Harbin Bank Co., Ltd. - Capital/Financing Update 2016

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This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities.

Distribution of this announcement into jurisdictions other than Hong Kong may be restricted by law. Persons into whose possession this announcement comes should inform themselves of and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Neither this announcement nor any copy thereof may be released into or distributed in the United States or any other jurisdiction where such release or distribution might be unlawful. The Offshore Preference Shares and the H Shares issuable upon conversion of the Offshore Preference Shares have not been and will not be registered under the U.S. Securities Act of 1933 (the “ U.S. Securities Act ”) or the securities laws of any State of the United States or other jurisdiction, and the Offshore Preference Shares may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable State or local securities laws. There is no intention to register any portion of any securities described herein in the United States or to conduct a public offering of securities in the United States.

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**Harbin Bank Co., Ltd. 哈爾濱銀行股份有限公司[*]**

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

(Stock Code: 6138)

(1) PROPOSED NON-PUBLIC ISSUANCE OF OFFSHORE PREFERENCE SHARES (2) PROPOSAL ON THE AUTHORISATION TO THE BOARD AND THE PERSONS AUTHORISED BY THE BOARD TO DEAL WITH ALL MATTERS RELATING TO THE ISSUANCE OF OFFSHORE PREFERENCE SHARES
(3) PROPOSED FORMULATION OF DRAFT ARTICLES OF ASSOCIATION FOR
OFFSHORE PREFERENCE SHARES AND DRAFT RULES OF PROCEDURE FOR OFFSHORE PREFERENCE SHARES
(4) PROPOSED FORMULATION OF DRAFT ARTICLES OF ASSOCIATION FOR A SHARES AND OFFSHORE PREFERENCE SHARES AND DRAFT RULES OF PROCEDURE FOR A SHARES AND OFFSHORE PREFERENCE SHARES AND
(5) PROPOSED CHANGE OF REGISTERED ADDRESS AND CORRESPONDING AMENDMENTS TO THE ARTICLES OF ASSOCIATION

PROPOSED NON-PUBLIC ISSUANCE OF OFFSHORE PREFERENCE SHARES

The Board is pleased to announce that, on 15 December 2016, the Board considered and approved the Offshore Issuance Plan, pursuant to which the Bank shall conduct a non-public issuance of not more than 80 million Offshore Preference Shares to raise proceeds not exceeding RMB8 billion or its equivalent to replenish the Bank’s Additional Tier 1 Capital.

The issuance of the Offshore Preference Shares will be conducted by way of a private placement in accordance with the relevant rules on issuance and the Offshore Preference Shares shall be issued in a single or multiple series in accordance with the relevant procedures after being approved by regulatory authorities. The listing/trading arrangements for the Offshore Preference Shares will be set out in the issuance documents. There will be no lock-up period for the Offshore Preference Shares. The Bank shall have the right to mandatorily convert all or part of the Offshore Preference Shares into H Shares on the occurrence of certain prescribed events.

The issuance of Offshore Preference Shares is subject to (i) the approval by the Shareholders at the EGM, the approval by the Domestic Shareholders at the Domestic Shareholders’ Class Meeting and the approval by the H Shareholders at the H Shareholders’ Class Meeting, in each case, as a special resolution; and (ii) the approval by or filing with competent regulatory authorities (namely, the approval by the CBRC or its local affiliate and the CSRC, and the filing and registration with the National Development and Reform Commission).

PROPOSAL ON THE AUTHORISATION TO THE BOARD AND THE PERSONS AUTHORISED BY THE BOARD TO DEAL WITH ALL MATTERS RELATING TO THE ISSUANCE OF OFFSHORE PREFERENCE SHARES

In order to deal with matters relating to the non-public issuance of Offshore Preference Shares, on 15 December 2016, the Board considered and approved the Proposal on Authorisation Matters in respect of the Offshore Preference Shares, and resolved to submit this proposal to the EGM, the Domestic Shareholders’ Class Meeting and the H Shareholders’ Class Meeting, respectively, in each case, as a special resolution, to authorise the Board, and the Board will then delegate the authority to the Chairman, the President and the Secretary to the Board of the Bank, in accordance with the principles for the issuance of Offshore Preference Shares approved at the Shareholders’ general meeting, to individually or jointly exercise the full power to deal with the matters relating to the issuance of Offshore Preference Shares within the validity period of the authorisation for the issuance of Offshore Preference Shares.

PROPOSED FORMULATION OF DRAFT ARTICLES OF ASSOCIATION FOR OFFSHORE PREFERENCE SHARES AND DRAFT RULES OF PROCEDURE FOR OFFSHORE PREFERENCE SHARES

In connection with the Bank’s proposal on the non-public issuance of Offshore Preference Shares, the Bank has formulated the Draft Articles of Association for Offshore Preference Shares and the Draft Rules of Procedure for Offshore Preference Shares, which have been considered and approved by the Board on 15 December 2016, details of which, respectively, will be set out in the circular to be dispatched to the Shareholders in relation to such proposal.

PROPOSED FORMULATION OF DRAFT ARTICLES OF ASSOCIATION FOR A SHARES AND OFFSHORE PREFERENCE SHARES AND DRAFT RULES OF PROCEDURE FOR A SHARES AND OFFSHORE PREFERENCE SHARES

In connection with the Bank’s proposal on the non-public issuance of Offshore Preference Shares, the Bank has formulated the Draft Articles of Association for A Shares and Offshore Preference Shares and the Draft Rules of Procedure for A Shares and Offshore Preference Shares, which have been considered and approved by the Board on 15 December 2016, details of which, respectively, will be set out in the circular to be dispatched to the Shareholders in relation to such proposal.

PROPOSED CHANGE OF REGISTERED ADDRESS AND CORRESPONDING AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Shareholders and potential investors shall be aware that the proposed issuance of Offshore Preference Shares is subject to all necessary approvals being obtained and various factors including market conditions, and therefore the proposed issuance of Offshore Preference Shares may or may not proceed. Accordingly, they are advised to excise caution when dealing in the securities of the Bank.

I. PROPOSED NON-PUBLIC ISSUANCE OF OFFSHORE PREFERENCE SHARES

In order to improve the capital structure of the Bank, advance the implementation of the strategic objectives of the Bank as well as continuously enhance the core competitiveness and sustainable development of the Bank, the Bank proposes to conduct a non-public issuance of not more than 80 million Offshore Preference Shares to raise proceeds not exceeding RMB8 billion or its equivalent to replenish the Bank’s Additional Tier 1 Capital.

In accordance with the Company Law, the Securities Law, the State Council Guidance Opinion, the Capital Management Rules, the Joint Guidance Opinion and the Hong Kong Listing Rules, and with reference to the Administrative Measures on Preference Shares, the Bank formulated relevant plan for non-public issuance of Offshore Preference Shares.

On 15 December 2016, the Board considered and approved the Offshore Issuance Plan, and resolved to submit this proposal to the EGM, the Domestic Shareholders’ Class Meeting and the H Shareholders’ Class Meeting for consideration and approval, respectively. The issuance of Offshore Preference Shares will be subject to the approval by the Shareholders at the EGM, the approval by the Domestic Shareholders at the Domestic Shareholders’ Class Meeting and the approval by the H Shareholders at the H Shareholders’ Class Meeting, in each case, as a special resolution. Upon approval by Shareholders at the EGM and the Class Meetings, the proposed issuance of Offshore Preference Shares is also subject to the approval by or filing with competent regulatory authorities (namely, the approval by the CBRC or its local affiliate and the CSRC, and the filing and registration with the National Development and Reform Commission).

Please refer to Appendix I to this announcement for details of the Offshore Issuance Plan.

II. PROPOSAL ON THE AUTHORISATION TO THE BOARD AND THE PERSONS AUTHORISED BY THE BOARD TO DEAL WITH ALL MATTERS RELATING TO THE ISSUANCE OF OFFSHORE PREFERENCE SHARES

In order to deal with matters relating to the non-public issuance of Offshore Preference Shares, on 15 December 2016, the Board considered and approved the Proposal on Authorisation Matters in respect of the Offshore Preference Shares, and resolved to submit this proposal to the EGM, the Domestic Shareholders’ Class Meeting and the H Shareholders’ Class Meeting respectively, in each case, as a special resolution, to authorise the Board, and the Board will then delegate the authority to the Chairman, the President and the Secretary to the Board of the Bank, in accordance with the principles for the issuance of Offshore Preference Shares approved at the Shareholders’ general meeting to individually or jointly exercise the full power to deal with the matters relating to the issuance of Offshore Preference Shares within the validity period of the authorisation for the issuance of Offshore Preference Shares.

Please refer to Appendix II to this announcement for details of the Proposal on Authorisation Matters in respect of the Offshore Preference Shares.

III. PROPOSED FORMULATION OF DRAFT ARTICLES OF ASSOCIATION FOR OFFSHORE PREFERENCE SHARES AND DRAFT RULES OF PROCEDURE FOR OFFSHORE PREFERENCE SHARES

In connection with the Bank’s proposal on the non-public issuance of Offshore Preference Shares, in accordance with the State Council Guidance Opinion, the Joint Guidance Opinion, the Hong Kong Listing Rules and other relevant laws, regulations and regulatory documents, with reference to the Administrative Measures, and taking into account the actual situation of the Bank, the Bank has formulated the Draft Articles of Association for Offshore Preference Shares and the Draft Rules of Procedure for Offshore Preference Shares, which have been considered and approved by the Board on 15 December 2016. Details of the proposed formulation of the Draft Articles of Association for Offshore Preference Shares and the Draft Rules of Procedure for Offshore Preference Shares, respectively, will be set out in the circular to be dispatched to the Shareholders in relation to such proposal.

The proposal regarding the Draft Articles of Association for Offshore Preference Shares and the Draft Rules of Procedure for Offshore Preference Shares will be submitted as a special resolution to the EGM for consideration and approval. Upon approval by Shareholders at the EGM, the Draft Articles of Association for Offshore Preference Shares is still subject to the approval by the CBRC or its local affiliate, and shall only come into force from the date of completion of the issuance of the first tranche of the Offshore Preference Shares. The Draft Rules of Procedure for Offshore Preference Shares shall come into force on the same date of the Draft Articles of Association for Offshore Preference Shares.

IV. PROPOSED FORMULATION OF DRAFT ARTICLES OF ASSOCIATION FOR A SHARES AND OFFSHORE PREFERENCE SHARES AND DRAFT RULES OF PROCEDURE FOR A SHARES AND OFFSHORE PREFERENCE SHARES

In compliance with the regulatory requirements on the A Share Offering, the Bank has formulated the Draft Articles of Association for A Shares and the Draft Rules of Procedure for A Shares which have been approved by the Shareholders of the Bank at the 2015 first extraordinary general meeting held on 30 June 2015 and the 2015 second extraordinary meeting of the Bank held on 24 August 2015 respectively. Please refer to the circulars of the Bank dated 14 May 2015 and 10 July 2015 respectively for details of the Draft Articles of Association for A Shares and the Draft Rules of Procedure for A Shares.

Following such approval by the Shareholders, the Bank has made further amendments to the Draft Articles of Association for A Shares in accordance with the requirements from the regulatory authorities and pursuant to the authorisation granted by the Shareholders at the 2015 first extraordinary general meeting in connection with the A Share Offering. Such further amendments were made for the purpose of further enhancing the corporate governance and supervision mechanism in accordance with relevant regulatory requirements for commercial banks.

The Draft Articles of Association for A Shares and the Draft Rules of Procedure for A Shares shall only come into force from the date of listing and commencing of trading of the A Shares to be issued under the A Share Offering on the Shanghai Stock Exchange.

In connection with the Bank’s proposal on the non-public issuance of Offshore Preference Shares, in accordance with the State Council Guidance Opinion, the Joint Guidance Opinion, the Hong Kong Listing Rules and other relevant laws, administrative regulations and regulatory documents, with reference to the Administrative Measures on Preference Shares, the Bank has formulated the Draft Articles of Association for A Shares and Offshore Preference Shares and the Draft Rules of Procedure for A Shares and Offshore Preference Shares, which have been considered and approved by the Board on 15 December 2016. Details of the Draft Articles of Association for A Shares and Offshore Preference Shares and the Draft Rules of Procedure for A Shares and Offshore Preference Shares, respectively, will be set out in the circular to be dispatched to the Shareholders in relation to such proposal.

The proposal regarding the Draft Articles of Association for A Shares and Offshore Preference Shares and the Draft Rules of Procedure for A Shares and Offshore Preference Shares will be submitted as a special resolution to the EGM for consideration and approval. Upon approval by Shareholders at the EGM, the Draft Articles of Association for A Shares and Offshore Preference Shares is still subject to the approval by the CBRC or its local affiliate, and shall only come into force from the date of both completion of the issuance of the first tranche of the Offshore Preference Shares and the listing and commencing of trading of the A Shares

to be issued under the A Share Offering on the Shanghai Stock Exchange (whichever is later). The Draft Rules of Procedure for A Shares and Offshore Preference Shares shall come into force on the same date as the Draft Articles of Association for A Shares and Offshore Preference Shares.

For the avoidance of doubt, the Draft Articles of Association for A Shares and Offshore Preference Shares and the Draft Rules of Procedure for A Shares and Offshore Preference Shares shall not affect the validity and condition of effectiveness of the Draft Articles of Association for A Shares and the Draft Rules of Procedure for A Shares.

V. PROPOSED CHANGE OF REGISTERED ADDRESS AND CORRESPONDING AMENDMENTS TO THE ARTICLES OF ASSOCIATION

In accordance with the requirements of the Company Law, the Articles of Association and other relevant laws and regulations, and considering the needs of the future development of the Bank, on 15 December 2016, the Board resolved to change its registered address from “No.160, Shangzhi Street, Daoli District, Harbin City; postal code: 150010” to “No.888, Shangjiang Street, Daoli District, Harbin City; postal code: 150070”, and make corresponding amendments to the current Articles of Association and the Draft Articles of Association for A Shares respectively. Details of the proposed amendments to the current Articles of Association and the Draft Articles of Association for A Shares, respectively, will be set out in the circular to be dispatched to the Shareholders in relation to such proposal.

The proposal regarding the change of registered address and corresponding amendments to the current Articles of Association and the Draft Articles of Association for A Shares will be submitted as a special resolution to the EGM for consideration and approval. Upon approval by Shareholders at the EGM, the proposed amendments are still subject to the approval by the CBRC or its local affiliate, and shall only come into force upon the approval by the CBRC or its local affiliate. It is also proposed to authorise the Board to deal with matters relating to the registration or filing of the change of registered address.

VI. DISPATCH OF CIRCULAR

A circular containing the notices of EGM, the Domestic Shareholders’ Class Meeting and the H Shareholders’ Meeting, and information regarding (i) the proposed non-public issuance of Offshore Preference Shares; (ii) the Proposal on Authorisation Matters in respect of the Offshore Preference Shares; (iii) the proposed formulation of the Draft Articles of Association for Offshore Preference Shares and Draft Rules of Procedure for Offshore Preference Shares; (iv) the proposed formulation of the Draft Articles of Association for A Shares and Offshore Preference Shares and Draft Rules of Procedure for A Shares and Offshore Preference Shares; and (v) the proposed change of registered address of the Bank and corresponding amendments the current Articles of Association and the Draft Articles of Association for A Shares is expected to be dispatched to the Shareholders in due course.

VII. DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning:

“Additional Tier 1 Capital”
has the meaning given to it in the Capital Management Rules
“Administrative Measures
on Preference Shares”
the Trial Administrative Measures on Preference Shares (優先股試點管理辦法) issued by the CSRC on 21 March 2014
“A Share(s)”
ordinary shares that are proposed to be issued pursuant to the A Share Offering by the Bank, which will be listed on the Shanghai Stock Exchange and traded in RMB
“A Share Offering”
the Bank’s proposed initial public offering of not more than 3,666,000,000 A Shares which are to be listed on the Shanghai Stock Exchange
“Articles of Association” the articles of association of the Bank as amended, supplemented or otherwise modified from time to time
“Bank” or “Company”
Harbin Bank Co., Ltd. (哈爾濱銀行股份有限公司), a joint stock company established in the PRC on 25 July 1997 with limited liability in accordance with the Company Law of the PRC (中華人民共和國公司法), and the H Shares of which are listed on The Stock Exchange of Hong Kong Limited (Stock Code: 06138)
“Board” the board of directors of the Bank
“Capital Management Rules” the Rules Governing Capital Management of Commercial Banks (Provisional) (商業銀行資本管理辦法（試行)) issued by the CBRC on 7 June 2012, which became effective on 1 January 2013
“CBRC” China Banking Regulatory Commission
“CSRC” China Securities Regulatory Commission
“Class Meetings” the Domestic Shareholders’ Class Meeting and the H Shareholders’ Class Meeting, collectively
“Company Law” the Company Law of the PRC (中華人民共和國公司法 as enacted and adopted by the Standing Committee of the Eighth National People’s Congress on 29 December 1993 and effective on 1 July 1994, as the same may be amended, supplemented and otherwise modified from time to time

“Director(s)” the director(s) of the Bank

“Domestic Shareholder(s)”

“Domestic Shareholders’ Class Meeting”

“Domestic Shares”

“Draft Articles of Association for A Shares”
“Draft Articles of Association for A Shares and Offshore Preference Shares”
“Draft Articles of Association for Offshore Preference Shares”
“Draft Rules of Procedure for A Shares”
“Draft Rules of Procedure for A Shares and Offshore Preference Shares”
“Draft Rules of Procedure for Offshore Preference Shares”

holder(s) of Domestic Shares

the 2017 first class meeting of Domestic Shareholders of the Bank to be held on the date of the EGM

ordinary shares of a nominal value of RMB1.00 each issued by the Bank in the PRC, which are subscribed for or credited as paid in Renminbi

the draft Articles of Association of the Bank formulated in relation to the A Share Offering, which has been approved by the Shareholders at the 2015 first extraordinary general meeting of the Bank held on 30 June 2015 and amended by the Board in accordance with the requirements from the regulatory authorities, which will be effective from the date of listing of the A Shares

the draft Articles of Association of the Bank formulated in relation to both the A Share Offering and the issuance of the Offshore Preference Shares, which will be effective from the date of both completion of issuance of the first tranche of Offshore Preference Shares and the date of listing of A Shares (whichever is later), details of which will be set out in the circular to be dispatched to the Shareholders
the draft Articles of Association of the Bank formulated in relation to issuance of the Offshore Preference Shares, to be effective from the date of completion of issuance of the first tranche of Offshore Preference Shares, details of which will be set out in the circular to be dispatched to the Shareholders

the draft Rules of Procedure for Shareholders’ general meetings formulated in relation to the A Share Offering, which have been approved by the Shareholders at the 2015 second extraordinary general meeting of the Bank held on 24 August 2015, to be effective on the same date as the Draft Articles of Association for A Shares

the draft Rules of Procedure for Shareholders’ general meetings formulated in relation to both the A Share Offering and the issuance of the Offshore Preference Shares, to be effective on the same date as the Draft Articles of Association for A Shares and Offshore Preference Shares, details of which will be set out in the circular to be dispatched to the Shareholders
the draft Rules of Procedure for Shareholders’ general meetings formulated in relation to issuance of the Offshore Preference Shares, to be effective on the same date as the Draft Articles of Association for Offshore Preference Shares, details of which will be set out in the circular to be dispatched to the Shareholders

“EGM”

the 2017 first extraordinary general meeting or any adjourned meeting of the Bank to consider and approve, among other things, (i) the proposed non-public issuance of Offshore Preference Shares; (ii) the Proposal on Authorisation Matters in respect of the Offshore Preference Shares; (iii) the proposed formulation of the Draft Articles of Association for Offshore Preference Shares and Draft Rules of Procedure for Offshore Preference Shares; (iv) the proposed formulation of the Draft Articles of Association for A Shares and Offshore Preference Shares and Draft Rules of Procedure for A Shares and Offshore Preference Shares; and (v) the proposed change of registered address of the Bank and corresponding amendments the current Articles of Association and the Draft Articles of Association for A Shares
“H Shareholder(s)”
“H Shareholders’ Class Meeting”
“H Share(s)”
“HK$” or “HK Dollars”
“Hong Kong”
“Hong Kong Listing Rules”
“Joint Guidance Opinion”
“Offshore Issuance Plan”
“Offshore Preference Share(s)”
“Offshore Preference Shareholder(s)”
holder(s) of H Shares
the 2017 first class meeting of H Shareholders of the Bank to be held on the date of the EGM
overseas listed foreign shares of RMB1.00 each in the share capital of the Bank, which are listed on The Stock Exchange of Hong Kong Limited (Stock Code: 06138) and traded in Hong Kong dollars
the lawful currency of Hong Kong
the Hong Kong Special Administrative Region of the PRC
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended, supplemented or otherwise revised from time to time
the Guidance Opinion on Issuance of Preference Shares by Commercial Banks for Replenishing Tier 1 Capital (關於商業銀行發行優先股補充一級資本的指導意見) jointly issued by the CBRC and the CSRC on 3 April 2014
the Plan for Non-public Issuance of Offshore Preference Shares by Harbin Bank Co., Ltd.
the not more than 80 million preference shares of an aggregate value of not more than RMB8 billion or its equivalent, proposed to be issued by the Bank in the offshore market pursuant to the Offshore Issuance Plan as set out in Appendix I to this announcement
holder(s) of Offshore Preference Shares

“PRC” the People’s Republic of China, excluding, for the purposes of this circular only, Hong Kong, Macau Special Administrative Region of the People’s Republic of China and Taiwan

“Proposal on Authorisation the Proposal on Authorisation to the Board and the Persons Matters in respect of the Authorised by the Board to Deal with All Matters Relating Offshore Preference Shares” to the Issuance of Offshore Preference Shares
“RMB”

the lawful currency of the PRC

“Rules of Procedure” the Rules of Procedure for Shareholders’ General Meetings of Harbin Bank Co., Ltd., as amended, supplemented or otherwise modified from time to time

“Securities Law” the Securities Laws of the PRC (中華人民共和國證券法), as amended, supplemented and otherwise modified from time to time

“Share(s)” Domestic Share(s) and/or H Share(s) of the Bank “Shareholder(s)” holder(s) of Shares

“State Council Guidance the Guidance Opinion on the Launch of Preference Shares Opinion” Pilot Scheme (國務院關於開展優先股試點的指導意見) issued by the State Council of the PRC on 30 November 2013

By order of the Board of Directors Harbin Bank Co., Ltd. Guo Zhiwen Chairman

Harbin, the PRC, 15 December 2016

As at the date of this announcement, the Board of Directors of the Bank comprises Guo Zhiwen, Liu Zhuo and Zhang Qiguang, as executive directors; Zhang Taoxuan, Chen Danyang, Cui Luanyi, Ma Pao-Lin and Peng Xiaodong, as non-executive directors; Zhang Shengping, He Ping, Du Qingchun, Wan Kam To and Kong Siu Chee, as independent non-executive directors.

Harbin Bank Co., Ltd. is not an authorized institution within the meaning of the Banking Ordinance (Chapter 155 of Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorized to carry on banking/deposit-taking business in Hong Kong.

APPENDIX I:

The Offshore Issuance Plan is written in Chinese, with no official English translation. The English translation is provided solely for reference only. In case of any discrepancy between the two versions, the Chinese version shall prevail. The full version of the Offshore Issuance Plan is as follows:

PLAN FOR NON-PUBLIC ISSUANCE OF OFFSHORE PREFERENCE SHARES BY HARBIN BANK CO., LTD

1. Type of preference shares to be issued

The type of Offshore Preference Shares to be issued will be preference shares that comply with the requirements of the laws, regulations and regulatory documents of the PRC and overseas.

2. Number of preference shares to be issued and issue size

The aggregate number of Offshore Preference Shares to be issued will not exceed 80 million, with an aggregate amount not exceeding RMB8 billion or its equivalent. The actual issue size is to be determined by the Board within the abovementioned limit, in accordance with the authorisation given by the shareholders’ general meeting.

3. Par value and issue price

The par value of the Offshore Preference Shares will be RMB100 per Offshore Preference Share. The Offshore Preference Shares will be issued at or above the par value. The actual currency and issue price will be determined by the Board prior to issuance with reference to market conditions and in accordance with relevant laws, regulations and market practice and the authorisation given by the shareholders’ general meeting.

4. Maturity

The Offshore Preference Shares will not have any maturity date.

5. Method of issuance and target investors

The issuance of Offshore Preference Shares will be conducted by way of a private placement in accordance with the relevant rules on issuance and the Offshore Preference Shares shall, after being approved by regulatory authorities, be issued in a single or multiple series in accordance with the relevant procedures. If the Offshore Preference Shares are to be issued in multiple series, no separate approval shall be required to be obtained from existing preference shareholders for each such issuance.

Each series of Offshore Preference Shares will be offered to no more than 200 qualified offshore investors who comply with the requirements under relevant regulatory rules and other laws and regulations. All target investors shall subscribe the Offshore Preference Shares in cash.

6. Lock-up period

There will be no lock-up period for the Offshore Preference Shares.

7. Dividend Distribution Terms

(1) Principles for determining the dividend rate

The proposed dividend rate for the Offshore Preference Shares (such dividend rate will be calculated by reference to the issue price of the Offshore Preference Shares, similarly construed hereinafter) may be adjusted at different intervals. The dividend rate at the time of issuance shall be determined by the Board by way of market pricing, in accordance with the authorisation given by the shareholders’ general meeting together with other factors including relevant laws and regulations, market conditions at the time of issuance, investors’ need and the actual circumstances of the Bank. In any adjusted dividend rate period, dividends on the Offshore Preference Shares will be paid at the same prescribed dividend rate and will reset at specified intervals thereafter.

The dividend rate consists of the benchmark rate and the fixed spread. The fixed spread will be determined by deducting the benchmark rate at the time of issuance from the dividend rate at the time of issuance and will remain unchanged once determined. On the reset date, the new dividend rate for the next adjusted dividend rate period will be determined, and will equal to the sum of the benchmark rate as at the reset date and the fixed spread as determined at the time of issuance.

The dividend rate of the Offshore Preference Shares will not be higher than the mean of the weighted average return on equity of the Bank for the last two financial years before issuance[1] .

(2) Conditions to distribution of dividends

If the Bank has distributable after-tax profit[2] after making up for previous years’ losses and contributing to the statutory reserve and general reserve, the Bank may pay dividends to the Offshore Preference Shareholders in accordance with the Articles of Association of the Bank, provided that the capital adequacy ratio of the Bank meets regulatory requirements. The Offshore Preference Shareholders shall rank in priority to the ordinary shareholders in terms of dividend distribution. Distribution of dividends will not be affected by the rating of the Bank and will not be adjusted as a result of any change to such rating.

1 As determined in accordance with the Rules for Preparation of Information Disclosure by Companies Offering Securities to the Public No. 9 – Calculation and Disclosure of Return on Equity and Earnings Per Share (as amended in 2010), and calculated based on the return attributable to the ordinary shareholders of the Bank.

2 Distributable after-tax profit is the undistributed profit as shown in the financial statements of the parent company prepared in accordance with Chinese Accounting Standards or International Financial Reporting Standards, whichever amount is lower.

In order to meet the regulatory requirements for the eligibility criteria for Additional Tier 1 capital instruments, the Bank shall have the right to cancel dividend payments on the Offshore Preference Shares in whole or in part at its discretion and this will not constitute an event of default. The Bank, at its discretion, may use any dividend so cancelled to repay other debts that are due. The cancellation of any dividend payment to the Offshore Preference Shareholders will only constitute a restriction on the payment of dividend to the ordinary shareholders and will not constitute any other restrictions on the Bank. Any declaration and payment of all of the dividends on the Offshore Preference Shares by the Bank will be determined by the Board in accordance with the authorisation given by the shareholders’ general meeting. Any cancellation of all or part of the dividends on the Offshore Preference Shares shall be subject to the consideration and approval by the shareholders’ general meeting. Any cancellation by the Bank of any dividends on the Offshore Preference Shares shall be notified to investors at least ten working days prior to the dividend payment date.

If the Bank cancels all or part of the distribution of dividends on the Offshore Preference Shares, the Bank shall not distribute any profits to the ordinary shareholders from the next day following the resolution being approved at the shareholders’ general meeting until the resumption of payment of dividends in full[3] .

(3) Method of dividend payment

Dividends on the Offshore Preference Shares shall be payable in cash. The dividend bearing principal amount of the Offshore Preference Shares shall be the aggregate value of the relevant series of Offshore Preference Shares then issued and outstanding (namely, the product of the issue price of the Offshore Preference Shares and the number of shares under the relevant series of Offshore Preference Shares then issued and outstanding, similarly construed hereinafter). Dividends on the Offshore Preference Shares shall be paid annually, and will accrue from the due date for payment for the issuance of the relevant series of Offshore Preference Shares.

(4) Dividend accumulation

The dividends on the Offshore Preference Shares will be non-cumulative, namely, in the event of any cancellation by the Bank of all or part of the dividends on the Offshore Preference Shares, any amount of dividends not paid to the Offshore Preference Shareholders in full in the current period will not be accumulated to the following dividend periods.

(5) Distribution of residual profits

After receiving the dividends at the prescribed dividend rate, the Offshore Preference Shareholders shall not be entitled to any distribution of residual profits of the Bank together with the ordinary shareholders.

3 Resumption of payment of dividends in full means that the Bank decides to resume payment of dividends in full to the Offshore Preference Shareholders. However, as the Offshore Preference Shares have adopted a noncumulative dividend approach, the Bank will not pay any dividends which have been cancelled in previous years.

8. Terms of mandatory conversion

(1) Mandatory conversion trigger events

(i) Upon the occurrence of an Additional Tier 1 Capital Trigger Event (namely, the Core Tier 1 capital adequacy ratio of the Bank falling to 5.125% or below), the Bank shall have the right to convert, without the approval of the Offshore Preference Shareholders, all or part of the Offshore Preference Shares then issued and outstanding into H Shares based on the aggregate value of such Offshore Preference Shares in order to restore the Core Tier 1 capital adequacy ratio of the Bank to above 5.125%. In case of partial conversion, the Offshore Preference Shares shall be converted ratably and on the same conditions. Upon conversion of the Offshore Preference Shares into H Shares, such H Shares will not be converted back to preference shares under any circumstances.
(ii) Upon the occurrence of a Tier 2 Capital Trigger Event, the Bank shall have the right to convert, without the approval of the Offshore Preference Shareholders, all of the Offshore Preference Shares then issued and outstanding into H Shares based on the aggregate value of such Offshore Preference Shares. Upon conversion of the Offshore Preference Shares into H Shares, such H Shares will not be converted back to preference shares under any circumstances. A Tier 2 Capital Trigger Event means the earlier of the following events: (a) the China Banking Regulatory Commission having concluded that without a conversion or write-off of the Bank’s capital, the Bank would become non-viable, and (b) the relevant authorities having concluded that without a public sector injection of capital or equivalent support, the Bank would become non-viable.

Upon the occurrence of the above mandatory conversion trigger events, the Bank shall report to the China banking regulatory authorities for review and determination and shall fulfil its relevant information disclosure obligations such as making provisional reports or announcements in accordance with relevant regulatory requirements.

(2) Mandatory conversion period

The mandatory conversion period of the Offshore Preference Shares commences on the first trading day immediately following the completion date of issuance of the Offshore Preference Shares and ends on the date of redemption or conversion of all the Offshore Preference Shares.

(3) Mandatory conversion price and method of adjustments of the mandatory conversion price

The initial mandatory conversion price of the Offshore Preference Shares will be equal to the net asset value per share disclosed in the Bank’s 2016 interim report as at 30 June 2016 and denominated in Hong Kong dollars, which shall be converted with reference to the central parity rate of Renminbi to Hong Kong dollars used by the interbank foreign exchange market as published by the China Foreign Exchange Trade System on the trading day prior to the announcement date of the Board resolution on the Offshore Preference Share issuance plan (rounded up to the nearest 2 decimal places).

In the event that the Bank, among other things, distributes bonus shares with respect to the H Shares, makes capitalisation issues with respect to the H Shares, issues shares below the market price of the H Shares (excluding any increase in the share capital as a result of conversion of certain financial instruments issued by the Bank that are convertible into ordinary shares) or makes any rights issues with respect to the Bank’s H Shares, after the date the Board approves the Offshore Preference Share issuance plan, the Bank will adjust the mandatory conversion price to reflect the above events on a cumulative basis and in the order of the occurrence of such events. The distribution of cash dividends to the ordinary shareholders will not result in any adjustment to the mandatory conversion price. The mandatory conversion price will be adjusted based on the following:

Bonus share issuance or capitalisation issue: P1 = P0 x N/(N + n);

Issuance of new H Shares below the market price of the H Shares or by way of a rights issue: P1 = P0 x (N + k/(N + n); k=n x A/M

Where, “P0” denotes the effective mandatory conversion price before adjustment; “P1” denotes the effective mandatory conversion price after adjustment; “N” denotes the aggregate number of H Shares before such bonus share issuance, capitalisation issue, issuance of new H Shares below the market price of the H Shares or rights issue; “n” denotes the number of new H Shares issued as a result of such bonus share issuance, capitalisation issue, issuance of new H Shares below the market price of the H Shares or rights issue; “A” denotes the price for such issuance of new H Shares below the market price of the H Shares or rights issue; and “M” denotes the closing price of H Shares on the trading day preceding the date of announcement of such issuance of new H Shares below the market price of the H Shares or rights issue (namely, announcement containing the effective and irrevocable terms of such issuance or rights issue).

In the event that the rights and interests of the Offshore Preference Shareholders may be affected by any redemption of the ordinary shares by, or merger or division of, the Bank or any other circumstance which causes changes in the Bank’s share class, number of shares and/or shareholders’ equity, the Bank shall have the right to adjust the mandatory conversion price based on the actual circumstances and in accordance with the principles of fairness, justice and equity as well as to fully protect the rights and interests of the Offshore Preference Shareholders and the ordinary shareholders. The adjustment mechanism for the mandatory conversion price in those circumstances will be determined in accordance with the relevant regulations.

(4) Principles for determining the ratio and number for mandatory conversion

Upon the occurrence of a trigger event, the Board will, in accordance with the approval of the China banking regulatory authorities and the authorisation given by the shareholders’ general meeting, confirm the aggregate amount of the Offshore Preference Shares for mandatory conversion and implement mandatory conversion of the Offshore Preference Shares then issued and outstanding in whole or in part, and the formula for determining the number of shares to be converted shall be: Q = V/P x conversion exchange rate.

Any fractional share will be dealt with by the Bank in accordance with relevant regulatory requirements. Where it is not specified in the regulatory requirements, any fractional share will be rounded down to the nearest integral number. Where: “Q” denotes the number of H Shares that shall be converted from the Offshore Preference Shares held by each Offshore Preference Shareholder; “V” denotes the number of the preference shares held by each Offshore Preference Shareholder that is subject to mandatory conversion multiplied by its issue price; “P” denotes the effective mandatory conversion price for the Offshore Preference Shares; and the “conversion exchange rate” refers to the cross rate between Hong Kong dollars and the currency in which the relevant series of Offshore Preference Shares are denominated based on the RMB central parity rate published by the China Foreign Exchange Trading System on the trading day preceding the date of the announcement of passing of the Board resolution in respect of the Offshore Preference Share issuance plan.

Upon the occurrence of a trigger event, the Offshore Preference Shares then issued and outstanding will be converted into corresponding number of H Shares based on the above formula in whole or in part on a ratable basis.

(5) Entitlement to dividends on ordinary shares in the year of mandatory conversion

The H Shares to be issued as a result of the mandatory conversion of the Offshore Preference Shares will rank pari passu with the existing issued H Shares, and all ordinary shareholders whose names appear on the register of members of the Bank on the record date for dividend entitlement (including the holders of H Shares as a result of the mandatory conversion of the Offshore Preference Shares) shall be entitled to receive the dividend for the current dividend period and enjoy the same rights.

9. Terms of conditional redemption

(1) Redemption right

The Bank shall have the right to redeem the Offshore Preference Shares subject to obtaining the approval of the China banking regulatory authorities. The Offshore Preference Shareholders do not have the right to require the Bank to redeem the Offshore Preference Shares and should not expect that the Offshore Preference Shares will be redeemed. The Offshore Preference Shares will not contain any term allowing investors to put back the Offshore Preference Shares to the Bank and the Offshore Preference Shareholders shall not have any right to require the Bank to repurchase the Offshore Preference Shares held by them.

(2) Redemption conditions and period

From the fifth year following the date of issuance of the Offshore Preference Shares, and subject to obtaining the approval of the China banking regulatory authorities and the compliance with the relevant requirements, the Bank shall have the right to redeem all or part of the Offshore Preference Shares. The specific commencement date of redemption period shall be finally determined by the Board (as authorised by the shareholders’ general meeting) in accordance with market conditions. The redemption period ends on the conversion or redemption of all the Offshore Preference Shares.

The exercise by the Bank of its right to redeem the Offshore Preference Shares shall be subject to the fulfilment of the following conditions:

(i) the Bank shall use capital instruments of the same or superior quality to replace the Offshore Preference Shares to be redeemed and such replacement shall only be made at a time at which the Bank has a sustainable income generating capability; or
(ii) the capital position of the Bank immediately after redemption of the Offshore Preference Shares will remain significantly higher than the regulatory capital requirements prescribed by the China Banking Regulatory Commission.

(3) Redemption price and basis for determining the redemption price

The redemption price of the Offshore Preference Shares will be an amount equal to the issue price plus the amount of dividend declared but unpaid for the current period.

10. Restrictions on voting rights and terms of restoration of voting rights

(1) Restrictions on voting rights

Under normal circumstances, the Offshore Preference Shareholders are not entitled to convene or attend any shareholders’ general meetings of the Bank nor do the Offshore Preference Shares carry voting rights in any shareholders’ general meeting. If any of the following matters occurs, the Offshore Preference Shareholders will be entitled to attend shareholders’ general meetings and vote as a separate class. Under such circumstance, each Offshore Preference Share will be entitled to one vote, but the Offshore Preference Shares held by the Bank do not entitle the Bank to vote:

(i) amendments to the Articles of Association of the Bank that relate to preference shares;
(ii) reduction of the registered capital of the Bank by more than 10% on a single or aggregate basis;
(iii) merger, division, dissolution or change of corporate form of the Bank;
(iv) issuance of preference shares by the Bank; and
(v) other events specified in the laws, administrative rules and departmental regulations and the Articles of Association.

Resolutions relating to the above matters shall be approved by more than two thirds of the votes held by the ordinary shareholders present at the meeting (including preference shareholders with restored voting rights) and by more than two thirds of the votes held by the preference shareholders present at the meeting (excluding preference shareholders with restored voting rights).

(2) Terms of restoration of voting rights

Following the issuance of the Offshore Preference Shares by the Bank and so long as such Offshore Preference Shares remain outstanding, if the Bank fails to pay the prescribed dividend to the Offshore Preference Shareholders for three financial years in aggregate or two consecutive financial years, the Offshore Preference Shareholders will have the right to attend and vote at the shareholders’ general meetings as if they are ordinary shareholders from the day immediately after the shareholders’ general meeting resolves that the Bank will not pay the prescribed dividend for the current dividend period, and each Offshore Preference Share will be entitled to the voting rights as provided in the Articles of Association of the Bank. The formula for calculating the voting rights of the Offshore Preference Shares with restored voting rights is as follows: Q = V/P x conversion exchange rate, with any fractional restored voting right rounded down to the nearest whole number.

Where: “Q” denotes the H Share voting rights restored from the Offshore Preference Shares held by each Offshore Preference Shareholder; “V” denotes the aggregate value of the Offshore Preference Shares with restored voting rights held by each Offshore Preference Shareholder; “P” denotes the conversion price, where the initial conversion price is equal to the initial mandatory conversion price; and the “conversion exchange rate” refers to the cross rate between Hong Kong dollars and the currency in which the relevant series of the Offshore Preference Shares are denominated based on the RMB central parity rate published by the China Foreign Exchange Trading System on the trading date preceding the date of the announcement of the passing of the Board resolution in respect of the Offshore Preference Share issuance plan.

After the date of the announcement of the passing of the Board resolution with respect to the Offshore Preference Share issuance plan, in the event of any distribution of bonus shares with respect to the H Shares, capitalisation issue with respect to the H Shares, issuance of new shares below the market price of the H Shares (excluding any increase of share capital due to conversion of financial instruments convertible to ordinary shares issued by the Bank), or rights issue with respect to the Bank’s H Shares, the Bank will make an adjustment to the conversion price, “P”, to reflect each of such events on a cumulative basis in the order of the occurrence of the events above. The detailed adjustment method shall be consistent with the adjustment method applicable to the mandatory conversion price as specified in “8. Terms of mandatory conversion”.

(3) Cancellation of restoration of voting rights

After such restoration of the voting rights of the Offshore Preference Shares, such restored voting rights shall be cancelled from the date of full payment of the dividend on the Offshore Preference Shares for the current dividend period. After the cancellation of the restored voting rights, if the Bank fails to make any scheduled dividend payment, then “(2) Terms of restoration of voting rights” above shall apply again.

11. Order of distribution on liquidation and procedures for liquidation

According to the Articles of Association of the Bank, after paying the liquidation cost, staff salary, labour insurance, statutory compensation and the outstanding taxes respectively, and after repayment of its debts, the remaining assets of the Bank shall be distributed to the shareholders of the Bank according to the type and proportion of their respective shareholdings.

The Offshore Preference Shareholders shall rank pari passu with the holders of other preference shares that may be issued by the Bank in the future, and shall take precedence over ordinary shareholders, in distribution of the residual property of the Bank. The Offshore Preference Shareholders will be entitled to an amount on liquidation equal to the aggregate value of the Offshore Preference Shares then issued and outstanding plus any declared but unpaid dividends for the current period. If there are insufficient residual assets, the distribution will be made ratably according to the aggregate value of the Offshore Preference Shares held by each Offshore Preference Shareholder as a proportion of the aggregate value of all preference shares.

The remaining assets of the Bank after settlement in accordance with the provisions aforesaid shall be distributed to the ordinary shareholders of the Bank in proportion to the shareholding of ordinary shares held by them.

12. Security

The Offshore Preference Shares will not have any security arrangements.

13. Ratings arrangement

The specific rating arrangement for the Offshore Preference Shares (if necessary) shall be determined according to relevant laws and regulations and issuance market conditions.

14. Use of proceeds

The proceeds from the issuance of the Offshore Preference Shares, after deduction of the expenses relating to the issuance, will be used to replenish the Bank’s Additional Tier 1 Capital.

15. Listing/trading arrangements

The listing/trading arrangements for the Offshore Preference Shares will be set out in the issuance documents.

16. Validity period of the resolution for the issuance of Offshore Preference Shares

The Offshore Preference Share issuance plan will be valid for 36 months from the date on which the resolution is approved at the shareholders’ general meeting.

APPENDIX II:

The Proposal on Authorisation Matters in respect of Offshore Preference Shares is written in Chinese, with no official English translation. The English translation is provided solely for reference. In case of any discrepancy between the two versions, the Chinese version shall prevail. The full version of the Proposal on Authorisation Matters in respect of Offshore Preference Shares is as follows:

PROPOSAL ON AUTHORISATION TO THE BOARD AND ITS AUTHORISED PERSONS TO HANDLE ALL MATTERS RELATING TO THE ISSUANCE OF OFFSHORE PREFERENCE SHARES

1. Matters authorised in connection with the issuance of Offshore Preference Shares

To ensure the successful implementation of the issuance of Offshore Preference Shares, it is proposed that the Shareholders’ general meeting authorise the Board, and the Board will then delegate the authority to the Chairman, the President and the Secretary to the Board of the Bank, in accordance with the principles for the issuance of Offshore Preference Shares approved at the Shareholders’ general meeting, to individually or jointly exercise the full power to deal with the matters relating to the issuance of Offshore Preference Shares within the validity period of the authorisation for the issuance of Offshore Preference Shares, including but not limited to those set out below:

(1) to formulate and implement the final Offshore Preference Share issuance plan, including but not limited to:
(i) to determine the number of series and the respective issue number and issue size of each series of the Offshore Preference Shares within the approved total issue number and issue size;
(ii) to determine the method for determining the dividend rate and the specific dividend rate and adjusted dividend rate period of the Offshore Preference Shares;
(iii) to determine whether the Offshore Preference Shares will be issued at or above par value, the issue price of the Offshore Preference Shares, the subscription currency, and the specific commencement date of the redemption period, redemption conditions and the issuance method of the Offshore Preference Shares, according to market conditions prior to the issuance of Offshore Preference Shares;
(iv) to determine the timing of issuance, the arrangements relating to issuance in multiple series, the target investors and the number of Offshore Preference Shares to be allocated to each target investor according to the approvals from regulatory authorities and market conditions prior to the issuance of Offshore Preference Shares; and
(v) to determine other matters in relation to the issuance plan of Offshore Preference Shares (including but not limited to rating arrangements, special account for the proceeds, the tax arrangements in relation to any dividend payment, the arrangements with respect to subscription procedures and the listing of the Offshore Preference Shares) and to make necessary adjustments to the issuance

plan of Offshore Preference Shares according to the latest regulatory requirements or opinions of regulatory authorities (including suspension and termination, similarly construed hereafter), except those matters that require a separate vote at a Shareholders’ general meeting in accordance with the relevant laws and regulations and the Articles of the Bank.

(2) if there are any new regulations by the State or policies by relevant regulatory authorities on preference shares or any changes to market conditions occurring prior to the issuance of Offshore Preference Shares, to exercise full power to amend the issuance plan of Offshore Preference Shares accordingly to reflect such changes, except for those amendments that require a separate vote at the Shareholders’ general meeting according to relevant laws, regulations and the Articles of the Bank;
(3) to produce, amend, execute, implement and file the application materials relating to the issuance, trading and transfer of the Offshore Preference Shares, the documents relating to the issuance and transfer of the Offshore Preference Shares and other documents (such as offering circular, issuance circular and/or prospectus, as applicable) of the Offshore Preference Shares, to deal with related matters, such as approval, registration, filing, authorisation and consent by relevant regulatory authorities and to conduct all acts relating to the issuance or transfer of the Offshore Preference Shares that are deemed necessary, proper or appropriate by such authorised person(s), in each case, according to the requirements of relevant domestic and offshore governmental bodies and regulatory authorities (including The Stock Exchange of Hong Kong Limited);
(4) to draft, amend, execute, implement, submit and publish all contracts, agreements and documents (including but not limited to sponsor and underwriting agreements, agreements relating to the issuance proceeds, subscription agreements entered into with investors, announcements, circulars and other disclosure documents) in relation to the issuance of the Offshore Preference Shares;
(5) to make appropriate amendments, adjustments and supplements to the issuance plan and terms of the Offshore Preference Shares in accordance with the opinions of the relevant regulatory authorities and the actual circumstances of the Bank to the extent permitted by laws and regulations;
(6) to amend those provisions in the Articles of the Bank relating to the issuance of Offshore Preference Shares, to deal with regulatory approvals, to handle the formalities in relation to the approval and filing of the amendments to the Articles of the Bank, and to register with the administration for industry and commerce and other competent governmental bodies for the change of registration as well as other matters, in each case, according to the opinions of the relevant regulatory authorities, the result of the issuance of Offshore Preference Shares and the actual situation of the Bank; and
(7) to deal with other matters relating to the issuance of Offshore Preference Shares.

The authorisation for the issuance of Offshore Preference Shares shall remain valid during the 12 months following the passing of the resolution at the Shareholders’ general meeting. If the issuance of Offshore Preference Shares is not completed before the expiration of the validity period of such authorisation, then such authorisation will lapse, but the Board has the right to seek approval at a Shareholders’ general meeting to extend or renew the validity period of such authorisation.

2. Matters authorised in connection with the Offshore Preference Shares that remain outstanding

So long as the Offshore Preference Shares remain outstanding, it is proposed that the Shareholders’ general meeting authorise the Board (including the authority for the Board to sub-delegate), to exercise full power to deal with the following matters in accordance with laws and regulations, the Articles of the Bank, relevant regulatory rules and the framework and principles for the issuance of Offshore Preference Shares as considered and resolved at the Shareholders’ general meeting:

(1) to deal with all matters relating to conversion of the Offshore Preference Shares during the conversion period upon occurrence of any trigger event for mandatory conversion of the Offshore Preference Shares, including but not limited to, determining the timing of conversion, conversion ratio and implementing the procedures for conversion, amending the relevant provisions in the Articles of the Bank, dealing with regulatory approvals, registering with the administration for industry and commerce and other competent governmental bodies for the change of registration as well as other matters.
(2) to decide on matters relating to redemption of the Offshore Preference Shares during the redemption period with reference to market conditions and other factors, and to deal with all matters relating to redemption as approved by China banking regulatory authority and other regulatory authorities; and
(3) to determine and deal with matters in relation to dividend payment to Offshore Preference Shareholders in accordance with the requirements of the issuance terms. However, cancellation in whole or in part of the Offshore Preference Share dividends shall still require the approval of the Shareholders’ general meeting.