GT : DISCLOSEABLE TRANSACTION - SUBSCRIPTION OF FURTHER SHARE IN AN INVESTEE COMPANY

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.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 263)

DISCLOSEABLE TRANSACTION

SUBSCRIPTION OF FURTHER SHARE IN AN INVESTEE COMPANY

On 27 January 2017 (after trading hours), Upperclass, an indirect wholly-owned subsidiary of the Company, entered into the Subscription Agreement and the Shareholders Agreement whereby Upperclass and the Investor will subscribe for one and eleven additional share(s) in the Investee Company respectively for the Subscription Price of US$3,000,000 and US$30,000,000 respectively. Upon issue of the additional shares, the Investee Company will be owned as to approximately 9.09% and 90.91% by Upperclass and the Investor respectively.

The Subscription Price is primarily to finance the Investee Company's acquisition of the Convertible Bonds due 2020 in the principal amount of US$30,000,000 issued by XinRen Aluminum pursuant to the CB Sale and Purchase Agreement.

As one of the applicable percentage ratios calculated in accordance with Rule 14.07 of the Listing Rules in respect of the Subscription is more than 5% but less than 25%, the commitments therefore constitute a discloseable transaction for the Company, which is subject to the announcement requirement but exempt from the shareholders' approval requirement under the Listing Rules.

SUBSCRIPTION OF FURTHER SHARE IN AN INVESTEE COMPANY

On 27 January 2017 (after trading hours), Upperclass, an indirect wholly-owned subsidiary of the Company, entered into the Subscription Agreement and the Shareholders Agreement whereby Upperclass and the Investor will subscribe for one and eleven additional share(s) in the Investee Company for the Subscription Price of US$3,000,000 and US$30,000,000 respectively. As at the date of this announcement, the Investee Company is owned as to one

share and nine shares by Upperclass and the Investor respectively. Upon issue of the additional shares, the Investee Company will be owned as to approximately 9.09% (two shares) and 90.91% (twenty shares) by Upperclass and the Investor respectively.

The Subscription Price is primarily to finance the Investee Company's acquisition of the Convertible Bonds pursuant to the CB Sale and Purchase Agreement entered into between the Investee Company (as purchaser) and Southwest Securities (as vendor), for a consideration equal to the principal amount together with interests accrued up to completion of the CB Sale and Purchase Agreement and a premium that would allow Southwest Securities to achieve an internal rate of return of 8.5% from its subscription up to completion of the CB Sale and Purchase Agreement. It is expected that the consideration for the sale and purchase of the Convertible Bonds will not exceed US$31,172,000. As of the date of this announcement, to the best knowledge, information and belief of the Directors, having made all reasonable enquiry, Southwest Securities is an Independent Third Party.

INFORMATION ON THE INVESTEE COMPANY

Shareholders

As at the date of this announcement, the Investee Company is owned as to one share (10%) and nine shares (90%) by Upperclass and the Investor respectively. Upon issue of the further shares pursuant to the Subscription Agreement and the Shareholders' Agreement, the Investee Company will be owned as to approximately 9.09% and 90.91% by Upperclass and the Investor respectively.

The Investor is an investment holding company incorporated in British Virgin Islands owned by two individuals. As at the date of this announcement, to the best knowledge, information and belief of the Directors, having made all reasonable enquiry, each of the Investor and its ultimate beneficial owners is an Independent Third Party.

Purpose of the Investee Company

The Investee Company is a company established in the Cayman Islands. The Investee Company has not commenced any operation since its incorporation on 26 May 2016. It is intended that the Investee Company is to acquire and hold the convertible bonds issued by XinRen Aluminum (or such other securities and instruments to be issued by XinRen Aluminum or its affiliates in exchange for such Convertible Bonds in connection with its restructuring or refinancing) (the ''Investment'').

Leverage financing

The Shareholders' Agreement provides that the Investee Company will seek to obtain leverage financing to facilitate the acquisition of the Investment and otherwise fund the operations of the Investee Company. The shareholders will use commercially reasonable efforts to assist the obtaining of such leverage finance and provide guarantee on a several but not joint basis pro rata to their shareholdings.

Call option

If a shareholder defaults in making payment for the Subscription Price or other payment or guarantee required under the Shareholders' Agreement, the non-defaulting shareholder may require the defaulting purchaser to sell its shares at a price to be valued by an independent appraiser.

Appointment of advisor

According to the Shareholders' Agreement, the Investee Company is to appoint Singularity Capital Group Limited (the ''Advisor'') as advisor to provide investment advisory and administrative services to the Investee Company. An annual advisory fee equal to 2% of the cost of the acquisition of the Convertible Bonds by the Investee Company is payable to the Advisor, payable semi-annually in advance. The Advisor will also be entitled to performance fees after the distribution to the shareholders of the Investee Company has exceeded specified internal rate of return as stipulated in the Shareholders' Agreement.

Composition of board

The board of directors of the Investee Company comprises three directors, all to be nominated by the Advisor. One of the first directors of Investee Company is the sole director and sole shareholder of the Advisor.

Compulsory sale of the Investment

After consultation with the Advisor, shareholders holding 51% or more of ordinary shares of the Investee Company may require that the Company promptly initiate a sale process with respect to the Investment (subject to such shareholders further approval of the terms of sale) after the occurrence of any of the following events:

1. the Advisor or any Approved Executive Officer (as defined in the Shareholders' Agreement) formally admits to in writing or otherwise has been convicted of wilful misconduct, gross negligence, actual fraud, embezzlement or a similar felony involving misappropriation of funds in connection with the Investee Company or the Investment;

2. the Company has failed to obtain leverage financing in order to complete the acquisition of the Investment within six months of the date of acquisition of the first tranche Investment;

3. the Company has not fully disposed of the Investment within thirty months of date of acquisition of the first tranche Investment; and

4. there ceases to be at least one Approved Executive Officer appointed as a director of the Investee Company.

Preemption rights on new issue

If the Investee Company intends to issue any further debt or equity securities, the Investee Company will first offer such securities to its shareholders on a pro rata basis. Any untaken securities will then be offered to the accepting shareholders, and the remaining untaken securities may be issued to third parties with the approval of shareholder(s) holding 51% or more ordinary shares in the Investee Company.

Restrictions on share transfer

A shareholder may not transfer its equity interests in the Investee Company other than to is affiliate or with the consent of the board of directors of the Investee Company.

Reserved matters

The Shareholders' Agreement provides that prior approval from shareholder(s) holding 51% or more shares in the Investee Company is required for material transactions (other than in relation to the Investment), related party transactions, disposal of any part of the Investment resulting in a net internal rate of return of less than 20% and issuance of additional equity or debt securities.

Distribution of profit

Any distribution of profits will be made to the shareholders of the Investee Company in proportion to their shareholding.

INFORMATION ON THE CONVERTIBLE BONDS AND XINREN ALUMINUM

The Convertible Bonds form part of the US$150,000,000 secured convertible bonds due 2020 issued by XinRen Aluminum. Set out below are the principal terms of the Convertible Bonds:

Issuer : XinRen Aluminum

Principal Amount : US$30,000,000 (being part of the secured convertible bonds due 2020 in the aggregate principal amount of US$150,000,000 issued by XinRen Aluminum)

Interest : 8% per annum, payable semi-annually in arrears

Maturity Date : 27 August 2020

Conversion Price : SG$1.01 per conversion share (subject to customary adjustment events including share subdivision, consolidation or reclassifications, capitalisation of profits or reserves, capital distribution, rights issue and other issue at under market value)