Honghua Group Limited — Capital/Financing Update 2013

Jul 4, 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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HONGHUA GROUP LIMITED

宏華集團有限公司

(a company incorporated in the Cayman Islands with limited liability)

(Stock Code: 196)

VOLUNTARY ANNOUNCEMENT

ENTERING INTO SALE AND PURCHASE AGREEMENTS

This is a voluntary announcement made by the Company.

The Board is pleased to announce that on 3 July 2013, Rushong-Hua and BKE entered into the Sale and Purchase Agreements pursuant to which Rushong-Hua shall sell to BKE and BKE shall purchase from Rushong-Hua 9 units of land drilling rigs with certain specifications in accordance with the terms and conditions of the Sale and Purchase Agreements.

This is a voluntary announcement made by Honghua Group Limited (the “ Company ”).

The Sale and Purchase Agreements

The board of the Company (the “ Board ”) is pleased to announce that on 3 July 2013, Rushong-Hua Co.Ltd ( “ Rushong-Hua ”), an indirect wholly-owned subsidiary of the Company and OOO Burovoya Kompaniya Eurasia (“BKE”) entered into two sale and purchase agreements (the “ Sale and Purchase Agreements ”) pursuant to which

Rushong-Hua shall sell to BKE and BKE shall purchase from Rushong-Hua 9 units of land drilling rigs with certain specifications in accordance with the terms and conditions of the Sale and Purchase Agreements.

The consideration in relation to the transaction contemplated under the Sale and Purchase Agreements amounts to an aggregate of about USD135 million (about RMB 837million).

The Sale and Purchase Agreements were determined after arms’ length negotiation between Rushong-Hua and BKE. The directors of the Company (the “ Directors ”) are of the view that the terms of the Sale and Purchase Agreements are on normal commercial terms, fair and reasonable and in the interest of the Company and the Shareholders as a whole.

The Board takes the view that the transaction contemplated under the Sale and Purchase Agreements is of a revenue nature in the ordinary and usual course of business of the Company under Rule 14.04(1)(g) of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “ Listing Rules ”).

Information of Rushong-Hua and BKE

Rushong-Hua is a company incorporated in Russia and is an indirect wholly-owned subsidiary of the Company. It is principally engaged in trading of drilling rigs and related parts.

BKE is a company incorporated in Russia and as measured by meters drilled is the largest on shore drilling contractor in Russia. It is principally engaged in well exploration and development of all types of oil and gas wells.

To the best of the knowledge, information and belief of the Directors and after having made all reasonable enquiries, BKE is an independent third party not connected with the Company and its connected persons (as defined in the Listing Rules).

General

The transaction contemplated under the Sale and Purchase Agreements does not constitute any notifiable transaction of the Company under Chapter 14 of the Listing Rules nor any connected transaction under Chapter 14A of the Listing Rules.

On behalf of the Board Honghua Group Limited Zhang Mi Chairman

PRC, 4 July 2013

As at the date of this announcement, the executive directors of the Company are Mr. Zhang Mi (Chairman), Mr. Ren Jie and Mr. Liu Zhi, the non-executive director of the Company is Mr. Siegfried Meissner （ Mr.PoPin Su as his alternate ） and the independent non-executive directors of the Company are Mr. Liu Xiaofeng, Mr. Qi Daqing, Mr. Tai Kwok Leung, Alexander, Mr. Chen Guoming, Mr. Shi Xingquan and Mr. Guo Yanjun.