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

Mar 11, 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)

Announcement in relation to the Provision of Guarantee on the Loan of Deqing Chuanghuan Water Co, Ltd.

The Board of Directors of the Company and all members of the Board hereby warrant that the contents in this announcement do not contain any false information, misleading statements or material omission, and accept individual and joint responsibilities for the truth, accuracy and completeness of the contents hereof.

Reference are made to the bid winning announcement of the Company dated 29 October 2018 in relation to the PPP Project and the discloseable transaction announcement of the Company dated 9 November 2018 in relation to the PPP Project. Unless the context otherwise stated, the terms used herein should have the same meanings as those defined in the announcement of the Company dated 9 November 2018.

The Board of the Company hereby announces that on 11 March 2019, the Board considered and approved that the Company intended to provide full guarantee (the “ Guarantee ”) in respect of a bank loan (the “ Loan ”) not exceeding RMB220,000,000 of Deqing Chuanghuan Water Co, Ltd.(德清創環水務有限公司) (“ Deqing Company ”), the subsidiary the Company.

The Guarantee is subject to the consideration and approval at the general meeting of the Company pursuant to the Articles of Association of the Company, given that Deqing Company’s gearing ratio exceeds 70% as of the end of January 2019. A circular containing (among others) the provision of the Guarantee in respect of the Loan and the notice of the general meeting will be despatched to the shareholders of the Company in due course.

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The particulars of the Guarantee are as follows:

I. Reason for entering into the Guarantee

The PPP Project has entered into the operation period in early 2019. Currently Deqing Company is negotiating with the lending bank to apply for a loan and pay the transfer price of the concession rights to the County Government in accordance with the provisions under the Project Contract. Pursuant to the requirements of the lending bank, the Company is required to provide Guarantee for the loan of Deqing Company.

II. Basic information of the Guarantee

The scope of guarantee the Company intends to provide for Deqing Company is all the debts of Deqing Company under the loan agreement entered into between the Deqing Company and the lending bank, including the principal amount not exceeding RMB220,000,000, interest, penalty interest, penalty and all other related expenses. The Company shall be jointly liable economically and legally to settle all the debts within the said guarantee scope.

Meanwhile, the Company will enter into counter guarantee agreement with Deqing Company. Deqing Company shall provide counter guarantee to the Company with its rights on the PPP Project charges and revenue, which is in line with the provisions on counter guarantee in the Articles of Association of the Company.

III. Basic Information and Financial Condition of Deqing Company

The Company contributed RMB54,000,000 in Deqing Company, holding 90% of the shares of Deqing Company; Deqing Qianlong Construction contributed RMB 6,000,000 in Deqing Company, holding 10% of the shares of Deqing Company. Deqing Company was incorporated on December 14, 2018.

As of the end of January 2019, Deqing Company’s total assets amounted to RMB281,646,900, net assets amounted to RMB59,366,200, liabilities amounted to RMB222,280,700, current assets amounted to RMB2,992,900, current liabilities amounted to RMB222,280,700, operating income amounted to RMB767,300 and net profit amounted to RMB633,400. The gearing ratio of Deqing Company was 78.92% as of the end of January 2019.

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IV. The Company’s decision-making procedures for the performance of the Guarantee

As of the date of this announcement, the total amount of guarantees provided to external parties by the Company and its holding subsidiaries (including the amount of the Guarantee) is RMB2,687,501,300, all of which are guarantees provided by the Company to its holding subsidiaries, accounting for 49.64% of the latest audited (as of 31 December 2017) net assets of the Company. The Company has no overdue guarantees.

Pursuant to the Articles of Association of the Company, the Guarantee falls within the scope of the approval of the Board of the Company. However, the Guarantee is subject to the consideration and approval at the general meeting of the Company pursuant to the Articles of Association of the Company, given that Deqing Company’s gearing ratio exceeds 70% as of the end of January 2019.

By Order of the Board Liu Yujun Chairman

Tianjin, the PRC 11 March 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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