RNS Number : 2075B West China Cement Limited 22 October West China Cement. Proposed Hong Kong Listing; Redemption of Warrants; and

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1 RNS Number : 2075B West China Cement Limited 22 October 2009 West China Cement Proposed Hong Kong Listing; Redemption of Warrants; and US$50m Loan Facility 22 October 2009 West China Cement Limited (the "Company"), the AIM listed cement producer and distributor located in the Shaanxi province of the People's Republic of China, is delighted to announce that the directors have decided to commence works relating to the Listing of the shares of the Company on the Main Board of the Hong Kong Stock Exchange. A Board meeting will be held in November in Xi'an to determine the choice of advisors. In preparation for the proposed Listing, the Company has on 21 October 2009 executed a Deed of Amendment relating to the Warrant Instrument entered into with Credit Suisse as part of the financing package agreed on 29 May 2008 (the "Amendment Deed"). Pursuant to the Amendment Deed, the Company shall redeem all of the outstanding 7,802,142 Warrants issued to the consortium led by Credit Suisse at a Settlement Price of US$6.5608, being

2 GBP4.00 converted at This compares with the Warrant exercise price of US$ The Settlement Price is equal to a 10% discount to yesterday's closing price of GBP4.45. The total Redemption Amount is US$30.2 million, payable in three instalments: 10% on the signing of the Amendment Deed; 50% on 15 December 2009; and the remaining 40% on 31 January Interest of 5% is payable on the outstanding Redemption Amount. The redeemed Warrants will be cancelled and will not be available for reissue or resale. In conjunction with the Amendment Deed, the Company has also entered into a bridging loan facility of US$50 million with an associate company of ICBC International (the "ICBC Facility"). The funds raised are to finance the Warrant Redemption and for general working capital purposes. Interest payable under the Facility is at LIBOR+5% per annum. The ICBC Facility is due for repayment 9 months from the date of the utilisation or immediately upon the Company's successful Listing on the Main Board of the Hong Kong Stock Exchange, whichever is earlier. The ICBC Facility is secured by a charge over 19,393,776 ordinary shares of the Company, held by Mr. Jimin Zhang, the Chief Executive Officer and majority shareholder, which amounts to 29.9% of the total shares in issue. The Redemption will result in a charge of US$21.1 million in 2H09, and a total charge of US$30.2 million for the financial year. It should be noted that, in accordance with previous reporting periods, had the Company not redeemed the warrants, a charge would have been accrued in accordance with International Financial Reporting Standards ("IFRS") treatment for embedded derivatives at the end of the Company's current reporting period. As an indication of the quantum, if the Company's mid-market closing price at the period end equalled yesterday's closing price, the charge in 2H09 would have equalled US$29.2 million, resulting in a full year Income Statement charge of US$33.5 million. The directors believe that the redemption of these Warrants secures the long term interest of the Company and its shareholders. It not only facilitates the Listing but it also removes the share price risk, the effect of volatility on earnings in future periods and the possibility of dilution at a low share price. As previously announced, the strike price of the Warrants was subject to annual price reset under certain circumstances, and the warrant holders could opt for either a share settlement

3 option or cash settlement option. The former would dilute the interests of the existing shareholders while the latter would exert an uncertain and potentially high pressure on the Company's liquidity. The Redemption removes these risks. In addition, under IFRS the cash settlement option is classified as a financial liability at "fair value through profit or loss". This derivative therefore has the potential to bring volatility in the future periods' earnings as there could be significant movements in the fair value of the financial liability. The Redemption removes this uncertainty. Commenting on the decisions, Jimin Zhang, WCC's Chief Executive Officer, said: "It was not an easy decision for the Board when entering into the financing and warrant agreements 16-months ago. But the construction of Ankang and, thereafter, the two Hanzhong plants have proven that we had made the right decision at a challenging time. Today, it was an easier decision to release the Company from the obligations relating to these warrants, which would otherwise have left the Company exposed to either substantial dilution or financial cost. "The latest arrangements provide a kick start to our Hong Kong listing process. We aim to be listed on the Main Board of the Hong Kong Stock Exchange before 30 June 2010." Robbie Robertson, Chairman of WCC, said: "I mentioned at the time of the interims that we felt that the Company had grown to the extent that we should consider the options of re-listing on the Main Board in London or Hong Kong. After careful consideration, we believe that the Company will be better positioned and understood in Hong Kong, where a number of other Chinese cement companies are currently listed. The AIM

4 market has served the Company well in helping to finance its growth from a small company to a regional leader which next year should produce about 7.5million tonnes of cement - not far off current UK cement demand. We believe Hong Kong will better facilitate the Company's further growth. We will also be considering whether it is appropriate to retain a listing in London." For further information, please contact: West China Cement Limited Po Ling Low Tel: NCB Stockbrokers Ltd Christopher Caldwell Tel: Citigate Dewe Rogerson Asia Pui Shan Lee Tel: / Mob: ps.lee@citigate.com.cn Notes to Editors:

5 West China Cement listed on the AIM market of the London Stock Exchange on 4 December 2006, raising approximately 20.1 million net of expenses. Prior to the listing, the Company, which is headquartered in Xi'an the provincial capital of Shaanxi Province, had operated three cement production plants in Pucheng with a combined production capacity of 1.5 million tonnes per annum since In order to service the growing demand for cement in the region, a new plant running two cement production lines, funded by money raised at the IPO, opened in Lantian in 2007 and has a production capacity of 2 million tonnes. On 29 May 2008, the Company entered into a US$60 million loan agreement with Warrants to finance the third production plant. This 1.8 million tonne plant at Ankang started producing and selling cement in March 2009 and is expected to reach full capacity in the second half of Approval for the building of two new cement plants, Yangxian and Mianxian, each with a capacity of 1 million tonnes per annum, was announced in March With the massive government spend on infrastructure as part of the RMB 4 trillion fiscal stimulus package and the need to rebuild in the wake of the Sichuan earthquake which occurred in this area, the Company has chosen the appropriate location to build these latest projects.