Nan Nan Resources Enterprise Ltd : Connected Transaction: Proposed extension of the maturity date of HK$200,000,000 Zero Coupon convertible bond due 2014

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 Bermuda with limited liability) (Stock Code: 1229)

On 21 January 2014, the Company and the Subscriber entered into a 2nd Deed of Amendment to further extend the maturity date of the Convertible Bond for 36 months and the conversion period will accordingly be further extended for 36 months to 13 March
2017.

Pursuant to Rule 16.03 of the Listing Rules, any alteration in the terms of convertible equity securities after issue must be approved by the Stock Exchange, except where alterations take effect automatically under the existing terms of such convertible equity securities. The Company will apply to the Stock Exchange for its approval of the proposed amendments contemplated by the 2nd Deed of Amendment pursuant to Rule 16.03 of the Listing Rules.
As the Subscriber is a Substantial Shareholder of the Company, thereby a connected person of the Company under the Listing Rules. Accordingly, the 2nd Extension to be effected by the 2nd Deed of Amendment between the Company and the Subscriber constitutes a connected transaction of the Company under the Listing Rule and, therefore, the 2nd Extension is subject to reporting, announcement and Independent Shareholders' approval requirement.
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An Independent Board Committee (comprising all independent non-executive Directors) has been formed to advise the Independent Shareholders and Karl Thomson has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders regarding the 2nd Extension.
A circular containing, among other matters, further information on (i) the 2nd Deed of Amendment and the 2nd Extension; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders; (iii) a letter from Karl Thomson containing their advice to the Independent Board Committee and the Independent Shareholders; and (iv) a notice of the SGM will be despatched to the Shareholders in accordance with the Listing Rules as soon as practicable.

References are made to the announcement of the Company dated 28 January 2008 in relation to the subscription of the Convertible Bond, the Subscription Circular, the announcement of Company dated 11 February 2011 in relation to the 1st Extension and the 1st Extension Circular.
The Company entered into a conditional subscription agreement on 15 January 2008 with the Subscriber, pursuant to which the Company issued the Convertible Bond to the Subscriber in an aggregate principal amount of HK$200,000,000. The Convertible Bond bears no interest and is convertible into Shares. All outstanding Convertible Bond should have matured on 13
March 2011 pursuant to the original terms and conditions of the Convertible Bond.
On 11 February 2011, the Company and the Subscriber entered into a Deed of Amendment to extend the maturity date and accordingly the conversion period of Convertible Bond for 36 months to 13 March 2014. Accordingly, all outstanding Convertible Bond is going to mature on 13 March 2014.
As at the date of this announcement, the Convertible Bond with an aggregate amount of
HK$200,000,000 held by the Subscriber is still outstanding.
Please refer to the Subscription Circular and the 1st Extension Circular for the details of the
Convertible Bond and the 1st Extension.
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On 21 January 2014, the Company and the Subscriber entered into a 2nd Deed of Amendment, pursuant to which the maturity date of the Convertible Bond will be further extended for 36 months and the conversion period will accordingly be extended for 36 months to 13 March
2017.
The 2nd Deed of Amendment is subject to the fulfillment of the following conditions:
(a) the passing by the Independent Shareholders at the SGM of the necessary resolutions to rectify and approve the 2nd Deed of Amendment and the 2nd Extension;
(b) the Stock Exchange having approved the 2nd Extension in accordance with Rule 16.03 of the Listing Rules; and
(c) all necessary consents and approvals required to be obtained on the part of the Company and the Subscriber in respect of the 2nd Extension having been obtained.
None of the above conditions could be waived by the parties to the 2nd Deed of Amendment. This 2nd Deed of Amendment shall have no effect unless and until all the conditions precedent set out above are fulfilled. The effective date of the 2nd Deed of Amendment shall be on the date when all its conditions precedents are fulfilled.
As at the date of this announcement, none of the above conditions have been fulfilled.

Apart from the Maturity Date and the Conversion Period, all terms of the Convertible Bond remain unchanged.
The principal terms of the Convertible Bond (as amended by the Deed of Amendment and the
2nd Deed of Amendment) will be as follows: Principal amount HK$200,000,000.
Coupon Zero (0)% interest rate.
Maturity the Company shall repay the principal amount of the outstanding Convertible Bond to the then holder of the Convertible Bond in full on the maturity date, being the date falling 108 months from the date of issue of the Convertible Bond certificate, unless previously converted, i.e. 13 March 2017.
Conversion The holders of the Convertible Bond may convert the whole or part of the principal amount of the Convertible Bond (in multiples of HK$1,000,000) into such number of Shares determined by dividing the principal amount of the Convertible Bond being converted by the Conversion Price then in effect on any business day during the Conversion Period.
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Conversion Price HK$0.20 per Conversion Share, subject to adjustment provisions which are normal for convertible debt securities of this type and, in summary, an adjustment may be made in the event of:
(i) any consolidation or sub-division of the Shares;
(ii) any issue of Shares (other than in lieu of a cash dividend) by way of capitalization of profits or reserves;
(iii) any capital distribution to holders of the Shares or grant to such holders rights to acquire assets of the Group for cash;
(iv) any offer to holders of the Shares for subscription by way of rights or grant to holders of the Shares any options or warrants to subscribe for new Shares at a price which is less than 90% of the market price as at the date of the related announcement;
(v) the issue by the Company wholly for cash of any securities which are convertible into or exchangeable for or carry rights of subscription for new Shares, and the total effective consideration per Share initially receivable for such securities is less than 90% of the market price as at the date of the related announcement;
(vi) the rights of conversion or exchange or subscription attached to such securities mentioned in (v) above are modified so that the total effective consideration per Share initially received for such securities shall be less than 90% of the market price at the date of the related announcement; or
(vii) any issue of Shares wholly for cash at a price per Share which is less than 90% of the market price at the date of the related announcement.
Conversion period The Conversion Period is a period commencing from the date of issue of the Convertible Bond certificate and ending on the Maturity Date.
Redemption Neither the Company nor the holder of Convertible Bond shall at any time redeem (all or part of) the principal amount of the Convertible Bond outstanding prior to the Maturity Date.
Transferability The Convertible Bond may be assigned or transferred (in whole or in part) with the execution of a transfer instrument in a form approved by the Board. Subject thereto, there is no restriction on the transfer of the Convertible Bond.
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Public float The conversion rights attaching to the Convertible Bond will not be exercised by the holder of the Convertible Bond and the Company will not issue the Conversion Shares if, immediately following the conversion, the Company would be unable to meet the public float requirement under the Listing Rules.
Ranking of Conversion
Shares
The Conversion Shares issued upon the exercise by the holder of Convertible Bond the conversion rights attaching to the Convertible Bond will, when issued, rank pari passu in all respects with the Shares in issue as at the date of allotment and issue of the Conversion Shares, including the right to receive all future dividends and distributions.
Listing No application has been nor will be made for the listing of the Convertible Bond on the Stock Exchange or any other recognized stock or securities exchanges.
Application have be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the aggregate of 1,000,000,000 shares Conversion Shares to be issued as a result of the exercise of the conversion rights attaching to the Convertible Bond in full, which was granted on 11 March 2008.

The 2nd Extension effectively allows the Group to refinance the debts under the Convertible Bond under the same terms for a further 36 months. As at the date of this announcement, the Company has sufficient funds to fully repay the Convertible Bond. However, the Board is of the view that the 2nd Extension will enable the Company to retain the funds for potential investments or opportunities. In addition, as the Convertible Bond is zero coupon, it will not incur any interest burden for the Group for the next 3 years. Save for the Maturity Date and the Conversion Period, other terms and conditions of the Convertible Bond remain unchanged.
The Board Note 1 (excluding the independent non-executive directors who will form their views after considering the advice of the independent financial adviser) considers that the terms and conditions of the 2nd Deed of Amendment are fair and reasonable and the 2nd Extension is in the interests of the Company and the Shareholders as a whole. The Directors are of the view that the 2nd Extension will not pose any significant impact on the operations of the Group.

Note 1: As Ms. Lo Fong Hung and Mr. Wang Xiangfei have material interest in the transaction, they have abstained from voting on the board resolution in relation to the 2nd Extension.

The principal activities of the Group are investment holding, mining, sales and distribution of coal.
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The Subscriber is an investment holding company. Save for holding the 74.42% shareholding in the Company and the Convertible Bond, the Subscriber does not have any other significant business activities.

Pursuant to Rule 16.03 of the Listing Rules, any alteration in the terms of convertible equity securities after issue must be approved by the Stock Exchange, except where alterations take effect automatically under the existing terms of such convertible equity securities. The Company will apply to the Stock Exchange for its approval of the proposed amendments contemplated by the 2nd Deed of Amendment pursuant to Rule 16.03 of the Listing Rules.
Directors of the Company, Ms. Lo Fong Hung and Mr. Wang Xiangfei, both having a material interest in the transaction, have abstained from voting on the board resolution in relation to the 2nd Extension. Ms. Lo Fong Hung has material interest in the transaction by virtue of her
30% equity interest in New Bright International Development Limited, which in turn holds
70% equity interest in China Sonangol International Limited, which is a holding company of the Subscriber. Mr. Wang Xiangfei has material interest in the transaction by virtue of him being the spouse of Ms. Lo Fong Hung.
As at the date of this announcement, the Subscriber holds 74.42% of the share capital of the Company and hence a Substantial Shareholder and connected person of the Company under the Listing Rules. The 2nd Extension to be effected by the 2nd Deed of Amendment between the Company and the Subscriber constitutes a connected transaction of the Company under the Listing Rules and, therefore, the 2nd Extension is subject to reporting, announcement and Independent Shareholders' approval requirement.

An Independent Board Committee (comprising all independent non-executive Directors) has been formed to advise the Independent Shareholders and Karl Thomson has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders regarding the 2nd Extension.
A circular containing, among other matters, further information on (i) the 2nd Deed of Amendment and the 2nd Extension; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders; (iii) a letter from Karl Thomson containing their advice to the Independent Board Committee and the Independent Shareholders; and (iv) a notice of the SGM will be despatched to the Shareholders in accordance with the Listing Rules as soon as practicable.
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In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:
"1st Extension Circular" The Company's circulars dated 21 February 2011 in relation to, among other matters, the 1st Extension
"1st Extension" The extension of the maturity date of the Convertible Bond for 36 months, together with the conversion period which will also be extended for 36 months to
13 March 2014 accordingly pursuant to the Deed of
Amendment
"2nd Deed of Amendment" The 2nd deed of amendment dated 21 January 2014 entered into between the Company and the Subscriber, whereby the Company and the Subscriber agreed to further extend the maturity date and conversion period of the Convertible Bond for 36 months to 13 March
2017
"2nd Extension" A further extension of the maturity date of the Convertible Bond for 36 months, together with the conversion period which will also be further extended for 36 months to 13 March 2017 pursuant to the 2nd Deed of Amendment
"Board" Board of Directors
"Company" Nan Nan Resources Enterprise Limited (stock code:
1229), a company incorporated in Bermuda with limited liability, and the shares of which are listed on the Stock Exchange
"connected persons" has the meaning ascribed thereto in the Listing Rules
"Conversion Period" T h e p e r i o d c ommencing from the date of issue of the Convertible Bond certificate and ending on the Maturity Date
"Conversion Price" HK$0.20 per Conversion Share, subject to adjustment provisions which are normal for convertible debt securities of this type
"Conversion Share(s)" Share(s) to be issued pursuant to exercise of the
Convertible Bond
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"Convertible Bond" Outstanding and exercisable zero per cent convertible bond issued by the Company to the Subscriber with an aggregate principal amount of HK$200,000,000
"Deed of Amendment" T h e deed of amendment dated 11 February 2011 entered into between the Company and the Subscriber, whereby the Company and the Subscriber agreed to extend the maturity date and conversion period of the Convertible Bond for 36 months to 13 March 2014
"Directors" The directors of the Company
"Group" The Company and its subsidiaries
"Hong Kong" The Hong Kong Special Administrative Region of the
PRC
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Independent Board Committee" a board comprising all independent non-executive Directors to advise the Independent Shareholders on the 2nd Extension
"Independent Financial Adviser"
or "Karl Thomson"
Karl Thomson Financial Advisory Limited, a corporation licensed under SFO to carry out type 6 (advising on corporate finance) regulated activities and the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders with regard to the 2nd Extension
"Independent Shareholders" Shareholders, other than the Subscriber and its associates
"Independent Third Party" independent third party (parties) who is (are) independent of and not connected with the Company and its connected persons (as defined in the Listing Rules)
"Listing Rules" The Rules Governing the Listing of Securities on the
Stock Exchange
"Maturity Date" t h e date upon which the Convertible Bond will expire and the last day for the Company to repay the outstanding amount under the Convertible Bond
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"PRC" the People's Republic of China (for the purpose of this announcement only, excluding Hong Kong, the Macau Special Administrative Region and Taiwan)
"SGM" T h e special general meeting of the Company to be convened and held for the independent shareholders to consider, and if thought fit, approve the 2nd Extension
"Share(s)" Ordinary share(s) in the paid up capital of the Company
"Shareholder(s)" Holder(s) of Share(s)
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Subscriber" Ascent Goal Investments Limited, the Substantial Shareholder of the Company and the subscriber to the Convertible Bond, a company incorporated in British Virgin Islands with limited liability, which is wholly- owned by China Sonangol International Limited a company incorporated in Hong Kong with limited liability
"Subscription Circular" T h e Company's circulars dated 21 February 2008 in relation to, among other matters, (i) proposed subscription of new shares and convertible bond and (ii) increase in authorized share capital
"Substantial Shareholder(s)" has the meaning ascribed in the Listing Rules
By Order of the Board

Executive Director

Hong Kong, 21 January 2014

As at the date of this announcement, the Board comprises three executive directors, namely Ms. Lo Fong Hung, Mr. Wang Xiangfei and Mr. Kwan Man Fai and three independent non- executive directors, namely Mr. Wong Man Hin, Raymond, Mr. Lam Ka Wai, Graham and Mr. Chan Yiu Fai, Youdey.

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