Kingwell Group Limited — M&A Activity 2016

Jun 12, 2016

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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(Incorporated in Bermuda with limited liability)

(Stock Code: 559)

MEMORANDUM OF UNDERSTANDING IN RELATION TO POSSIBLE ACQUISITION OF EMISSION PARTICLE SOLUTION SWEDEN AB

The Board announces that on 10 June 2016 (after trading hours), the Purchaser entered into a MOU with seven Vendors in relation to the Possible Acquisition.

The Target Company is a company domiciled in Sweden with limited liability and as at the date of this announcement is principally engaged in the trading and distribution of a product that can reduce fuel consumption and environmental impact.

Pursuant to the MOU, the Vendors and the Purchaser shall negotiate in good faith towards one another in ensuring that the SPA for the Possible Acquisition be entered into as soon as possible and in any event on or before 30 June 2016 (or such other date as the Vendors and the Purchaser may mutually agree in writing).

The Board wishes to emphasise that no binding agreement in relation to the Possible Acquisition has been entered into by the Vendors and the Purchaser as at the date of this announcement. As such, the Possible Acquisition may or may not proceed. If the Possible Acquisition materialises, it will constitute a notifiable transaction on the part of the Company under Chapter 14 of the Listing Rules.

Shareholders and investors are urged to exercise caution when dealing in the securities of the Company. Further announcement in respect of the Possible Acquisition will be made by the Company in compliance with the Listing Rules as and when appropriate.

This announcement is made by DeTai New Energy Group Limited (the ‘‘Company’’, together with its subsidiaries as the ‘‘Group’’) pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The board (the ‘‘Board’’) of directors (the ‘‘Directors’’) of the Company is pleased to announce that on 10 June 2016 (after trading hours), Perfect Essential Holdings Limited, a wholly-owned subsidiary of the Company, as purchaser (the ‘‘Purchaser’’) entered into a memorandum of understanding (the ‘‘MOU’’) with seven independent third parties (the ‘‘Vendors’’) pursuant to which the Purchaser intends to acquire and the Vendors intend to sell the entire share capital of Emission Particle Solution Sweden AB (the ‘‘Target

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Company’’) (the ‘‘Possible Acquisition’’). The terms and conditions of the Possible Acquisition are subject to further negotiation and the execution of the formal sale and purchase agreement between the parties thereto.

THE MOU

Set out below is a summary of the principal terms of the MOU:

Date : 10 June 2016 (after trading hours) Parties : (1) seven Vendors; and (2) the Purchaser.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as at the date of the MOU, each of the Vendors and their respective ultimate beneficial owners are parties independent of and not connected with the Company and its connected persons (as defined under the Listing Rules).

Assets intended to be acquired

Pursuant to the MOU, the Purchaser intends to acquire and the Vendors intend to sell the 1,366 shares (the ‘‘Sale Shares’’) of the Target Company (representing the entire share capital of the Target Company) at a consideration subject to further negotiation by the parties thereto.

Formal sale and purchase agreement

The Vendors and the Purchaser shall negotiate in good faith towards one another in ensuring that the formal sale and purchase agreement (the ‘‘SPA’’) for the Possible Acquisition be entered into as soon as possible and in any event on or before 30 June 2016 (or such other date as the Vendors and the Purchaser may mutually agree in writing).

Due diligence review

Following the signing of the MOU, the Purchaser shall be entitled to conduct due diligence review of the assets, liabilities, operations and affairs of the Target Company as it may consider appropriate and the Vendors shall provide and procure the Target Company and its agents to provide such assistance as the Purchaser and its advisers and agents may require in connection with such due diligence review.

Exclusivity

Pursuant to the MOU, the Vendors will not, and will procure that the Target Company and its directors, officers, employees, representatives and agents will not, directly or indirectly, for the period ended on 30 June 2016 (or such other date as the Vendors and the Purchaser may mutually agree in writing) (i) solicit, initiate or encourage inquiries or offers from, or (ii) initiate or continue negotiations or discussions with or furnish any information to, or (iii) enter into any agreement or statement of intent or understanding with, any person or entity other than the Purchaser with respect to the sale or other disposition of the Sale Shares or the sale, subscription, or allotment of any part thereof or any other shares of the Target Company.

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Termination

The Purchaser may terminate the MOU without liability on its part by serving a written notice of not less than seven (7) days to the Vendors provided that termination of the MOU shall be without prejudice to any rights or remedies accrued to any party prior to its termination.

Binding Effect

The MOU does not create legally binding obligations on the parties in relation to the Possible Acquisition but is legally binding as to such terms relating to, among others, the signing of the SPA, the conduct of the due diligence review, exclusivity period, termination, confidentiality, notices, costs and expenses, and governing law and jurisdiction. The Possible Acquisition is subject to further negotiation and execution of the SPA between the Vendors and the Purchaser.

INFORMATION OF THE TARGET COMPANY

The Target Company is a company domiciled in Sweden with limited liability and as at the date of this announcement is principally engaged in the trading and distribution of a product that can reduce fuel consumption and environmental impact.

REASONS FOR AND BENEFITS OF THE POSSIBLE ACQUISITION

The Company and its subsidiaries are principally engaged in the businesses of manufacturing and trading of electric cycles, trading and distribution of liquor and wine, provision of money lending services and investments in listed securities. The Company has been actively seeking new business opportunities from time to time in order to diversify its business and enhance the long-term growth potential of the Company and its shareholders’ value.

Saving energy and minimising environmental impact have become the recent trend all over the world. The product distributed by the Target Company has been tested to reduce fuel consumption and dangerous particulate effectively. The Group seizes this opportunity to further expand and diversify its business portfolio into consumption products market of the new energy industry worldwide.

The Company and its subsidiaries is expected to be benefited from the synergy arising from the Possible Acquisition and therefore it is in the interest of the Company and its shareholders as a whole.

GENERAL

The Board wishes to emphasise that the Possible Acquisition may or may not proceed and that the Purchaser and the Vendors have not entered into any binding agreement in relation to the Possible Acquisition as at the date of this announcement. If the Possible Acquisition materialises, it will constitute a notifiable transaction on the part of the Company under Chapter 14 of the Listing Rules.

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Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company. The Company will make further announcement in respect of the Possible Acquisition as and when appropriate in accordance with the Listing Rules.

By order of the Board DeTai New Energy Group Limited Wong Hin Shek Chairman and Executive Director

Hong Kong, 12 June 2016

As at the date of this announcement, the executive Directors are Mr. Wong Hin Shek and Mr. Chi Chi Hung, Kenneth; the non-executive Director is Mr. Chui Kwong Kau; and the independent non-executive Directors are Mr. Chiu Wai On, Mr. Man Kwok Leung and Dr. Wong Yun Kuen.

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