Zhenro Properties Group Limited — Capital/Financing Update 2021

Jun 2, 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.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities referred to herein will not be registered under the Securities Act, and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. The Company does not intend to make any public offering of securities in the United States.

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Zhenro Properties Group Limited 正榮地產集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6158)

ISSUANCE OF US$340,000,000 7.1% SENIOR NOTES DUE 2024

On 1 June 2021, the Company and the Subsidiary Guarantors entered into the Purchase Agreement with Deutsche Bank, HSBC, Standard Chartered Bank, Bank of China (Hong Kong), BNP PARIBAS, BOC International, CCB International, CLSA, CMB International, Credit Suisse, Guotai Junan International, Haitong International, The Bank of East Asia, Limited and Zhenro Securities in connection with the Notes Issue.

The Company intends to use the net proceeds of the Notes Issue to refinance its existing indebtedness and in accordance with the Company’s Green Bond Framework. The Company may adjust its plans in response to changing market conditions and thus, reallocate the use of the net proceeds.

The Company will seek a listing of the Notes on the Stock Exchange. A confirmation of the eligibility for the listing of the Notes has been received from the Stock Exchange for the listing of the Notes by way of debt issues to professional investors only as described in the offering memorandum. Admission of the Notes to the Stock Exchange is not to be taken as an indication of the merits of the Company or the Notes.

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The Board is pleased to announce that on 1 June 2021, the Company, together with the Subsidiary Guarantors, entered into the Purchase Agreement with the Initial Purchasers in connection with the Notes Issue.

THE PURCHASE AGREEMENT

Date: 1 June 2021

Parties to the Purchase Agreement

• (a) the Company;

• (b) the Subsidiary Guarantors;

• (c) Deutsche Bank, HSBC, Standard Chartered Bank, Bank of China (Hong Kong), BNP PARIBAS, BOC International, CCB International, CLSA, CMB International, Credit Suisse, Guotai Junan International, Haitong International, The Bank of East Asia, Limited and Zhenro Securities as initial purchasers.

Deutsche Bank, HSBC, Standard Chartered Bank, Bank of China (Hong Kong), BNP PARIBAS, BOC International, CCB International, CLSA, CMB International, Credit Suisse, Guotai Junan International, Haitong International, The Bank of East Asia, Limited and Zhenro Securities have been appointed as the joint global coordinators, the joint lead managers and the joint bookrunners of the Notes Issue. Deutsche Bank and Standard Chartered Bank are also the joint green structuring advisors of the Notes Issue. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of Deutsche Bank, HSBC, Standard Chartered Bank, Bank of China (Hong Kong), BNP PARIBAS, BOC International, CCB International, CLSA, CMB International, Credit Suisse, Guotai Junan International, Haitong International and The Bank of East Asia, Limited is an independent third party and not a connected person of the Company. Zhenro Securities is a wholly-owned subsidiary of the Company.

The Notes and the Subsidiary Guarantees have not been, and will not be, registered under the Securities Act or any state securities laws. The Notes and the Subsidiary Guarantees will only be offered and sold by the Initial Purchasers outside the United States in compliance with Regulation S under the Securities Act, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. None of the Notes and the Subsidiary Guarantees will be offered to the public in Hong Kong.

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Principal terms of the Notes

The following is a summary of certain provisions of the Notes and the Indenture. This summary does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture, the Notes, the Subsidiary Guarantees, and the JV Subsidiary Guarantees, if any.

Notes Offered

Subject to certain conditions to completion, the Company will issue the Notes in the aggregate principal amount of US$340,000,000. The Notes will mature on 10 September 2024, unless earlier redeemed in accordance with the terms thereof.

Offering Price

The offering price of the Notes will be 99.163% of the principal amount of the Notes.

Interest and Interest Payment Dates

The Notes will bear interest from and including 10 June 2021 at a rate of 7.1% per annum, payable semi-annually in arrears on 10 March and 10 September of each year, commencing 10 September 2021 except that the first payment of interest, to be made on 10 September 2021, will be in respect of the period from and including 10 June 2021, to but excluding 10 September 2021.

Ranking of the Notes

The Notes are (1) general obligations of the Company; (2) senior in right of payment to any existing and future obligations of the Company expressly subordinated in right of payment to the Notes; (3) at least pari passu in right of payment with the Existing Notes and all other unsecured, unsubordinated indebtedness of the Company (subject to any priority rights of such unsecured, unsubordinated indebtedness pursuant to applicable law); (4) guaranteed by the Subsidiary Guarantors and the JV Subsidiary Guarantors, if any, on a senior basis, subject to certain limitations; (5) effectively subordinated to the secured obligations (if any) of the Company, the Subsidiary Guarantors and the JV Subsidiary Guarantors (if any), to the extent of the value of the assets serving as security therefor; and (6) effectively subordinated to all existing and future obligations of the subsidiaries of the Company which are not providing guarantees under the Notes.

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Events of default

The events of default under the Notes include, among others: (a) default in the payment of principal of (or premium, if any, on) the Notes when the same becomes due and payable at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 consecutive days; (c) default in the performance or breach of the provisions of certain covenants under the Indenture relating to consolidation, merger and sale of assets, the failure by the Company to make or consummate an offer to purchase in the manner described in the Indenture; (d) default by the Company or certain of its subsidiaries in the performance of or breaches of any other covenant or agreement in the Indenture or under the Notes (other than a default specified in clause (a), (b) or (c) above) and such default or breach continues for a period of 30 consecutive days after written notice by the trustee or the holders of 25% or more in aggregate principal amount of the Notes; (e) there occurs with respect to any indebtedness of the Company or certain of its subsidiaries having an outstanding principal amount of US$10.0 million or more in the aggregate for such indebtedness (i) an event of default that has caused the holder of such indebtedness to declare such indebtedness to be due and payable prior to its stated maturity and/or (ii) the failure to make a principal payment when due; (f) one or more final judgments or orders for the payment of money are rendered against the Company or certain of its subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such persons to exceed US$10.0 million (in excess of amounts which the Company’s insurance carriers have agreed to pay under applicable policies) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect; (g) an involuntary case or other proceeding is commenced against the Company or any of its significant subsidiaries (or any group of subsidiaries that together would constitute a significant subsidiary) under bankruptcy, insolvency or other similar law, which remains undismissed and unstayed for a period of 60 consecutive days; (h) voluntary bankruptcy or insolvency proceedings commenced by the Company or any of its significant subsidiaries (or any group of subsidiaries that together would constitute a significant subsidiary); or consent to the entry of an order for relief in an involuntary case under any such law; or consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any of the Company’s significant subsidiaries (or any group of subsidiaries that together would constitute a significant subsidiary) or for all or substantially all of the property and assets of the Company or any of its significant subsidiaries (or any group of subsidiaries that together would constitute a significant subsidiary); or effects any general assignment for the benefit of creditors; or (i) any Subsidiary Guarantor or JV Subsidiary Guarantor denying or disaffirming its obligations under its Subsidiary Guarantee or JV Subsidiary Guarantee or, except as permitted by the Indenture, any Subsidiary Guarantee or JV Subsidiary Guarantee being determined to be unenforceable or invalid or for any reason ceasing to be in full force and effect.

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If an event of default (other than the default specified in clause (g) and (h) above) occurs and is continuing under the Indenture, the trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the trustee if such notice is given by the holders) may, and the trustee at the written request of such holders shall, declare the principal of, premium, if any, and accrued and unpaid interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal of, premium, if any, and accrued and unpaid interest shall be immediately due and payable. If an event of default specified in (g) and (h) above occurs with respect to the Company or any of its significant subsidiary (or any group of subsidiaries that together would constitute a significant subsidiary), the principal of, premium, if any, and accrued and unpaid interest on the Notes then outstanding shall automatically become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder.

Covenants

The Notes and the Indenture governing the Notes will limit the Company’s ability and the ability of certain of its subsidiaries to, among other things:

• (a) incur or guarantee additional indebtedness and issue disqualified or preferred stock;

• (b) declare dividends;

• (c) make investments or other specified restricted payments;

• (d) issue or sell capital stock of certain of its subsidiaries;

• (e) guarantee indebtedness of certain of its subsidiaries;

• (f) sell assets;

• (g) create liens;

• (h) enter into sale and leaseback transactions;

• (i) engage in any business other than permitted business;

• (j) enter into agreements that restrict certain of its subsidiaries’ ability to pay dividends, transfer assets or make intercompany loans;

• (k) enter into transactions with shareholders or affiliates; and

• (l) effect a consolidation or merger.

Optional Redemption of the Notes

• (1) At any time from time to time on or after 10 September 2023, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 101.5% of the principal amount of the Notes plus the accrued and unpaid interest (if any) to (but not including) the redemption date.

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• (2) At any time and from time to time prior to 10 September 2023, the Company may at its option redeem the Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date.

• (3) At any time and from time to time prior to 10 September 2023, the Company may redeem up to 35% of the aggregate principal amount of the Notes with the net cash proceeds of one or more sales of common stock of the Company in an equity offering at a redemption price of 107.1% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to (but not including) the redemption date; provided that at least 65% of the aggregate principal amount of the Notes originally issued on the original issue date remains outstanding after each such redemption and any such redemption takes place within 60 days after the closing of the related equity offering.

The Company will give not less than 30 days’ nor more than 60 days’ notice of any redemption.

Proposed use of proceeds

The Company intends to use the net proceeds of the Notes Issue to refinance its existing indebtedness and in accordance with the Company’s Green Bond Framework.

The Notes will be issued as “Green Bonds” under the Company’s Green Bond Framework (the “ GBF ”) to fund new and existing projects and businesses with environmental benefits in alignment with the ICMA Green Bond Principles 2018 (GBP). The GBF is made public on the Company’s website.

Listing

The Company will seek a listing of the Notes on the Stock Exchange. A confirmation of the eligibility for the listing of the Notes has been received from the Stock Exchange for the listing of the Notes by way of debt issues to professional investors only as described in the offering memorandum. Admission of the Notes to the Stock Exchange is not to be taken as an indication of the merits of the Company or the Notes.

DEFINITIONS

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

“April 2019 Notes” US$420,000,000 8.65% senior notes due 2023 “April 2021 Notes” US$220,000,000 5.98% senior notes due 2022 “August 2020 RMB Notes” RMB1,000,000,000 7.40% senior notes due 2021

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“Bank of China (Hong Kong)” Bank of China (Hong Kong) Limited “BNP PARIBAS” BNP Paribas “Board” the board of Directors “BOC International” BOCI Asia Limited “CCB International” CCB International Capital Limited “CLSA” CLSA Limited “CMB International” CMB International Capital Limited “Company” Zhenro Properties Group Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange “connected person(s)” has the meaning ascribed to it under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “Credit Suisse” Credit Suisse (Hong Kong) Limited “Deutsche Bank” Deutsche Bank AG, Singapore Branch “Directors” the directors of the Company “Existing Notes” the February 2019 Notes, the April 2019 Notes, the October 2019 Notes, the November 2019 Notes, the January 2020 Notes, the May 2020 Notes, the June 2020 Notes, the August 2020 RMB Notes, the September 2020 Notes, the November 2020 Notes, the January 2021 Notes, the February 2021 Notes and the April 2021 Notes “February 2019 Notes” US$230,000,000 9.8% senior notes due 2021 “February 2021 Notes” US$300,000,000 6.7% senior notes due 2026 “Group” the Company and its subsidiaries “Guotai Junan International” Guotai Junan Securities (Hong Kong) Limited “Haitong International” Haitong International Securities Company Limited “Hong Kong” the Hong Kong Special Administrative Region of the PRC “HSBC” The Hongkong and Shanghai Banking Corporation Limited

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“Indenture”

“Indenture”	the written agreement to be entered into between the Company,
	the Subsidiary Guarantors as guarantors and Citicorp International
	Limited as trustee, that specifies the terms and conditions of the
	Notes including the covenants, events of default, interest rate of
	the Notes and the maturity date
“January 2020 Notes”	US$290,000,000 7.875% senior notes due 2024
“January 2021 Notes”	US$400,000,000 6.63% senior notes due 2026
“June 2020 Notes”	US$200,000,000 8.3% senior notes due 2023
“JV Subsidiary Guarantee”	limited recourse guarantees given by the JV Subsidiary Guarantors
	on the Notes
“JV Subsidiary Guarantor”	each subsidiary of the Company which will in the future provide
	a JV Subsidiary Guarantee
“May 2020 Notes”	US$200,000,000 8.35% senior notes due 2024
“November 2020 Notes”	US$200,000,000 5.95% senior notes due 2021
“Notes”	the 7.1% senior notes due 2024 in the aggregate principal amount
	of US$340,000,000 to be issued by the Company
“Notes Issue”	the issue of the Notes by the Company
“November 2019 Notes”	US$300,000,000 9.15% senior notes due 2023
“October 2019 Notes”	US$300,000,000 8.7% senior notes due 2022
“PRC”	the People’s Republic of China, excluding Hong Kong, Macao
	Special Administrative Region of the People’s Republic of China
	and Taiwan for the purpose of this announcement
“Purchase Agreement”	the purchase agreement dated 1 June 2021 entered into by and
	among, the Company, the Subsidiary Guarantors, Deutsche Bank,
	HSBC, Standard Chartered Bank, Bank of China (Hong Kong),
	BNP PARIBAS, BOC International, CCB International, CLSA,
	CMB International, Credit Suisse, Guotai Junan International,
	Haitong International, The Bank of East Asia, Limited and Zhenro
	Securities in relation to the Notes Issue
“Securities Act”	the United States Securities Act of 1933, as amended
“September 2020 Notes”	US$350,000,000 7.35% senior notes due 2025
“Standard Chartered Bank”	Standard Chartered Bank
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

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“Subsidiary Guarantees” the guarantees provided by the Subsidiary Guarantors in respect of the Notes

• “Subsidiary Guarantors” certain subsidiaries of the Company that on the issue date of the Notes will provide guarantees to secure the Company’s obligations under the Notes

• “The Bank of East Asia, The Bank of East Asia, Limited Limited”

• “United States” the United States of America

• “U.S. Dollars” or “US$” United States dollar(s), the lawful currency of the United States

• “Zhenro Securities” Zhenro Securities Co. Limited

• “%” per cent

By Order of the Board Zhenro Properties Group Limited Huang Xianzhi Chairman

Hong Kong, 2 June 2021

As at the date of this announcement, the executive Directors are Mr. Huang Xianzhi, Mr. Liu Weiliang, Mr. Li Yang and Mr. Chan Wai Kin, the non-executive Director is Mr. Ou Guowei, and the independent non-executive Directors are Dr. Loke Yu (alias Loke Hoi Lam), Mr. Wang Chuanxu and Mr. Lin Hua.

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