Rego Interactive Co., Ltd — Capital/Financing Update 2021

Mar 25, 2021

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.

==> picture [375 x 50] intentionally omitted <==

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1065)

Announcement on the Guarantees for Subsidiaries’ Financing and Authorization to the Board

The board (the “ Board ”) of directors (the “ Directors ”) of Tianjin Capital Environmental Protection Group Company Limited (the “ Company ”) and all the Directors 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 the contents contained in this announcement.

The Board hereby announces that on 25 March 2021, the Board considered and approved that the Company is expected to provide additional guarantees (the “ Guarantees ”) up to a total amount of not exceeding RMB3,637,000,000 (the “ Guaranteed Amount ”) (including the guaranteed amount of approximately RMB1,407,000,000 on the replacement of existing loans of subsidiaries) to subsidiaries of the Company within the period from the date of the 2020 annual general meeting to the date of 2021 annual general meeting of the Company (collectively, the “ Subsidiaries ” or the “ Guaranteed Parties ”) based on business development plans and subject to the approval conditions.

As the total amount of external guarantees of the Company (including the amount of the Guarantees) exceeds 50% of the latest audited net assets of the Company, according to the Articles of Association of the Company, the Guarantees shall be subject to the consideration and approval of the shareholders of the Company as a special resolution at the annual general meeting of the Company. The Company will despatch a circular and a notice of the annual general meeting containing, among other things, the provision of the Guarantees for the Subsidiaries by the Company to shareholders of the Company in due course.

1

The details of the Guarantees are as follows:

I. GUARANTEE MODEL

As at the date of this announcement, the guarantees provided by the Company for the financing of Subsidiaries are generally in the following model:

(1) For subsidiaries in the water utilities business sector

The Company obtains Public Private Partnership (“ PPP ”) projects in the water utilities business through public competition, negotiations and other means. Under the current policy environment, the operation model of PPP projects in water utilities in the market requires the Company to establish a project company (or leverage on the previous project company) and the project company invests in and operates the PPP project as an independent legal entity. The registered capital of the project company is generally 20% to 30% of the total investment in the PPP project. Meanwhile, it requires bidding winners to guarantee the completion of financing for the PPP project as a shareholder of the project company. The Company shall contribute to the establishment of a project company (or make capital increase in the previous project company) and provide guarantees to the project financing of the project company when necessary.

(2) For subsidiaries in other environmental business sectors

In addition to the water utilities business, the current businesses of the Company also include hazardous waste disposal, sludge disposal and new energy cooling and heating supply and relevant businesses. The project investments and the financing models for hazardous waste disposal, sludge disposal and new energy cooling and heating supply business are generally the same as the water utilities business, namely that the Company contributes capital to establish a project company with 20% to 30% of the total investment in the project and provides guarantees to the project financing of the project company when necessary.

II. REASONS FOR ENTERING INTO THE GUARANTEES

The water utilities business is the principal business of the Company and the key business development area of the Company in the future, therefore, it is expected that PPP projects on water utilities business will be obtained from time to time, and strategic new businesses, including other environmental protection businesses, will be actively developed. As such, the Company shall provide guarantee for the project financing of the project companies.

In order to improve efficiency and achieve efficient fundraising for the project companies, the Board proposed that the shareholders shall, at the annual general meeting, consider and approve the above-mentioned Guarantees and authorise the Board to consider and approve the specific matters of the Guarantees within the scope of the Guaranteed Amount.

2

III. G U A R A N T E E D A M O U N T A N D A P P R O V A L C O N D I T I O N S F O R T H E GUARANTEES

Based on business development plans and during the period from the date of the 2020 annual general meeting to the date of 2021 annual general meeting of the Company, the Company is expected to provide an amount of new guarantees of not exceeding RMB3,637,000,000 (including the guaranteed amount of approximately RMB1,407,000,000 on the replacement of existing loans of Subsidiaries) to the Subsidiaries of the Company subject to the following six approval conditions:

• (1) Breakdown of Guaranteed Parties and the guarantee amount are as follows:

Unit: 0,000 Currency: RMB

			Proportion of
			equity interest
			held by
			the Company	Amount of	Use of loans/
Serial	Name of Guaranteed		in Guaranteed	loans/letters	letters of	Guaranteed
No.	Parties/Subsidiaries	Project	Parties	of guarantee	guarantee	amount
1	Anhui Tianchuang	PPP Project of Yuwan Sewage	100.00%	450.00	Letter of	450.00
	Capital Water	Treatment Plant in Hefei			performance
	Company Limited *(安				guarantee
	徽天創水務有限公司)
	(“Anhui Tianchuang
	Capital Water”)
2	Anhui Tianchuang Capital	PPP Project of Yuwan Sewage	100.00%	500.00	New liquidity loans	500.00
	Water	Treatment Plant in Hefei
3	Anhui Tianchuang	PPP Project of Yuwan Sewage	100.00%	13,358.00	Replacement of	13,358.00
	Capital Water	Treatment Plant in Hefei			loans on existing
					projects
4	Changsha Tianchuang	Changes to Phase-I Project of Sewage	80.00%	841.86	New project loans	673.49
	Capital Water Co., Ltd.	Treatment and Recycling Plant in
	*(長沙天創水務有	Ningxiang Economic Development
	限公司) (“Changsha	Zone
	Tianchuang Capital
	Water”)
5	Changsha Tianchuang	Construction of Emergency Pool for	81.43%	1,070.71	New project loans	871.88
	Environmental	Sewage Treatment Plant in Ningxiang
	Protection Co., Ltd.	Economic Development Zone
	*(長沙天創環保有
	限公司) (“Changsha
	Tianchuang
	Environmental
	Protection”)

3

			Proportion of
			equity interest
			held by
			the Company	Amount of	Use of loans/
Serial	Name of Guaranteed		in Guaranteed	loans/letters	letters of	Guaranteed
No.	Parties/Subsidiaries	Project	Parties	of guarantee	guarantee	amount
6	Shibinggui Capital Water	PPP Project of Sewage Treatment for	95.68%	7,500.00	New project loans	7,176.00
	Company Limited *(施	Towns and Townships in Shibing
	秉貴創水務有限公司)	County
	(“Shibinggui Capital
	Water”)
7	Shandong Capital	Project of Tancheng Ecological	55.00%	8,500.00	New project loans	4,675.00
	Environmental	Treatment Center for Comprehensive
	Protection Technology	Materials
	Development Co., Ltd. *(山東創業環保 科技發展有限公司)
	(“Shandong Capital
	Environmental
	Protection”)
8	Jiuquan Capital Water Company Limited (酒 泉創業水務有限公 司) (“Jiuquan Capital*	Construction of the First and Second Sewage Treatment Plants in Suzhou District, Jiuquan City under the Public-Private Partnership (PPP)	88.78%	41,500.00	Replacement of loans on existing projects	36,843.70
	Water”)	Model
9	Jieshou Capital Water	Existing and New PPP Project for	100.00%	19,600.00	Replacement of	19,600.00
	Company Limited (界首市創業水務有 限公司) (“Jieshou*	Sewage Treatment in Jieshou City (1st Batch)			loans on existing projects
	Capital Water”)
10	Jieshou Capital Water	PPP Project for Sewage Treatment in	100.00%	34,000.00	Replacement of	34,000.00
		Jieshou City (2nd Batch)			loans on existing
					projects
11	Hangzhou Tianchuang	Hangzhou Qige Sewage Treatment Plant	70.00%	8,640.00	Replacement of	6,048.00
	Capital Water	Project			loans on existing
	Company Limited (杭州天創水務有限 公司) (“Hangzhou*				projects
	Tianchuang Capital
	Water”)
12	Hangzhou Tianchuang	Hangzhou Qige Sewage Treatment Plant	70.00%	7,360.00	New liquidity loans	5,152.00
	Capital Water	Project
13	Deqing Capital Water Co., Ltd. (德清創環水務 有限公司) (“Deqing*	PPP Project of Qianyuan Sewage Treatment Plant in Deqing	90.00%	21,682.00	Replacement of loans on existing projects	19,513.80
	Capital Water”)
14	Dongying Tianchi	Project of Ecological Treatment Center	51.00%	31,700.00	New project loans	16,167.00
	Environmental	for Comprehensive Materials in the
	Technology Co., Ltd. *(東營天馳環 保科技有限公司)	Agricultural High and New-tech Development Zone
	(“Dongying Tianchi
	Environmental”)
15	Yingshang Capital Water Company Limited *(潁 上創業水務有限公司)	BOT Project of Chengnan Sewage Treatment Plant in Yingshang County, Anhui	100.00%	11,363.22	Replacement of loans on existing projects	11,363.22
	(“Yingshang Capital
	Water”)
Total				208,065.79		176,392.09

4

Guarantees with serial No. 1-15 for above-mentioned Subsidiaries provided by the Company were joint liability guarantees provided on the basis of the proportion of the contributions in respect of financing, interest, penalty interest, liquidated damages and all other expenses in a total amount of no more than RMB1,763,920,900, for which counter-guarantee agreements will be entered into. The above-mentioned Subsidiaries shall, leveraging their rights of charge and revenue arising therefrom, provide counterguarantees to the Company in an amount no less than their respective guarantees, to ensure that the Company reasonably prevents and controls risks.

In addition to the guarantees for the above-mentioned projects with serial No. 1-15, the Guarantees also include an expected amount of guarantee of not exceeding RMB1,872,729,400 to the subsidiaries of the Company within the scope of the consolidated financial statements existing within the period from the date of the 2020 annual general meeting to the date of 2021 annual general meeting of the Company for project financing and financing demands in routine operation of Subsidiaries.

• (2) The respective Guaranteed Amount shall not exceed the shareholding percentage of the Company in the relevant Subsidiaries;

• (3) The subject projects for financing are legally obtained, and have been approved by the authority of the Company that has the right to approve;

• (4) The income level of each of the subject projects for financing meets investment requirements and standards of the Company;

• (5) The Guaranteed Parties have been provided with counter-guarantees no less than the guaranteed amounts; and

• (6) The Guaranteed Parties operate in a regulated manner and the risks are controllable.

5

The Board considered and approved to propose that the shareholders shall, at the annual general meeting, consider and approve the Guaranteed Amount of the above-mentioned Guarantees and authorize the Board to consider and approve the following specific matters of the Guarantees within the expanded scope of Guaranteed Amount of the Guarantees subject to the above-mentioned six conditions and that the accumulated amount of the guarantees shall not exceed 100% of the latest audited net assets of the Company:

• (1) approve and make timely disclosure for each guarantee matter according to the actual progress of the projects obtained by the Company and the actual needs of the relevant subsidiaries; and

• (2) approve whether the financing and the corresponding guarantee will provide pledge or mortgage.

IV. FINANCIAL CONDITIONS OF GUARANTEED PARTIES

Unit: 0,000 Currency: RMB

				As at and for the year	As at and for the year	ended 31 December 2020	ended 31 December 2020
									Assets
Serial	Name of Guaranteed Parties/	Total	Net		Current	Current			liability
No.	Subsidiaries	assets	assets	Liabilities	assets	liabilities	Revenue	Net profit	ratio
1	Anhui Tianchuang Capital Water	20,440.64	5,432.44	15,008.21	881.07	4,573.92	1,540.44	– 739.44	73.42%
2	Changsha Tianchuang Capital
	Water	10,218.91	2,047.90	8,171.02	954.28	2,193.42	1,120.24	– 10.54	79.96%
3	Changsha Tianchuang
	Environmental Protection	13,788.87	4,054.85	9,734.02	606.61	1,937.27	1,469.00	– 167.25	70.59%
4	Shibinggui Capital Water	11,714.42	2,985.28	8,729.14	3,497.65	8,729.14	0.00	– 1.03	74.52%
5	Shandong Capital Environmental
	Protection	58,058.30	20,472.40	37,585.90	8,797.43	8,286.66	6,141.94	596.24	64.74%
6	Jiuquan Capital Water	60,612.90	19,293.72	41,319.18	15,369.61	1,819.18	5,655.29	1,574.32	68.17%
7	Jieshou Capital Water	67,026.69	25,677.88	41,348.81	5,754.89	5,346.74	5,586.11	1,407.98	61.69%
8	Hangzhou Tianchuang Capital
	Water	91,409.12	69,696.92	21,712.20	40,429.54	6,214.32	29,696.54	8,693.49	23.75%
9	Deqing Capital Water	28,419.58	6,335.85	22,083.73	3,148.05	1,383.06	3,373.80	296.44	77.71%
10	Dongying Tianchi Environmental	500.00	499.63	0.37	320.77	0.37	0.00	– 0.37	0.07%
11	Yingshang Capital Water	11,283.58	6,065.93	5,217.65	1,522.14	337.43	1,577.96	424.54	46.24%

6

Unit: 0,000 Currency: RMB

								For the two months	For the two months
								ended between 1
								January 2021 and 28
				As at 28 February 2021				February 2021
							Assets
Serial	Name of Guaranteed Parties/	Total	Net		Current	Current	liability
No.	Subsidiaries	assets	assets	Liabilities	assets	liabilities	ratio	Revenue	Net profit
1	Anhui Tianchuang Capital Water	20,253.90	5,240.71	15,013.19	822.72	4,578.91	74.12%	160.23	–191.72
2	Changsha Tianchuang Capital
	Water	10,463.52	2,032.08	8,431.45	1,256.42	2,453.85	80.58%	159.63	–15.82
3	Changsha Tianchuang
	Environmental Protection	13,705.33	4,039.60	9,665.73	598.03	1,884.50	70.53%	233.77	–15.25
4	Shibinggui Capital Water	13,196.13	2,985.10	10,211.03	4,362.66	10,211.03	77.38%	0.00	–0.18
5	Shandong Capital Environmental
	Protection	56,199.63	19,618.21	36,581.42	7,207.03	6,882.18	65.09%	385.71	–905.59
6	Jiuquan Capital Water	61,132.15	19,535.32	41,596.83	16,009.16	2,096.84	68.04%	1,003.59	241.59
7	Jieshou Capital Water	67,412.00	25,927.51	41,484.49	5,786.32	2,655.92	61.54%	961.32	249.63
8	Hangzhou Tianchuang Capital
	Water	92,079.19	71,423.83	20,655.37	41,972.02	5,157.48	22.43%	4,364.25	1,700.90
9	Deqing Capital Water	27,789.13	6,087.23	21,701.90	2,752.36	1,001.22	78.09%	144.85	–248.62
10	Dongying Tianchi Environmental	499.76	499.63	0.13	186.16	0.13	0.03%	0.00	0.00
11	Yingshang Capital Water	10,550.83	6,169.44	4,381.40	853.50	– 294.43	41.53%	259.99	103.50

V. THE COMPANY’S DECISION-MAKING PROCEDURES FOR THE GUARANTEES

As at the date of this announcement, the total amount of external guarantees of the Company amounted to RMB4,447,813,900 (excluding the amount of Guarantees), all of which were financing guarantees to the wholly-owned and controlling subsidiaries within the scope of the consolidated financial statements of the Company, representing approximately 67.48% of the latest audited net assets of the Company.

As at the date of this announcement, the total amount of external guarantees of the Company amounted to RMB6,677,197,000 (including the amount of Guarantees), all of which were financing guarantees to the wholly-owned and controlling subsidiaries within the scope of the consolidated financial statements of the Company, representing approximately 101.3% of the latest audited net assets of the Company as at 31 December 2020, and there is no overdue guarantee.

7

As the total amount of external guarantees of the Company (including the amount of the Guarantees) exceeds 50% of the latest audited net assets of the Company, according to the Articles of Association of the Company, such Guarantees shall be subject to consideration and approval of the shareholders of the Company as a special resolution at the annual general meeting of the Company.

By order of the Board Liu Yujun Chairman

Tianjin, the PRC 25 March 2021

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

• For identification purpose only

8