CMON Limited — Capital/Financing Update 2016

Jan 19, 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)

PLACING OF H-SHARES UNDER GENERAL MANDATE

PLACING OF H-SHARES UNDER GENERAL MANDATE

The Board is pleased to announce that on 19 January 2016 (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 an aggregate of up to 100,896,000 new Placing Shares at the Placing Price of RMB1 per Placing Share.

The 100,896,000 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.

The Placing Price of RMB1 (equivalent to approximately HK$1.19) per Placing Share represents:

• (i) a premium of approximately 38.37% to the closing price of HK$0.86 per Share as quoted on the Stock Exchange on 19 January 2016, the date of the Placing Agreement;

• (ii) a premium of approximately 49.50% to the average closing price of HK$0.796 per Share as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the date of the Placing Agreement; and

• (iii) a premium of approximately 41.67% to the average closing price of HK$0.84 per Share as quoted on the Stock Exchange for the ten consecutive trading days immediately prior to the date of the Placing Agreement;

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The Placing Price was determined after arm’s length negotiations between the Company and the Placing Agent with reference to the recent market prices of the Shares and the par value of the Shares and the subscription price of the Subscription Agreements. The Directors consider that the Placing Price is fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

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”. The Company has obtained the formal approval from CSRC on 29 December 2015 for the Placing.

On the assumption that all the 100,896,000 Placing Shares are issued under the Placing at the placing price of RMB1 (equivalent to approximately HK$1.19) per Placing Share, the maximum amount of net proceeds (after deducting all applicable costs and expenses, including commission, legal fees and levies) of approximately HK$117.64 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.

THE PLACING AGREEMENT

Date

19 January 2016

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, not less than six Placees to subscribe for an aggregate of up to 100,896,000 new Placing Shares at the Placing Price of RMB1 per Placing Share. The Placing Agent shall use all reasonable endeavours to ensure that the Placees (being independent individual, professional or institutional investors) and their ultimate beneficial owners are Independent Third Parties and that none of the Placees will become substantial shareholder (as defined in the Listing Rules) of the Company immediately after the Placing.

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Number of Placing Shares

The Placing Shares to be allotted and issued comprising a maximum of 100,896,000 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. On 18 December 2015, the Company entered into Subscription Agreements pursuant to which the Company has conditional agreed to issue 144,000,000 Domestic Shares at a price of RMB1 per Domestic Share. Details of the Subscription Agreements are set out in the announcement of the Company dated 18 December 2015. At the date of this announcement, the Issuance of Domestic Shares has not been completed and no Shares have been allotted and issued pursuant to the General Mandate. The Company has obtained the formal approval from CSRC on 29 December 2015 for the Placing.

The aggregate nominal value of the Placing Shares will be RMB100,896,000 (equivalent to approximately HK$120,017,129 [(Note)] ). The Placing Shares to be allotted and issued will fully 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

The Placing Price of RMB1 (equivalent to approximately HK$1.19) per Placing Share represents:

• (i) a premium of approximately 38.37% to the closing price of HK$0.86 per Share as quoted on the Stock Exchange on 19 January 2016, the date of the Placing Agreement;

• (ii) a premium of approximately 49.50% to the average closing price of HK$0.796 per Share as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the date of the Placing Agreement; and

• (iii) a premium of approximately 41.67% to the average closing price of HK$0.84 per Share as quoted on the Stock Exchange for the ten consecutive trading days immediately prior to the date of the Placing Agreement;

The Placing Price was determined after arm’s length negotiations between the Company and the Placing Agent with reference to the recent market prices of the Shares, the par value of the Shares and the subscription price under the Subscription Agreements. The Directors consider that the Placing Price is fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

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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.

Condition of Placing

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

• (i) the Listing Committee of the Stock Exchange granting 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); and

• (ii) 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 12 February 2016, 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.

Completion of the Placing

The completion of the Placing shall take place not later than 4 p.m. on the seventh business days after the date on which all the conditions precedent to the Placing have been fulfilled or waived (or such other time and date as may be agreed between the Placing Agent and the Company).

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

• (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.

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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REASONS FOR THE PLACING AND USE OF PROCEEDS

The Directors have considered various ways of fund raising activities and are of the opinion that the Placing could strengthen the Company’s cash resources and working capital position for the development of existing business of the Group. It will also facilitate the efficient and timely execution of any potential investments as and when opportunities arise.

On the assumption that all the 100,896,000 new Placing Shares are issued under the Placing at the placing price of RMB1, equivalent to approximately HK$1.19 [(Note)] per Placing Share, the maximum amount of net proceeds from Placing (after deducting all applicable costs and expenses, including commission, legal fees and levies) is approximately HK$117.64 million. On such basis, the net price per Placing Share will be approximately HK$1.17. It is expected that such net proceeds from the Placing will be used for general working capital for the Group.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Save for the following fund raising activities, the Company has not conducted any equity fund raising activities in the past twelve months immediately preceding the date of this announcement:

				Actual use of
				proceeds as at
Date of	Fund raising		Intended use	the date of this
announcement	activity	Net Proceeds	of net proceeds	announcement
29 May 2013,	Placing of	HK$103.6	general working	Fully utilized as the capital for the
17 June2014,	840,800,000	million	capital of the	development of credit business
22 April 2015 and	H-Shares		Group	in Hong Kong
5 May 2015
22 May 2015 and	Issuance of	RMB119.5	general working	Fully utilized as to approximately
9 June 2015	120,000,000	million	capital of the	RMB12,000,000 as the working capital for
	Domestic		Group	construction and infrastructure business
	Shares			of Zhongfang Chaozhou Investment
				Development Company Limited;

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

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. 18 December 2015 Issuance of RMB143.2 business To be determined upon completion 144,000,000 million development Domestic and general Shares working capital of the Group

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EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

The following table sets out the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediately after completion of the Placing assuming that all of the 100,896,000 new Placing Shares are subscribed or purchased in full, and the shareholding of Domestic Shares remains unchanged; and (iii) immediately after completion of the Placing and Issuance of Domestic Shares assuming that all of the 100,896,000 new Placing Shares and all of the 144,000,000 new Domestic Shares are subscribed or purchased in full, are as follows:

						Upon completion of the	Upon completion of the
	As at	the date	Upon completion			Placing and	Issuance
	of this announcement		of the	Placing		of Domestic Shares
		Approximate		Approximate			Approximate
	Number	% of issued	Number	% of issued		Number	% of issued
	of Shares	Shares	of Shares	Shares		of Shares	Shares
Domestic Shares
Shenzhen Jinma	600,000,000	49.00	600,000,000		45.27	600,000,000	40.83
Other Shareholders	120,000,000	9.80	120,000,000		9.06	264,000,000	17.97
H Shares
Public Shareholders	504,480,000	41.20	504,480,000		38.06	504,480,000	34.33
Placees	–	–	100,896,000		7.61	100,896,000	6.87
Total	1,224,480,000	100.00	1,325,376,000	100.00		1,469,376,000	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 RMB0.84068 to HK$1 as quoted by The People’s Bank of China as at 19 January 2016, 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

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

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• “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 Placing pursuant to the Placing Agreement

• “Completion Date” the date falling seventh 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

• “connected person” has the meaning defined by the Listing Rules

• “CSRC” China Securities Regulatory Commission

• “Director(s)” means the director(s) 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

• “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

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

• “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)

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“Issuance of Domestic	Issue of 144,000,000 Domestic Shares at a price of RMB1 per
Shares”	Domestic Share pursuant to the Subscription Agreements
“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 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 19 January 2016 entered
	into between the Company and the Placing Agent in respect of the
	Placing
“Placing Price”	RMB 1 per Placing Share determined in accordance to the
	basis set out under the paragraph headed “Placing Price” of this
	announcement
“Placing Shares”	an aggregate of up to 100,896,000 new H-Shares to be allotted and
	issued pursuant to the Placing under the General Mandate
“PRC”	the People’s Republic of China
“Share(s)”	H-Share(s) and Domestic Share(s)
“Shareholder(s)”	holder(s) of the H-Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscription	subscription agreements dated 18 December 2015 entered into
Agreements”	by the Company in relation to the Issuance of Domestic Shares.
	Please refer to the details to the announcement of the Company
	dated 18 December 2015
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

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Renminbi, the lawful currency of the PRC

“RMB”

“%”

per cent.

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

Shenyang, the PRC, 19 January 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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