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CHANGFENG AXLE (CHINA) COMPANY LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1039) COMPLETION OF ISSUE OF (A) US$20,000,000 13% SECURED NOTE DUE 2017 (B) US$6,000,000 13% SECURED CONVERTIBLE BOND DUE 2018 UNDER GENERAL MANDATE AND (C) US$4,000,000 13% SECURED CONVERTIBLE BOND DUE 2018 UNDER GENERAL MANDATE

The Board is pleased to announce that the conditions precedent set out in the Subscription Agreement have been fulfilled and that completion of the Subscription took place on 3 June 2015. The Note in the principal amount of US$20 million, the Series 1 CB in the principal amount of US$6 million and the Series 2 CB in the principal amount of US$4 million have been issued to Chance Talent Management Limited (the "Subscriber").

Reference is made to the announcement of the Company dated 6 May 2015 (the "Announcement") in relation to the issue of the Note, the Series 1 CB and the Series 2 CB. Capitalised terms used herein shall have the same meanings as those defined in the Announcement unless the context requires otherwise.
The Board is pleased to announce that the conditions precedent set out in the Subscription Agreement have been fulfilled and that completion of the Subscription took place on 3 June 2015. The Note in the principal amount of US$20 million, the Series 1 CB in the principal amount of US$6 million and the Series 2 CB in the principal amount of US$4 million have been issued to the Subscriber.
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CB Holders will be entitled to convert the outstanding principal amount of the Convertible Bonds into Conversion Shares at the relevant Conversion Price based on the Screen Rate during the Conversion Period. Assuming exercise in full of the Conversion Rights at the initial Series 1 CB Conversion Price of HK$1.06 per Share and the initial Series 2 CB Conversion Price of HK$1.50 per Share both at the exchange rate of US$1 = HK$7.75, an aggregate of 64,534,590 Conversion Shares will be issued, representing approximately 4.21% of the issued share capital of the Company as at the date of this announcement and approximately 4.04% of the issued share capital of the Company as enlarged by the allotment and issue of the Conversion Shares (assuming there was no repurchase of Shares or issue of other new Shares).
By Order of the Board

Changfeng Axle (China) Company Limited Mr. Cheng Jerome

Chairman

Hong Kong, 3 June 2015

As at the date of this announcement, the executive directors of the Company are Mr. Cheng Jerome, Ms. Wu Ching and Mr. Yuan Weitao; the non-executive directors of the Company are Ms. Dong Ying, Dorothy, Mr. Feng Xiaohui and Mrs. Guo Yan; and the independent non-executive directors of the Company are Mr. Wong Chi Keung, Mr. Liu Erhfei and Mr. Chan Chi Keung Alan.

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