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)

CONNECTED TRANSACTION — ESTABLISHMENT OF A JOINT VENTURE

The Board is pleased to announce that, on 11 March 2019, the Board considered and approved the resolution in respect of the proposed signing of the draft PPP Project Contract by the Company with Hebei Guokong, CCTB3C, TMEDI and Hebei Gaocheng Economic Committee, pursuant to which, inter alia , the parties agree to implement the PPP Project, under which the Project Company shall be responsible for the investment, financing, design, construction, operation, maintenance, transfer and other activities of the PPP Project. The total investment for the PPP Project is estimated to be approximately RMB724,989,500.

On the same day, the Board considered and approved the resolution in respect of the proposed entering into of the JV Contract by the Company with Hebei Guokong, CCTB3C, TMEDI, SGCI (a government representative) and SGEZTC (a 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 shall be RMB217,496,900, among which, the Company agrees to contribute in cash of RMB128,323,200, representing 59% of the registered capital of the Project Company; Hebei Guokong agrees to contribute in cash of RMB65,249,100, representing 30% of the registered capital of the Project Company; CCTB3C agrees to contribute in cash of RMB1,957,500, representing 0.9% of the registered capital of the Project Company; TMEDI agrees to contribute in cash of RMB217,500, representing 0.1% of the registered capital of the Project Company; and the government representatives agree to contribute in cash of RMB21,749,600, representing 10% of the registered capital of the Project Company.

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As Hebei Guokong is held as to 40% by Tianjin Infrastructure Construction, the ultimate holding company of the Company, Hebei Guokong is considered as a 30%-controlled company and an associate of Tianjin Infrastructure Construction within the meaning of the Listing Rules, and is therefore a connected person of the Company. Hence, the transactions contemplated under the Contracts constitute connected transactions of the Company under the Listing Rules.

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

INTRODUCTION

The tenderer of the PPP Project is Hebei Gaocheng Economic Committee. After the PPP Project was awarded to the consortium formed by the Company, Hebei Guokong, CCTB3C and TMEDI, Hebei Gaocheng Economic Committee appointed SGCI and SGEZTC as government representatives, to represent the government to participate in the establishment of the Project Company and sign the contracts concerned.

The Board is pleased to announce that, on 11 March 2019, the Board considered and approved the resolution in respect of the proposed signing of the draft PPP Project Contract by the Company with Hebei Guokong, CCTB3C, TMEDI and Hebei Gaocheng Economic Committee, pursuant to which, inter alia , the parties agree to implement the PPP Project. On the same day, the Board considered and approved the resolution in respect of the proposed entering into of the JV Contract by the Company with Hebei Guokong, CCTB3C, TMEDI, SGCI (a government representative) and SGEZTC (a 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 summary of the principal terms of the proposed PPP Project Contract and JV Contract.

THE PROPOSED PPP PROJECT CONTRACT

(1) Parties

• (a) the Company;

• (b) Hebei Guokong；

• (c) CCTB3C;

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• (d) TMEDI; and

• (e) Hebei Gaocheng Economic Committee.

The Project Company, upon establishment, will formally enter into the PPP Project Contract with Hebei Gaocheng Economic Committee.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, other than Hebei Guokong, CCTB3C, TMEDI and Hebei Gaocheng Economic Committee and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.

(2) The PPP Project

The PPP Project involves the joint establishment by the Company, Hebei Guokong, CCTB3C, TMEDI (as the consortium), and SGCI (a government representatives) and SGEZTC (a government representatives) of the Project Company, which shall formally enter into the PPP Project Contract with Hebei Gaocheng Economic Committee and shall be responsible for the investment, financing, design, construction, operation, maintenance, transfer and other activities of the PPP Project during the cooperation period.

The PPP Project refers to the PPP Project for Comprehensive Improvement of Regional Water Environment in Gaocheng District of Shijiazhuang City in Hebei Province (河北省石家莊市槁城區區域水環境綜合提升工程PPP項目). The total investment for the PPP Project is estimated to be approximately RMB724,989,500. It consists of three subprojects, namely the new Project for Control of Rural Domestic Wastewater in Gaocheng City (槁城區農村生活污水 治理項目), the new Project for Construction of Sewage Treatment Plant and Ancillary Facilities in Dongpu Village of Zhangjiazhuang Town in Gaocheng District (槁城區張家莊鎮東蒲城污水處理廠及配套工程), and the Project for Upgrade and Reconstruction of Water Treatment Centre in Gaocheng District of Shijiazhuang City (Zhenxing Sewage Treatment Plant) (石家莊市槁城區水處理 中心（振興污水處理廠）提標改造項目).

The Project for Control of Rural Domestic Wastewater in Gaocheng City (槁城 區農村生活污水治理項目) will be constructed at 22 villages in 11 towns including Nanying Town and Chang’an Town and in phases within two years. Upon completion, the quality of wastewater will meet the Class 1A standard under the Standard for Discharge of Pollutants from Municipal Sewage Treatment Plant 《城鎮污水治理廠污染物排放標準》( )(GB18918-2002).

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The Project for Construction of Sewage Treatment Plant and Ancillary Facilities in Dongpu Village of Zhangjiazhuang Town in Gaocheng District (槁城區張家 莊鎮東蒲城污水處理廠及配套工程) will be constructed at north of Dongpu Village, Zhangjiazhuang Town, Gaocheng District, Shijiazhuang City. It is the plan that a sewage treatment plant, a parcel of ancillary engineered wetland and a sewerage network will be constructed. The design capacity of the sewage treatment plant will be 1,500 tonnes/day. The engineered wetland will cover an area of 10.2 mu. The sewerage network will have a length of 1,165 metres. Upon completion, the quality of sewage will meet the Class 1A standard under the Standard for Discharge of Pollutants from Municipal Sewage Treatment Plant (《城鎮污水治理廠污染物排放標準》) (GB18918-2002).

The Project for Upgrade and Reconstruction of Water Treatment Centre in Gaocheng District of Shijiazhuang City (Zhenxing Sewage Treatment Plant)* (石 家莊市槁城區水處理中心（振興污水處理廠）提標改造項目) is an existing project, which has a processing capacity of 100,000 tonnes/day, with a design production capacity of 35,000 tonnes/day of reclaimed water.

(3) Operation Right

Under the proposed PPP Project Contract, Hebei Gaocheng Economic Committee agrees to grant a concession right of the PPP Project to the Project Company. The Project Company shall be responsible for the investment, financing, design, construction, operation, maintenance and transfer of the facilities under the project, and shall be entitled to receive fees for sewage treatment service rendered during the concession period.

The concession period of the PPP Project will be 30 years commencing from the date of the formal entering into of the PPP Project Contract or the Supplemental Contract from the Succession of the PPP Project Contract between the Project Company and Hebei Gaocheng Economic Committee. The Project for Control of Rural Domestic Wastewater in Gaocheng City (槁城區農村生活污水治理項目) will have a construction period of 2 years and an operation period of 28 years; the Project for Construction of Sewage Treatment Plant and Ancillary Facilities in Dongpu Village of Zhangjiazhuang Town in Gaocheng District (槁城區張家 莊鎮東蒲城污水處理廠及配套工程) and the Project for Upgrade and Reconstruction of Water Treatment Centre in Gaocheng District of Shijiazhuang City (Zhenxing Sewage Treatment Plant)* (石家莊市槁城區水處理中心（振興污 水處理廠）提標改造項目) will have a construction period of 1 year and an operation period of 29 years. Upon expiry of the concession period, the Project Company shall transfer, at nil consideration and in full, the facilities under the PPP Project to Hebei Gaocheng Economic Committee or other body(ies) it may designate.

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(4) Letters of Guarantee

• (a) Letter of Guarantee in relation to Operation and Maintenance

• At the time when the PPP Project is put into official operation, the Project Company shall deliver to Hebei Gaocheng Economic Committee a letter of guarantee in relation to operation and maintenance in the amount of approximately RMB10,000,000 issued by a financial institution to secure performance of the operation and maintenance obligations under the PPP Project. The letter of guarantee in relation to operation and maintenance shall be effective for the period from the date on which the operation period of the PPP Project commences until the effective date on which the Project Company delivers a letter of guarantee in relation to transfer.

• (b) Letter of Guarantee in relation to Transfer

Within twelve months before expiry of the operation period of the PPP Project, the Project Company shall deliver to Hebei Gaocheng Economic Committee a letter of guarantee in relation to transfer in the amount of approximately RMB71,950,000 issued by a financial institution to secure performance of the obligations relating to the transfer and repair of the facilities under the PPP Project. The letter of guarantee in relation to transfer shall be effective from the date on which the letter of guarantee in relation to transfer is delivered and becomes effective until expiry of quality assurance period of the PPP Project.

The Proposed JV Contract

(1) Parties

• (a) the Company;

• (b) Hebei Guokong;

• (c) CCTB3C;

• (d) TMEDI;

• (e) SGCI (a government representative); and

• (f) SGEZTC (a government representative).

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, other than Hebei Guokong, CCTB3C, TMEDI, SGCI and SGEZTC and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.

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(2) Business Scope

The business scope of the Project Company covers the investment, financing, design, construction, operation, maintenance and transfer activities of the PPP Project for Comprehensive Improvement of Regional Water Environment in Gaocheng District of Shijiazhuang City in Hebei Province* (河北省石家莊市槁 城區區域水環境綜合提升工程PPP項目) under the proposed PPP Project Contract.

(3) Registered Capital

It is intended that the Company, Hebei Guokong, CCTB3C, TMEDI, SGCI (a government representative) and SGEZTC (a government representative) will jointly establish the Project Company. The registered capital of the Project Company shall be RMB217,496,900, among which, the Company agrees to contribute in cash of RMB128,323,200, representing 59% of the registered capital of the Project Company; Hebei Guokong agrees to contribute in cash of RMB65,249,100, representing 30% of the registered capital of the Project Company; CCTB3C agrees to contribute in cash of RMB1,957,500, representing 0.9% of the registered capital of the Project Company; TMEDI agrees to contribute in cash of RMB217,500, representing 0.1% of the registered capital of the Project Company; and SGCI (a government representative) and SGEZTC (a government representative) agree to contribute in cash of RMB21,749,600, representing 10% of the registered capital of the Project Company. The investment amount of PPP Project exceeding the registered capital of the Project Company shall be settled by the Project Company by way of project financing or otherwise in compliance with the laws and regulations.

(4) Organisational Structure

The board of directors of the Project Company will consist of five directors, three of them will be appointed by the Company, one of them will be appointed by Hebei Guokong and one of them will be jointly appointed by SGCI (a government representative) and SGEZTC (a government representative). The chairman of the board of directors of the Project Company will be nominated from those board members to be appointed by the Company, and will then be selected by election from the board of directors of the Project Company.

The supervisory committee of the Project Company consists of three supervisors, of which one of them will be appointed by the Company; one of them will be jointly appointed by SGCI (a government representative) and SGEZTC (a government representative); one employee supervisor will be selected by election of the employee representative’s meeting. The chairman of the board of supervisors of the Company will be nominated by the Company and elected by the board of supervisors.

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(5) Transfer of Shares

Without the prior written consent of SGCI and SGEZTC, the shareholding structure and proportion of the Project Company shall not be altered.

INFORMATION ON THE COMPANY, HEBEI GUOKONG, CCTB3C, TMEDI, HEBEI GAOCHENG ECONOMIC COMMITTEE, SGCI (A GOVERNMENT REPRESENTATIVE) AND SGEZTC (A GOVERNMENT REPRESENTATIVE)

The Company is principally engaged in 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.

Hebei Guokong is principally engaged in air pollution control, sewage treatment, disposal and treatment of solid waste, soil remediation, environmental monitoring, design and construction of environmental projects, research and development and technical consultation of clean energy and environmental technology, development and sale of environmental equipment.

CCTB3C is a major state-owned general contractor for construction projects, possessing a complete range of qualifications such as special grade for general contracting for building construction projects (建築工程施工總承包特級) and special grade for general contracting for petroleum and chemical construction projects (石油 化工施工總承包特級).

TMEDI, currently a municipal institute in the PRC, serves as a national grade A integrated design and research institute. It possesses qualifications such as grade A for municipal engineering industry (市政行業甲級), professional grade A for highway industry (highways, grand bridges, grand tunnels, traffic engineering (公路 行業（公路、特大橋樑、特長隧道、交通工程）專業甲級), grade A for construction industry (construction engineering) (建築行業（建築工程）甲級), grade A for landscape and garden engineering and design projects (風景園林工程設計專項甲級), grade A for engineering consulting (工程諮詢甲級), integrated grade A for engineering survey (工程勘察綜合類甲級), grade A for mapping (測繪資質甲級), grade A for EPC contracting (工程總承包甲級), grade A for project supervision (工 程監理甲級), grade A for urban and rural planning (城鄉規劃編制甲級) and grade B for environmental engineering (pollution remediation) projects (環境工程（污染修復 工程）專項乙級資質).

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Hebei Gaocheng Economic Committee is the institution authorised by the People’s Government of Gaocheng District of Shijiazhuang City to implement the PPP Project.

SGCI is one of the government representatives of the PPP Project, principally engaged in investment in and management of projects such as new socialist countryside construction, rural living environment, rural road network, overall urban construction, public infrastructure construction, shanty town redevelopment, irrigation construction, comprehensive agricultural development, acquisition of collective lands, urban renewal, relocation and compensation, property acquisition, preliminary land development, property development and relocation housing construction.

SGEZTC is one of the government representatives of the PPP Project, principally engaged in infrastructure and municipal engineering construction, property development and operation, building demolition (without blasting), property services, engineering project management and information consultancy, domestic advertisement design, production, agency and publishing; conference and convention services; sale of building materials; construction projects for improvement and reconstruction of water treatment centres.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, other than Hebei Guokong, CCTB3C, TMEDI, Hebei Gaocheng Economic Committee, SGCI, SGEZTC and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.

REASONS FOR ENTERING INTO THE PROPOSED PPP PROJECT CONTRACT AND THE JV CONTRACT

The investment in and operation of the PPP Project can help the Company expand the market of water projects, increase the market shares of its sewage treatment business, and boost its revenue and profits. The acquisition of the PPP Project is in line with the plan of the Company for strategic development and also aligns with the national strategic initiative of “Beijing-Tianjin-Hebei integration”. By entering into the Shijiazhuang market, the Company will be able to extend its business reach across Hebei, which will be positive to the Company by promoting development of its environmental protection business and further strengthening its brand influence.

The terms of the PPP Project Contract and the JV 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 JV Contract are on normal commercial terms, fair and reasonable and in the interests of the Group and the Shareholders as a whole.

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LISTING RULES IMPLICATIONS

As Hebei Guokong is held as to 40% by Tianjin Infrastructure Construction, the ultimate holding company of the Company, Hebei Guokong is considered as a 30%-controlled company and an associate of Tianjin Infrastructure Construction within the meaning of the Listing Rules, and is therefore a connected person of the Company. Hence, the transactions contemplated under the Contracts constitute connected transactions of the Company under the Listing Rules.

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

As Mr. Liu Yujun, an executive Director of the Company, Mr. Yu Zhongpeng, Mr. Han Wei and Mr. Si Xiaolong are connected with Tianjin Infrastructure Construction or Hebei Guokong, they are considered as not being able to make any recommendation to the Board independently. Therefore, they have abstained from voting in respect of the approval of the agreements at the Board meeting.

DEFINITIONS

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

• “30%-controlled company”

has the meaning as ascribed to it under the Listing Rules

• “associate(s)”

• “Board”

• has the meaning as ascribed to it under the Listing Rules the board of Directors

• “CCTB3C”

China Construction Third Bureau No. 3 Construction Engineering Co., Ltd.* (中建三局第三建設工程有限責 任公司), a limited liability company established in the PRC and a member of the consortium formed with the Company

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• “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, and also the leader of the consortium jointly formed with Hebei Guokong, CCTB3C and TMEDI

• “connected person(s)” has the meaning as ascribed to it under the Listing Rules

• “Contracts” collectively, the PPP Project Contract and the JV Contract

• “Director(s)” director(s) of the Company, including the independent non-executive Director(s)

• “Group” the Company and its subsidiaries

• “Hebei Gaocheng the management committee of Economic Development Economic Zone in Gaocheng of Hebei Committee”

• “Hebei Guokong”

• Hebei Guokong Jincheng Environmental Control Co., Ltd.* (河北國控津城環境治理有限責任公司), a limited liability company established in the PRC. It is the member of the consortium formed with the Company and a connected person of the Company

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “JV Contract” the joint venture contract proposed to be entered into by the Company with Hebei Guokong, CCTB3C, TMEDI, SGCI (a government representative) and SGEZTC (a government representative) for the establishment of the Project Company

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

• “percentage ratio(s)” the percentage ratio(s) as set out in Rule 14.07 of the Listing Rules, to be applied for determining the classification of a transaction

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“PPP Project”

• the proposed PPP project for Comprehensive Improvement of Regional Water Environment in Gaocheng District of Shijiazhuang City in Hebei Province (河北省石家莊市槁城區區域水環境綜合提 升工程PPP項目) to be implemented by the Company, Hebei Guokong, CCTB3C, TMEDI and Hebei Gaocheng Economic Committee by adopting the public-private partnership model (PPP model), consisting of three subprojects, namely the new Project for Control of Rural Domestic Wastewater in Gaocheng City (槁城區 農村生活污水治理項目), the new Project for Construction of Sewage Treatment Plant and Ancillary Facilities in Dongpu Village of Zhangjiazhuang Town in Gaocheng District (槁城區張家莊鎮東蒲城污水處理廠 及配套工程), and the Project for Upgrade and Reconstruction of Water Treatment Centre in Gaocheng District of Shijiazhuang City (Zhenxing Sewage Treatment Plant) (石家莊市槁城區水處理中心（振興 污水處理廠）提標改造項目).

• “PPP Project Contract”

• the proposed draft PPP project contract to be signed by the Company with Hebei Guokong, CCTB3C, TMEDI and Hebei Gaocheng Economic Committee, pursuant to which, the parties agree to implement the PPP Project and Hebei Gaocheng Economic Committee agrees to grant an operation right of the PPP Project to the Project Company

• “PRC” 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

• “Project Company” the project company of the PPP Project, a limited liability company proposed to be established in the Economic Development Zone in Gaocheng of Hebei by the Company, Hebei Guokong, CCTB3C and TMEDI (as the consortium) with SGCI and SGEZTC (as the government representatives)

• “RMB”

• Renminbi, the lawful currency of the PRC

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“SGCI” Shijiazhuang Gaocheng Construction Investment Co., Ltd.* (石家莊市槁城區建設投資有限公司), a wholly state-owned enterprise established in the PRC

• “SGEZTC” Shijiazhuang Gaocheng Economic Development Zone Zhengtong Construction & Development Co., Ltd.* (石 家莊槁城經濟開發區政通建設開發有限公司), a wholly state-owned enterprise established in 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 Infrastructure Tianjin 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

• “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

• “TMEDI” Tianjin Municipal Engineering Design & Research Institute* (天津市市政工程設計研究院), an enterprise owned by the whole people and a member of the consortium formed with the Company

• “%”

• per cent

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.

* For identification purposes only

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