China Glass : 2017-06-23Discloseable Transaction – Dongtai Finance Lease Arrangement

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CHINA GLASS HOLDINGS LIMITED

中 國 玻 璃 控 股 有 限 公 司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 3300)

DISCLOSEABLE TRANSACTION DONGTAI FINANCE LEASE ARRANGEMENT

The Board would like to announce that on 23 June 2017, Dongtai China Glass (as lessee) entered into the Dongtai Finance Lease Arrangement which included: (i) the Sale and Purchase Agreement and (ii) the Financial Lease Agreement with the Lessor. Pursuant to the Dongtai Finance Lease Arrangement, the Lessor has agreed, among other things, to (i) purchase the Leased Asset from Dongtai China Glass at a consideration of RMB100 million, and (ii) lease the Leased Asset to Dongtai China Glass for a period of four (4) years with an aggregate lease payment of approximately RMB115.5 million, which is to be payable by Dongtai China Glass to the Lessor on a quarterly basis in sixteen (16) equal instalments.

As one or more of the applicable percentage ratios in respect of the Dongtai Finance Lease Arrangement is more than 5% but are all less than 25%, the Dongtai Finance Lease Arrangement constitutes a discloseable transaction of the Company and are subject to the notification and announcement requirements but exempt from the shareholders' approval requirement under Chapter 14 of the Listing Rules.

THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are set out below: Date: 23 June 2017

Parties:

1. the Lessor (as purchaser); and

2. Dongtai China Glass (as seller).

Purchase of the Leased Asset

As part of the Dongtai Finance Lease Arrangement and pursuant to the Sale and Purchase Agreement, the Lessor agreed to procure from Dongtai China Glass, the Leased Asset, at a consideration of RMB100 million (the "Purchase Price"). Pursuant to the Dongtai Finance Lease Arrangement, the Leased Asset will be leased back by the Lessor to the Dongtai China Glass. The Purchase Price was determined after arm's length negotiations between the parties to the Sale and Purchase Agreement with reference to the net book value of the Leased Asset, which is approximately RMB109.7 million.

THE FINANCE LEASE AGREEMENT

The principal terms of the Finance Lease Agreement are set out below: Date: 23 June 2017

Parties:

1. the Lessor; and

2. Dongtai China Glass (as lessee).

Lease back of the Leased Asset

As part of the Dongtai Finance Lease Arrangement and pursuant to the Finance Lease Agreement, the Lessor agreed to lease the Leased Asset to Dongtai China Glass for a period of four (4) years.

Lease Payments

The aggregate lease payments (the "Lease Payments") payable by Dongtai China Glass to the Lessor under the Finance Lease Agreement shall be approximately RMB115.5 million, comprising (i) the principal amount of RMB100 million, which is equal to the Purchase Price; (ii) interest payments of approximately RMB11.5 million, estimated based on the annual interest rate of approximately 5.225% (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); and (iii) a service fee of RMB4 million for provision of technical support and consulting services by the Lessor, in relation to structure design of finance lease, other general financial and economic issues in relation to finance lease and process optimisation design. The principal amount and the interest payments are payable on a quarterly basis in sixteen (16) equal instalments during the Lease Period. The Lease Payments were determined after arm's length negotiations between the parties to the Finance Lease Agreement with reference to the prevailing market rates for finance leases for similar assets.

Deposit

Pursuant to the Finance Lease Agreement, Dongtai China Glass shall pay a deposit (free from interests) of RMB5 million to the Lessor. If Dongtai China Glass fails to pay the lease payments or any other liabilities under the Finance Lease Agreement in time, the Lessor is entitled to deduct the corresponding amount from the deposit and may request Dongtai China Glass to replenish the Deposit if the current balance of the Deposit at any time falls below RMB5 million as a result of deduction of the Deposit pursuant to the Finance Lease Agreement. At the end of the Lease Period, if Dongtai China Glass has not breached any of the terms of the Lease Agreement or if a breach has occurred but has been remedied by Dongtai China Glass, the deposit may be used to set off any outstanding Lease Payments or returned to Dongtai China Glass.

Ownership of the Leased Asset

At the end of the Lease Period and subject to payment by Dongtai China Glass of (i) all amounts due under the Finance Lease Agreement; and (ii) a nominal repurchase price of RMB100, the ownership of the Leased Asset will be transferred back to Dongtai China Glass.

THE GUARANTEES BY THE COMPANY AND TRIUMPH GROUP COMPANY

In connection with the Finance Lease Agreement, each of the Company and Triumph Group Company separately agreed to provide guarantee to the Lessor on a joint basis for the liabilities of Dongtai China Glass under the Finance Lease Agreement.

REASONS FOR AND BENEFITS OF THE DONGTAI FINANCE LEASE ARRANGEMENT

The terms of the Dongtai Finance Lease Arrangement, including, the Purchase Price and the Lease Payments, were determined after arm's length negotiations with reference to the net book value of the Leased Asset, which is approximately RMB109.7 million and the prevailing market rates for finance leases for similar assets. The Directors are of the view that the Group will be able to replenish the operating cash of the Company through the Dongtai Finance Lease Arrangement and that the terms and conditions of the Dongtai Finance Lease Arrangement are on normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders as a whole.