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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.



CHANGFENG AXLE (CHINA) COMPANY LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1039) MEMORANDUM OF UNDERSTANDING IN RESPECT OF PROPOSED ISSUE OF NOTES AND CONVERTIBLE BONDS

This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and Inside
Information Provisions under Part XIVA of the SFO.
The Board is pleased to announce that on 22 April 2015 (after trading hours of the Stock Exchange), the Company and CCBIAM entered into a non-legally binding MOU in respect of the proposed issue of the Notes and the Convertible Bonds by the Company and the proposed subscription of the Notes and the Convertible Bonds by CCBI.

The Board wishes to emphasise that save and except for those terms elaborated in the section headed "Major Terms of the MOU" below and the confidentiality, legally binding effect and governing law provisions set out in the MOU, the MOU is not legally binding and may or may not lead to the entering into of any definitive agreement(s) and the transaction contemplated thereunder may or may not be consummated. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company. Further announcement will be made by the Company if any definitive agreement in relation to the Proposed Transaction is entered into.


This announcement is made by Changfeng Axle (China) Company Limited (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO").
The board of directors of the Company (the "Board") is pleased to announce that on 22 April 2015 (after trading hours of The Stock Exchange of Hong Kong Limited (the "Stock Exchange")), the Company and CCBIAM (as defined below) entered into a non-legally binding memorandum of understanding (the "MOU") in respect of (i) the proposed issue of Notes (as defined below) by the Company and the proposed subscription of the Notes by CCBI (as defined below); and (ii) the proposed issue of Convertible Bonds (as defined below) by the Company and the proposed subscription of the Convertible Bonds by CCBI (the "Proposed Transaction").
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MAJOR TERMS OF THE MOU Date of the MOU

22 April 2015

Parties to the MOU

(a) CCB International Asset Management Limited ( J! ��itìi:�Jlf�0PJ ) ("CCBIAM"); and
(b) the Company.

Subject matter

The Company will issue and CCBIAM will procure its affiliate company, CCBI Investment Limited ( J!
��JIitf�0PJ ) or its wholly owned special purpose vehicle ("CCBI") , to subscribe for:
(a) 13% coupon notes (the "Notes") in an aggregate principal amount of US$20,000,000 (or its Hong Kong dollar equivalent) maturing 24 months from the date of issue of the Notes (subject to an extension of up to an additional 12 months if so agreed by CCBI); and
(b) two tranches of convertible bonds (namely the "Tranche A Convertible Bonds" and "Tranche B Convertible Bonds", and together referred to as the "Convertible Bonds") which are convertible into new shares of the Company (the "Shares").
The Notes and Convertible Bonds shall be issued by the Company on the same date.

Principal Terms of the Tranche A Convertible Bonds

Issuer : the Company
Bondholder : CCBI
Principal amount : an aggregate principal amount of US$6,000,000
Maturity : 36 months from the date of issue of the Tranche A Convertible Bonds
Interest rate : 13% per annum
Conversion price : HK$1.06 per Share
Conversion period : from the date of the first anniversary of the issue of the Convertible
Bonds to the date on which the Convertible Bonds mature
Anti-dilution : there shall be anti-dilution mechanisms in the agreement to be entered into by the parties in relation to the Proposed Transaction
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Principal Terms of the Tranche B Convertible Bonds

Issuer : the Company
Bondholder : CCBI
Principal amount : an aggregate principal amount of US$4,000,000
Maturity : 36 months from the date of issue of the Tranche B Convertible Bonds
Interest rate : 13% per annum
Conversion price : HK$1.50 per Share
Conversion period: : from the date of the first anniversary of the issue of the Convertible
Bonds to the date on which the Convertible Bonds mature
Anti-dilution : there shall be anti-dilution mechanisms in the agreement to be entered into by the parties in relation to the Proposed Transaction

Exclusivity Right

The Company shall not enter into any financing transactions similar to the Proposed Transaction with other third parties, including but not limited to entering into formal negotiations and exchange of information with other third parties in respect of any fund raising exercise within three months from the date of the MOU or before the completion of the Proposed Transaction (whichever is earlier).

Legally binding effect

Save for the terms of the MOU set out above and the confidentiality, legally binding effect and governing law provisions set out in the MOU which are legally binding on the parties to the MOU, the MOU was intended to serve as a platform for further negotiation between the parties to the MOU and was not intended to be legally binding on the relevant parties.
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The Board wishes to emphasise that save and except for those terms elaborated in the section headed "Major Terms of the MOU" above and the confidentiality, legally binding effect and governing law provisions set out in the MOU, the MOU is not legally binding and may or may not lead to the entering into of any definitive agreement(s) and the transaction contemplated thereunder may or may not be consummated. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company. Further announcement will be made by the Company if any definitive agreement in relation to the Proposed Transaction is entered into.

By Order of the Board

Changfeng Axle (China) Company Limited Mr. Cheng Jerome

Chairman

Hong Kong, 22 April 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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