China Oriental : Announcements and Notices - Placing of New Shares under General Mandate and Placing of Existing Shares by the Controlling Shareholder

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 Bermuda with limited liability)

(Stock Code: 581) PLACING OF NEW SHARES UNDER GENERAL MANDATE AND PLACING OF EXISTING SHARES BY THE CONTROLLING SHAREHOLDER Placing Agent Shenwan Hongyuan Securities (H.K.) Limited Sub-placing Agent Yue Xiu Securities Company Limited PLACING OF NEW SHARES UNDER GENERAL MANDATE

On 20 January 2017, the Company entered into the Placing Agreement I with the Placing Agent whereby the Company agreed to place, through the Placing Agent, on a best effort basis, a maximum of 586,285,000 Placing Shares I to not less than six Placees I at a price of HK$1.30 per Placing Share I.

The maximum of 586,285,000 Placing Shares I represent (i) approximately 20.00% of the existing issued share capital of the Company of 2,931,425,000 Shares as at the date of this announcement; and (ii) approximately 16.67% of the issued share capital of the Company of 3,517,710,000 Shares as enlarged by the issue of the 586,285,000 Placing Shares I, assuming no further change in the issued share capital of the Company upon the completion of the Placing I. The aggregate nominal value of the maximum number of Placing Shares I under the Placing I will be HK$58,628,500.

The Placing Shares I will be issued under the General Mandate and therefore the issue of the Placing Shares I will not be subject to the approval of the Shareholders.

The maximum gross proceeds and net proceeds from the Placing I will be approximately HK$762,170,500 and HK$740,796,000 respectively. The net placing price will be approximately HK$1.26 per Share. The net proceeds from the Placing I are intended to be used for capital expenditure in setting up a production line of sheet piling products to further improve the current product mix and as general working capital for the Group. Completion of the Placing I is expected to take place on or about 27 January 2017.

PLACING OF EXISTING SHARES BY CONTROLLING SHAREHOLDER

The Company was informed by Wellbeing Holdings Limited (the "Vendor"), the controlling shareholder of the Company that on 20 January 2017, the Vendor entered into the Placing Agreement II with the Placing Agent in order to assist the Company to restore its public float. Pursuant to the Placing Agreement II, the Placing Agent agreed to place, on a best effort basis, 64,314,000 Shares (representing approximately 1.83% of the issued share capital of the Company of 3,517,710,000 Shares as enlarged by the issue of the 586,285,000 Placing Shares I). Completion of the Placing II is expected to take place on or about 27 January 2017.

PUBLIC FLOAT

Assuming all the Placing Shares I and Placing Shares II are placed out, the Vendor and parties acting in concert with it and other connected persons of the Company will be interested in 2,638,280,740 Shares (representing approximately 75.00% of the total issued share capital of the Company) immediately after completion of the Placing I and Placing II and the balance of 879,429,260 Shares (representing approximately 25.00% of the total issued share capital of the Company) will be held in the hands of the public. Accordingly, the public float of the Company will be restored and the Company will meet the minimum prescribed percentage of shares being held by public shareholders in accordance with Rule 8.08 of the Listing Rules.

Further announcement(s) will be made by the Company regarding the completion of the Placings and restoration of the public float of the Company.

RESUMPTION PROPOSAL

Trading in the Shares on the Stock Exchange was suspended at the Company's request with effect from 09:01 a.m. on Tuesday, 29 April 2014 due to insufficient public float of the Company. The Company has submitted the resumption proposal ("Resumption Proposal") including, among other things, the Placings, to the Stock Exchange, as further detailed in the announcement of the Company dated 16 January 2017, and the Listing Department of the Stock Exchange has confirmed that it has no further comments on the Resumption Proposal. The Company will make an application to the Stock Exchange for the resumption of trading in the shares of the Company upon Completion I and Completion II.

Shareholders and potential investors should note that completion of the Placing I and Placing II is subject to fulfillment of the conditions under the Placing Agreements. As the Placing I and Placing II may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares. THE PLACING AGREEMENT I Date: 20 January 2017 Issuer: the Company Placing Agent: Shenwan Hongyuan Securities (H.K.) Limited

To the best of the Director's knowledge, information and belief (including all independent non-executive Directors but excluding Mr. Ondra OTRADOVEC (non-executive Director of the Company, "Mr. Otradovec")), having made all reasonable enquiries, the Placing Agent and their ultimate beneficial owners are Independent Third Parties.

Yue Xiu Securities Company Limited is a sub-placing agent ("Sub-Placing Agent") appointed by the Placing Agent under the Placing Agreement I. To the best of the Directors' knowledge, information and belief (including all independent non-executive Directors but excluding Mr. Otradovec), having made all reasonable enquiries, the Sub-Placing Agent and their ultimate beneficial owners are Independent Third Parties.

Placees I

Pursuant to the Placing Agreement I, the Company has agreed to grant and the Placing Agent has agreed to procure, on a best efforts basis, not less than six Placees I to subscribe for up to 586,285,000 Shares, at a placing price of HK$1.30 per Share.

Each of the Placees I to be procured by the Placing Agent and their ultimate beneficial owner(s) will be Independent Third Parties.

Number of Placing Shares I

The 586,285,000 Placing Shares I represent (i) approximately 20.00% of the existing issued share capital of the Company of 2,931,425,000 Shares at the date of this announcement; and (ii) approximately 16.67% of the issued share capital of the Company of 3,517,710,000 Shares as enlarged by the Placing I (assuming all the Placing Shares I are placed out), assuming no further change in the issued share capital of the Company upon the completion of the Placing I. The aggregate nominal value of maximum number of the Placing Shares I shall be HK$58,628,500.

Ranking of Placing Shares I

The Placing Shares I, when issued and fully paid, will rank pari passu among themselves and with the Shares in issue at the time of allotment and issue of the Placing Shares I.

Placing Price I

The Placing Price I of HK$1.30 represents:

1. a premium of approximately 12.07% to the closing price of approximately HK$1.16 per Share as quoted on the Stock Exchange on the Last Trading Day;

2. a premium of approximately 11.68% to the average of the closing prices of approximately HK$1.164 per Share as quoted on the Stock Exchange in the last five consecutive trading days immediately prior to the Last Trading Day; and

3. a discount of approximately 62.43% to the unaudited consolidated net asset value per Share (excluding non-controlling interests) of approximately RMB3.09 (equivalent to approximately HK$3.46) as at 30 June 2016 as disclosed under the interim report of the Company for the six months ended 30 June 2016.

The Placing Price I was negotiated on an arm's length basis between the Company and the Placing Agent and was determined with reference to the prevailing general market situation and the circumstances of the Company. The Directors (including all independent non-executive Directors but excluding Mr. Otradovec) consider that the Placing Price I is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Placing commission

The Placing Agent will charge the Company a placing commission equivalent to 2.5% of the Placing Price I multiplied by the number of Placing Shares I successfully placed by the Placing Agent (subject to completion of the Placing I) in relation to the Placing I in accordance with the Placing Agreement I.

Pursuant to the Placing Agreement I, the Company will also give to the Placing Agent 0.5% of the amount equal to the Placing Price I multiplied by the number of Placing Shares I which the Placing Agent has successfully procured subscribers for at the end of the Placing Period I as bonus on a discretionary basis by the Company.

The said placing commission was negotiated on an arm's length basis between the Company and the Placing Agent with reference to the prevailing market rate.

Conditions Precedent of the Placing I

Completion of the Placing Agreement I is conditional on, among the other matters, the fulfillment of all the following conditions on or before the Long Stop Date I:

i. the Listing Committee granting approval for the listing of, and permission to deal in, the Placing Shares I on the Stock Exchange;