China Glass : 2017-11-09Announcement – Discloseable Transaction Finance Lease Arrangements

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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 FINANCE LEASE ARRANGEMENTS

The Board would like to announce that the Lessees entered into the Finance Lease Arrangements with the Lessor, pursuant to which the Lessor has agreed, among other things, to (i) purchase the Leased Assets from each of Weihai CNG and Zhongbo Technology at an aggregate consideration of RMB89.9 million, and (ii) lease the Leased Assets to Weihai CNG and Zhongbo Technology respectively until May 2020, with an aggregate lease payment of approximately RMB109.4 million. Interest payment shall be paid during the Lease Period on a semi-annual basis in accordance with the payment schedule under the Finance Lease Agreements.

As one or more of the applicable percentage ratios in respect of the Finance Lease Arrangements is more than 5% but are all less than 25%, the Finance Lease Arrangements constitute discloseable transactions 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 Board would like to announce that Weihai CNG, Zhongbo Technology (both subsidiaries of the Company) and Triumph Group Company finalised a series of transactions and arrangements with the Lessor on 9 November 2017, which together constitute the Finance Lease Arrangements.

THE FINANCE LEASE ARRANGEMENTS

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

Finance Lease Arrangement in relation to Weihai CNG

Parties:

1. the Lessor (as purchaser);

2. Weihai CNG (as seller and lessee); and

3. Triumph Group Company (as lessee).

Finance Lease Arrangement in relation to Zhongbo Technology

Parties:

1. the Lessor (as purchaser);

2. Zhongbo Technology (as seller and lessee); and

3. Triumph Group Company (as lessee).

Purchase of the Leased Assets

As part of the Finance Lease Arrangements and pursuant to the Finance Lease Agreements, the Lessor agreed to procure from each of Weihai CNG and Zhongbo Technology the Leased Assets, at an aggregate consideration of RMB89.9 million (the "Purchase Price"). The Purchase Price was determined after arm's length negotiations between the Lessor and the Lessees with reference to the net book value of the Leased Assets, which is approximately RMB90 million.

Lease back of the Leased Assets

As part of the Finance Lease Arrangements and pursuant to the Finance Lease Agreements, the Lessor agreed to lease the Leased Assets to Weihai CNG and Zhongbo Technology respectively until May 2020.

Lease Payments

The aggregate lease payments (the "Lease Payments") payable to the Lessor under the Finance Lease Agreements shall be approximately RMB109.4 million, comprising (i) the principal amount of RMB89.9 million, which is equal to the Purchase Price; and (ii) interest payments of approximately RMB19.5 million, estimated based on a fixed annual interest rate of 7.5%. The interest payments are payable on a semi-annual basis during the Lease Period in accordance with the payment schedule under the Finance Lease Agreements. The principal amount are payable to the Lessor together with the final instalment of interest payments. The Lease Payments were determined after arm's length negotiations between the parties to the Finance Lease Agreements with reference to the prevailing market rates for finance leases for similar assets.

Deposit

Pursuant to the Finance Lease Agreements, a deposit of approximately RMB0.9 million would be deducted from the Purchase Price by the Lessor. The Lessor is entitled to deduct the corresponding amount from the deposit on each failure of payment of Lease Payments or any other liabilities under the Finance Lease Agreements. At the end of the Lease Period, if there are no overdue amount of Lease Payments, the deposit may be used to set off any outstanding Lease Payments.

Ownership of the Leased Assets

At the end of the Lease Period and subject to payment of (i) all amounts due under the Finance Lease Agreements; and (ii) an aggregate nominal repurchase price of RMB2, the ownership of the Leased Assets will be transferred back to Weihai CNG and Zhongbo Technology respectively.

Related notes issuance and role of Triumph Group Company

The Finance Lease Arrangements are part of a financing arrangement under which the Lease Payments would become part of the underlying assets for issue of asset- backed notes by the Lessor in the PRC. The Finance Lease Arrangements and the issue of asset-back notes were finalized by the parties to the Finance Lease Arrangements on 9 November 2017, and accordingly the Finance Lease Arrangements became unconditional.

Under the Finance Lease Arrangements, Triumph Group Company is one of the Lessees primarily to facilitate and provide necessary support to Weihai CNG and Zhongbo Technology in relation to the finance leases and issue of the asset-backed notes by the Lessor, and act as one of the obligors for repayment of Lease Payments. The participation of Triumph Group Company in the Finance Lease Arrangements does not constitute a transaction with Weihai CNG and Zhongbo Technology.

REASONS FOR AND BENEFITS OF THE FINANCE LEASE ARRANGEMENTS

The terms of the Finance Lease Arrangements, 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 Assets, which is approximately RMB90 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 Finance Lease Arrangements and that the terms and conditions of the Finance Lease Arrangements are on normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders as a whole.