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. Comtec Solar Systems Group Limited (Incorporated in the Cayman Islands with limited liability) (Stock code: 712) SUBSCRIPTIONS OF NEW SHARES UNDER SPECIFIC MANDATES AND RESUMPTION OF TRADING THE SUBSCRIPTIONS On 11 January 2016, the Company entered into a Subscription Agreement with each of GF Holding and Mr. Li, respectively, both being independent third parties, pursuant to which the Company has conditionally agreed to issue, and each of the Subscribers has conditionally agreed to subscribe for, the Subscription Shares at a subscription price of HK$0.66 per Subscription Share. GF Holding will subscribe for 672,900,231 Subscription Shares, representing (i) approximately 48.35% of the existing issued share capital of the Company, and (ii) approximately 29.00% of the issued share capital of the Company as enlarged by the Subscriptions. Mr. Li (or a company wholly-owned and designated by Mr. Li) will subscribe for 255,238,019 Subscription Shares, representing (i) approximately 18.34% of the existing issued share capital of the Company, and (ii) approximately 11.00% of the issued share capital of the Company as enlarged by the Subscriptions. 1
Completion of each of the Subscriptions shall be conditional on (i) there shall not have occurred any material breach of any representation, warranty or undertaking given by the Company in the respective Subscription Agreements (or any such representation, warranty or undertaking is otherwise rendered inaccurate, untrue or misleading in any material respect) at and as of the Closing Date; (ii) satisfaction and compliance with the applicable requirements under the Listing Rules regarding the Subscription, including the passing of resolution(s) by the Shareholders to approve the Subscription Agreements and the transactions contemplated thereunder and the grant of the Specific Mandates for the allotment and issue of the Subscription Shares at the EGM; and (iii) the Listing Committee granting the listing of and permission to deal in the Subscription Shares on the Stock Exchange (and such listing and permission not subsequently revoked prior to the delivery of definitive share certificate(s) representing the Subscription Shares under the respective Subscription Agreements). GENERAL The net proceeds from the Subscriptions (after deducting related professional fees and related expenses) are expected to be approximately HK$611.13 million. The Subscription Shares will be allotted and issued under the Specific Mandates to be sought from the Shareholders at the EGM. A circular containing, among other matters, further details about the Subscription Agreements, the proposed grant of the Specific Mandates together with a notice convening the EGM to consider and approve, among other things, the Specific Mandates will be despatched to the Shareholders as soon as practicable. Completion of each Subscription is subject to the satisfaction of the Conditions Precedent under the respective Subscription Agreement. As the Subscriptions may or may not proceed, Shareholders and prospective investors are advised to exercise caution when dealing in the Shares. On 11 January 2016, the Company entered into a Subscription Agreement with each of GF Holding and Mr. Li, respectively, pursuant to which the Company has conditionally agreed to issue, and each of the Subscribers has conditionally agreed to subscribe for, the Subscription Shares at a subscription price of HK$0.66 per Subscription Share. THE SUBSCRIPTION AGREEMENTS Date 11 January 2016 Parties to the Subscription Agreements Issuer: the Company 2
Subscriber: GF Holding under the Subscription Agreement entered into between the Company and GF Holding; Mr. Li under the Subscription Agreement entered into between the Company and Mr. Li GF Holding is an investment holding company incorporated in Hong Kong which is owned as to 40.00%, 35.00% and 25.00% by Surrich International, China First Capital and New Citic, respectively. To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, the Subscribers are independent of and not related to each other. Subscription Shares GF Holding will subscribe for 672,900,231 Subscription Shares, representing (i) approximately 48.35% of the existing issued share capital of the Company, and (ii) approximately 29.00% of the issued share capital of the Company as enlarged by the Subscriptions. Mr. Li will subscribe for, or will procure a company wholly-owned and designated by him to subscribe for, 255,238,019 Subscription Shares, representing (i) approximately 18.34% of the existing issued share capital of the Company, and (ii) approximately 11.00% of the issued share capital of the Company as enlarged by the Subscriptions. Subscription Price The Subscription Price of HK$0.66 per Subscription Share was arrived at after arm s length negotiation between the Company and the Subscribers based on a 5% discount to the average closing price of the Shares during the period for the last thirty trading days immediately prior to the date of the Subscription Agreements. The Subscription Price represents: (i) a discount of approximately 20.48% to the closing price of HK$0.83 per Share as quoted on the Stock Exchange on 8 January 2016, being the last trading day before the date of the Subscription Agreements; (ii) a discount of approximately 10.81% to the average closing price of HK$0.74 per Share as quoted on the Stock Exchange for the last five trading days immediately prior to 8 January 2016; and (iii) a discount of approximately 8.33% to the average closing price of HK$0.72 per Share as quoted on the Stock Exchange for the last ten trading days to 8 January 2016. The Directors are of the opinion that the Subscription Price is fair and reasonable and is in the best interest of the Company and the Shareholders. 3
Ranking The Subscription Shares will, when fully paid, rank pari passu in all respects with the existing issued Shares of the Company upon issuance. Conditions Precedent Completion of each of the Subscriptions shall be conditional on: (i) there shall not have occurred any material breach of any representation, warranty or undertaking given by the Company in the respective Subscription Agreements (or any such representation, warranty or undertaking is otherwise rendered inaccurate, untrue or misleading in any material respect) at and as of the Closing Date; (ii) satisfaction and compliance with the applicable requirements under the Listing Rules regarding the Subscriptions, including the passing of resolution(s) by the Shareholders to approve the respective Subscription Agreements and the transactions contemplated thereunder and the grant of the Specific Mandates for the allotment and issue of the Subscription Shares at the EGM; and (iii) the Listing Committee granting the listing of and permission to deal in the Subscription Shares on the Stock Exchange (and such listing and permission not subsequently revoked prior to the delivery of definitive share certificate(s) representing the Subscription Shares under the respective Subscription Agreements). The Company shall use all reasonable efforts to procure the Conditions Precedent above to be fulfilled at or before 8:00 a.m. (Hong Kong time) on 11 April 2016. If the Conditions Precedent above are not fulfilled at or before 8:00 a.m. on 11 April 2016 or such later time and/or date as may be agreed between the Company and each of the Subscribers, or if Completion does not take place on or before the ninetieth (90th) Business Day after the date of the Subscription Agreements or such later date as may be agreed between the Company and each of the Subscribers, the obligations and liabilities of the Subscribers and the Company under the respective Subscription Agreements shall be null and void and none of the Company or the Subscribers (as applicable) shall have any claim against the other party for costs, damages, compensation or otherwise, except for any antecedent breach of any obligation under the respective Subscription Agreements. For the avoidance of doubts, the Subscriptions under the Subscription Agreements are not inter-conditional to each other. Completion Completion of the Subscriptions will take place on the Closing Date, which shall be the first Business Day after the date upon which the last of the Conditions Precedent to be satisfied shall have been so satisfied, provided that it shall take place on a date no later than the ninetieth (90th) Business Day after the date of the Subscription Agreements (or such other time and/or date as the Company and each of the Subscribers may agree in writing). 4
Termination Each of the Subscribers may by notice in writing to the Company elect to proceed to Completion or terminate their respective Subscription Agreements, if at any time prior to 8:30 a.m. (Hong Kong time) on the Closing Date, there develops, occurs or comes into force: (i) any material adverse change to the Group taken as a whole; (ii) any new law or regulation in existing laws or regulations in any relevant jurisdiction which prohibits the completion of the transactions contemplated by the respective Subscription Agreements; (iii) material breach of any of the Company s representations, warranties and undertakings as set out in the Subscription Agreements as given on the date of the Subscription Agreements, or any event occurs which would constitute a material breach of any of such representations, warranties and undertakings as if the Company s representations, warranties and undertakings were repeated on the Closing Date by reference to the facts and circumstances then existing; or (iv) material breach by the Company of any provision of the respective Subscription Agreements. In addition, pursuant to the Subscription Agreement entered into between the Company and GF Holding ( GF Holding Subscription Agreement ), the Company has the right to unilaterally terminate the GF Holding Subscription Agreement if the allotment and issue of the Subscription Shares to GF Holding would lead to the circumstance where GF Holding would hold 30.00% or more of the Company s issued share capital immediately after the Completion. In the event that the Subscribers or the Company terminate the respective Subscription Agreements in accordance with provisions as set out above, the further rights and obligations of the parties to the respective Subscription Agreements shall cease immediately on termination, except that clauses relating to costs and taxes, confidentiality, announcement, notices, applicable law and jurisdiction shall survive the termination of the respective Subscription Agreements and shall continue in full force in effect. Termination does not affect a party s accrued rights and obligations as at the date of termination. Lockup Undertaking For a period of six months after the Closing Date, the Subscribers shall not (unless with the prior written consent of the Company or for the purpose of charging or pledging in favour of banks or licensed financial institutions for a bona fide commercial loan), directly or indirectly, (i) sell, transfer, charge, encumber, create or grant any option over or otherwise dispose of any Subscription Shares; or (ii) enter into any swap, derivative or other arrangement that passes or transfers to another, in whole or in part, any of the economic interests in or beneficial ownership of any Subscription Shares. 5
INFORMATION ON THE SUBSCRIBERS GF Holding is an investment holding company incorporated in Hong Kong which is owned as to 40.00%, 35.00% and 25.00% by Surrich International, China First Capital and New Citic. Surrich International is wholly-owned by Wuxi Guolian Development (Group) Co., Ltd.* ( 無 錫 市 國 聯 發 展 ( 集 團 ) 有 限 公 司 ) ( Guolian Group ), a wholly state-owned limited liability company established in the PRC, and is principally engaged in investment holding of wide range of investments in the financial sector, including but not limited to, banks, securities firms, insurance, trust and funds. Guolian Group possesses strong expertise and experience in investing in green energy businesses and has a strong track record in this regard. China First Capital is an investment holding company and China First Capital and its subsidiaries are principally engaged in the research and development, design, manufacturing and sale of various automobile shock absorbers and has more than 50 years of experience in the industry. Since the end of 2014, China First Capital has tapped into new business including investment migration advisory services and financial consultancy and advisory services, in order to facilitate the diversification of its business and further expand its asset portfolio and revenue sources. New Citic is principally engaged in investment in international capital market and the provision of offshore financial service to enterprises in the PRC. Mr. Li is a PRC citizen and the chairman of Henan Wanzhong and the controlling shareholders of Henan Wanzhong through Beijing Bohai. Henan Wanzhong is principally engaged in the businesses of comprehensive natural gas utilization, with a power generation capacity of 1,600,000 kilowatt, real estate development and financial investment. Mr. Li has extensive experience in the energy as well as the financial sectors. To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, each of the Subscribers, Surrich International, China First Capital and New Citic is a third party independent of both of the Company and connected persons of the Company. REASONS FOR THE SUBSCRIPTIONS Strengthen the financial position of the Company The Board intends to use the net proceeds for expanding into downstream solar power business and explore opportunities to integrate with existing upstream solar business of the Group. Under prevailing market conditions, the Board believes that the Subscriptions will strengthen the financial position of the Company and provide financial resources to fund and support the Group s expansion into the downstream solar power business. 6
Broaden the shareholder base of the Company with strategic value The Board considers that, while broadening the shareholder base of the Company, the Subscriptions represent a valuable opportunity for the Company to bring in renowned investors with strong financial resources and background and wide business network, which in turn would bring strategic value to the Company. The Board believes that by leveraging on the investors strong expertise, experience and business network in the financial and energy sectors, the Company will be well-equipped to continue to grow and expand its business. The Board considers the terms of the Subscription Agreements, which have been negotiated on an arm s length basis on normal commercial terms, are fair and reasonable and in the interests of the Company and the Shareholders as a whole. USE OF PROCEEDS The net proceeds from the Subscriptions (after deducting related professional fees and related expenses) are expected to be approximately HK$611.13 million. The Directors intend to use the net proceeds for (i) expanding into downstream solar power business and explore opportunities to integrate with existing upstream solar business of the Group; and (ii) general working capital of the Group. FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS The Company has not conducted any equity fund raising activities in the past twelve months preceding the date of this announcement. EFFECT OF THE SUBSCRIPTIONS ON SHAREHOLDING STRUCTURE The shareholding structure of the Company immediately before and after the Subscriptions is summarised as follows (Note 1): Immediately after As at the date of this Announcement completion of the Subscriptions No. of Shares % No. of Shares % Mr. Zhang (Note 2) 624,283,550 44.85 624,283,550 26.91 Shares held by the Subscribers GF Holding 672,900,231 29.00 Mr. Li (or a company wholly-owned and designated by Mr. Li) 255,238,019 11.00 Public shareholders 767,578,200 55.15 767,578,200 33.09 Total 1,391,861,750 100.00 2,320,000,000 100.00 7
Notes: (1) The table above assumes no Shares will be issued pursuant to the employee share option scheme of the Company between the date of this announcement and the completion of the Subscriptions. (2) As at the date of this announcement, Mr. Zhang is the sole shareholder of Fonty and is therefore deemed to be interested in the 576,453,844 Shares held by Fonty. Mr. Zhang is also deemed to be interested in 47,829,706 Shares which are beneficially owned by Mr. Alan Zhang, Mr. Zhang s child under the age of 18, as beneficiary of Zhang Trusts For Descendants, which is an irrevocable trust set up by Mr. Zhang for the benefit of his descendants and of which J.P. Morgan Trust Company of Delaware is the trustee. The Board considers that the Company can maintain the minimum public float as prescribed by the Listing Rules upon completion of the Subscriptions. SPECIFIC MANDATES The Subscription Shares will be allotted and issued under the two Specific Mandates to be sought from the Shareholders at the EGM to (i) allot and issue the 672,900,231 Subscription Shares to GF Holding; and (ii) allot and issue the 255,238,019 Subscription Shares to Mr. Li (or a company wholly-owned and designated by Mr. Li). EGM The EGM will be held to consider and, if thought fit, to approve, among others, the Subscription Agreements and the Specific Mandates for the issue of the Subscription Shares. To the best knowledge, information and belief of the Directors, and having made all reasonable enquiries, no Shareholder has material interest in the Subscription Agreements and therefore, no Shareholder is required to abstain from voting at the EGM. A circular containing, among other matters, further details about the Subscription Agreements, the proposed grant of the Specific Mandates together with a notice convening the EGM to consider and approve, among other things, the Specific Mandates will be despatched to the Shareholders as soon as practicable. APPLICATIONS FOR LISTING Applications will be made to the Stock Exchange for the grant of listing of and permission to deal in the Subscription Shares. RESUMPTION OF TRADING At the request of the Company, trading in the Shares on the Stock Exchange was halted with effect from 9:00 a.m. on 11 January 2016 pending the publication of this announcement. The Company has applied to the Stock Exchange for the resumption of trading in its Shares on the Stock Exchange with effect from 1:00 p.m. on 11 January 2016. Completion of each Subscription is subject to the satisfaction of the Conditions Precedent under the respective Subscription Agreement. As the Subscriptions may or may not proceed, Shareholders and prospective investors are advised to exercise caution when dealing in the Shares. 8
DEFINITIONS In this announcement, the following expressions shall have the following meanings unless the context requires otherwise: Beijing Bohai Board Business Day China First Capital Closing Date Beijing Bohai Jinkong Investment Co., Ltd.* ( 北 京 博 海 金 控 投 資 有 限 公 司 ), a company incorporated in the PRC with limited liability; the board of Directors of the Company; a day other than a Saturday or Sunday on which commercial banks are open for business in Hong Kong; China First Capital Group Limited, a company incorporated in Cayman Islands with limited liability, whose shares are listed on the Main Board of the Stock Exchange; the date on which the Completion takes place; Company Comtec Solar Systems Group Limited, a company incorporated in the Cayman Islands whose shares are listed on the Stock Exchange; Completion Conditions Precedent connected person Director(s) EGM Fonty GF Holding Group the completion of the Subscriptions on the terms and subject to the conditions set out in the respective Subscription Agreements; the conditions precedent under the respective Subscription Agreements set out in the paragraph headed Conditions Precedent of this announcement; has the meaning ascribed to it under the Listing Rules; the director(s) of the Company; an extraordinary general meeting of the Company to be convened to consider and, if thought fit, passing the resolution(s) to approve, among others, the Subscription Agreements and the Specific Mandates; Fonty Holdings Limited, a company incorporated in the British Virgin Islands with limited liability which is 100% beneficially owned by Mr. Zhang; Guolian Financial Holding Group Co., Limited ( 國 聯 金 融 控 股 集 團 有 限 公 司 ), a company incorporated in Hong Kong with limited liability; the Company and its subsidiaries; 9
Henan Wanzhong HK$ Listing Committee Listing Rules Mr. Li Mr. Zhang New Citic PRC Share(s) Shareholder(s) Henan Wanzhong Group Co., Ltd.* ( 河 南 萬 眾 集 團 有 限 公 司 ), a company incorporated in the PRC with limited liability which is owned as to 98.33% and 1.67% by Beijing Bohai and Mr. Li, respectively; Hong Kong dollar, the lawful currency of Hong Kong; the listing committee of the Stock Exchange; the Rules Governing the Listing of Securities on the Stock Exchange; Mr. Lin Wanbin ( 李 萬 斌 ), an individual independent of both of the Company and connected persons of the Company; Mr. John Zhang, an executive Director and a substantial Shareholder which is interested in 624,283,550 Shares, representing approximately 44.85% of the issued share capital of the Company as at the date of this announcement; New Citic International Capital Co., Ltd ( 新 中 信 國 際 資 本 有 限 公 司 ), a company incorporated in the British Virgin Islands with limited liability; the People s Republic of China; ordinary share(s) of HK$0.001 each in the share capital of the Company; the shareholder(s) of the Company; Specific Mandates the proposed specific mandates to be sought from Shareholders at the EGM to (i) allot and issue the 672,900,231 Subscription Shares to GF Holding; and (ii) allot and issue the 255,238,019 Subscription Shares to Mr. Li (or a company wholly-owned and designated by Mr. Li); Stock Exchange Subscribers the Stock Exchange of Hong Kong Limited; GF Holding and Mr. Li (or a company wholly-owned and designated by Mr. Li); Subscription(s) the subscription(s) of the Subscription Shares by the respective Subscribers pursuant to the terms and conditions of the respective Subscription Agreements; 10
Subscription Agreements Subscription Price the subscription agreement dated 11 January 2016 entered into between the Company and the GF Holding and the subscription agreement dated 11 January 2016 entered into between the Company and Mr. Li; HK$0.66 per Subscription Share; Subscription Shares the 672,900,231 Shares and 255,238,019 Shares to be alloted and issued by the Company for subscriptions by GF Holding and Mr. Li (or a company wholly-owned and designated by Mr. Li), respectively; Surrich International Surrich International Company Limited ( 錫 洲 國 際 有 限 公 司 ), a company incorporated in Hong Kong with limited liability; % per cent. * For identification purpose only By Order of the Board Comtec Solar Systems Group Limited John ZHANG Chairman Hong Kong, 11 January 2016 As at the date of this announcement, the executive Directors are Mr. John Zhang, Mr. Chau Kwok Keung and Mr. Shi Cheng Qi, the non-executive Director is Mr. Donald Huang, and the independent non-executive Directors are Mr. Leung Ming Shu, Mr. Kang Sun and Mr. Daniel DeWitt Martin. 11