Yingde Gases : Announcements and Notices - Voluntary Announcement - Update on the Repayment of Bank Loan

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Yingde Gases Group Company Limited

盈德氣體集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 02168) VOLUNTARY ANNOUNCEMENT UPDATE ON THE REPAYMENT OF BANK LOAN

Reference is made to the announcement of Yingde Gases Group Company Limited (the "Company") dated 22 December 2016 in relation to, among others, an update on the repayment of bank loan (the "Announcement"). Unless stated otherwise, the capitalized terms used herein shall have the same meaning as those defined in the Announcement.

The proceeds from the Proposed Placing to Originwater was to be primarily used to repay a substantial portion of a bank loan (the "Bank Loan") of the Company in an outstanding principal amount of HK$820 million under a loan facility agreement (the "Loan Agreement") whose maturity date is 3 January 2017.

Due to the severe delay in the completion of the Proposed Placing as a result of the continuing frustration by Mr. Zhongguo Sun and Mr. Trevor Raymond Strutt (collectively the "Minority Directors"), the Company was not able to use the proceeds from the Proposed Placing to repay the Bank Loan before its maturity date. In order not to trigger substantive default under the Loan Agreement and cross-default under the other relevant loan agreements of the Company, the Company has proactively made financial arrangements to minimize the adverse impact brought by the frustration of the Proposed Placing by the Minority Directors. As of the date of this announcement, the Bank Loan has been repaid by the Company with a new offshore bank loan of HK$820 million secured by onshore pledged deposits.

The new bank loan carries an effective annual interest rate which is about twice of the interest rate of the Bank Loan. The financial costs for the new bank loan could have been saved if the Proposed Placing had been able to proceed as scheduled.

Hong Kong, 2 January 2017

By order of the Board

Yingde Gases Group Company Limited Zhao Xiangti

Chairman

As at the date of this announcement, the executive directors of the Company are Mr. Zhao Xiangti, Mr. He Yuanping and Mr. Zhang Yunfeng; the non-executive directors of the Company are Mr. Zhongguo Sun, Mr. Trevor Raymond Strutt and Mr. Suo Yaotang; and the independent non-executive directors of the Company are Mr. Zheng Fuya, Dr. Wang Ching and Dr. Feng Ke.