Fufeng Group Limited — Capital/Financing Update 2013

Nov 6, 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.

This announcement is not an offer to sell or the solicitation of an offer to buy any securities and neither this announcement nor anything herein forms the basis for any contract or commitment whatsoever. Neither this announcement nor any copy hereof may be taken into or distributed in the United States.

The information contained in this announcement is not for distribution, directly or indirectly, in or into the United States. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The Bonds and the New Shares mentioned herein have not been, and will not be, registered under the Securities Act. The Bonds and the New Shares may not be offered or sold in the United States except pursuant to registration or an exemption from the registration requirements of the Securities Act.

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Fufeng Group Limited 阜豐集團有限公司

( incorporated in the Cayman Islands with limited liability )

(Stock code: 546)

PROPOSED ISSUE OF RMB DENOMINATED USD SETTLED 3.0% CONVERTIBLE BONDS DUE 2018

(WITH AN OPTION FOR THE ISSUE OF FURTHER RMB DENOMINATED USD SETTLED 3.0% CONVERTIBLE BONDS DUE 2018)

Sole Global Coordinator

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Joint Bookrunners

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Co-Manager

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The Board is pleased to announce that on 6 November 2013, the Company and the Managers entered into the Subscription Agreement, pursuant to which the Joint Bookrunners have agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the Firm Bonds to be issued by the Company in an initial aggregate principal amount of RMB975 million (equivalent to approximately US$160 million). In addition, the Company has granted to the Joint Bookrunners an option (the " Option ") to subscribe for all or any of the Option Bonds up to a further aggregate principal amount of RMB125 million (equivalent to approximately US$20 million), and the Option shall be exercisable on one or more occasions, in whole or in part, solely at the discretion of the Sole Global Coordinator, at any time on or before the 30th day following the Closing Date.

The terms and conditions of the Bonds provide for the Company to undertake to, on or before the 30th day after the Closing Date (both days inclusive): (i) repay in full the Existing Loan with the proceeds of the Bonds; and (ii) ensure the Bonds are jointly and severally guaranteed by the Subsidiary Guarantors and secured by the Required Security, and any future release of such Required Security (if any) will be permitted in accordance with the indenture constituting the Company's existing USD denominated 7.625% notes due 2016. The Required Security is the security over the collateral under the Security Documents and is required to ensure that the obligations of the Company under the Bonds and the trust deed are secured rateably and on a pari passu basis with the obligations of (i) the Company's existing RMB denominated USD settled 4.5% convertible bonds due 2015 bonds and the trust deed constituting such bonds; and (ii) the Company's existing USD denominated 7.625% notes due 2016 and the indenture constituting such notes.

Based on the initial Conversion Price of HK$4.173 and assuming full conversion of the Bonds (assuming the Option Bonds are issued in full) at the initial Conversion Price, the Bonds will be convertible into 335,206,044 Shares, representing approximately 16.06% of the issued share capital of the Company as at the date of this announcement and approximately 13.84% of the issued share capital of the Company, as enlarged. The New Shares will be allotted and issued pursuant to the general mandate of the Company granted to the Directors at the annual general meeting held on 23 May 2013 and will rank pari passu in all respects with the Shares then in issue on the relevant conversion date. The issue of the Bonds is not subject to the approval of the Shareholders. As at the date of this announcement, there has been no issue of Shares under the general mandate granted.

The gross proceeds from the issue of the Bonds (assuming the Option is not exercised) is approximately US$160 million or if the Option Bonds are issued in full, US$180 million. The total expenses and commissions amount to approximately US$4.6 million. The Company will receive net proceeds in the amount of US$175.4 million from the issue of the Bonds (assuming the Option is exercised in full). The Company intends to use the net proceeds, whether or not the Option is exercised in full, for (i) the repayment in full of the Existing Loan and (ii) general corporate and working capital purposes.

An application will be made to the Singapore Stock Exchange for the listing of the Bonds on the Singapore Stock Exchange and the Company will apply to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the New Shares.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Managers are independent third parties not connected with the Company or any of its Subsidiaries or any of their respective directors, chief executives or substantial shareholders or any of their respective associates.

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The Managers have informed the Company that they intend to offer and sell the Bonds to not less than six placees (who will be independent individual, corporate and/or institutional investors). To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the placees (and their respective ultimate beneficial owners) is and will be an independent third party not connected with the Company or any of its Subsidiaries or any of their respective directors, chief executives or substantial shareholders or any of their respective associates.

The Managers and their Subsidiaries or affiliates may purchase the Bonds for their own account and enter into transactions, including (i) credit derivatives, including assets swaps, repackaging and credit default swaps relating to the Bonds and/or the Company’s securities or (ii) equity derivatives and stock transfer transactions relating to the Shares at the same time as the offer and sale of the Bonds or in secondary market transactions (including synthetic short positions for investors of the Bonds).

Completion of the Subscription Agreement is subject to the satisfaction and/or waiver of the conditions precedent therein. In addition, the Subscription Agreement may be terminated in certain circumstances. Please refer to the paragraph headed "The Subscription Agreement" below for further information.

As the subscription and issue of the Bonds may or may not complete, Shareholders and prospective investors are advised to exercise caution when dealing in the Shares.

THE SUBSCRIPTION AGREEMENT

Date: 6 November 2013

Parties: Company Managers

Proposed issue of the Bonds:

Subject to the fulfilment of the conditions set out below in the section headed "Conditions Precedent" and on the terms of the Subscription Agreement, the Joint Bookrunners have severally agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the Firm Bonds to be issued by the Company in an initial aggregate principal amount of RMB975 million (equivalent to approximately US$160 million). In addition, the Company has granted to the Joint Bookrunners an Option to subscribe for all or any of the Option Bonds up to a further aggregate principal amount of RMB125 million (equivalent to approximately US$20 million), exercisable on one or more occasions, in whole or in part, solely at the discretion of the Sole Global Coordinator and subject to the consent of the Company, at any time on or

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before the 30th day following the Closing Date. Accordingly, the maximum aggregate principal amount of the Bonds to be issued will be RMB1,100 million (equivalent to approximately US$180 million).

Conversion of the Bonds:

Distribution:

Based on the initial Conversion Price of HK$4.173 and assuming full conversion of the Bonds at the initial Conversion Price, the Bonds will be convertible into 335,206,044 Shares, representing approximately 16.06% of the issued share capital of the Company as at the date of this announcement and approximately 13.84% of the issued share capital of the Company as enlarged assuming full conversion of the Bonds (assuming the Option Bonds are issued in full). The New Shares will be allotted and issued pursuant to the general mandate of the Company granted to the Directors at the annual general meeting held on 23 May 2013 and will rank pari passu in all respects with the Shares then in issue on the relevant conversion date. The issue of the Bonds is not subject to the approval of the Shareholders. As at the date of this announcement, there has been no issue of Shares under the general mandate granted.

The Bonds and the New Shares have not been and will not be registered under the Securities Act and, subject to certain exceptions, may not be offered or sold within the United States. The Bonds will be offered and sold in an institutional offering outside the United States in reliance on Regulation S of the Securities Act. None of the Bonds will be offered to the public in Hong Kong or the Cayman Islands nor will they be placed to any connected persons of the Company. The Bonds have not been offered or sold and will not be offered or sold in Hong Kong to the public within the meaning of the Companies Ordinance.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Managers are independent third parties not connected with the Company or any of its Subsidiaries or any of their respective directors, chief executives or substantial shareholders or any of their respective associates.

The Company will promptly notify the Hong Kong Stock Exchange upon becoming aware of any dealing in the Bonds by any connected person of the Company.

Lock-up Undertaking:

The Company has undertaken with the Managers that neither the Company nor any person acting on its

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behalf will (i) issue, offer, sell, pledge, contract to sell or otherwise dispose of or grant options, issue warrants or offer rights entitling persons to subscribe or purchase any interest in any Shares or securities of the same class as the Bonds or the Shares or any securities convertible into, exchangeable for or which carry rights to subscribe or purchase the Bonds, the Shares or securities of the same class as the Bonds, the Shares or other instruments representing interests in the Bonds, the Shares or other securities of the same class as them, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of the ownership of the Shares, (iii) enter into any transaction with the same economic effect as, or which is designed to, or which may reasonably be expected to result in, or agree to do, any of the foregoing, whether any such transaction of the kind described in (i), (ii) or (iii) is to be settled by delivery of Shares or other securities, in cash or otherwise or (iv) announce or otherwise make public an intention to do any of the foregoing, in any such case without the prior written consent of the Managers between the date hereof and the date which is 90 days after the Closing Date (or if any Option Bonds are issued, after the last Option Closing Date) (both dates inclusive) except for the Bonds and the New Shares issued on conversion of the Bonds.

Shareholder Undertaking:

Motivator undertakes that, for a period from the date of the Subscription Agreement up to 90 days after the Closing Date (or if any Option Bonds are issued, after the last Option Closing Date) (both dates inclusive), neither it nor any of its subsidiaries (if applicable) or affiliates or spouse (if applicable) or family members (if applicable) over which it exercises management or voting control, nor any person acting on its or their behalf will, without the prior written consent of the Managers, issue, offer, sell, contract to sell, pledge or otherwise dispose of (or publicly announce any such issuance, offer, sale or disposal), any Shares or securities convertible or exchangeable into or exercisable for Shares or warrants or other rights to purchase Shares or any security or financial product whose value is determined directly or indirectly by reference to the price of the Shares, including equity swaps, forward sales and options representing the right to receive any Shares (whether or not such contract is to be settled by delivery of Shares or such other securities, in cash or otherwise) except for the lending of Shares by Motivator to J.P. Morgan under a global

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master securities lending agreement.

Conditions Precedent:

The obligations of the Managers to subscribe and pay for the Bonds are subject to, among others, the following conditions precedent:

1. Due Diligence : the Managers being satisfied with the results of its due diligence investigations with respect to the Company, the Subsidiary Guarantors and the Consolidated Group, and the offering circular (to be prepared relating to the Bonds) having been prepared in form and content satisfactory to the Managers;

2. Other contracts: the execution and delivery (on or before the Closing Date) of the trust deed constituting the Bonds and the paying and conversion agency agreement in relation to the Bonds, each in a form reasonably satisfactory to the Sole Global Coordinator, by the respective parties;

3. Lock-up: Motivator shall have executed a lock-up agreement on or before the Closing Date in the form set out in the Subscription Agreement;

4. Auditors’ letters: upon the date of the offering circular relating to the Bonds and on the Closing Date and the Option Closing Date (if any), there having been delivered to the Managers letters, in form and substance satisfactory to the Sole Global Coordinator, dated the date of the final offering circular in the case of the first letter and dated the Closing Date and the Option Closing Date (if any) in the case of the subsequent letters, and addressed to the Managers from PricewaterhouseCoopers, Certified Public Accountants to the Company;

5. Compliance: at the Closing Date and the Option Closing Date (if any):

6. (i) the representations and warranties of the Company in the Subscription Agreement being true, accurate and correct at, and as if made on such date;

7. (ii) the Company having performed all of its obligations under the Subscription

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Agreement to be performed on or before such date; and

(iii)

• there having been delivered to the Managers each a certificate, dated as of such date, of a duly authorised officer of the Company to such effect;

• Material adverse change: after the date of the Subscription Agreement or, if earlier, the dates as of which information is given in the offering circular up to and at the Closing Date (in the case of the Firm Bonds) and the Option Closing Date (if any) (in the case of the Option Bonds), there shall not have occurred any change (nor any development or event involving a prospective change), in the financial or business condition, prospects, results of operations or general affairs of the Company or of the Consolidated Group from that set out in the offering circulars, which, in the opinion of the Sole Global Coordinator, is material and adverse in the context of the issue and offering of the Firm Bonds or, as the case may be, the Option Bonds;

• Other consents: on or prior to the Closing Date there shall have been delivered to the Managers copies of all consents and approvals required in relation to the issue of the Bonds, the giving of the guarantee of the Bonds and the Required Security and the performance of the Company's and the Subsidiary Guarantors’ respective obligations under the Subscription Agreement, the trust deed constituting the Bonds and the paying and conversion agency agreement in relation to the Bonds, and the Bonds (including the consents and approvals required from all lenders);

• Certificate of no default: on the Closing Date, there having been delivered to the Managers a certificate of no default dated as of such date, of a duly authorised officer of each of the Company;

• Listing: the Hong Kong Stock Exchange having agreed to list the New Shares upon conversion of the Bonds and the Singapore Stock Exchange having agreed, subject to any conditions reasonably satisfactory to the Sole

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Global Coordinator, to list the Bonds (or, in each case, the Sole Global Coordinator being reasonably satisfied that such listing will be granted); and

1. Legal opinions: on or before the Closing Date and the Option Closing Date (if any), there having been delivered to the Managers opinions, in form and substance satisfactory to the Sole Global Coordinator, dated the Closing Date or the Option Closing Date, as the case may be, of legal counsels, and such other resolutions, consents, authorities and documents relating to the issue of the Bonds, as the Sole Global Coordinator may reasonably require.

The Sole Global Coordinator may, at its discretion and upon such terms as they think fit waive compliance with the whole or any part of the conditions precedent.

Termination:

The Sole Global Coordinator may, by notice to the Company given at any time prior to payment of the net subscription monies for the Firm Bonds or the Option Bonds (if any) to the Company, terminate this Agreement in any of the following circumstances:

1. if there shall have come to the notice of the Sole Global Coordinator any breach of, or any event rendering untrue or incorrect in any respect, any of the warranties and representations contained in the Subscription Agreement or any failure to perform any of the Company undertakings or agreements in the Subscription Agreement;

2. if any of the conditions precedent have not been satisfied or waived by the Sole Global Coordinator on or prior to the Closing Date or the Option Closing Date, as the case may be;

3. if in the opinion of the Sole Global Coordinator, there shall have been, since the date of the Subscription Agreement, any change, or any development involving a prospective change, in national or international monetary, financial, political or economic conditions (including any disruption to trading generally, or trading in any securities of the Company on any stock exchange or in any over-the-counter market) or currency exchange

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rates or foreign exchange controls such as would, in its view, be likely to prejudice materially the success of the offering and distribution of the Bonds or dealings in the Bonds in the secondary market;

1. if, in the opinion of the Sole Global Coordinator, there shall have occurred any of the following events: (i) a suspension or a material limitation in trading in securities generally on the New York Stock Exchange, the London Stock Exchange plc, the Singapore Stock Exchange, the Shanghai Stock Exchange and/or the Hong Kong Stock Exchange and/or any other stock exchange on which the Company’s securities are traded; (ii) a suspension or a material limitation in trading in the Company’s securities on the Hong Kong Stock Exchange and/or any other stock exchange on which the Company’s securities are traded; or (iii) a general moratorium on commercial banking activities in the United States, Singapore, Hong Kong, the PRC and/or the United Kingdom declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States, Hong Kong, Singapore or the United Kingdom;

2. if, in the opinion of the Sole Global Coordinator, there shall have occurred any event or series of events (including the occurrence of any local, national or international outbreak or escalation of disaster, hostility, insurrection, armed conflict, act of terrorism, act of God or epidemic) as would in their view be likely to prejudice materially the success of the offering and distribution of the Bonds or dealings in the Bonds in the secondary market; or

3. if there shall have occurred any new law or regulation or any change or development involving a prospective change in existing laws or regulations which, in the Sole Global Coordinator’s view, would or would be likely to have a material adverse effect on the financial position of the Group.

Subject to the foregoing, completion of the subscription and issue of the Firm Bonds or the Option

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Bonds (if any) will take place on the Closing Date or the Option Closing Date (if any).

The Directors consider that the terms and conditions of the Subscription Agreement and the Bonds are fair and reasonable, on normal commercial terms and in the interests of the Company and its shareholders as a whole.

PRINCIPAL TERMS OF THE BONDS

The principal terms of the Bonds are summarised as follows:

Issuer: The Company

• Managers: J.P. Morgan as Sole Global Coordinator and Joint Bookrunner, Standard Chartered Bank as Joint Bookrunner and China Galaxy International Securities (Hong Kong) Limited as Co-Manager

• Principal amount of Firm Bonds: RMB975 million aggregate principal amount of USD Settled 3.0% Convertible Bonds due 2018, convertible into fully-paid ordinary shares with a par value of HK$0.10 each in the share capital of the Company.

• Option Bonds: The Company has granted to the Joint Bookrunners an option which can be exercised subject to the consent of the Company, in whole or in part and on one or more occasions, at any time on or before the 30th day following the Closing Date to subscribe for an additional RMB125 million in aggregate RMB principal amount of USD Settled 3.0% Convertible Bonds due 2018.

• Number of Placees: Not less than six placees (who will be independent individual, corporate and/or institutional investors) and each of them (and their respective ultimate beneficial owners) will be an independent third party not connected with the Company, or any of its Subsidiaries or any of their respective directors, chief executives or substantial shareholders or any of their respective associates.

• US Dollar Settlement:

• All amounts due under, and all claims arising out of or pursuant to, the Bonds and/or the trust deed from or against the Company shall be payable and settled in US Dollars only.

• Issue price: 100% of the RMB principal amount of the Bonds.

• Form and Denomination:

• The Bonds will be issued in registered form in the denomination of RMB1,000,000 each without coupons

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attached.

Subscription Price: The subscription amount payable in respect of each Bond on the Closing Date is approximately US$164,044.69 based on an exchange rate of RMB6.09590 to US$1.00. Interest:

The Bonds bear interest from (and including) 27 November 2013 at the rate of 3.0% per annum calculated by reference to the RMB principal amount of the Bonds and payable in US Dollars at the US Dollar equivalent semi-annually in arrear in equal instalments on 27 May and 27 November in each year.

Maturity date: 27 November 2018 (the " Maturity Date ") Negative pledge: So long as any Bond remains outstanding, the Company will not, and will ensure that none of its Subsidiaries will, create or have outstanding, any Encumbrance, upon the whole or any part of its present or future undertaking, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness, or any guarantee or indemnity in respect of any Relevant Indebtedness unless, at the same time or prior thereto, the Company’s obligations under the Bonds are secured equally and rateably (i) by the same Encumbrance or (ii) at the option of the Company, by such other security, guarantee, indemnity or other arrangement as either (a) the Trustee shall in its absolute discretion deem not materially less beneficial to the interests of the Bondholders or (b) shall be approved by an extraordinary resolution of the Bondholders.

• Security Undertaking The Company will undertake in the trust deed that on or before the 30th day after the Closing Date (both days inclusive) it will: (i) repay in full the Existing Loan with the proceeds of the Bonds; and (ii) ensure the Bonds are jointly and severally guaranteed by the Subsidiary Guarantors and secured by the Required Security.

Conversion period:

• On or after 7 January 2014 up to the close of business (at the place where the certificate evidencing such Bond is deposited for conversion) on the 10th day prior to the Maturity Date or, if the Bonds shall have been called for redemption by the Company before the Maturity Date, then up to the close of business (at the place aforesaid) on a date no later than 10 days (both days inclusive and in the place aforesaid) prior to the date fixed for redemption thereof or if notice requiring

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redemption has been given by the holder of such Bond then up to the close of business (at the place aforesaid) on the day prior to the giving of such notice.

• The number of Shares to be issued on conversion of a Bond will be determined by dividing the RMB principal amount of the Bond to be converted (translated into Hong Kong dollars at the fixed rate of RMB0.78638 to HK$1.00) by the Conversion Price then in effect.

Conversion price:

• The initial Conversion Price is HK$4.173 per Share with a fixed exchange rate applicable on conversion of the Bonds of RMB0.78638 to HK$1.00.

• The Conversion Price will be subject to adjustment for, among other things, subdivision, reclassification or consolidation of Shares, bonus issues, rights issues, capital distributions, distributions and other dilutive events as described in the terms and conditions of the Bonds. The Conversion Price may not be reduced so that, on conversion of the Bonds, Shares would fall to be issued at a discount to their par value.

Final redemption:

• Security Event

• Unless previously redeemed, converted or purchased and cancelled in the circumstances referred to in the terms and conditions of the Bonds, the Company will redeem each Bond at an amount equal to the US Dollar equivalent of 108.31 per cent. of their RMB principal amount on the Maturity Date.

• Following the occurrence of a Security Event, the holder of each Bond will have the right at such holder’s option, to require the Company to redeem all, or some only, of such holder’s Bonds at their Security Event Redemption Amount, together with accrued but unpaid interest on the date fixed for redemption in the security event exercise notice (the " Security Event Redemption Date ").

Where:

" Bond Fair Value " means the average of the mid-rate prices of the Bonds quoted by J.P. Morgan to the Company at 4.30 p.m. (Hong Kong time) on each of the five consecutive trading days immediately following the date upon which the Security Event Exercise Notice is given;

The " Security Event " shall occur on the 31st day after the Closing Date (both days inclusive) if the Company

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has not delivered to the Trustee a certificate signed by two directors of the Company by such date confirming that: (i) the Existing Loan has been fully repaid with the proceeds from the Bonds; and (ii) the Bonds have been jointly and severally guaranteed by the Subsidiary Guarantors and secured by the Required Security; and

" Security Event Redemption Amount " means the US Dollar Equivalent of the greater of (i) 101 per cent. of the early redemption amount of the Bonds as at the Security Event Redemption Date or (ii) 101 per cent. of the Bond Fair Value.

Redemption at the Option of the Company:

On giving not less than 30 nor more than 90 days’ notice to the Bondholders and the Trustee (which notice will be irrevocable), the Company:

• (i) may at any time after 27 November 2016 redeem all, but not some only, of the Bonds for the time being outstanding at the US Dollar equivalent of their RMB principal amount, together with accrued but unpaid interest to the date fixed for redemption, provided that the closing price of the Shares, translated into RMB at the prevailing rate applicable to the relevant Trading Day, for any 20 out of 30 consecutive Trading Days prior to the date upon which notice of such redemption is published was at least 130 per cent. of the early redemption amount divided by the Conversion Ratio. “ Conversion Ratio ” means the RMB principal amount of each Bond divided by the Conversion Price then in effect immediately prior to the date upon which the Optional Redemption Notice is given translated into Renminbi at the Fixed Exchange Rate; or

• (ii) may at any time redeem all, but not some only, of the Bonds being outstanding at a redemption price equal to the US Dollar equivalent of the early redemption amount, together with accrued but unpaid interest to the date fixed for redemption provided that prior to the date of such notice at least 90 per cent. in RMB principal amount of the Bonds originally issued (including any Option Bonds) has already been converted, redeemed or purchased and cancelled.

Tax Redemption and Non-

The Bonds may be redeemed at the option of the

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Redemption Right:

Redemption at the option of the Bondholders:

Redemption upon Delisting or Change of Control:

Company in whole, but not in part, at any time, on giving not less than 30 nor more than 60 days' irrevocable notice (a " Tax Redemption Notice ") to the Bondholders at the US Dollar equivalent of the early redemption amount, together with accrued but unpaid interest to the date fixed for redemption, if the Company satisfies the Trustee immediately prior to the giving of such notice that (i) the Company has or will become obliged to pay additional tax amounts as a result of any change in, or amendment to, the laws or regulations of the Cayman Islands or Hong Kong or any political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after 6 November 2013, and (ii) such obligation cannot be avoided by the Company taking reasonable measures available to it, provided that no Tax Redemption Notice shall be given earlier than 90 days prior to the earliest date on which the Company would be obliged to pay such additional tax amounts were a payment in respect of the Bonds then due.

On 27 November 2016, the holder of each Bond has the right, at such holder’s option, to require the Company to redeem all or some only of the Bonds at an amount equal to the US Dollar equivalent of 104.76 per cent. of their RMB principal amount.

Following the occurrence of a Relevant Event, the holder of each Bond will have the right at such holder’s option, to require the Company to redeem all, but not some only, of such holder’s Bonds on the Relevant Event Redemption Date (as defined below) at a price equal to the US Dollar equivalent of the early redemption amount, together with accrued but unpaid interest to the date fixed for redemption. To exercise such right, the holder of the relevant Bond must deposit at the specified office of any paying agent a duly completed and signed notice of redemption, in the form for the time being current, obtainable from the specified office of any paying agent (" Relevant Event Redemption Notice "), together with the certificate evidencing the Bonds to be redeemed by not later than 60 days following a Relevant Event, or, if later, 60 days following the date upon which notice thereof is given to Bondholders by the Company in accordance with the terms and conditions of the Bonds. The " Relevant Event Redemption Date " shall be the

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fourteenth day after the expiry of such period of 60 days as referred to above.

Listing:

• Application will be made for the listing of the Bonds to the Singapore Stock Exchange for the listing of the Bonds on the Singapore Stock Exchange. The Bonds will be traded and settled in US Dollars only. The Bonds will be traded on the Singapore Stock Exchange in a minimum board lot size of US$200,000 for so long as the Bonds are listed on the Singapore Stock Exchange.

• An application will be made to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the New Shares.

Clearing Systems:

Voting rights:

• Transferability:

Status:

• The Bonds will be represented by the Global Certificate, which will be registered in the name of a nominee of, and deposited on the Closing Date with a common depositary for, Euroclear and Clearstream, Luxembourg.

Unless and until the Bondholders acquire the Shares upon conversion of the Bonds, they will have no rights with respect to the Shares, including any voting rights or rights to receive any regular dividends or other distributions with respect to the Shares.

The Bonds are freely transferrable.

The Bonds constitute direct, unsubordinated, unconditional and (subject to the terms and conditions) unsecured obligations of the Company and shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Company under the Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law and subject to the terms and conditions at all times rank at least equally with all of its other present and future senior, unsecured and unsubordinated obligations.

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PRINCIPAL TERMS OF THE REQUIRED SECURITY AND THE GUARANTEE OF THE BONDS

Security

Following the date that the Security Undertaking is completed by the Company, the Bonds will have the benefit of the security over the collateral under the Security Documents, so that the obligations of the Company under the Bonds and the trust deed are secured rateably and on a pari passu basis with the obligations of (i) the Company's existing RMB denominated USD settled 4.5% convertible bonds due 2015 bonds and the trust deed constituting such bonds; and (ii) the Company's existing USD denominated 7.625% notes due 2016 and the indenture constituting such notes, and such security will be granted by the Company and the subsidiary guarantor pledgors under the Security Documents and will be subject to the terms of the supplemental intercreditor agreement.

Guarantee of the Bonds

Following the date that the Security Undertaking is completed by the Company, the Bonds will be jointly and severally guaranteed by the Subsidiary Guarantors under the trust deed of the Bonds. The Guarantee of the Bonds constitutes direct, unconditional, unsubordinated and secured obligations of each Subsidiary Guarantor.

Status ( following the date that the Security Undertaking is completed by the Company )

Following the date that the Security Undertaking is completed by the Company, the Bonds will constitute direct, unsubordinated, unconditional and secured obligations of the Company and shall at all times rank pari passu and without any preference or priority among themselves.

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EFFECT ON THE SHARE CAPITAL OF THE COMPANY AS A RESULT OF CONVERSION

Based on the initial Conversion Price of HK$4.1730 per Share and assuming full conversion of the Bonds (assuming the Option Bonds are issued in full), the Bonds will be convertible into 335,206,044 Shares, representing approximately 16.06% of the issued share capital of the Company as at the date of this announcement and approximately 13.84% of the issued share capital of the Company as enlarged by the issue of the New Shares.

The following table summarises the potential effects on the shareholding structure of the Company as a result of the Bond issue (by reference to the shareholdings as at the date of this announcement and assuming full conversion of the Firm Bonds and the Option Bonds):

	Existing (as at announcement)	the date of this	Assuming the Firm Bonds are fully converted into Shares at the initial Conversion Price of HK$4.1730 each	Assuming the Firm Bonds are fully converted into Shares at the initial Conversion Price of HK$4.1730 each	Assuming the Firm Bonds and the Option Bonds are fully converted into Shares at the initial Conversion Price of HK$4.1730 each	Assuming the Firm Bonds and the Option Bonds are fully converted into Shares at the initial Conversion Price of HK$4.1730 each
Shareholder	No. of Shares	% of issued share capital of the Company	No. of Shares	% of enlarged share capital of the Company	No. of Shares	% of enlarged share capital of the Company
Motivator Enterprises Limited (Note 1)	963,342,461	46.15	963,342,461	40.40	963,342,461	39.76
Ever Soar Enterprises Limited_(Note 2)_	222,134,400	10.64	222,134,400	9.32	222,134,400	9.17
Bondholders	0	0	297,114,448	12.46	335,206,044	13.84
Other Shareholders	902,083,739	43.21	902,083,739	37.83	902,083,739	37.23
Total	2,087,560,600	100.00	2,384,675,048	100.00	2,422,766,644	100.00

Notes:

1. The interest in these Shares is held by Motivator Enterprises Limited, the entire issued share capital of which is wholly and beneficially owned by Mr. Li Xuechun, an executive Director and the Chairman of the Company. Ms. Shi Guiling is the spouse of Mr. Li Xuechun. Accordingly, she is also deemed to be interested in the 963,342,461 Shares held by Motivator Enterprises Limited.

2. Ever Soar Enterprises Limited is owned as to 15% by Mr. Feng Zhenquan, 15% by Mr. Xu Guohua, 15% by Mr. Li Deheng (all of whom are executive Directors), 25% by Mr. Wu Xindong (a former executive director who resigned with effect from 9 March 2010), 15% by Mr. Yan Ruliang (a former executive director who resigned with effect from 15 May 2009) and 15% by Ms. Guo Yingxi.

USE OF PROCEEDS

The gross proceeds from the issue of the Bonds (assuming the Option is not exercised) is approximately US$160 million or, if the Option Bonds are issued in full, US$180 million. The total expenses and commissions amount to approximately US$4.6 million. The Company will receive net proceeds in the amount of approximately US$175.4 million from the issue of the Bonds (assuming the Option is exercised in full). The Company intends to use the net

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proceeds, whether or not the Option is exercised, in full for (i) the repayment in full of the Existing Loan and (ii) general corporate and working capital purposes.

REASONS FOR AND BENEFITS OF THE ISSUE OF THE BONDS

The Directors consider the issue of the Bonds as an opportunity to broaden the capital base of the Company and to obtain immediate funding to refinance the Company's existing indebtedness. Accordingly, the Directors consider the terms of the Subscription Agreement fair and reasonable and in the interests of the Shareholders and the Company as a whole.

FUND RAISING ACTIVITIES BY THE COMPANY IN THE LAST 12 MONTHS

The Company issued 348,209,600 rights shares on 2 May 2013. The net proceeds amount to approximately HKD618.5 million after expenses, which have been mainly used for repayment of bank borrowings and working capital.

Save for the rights issue, the Company has not carried out any equity fundraising activities in the past twelve months immediately before the date of this announcement.

SECURITIES LENDING AGREEMENT

Motivator (the " Lender ") entered into a securities lending agreement with J.P. Morgan dated 6 November 2013 to effect the lending of up to 90,000,000 Shares (the " Maximum Number of Shares ") in aggregate by the Lender to J.P. Morgan.

The Maximum Number of Shares subject to the securities lending agreements represent 26.85% of the Shares into which the aggregate number of Bonds (assuming the Option Bonds are issued in full) may be converted based on the initial Conversion Price.

COMPARISON OF CONVERSION PRICE

The initial Conversion Price of HK$4.173 represents:

• (1) a premium of approximately 30.0% over the closing price of HK$3.21 per Share as quoted on the Hong Kong Stock Exchange on the Last Trading Day;

• (2) a premium of approximately 29.3% over the average closing price of HK$3.228 per Share for the last five consecutive trading days up to and including the Last Trading Day; and

• (3) a premium of approximately 29.4% over the average closing price of HK$3.225 per Share for the last ten consecutive trading days up to and including the Last Trading Day.

The initial Conversion Price was determined after arm’s length negotiations between the Company and the Managers with reference to the closing price of the Shares quoted on the Hong Kong Stock Exchange on the Last Trading Day.

GENERAL MANDATE

By a resolution of the shareholders of the Company passed at the annual general meeting held on 23 May 2013, the Company granted a general mandate to the Directors to allot and issue

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up to 20% of the issued share capital of the Company, being 417,851,520 Shares. The Directors have not exercised the power to allot and issue any new Shares pursuant to the general mandate granted. As at the date of this announcement, the Company is entitled to issue up to 417,851,520 Shares pursuant to such general mandate. The New Shares will be issued under such general mandate.

INFORMATION ABOUT THE GROUP

The Company is one of the leading vertically integrated manufacturers of glutamic acid, monosodium glutamate (MSG) and xanthan gum in the PRC and in the world and has been listed on the Main Board of the Hong Kong Stock Exchange since 8 February 2007.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:

"Alternative Stock Exchange" at any time, in the case of the Shares, if they are not at that time listed and traded on the Hong Kong Stock Exchange, the principal stock exchange or securities market on which the Shares are then listed or quoted or dealt in

"Board"

the board of Directors

"Bonds" the Firm Bonds and the Option Bonds (if any) "Bondholders" holder(s) of the Bonds from time to time "Change of Control" a "Change of Control" occurs when:

• (i) any Person or Persons (other than the Permitted Holders) acting together acquires Control of the Company if such Person or Persons does not or do not have, and would not be deemed to have, Control of the Company on the Issue Date;

• (ii) the Company consolidates with or merges into or sells or transfers all or substantially all of the assets of the Company to any other Person, unless the consolidation, merger, sale or transfer will not result in the other Person or Persons acquiring Control over the Company or the successor entity; or

• (iii) one or more Persons (other than any Person referred to in sub-paragraph (i) above) acquires the legal or beneficial ownership of all or substantially all of the issued share capital of the Company

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"Closing Date"

• 27 November 2013 or such other date as the Company and the Sole Global Coordinator may agree

• "Closing Price"

• "Closing Price" for the Shares for any Trading Day shall be the price published in the daily quotation sheet published by the Hong Kong Stock Exchange or, as the case may be, the equivalent quotation sheet of an Alternative Stock Exchange for such day

• "Co-Manager"

• China Galaxy International Securities (Hong Kong) Co., Limited

• "Companies Ordinance" the Companies Ordinance (Chapter 32 of the Laws of Hong Kong)

• "Company"

• Fufeng Group Limited, a company incorporated in the Cayman Islands with limited liability, the ordinary shares of which are listed on the Main Board of the Hong Kong Stock Exchange

• "connected person(s)" has the meaning ascribed to it under the Listing Rules

• "Consolidated Group"

• the Company and its Subsidiaries

• "Control"

• the acquisition or control of more than 50 per cent. of the voting rights of the issued share capital of the Company or the right to appoint and/or remove all or the majority of the members of the Company’s board of directors or other governing body, whether obtained directly or indirectly, and whether obtained by ownership of share capital, the possession of voting rights, contract or otherwise, and the terms "Controlling" and "Controlled" have meanings correlative to the foregoing

• "Conversion Price"

• the price at which New Shares will be issued upon conversion of the Bonds which will initially be HK$4.173 per Share and will be subject to adjustment in the manner provided in the terms and conditions of the Bonds

• "Director(s)"

• director(s) of the Company

• "Encumbrance"

• a mortgage, charge, pledge, lien or other encumbrance or security interest securing any obligation of any person or any other arrangement with similar economic effect

• "Existing Loan"

the USD$150,000,000 term loan facility under the term loan facility agreement dated 12 November 2012 entered into between, inter alia, the Issuer, the subsidiary guarantors named therein, Deutsche Bank

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AG, Singapore Branch and Standard Chartered Bank (Hong Kong) Limited as arrangers, Deutsche Bank AG, Hong Kong Branch as agent and DB (Trustees (Hong Kong) Limited as security trustee, as amended from time to time

"Firm Bonds" the RMB Denominated USD Settled 3.0% Convertible Bonds due 2018 of an initial aggregate principal amount of RMB975 million (equivalent to approximately US$160 million) "Fixed Exchange Rate" HK$1.00 = RMB0.78638

“Global Certificate” a global certificate representing the Bonds to be issued

• "Group" the Company and its Subsidiaries and affiliates

"HK$" Hong Kong Dollars, the lawful currency of Hong Kong "Hong Kong" the Hong Kong Special Administrative Region of the PRC

• "Hong Kong Stock Exchange" The Stock Exchange of Hong Kong Limited "J.P. Morgan" J.P. Morgan Securities plc "Joint Bookrunners" J.P. Morgan and Standard Chartered Bank "Last Trading Day" 6 November 2013, being the last full trading day immediately before the time at which the Subscription Agreement is signed

"Listing Rules" the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• "Managers" J.P. Morgan, Standard Chartered Bank and China Galaxy International Securities (Hong Kong) Co., Limited

• "Motivator"

• Motivator Enterprises Limited

• "New Shares" Shares to be allotted and issued by the Company upon conversion of the Bonds

"Option Bonds" the additional RMB Denominated USD Settled 3.0% Convertible Bonds due 2018 of up to an aggregate principal amount of RMB125 million (equivalent to approximately US$20 million)

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"Option Closing Date"

• a date to be specified by the Sole Global Coordinator upon exercise of the option to subscribe for all or any of on which the Option Bonds, being a date which is at least two business days before the date on which the Option Bonds are to be issued by the Company against payment for the Option Bonds and no later than 5 business days after the date on which the option shall have been exercised

• "Permitted Holders"

• means Li Xuechun, Shi Guiling, Wu Xindong, Yan Ruliang, Feng Zhenquan, Xu Guohua, Li Deheng and Cheah Cheng Hye and any affiliate or related person of any of them

• "Person"

• includes any individual, company, corporation, firm, partnership, joint venture, undertaking, association, organisation, trust, state or agency of a state (in each case whether or not being a separate legal entity) but does not include the board of directors of the Company or any other governing board and does not include the wholly-owned direct or indirect Subsidiaries of the Company

• "PRC"

• the People’s Republic of China (for the purpose of this announcement excluding Hong Kong, Macau Special Administrative Region of the People’s Republic of China and Taiwan)

• "Regulation S" Regulation S under the Securities Act

• "Relevant Event"

A "Relevant Event" occurs:

• (i) when the Shares cease to be listed or admitted to trading or are suspended for trading for a period equal to or exceeding 30 consecutive days on the Hong Kong Stock Exchange or, if applicable, the Alternative Stock Exchange; or

• (ii) when there is a Change of Control

• "Relevant Indebtedness"

• includes any future or present indebtedness in the form of or represented by debentures, loan stock, bonds, notes, bearer participation certificates, depositary receipts, certificates of deposit or other similar securities or instruments or by bills of exchange drawn or accepted for the purpose of raising money which are, or are capable of being, quoted, listed, ordinarily dealt in or traded on any stock exchange or over-the-counter or on any other securities market (whether or not initially distributed by way of private placement), excluding the

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• Company's existing RMB denominated USD settled 4.5% convertible bonds due 2015 bonds and the trust and the Company's existing USD denominated 7.625% notes due 2016, and for the avoidance of doubt does not include bilateral loans, syndicated loans or club deal loans

"Required Security"

• the security required to ensure that the obligations of the Company under the Bonds and the trust deed are secured rateably and on a pari passu basis with the obligations of any amounts payable under (i) the Company's existing RMB denominated USD settled 4.5% convertible bonds due 2015 bonds and the trust deed constituting such bonds; and (ii) the Company's existing USD denominated 7.625% notes due 2016 and the indenture constituting such notes.

"RMB" or "Renminbi"

• Renminbi yuan, the lawful currency of the PRC

• "Securities Act"

• the US Securities Act of 1933, as amended

• "Security Documents"

• collectively, the share charges, the supplemental intercreditor agreement and any other agreements or instrument that in each case may evidence or create any security in favour of Citicorp International Limited (or its successors and assigns) as the security trustee for itself and the Bondholders in any or all of the relevant collateral

"Share(s)"

• the ordinary share(s) with par value of HK$0.10 each in the share capital of the Company

"Shareholder(s)"

the holder(s) of the Shares

• "Singapore Stock Exchange" Singapore Exchange Securities Trading Limited "Sole Global Coordinator"

J.P. Morgan

"Subscription Agreement"

the subscription agreement entered into between the Company and the Managers dated 6 November 2013 in respect of the issue of the Bonds

"Subsidiary(ies)"

any company or other business entity of which that person owns or controls (either directly or through one or more other Subsidiaries) more than 50% of the issued share capital or other ownership interest having ordinary voting power to elect directors, managers or trustees of such company or other business entity or any company or other business entity which at any time has its accounts consolidated with those of that person or which, under Cayman Islands law or Hong

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Kong law, regulations or generally accepted accounting principles from time to time, should have its accounts consolidated with those of that person

• "Subsidiary Guarantors"

• Initially, Acquest Honour Holdings Limited, Summit Challenge Limited, Absolute Divine Limited, Expand Base Limited, Profit Champion International Limited, Full Profit Investment (Group) Limited, Trans-Asia Capital Resources Limited, Fufeng International Trade (Hong Kong) Limited and Fufeng Singapore Pte. Ltd, pursuant to the trust deed constituting the Bonds, provided that such Subsidiary Guarantor has not been released in accordance with the trust deed constituting the Bonds

• "Trading Day"

a day when the Hong Kong Stock Exchange or, as the case may be an Alternative Stock Exchange is open for dealing business, provided that if no Closing Price is reported for one or more consecutive dealing days such day or days will be disregarded in any relevant calculation and shall be deemed not to have been dealing days when ascertaining any period of dealing days

• "Trustee"

Citicorp International Limited

• "US" or "United States"

the United States of America

• "US$", "USD" or "US Dollars" United States dollars, the lawful currency of the United States

"%"

per cent.

By order of the Board Fufeng Group Limited Li Xuechun Chairman

Hong Kong, 6 November 2013

As at the date of this announcement, the Board comprises: (1) Mr. Li Xuechun, Mr. Wang Longxiang, Mr. Feng Zhenquan, Mr. Xu Guohua, Mr. Li Deheng, Mr. Chen Yuan and Mr. Li Guangyu as executive Directors; (2) Mr. Choi Tze Kit, Sammy, Mr. Chen Ning, Mr. Liang Wenjun and Ms. Zheng Yu as independent non-executive Directors.

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