Proposed Privatisation of China Baofeng (International) Limited by the Offeror by way of a Scheme of Arrangement and Withdrawal of Listing of China Baofeng (International) Limited

Thursday, 23 July 2020, 18:10 HKT/SGT

HONG KONG, July 23, 2020 - (ACN Newswire) - At present, China Baofeng (International) Limited ("China Baofeng" or the "Company", stock code on the Hong Kong Stock Exchange: 03966) and East Step International Holdings Limited (the "Offeror") are jointly issuing the Scheme of Arrangement Composite Document (the "Scheme Document") dated Thursday, 23 July 2020. The Scheme Document containing, among other things, (I) The definitions, (II) The actions to be taken by the shareholders, (III) the expected timetable, (IV) a letter from the Company's Board, (V) A letter from the Independent Board Committee of the Company, (VI) a letter from the Independent Financial Adviser, (VII) the Explanatory Statement; and the Appendices to the Scheme Document, the notice of Court Meeting and EGM, together with a pink form of proxy for the Court Meeting and a white form of proxy for the EGM, have been despatched to the shareholders on Thursday, 23 July 2020.

The Court Meeting will be held at 9 a.m. (Hong Kong time) on Monday, 17 August 2020 at Suite 3401, 34/F, Two Pacific Place, 88 Queensway Admiralty, Hong Kong to vote the resolutions of the Scheme. The EGM will be held at 11 a.m. on the same day (Hong Kong time) to vote the special resolution and / or the ordinary resolution.

Principal Terms of the Scheme of Arrangement

The Scheme Shares will be cancelled at the price of HK$2.60 per Scheme Share payable in cash by the Offeror (the "Cancellation Price"). The Cancellation Price will not be increased, and the Offeror does not reserve the right to do so. The Cancellation Price represents a premium of approximately 52.0%, 42.9% and 30.7% over the average closing prices as quoted on the Hong Kong Stock Exchange for the 30, 60, and 180 trading days up to and including the Last Trading Day, respectively. The Cancellation Price represents a discount of approximately 5.5% over the audited consolidated net asset value per Share of approximately HK$2.75 as at 31 December 2019, based on the exchange rate of RMB1:HK$1.1154.

The main conditions of the Scheme in relation to (a) the approval of the Scheme by a majority in number of the Scheme Shareholders representing 75% in value of the Scheme Shares held by the Scheme Shareholders present and voting either in person or by proxy at the Court Meeting; (b) the approval of the Scheme by Independent Shareholders holding at least 75% of the votes attaching to the Scheme Shares held by Independent Shareholders that are cast either in person or by proxy at the Court Meeting, provided that the number of votes against the resolution to approve the Scheme is not more than 10% of the votes attaching to all Scheme Shares held by the Independent Shareholders; (c) the passing of a special resolution by a majority of not less than 75% of the votes cast by the Shareholders present and voting in person or by proxy at the EGM, and the passing of an ordinary resolution by the Shareholders at the EGM; and (d) the Grand Court's sanction of the Scheme.

Assuming that all conditions are fulfilled or waived, it is expected that the Scheme will become effective on or before 4, September 2020 (Cayman Islands time). Further announcements will be made including, (i) the results of the Court Meeting and the EGM; (ii) the result of the Grand Court hearing of the petition to sanction of the Scheme and to confirm the capital reduction; (iii) the Scheme Record Date; (iv) the Effective Date; and (v) the withdrawal of the listing of the Shares on the Stock Exchange. For further information of the detailed conditions to be met of the Scheme of Arrangement, please refer to the full text of the Scheme Document (https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0723/2020072300011.pdf).

Reasons for and Benefits of the Withdrawal of the Listing

The Company mainly engages in the photovoltaic power generation business and lighting products business. The photovoltaic power generation industry is heavily regulated by the PRC government and the Company's financial performance is dependent on the subsidy from Ministry of Finance, this poses uncertainty on both the net profit and cash flow generating capabilities of the Company. The lighting products market competition remains fierce and the global trading environment becomes unfavourable to the Company. Besides, the share price of the Company has dropped substantially since December 2016, and the liquidity of the Company's shares has been at a low level over a long period of time, indicating that the Company's current listing platform may no longer be able to serve as an effective fund-raising platform for the Company's business and future growth.

The Independent Financial Adviser considers the Cancellation Price fair and reasonable for the Independent Shareholders. The details of the analysis of the Independent Financial Adviser are set out in Part [VI] of the Scheme Document, headed "Letter from the Independent Financial Adviser"

The register of members of the Company will be closed from 12, August 2020 to 17, August 2020 (both days inclusive) and during such period, no transfer of the shares will be effected. In order to qualify to attend and vote at the Court Meeting and the EGM, all transfers accompanied by the relevant share certificates must be lodged with the Hong Kong branch share registrar and transfer office of the Company at Suites 3301-4, 33/F, Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong before 4 p.m. on 11, August 2020.

If you have any questions concerning administrative or procedural matters, such as the dates, documentation and procedures relating to the Scheme, please call the hotline of the Company's Hong Kong branch share registrar and transfer office at +852 2849 3399. You may also visit the Company's website at www.baofengintl.com and/or direct your questions to the Company in the following ways:

Fax: (852) 2115 2137 (between 9:00 a.m. and 5:00 p.m. on Monday to Friday, excluding public holidays in Hong Kong)
E-mail: ir@baofengintl.com

For the avoidance of doubt, the hotline or the Company's designated phone line cannot and will not provide any advice on the merits or risks of the Scheme or give any financial or legal advice. If you are in doubt as to any aspect of the Scheme Document or the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor or other professional advisers.

Topic: Press release summary Sectors: Daily Finance, Daily News
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