Global Corn Group Limited — Capital/Financing Update 2011

Nov 17, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibilities for the content 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.

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司[*]

(incorporated in the Cayman Islands with limited liability)

(Stock code: 03889)

COMPLETION OF THE TRANSACTION IN RELATION TO A CORN REFINERY PLANT

SALES AGENCY AGREEMENT

IN RESPECT OF SALES OF CORN STARCH AND OTHER CO-PRODUCTS

The Board is pleased to announce that the Transaction was completed on 17 November 2011.

Pursuant to the terms of the S&P Agreement, the Group entered into the Jincheng Sales Agency Agreement with the GBT Group on 17 November 2011.

COMPLETION OF THE TRANSACTION

Reference is made to the joint announcement of the Company and GBT on 2 September 2011 and the circular of the Company dated 26 September 2011 in relation to, among others, the Transaction.

The Board is pleased to announce that all conditions precedent under the S&P Agreement have been satisfied and Completion has taken place on 17 November 2011. Accordingly, the Target Group became wholly owned subsidiaries of the Company.

* for identification purpose only

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SALES AGENCY AGREEMENT IN RESPECT OF SALES OF CORN STARCH AND OTHER CO-PRODUCTS

Pursuant to the S&P Agreement, Changchun Jincheng and Global Corn have entered into the Jincheng Sales Agency Agreement on 17 November 2011. Under the Jincheng Sales Agency Agreement, Changchun Jincheng has appointed Global Corn (for itself and on behalf of the GBT Group) as its exclusive agent for the sale of the Co-products and corn starch in excess of its internal consumption from time to time produced by Changchun Jincheng from 17 November 2011 to 31 December 2013 (both dates inclusive).

The Jincheng Sales Agency Agreement is renewable by Changchun Jincheng on the same terms and conditions (including Changchun Jincheng’s right of renewal) for a successive term of three years upon its expiry subject to the compliance by GBT and/or the Company of the applicable announcement and/or shareholders’ approval requirement under the Listing Rules in connection with the transaction contemplated under the Jincheng Sales Agency Agreement. The GBT Group will use its best endeavours to procure the sale and marketing of the Co-products and corn starch as exclusive agent of Changchun Jincheng, and will sell the Co-products and corn starch produced by Changchun Jincheng in priority to any Co-products and corn starch produced by any members of the GBT Group (other than those goods produced by Global Corn or any member of the GBT Group for sales in Jilin and Heilongjiang Provinces of the PRC).

Changchun Jincheng shall reimburse the GBT Group for its costs for the performance of its obligations under the Jincheng Sales Agency Agreement on a semi-annual basis and there will not be any other agency fee being charged by the GBT Group for the services rendered.

The transactions contemplated under the Jincheng Sales Agency Agreement and the Yuancheng Sales Agency Agreement are aggregated as a single transaction as they involve the provision of sales agency services by the same connected person pursuant to Rule 14A.27 of the Listing Rules. The following table sets out the annual caps under the Sales Agency Agreements for each of the three years ending 31 December 2013:

Year ending 31 December 2011 2012 2013

Annual caps HK$8.5 million HK$10.2 million HK$12.4 million

The above annual caps have been determined with reference to the average selling expense (after deduction of transportation expenses which have been incurred by Jinzhou Yuancheng and will be incurred by Changchun Jincheng directly in the future) per tonne of corn starch and Co-products incurred by the GBT Group in connection with Jinzhou Yuancheng and Changchun Jincheng during the year ended 31 December 2010, the production capacity of Jinzhou Yuancheng and Changchun Jincheng, the expected internal consumption of corn starch by the Group during each of the three financial years ending 31 December 2013 and an annual inflation of the selling expenses at an estimated rate of 5%.

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Reasons for the continuing connected transactions

As stated in the annual report of the Company for the year ended 31 December 2010, the Group is expanding its production capacity by establishing new production facilities and enhancing and expanding its existing production facilities. Pending completion of such expansion, the corn starch produced by Changchun Jincheng will be in excess for the internal consumption of the Group. Besides, in the course of production of corn starch, certain co-products including the Co-products are produced at the same time which are not required by the Group for its own production use. Prior to the Completion, the GBT Group has been selling corn starch and Co-products produced by Changchun Jincheng for and on its behalf through the distribution network of the GBT Group originated from Changchun. Since the sales teams of the GBT Group are experienced and have already established relationships with prospective customers, and given their established distribution channels for the Co-products and corn starch across the whole of the PRC, the Directors believe that it will be more efficient to sell the Co-products and corn starch in excess of internal consumption produced by Changchun Jincheng to independent third parties by leveraging on the sales teams and network already established by the GBT Group. As such, the arrangements under the Jincheng Sales Agency Agreement can serve to enable the Group to concentrate on its corn sweeteners business while the GBT Group can handle its Co-products and corn starch produced in excess of internal consumption.

The Directors, including the independent non-executive Directors, consider the Jincheng Sales Agency Agreement and the related annual caps are fair and reasonable and in the interests of the Company and its shareholders as a whole.

Listing Rules implications

As at the date of this announcement, Global Corn is wholly owned by GBT (a controlling shareholder of the Company) and hence an associate of GBT. Changchun Jincheng is an indirect wholly owned subsidiary of the Company. Therefore, the transactions contemplated under the Jincheng Sales Agency Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

Since the annual caps under the Sales Agency Agreements represent less than 5% of each of the applicable percentage ratios under the Listing Rules, the transactions contemplated under the Sales Agency Agreements are only subject to the reporting, announcement and annual review requirements set out in Rules 14A.45 to 14A.47 and Rules 14A.37 to 14A.40 of the Listing Rules and are exempt from independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

As each of Mr. Kong Zhanpeng and Mr. Xu Zhouwen is interested in more than 5% of the issued share capital of GBT, they are considered to have a material interest in the Jincheng Sales Agency Agreement and have abstained from voting on the Board resolution approving the Jincheng Sales Agency Agreement. Other than Mr. Kong Zhanpeng and Mr. Xu Zhouwen, no Director has a material interest in the Jincheng Sales Agency Agreement.

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Review of the Jincheng Sales Agency Agreement

As disclosed in prospectus of the Company for its initial public offering dated 10 September 2007, the Board has established the CCT Supervisory Committee for monitoring, review and management of the continuing connected transactions between the Group and the GBT Group from time to time. The CCT Supervisory Committee has reviewed and approved the Jincheng Sales Agency Agreement and considered that the terms of the Jincheng Sales Agency Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole.

The continuing connected transactions under the Jincheng Sales Agency Agreement will also be subject to the half-yearly review by the CCT Supervisory Committee and the auditors of the Company.

The current Prescribed Guidelines contain procedures regarding the monitoring of the Yuancheng Sales Agency Agreement. In view of the entering into of the Jincheng Sales Agency Agreement, the Board has revised the Prescribed Guidelines on 16 November 2011 so that the Jincheng Sales Agency Agreement will be monitored under the same procedures as that of the Yuancheng Sales Agency Agreement. Any findings and any further changes to the Prescribed Guidelines will be reported by way of announcement on a half-yearly basis, and by inclusion in the corporate governance report in the Company’s annual report.

DEFINITIONS

Unless the context otherwise requires, the following terms shall have the meanings set out below:

• “associate(s)” shall have the same meaning as ascribed to it under the Listing Rules “Board” the board of Directors “CCT Executive Committee” the independent management team comprising two disinterested Directors, namely Mr. Zhang Fazheng and Mr. Lee Chi Yung, established by the Board and responsible for monitoring, review and management of the continuing connected transactions between the Group and the GBT Group

• “CCT Supervisory the committee comprising the three independent non-executive Committee” Directors established by the Board to supervise the CCT Executive Committee

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“Changchun Jincheng”	長春金成玉米開發有限公司(Changchun Jincheng Corn Development
	Co., Ltd.), a wholly foreign owned enterprise established in the PRC
	and a wholly owned subsidiary of the HK Subsidiary
“Co-products”	steepwater liquid, corn oil, germ cake, corn fibre feed, corn gluten
	meal, corn gluten feed pellets and/or such other types of products
	other than corn starch as being the types of co-products that are to
	be sold under the Sales Agency Agreements
“Company”	Global Sweeteners Holdings Limited, a company incorporated under
	the laws of the Cayman Islands with limited liability and the shares
	of which are listed on the Stock Exchange
“Completion”	completion of the S&P Agreement in accordance with its terms
“Directors”	the directors of the Company
“GBT”	Global Bio-chem Technology Group Company Limited, a company
	incorporated in the Cayman Islands and the shares of which are
	listed on the Stock Exchange
“GBT Group”	GBT and its subsidiaries which, for the purpose of this
	announcement, excludes the Group
“Global Corn”	Global Corn Investments Limited, a company incorporated in the
	British Virgin Islands and a wholly owned subsidiary of GBT
“Group”	the Company and its subsidiaries
“HK Subsidiary”	Global Starch (Changchun) Investments Limited, a company
	incorporated in Hong Kong and a wholly-owned subsidiary of the
	Target Company
“HK$”	Hong Kong dollars, the lawful currency in Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Jincheng Sales Agency	the sales agency agreement dated 17 November 2011 and entered
Agreement”	into between Changchun Jincheng and Global Corn in relation to
	the distribution of the Co-products and corn starch for the term
	commencing from 17 November 2011 to 31 December 2013 (both
	dates inclusive)

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• “Jinzhou Yuancheng” 錦州元成生化科技有限公司 (Jinzhou Yuancheng Bio-chem Technology Co., Ltd.), a wholly foreign owned enterprise established in the PRC and a wholly owned subsidiary of the Company

• “Listing Rules” Rules Governing the Listing of Securities on the Stock Exchange

• “PRC” People’s Republic of China “Prescribed Guidelines” detailed rules and guidelines devised by the CCT Supervisory Committee from time to time in respect of the continuing connected transactions between the Group and the GBT Group

• “S&P Agreement” the agreement in relation to the Transaction dated 2 September 2011 entered into between the Vendor and the Company

• “Sales Agency Agreements” the Jincheng Sales Agency Agreement and the Yuancheng Sales Agency Agreement

• “Shareholder Loans” such amount as equals to 100% of the face value of all debts and liabilities owing by any member of the Target Group to the Vendor (whether arising primarily from advances made by or on behalf of the Vendor to any member of the Target Group or derived from any payment by the Vendor on behalf of such member of the Target Group) on Completion

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “Target Company” Global Starch (BVI) Investments Limited, a company incorporated in the British Virgin Islands with limited liability and wholly-owned by the Company

• “Target Group” the Target Company, HK Subsidiary and Changchun Jinchang

• “Transaction” the acquisition by the Company and the disposal by the Vendor of the entire issued share capital in, and Shareholders Loans of, the Target Company pursuant to the S&P Agreement

• “Vendor” Global Corn Investments (HK) Limited, a company incorporated in Hong Kong and a wholly owned subsidiary of GBT

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“Yuancheng Sales Agency Agreement”

the sales agency agreement dated 10 December 2010 and entered into between Jinzhou Yuancheng and Global Corn in relation to the distribution of the Co-products and corn starch for the term commencing from 1 January 2011 to 31 December 2013 (both dates inclusive)

By order of the Board Global Sweeteners Holdings Limited Kong Zhanpeng Chairman

Hong Kong, 17 November 2011

As at the date of this announcement, the Board comprises four executive directors, namely Mr. Kong Zhanpeng, Mr. Zhang Fazheng, Mr. Xu Zhouwen and Mr. Lee Chi Yung; and three independent nonexecutive directors, namely Mr. Chan Yuk Tong, Mr. Gao Yunchun and Mr. Ho Lic Ki.

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