China Glass : 2018-11-14MAJOR TRANSACTION - NEW FINANCE LEASE ARRANGEMENTS

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CHINA GLASS HOLDINGS LIMITED ʕ਷ޚᆨછٰϞࠢʮ̡*

(Incorporated in Bermuda with limited liability)

(Stock Code: 3300)

MAJOR TRANSACTION

NEW FINANCE LEASE ARRANGEMENTS

The Board would like to announce that on 14 November 2018, the Lessees and the Joint Lessors entered into the New Finance Lease Arrangements (which consisted the Weihai Finance Lease Arrangement, the First CNG Finance Lease Arrangement and the Second CNG Finance Lease Arrangement) involving the Finance Lease Agreements and the Service Agreements, pursuant to which the Joint Lessors have agreed, among other things, to (i) purchase the Leased Assets from the respective Lessees at an aggregate consideration of RMB200 million, and (ii) lease back the Leased Assets to the respective Lessees for a period of thirty-six (36) months with an aggregate lease payment of approximately RMB209 million, which is to be payable by the respective Lessees to the Joint Lessors in six (6) instalments.

LISTING RULES IMPLICATIONS

In addition to the New Finance Lease Arrangements, the Group also entered into the Existing Finance Lease Arrangements with the Joint Lessors on 4 September 2018, 18 September 2018 and 3 October 2018 respectively. As the Existing Finance Lease Arrangements also involved the leasing of certain machinery and equipment from the Joint Lessors, the consideration of the Existing Finance Lease Arrangements, together with the New Finance Lease Arrangements, are aggregated for the purpose of classification of notifiable transactions in accordance with Rule 14.22 of the Listing Rules.

As one or more of the applicable percentage ratios in respect of the New Finance Lease Arrangements, when aggregated with the Existing Finance Lease Arrangements, exceed 25% but are all less than 75%, the New Finance Lease Arrangements constitute a major transaction of the Company under the Listing Rules and are therefore subject to the notification, announcement and Shareholders' approval requirements pursuant to Chapter 14 of the Listing Rules.

As the entering into of the New Finance Lease Arrangements is conditional on approval by the Shareholders being obtained at the special general meeting of the Company, the New Finance Lease Arrangements may or may not proceed.

Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

THE SPECIAL GENERAL MEETING

A special general meeting will be convened by the Company with a view to seek approval of the Shareholders for the New Finance Lease Arrangements in accordance with the requirements of the Listing Rules.

A circular of the Company containing, among other things, further details of the New Finance Lease Arrangements and a notice convening the special general meeting will be despatched to the Shareholders as soon as practicable on or before 7 December 2018 so as to allow sufficient time for the Company to prepare the financial information for inclusion in the circular.

THE WEIHAI FINANCE LEASE AGREEMENT

The principal terms of the Weihai Finance Lease Agreement are set out below:

Date: 14 November 2018

Parties:	(1)	the Joint Lessors; and
(2)	Weihai CNG

Purchase of the Weihai Leased Asset

As part of the Weihai Finance Lease Arrangement and pursuant to the Weihai Finance Lease Agreement, Weihai CNG agreed to sell, and the Joint Lessors agreed to purchase, the Weihai Leased Asset owned by Weihai CNG at a consideration of RMB60 million (the "Weihai Purchase Price"). The Weihai Purchase Price was determined after arm's length negotiations between the parties to the Weihai Finance Lease Agreement with reference to the book value of the Weihai Leased Asset, which is approximately RMB61.79 million.

Lease back of the Weihai Leased Asset

As part of the Weihai Finance Lease Arrangement and pursuant to the Weihai Finance Lease Agreement, the Weihai Leased Asset will be leased back to Weihai CNG for a period of thirty-six (36) months.

Lease Payments

The aggregate lease payments (the "Weihai Lease Payments") payable by Weihai CNG to the Joint Lessors under the Weihai Finance Lease Agreement shall be approximately RMB62.70 million, payable in six (6) instalments during the Lease Period in accordance with the payment schedule in the Weihai Finance Lease Agreement, comprising (i) the principal amount of RMB60 million, which is equal to the Weihai Purchase Price; and (ii) interest payments of approximately RMB2.70 million, estimated based on an annual interest rate of approximately 3.56% (determined and may be adjusted with reference to the benchmark interest rate for RMB loans with the same maturity as the Lease Period as promulgated by the People's Bank of China from time to time). As part of the Weihai Finance Lease Arrangement and pursuant to the Weihai Service Agreement, Weihai CNG shall pay the service fee of RMB5.05 million to Ping An Financial Leasing (Tian Jin) (the "Weihai Service Fee") for the provision of business development, financial planning and management consulting service for a period of thirty-six (36) months, which will be payable within five (5) business days after commencement of the Lease Period. The Weihai Lease Payments and the Weihai Service Fee were determined after arm's length negotiations between the parties to the Weihai Finance Lease Agreement and the Weihai Service Agreement with reference to the prevailing market rates for finance leases arrangements for similar assets.

Ownership of the Weihai Leased Asset

The ownership of the Weihai Leased Asset under the Weihai Finance Lease Agreement will be vested in the Joint Lessors throughout the Lease Period. At the end of the Lease Period and subject to payment by Weihai CNG of (i) all amounts due under the Weihai Finance Lease Agreement; and (ii) a nominal repurchase price of RMB100, the ownership of the Weihai Leased Asset will be transferred back to Weihai CNG.

Early Termination

During the period between the expiry of the first 6 months after the beginning of the Lease Period and the end of the Lease Period, Weihai CNG may serve a month's written notice to the Joint Lessors requesting for an early termination of the Weihai Finance Lease Agreement. Subject to the agreement of the Joint Lessors, Weihai CNG shall make a payment in full to the Joint Lessors of the following: (i) all of the outstanding Weihai Lease Payments and the Weihai Service Fee that has been due; (ii) the principal portion of the undue Weihai Lease Payments and undue Weihai Service Fee; (iii) 20% of the interest portion of the undue Weihai Lease Payments; and (iv) the nominal repurchase price of RMB100. Upon receipt of all the above payment by the Joint Lessors, the Weihai Finance Lease Agreement shall be terminated, upon which the ownership of the Weihai Leased Asset shall be transferred to Weihai CNG.

THE FIRST CNG FINANCE LEASE AGREEMENT

The principal terms of the First CNG Finance Lease Agreement are set out below:

Date: 14 November 2018

Parties:	(1)	the Joint Lessors; and
(2)	CNG Technology

Purchase of the First CNG Leased Asset

As part of the First CNG Finance Lease Arrangement and pursuant to the First CNG Finance Lease Agreement, CNG Technology agreed to sell, and the Joint Lessors agreed to purchase, the First CNG Leased Asset owned by CNG Technology at a consideration of RMB85 million (the "First CNG Purchase Price"). The First CNG Purchase Pricewas determined after arm's length negotiations between the parties to the First CNG Finance Lease Agreement with reference to the book value of the First CNG Leased Asset, which is approximately RMB112.25 million.

Lease back of the First CNG Leased Asset

As part of the First CNG Finance Lease Arrangement and pursuant to the First CNG Finance Lease Agreement, the First CNG Leased Asset will be leased back to CNG Technology for a period of thirty-six (36) months.

Lease Payments

The aggregate lease payments (the "First CNG Lease Payments") payable by CNG Technology to the Joint Lessors under the First CNG Finance Lease Agreement shall be approximately RMB88.83 million, payable in six (6) instalments during the Lease Period in accordance with the payment schedule in the First CNG Finance Lease Agreement, comprising (i) the principal amount of RMB85 million, which is equal to the First CNG Purchase Price; and (ii) interest payments of approximately RMB3.83 million, estimated based on an annual interest rate of approximately 3.56% (determined and may be adjusted with reference to the benchmark interest rate for RMB loans with the same maturity as the Lease Period as promulgated by the People's Bank of China from time to time). As part of the First CNG Finance Lease Arrangement and pursuant to the First CNG Service Agreement, CNG Technology shall pay the service fee of RMB7.65 million to Ping An Financial Leasing (Tian Jin) (the "First CNG Service Fee") for the provision of business development, financial planning and management consulting service for a period of thirty-six (36) months, which will be payable within five (5) business days after commencement of the Lease Period. The First CNG Lease Payments and the First CNG Service Fee were determined after arm's length negotiations between the parties to the First CNG Finance Lease Agreement and the First CNG Service Agreement with reference to the prevailing market rates for finance leases arrangements for similar assets.

Ownership of the First CNG Leased Asset

The ownership of the First CNG Leased Asset under the First CNG Finance Lease Agreement will be vested in the Joint Lessors throughout the Lease Period. At the end of the Lease Period and subject to payment by CNG Technology of (i) all amounts due