China Evergrande : DISCLOSEABLE TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE TARGET COMPANY

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CHINA EVERGRANDE GROUP

中 國 恒 大 集 團

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3333)

DISCLOSEABLE TRANSACTION IN RELATION TO

THE DISPOSAL OF THE ENTIRE EQUITY INTEREST IN THE TARGET COMPANY

THE DISPOSAL

The Board announces that on 29 November 2016, Calxon Group (Shanghai) Company Limited, an indirect subsidiary of the Group, as the vendor, entered into the Equity Transfer Agreement with Sunac (Qingdao) Real Estate Company Limited, an indirect wholly-owned subsidiary of Sunac, as the Purchaser, for the disposal of the entire equity interest in the Target Company at a consideration of RMB3,662,000,000. The Disposal is the result of a successful bid by the Purchaser through the Zhejiang Asset Exchange for the Target Company.

In connection with the Equity Transfer Agreement, the Guarantor provided the Guarantee in favour of the Vendor in respect of the shareholder loans owed by the Target Company to the Vendor and its related parties in the amount of RMB2,347,153,200, and the Counter Guarantee in favour of the Vendor Related Parties in respect of the loans owed by the Target Company to the Relevant Lenders in the principal amount of RMB1,850,000,000.

The Target Company is principally engaged in the development of the Qingdao Shidai City Project, which is located at Licang District, Qingdao city, the PRC, with a total site area of approximately 1,066,100 sq.m., a total gross floor area of approximately 1,787,900 sq.m., and a total unsold area of approximately 980,000 sq.m., mainly for residential and commercial purposes.

Upon completion of the Disposal, the Group will no longer have any interest in the Target Company.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios in respect of the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

THE DISPOSAL

The Board announces that on 29 November 2016, Calxon Group (Shanghai) Company Limited, an indirect subsidiary of the Group, as the vendor, entered into the Equity Transfer Agreement with Sunac (Qingdao) Real Estate Company Limited, an indirect wholly-owned subsidiary of Sunac, as the Purchaser, for the disposal of the entire equity interest in the Target Company at a consideration of RMB3,662,000,000. The Disposal is the result of a successful bid by the Purchaser through the Zhejiang Asset Exchange for the Target Company.

In connection with the Equity Transfer Agreement, the Guarantor provided the Guarantee in favour of the Vendor in respect of the shareholder loans owed by the Target Company to the Vendor and its related parties in the amount of RMB2,347,153,200, and the Counter Guarantee in favour of the Vendor Related Parties in respect of the loans owed by the Target Company to the Relevant Lenders in the principal amount of RMB1,850,000,000.

The principal terms of the Equity Transfer Agreement are summarised below:

Principal terms of the Equity Transfer Agreement Date: 29 November 2016

Parties:

1. the Purchaser, an indirect wholly-owned subsidiary of Sunac; and

2. the Vendor, an indirect subsidiary of the Group.

To the best of the Directors' knowledge, information and belief, after having made all reasonable enquiries, each of the Purchaser and its ultimate beneficial owners is independent of the Company and its connected persons.

Assets to be disposed

Pursuant to the terms of the Equity Transfer Agreement, the Vendor agreed to dispose the entire equity interest in the Target Company to the Purchaser.

Consideration

The Consideration payable by the Purchaser for the acquisition of the Target Company is RMB3,662,000,000.

The Consideration shall be paid by the Purchaser in the following manner:

1. RMB1,831,000,000 (the ''First Instalment'') shall be paid within one month after the date of the Equity Transfer Agreement; and

2. the remaining balance of RMB1,831,000,000 shall be paid within twelve months after the date of the Equity Transfer Agreement.

   The Consideration is determined through the public auction procedure of the Zhejiang Asset Exchange.

   Completion of the Disposal

   Pursuant to the terms of the Equity Transfer Agreement, after full payment of the First Instalment by the Purchaser, the receipt of an equity transaction certificate (產權交易憑證), and execution of the

   Guarantee Agreement, the Vendor will procure the Target Company to complete the registration procedure for the change of shareholding before 31 December 2016.

   PROVISION OF GUARANTEE BY THE GUARANTOR

   As at 30 September 2016, the Target Company owed the Vendor and its related parties shareholder loans in the amount of RMB2,347,153,200. On 29 November 2016, Beijing Sunac Property Construction and Investment Limited, an indirect wholly-owned subsidiary of Sunac, as the Guarantor, entered into the Guarantee Agreement with the Purchaser, the Vendor and the Target Company, pursuant to which, the Guarantor shall guarantee in favour of the Vendor:

3. the due performance of the payment obligation of the Purchaser under the Equity Transfer Agreement; and

4. the due performance of the obligation of the Target Company to repay to the Vendor the shareholder loans. As at 30 September 2016, the shareholder loans owed by the Target Company to the Vendor and its related parties amounted to RMB2,347,153,200. The Target Company shall repay to the Vendor such shareholder loans within 365 days after the date of registration procedure for the change of shareholding at the industry and commerce authority under the Equity Transfer Agreement at the interest rate of 10% per annum accrued from 1 October 2016 to the actual repayment date; and

5. the payment of any other compensation, damages and expenses as a result of any breach by the Purchaser or the Target Company of the Equity Transfer Agreement or the Guarantee Agreement.

PROVISION OF COUNTER GUARANTEE BY THE GUARANTOR

The Target Company entered into the Relevant Loan Agreements with the Relevant Lenders, pursuant to which the Relevant Lenders have provided loans to the Target Company, and the Vendor Related Parties agreed to provide guarantee for the payment obligations and liabilities of the Target Company under the Relevant Loan Agreements.

As at 30 September 2016, the outstanding principal amount of the loans owed by the Target Company to the Relevant Lenders under the Relevant Loan Agreements amounted to RMB1,850,000,000.

On 29 November 2016, Beijing Sunac Property Construction and Investment Limited, an indirect wholly-owned subsidiary of Sunac, as the Guarantor, entered into the Counter Guarantee Agreement with the Vendor Related Parties, pursuant to which, the Guarantor agreed to provide the Counter Guarantee in favour of the Vendor Related Parties. The Guarantor shall guarantee in favour of the Vendor Related Parties:

1. all liabilities and expenses which may be incurred by the Vendor Related Parties under the Vendor Guarantee; and

2. any interests, penalty, compensation and related fees and expenses which may be payable by the Vendor Related Parties under the Vendor Guarantee.

INFORMATION ON THE PARTIES

Sunac, the Purchaser and the Guarantor

Sunac is a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange. Sunac specializes in integrated development of residential and commercial properties and is one of the leading real estate developers in the PRC.

Each of the Purchaser and the Guarantor is a company established under the laws of the PRC with limited liability and is an indirect wholly-owned subsidiary of Sunac. The principal business of the Purchaser is property development and house sales. The principal business of the Guarantor is property investment and investment management.

To the best of the Directors' knowledge, information and belief, after having made all reasonable enquiries, each of Sunac, the Purchaser and the Guarantor and their respective substantial shareholders (as defined in the Listing Rules) is independent of the Company and its connected persons.

The Vendor

The Vendor is a limited liability company established under the laws of the PRC and is a subsidiary of Calxon Group. Its principal business is property development and property management.

The Vendor Related Parties

Calxon Group is a company established under the laws of the PRC with limited liability, the shares of which are listed on the Shenzhen Stock Exchange (Stock Code: 000918). Calxon Group is engaged in property investment and property management business.

The Group is principally engaged in the development of large scale residential properties and integrated commercial properties in the PRC.