Beijing Enterprises Clean Energy : DISCLOSEABLE TRANSACTION FINANCE LEASE ARRANGEMENT (in PDF)

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01250) DISCLOSEABLE TRANSACTION FINANCE LEASE ARRANGEMENT THE FINANCE LEASE ARRANGEMENT

On 29 August 2017, KYNE, as lessee, entered into the Finance Lease Agreement with BOB Leasing, as lessor, pursuant to which BOB Leasing shall purchase the Leased Assets from HPBC and HGEE as per the instructions given by KYNE at a total consideration of RMB88,000,000. The Leased Assets were then leased to KYNE for a term of 3 years. The ownership of the Leased Assets under the Finance Lease Agreement will be vested in BOB Leasing throughout the lease period. At the end of the lease period and subject to payments by KYNE of (i) all amounts due under the Finance Lease Agreement; and (ii) a consideration of RMB75,328,000 for the Leased Assets, the ownership of the Leased Assets will be vested in KYNE.

THE CONSULTANCY AGREEMENT

On 29 August 2017, KYNE entered into the Consultancy Agreement with BOB Leasing, pursuant to which KYNE agreed to engage BOB Leasing for providing certain consultancy services relating to the Leased Assets, which includes, among others, valuation of assets and supervision on the operation of the Leased Assets at a total services fee of RMB7,480,000.

IMPLICATIONS UNDER THE LISTING RULES

As the transactions contemplated under the Finance Lease Agreement, the Previous Finance Lease Agreements, the Consultancy Agreement and the Previous Consultancy Agreements were entered into with the same party and within a twelve month period, the Finance Lease Agreement, the Previous Finance Lease Agreements, the Consultancy Agreement and the Previous Consultancy Agreements are required to be aggregated for the calculation of the relevant percentage ratios to determine the classification of notifiable transactions under the Listing Rules.

As certain of the applicable ratios set out in Rule 14.07 of the Listing Rules in respect of the Finance Lease Agreement, the Previous Finance Lease Agreements, the Consultancy Agreement, the Previous Consultancy Agreements and the transactions contemplated therein are more than 5% and all of which are below 25%, the entering into of the Finance Lease Agreement, the Previous Finance Lease Agreements, the Consultancy Agreement, the Previous Consultancy Agreements and the transactions contemplated therein constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules and are therefore subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

On 29 August 2017, KYNE, as lessee, entered into the Finance Lease Agreement with BOB Leasing, as lessor, pursuant to which BOB Leasing shall purchase the Leased Assets from HPBC and HGEE as per the instructions given by KYNE at a total consideration of RMB88,000,000. The Leased Assets were then leased to KYNE for a term of 3 years. The ownership of the Leased Assets under the Finance Lease Agreement will be vested in BOB Leasing throughout the lease period. At the end of the lease period and subject to payments by KYNE of (i) all amounts due under the Finance Lease Agreement; and (ii) a consideration of RMB75,328,000 for the Leased Assets, the ownership of the Leased Assets will be vested in KYNE.

THE FINANCE LEASE AGREEMENT Date

29 August 2017

Parties

Lessor: BOB Leasing

Lessee: KYNE

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, BOB Leasing and its respective ultimate beneficial owners are independent of the Company and the Connected Persons of the Company.

The Finance Lease Agreement comprised (i) the purchase of the Leased Assets from HPBC and HGEE by BOB Leasing; and (ii) the direct lease arrangement of the Leased Assets from BOB Leasing to KYNE, details of which are discussed below.

Sale and purchase arrangement

Pursuant to the Finance Lease Agreement, BOB Leasing shall purchase the Leased Assets from HPBC and HGEE as per the instructions given by KYNE at a total consideration of RMB88,000,000 for the Leased Assets.

The consideration to be paid by BOB Leasing to HPBC and HGEE pursuant to the terms set out in the quad-party procurement agreement dated 29 August 2017 entered into between BOB Leasing, HPBC, HGEE and KYNE in respect of the sale and purchase of the Leased Assets was determined after arm's length negotiations between parties to the quad-party procurement agreement by reference to the prevailing market price of the Leased Assets. The payments of the consideration are conditional upon the fulfilment of certain conditions under the Finance Lease Agreement, including, among others, BOB Leasing having received the relevant documentary proof for confirming the ownership of the Leased Assets; and BOB Leasing having received the relevant documentary proof for confirming that the applicable registration procedures in respect of certain pledges as mentioned in the third paragraph headed "Lease payments" below have been completed for the Finance Lease Agreement.

Direct lease arrangement

Pursuant to the Finance Lease Agreement, BOB Leasing agreed to lease the Leased Assets to KYNE for a term of 3 years. The commencement date of the finance lease period of the Leased Assets shall be notified by BOB Leasing in writing.

Lease payments

Pursuant to the Finance Lease Agreement, the estimated aggregate lease payments payable by KYNE for the Finance Lease Agreement to BOB Leasing shall be RMB102,942,175, being the total principal lease cost of RMB12,672,000, the total estimated aggregate interest of approximately RMB14,942,175 and the consideration of RMB75,328,000 for the transfer of the ownership of the Leased Assets.

The total principal lease cost and the total estimated aggregate interest shall be payable in 12 quarterly instalments and the consideration for the transfer of the ownership of the Leased Assets shall be payable at the end of the lease period. The interests are calculated at a floating rate and shall be adjusted with reference to the benchmark interest rate for RMB loans with a maturity of above 5 years as promulgated by the People's Bank of China from time to time plus a premium.

The obligations of the lessee under the Finance Lease Agreement shall be secured by, among others, (a) a pledge of the 100% equity interest in KYNE; (b) a corporate guarantee from each of the Company and HPBC; (c) a pledge on the Leased Assets; and (d) a pledge on the electricity bill receivables by KYNE.

Ownership of the Leased Assets

The ownership of the Leased Assets under the Finance Lease Agreement will be vested in BOB Leasing throughout the lease period. At the end of the lease period and subject to payments by KYNE of (i) all amounts due under the Finance Lease Agreement; and (ii) a consideration of RMB75,328,000 for the Leased Assets, the ownership of the Leased Assets will be vested in KYNE.