Fufeng Group Limited — Capital/Financing Update 2015

Jun 24, 2015

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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Fufeng Group Limited 阜豐集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 546)

ANNOUNCEMENT MADE PURSUANT TO RULE 13.09 OF THE LISTING RULES

This announcement is made by the Board pursuant to Rule 13.09(2)(a) of the Listing Rules and the inside information provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong).

THE PROPOSED DISPOSAL

After trading hours of 24 June 2015, the Vendor and the Purchaser entered into the SP Agreement, pursuant to which the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to acquire the Sale Share for a consideration of RMB10 million, which would be payable within 15 days upon signing of the SP Agreement. Pursuant to the SP Agreement, within 15 business days upon completion of the SP Agreement, the Purchaser and the Target Company undertake to repay the outstanding Loan of approximately RMB288.8 million payable by the Target Company to the Vendor. If the Purchaser and the Target Company is unable to repay such outstanding loan amount according to the deadline, a daily 0.03% interest would be imposed on the amount outstanding.

The Consideration was determined after arm’s length negotiations between the Vendor and the Purchaser by taking into account the net asset value of the Target Company as at 31 May 2015, which included the Loan owing by the Target Company to the Vendor of approximately RMB288.8 million. The Company has also considered the value of the Land with reference to a property valuation done by an independent PRC valuer.

To be best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Purchaser and its ultimate beneficial owner(s), are third parties independent of the Company and connected persons of the Company.

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INFORMATION ON THE TARGET COMPANY

The Target Company is an investment holding company and held parcel of lands which are located at Longshan Road (Northern section), Junan County, Shandong Province, PRC* (莒南 縣縣城隆山路北段). The aggregate site area of the Land is approximately 253,926.1 square metres, and the Land is designated for commercial use.

REASONS FOR AND BENEFITS OF THE DISPOSAL

Given that the Land is not for the development of our core business, the Directors consider that the Disposal would help realize cash for the reduction of net gearing and working capital of the Group, and in turn strengthen the overall balance sheet structure.

The Directors (including the independent non-executive Directors) believe that the terms of the SP Agreement are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

GENERAL

As no applicable percentage ratio (as defined under the Listing Rules) in respect of the Disposal exceed 5%, the Disposal, if materialize, will however not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. As the Disposal may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealings in the Shares of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning:

• “Board” the board of Directors of the Company “Company” Fufeng Group Limited, a company incorporated in the Cayman Islands with limited liability and the issued shares of which are listed on the Stock Exchange

• “Completion” completion of the Disposal “Consideration” the sum of RMB298.75 million, being the aggregate consideration for the sale and purchase of the Sale Shares and the entire sum of the Sale Loan

• “Directors” directors of the Company

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“Disposal”	the disposal of the Sale Shares and repayment of the
	outstanding amount of the Loan owing by the Target
	Company to the Vendor under the SP Agreement
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Third Party”	any person or company and their respective ultimate
	beneficial owner(s) which, to the best of the Directors’
	knowledge, information and belief, having made all
	reasonable enquiries, are third parties independent of the
	Company and its connected persons (as defined in the Listing
	Rules)
“Land”	seven parcel of lands which are located at Longshan Road
	(Northern section), Junan County, Shandong Province, PRC*
	(莒南縣縣城隆山路北段), of which the aggregate site area is
	approximately 253,926.1 square meters
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Loan”	the sum of debt owing to the Company by the Target
	Company as at the signing of the SP Agreement with an
	amount of approximately RMB288.8 million
“PRC”	the People’s Republic of China
“RMB”	Renminbi, the lawful currency of the PRC
“Sale Shares”	the entire issued share capital of the Target Company
“Shareholders”	shareholder(s) of the Company
“SP Agreement”	the sale and purchase agreement dated 24 June 2015 entered
	into between the Vendor and the Purchaser in relation to the
	Disposal
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

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“Target Company”

莒南北城置業有限公司 (Junan North City Property Company Limited*), a company incorporated in the PRC with limited liability

“Vendor”

山東阜豐發酵有限公司 (Shandong Fufeng Fermentation Co., Ltd.*), an indirect wholly-owned company of the Company

“%”

per cent

On behalf of the Board Fufeng Group Limited Li Xuechun Chairman

Hong Kong, 24 June 2015

As at the date of this announcement, the executive directors of the Company are Mr. Li Xuechun, Mr. Wang Longxiang, Mr. Feng Zhenquan, Mr. Xu Guohua, Mr. Li Deheng and Mr. Li Guangyu and the independent non-executive directors of the Company are Mr. Choi Tze Kit, Sammy, Mr. Qi Qingzhong and Ms. Zheng Yu.

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