Global Bio chem Technology : Announcements and Notices - Major Transaction Provision of Financial Assistance to A Supplier

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(incorporated in the Cayman Islands with limited liability)

大成糖業控股有限公司 *

(incorporated in the Cayman Islands with limited liability)

As disclosed in the respective annual report of GBT and GSH for the year ended 31 December 2015, the management teams of GBT and GSH have been actively negotiating with BOC for the release of the Previous Supplier Guarantees. While BOC has expressed its intention to release the Guarantors from the Previous Supplier Guarantees by the end of 2016 subject to the obtaining of internal approval by BOC, to the best of the knowledge, information and belief of the GBT Directors and the GSH Directors after making reasonable enquiries, the internal approval has not yet been completed as at the date of this announcement.

The term of the Previous Supplier Loan will expire between August to November 2016. Based on the Supplier's indication and the financial information of the Supplier available to GBT and GSH, the Supplier may not have sufficient financial resources to repay the Previous Supplier Loan upon the respective maturity dates. Under the Previous Supplier Guarantees, BOC shall have the right to demand the Guarantors or any of them to repay the Previous Supplier Loan if the Supplier is in default. To avoid immediate demand for full repayment of the Previous Supplier Loan by the Guarantors or any of them pursuant to the Previous Supplier Guarantee, the Supplier proposes to refinance the Previous Supplier Loan by entering into the New Supplier Loan Agreements with BOC for the New Supplier Loan. As a condition to the New Supplier Loan, BOC has requested each of the Guarantors to enter into the New Supplier Guarantees to severally guarantee the obligations of the Supplier under the New Supplier Loan.

As the applicable percentage ratios in respect of each of the New Supplier Guarantees exceeded 25%, the New Supplier Guarantees constitute a major transaction of GBT and GSH and is therefore subject to the notification, announcement and shareholders' approval requirements under the Listing Rules.

• For identification purposes only

  A circular containing, among other things, further details of the New Supplier Guarantees together with a notice convening the GBT EGM, will be despatched by GBT to the GBT Shareholders on or before 29 August 2016.

  A circular containing, among other things, further details of the GSH New Supplier Guarantee together with a notice convening the GSH EGM, will be despatched by GSH to the GSH Shareholders on or before 29 August 2016.

  BACkGROUNd

  As disclosed in the respective annual report of GBT and GSH for the year ended 31 December 2015, the management teams of GBT and GSH have been actively negotiating with BOC for the release of the Previous Supplier Guarantees. While BOC has expressed its intention to release the Guarantors from the Previous Supplier Guarantees by the end of 2016 subject to the obtaining of internal approval by BOC, to the best of the knowledge, information and belief of the GBT Directors and the GSH Directors after making reasonable enquiries, the internal approval has not yet been completed as at the date of this announcement.

  The term of the Previous Supplier Loan will expire between August to November 2016. Based on the Supplier's indication and the financial information of the Supplier available to GBT and GSH, the Supplier may not have sufficient financial resources to repay the Previous Supplier Loan upon the respective maturity dates. Under the Previous Supplier Guarantees, BOC shall have the right to demand the Guarantors or any of them to repay the Previous Supplier Loan if the Supplier is in default. To avoid immediate demand for full repayment of the Previous Supplier Loan by the Guarantors or any of them pursuant to the Previous Supplier Guarantee, the Supplier proposes to refinance the Previous Supplier Loan by entering into New Supplier Loan Agreements with BOC for the New Supplier Loan. As a condition to the New Supplier Loan, BOC has requested each of the Guarantors to enter into the New Supplier Guarantees to severally guarantee the obligations of the Supplier under the New Supplier Loan.

  Set out below are the principal terms of the New Supplier Loan Agreements: Name of bank: BOC

  Borrower: The Supplier

  Loan principal: RMB2.49 billion

  Term of loan: 12 months from the respective date of drawdown

  Rate of interest: 0.10% below the benchmark lending rate on the business day immediately before the respective date of signing of the New Supplier Loan Agreements, payable on a quarterly basis

  Use of the loan proceeds: Refinancing of the Previous Supplier Loan

  Events of default: There shall be an event of default if, among others, any of the

  following events shall have occurred or is continuing:

• the Supplier fails to pay any sums when due in accordance with the terms of the New Supplier Loan Agreements;

• the Supplier fails to use the New Supplier Loan for the purpose set out in the New Supplier Loan Agreements;

• any of the representations or warranties by the Supplier have been untrue or incorrect or the Supplier fails to duly perform or observe any of its obligations under the New Supplier Loan Agreements;

• the creditability, profitability, ability of repayment, operational status or cash flow of the Supplier has become worsen;

• the breach by the Supplier of any contract entered into with affiliates of BOC or any facility agreements entered into with other financial institutions;

• the breach of New Supplier Guarantees by any of the Guarantors;

• the termination of operation, dissolution or winding up of the Supplier.

Upon the occurrence of an event of default, BOC shall have the right to declare all outstanding indebtedness under the New Supplier Loan Agreements to be forthwith due and payable and shall have the right to demand the Guarantors to perform their guarantee obligations under the New Supplier Guarantees.

Security (other than the New Supplier Guarantees):

Nil

The terms of the New Supplier Guarantees are substantially the same as the Previous Supplier Guarantees. Details of the New Supplier Guarantees are as follows:

Name of bank: BOC

Guarantors: (i) Changchun Baocheng

1. Changchun Dacheng Bio-tech

2. Changchun Dahe

3. Changchun Dihao

4. Changchun GBT

Guaranteed Amount: All indebtedness due and owing to BOC pursuant to any loan

agreements or other documents signed by the Supplier within nine months from, whichever is the later, the date of the GBT EGM or the GSH EGM and the maximum principal amount guaranteed under the New Supplier Guarantees shall be RMB2.5 billion.

Date of expiry of the guarantee: Two years from the respective expiry of term of the New Supplier Loan Agreements

None of the GBT Guarantors and the GSH Guarantors receives, or will receive, any fee or commission for entering into the New Supplier Guarantees.

The principal business of the Supplier is the purchase of corn kernels from local farmers in Changchun and other regions of the Jilin Province and the resale thereof to end users in the north- east provinces in the PRC.

The Supplier is beneficially majority-owned by the Labour Union, being the labour union of the PRC employees of the Group. To the best of the knowledge, information and belief of the GBT Directors and the GSH Directors having made all reasonable enquiries, save that (i) the Supplier is the supplier of the GBT Group/the Group of corn kernels, and (ii) the ultimate beneficial owner of the Supplier includes the labour union of the PRC employees of the Group, the Supplier and its ultimate beneficial owners are third parties independent of GBT, GSH and their respective connected persons, and the business and operations are separately managed by its owned management team, independent from that of the Group.

Based on the unaudited financial statements provided by the Supplier, the Supplier has a negative net asset value of approximately RMB53 million as of 31 December 2015 and a net loss after taxation of approximately RMB136 million for the year ended 31 December 2015.