THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this circular, 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 circular.
If you are in any doubt as to any aspect about this circular or as to the action to be taken, you should consult
a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional
accountant or other professional adviser.
If you have sold or transferred all your shares in China Lumena New Materials Corp., you should at once
hand this circular, together with the enclosed form of proxy, to the purchaser(s) or the transferee(s) or to the
licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer
was effected for transmission to the purchaser(s) or transferee(s).
This circular appears for information purposes only and does not constitute an invitation or offer to acquire,
purchase or subscribe for securities of China Lumena New Materials Corp..
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 67)
PROPOSED ISSUE TO STABLE INVESTMENT CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
CHINA INVESTMENT CORPORATION, AND
CITIC CAPITAL CHINA ACCESS FUND LIMITED
OF 6 PER CENT CONVERTIBLE BONDS DUE 2014
CONVERTIBLE INTO ORDINARY SHARES OF
CHINA LUMENA NEW MATERIALS CORP.
A notice of the EGM to be held at Rose Room, Lower Level II, Kowloon Shangri-La Hotel, 64 Mody Road,
Kowloon, Hong Kong at 10:30 a.m. on 6 May 2011 is contained in this circular. Whether or not you are able
to attend the EGM, please complete and return the form of proxy enclosed herewith in accordance with the
instructions printed thereon to the Company’s branch share registrar in Hong Kong, Computershare Hong Kong
Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong or
the principal place of business of the Company in Hong Kong at Units 4607-8, 46th Floor, COSCO Tower, No.
183 Queen’s Road Central, Hong Kong, as soon as possible and in any event not less than 48 hours before the
time fixed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy
will not preclude you from attending and voting at the EGM or any adjournment thereof should you so wish.
18 April 2011
CONTENTS
Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
–i–
DEFINITIONS
In this circular, the following expressions shall have the meanings stated below unless the
context otherwise requires:
“Additional Bonds Closing Date”
the date of payment and delivery for the Additional
Convertible Bonds set out on the Option Exercise Notice
“Additional Conversion Shares”
Shares to be allotted and issued upon the conversion of
the Additional Convertible Bonds
“Additional Convertible Bonds”
convertible bonds with an aggregate principal amount of
up to U.S.$100,000,000 due 3 years from the Additional
Bonds Closing Date
“Additional Tax Amounts”
such additional amounts to be paid by the Company if
deduction or withholding of taxes, duties, assessments or
governmental charges is compelled by law
“Board”
the board of Directors
“Bondholder”
holder of a Convertible Bond or an Additional
Convertible Bond
“CITIC Capital”
CITIC Capital China Access Fund Limited, a private
investment fund managed by a subsidiary of CITIC
Capital Holdings Limited
“Closing Date”
a date as soon as practicable, but in no event later than 10
business days after satisfaction of the conditions
precedent set out in the Subscription Agreement, or such
other date as the Company and Subscribers may agree,
which may not be later than 15 June 2011
“Closing Price”
the price published in the daily quotation sheet published
by the Stock Exchange for such day
“Company”
China Lumena New Materials Corp., a company
incorporated in the Cayman Islands with limited liability
and the shares of which are listed on the main board of
the Stock Exchange
“Consolidated Group” or
“Group”
the Company and its subsidiaries taken as a whole
“Controlling Shareholder”
Mr. Suo Lang Duo Ji
–1–
DEFINITIONS
“Conversion Date”
the date on which any certificate and the original, signed
Conversion Notice is received by the Company
“Conversion Notice”
a completed notice of conversion in the form as set out in
the Subscription Agreement
“Conversion Price”
conversion price of the Convertible Bonds (and the
Additional Convertible Bonds)
“Conversion Rights”
rights of holders of the Convertible Bonds (and the
Additional Convertible Bonds) to convert such bonds into
duly authorised, validly issued, fully-paid and
unencumbered Shares
“Conversion Shares”
the Shares to be allotted and issued upon the exercise of
the Conversion Rights
“Convertible Bonds”
convertible bonds with an aggregate principal amount of
6.00% U.S.$120,000,000 convertible into Shares due
2014
“Designated Office”
principal place of business of the Company (or other
office notified to the Bondholders) which must be in
Hong Kong
“Director(s)”
director(s) of the board of the Company
“Early Redemption Amount”
in relation to a Convertible Bond to be redeemed on any
redemption date, an amount equal to 100% of the
principal amount of the Convertible Bonds redeemed plus
a premium that will provide a Bondholder who purchased
the Convertible Bond at an issue price of 100% of the
principal amount of the Convertible Bonds on the Closing
Date a gross compound yield of 20% per annum through
to the redemption date, calculated on a yearly basis using
a 360-day year consisting of 12 months of 30 days each
“EGM”
extraordinary general meeting of the Shareholders to
approve the specific mandate for the issue of the
Convertible Bonds, the Conversion Shares, the
Additional Convertible Bonds and the Additional
Conversion Shares
“Event of Default”
each event of default as set out in the Terms and
Conditions
–2–
DEFINITIONS
“Group”
the Company and its subsidiaries from time to time
“HK$”
Hong Kong dollar(s), the lawful currency of Hong Kong
“Hong Kong”
Hong Kong Special Administrative Region of the
People’s Republic of China
“Interest Payment Date”
31 March, 30 June, 30 September and 31 December in
each year
“Interest Period”
in respect of any Convertible Bonds, the period beginning
on (and including) the Closing Date applicable to such
Convertible Bonds and ending on (but excluding) the first
Interest Payment Date and each successive period
beginning on (and including) an Interest Payment Date
and ending on (but excluding) the next succeeding
Interest Payment Date
“Last Trading Day”
6 April 2011
“Latest Practicable Date”
14 April 2011, being the latest practicable date prior to
the printing of this circular for ascertaining certain
information contained herein
“Listing Committee”
the listing committee of the Stock Exchange
“Listing Rules”
the Rules Governing the Listing of Securities on the
Stock Exchange
“Material Adverse Effect”
(i) a material adverse effect on the condition (financial or
otherwise), results of operations, business or properties
of the Consolidated Group taken as a whole, or (ii) a
material and adverse effect on the ability of the Company
to perform its obligations under the Subscription
Agreement or the Convertible Bonds
“Maturity Date”
the date falling 3 years from the Closing Date
“Mr. Suo Lang Duo Ji”
Suo Lang Duo Ji (索郎多吉) (formerly known as
Dominique Shannon (索郎多吉) and Li Yan (李炎)),
being the founder and controlling Shareholder of the
Company
“Option Exercise Notice”
a written notice served by the Subscribers to exercise the
option to subscribe for the Additional Convertible Bonds
“PRC”
People’s Republic of China
–3–
DEFINITIONS
“Relevant Event”
the Shares cease to be listed or admitted to trading on the
Stock Exchange
“Relevant Event Redemption
Date”
be the 14th day after the expiry of 60 days either
following a Relevant Event, or, if later, 60 days following
the date upon which a notice of redemption is given to
Bondholder by the Company
“RMB”
Renminbi, the lawful currency of the PRC
“Securities Act”
the U.S. Securities Act of 1933 (as amended)
“Shareholder(s)”
the holder(s) of the Share(s)
“Share(s)”
the ordinary share(s) of US$0.00001 each in the share
capital of the Company
“SIC”
Stable Investment Corporation, a wholly-owned
subsidiary of China Investment Corporation
“Specific Mandate”
a specific mandate to be sought at the EGM to authorise
the Directors to issue the Convertible Bonds, the
Conversion Shares, the Additional Convertible Bonds
and the Additional Conversion Shares
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Subscribers”
SIC and CITIC Capital
“Subscription Agreement”
the subscription agreement relating to U.S.$120,000,000
6% convertible bonds due 2014 convertible into ordinary
shares of the Company amongst the Company, SIC and
CITIC Capital dated 7 April 2011
“Terms and Conditions”
the terms and conditions of the Convertible Bonds as set
out in schedule 1 to the Subscription Agreement
“Trading Day”
a day when the Stock Exchange is open for dealing
business, provided that if no Closing Price is reported for
one or more consecutive dealing days such day or days
will be disregarded in any relevant calculation and must
be deemed not have existed when ascertaining any period
of dealing days
“U.S.$”
United States dollars
“%”
per cent.
–4–
LETTER FROM THE BOARD
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 67)
Executive Directors:
Mr. Zhang Daming
Mr. Yu Man Chiu Rudolf
Mr. Gou Xingwu
Mr. Zhang Zhigang
Mr. Tan Jianyong
Registered Office:
Appleby Trust (Cayman) Limited
Clifton House
75 Fort Street
P.O. Box 1350
Grand Cayman KY1-1108
Cayman Islands
Independent Non-Executive Directors:
Mr. Koh Tiong Lu, John
Mr. Wong Chun Keung
Mr. Xia Lichuan
Principal place of business in
Hong Kong:
Units 7503B, 7504 and 7505
Level 75 International Commerce Centre
1 Austin Road West
Kowloon, Hong Kong
18 April 2011
To the Shareholders
Dear Sir or Madam,
PROPOSED ISSUE TO STABLE INVESTMENT CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
CHINA INVESTMENT CORPORATION, AND
CITIC CAPITAL CHINA ACCESS FUND LIMITED
OF 6 PER CENT CONVERTIBLE BONDS DUE 2014
CONVERTIBLE INTO ORDINARY SHARES OF
CHINA LUMENA NEW MATERIALS CORP.
1.
INTRODUCTION
We refer to the announcement of the Company dated 7 April 2011 in relation to the
proposed issue to Stable Investment Corporation, a wholly owned subsidiary of China
Investment Corporation, and CITIC Capital China Access Fund Limited of 6 per cent
convertible bonds due 2014 convertible into ordinary shares of China Lumena New Materials
Corp..
–5–
LETTER FROM THE BOARD
The purpose of this circular is to provide you with information regarding the Subscription
Agreement, the material terms and conditions of the Convertible Bonds and the Additional
Convertible Bonds and a notice of the EGM.
2.
THE SUBSCRIPTION AGREEMENT
Date:
7 April 2011
Parties:
1.
The Company as issuer of the Convertible Bonds, the Additional Convertible Bonds
(if any) the Conversion Shares and the Additional Conversion Shares (if any)
2.
SIC, a wholly owned subsidiary of China Investment Corporation, and CITIC
Capital as the Subscribers
As at the Latest Practicable Date and to the Directors’ best knowledge, CITIC Capital
held 17,200,000 Shares and Flourish Investment Corporation, a wholly-owned subsidiary of
China Investment Corporation and an associate (as defined under the Listing Rules) of SIC,
held 5,420,000 Shares, representing approximately 0.32% and 0.10%, respectively, of the
issued share capital of the Company. Save as set out above, to the best of the Directors’
knowledge, information and belief, having made all reasonable enquiries, the Subscribers and
their respective ultimate beneficial owners are third parties independent of and not connected
with the Company or any connected persons (as defined under the Listing Rules) of the
Company.
Subscription
Subject to the fulfillment of the conditions set out below in the section headed
“Conditions Precedent”, the Board has agreed to issue and the Subscribers have severally and
not jointly agreed to subscribe and pay for the Convertible Bonds on the Closing Date in an
aggregate principal amount of U.S.$120,000,000. SIC, a wholly owned subsidiary of China
Investment Corporation and CITIC Capital have severally and not jointly agreed to subscribe
for the Convertible Bonds in a principal amount of U.S.$90,000,000 and U.S.$30,000,000
respectively.
None of the Convertible Bonds will be offered to the retail public in Hong Kong.
Additional Convertible Bonds
The Company has further granted the Subscribers an option to subscribe for the
Additional Convertible Bonds in an aggregate principal amount of up to U.S.$100,000,000 at
an issue price of 100% of the principal amount of the Additional Convertible Bonds. The
amount of the Additional Convertible Bonds to be respectively subscribed by each Subscriber
shall be solely determined by the Subscribers themselves provided that the aggregate amount
of the Additional Convertible Bonds shall not exceed U.S.$100,000,000.
–6–
LETTER FROM THE BOARD
The option to subscribe for the Additional Convertible Bonds is exercisable by each
Subscriber by serving on the Company an Option Exercise Notice at any time and from time
to time during the period commencing on the Closing Date and ending on the first anniversary
of the Closing Date, which notice shall set out the principal amount of, and the time and date
of payment and delivery for, the Additional Convertible Bonds to be issued upon exercise of
such Option.
None of the Additional Bonds will be offered to the retail public in Hong Kong.
The terms and conditions of the Additional Convertible Bonds will be the same as the
Terms and Conditions in all respects except for:
(a)
the conversion price in respect of the Additional Convertible Bonds, which
conversion price shall be the average of the Closing Prices for one Share for the
twenty consecutive Trading Days ending on the Trading Day immediately preceding
the date of the relevant option exercise notice, provided that the conversion price for
the Additional Convertible Bonds shall not be less than the then applicable
Conversion Price for the Convertible Bonds; and
(b)
the first payment of interest.
It is understood that in relation to the Additional Convertible Bonds, any reference in the
Terms and Conditions to the Closing Date is to be read as a reference to the Additional Bonds
Closing Date.
Conditions Precedent
The obligations of each of the Subscribers to subscribe and pay for the Convertible Bonds
are subject to, amongst others, the following conditions precedent:
1.
Compliance: up to and on the Closing Date:
(i)
all the representations and warranties of the Company set out in the
Subscription Agreement shall be accurate and correct (to the extent not already
subject to materiality or Material Adverse Effect, in all material respects) at,
and as if made on, the Closing Date (with reference to the facts and
circumstances then subsisting); and
(ii) the Company shall have complied with the undertakings set out in the
Subscription Agreement to be performed on or before the Closing Date;
2.
Certificate: there shall have been delivered to each Subscriber a certificate, dated as
of the Closing Date, of a duly authorised officer of the Company, to the effect of the
matters set out in paragraph 1 above;
3.
Hong Kong Legal Opinion: on or prior to the Closing Date there shall be delivered
to the Subscribers in a customary form reasonably satisfactory to the Subscribers, an
opinion, dated the Closing Date, of legal advisors to the Company as to matters of
Hong Kong law;
–7–
LETTER FROM THE BOARD
4.
Cayman Legal Opinion: on or prior to the Closing Date there shall be delivered to
the Subscribers in a customary form reasonably satisfactory to the Subscribers, an
opinion, dated the Closing Date, of legal advisors to the Company as to matters of
Cayman Islands law;
5.
Listing Approval: on or prior to the Closing Date the Company shall have obtained
from the Stock Exchange listing approval in relation to the Conversion Shares and
the Additional Conversion Shares;
6.
Mandate: on or prior to the Closing Date the Company shall have obtained a
mandate from its shareholders to allot and issue the Convertible Bonds, the
Conversion Shares, the Additional Convertible Bonds and the Additional
Conversion Shares;
7.
Audit: the auditors of the Company which audited the financial statements of the
Consolidated Group have not qualified their report on the financial statements for
the three years ended 31 December 2010, 2009 and 2008 in any manner which, in
the reasonable opinion of the Subscribers, is materially adverse to the Company;
8.
Material Adverse Change: no change has occurred since 31 December 2010 with
respect to the Company or any other member of the Consolidated Group which has
or would reasonably be expected to have a Material Adverse Effect;
9.
Controlling Shareholder Undertaking: the Controlling Shareholder has executed and
delivered a deed of undertaking pursuant to which he undertakes that he shall:
(a)
at all time from, and including, the Closing Date to, and including, the earlier
of the date falling 24 months from the Closing Date and the date on which all
of the Convertible Bonds have either been redeemed or converted (the “Initial
Period”), own, legally or beneficially and directly or indirectly, at least 30% of
the outstanding Shares; and
(b)
at all times from, and including, the date falling 1 day after the last day of the
Initial Period to, and including, the earlier of the Maturity Date and the date on
which all of the Convertible Bonds have either been redeemed or converted,
own, legally or beneficially and directly or indirectly, at least 25% of the
outstanding Shares; and
10. No Adverse Law, Action or Decision or Injunction: there shall be no law, statute,
order, rule or regulation of, and no action, suit, investigation or proceedings pending
by, any governmental authority, court or the Stock Exchange that seeks to restrain,
enjoin or prevent the consummation of the transactions contemplated under the
Subscription Agreement, and there shall not be in effect any law, order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated under the Subscription Agreement.
–8–
LETTER FROM THE BOARD
The Subscribers may, at their discretion, waive any or all of the conditions set forth
above. If any of the conditions set forth above is not satisfied or waived on or before the 15
June 2011, the Company and the Subscribers shall be released and discharged from their
respective obligations under the Subscription Agreement.
Representations, Warranties and Indemnity
The Company has given customary representations warranties and indemnities to the
Subscribers under the Subscription Agreement.
Termination
The Subscribers may by giving notice at any time before the time on the Closing Date
when payment would otherwise be due, terminate the Subscription Agreement in any of the
following circumstances:
3.
1.
if there is any material breach of, or any event rendering untrue or incorrect in any
material respect, any of the warranties and representations of the Company or any
material failure by the Company to perform its undertakings or agreements in the
Subscription Agreement;
2.
if an Event of Default has occurred;
3.
if there has been a suspension of trading of the Shares by the Stock Exchange for
five consecutive business days occurring after the date of the Subscription
Agreement; or
4.
if any of the conditions precedent has not been satisfied or waived by the
Subscribers on or prior to 15 June 2011.
PRINCIPAL TERMS AND CONDITIONS OF THE CONVERTIBLE BONDS
The principal terms and conditions of the Convertible Bonds are summarized as follows:
Issuer
The Company
Principal amount
The aggregate principal amount of the Convertible Bonds
will be U.S.$120,000,000
Issue price
100% of the principal amount of the Convertible Bonds
–9–
LETTER FROM THE BOARD
Redemption price
(i) in the case of redemption on the Maturity Date by the
Company, 148.15% of the principal amount of the
Convertible Bonds, together with accrued and unpaid
interest; (ii) in the case of redemption for delisting
requested by the Bondholders or events of default, an
amount equal to the Early Redemption Amount.
Interest
The Convertible Bonds bear interest at the rate of 6% per
annum payable quarterly in arrear on 31 March, 30 June, 30
September and 31 December commencing on the first
Interest Payment Date after the passage of a full Interest
Period after the Closing Date.
Conversion period
A Bondholder may exercise its Conversion Right subject to
and upon compliance with the provisions of the Terms and
Conditions at any time from and including the date falling 6
months from the Closing Date up to the close of business in
Hong Kong on the day falling seven days prior to the
Maturity Date.
Conversion Price
The initial Conversion Price is HK$2.81 per Share. The
number of Shares to be issued or transferred and delivered
on exercise of conversion of a Convertible Bond shall be
determined by dividing the U.S. dollar principal amount of
such bond to be converted translated into Hong Kong
dollars
at
the
fixed
exchange
rate
of
U.S.$1.00=HK$7.77581 by the Conversion Price.
The Conversion Price is subject to adjustment in
circumstances customary for convertible bonds, including,
amongst other things, upon the occurrence of an alteration
to the nominal value of the Shares as a result of
consolidation, subdivision or reclassification, capitalization
of profits or reserves, capital distributions, rights issues of
Shares or options over Shares, rights issues of other
securities, issues of Shares at less than current market price,
other issues of securities of the Company at less than current
market price modification of rights of conversion and other
offers to Shareholders.
The Company will publish an announcement upon any
adjustment to the Conversion Price.
– 10 –
LETTER FROM THE BOARD
The Conversion Price must not under any circumstances be
less than the par value of the Shares (currently at
U.S.$0.00001) on the Conversion Date unless permitted by
law and in compliance with the Listing Rules.
Formation and
denomination
The Convertible Bonds and the Additional Convertible
Bonds will be in registered form and in denomination of
U.S.$10,000,000 each.
Status
The Convertible Bonds, when issued, will constitute direct,
unconditional, unsubordinated and unsecured obligations of
the Company and will at all times rank pari passu and
rateably, without any preference among themselves, and
equally with all other existing and future unsecured and
unsubordinated obligations of the Company other than those
preferred by law that are mandatory and of general
application.
Transfer
A Bondholder may assign or transfer any of the Convertible
Bonds registered in its name (i) without consent from the
Company, to any of its affiliate and (ii) with the prior
written consent of the Company, to any third party (such
consent not to be unreasonable withheld or delayed, it being
understood, without limitation, that it will be reasonable for
the Company to withhold consent to any assignment or
transfer to a third party engaged in (A) the mining,
processing or manufacturing of natural thenardite products
or (B) the production, development and sales of
polyphenylene sulfide products).
Ranking of Conversion
Shares
The Conversion Shares to be issued upon conversion of the
Convertible Bonds will (i) be duly and validly issued,
fully-paid and non-assessable; (ii) rank pari passu and carry
the same rights and privileges in all respects as the other
Shares then outstanding; (iii) be entitled to all dividends and
other distributions declared, paid or made by the Company;
and (iv) be freely transferable, free and clear of all liens,
charges, encumbrances, security interests or claims of third
parties and not be subject to calls for further payments.
Maturity
Unless previously redeemed, converted or purchased and
cancelled, the Company will on the Maturity Date, redeem
the Convertible Bonds at 148.15% of their principal amount
together with accrued and unpaid interest.
– 11 –
LETTER FROM THE BOARD
Redemption for
delisting
Following the occurrence of a Relevant Event, each
Bondholder will have the right to require the Company to
redeem all and not some only of that Bondholder’s
Convertible Bonds on the Relevant Event Redemption Date
at a redemption price equal to the Early Redemption
Amount. To exercise such right, the holder of the relevant
Bond must complete, sign and deposit at the Designated
Office a duly completed and signed notice of redemption
(which will be irrevocable once served) together with the
certificate evidencing the Convertible Bonds to be redeemed
by not later than 60 days following a Relevant Event, or, if
later, 60 days following the date upon which notice is given
to Bondholder by the Company.
Event of Default
The occurrence of any of the following events shall be an
Event of Default under the Terms and Conditions:
(a)
the Company defaults in any payment due in respect of
the Convertible Bonds and such default is not
remedied in any applicable grace period;
(b)
the Company defaults in (i) delivering any Conversion
Shares as and when required, or (ii) the performance of
any obligation under the Convertible Bonds (other
than the obligation to make any payment in respect of
the Convertible Bonds) and such default is not
remedied within any applicable grace period;
(c)
any indebtedness of the Company or any principal
subsidiary (as defined in the Terms and Conditions) in
an aggregate amount of at least U.S.$25,000,000 is
declared to be repayable before the scheduled maturity
date following a default in respect of the terms thereof
which has not been remedied;
(d)
a resolution is passed or a court order is made for the
winding-up of the Company or any of its principal
subsidiaries, (otherwise than for the purposes of a
solvent reorganisation which has previously been
approved by the shareholders of the Company or the
relevant principal subsidiary and pursuant to which the
surviving entity shall assume all of the relevant
obligations under the Convertible Bonds);
– 12 –
LETTER FROM THE BOARD
(e)
any person takes possession of, or a receiver or similar
officer is appointed over, a material part of the assets
or undertaking of the Company or any of its principal
subsidiaries;
(f)
(i)
the Company or any of its principal subsidiaries
is (or could reasonably be expected to be deemed
by law to be) insolvent or, without lawful cause
stops or threatens in writing to stop payment of
its debts, proposes to make any agreement for the
rescheduling of its debts, makes a general
arrangement with the relevant creditors in respect
of any such debts or a moratorium is declared in
respect of its the debts or those of any of its
principal subsidiaries;
(ii) the Company or any of its principal subsidiaries
(otherwise than for the purposes of a solvent
reorganisation as referred to in paragraph (d)
above) ceases or evidences an intention to cease
to carry on business;
(g)
non-frivolous proceedings are threatened or initiated
against the Company or any principal subsidiaries
under applicable bankruptcy laws and such
proceedings have not been discharged or stayed within
a period of 30 days; or
(h)
the Company or any of its principal subsidiaries
initiates proceedings seeking adjudication of
bankruptcy or other similar procedures or the
appointment of an administrator or other similar
official under any applicable bankruptcy laws;
(i)
any legal process is enforced against a part of the
property, assets or revenue of the Company or any
principal subsidiary, which is material and is not
discharged within 30 days;
(j)
any event occurs under the law of any relevant
jurisdiction which has an analogous effect to any of the
events referred to in any of the foregoing paragraphs;
– 13 –
LETTER FROM THE BOARD
(k)
any action at any time required to be fulfilled or done
in order (i) to enable the Company and its subsidiaries
(as defined in the Terms and Conditions) lawfully to
exercise their rights and perform their obligations
under the Convertible Bonds, (ii) to ensure that those
obligations are legally binding and enforceable and
(iii) to make the Convertible Bonds admissible in
evidence in the courts of the Cayman Islands, Hong
Kong or England is not fulfilled or done; or
(l)
(i) any step is taken to compulsorily acquire or
nationalise a material part of the assets of the
Company or the principal subsidiaries; or (ii) the
Company or any of the principal subsidiaries is
prevented from exercising normal control over a
material part of its property, assets and turnover.
Upon the occurrence of any of the foregoing Events of
Default, holders of 25 per cent. of the aggregate principal
amount of Convertible Bonds then outstanding may declare
the Convertible Bonds immediately due and payable at a
redemption price equal to the Early Redemption Amount.
4.
Voting rights
The Bondholders will not have any right to attend or vote at
any meeting of the Company by virtue of them being
Bondholders, and until and unless they have converted their
Convertible Bonds into Shares.
Listing
No application will be made for the listing of the
Convertible Bonds on the Stock Exchange or any other
stock or securities exchange. Application will be made for
the listing of, and permission, deal in the Conversion Shares
and the Additional Conversion Shares.
Governing law
Hong Kong law
TERMS AND CONDITIONS OF THE ADDITIONAL CONVERTIBLE BONDS
The terms and conditions of the Additional Convertible Bonds, the aggregate principal
amount of which will be up to U.S.$100,000,000, will be the same as the Terms and Conditions
in all respects except for:
(a)
the conversion price in respect of the Additional Convertible Bonds, which
conversion price shall be the average of the Closing Prices for one Share for the
twenty consecutive Trading Days ending on the Trading Day immediately preceding
the date of the relevant Option Exercise Notice, provided that the conversion price
for the Additional Convertible Bonds shall not be less than the then applicable
Conversion Price for the Convertible Bonds; and
(b)
the first payment of interest.
– 14 –
LETTER FROM THE BOARD
It is understood that in relation to the Additional Convertible Bonds, any reference in the
Terms and Conditions to the Closing Date is to be read as a reference to the Additional Bonds
Closing Date. The ranking of the Additional Conversion Shares to be issued upon conversion
of the Additional Convertible Bonds will be the same as the ranking of the Conversion Shares.
5.
COMPARISON OF CONVERSION PRICE
The initial Conversion Price of HK$2.81 per Share represents:
6.
1.
a premium of approximately 0.72% to the average Closing Price of the Shares of
HK$2.79 per Share for the last 20 consecutive Trading Days up to and including the
Last Trading Day;
2.
a discount of approximately 1.40% to the average Closing Price of the Shares of
HK$2.85 per Share for the last 10 consecutive trading days up to and including the
Last Trading Day;
3.
a discount of approximately 3.77% to the average Closing Price of the Shares of
HK$2.92 per Share for the last 5 consecutive trading days up to and including the
Last Trading Day;
4.
a discount of approximately 9.65% to the Closing Price of the Shares of HK$3.11
per Share as quoted on the Stock Exchange on the Last Trading Day; and
5.
a discount of approximately 16.22% to the Closing Price of the Shares of HK$3.35
per Share as quoted on the Stock Exchange on the Latest Practicable Date.
EFFECT ON THE SHARE CAPITAL OF THE COMPANY AS A RESULT OF
CONVERSION
Assuming full conversion of the Convertible Bonds at the initial Conversion Price, the
Convertible Bonds will be convertible into approximately 332,063,060 Shares, representing
approximately 6.09% of the issued share capital of the Company as at the Latest Practicable
Date and approximately 5.74% of the issued share capital of the Company as enlarged by the
issue of the Conversion Shares.
Assuming issue of the Additional Convertible Bonds in the aggregate principal amount of
U.S.$100,000,000 and full conversion of the Convertible Bonds and the Additional Convertible
Bonds at the initial Conversion Price, the Convertible Bonds and the Additional Convertible
Bonds will be convertible into approximately 608,782,278 Shares, representing approximately
11.17% of the issued share capital of the Company as at the Latest Practicable Date and
approximately 10.04% of the issued share capital of the Company as enlarged by the issue of
the Conversion Shares and the Additional Conversion Shares. The Conversion Shares and the
Additional Conversion Shares to be issued upon conversion of the Convertible Bonds and the
Additional Convertible Bonds will rank pari passu in all respects with the Shares then in issue
on the relevant conversion date.
– 15 –
LETTER FROM THE BOARD
The following table summarises the potential effects on the shareholding structure of the
Company as a result of the issue of the Convertible Bonds and the Additional Convertible
Bonds (by reference to the issued share capital of the Company as at the Latest Practicable Date
and assuming full conversion of the Convertible Bonds and the Additional Convertible Bonds):
Name of shareholders
Notes
“Mr. Suo Lang Duo Ji and
parties acting in concert
with him and their
respective associates”
(1)
Subscribers and their
respective associates
(2)
Shareholding as at the
Latest Practicable Date
Assuming the Convertible
Bonds are fully converted into
Shares (subject to adjustment)
at the initial Conversion Price
Assuming the Additional
Convertible Bonds are issued
in the principal amount of
U.S.$100,000,000 and the
Convertible Bonds and the
Additional Convertible Bonds
are fully converted into
Shares (subject to adjustment)
at the initial Conversion Price
Number of
Shares
% of
shareholding
(approximate)
Number of
Shares
% of
shareholding
(approximate)
Number of
Shares
% of
shareholding
(approximate)
3,472,949,565
63.69%
3,472,949,565
60.04%
3,472,949,565
57.29%
22,620,000
0.41%
354,683,060
6.13%
631,402,278
10.42%
Other public shareholders
1,957,194,502
35.90%
1,957,194,502
33.83%
1,957,194,502
32.29%
Total
5,452,764,067
100.00%
5,784,827,127
100.00%
6,061,546,345
100.00%
Note 1: The shareholdings of Mr. Suo Lang Duo Ji and parties acting in concert with him and their respective
associates are as follows:
Name of shareholders
Mr. Suo Lang Duo Ji
Mr. Wang Chun Lin and
his wife
Mr. Zhang Songyi and
his wife
Moonchu
Mr. Wan Keung
Yang Huaijin and Cao
Zhong
Li Feng, Liu Meifang,
Li Bing, Chan Tim
Shing, Jiang Guorong
Wu Chi Pan
Qin Ke Bo
Song Jifeng
Cheng Zai Zhong
Ho Ying
Wang Jianfeng
Zhang Weibing
Zhang Yinghua
Chung Mei Chai and Chu
Chuang Chieh
Total
Notes
Shareholding as at the
Latest Practicable Date
% of
Number of shareholding
Shares (approximate)
Assuming the Convertible
Bonds are fully converted into
Shares (subject to adjustment)
at the initial Conversion Price
% of
Number of shareholding
Shares (approximate)
Assuming the Additional
Convertible Bonds are issued
in the principal amount of
U.S.$100,000,000 and the
Convertible Bonds and the
Additional Convertible Bonds
are fully converted into
Shares (subject to adjustment)
at the initial Conversion Price
% of
Number of shareholding
Shares (approximate)
a
1,878,549,403
34.45%
1,878,549,403
32.47%
1,878,549,403
30.99%
b
131,679,122
2.41%
131,679,122
2.28%
131,679,122
2.17%
c
d
e
444,552,288
265,165,255
272,573,466
8.15%
4.86%
5.00%
444,552,288
265,165,255
272,573,466
7.68%
4.58%
4.71%
444,552,288
265,165,255
272,573,466
7.33%
4.37%
4.50%
f
115,614,207
2.12%
115,614,207
2.00%
115,614,207
1.91%
g
h
i
j
k
l
m
n
o
81,778,638
65,043,060
59,130,090
32,169,354
14,782,523
8,869,514
8,869,514
6,265,597
391
1.50%
1.19%
1.08%
0.59%
0.27%
0.16%
0.16%
0.12%
0.01%
81,778,638
65,043,060
59,130,090
32,169,354
14,782,523
8,869,514
8,869,514
6,265,597
391
1.41%
1.12%
1.02%
0.56%
0.26%
0.15%
0.15%
0.11%
0.01%
81,778,638
65,043,060
59,130,090
32,169,354
14,782,523
8,869,514
8,869,514
6,265,597
391
1.35%
1.07%
0.98%
0.53%
0.24%
0.15%
0.15%
0.09%
0.01%
p
87,907,143
1.62%
87,907,143
1.53%
87,907,143
1.45%
3,472,949,565
63.69%
3,472,949,565
60.04%
3,472,949,565
57.29%
– 16 –
LETTER FROM THE BOARD
(a)
Mr. Suo Lang Duo Ji has an interest in 1,878,549,403 Shares which are held through Ascend Concept
Technology Limited, Nice Ace Technology Limited and himself.
(b)
The interest of Mr. Wang Chun Lin and his wife is held through AAA Mining Limited, a company which
is ultimately beneficially owned as to 50% by Mr. Wang Chun Lin and as to 50% by his wife and Triple
A Investments Limited which is a company ultimately beneficially owned as to 50% by Mr. Wang Chun
Lin, a non-executive Director, and as to 50% by his wife, Ms. Caroline Chan Hiu Lai.
(c)
The interest of Mr. Zhang Songyi and his wife is held through Mandra Esop Limited and Mandra
Materials Limited, each of which is a company ultimately beneficially owned as to 50% by Mr. Zhang
Songyi and as to 50% by his wife, Ms. Mui Bing How.
(d)
The interest of Moonchu Foundation Limited is held through Woo Foong Hong Limited which is a
company ultimately beneficially owned by Moonchu Foundation Limited, and Mandra Mirabilite
Limited which is a company wholly owned by Woo Foong Hong Limited. Moonchu is a tax exempt
charity established by Mr. Zhang Songyi and his family.
(e)
The interest of Mr. Wan Keung is held through Sky Success, a company which is ultimately beneficially
wholly-owned by Mr. Wan Keung.
(f)
The interest of Yang Huaijin and Cao Zhong is held through Fine Talent Group Limited, a company
which is owned by Yang Huaijin and Cao Zhong as to 94.00% and 6.00% respectively.
(g)
The interest of Li Feng, Liu Meifang, Li Bing, Chan Tim Shing and Jiang Guorong is held through
Unique Speed Investments Limited, a company which is owned by Li Feng, Liu Meifang, Li Bing, Chan
Tim Shing and Jiang Guorong as to 41.92%, 23.98%, 17.96%, 11.97% and 4.17% respectively.
(h)
The interest of Wu Chi Pan is held through Raybest Investment Ltd, a company which is ultimately
beneficially wholly-owned by Wu Chi Pan.
(i)
The interest of Qin Ke Bo is held through Marble King Investment Ltd, a company which is ultimately
beneficially wholly-owned by Qin Ke Bo.
(j)
The interest of Song Jifeng is held through Joint Peak Investments Limited, a company which is
ultimately beneficially wholly-owned by Song Jifeng.
(k)
The interest of Cheng Zai Zhong is held through Sino Reach Investments Limited, a company which is
ultimately beneficially wholly-owned by Cheng Zai Zhong.
(l)
The interest of Ho Ying is held through Orient Value Limited, a company which is ultimately
beneficially wholly-owned by Ho Ying.
(m)
The interest of Wang Jianfeng is held through Profuse Investment Holding Limited, a company which
is ultimately beneficially wholly-owned by Wang Jianfeng.
(n)
The interest of Zhang Weibing is held through True Express Limited, a company which is ultimately
beneficially wholly-owned by Zhang Weibing.
(o)
The interest of Zhang Yinghua is held through China-Land Biotech Holdings Limited, a company which
is ultimately beneficially wholly-owned by Zhang Yinghua.
(p)
The interest of Chung Mei Chai and Chu Chuang Chieh is held through Ying Mei, a company which is
ultimately beneficially owned by Chung Mei Chai and Chu Chuang Chieh as to 60% and 40%
respectively.
– 17 –
LETTER FROM THE BOARD
Note 2: As at the Latest Practicable Date and to the Directors’ best knowledge, CITIC Capital held 17,200,000
Shares and Flourish Investment Corporation, an associate of SIC, held 5,420,000 Shares, representing
0.32% and 0.10%, respectively of the issued share capital of the Company. Upon the conversion of the
Convertible Bonds at the initial Conversion Price and assuming each of CITIC Capital, Flourish Investment
Corporation and SIC have not dealt in any of the Shares, CITIC Capital will hold 100,215,765 Shares,
Flourish Investment Corporation, an associate of SIC, will continue to hold 5,420,000 Shares, and SIC will
hold 249,047,295 Shares, representing 1.73%, 0.09% and 4.30%, respectively, of the issued share capital
of the Company as enlarged by the full conversion of the Convertible Bonds. Upon the conversion of
Additional Convertible Bonds at the initial Conversion Price, 276,719,217 Shares will be issued and the
respective shareholdings of CITIC Capital and SIC will depend on the actual amount of Additional
Convertible Bonds subscribed by each of them.
Note 3: Due to rounding, the percentages of shareholding interests held in the Company as set out above are
approximate figures.
As at the Latest Practicable Date, the Company had, pursuant to the share option scheme
adopted by the Company, 244,514,502 outstanding share options granted, carrying rights to
subscribe for 244,514,502 Shares, out of which 6,573,173, 15,500,000, 12,900,000 and
87,960,000 share options are exercisable at the exercise price of HK$2.00, HK$3.59, HK$2.64
and HK$3.28 respectively. 121,581,329 share options remain outstanding and vested as at the
Latest Practicable Date. Save as disclosed above, at the Latest Practicable Date, the Company
has no outstanding convertible securities which are convertible into Shares.
7.
PUBLIC FLOAT
As illustrated in the table above, the Company will be able to comply with the public float
requirement under the Listing Rules assuming full conversion of the Convertible Bonds and the
Additional Convertible Bonds.
8.
USE OF PROCEEDS
The estimated net proceeds from the issue of the Convertible Bonds, after deduction of
expenses, amount to approximately U.S.$118 million. In the event of the Subscribers
exercising their option to subscribe for the Additional Convertible Bonds, the estimated net
proceeds from the issue of the Convertible Bonds and the issue of the Additional Convertible
Bonds, after deduction of expenses, amount to approximately U.S.$217 million.
The Company intends to use the net proceeds for capital expenditure and working capital
purposes as the Group intends to expand its production capacity and carry out technical
improvements in 2011 and 2012, including:
–
acquisition of new thenardite mines in Sichuan together with mining rights, which
may provide an additional annual production capacity of up to 600,000 tons per
annum (“tpa”) of powder and specialty thenardite;
–
construction of a PPS resin plant with an annual capacity of 25,000 tpa;
–
construction of a PPS fibre plant with an annual capacity of 15,000 tpa; and
–
maintenance of mines, plant and equipment and technical improvements on existing
production lines and facilities.
– 18 –
LETTER FROM THE BOARD
In addition, the Group has other funding needs, including the cash consideration for the
acquisition of Sino Polymer New Materials Co., Ltd by the Company in the aggregate amount
of approximately U.S.$141 million payable no later than on 13 May 2011 and the settlement
of the senior secured fixed term notes issued by Sino Polymer New Materials Co., Ltd., dated
5 November 2010 in the aggregate amount of U.S.$90 million by no later than on 13 May 2011.
It is expected that capital expenditure and working capital in an aggregate amount of
approximately RMB2 billion will be required in 2011 in connection with the intended capacity
expansion and technical improvement described above, and the net proceeds from the issue of
the Convertible Bonds and the Additional Convertible Bonds (if any) are intended to be used
to fund a portion thereof.
9.
REASONS FOR ENTERING INTO THE SUBSCRIPTION AGREEMENT
The Group operates in a competitive environment and timely capacity expansion and
technical improvement is critical to maintaining its leading position as a producer of high-end,
high performance specialty new materials. The issue of the Convertible Bonds and the
Additional Convertible Bonds (if any) will allow the Company to raise sufficient funds to
support and realize its expansion plans, maintain its competitive edge and generate further
returns for all Shareholders. The transaction under the Subscription Agreement and the issue
of the Convertible Bonds and the Additional Convertible Bonds will therefore provide strong
capital support for the development of the Company’s key business and enable the Company
to enhance its market presence and competitiveness.
The Directors (including the independent non-executive Directors) consider the terms of
the Subscription Agreement, the Convertible Bonds and the Additional Convertible Bonds are
on normal commercial terms and are fair and reasonable taking into account the following:
–
the initial Conversion Price was determined after arm’s length negotiation between
the Company and the Subscribers with reference to the average of the Closing Prices
for one Share for the twenty consecutive Trading Days ending on the Last Trading
Date;
–
the interest rate of the Convertible Bonds and the Additional Convertible Bonds is
determined with reference to the prime rate of Hong Kong and coupon rate of 12%
on the Company’s senior notes due 2014;
–
the maturity date of the Convertible Bonds and the Additional Convertible Bonds (if
any) 3 years from the Closing Date extends beyond 2012 by which time the Group
intends to have completed its envisaged expansion plans;
–
a Bondholder may exercise its Conversion Right only from and including the date
falling 6 months from the Closing Date; and
–
the transferability of the Convertible Bonds and the Additional Convertible Bonds
(if any) is restricted as set out in the Terms and Conditions.
– 19 –
LETTER FROM THE BOARD
Notwithstanding the potential dilution effect on the shareholding of the existing
Shareholders upon any conversion of the Convertible Bonds and the Additional Convertible
Bonds (if any), the Directors (including the independent non-executive Directors) consider that
the Subscription Agreement and the transactions contemplated thereunder are in the interests
of the Company and the Shareholders as a whole as it represents opportunities to raise
additional capital for the Company without having an immediate dilution effect on the
shareholding of the existing Shareholders in order to satisfy the financial needs of the Group.
The Directors consider the Subscribers to be reputable anchor investors which, upon
conversion of the Convertible Bonds or Additional Convertible Bonds (if any), would expand
and diversify the Company’s shareholder base and thereby strengthen the Company’s capital
basis.
10. IMPLICATIONS UNDER THE LISTING RULES
As at the Latest Practicable Date and to the Directors’ best knowledge, CITIC Capital
held 17,200,000 Shares and Flourish Investment Corporation, an associate of SIC, held
5,420,000 Shares, representing approximately 0.32% and 0.10%, respectively, of the issued
share capital of the Company. As CITIC Capital and SIC and their respective associates
including Flourish Investment Corporation, have a material interest in the Subscription
Agreement and the transactions contemplated thereunder, CITIC Capital and SIC and their
respective associates, including Flourish Investment Corporation, will be required to abstain
from voting on the relevant resolutions as set out in the notice of the EGM.
To the best of the Directors’ knowledge, information and believe and having made all
reasonable enquiries, no Shareholder, other than CITIC Capital and SIC and their respective
associates, including Flourish Investment Corporation, is required to abstain from voting on the
relevant resolutions as set out in the notice of the EGM.
– 20 –
LETTER FROM THE BOARD
11.
FUND RAISING ON ISSUE OF EQUITY SECURITIES BY THE COMPANY IN
THE LAST 12 MONTHS
Save for the following fund raising activities with total net proceeds of approximately
HK$10,776,336,719, the Company did not conduct any other fund raising on issue of equity
securities in the last 12 months immediately proceeding the Latest Practicable Date:
Date of
announcement Event
Net proceeds
Intended use of
proceeds
Actual use of
proceeds
25 January
2011
Placing of
340,000,000
existing Shares
and
subscription of
340,000,000
new Shares
Approximately
Capital expenditures,
HK$923,000,000
payment of the cash
consideration for
the acquisition of
Sino Polymer New
Materials Co., Ltd
by the Company
and as general
working capital of
the Group
Capital expenditure
and general working
capital:
approximately
HK$234 million;
remaining to be
used for payment of
the cash
consideration for
the acquisition of
Sino Polymer New
Materials Co., Ltd.
by the Company
14 January
2011
Issue of a total of
3,128,043,403
new Shares as
consideration
shares of the
Company’s
acquisition of
94.10% of
equity interests
in Sino
Polymer New
Materials Co.,
Ltd.
HK$9,853,336,719
Settlement of part of
the consideration of
the Company’s
acquisition of
94.10% of equity
interests in Sino
Polymer New
Materials Co., Ltd.
Settlement of part of
the consideration of
the Company’s
acquisition of
94.10% of equity
interests in Sino
Polymer New
Materials Co., Ltd.
12. PRINCIPAL BUSINESS OF THE GROUP
The Company has been engaged in the mining, processing and manufacturing of natural
thenardite products. The Group is also engaged in the production, development and sales of
PPS resin, PPS compounds and PPS fibre.
– 21 –
LETTER FROM THE BOARD
13. GENERAL
The Convertible Bonds, the Conversion Shares, the Additional Convertible Bonds and
the Additional Conversion Shares will be issued under the Specific Mandate proposed to be
sought from the Shareholders at the EGM. Application will be made by the Company to the
Listing Committee for the listing of, and permission to deal in, the Conversion Shares and the
Additional Conversion Shares.
Completion of the Subscription Agreement is subject to the satisfaction and/or
waiver of the conditions precedent therein. In addition, the Subscription Agreement may
be terminated in certain circumstances. Please refer to the paragraph headed “THE
SUBSCRIPTION AGREEMENT” for further information.
WARNING: As the Subscription Agreement may or may not complete, the
Convertible Bonds or the Additional Convertible Bonds may or may not be issued and/or
the Conversion Shares or the Additional Conversion Shares may or may not be issued or
listed, Shareholders are advised to exercise caution when dealing in the Shares.
14. VOTING UNDERTAKING
On 7 April 2011, Mr. Suo Lang Duo Ji executed and delivered to SIC and CITIC Capital
a deed of undertaking pursuant to which he undertook that he shall, and shall procure, that each
entity directly or indirectly controlled by him (an “Affiliate”), vote all Shares that he or such
Affiliate is entitled to vote at the time of any vote by the Shareholders to approve the
transactions contemplated by the Subscription Agreement (including the Specific Mandate).
15. EGM
The EGM will be held at Rose Room, Lower Level II, Kowloon Shangri-La Hotel, 64
Mody Road, Kowloon, Hong Kong at 10:30 a.m. on 6 May 2011. Whether or not you are able
to attend the EGM, please complete and return the form of proxy enclosed herewith in
accordance with the instructions printed thereon to the Company’s branch share registrar in
Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell
Centre, 183 Queen’s Road East, Wanchai, Hong Kong or the principal place of business of the
Company in Hong Kong at Units 4607-8, 46th Floor, COSCO Tower, No. 183 Queen’s Road
Central, Hong Kong, as soon as possible and in any event not less than 48 hours before the time
fixed for the holding of the EGM or any adjournment thereof. Completion and return of the
form of proxy will not preclude you from attending and voting at the EGM or any adjournment
thereof should you so wish.
In accordance with the Listing Rules, any vote of shareholders at a general meeting must
be taken by a poll. Accordingly, the Company will procure that the chairman of the EGM shall
demand voting on the ordinary resolutions set out in the notice of the EGM be taken by way
of poll.
16. RECOMMENDATION
The Directors (including the independent non-executive Directors) consider that the issue
of the Convertible Bonds, the Additional Convertible Bonds, the Conversion Shares and the
– 22 –
LETTER FROM THE BOARD
Additional Conversion Shares, and the Specific Mandate are fair and reasonable so far as the
Shareholders are concerned and in the interest of the Company and the Shareholders as a
whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant
ordinary resolutions as set out in the notice of the EGM.
17. RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Listing Rules for the purpose
of giving information with regard to the Company. The Directors, having made all reasonable
enquiries, confirm that to the best of their knowledge and belief the information contained in
this circular is accurate and complete in all material respects, and not misleading or deceptive,
and there are no other matters the omission of which would made any statement herein or this
circular misleading.
Yours faithfully,
By order of the Board
China Lumena New Materials Corp.
Zhang Daming
Chief Executive Officer and Executive Director
– 23 –
NOTICE OF EGM
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 67)
NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the “Meeting”)
of China Lumena New Materials Corp. (the “Company”) will be held at Rose Room, Lower
Level II, Kowloon Shangri-La Hotel, 64 Mody Road, Kowloon, Hong Kong at 10:30 a.m. on
6 May 2011 for the purposes of considering and, if thought fit, passing with or without
modification the following resolutions of the Company:
ORDINARY RESOLUTIONS
“THAT conditional upon the listing committee of The Stock Exchange of Hong Kong
Limited granting the listing of, and permission to deal in, the Conversion Shares and the
Additional Conversion Shares which may fall to be allotted and issued upon exercise of the
conversion rights attached to the Convertible Bonds and the Additional Convertible Bonds
(each as defined in the circular to the shareholders of the Company dated 18 April 2011 (the
“Circular”)):
1.
the Subscription Agreement (as defined in the Circular, a copy of which is proposed
to the Meeting marked “A” and signed by the Chairman of the Meeting for the
purpose of identification), and the transactions contemplated thereunder be and are
hereby approved, confirmed and ratified;
2.
the issue of the Convertible Bonds and the Additional Convertible Bonds (as defined
in the Circular) in accordance with the Subscription Agreement be and is hereby
approved;
3.
the issue and allotment by the Company of the Conversion Shares and the Additional
Conversion Shares (as defined in the Circular) to the Bondholders (as defined in the
Circular) as contemplated under the Terms and Conditions (as defined in the
Circular) be and is hereby approved; and
– 24 –
NOTICE OF EGM
4.
any one director of the Company be and is hereby authorised to do all such things
and acts as he may in his discretion consider necessary, expedient or desirable for
the purpose of or in connection with the implementation of the Subscription
Agreement and the transactions contemplated thereunder, including but not limited
to the execution of all such documents under seal where applicable, as he considers
necessary or expedient in his opinion to implement and/or give effect to the issue of
the Convertible Bonds and the Additional Convertible Bonds, and the allotment and
issue of the Conversion Shares and Additional Conversion Shares of which may fall
to be issued upon exercise of the conversion rights attached to the Convertible
Bonds and the Additional Convertible Bonds.”
By order of the Board
China Lumena New Materials Corp.
Zhang Daming
Chief Executive Officer and Executive Director
Hong Kong, 18 April 2011
Notes:
(1)
A member entitled to attend and vote at the Meeting may appoint a proxy to attend and, on a poll, vote on his
behalf and such proxy need not be a member of the Company. A form of proxy for use at the Meeting is
enclosed.
(2)
In order to be valid, the form of proxy, together with any power of attorney or authority under which it is
signed or a notarially certified copy of that power of attorney or authority, must be deposited with the
Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M
Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time
appointed for holding the Meeting or any adjournment thereof.
(3)
Completion and return of the form of proxy will not preclude a shareholder of the Company from attending
and voting in person at the Meeting convened or any adjournment thereof and in such event, the authority of
the proxy shall be deemed to be revoked.
(4)
In the case of joint holders of a share, any one of such joint holders may vote, either in person or by proxy,
in respect of such share as if he/she/it were solely entitled thereto. If more than one of such joint holders are
present at the Meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be
accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined
by the order in which the names stand in the register of members of the Company in respect of the joint
holding.
(5)
As at the date of this notice, the executive Directors are Mr. Zhang Daming, Mr. Yu Man Chiu Rudolf, Mr. Gou
Xingwu, Mr. Zhang Zhigang and Mr. Tan Jianyong; and the independent non-executive Directors are Mr. Koh
Tiong Lu, John, Mr. Wong Chun Keung and Mr. Xia Lichuan.
– 25 –