Fufeng Group Limited — Capital/Financing Update 2013

Apr 30, 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.

Distribution of this announcement into jurisdictions other than Hong Kong may be restricted by law. Persons into whose possession this announcement comes should inform themselves of and observe any such restrictions. This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States. This announcement is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Neither this announcement nor anything in this announcement forms the basis for any contract or commitment whatsoever.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or the laws of any state of the United States, and may not be offered or sold within the United States, absent registration or an exemption from the registration requirements of the U.S. Securities Act and applicable state laws. There is no intention to register any portion of the Rights Issue or any securities described herein in the United States or to conduct a public offering of securities in the United States.

==> picture [74 x 57] intentionally omitted <==

Fufeng Group Limited 阜豐集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 546)

RESULTS OF THE RIGHTS ISSUE OF 348,209,600 RIGHTS SHARES AT HK$1.80 EACH ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY FIVE SHARES HELD ON THE RECORD DATE AND ADJUSTMENTS TO THE EXERCISE PRICE AND NUMBER OF SHARE OPTIONS AND THE CONVERSION PRICE OF THE CONVERTIBLE BONDS

Joint Financial Advisors to Fufeng Group Limited

==> picture [163 x 33] intentionally omitted <==

Joint Underwriters of the Rights Issue

==> picture [164 x 33] intentionally omitted <==

– 1 –

RESULTS OF THE RIGHTS ISSUE

The Board is pleased to announce that as at 4:00 p.m. on Thursday, 25 April 2013, being the latest time for acceptance of and payment for the Rights Shares and application and payment for excess Rights Shares, a total of 2,100 valid acceptances and applications were received for a total of 9,668,025,586 Rights Shares, which comprised:

• (a) 1,055 valid acceptances of provisional allotments for a total of 337,693,927 Rights Shares, representing approximately 97.0% of the total number of Rights Shares under the Rights Issue; and

• (b) 1,045 valid applications for a total of 9,330,331,659 excess Rights Shares, representing approximately 2,679.5% of the total number of Rights Shares under the Rights Issue.

In aggregate, they represented approximately 27.8 times of the 348,209,600 Rights Shares available for subscription under the Rights Issue.

UNDERWRITING AGREEMENT

As all the conditions set out in the Underwriting Agreement had been fulfilled and the Underwriting Agreement had not been terminated by the Joint Underwriters at or before 4:00p.m. on Monday, 29 April 2013, the Rights Issue and the Underwriting Agreement became unconditional at 4:00 p.m. on Monday, 29 April 2013. As the Rights Issue was over-subscribed, the obligations of the Joint Underwriters in respect of the Underwritten Rights Shares have been fully discharged.

EXCESS RIGHTS SHARES

Based on the number of valid acceptances referred to above, 10,515,673 Rights Shares were available as excess Rights Shares for subscription under the EAFs. The Board has resolved to allot all the excess Rights Shares as set out below in this announcement.

DESPATCH OF THE SHARE CERTIFICATES FOR FULLY-PAID RIGHTS SHARES AND REFUND CHEQUES

Share certificates for fully-paid Rights Shares in respect of valid acceptances of the Rights Shares under the PALs, successful applications for excess Rights Shares under the EAFs and the refund cheques in respect of the wholly or partially unsuccessful applications for excess Rights Shares under the EAFs will be despatched to the applicant(s)/allottee(s) who are entitled thereto by ordinary post to their registered address(es), at their own risk, on or around Thursday, 2 May 2013.

– 2 –

COMMENCEMENT OF DEALINGS IN RIGHTS SHARES IN FULLY-PAID FORM

Dealings in the fully-paid Rights Shares on the Stock Exchange are expected to commence at 9:00 a.m. on Friday, 3 May 2013.

ADJUSTMENTS TO THE EXERCISE PRICE AND NUMBER OF SHARE OPTIONS AND THE CONVERSION PRICE OF THE CONVERTIBLE BONDS

As a result of the Rights Issue, adjustments will be made to (i) the exercise price and the number of Shares to be allotted and issued under the outstanding Share Options; and (ii) the conversion price of the Convertible Bonds; details of which are set out in the section headed “Adjustments to the exercise price and number of Share Options and the conversion price of the Convertible Bonds” in this announcement.

Reference is made to the prospectus (the “Prospectus”) of Fufeng Group Limited (the “Company”) dated 11 April 2013 in relation to the Rights Issue. Unless otherwise stated, capitalised terms used herein shall bear the same meanings as defined in the Prospectus.

RESULTS OF THE RIGHTS ISSUE

The Board is pleased to announce that as at 4:00 p.m. on Thursday, 25 April 2013, being the latest time for acceptance of and payment for the Rights Shares and application and payment for excess Rights Shares, a total of 2,100 valid acceptances and applications were received for a total of 9,668,025,586 Rights Shares, which comprised:

• (a) 1,055 valid acceptances of provisional allotments for a total of 337,693,927 Rights Shares, representing approximately 97.0% of the total number of Rights Shares under the Rights Issue; and

• (b) 1,045 valid applications for a total of 9,330,331,659 excess Rights Shares, representing approximately 2,679.5% of the total number of Rights Shares under the Rights Issue.

In aggregate, they represented approximately 27.8 times of the 348,209,600 Rights Shares available for subscription under the Rights Issue.

UNDERWRITING AGREEMENT

As all the conditions set out in the Underwriting Agreement had been fulfilled and the Underwriting Agreement had not been terminated by the Joint Underwriters at or before 4:00p.m. on Monday, 29 April 2013, the Rights Issue and the Underwriting Agreement became unconditional at 4:00 p.m. on Monday, 29 April 2013. As the Rights Issue was oversubscribed, the obligations of the Joint Underwriters in respect of the Underwritten Rights Shares have been fully discharged.

– 3 –

EXCESS RIGHTS SHARES

Based on the number of valid acceptances referred to above, 10,515,673 Rights Shares were available as excess Rights Shares for subscription under the EAFs. The Board has resolved to allot all the excess Rights Shares as set out below in this announcement.

EXCESS APPLICATIONS

Based on the number of valid acceptances referred to above, 10,515,673 Rights Shares were available as excess Rights Shares for subscription under the EAFs. Given that the number of excess Rights Shares is insufficient to satisfy all valid applications but the 10,515,673 Rights Shares available for allocation are sufficient to top-up all odd lots to whole board lots, the Board has resolved to allocate the 10,515,673 excess Rights Shares on a fair and equitable basis as far as practicable on the principles set forth in the Prospectus, as follows:

• (i) 880,673 excess Rights Shares have been allocated to 1,002 applications for topping up odd-lot holdings to whole-lot holdings; and

• (ii) the remaining 9,635,000 excess Rights Shares have been allocated to the Qualifying Shareholders based on a pro-rata basis with reference to the number of excess Rights Shares applied for by them, with flexibility to round up to whole-lot holdings, details of which are set out below:

Number of excess Rights Shares applied for under each valid excess application 1 to 999 1,000 to 32,310,999 9,194,128,859 Total	Number of valid excess applications 189 855 1 1,045	Total number of excess Rights Shares applied for 146,211 136,056,589 9,194,128,859 9,330,331,659	Total number of excess Rights Shares allocated Approximate percentage of allocation based on the total number of excess Rights Shares applied for Basis of allocation (Note) 146,211 100.000% Allot odd Shares applied for in full Allot odd Shares applied for in full plus 0.096% of the remaining excess Rights Shares applied for (rounded up to the nearest board lot) Allot approximately 0.094% of the excess Rights Shares applied for 1,691,589 1.243% 8,677,873 0.094% 10,515,673

Note: The number of excess Rights Shares allocated has been rounded up (as appropriate) to eliminate any fractional Shares which may arise after the foregoing basis of allocation has been applied.

– 4 –

The Board is of the view that the above basis of allotment is fair and equitable to the Qualifying Shareholders who applied for excess Rights Shares under each application.

SHAREHOLDING STRUCTURE OF THE COMPANY

To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, the shareholding structure of the Company immediately before and after completion of the Rights Issue is as follows:

BVI Controlling Shareholder BVI1 BVI2 BVI3 BVI4 Mr. Wang Other public Shareholders Total	Immediately before completion of the Rights Issue(Note 1) Shares Approximate % 802,781,000 46.1 185,112,000 10.6 51,456,000 3.0 57,600,000 3.3 57,600,000 3.3 6,910,000 0.4 579,589,000 33.3 1,741,048,000 100	Immediately after completion of the Rights Issue(Notes 2 and 3) Shares Approximate % 963,342,440 46.1 222,134,400 10.6 61,747,200 3.0 69,120,000 3.3 69,120,000 3.3 8,292,000 0.4 695,501,560 33.3 2,089,257,600 100	Immediately after completion of the Rights Issue(Notes 2 and 3) Shares Approximate % 963,342,440 46.1 222,134,400 10.6 61,747,200 3.0 69,120,000 3.3 69,120,000 3.3 8,292,000 0.4 695,501,560 33.3 2,089,257,600 100
			100

Note:

• (1) Based on the information in the disclosure of interests register which is required to be kept by the Company under s336 of the SFO and the Shares held by parties as confirmed by the Irrevocable Undertakings.

• (2) Certain percentage figures included in this table have been subject to rounding adjustment. Accordingly, figures shown as totals may not be an arithmetic aggregation of the figures preceding them.

• (3) Certain figures included in this table have been subject to rounding adjustment based on the number of excess Rights Shares expected to be allocated under the above basis of allocation for applications for excess Rights Shares.

DESPATCH OF THE SHARE CERTIFICATES FOR FULLY-PAID RIGHTS SHARES AND REFUND CHEQUES

Share certificates for fully-paid Rights Shares in respect of valid acceptances of the Rights Shares under the PALs, successful applications for excess Rights Shares under the EAFs and the refund cheques in respect of the wholly or partially unsuccessful applications for excess Rights Shares under the EAFs will be despatched to the applicant(s)/allottee(s) who are entitled thereto by ordinary post to their registered address(es), at their own risk, on or around Thursday, 2 May 2013. Applicant(s)/allotee(s) will receive one Share certificate for all the Rights Shares allotted and issued to him/her/it.

– 5 –

COMMENCEMENT OF DEALINGS IN RIGHTS SHARES IN FULLY-PAID FORM

Dealings in the fully-paid Rights Shares on the Stock Exchange are expected to commence at 9:00 a.m. on Friday, 3 May 2013.

ADJUSTMENTS TO THE EXERCISE PRICE AND NUMBER OF SHARE OPTIONS AND THE CONVERSION PRICE OF THE CONVERTIBLE BONDS

As disclosed in the announcement of the Company dated 26 March 2013 and the Prospectus, the Rights Issue, if it becomes unconditional, will cause adjustments to (i) the exercise price and the number of Shares to be allotted and issued under the outstanding Share Options; and (ii) the conversion price of the Convertible Bonds.

Adjustments to the exercise price and number of Share Options

As at the date of this announcement, the Company has outstanding Share Options in respect of 50,270,000 Shares (comprising 45,270,000 Share Options granted on 14 July 2009 and 5,000,000 Share Options granted on 9 November 2010) of which Share Options in respect of 29,878,200 Shares have been vested and are exercisable as at the date of this announcement.

In accordance with the respective terms of the Share Options granted on 14 July 2009 and Share Options granted on 9 November 2010 and in compliance with Rule 17.03(13) of the Listing Rules and the supplementary guidance issued by the Stock Exchange on 5 September 2005, the exercise price and the number of Shares to be allotted and issued upon full exercise of the outstanding Share Options will be adjusted in the following manner:

	Exercise price	Number of Share	Adjusted exercise	Adjusted number
	per Share before	Options before	price per Share	of Share Options
Date of grant of	completion of the	completion of the	after completion	after completion
the Share Options	Rights Issue	Rights Issue	of the Rights Issue	of the Rights Issue
	(HK$)		(HK$)
14 July 2009	3.00	45,270,000	2.80	48,486,197
9 November 2010	8.20	5,000,000	7.66	5,355,224

The above adjustments will become effective on 2 May 2013 upon the allotment and issue of the Rights Issue. Separate notification regarding the adjustments will be sent to each of the holders of the Share Options. PricewaterhouseCoopers, the auditor of the Company, has reviewed and confirmed that the adjustments satisfy the requirements set out in the Note to Rule 17.03(13) of the Listing Rules.

Adjustments to the conversion price of the Convertible Bonds

As at the date of this announcement, the Company has Outstanding Convertible Bonds with an outstanding principal amount of RMB13,200,000.

– 6 –

As a result of the Rights Issue, the conversion price of the Outstanding Convertible Bonds will be adjusted in the following manner:

Conversion price per Adjusted conversion price per Share before completion Share after completion of the Rights Issue of the Rights Issue (HK$) (HK$) 7.03 6.56

Separate notification regarding the adjustment will be sent to each of the holders of the Convertible Bonds.

By Order of the Board Fufeng Group Limited Li Xuechun Chairman

Hong Kong, 30 April 2013

As at the date of this announcement, the executive Directors are Mr. Li Xuechun, Mr. Wang Longxiang, Mr. Feng Zhenquan, Mr. Xu Guohua, Mr. Li Deheng, Mr. Chen Yuan and Mr. Li Guangyu and the independent non-executive Directors are Mr. Choi Tze Kit, Sammy, Mr. Chen Ning, Mr. Liang Wenjun and Ms. Zheng Yu.

– 7 –