2015	120,000,000	million	working
	Domestic		capital of	(i)	approximately
	Shares		the Group		RMB12,000,000 as
					the working capital
					for construction and
					infrastructure business
					of Zhongfang Chaozhou
					Investment Development
					Company Limited;

• (ii) as to approximately RMB50,000,000 as the investment in 4.35% equity interests of Wuhan Yi Da Construction Services Shares Company Limited; and

• (iii) as to approximately RMB57,500,000 as the payment of consideration for the acquisition of 30% equity interest of Guangzhou Hai Yue Real Estate Development Company Limited

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REASONS FOR SUBSCRIPTION

The net proceeds from the Subscription, after deducting relevant expenses, will be approximately RMB143,200,000 (equivalent to approximately HK$171,281,622 [(Note)] ). The net proceeds raised per Share upon completion of the Subscription will be approximately HK$1.189 per Subscription Share. The Company intends to use such net proceeds for business development and general working capital of the Group.

As at the date of this announcement, the Group is principally engaged in infrastructure and construction business in the PRC. The Directors are of the opinion that the Subscription represents a good opportunity to raise additional funds to strengthen the Group’s financial position as well as broaden its capital base. Accordingly, the Directors consider that the Subscription is in the interests of the Company and its Shareholders as a whole.

EFFECTS ON 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 Subscription assuming that all of the 144,000,000 new Subscription Shares are subscribed or purchased in full, and the shareholding of H-Shares remains unchanged are as follows:

Domestic Shares Shenzhen Jinma Other Shareholders Subscriber I Subscriber II H-Shares Public Shareholders Total	As at the date of this announcement Number of Shares Approximate % of issued Shares 600,000,000 49.00 90,100,000 7.36 – – 29,900,000 2.44 504,480,000 41.20 1,224,480,000 100.00	Upon completion of the Subscription Number of Shares Approximate % of issued Shares 600,000,000 43.84 90,100,000 6.58 140,000,000 10.23 33,900,000 2.48 504,480,000 36.86 1,368,480,000 100.00

Since the completion of the Subscription is subject to the satisfaction of the conditions precedent in the Subscription Agreements, the Subscription 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 RMB0.83605 to HK$1 as quoted by The People’s Bank of China as at 18 December 2015, being the date of this announcement.

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

• “Company” 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” completion of the condition to Subscription pursuant to the Subscription Agreements

• “connected person” has the meaning defined by the Listing Rules “Director(s)” means the director(s) of the Company “Domestic Share(s)” ordinary shares in the share capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for in RMB by PRC nationals and/or PRC incorporated entities

• “Domestic Shareholder” The holders of the Domestic Share(s) “General Mandate” the general mandate granted to the Directors by the Shareholders at the annual general meeting of the Company held on 24 June 2015, 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

• “Group” the Company and its subsidiaries “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

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“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)
“Last Trading Day”	17 December 2015, being the last trading day of the H-Shares
	on the Stock Exchange prior to the date of Subscription
	Agreements
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China
“Share(s)”	H-Share(s) and Domestic Share(s)
“Shareholder(s)”	holder(s) of the H-Shares and the Domestic Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscriber I”	Shenzhen Jian Xin De Yong Investment Enterprise (Limited
	Partnership)深圳市建鑫德永投資企業（有限合夥）
“Subscriber II”	Ms. Lin Ying Jie (林映潔女士)
“Subscribers”	Subscriber I and Subscriber II
“Subscription”	the subscription of Subscription Shares by the Subscribers
	pursuant to the Subscription Agreements
“Subscription Agreement I”	the conditional subscription agreement dated 18 December
	2015 entered into between the Company and with the
	Subscriber I in respect of the Subscription
“Subscription Agreement II”	the conditional subscription agreement dated 18 December
	2015 entered into between the Company and with the
	Subscriber II in respect of the Subscription
“Subscription Agreements”	Subscription Agreement I and Subscription Agreement II
“Subscription Price”	The subscription price of RMB1 per Subscription Shares

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“Subscription Share(s)” an aggregate of up to 144,000,000 new Domestic Shares to be allotted and issued pursuant to the Subscription under the General Mandate

“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 Zhang Jing Ming Chairman

Shenyang, the PRC, 18 December 2015

As at the date of this announcement, the executive directors of the Company are Mr. Zhang Jing Ming, Mr. Deng Xiao Gang and Mr. Huang Zhen Kun, the non-executive directors are Mr. Yin Zong Chen and Ms. Li Yu Xiang and the independent non-executive directors are Mr. Chan Ming Sun Jonathan, Mr. He Qing Jia and Mr. Yu Guan Jian.

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