Recycling Aluminium enters into an Equity Transfer Agreement with JX Electronic

Recycling Aluminium, an indirect wholly-owned subsidiary of Mianyang Xinhuan Aluminium, entered into an Equity Transfer Agreement with JX Electronic. Pursuant to the agreement Recycling Aluminium agreed to acquire and JX Electronic agreed to sell 30% equity interest in Xinhuan Aluminium, for a cash consideration of RMB1,500,000.

Upon completion, Recycling Aluminium will legally and beneficially hold 30% equity interest of Xinhuan Aluminium, with the right to appoint two out of the three members of the board of directors of Xinhuan Aluminium. Accordingly, Xinhuan Aluminium will become an indirect non-wholly owned subsidiary of the company.

JX Electronic is a company which is controlled by Ms. Yu Yanyan and Ms. Yu Jiajia, associates of Mr. Yu Jianqiu, Chairman and controlling shareholder, and connected persons of the company. Accordingly, JX Electronic is a connected person of the company and the transactions under the Equity Transfer Agreement constitute connected transactions of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios (as defined in the Listing Rules) in respect of the transactions under the Equity Transfer Agreement, being the aggregate of the consideration of RMB1,500,000 payable by Recycling Aluminium at completion and the additional RMB7,500,000 capital to be contributed by Recycling Aluminium by 30 July 2016, in aggregate, are less than 5%, the Transaction is subject to the reporting and announcement requirements, but is exempt from the circular and shareholders’ approval requirements under Chapter 14A of the Listing Rules.