Beijing Enterprises Clean Energy : DISCLOSEABLE TRANSACTION THE PARTICIPATION AND THE ACQUISITION (in PDF)

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01250)

DISCLOSEABLE TRANSACTION THE PARTICIPATION AND THE ACQUISITION THE PARTICIPATION

On 9 August 2017, the Partners entered into the Partnership Agreement in relation to the establishment of the Limited Partnership. The Subsidiary will participate in the Limited Partnership as a junior limited partner with a capital contribution of RMB195,000,000. The Limited Partnership will primarily invest in clean energy businesses, including photovoltaic power projects.

THE ACQUISITION

On 9 August 2017, the Subsidiary, the Company, Partner B and Partner C entered into the Acquisition Agreement under which:

1. (a) the Company agreed to acquire from Partner B 65% of the Senior Interest at a consideration of not more than RMB586,950,000, and Party C agreed to acquire from Partner B 35% of the Senior Interest at a consideration of not more than RMB316,050,000; and

   (b) each of the Company/the Subsidiary on one part and Partner C on the other will guarantee the other's payment obligation with respect to the acquisition of the Senior Interest; and

2. the Company agreed to provide the Senior Return Guarantee.

IMPLICATIONS UNDER THE LISTING RULES

Certain applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of (1) the Participation and the Acquisition on an aggregated basis, or (2) the Acquisition on a stand-alone basis, are more than 5% but below 25%, (1) the Participation and the Acquisition on an aggregated basis, or (2) the Acquisition on a stand-alone basis, constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and are therefore subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

THE PARTICIPATION

On 9 August 2017, the Partners entered into the Partnership Agreement in relation to the establishment of the Limited Partnership.

To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, each of the Partners (apart from the Subsidiary) and their respective ultimate beneficial owners are independent of the Company and its connected persons.

The principal terms of the Partnership Agreement in relation to the Limited Partnership are set out below.

Capital contribution

The Subsidiary will participate in the Limited Partnership as a junior limited partner with a capital contribution of RMB195,000,000. The maximum capital contribution to be made by each of the Partners to the Limited Partnership in cash is set out as follows:

Partners	Total maximum capital contribution	Approximate equity interest in the Limited Partnership
(RMB)	(%)
Partner A as the general and executive partner	100,000	0.01
Partner B as the senior limited partner	700,000,000	69.99
Partner C as a junior limited partner	105,000,000	10.50
The Subsidiary as a junior limited partner	195,000,000	19.50
Total	1,000,100,000	100.00

Business scope

The business scope of the Limited Partnership is equity investments, and investment and assets management. The Limited Partnership will primarily invest in clean energy businesses, including photovoltaic power projects.

Term

Unless otherwise agreed by the Partners, the term of the Limited Partnership is five years commencing from the date of issuance of the relevant business licence.

Decision making

An investment committee comprising six members nominated by the Partners will be set up for all investment decisions of the Limited Partnership. The Subsidiary is entitled to nominate two members to the investment committee. Any resolution of the investment committee has to be passed by at least four members. Partner A is vested with the authority to manage daily business and operation of the Limited Partnership.

Profit distribution

The net profits after deducting relevant taxes, fees and operating expenses incurred by the Limited Partnership available for distribution shall be distributed in the following order:

1. to the senior limited partner to the extent of its capital contribution and the return on it as prescribed in the Partnership Agreement; and

2. to the junior limited partners and the general partner pro-rata to their capital contributions to the Limited Partnership.

Loss sharing

Any loss incurred by the Limited Partnership will be borne in the following order:

1. by the junior limited partners on a pro rata basis and to the extent of their capital commitments;

2. by the general partner to the extent of its capital commitment;

3. by the senior limited partner to the extent of its capital commitment; and

4. by the general partner for any further loss.

THE ACQUISITION

On 9 August 2017, the Subsidiary, the Company, Partner B and Partner C entered into the Acquisition Agreement. The principal terms of the Acquisition Agreement are set out below.

Acquisition of 65% of the Senior Interest Subject matter

The Company agreed to acquire from Partner B 65% of the Senior Interest, and Partner C agreed to acquire from Partner B 35% of the Senior Interest.

Consideration

The maximum consideration for the acquisition of 65% of the Senior Interest will be RMB586,950,000. It shall be payable in cash by the Company to Partner B on the 5th anniversary of the date upon the first capital contribution by Partner B to the Limited Partnership. It is determined with reference to 65% of the total capital contribution of Partner B to the Limited Partnership in the amount of RMB700,000,000 and the Senior Return for the five-year term of the Limited Partnership. If Partner B receives any Senior Return from the Limited Partnership and/or under the Senior Return Guarantee, the maximum consideration for the acquisition of 65% of the Senior Interest will be reduced by 65% of the same amount.

Guarantee of Partner C's obligation

Each of the Company/the Subsidiary on one part and Partner C on the other will guarantee the other's obligation with respect to the acquisition of the Senior Interest. The maximum exposure for the Group with respect to the acquisition of the Senior Interest is RMB903,000,000. It is determined with reference to 100% of the total capital contribution of Partner B to the Limited Partnership in the amount of RMB700,000,000 and the Senior Return for the five-year term of the Limited Partnership. If Partner B receives any Senior Return from the Limited Partnership and/or under the Senior Return Guarantee, the maximum consideration for the acquisition of the Senior Interest will be reduced by the same amount.