China Glass : 2017-08-01Major Transaction – New 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)

MAJOR TRANSACTION NEW FINANCE LEASE ARRANGEMENT

The Board would like to announce that on 1 August 2017, Suqian Electronic Glass and the Lessor entered into the New Finance Lease Arrangement, involving the Ownership Transfer Agreement and the Leaseback Agreement, pursuant to which the Lessor conditionally agreed, among other things, to (i) purchase the Leased Asset from Suqian Electronic Glass at a consideration of RMB65 million, and (ii) lease back the Leased Asset to Suqian Electronic Glass for a period of three (3) years with an aggregate lease payment of approximately RMB71.45 million, which is to be payable by Suqian Electronic Glass to the Lessor in twelve (12) equal instalments.

LISTING RULES IMPLICATIONS

In addition to the New Finance Lease Arrangement, the Group also entered into the Existing Finance Lease Arrangements with the Lessor on 18 May 2017 and 15 June 2017. As the Existing Finance Lease Arrangements also involved the leasing of certain machinery and equipment from the Lessor, the consideration of each of the Existing Finance Lease Arrangements, together with the New Finance Lease Arrangement, 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 Arrangement, when aggregated with the Existing Finance Lease Arrangements, are more than 25% but are all less than 75%, the New Finance Lease Arrangement constitutes a major transaction of the Company and are subject to the notification, announcement and Shareholders' approval requirements under Chapter 14 of the Listing Rules. Hence, the New Finance Lease Arrangement is conditional on approval by the Shareholders being obtained at the special general meeting 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 New Finance Lease Arrangement from the Shareholders in accordance with the requirements of the Listing Rules.

A circular containing, among other things, further details of the New Finance Lease Arrangement and a notice convening the special general meeting, will be dispatched to the Shareholders as soon as practicable on or before 22 August 2017 in accordance with the requirements of the Listing Rules.

THE OWNERSHIP TRANSFER AGREEMENT

The principal terms of the Ownership Transfer Agreement are set out below: Date: 1 August 2017

Parties:

1. the Lessor (as purchaser); and

2. Suqian Electronic Glass (as seller).

Purchase of the Leased Asset

As part of the New Finance Lease Arrangement and pursuant to the Ownership Transfer Agreement, Suqian Electronic Glass conditionally agreed to sell, and the Lessor conditionally agreed to purchase, the Leased Asset owned by Suqian Electronic Glass at a consideration of RMB65 million (the "Purchase Price"). The Purchase Price was determined after arm's length negotiations between the parties to the Ownership Transfer Agreement with reference to the original purchase value of the Leased Asset, which is approximately RMB66.43 million.

THE LEASEBACK AGREEMENT

The principal terms of the Leaseback Agreement are set out below: Date: 1 August 2017

Parties:

1. the Lessor; and

2. Suqian Electronic Glass (as lessee).

Lease back of the Leased Asset

As part of the New Finance Lease Arrangement and pursuant to the Leaseback Agreement, the Leased Asset will be leased back to Suqian Electronic Glass for a period of three (3) years.

Lease Payments

The aggregate lease payments (the "Lease Payments") payable by Suqian Electronic Glass to the Lessor under the Leaseback Agreement shall be approximately RMB71.45 million, payable in twelve (12) equal instalments during the Lease Period, comprising

1. the principal amount of RMB65 million, which is equal to the Purchase Price and

2. and interest payments of approximately RMB6.45 million, estimated based on an initial annual interest rate of approximately 5.95% (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). The Lease Payments were determined after arm's length negotiations between the parties to the Leaseback Agreement with reference to the prevailing market rates for finance leases for similar assets.

Deposit

Pursuant to the Leaseback Agreement, Suqian Electronic Glass shall pay a deposit (free from interests) of RMB9.75 million to the Lessor, which will be deducted directly from the Purchase Price paid by the Lessor to Suqian Electronic Glass under the Ownership Transfer Agreement. If Suqian Electronic Glass fails to pay the lease payments or any other liabilities under the Leaseback Agreement in time, the Lessor is entitled to deduct the corresponding amount from the deposit and Suqian Electronic Glass shall immediately replenish the deposit. In the event that in six (6) months before the end of the Lease Period, the deposit has not been deducted or has been fully replenished, the deposit may be used to set off the remaining lease payments and the nominal repurchase price for reacquiring the Leased Asset. Any remaining amount after the set-off shall be returned to Suqian Electronic Glass.

Ownership of the Leased Asset

The ownership of the Leased Asset under the Ownership Transfer Agreement will be vested in the Lessor throughout the Lease Period. At the end of the Lease Period and subject to payment by Suqian Electronic Glass of (i) all amounts due under the Leaseback Agreement; and (ii) a nominal repurchase price of RMB1,000, the ownership of the Leased Asset will be transferred back to Suqian Electronic Glass.

Early Termination

During the period between the expiry of the first 18 months after the beginning of the Lease Period and the end of the Lease Period, Suqian Electronic Glass may serve

60 days' notice to the Lessor requesting for an early termination of the Leaseback Agreement. Subject to the agreement of the Lessor, Suqian Electronic Glass shall make a payment in full to the Lessor of the following: (i) all of the outstanding Lease Payments that has been due; (ii) the principal portion of the undue Lease Payments; (iii) 25% of the interest portion of the undue Lease Payments; and (iv) the nominal repurchase price of RMB1,000. Upon receipt of all the above payment by the Lessor, the Leaseback Agreement shall be terminated, upon which the ownership of the Leased Asset will be transferred back to Suqian Electronic Glass.