GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. — Regulatory Filings 2013

Aug 23, 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.

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DISCLOSEABLE TRANSACTION

Pursuant to the Cooperation Agreement, the Company deposited, in favour of the Bank, the Provision amounting to 10% of the Loan Facility at a designated account maintained with the Bank in connection with the Loan Facility granted by the Bank to the Borrower, a former indirect wholly-owned subsidiary of the Company and a current customer of the Group.

As the relevant percentage ratios applicable to the Transaction exceeded 5% but were less than 25%, the Transaction constituted a discloseable transaction for the Company under the Listing Rules when the Borrower ceased to be a subsidiary of the Company on 10 January 2013 and was only subject to reporting and announcement requirements, but exempt from shareholders’ approval requirements under the Listing Rules.

Due to the differences in the understanding of the nature of the Transaction, no disclosure of the Transaction was made in accordance with the Listing Rules when the Borrower ceased to be a subsidiary of the Company. To maintain a higher standard of disclosure practices, the Company hereby makes this announcement immediately after the discussions and deliberation of the management. In order to ensure such incidents will not occur in the future, the Company will arrange for more training on the applicable regulations and rules, in particular, the Listing Rules, to be provided to the members of the management of the Group, and will implement further internal control measures in identifying and monitoring notifiable transactions.

BACKGROUND

To facilitate the implementation of the Company’s internationalisation strategy and to promote awareness of its products in international markets, on 12 October 2010, the Company entered into the Cooperation Agreement with the Bank, pursuant to which the Bank shall grant loans or provide financing in relation to the projects in which any member of the Group is involved as supplier and the Company shall deposit with the Bank 10% of the amount of the loans or the financing extended by the Bank.

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The Borrower was an indirect wholly-owned subsidiary prior to January 2013. It owns and operates the Wind Farm Project in the United States which was developed by the Group in 2011. The Group has supplied 68 sets of GW1.5/87 wind turbine generators and 3 sets of GW2.5/100 wind turbine generators, all manufactured by the Group, in connection with the development of the project, therefore, in 2011, the Bank extended the Loan Facility to the Borrower for a term of 15 years and the Company deposited the Provision amounting to 10% of the principal amount of the Loan Facility at a designated account maintained with the Bank.

Pursuant to the Cooperation Agreement, (i) if the Borrower fails to make payment(s) to the Bank in full before the due dates stipulated in the relevant financing agreement, the Bank shall be entitled to directly deduct the outstanding amount from the Provisions made by the Company at the designated account of the Company maintained with Bank. If the Borrower subsequently repaid the amounts due, the Bank shall transfer the amounts back to the Company’s designated account; (ii) if the Borrower fails to make repayment in full which is equal to the amount deducted from the Provisions by the Bank within two consecutive interest periods, the Company shall repay the outstanding amounts in relation to the Loan Facility owed by the Borrower to the Bank in full and the Bank shall transfer its receivables due from the Borrower to the Company. No fees have been and will be paid by the Borrower to the Company in connection with the deposit of the Provisions with the Bank.

REASONS FOR AND BENEFITS OF THE TRANSACTION

As disclosed above, the Borrower owns and operates the Wind Farm Project in the United States which was developed by the Group in 2011 as its first overseas wind farm project. The Group has supplied 68 sets of GW1.5/87 wind turbine generators and 3 sets of GW2.5/100 wind turbine generators, all manufactured by the Group, in connection with the development of the project. The Wind Farm Project has a total capacity of 109.5MW and has commenced operation on 1 June 2012. The Company believes the Group’s success in development of the Wind Farm Project and the implementation of the Company’s internationalisation strategy is in part attributed to the financial support arrangement under the Cooperation Agreement. On 10 January 2013, the Group transferred its entire equity interest in the Borrower a third party independent of the Company, and monetise the value of its interest in the Borrower for the shareholders of the Company through the disposal.

The Group has been providing maintenance services to the Wind Farm Project since it commenced operation in June 2012 and continued to provide maintenance services to it pursuant to the maintenance service contract with the Borrower after the Borrower ceased to be a subsidiary of the Company on 10 January 2013.

On the basis stated above and having taken into consideration that (i) the cooperation between the Company and the Bank contemplated under the Cooperation Agreement has assisted the Company in the implementation of its internationalisation strategy and improvement of its competitiveness and awareness of the Group’s products in international markets; and (ii) the terms of the Cooperation Agreement were arrived at after arm’s length negotiations between the parties in the ordinary course of business, the Directors, including the independent nonexecutive Directors, considered that the terms of the Cooperation Agreement are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

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INFORMATION ABOUT THE PARTIES

The Company is a leading manufacturer of wind turbine generators and provider of comprehensive wind power solutions in China and overseas. Its primary business is wind turbine generator research and development, manufacturing and sales. The Company is also engaged in the provision of comprehensive wind power services and the investment, development and sales of wind farms.

The Bank is a licensed commercial bank in the PRC and principally engaged in the business of financing and provision of loans. To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, as at the relevant date and the date of this announcement, the Bank and its ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined under the Listing Rules).

The Borrower owns and operates the Wind Farm Project in the United States. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as at the date of this announcement, the Borrower and its ultimate beneficial owner are third parties independent of the Company and its connected persons.

LISTING RULES IMPLICATIONS

As the relevant percentage ratios applicable to the Transaction exceeded 5% but were less than 25%, the Transaction constituted a discloseable transaction for the Company under the Listing Rules when the Borrower ceased to be a subsidiary of the Company on 10 January 2013 and was only subject to reporting and announcement requirements, but exempt from shareholders’ approval requirements under the Listing Rules.

Due to the differences in the understanding of the nature of the Transaction, no disclosure of the Transaction was made in accordance with the Listing Rules when the Borrower ceased to be a subsidiary of the Company. To maintain a higher standard of disclosure practices, the Company hereby makes this announcement immediately after the discussions and deliberation of the management. In order to ensure such incidents will not occur in the future, the Company will arrange for more training on the applicable regulations and rules, in particular, the Listing Rules, to be provided to the members of the management of the Group and will implement further internal control measures in identifying and monitoring notifiable transactions.

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DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

following meanings:
“Bank”	a licensed commercial bank in the PRC;
“Board”	the board of Directors of the Company;
“Borrower”	GSG6, LLC, a company incorporated under the laws of the United
	States;
“Company”	新疆金風科技股份有限公司(Xinjiang Goldwind Science &Technology Co., Ltd.†), a joint stock limited company incorporated
	in the PRC with its H Shares listed and traded on the main board of
	the Stock Exchange;
“Cooperation	the cooperation agreement entered into between the Company and the
Agreement”	Bank dated 12 October 2010;
“Provision”	a deposit amounting to 10% of the Loan Facility made by the
	Company into a designated account maintained with the Bank in
	connection with the Loan Facility granted by the Bank to the
	Borrower in 2011;
“Directors”	the directors of the Company;
“Group”	the Company and its subsidiaries;
“GW”	gigawatts (1,000,000,000 watts);
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC;
“H shares”	foreign shares in the share capital of the Company, with par value of
	RMB1.00 each, which are listed and traded on the Stock Exchange;
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange
	of Hong Kong Limited;
“Loan Facility”	the loan facility in the principal amount of USD150 million granted
	by the Bank to the Borrower. As at the date of this announcement, the
	outstanding principal amount is USD135 million;
“PRC”	the People’s Republic of China (for the purpose of this
	announcement, excluding Hong Kong Special Administrative
	Region, Macau Special Administrative Region and Taiwan);
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Shareholder”	the shareholders of the Company;

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“Transaction” the deposit of the Provision by the Company to the Bank pursuant to the Cooperation Agreement;

“United States” United States of America;

“USD” United States dollars, the lawful currency of the United States;

“Wind Farm Project” the wind farm project operated by the Borrower in the United States, which has been developed by the Group; and

“%” percentage.

† denotes English translation of the name of a Chinese company, or vice versa, and is provided for identification purposes only

By order of the Board Xinjiang Goldwind Science & Technology Co., Ltd. Ma Jinru Company Secretary

Beijing, 23 August 2013

As at the date of this announcement, the executive Directors are Mr. Wu Gang, Mr. Wang Haibo and Mr. Cao Zhigang; the non-executive Directors are Mr. Li Ying, Ms. Hu Yang and Mr. Yu Shengjun; and the independent non-executive Directors are Dr. Tin Yau Kelvin Wong, Mr. Yang Xiaosheng and Mr. Luo Zhenbang.

* For identification purposes only

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