Fosun International : DISCLOSEABLE TRANSACTION - IN RELATION TO THE ACQUISITION OF ORDINARY SHARES OF PUBLIC JOINT STOCK COMPANY POLYUS

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DISCLOSEABLE TRANSACTION IN RELATION TO THE ACQUISITION OF ORDINARY SHARES OF PUBLIC JOINT STOCK COMPANY POLYUS THE SPA

The Board is pleased to announce that the Purchaser (an indirect non-wholly owned subsidiary of the Company) entered into the SPA on 31 May 2017 with the Seller, pursuant to which the Purchaser (directly or through its affiliates) agreed to purchase and the Seller agreed to sell the Sale Shares owned by the Seller, representing 10% of the share capital excluding treasury shares of the Target Company, at USD70.6025 per share for a maximum Consideration of approximately USD887 million in cash, on the terms and subject to the conditions set out in the SPA. Subject to Closing, the Purchaser (or its affiliates) shall have an option to purchase from the Seller, and to require the Seller to sell, all or some of the Call Option Shares under the SPA which, taken together with the Sale Shares, would result in the Purchaser holding up to 15% of share capital of the Target Company. The option to purchase the Call Option Shares can be exercised not later than one year from the date of this announcement.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined under Rule 14.04(9) of the Listing Rules) in relation to the Acquisition exceeds 5% but is less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is subject to notification and announcement requirements under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board is pleased to announce that the Purchaser (an indirect non-wholly owned subsidiary of the Company) entered into the SPA on 31 May 2017 with the Seller, pursuant to which the Purchaser (directly or through its affiliates) agreed to purchase and the Seller agreed to sell the Sale Shares owned by the Seller, representing 10% of the share capital excluding treasury shares of the Target Company, at USD70.6025 per share for a maximum Consideration of approximately USD887 million in cash, on the terms and subject to the conditions set out in the SPA. Subject to Closing, the Purchaser (or its affiliates) shall have an option to purchase from the Seller, and to require the Seller to sell, all or some of the Call Option Shares under the SPA which, taken together with the Sale Shares, would result in the Purchaser holding up to 15% of share capital of the Target Company. The option to purchase the Call Option Shares can be exercised not later than one year from the date of this announcement.

The details of the SPA are as follows:

THE SPA

Date:	31 May 2017
Parties:	Purchaser: Shanghai Pingju Investment Management Co., Ltd.; As at the date of this announcement, the Purchaser is held as to: 49.90% by Hainan Mining; 37.37% by Shanghai Fosun High Technology (Group) Co., Ltd, a subsidiary of the Company; and 12.73% by Zhaojin Mining Seller: Polyus Gold International Limited The Group or its affiliate(s) will take up the proportion allotted to Zhaojin Mining for its equity interest in the Purchaser under the circumstances that Zhaojin Mining decides not to participate in the Acquisition.
To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Seller and its ultimate beneficial owners are third parties independent of the Company and connected persons of the Company.

Sale Shares: Subject to the terms and conditions of the SPA, sale by the Seller and purchase by the Purchaser (or its affiliates) of the Sale Shares, representing 10% of the share capital excluding treasury shares of the Target Company. Consideration and Payment Terms:

The maximum Consideration for the Sale Shares shall be approximately USD887 million, which is the product of USD70.6025 per share multiplied by the number of the Sale Shares. USD70.6025 per share price is subject to an adjustment for dividends of the Target Company where the record date for such dividends falls during the period between the date of this announcement and Closing.

The Purchaser (or its affiliates) shall pay the Consideration to the Seller in cash at Closing.

It is proposed that the Consideration shall be satisfied by capital contribution from the shareholders of the Purchaser according to their proportionate shareholding interest and external financing.

The Consideration was determined at arm's length negotiations between the Purchaser and Seller with reference to, among others, the assessment and analysis by an independent evaluation institution and by the management of the Company internally, based on the prospects of the Target Company and the projection of future profits and cash flow to be generated by the Target Company in accordance with technical reports and business plans of the Target Company.

The audited net profits (both before and after taxation) attributable to the equity holders of the Target Company for the two fiscal years immediately preceding the Acquisition, under the international financial reporting standards ("IFRS"), are as follows:

For the year ended 31 December
2016 (audited) approximately USD million	2015 (audited) approximately USD million
Net profit before tax	1,771	1,212
Net profit after tax	1,445	1,021

The total assets and net assets of the Target Company in accordance with reviewed financial statements were approximately USD5,927 million and USD66 million, respectively, as at 31 March 2017.
Conditions to Closing:	The obligations under the SPA to consummate the Proposed Transaction are subject to the satisfaction (or waiver) at or prior to the Closing of the closing conditions contemplated by the SPA, among others, including receipt of certain regulatory approvals and clearance in the PRC and Russia as well as shareholders' approval of Hainan Mining.
Closing:	The Closing shall take place following the satisfaction or waiver, as applicable, of all the conditions set forth in the SPA or on such other date as may be mutually agreed in writing by the Seller and the Purchaser. Upon consummation of the Acquisition, the Purchaser (or its affiliates) is expected to be the second largest shareholder of the Target Company.
Other Terms:	Within one year from the date of this announcement, the Purchaser (or its affiliates) shall have an option to purchase from the Seller, and to require the Seller to sell, all or some of the Call Option Shares under the SPA. The board of directors of the Target Company will be expanded from 9 to 11 directors and, subject to certain conditions, the Purchaser (or its affiliates) has the right to nominate two members to the board of directors of the Target Company when it holds at least 10% of the share capital excluding treasury shares of the Target Company; or one member when the holding is between 5% and 10%. The Purchaser (or its affiliates) and the Seller agreed to vote in favour of the minimum annual dividend payments for the years 2017-2021 at the greater of (i) 30% of the full-year EBITDA1 calculated based on IFRS accounts; (ii) USD550 million for each of 2017, 2018 and 2019 and USD650 million for each of 2020 and 2021, which will be subject to compliance with the financial covenants of the Target Company. The Purchaser (or its affiliates) has a right to subscribe for up to its respective proportion when the Target Company issues new shares.

1 EBITDA = profit for the year + tax + net interest expense + depreciation and amortization