Tianjin Zhonghuan Semiconductor Co., Ltd. (SZSE:002129) entered into a framework agreement to acquire 90% stake in GD Solar (Jiangsu) Co., Ltd. from Guodian Technology & Environment Group Corporation Limited (SEHK:1296) for approximately CNY 700 million on May 3, 2016. The parties entered into the sale and purchase agreement on July 1, 2016. Tianjin Zhonghuan Semiconductor will issue 85.13 million shares as consideration. Both parties agree that the issue price and number of shares to be issued will be adjusted accordingly in cases of ex-rights or ex-dividend matters such as distribution of dividends, dividend payout, bonus issuance and conversion of capital reserve into share capital during the period from the price determination date to the issuance date. As of June 30, 2017, the parties signed the supplemental agreement pursuant to which Tianjin Zhonghuan Semiconductor adjusted the number of shares to 83.44 million due to implementation of its 2015 profit distribution plan. As of September 29, 2017, Tianjin Zhonghuan Semiconductor adjusted the number of shares to 83.76 million due to implementation of its 2016 profit distribution plan. On June 26, 2018, Tianjin Zhonghuan Semiconductor announced to issue 83.98 million shares as part of the consideration rather than 83.76 million shares due to distribution of cash dividend of CNY 0.02 per 10 shares by Tianjin Zhonghuan Semiconductor. Tianjin Zhonghuan Semiconductor will raise supporting funds of CNY 416.16 million to partially fund the acquisition, handling fees including agency fees and transaction taxes. Upon closing, Tianjin Zhonghuan Semiconductor and Guodian Technology & Environment will hold 90% and 10% equity interest in GD Solar respectively. On February 7, 2018, Guodian Technology & Environment Group Corporation Limited and Tianjin Zhonghuan Semiconductor Co., Ltd entered into the supplemental agreement to extend the said lock-up period from a 12-month lock-up period commencing from the date of listing of the shares issued by Tianjin Zhonghuan Semiconductor Co., Ltd to a 36-month lock-up period commencing from the date of listing of such shares issued by Tianjin Zhonghuan Semiconductor Co., Ltd.

GD Solar reported total assets of CNY 1.18 billion, net assets of CNY 1.06 billion, loss from operations of CNY 1.28 billion and net loss of CNY 1.28 billion as of December 31, 2015. Tianjin Zhonghuan Semiconductor will re-enter into employment contracts with the existing employees of GD Solar, this being a prerequisite to the disposal and the basis of cooperation as agreed by both parties. Thus, there will not be any redundancies as a result of the disposal. The transaction is subject to approval by the Board of Directors and shareholders of Tianjin Zhonghuan Semiconductor and Guodian Technology & Environment, approval from competent state-owned assets supervision and administration authority and approval from China Securities Regulatory Commission. On July 1, 2016, the Board of Tianjin Zhonghuan Semiconductor approved the transaction. As of August 25, 2016, the Board of Directors of Guodian Technology & Environment approved the transaction. The Board of Directors and the independent Board committee of Guodian Technology & Environment recommended the shareholders to vote in favor of the resolutions. On August 30, 2016, State-owned Assets Supervision and Administration Commission of Tianjin Municipal People's Government approved the transaction. On September 9, 2016, Guodian Technology & Environment Group Corporation Limited held the 2nd extraordinary shareholders' meeting of 2016 and approved the transaction. On June 30, 2017, Guodian Technology & Environment Group Corporation Limited held the 51st session of the 4th directorate and approved the adjustment of this transaction plan. The transaction plan needs to be re-approved by State-owned Assets Supervision and Administration Commission of Tianjin Municipal People's Government. On October 12, 2017, the State-owned Assets Supervision and Administration Commission of Tianjin Municipal People's Government approved the transaction. On December 14, 2017, the transaction was approved by the 2017 4th extraordinary general meeting of Tianjin Zhonghuan Semiconductor Co., Ltd. On January 29, 2018, Cancellation of amendment was approved by the Board of Tianjin Zhonghuan Semiconductor Co., Ltd. As of February 9, 2018, the Merger and Reorganization Committee of China Securities Regulatory Commission disapproved the transaction. The transaction is expected to close within one month of agreement becoming effective. As of May 7, 2018, the transaction was unconditionally approved by CSRC (The China Securities Regulatory Commission).

Gram Capital Limited acted as a financial advisor to the independent Board committee and the independent shareholders of Guodian Technology & Environment Group Corporation Limited. KPMG acted as the accountant, Computershare Hong Kong Investor Services Limited acted as a registrar and Tianjin Huaxia Jinxin Assets Appraisal Limited acted as a valuer to Guodian Technology & Environment Group Corporation Limited. Fun Li, Chen Zi, and Zhao Xin of Minsheng Securities Co.,Ltd. acted as financial advisors, Huang Wenbiao, Zhou Yan, Chen Bo, and Du Minyi of China Commercial Law Firm acted as legal advisors and Yan Bingqi and Li Fengqin of Union Power Certified Public Accountants Co., Ltd and Liang Xueping, Zhang Xuebing, and Ding Chen of CHW CPA Limited Liability Partnership acted as accountants to Tianjin Zhonghuan Semiconductor Co., Ltd.

Tianjin Zhonghuan Semiconductor Co., Ltd. (SZSE:002129) completed the acquisition of 90% stake in GD Solar (Jiangsu) Co., Ltd. from Guodian Technology & Environment Group Corporation Limited (SEHK:1296) on July 2, 2018.