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.
DONGJIANG ENVIRONMENTAL COMPANY LIMITED*
東江環保股份有限公司
(a joint stock limited company incorporated in the People’s Republic of China)
(Stock Code: 00895)
TERMINATION OF THE PROPOSED NON-PUBLIC ISSUANCE OF NEW A SHARES
UNDER SPECIFIC MANDATE
We refer to the announcements of Dongjiang Environmental Company Limited* (the “Company”)
dated 25 May 2016, 15 June 2016, 13 July 2016, 14 July 2016, 11 August 2016 , 1 September
2016 and 31 October 2016 in relation to:
(i) the proposed share transfer arrangement between Mr. Zhang Wei Yang (“Mr. Zhang”) and
Guangdong Rising Assets Management Co., Ltd (“Guangdong Rising Assets”) pursuant to
which Mr. Zhang:
(a) agreed to transfer 60,682,871 A shares of the Company (representing approximately
6.98% of the then total issued share capital of the Company) to Guangdong Rising Assets
(the “6.98% Share Transfer”); and
(b) proposed to further transfer 61,030,624 A shares of the Company (representing
approximately 7.02% of the then total issued share capital of the Company) to Guangdong
Rising Assets (the “Proposed 7.02% Share Transfer”) and pledge these shares to
Guangdong Rising Assets before a formal agreement of the Proposed 7.02% Share
Transfer has been entered into (the “Pledge”);
(ii) the proposed non-public issuance of A shares of the Company under specific mandate to
Guangdong Rising Assets pursuant to which Guangdong Rising Assets will subscribe for not
more than 117,164,616 new A shares, representing not more than 13.48% of the then total
existing issued share capital of the Company before the issue (the “Proposed A Share
Issuance”); and
(iii) the delay in dispatch of the circular in relation to the Proposed A Share Issuance.
As stated in the announcement dated 13 July 2016, the 6.98% Share Transfer was completed on 13
July 2016.
In the course of preparing the circular in relation to the Proposed A Share Issuance, the Company
received an oral enquiry from the Hong Kong Securities and Futures Commission (the “SFC”)
regarding the Pledge and whether the undertaking of Mr. Zhang to vote according to the direction
of Guangdong Rising Assets with his voting rights of the pledged portion of the 61,030,624 A
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shares (the “Voting Undertaking”) would suggest that Mr. Zhang and Guangdong Rising Assets
are parties acting in concert in respect of the Company under the Codes on Takeovers and Mergers
and Share Buy-backs (the “Hong Kong Takeovers Code”). The Company has made a submission
in response to the oral enquiry from the SFC to seek to demonstrate that Guangdong Rising Assets
and Mr. Zhang are not parties acting in concert.
On 29 December 2016, the Company received a letter from the SFC (the “SFC Letter”).
According to the SFC Letter, the SFC considered that, in light of the arrangements contemplated
under the Pledge and the Voting Undertaking between Mr. Zhang and Guangdong Rising Assets,
and in particular, the voting arrangement in relation to the 61,030,624 A shares held and
beneficially owned by Mr. Zhang, Mr. Zhang and Guangdong Rising Assets are parties acting in
concert in respect of the Company under the Hong Kong Takeovers Code. As a result, a mandatory
general offer obligation will be triggered on the part of Guangdong Rising Assets upon the
completion of the Proposed A Share Issuance, as Mr. Zhang and Guangdong Rising Assets would
then collectively hold more than 30% of the voting rights of the Company.
Guangdong Rising Assets and Mr. Zhang have confirmed to the Company that, except for the
Pledge and the Voting Undertaking, Mr. Zhang does not have any other relationship with
Guangdong Rising Assets, its directors, supervisors or senior management, and Mr. Zhang and
Guangdong Rising Assets are not considered as parties acting in concert under the laws and
regulations in the PRC such as Administrative Measures for the Acquisition of Listed Companies.
Taking into account the SFC Letter and having considered the mandatory general offer obligation
under the Hong Kong Takeovers Code, the Company and Guangdong Rising Assets have mutually
agreed to terminate the Proposed A Share Issuance.
The termination of the Proposed A Share Issuance will not affect the effective controller status of
the Company held by the State-owned Assets Supervision and Administration Commission of the
People’s Government of Guangdong Province, and the controlling shareholder status of the
Company held by Guangdong Rising Assets under PRC laws and regulations. Guangdong Rising
Assets will continue to perform the responsibilities of the controlling shareholder of the Company
in accordance with applicable laws and regulations.
Since the Company has available credit of approximately RMB 1.9 billion and cash of
approximately RMB 767 million as at 30 September 2016 and the issuance of the Green Corporate
Bonds with a par value not exceeding RMB 1 billion by the Company has been approved China
Securities Regulatory Commission, the Company considers that the financial resources of the
Company are still adequate. The termination of the Proposed A Share Issuance will not have any
adverse effect on the operations, project construction and business development of the Company,
nor will it prejudice the interests of the Company and the shareholders of the Company. The
Company will consider implementing appropriate financing proposals to meet the capital
requirements of the Company as and when necessary and appropriate in compliance with the laws
and regulations of the PRC and Hong Kong.
By order of the Board
Dongjiang Environmental Company Limited*
Liu Ren
Chairman
Shenzhen, the PRC, 30 December 2016
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As at the date of this announcement, the Board of Directors of the Company comprises three
executive Directors, being Mr. Liu Ren, Mr. Chen Shu Sheng and Mr. Li Yong Peng; three
non-executive Directors, being Mr. Liu Boren, Mr. Deng Qian and Mr. Huang Yiming; and three
independent non-executive Directors, being Mr. Wong Hin Wing, Mr. Qu Jiu Hui and Mr. Zhu
Zhengfu.
*For identification purpose only
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