a8c60794-68f8-40dc-92f5-f69bfc294e80.pdf

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CHINA HUARONG ENERGY COMPANY LIMITED

中 國 華 榮 能 源 股 份 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01101)


LETTERS OF INTENT IN RELATION TO DISPOSAL OF LIABILITIES AND FURTHER UPDATES IN RELATION TO THE POTENTIAL RESTRUCTURING

Reference is made to the announcements of China Huarong Energy Company Limited (the 'Company') which dated 29 August 2014, 5 September 2014, 15 September 2014, 22

September 2014, 29 September 2014 and 29 October 2014 and the circular of the Company dated 17 February 2015 (the 'Circular') in relation to, amongst other things, the potential restructuring ('Potential Restructuring') of the Company's subsidiary, Jiangsu Rongsheng Heavy Industries Co., Ltd. ( 江 蘇 熔 盛 重 工 有 限 公 司 ), and the announcement of the

Company dated 16 March 2015, 21 April 2015 and 1 July 2015 (the 'Announcements'). Unless otherwise stated, capitalised terms used in this announcement shall have the same meanings as defined in the Announcements and the Circular unless the context requires otherwise.

The Company wishes to inform the shareholders and potential investors of the Company that, with the support of the government authorities, through friendly negotiations, the Company and the relevant financial institutions are accelerating the implementation of and promoting a material asset reorganisation and optimised debt restructuring proposal of Jiangsu Rongsheng Heavy Industries and the proposal has been affirmed by relevant parties. On 19 November 2015, the Company entered into conditional letters of intent (the 'Letters of Intent') in relation to the disposal of liabilities and other related matters with each of more than 10 major institutional creditors (all are third parties independent of the Company and its connected persons (as defined in the Listing Rules)), respectively, pursuant to which the Company and the institutional creditors agreed that, amongst other things, the entire or partial amount of borrowings of the institutional creditors owed by the Company and the Company's shipbuilding segment subsidiaries and its related companies (namely, Nantong Rongye

Storage Co., Ltd. (南通熔燁倉儲有限公司), Jiangsu Rongsheng Heavy Industries Co., Ltd.

(江蘇熔盛重工有限公司), Jiangsu Rongsheng Shipbuilding Co., Ltd. (江蘇熔盛造船有限 公司), Shanghai Rongsheng Shipbuilding Trading Company Limited (上海熔盛船舶貿易有 限公司), Hefei Rong An Power Machinery Co., Ltd. (合肥熔安動力機械有限公司), Rongsheng Machinery Company Limited ( 熔 盛 機 械 有 限 公 司 ) and Hefei Zhenyu Engineering Machinery Company Limited (合肥振宇工程機械有限公司)) will be settled through an issuance of shares of the Company to the relevant institutional creditors or its designated related companies by the Company in order to satisfy the liabilities (the 'Disposal of Liabilities').

The Board believes that the Disposal of Liabilities would accelerate and facilitate the progress of negotiation of the Potential Restructuring by easing the debt burden of the Group and enlarging the equity base of the Company. By easing the debt burden of the Group, the Company could enhance the flexibility of fund utilisation and improve the operation of shipbuilding business and also mitigate the adverse effect of the high gearing of the Group on its expansion in the energy service industry, in order to better implement the strategy of industry transformation and steadily develop the energy development business of the Group.

The content contained in the Letters of Intent does not represent the entire terms and conditions of the Disposal of Liabilities, the parties are entitled to negotiate the Disposal of Liabilities. The terms of the Disposal of Liabilities are subject to the legally binding formal agreement(s) to be finally entered into.

Save for the clauses on confidentiality and governing law, the Letters of Intent are not legally binding on the parties thereto and do not constitute the parties' legally binding commitment in respect of entering into formal agreement(s) or proceeding with the Disposal of Liabilities. In the event formal agreement(s) is/are entered into, the Company will make further announcement(s) and seek shareholder's approval and comply with the Listing Rules or other relevant requirements.

The negotiations of the Potential Restructuring are still ongoing. The Company will continue to closely monitor the status of the Potential Restructuring and the Disposal of Liabilities and will make further announcement(s) on any material development in a timely manner as and when necessary in accordance with the Listing Rules and relevant legal or regulatory requirements.

The Company wishes to emphasise that the Potential Restructuring and Disposal of Liabilities are subject to (amongst others) the signing of formal agreement(s), the final terms and conditions of which are still under further negotiations by the parties. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.


By Order of the Board

China Huarong Energy Company Limited LEE Man Yee

Company Secretary


Hong Kong, 19 November 2015


As at the date of this announcement, the directors of the Company are: Executive directors:

Mr. CHEN Qiang (Chairman), Mr. HONG Liang, Mr. Sean S J WANG, Mr. WANG Tao, Mr. WEI A Ning and Ms. ZHU Wen Hua;


Independent non-executive directors:

Mr. WANG Jin Lian, Ms. ZHOU Zhan and Mr. LAM Cheung Mau.

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