GCL Poly Energy : Announcements and Notices - Discloseable Transaction Capital Increase in Inner Mongolia Zhonghuan GCL

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GCL-POLY ENERGY HOLDINGS LIMITED

保 利 協 鑫 能 源 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3800)

DISCLOSEABLE TRANSACTION

CAPITAL INCREASE IN INNER MONGOLIA ZHONGHUAN GCL

We refer to the Company's announcement dated 28 November 2017 regarding the capital contribution from Suzhou GCL Technology (an indirect subsidiary of the Company), Tianjin Zhonghuan and Inner Mongolia Zhonghuan to Inner Mongolia Zhonghuan GCL.

THE CAPITAL INCREASE AGREEMENT

On 30 May 2019 (after trading hours), (a) Suzhou GCL Technology, Tianjin Zhonghuan and Inner Mongolia Zhonghuan (together the "Original Shareholders") and (b) Hohhot Industrial Park Fund and Hohhot City Chengchi Phase II Fund (together the "Investors") entered into a capital increase agreement (the "Capital Increase Agreement").

Pursuant to the Capital Increase Agreement, the Original Shareholders and the Investors will in aggregate contribute an amount of RMB2,400,000,000 (equivalent to approximately HK$2,730,000,000) to the registered capital and capital reserve of Inner Mongolia Zhonghuan GCL (the "Capital Contribution"). Of this amount, RMB800,000,000 (equivalent to approximately HK$910,000,000) is to be contributed by Suzhou GCL Technology in cash.

As at the date of this announcement, the Group, through Suzhou GCL Technology, holds 30% of the equity interests of Inner Mongolia Zhonghuan GCL. Upon completion of the Capital Contribution as contemplated under the Capital Increase Agreement, the Group's equity interest in the registered capital of Inner Mongolia Zhonghuan GCL will increase from 30% to 31.27%.

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The Original Shareholders and the Investors further entered into a supplemental agreement (the "Supplemental Agreement"), amending certain terms of the Capital Increase Agreement.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratios in respect of the transaction contemplated under the Capital Increase Agreement and the Supplemental Agreement exceeds 5% but is less than 25%, the entering into of the Capital Increase Agreement and the Supplemental Agreement constitute a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements.

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, save as otherwise disclosed in this announcement, the Original Shareholders (other than Suzhou GCL Technology) and the Investors are Independent Third Parties.

As at the date of this announcement, Tianjin Zhonghuan is a substantial shareholder of Xinjiang GCL, an insignificant subsidiary of the Company under Rule 14A.09 of the Listing Rules. Therefore, Tianjin Zhonghuan is not a connected person of the Company under Chapter 14A of the Listing Rules and the entering into of the Capital Increase Agreement does not constitute a connected transaction of the Company under Chapter 14A of the Listing Rules.

INTRODUCTION

The Board is pleased to announce that on 30 May 2019 (after trading hours), (a) the Original Shareholders and (b) the Investors entered into the Capital Increase Agreement, pursuant to which the Original Shareholders and the Investors will in aggregate contribute an amount of RMB2,400,000,000 (equivalent to approximately HK$2,730,000,000) to the registered capital and capital reserve of Inner Mongolia Zhonghuan GCL.

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PRINCIPAL TERMS OF THE CAPITAL INCREASE AGREEMENT

The principal terms of the Capital Increase Agreement are set out below:

Date:	30 May 2019
Parties:	Original Shareholders:
	(a)	Suzhou GCL Technology;
	(b)	Tianjin Zhonghuan; and
	(c)	Inner Mongolia Zhonghuan;
	Investors:
	(a)	Hohhot Industrial Park Construction Plan Fund (Limited
		Partnership); and
	(b)	Hohhot City Chengchi Phase II Industrial Development Fund
		Investment Center (Limited Partnership),

(each a "Party" and together the "Parties").

Capital Contribution:

		Contribution to	Contribution to	Total	Time of
Shareholders	Form	registered capital	capital reserve	Contribution	payment
		(RMB)	(RMB)	(RMB)
Suzhou GCL	Cash	614,430,924.06	185,569,075.94	800,000,000	Before
Technology								31	July 2019
Tianjin Zhonghuan	Cash	614,430,924.06	185,569,075.94	800,000,000	Before
								31	July 2019
Inner Mongolia	Cash	-	-	-	N/A
Zhonghuan
Hohhot Industrial	Cash	384,019,327.54	115,980,672.46	500,000,000	Before
Park Fund								31	July 2019
Hohhot City Chengchi	Cash	230,411,596.52	69,588,403.48	300,000,000	Before
Phase II Fund								31	July 2019

Total	-	1,843,292,772.19	556,707,227.81	2,400,000,000 N/A

The Capital Contribution by each Party was determined after arm's length negotiations among the Parties after taking into consideration, among other things, the capital requirements of the monosilicon rods project of Inner Mongolia Zhonghuan GCL.

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Shareholding	Set out below is the shareholding structure of the registered share
in Inner	capital of Inner Mongolia Zhonghuan GCL before and immediately
Mongolia	after the Completion of the Capital Contribution:
Zhonghuan			Before completion	Immediately after
GCLF:
		of the Capital	completion of the
			Contribution	Capital Contribution
	Registered share capital		RMB3,000,000,000	RMB5,400,000,000
	Shareholders		Approximate equity	Approximate equity
			interest in the	interest in the
			registered capital	registered capital
			of Inner Mongolia	of Inner Mongolia
			Zhonghuan GCL	Zhonghuan GCL
		before Completion of	immediately after the
			the Capital Increase	Completion of the
					Capital Increase for
					all Investors
	Suzhou GCL	30%		31.27%
	Technology
	Tianjin Zhonghuan	15%		21.98%
	Inner Mongolia	55%		34.07%
	Zhonghuan
	Hohhot Industrial	0%		7.93%
	Park Fund
	Hohhot City Chengchi	0%		4.76%
	Phase II Fund
	Total
	100%		100%

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Conditions	Completion is conditional upon the fulfilment and/or waiver of,
precedent to	among others, the following conditions:
Completion:	(a)	the execution of the Capital Increase Agreement and supplemental
		agreement by all Parties;
	(b)	Inner Mongolia Zhonghuan GCL having amended its articles of
		association in accordance with the terms of the Capital Increase
		Agreement with the written approvals of the Original Shareholders;
	(c)	Inner Mongolia Zhonghuan GCL having obtained all necessary
		governmental authorisations (if applicable), internal approvals and
		third party consent and approvals, including but not limited to
		relevant board resolutions, shareholders' resolutions to reflect the
		arrangements contemplated under the Capital Increase Agreement;
	(d)	Inner Mongolia Zhonghuan GCL and the Original Shareholders
		having made true, accurate and complete written disclosures to the
		Investors regarding the assets, debts, rights, external guarantees of
		Inner Mongolia Zhonghuan GCL and all other information relevant
		to the Capital Increase Agreement; and
	(e)	Inner Mongolia Zhonghuan GCL as a going concern not being in
		violation of any applicable laws and regulations.
Completion:	Completion shall take place when the Parties have paid their respective
	portion of the Capital Contribution into the specified capital verification
	account（專用驗資戶口）of Inner Mongolia Zhonghuan GCL.
	Within fifteen (15) Business Days after all Parties completing payment
	of their respective Capital Contribution, Inner Mongolia Zhonghuan
	shall engage a qualified accounting firm to conduct verification on
	the Capital Contribution. Inner Mongolia Zhonghuan shall issue an
	investment certificate (出資證明書) to each Party based on the verification
	report issued by the qualified accounting firm and make all necessary
	submissions and filings to complete the business registration amendment
	procedures (工商變更手續) in relation to the Capital Contribution.
Pre-emptive	The	shareholders of Inner Mongolia Zhonghuan GCL shall have a
right:	right of pre-emption against any proposed transfer of shares in Inner
	Mongolia Zhonghuan GCL.

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