Up Energy Development : Announcements and Notices - Very Substantial Acquisition in Relation to the Acquisition of 100% Equity Interest in Hao Chang Limited and Resumption of Trading

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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 or any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 307)

VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF 100% EQUITY INTEREST IN HAO CHANG LIMITED AND RESUMPTION OF TRADING

Financial Adviser to the Company

THE ACQUISITION

The Board is pleased to announce that on 9 December 2015 (after trading hours), the Purchaser, the Company and the Vendor entered into the Sale and Purchase Agreement pursuant to which the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the Sale Shares for a total consideration of RMB2,600 million (representing approximately HK$3,120 million).

The Consideration for the Sale Shares is RMB2,600 million (representing approximately HK$3,120 million), subject to adjustment described in the paragraph headed "Adjustments to the Consideration" and shall be settled by two instalments: (i) on Completion date, by allotment and issue of the First Batch Consideration Shares in the amount of RMB1,400 million (representing approximately HK$1,680 million) (and only if applicable, the issuance of the First Batch Promissory Notes by the Company); and (ii) by allotment and issue of the Second Batch Consideration Shares in the amount of RMB1,200 million (representing approximately HK$1,440 million) (and only if applicable, the issuance of the Second Batch Promissory Notes by the Company), being the remaining balance of the Consideration, which may be subject to the Consideration Adjustment as stated in the Sale and Purchase Agreement.

As Acquisition Completion is conditional upon the fulfilment and/or waiver (if applicable) of the conditions precedent set out in the Sale and Purchase Agreement and is conditional, among other things, the Purchaser being satisfied in its absolute discretion with the results of the due diligence review and the obtaining of the Shareholders' approval for the Acquisition. The Acquisition may or may not proceed. Shareholders and investors are advised to exercise caution when dealing in the Shares.

CAPITAL CONTRIBUTION

Pursuant to the Sale and Purchase Agreement, the Purchaser shall each use its reasonable efforts to conduct the Fund Raising by it or through the Company on or before Completion, or if the amount raised is insufficient, to continue to use all reasonable efforts to conduct fund raising activities during the Performance Target Period, for the purpose of contributing to the increase of the registered capital of the onshore companies of the Target Group, through the offshore companies of the Target Group, by an amount of no less than RMB600 million (representing approximately HK$720 million) or an equivalent amount of HK$.

FUND RAISING MOU

The Company had entered into the Fund Raising MOU with the Financial Institution with effect from the date of the Sale and Purchase Agreement to engage the Financial Institution to arrange placing of bonds and/or unlisted warrants of the Company for an estimated aggregate amount of US$200 million (representing approximately HK$1,560 million) to a maximum of US$300 million (representing approximately HK$2,340 million). The purpose of the fund raised under the Fund Raising MOU (to be formalised by separate placing agreement) shall be utilised, among others, for (a) the purpose of the Capital Contribution under the Acquisition; and (b) the working capital of the Company. Separate formal placing agreement will be signed between the Company and the Financial Institution subject to certain conditions to be fulfilled and the Company will publish separate announcement when the said formal placing agreement is signed in comply with the relevant Listing Rules.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Acquisition exceeds 100%, the Acquisition, together with the Capital Contribution, constitutes a very substantial acquisition for the Company pursuant to Rule 14.06(5) of the Listing Rules and is therefore subject to the approval by the Shareholders at the SGM by way of poll. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the Vendor and its associates and ultimate beneficial owners do not hold any Shares, options or securities convertible into Shares as at the date of this announcement. As such, no Shareholder is required to abstain from voting at the SGM.

GENERAL

The circular containing, among other things: (i) further details of the Acquisition; (ii) financial information of the Group; (iii) financial information of the Target Group; (iv) the Competent Person's Report; (v) the Valuation Report on the Target Mines; (vi) details of the Capital Contribution; (vii) the notice of the SGM; and (viii) other information as required under the Listing Rules is expected to be despatched to the Shareholders on or before 31 March 2016, which is more than 15 business days after the publication of this announcement, as the Company requires additional time to prepare the financial information, the Competent Person's Report and the Valuation Report.

SUSPENSION AND RESUMPTION OF TRADING IN THE SHARES

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:00 a.m. on 10 December 2015 pending the publication of this announcement. The Company has applied to the Stock Exchange for the resumption of trading in the Shares with effect from 1:00 p.m. on 15 January 2016.

Reference is made to the announcement of the Company dated 25 August 2015 in relation to the MOU, entered into among the Company, the Vendor and Mr. Qin relating to the Acquisition.

INTRODUCTION

The Board is pleased to announce that on 9 December 2015 (after trading hours), the Purchaser, the Company and the Vendor entered into the Sale and Purchase Agreement pursuant to which the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the Sale Shares for a total consideration of RMB2,600 million (representing approximately HK$3,120 million). The principal terms of the Sale and Purchase Agreement are set out below.

THE SALE AND PURCHASE AGREEMENT

Date: 9 December 2015

Parties: (i) Up Energy Investment Company Limited, a wholly-owned subsidiary of the Company, as the Purchaser;

1. Hua Lin Energy Limited, as the Vendor; and

   
   

2. the Company.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the Vendor and its ultimate beneficial owner(s) are Independent Third Parties.