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.

Incorporated in Hong Kong with limited liability (Stock Code: 00267)

CONNECTED TRANSACTION SUBSCRIPTION FOR NEW SHARES OF STAR THRIVE BY CITIC METAL, A WHOLLY-OWNED SUBSIDIARY OF CITIC LIMITED

On 29 September 2017, CITIC Metal, an indirect wholly-owned subsidiary of CITIC Limited, and Star Thrive, an indirect wholly-owned subsidiary of CITIC Group (which is a special purpose vehicle holding 76.37% equity interest in Jinzhou Titanium) entered into the New Share Subscription Agreement, pursuant to which CITIC Metal agreed to subscribe for 60% of the enlarged share capital of Star Thrive at a consideration of HK$1,325,770,960.

CITIC Group holds 58.13% equity interest in the Company as at the date of this announcement, and is thus a connected person of the Company under Chapter 14A of the Listing Rules. Star Thrive constitutes a connected person of the Company by virtue of being an indirect wholly-owned subsidiary of CITIC Group and the transaction under the New Share Subscription Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As the highest applicable percentage ratio applied in accordance with Rule 14A.76 of the Listing Rules in respect of the transaction under the New Share Subscription Agreement is more than 0.1% but less than 5%, such transaction is subject to the reporting and announcement requirements and exempt from the circular and independent shareholders' approval requirements.

The Board is pleased to announce that, on 29 September 2017, CITIC Metal, an indirect wholly- owned subsidiary of CITIC Limited, and Star Thrive, an indirect wholly-owned subsidiary of CITIC Group (which is a special purpose vehicle holding 76.37% equity interest in Jinzhou Titanium Industry Co., Ltd. ("Jinzhou Titanium")) entered into the New Share Subscription Agreement, pursuant to which CITIC Metal agreed to subscribe for 60% of the enlarged share capital of Star Thrive at a consideration of HK$1,325,770,960. Upon the completion of the capital increase, the number of issued shares of Star Thrive will increase from 742,672,356 to 1,856,680,890.

NEW SHARE SUBSCRIPTION AGREEMENT Date:

29 September 2017

Parties:

  1. Star Thrive (as the Target Company)

  2. CITIC Metal (as the subscriber)

Subject matter:

1,114,008,534 new shares issued by the Target Company to CITIC Metal, representing 60% of the enlarged share capital of the Target Company.

Consideration:

The total subscription price is HK$1,325,770,960.

Completion:

The completion will take place on the third business day after the satisfaction of all conditions precedent below, or a later date that may be agreed by the parties in writing.

Conditions precedent:

The completion is subject to all of the following conditions precedent having been fulfilled:

  1. the board of CITIC Limited, the controlling shareholder of CITIC Metal, having approved the transaction contemplated under the New Share Subscription Agreement;

  2. the shareholders' general meeting of CITIC Metal having approved the transaction contemplated under the New Share Subscription Agreement; and

  3. the Target Company and Jinzhou Titanium having obtained all necessary third party consents required for the transaction contemplated under the New Share Subscription Agreement.

The parties shall make all reasonable efforts to procure that all conditions precedent are to be satisfied as soon as possible prior to the Long-stop Date. If the completion does not occur prior to the Long-stop Date, the parties shall further negotiate in order to propose a later date that may be agreed by the parties in writing for the satisfaction of conditions precedent and completion. In case the parties fail to agree on such later date, either party may have the right to terminate the New Share Subscription Agreement upon written notice to the other party, and the New Share Subscription Agreement as well as all rights and obligations thereunder shall cease to be effective (other than those already accrued under the New Share Subscription Agreement).

Transitional Period:

Subject to and upon completion, CITIC Metal shall be entitled to any profit or bear any loss of Star Thrive from the Valuation Reference Date to the Completion on a pro-rata basis according to the percentage of its shareholding in Star Thrive upon the Completion.

BASIS OF CONSIDERATION

The consideration for the subscription of the new shares under the New Share Subscription Agreement, being HK$1,325,770,960, was determined after independent negotiations on an arm's length basis between the Target Company and CITIC Metal with reference to the net asset value of the Target Company based on asset replacement approach, being RMB790,601,416 (approximately HK$883,847,307), as at the Valuation Reference Date as determined by the appraiser. As the Target Company is a special purpose vehicle, the valuation of the Target Company was solely based on the valuation of Jinzhou Titanium, and was conducted by way of the income approach.

CHANGES TO THE SHAREHOLDING STRUCTURE OF THE TARGET COMPANY

The shareholding structure of the Target Company as at the date of this announcement is set out below:

CITIC Group

100%

Deep Sky Investments Limited

100%

CITIC United Asia Holdings Limited

100%

CITIC United Asia Holdings (HK) Limited

100%

Star Thrive

Panzhihua Iron & Steel Group Co., Ltd.

76.37%

23.63%

Jinzhou Titanium

The shareholding structure of the Target Company upon the completion of the transaction is set out below:

CITIC Group

Deep Sky Investments Limited

100%

100% 58.13%

CITIC Limited

100%

CITIC United Asia Holdings Limited

100%

CITIC United Asia Holdings (HK) Limited

CITIC Corporation Limited

100%

Metal And Mining Link Limited

100%

CITIC Metal

40%60%

Star Thrive Panzhihua Iron & Steel Group Co., Ltd.

76.37%

23.63%

Jinzhou Titanium

FINANCIAL INFORMATION

Set out below is the unaudited financial information of the Target Company for the years ended 31 December 2015 and 2016:

HK$

Financial years ended 31 December

2015

(Unaudited)

2016

(Unaudited)

Net profit/(loss) before taxation and extraordinary items

61,617,430

50,197,106

Net profit/(loss) after taxation and extraordinary items

45,291,579

36,832,426

The unaudited net assets value of the Target Company as at 31 December 2016 and 30 June 2017 were approximately HK$822 million and HK$894 million, respectively.

CITIC Limited published this content on 29 September 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 29 September 2017 10:54:02 UTC.

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