Rego Interactive Co., Ltd — Capital/Financing Update 2018

Jul 10, 2018

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

(Stock code: 1065)

CONNECTED TRANSACTION — ESTABLISHMENT OF A JOINT VENTURE

The Board is pleased to announce that, on 10 July 2018, the Board considered and approved the resolution for the Company to initiate the PPP Project Contract with Beijing OriginWater, Beijing Jiuan Construction, Tianjin Haihe Construction and Tianjin Water Bureau and TURCC, pursuant to which, inter alia , the parties agree to implement the PPP Project, which covers the adoption of “Build-Operate-Transfer (BOT)” model for the implementation of the PPP Project by the Project Company. On the same day, the Board considered and approved the resolution for the Company to enter into the Joint Venture Contract with Beijing OriginWater, Beijing Jiuan Construction and Tianjin Haihe Construction (Government Representative), pursuant to which, inter alia , the parties agree to establish the Project Company for the implementation of the PPP Project. The registered capital of the Project Company will be RMB650,000,000 (equivalent to approximately HK$767,000,000), among which, the Company agrees to contribute in cash of RMB195,000,000 (equivalent to approximately HK$230,100,000), representing 30% of the registered capital of the Project Company; Beijing OriginWater agrees to contribute in cash of RMB227,500,000 (equivalent to approximately HK$268,450,000), representing 35% of the registered capital of the Project Company; Beijing Jiuan Construction agrees to contribute in cash of RMB32,500,000 (equivalent to approximately HK$38,350,000), representing 5% of the registered capital of the Project Company; the Government Representative agrees to contribute in cash of RMB195,000,000 (equivalent to approximately HK$230,100,000), representing 30% of the registered capital of the Project Company.

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Tianjin Haihe Construction is a wholly-owned subsidiary of Tianjin Infrastructure Construction, the ultimate controlling shareholder of the Company, and is therefore considered a Connected Person of the Company under the Listing Rules. The transactions contemplated under the agreements constitute connected transactions of the Company under the Listing Rules.

As the applicable percentage ratios of such contemplated transactions are more than 0.1% but less than 5%, the transactions contemplated under such agreements are subject to the reporting and announcement requirements only but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

INTRODUCTION

Reference is made to the announcement of the Company dated 11 April 2018 in relation to success in the bid for the PPP Project.

The PPP Project tenderer is TURCC. After the PPP project was awarded to the consortium formed by the Company, Beijing OriginWater and Beijing Jiuan Construction, TURCC appointed Tianjin Haibe Construction as the Government Representative, representing the government to participate the establishment of the Project Company and the signing of the relevant contracts.

The Board is pleased to announce that, on 10 July 2018, the Board considered and approved the resolution for the Company to initiate the PPP Project Contract with Beijing OriginWater, Beijing Jiuan Construction, Tianjin Haihe Construction and Tianjin Water Bureau and TURCC, pursuant to which, the parties agree to implement the PPP Project. On the same day, the Board considered and approved the resolution for the Company to enter into the Joint Venture Contract with Beijing OriginWater, Beijing Jiuan Construction and Tianjin Haihe Construction (Government Representative), pursuant to which, inter alia , the parties agree to establish the Project Company for the implementation of the PPP Project. Set out below is a brief summary of the principal terms of the PPP Project Contract and the Joint Venture Contract.

TO BE INITIATED PPP PROJECT CONTRACT

• (1) Parties

• (a) The Company;

• (b) Beijing OriginWater;

• (c) Beijing Jiuan Construction;

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• (d) Tianjin Haihe Construction;

• (e) Tianjin Water Bureau; and

• (f) TURCC.

Upon establishment of the Project Company, the Project Company will officially enter into the PPP Project Contract with Tianjin Haihe Construction (Government Representative).

To the best of the Director’s knowledge, information and belief having made all reasonable enquiry, saved for Tianjin Haihe Construction, Beijing OriginWater, Beijing Jiuan Construction, Tianjin Water Bureau and TURCC and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.

(2) PPP Project

PPP Project involves the establishment of the Project Company by the Company, Beijing OriginWater and Beijing Jiuan Construction (the consortium) jointly with Tianjin Haihe Construction (Government Representative), and Tianjin Water Bureau and TURCC will enter into the PPP Project Contract with the Project Company. The Project Company will be responsible for the preliminary work, investment and financing, construction and operation and maintenance of the PPP Project by adoption of “Build-Operate-Transfer (BOT)” model during the cooperation period.

PPP Project refers to the PPP Project for construction of sponge city in Jiefang South Road District, Tianjin. The construction area is located in the south of Tianjin downtown area with a planned land area of approximately 16.7 sq.m. The total investment of the project is estimated to be approximately RMB2,521,130,000 (equivalent to approximately HK$2,974,933,400), covering (1) the initial rainwater treatment project of the pumping stations (including five pumping stations and initial rainwater treatment facilities, storage tanks and rainwater pools); (2) park projects (Zhongyang Luzhou with planned total area of 726,769 sq.m.); (3) 13 roads and pipe network projects with a total length of approximately 10.11 km; and (4) sponge transformation in construction small areas occupying 30.3 hectares of construction area, altogether consisting of 21 new construction projects in a total of 4 categories.

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(3) Operation Rights

Under the PPP Project Contract, Tianjin Water Bureau and TURCC agree to grant the operation rights of the PPP Project to the Project Company. The Project Company shall be responsible for the design, investment, construction, operation, maintenance and renovation of the facilities under the project, and receives service fees.

The operation period of the PPP Project will be 15 years from the commencement date of construction (including 3 years for the construction phase and 12 years for the operation phase). Upon expiry of the operation phase, the Project Company shall transfer the operating facilities under the PPP Project to Tianjin Water Bureau and TURCC or other institution designated by them without compensation.

(4) Letters of Guarantee

(a) Letter of Guarantee in relation to Construction Period

As the guarantee for performance of all obligations relating to matters of construction under the PPP Project, a demand letter of guarantee in the amount of RMB50,000,000 (equivalent to approximately HK$59,000,000) produced by a domestic financial institution in China shall be submitted by the Project Company to Tianjin Water Bureau and TURCC within five working days from the date of formally entering into the PPP Project Contract.

(b) Letter of Guarantee in relation to Transfer and Maintenance

As the guarantee for performance of obligations relating to transfer and maintenance of project facilities under the PPP Project, a demand letter of guarantee in the amount of RMB50,000,000 (equivalent to approximately HK$59,000,000) shall be produced by the Project Company to Tianjin Water Bureau and TURCC twelve months before the expiration of the project operation period. The letter of guarantee in relation to transfer and maintenance shall be effective from the date of letter of guarantee in relation to transfer and maintenance to the date which is one year after the end of the operation.

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TO BE ENTERED JOINT VENTURE CONTRACT

(1) Parties

• (a) The Company;

• (b) Beijing OriginWater;

• (c) Beijing Jiuan Construction; and

• (d) Tianjin Haihe Construction (Government Representative).

To the best of the Director’s knowledge, information and belief having made all reasonable enquiry, saved for Tianjin Haihe Construction, Beijing OriginWater, Beijing Jiuan Construction, Tianjin Water Bureau and TURCC and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.

(2) Scope of Business

The scope of business of the Project Company is the investment, financing, design, construction, operation, maintenance and transfer of the PPP Project for construction of sponge city in Jiefang South Road District, Tianjin under the PPP Project Contract.

(3) Registered Capital

The Company shall establish the Project Company jointly with Beijing OriginWater, Beijing Jiuan Construction and Tianjin Haihe Construction (Government Representative). The initial registered capital will be RMB 650,000,000 (equivalent to approximately HK$ 767,000,000), among which, the Company agrees to contribute in cash of RMB195,000,000 (equivalent to approximately HK$230,100,000), representing 30% of the registered capital of the Project Company; Beijing OriginWater agrees to contribute in cash of RMB227,500,000 (equivalent to approximately HK$268,450,000), representing 35% of the registered capital of the Project Company; Beijing Jiuan Construction agrees to contribute in cash of RMB32,500,000 (equivalent to approximately HK$38,350,000), representing 5% of the registered capital of the Project Company ; the Government Representative agrees to contribute in cash of RMB195,000,000 (equivalent to approximately HK$230,100,000), representing 30% of the registered capital of the Project Company.

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The amount exceeding the initial registered capital of the Project Company shall be settled by the Project Company through project financing, shareholder borrowing and other ways that comply with laws and regulations. If the Project Company fails to resolve the financing, the funds will be raised by the Company, Beijing OriginWater and Beijing Jiuan Construction in accordance with the law.

(4) Profit Distribution

After making up for its losses and drawing for the provident fund, the Project Company shall distribute the profit after tax to its shareholders based on their respective shareholdings.

(5) Organizational Structure

The board of directors of the Project Company will comprise of seven directors, of which two directors will be appointed by the Government Representative, two directors will be appointed by Beijing OriginWater, two directors will be appointed by the Company, and one director will be elected at staff meeting, staff general meeting or other democratic ways of the Project Company. The chairman of the board of directors will be served by the director nominated by Beijing OriginWater and the vice-chairman of the board of directors will be served by the director nominated by the Government Representative respectively, and both the chairman and the vice-chairman will be elected by resolutions passed in the shareholders general meeting.

(6) Equity Transfer

The parties shall not transfer all or part of their equity interests in the Project Company without prior written consent of Tianjin Water Bureau and TURCC.

If Government Representative intends to transfer its equity interests, it may effect the transfer of its own accord without consent of other parties if it has obtained the written consent of Tianjin Water Bureau and TURCC.

If the Company, Beijing OriginWater or Beijing Jiuan Construction intends to transfer its equity, it shall not effect the transfer of its own accord until obtaining the consent of the majority of the other parties and the written consent of Tianjin Water Bureau and TURCC. The remaining parties also have the priority to purchase the relevant equity, but the shareholding of Tianjin Haihe Construction shall not exceed 50%. If the Company, Beijing OriginWater or Beijing Jiuan Construction intends to transfer its equity to a third party, the transferee shall satisfy the conditions stipulated in the Joint Venture Contract.

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INFORMATION OF THE COMPANY, BEIJING ORIGINWATER, BEIJING JIUAN CONSTRUCTION, TIANJIN HAIHE CONSTRUCTION (GOVERNMENT REPRESENTATIVE), TIANJIN WATER BUREAU AND TURCC

The Company is principally engaged in the investment, construction, design, management, operation, technical consultation and auxiliary services of treatment facilities of sewage water, tap water and other types of water; design, construction, management, building and operation management of municipal infrastructures; license operation, technical consultation and auxiliary services of Southeastern Half Ring Urban Road of the Middle Ring of Tianjin City; development and operation of environmental protection technology and products; leasing of self-owned properties, etc.

Beijing OriginWater is a high-tech environmental protection enterprise that manufactures and supplies membrane equipment. It has membrane integrated urban sewage deep purification technology, and participates in municipal sewage and industrial wastewater treatment, tap water treatment, seawater desalination, civil water purification, wetland protection and reconstruction, comprehensive river management, municipal landscape construction, solid waste and hazardous waste treatment, environmental monitoring, ecological agriculture and other businesses.

Beijing Jiuan is a wholly-owned subsidiary of Beijing OriginWater. It is mainly engaged in engineering fields such as the construction of water plants and the installation and operation of ancillary pipe network projects, water conservancy projects, river management and ecological restoration.

Tianjin Haihe Construction is a government representative of the Tianjin Municipal People’s Government. It is mainly engaged in the investment and management of urban infrastructure, environmental protection projects, real estate development projects; urban construction project consulting; the development, construction, management of municipal roads, bridges, underground pipe networks and their civil engineering and construction projects, etc.

Tianjin Water Bureau is a functional authority under the Tianjin Municipal People’s Government, the PRC. It mainly manages water resources, including: the development and utilization of rainwater, floods and reclaimed water; the construction and management of water conservancy projects; urban water supply and drainage management; and the management, protection, control and development of waterworks, waters and their shorelines.

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TURCC is a functional authority under the Tianjin Municipal People’s Government, the PRC. It is mainly responsible for the supervision of whole-city urban and rural construction management, urban infrastructure management, public utility management and state-owned assets of the construction system.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiry, other than Tianjin Haihe Construction, Beijing OriginWater, Beijing Jiuan Construction, Tianjin Water Bureau and TURCC and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.

REASONS FOR ENTERING INTO THE PPP PROJECT CONTRACT AND THE JOINT VENTURE CONTRACT

The PPP project is a project in which the Company participates in investing, constructing and operating rainwater pipe networks and community reconstruction, which will be beneficial to the Company in expanding its share in the Tianjin water market while increasing its revenue and profit. The acquisition of the PPP Project will be of great significance to the Company in increasing the influence in the region and expanding the overall scale, which is in line with the development strategy of the Company. The smooth operation of the PPP Project will enable the Company to take full advantage of its management and technical personnel resources.

The terms of the PPP Project Contract and the Joint Venture Contract were determined after arm’s length negotiations among the parties thereto. The Directors (including the independent non-executive Directors) consider that the terms of the PPP Project Contract and the Joint Venture Contract are on normal commercial terms, fair and reasonable and in the interest of the Group and the Shareholders as a whole.

Listing Rules Implications

Tianjin Haihe Construction is a wholly-owned subsidiary of Tianjin Infrastructure Construction, the ultimate holding company of the Company, and is therefore considered to be a connected person of the Company under the Listing Rules. The transaction contemplated under the Agreements constitute a connected transaction of the Company under the Listing Rules.

As the applicable percentage ratio of the relevant contemplated transaction is more than 0.1% but less than 5%, the transaction contemplated under the agreements is subject to the reporting and announcement requirements only but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

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Mr. Liu Yujun, Mr. Yu Zhongpeng and Mr. Han Wei, directors of the Company, who are related Tianjin Infrastructure Construction or TMICL, are deemed to be unable to make any recommendations to the Board independently. Therefore, they have abstained from voting on the approval of the Agreements at the Board meeting.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following terms shall have the following meanings:

• “Beijing OriginWater” Beijing OriginWater Technology Co., Ltd.* (北京碧水 源科技股份有限公司), a limited liability company established in the PRC, and a consortium leader of a consortium formed with the Company

• “Beijing Jiuan Beijing Jiuan Construction and Investment Group Co., Construction” Ltd* (北京久安建設投資集團有限公司), a limited liability company established in the PRC, and another member of a consortium formed with the Company

• “Board”

• the board of Directors

• “Company” Tianjin Capital Environmental Protection Group Company Limited, a joint stock limited company established in the PRC whose A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange respectively

• “Connected Person(s)” has the same meaning as ascribed to it under the Listing Rules

• “Directors” the directors of the Company, including the independent non-executive directors

• “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC

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• “Joint Venture Contract”

• “Listing Rules”

• “percentage ratios”

• “PPP Project”

• “PPP Project Contract”

• “PRC”

• “Project Company”

• The joint venture contract in relation to the establishment of the Project Company to be entered into by the Company, Beijing OriginWater, Beijing Jiuan Construction and Tianjin Haihe Construction (Government Representative)

• the Rules Governing the Listing of Securities on the Stock Exchange

• has the same meaning as ascribed to it under the Listing Rules, as applicable to a transaction

• The Company, Beijing OriginWater, Beijing Jiuan Construction, Tianjin Haihe Construction together with Tianjin Water Bureau (天津市水務局) and TURCC intended to adopt the Public-Private Partnership model ( PPP model* ) for the implementation of the PPP project constructed in the sponge city, Jiefang South Road District, Tianjin. The construction area located in the southern of Tianjin downtown area with planned land area of approximately 16.7 kilometers, and including 21 new construction projects of 4 categories, i.e. initial rainwater treatment in pumping stations, park projects, road and pipeline and sponge transformation in construction district

• The PPP Project contract to be initiated by the Company, Beijing OriginWater, Beijing Jiuan Construction, Tianjin Haihe Construction together with Tianjin Water Bureau and TURCC, pursuant to which the parties agree to implement the PPP Project, and Tianjin Water Bureau and TURCC agree to grant the operation right of the PPP Project.

• The People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

• The project company of the PPP Project, a limited liability company incorporated in Tianjin, the PRC by the Company, Beijing OriginWater, Beijing Jiuan Construction and Tianjin Haihe Construction (Government Representative) in accordance with the Joint Venture Contract

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“RMB” Renminbi, the lawful currency of the PRC

“Share(s)”

share(s) of the Company with nominal value of RMB1.00 each

“Shareholder(s)”

registered holder(s) of the Shares

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Tianjin Haihe Tianjin Haihe Construction Development and Construction”/ Investment Company Limited (天津市海河建設發展投 “Government 資有限公司), a limited liability company established in Representative” the PRC. It is the representative of the Tianjin Municipal People’s Government and a connected person of the Company. “Tianjin Infrastructure Tianjin City Infrastructure Construction and Investment Construction” Group Company Limited (天津城市基礎設施建設投資 集團有限公司), the ultimate controlling Shareholder of the Company and the sole shareholder of TMICL, holding 100% equity interest in TMICL

• “Tianjin Haihe Construction”/ “Government Representative”

• “TMICL” Tianjin Municipal Investment Company Limited* (天津 市政投資有限公司), the controlling Shareholder of the Company, holding 50.14% equity interest in the Company

• “TURCC” Tianjin Urban and Rural Construction Committee of China

• “%” per cent

For the purpose of this announcement, the following exchange rate is used: RMB1.00 = HK$1.18

By Order of the Board Liu Yujun Chairman

Tianjin, the PRC 10 July 2018

As at the date of this announcement, the Board comprises four executive Directors: Mr. Liu Yujun, Mr. Tang Fusheng, Ms. Fu Yana and Ms. Peng Yilin; two non-executive Directors: Mr. Yu Zhongpeng and Mr. Han Wei; and three independent non-executive Directors: Mr. Gao Zongze, Mr. Guo Yongqing and Mr. Wang Xiangfei.

• For identification purposes only

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