China Water Affairs Group Limited (SEHK:855) and others entered into the equity transfer agreement to acquire 31% stake in Zhongyuan Water Group Co., Ltd. from Chongqing Kangda Environmental Protection Industrial (GROUP) Co., Ltd for CNY 150 million on November 16, 2023. The acquisition is conditional upon all necessary consents, permits and approvals required to be obtained on the part of Zhongyuan Water Group, Shenzhen Goldtact and Chongqing Kangda and the transactions contemplated thereunder having been obtained and remain in full force and effect, all necessary consents, the passing of the necessary resolution by the Independent Shareholders at the EGM approving the agreement, the representations and warranties given by Chongqing Kangda under the agreement are true and accurate and without limitation of conditions above, all necessary consent, approvals, permits and authorization to be obtained from PRC governing authorities or other appropriate authorities in connection with the Equity Transfer Agreement. It is intended that the net proceeds will be used for general working capital.

Advent Corporate Finance Limited acted as the financial advisor to Independent Board Committee and the Independent Shareholders of Kangda. The Board is pleased to announce that all the conditions precedent set out in the Equity Transfer Agreement have been fulfilled, and the Completion took place on December 27, 2023. Upon Completion, the Group ceased to have any interest in the Target Company.

Accordingly, the Target Company ceased to be an associate of the Company and the financial information of the Target Group will no longer be recognized in the consolidated financial statements of the Group.