Auhua Clean Energy PLC : Notice of EGM

AUHUA CLEAN ENERGY PLC

("Auhua" or "the Company")

Notice of EGM

3 February 2014: Auhua Clean Energy Plc (AIM: ACE), the environmental technology group, announces that further to the announcement on 27 January 2014, a circular (the "EGM Circular") will be posted to shareholders today containing notice of an Extraordinary General Meeting ("EGM") to be held at 10 a.m. on 20 February 2014 at the offices of Grant Thornton UK LLP, 30 Finsbury Square, London EC2P 2YU, United Kingdom. At this meeting, the Company's shareholders will be asked to approve resolutions for the following:

(i)         for the Company to allot and issue an aggregate of 6,944,400 ordinary shares in the Company (each ordinary share in the Company, a "Share") as consideration for the acquisition by the Company's wholly-owned subsidiary Auhua Holdings Pte Ltd ("Auhua Holdings") of the entire issued share capital of Taiwan Ziolar Technology Co. Ltd. ("Taiwan Ziolar") and the entire business and assets of Ziolar Pte Ltd ("Ziolar Singapore") for an aggregate consideration equivalent to US$4.5 million, and that if within the 12 months following the issue of such Shares the Company issues any new Shares at a price below 40 pence per Share (such lower price being the "Reduced Price"), for the Company to allot and issue additional Shares as consideration for the abovementioned acquisition; and

(ii)        in addition to the authority referred to in sub-paragraph (i) above and in addition to the existing authorities granted to the Directors, to grant the Directors a general mandate to exercise all powers of the Company to issue and allot, and/or grant rights to subscribe for and/or convert any security into, such number of Shares as in aggregate does not exceed 10,000,000, and to disapply the pre-emption provisions contained in article 3.18 of the Company's articles of association ("Articles") in respect of any such allotment.

The resolutions to be proposed at the EGM are as follows:

·        Resolution 1 is an ordinary resolution to authorise the directors of the Company (the "Directors") to allot up to 6,944,400 Shares as the consideration for the Ziolar Acquisition, as announced on 27 January 2014;

·        Resolution 2 is an ordinary resolution to authorise the Directors to allot up to 2,000,000 additional Shares to SSP Innovations Pte Ltd (and/or its nominees), Steve Peng and Yu-Yao Eddie Chen in the event that within the Relevant Period, the Company issues any Shares at a Reduced Price. Any such further issue of Shares would be in settlement of the consideration payable for the Ziolar Acquisition.

·        Resolution 3 is an ordinary resolution to grant the Directors a general mandate to allot and issue up to 10,000,000 Shares (in addition to the existing authorities granted to the Directors to allot and issue Shares); and

·        Resolution 4 is a special resolution to grant the Directors the authority to disapply the pre-emption provisions contained in the Articles that would otherwise apply upon any allotment made pursuant to Resolution 3.

The Directors believe that all of the resolutions are in the best interests of the Company and its shareholders as a whole and accordingly recommend that the shareholders vote in favour of all of the resolutions, as they intend to do so in respect of their aggregate holding of 47,100,450 Shares, representing approximately 57.1 per cent. of the issued share capital of the Company.

A copy of the EGM Circular is available on the Company's website at www.auhuacleanenergy.com.

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About Auhua:

) is an environmental technology group based in the Shandong Province of Eastern China specialising in the development and application of green energy and energy efficient solar water heating solutions. In particular, the Group is focused on the manufacture and sale of split-unit solar water heating systems. Auhua Clean Energy operates through its wholly owned subsidiaries Shandong Auhua New Energy Co., Ltd and Weihua Auhua New Energy Co., Ltd., of which Auhua Holdings Pte Ltd is the intermediate holding company.