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聯想控股股份有限公司

Legend Holdings Corporation

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 3396) Connected Transaction CAS Holdings' Strategic Investment in Levima Advanced Materials, Co., Ltd., a subsidiary of the Company

On May 5, 2017 (after trading hours), CAS Holdings, Levima Group, Levima Advanced Materials and other shareholders of Levima Advanced Materials entered into the Equity Transfer and Capital Increase Agreement, pursuant to which (i) CAS Holdings agreed to acquire from Levima Group and Levima Group agreed to sell the equity interest corresponding to RMB129,600,000 in the registered capital of Levima Advanced Materials (representing approximately 17.28% of the registered capital of Levima Advanced Materials before capital injection), at a consideration of RMB425,580,000; (ii) CAS Holdings will make additional capital injection of RMB426,890,000 in cash to Levima Advanced Materials, of which RMB130,000,000 will be included in the registered capital of Levima Advanced Materials, and RMB296,890,000 will be included in the capital reserve of Levima Advanced Materials. Regarding to CAS Holdings' Strategic Investment in Levima Advanced Materials, all shareholders of Levima Advanced Materials have agreed to the above transfer and capital increase and have passed the relevant resolutions at general meeting in accordance with the requirements of the PRC laws. Upon completion of (i) and

(ii) above, Levima Group's shareholding in Levima Advanced Materials will decrease from 88.19% to 60.44%. The registered capital of Levima Advanced Materials will increase from RMB750,000,000 to RMB880,000,000, and CAS Holdings' shareholding in Levima Advanced Materials will become 29.50% (CAS Holdings had no shareholding in Levima Advanced Materials prior to the Transaction).

CAS Holdings is a substantial shareholder of the Company, holding approximately 29.04% of the entire issued share capital of the Company, and is a connected person of the Company. CAS Holdings' Strategic Investment in Levima Advanced Materials constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Upon completion of the Transaction, Levima Advanced Materials will change from a subsidiary of the Company to a connected subsidiary of the Company. As the applicable percentage ratios in respect of the Transaction exceed 0.1% but are less than 5%, the Transaction is only subject to the reporting and announcement requirements under Chapter 14A of the Listing Rules, but is exempt from the independent shareholders' approval requirement.

EquITy TRANSFER AND CAPITAL INCREASE AGREEMENT

On May 5, 2017 (after trading hours), the Purchaser, the Vendor, the Target Company and other shareholders of the Target Company entered into the Equity Transfer and Capital Increase Agreement, pursuant to which (i) the Purchaser agreed to acquire from the Vendor and the Vendor agreed to sell the equity interest corresponding to RMB129,600,000 in the registered capital of the Target Company (representing approximately 17.28% of the registered capital of the Target Company before capital injection), at a consideration of RMB425,580,000; (ii) the Purchaser will make additional capital injection of RMB426,890,000 in cash to the Target Company, of which RMB130,000,000 will be included in the registered capital of the Target Company, and RMB296,890,000 will be included in the capital reserve of the Target Company. Upon completion of (i) and (ii) above, the Purchaser will hold a total of 29.50% equity interest in the Target Company.

IMPACTS OF THE TRANSACTION

Upon completion of the Transaction, Levima Group's shareholding in Levima Advanced Materials will decrease from 88.19% to 60.44%. The registered capital of Levima Advanced Materials will increase from RMB750,000,000 to RMB880,000,000, and the Purchaser's shareholding in the Target Company will become 29.50% (the Purchaser had no shareholding in the Target Company prior to the Transaction).

All Shareholders of Levima Advanced Materials have agreed to the above transfer and capital increase and have passed the relevant resolutions at general meeting in accordance with the requirements of the PRC laws.

MAJOR TERMS OF THE Equ ITy TRANSFER AND CAPITAL INCREASE AGREEMENT Date:

May 5, 2017 (after trading hours)

Parties:

Levima Group as the Vendor; CAS Holdings, as the Purchaser; Target Company; and

Other four shareholders of the Target Company (To the best of the Director's knowledge, information and belief, having made all reasonable enquiry, each of these shareholders is independent of the Company and its connected persons)

Equity interest to be disposed of by the Vendor:

The equity interest in the Target Company corresponding to RMB129,600,000 of registered capital (representing approximately 17.28% of the registered capital of the Target Company before capital injection).

Capital injection in the Target Company to be made by the Purchaser:

The Purchaser will also make additional capital injection to the Target Company. Upon the completion of the capital injection (and the equity transfer), the Purchaser will hold a total of 29.50% equity interest in the Target Company. Levima Group's shareholding in the Target Company will decrease from 88.19% to 60.44%.

Consideration and payment method

Under the terms of the Equity Transfer and Capital Increase Agreement, the total consideration of the Transaction shall be RMB852,470,000 in cash.

The consideration shall be settled by the Purchaser in the following manner:

  1. RMB425,580,000 as the consideration for the equity transfer, shall be paid in cash to Levima Group within 10 business days of the execution of the Equity Transfer and Capital Increase Agreement; and

  2. RMB426,890,000 as the sum for the capital injection, shall be paid in cash to the Target Company within 10 business days of the execution of the Equity Transfer and Capital Increase Agreement.

    Basis for Consideration

    The consideration was determined by the Company and the Purchaser on normal commercial terms following arm's length negotiations, after taking into account of the recorded valuation of net assets of the Target Company of RMB2,462,829,200 as at November 30, 2016, being the base date. This recorded valuation was adopted as the consideration for the Transaction.

    Upon execution of the Equity Transfer and Capital Increase Agreement:

    1. The existing shareholders of the Target Company shall, in a timely manner, cooperate with the Purchaser in the election and appointment of directors, supervisors and senior management nominated by the Purchaser (including but not limited to holding general meetings for shareholders to pass shareholders' resolutions, holding board meetings for directors to pass board resolutions, holding meetings of the supervisory committee for supervisors to pass resolutions, and arranging for amendments to the articles of association etc.).

    2. Within 30 days of the full payment by the Purchaser of the consideration for the equity transfer and capital injection, the Target Company shall complete the procedures for the change of business registration and provide the Purchaser with the amended "Business License for Enterprise as a Legal Person"(《企業法人營業執照》), the articles of association, the register of members and the capital injection certificate showing the Purchaser holds 29.50% equity interest of the Target Company.

    3. Upon completion of all the above, Levima Advanced Materials will remain a subsidiary of the Company and its financial results will continue to be consolidated into the financial statements of the Company.

    4. Corporate Governance of Levima Advanced Materials:

      After CAS Holdings' Strategic Investment in Levima Advanced Materials, the key points of corporate governance of Levima Advanced Materials will be as follows:

      1. Its board of directors shall comprise six members, of which four will be nominated by Levima Group and two will be nominated by CAS Holdings. The position of chairman of its board of directors shall be held by one of the directors nominated by Levima Group.

      2. Its supervisory committee shall comprise three supervisors, of which one shall be nominated by Levima Group, one shall be nominated by CAS Holdings and one shall be staff representative. The position of chairman of its supervisory committee shall be held by the supervisor nominated by CAS Holdings.

      FINANCIAL EFFECT OF THE TRANSACTION AND uSE OF PROCEEDS

      Based on the net assets value of Levima Advanced Materials as at November 30, 2016, the expected relevant gain from the Transaction of approximately RMB141,739,000 will be included in the capital reserve in the consolidated financial statements of Levima Group. The actual impact in the amount depends on the net assets value of Levima Advanced Materials upon completion of the equity transfer and capital injection.

      The proceeds of RMB425,580,000 to be received by Levima Group will be utilized as general working capital of the Company and its subsidiaries, and the proceeds from the capital injection of RMB426,890,000 to be received by Levima Advanced Materials will be utilized as general working capital of Levima Advanced Materials.

      REASONS FOR AND BENEFITS OF THE TRANSACTION
      1. CAS Holdings' Strategic Investment in Levima Advanced Materials will allow the two parties to complement each other with their own advantages and generate synergy effect that the sum of one plus one will be greater than two.

      2. Levima Advanced Materials is committed to becoming an outstanding enterprise in the chemical new materials area. With its excellent staff team and strong industry operation ability, Levima Advanced Materials has built up its professional competence and competitive advantages in areas of differentiated product research and development, customized application services and technology industrialization. The Chinese Academy of Sciences, which is the highest PRC institution in the field of scientific research and possesses a globally high level of innovation and research and development capabilities, has extensive technical achievements and strong talent reserve in areas of fine chemicals and chemical new materials. Following the strategic investment in Levima Advanced Materials by CAS Holdings (which acts on behalf of the Chinese Academy of Sciences), the research and development resources and innovations of the Chinese Academy of Sciences in areas of fine chemicals and chemical new materials can be combined with Levima Advanced Materials' operation ability and technical transformation ability. This will improve the efficiency of Levima Advanced Materials in results achievement and industrialization in the fine chemicals and chemical new materials area, enable Levima Advanced Materials to build up new industrial advantages, improve Levima Advanced Materials' core competitiveness and speed up the realization of its strategy of becoming an outstanding enterprise in the new materials area of China.

      3. CAS Holdings' Strategic Investment in Levima Advanced Materials will further enhance the shareholders base of Levima Advanced Materials, enlarge its registered capital, lower its finance cost and gearing ratio, improve its profitability and increase its ability to resist risks.

      INFORMATION ON LEVIMA ADVANCED MATERIALS

      Levima Advanced Materials, which specializes in the operation in the fine chemicals and new chemical materials industry, is a limited liability company incorporated in the PRC on May 21, 2009 and a subsidiary of Levima Group. Levima Group is a wholly-owned subsidiary of the Company.

      Levima Advanced Materials operates in the promising new chemical industry and produces high-end polyolefin materials and fine chemicals by using methanol enrichment in the PRC as main materials. All of its equipment make use of the leading technology in the industry and its production and operational ability is leading in the industry. Its main products are ethylene- vinyl acetate copolymer (EVA), polypropylene (PP) special materials, ethylene oxide (EO), special ethylene oxide derivatives (EOD) etc. It uses innovations as the driving force for its development, and its production and sales have been highly collaborative. It has successfully developed over 110 models of fine material products in more than 31 series including nonionic surfactants, polyethers and end-capped polyether products, more than 60 of which have achieved industrialization. It is a mainstream supplier of EOD products in the PRC. It produces high-performance PP, EVA special materials and high-performance modified engineering plastics. Currently it is the largest supplier of high melting homopolypropylene products in the PRC, and its production and sales volume of high-end EVA products with high VA content is leading in the PRC.

      The audited net asset value of Levima Advanced Materials prepared under the China Accounting Standards for Business Enterprises as at November 30, 2016 was RMB1,952,162,831, and its audited net asset value as at December 31, 2016 was RMB1,938,673,987. There were no material differences between the financial statements of Levima Advanced Materials prepared under the China Accounting Standards for Business Enterprises and those prepared under the International Financial Reporting Standards.

      According to the valuation report on Levima Advanced Materials prepared by an independent valuer, the value of 100% equity interest in Levima Advanced Materials as at November 30, 2016 was RMB2,462,829,200.

      The audited results of Levima Advanced Materials for the two years ended December 31, 2015 and 2016 prepared under the China Accounting Standards for Business Enterprises were as follows:

      For the year Ended December 31,

      (Audited)

      2016

      (Audited)

      2015

      in RMB million

      in RMB million

      Profit/(loss) before taxation

      235

      (5)

      Profit/(loss) after taxation

      223

      (3)

      INFORMATION ON CAS HOLDINGS

      Established under the authority of the State Council of the PRC, CAS Holdings is the first centrally operating state-owned asset management company. CAS Holdings, which completed its business registration as a wholly state-owned limited liability company on April 12, 2002, acts on behalf of the Chinese Academy of Sciences to exercise the right of investor over the direct investment in the operating state-owned assets in the wholly-owned, controlled and joint-venture enterprises and assumes the corresponding responsibility for preserving and increasing the enterprises' values. The main business of CAS Holdings includes: (i) assuming the responsibility of investor over the enterprises in which it holds equity interest; (ii) private equity fund investment; (iii) strategic direct investment; and (iv) supervising and guiding the management of operating state-owned assets owned by entities under the Chinese Academy of Sciences.

      CAS Holdings is a substantial shareholder of the Company, holding approximately 29.04% of the entire issued share capital of the Company.

      INFORMATION ON LEGEND HOLDINGS

      Legend Holdings is a leading diversified investment holding group in China and has developed an innovative, two-wheel-driven synergy business model "strategic investments

      + financial investments". Its strategic investments business diversifies into five segments: IT, financial services, innovative consumption and services, agriculture and food, and new materials. Its financial investments business primarily consists of angel investments, venture capital investments, private equity investments and other investments which cover all stages of a company's life cycle.

      IMPLICATIONS uNDER THE LISTING RuLES

      CAS Holdings is a substantial shareholder of the Company, holding approximately 29.04% of the entire issued share capital of the Company, and is a connected person of the Company. CAS Holdings' Strategic Investment in Levima Advanced Materials constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Upon completion of the Transaction, Levima Advanced Materials will change from a subsidiary of the Company to a connected subsidiary of the Company. As the applicable percentage ratios in respect of the Transaction exceed 0.1% but are less than 5%, the Transaction is only subject to the reporting and announcement requirements under Chapter 14A of the Listing Rules, but is exempt from the independent shareholders' approval requirement.

      OPINIONS OF THE BOARD

      Mr. WU Lebin, a non-executive Director, is the chairman of board of directors of CAS Holdings and is deemed to have interest in the Transaction. As such, he has abstained from voting on the resolution of the Board approving the Transaction. Save for Mr. WU Lebin, no other Director of the Company has any material interest in the Transaction or is required to abstain from voting on the relevant resolution of the Board.

      The Directors, including independent non-executive Directors, are of the opinion that the Transaction is determined by the parties to the agreement after arm's length negotiations and the terms of the agreement (including the basis for consideration) are fair and reasonable, on normal commercial terms, in the ordinary course of business of Legend Holdings and its subsidiaries and in the interests of the Company and its shareholders as a whole.

      DEFINITIONS

      In this announcement, unless the context specifies otherwise, the following terms shall have the following meanings:

      "Board" the board of directors of the Company

      "business day(s)" shall have the same meanings ascribed thereto under the

      Listing Rules

      "Legend Holdings" Legend Holdings Corporation, a joint-stock company or "Company" incorporated with limited liability under the laws of the

      PRC, the H shares of which are listed on the main board of the Stock Exchange

      "Director(s)" director(s) of the Company

      "Equity Transfer and the equity transfer and capital increase agreement entered Capital Increase into among CAS Holdings, Levima Group, Levima Agreement" Advanced Materials and other shareholders of Levima

      Advanced Materials on May 5, 2017 (after trading hours)

      "Transaction" or the acquisition of the equity interest in Levima Advanced "CAS Holdings' Strategic Materials corresponding to RMB129,600,000 in its registered Investment in Levima capital (representing approximately 17.28% of the registered Advanced Materials" capital of the Target Company before capital injection) by

      CAS Holdings from Levima Group, at a consideration of RMB425,580,000 in cash, and the increase in capital of the Target Company by CAS Holdings of RMB426,890,000 in cash; upon completion of the Transaction, CAS Holdings will hold a total of 29.50% equity interest in the Target Company

      "CAS Holdings" or 中國科學院控股有限公司 (formerly known as 中國科學院

      "Purchaser" 國有資產經營有限責任公司) Chinese Academy of Sciences Holdings Co., Ltd.

      "Listing Rules" the Rules Governing the Listing of Securities on the Stock

      Exchange

      "China" or "PRC" the People's Republic of China, which, for the purposes of

      this announcement, excludes Hong Kong, Macau and Taiwan "Stock Exchange" The Stock Exchange of Hong Kong Limited

      "Target Company" or 聯泓新材料有限公司 Levima Advanced Materials Co., Ltd., "Levima Advanced a subsidiary of Levima Group

      Materials"

      "Levima Group" or 聯泓集團有限公司 Levima Group Co., Ltd., a company "Vendor" incorporated and legally subsisting in accordance with the laws of the PRC, is a wholly-owned subsidiary of

      the Company. Its subsidiaries principally engage in the development and production of chemical and energy materials

      By order of the Board

      Legend Holdings Corporation ZHu Linan

      Executive Director and President

      Hong Kong, May 5, 2017

      As at the date of this announcement, the Executive Directors of the Company are Mr. LIU Chuanzhi, Mr. ZHU Linan and Mr. ZHAO John Huan; the Non-executive Directors are Mr. WU Lebin, Mr. WANG Jin and Mr. LU Zhiqiang; and the Independent Non-executive Directors are Mr. MA Weihua, Mr. ZHANG Xuebing and Ms. HAO Quan.

    Legend Holdings Corporation published this content on 05 May 2017 and is solely responsible for the information contained herein.
    Distributed by Public, unedited and unaltered, on 29 May 2017 15:21:27 UTC.

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