Rego Interactive Co., Ltd — Capital/Financing Update 2019

May 16, 2019

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)

ANNOUCEMENT IN RELATION TO SUCCESS IN THE BID FOR A PPP PROJECT FOR THE CONSTRUCTION OF THE FIRST AND SECOND SEWAGE TREATMENT PLANTS IN SUZHOU DISTRICT, JIUQUAN

The board (the “ Board ”) of directors (the “ Directors ”) and all Directors of Tianjin Capital Environmental Protection Group Company Limited (the “ Company ”) warrant that there are no false information, misleading statements or material omissions in this announcement, and accept joint and several responsibilities for the truthfulness, accuracy and completeness of its contents.

On 15 May 2019, the Company noted that, pursuant to the “Announcement in relation to Results of Success in the Bid (second time) for the Construction of the First and Second Sewage Treatment Plants Project under the Public-Private Partnership (PPP) Model of Housing and Urban-Rural Development Bureau of Suzhou District, Jiuquan City”, it was confirmed that the Company shall be the successful bidder for the construction of the first and second sewage treatment plants (second time) in Suzhou District, Jiuquan City (the “ Project ”) under the Public-Private Partnership (“ PPP ”) model. Details are as follows:

I. Basic information of the Project

1. Project overview

The total investment amount of the Project is approximately RMB594,126,200 (the specific amount is subject to the audit result of the completion). The Project includes the transfer of 30 years of franchise rights for the first and second sewage treatment plants in Suzhou District, Jiuquan City with an amount of RMB267,500,000, and the estimated investments in the new project is RMB326,626,200, of which the estimated total investments in the project construction for the reclaimed water recycling project is RMB217,611,600, the estimated total investments in the project construction of the upgrading and reconstruction project for the first and second sewage treatment plants in Suzhou

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District, Jiuquan City is RMB45,828,300 and the estimated total investments in the project construction of the sludge treatment project for the first and second sewage treatment plants in Suzhou District, Jiuquan City is RMB63,186,300. All of the aforesaid specific amounts are subject to the audit results of the completion.

			Project
		No.	composition	Type		Project Description
						The first sewage treatment plant of
		1	First sewage treatment plant of Suzhou District	Existing		Jiuquan city with total size of 40,000m3/d. (The specific amount of reserve assets is subject to the final evaluation of the appraisal of the			the
						company)
						The second sewage treatment plant of
						Jiuquan city with total size (long-term
						design) of 100,000m3/d, including phase
		2	Second sewage treatment plant of Suzhou District	Existing		I with size of 60,000m3/d, and phase II with size of 40,000m3/d. The construction of phase I has been completed. (The specific amount of the
						reserve assets is		subject to the final
						evaluation of the appraisal of the
						company)
			Water recycling
		3	construction project in urban area of Suzhou	Newly- built		Total size of 60,000 m3/d, including phase I with design size of 30,000m3/d
			District
						The contents of		the upgrading and
						reconstruction include: transformation of
						A2O biological aeration tank, biological
		4	The upgrading and reconstruction project for the first sewage treatment plants in Suzhou District	Newly- built		aerated filter, contact tank, blower room, addition of deodorization system, laboratory instrumentation, replacement of factory lighting, instrumentation, monitoring systems and other equipment and renovation of building facade. It is required to meet the first grade A
						standards of the		“Urban Sewage
						Disposal	Plant Discharge Standard” (GB
						18918-2002).

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		Project	Project
	No.	composition				Type	Project Description
							The total size of the sludge treatment
							and disposal project is 120t/d, and the
							recent	construction	size is 80t/d. Of
	5	The sludge treatment project for the first and second sewage treatment plant				Newly- built	which: the sludge treatment size of the first sewage treatment plant is 40t/d, which will be completed in the near future; the sludge treatment size of the second sewage treatment plant is 80t/d, the recent construction size is 40t/d, and
							the civil engineering is built at the size
							of 80t/d. Land for		equipment will be
							reserved in the long term.

1. Total investment of the Project: approximately RMB594,126,200.

2. Shareholding structure: the estimated total investment of the Project under the PPP model will be RMB594,126,200, and the capital will account for 30% of the total investment (RMB178,237,900), which will be jointly funded by the government and the Company, among which the government will contribute RMB20,000,000, accounting for approximately 11.22% of the capital of the Project and the Company will contribute RMB158,237,900 with its own funds, accounting for approximately 88.78% of the capital of the Project. The remaining 70% (RMB415,888,300) will be financed by the Company itself or raised by the Project Company from financial institutions.

3. Term of cooperation of the Project: 30 years (including construction period).

4. Location of the Project: the first and second sewage treatment plants in Suzhou District.

5. Operation model: ROT (reconstruction-operation-transfer).

6. Investment return mechanism of the Project: viability gap funding.

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II. Impact on the Company and Risk Warning

Winning the bid for the Project is in line with the development strategy of the Company and will increase the revenue of the principal operation business of the Company in the future and expand our market share, which will have a positive impact on the future development of the Company. As at the date of this announcement, formal agreement has not yet been entered into for the Project. The terms of the agreement and the impact on the Company remain uncertain. Specific terms are subject to formal agreement. The Project, if materialized, may constitute a disclosable transaction of the Company pursuant to Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”). As the applicable percentage ratios are expected to be more than 5% but less than 25%, the Project, if materialized, is only subject to the reporting and announcement requirements but is exempt from the requirement of shareholders’ approval of the Company. The Company will disclose subsequent development of the Project in accordance with the Listing Rules and the actual circumstances in due course. Investors are advised to pay attention to the investment risks.

By order of the Board Liu Yujun Chairman

Tianjin, the PRC

15 May 2019

As at the date of this announcement, the Board comprises three executive Directors: Mr. Liu Yujun, Ms. Wang Jing and Mr. Niu Bo; three non-executive Directors: Mr. Yu Zhongpeng, Mr. Han Wei and Mr. Si Xiaolong; and three independent non-executive Directors: Mr. Di Xiaofeng, Mr. Guo Yongqing and Mr. Wang Xiangfei.

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