RoboSense Technology Co., Ltd - Capital/Financing Update 2015

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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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MAJOR AND CONNECTED TRANSACTIONS AND PROPOSED ISSUANCE AND PLACING OF A SHARES

Financial adviser to the Company

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Independent financial adviser to the Independent Board Committee and the Independent Shareholders

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THE REORGANISATION

On 31 December 2014, the Company entered into the Framework Agreement with CLFG. The filing of valuation in relation to the Outgoing Entities and the Incoming Entity by the SASAC was undertaken by the Company in early May 2015. In response to the New Measures of the PRC authorities governing the fund raising activities in relation to significant asset restructuring of PRC listed companies, the Company and CLFG amended the structure of the Reorganisation and entered into the Formal Agreement which superseded the Framework Agreement on 10 June 2015.

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Pursuant to the Formal Agreement, (i) the Company has conditionally agreed to transfer its Sale Interests in the Outgoing Entities and the amounts due from the Outgoing Entities to the Company to CLFG for a total consideration of RMB494,179,465; (ii) CLFG has conditionally agreed to transfer its 100.00% equity interest in the Incoming Entity to the Company for a consideration of RMB674,909,180; and (iii) the difference between the considerations of the Disposal and the Acquisition of RMB180,729,715 will be partially settled by cash of RMB90,729,715 from the proceeds of the Proposed A Share Placing within two months after the completion of the Proposed A Share Placing while the remaining balance of RMB90,000,000 will be settled by the allotment and issue of 15,000,000 Consideration Shares to CLFG at the issue price of RMB6.00 per Consideration Share.

As part of the Formal Agreement, the Company plans to undertake the proposed placing of not more than 32,137,519 new A Shares to not more than 10 independent specific investors at the minimum issue price of RMB6.69 per A Share for a gross proceeds of not more than RMB215,000,000 subsequent to the completion of the Disposal, the Acquisition and the issue of the Consideration Shares. The exact issue price will be determined after obtaining the approval of the CSRC for the Proposed A Share Placing with reference to bid prices offered by target subscribers.

In accordance with the applicable PRC laws and regulations, issuance of A Shares is subject to Shareholders’ approval, regardless whether a general mandate has been granted at the general meeting of the Company. As such, the issue of the Consideration Shares and the Proposed A Share Placing will be subject to the approval by the Independent Shareholders at the EGM, the A Shares Class Meeting and the H Shares Class Meeting.

LISTING RULES IMPLICATIONS

The Reorganisation involves, inter alia, the execution of the Formal Agreement which involves the Disposal, the Acquisition and the issue of the Consideration Shares. As (i) one or more of the applicable percentage ratios calculated pursuant to Chapter 14 of the Listing Rules in respect of the Disposal are more than 25% but less than 75%; and (ii) CLFG (as a controlling Shareholder) is a connected person of the Company, the Disposal constitutes a major disposal and connected transaction of the Company. As (i) one or more of the applicable percentage ratios calculated pursuant to Chapter 14 of the Listing Rules in respect of the Acquisition are more than 25% but less than 100%; and (ii) CLFG (as a controlling Shareholder) is a connected person of the Company, the Acquisition constitutes a major acquisition and connected transaction of the Company.

Accordingly, the Formal Agreement comprising the Disposal, the Acquisition and the issue of the Consideration Shares is subject to the notification, announcement, circular and independent shareholders’ approval requirements of the Listing Rules.

INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising all the independent non-executive Directors has been established by the Company to advise the Independent Shareholders on the terms of the Formal Agreement and the transactions contemplated thereunder and the specific mandates.

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Goldin has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Formal Agreement and the transactions contemplated thereunder and the specific mandates are fair and reasonable and in the interests of the Company and the Shareholders as a whole and make recommendation on voting.

EGM AND CLASS MEETINGS

The EGM and the Class Meetings will be held to consider and, if thought fit, pass the resolutions to approve (i) the Formal Agreement and the transactions contemplated thereunder; (ii) the grant of the specific mandate for the issue of the Consideration Shares; and (iii) the grant of the specific mandate for the issue of the new A Shares under the Proposed A Share Placing. The voting in relation to the Formal Agreement and the specific mandates at the EGM and the Class Meetings will be conducted by way of poll. As the same case of the Framework Agreement, CLFG and its close associates will abstain from voting on the relevant resolutions to be proposed at the EGM and the Class Meetings for approving the Formal Agreement and the transactions contemplated thereunder and the specific mandates.

GENERAL

A circular containing, among other things, (i) details of the Reorganisation, the Framework Agreement and the Formal Agreement, the transactions contemplated thereunder, the specific mandates and the Proposed A Share Placing; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders on the Formal Agreement and the transactions contemplated thereunder and the specific mandates; and (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders on the Formal Agreement and the transactions contemplated thereunder and the specific mandates, is required to be despatched to the Shareholders within 15 business days from the date of the announcement in relation to the Framework Agreement (i.e 31 December 2014) pursuant to Rule 14A.68 of the Listing Rules. As disclosed in the announcement of the Company dated 31 May 2015, the despatch date of the circular will be postponed to a date falling on or before 31 July 2015.

Completion of the Disposal, the Acquisition, the issue of the Consideration Shares and the Proposed A Share Placing is subject to the satisfaction of the conditions precedent for the Formal Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

INTRODUCTION

References are made to the announcements of the Company dated 29 May 2015, 22 May 2015, 12 May 2015, 10 April 2015, 31 March 2015, 13 March 2015, 20 January 2015, 31 December 2014, 23 December 2014, 18 December 2014, 16 December 2014, 12 December 2014, 5 December 2014, 28 November 2014, 21 November 2014, 14 November 2014, 11 November 2014, 4 November 2014, 28 October 2014, 21 October 2014, 14 October 2014, 10 October 2014, 26 September 2014, 19 September 2014, 12 September 2014, 9 September 2014, 2 September 2014, 26 August 2014, 19 August 2014, 12 August 2014, 8 August 2014, 1 August 2014, 25 July 2014 and 18 July 2014 regarding the significant asset restructuring.

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THE REORGANISATION

The Formal Agreement

Date

10 June 2015

Parties

(a) The Company; and
(b) CLFG.

CLFG is a controlling Shareholder and therefore is a connected person of the Company under Chapter 14A of the Listing Rules.

The Disposal

Pursuant to the Formal Agreement, the Company has conditionally agreed to transfer its Sale Interests in the Outgoing Entities and the amounts due from the Outgoing Entities to the Company to CLFG.

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The aggregate consideration for the Disposal is RMB494,179,465, which was determined on arm’s length negotiations with reference to (i) the valuation of the net assets/(liabilities) of the Outgoing Entities as at 31 October 2014 (If the fair value of the net assets of any of the Outgoing Entities is negative, the consideration for the disposal of that entity shall then be RMB1.00. For those Outgoing Entities with a positive fair value of net assets, the consideration is calculated based on the fair value of the net assets multiplied by the Company’s proportionate equity interest in the respective Outgoing Entities); and (ii) the valuation of the amounts due from the Outgoing Entities to the Company as at 31 October 2014 as appraised by the Valuer (i.e. China United Assets Appraisal Group Co., Ltd.) based on the cost method.

Set out below is a summary of the valuation of (i) the net assets/(liabilities) of the Outgoing Entities as at 31 October 2014; and (ii) the amounts due from the Outgoing Entities to the Company as at 31 October 2014:

(i) Valuation of the net assets/(liabilities) of the Outgoing Entities as at 31 October 2014

Company Longhao Company Longfei Company Dengfeng Silicon Company Yinan Huasheng Mineral Products Company Total	Valuation of the net assets/ (liabilities) of the relevant company Interest of the Company in the relevant company Consideration (RMB) (%) (RMB) (178,305,058) 100.00 1 (145,172,516) 63.98 1 30,056,144 67.00 20,137,616 37,793,155 52.00 19,652,441 24,298,793 40.29 9,789,984 49,580,043	Valuation of the net assets/ (liabilities) of the relevant company Interest of the Company in the relevant company Consideration (RMB) (%) (RMB) (178,305,058) 100.00 1 (145,172,516) 63.98 1 30,056,144 67.00 20,137,616 37,793,155 52.00 19,652,441 24,298,793 40.29 9,789,984 49,580,043
		49,580,043

(ii) Valuation of the amounts due from the Outgoing Entities to the Company as at 31 October 2014

Amount due from Longhao Company Amount due from Longfei Company Amount due from Longxiang Company Amount due from Yinan Huasheng Amount due from Mineral Products Company Total	Valuation (RMB) 250,532,385 108,994,916 62,742,706 20,987,425 1,341,990 444,599,422	Consideration (RMB) 250,532,385 108,994,916 62,742,706 20,987,425 1,341,990
		444,599,422

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The Acquisition

Pursuant to the Formal Agreement, CLFG has conditionally agreed to transfer its 100.00% equity interest in the Incoming Entity to the Company.

The consideration for the Acquisition is RMB674,909,180, which was determined on arm’s length negotiations with reference to the valuation of the net asset value of the Incoming Entity as at 31 October 2014 as appraised by the Valuer (i.e. China United Assets Appraisal Group Co., Ltd.) based on the cost method.

Set out below is a summary of the valuation of the net asset value of the Incoming Entity as at 31 October 2014:

(i) Valuation of the net asset value of the Incoming Entity as at 31 October 2014

	Valuation of	Interest in
	the net asset	the Incoming
	value of the	Entity to be
	Incoming	acquired by
Company	Entity	the Company	Consideration
	(RMB)	(%)	(RMB)
Bengbu Company	674,909,180	100.00	674,909,180

The valuation reports in relation to (i) the net assets/(liabilities) of the Outgoing Entities as at 31 October 2014; (ii) the amounts due from the Outgoing Entities to the Company as at 31 October 2014; and (iii) the net asset value of the Incoming Entity as at 31 October 2014 dated 15 April 2015 prepared by the Valuer (i.e. China United Assets Appraisal Group Co., Ltd.) have been filed by the Company with the SASAC in early May 2015.

The Consideration Shares

Pursuant to the Formal Agreement, both parties have agreed that the difference between the considerations of the Disposal and the Acquisition of RMB180,729,715 will be settled partially by cash of RMB90,729,715 from the proceeds of the Proposed A Share Placing within two months after the completion of the Proposed A Share Placing while the remaining balance of RMB90,000,000 will be settled by the allotment and issue of 15,000,000 Consideration Shares by the Company to CLFG at the issue price of RMB6.00 per Consideration Share. In the event that the net proceeds from the Proposed A Share Placing fell short of RMB90,729,715, the Company will settle the shortfall amount by internal funding or other settlement methods to be determined by commercial negotiations between the Company and CLFG however excluding the allotment and issue of new Shares by the Company to CLFG.

The issue price of the Consideration Shares is RMB6.00 (equivalent to approximately HK$7.50) per Consideration Share, which was determined with reference to 90% of the ratio of the total turnover over the total volume of the A Shares for the last 60 trading days as quoted on the SSE prior to the date of first board meeting in relation to the Reorganisation. As trading in the Shares was suspended during the period from 30 June 2014 to the date of first board meeting in relation to the Reorganisation, the issue price of the Consideration Shares was determined based on 90% of the ratio of the total turnover over the total volume of the A Shares for the last 60 trading days prior to 30 June 2014. Such issue price represents:

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(a) a premium of approximately 10.78% over the closing price of HK$6.77 per H Share as quoted on the Stock Exchange on the date of the Formal Agreement;
(b) a premium of approximately 97.37% over the closing price of HK$3.80 per H Share as quoted on the Stock Exchange on the Last Trading Day;
(c) a premium of approximately 90.16% over the average closing price of approximately HK$3.94 per H Share as quoted on the Stock Exchange for the last five trading days up to and including the Last Trading Day;
(d) a premium of approximately 94.30% over the average closing price of approximately HK$3.86 per H Share as quoted on the Stock Exchange for the last ten trading days up to and including the Last Trading Day;
(e) a premium of approximately 150.36% over the average closing price of approximately HK$3.00 per H Share as quoted on the Stock Exchange for the last thirty trading days up to and including the Last Trading Day;
(f) a discount of approximately 74.39% to the closing price of RMB23.43 (equivalent to approximately HK$29.29) per A Share as quoted on the SSE on the date of the Formal Agreement;
(g) a discount of approximately 17.13% to the closing price of RMB7.24 (equivalent to approximately HK$9.05) per A Share as quoted on the SSE on the Last Trading Day; and
(h) a premium of approximately 17,000.00% over the unaudited net assets attributable to the Shareholders per Share of approximately RMB0.03 (equivalent to approximately HK$0.04), calculated based on the Company’s unaudited net assets attributable to the Shareholders of approximately RMB17.38 million as at 31 March 2015.

Based on (i) the portion of the difference between the considerations of the Disposal and the Acquisition of RMB90,729,715 to be settled by the proceeds from the Proposed A Shares Placing, and (ii) the issue price of RMB6.00 per Consideration Share, the aggregate number of Consideration Shares to be issued by the Company is 15,000,000 new A Shares, which represent approximately 3.00% of the issued share capital of the Company as at the date of this announcement and approximately 2.91% of the issued share capital of the Company as enlarged by the issue of such Consideration Shares.

The Consideration Shares shall rank pari passu among themselves and with the A Shares in issue. The issue of the Consideration Shares will be subject to the approval by the Independent Shareholders at the EGM, the A Shares Class Meeting and the H Shares Class Meeting.

The Consideration Shares to be issued to CLFG for settlement of the difference between the considerations of the Disposal and the Acquisition (excluding the cash portion) cannot be transferred within 36 months after completion of the issue of the Consideration Shares (the “ Lock-up Period ”). CLFG undertakes that if the closing prices of the A Shares for 20 consecutive trading days are below the issue price of the Consideration Shares within the 6-month period from the issue date of the Consideration Shares or the closing price of the A Shares is below the issue price of the Consideration Shares as at the end of the 6-month period after completion of the issue of the Consideration Shares, the Lock-up Period will be automatically extended for at least 6 months. If the Lock-up Period does not comply with the latest requirements of the CSRC, CLFG will adjust the Lock-up Period according to the latest requirements of the CSRC.

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The Proposed A Share Placing

The Company plans to undertake a proposed placing of not more than 32,137,519 new A Shares at the minimum issue price of RMB6.69 per A Share to not more than 10 independent specific investors which according to the requirements of the CSRC include securities investment fund management companies, insurance institutional investors, trust investment companies, finance companies, securities companies, qualified foreign institutional investors (QFII), natural persons and other qualified investors under statutory requirements to be procured by the independent financial adviser of the Company in the PRC. The Proposed A Share Placing is non-legally binding and is conditional on the Disposal, the Acquisition and the issue of the Consideration Shares. In accordance with the applicable PRC laws and regulations, the Proposed A Share Placing will be subject to the approval by the Independent Shareholders at the EGM, the A Shares Class Meeting and the H Shares Class Meeting.

The terms of the Proposed A Share Placing are as follows:

Type of shares and : A Shares, with a nominal value of RMB1.00 each. nominal value

Method of issue

: Non-public issuance.

Target subscribers

: The Company will issue the new A Shares to not more than 10 independent specific investors which according to the requirements of the CSRC include securities investment fund management companies, insurance institutional investors, trust investment companies, finance companies, securities companies, qualified foreign institutional investors (QFII), natural persons and other qualified investors under statutory requirements to be procured by the independent financial adviser of the Company in the PRC. Such specified investors shall not include connected persons of the Company as defined under the Listing Rules and persons acting in concert with the controlling Shareholder as defined under the Takeovers Code. The Company will determine the target subscribers to ensure that no specific investor will become connected persons of the Company after the Proposed A Share Placing.

To the best knowledge, information and belief of the Directors, as at the date of this announcement, the Company is not aware of any potential investors or any of their respective ultimate beneficial owners who are connected persons of the Company. The Company will comply with the relevant requirements of the Listing Rules should there be any changes or if otherwise necessary.

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Lock-up period : The A Shares to be subscribed by the target subscribers are not transferable for a period of 12 months from the date of completion of the issue of the new A Shares under the Proposed A Share Placing.
Subscription method : All target subscribers will subscribe for the A Shares under the Proposed A Share Placing in cash.
Pricing base date and : The pricing base date of the Proposed A Share Placing is price of the issue the date of announcement of the resolution of the first board meeting in relation to the Reorganisation (i.e. 31 December 2014). The issue price per A Share will be not less than 90% of the average trading price of the A Shares for the 20 trading days immediately preceding the pricing base date, i.e. not less than RMB6.69 per A Share. The exact issue price will be determined after obtaining the approval of the CSRC according to the relevant regulations of the CSRC for the Proposed A Share Placing with reference to bid prices offered by target subscribers. The issue price of the A Shares under the Proposed A Share Placing will be adjusted correspondingly in case of ex-rights or ex-dividend during the period from the pricing base date to the issue date.
Amount of gross proceeds to be raised and number of A Shares to be issued
: The maximum amount of gross funds to be raised through the Proposed A Share Placing will not exceed RMB215,000,000 in accordance with the New Measures pursuant to which the fund raising size in relation to the significant asset restructuring by PRC listed companies shall not be more than 100% of the consideration of proposed assets to be acquired i.e. RMB674,909,180.
Based on the minimum issue price of RMB6.69 per A Share under the Proposed A Share Placing, the number of new A Shares to be issued will not be more than 32,137,519 A Shares.
The final number of new A Shares to be issued under the Proposed A Share Placing will be determined by the Board based on the final issue price and the result of price bidding as authorised in the Shareholders’ general meeting of the Company.

Place of listing

: The A Shares to be issued pursuant to the Proposed A Share Placing will be listed and traded on the SSE.

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Use of proceeds

: The proceeds to be raised from the Proposed A Share Placing will not exceed RMB215,000,000. After the settlement of the cash portion of the difference between the considerations of the Disposal and the Acquisition and the deduction of the relevant cost of transaction (including relevant tax, expense, offering cost and intermediary fee, etc.), the remaining net proceeds, which shall not be more than 50% of the gross proceeds from the Proposed A Share Placing in accordance with the New Measures, will be used for general working capital of the Group. In the event that the net proceeds from the Proposed A Share Placing fell short of RMB215,000,000, such proceeds will be used to settle the difference between the considerations of the Disposal and the Acquisition with priority. In the event that the net proceeds from the Proposed A Share Placing fell short of RMB90,729,715, the Company will settle the shortfall amount by internal funding or other settlement methods to be determined by commercial negotiations between the Company and CLFG however excluding the allotment and issue of new Shares by the Company to CLFG.
Arrangements with regard to the undistributed cumulated profits
: The new Shareholders after completion of the Proposed A Share Placing and existing Shareholders will share the undistributed profits cumulated prior to the Proposed A Share Placing.
Period of validity of the resolution(s) in relation to the Proposed A Share Placing
: 12 months from the date of the resolution(s) of the Proposed A Share Placing passed at the Shareholders’ general meeting of the Company. If the Company has obtained the approval from the CSRC in relation to the Proposed A Share Placing within this 12-month period, the period of validity will be automatically extended until the date of completion of the Proposed A Share Placing.

Conditions precedent

The Formal Agreement shall become effective after satisfaction of, among other things, the conditions set forth below. If any of the conditions precedent below remains not satisfied, the Formal Agreement shall not become effective and no party shall have any claim against or liability or obligation to the other party save in respect of any deliberate or serious defect (including but not limited to any breach of mandatory requirements under any applicable laws and regulations) causing any of the conditions set out below unable to be fulfilled.

(a) the approval of the transactions contemplated under the Formal Agreement by the Board;
(b) the approval of the transactions contemplated under the Formal Agreement by the Nonconnected Shareholders at the EGM and the A Shares Class Meeting;
(c) the approval of the transactions contemplated under the Formal Agreement by the Independent Shareholders at the EGM and the H Shares Class Meeting;

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(d) the approval of the transactions contemplated under the Formal Agreement by the SASAC; and
(e) the approval of the transactions contemplated under the Formal Agreement by the CSRC.

In the event that any of the conditions precedent for the Formal Agreement to become effective cannot be fulfilled or satisfied within the period agreed or expected by the parties, the parties shall negotiate amendments, modification, supplements or improvements for the Formal Agreement with the aim of enhancing the Company’s quality of assets, financial position and profitability and safeguarding minority Shareholders’ interests.

Completion of the transactions contemplated under the Formal Agreement

The Formal Agreement shall become effective after satisfaction of the conditions precedent set forth therein. Completion of the transactions contemplated under the Formal Agreement shall take place after all the conditions precedent for the Formal Agreement to become effective have been fulfilled. The Acquisition and the Disposal shall take place simultaneously and are inter-conditional with each other. There will be no change in control of the Company as a result of the Disposal and the Acquisition. The Proposed A Share Placing shall take place subsequent to the Disposal, the Acquisition and the issue of the Consideration Shares and whether the Proposed A Share Placing is implemented or fully subscribed or not will not affect the implementation of the Disposal, the Acquisition and the issue of the Consideration Shares.

Profit and loss of the Outgoing Entities and the Incoming Entity

CLFG and the Company agreed that upon completion of the Disposal and the Acquisition, all the profit or loss of the Outgoing Entities arising from or incurred during the period commencing from 31 October 2014 to the completion date of the Disposal and the Acquisition shall belong to or be borne by the Company.

CLFG and the Company also agreed that upon completion of the Disposal and the Acquisition, all the profit of the Incoming Entity arising from or incurred during the period commencing from 31 October 2014 to the completion date of the Disposal and the Acquisition shall belong to the Company and all the loss of the Incoming Entity arising from or incurred during the period commencing from 31 October 2014 to the completion date of the Disposal and the Acquisition shall be compensated by CLFG in cash.

SHAREHOLDING STRUCTURE

Based upon the shares in issue for each of the companies identified below, the simplified shareholding structure of the relevant companies as at the date of this announcement and after completion of the Reorganisation are as follows:

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As at the date of this announcement (Before completion of the Reorganisation, the transfer of 67.00% equity interest in Dengfeng Silicon Company from Longhai Company to the Company under the Equity Interest Transfer Agreement III and the transfer of the Transfer Shares from CLFG to Bengbu Institute under the Equity Interest Transfer Agreement II)

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----- Start of picture text -----

CLFG
31.80% 100.00%
Bengbu
Company
Company
100.00% 100.00% 100.00% 63.98% 52.00% 100.00% 40.29% 59.71%
Mineral
Longhai Longmen Longhao Longfei Yinan Furuida Products
Company Company Company Company Huasheng Commerce
Company
67.00% 100.00% 63.51%
Dengfeng
Silicon Longxiang Xinan Transport
Company
Company
55.12%
Dengfeng
Hongzhai
Silicon
----- End of picture text -----

After completion of the Reorganisation (but not taking into account the transfer of the Transfer Shares under the Equity Interest Transfer Agreement II)

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----- Start of picture text -----

CLFG
31.80% 67.00% 100.00% 63.98% 52.00% 100.00%
Company DengfengSilicon Longhao Longfei Yinan ProductsMineral
Company Company Huasheng
Company Company
55.12% 100.00% 63.51%
Dengfeng Longxiang Xinan
Hongzhai
Silicon Company Transport
100.00% 100.00% 100.00% 100.00%
Bengbu Longhai Longmen Furuida
Company Company Company Commerce
----- End of picture text -----

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EFFECT OF THE REORGANISATION, THE PROPOSED A SHARE PLACING AND THE TRANSFER OF THE TRANSFER SHARES ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The following table sets out the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediately after completion of the Reorganisation (but not taking into account the Proposed A Share Placing and the transfer of the Transfer Shares); (iii) immediately after completion of the Reorganisation and the Proposed A Share Placing (but not taking into account the transfer of the Transfer Shares); and (iv) immediately after completion of the Reorganisation, the Proposed A Share Placing and the transfer of the Transfer Shares:

Shareholders A Shares CLFG Bengbu Institute_(note 1) Other A Shareholders Sub-total H Shares HKSCC (Nominees) Limited (note 2)_ Public H Shareholders Sub-total Total	As at the date of this announcement Number of Shares Shareholding percentage of the total issued Shares (million) % 159.0 31.80% – 0.00% 91.0 18.20% 250.0 50.00% 247.8 49.57% 2.2 0.43% 250.0 50.00% 500.0 100.00%	Immediately after completion of the Reorganisation (but not taking into account the Proposed A Share Placing and the transfer of the Transfer Shares) Number of Shares Shareholding percentage of the total issued Shares (million) % 174.0 33.79% – 0.00% 91.0 17.67% 265.0 51.46% 247.8 48.12% 2.2 0.42% 250.0 47.54% 515.0 100.00%	Immediately after completion of the Reorganisation and the Proposed A Share Placing (but not taking into account the transfer of the Transfer Shares) Number of Shares Shareholding percentage of the total issued Shares (million) % 174.0 31.80% – 0.00% 123.1 22.51% 297.2 54.31% 247.8 45.30% 2.2 0.39% 250.0 45.69% 547.2 100.00%	Immediately after completion of the Reorganisation, the Proposed A Share Placing and the transfer of the Transfer Shares *(note 3)* Number of Shares Shareholding percentage of the total issued Shares (million) % 105.0 19.19% 69.0 12.61% 123.1 22.51% 297.2 54.31% 247.8 45.30% 2.2 0.39% 250.0 45.69% 547.2 100.00%	Immediately after completion of the Reorganisation, the Proposed A Share Placing and the transfer of the Transfer Shares *(note 3)* Number of Shares Shareholding percentage of the total issued Shares (million) % 105.0 19.19% 69.0 12.61% 123.1 22.51% 297.2 54.31% 247.8 45.30% 2.2 0.39% 250.0 45.69% 547.2 100.00%
					45.30% 0.39% 45.69%
					100.00%

Note 1: Bengbu Institute directly holds 19.00% equity interest in CLFG. Bengbu Institute in turn is an indirect wholly-owned subsidiary of CNBMG. CNBMG, through another wholly-owned subsidiary of it, indirectly holds approximately 51.70% interest in CLFG.
Note 2: To the best knowledge of the Company, HKSCC (Nominees) Limited holds the H Shares as nominee of public H Shareholders.
Note 3: The SASAC has granted the approval of the transfer of the Transfer Shares under the Equity Interest Transfer Agreement II. The transfer of the Transfer Shares is subject to the arrangement among CLFG and Bengbu Institute. The shareholding structure above has assumed the transfer of the Transfer Shares to take place subsequent to the completion of the Formal Agreement.

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INFORMATION ON THE COMPANY

The Company is principally engaged in the production and sale of ordinary float glass and ultra-thin glass substrate.

INFORMATION ON CLFG

CLFG is principally engaged in the production and sale of float glass, imports, exports and the domestic sale of processing technology of glass, design and subcontracting of engineering works, labour export and other businesses.

INFORMATION ON THE OUTGOING ENTITIES

Longhao Company

Longhao Company is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Longhao Company is a wholly-owned subsidiary of the Company. Upon completion of the Reorganisation, Longhao Company will cease to be a subsidiary of the Company.

Longhao Company is mainly engaged in the manufacturing and sales of float glass. As disclosed in the Company’s announcement dated 7 May 2015, the Company resolved that the 650 tons float glass production line of Longhao Company would have phased suspension of production and reformation in order to further enhance the market competitiveness of its products and to meet the relevant requirements of the environmental protection authorities.

Set out below is the audited financial information of Longhao Company prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2014:

	For the year ended
	31 December
	2014	2013
	RMB’000	RMB’000
Revenue	245,962	56,781
Loss before taxation	(138,743)	(34,735)
Net loss after taxation	(138,743)	(34,735)

The audited net liability value of Longhao Company was approximately RMB264,406,435 as at 31 December 2014. The audited book value of the amount due from Longhao Company to the Company, which includes account and other receivables and entrusted loan due from Longhao Company, was approximately RMB245,858,038 as at 31 December 2014.

Longfei Company

Longfei Company is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Longfei Company is a 63.98% owned subsidiary of the Company and is interested in the entire equity interest in Longxiang Company. Upon completion of the Reorganisation, Longfei Company and its subsidiary will cease to be subsidiaries of the Company.

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Longfei Company is mainly engaged in the manufacturing and sales of float sheet glass for construction and automobile uses. Longxiang Company is also engaged in the manufacturing and sales of float sheet glass.

Set out below is the audited consolidated financial information of Longfei Company prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2014:

	For the year ended
	31 December
	2014	2013
	RMB’000	RMB’000
Revenue	592	1,111
Loss before taxation	(33,825)	(32,954)
Net loss after taxation	(33,825)	(32,954)

The standalone audited net liability value of Longfei Company was approximately RMB209,052,093 as at 31 December 2014. The audited book value of the amount due from Longfei Company to the Company, which includes account and other receivables and entrusted loan due from Longfei Company, was approximately RMB109,152,117 as at 31 December 2014. The audited book value of the amount due from Longxiang Company to the Company was approximately RMB62,351,586 as at 31 December 2014.

Dengfeng Silicon Company

Dengfeng Silicon Company is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Dengfeng Silicon Company is a 67.00% owned subsidiary of the Company and is interested in 55.12% equity interest in Dengfeng Hongzhai Silicon. Upon completion of the Reorganisation, Dengfeng Silicon Company and its subsidiary will cease to be subsidiaries of the Company.

Dengfeng Silicon Company is mainly engaged in the sales of silica sands. Dengfeng Hongzhai Silicon is mainly engaged in the sales of silica sands and the mining, processing and sales of quartzite.

Set out below is the audited consolidated financial information of Dengfeng Silicon Company prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2014:

	For the year ended
	31 December
	2014	2013
	RMB’000	RMB’000
Revenue	–	–
Loss before taxation	(1,946)	(1,279)
Net loss after taxation	(1,946)	(1,280)

The standalone audited net asset value of Dengfeng Silicon Company was approximately RMB9,987,105 as at 31 December 2014.

– 15 –

On 31 December 2014, Longhai Company and the Company entered into the Equity Interest Transfer Agreement III, pursuant to which Longhai Company agreed to sell and the Company agreed to purchase 67.00% equity interest in Dengfeng Silicon Company at a consideration of approximately RMB7,094,453. Prior to the date of signing the Equity Interest Transfer Agreement III, Dengfeng Silicon Company was owned as to 67.00% by Longhai Company which is a wholly-owned subsidiary of the Company. Upon completion of the Equity Interest Transfer Agreement III, the Dengfeng Silicon Group will be owned by the Company.

The consideration of approximately RMB7,094,453 was determined after arm’s length negotiations between Longhai Company and the Company with reference to the audited net asset value of Dengfeng Silicon Company as at 31 December 2013.

Yinan Huasheng

Yinan Huasheng is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Yinan Huasheng is a 52.00% owned subsidiary of the Company. Upon completion of the Reorganisation, Yinan Huasheng will cease to be a subsidiary of the Company.

Yinan Huasheng is mainly engaged in the manufacturing, selling and distribution services of silicon powder.

Set out below is the audited financial information of Yinan Huasheng prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2014:

	For the year ended
	31 December
	2014	2013
	RMB’000	RMB’000
Revenue	31,092	37,107
Profit/(Loss) before taxation	(4,990)	1,255
Net profit/(loss) after taxation	(5,123)	1,092

The audited net asset value of Yinan Huasheng was approximately RMB3,772,670 as at 31 December 2014. The audited book value of the amount due from Yinan Huasheng to the Company, which includes other receivable due from Yinan Huasheng, was approximately RMB21,138,847 as at 31 December 2014.

Mineral Products Company

Mineral Products Company is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Mineral Products Company is a 40.29% owned associate of the Company and is interested in 63.51% equity interest in Xinan Transport. Upon completion of the Reorganisation, Mineral Products Company and its subsidiary will cease to be associates of the Company.

Mineral Products Company is mainly engaged in the mining of clay and other soil, sand and stone. Xinan Transport is mainly engaged in the provision of goods transportation services and is in the process of de-registration.

– 16 –

Set out below are the audited consolidated financial information of Mineral Products Company prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2014:

	For the year ended
	31 December
	2014	2013
	RMB’000	RMB’000
Revenue	4,431	2,884
Loss before taxation	(8,649)	(3,107)
Net loss after taxation	(8,649)	(3,107)

The standalone audited net liability value of Mineral Products Company was approximately RMB32,388,065 as at 31 December 2014. The audited book value of the amount due from Mineral Products Company to the Company was approximately RMB1,341,990 as at 31 December 2014.

INFORMATION ON THE INCOMING ENTITY

Bengbu Company

Bengbu Company is a company established under the laws of the PRC with limited liability on 29 September 2013. As at the date of this announcement, Bengbu Company is a wholly-owned subsidiary of CLFG. Upon completion of the Reorganisation, Bengbu Company will become a wholly-owned subsidiary of the Company.

Bengbu Company is mainly engaged in the research and development, production and sales of ultra-thin (1.1 mm, 0.7 mm, 0.55 mm, 0.4 mm and 0.33 mm and etc.) glass substrates. Compared with ordinary plate glass which is commonly used in the construction market, ultra-thin glass substrate is a new type of glass with different physical properties, chemical composition and production technology and is widely used in various areas including (a) flat panel displays like liquid-crystal display, plasma display panel, organic light-emitting diode displays; (b) touch panel displays; (c) instruments, meters and cameras; and (d) microscope and pharmaceutical uses.

Bengbu Company currently operates a 150t/d electronic information display ultra-thin glass substrates production line which started business operation in October 2013 and commenced mass production since August 2014 and is one of the few PRC manufacturers equipped with production technology of 0.55mm and 0.33mm ultra-thin glass substrates in the PRC.

– 17 –

Set out below is the audited financial information of Bengbu Company prepared in accordance with PRC generally accepted accounting principles for the period from 29 September 2013 (date of incorporation) to 31 December 2013 and the year ended 31 December 2014:

		From 29
		September
	For the year	2013 (date of
	ended 31	incorporation) to
	December 2014	31 December 2013
	RMB’000	RMB’000
Revenue	47,517	–
Profit before taxation	7,262	10
Net profit after taxation	5,155	8

The audited net asset value of Bengbu Company was approximately RMB667,678,766 as at 31 December 2014.

On 27 October 2014, CLFG and Bengbu Institute entered into the Equity Interest Transfer Agreement I pursuant to which Bengbu Institute agreed to sell and CLFG agreed to purchase 93.68% equity interest in Bengbu Company at a consideration of approximately RMB628.7 million. As at the date of the Equity Interest Transfer Agreement I, Bengbu Company was owned as to 93.68% by Bengbu Institute and 6.32% by CLFG. Completion of the Equity Interest Transfer Agreement I has taken place as at the date of this announcement and Bengbu Company has become a wholly-owned subsidiary of CLFG.

On 31 December 2014, CLFG and Bengbu Institute entered into the Equity Interest Transfer Agreement II pursuant to which both parties agreed that RMB434.7 million among the consideration of approximately RMB628.7 million under the Equity Interest Transfer Agreement I will be satisfied by the transfer of the 69,000,000 Transfer Shares from CLFG to Bengbu Institute. The transfer price of the Transfer Shares is RMB6.30 per Transfer Share.

The parties to the Equity Interest Transfer Agreement I shall further discuss and agree on the settlement of the remaining balance of approximately RMB194.0 million of the consideration under the Equity Interest Transfer Agreement I.

The SASAC has granted the approval of the transfer of the Transfer Shares under the Equity Interest Transfer Agreement II. The transfer of the Transfer Shares is subject to the arrangement among CLFG and Bengbu Institute.

REASONS FOR AND BENEFITS OF THE REORGANISATION

In recent years, the current structural excess supply in light of the slowing demand and intense competition in the ordinary float glass market in the PRC has an adverse impact on the ordinary float glass business of the Group which has dragged down the economic efficiency and profitability of the Company. The Company expects that such situation will not improve significantly in the near future due to the deteriorating industry trend in the ordinary float glass industry. On 30 December 2011, the State Council of the PRC published the “About Industrial Restructuring the Upgrading Plan (2011-2015)” (《關於工業轉型升級規劃 (2011-2015)》) which emphasises the development of ultra-thin glass substrate, photovoltaic solar cells with ultra-white glass, transparent conductive oxide (TCO) glass and encourages the development and application of low-emissivity (Low-E) coated glass, hollow glass vacuum and other energy-saving glass.

– 18 –

Prior to the Reorganisation, the major products of the Company include ordinary float glass and ultra-thin glass substrate. In order to sustain the continuous development and growth, and enhance the competitiveness and profitability of the Company and hence maximise the interest of the Shareholders, the Company decided to undertake the Reorganisation through (i) the injection of more profitable ultra-thin glass substrate assets from the Incoming Entity to the Company; and (ii) the disposal of assets in the ordinary float glass and related segments with the aim to focus the Group in the production and sale of ultra-thin glass substrate products. After the Reorganisation, the Company will no longer produce ordinary float glass products and will concentrate on the production and sale of ultra-thin glass substrate products. The shift in major products of the Group towards the ultra-thin glass substrate business provides better opportunities for the Company’s growth.

Accordingly, the Directors (excluding the independent non-executive Directors whose views will be rendered upon having received the advice of the independent financial adviser) are of the view that the terms of the Formal Agreement and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF THE CONSIDERATION FOR THE DISPOSAL

Based on the preliminary assessment, the Company expects to recognise a net gain of approximately RMB174.87 million upon completion of the Disposal, which is calculated with reference to the difference between the consideration of the Disposal of approximately RMB494.18 million and the sum of the proportionate interests in the audited net assets/ (liabilities) of the Outgoing Entities and the book value of the amounts due from the Outgoing Entities to the Company as at 31 October 2014, which amounts to approximately RMB319.31 million in aggregate. The amount of the actual gain arising from the Disposal will be determined and confirmed by the auditors of the Company subsequent to completion of the Disposal depending on the actual net assets/(liabilities) of the Outgoing Entities and the amounts due from the Outgoing Entities to the Company (which can only be determined upon completion of the Disposal) and therefore may be different from the amount mentioned above.

The consideration to be received by the Company from the Disposal will be fully used to net off the consideration for the Acquisition payable by the Company.

REASONS FOR AND BENEFITS OF THE PROPOSED A SHARE PLACING

The Directors (including the independent non-executive Directors) consider that the Proposed A Share Placing represents an opportunity to raise additional capital for the Group to partially finance the Reorganisation and enhance its general working capital base for the business operation of the Group, which is in the interests of the Group.

The proceeds to be raised from the Proposed A Share Placing will not exceed RMB215,000,000. After the settlement of the cash portion of the difference between the considerations of the Disposal and the Acquisition and the deduction of the relevant cost of transaction (including relevant tax, expense, offering cost and intermediary fee, etc.), the remaining net proceeds, which shall not be more than 50% of the gross proceeds from the Proposed A Share Placing in accordance with the New Measures, will be used for general working capital of the Group.

– 19 –

The Directors (including the independent non-executive Directors) consider that the terms of the Proposed A Share Placing, including the issue price, are on normal commercial terms and are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has not conducted any fund raising activities involving the issue of equity shares within the 12 months immediately prior to the date of this announcement.

LISTING RULES IMPLICATIONS

INDEPENDENT BOARD COMMITTEE

EGM AND CLASS MEETINGS

– 20 –

GENERAL

DEFINITIONS

In this announcement, save for the below and unless the context otherwise requires, the terms and expressions used herein shall have the meanings ascribed to it in the announcement of the Company dated 31 December 2014 in relation to the Framework Agreement.

“Acquisition” the transfer by CLFG of the Incoming Entity to the Company pursuant to the terms and conditions of the Formal Agreement
“Consideration Share(s)” a total of 15,000,000 new A Shares to be allotted and issued by the Company to CLFG pursuant to the Formal Agreement as the settlement of the difference between the considerations of the Disposal and the Acquisition (excluding the cash portion)
“Disposal” the transfer by the Company of the Sale Interests in the Outgoing Entities and the amounts due from the Outgoing Entities to the Company to CLFG pursuant to the terms and conditions of the Formal Agreement
“Formal Agreement” the formal agreement dated 10 June 2015 entered into between CLFG and the Company in relation to the Disposal, the Acquisition, the issue of the Consideration Shares and the Proposed A Share Placing
“Framework Agreement” the initial framework agreement dated 31 December 2014 entered into between CLFG and the Company in relation to the Disposal, the Acquisition, the issue of the Consideration Shares and the Proposed A Share Placing and superseded by the Formal Agreement

– 21 –

“Independent Shareholders”

Shareholders other than CLFG and its associates

“New Measures”

Amendment to the Administrative Measures on Significant Asset Restructuring of Listing Companies with Regard to Applicable Opinions in Rule 14 and Rule 44 – Applicable Opinions No.12 on the Securities and Futures Laws (Zheng Jian Hui Gong Gao [2015] No.10) (《第十四條、第四十四條的適用意見 – 證券期貨法律適用意見第12號》(證監會公告[2015]10號）修訂版) and Questions and Answers about Issuance of Shares by Listed Companies to Acquire Assets and Use of Supporting Proceeds (《關於上市公司發行股份購買資產同時募集配套資金用途等問題與解答》) issued by the CSRC on 24 April 2015, which details, among other things, the following changes to fund raising activities in relation to significant asset restructuring: (i) the fund raising size in relation to the significant asset restructuring by PRC listed companies shall not be more than 100% of the consideration of proposed assets to be acquired; and (ii) the PRC listed companies shall not allocate more than 50% of its proceeds from the fund raising for working capital use

“Proposed A Share Placing”

the proposed placing of not more than 32,137,519 new A Shares by the Company based on the minimum issue price of RMB6.69 per A Share to not more than 10 independent specific investors

By order of the Board Luoyang Glass Company Limited* Ma Liyun Chairman

Luoyang, the PRC 10 June 2015

As at the date of this announcement, the Board comprises four executive Directors: Mr. Ma Liyun, Mr. Ni Zhisen, Ms. Sun Lei and Mr. Xie Jun; two non-executive Directors: Mr. Zhang Chengong and Mr. Zhang Chong; and four independent non-executive Directors: Mr. Huang Ping, Mr. Dong Jiachun, Mr. Liu Tianni and Mr. Jin Zhanping.

For the purpose of this announcement, all amounts denominated in RMB have been translated (for information only) into HK$ using the exchange rate of RMB1:HK$1.25. No representation is made that any amounts in RMB or HK$ can be or could have been converted at the relevant dates at the above rate or any other rates at all.

* for identification purposes only

– 22 –

AI assistant

RoboSense Technology Co., Ltd — Capital/Financing Update 2015

50628_rns_2015-06-10_2dff622b-12cf-48c1-8115-4b83ed0c4bbf.pdf

MAJOR AND CONNECTED TRANSACTIONS AND PROPOSED ISSUANCE AND PLACING OF A SHARES

Financial adviser to the Company

THE REORGANISATION

LISTING RULES IMPLICATIONS

INDEPENDENT BOARD COMMITTEE

EGM AND CLASS MEETINGS

GENERAL

INTRODUCTION

THE REORGANISATION

The Formal Agreement

Date

Parties

The Disposal

(i) Valuation of the net assets/(liabilities) of the Outgoing Entities as at 31 October 2014

The Acquisition

(i) Valuation of the net asset value of the Incoming Entity as at 31 October 2014

The Consideration Shares

The Proposed A Share Placing

Conditions precedent

Completion of the transactions contemplated under the Formal Agreement

Profit and loss of the Outgoing Entities and the Incoming Entity

SHAREHOLDING STRUCTURE

EFFECT OF THE REORGANISATION, THE PROPOSED A SHARE PLACING AND THE TRANSFER OF THE TRANSFER SHARES ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

INFORMATION ON THE COMPANY

INFORMATION ON CLFG

INFORMATION ON THE OUTGOING ENTITIES

Longhao Company

Longfei Company

Dengfeng Silicon Company

Yinan Huasheng

Mineral Products Company

INFORMATION ON THE INCOMING ENTITY

Bengbu Company

REASONS FOR AND BENEFITS OF THE REORGANISATION

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF THE CONSIDERATION FOR THE DISPOSAL

REASONS FOR AND BENEFITS OF THE PROPOSED A SHARE PLACING

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

LISTING RULES IMPLICATIONS

INDEPENDENT BOARD COMMITTEE

EGM AND CLASS MEETINGS

GENERAL

DEFINITIONS

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RoboSense Technology Co., Ltd Capital/Financing Update 2015