Kingwell Group Limited — M&A Activity 2016

Apr 14, 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.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the shares of the Company.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 559)

UPDATE ON THE MAJOR ACQUISITION IN RELATION TO THE INVESTMENT IN WINE TRADING AND DISTRIBUTION BUSINESS

Reference is made to the circular of DeTai New Energy Group Limited (the ‘‘Company’’) dated 8 February 2013 (the ‘‘Circular’’) and the announcement of the Company dated 22 April 2013 in relation to, among other matters, the acquisition of the entire issued share capital of Total Grand Investments Limited (the ‘‘Acquisition’’). Unless the context requires otherwise, capitalised terms used herein shall have the same meanings as those defined in the Circular.

Pursuant to the Agreement (as amended and supplemented by the Supplemental Agreement), the Counterparty and the Guarantor jointly and severally warranted and guaranteed to the Investor that: (i) the Net Profit shall not be less than RMB50,000,000; (ii) the Total Net Profits shall not be less than RMB300,000,000; and (iii) the Target Group will have at least 300 Stores signed up in the PRC upon Completion which shall increase to at least 500 Stores before 30 June 2013. If the Target Group shall fail to meet the Total Net Profits in the sum of RMB300,000,000 by 31 December 2015, the actual number of the Convertible Preference Shares to be released to the Counterparty or its nominee(s) by the Escrow Agent on the Payment Date will be downward adjusted in proportion to the actual Total Net Profits.

According to the audited accounts of the Target Group, the Target Group incurred a net loss of aggregate amount of approximately HK$38,000,000 (equivalent to approximately RMB32,000,000) for the three financial years ended 31 December 2015. Accordingly, the Counterparty shall not be entitled to any Convertible Preference Shares.

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The Company is now considering the possible ways to deal with the Convertible Preference Shares. Further announcement(s) in relation to the treatment of the Convertible Preference Shares will be made by the Company as and when appropriate.

In this announcement, amounts in HK$ are translated into RMB on the basis of approximately HK$1=RMB0.84. The conversion rate is for illustration purpose only and should not be taken as a representation that HK$ could actually be converted into RMB at such rate or at all.

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

Hong Kong, 14 April 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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