Change - Change in Corporate Information::Subscription of New Shares in Longjiang

The Singapore Exchange Securities Trading Limited, 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.

SIIC ENVIRONMENT HOLDINGS LTD.

上海實業環境控股有限公司*

(Incorporated in the Republic of Singapore with limited liability)

(Hong Kong stock code: 807)

(Singapore stock code: BHK)

CONNECTED TRANSACTION

SUBSCRIPTIONS OF NEW SHARES IN LONGJIANG

The Subscriptions

The Board is pleased to announce that as at the date of this announcement, the Company through the Subsidiaries completed its subscription of 14,492,175 shares of Longjiang at the consideration of RMB115,937,400.

Defined terms have the meaning set out in paragraph XVII of this announcement below.

SIHL through its wholly owned subsidiaries also completed its subscription of 10,195,325 shares of Longjiang at the consideration of RMB81,562,600.

The shares of Longjiang issued, allotted, and subscribed under the Subscriptions were undertaken on a pro-rata basis according to the existing shareholdings of the Company and SIHL in Longjiang. Following the Subscriptions:

• there will be no change to the percentage of effective equity interest and voting power held by the Group in Longjiang as disclosed in the Company's annual report for the year ended 31 December 2020 ("FY2020"); and
• the Company continues to own, through the Subsidiaries, approximately 57.9687% of the entire issued and paid-up shares of Longjiang, now comprising 243,468,540 shares; and
• SIHL continues to own, through its wholly owned subsidiaries, approximately 40.7813% of the entire issued and paid-up shares of Longjiang, now comprising 171,281,460 shares.

The articles of association of Longjiang have been updated and submitted to the relevant local authority for record.

SINGAPORE LISTING MANUAL REQUIREMENT

To comply with the relevant applicable requirements of the Listing Manual, the Company hereby further discloses the following information in respect of the Subscriptions: -

1. INTERESTED PERSON TRANSACTION

As at the date of this announcement, SIHL is a "controlling shareholder" of the Company under the Listing Manual as it is deemed to be interested in 1,268,485,926 Shares, representing approximately 49.25% of the total number of the Shares in issue, through its subsidiaries.

A breakdown of the deemed interests in the Shares held by SIHL through its subsidiaries, namely SIHL Treasury, S.I. Infrastructure(2) and S.I. TPL, as at the date of this announcement is set out in the table below.

Shareholder	Number of Shares	% of existing issued share capital
		of the Company (1)
SIHL Treasury	116,137,900	4.51
S.I. Infrastructure	165,418,475	6.42
S.I. TPL	986,929,551	38.32
Total	1,268,485,926	49.25

Notes:

1. Based on the existing issued and paid up share capital of the Company of 2,575,665,726 Shares as at the date of this announcement.
2. S.I. Infrastructure directly holds the entire issued and paid up share capital of S.I. TPL and is deemed interested in the Shares held by S.I. TPL. Accordingly, S.I. Infrastructure has an aggregate (both direct and deemed) interest in 44.74% of the issued and paid-up share capital of the Company (i.e. its direct interest of 6.42% plus its deemed interest of 38.32% held by S.I. TPL).

SIIC Subscription: SIHL held an aggregate of 161,086,135 shares representing 40.7813% of the shares in Longjiang prior to completion of the Subscriptions. Longjiang is therefore considered to be an "associate" of SIHL and considered an "interested person" within the meaning of Chapter 9 of the Listing Manual.

SIHL Subscription: The Company, through the Subsidiaries, held an aggregate of 228,976,365 shares representing 57.9687% of the shares in Longjiang prior to completion of the Subscriptions, and Longjiang is a subsidiary of the Company. As SIHL is a controlling shareholder of the Company, it is an "interested person" within the meaning of Chapter 9 of the Listing Manual.

1. NTA

The latest audited consolidated net tangible assets of the Group based on the Company's audited consolidated financial statements for FY 2020 ("FY2020 NTA"), was approximately RMB 12.56 billion.

1. RULE 905 AND RULE 906 OF THE LISTING MANUAL

The subscription amount paid by the Group pursuant to the SIIC Subscription of RMB115,937,400 and the value of the SIHL Subscription, together with the aggregate value of all transactions entered into between the Group and the same interested persons during this financial year ending 31 December 2021, represents approximately 1.84 % of the FY2020 NTA.

Accordingly, as the value of the SIIC Subscription does not exceed 3% of the FY2020 NTA, approval of the Shareholders will not be required for the Subscriptions under rule 906 of the Listing Manual.

IV. TOTAL VALUE OF INTERESTED PERSON TRANSACTIONS

For the period from the beginning of the current financial year, save for the Subscriptions, the details of the interested transactions entered into with SIHL or Longjiang or any other interested person of the Company are as follows:

		Aggregate value of all
		interested person	Aggregate value of
		transactions during the	all interested person
		financial year under	transactions
Name of Interested	Nature of	review (excluding	conducted under
transactions less than	shareholders'
Person	relationship
S$100,000 and	mandate pursuant to
		transactions conducted	Rule 920 (excluding
		under shareholders'	transactions less than
		mandate pursuant to	S$100,000)
		Rule 920)
SIIC Management	A wholly owned
(Shanghai) Limited	RMB 6,350,000	-
subsidiary of SIHL
Company
Shanghai Luqiao	A wholly owned	RMB 24,264,250	-
Development Co.,	subsidiary of SIHL

Ltd.
SIHL Finance	A wholly owned	RMB 26,946,901	-
Limited	subsidiary of SIHL
Shanghai Shen-Yu
Expressway	A wholly owned	RMB 4,827,750	-
(Shanghai Section)	subsidiary of SIHL
Co., Ltd
Shanghai Huning
Expressway	A wholly owned
(Shanghai Section)	RMB 5,000,000	-
subsidiary of SIHL
Development Co.,
Ltd.
Hong Kong Shun
Yuen Investment	A wholly owned
(Holdings) Limited	RMB 47,280,779(1)	-
subsidiary of SIHL
and Topper Gain
Group Limited
Total		RMB 114,669,680	-

Notes:

1. Calculated as 57.9687% (being the Company's effective interest in Longjiang) of the consideration of the SIHL Subscription of RMB81,562,600. Pursuant to rule 909 of the Listing Manual, the value of the SIHL Subscription is the amount at risk to the Company. Under rule 909(1) of the Listing Manual, in the case of a partly owned subsidiary or associated company, the value of the transaction is the issuer's effective interest in that transaction.

1. OPINION OF AUDIT COMMITTEE

Having reviewed the terms of the SIIC Subscription and the SIHL Subscription, the Company's audit committee, comprising Mr. An Hongjun, Mr. Yeo Guat Kwang and Mr. Zhong Ming, is of the view that each of (i) the SIIC Subscription and (ii) the SIHL Subscription is on normal commercial terms and is not prejudicial to the interests of the Company and its minority shareholders.

HONG KONG LISTING RULES REQUIREMENT AND OTHER INFORMATION

Further information on the Subscriptions, including information to comply with the relevant applicable requirements of the Hong Kong Listing Rules are as follows: -

VI. CONSIDERATION

The subscription price for the Subscriptions was determined with reference to the working capital needs of Longjiang and the proportion of the respective shareholding of the Company and SIHL in

Longjiang. The consideration for the SIIC Subscription was funded by the internal resources of the Subsidiaries and was paid in cash.

VII. INFORMATION OF THE GROUP

The Group is principally engaged in wastewater treatment, reclaimed water treatment, sludge treatment, water supply and waste incineration.

VIII. INFORMATION OF LONGJIANG

Longjiang is a non-wholly owned subsidiary of the Company and is principally engaged in the developing and operating water and other relative projects such as sludge treatment facilities.

Prior to the Subscriptions, the Company through the Subsidiaries held approximately 57.9687% and SIHL through its wholly owned subsidiaries held approximately 40.7813% of the entire issued shares of Longjiang.

IX. INFORMATION OF SIHL

SIHL is principally engaged in the businesses of infrastructure facilities, real estate and consumer products. Its shares are listed on the Main Board of the SEHK (stock code: 363) and is a controlling Shareholder (has the meaning as ascribed under the Hong Kong Listing Rules) of the Company.

1. REASONS FOR AND BENEFITS OF THE SUBSCRIPTIONS

The Subscriptions are for the financial restructuring of Longjiang and reducing its borrowing costs. The Board is of the view that the Subscriptions will enhance Longjiang's financial position.

The Directors (including the independent non-executive Directors) are of the view that the terms of the Subscriptions are on normal commercial terms, fair and reasonable, and the Subscriptions are in the interests of the Company and the Shareholders as a whole.

As none of the Directors were considered to have any material interest in the Subscriptions, none of the Directors were required to abstain from voting for approving the Subscriptions.

Set out below is the audited financial information of Longjiang for the financial years ended 31 December 2019 and 2020, respectively, prior to the Subscriptions:

	For the year ended 31 December
	2019	2020
	RMB'000	RMB'000
Net profit before tax and extraordinary items	297,208	302,354
Net profit after tax and extraordinary items	221,766	242,523