Hong Kong New Materials Industry Investment Company Limited entered into a framework agreement to acquire Xinjiang Tengxiang Magnesium Products Co., Ltd. from Hangzhou Boiler Group Co., Ltd. (SZSE:002534), Gansu Tengda West Iron Resources Holding Group Co., Ltd. and Wang Jian Min for approximately CNY 72.3 million on May 14, 2015. An agreement was signed on August 12, 2015. Hangzhou Boiler Group Co., Ltd. (SZSE:002534) sold the 45.46% stake for CNY 32.86 million. CNY 21.68 million will be paid within five business days upon fulfillment of the conditions; CNY 21.68 million will be paid within five business days upon conclusion of all completion matters and completion procedures for the transfer of the target company and having obtained a modified business registration and licence of target company; CNY 21.68 million will be paid within five business days after commencement of production and CNY 7.24 million will be kept as retention money and will be payable within six months after obtaining of the abovementioned approval, authorization and certification. As part of the deal, buyer will give a loan of CNY 20 million to target. The Consideration will be funded by the internal resources of Group Sense.

For the four months period ended April 30, 2015 Xinjiang Tengxiang Magnesium reported revenues of CNY 36.4 million, loss before tax of CNY 23.9 million and net assets of CNY 78.8 million. In the year ended December 31, 2014, Xinjiang Tengxiang Magnesium reported revenues of CNY 147.59 million and loss before tax of CNY 43.16 million. The deal is subject to regulatory approval including approval by National Development and Reform Commission, due diligence investigation, approval from shareholders and Board of Directors of Group Sense (International) Limited, parent of Hong Kong New Materials Industry Investment Company Limited along with Gansu Tengda West Iron Resources Holding Group Co., Ltd. and Hangzhou Boiler Group Co., Ltd and also the consent of the spouse of Wang Jian Min. Completion shall take place on the third business day after all the conditions having been fulfilled. The transaction has been approved by the Board of Directors of Hangzhou Boiler Group Co. on September 10, 2015.

Octal Capital Limited acted as financial advisor to Group Sense (International) Limited. Ernst & Young Hong Kong acted as accountant and Tricor Secretaries Limited and Appleby Management (Bermuda) Ltd. acted as transfer agent to Hong Kong New Materials Industry Investment Company Limited.

Hong Kong New Materials Industry Investment Company completed the acquisition of Xinjiang Tengxiang Magnesium Products Co., Ltd. from Hangzhou Boiler Group Co., Ltd. (SZSE:002534), Gansu Tengda West Iron Resources Holding Group Co., Ltd. and Wang Jian Min on December 28, 2015.