Aluminum of China : DISPOSAL OF 60% EQUITY INTEREST IN SHANDONG ENGINE…

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.

On 31 October 2017, the Company and CHALIECO entered into the Equity Transfer Agreement, subject to fulfillment of the condition precedents. Pursuant to the Equity Transfer Agreement, the Company agreed to dispose and CHALIECO agreed to acquire 60% equity interest in Shandong Engineering.

As at the date of this announcement, CHALIECO is a non-wholly-owned subsidiary of Chinalco, the controlling shareholder of the Company, thus CHALIECO is a connected person of the Company in accordance with the Hong Kong Listing Rules, and the transaction contemplated under the Equity Transfer Agreement constitutes a connected transaction under the Chapter 14A of the Hong Kong Listing Rules. As the highest applicable percentage ratio (as defined under the Hong Kong Listing Rules) in respect of the transaction contemplated under the Equity Transfer Agreement is more than 0.1% but less than 5%, this transaction is subject to the reporting and announcement requirements, but is exempted from the independent Shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

1. INTRODUCTION

   On 31 October 2017, the Company and CHALIECO entered into the Equity Transfer Agreement, subject to fulfillment of the condition precedents. Pursuant to the Equity Transfer Agreement, the Company agreed to dispose and CHALIECO agreed to acquire 60% equity interest in Shandong Engineering.

2. EQUITY TRANSFER AGREEMENT
3. Date

   31 October 2017

4. Parties

5. the Company (as the seller of its 60% equity interest in Shandong Engineering); and

6. CHALIECO (as the acquirer of the 60% equity interest in Shandong Engineering).

7. Nature of the Transaction

   The Company conditionally agreed to dispose and CHALIECO conditionally agreed to acquire 60% equity interest in Shandong Engineering.

8. Consideration

   RMB360,386,500, being the transfer price as agreed in the Equity Transfer Agreement, which is determined after negotiation between the parties with reference to the appraised value of equity interest in Shandong Engineering as set out in the valuation report prepared by China Assets Appraisal as at the Benchmark Date.

   Since the income approach is adopted by China Assets Appraisal for preparing the valuation report mentioned above in respect of valuation of the long-term equity investment in Chalco Wancheng, the subsidiary of Shandong Engineering, such valuation constitutes a profit forecast under Rule 14.61 of the Hong Kong Listing Rules. The Company will further make an announcement within 15 business days after the publication of this announcement in accordance with Rule 14.60A and Rule 14.62 of the Hong Kong Listing Rules.

9. Payment

   The consideration will be paid in one lump sum by cash to the designated bank account of the Company within 30 business days from the date on which the Equity Transfer Agreement is entered into by CHALIECO.

10. Conditions Precedents

    The Equity Transfer Agreement shall take effect upon fulfillment by the Company and CHALIECO of necessary internal decision-making procedures in respect of the transfer of equity under the Equity Transfer Agreement in accordance with the applicable laws and regulations as well as their espective Articles of Association.

11. Completion

    The business registration procedures for the change of shareholder of Shandong Engineering shall be completed within 60 business days after the payment of consideration, and the registration for other changes shall be completed within 120 business days after the payment of consideration.

12. Financial Assistance

    The financial assistance provided by the Group to Shandong Engineering includes:

13. the entrusted loan of RMB30 million provided by Chalco Shandong, a subsidiary of the Company, to Shandong Engineering on 9 June 2017 for a term expiring on 8 June 2018; and

14. the provision of financial guarantee of up to RMB200 million by Chalco Shandong for Shandong Engineering for a term of not more than one year, which was considered and approved at the twelfth meeting of the sixth session of the Board held on 27 July 2017. As at the date of this announcement, Chalco Shandong had provided financial guarantee totalling RMB80 million for Shandong Engineering, for a guarantee period of two year commencing from the maturity date of each loan under the principal agreement.

    Pursuant to the Equity Transfer Agreement, the aforesaid entrusted loan shall be repaid by Shandong Engineering on the Closing Date, and the aforesaid guarantee shall be assumed by CHALIECO from the Closing Date.

15. INFORMATION OF SHANDONG ENGINEERING

Shandong Engineering was established in July 1995, with registered address at No. 1 Wu Gong Li Road, Zhang Dian District, Zibo, Shandong. Its scope of business includes: metallurgical engineering, design and consulting of construction projects; project cost consulting; general contracting; computer control of production procedures, office automation, design, installation and commissioning, maintenance, software development and outsourcing and consulting services of information network system; manufacturing, sales, installation and maintenance of machinery equipment and non-standard equipment; design, sales, installation and maintenance of dust collectors and water heating equipment; installation and commissioning of weighing apparatus and equipment; energy saving technology services; leasing of properties and equipment; construction of metallurgical engineering, steelwork engineering, petrochemical engineering, housing construction, anti-corrosion insulation works, aluminum-plastic doors and windows engineering and greening works; housing maintenance; lifting operations; furnace masonry; research and development and sales of products in comprehensive utilization of red mud, and mechanical and electrical integration systems and products; research and development of gallium extraction process and sales of products; sales of alumina, aluminum alloy, aluminum, recycled aluminium, metal products, construction materials, electrical and mechanical products, emery, steel, refractory materials, chemical products (excluding those that are dangerous and precursor chemicals), and hardware and electrical equipment; import and export of goods and technologies; design, manufacturing, sales and maintenance of environmental equipment, metallurgical equipment, chemical equipment, electrical equipment, mining special equipment and woven bags; maintenance of special equipment and motor vehicles; warehousing services (excluding hazardous goods); handling, loading and unloading and packaging services; cleaning services; environmental technology advisory services.

According to the asset appraisal report prepared by China Assets Appraisal on the Benchmark Date, as at the Benchmark Date, the appraised value of the total assets and net assets of Shandong Engineering were RMB1,298,853,500 and RMB600,644,200, respectively.