Aluminum of China : DISCLOSEABLE TRANSACTION - DISPOSAL OF ENVIRONMENTAL PROTECTION ASSETS

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DISCLOSEABLE TRANSACTION DISPOSAL OF ENVIRONMENTAL PROTECTION ASSETS

Reference is made to the announcement of the Company dated 30 May 2016 in relation to the disposal of the Company's Environmental Protection Assets at the China Beijing Equity Exchange by way of public listing. The Board of the Company hereby announces that Aluminum SPC participated in the bidding of the disposal of the Environmental Protection Assets at the China Beijing Equity Exchange. On 29 June 2016, each of the Lanzhou Branch and three subsidiaries of the Company entered into an Assets Transfer Agreement with Aluminum SPC, respectively, i.e. four Assets Transfer Agreements in total, pursuant to which Lanzhou Branch and three subsidiaries of the Company agreed to sell and Aluminum SPC agreed to acquire the Environmental Protection Assets.

Such Proposed Disposal constitutes a transaction under Chapter 14 of the Listing Rules. As the highest applicable percentage ratio (as defined in the Listing Rules) for the Proposed Disposal exceeds 5% but is less than 25%, the Proposed Disposal constitutes a disclosable transaction which is subject to the announcement requirement under Chapter 14 of the Listing Rules but exempted from the shareholders' approval requirement.

INTRODUCTION

Reference is made to the announcement of the Company dated 30 May 2016 in relation to the disposal of the Environmental Protection Assets of the Company and its subsidiaries at the China Beijing Equity Exchange by way of public listing. The Board hereby announces that Aluminum SPC participated in the bidding of the disposal of the Environmental Protection Assets at the China Beijing Equity Exchange. On 29 June 2016, each of the Lanzhou Branch and three subsidiaries (i.e. Baotou Aluminum, Shandong Huayu and Chalco Ningxia Energy) of the Company (collectively the "Sellers" and each a "Seller") entered into an Assets Transfer Agreement with Aluminum SPC, respectively, i.e. four Assets Transfer Agreements in total, pursuant to which the Sellers agreed to sell and Aluminum SPC agreed to acquire the Environmental Protection Assets.

Assets Transfer Agreements Date

29 June 2016

Parties

1. Lanzhou Branch, Baotou Aluminum, Shandong Huayu and Chalco Ningxia Energy (each as the Seller of an Assets Transfer Agreement, respectively); and

2. Aluminum SPC (as the purchaser of four Assets Transfer Agreements).

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, Aluminum SPC and its beneficial owners are third parties independent from the Company and its connected persons.

Environmental Protection Assets to be Disposed

The Environmental Protection Assets include the environmental protection assets in relation to the desulfurization, denitration and dedusting of the coal-fired generating units of five enterprises, namely Lanzhou Branch (a branch of the Company), Baotou Aluminum, Shandong Huayu, Maliantai Power Station and Liupanshan Power Station of Chalco Ningxia Energy (subsidiaries of the Company).

Deposit

As a guarantee of its intention to acquire and to show its credit status and performance ability, a trading deposit amounting to RMB80 million has been paid to China Beijing Equity Exchange for the transactions under the four Assets Transfer Agreements by Aluminum SPC in total.

Consideration and the Payment

The aggregate consideration for the Proposed Disposal under the four Assets Transfer Agreements is RMB1,754,364,500, being the starting price for the bidding of the Environmental Protection Assets, which was determined based on the valuation of the Environmental Protection Assets on the Valuation Base Date as set out on the valuation reports issued by Orient Appraisal and according to the rules of China Beijing Equity Exchange.

The consideration will be paid in two instalments. The first instalment, which is 30% of the consideration, shall be paid (after deducting the deposit) by Aluminum SPC on the date of entering into the Assets Transfer Agreements to the designated account of China Beijing Equity Exchange, and China Beijing Equity Exchange shall transfer the first instalment (deposit inclusive) to the designated accounts of the Sellers before 30 June 2016. The second instalment, which is the remaining 70% of the consideration, shall be paid by Aluminum SPC before 31 December 2016.

Conditions Precedent

The conditions precedent of the Proposed Disposal include that the Sellers have went through the relevant procedures of internal decision and assets evaluation and etc. in relation to the Environmental Protection Assets in accordance with the laws; the Sellers have completed the procedures of public disclosure and/or bidding at China Beijing Equity Exchange in accordance with the relevant laws, regulations and policies for the Proposed Disposal under the Assets Transfer Agreements; and other reasonable and usual conditions.

Delivery of the Environmental Protection Assets

The Sellers shall undertake the transfer of the Environmental Protection Assets with Aluminum SPC within one business day after Aluminum SPC paid up the consideration in full.

INFORMATION ON THE ENVIRONMENTAL PROTECTION ASSETS

According to the valuation report prepared by Orient Appraisal using income approach, the aggregate net book value and the appraised value of the Environmental Protection Assets under the four Asset Transfer Agreements on the Valuation Base Date are RMB1,188,632,900 and RMB1,754,364,500 (including certain liabilities), respectively.

The Environmental Protection Assets are free from mortgages, pledges and any other transfer restrictions, and not subject to litigation, arbitration or judicial measures such as distrain and freezing of assets as well as other conditions obstructing the transfer of ownership.

Set out below are the net profits attributable to such Environmental Protection Assets (before and after taxes and extraordinary items) for the financial years ended 31 December 2014 and 2015 pursuant to the financial reports prepared according to generally accepted accounting principles in the PRC by Lanzhou Branch, Baotou Aluminum, Shandong Huayu and Chalco Ningxia Energy.

The year ended 31 December 2014 The year ended 31 December 2015 (audited) (audited)

(RMB) (RMB)

Net profit before taxes and

extraordinary items 0 0

Net profit after taxes and

extraordinary items 0 0

PROFIT FORECAST RELATED TO THE VALUATION METHOD

Since Orient Appraisal used the income approach to prepare the aforesaid valuation report, the calculation of the valuation of the Environmental Protection Assets under the valuation report is deemed as a profit forecast under Rule 14.61 of Hong Kong Listing Rules. Accordingly, the Company discloses the following details on the valuation in accordance with Rule 14.62 of Hong Kong Listing Rules.