Global Corn Group Limited — Capital/Financing Update 2018

Nov 6, 2018

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.

==> picture [113 x 35] intentionally omitted <==

GLOBAL BIO-CHEM TECHNOLOGY GLOBAL SWEETENERS GROUP COMPANY LIMITED HOLDINGS 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) (Stock Code: 00809)

(incorporated in the Cayman Islands with limited liability)

(Stock code: 03889)

MAJOR TRANSACTION

PROVISION OF FINANCIAL ASSISTANCE TO DAJINCANG

As disclosed in the respective interim reports of GBT and GSH for the six months ended 30 June 2018, the management of the Group has continued to negotiate with BOC to find solutions to relieve the Group from its obligations under the Previous Supplier Guarantees, and continued to explore other alternatives in case Dajincang fails to repay the Previous Supplier Loan, in the event of which will trigger the Group’s obligations as guarantor pursuant to the Previous Supplier Guarantees. On 26 March 2018, Mr. Yuan Weisen, the Chairman of GBT, met with the representatives of Bank of China Jilin Province Branch on behalf of the Group and on 2 April 2018, a revised debt-equity swap proposal was submitted to Bank of China Jilin Province Branch for their consideration. However, while the management of the Group is awaiting for the result on the approval of the debt-equity swap proposal, the terms of the Previous Supplier Loan Agreements will expire in December 2018. Based on Dajincang’s indication and the financial information of Dajincang available to GBT and GSH, Dajincang still does not have sufficient financial resources to repay the Previous Supplier Loan when the same falls 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 Dajincang 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, Dajincang 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 Dajincang under the New Supplier Loan.

— 1 —

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 notices convening the GBT EGM and the GSH EGM, will be despatched by GBT and GSH to their respective shareholders on or before 27 November 2018.

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 Dihao Foodstuff and Dihao Crystal Sugar. Upon the completion of the S&P Agreement, Dihao Foodstuff 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. As stated in the joint announcement of GBT and GSH dated 16 July 2018, additional time is required for the management to discuss with the relevant banks for the release of guarantees and/or charges given by a member of the GSH Group in resepct of the indebtedness of Dihao Foodstuff, which is a condition precedent to the completion of the S&P Agreement. 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

As disclosed in the respective interim reports of GBT and GSH for the six months ended 30 June 2018, the management of the Group has continued to negotiate with BOC to find solutions to relieve the Group from its obligations under the Previous Supplier Guarantees, and continued to explore other alternatives in case Dajincang fails to repay the Previous Supplier Loan, in the event of which will trigger the Group’s obligations as guarantor pursuant to the Previous Supplier Guarantees. On 26 March 2018, Mr. Yuan Weisen, the Chairman of GBT, met with the representatives of Bank of China Jilin Province Branch on behalf of the Group and on 2 April 2018, a revised debt-equity swap proposal was submitted to Bank of China Jilin Province Branch for their consideration. However, while the management of the Group is awaiting for the result on the approval of the debt-equity swap proposal, the terms of the Previous Supplier Loan Agreements will expire in December 2018. Based on Dajincang’s indication and the financial information of Dajincang available to GBT and GSH, Dajincang still does not have sufficient financial resources to repay the Previous Supplier Loan when the same falls 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 Dajincang 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, Dajincang 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 Dajincang under the New Supplier Loan.

— 2 —

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

Name of bank:

BOC

Borrower: Dajincang

Loan principal: RMB2.49 billion

• Term of loan: 12 months from the respective date of drawdown

Rate of interest: 39.5 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

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) Dajincang fails to pay any sums when due in accordance with the terms of the New Supplier Loan Agreements;

• (ii) Dajincang 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 Dajincang have been untrue or incorrect or Dajincang 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 Dajincang has become worsen;

• (v) the breach by Dajincang 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 Dajincang.

— 3 —

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 Dajincang shall pledge its receivables in favour of BOC the New Supplier Guarantees):

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) Dihao Foodstuff

• (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 12 months from the date of the New Supplier Guarantees guarantee:

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 DAJINCANG AND BOC

The principal business of Dajincang 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.

— 4 —

Dajincang 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) Dajincang was a former major supplier of the Group of corn kernels, and (ii) the ultimate beneficial owner of Dajincang includes the labour union of the PRC employees of the Group, Dajincang 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.

Based on the unaudited financial statements provided by Dajincang, Dajincang has a negative net asset value of approximately RMB103.2 million as of 30 June 2018 and a net loss after taxation of approximately RMB61.4 million for the six months ended 30 June 2018.

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, BOC and its ultimate beneficial owners are third parties independent of GBT, GSH and their connected persons. BOC is principally engaged in the provision of banking services.

INFORMATION OF THE GBT GROUP AND 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.

REASON FOR ENTERING INTO OF THE NEW SUPPLIER GUARANTEES

For the reason 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 2017 Circulars, the Guarantors entered into the Previous Supplier Guarantees.

As set out in the paragraph headed “Background” above, in order for Dajincang 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 Dajincang to repay the Previous Supplier Loan, Dajincang must refinance the Previous Supplier Loan by entering into the New Supplier Loan. Should the Guarantors refuse to enter into the New Supplier Guarantees, which is a condition to the New Supplier Loan, Dajincang will not be able to finance the Previous Supplier Loan and BOC may enforce the Previous Supplier Guarantees. The entering into of the New Supplier Guarantees could therefore avoid immediate demand for full repayment of the Previous Supplier

— 5 —

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 2018, the aggregate net current liabilities of the Guarantors amounted to approximately HK$6,136.3 million, while the net current liabilities of the GSH Guarantor amounted to approximately HK$833.6 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 current liabilities as at 30 June 2018 of approximately HK$7,520.1 million and HK$1,017.0 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 2018 amounted to approximately HK$258.9 million and HK$116.6 million, respectively.

As such, if Dajincang 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 2018, the outstanding amount of the banking facilities of the GBT Guarantors guaranteed by GBT amounted to approximately RMB5,182.5 million, while the outstanding amount of the banking facilities of the GSH Guarantor guaranteed by GSH amounted to approximately RMB180.0 million and GBT amounted to approximately RMB199.0 million, respectively. 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 to honour 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.

— 6 —

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.

The circulars containing, among other things, further details of the New Supplier Guarantees together with notices convening the GBT EGM and the GSH EGM, will be despatched by GBT and GSH to their respective shareholders on or before 27 November 2018.

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 Dihao Foodstuff and Dihao Crystal Sugar. Upon the completion of the S&P Agreement, Dihao Foodstuff 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. As stated in the joint announcement of GBT and GSH dated 16 July 2018, additional time is required for the management to discuss with the relevant banks for the release of guarantees and/or charges given by a member of the GSH Group in resepct of the indebtedness of Dihao Foodstuff, which is a condition precedent to the completion of the S&P Agreement. 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:

• “2017 Circulars” the circulars made by GBT dated 29 December 2017 and GSH dated 17 January 2018 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

— 7 —

• “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 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

• “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 an indirect wholly owned subsidiary of GSH

• “Dihao Foodstuff” 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

• “Dajincang” 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

• “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 main board of 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

— 8 —

• “GBT New Supplier the various guarantees to be executed by each of the GBT Guarantors in Guarantees” favour of BOC in respect of the New Supplier Loan

• “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 main board of the Stock Exchange

• “GSH Board” the board of directors of GSH

• “GSH Directors” the directors of GSH

• “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” Dihao Foodstuff

• “GSH New Supplier the guarantee to be executed by the GSH Guarantor in favour of BOC in Guarantee” respect of the New Supplier Loan

• “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

• “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 the GBT New Supplier Guarantees and the GSH New Supplier Guarantee Guarantees”

• “New Supplier Loan” all indebtedness due and owing to BOC pursuant to the New Supplier Loan Agreement(s)

— 9 —

• “New Supplier Loan the loan agreement(s) to be entered into between Dajincang and BOC in Agreement(s)” 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 benefit of Guarantees” Dajincang as disclosed in the 2017 Circulars

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

• “Previous Supplier Loan various loan agreements entered into between Dajincang and BOC in 2017 Agreements” and 2018

• “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 Foodstuff and Dihao Crystal Sugar

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

By order of the GBT Board By order of the GSH Board Global Bio-chem Technology Group Company Limited Global Sweeteners Holdings Limited Yuan Weisen Kong Zhanpeng Chairman Chairman

Hong Kong, 6 November 2018

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

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

— 10 —