Medlive Technology Co., Ltd. — Capital/Financing Update 2012

Jan 12, 2012

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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HISENSE KELON ELECTRICAL HOLDINGS COMPANY LIMITED 海信科龍電器股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 00921)

ANNOUNCEMENT DISCLOSEABLE TRANSACTION – DISPOSAL OF 60% EQUITY INTERESTS IN XI,AN KELON AND RELEVANT DEBT

On 12 January 2012, the Company entered into the Transfer Contract with the Purchaser, pursuant to which the Company agreed to transfer the Equity Interests (being 60% of the equity interests in Xi,an Kelon) to the Purchaser. Pursuant to the Transfer Contract, the transfer of the Relevant Debt to the Purchaser is a condition to the transfer of the Equity Interests. The total consideration for the transfer of the Equity Interests and the Relevant Debt by the Group to the Purchaser is RMB110,580,000.

Prior to the cessation of its production in 2007, Xi,an Kelon was principally engaged in the development, manufacture, design, production and sale of refrigerating compressor products for fluorine-free refrigerators (freezers) and the provision of after-sale maintenance services.

The applicable percentage ratios in respect of the Disposal are greater than 5% but less than 25%. Therefore, the Disposal constitutes a discloseable transaction for the Company and is subject to the announcement requirements but exempt from shareholders’ approval requirement under the Listing Rules.

THE TRANSFER CONTRACT

On 12 January 2012, the Company entered into the Transfer Contract with the Purchaser, pursuant to which the Company agreed to transfer the Equity Interests (being 60% of the equity interests in Xi,an Kelon) to the Purchaser. Pursuant to the Transfer Contract, the transfer of the Relevant Debt to the Purchaser is a condition to the transfer of the Equity Interests. The total consideration for the transfer of the Equity Interests and the Relevant Debt by the Group to the Purchaser is RMB110,580,000.

The principal terms of the Transfer Contract are set out below:

Date:

12 January 2012

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Parties:

• (i) The Company as vendor

• (ii) The Purchaser as purchaser

Subject matter:

• (i) The Equity Interests (being 60% of the equity interests in Xi,an Kelon (represented by RMB121,200,000 of the registered capital of Xi,an Kelon contributed by the Company) held by the Company); and

• (ii) The Relevant Debt (being the debt owed by Xi,an Kelon to the Company in the sum of RMB10,580,000 and the debt owed by Xi,an Kelon to Hisense Ronshen in the sum of RMB87,314,216.54, together with interests, as well as the case acceptance fee, property preservation fee and assessment costs in the sum of RMB872,733).

The debt owed by Xi,an Kelon to the Company comprises (a) the sum of RMB8,430,000 paid by the Company for and on behalf of Xi,an Kelon to settle the debts for payment for goods owed by Xi,an Kelon to its suppliers which have entered into execution procedures, (b) the sum of RMB1,150,000 paid by the Company for and on behalf of Xi,an Kelon to pay the wages and social security payments as a result of labour dispute litigations and (c) the sum of RMB1,000,000 advanced by the Company to Xi,an Kelon to maintain its normal continuance after Xi,an Kelon ceased its production.

The debt owed by Xi,an Kelon to Hisense Ronshen in the amount of RMB87,314,216.54, together with interests for the period from 23 December 2006 to 8 June 2007, based on the bank loan interest rate over the same period, as well as the case acceptance fee, property preservation fee and assessment costs in the sum of RMB872,733, have been confirmed in the civil judgment (Fo Zhong Fa Min Er Chong Zi No. 2 (2010)).

Conditions:

Pursuant to the Transfer Contract, the conditions to the transfer of the Equity Interests include:

• (i) the Purchaser knowing and agreeing to the board resolutions passed in a meeting of the board of directors of Xi,an Kelon and agreeing to perform the obligations in favour of the transferor of the equity interests according to certain resolutions passed at such board meeting which mainly relate to the remaining historical issues concerning the settlement by the Purchaser of each type of liabilities and debts for and on behalf of Xi,an Kelon and the requirement that the Purchaser will proceed the transfer involving state-owned equity interests in accordance with the legal procedures prescribed for state-owned equity interests;

• (ii) the transfer of the Relevant Debt to the Purchaser.

Consideration:

The total consideration for the transfer of the Equity Interests and the

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Relevant Debt is RMB110,580,000 (of which RMB10,580,000 is the consideration for the Equity Interests and RMB100,000,000 is the consideration for the Relevant Debt), which shall be paid by the Purchaser to the Company in the following manner:

• (i) RMB2,000,000 shall be paid within 2 days after the signing of the Transfer Contract as deposit;

• (ii) RMB10,580,000 shall be paid within 10 days from the date of signing of the Transfer Contract (whereby the deposit will be treated as part payment of the consideration);

• (iii) 25% of the consideration for the transfer of the Relevant Debt shall be paid within 10 days from the date of signing of the Transfer Contract;

• (iv) 25% of the consideration for the transfer of the Relevant Debt shall be paid within 10 working days from the date when the land, factories, equipment, licences for operations, seals and financial information (including without limitation, financial and liabilities record and documents, bank records, litigation documents and payment evidence) of Xi,an Kelon are handed over by the Company to the Purchaser (“ Handover Date ”), which payment shall not be made later than 29 February 2012;

• (v) the remaining consideration for the transfer of the Relevant Debt shall be paid within 10 working days from the date when the Equity Interests is changed to the name of the Purchaser, provided that in any event, regardless whether the Equity Interests have been changed to the name of the Purchaser, 30% of the consideration for the transfer of the Relevant Debt shall be paid before 30 June 2012 whereas the remaining consideration shall be paid before 30 June 2013.

• Others: (i) The Transfer Contract shall take effect after approval by the examination and approval authorities.

• (ii) Within 10 days after the payment of RMB10,580,000 and the payment of the first 25% of the consideration for the transfer of the Relevant Debt by the Purchaser to the Company, the land, factories, equipment, licences for operations, seals and financial information (including without limitation, financial and liabilities record and documents, bank records, litigation documents and payment evidence) of Xi,an Kelon shall be handed over by the Company to the Purchaser.

• (iii) Within 30 days after the approval of the Transfer Contract by the examination and approval authorities for foreign investment enterprises, the procedures for the change of ownership of the Equity Interests and the change of creditors in the debt legal

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documentation shall be attended to, provided that if the debt legal documentation has not been obtained, the procedures for the change of creditors can be deferred until 30 days from the date when such documentation is obtained.

• (iv) If there are other debts and contingent liabilities which are payable by Xi’an Kelon as at the date of signing of the Transfer Contract and which have not been disclosed, the Company shall be responsible for 60% of Xi’an Kelon’s loss arising from such undisclosed debts and contingent liabilities for such part which exceeds RMB500,000. However, the Company shall not assume any legal liability for Xi,an Kelon’s loss arising from such undisclosed matters six months after the handover of the financial documents.

• (v) The Transfer Contract is subject to the exercise of any pre-emptive rights by the other shareholders of Xi,an Kelon according to the relevant requirements. As at the date of this announcement, such shareholders are deemed to have waived their respective pre-emptive rights.

BASIS OF THE CONSIDERATION

The consideration for the Disposal was determined after arm’s length negotiation between the Company and the Purchaser based on normal commercial terms and after considering the book value of the assets and liabilities position of Xi,an Kelon and the debts owed by Xi,an Kelon to the Group.

INFORMATION OF XI,AN KELON

Xi,an Kelon, which is owned as to 60% by the Company prior to the Disposal, is a company established in the PRC in 2002 and has a registered capital of RMB202,000,000. Prior to the cessation of its production in 2007, Xi,an Kelon was principally engaged in the development, manufacture, design, production and sale of refrigerating compressor products for fluorine-free refrigerators (freezers) and the provision of after-sale maintenance services. Its assets include the land use right in respect of the land of approximately 23,761 square metres located at Sci-tech Second Road, Xi’an (西安市科技二路) in the PRC and the factories thereon.

The financial highlights of Xi,an Kelon are set out below:-

	For the 9 months	For the financial year	For the financial year
	ended 30 September	ended 31 December	ended
	2011	2010	31 December 2009
	RMB	RMB	RMB
Profit / (Loss)	(13,086,631.08)	(18,892,390.09)	(21,280,915.06)
before taxation
and extraordinary
items
Profit / (Loss)	(13,086,631.08)	(18,892,390.09)	(21,280,915.06)
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after taxation and extraordinary items

	As at 30 September	As at 31 December	As at 31 December
	2011	2010	2009
	RMB	RMB	RMB
Total assets value	44,958,483.99	57,894,662.17	76,139,275.64
Net assets /	(88,968,811.50)	(75,882,180.42)	(56,989,790.33)
(liabilities)

Note: The financial figures for each of the two financial years ended 31 December 2010 were based on the audited financial statements of Xi,an Kelon which were prepared in accordance with PRC accounting standards. The financial figures for the 9 months ended 30 September 2011 were based on the unaudited financial statements of Xi,an Kelon which were prepared in accordance with PRC accounting standards.

Upon completion of the Disposal, the Group will cease to hold any equity interests in Xi,an Kelon and accordingly Xi,an Kelon will cease to be a subsidiary of the Company.

INFORMATION OF THE GROUP AND THE PURCHASER

The Group is principally engaged in the manufacture and sales of refrigerators and air-conditioners.

The Purchaser was established in 1998 and is principally engaged in the development, design, construction and ancillary services of science and technology park, development of high and new technology, introduction and application of technology, consultation and technological services in respect of corporate management and development and sale of real properties.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are third parties independent of and not connected with the Company and its connected persons.

REASONS FOR AND BENEFITS OF THE DISPOSAL

Xi,an Kelon has ceased production for several years and a rather large debt is owed by Xi,an Kelon to Hisense Ronshen. The Disposal can resolve the historical problem and enable the Company to safely recover the debts owed by Xi,an Kelon. At the same time, the Disposal allows the Company to strip off bad assets, reduce the source of loss and focus its resources which will enhance the profit level of the Company.

As at 31 December 2011, the net book value for the long term investments in Xi,an Kelon attributable to the Company is RMB-55,970,000 and the net book value for the Relevant Debt is RMB93,430,000. The Company estimates that the expected gain of the Disposal to the Group is approximately RMB73,000,000 based on the net book value of the Equity Interests held by the Company in Xi,an Kelon and the net book value of the Relevant Debt. The Company intends to use the net proceeds (after deducting relevant expenses in connection with the Disposal) mainly for

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supplementing the Company’s need for cash flow during the course of its normal production and operational activities.

The Directors (including the independent non-executive Directors) are of the view that the terms of the Transfer Contract are on normal commercial terms and are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

None of the Directors has a material interest in the Transfer Contract. Accordingly, none of the Directors is required to abstain from voting on the relevant board resolution(s) to approve the Transfer Contract and the transactions contemplated thereunder.

IMPLICATIONS UNDER THE LISTING RULES

The applicable percentage ratios in respect of the Disposal are greater than 5% but less than 25%. Therefore, the Disposal constitutes a discloseable transaction for the Company and is subject to the announcement requirements but exempt from shareholders’ approval requirement under the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the meanings set opposite to them below:

“A Shares”	domestic ordinary shares of the Company with a nominal value of
	RMB1.00 each and are listed on the Shenzhen Stock Exchange;
“Board” or “Director(s)”	the board of directors of the Company;
“Company”	Hisense Kelon Electrical Holdings Company Limited, a company
	incorporated in the PRC with limited liabilities, whose shares are
	listed on the main board of the Stock Exchange and the Shenzhen
	Stock Exchange;
“connected person”	has the meaning ascribed to it in the Hong Kong Listing Rules;
“Disposal”	the transfer of the Equity Interests and the Relevant Debt by the
	Group to the Purchaser pursuant to the terms of the Transfer
	Contract;
“Equity Interests”	60% equity interests in Xi,an Kelon (represented by
	RMB121,200,000 of the registered capital of Xi,an Kelon
	contributed by the Company) held by the Company;
“Group”	the Company and its subsidiaries;
“H Shares”	overseas listed foreign shares of the Company with a nominal
	value of RMB1.00 each and are listed on the Stock Exchange;
“Hisense Ronshen”	海信容聲（廣東）冰箱有限公司(Hisense Ronshen (Guangdong) Refrigerator Co., Ltd.), a wholly-owned subsidiary of the
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	Company;
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China;
“Hong Kong Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“PRC”	the People’s Republic of China, which for the purposes of this
	announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the People’s Republic of China and
	Taiwan;
“Purchaser”	陝西啟迪科技園發展有限公司(Shanxi Qidi Science and Technology Park Development Co., Ltd.), a company established
	in the PRC;
“Relevant Debt”	the debt owed by Xi,an Kelon to the Company in the sum of
	RMB10,580,000 and the debt owed by Xi,an Kelon to Hisense
	Ronshen in the sum of RMB87,314,216.54, together with
	interests, as well as the case acceptance fee, property preservation
	fee and assessment costs in the sum of RMB872,733;
“Share(s)”	share(s) of RMB1.00 each in the capital of the Company,
	comprising the A Shares and the H Shares;
“Shareholder(s)”	holder(s) of the Shares;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Transfer Contract”	the equity transfer contract between the Company and the
	Purchaser dated 12 January 2012 in relation to the transfer of the
	Equity Interests and the Relevant Debt by the Group to the
	Purchaser;
“Xi,an Kelon”	西安科龍製冷有限公司(Xi,an Kelon Refrigeration Co., Ltd.), a
	company established in the PRC which is a non-wholly owned
	subsidiary of the Company (owned as to 60%) prior to the
	Disposal;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“RMB”	Renminbi, the lawful currency of the PRC;
“%”	per cent.

By order of the Board of Hisense Kelon Electrical Holdings Company Limited Tang Ye Guo

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Chairman

As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Mr. Ren Li Ren, Ms. Yu Shu Min, Mr. Lin Lan and Mr. Xiao Jian Lin; and the Company’s independent non-executive directors are Mr. Zhang Sheng Ping, Mr. Wang Xinyu and Mr. Wang Ai Guo.

Foshan City, Guangdong, the PRC,12 January 2012

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