Haier Electronics : (1) DISCLOSEABLE TRANSACTION IN RELATION TO THE PROPOSED SUBSCRIPTION FOR NEW OZNER SHARES BY THE SUBSCRIBER AND (2) APPLICATION FOR WHITEWASH WAIVER AND CONSENT FOR SPECIAL DEAL

November 01, 2019 at 03:03 pm

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this joint 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 joint announcement.

This joint announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of Haier Electronics or Ozner.

HAIER ELECTRONICS GROUP CO.,	OZNER WATER INTERNATIONAL
LTD.	HOLDING LIMITED
海爾電器集團有限公司 *	浩澤淨水國際控股有限公司
(Incorporated in Bermuda with limited liability)	(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 1169)	(Stock Code: 2014)
JOINT ANNOUNCEMENT
(1) DISCLOSEABLE TRANSACTION	(1) PROPOSED SUBSCRIPTION FOR
IN RELATION TO THE PROPOSED	NEW OZNER SHARES BY
SUBSCRIPTION FOR NEW OZNER	THE SUBSCRIBER
SHARES BY THE SUBSCRIBER	UNDER SPECIFIC MANDATE
AND	(2) APPLICATION FOR
	WHITEWASH WAIVER AND CONSENT
(2) APPLICATION FOR	FOR SPECIAL DEAL
WHITEWASH WAIVER AND CONSENT
FOR SPECIAL DEAL		AND
	(3) APPOINTMENT OF INDEPENDENT
	FINANCIAL ADVISER
Financial Advisers to Haier Electronics	Financial Adviser to Ozner

Independent Financial Adviser to the Ozner Independent Board Committee

and the Ozner Independent Shareholders

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PROPOSED SUBSCRIPTION FOR NEW OZNER SHARES BY THE SUBSCRIBER

After the close of markets on 1 November 2019, Ozner entered into the Subscription Agreement with Haier Electronics, pursuant to which Haier Electronics has conditionally agreed to (or to procure one of its direct or indirect wholly-owned subsidiaries to) subscribe for, and Ozner has conditionally agreed to allot and issue, 1,599,248,963 new Ozner Shares at the Subscription Price of HK$1.03 per Subscription Share. The Subscription Shares represent (i) approximately 75.0% of the issued share capital of Ozner as at the date of this joint announcement, and (ii) approximately 42.9% of the issued share capital of Ozner as enlarged by the allotment and issue of the Subscription Shares (assuming that there is no change in the issued share capital of Ozner other than the allotment and issue of the Subscription Shares before Closing).

The Subscription is subject to Ozner Shareholders' approval. If approved, Ozner will allot and issue the Subscription Shares under the Specific Mandate to be granted by the Ozner Shareholders at the Ozner EGM. An application will be made by Ozner to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

IMPLICATIONS UNDER THE TAKEOVERS CODE

As at the date of this joint announcement, the Subscriber is not interested in any Ozner Shares and the Subscriber Concert Group (comprising as at the date of this joint announcement the Subscriber and SAIF Partners IV L.P.) is interested in 334,857,000 Ozner Shares, representing approximately 15.7% of the total issued share capital of Ozner. Immediately after Closing, the Subscriber and the Subscriber Concert Group (comprising at that time the Subscriber, SAIF Partners IV L.P. and Mr. Xiao and his related parties (namely, Baida Holdings Limited, Lion Rise Holdings Limited and Glorious Shine Holdings Limited)) will be interested in 1,599,248,963 Ozner Shares and 2,725,154,113 Ozner Shares, respectively, representing approximately 42.9% and 73.0% respectively of the total issued share capital of Ozner as enlarged by the allotment and issue of the Subscription Shares (assuming that there is no change in the issued share capital of Ozner other than the allotment and issue of the Subscription Shares before Closing).

Under Rule 26.1 of the Takeovers Code, the acquisition of 30% or more of the voting rights in Ozner by the Subscriber (or the Subscriber Concert Group) would trigger an obligation on the Subscriber (or the Subscriber Concert Group) to make a mandatory general offer for all the issued Ozner Shares and other securities of Ozner (other than those already owned or agreed to be acquired by the Subscriber Concert Group), unless the Whitewash Waiver is granted by the Executive. An application will be made to the Executive for the Whitewash Waiver pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the Executive, would be subject to, among other things, the approval of the Ozner Independent Shareholders at the Ozner EGM by way of poll.

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The Executive may or may not grant the Whitewash Waiver, and if granted, the Whitewash Waiver will be subject to approval by at least 75% of the votes cast by Ozner Independent Shareholders (either in person or by proxy) at the Ozner EGM. In the event that the Whitewash Waiver is not granted or not approved by at least 75% of the votes cast by Ozner Independent Shareholders at the Ozner EGM, Haier Electronics may, in its sole discretion and if it is ready to make the Possible Offer, elect to waive the relevant Conditions and proceed with the Subscription in the absence of the Whitewash Waiver. In that case, the Subscriber will make the Possible Offer in compliance with the Takeovers Code. Relevant announcement(s) will be made by Ozner and Haier Electronics in compliance with the Listing Rules and the Takeovers Code as and when appropriate.

Special Deal

As each Ozner Shareholder holding 5% or more of Ozner's issued share capital immediately following Closing (except for the Subscriber) shall be entitled to nominate one person as a member of the Strategic Committee, the Strategic Committee Establishment is considered by the Executive to be a special deal under Rule 25 of the Takeovers Code.

An application will be made to the Executive for consent for the Strategic Committee Establishment under Rule 25 of the Takeovers Code. Such consent, if granted, is expected to be subject to (i) an opinion being given by the Independent Financial Adviser that the terms of the Strategic Committee Establishment are fair and reasonable and (ii) approval of the Strategic Committee Establishment by the Ozner Independent Shareholders at the Ozner EGM. In the event that the Executive does not consent to the Strategic Committee Establishment, the Independent Financial Adviser opines that the terms of the Strategic Committee Establishment are not fair and reasonable, or the Strategic Committee Establishment is not approved by the Ozner Independent Shareholders at the Ozner EGM, and assuming that all the Conditions are satisfied or waived (as applicable), Ozner and Haier Electronics will proceed with the Subscription in the absence of the Strategic Committee Establishment.

IMPLICATIONS UNDER THE LISTING RULES FOR HAIER ELECTRONICS

For Haier Electronics, as the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Subscription is more than 5% but less than 25%, the Subscription constitutes a discloseable transaction for Haier Electronics under Chapter 14 of the Listing Rules and is therefore subject to the notification and announcement requirements (but is not subject to the circular and shareholders' approval requirements) under the Listing Rules.

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GENERAL

Pursuant to the Takeovers Code, the Ozner Independent Board Committee comprising LAU Tze Cheung Stanley, BAO Jiming, CHAN Yuk Sing Gilbert and GU Jiuchuan, being all the independent non-executive Ozner Directors, has been established to advise the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment. Somerley Capital Limited has been appointed, with the approval of the Ozner Independent Board Committee, as the Independent Financial Adviser to advise the Ozner Independent Board Committee and the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment.

A circular containing, among other things, (i) further details of the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment; (ii) recommendations from the Ozner Independent Board Committee to the Ozner Independent Shareholders on the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment; (iii) a letter of advice from the Independent Financial Adviser to the Ozner Independent Board Committee and the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment; and (iv) a notice of the Ozner EGM and a form of proxy, is expected to be despatched to the Ozner Shareholders on or before 22 November 2019 and in compliance with the requirements of the Listing Rules and the Takeovers Code.

The Ozner EGM will be held to consider and, if thought fit, pass resolutions to approve, among other things: (i) the Subscription; (ii) the Specific Mandate for the allotment and issue of the Subscription Shares; (iii) the Whitewash Waiver; and (iv) the Strategic Committee Establishment. The resolutions in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment will be proposed to the Ozner Independent Shareholders and be voted on by way of poll in accordance with the Takeovers Code. Separate resolutions in relation to the Subscription and the Specific Mandate, as well as the appointment of the Subscriber Directors, will be proposed to such Ozner Shareholders as are permitted to vote under the Listing Rules or by the Stock Exchange and be voted on by way of poll in accordance with the Listing Rules.

As at the date of this joint announcement, save as follows, no Ozner Shareholder has a material interest in or is otherwise interested or involved in the Subscription, the Specific Mandate, the Whitewash Waiver or the Strategic Committee Establishment and therefore no Ozner Shareholder is required to abstain from voting on the resolutions in relation to these matters at the Ozner EGM. For the reasons set out in this joint announcement, each of SAIF Partners IV L.P., China Innovative Capital Management Co., Ltd, Ares FW Holdings, L.P., Mr. Xiao and his related parties (namely, Baida Holdings Limited, Lion Rise Holdings Limited and Glorious Shine Holdings Limited), Mr. Wang Yonghui, Mr. Tan Jibin and Mr. Li Honggao will abstain from voting, and Watercube Holdings L.L.C. does not propose to vote, on the relevant resolutions to be proposed to the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment in accordance with the Takeovers Code.

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The Subscription is subject to the fulfilment and/or waiver (as applicable) of the Conditions, including approval of the Subscription, the Specific Mandate and the Whitewash Waiver by the Ozner Shareholders (or the Ozner Independent Shareholders, as applicable) at the Ozner EGM, and the granting of the Whitewash Waiver by the Executive. As such, the Subscription may or may not proceed to Closing. Ozner Shareholders and potential investors are advised to exercise caution when dealing in the Ozner Shares, and are recommended to consult their professional advisers if they are in any doubt about their position and as to actions that they should take.

PROPOSED SUBSCRIPTION FOR NEW OZNER SHARES BY THE SUBSCRIBER

After the close of markets on 1 November 2019, Ozner entered into the Subscription Agreement with Haier Electronics in relation to the Subscription. A summary of the principal terms of the Subscription Agreement is set out below.

Date

1 November 2019

Parties

Issuer: Ozner

Subscriber: Haier Electronics (or such direct or indirect wholly-owned subsidiary of Haier Electronics which it procures to acquire the Subscription Shares) (i.e., the Subscriber)

Haier Electronics is a third party independent of both Ozner and connected persons of Ozner. Without prejudice to such independence, it is noted that, as at the date of this joint announcement, Mr. Andrew Y. Yan is a non-executive director of Haier Electronics' controlling shareholder, Haier Smart Home Co., Ltd (stock code: 600690 SH), and is also the sole shareholder and director of SAIF IV GP Capital Limited, which is the sole general partner of SAIF IV GP, L.P., which in turn is the sole general partner of SAIF Partners IV L.P., which in turn is a substantial shareholder of Ozner. Mr. Andrew Y. Yan also controls 天津賽富盛元投資管理中心(有限合夥) (Tianjin SAIF Shengyuan Investment Management Center L.P.*), which is an associated company (as defined in the Takeovers Code) of Haier Electronics. Accordingly, SAIF Partners IV L.P. is presumed to be acting in concert with the Subscriber under classes (1) and (2) of the definition of ''acting in concert'' in the Takeovers Code.

The Subscription

The Subscriber has conditionally agreed to (or to procure one of its direct or indirect wholly-owned subsidiaries to) subscribe for, and Ozner has conditionally agreed to allot and issue, 1,599,248,963 new Ozner Shares (with an aggregate nominal value of HK$1,647,226,432) at the Subscription Price of HK$1.03 per Subscription Share.

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The Subscription Shares

As at the date of this joint announcement, Ozner has 2,132,331,950 Ozner Shares in issue. The Subscription Shares represent (i) approximately 75.0% of the issued share capital of Ozner as at the date of this joint announcement; and (ii) approximately 42.9% of the issued share capital of Ozner as enlarged by the allotment and issue of the Subscription Shares (assuming that there is no change in the issued share capital of Ozner other than the allotment and issue of the Subscription Shares before Closing).

The Subscription Shares, when issued and fully paid-up, will rank pari passu in all respects among themselves and with all the Ozner Shares in issue as at the date of allotment and issue of the Subscription Shares.

Specific Mandate

The Subscription is subject to Ozner Shareholders' approval. If approved, the Subscription Shares will be allotted and issued under the Specific Mandate to be obtained from the Ozner Shareholders at the Ozner EGM.

Application for Listing

An application will be made by Ozner to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

The Subscription Price

The aggregate amount of the consideration for the Subscription Shares is HK$1,647,226,432, which shall be payable by Haier Electronics in cash upon Closing.

The Subscription Price of HK$1.03 per Subscription Share represents:

a discount of approximately 30.4% to the closing price of HK$1.48 per Ozner Share as quoted on the Stock Exchange on the Last Trading Day;
a discount of approximately 29.7% to the average of the closing price per Ozner Share of approximately HK$1.47 for the last five trading days as quoted on the Stock Exchange up to and including the Last Trading Day;
a discount of approximately 28.9% to the average of the closing price per Ozner Share of HK$1.45 for the last 10 trading days as quoted on the Stock Exchange up to and including the Last Trading Day;
a discount of approximately 42.6% to the unaudited consolidated net asset value of Ozner of approximately HK$1.80 per Ozner Share as at 30 June 2019 (based on the number of issued Ozner Shares as at 30 June 2019 and an exchange rate of: HK$1 = RMB0.87966 as published by the People's Bank of China on 28 June 2019); and

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a discount of approximately 41.8% to the audited consolidated net asset value of Ozner of approximately HK$1.77 per Ozner Share as at 31 December 2018 (based on the number of issued Ozner Shares as at 31 December 2018 and an exchange rate of: HK$1 = RMB0.87620 as published by the People's Bank of China on 28 December 2018).

The Subscription Price was determined after arm's length negotiation between Ozner and Haier Electronics with reference to the financial performance of Ozner, the prevailing market prices of the Ozner Shares, the recent market conditions and the benefits of introducing Haier Electronics as Ozner's strategic investor as detailed in the section headed ''Reasons for and Benefits of the Proposed Subscription'' below.

Conditions of the Subscription

Closing is conditional upon fulfilment (or, where applicable, waiver) of the following Conditions:

the Executive having granted the Whitewash Waiver and all of the conditions (if any) attached to the Whitewash Waiver granted having been satisfied in accordance with the terms thereof, and such Whitewash Waiver having not been revoked;
the Listing Committee of the Stock Exchange having granted the approval for the listing of, and the permission to deal in, the Subscription Shares and such approval and permission having not been withdrawn or revoked;
the passing by the Ozner Independent Shareholders at the Ozner EGM of resolutions to approve:
1. the Subscription; (ii) the Specific Mandate; and (iii) the Whitewash Waiver, in each case by way of poll in accordance with the Listing Rules, the Takeovers Code and the articles of association of Ozner;
the passing by the Ozner Shareholders (being such Ozner Shareholders as are permitted to vote under the Listing Rules or by the Stock Exchange) at the Ozner EGM of resolutions to approve: (i) the Subscription; (ii) the Specific Mandate; and (iii) the appointment of the Subscriber Directors, in each case by way of poll in accordance with the Listing Rules and the articles of association of Ozner;
the issuance of a notice by SAMR approving the Transaction for merger control purposes pursuant to the AML without imposing any material conditions on Haier Electronics, or the expiry of the statutory review period under the AML and no objection having been raised by SAMR with respect to the Transaction;
the Subscriber Warranties remaining true, accurate and not misleading in each case in all material respects at and as if made on the Closing Date;
the Ozner Warranties remaining true, accurate and not misleading in each case in all material respects at and as if made on the Closing Date;

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there having not been a change of control of Ozner, nor any disciplinary proceedings having been initiated by the SFC or the Stock Exchange against Ozner which have resulted, or would be reasonably expected to result, in disciplinary sanctions more severe than a private reprimand;
Ozner having complied in all material respects with all of its obligations under the Subscription Agreement that are required to be performed on or before Closing;
there having been no material adverse change to the business, operations, properties, assets (tangible and intangible), liabilities (including contingent liabilities), earnings, results of operations or financial condition of the Ozner Group's business or the Ozner Group taken as a whole, or to the ability of Ozner to perform its obligations under the 2015 CB or the 2018 CB, on or prior to Closing other than changes in applicable laws or mandatory accounting standards or changes generally applicable to financial or securities markets which have a disproportionate impact on the Ozner Group relative to other participants in the same industry sector; and
Ozner having obtained all the Consents.

The Conditions in paragraphs (a) and (c) may be waived by Haier Electronics in its sole discretion when it is prepared to make a general offer under Rule 26.1 of the Takeovers Code. The Conditions in paragraph (d)(iii), (g), (h), (i), (j) and (k) above may be waived by Haier Electronics at its sole discretion. The Condition in paragraph (f) above may be waived by Ozner in its sole discretion.

In the event that Haier Electronics elects to waive the fulfilment of the Conditions in paragraphs (a) and (c) and proceeds with the Subscription, the Subscriber will comply with the relevant requirements under the Takeovers Code, including the making of the Possible Offer. Further announcement(s) will be published by Ozner and Haier Electronics as and when appropriate in accordance with the Listing Rules and the Takeovers Code. As at the date of this joint announcement, Haier Electronics has not determined whether or not to proceed with the Subscription if the Conditions in paragraphs (a) and (c) are not fulfilled.

In the event the Conditions are not fulfilled (or waived) at or before 5:00 p.m., Hong Kong time, on the Long Stop Date, the Subscription Agreement may be terminated by either Ozner or Haier Electronics by notice in writing to the other party, provided that the right to terminate the Subscription Agreement shall not be available to any party whose material breach of the Subscription Agreement has resulted in or materially contributed to the failure to fulfil the Conditions.

As at the date of this joint announcement, none of the Conditions has been fulfilled.

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Additional Undertakings

Ozner has given certain representations, warranties and indemnities to the Subscriber and undertaken to ensure the following events occur as soon as practical after the date of the Subscription Agreement and in any event before the Long Stop Date to the reasonable satisfaction of Haier Electronics:

the Ozner Group will carry out a restructuring exercise with regards to its interests in certain of its existing distributors such that, upon completion of such restructuring exercise, Ozner Group will have control over each such distributor; and
written advice will be obtained from reporting accountants of the Ozner Group in relation to the accounting treatment of the restructuring exercise referred to in (a) above.

Subject to compliance with the Listing Rules, Haier Electronics and Ozner have also undertaken to procure that the following agreements are entered into by them or their respective affiliates in connection with a strategic collaboration between Haier Electronics and Ozner within one month from the date of the Subscription Agreement, in each case to take effect on Closing or on such other date agreed between the parties:

a brand licence agreement (the ''Brand Licence Agreement'') authorising the relevant Ozner Group Companies to use the ''Haier'' brand and relevant trademark(s) to market certain of Ozner's products in its water purification commercial leasing business; and
a framework agreement (the ''Framework Agreement'') regarding business cooperation in relation to (i) cooperation in production and manufacturing of certain water purification products; (ii) developing synergies in the distribution and sale of products; (iii) sharing of the Ozner Group's after-sales services resources; and (iv) cooperation in financing and optimising the capital structure of Ozner.

Before Closing, Ozner shall procure that the business of the Ozner Group is operated on its normal and usual basis as carried on before the date of the Subscription Agreement and, subject to the fiduciary duties of the Ozner Directors, the Ozner Group shall not do or omit to do (or allow to be done or to be omitted to be done) any act or thing which is in breach of the Ozner Warranties or would lead to a breach thereof in any respect or would otherwise be material to the business of the Ozner Group, including certain agreed customary matters and an obligation on Ozner (subject to compliance with the Takeovers Code and certain exceptions set out in the Subscription Agreement) not to solicit or negotiate any acquisition proposal other than the Subscription.

To support business growth, Haier Electronics has agreed, after Closing, to negotiate in good faith with Ozner (a) to make available, subject to the financing needs proven necessary and the budget to be approved by the Ozner Board, a credit line of up to RMB500 million by way of offering an intra-group onshore entrusted loan by a subsidiary of Haier Electronics or procuring an onshore loan to be provided by a relationship bank introduced by Haier Electronics; and (b) subject to the capital needs of Ozner at such time, to procure an affiliate of Haier Electronics to provide a tailor-made financial solution to Ozner.

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Break fee and reverse break fee

Under the Subscription Agreement, if there is a breach by Ozner of its obligations to fulfil the Conditions by the Long Stop Date, any of its Closing obligations or its exclusivity obligation, Haier Electronics may choose to terminate the Subscription Agreement, upon which Ozner shall pay Haier Electronics a break fee of HK$10 million within 5 business days, or Haier Electronics may seek other remedies without terminating the Subscription Agreement.

Under the Subscription Agreement, if there is a breach by Haier Electronics of its obligations to fulfil the Conditions by the Long Stop Date, or any of its Closing obligations, Ozner may choose to terminate the Subscription Agreement, upon which Haier Electronics shall pay Ozner a break fee of HK$10 million within 5 business days, or Ozner may seek other remedies without terminating the Subscription Agreement.

Non-competition undertaking

With effect from Closing and during the Restricted Period, subject to certain exceptions set out in the Subscription Agreement, Haier Electronics shall not and shall procure that none of its affiliates (other than an Ozner Group Company) will, either for its own account or for that of any person, firm or company (other than an Ozner Group Company), other than through an Ozner Group Company:

carry on or be engaged in any Competing Business in any of the Restricted Territories except for the Existing Competing Business; and
induce or seek to induce any member of the Ozner Group's senior management team who is employed by an Ozner Group Company either at the relevant time or in the preceding 12-month period to be employed whether as employee, consultant or otherwise by it or any of its affiliates, save pursuant to a general recruitment effort not targeting such person, including the placing of an advertisement of a post available to the public generally and the recruitment of a person through an employment agency if neither Haier Electronics nor any of its affiliates encourages or advises such agency to approach any relevant person.

Subject to compliance with Listing Rules and other applicable laws, Haier Electronics will negotiate in good faith with the shareholder(s) of the Existing Competing Business with a view to inject the Existing Competing Business into the Ozner Group within two years after the date of the Subscription Agreement, on terms and valuation acceptable to the parties.

Board composition of Ozner

Ozner will: (a) cause five individuals nominated by Haier Electronics to be appointed as non-executive Ozner Directors representing a majority of the Ozner Board immediately following such appointment, having carried out the ordinary procedures for the appointment of such Ozner Directors in accordance with the Listing Rules and Ozner's articles of association; and (b) effect the resignation of such number of Ozner Directors from the Ozner Board immediately after Closing so as to enable the individuals nominated by Haier Electronics to represent a majority of the Ozner Board.

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Strategic committee

Subject to consent by the Executive to, and approval by the Independent Ozner Shareholders of, the Strategic Committee Establishment, as soon as practicable after Closing (and in any event within 20 days after the Closing Date), Haier Electronics and Ozner will cause a strategic committee (the ''Strategic Committee'') to be established under the Ozner Board according to the following principles, and subject to the Listing Rules and applicable laws and regulations:

each Ozner Shareholder holding 5% or more of Ozner's issued share capital immediately following Closing (except for the Subscriber) shall be entitled to nominate one person as a member of the Strategic Committee and the appointment of such persons shall be subject to approval by the Ozner Board. In the event any such Ozner Shareholder ceases to hold 5% or more of Ozner's issued share capital at any time following Closing, that Ozner Shareholder shall cease to be entitled to nominate a person as a member of the Strategic Committee and, unless otherwise required by the Ozner Board, any person nominated by that Ozner Shareholder shall cease to be a member of the Strategic Committee;
it is intended that the Strategic Committee shall initially comprise nine members, including four to be nominated by Haier Electronics, four to be nominated by other eligible Ozner Shareholders and one independent non-executive Ozner Director;
unless otherwise determined by the Ozner Board, the Strategic Committee shall be dissolved when no more than two of the eligible shareholders hold 5% or more of Ozner's issued share capital or on the date falling three years after the Closing Date, whichever is earlier;
the Strategic Committee will have an advisory role and provide recommendation and comments to the Ozner Board to facilitate business strategy formulation for the consideration and approval by the Ozner Board, subject to compliance with applicable law and regulations and the Listing Rules, including but not limited to, during the term of the Strategic Committee, all major strategic proposals of the Ozner Group, including those relating to technologies, product and distribution strategy, supplier and customer development, merger and acquisition strategy, and new business shall be recommended to the Ozner Board for its consideration and approval following the review and approval of the majority of the members of the Strategic Committee. The strategic proposals to be reviewed by the Strategic Committee will only relate to the long-term overall strategy in the respective areas, and not to the conduct of Ozner's day-to-day operations;
during the term of the Strategic Committee, each of the following matters shall only be recommended to the Ozner Board for its consideration and approval upon approval of the majority of the members of the Strategic Committee: (i) any material disposal by any Ozner Group Company of a material undertaking, material business, material company or securities of a material company, material asset or material property; (ii) the entry by any Ozner Group Company into any material acquisitions or other material investments, (iii) the liquidation, administration, winding- up, bankruptcy or dissolution of any material Ozner Group Company; (iv) the annual budgets of Ozner and the Ozner Group;

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the Ozner Board may request the Strategic Committee to consider any matter which the Ozner Board believes relevant and the decision of the Strategic Committee to recommend or not to recommend a matter shall be promptly reported to the Ozner Board; and
the Strategic Committee's decision to recommend or not to recommend any of the matters set out in paragraphs (d), (e) and (f) above shall not fetter the powers of the Ozner Board to consider and approve any such matter.

The Strategic Committee as set out under the Subscription Agreement was proposed with the objective of providing recommendation to the Ozner Board with respect to review and approval of the development and implementation of Ozner's strategic plan.

Closing

Closing shall take place on the fifth Business Day after the date on which all of the Conditions (except those which by their nature may only be satisfied on the Closing Date) are satisfied or waived, or any other date as Ozner and Haier Electronics may agree in writing.

REASONS FOR AND BENEFITS OF THE PROPOSED SUBSCRIPTION

Driven by increasing awareness of water pollution, attention to living quality improvement and disposable income, the Chinese water purification market, which is currently in its early development stage, is expected to grow at a very fast pace, with retail sales value expected to reach approximately RMB233.2 billion in 2022. In such a booming market, the retail sales value attributable to water purifiers at commercial premises will increase to approximately RMB44.0 billion in 2022 from approximately RMB18.6 billion in 2017. The above statistics are extracted from the Frost & Sullivan Report.

During the past few years, Ozner has been investing in both water purification and other related businesses. Due to its leasing business model, substantial initial capital outflow is required for the development of its water purification business. Also, as it takes time to realise the benefit from such investments and as a result of the relatively tight credit environment in the PRC, the combination of these factors has led to an increase in debt, a net current liabilities position and high cost of capital. As disclosed in Ozner's financial statements, its net debt (calculated by total debt minus sum of cash and cash equivalents and short term investments) increased from RMB1.6 billion as at 31 December 2018 to RMB2.1 billion as at 30 June 2019, while financing cost as a percentage of revenue increased from 10.3% in 2018 to 13.5% in the first half of 2019. The Transaction would therefore provide Ozner with additional capital to meet its imminent financial needs. In addition, in view of the intensifying competition in the water purification market in the PRC, the Ozner Directors believe that stable shareholder support is important for enabling further penetration into the growing water purification market and solidifying Ozner's leading market position. On top of these benefits, realisation of potential synergies between Haier Electronics and Ozner is also expected to bring positive impact to Ozner's long term growth. Following Closing, Ozner is expected to become the flagship commercial

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water purification business platform within the Haier Group. It is expected that Ozner will enter into the Brand Licence Agreement and the Framework Agreement with Haier Electronics to specify the areas of collaboration which shall include, but are not limited to, the following:

brand licensing which would authorise Ozner to use the ''Haier'' brand and relevant trademark(s) to market certain products of Ozner;
cooperation in production and manufacturing of certain water purification products;
cooperation in the distribution and sale of products whereby Haier Electronics and Ozner may share distribution channels to distribute their respective products;
sharing of Ozner's and Haier Electronics' after-sales service resources for installation and on-site maintenance services for end users; and
cooperation in financing and optimising the capital structure of Ozner.

Benefits to Ozner

As a result of the potential collaboration, it is expected that the following benefits to Ozner may be achieved after the Transaction:

Potential enhancement in market leadership and scale. By leveraging the ''Haier'' brand and distribution channels of both parties, and being positioned as the flagship commercial water purification business platform within the Haier Group, Ozner may be able to reach a broader customer base and further grow its market share in the commercial water purification sector, which may potentially increase Ozner's revenue;
Potential savings in manufacturing cost. Through cooperation in production and manufacturing between Ozner and Haier Electronics, potential benefits of economies of scale and higher production efficiency may be achieved, which may potentially generate savings in manufacturing and operational costs;
Potential savings in financing cost. Through cooperation in financing between Ozner and Haier Electronics, Ozner may be able to gain Haier Electronics' support in improving its indebtedness structure and lowering financing costs;
Potential product line expansion. Haier Electronics may allow Ozner to sell through its network certain of Haier Electronics' products such as water jugs, water heaters or other home or office use products, which may result in greater utilisation of Ozner's extensive distribution channel and additional sources of revenue; and
Improved liquidity. The Subscription will immediately improve Ozner's liquidity, allowing the proceeds of the Subscription to be used for debt repayment and general working capital (for more details, please refer to the section of this joint announcement entitled ''Use of Proceeds'').

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Taking into consideration the potential benefits of the Transaction, the Ozner Directors (other than the members of the Ozner Independent Board Committee who will give their views following consideration of the advice of the Independent Financial Adviser as to fairness and reasonableness of the terms of the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment) consider that the terms of the Subscription Agreement are fair and reasonable, and entering into the Transaction would be in the interests of Ozner and the Ozner Shareholders as a whole.

Strategic rationale of Haier Electronics

As demonstrated by its investment in Qingdao Haishi, Haier Electronics has a strong belief in the continuous growth of the water purification market in the PRC, and believes that, among the various industry participants, Ozner is a significant participant in the market of commercial water filtration and purification in the PRC with quality products, services and management.

Upon Closing, Ozner will be positioned as the flagship commercial water purification business platform within the Haier Group and enjoy a wide range of resources available to Haier Group companies. In particular, Ozner will specialise in the commercial water purification space. It is expected that Haier Electronics and Ozner will collaborate closely in various areas including product development, research and development, distribution, supply chain management (including but not limited to manufacturing and procurement), services and investment management.

Given the potential synergy between the two groups, the Haier Electronics Directors anticipate that the Transaction will bring favourable development opportunities in relation to the commercial water purification business. The cooperation between the two groups would enable both parties to benefit from each other's respective competitive advantages.

The Haier Electronics Directors believe that the Transaction will be in the long-term interest of Haier Electronics and its shareholders as a whole.

USE OF PROCEEDS

The gross proceeds from the Subscription will amount to approximately HK$1.65 billion. The net proceeds to be raised from the Subscription will be approximately HK$1.62 billion. The net subscription price per Subscription Share will be approximately HK$1.01.

Ozner intends that the net proceeds of the Subscription will be used as follows:

approximately 60% will be used for debt repayment; and
approximately 40% will be used for general working capital.

It is also expected that the Subscription will enhance the general working capital of the Ozner Group without incurring additional interest burden.

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INFORMATION ON THE OZNER GROUP

Ozner is incorporated in the Cayman Islands as a company with limited liability, and the issued Ozner Shares are listed on the Stock Exchange. The principal activity of Ozner is investment holding. The Ozner Group is principally engaged in the provision of water purification services and air sanitization services.

Ozner, through its unique ''lease + service'' business model and positioning as a ''round-the-clock safe drinking water solution provider'' (全天候安全飲用水服務解決方案提供商), has established a leading position in the commercial water purification market. According to the Frost & Sullivan Report, the market size of Ozner based on retail sales value was approximately 8.0% in 2017, higher than the combined market size for the 2nd through the 5th runners-up. Ozner has developed an extensive and effective distribution network of more than 7,300 distributors as at 30 June 2019 and its proprietary service network, a key competitive advantage, covers more than 2,300 cities and counties in all provinces of Mainland China as at 30 June 2019. Ozner has been committed to bringing high quality products and services to end users through state-of-the-art purification and Internet of Things technologies. Its water purification manufacturing facility is also one of the largest in China.

As at 31 December 2018, the consolidated audited net asset value of the Ozner Group was RMB3,310,806,000. The consolidated audited net profits before tax and after tax of the Ozner Group for the two years ended 31 December 2018 are set forth below:

	For the year ended	For the year ended
	31 December 2017	31 December 2018
	(RMB'000)	(RMB'000)
Net profits before tax	286,088	196,016
Net profits after tax	240,880	134,270
INFORMATION ON HAIER ELECTRONICS

Haier Electronics is a subsidiary of Haier Group Corporation (''Haier Corp'') and Haier Electronics' shares are listed on the Stock Exchange. Haier Electronics and its subsidiaries are principally engaged in the research, development, manufacture and wholesale of washing machines and water heaters under Haier Corp brands (''Haier'', ''Casarte'' and ''Leader''); and the distribution of electronics products of Haier Corp in the PRC.

- 15 -

Haier Corp is an urban collectively-owned enterprise. According to the ''Regulation of the People's Republic of China on Urban Collectively-Owned Enterprises'' as amended in February 2016 by the State Council, all the property of an urban collectively-owned enterprise belongs to its working people as a collective, and the body of the employee representatives is its governing body.

Haier Corp is one of the most well-known companies in China and one of the world's leading consumer appliance companies. According to data published by Euromonitor International in January 2019, Haier Electronics has once again been named as the number one major appliances brand in the world. The Haier brand has also topped the global white goods brand rankings for the tenth consecutive years.

In 2019, Haier Electronics completed the acquisition of a 51% equity interest in Qingdao Haishi, a prominent participant in the PRC residential water purification market. This acquisition was the first step for Haier Electronics in its proposed development into a global market leader in the water purification industry. In the first half of 2019, Qingdao Haishi was ranked third in terms of market share based on its sales of household water purification products. It is believed that the Transaction will bring in complementary benefits to both Qingdao Haishi and Ozner, and strong synergies between the two businesses may be achieved to further enlarge the offering of Haier Electronics' water purification business.

EQUITY FUND RAISING ACTIVITY OF OZNER IN THE PAST 12 MONTHS

Save for the issue of the 2018 CB, Ozner has not carried out any equity fund-raising activities during the 12 months immediately preceding the date of this joint announcement.

CHANGES IN THE SHAREHOLDING STRUCTURE OF OZNER

As at the date of this joint announcement:

Ozner has 2,132,331,950 Ozner Shares in issue;
Ozner has a total of 155,124,964 share options (the ''Pre-IPOShare Options'') outstanding which were granted under the pre-IPO share option scheme adopted by the Ozner Shareholders on 26 May 2014 (the ''Pre-IPOShare Option Scheme'');
Ozner has a total of 65,000,000 share options (the ''Share Options'') outstanding which were granted on 23 March 2018 under the share option scheme adopted by the Ozner Shareholders on 26 May 2014 (the ''Share Option Scheme'');

- 16 -

the 2015 CB issued by Ozner on 6 November 2015 (the ''2015 CB Issue Date'') in an aggregate principal amount of HK$465.0 million remains outstanding. The coupon interest rate is 5% per annum, payable semi-annually in arrears. The holders of the 2015 CB have the option to convert the 2015 CB into Ozner Shares at an initial conversion price of HK$2.25 per share (subject to adjustments) at any time on or after the 41st day after the 2015 CB Issue Date up to the close of business on the 10th day prior to the fifth anniversary of the 2015 CB Issue Date (the ''2015 CB Maturity Date'') (both days inclusive). The conversion price was adjusted to HK$1.91 per share on 1 December 2016 and was further adjusted to HK$1.88 per share on 13 July 2018. Unless previously converted or cancelled, each 2015 CB will be redeemed at 100% of the principal amount outstanding on the 2015 CB Maturity Date;
the 2018 CB issued by Ozner on 2 November 2018 (the ''2018 CB Issue Date'') in an aggregate principal amount of HK$215.0 million remains outstanding. The coupon interest rate is 6.8% per annum, payable semi-annually in arrears. The holders of the 2018 CB have the option to convert the 2018 CB into Ozner Shares at an initial conversion price of HK$2.03 per share (subject to adjustments) at any time during the period commencing from 13 December 2018 up to 3:00 p.m. on the 10th day prior to 2 November 2021 (the ''2018 CB Maturity Date'') (both days inclusive). Unless previously redeemed, converted or purchased and cancelled, each 2018 CB will be redeemed at 105% of the principal amount together with unpaid accrued interest on the 2018 CB Maturity Date; and
save for the Pre-IPO Share Options, the Share Options, the 2015 CB and the 2018 CB detailed above, Ozner does not have any outstanding convertible securities, options, warrants or other derivatives in issue which are convertible or exchangeable into Ozner Shares.

- 17 -

The shareholding structure of Ozner as at the date of this joint announcement and immediately after Closing (assuming that there is no change in the issued share capital of Ozner other than the allotment and issue of the Subscription Shares before Closing) is as follows:

	As at the date of this joint
Ozner Shareholders	announcement	Immediately after Closing
	Number of			Number of
	Ozner Shares	Approx. %(6)	Ozner Shares	Approx. %(6)
Subscriber Concert Group
The Subscriber	-	-	1,599,248,963		42.86
SAIF Partners IV L.P.(1)	334,857,000		15.70		334,857,000		8.97
Mr. Xiao and related parties(2)
Mr. Xiao(3)	4,198,000		0.20		4,198,000		0.11
Baida Holdings Limited(3)	341,820,000		16.03		341,820,000		9.16
Lion Rise Holdings Limited(3)	62,182,200		2.92		62,182,200		1.67
Glorious Shine Holdings Limited(3)	382,847,950		17.95		382,847,950		10.26
Subtotal	791,048,150		37.10		791,048,150		21.20
Subtotal	1,125,905,150		52.80		2,725,154,113		73.03
Other substantial shareholders of Ozner
China Innovative Capital Management Co., Ltd(4)	271,662,200		12.74		271,662,200		7.28
Ares FW Holdings, L.P.	187,166,800		8.78		187,166,800		5.02
Watercube Holdings, L.L.C.(5)	139,006,800		6.52		139,006,800		3.73
Ozner Directors (other than Mr. Xiao)
LI Honggao	420,096		0.02		420,096	0.01
TAN Jibin	385,900		0.02		385,900		0.01
WANG Yonghui	416,472		0.02		416,472		0.01
ZHOU Guanxuan	38,388	0.00		38,388		0.00
Other Ozner Shareholders	407,330,144		19.10		407,330,144		10.92
Total	2,132,331,950		100.00		3,731,580,913		100.00
Notes:

SAIF Partners IV L.P. is presumed to be acting in concert with the Subscriber under classes (1) and (2) of the definition of ''acting in concert'' in the Takeovers Code by virtue of the fact that Mr. Andrew Y. Yan, a non-executive director of Haier Electronics' controlling shareholder, Haier Smart Home Co., Ltd, indirectly controls SAIF Partners IV L.P. and controls 天津賽富盛元投資管理中心(有限合夥) (Tianjin SAIF Shengyuan Investment Management Center L.P.*), which is an associated company (as defined in the Takeovers Code) of Haier Electronics.
Following Closing, the Subscriber will be presumed to be acting in concert with Mr. Xiao under class (1) of the definition of ''acting in concert'' in the Takeovers Code by virtue of each of them holding 20% or more of the issued share capital of Ozner.

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Baida Holdings Limited, Lion Rise Holdings Limited and Glorious Shine Holdings Limited are wholly-owned by Baida Capital Limited, Lion Rise Capital Limited and Glorious Shine Capital Limited under the Xiao Family I Trust, the Xiao Family II Trust and the Xiao Family III Trust, respectively. Each of the Xiao Family I Trust, the Xiao Family II Trust and the Xiao Family III Trust is a discretionary trust established by Mr. Xiao (as the settlor) and the discretionary beneficiaries of which include Mr. Xiao and certain of his family members.
These 271,662,200 Ozner Shares represent 82,806,000 Ozner Shares held by Chongqing Innovative Investment Co., Ltd and 188,856,200 Ozner Shares held by Hong Kong China Innovative Capital Management Co., Ltd. Chongqing Innovative Investment Co., Ltd and Hong Kong China Innovative Capital Management Co., Ltd. are wholly-owned subsidiaries of China Innovative Capital Management Co., Ltd. In addition, Chongqing Innovative Investment Co., Ltd is the general partner of Chongqing Zhongxinrongbang Investment Centre (Limited Partnership). Chongqing Zhongxinrongbang Investment Centre (Limited Partnership) is interested in the 2015 CB which can be converted to a maximum number of 247,329,788 Ozner Shares to be issued by Ozner.
Watercube Holdings, L.L.C. is a limited liability company organized under the laws of Delaware. GS Direct, L.L.C., a limited liability company organized under the laws of Delaware, is the managing member of Watercube Holdings L.L.C. and owns 80.1% of the voting interest in Watercube Holdings L.L.C. Goldman, Sachs & Co., a limited partnership organized under the laws of New York, is the managing member of GS Direct, L.L.C. The Goldman, Sachs & Co. L.L.C., a limited liability company organized under the laws of Delaware, is the general partner of Goldman, Sachs & Co. The Goldman Sachs Group, Inc., a corporation organized under the laws of Delaware, holds (i) 100% voting interests of The Goldman, Sachs & Co. L.L.C.; (ii) 99.8% voting interests of Goldman, Sachs & Co.; and (iii) 100% non-voting interests of GS Direct, L.L.C. The Goldman Sachs Group, Inc. is listed on the New York Stock Exchange. Accordingly, each of GS Direct, L.L.C., Goldman, Sachs & Co., The Goldman, Sachs & Co. L.L.C. and The Goldman Sachs Group, Inc. is deemed to be interested in the 139,006,800 Shares held by Watercube Holdings, L.L.C..
The percentage figures have been subject to rounding adjustments. Accordingly, figures shown in totals may not be an arithmetic aggregation of the figures preceding them.

IMPLICATIONS UNDER THE TAKEOVERS CODE

As at the date of this joint announcement, the Subscriber is not interested in any Ozner Shares and the Subscriber Concert Group (comprising as at the date of this joint announcement the Subscriber and SAIF Partners IV L.P.) is interested in 334,857,000 Ozner Shares, representing approximately 15.7% of the total issued share capital of Ozner. SAIF Partners IV L.P. is presumed to be acting in concert with the Subscriber under classes (1) and (2) of the definition of ''acting in concert'' in the Takeovers Code by virtue of the fact that Mr. Andrew Y. Yan, a non-executive director of Haier Electronics' controlling shareholder, Haier Smart Home Co., Ltd, indirectly controls SAIF Partners IV L.P. and controls 天津賽富盛元投資管理中心(有限合夥) (Tianjin SAIF Shengyuan Investment Management Center L.P.*), which is an associated company (as defined in the Takeovers Code) of Haier Electronics.

Immediately after Closing, the Subscriber and the Subscriber Concert Group (comprising at that time the Subscriber, SAIF Partners IV L.P. and Mr. Xiao and his related parties) will be interested in 1,599,248,963 Ozner Shares and 2,725,154,113 Ozner Shares, respectively, representing approximately 42.9% and 73.0% respectively of the issued share capital of Ozner as enlarged by the allotment and issue of the Subscription Shares (assuming that there is no change in the issued share capital of Ozner other than the allotment and issue of the Subscription Shares before Closing). Following Closing, the

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Subscriber will be presumed to be acting in concert with Mr. Xiao under class (1) of the definition of ''acting in concert'' in the Takeovers Code by virtue of each of them holding 20% or more of the issued share capital of Ozner.

Under Rule 26.1 of the Takeovers Code, the acquisition of 30% or more of the voting rights in Ozner by the Subscriber (or the Subscriber Concert Group) would trigger an obligation on the Subscriber (or the Subscriber Concert Group) to make a mandatory general offer for all the issued Ozner Shares and other securities of Ozner (other than those already owned or acquired by the Subscriber Concert Group), unless the Whitewash Waiver is granted by the Executive. An application will be made to the Executive for the Whitewash Waiver pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted by the Executive, would be subject to, among other things, the approval by at least 75% of the votes cast by Ozner Independent Shareholders at the Ozner EGM by way of poll.

If the Whitewash Waiver is approved by the Ozner Independent Shareholders and Closing occurs, the Subscriber will hold between 30% and 50% of the voting rights in Ozner and may be subject to the 2% ''creeper rule'' under Rule 26.1(c) and (d) of the Takeovers Code. Accordingly if the Subscriber acquires additional voting rights and such acquisition has the effect of increasing its holding of voting rights in Ozner by more than 2% from the lowest collective percentage holding of the Subscriber in the 12-month period ending on and inclusive of the date of the relevant acquisition, the Subscriber may trigger an obligation to make a mandatory general offer for all the issued Ozner Shares and other securities of Ozner (other than those already owned or agreed to be acquired by the Subscriber Concert Group).

As at the date of this joint announcement, neither Ozner nor Haier Electronics believes that the Subscription gives rise to any concerns in relation to compliance with other applicable rules or regulations (including the Listing Rules). If a concern should arise after the release of this joint announcement, Ozner and Haier Electronics will endeavour to resolve the matter to the satisfaction of the relevant authority as soon as possible but in any event before the despatch of the circular. Ozner and Haier Electronics note that the Executive may not grant the Whitewash Waiver if the Subscription does not comply with other applicable rules and regulations.

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Special Deal

As each Ozner Shareholder holding 5% or more of Ozner's issued share capital immediately following Closing (except for the Subscriber) shall be entitled to nominate a person as a member of the Strategic Committee, the Strategic Committee Establishment is considered by the Executive to be a special deal under Rule 25 of the Takeovers Code.

An application will be made to the Executive for consent for the Strategic Committee Establishment under Rule 25 of the Takeovers Code. Such consent, if granted, is expected to be subject to (i) an opinion being given by the Independent Financial Adviser to be appointed by the Ozner Board that the terms of the Strategic Committee Establishment are fair and reasonable and (ii) approval of the Strategic Committee Establishment by the Ozner Independent Shareholders at the Ozner EGM. In the event that the Executive does not consent to the Strategic Committee Establishment, the Independent Financial Adviser opines that the terms of the Strategic Committee Establishment are not fair and reasonable, or the Strategic Committee Establishment is not approved by the Ozner Independent Shareholders at the Ozner EGM, and assuming that all the Conditions are satisfied or waived (as applicable), Ozner and Haier Electronics will proceed with the Subscription in the absence of the Strategic Committee Establishment.

DEALING AND INTEREST OF HAIER ELECTRONICS AND SUBSCRIBER CONCERT GROUP IN THE SECURITIES OF OZNER

As at the date of this joint announcement:

save as set out in the shareholding structure table in the section of this joint announcement entitled ''Changes in the Shareholding Structure of Ozner'', neither Haier Electronics nor any other member of the Subscriber Concert Group holds, owns, controls or has direction over any Ozner Shares, outstanding options, warrants or any securities that are convertible into Ozner Shares or any derivatives in respect of the securities in Ozner, or hold any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in Ozner;
there are no relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in Ozner which Haier Electronics or any other member of the Subscriber Concert Group has borrowed or lent;
neither Haier Electronics nor any other member of the Subscriber Concert Group has received any irrevocable commitment to vote for or against the proposed resolutions approving the Subscription, the Specific Mandate, the Whitewash Waiver or the Strategic Committee Establishment at the EGM;
there is no arrangement (whether by way of option, indemnity or otherwise) as referred to in Note 8 to Rule 22 of the Takeovers Code in relation to the relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of Ozner or Haier Electronics which might be material to the Subscription or the Whitewash Waiver, with any other persons;

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there is no arrangement or agreement to which Haier Electronics or any other member of the Subscriber Concert Group is a party which relates to the circumstances in which Haier Electronics may or may not invoke or seek to invoke a pre-condition or a condition to the Subscription or the Whitewash Waiver;
save for the consideration paid for the issuance of the Subscription Shares, there is no consideration, compensation or benefit in whatever form paid or to be paid by any member of the Subscriber Concert Group to any other Ozner Shareholder and/or any party acting in concert with it;
save for the Strategic Committee Establishment, there is no understanding, arrangement, agreement or special deal (as defined under Rule 25 of the Takeovers Code) between any member of the Subscriber Concert Group on the one hand, and any Ozner Shareholder and/or party acting in concert with it on the other hand; and
save for the Strategic Committee Establishment, there is no understanding, arrangement or agreement or special deal (as defined under Rule 25 of the Takeovers Code) between (i) any Ozner Shareholder, and (ii)(a) any member of the Subscriber Concert Group, or (b) Ozner, its subsidiaries or associated companies.

Other than entering into the Subscription Agreement, no member of the Subscriber Concert Group has acquired or disposed of or entered into any agreement or arrangement to acquire or dispose of any voting rights in Ozner or has dealt for value in any Ozner Shares, outstanding options, warrants, or any securities that are convertible into Ozner Shares or any derivatives in respect of the securities of Ozner in the six-month period prior to the date of this joint announcement.

IMPLICATIONS UNDER THE LISTING RULES FOR HAIER ELECTRONICS

For Haier Electronics, as the highest applicable percentage ratios (as defined under the Listing Rules) in respect of the Subscription is more than 5% but less than 25%, the Subscription constitutes a discloseable transaction for Haier Electronics under Chapter 14 of the Listing Rules and is therefore subject to the notification and announcement requirements (but is not subject to the circular and shareholders' approval requirements) under the Listing Rules.

GENERAL

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Somerley Capital Limited has been appointed, with the approval of the Ozner Independent Board Committee, as the Independent Financial Adviser to advise the Ozner Independent Board Committee and the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment.

A circular containing, among other items, (i) further details of the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment; (ii) recommendations from the Ozner Independent Board Committee to the Ozner Independent Shareholders on the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment; (iii) a letter of advice from the Independent Financial Adviser to the Ozner Independent Board Committee and the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment; and (iv) a notice of the Ozner EGM and a form of proxy, is expected to be despatched to the Ozner Shareholders on or before 22 November 2019 and in compliance with the requirements of the Listing Rules and the Takeovers Code.

Each of SAIF Partners IV L.P. (which is presumed to be acting in concert with the Subscriber under classes (1) and (2) of the definition of ''acting in concert'' in the Takeovers Code), China Innovative Capital Management Co., Ltd and Ares FW Holdings, L.P. is considered by the Executive to be interested in the Subscription, the Whitewash Waiver and the Strategic Committee Establishment for the purpose of the Takeovers Code, as each of them will hold 5% or more of Ozner's issued share capital immediately following Closing (assuming there are no changes to their shareholdings prior to Closing) and will therefore be entitled to nominate persons as members of the Strategic Committee. Therefore, each of SAIF Partners IV L.P., China Innovative Capital Management Co., Ltd and Ares FW Holdings, L.P. will abstain from voting on the relevant resolutions to be proposed to the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment in accordance with the Takeovers Code.

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Further, since Mr. Xiao, Mr. Wang Yonghui, Mr. Tan Jibin and Mr. Li Honggao (each of whom is an executive Ozner Director and an Ozner Shareholder) have been involved in the discussions and negotiations with Haier Electronics in relation to the Subscription on behalf of Ozner, they are considered by the Executive to be involved in the Subscription for purposes of the Takeovers Code. Therefore, each of Mr. Xiao and his related parties (namely, Baida Holdings Limited, Lion Rise Holdings Limited and Glorious Shine Holdings Limited), Mr. Wang Yonghui, Mr. Tan Jibin and Mr. Li Honggao will abstain from voting on the relevant resolutions to be proposed to the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment in accordance with the Takeovers Code.

Watercube Holdings L.L.C. does not propose to vote on the resolutions to be proposed to the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment in accordance with the Takeovers Code given that it is in the same group of companies as Goldman Sachs (Asia) L.L.C. (the financial adviser to Ozner in connection with the Subscription).

DEALING DISCLOSURE

In light of the fact that Haier Electronics may, in its sole discretion and if it is ready to make the Possible Offer, elect to waive the relevant Conditions and proceed with the Subscription in the absence of the Whitewash Waiver and make the Possible Offer, an offer period (as defined in the Takeovers Code) commences as at the date of this joint announcement.

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Associates (including a person who owns or controls 5% or more of any class of relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code)) of Ozner and Haier Electronics are hereby reminded to disclose their dealings in the securities of Ozner pursuant to the requirements of the Takeovers Code. In accordance with Rule 3.8 of the Takeovers Code, reproduced below is the full text of Note 11 to Rule 22 of the Takeovers Code:

''Responsibilities of stockbrokers, banks and other intermediaries

Stockbrokers, banks and others who deal in relevant securities on behalf of clients have a general duty to ensure, so far as they are able, that those clients are aware of the disclosure obligations attaching to associates and other persons under Rule 22 and that those clients are willing to comply with them. Principal traders and dealers who deal directly with investors should, in appropriate cases, likewise draw attention to the relevant Rules. However, this does not apply when the total value of dealings (excluding stamp duty and commission) in any relevant security undertaken for a client during any 7 day period is less than $1 million. This dispensation does not alter the obligation of principals, associates and other persons themselves to initiate disclosure of their own dealings, whatever total value is involved. Intermediaries are expected to co-operate with the Executive in its dealings enquiries. Therefore, those who deal in relevant securities should appreciate that stockbrokers and other intermediaries will supply the Executive with relevant information as to those dealings, including identities of clients, as part of that co-operation.''

DEFINITIONS

In this joint announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

''2015 CB''	the 5% convertible bonds due 2020 in the principal amount of
	HK$465.0 million issued by Ozner on 6 November 2015, which are
	currently held by Chongqing Zhongxinrongbang Investment Centre
	(Limited Partnership) (重慶中新融邦投資中心(有限合夥))
''2018 CB''	the 6.8% convertible bonds due 2021 in the principal amount of
	HK$215.0 million issued by Ozner on 2 November 2018, which are
	currently held by CNCB (Hong Kong) Investment Limited and CNCB
	Capital Value SPC
''acting in concert''	has the meaning given to it in the Takeovers Code
''AML''	the Anti-Monopoly Law of the PRC
''Business Day''	a day (other than Saturday, Sunday and days on which a tropical
	cyclone warning No. 8 or above or a ''black rainstorm warning signal''
	is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.)
	on which commercial banks are open in Hong Kong for general
	business

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''Closing''	the completion of the Subscription pursuant to the terms and conditions
	of the Subscription Agreement
''Closing Date''	the date on which Closing takes place
''Competing Business''	subject to certain exceptions, the manufacture, sale and leasing of
	water purification machines that are not for household usage but solely
	for installation in public spaces or commercial facilities (such as hotels,
	restaurants, banks, public transportation, airports and office buildings),
	but excluding the development, manufacturing, sale or leasing of any
	water purification products, services or technologies used in sewage
	treatment, water purification projects in rural areas, seawater
	desalination or other similar areas
''Conditions''	the conditions precedent to Closing, as more particularly set out in the
	section headed ''The Subscription Agreement - Conditions of the
	Subscription'' in this joint announcement
''Consents''	the consents, approvals and authorisations required to be obtained by
	Ozner in relation to the transaction as contemplated by the Subscription
	Agreement, being the relevant consents under certain agreements
	entered into by one or more Ozner Group Companies before the date
	of the Subscription Agreement (save for any of those agreements that
	have been terminated prior to Closing), together with any such
	consents, approvals and authorisations required under any agreement
	which is entered into or any law which comes into effect, or by any
	governmental authority, before Closing
''controlling shareholder''	has the meaning given to it in the Listing Rules
''Executive''	the Executive Director of the Corporate Finance Division of the
	Securities and Futures Commission of Hong Kong or any of its
	delegates
''Existing Competing	any Competing Business conducted as of the date of the Subscription
Business''	Agreement by Qingdao Haishi or any of its subsidiaries related to the
	production and sale of commercial water purification products
''Frost & Sullivan Report''	the Independent Market Research for China's Drinking Water Purifier
	Market and Air Purification Market published by Frost & Sullivan in
	2018

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''Haier Electronics''	Haier Electronics Group Co., Ltd. (海爾電器集團有限公司*), a
	company incorporated in Bermuda with limited liability, the shares of
	which are listed on the main board of the Stock Exchange (stock code:
	1169)

''Haier Electronics Director(s)''

''Haier Electronics Group''

''Haier Electronics Share(s)''

''Haier Group'' ''HK$'' ''Hong Kong''

''Independent Financial Adviser''

the director(s) of Haier Electronics

Haier Electronics and its subsidiaries

ordinary shares of HK$0.01 each in the share capital of Haier Electronics

Haier Group Corporation and its subsidiaries

Hong Kong dollar(s), the lawful currency of Hong Kong

the Hong Kong Special Administrative Region of the People's Republic of China

Somerley Capital Limited, the independent financial adviser appointed to advise the Ozner Independent Board Committee and the Ozner Independent Shareholders in relation to the Subscription, the Specific Mandate, the Whitewash Waiver and the Strategic Committee Establishment. Somerley Capital Limited is a corporation licensed under the SFO to conduct type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO

''Last Trading Day''	1 November 2019, being the last trading day of the Ozner Shares
	before the entry into of the Subscription Agreement
''Listing Rules''	the Rules Governing the Listing of Securities on The Stock Exchange
	of Hong Kong Limited
''Long Stop Date''	31 December 2019, provided that this date may be extended by Ozner
	or Haier Electronics in its respective sole discretion if any of the
	Conditions for which the other is responsible is not fulfilled by 31
	December 2019 (or such other date as may be agreed by Ozner and
	Haier Electronics)
''Mr. Xiao''	Mr. Xiao Shu, the chairman, chief executive officer, executive Ozner
	Director, a substantial shareholder (as defined in the Listing Rules) of
	Ozner and the ultimate controlling Shareholder of Ozner as at the date
	of this joint announcement

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''Ozner''	Ozner Water International Holding Limited, a company incorporated in
	the Cayman Islands with limited liability, the shares of which are listed
	on the main board of the Stock Exchange
''Ozner Board''	the board of directors of Ozner
''Ozner Director(s)''	the director(s) of Ozner
''Ozner EGM''	the extraordinary general meeting of Ozner to be convened and held to
	consider, and if thought fit, approve, among other matters, the
	Subscription, the Specific Mandate, the Whitewash Waiver and the
	Strategic Committee Establishment
''Ozner Group''	Ozner and its subsidiaries, and ''Ozner Group Company'' means any
	of them
''Ozner Independent Board	an independent board committee established by the Ozner Board,
Committee''	comprising LAU Tze Cheung Stanley, BAO Jiming, CHAN Yuk Sing
	Gilbert and GU Jiuchuan, being all the independent non-executive
	Ozner Directors, to advise the Ozner Independent Shareholders as to
	the fairness and reasonableness of the terms of the Subscription, the
	Specific Mandate, the Whitewash Waiver and the Strategic Committee
	Establishment and as to voting at the Ozner EGM
''Ozner Independent	Ozner Shareholders other than the Subscriber Concert Group and those
Shareholders''	Ozner Shareholders who are involved or interested in the Subscription
''Ozner Share(s)''	ordinary shares of HK$0.01 each in the share capital of Ozner
''Ozner Shareholder(s)''	holder(s) of the Ozner Shares
''Ozner Warranties''	the warranties and representations of Ozner set out in the Subscription
	Agreement
''Possible Offer''	the possible mandatory unconditional general offer that may be made
	by the Subscriber for all securities of Ozner which are not owned or
	acquired by the Subscriber Concert Group under Rule 26 and Rule 13
	of the Takeovers Code in the event that Haier Electronics elects to
	proceed with Closing in the absence of the Whitewash Waiver
''PRC''	the People's Republic of China
''Qingdao Haishi''	青島海施水設備有限公司 (Qingdao HAISHI Water Equipment Co.,
	Ltd.)*, a non-wholly-owned subsidiary of Haier Electronics

- 28 -

''Restricted Period''	the period during which (a) the Ozner Directors nominated by Haier
	Electronics are appointed and constitute a majority of the Ozner Board
	or Ozner Directors nominated by Haier Electronics fail to constitute a
	majority of the Board solely as a result of any intentional action or
	omission by Haier Electronics in nominating and procuring that its
	nominees are appointed at any general meeting of Ozner or (b) Haier
	Electronics controls (as defined in the Subscription Agreement) Ozner
''Restricted Territories''	means the PRC, the Republic of Indonesia, Malaysia, the Republic of
	the Philippines, the Republic of Singapore, the Kingdom of Thailand,
	Brunei Darussalam, the Socialist Republic of Vietnam, the Lao
	People's Democratic Republic, the Republic of the Union of Myanmar
	and the Kingdom of Cambodia
''RMB''	Renminbi, the lawful currency of the PRC
''SAMR''	the State Administration for Market Regulation of the PRC or any of
	its relevant local counterparts authorised by applicable PRC law
''Specific Mandate''	the specific mandate to be granted to the Ozner Directors by the Ozner
	Shareholders at the Ozner EGM to allot and issue the Subscription
	Shares to the Subscriber
''Stock Exchange''	The Stock Exchange of Hong Kong Limited
''Strategic Committee	the establishment of the Strategic Committee (as defined in the section
Establishment''	of this joint announcement entitled ''Proposed Subscription for new
	Ozner Shares by the Subscriber - Strategic Committee'') pursuant to
	the Subscription Agreement
''Subscriber''	Haier Electronics or the direct or indirect wholly-owned subsidiary of
	Haier Electronics which acquires the Subscription Shares
''Subscriber Concert Group''	the Subscriber and persons acting in concert with it, including (a) as at
	the date of this joint announcement, SAIF Partners IV L.P. and (b)
	following Closing, SAIF Partners IV L.P. and Mr. Xiao and his related
	parties (namely, Baida Holdings Limited, Lion Rise Holdings Limited
	and Glorious Shine Holdings Limited)
''Subscriber Director(s)''	the individuals nominated by Haier Electronics to be appointed as
	Ozner Directors pursuant to the Subscription Agreement, which shall
	be notified by Haier Electronics to Ozner in writing at least five
	Business Days prior to the issuance of the circular for the Ozner EGM

- 29 -

''Subscriber Warranties''	the warranties and representations of Haier Electronics set out in the
	Subscription Agreement
''Subscription''	the subscription for the Subscription Shares by the Subscriber pursuant
	to the terms and conditions of the Subscription Agreement
''Subscription Agreement''	the subscription agreement dated 1 November 2019 between Ozner and
	Haier Electronics in relation to the Subscription
''Subscription Price''	HK$1.03 per Subscription Share
''Subscription Share(s)''	1,599,248,963 new Ozner Shares to be allotted and issued by Ozner to
	the Subscriber pursuant to the Subscription Agreement
''substantial shareholder''	has the meaning given to it in the Listing Rules
''Takeovers Code''	the Hong Kong Code on Takeovers and Mergers
''Transaction''	the transactions contemplated under the Subscription Agreement and
	any documents mentioned therein
''Whitewash Waiver''	a waiver from the Executive pursuant to Note 1 on dispensations from
	Rule 26 of the Takeovers Code in respect of the obligations of the
	Subscriber (or the Subscriber Concert Group) to make a mandatory
	general offer for all securities of Ozner not already owned or acquired
	by the Subscriber Concert Group under Rule 26 of the Takeovers Code
	which would otherwise arise as a result of the Subscriber subscribing
	for the Subscription Shares
''%''	per cent.

By order of the board of directors of	By order of the board of directors of
Haier Electronics Group Co., Ltd.	Ozner Water International Holding Limited
Zhou Yun Jie	XIAO Shu
Chairman	Chairman and Chief Executive Officer
Hong Kong, 1 November 2019

As at the date of this joint announcement, the executive Ozner Directors are XIAO Shu, ZHOU Guanxuan, TAN Jibin, LI Honggao and WANG Yonghui; the non-executive Ozner Directors are WANG Duo, SUI Wei and GUI Songlei; and the independent non-executive Ozner Directors are LAU Tze Cheung Stanley, BAO Jiming, CHAN Yuk Sing Gilbert and GU Jiuchuan.

- 30 -

The Ozner Directors jointly and severally accept full responsibility for the accuracy of information (other than that relating to the Subscriber Concert Group) contained in this joint announcement and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed (other than those expressed by the Haier Electronics Directors) in this joint announcement have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement in this joint announcement misleading.

As at the date of this joint announcement, the executive Haier Electronics Directors are ZHOU Yun Jie (Chairman), XIE Ju Zhi (Chief Executive Officer) and LI Hua Gang; the non-executive Haier Electronics Directors are LIANG Hai Shan and YANG Guang; and the independent non-executive Haier Electronics Directors are YU Hon To, David, Eva CHENG LI Kam Fun, GONG Shao Lin and John Changzheng MA.

The Haier Electronics Directors jointly and severally accept full responsibility for the accuracy of the information relating to the Subscriber Concert Group contained in this joint announcement and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed by the Haier Electronics Directors in this joint announcement have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement in this joint announcement misleading.

In this joint announcement, the English or Chinese names of certain entities are translations of their Chinese or English (as the case may be) names, and are included herein for identification purpose only.

- 31 -

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Haier Electronics Group Co. Ltd. published this content on 01 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2019 15:02:07 UTC

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