Comtec Solar Systems Group Limited — Capital/Financing Update 2017

Mar 7, 2017

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.

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**UNISPLENDOUR TECHNOLOGY (HOLDINGS) LIMITED 紫光科技（控股）有限公司 ***

(Incorporated in Bermuda with limited liability)

(Stock Code: 365)

CONNECTED TRANSACTION IN RELATION TO PROPOSED AMENDMENTS OF THE TERMS AND CONDITIONS OF THE CONVERTIBLE BONDS

References are made to the joint announcements issued by Unis Technology Strategy and the Company dated 14 February 2016 and 2 June 2016 respectively, and the Circular of the Company dated 20 April 2016 in relation to, among other things, the issue of the Convertible Bonds (the “ Issuance Circular ”).

BACKGROUND

On 4 February 2016, the Company entered into the UNISTECH Subscription Agreement with Mr. But and Unis Technology Strategy in relation to, among other things, the issue of the Convertible Bonds in an aggregate principal amount of HK$148,000,000. The Convertible Bonds bears no interest and is convertible into the Conversion Shares, being 370,000,000 Shares, at the Conversion Price of HK$0.40 per Conversion Share. The UNISTECH Completion took place on 30 May 2016 pursuant to the terms of the UNISTECH Subscription Agreement. All outstanding Convertible Bonds will mature on 30 May 2021. As at the date of this announcement, the Convertible Bonds are wholly held by Unis Technology Strategy and none of the Convertible Bonds has been redeemed nor converted, in whole or in part.

THE PROPOSED AMENDMENTS

On 7 March 2017 (after trading hours), the Company entered into a supplemental deed with Unis Technology Strategy, pursuant to which the Company and Unis Technology Strategy agreed to amend certain terms and conditions of the Convertible Bonds to the effect that the Conversion Price shall not be subject to further adjustment of the occurrence of dilutive events set forth in paragraph (d), (f), (g) and (h) under the heading of “Anti-dilution adjustments” in the Issuance Circular (the “ Subject Dilutive Events ”)(the “ Proposed Amendment s”). Below is the comparison of differences between the original terms and the Proposed Amendments contemplated under the Supplemental Deed:

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	Original terms	The Proposed Amendments contemplated under the Supplemental Deed
Anti-dilution Adjustments:	The Conversion Price will from time to time be adjusted upon the occurrence of certain events, including the following: (a) consolidation, sub-division or reclassification of the Shares; (b) capitalisation of profits or reserves; (c) capital distribution to the Shareholders; (d) issue of Shares to all or substantially all Shareholders as a class by way rights, or issue or grant to all or substantially all Shareholders as a class by way of rights, of options, warrants or other rights to subscribe for or purchase any Shares, in each case at a price per Share which is less than the higher of (i) 80% of the market price on the date of the announcement of the terms of the issue or grant and (ii) the Conversion Price then in effect on the date of the announcement of the terms of the issue or grant; (e) issue of any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares) to all or substantially all Shareholders as a class by way of rights or grant to all or substantially all Shareholders as a class by way of rights, options, warrants or other rights to subscribe for, purchase or otherwise acquire any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares); (f) issue (other than as mentioned in paragraph (d) above) of any Shares (other than Shares issued on the exercise of conversion rights or on the exercise of any other rights of conversion into, or exchange or subscription for, Shares) or issue or grant(other than as mentioned in	The Conversion Price will from time to time be adjusted upon the occurrence of certain events, including the following: (a) consolidation, sub-division or reclassification of the Shares; (b) capitalisation of profits or reserves; (c) capital distribution to the Shareholders; (d) issue of any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares) to all or substantially all Shareholders as a class by way of rights or grant to all or substantially all Shareholders as a class by way of rights, options, warrants or other rights to subscribe for, purchase or otherwise acquire any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares); (e) when any of the Company or any of its subsidiaries issues, sells or distributes any securities whereby the Shareholders generally are entitled to participate in such issue, sale or distribution (except where the Conversion Price falls to be adjusted under paragraphs (d) above), the Conversion Price shall be adjusted, in order to reflect the fact that such right of participation represents an adjustment to the value of the Shares, by multiplying the Conversion Price in force immediately before such issue by the following fraction: A–B A Where: A is the current market price of one (1) Share on the date on which such issue,

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• paragraph (d) above) options, warrants sale or distribution is publicly or other rights to subscribe for, or announced; and purchase or otherwise acquire any Shares, in each case at a price per Share B is the fair market value on the date which is less than the higher of (i) 80% of such announcement of the portion of of the market price on the date of the the rights attributable to one (1) Share; announcement of the terms of the issue and and (ii) the Conversion Price then in effect on the date of the announcement (f) if the Company or any bondholder of the terms of the issue; determines that a downward adjustment should be made to the

• (g) save in the case of an issue of securities Conversion Price as a result of one (1) arising from a conversion of exchange or more events or circumstances not of other securities in accordance with referred to in paragraphs (a) to (e), the the terms applicable to such securities Company or such bondholder shall, at themselves falling within this the costs and expenses of the paragraph (g), the issue wholly for cash Company, consult an independent in paragraphs (d), (e) and (f) of any bank of international repute (acting as securities (other than the Convertible an expert) to determine as soon as Bonds) which by their terms of issue practicable what adjustment (if any) to carry rights of conversion into, or the Conversion Price is fair and exchange or subscription at a reasonable to take account thereof, and consideration per Share which is less the date on which such adjustment than the higher of (i) 80% of the market should take effect. price on the date of the announcement of the terms of the issue of such securities and (ii) the Conversion Price in effect on the date of the announcement of the terms of the issue of such securities;

• (h) when the rights of conversion, exchange or subscription attached to any such securities as are mentioned in paragraph (g) above (other than in accordance with the terms of such securities) are modified so that the consideration per Share is less than the higher of (i) 80% of the market price on the date of the announcement of the proposals for such modification and (ii) the Conversion Price then in effect on the date of the announcement of the proposals for such modification;

• (i) when any of the Company or any of its subsidiaries issues, sells or distributes any securities whereby the Shareholders generally are entitled to participate in such issue, sale or distribution (except where the

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	(j)	Conversion Price falls to be adjusted under paragraphs (d), (e), (f) or (g) above), the Conversion Price shall be adjusted, in order to reflect the fact that such right of participation represents an adjustment to the value of the Shares, by multiplying the Conversion Price in force immediately before such issue by the following fraction: A–B A Where: A is the current market price of one (1) Share on the date on which such issue, sale or distribution is publicly announced; and B is the fair market value on the date of such announcement of the portion of the rights attributable to one (1) Share; and if the Company or any bondholder determines that a downward adjustment should be made to the Conversion Price as a result of one (1) or more events or circumstances not referred to in paragraphs (a) to (i), the Company or such bondholder shall, at the costs and expenses of the Company, consult an independent bank of international repute (acting as an expert) to determine as soon as practicable what adjustment (if any) to the Conversion Price is fair and reasonable to take account thereof, and the date on which such adjustment should take effect.

Save as disclosed above, the principal terms and conditions of the Convertible Bonds as disclosed in the Circular remain intact and unchanged and are still in full force and effect.

Pursuant to the Supplemental Deed, the Proposed Amendments is subject to the satisfaction of the following conditions:

• (i) the passing by the Independent Shareholders at the SGM of the necessary resolutions to approve the Proposed Amendments, the Supplemental Deed and the transactions contemplated thereunder;

• (ii) the Stock Exchange having approved the Proposed Amendments pursuant to the Listing Rules; and

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• (iii) all necessary consents and approvals required to be obtained on the part of the Company and Unis Technology Strategy in respect of the Proposed Amendments, the Supplemental Deed and the transactions contemplated thereunder having been obtained.

None of the above conditions could be waived by the parties to the Supplemental Deed. The Proposed Amendments shall take effect on the date when all the conditions are fulfilled.

As at the date of this announcement, none of the above conditions have been satisfied.

REASONS FOR THE PROPOSED AMENDMENTS

The Group is principally engaged in designing, manufacturing and distributing of SMT and related equipment.

Subsequent to the UNISTECH Completion, the Shares have been trading on market prices substantially over the initial Conversion Price of HK$0.40. Pursuant to the original terms and conditions of the Convertible Bonds, the Conversion Price will be adjusted downwards even if the Company undertakes any corporate actions set forth in the Subject Dilutive Events at a price per Share substantially higher than the initial Conversion Price but less than the 80% of the market price on the date of the announcement of the terms of the issue or the proposals, as the case may be (the “ Subject Corporate Actions ”). The Board considers the Subject Dilutive Events might, upon the occurrence of the Subject Corporate Actions, have a substantial dilutive effect on the minority shareholders’ interest and be detrimental to the minority shareholders.

The Board also consider that:

• (i) the Proposed Amendments represent a waiver of rights by Unis Technology Strategy and will have no impact on the daily business operations of the Group;

• (ii) the rights of the Shareholders will not be affected by the Proposed Amendments;

• (iii) the cancellation of the adjustment mechanism of the Convertible Bonds, so as to the consequential cancellation of the corresponding dilutive effect on the share capital of the Company may lead to the enhancement of the net asset value per Share; and

• (iv) the Proposed Amendments will allow the Company to have more flexibility for future fund raising exercises without concerns on the adjustments to the Conversion Price.

Unis Technology Strategy is the controlling shareholder of the Company and an investment holding company. Unis Technology Strategy has agreed to the Proposed Amendments in order to continually support the development of the Company and contribute to the Company’s future growth.

Having considered the above, the Board (excluding the independent non-executive Directors who will form their views after considering the advice of the Independent Financial Adviser) are of the view that the Proposed Amendments and the terms of the Supplemental Deed are fair and reasonable and in the interests of the shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

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According to Rule 28.05 of the Listing Rules, any alterations in the terms of convertible debt securities after issue must be approved by the Stock Exchange, except where the alterations take effect automatically under the existing terms of such convertible debt securities. The Company has applied to the Stock Exchange for its approval for the Proposed Amendments pursuant to the requirements under the Listing Rules.

The Proposed Amendments are considered a material change to the terms and conditions of the Convertible Bonds. They are therefore regarded as new arrangements for the Company to issue convertible debt securities to Unis Technology Strategy and Shareholders’ approval is required.

The Company will seek the grant of a specific mandate from the Independent Shareholders at the SGM to be convened to authorise the Board to allot and issue the Conversion Shares upon conversion of the Convertible Bonds pursuant to the terms and conditions of the Convertible Bonds as amended by the Supplemental Deed (the “ Specific Mandate ”).

No application will be made by the Company for the listing of the Convertible Bonds. Application will be made to the Listing Committee for the listing of, and permission to deal in, the Conversation Shares which may fall to be allotted and issued upon conversion of the Convertible Bonds pursuant to the terms and conditions of the Convertible Bonds as amended by the Supplemental Deed.

As at the date of this announcement, Unis Technology Strategy holds approximately 67.82% of the total issued share capital of the Company and therefore is the controlling shareholder of the Company. In addition, Mr. But, who is the guarantor under the UNISTECH Subscription Agreement, was a Director of the Company in the last 12 months. As Unis Technology Strategy and Mr. But are connected persons of the Company, the entering into of the Supplemental Deed constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules and is subject to reporting, announcement and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Unis Technology Strategy is a wholly-owned subsidiary of Tsinghua Unigroup, which is one of the key enterprises under Tsinghua Holdings. As three of our Directors, namely Mr. Wang Huixuan, Mr. Qi Lian and Mr. Li Zhongxiang, hold directorships and/or management positions in Tsinghua Holdings and Tsinghua Unigroup, they have abstained from the voting on the Board resolution in relation to the approval for the execution of the Supplemental Deed. Save for the above, no other Directors have a material interest in the transactions contemplated under the Supplemental Deed and hence no other Directors are required to abstain from voting on such Board resolution.

The SGM will be convened by the Company to consider and, if thought fit, pass the resolutions to approve (i) the Supplemental Deed and the Proposed Amendments contemplated thereunder; and (ii) the grant of the Specific Mandate. Unis Technology Strategy and Mr. But together with their respective associates will abstain from voting in respect of the resolutions.

The Supplemental Deed, the Proposed Amendments contemplated thereunder and the grant of the Specific Mandate, are subject to, among other things, the approval of Independent Shareholders at the SGM. The Company has formed an Independent Board Committee (comprising all independent non-

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executive Directors) to advise the Independent Shareholders as to the fairness and reasonableness of the entering into of the Supplemental Deed and the Proposed Amendments contemplated thereunder and the grant of the Specific Mandate. Orient Capital has been appointed as the independent financial adviser to advise the Independent Board Committee in this regard.

GENERAL

A circular containing, among other things, (i) further details of the Supplemental Deed and the Proposed Amendments contemplated thereunder and the Specific Mandate; (ii) a letter from the Independent Board Committee to the Independent Shareholders; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Supplemental Deed and the Proposed Amendments contemplated thereunder and the grant of the Specific Mandate; and (iv) a notice of the SGM is expected to be despatched to the Shareholders on or before 17 March 2017.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following terms shall have the same following meanings as set out below:

“associate”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors of the Company
“Circular”	the Circular of the Company dated 20 April 2016 in relation to,
	among others, the issue of the Convertible Bonds
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Conversion Price”	HK$0.40 per Conversion Share, being the initial conversion price at
	which the Conversion Shares will be allotted and issued upon the
	exercise of the conversion rights attaching to the Convertible Bonds,
	subject to adjustment pursuant to the terms and conditions of the
	Convertible Bonds
“Convertible Bonds”	the zero coupon convertible bonds due 2021 in the aggregate
	principal amount of up to HK$148,000,000 issued by the Company
	to the Offeror
“Convertible Share(s)”	new Share(s) to be allotted and issued by the Company pursuant to
	the exercise of the conversion rights attached to the Convertible
	Bonds pursuant to the terms and conditions of the Convertible Bonds
“Company”	Unisplendour Technology (Holdings) Limited (Stock Code: 365), a
	company incorporated in Bermuda with limited liability and the

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	Ordinary Shares of which are listed on the Main Board of the Stock
	Exchange
“Director(s)”	the director(s) of the Company
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of the Hong Kong special
	Administrative Region of the PRC
“Independent	means the Shareholders other than (i) Unis Technology Strategy, its
Shareholders”	associates and parties acting in concert with it; (ii) Mr. But, his
	associates and parties acting in concert with him; and (iii) any
	Shareholders who are interested in the transactions contemplated
	under the Supplemental Deed, who are required by the Listing Rules
	to abstain from voting in respect of the resolution(s) relating to the
	Supplemental Deed and the Proposed Amendments contemplated
	thereunder and the grant of the Specific Mandate at the SGM

“Independent Board	a Board committee comprising all independent non-executive
Committee”	Directors established to advise and make recommendation to the
	Independent Shareholders in relation to the Supplemental Deed and
	the Proposed Amendments contemplated thereunder and the grant of
	the Specific Mandate

• “Independent Financial Orient Capital (Hong Kong) Limited, a corporation licensed to carry Adviser” or “Orient out type 6 (advising on corporate finance) regulated activities under Capital” SFO, and is the independent financial adviser appointed by the Company for the purpose of advising the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Deed and the Proposed Amendments contemplated thereunder and the granting of the Specific Mandate

• “Listing Rules” The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “Listing Committee” the listing committee of the Stock Exchange “Mr. But” Mr. But Tin Fu, a former Director of the Company, and an existing shareholder of the Company

• “PRC” the People’s Republic of China

• “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of

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Hong Kong)

• “Shareholder(s)” holder(s) of issued share(s) of the Company “Share(s)” the ordinary share(s) of HK$0.10 each in the share capital of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “SGM” the special general meeting of the Company to be convened and held for the Independent Shareholders to consider and, if thought fit, approve, among other things, the Supplemental Deed and the Proposed Amendments contemplated thereunder and the grant of the Specific Mandate

• “Supplemental Deed” The supplemental deed entered into between the Company and the Offeror on 7 March 2017 in respect of the Proposed Amendments

• “Tsinghua Holdings” Tsinghua Holdings Co., Ltd.（清華控股有限公司）, a company established under the laws of the PRC and a wholly-owned subsidiary of of Tsinghua University （清華大學）

• “Tsinghua Unigroup” Tsinghua Unigroup Co., Ltd. （紫光集團有限公司）, a company established under the laws of the PRC and which is owned as to 51% by Tsinghua Holdings and as to 49% by Beijing Jiankun Investment Group Co., Ltd.（北京健坤投資集團有限公司）

• “UNISTECH Completion” Completion of the subscription of the Convertible Bonds pursuant to the UNISTECH Subscription Agreement

• “UNISTECH Subscription the subscription agreement entered into among Mr. But, the Agreement” Company and the Offeror on 4 February 2016 in relation to, among other things, the subscription of the Convertible Bonds

• “Unis Technology Unis Technology Strategy Investment Limited, a company Strategy” incorporated in Hong Kong with limited liability, being the controlling shareholder of the Company and the holder of the Convertible Bonds

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By order of the Board Unisplendour Technology (Holdings) Limited Wang Huixuan Chairman

Hong Kong, 7 March 2017

As at the date of this announcement, the Directors are Mr. Wang Huixuan, Mr. Qi Lian and Mr. Xia Yuan as executive Directors; Mr. Li Zhongxiang as non-executive Director; and Mr. Cui Yuzhi, Mr. Bao Yi and Mr. Ping Fan as independent non-executive Directors.

* For identification purpose only

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