CMON Limited — Capital/Financing Update 2016

Nov 15, 2016

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)

DISCLOSEABLE TRANSACTION — PRE-ACQUISITION OF PROPERTY IN BEIJING PRC

PRE-ACQUISITION OF A PROPERTY IN BEIJING, PRC

The Board is pleased to announce that on 15 November 2016, after trading hours, the Subscriber, a wholly owned subsidiary of the Company, entered into the Pre-Acquisition Agreement with the Vendor, pursuant to which the Vendor agreed to sell and the Subscriber agreed to acquire the Property at a total consideration of RMB152,800,000.

IMPLICATION OF LISTING RULES

As the applicable percentage ratio (as defined under the Listing Rules) in respect of the Pre-Acquisition are more than 5% but less than 25%, the Pre-Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

THE PRE-ACQUISITION AGREEMENT

Date: 15 November 2016 (after trading hours)

Parties:

Subscriber: Beijing Shen Shang Investment & Consulting Company Limited (北京 瀋商投資諮詢有限公司), a wholly-owned subsidiary of the Company Vendor: Beijing Zhong Tou Chuang Zhan Property Limited 北京中投創展置業 有限公司

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The Vendor is an limited liability company incorporated in the PRC. It principally engaged in development and construction of property, property management and hotel management. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendor and its respective ultimate beneficial owner are Independent Third Parties.

Property to be acquired

Commercial premise with the construction area of 2,800 square meters (with the right to use 5,000 square meters of car parks at the basement level two, being part of Phase 3 of the ancillary facility project of Beijing International Zone Convention Center (北京會展國際港 展館) to be constructed in Beijing Shunyi District Tianzhu Airport Commercial Zone (北京 市順義區天竺空港商務區).

Consideration

The Consideration for the Pre-Acquisition is RMB152,800,000 and was arrived at after the arm’s length negotiations between the Subscriber and the Vendor with reference to the average price of RMB50,000 per square meter on the construction area of the Property and the appraised value of the right for car park utilization. The average price of the construction area of property is determined after taking into account the market price of comparable properties of similar size, character and location.

In accordance with the valuation report conducted by the independent valuer, the market value of the Property assuming it is completed at 31 October 2016 was RMB169,600,000.

The Consideration shall be payable in cash by the Subscriber to the Vendor in the following manner:–

• (a) a deposit of RMB10,000,000 (the “ Deposit ”) shall be paid within 5 days upon signing the Pre-Acquisition Agreement;

• (b) the second payment of RMB60,000,000 shall be paid within 60 days upon signing the Pre-Acquisition Agreement;

• (c) the third payment of RMB70,000,000 shall be paid within 180 days upon signing the Pre-Acquisition Agreement; and

• (d) the balance payment of RMB12,800,000 shall be otherwise agreed upon the execution of the Beijing Commodity Housing Pre-sale Contract by both parties.

The consideration shall be funded by internal resources of the Group.

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Obligations of Vendor and Subscriber

The obligations of Vendor and Subscriber are as follow:

• (i) 建築工程施工許可證 (Construction Works Commencement Permit) shall be obtained by the Vendor by 25 May 2017;

• (ii) 商品房預售許可證 (Commodity House Pre-sale Permit) shall be obtained by the Vendor by 31 December 2017 and the Subscriber and Vendor shall enter into the 北京市商品 房預售合同 (Beijing Commodity Housing Pre-sale contract) within 3 months upon the 商品房預售許可證 (Commodity House Pre-sale Permit) is obtained;

• (iii) Vendor shall complete all necessary legal procedures regarding the development, construction and sale of the Property in accordance with the relevant PRC government requirements and obtain the necessary approval documents from the relevant regulatory authorities;

• (iv) the Vendor shall obtain the consent from the Subscriber on any changes or modifications in design and planning of the Property;

• (v) the floor area of the Property shall be in accordance with the floor area shown in the certificate of property ownership issued by the Property Ownership Department. If the undividable floor area shown in the certificate of property ownership is greater than 2,800 square meter, the Subscriber shall purchase the additional floor area in accordance with the actual selling price of the Property;

• (vi) if the record price/square meter of the Property is less than 50,000 yuan/square meter, the Vendor shall refund the price difference to the Subscriber. The formula for the refund amount is (50,000 yuan/square meter – record price) × 2800. On the other hand, if the record price of the Property is higher than 50,000 yuan/square meter, the consideration remain unchanged, the Subscriber is not required to pay the price difference;

• (vii) the Vendor shall warranty that the completion and acceptance of the Property shall be completed by December 31, 2018 (the “ Delivery Date ”) and the Property shall be delivered to the Subscriber in a timely manner; and

• (viii) the Subscriber shall undertake to make payments in accordance with the terms of the Pre-Acquisition Agreement and to ensure the source of payments is legal.

Conditions Precedent

Completion of the Pre-Acquisition shall be subject to the completion of the following:

• (i) the passing of the resolution approving the Pre-Acquisition Agreement and the transactions contemplated thereunder in the meeting of the Board;

• (ii) the Company having obtained all the necessary approvals, consents or waivers (if any) from the relevant regulatory authorities;

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• (iii) the passing of the resolution approving the Pre-Acquisition Agreement and the transactions contemplated thereunder in the respective meeting of the shareholders of the Subscriber and the Vendor;

• (iv) the Vendor having obtained 建築工程施工許可證 (Construction Works Commencement Permit) and 商品房預售許可證 (Commodity House Pre-sale Permit) (the “ Permits ”) in accordance with the stipulated time period;

• (v) the execution of 北京市商品房預售合同 (Beijing Commodity Housing Presale Contract) by the Vendor and Subscriber;

• (vi) the execution of 商品房買賣合同 (Purchase and Sale Contract of Commodity House); and

• (vii) the certificate of property ownership of the Property having been obtained by the Subscriber.

Default of Vendor and Subscriber

In the event of the Vendor failing to obtain the Permits in accordance with the stipulated time period, the Subscriber has the right to terminate the Pre-Acquisition Agreement.

In the event of the Vendor failing to obtain the Permits in accordance with the stipulated time and deliver the Property to the Subscriber with the proof of satisfaction of completion by the Delivery Date, the Vendor shall pay the Subscriber a compensation amount of 0.03% of the amount paid under the Pre-Acquisition Agreement per day for each day of delay.

Save for the uncontrollable factor and in the event that the Subscriber fail to complete the PreAcquisition under the Pre-Acquisition Agreement, the Vendor shall refund all the amount paid by the Subscriber other than the Deposit. The Deposit shall be forfeited by the Vendor.

Save for the uncontrollable factor and in the event that the Vendor fail to complete the Pre-Acquisition under the Pre-Acquisition Agreement, the Vendor shall refund all the amount paid by the Subscriber (excluding the Deposit) and compensate the Subscriber an additional amount equivalent to two times of the Deposit.

INFORMATION OF THE PROPERTY

The Property comprise a commercial premise with the construction area of 2,800 square meters, (with the right to use 5,000 square meters of car parks at the basement level two, being part of Phase 3 of the ancillary facility project of Beijing International Zone Convention Center (北京會展國際港展館) to be constructed at 23 Street Zone, Shunyi New District (順 義新城第23街區) in Beijing Shunyi District Tianzhu Airport Commercial Zone (北京市順 義區天竺空港商務區). The Property will be developed into shops and underground car park and will be held for investment purpose by the Group. Currently, the Property is still under construction and the construction of the Property is expected to be completed by December 2018.

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REASONS FOR THE PRE-ACQUISITION

As at the date of this announcement, the Group is principally engaged in infrastructure and construction business in the PRC.

The Subscriber will hold the Property for investment purposes and lease out the Property for rental income purposes or obtain income from appreciation of the Property. The Pre-Acquisition will enable the Group to generate steady recurring rental income and strengthen income base of the Group and provide capital appreciation potential to the Group. Therefore, the Directors consider that it is a good opportunity for the Group to invest in the Property. As such, the Board is of the view that the Pre-Acquisition is in the benefit of the Company.

In light of the above, the Directors (including the independent non-executive Directors) are of the view that the Pre-Acquisition is in the interest of the Group and the terms and conditions of the Pre-Acquisition Agreement 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 PRE-ACQUISITION

As the applicable percentage ratios (as defined under the Listing Rules) in respect of the PreAcquisition are more than 5% but less than 25%, the Pre-Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

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

“associate(s)”	has the meaning ascribed to it under the Listing Rules
“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”	c o n s i d e r a t i o n f o r t h e P r e - A c q u i s i t i o n , b e i n g
	RMB152,800,000
“Director(s)”	means the directors of the Company
“Domestic Share(s)”	domestic share(s) with a nominal value of RMB1 each in the
	share capital of the Company which are subscribed for in
	RMB
“Group”	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

• “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

• “PRC” the People’s Republic of China

• “Pre-Acquisition” the pre-acquisition of the Property by the Subscriber from the Vendor pursuant to the Pre-Acquisition Agreement

• “Pre-Acquisition Agreement” the pre-acquisition agreement dated 15 November 2016 entered into between the Subscriber and the Vendor for the Pre-Acquisition

• “Property” a commercial premise with the construction area of 2,800 square meters (with the right to use 5,000 square meters of car parks at the basement level two of the Convention Center), being part of Phase 3 of the ancillary facility project of Beijing International Zone Convention Center (北京會 展國際港展館) to be constructed at 23 Street Zone, Shunyi New District (順義新城第23街區) to be constructed in Beijing Shunyi District Tianzhu Airport Commercial Zone (北京市順義區天竺空港商務區)

• “RMB” Renminbi, the lawful currency of the PRC

• “Shareholder(s)” holder(s) of the Shares “Shares” Domestic Shares and/or H-Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited

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“Subscriber”

Beijing Shen Shang Investment & Consulting Company Limited* ( 北京瀋商投資諮詢有限公司 ), a company incorporated in the PRC with limited liability and a whollyowned subsidiary of the Company

“Vendor”

Beijing Zhong Tou Chuang Zhan Property Limited* 北京中 投創展置業有限公司, a company incorporated in the PRC with limited liability

“%”

per cent.

• For identification purpose only

By Order of the Board Shenyang Public Utility Holdings Company Limited Zhang Jing Ming Chairman

Shenyang, PRC 15 November 2016

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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