The board of directors of Chiho Environmental Group Limited announced that, the Group has entered into exclusive talks with a bank and an investment firm ("Potential Lenders") which are based in Europe about a possible financing of EUR 130 million (equivalent to approximately HKD 1,170 million), representing EUR 90 million senior tranche loan and EUR 40 million junior tranche loan. The proceeds of the proposed financing package will be mainly used to repay the existing indebtedness of the Group. Pursuant to a non-binding term sheet entered into between an indirectly wholly owned subsidiary of the Company and the Potential Lenders, the cost of the senior tranche is expected to be around 6%, while the cost of the junior tranche is expected to reflect the premium to senior pricing reflective of typical senior-junior financings. The expected maturity of the new financing is around 5 years.