Global Corn Group Limited — Capital/Financing Update 2017

Dec 8, 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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Global Bio-chem Technology Group Global Sweeteners Holdings Limited Company Limited 大成生化科技集團有限公司 * 大成糖業控股有限公司[*]

(incorporated in the Cayman Islands with limited liability) (incorporated in the Cayman Islands with limited liability) (Stock Code: 00809) (Stock code: 03889)

MAJOR TRANSACTION

PROVISION OF FINANCIAL ASSISTANCE TO A FORMER SUPPLIER

Whilst the management teams of GBT and GSH have been actively negotiating with BOC for the release of the Previous Supplier Guarantees and yet to receive a favourable result, the term of the Previous Supplier Loan had expired in September 2017. Based on the Former Supplier’s indication and the financial information of the Former Supplier available to GBT and GSH, the Former Supplier still did not have sufficient financial resources to repay the Previous Supplier Loan when the same fell due. Under the Previous Supplier Guarantees, BOC shall have the right to demand the Guarantors or any of them to repay the Previous Supplier Loan if the Former Supplier is in default. To avoid immediate demand for full repayment of the Previous Supplier Loan by the Guarantors or any of them pursuant to the Previous Supplier Guarantees, the Former Supplier proposes to refinance the Previous Supplier Loan by entering into the New Supplier Loan Agreements with BOC for the New Supplier Loan. As a condition to the New Supplier Loan, BOC has requested each of the Guarantors to enter into the New Supplier Guarantees to severally guarantee the obligations of the Former Supplier under the New Supplier Loan.

As the applicable percentage ratios in respect of each of the New Supplier Guarantees exceeded 25%, the New Supplier Guarantees constitute a major transaction of GBT and GSH and is therefore subject to the notification, announcement and shareholders’ approval requirements under the Listing Rules.

The circulars containing, among other things, further details of the New Supplier Guarantees together with a notice convening the GBT EGM and the GSH EGM, will be despatched by GBT and GSH to their respective shareholders on or before 29 December 2017.

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On 21 July 2017, the GSH Group entered into the S&P Agreement with the GBT Group, for the sale of the entire equity interest in Changchun Dihao and Dihao Crystal Sugar. Upon the completion of the S&P Agreement, Changchun Dihao will cease to be a member of the GSH Group and the GSH Group will then cease to be involved in the New Supplier Guarantees. While GSH is working on the fulfilment of the conditions set out in the S&P Agreement, the S&P Agreement is yet to be completed as at the date of this announcement. If the completion of the S&P Agreement takes place before the GSH EGM, the GSH EGM will not be convened and further announcement(s) will be made by GSH accordingly.

BACkGROUNd

Whilst the management teams of GBT and GSH have been actively negotiating with BOC for the release of the Previous Supplier Guarantees and yet to receive a favourable result, the term of the Previous Supplier Loan had expired in September 2017. Based on the Former Supplier’s indication and the financial information of the Former Supplier available to GBT and GSH, the Former Supplier still did not have sufficient financial resources to repay the Previous Supplier Loan when the same fell due. Under the Previous Supplier Guarantees, BOC shall have the right to demand the Guarantors or any of them to repay the Previous Supplier Loan if the Former Supplier is in default. To avoid immediate demand for full repayment of the Previous Supplier Loan by the Guarantors or any of them pursuant to the Previous Supplier Guarantees, the Former Supplier proposes to refinance the Previous Supplier Loan by entering into the New Supplier Loan Agreements with BOC for the New Supplier Loan. As a condition to the New Supplier Loan, BOC has requested each of the Guarantors to enter into the New Supplier Guarantees to severally guarantee the obligations of the Former Supplier under the New Supplier Loan.

Set out below are the principal terms of the New Supplier Loan Agreements:

Name of bank: BOC Borrower: The Former Supplier Loan principal: RMB2.49 billion Term of loan: 12 months from the respective date of drawdown Rate of interest: 38.5 basis points below the Loan Prime Rate quoted by the National Interbank Funding Center on the business day immediately before the respective date of signing of the New Supplier Loan Agreements, payable on a quarterly basis

Use of the loan proceeds: Refinancing of the Previous Supplier Loan

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Events of default:

There shall be an event of default if, among others, any of the following events shall have occurred or is continuing:

• (i) the Former Supplier fails to pay any sums when due in accordance with the terms of the New Supplier Loan Agreements;

• (ii) the Former Supplier fails to use the New Supplier Loan for the purpose set out in the New Supplier Loan Agreements;

• (iii) any of the representations or warranties by the Former Supplier have been untrue or incorrect or the Former Supplier fails to duly perform or observe any of its obligations under the New Supplier Loan Agreements;

• (iv) the creditability, profitability, ability of repayment, operational status or cash flow of the Former Supplier has become worsen;

• (v) the breach by the Former Supplier of any contract entered into with affiliates of BOC or any facility agreements entered into with other financial institutions;

• (vi) the breach of New Supplier Guarantees by any of the Guarantors;

• (vii) the termination of operation, dissolution or winding up of the Former Supplier.

Upon the occurrence of an event of default, BOC shall have the right to declare all outstanding indebtedness under the New Supplier Loan Agreements to be forthwith due and payable and shall have the right to demand the Guarantors to perform their guarantee obligations under the New Supplier Guarantees.

Security (other than the New Supplier Guarantees):

The Former Supplier shall pledge its receivables in favour of BOC.

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The terms of the New Supplier Guarantees are substantially the same as the Previous Supplier Guarantees. Details of the New Supplier Guarantees are as follows:

• Name of bank: BOC Guarantors: (i) Changchun Baocheng

• (ii) Changchun Dacheng Bio-tech

• (iii) Changchun Dahe

• (iv) Changchun Dihao

• (v) Changchun GBT

Guaranteed Amount: All indebtedness due and owing to BOC pursuant to the New Supplier Loan Agreements and the maximum principal amount guaranteed under the New Supplier Guarantees shall be RMB2.5 billion.

Date of expiry of the Two years from the respective expiry of the New Supplier Loan guarantee: Agreements

None of the GBT Guarantors and the GSH Guarantor receives, or will receive, any fee or commission for entering into the New Supplier Guarantees.

INFORMATION ABOUT THE FORMER SUPPLIER ANd BOC

The principal business of the Former Supplier is the purchase of corn kernels from local farmers in Changchun and other regions of the Jilin Province and the resale thereof to end users in the northeast provinces in the PRC.

The Former Supplier is beneficially majority-owned by the Labour Union, being the labour union of the PRC employees of the Group. To the best of the knowledge, information and belief of the GBT Directors and the GSH Directors having made all reasonable enquiries, save that (i) the Former Supplier was a former supplier of the Group of corn kernels, and (ii) the ultimate beneficial owner of the Former Supplier includes the labour union of the PRC employees of the Group, the Former Supplier and its ultimate beneficial owners are third parties independent of GBT, GSH and their respective connected persons, and the business and operations are separately managed by its owned management team, independent from that of the Group.

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Based on the unaudited financial statements provided by the Former Supplier, the Former Supplier has a negative net asset value of approximately RMB252.5 million as of 30 June 2017 and a net loss after taxation of approximately RMB62.4 million for the six months ended 30 June 2017.

To the best of the knowledge, information and belief of the GBT Directors and the GSH Directors having made all reasonable enquiries, save that BOC is one of the principal banks of the Group and GBT’s controlling shareholders, BOC and its ultimate beneficial owners are third parties independent of GBT, GSH and their connected persons of GSH. BOC is principally engaged in the provision of banking services.

INFORMATION OF THE GBT GROUP ANd THE GSH GROUP

The GBT Group is principally engaged in the manufacture and sale of corn refined products and corn based biochemical products.

The GSH Group is principally engaged in the manufacture and sale of corn refined products and corn based sweetener products.

REASONS FOR ENTERING INTO OF THE NEw SUPPLIER GUARANTEES

For the reasons set out in the paragraph headed “Reasons for entering into of the New Supplier Guarantees” or “Reasons for entering into of the GSH New Supplier Guarantee” in the 2016 Circulars, the Guarantors entered into the Previous Suppliers Guarantees.

As set out in the paragraph headed “Background” above, in order for the Former Supplier to obtain the New Supplier Loan for refinance of the Previous Supplier Loan so that the Guarantors would not be called upon to repay the Previous Supplier Loan pursuant to the Previous Supplier Guarantees, the Guarantors are required to enter into the New Supplier Guarantees.

The GBT Directors and the GSH Directors consider that given the inability of the Former Supplier to repay the Previous Supplier Loan, should the Guarantors refuse to enter into the New Supplier Guarantees which result in the Former Supplier’s failure to refinance the Previous Supplier Loan, BOC may enforce the Previous Supplier Guarantees. The entering into of the New Supplier Guarantees could facilitate the obtaining of the New Supplier Loan by the Former Supplier and therefore could avoid immediate demand for full repayment of the Previous Supplier Loan by the Guarantors or any of them pursuant to the Previous Supplier Guarantees. As such, the GBT Board and the GSH Board believe that the terms of the New Supplier Guarantees are fair and reasonable and in the interests of the GBT Shareholders and GSH Shareholders as a whole.

As at 30 June 2017, the aggregate net current liabilities of the GBT Guarantors amounted to approximately HK$1,368.4 million, while the net current liabilities of the GSH Guarantor amounted to approximately HK$356.3 million. On the other hand, both the Group (including the GSH Group) and the GSH Group were in consolidated net current liabilities position, with consolidated net

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current liabilities as at 30 June 2017 of approximately HK$4,839.5 million and HK$754.1 million, respectively. The consolidated cash and cash equivalent of each of the Group (including the GSH Group) and the GSH Group as at 30 June 2017 amounted to approximately HK$501.3 million and HK$99.3 million, respectively.

As such, if the Former Supplier fails to repay and/or refinance the Previous Supplier Loan and all or any of the Guarantors are demanded for immediate repayment of the Previous Supplier Loan pursuant to the Previous Supplier Loan Agreement, the Guarantors may not have sufficient resources to repay the indebtedness under the Previous Supplier Guarantees, and the GBT Group and the GSH Group may not have sufficient resources and liquidity to provide financial assistance to these Guarantors. If such circumstances arise, these Guarantors may need to dispose of all or any their assets and/or their respective businesses in order to satisfy the Previous Supplier Loan, failing which may result in the liquidation of these Guarantors.

Each of GBT and GSH has also provided intra-group corporate guarantees in respect of the other banking facilities of the GBT Guarantors and the GSH Guarantor, respectively. As at 30 June 2017, the outstanding amount of the banking facilities of the GBT Guarantors guaranteed by GBT amounted to approximately RMB5,531.8 million, while the outstanding amount of the banking facilities of the GSH Guarantor guaranteed by GSH amounted to approximately RMB180.0 million. If any of these Guarantors is demanded but fails to repay the Previous Supplier Loan pursuant to the Previous Supplier Guarantees, or any of them is forced to dispose of its material assets or businesses or is forced to go into liquidation, GBT or, as the case may be, GSH may be demanded by all or any of the banks for immediate repayment of these banking facilities. If GBT or, as the case may be, GSH, does not have sufficient resources to repay the indebtedness under these corporate guarantees, it may need to raise further financing or otherwise dispose of its other assets or businesses in order to honour its obligations under these corporate guarantees. There is no assurance that GBT or, as the case may be, GSH may be able to raise sufficient funds for honouring these corporate guarantees. Any disposal by GBT or, as the case may be, GSH of its principal operating assets and/or business may have significant adverse impact on the business and operational performance of the GBT Group or, as the case may be, the GSH Group.

The GBT Board and the GSH Board believe that, by entering into the New Supplier Guarantees, BOC would not enforce the Previous Supplier Guarantees immediately. In the meantime, the Group will continue to actively negotiate with BOC to reach an agreement for better and long-term solution. The Group will also strive to strengthen its cash position by, among others, debt restructuring and/or seeking financial or other support from the ultimate controlling shareholder of GBT.

LISTING RULES IMPLICATIONS

As the applicable percentage ratios in respect of each of the New Supplier Guarantees exceeded 25%, the New Supplier Guarantees constitute a major transaction of GBT and GSH and is therefore subject to the notification, announcement and shareholders’ approval requirements under the Listing Rules.

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The circulars containing, among other things, further details of the New Supplier Guarantees together with a notice convening the GBT EGM and the GSH EGM, will be despatched by GBT and GSH to their respective shareholders on or before 29 December 2017.

On 21 July 2017, the GSH Group entered into the S&P Agreement with the GBT Group, for the sale of the entire equity interest in Changchun Dihao and Dihao Crystal Sugar. Upon the completion of the S&P Agreement, Changchun Dihao will cease to be a member of the GSH Group and the GSH Group will then cease to be involved in the New Supplier Guarantees. While GSH is working on the fulfilment of the conditions set out in the S&P Agreement, the S&P Agreement is yet to be completed as at the date of this announcement. If the completion of the S&P Agreement takes place before the GSH EGM, the GSH EGM will not be convened and further announcement(s) will be made by GSH accordingly.

dEFINITIONS

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

• “2016 Circulars” the circulars made by GBT and GSH dated 6 September 2016 in relation to, among others, the Previous Supplier Guarantees

• “BOC” 中國銀行股份有限公司偉峰國際支行 (Bank of China Weifeng International Branch)

• “Changchun Baocheng” 長春寶成生化發展有限公司 (Changchun Baocheng Bio-chem Development Co., Ltd.), a sino-foreign enterprise established in the PRC and an indirect wholly owned subsidiary of GBT

• “Changchun Dacheng 長春大成生物科技開發有限公司 (Changchun Dacheng Bio-tech Bio-tech” Development Co., Ltd.), a sino-foreign enterprise established in the PRC and an indirect wholly owned subsidiary of GBT

• “Changchun Dahe” 長春大合生物技術開發有限公司 (Changchun Dahe Bio Technology Development Co., Ltd.), a wholly foreign owned enterprise established in the PRC and an indirect wholly owned subsidiary of GBT

• “Changchun Dihao” 長春帝豪食品發展有限公司 (Changchun Dihao Foodstuff Development Co., Ltd.), a wholly foreign owned enterprise established in the PRC and an indirect wholly owned subsidiary of GSH

• “Changchun GBT” 長春金寶特生物化工有限公司 (Changchun GBT Bio-Chemical Co., Ltd.), a sino-foreign enterprise established in the PRC and an indirect wholly owned subsidiary of GBT

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“Dihao Crystal Sugar”	長春帝豪結晶糖開發實業有限公司(Changchun Dihao Crystal Sugar
	Industry Development Co., Ltd.), a wholly foreign owned enterprise
	established in the PRC and a wholly owned subsidiary of GSH
“Former Supplier”	長春大金倉玉米收儲有限公司(Changchun Dajincang Corn
	Procurement Co., Ltd.), a sino-foreign enterprise established in
	the PRC which is beneficially owned by the Labour Union as
	to approximately 98.91% and an Independent Third Party as to
	approximately 1.09%
“GBT”	Global Bio-chem Technology Group Company Limited, a company
	incorporated in the Cayman Islands and the issued shares of which
	are listed on the Stock Exchange
“GBT Board”	the board of directors of GBT
“GBT Directors”	the directors of GBT
“GBT EGM”	an extraordinary general meeting of GBT to be convened and held
	to consider and, if thought fit, approve the New Supplier Guarantees
	and the transactions contemplated thereunder
“GBT Group”	GBT and its subsidiaries which, for the purpose of this
	announcement, excludes the GSH Group
“GBT Guarantors”	Changchun Baocheng, Changchun Dacheng Bio-tech, Changchun
	Dahe, Changchun GBT or either of them
“GBT New Supplier	the various guarantees to be executed by each of the GBT Guarantors
Guarantees”	for the benefit of the Former Supplier
“GBT Shareholders”	the shareholders of GBT
“Group”	the GBT Group and the GSH Group
“GSH”	Global Sweeteners Holdings Limited, a company incorporated in
	the Cayman Islands and the issued shares of which are listed on the
	Stock Exchange
“GSH Board”	the board of directors of GSH
“GSH Directors”	the directors of GSH

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“GSH EGM”	an extraordinary general meeting of GSH to be convened and held
	to consider and, if thought fit, approve the GSH New Supplier
	Guarantee and the transactions contemplated thereunder
“GSH Group”	GSH and its subsidiaries
“GSH Guarantor”	Changchun Dihao
“GSH New Supplier	the guarantee to be executed by the GSH Guarantor for the benefit
Guarantee”	of the Former Supplier
“GSH Shareholders”	the shareholders of GSH
“Guarantors”	the GBT Guarantors and the GSH Guarantor
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Third Party”	a person or an entity which, to the best of the respective GBT
	Directors’ and GSH Directors’ knowledge, information and belief
	having made all reasonable enquiry, that it and its ultimate beneficial
	owners (in the case of an entity) are third parties independent of
	GBT, GSH and their respective connected persons
“Labour Union”	the labour union of the PRC employees of the Group
“Listing Rules”	Rules Governing the Listing of Securities on the Stock Exchange
“New Supplier Guarantees”	the GBT New Supplier Guarantees and the GSH New Supplier
	Guarantee
“New Supplier Loan”	all indebtedness due and owing to BOC pursuant to the New Supplier
	Loan Agreement(s)
“New Supplier Loan	the loan agreement(s) to be entered into between the Former Supplier
Agreement(s)”	and BOC in relation to the New Supplier Loan
“PRC”	People’s Republic of China
“Previous Supplier	the various guarantees given by each of the Guarantors for the
Guarantees”	benefit of the Former Supplier as disclosed in the 2016 Circulars

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“Previous Supplier Loan” the loan advanced by BOC to the Former Supplier under the Previous Supplier Loan Agreements with an aggregate principal amount of RMB2.49 billion

• “Previous Supplier Loan various loan agreements entered into between the Former Supplier Agreements” and BOC in 2016 and 2017

• “RMB” Renminbi, the lawful currency in the PRC

“S&P Agreement” the agreement dated 21 July 2017 entered into between the GBT Group and the GSH Group in relation to the acquisition by the GBT Group and the disposal by the GSH Group of the entire equity interest in Dihao Crystal Sugar and Changchun Dihao

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

By order of the GBT Board

Global Bio-chem Technology Group

Company Limited Yuan weisen

By order of the GSH Board Global Sweeteners Holdings Limited kong Zhanpeng Chairman

Chairman

Hong Kong, 8 December 2017

As at the date of this announcement, the GBT Board comprises two executive directors, namely, Mr. Yuan Weisen and Mr. Zhang Zihua; and three independent non-executive directors, namely, Mr. Ng Kwok Pong, Mr. Yeung Kit Lam and Ms. Chiu Lai Ling Shirley.

As at the date of this announcement, the GSH Board comprises two executive directors, namely, Mr. Kong Zhanpeng and Mr. Zhang Zihua; and three independent non-executive directors, namely, Mr. Ho Lic Ki, Mr. Lo Kwing Yu and Mr. Yuen Tsz Chun.

• For identification purposes only

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