Guangzhou R&F Properties Co., Ltd. — Proxy Solicitation & Information Statement 2008

Nov 6, 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Guangzhou R&F Properties Co., Ltd. , you should at once hand this circular to the purchaser or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

==> picture [187 x 41] intentionally omitted <==

==> picture [64 x 39] intentionally omitted <==

(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2777)

PROPOSED ISSUE OF DOMESTIC CORPORATE BONDS IN THE PRC AND NOTICE OF EGM

A notice convening the EGM to be held at 10:30 a.m. on 24 December 2008 at the Conference Room, 54/F, R&F Center, No.10 Huaxia Road, Pearl River New Town, Guangzhou, the PRC, is set out on pages 7 to 10 of this circular. Whether or not you are able to attend the said meeting, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return the form to the Company’s H Shares share registrar, Computershare Hong Kong Investors Services Limited, at Room 1806-1807, 18/F., Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible, and in any event no less than 24 hours before the time appointed for the EGM or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting thereof should you so wish.

* for identification purpose only

7 November 2008

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Proposed Issue of Domestic Corporate Bonds in the PRC . . . . . . . . . . . . . . . . . . . . . . . .	3
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Book Close Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Procedures for Demanding a Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

— i —

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

“Articles of Association” the articles of association of the Company “Board” the Company’s board of directors “Company” Guangzhou R&F Properties Co., Ltd., a company incorporated in the PRC with its H shares listed and traded on the main board of the Stock Exchange “CSRC” China Securities Regulatory Commission “Directors” directors of the Company “Domestic Corporate Bonds” domestic corporate bonds in the principal amount of not more than RMB6.0 billion proposed to be issued by the Company in the PRC “EGM” the extraordinary general meeting of the Company to be held to approve the issue of the Domestic Corporate Bonds and to grant authority to the Board to deal with matters in relation to the issue of the Domestic Corporate Bonds “Hong Kong” Hong Kong Special Administrative Region of the PRC “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “PRC” the People’s Republic of China “RMB” Renminbi, the lawful currency of the PRC “Shareholders” the shareholders of the Company “Shares” shares of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited

— 1 —

LETTER FROM THE BOARD

==> picture [187 x 41] intentionally omitted <==

==> picture [64 x 39] intentionally omitted <==

(a joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 2777)

Executive Directors:

Mr. Li Sze Lim Mr. Zhang Li Mr. Zhou Yaonan Mr. Lu Jing

Registered Office, head office and Principal place of business:

R&F Center, No.10 Huaxia Road Pearl River New Town Guangzhou, PRC

Non-executive Director:

Ms. Zhang Lin Ms. Li Helen

Independent Non-executive Directors:

Mr. Huang Kaiwen Mr. Dai Feng Mr. Lai Ming, Joseph

7 November 2008

To the Shareholders

Dear Sir or Madam,

I. INTRODUCTION

Reference is made to the Company’s announcement dated 6 November 2008, in which the Board announced the proposed issue of the Domestic Corporate Bonds in the PRC by the Company with an aggregate principal amount of not more than RMB6.0 billion. The Company proposes to convene the EGM to approve the proposed issue of the Domestic Corporate Bonds. This circular is to provide you with information regarding the proposed issue of the Domestic Corporate Bonds to allow you to make an informed decision on voting in respect of the resolutions to be proposed at the EGM.

* for identification purpose only

— 2 —

LETTER FROM THE BOARD

II. PROPOSED ISSUE OF DOMESTIC CORPORATE BONDS IN THE PRC

1. Background

The Board proposes to issue domestic corporate bonds in the PRC with an aggregate principal amount of not more than RMB6.0 billion. The Company intends to issue the Domestic Corporate Bonds to strengthen working capital, partially refinance short and medium bank loans and improve the capital structure of the Company.

According to Article 75 of the Articles of Association, the proposed issue of the Domestic Corporate Bonds requires approval of the Shareholders by special resolution. The Company proposes to convene the EGM to approve the proposal.

The proposed issue of the Domestic Corporate Bonds also requires approval from the CSRC. Issuance of the Domestic Corporate Bonds will depend on the timing of the CSRC approval and the conditions of the bonds market in the PRC.

2. Proposed Issue of Domestic Corporate Bonds

Details of the Domestic Corporate Bonds proposed to be issued are as follows:-

(i)	Issuer	:	Guangzhou R&F Properties Co., Ltd.
(ii)	Place of issue	:	the PRC
(iii)	Size of issue	:	The aggregate principal amount shall not be more
			than RMB6.0 billion.
(iv)	Arrangement for issue	:	The Domestic Corporate Bonds will not be placed to
	to Shareholders		existing Shareholders on a preferential basis.
(v)	Maturity	:	5 to 10 years
(vi)	Use of proceeds	:	To repay part of the existing bank loans and to
			supplement the working capital of the Company.
(vii)	Listing	:	Subject to the satisfaction of the relevant
			requirements for listing, an application for listing of
			the Domestic Corporate Bonds on a domestic stock
			exchange as approved by the relevant PRC regulatory
			authorities will be made.

— 3 —

LETTER FROM THE BOARD

(viii) Validity period for the : Subject to approval by Shareholders and CSRC, the issue validity period for the issue of the Domestic Corporate Bonds shall be 24 months from the date of passing of the special resolution at the EGM approving the issue and the date of approval by CSRC.

1. Granting of authority to the Board to deal with matters relating to the issue of the Domestic Corporate Bonds

To ensure the proper issue of the proposed Domestic Corporate Bonds, it is proposed that a special resolution be passed by the Shareholders generally and unconditionally at the EGM to authorize the Board to handle all matters relating to the proposed issue of the Domestic Corporate Bonds, including but not limited to the following:

• (i) implement specific plan for the issue of the Domestic Corporate Bonds according to market conditions, including but not limited to the timing of issue, issue size, issue price, maturity, whether to issue in tranches and their respective size and maturity, interest rate and method of determination, conditions for redemption or repurchase, guarantees, place of issue and listing, other terms of the bonds and all other matters relating to the issue of the Domestic Corporate Bonds;

• (ii) determine the final use of the proceeds in accordance with the needs of the Company;

• (iii) decide and appoint intermediaries and a trustee for the proposed issue of the Domestic Corporate Bonds;

• (iv) apply to the relevant PRC regulatory authorities to issue the Domestic Corporate Bonds and make appropriate adjustments to the plan for the issue and terms of the Domestic Corporate Bonds in accordance with the feedback (if any) from the relevant PRC regulatory authorities;

• (v) deal with any matters relating to the issue and listing of the Domestic Corporate Bonds pursuant to the relevant rules of the relevant domestic stock exchange(s);

• (vi) approve and execute relevant legal documents relating to the issue and listing of the Domestic Corporate Bonds and make appropriate disclosure; and

• (vii) take all necessary actions to determine and make arrangements for all matters relating to the proposed issue and listing of the Domestic Corporate Bonds, including exercising discretion to delay or temporarily suspend the issue of the Domestic Corporate Bonds should such event of force majeure or other situations make the issue of the Domestic Corporate Bonds difficult or would not be beneficial to the Company even if it could be issued.

— 4 —

LETTER FROM THE BOARD

The authority granted to the Board to deal with the above matters will take effect from the date of the passing of such resolution at the EGM until all the authorized matters in relation to the issue of the Domestic Corporate Bonds have been completed.

4. Measures to be Implemented by the Company to Repay the Domestic Corporate Bonds

In the occurrence of an event of expected inability to repay principals and interests of the Domestic Corporate Bonds as scheduled or inability to repay principals and interest of the Domestic Corporate Bonds when they become due, the Company will implement, as a minimum, the following measures:

• (i) no dividends will be distributed to Shareholders;

• (ii) suspend capital expenditure, such as major external investments, acquisitions and mergers;

• (iii) salary and bonus of Directors and senior management of the Company will be reduced or suspended; and

• (iv) no key officers will be allowed to leave office.

III. RECOMMENDATION

The Directors consider that the proposed issue of the Domestic Corporate Bonds is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders to vote in favour of the resolutions set out in the notice of the EGM.

The proposed issue of the Domestic Corporate Bonds is subject to, among others, the approval of the Shareholders at the EGM, the approval by CSRC and market conditions and may or may not materialize, Shareholders and the public should exercise cautions when dealing in the securities of the Company.

IV. EXTRAORDINARY GENERAL MEETING

The EGM will be convened to approve the proposed issue of the Domestic Corporate Bonds by special resolution. The notice for convening the EGM to be held at 10:30 a.m. on 24 December 2008 at the Conference Room, 54/F, R&F Center, No.10 Huaxia Road, Pearl River New Town, Guangzhou, the PRC, is set out on pages 7 to 10 of this circular.

V. BOOK CLOSE PERIOD

The register of members of the H Shares will be closed from 24 November 2008 to 23 December 2008 (both days inclusive) in accordance with the Articles of Association. During such period, no transfer of H Shares will be registered. Shareholders, who intend to attend the EGM, must deliver their

— 5 —

LETTER FROM THE BOARD

instruments of transfer together with the relevant share certificates to the Company’s H Share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Rooms 1712-1716, 17/F., Hopewell Center, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 21 November 2008.

VI. PROCEDURES FOR DEMANDING A POLL

Pursuant to Article 70 of the Articles of Association, a resolution put to vote at a general meeting of the Shareholders shall be decided on a show of hands unless a poll is (before or after any vote by a show of hands) demanded by:

• (1) the chairman of the meeting;

• (2) at least two Shareholders with voting right or their proxy; or

• (3) one or more Shareholders (including proxies) holding totally or separately 10% or more of the shares carrying the right to vote at the meeting.

VII. RESPONSIBILITY STATEMENT

This circular includes particular given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries that to the best of their knowledge and belief, there are no other facts not contained in this circular, the omission of which would make any statement herein misleading,

Yours faithfully, By order of the Board Guangzhou R&F Properties Co., Ltd. Li Sze Lim

Chairman

— 6 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [187 x 41] intentionally omitted <==

==> picture [64 x 39] intentionally omitted <==

(a joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 2777)

Notice of Extraordinary General Meeting

Notice is hereby given that an extraordinary general meeting (the “ EGM ”) of Guangzhou R&F Properties Co., Ltd. (the “Company”) will be held at 10:30 a.m. on 24 December 2008 at the Conference Room, 54/F., R&F Center, No.10 Huaxia Road, Pearl River New Town, Guangzhou, the PRC, to consider and if thought fit, to pass the following resolutions. Unless otherwise indicated, capitalized terms used herein shall have the same meaning as those defined in the announcement of the Company dated 6 November 2008:

AS SPECIAL RESOLUTIONS

1. “ THAT each of the following proposed items in respect of the proposed issue of Domestic Corporate Bonds in the PRC be and is hereby individually approved (subject to the approval of the CSRC and the conditions of the bonds market in the PRC):

2. (i) Issuer : Guangzhou R&F Properties Co., Ltd.

3. (ii) Place of issue : the PRC

4. (iii) Size of issue :

5. The aggregate principal amount shall not be more than RMB6.0 billion.

6. (iv) Arrangement for issue : The Domestic Corporate Bonds will not be placed to to Shareholders existing Shareholders on a preferential basis.

7. (v) Maturity : 5 to 10 years

8. (vi) Use of proceeds : To repay part of the existing bank loans and to supplement the working capital of the Company.

* For identification purpose only

— 7 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

(vii) Listing : Subject to the satisfaction of the relevant requirements for listing, an application for listing of the Domestic Corporate Bonds on a domestic stock exchange as approved by the relevant PRC regulatory authorities will be made. (viii) Validity period for the : Subject to approval by Shareholders and CSRC, the issue validity period for issue of the Domestic Corporate Bonds shall be 24 months from the date of passing of the special resolution at the EGM approving the issue and the date of approval by CSRC.”

1. “ THAT the board of directors of the Company be and is hereby authorised to deal with all matters in connection with the issue of the Domestic Corporate Bonds in the PRC, including but not limited to the following:

2. (i) implement specific plan for the issue of the Domestic Corporate Bonds according to market conditions, including but not limited to the timing of issue, issue size, issue price, maturity, whether to issue in tranches and their respective size and maturity, interest rate and method of determination, conditions for redemption or repurchase, guarantees, place of issue and listing, other terms of the bond and all other matters relating to the issue of the Domestic Corporate Bonds;

3. (ii) determine the final use of the proceeds in accordance with the needs of the Company;

4. (iii) decide and appoint intermediaries and a trustee for the proposed issue of the Domestic Corporate Bonds;

5. (iv) apply to the relevant PRC regulatory authorities to issue the Domestic Corporate Bonds and make appropriate adjustments to the plan for the issue and terms of the Domestic Corporate Bonds in accordance with the feedback (if any) from the relevant PRC regulatory authorities;

6. (v) deal with any matters relating to the issue and listing of the Domestic Corporate Bonds pursuant to the relevant rules of the relevant domestic stock exchange(s);

7. (vi) approve and execute relevant legal documents relating to the issue and listing of the Domestic Corporate Bonds and make appropriate disclosure; and

— 8 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

• (vii) take all necessary actions to determine and make arrangements for all matters relating to the proposed issue and listing of the Domestic Corporate Bonds, including exercising discretion to delay or temporarily suspend the issue of the Domestic Corporate Bonds should such event of force majeure or other situations make the issue of the Domestic Corporate Bonds difficult or would not be beneficial to the Company even if it could be issued.”

• “ THAT the following measures to be implemented by the Company in the event of an expected inability to repay the Domestic Corporate Bonds as scheduled or inability to repay principals and interest of the Domestic Corporate Bonds when they become due be and are hereby approved:

• (i) no dividends will be distributed to Shareholders;

• (ii) suspend capital expenditure, such as major external investments, acquisitions and mergers;

• (iii) salary and bonus of Directors and senior management of the Company will be reduced or suspended; and

• (iv) no key officers will be allowed to leave office.”

By order of the Board Li Sze Lim Chairman

Hong Kong, 7 November 2008

Notes:

1. The holders of the Company’s H Shares are reminded that pursuant to the Articles of Association of the Company, the register of the shareholders of the Company shall be closed from 24 November 2008 to 23 December 2008 (both days inclusive), during which period, no transfer of shares will be registered. Shareholders, who intend to attend the EGM, must deliver their instruments of transfer together with the relevant share certificates to the Company’s H Share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Rooms 1712-1716, 17/F, Hopewell Center, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 21 November 2008.

2. Any shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy needs not be a shareholder of the Company. Where a shareholder of the Company appoints more than one proxy, his proxies can only vote in a poll.

— 9 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. To be valid, the proxy form is to be used by shareholder of the Company (both Domestic Share and H Share) and, if such proxy form is signed by a person authorized by a shareholder pursuant to a power of attorney or other instrument must be delivered to the Company or the Company’s H Share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Rooms 1806-1807, 18/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 24 hours before the time designated for the commencement of the EGM.

2. Shareholders who intend to attend the EGM, are required to return the notice of attendance to the Company no later than 4:30 p.m. on 4 December 2008 (20 days before the date of the meeting).

3. A shareholder or his/her/its proxy shall produce proof of identity when attending the EGM. If a corporate shareholder appoints its legal representative to attend the meeting, such legal representative shall produce proof of identity and a copy of the resolution of the board of directors or governing body of such shareholder.

4. In accordance with the Company’s Articles of Association, where there are joint registered shareholders, only the first named shareholder in the register of shareholders has the right to receive this notice, attend the EGM and exercise the voting rights in relation to the relevant shares.

5. The EGM is expected to last for about half a day. Shareholders of the Company and their proxies attending the EGM shall be responsible for their own transportation, food and lodging.

— 10 —