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Add New Energy Investment Holdings Group Limited

愛 德 新 能 源 投 資 控 股 集 團 有 限 公 司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 02623) DISCLOSEABLE TRANSACTION DISPOSAL OF LINYI LUXING TITANIUM COMPANY LIMITED THE DISPOSAL

The Board announces that on 18 November 2017, Shandong Ishine Mining Industry, a wholly-owned subsidiary of the Company, as Vendor I, Linyi Run Xing Investment, as Vendor II, Wang Xingyan as Purchaser I, and Zhang Peng as Purchaser II entered into the Agreement pursuant to which Vendor I and Vendor II conditionally agreed to sell and Purchaser I and Purchaser II conditionally agreed to purchase the Sale Shares at the Total Consideration of RMB22,000,000, among which the consideration from Purchaser I is RMB20,900,000 and that from Purchaser II is RMB1,100,000.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Disposal are more than 5% and all of such ratios are less than 25%, the Disposal constitutes a discloseable transaction for the Company under Rule 14.06(2) of the Listing Rules, and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

THE DISPOSAL

The Board announces that on 18 November 2017, Shandong Ishine Mining Industry, a wholly-owned subsidiary of the Company, as Vendor I, Linyi Run Xing Investment, as Vendor II, Wang Xingyan as Purchaser I, and Zhang Peng as Purchaser II entered into the Agreement pursuant to which Vendor I and Vendor II conditionally agreed to sell and Purchaser I and Purchaser II conditionally agreed to purchase the Sale Shares at the Total Consideration of RMB22,000,000, among which the consideration from Purchaser I is RMB20,900,000 and that from Purchaser II is RMB1,100,000.

THE AGREEMENT

Set out below are the principal terms of the Agreement:

Date

18 November 2017

Parties:

Vendors

  1. Shandong Ishine Mining Industry, a wholly-owned subsidiary of the Company ("Vendor I")

  2. Linyi Run Xing Investment ("Vendor II")

Purchasers

  1. Wang Xingyan ("Purchaser I")

  2. Zhang Peng ("Purchaser II") (hereafter collectively called the "Purchasers")

Vendor II is wholly and beneficially owned by Mr. Li Yunde, the Chairman of the Company, executive Director and the controlling Shareholder, and his spouse

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of Purchaser I and Purchaser II are independent of the Company and connected persons (as defined in the Listing Rules) of the Company.

Sale and purchase of the Sale Shares

The Sale Shares represent 100% equity interest in the Subject Company, among which Vendor I sells 20,900,000 Sale Shares representing 95% of the share capital in the Subject Company at a consideration of RMB20,900,000; while Vendor II sells 1,100,000 Sale Shares representing 5% of the

share capital in the Subject Company at a consideration of RMB1,100,000. Purchaser I shall purchase 51% of 11,220,000 Sales Shares while Purchaser II shall purchase 49% of 10,780,000 Sales Shares.

The Subject Company is principally engaged in ilmenite ore mining and processing. It holds a mining licence in respect of the Luxing Titanium Mine issued by the Land and Resources Department of Shandong Province and engages in titanium ore and iron ore mining by way of open-pit mining with a mining area of 0.829 km2.

Total Consideration

The Total Consideration for the sale and purchase of the Sale Shares is RMB22,000,000.

The Total Consideration was determined after arm's length negotiations between the parties by reference to the net asset value of the Subject Company as at 30 June 2017 and the prevailing market conditions. Based on the aforesaid, the Directors are of the view that the Total Consideration is fair and reasonable.

Conditions precedent

Completion of the Disposal is subject to the fulfilment of the following conditions precedent:

  1. Vendor I and Vendor II shall have obtained approval from or arranged registration with relevant administrative authority should signing of the Agreement and the transactions contemplated thereunder require the same;

  2. The Agreement, the Disposal and all related issues shall be passed at the general meeting of the Subject Company; and

  3. For the period from the date of signing of the Agreement to the Completion Date, (i) the warranties under the Agreement remain true and accurate, and contain no misleading in all material respects; (ii) such warranties are not breached; and (iii) there is no occurrence of any event which might result in material adverse change.

The parties shall procure the above conditions precedent to be fulfilled before 21 November 2017, failing which the parties may agree on another date for the fulfilment of conditions precedent in writing or terminate the Agreement.

Completion

Completion will take place within seven (7) business days (i.e. 30 November 2017) after fulfilment of the above conditions precedent.

Upon Completion, the Subject Company shall cease to be an indirect subsidiary of the Company and its financial results shall no longer be consolidated to the consolidated financial statements of the Group.

INFORMATION ON THE SUBJECT COMPANY

The Subject Company is a limited company incorporated in the PRC.

The net deficit and total assets of the Subject Company as extracted from its unaudited accounts as at 30 June 2017 was approximately RMB16,313,000 and RMB173,424,000 respectively.

The financial results of the Subject Company as extracted from its unaudited accounts for the two financial years ended 31 December 2016 were as follows:

For the year ended 31 December

2015

2016

(RMB'000)

(RMB'000)

Net loss before taxation and extraordinary items

86,617

12,701

Net loss after taxation and extraordinary items

67,299

11, 808

It is expected that the Group will record a loss on disposal and related loss of approximately RMB 61 million.

INFORMATION ON THE PARTIES

Purchaser I and Purchaser II are both natural persons.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The principal activities of the Group are iron and ilmenite ore exploration, mining and processing to produce iron concentrates and titanium concentrates, selling of iron concentrates and titanium concentrates, financial lease activities and wind power electricity generation in Shandong Province, the PRC.

The Company actively responds to the government's call to seize the opportunities arising from national policies by developing clean energy such as wind power, photovoltaic power and solar thermal power as new sources of economic growth. In order to better reflect the Company's strategic business plan and expanding into new business including (but not limited to) clean energy business, water pollution treatment business and soil pollution treatment business, sticking to the development of iron and titanium concentrates business, deepening and expanding the building of whole industrial chain of titanium products including sponge titanium and high purity titanium.

Add New Energy Investment Holdings Group Ltd. published this content on 19 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 19 November 2017 11:10:10 UTC.

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