Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00270)

PPPPROJECT

CONNECTED TRANSACTION

CONTINUING CONNECTED TRANSACTION

The Board is pleased to announce that on 18 May 2019, Public Partner issued a bid-winning notice in respect of the PPP Project. It was stated in the notice that the Company, Guangdong Water Co, Jiangsu Chunghe Yongtai and CFMG were the successful bidder in the PPP Project of Yangtze River water diversion project in Xinghua, Jiangsu, the PRC. On 20 May 2019, the Private Partners and Public Partner entered into the PPP Contract in relation to the PPP Project. On the same day, the Private Partners and Xinghua City Investment entered into the JV Agreement and articles of association in relation to establishment of the JV Company for implementation of the PPP Project.

According to PPP Contract, the estimated total investment amount of the PPP Project (including registered capital of the JV Company) is approximately RMB2,759,789,000 (equivalent to approximately HK$3,217,086,037), subject to the final sum as audited by the government audit department. According to JV Agreement and articles of association, the registered capital shall be approximately RMB689,947,300 (equivalent to approximately HK$804,271,568). The Company, Guangdong Water Co, Jiangsu Chunghe Yongtai, CFMG and Xinghua City Investment will contribute to the registered capital as to RMB317,375,900 (equivalent to approximately HK$369,965,087), RMB100,042,300 (equivalent to approximately HK$116,619,309), RMB20,698,400 (equivalent to approximately HK$24,128,125), RMB20,698,400 (equivalent to approximately HK$24,128,125) and RMB 231,132,300 (equivalent to approximately HK$269,430,922) in cash, representing 46%, 14.5%, 3%, 3% and 33.5% equity interests in the JV Company, respectively.

According to the relevant law, the Private Partners signed a consortium agreement on 7 January 2019, according to which, each of the Private Partners will be jointly and severally liable for the PPP Project. As such, each of the Company and Guangdong

1

Water Co is contingently liable for the other's liability, constituting the Company's financial assistance to Guangdong Water Co. After deducting the registered capital of approximately RMB231,132,300 (equivalent to approximately HK$269,430,922) injected by Xinghua City Investment into the JV Company, the Company is likely to invest a maximum of approximately RMB2,528,656,700 (equivalent to approximately HK$2,947,655,115) in relation to the PPP Project, inter alia, the Company shall be liable in respect of the obligation of Guangdong Water Co in the maximum amount of RMB400,169,405 (being 14.5% of the total investment of Guangdong Water Co in the PPP Project, equivalent to approximately HK$466,477,475).

The Private Partners also signed a supplemental consortium agreement on 6 May 2019, pursuant to which, each of the Private Partners will inject the registered capital in the proportion of their equity interests at the same time whilst the Company and Guangdong Water Co shall be liable for not more than the balance of the total investment of the PPP Project in the relative proportion of their respective equity interests. It entails that the Company and Guangdong Water Co shall only undertake not more than the project financing and/or guarantee liability of the PPP Project. Accordingly, taking into account the proportionate registered capital contributed by Jingsu Chunghe Yongtai and CFMG, and Guangdong Water Co shall be responsible for its proportionate registered as well as assuming the responsibility for the project financing and/or joint guarantees other than the registered capital, the Company is likely to invest a maximum of RMB1,891,139,837 (equivalent to approximately HK$2,204,501,708).

Guangdong Water Co is an indirect wholly owned subsidiary, and hence an associate, of Guangdong Holdings, the Company's ultimate holding company. Guangdong Holdings indirectly holds approximately 56.49% of the issued shares of the Company as at the date of this announcement and is, therefore, a controlling shareholder of the Company. Thus, Guangdong Holdings and Guangdong Water Co are connected persons of the Company. Each of the Transaction and the Financial Assistance constitute a connected transaction and a continuing connected transaction of the Company respectively under the Listing Rules. As all of the applicable percentage ratios (as defined in Chapter 14 of the Listing Rules) in respect of each of the Transaction and the Financial Assistance exceed 0.1% but are less than 5%, the Transaction and the Financial Assistance are subject to the reporting and announcement requirements, but exempt from the independent shareholders' approval requirement, under Chapter 14A of the Listing Rules.

INTRODUCTION

Reference is made to the announcement of the Company dated 10 May 2019, which disclosed that Public Partner issued a preliminary bid-winning notice. The notice stipulated that the Private Partners are the preliminary winning bidders for the bid of the PPP Project.

On 18 May 2019, Xinghua City Bureau issued a bid-winning notice in respect of the PPP Project. It was stated in the notice that the Private Partners were the winning bidder

2

in the PPP Project.

The Board is pleased to announce that on 20 May 2019, the Private Partners and Public Partner entered into the PPP Contract in relation to the PPP Project. On the same day, the Private Partners and Xinghua City Investment entered into the JV Contract and articles of association in relation to establishment of the JV Company for implementation of the PPP Project (the "Transaction").

The JV Company and Xinghua Water Plan and /or the Xinghua City Water Supply (proposed to be established) will subsequently enter into an entrusted operation management agreement to be responsible for the entrusted operation and handover of the Operation Project.

PPP CONTRACT

The PPP Contract governs the corporative joint venture of the PPP Project, the financing, construction, operation, maintenance and transfer of the water diversion project as well as the entrusted management of the operation projects.

PPP Project

(1)

the Company;

contractual parties

(2)

Guangdong Water Co;

(3)

Jiangsu Chunghe Yongtai;

(4)

CFMG; and

(5)

Xinghua City Investment.

PPP Project

The PPP Project comprised the water diversion project and the

operation project. Pursuant to the bidding documents of the PPP

Project, the PPP Project is listed on the PPP Project List.

Water Diversion

The Yangtze River water diversion project in Xinghua is a new

Project

project with design and construction scale of approximately

430,000 tons per day. The water diversion project mainly

comprises the construction of approximately 174 km of water

pipelines, 62 km of water mains and two Xinghua booster

pump stations (approximately 510,000 tons/day in total). The

JV Company will use the Build-Operate-Transfer (commonly

known as the "BOT") model to operate the water division

project.

Operation Project

The Xinghua City Operation Project is an existing project for

the operation, maintenance, management of the existing water

plant including the provision of water to Xinghua City. The JV

Company will use the Operate and Management (commonly

known as "O&M") model to operate the operation project

Cooperation period

The cooperation period of the project is 30 years, comprising a

of the PPP Project

construction period of 2 years and an operation period of 28

years.

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Transfer of the PPP Upon expiry of the project cooperation period, income rights

Projectand operation rights of operation project, and the entrusted operation management rights of the operation project shall be transferred to the government or its designated institution without compensation.

Total Investment of The estimated total investment amount of the PPP Project is

the PPP Project approximately RMB2,759,789,000 (equivalent to approximately HK$3,217,086,037) and will be subject to the final audit of the project by the auditing department of the Government.

Finance of the PPP The private partners shall be responsible for the portion of

Projectinvestment in the PPP Project in excess of the registered capital of the JV Company.

According to the relevant law, the Private Partners signed a consortium agreement on 7 January 2019, according to which, each of the Private Partners will be jointly and severally liable for the PPP Project. As such, each of the Company and Guangdong Water Co is continually liable for the other's liability, constituting the Company's financial assistance to Guangdong Water Co. After deducting the registered capital of approximately RMB231,132,300 (equivalent to approximately HK$269,430,922) injected by Xinghua City Investment into the JV Company, the Company is likely to invest a maximum of

approximately RMB2,528,656,700 (equivalent to approximately HK$2,947,655,115) in relation to the PPP Project, inter alia, the Company shall be liable in respect of the obligation of Guangdong Water Co in the maximum amount of RMB400,169,405 (being 14.5% of the total investment of Guangdong Water Co in the PPP Project, equivalent to approximately HK$466,477,475).

The Private Partners also signed a supplemental consortium agreement on 6 May 2019, pursuant to which, each of the Private Partners will inject the registered capital in the proportion of their equity interests at the same time whilst the Company and Guangdong Water Co shall be liable for not more than the balance of the total investment of the PPP Project in the relative proportion of their respective equity interests. It entails that the Company and Guangdong Water Co shall only undertake not more than the project financing and/or guarantee liability of the PPP Project. Accordingly, taking into account the proportionate registered capital contributed by Jingsu Chunghe Yongtai and CFMG, and Guangdong Water Co shall

4

be responsible for its proportionate registered as well as assuming the responsibility for the project financing and/or joint guarantees other than the registered capital, the Company is likely to invest a maximum of RMB1,891,139,837 (equivalent to approximately HK$2,204,501,708).

Profit Distribution The PPP Project includes income from sales of processing of

Mechanism of the natural water and entrusted management of the operation

PPPProjectprojects. As such income is insufficient to cover the project construction investment cost, the operating cost and returns to private partners, hence, a feasible subsidy mechanism will be in place.

JV COMPANY

The JV Company the is responsible for the financing, construction, operation, maintenance and transfer as well as the entrusted management of the operation projects.

JV companies'

(1)

the Company;

partners

(2)

Guangdong Water Co;

(3)

Jiangsu Chunghe Yongtai;

(4)

CFMG; and

(5)

Xinghua City Investment.

Terms of the JV

The

JV Company shall operate for a term of 30 years

Company

commencing from the date of first approved registration of the

JV Company.

Registered Capital

The

registered

capital

of the JV

Company

shall

be

of JV Company

RMB689,947,300

(equivalent

to

approximately

HK$804,271,568). The Company, Guangdong Water Co, Jiangsu

Chunghe Yongtai, CFMG and Xinghua City Investment will

contribute to the registered capital of RMB317,375,900

(equivalent

to

approximately

HK$369,965,087),

RMB100,042,300

(equivalent

to

approximately

HK$116,619,309),

RMB20,698,400

(equivalent

to

approximately HK$24,128,125), RMB20,698,400 (equivalent to

approximately HK$24,128,125) and RMB 231,132,300

(equivalent to approximately HK$269,430,922) in cash,

representing 46%, 14.5%, 3%, 3% and 33.5% equity interests in

the JV Company, respectively. 30% of the registered capital shall

be paid within 90 days after the establishment of the JV

Company, each equity holder shall pay in the proportion of the

equity interests at the same time. The remaining registered

capital shall be injected according to the construction progress

and capital requirements of the PPP Project but within 12 months

from the date of establishment of the JV Company. The

respective contributions

to the registered

capital

of the

JV

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GDH - Guangdong Investment Ltd. published this content on 20 May 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 20 May 2019 15:12:07 UTC