DISCLOSEABLE TRANSACTION PROVISION OF PLEDGE, MORTGAGE AND GUARANTEE AND ANNOUNCEMENT PURSUANT TO RULE OF THE LISTING RULES

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this 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 announcement. (Stock Code: 0832) DISCLOSEABLE TRANSACTION PROVISION OF PLEDGE, MORTGAGE AND GUARANTEE AND ANNOUNCEMENT PURSUANT TO RULE OF THE LISTING RULES PROVISION OF PLEDGE, MORTGAGE AND GUARANTEE On 4 July 2018 (after trading hours), (i) Henan Zhiteng entered into the Pledge Agreement with Ping An Trust, (ii) Central China Huayi entered into the Mortgage Agreement with Ping An Trust, (iii) CCRE China entered into the Guarantee Agreement with Ping An Trust, and Central China Hengxin entered into the Trust Loan Agreement with Ping An Trust, pursuant to which Henan Zhiteng agreed to provide the Pledge in favor of Ping An Trust, Central China Huayi agreed to provide the Pledge in favor of Ping An Trust, CCRE China agreed to provide the Guarantee in favor of Ping An Trust as Security for the repayment obligations of Central China Hengxin under the Trust Loan in the amount of RMB1,600,000,000 (equivalent to approximately HK$1,904,000,000) granted by Ping An Trust pursuant to the Trust Loan Agreement. 1

2 IMPLICATIONS UNDER THE LISTING RULES As the applicable percentage ratios in respect of the amount under the Pledge, Mortgage and Guarantee are more than 5% but not less than 25%, the provision of the Pledge, Mortgage and Guarantee constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. DISCLOSURE PURSUANT TO RULE OF THE LISTING RULES The disclosure is also made pursuant to Rule of the Listing Rules as the Security provided by the Group for the financing of Central China Hengxin, an jointly controlled entity of an affiliated company of the Company as defined under Rule 13.11(2) of the Listing Rules, exceeds 8% of the assets ratio as defined under Rule 14.07(1) of the Listing Rules. INTRODUCTION On 4 July 2018 (after trading hours), (i) Henan Zhiteng entered into the Pledge Agreement with Ping An Trust, (ii) Central China Huayi entered into the Mortgage Agreement with Ping An Trust, (iii) CCRE China entered into the Guarantee Agreement with Ping An Trust, and Central China Hengxin entered into the Trust Loan Agreement with Ping An Trust, pursuant to which Henan Zhiteng agreed to provide the Pledge in favor of Ping An Trust, Central China Huayi agreed to provide the Pledge in favor of Ping An Trust, CCRE China agreed to provide the Guarantee in favor of Ping An Trust as Security for the repayment obligations of Central China Hengxin under the Trust Loan in the amount of RMB1,600,000,000 (equivalent to approximately HK$1,904,000,000) granted by Ping An Trust pursuant to the Trust Loan Agreement. 2

3 TRUST LOAN AGREEMENT The Trust Loan will be granted by Ping An Trust to Central China Hengxin on the terms and conditions set out in the Trust Loan Agreement, and will be financed with the trust funds under the trust subject to management of Ping An Trust. Ping An Trust can release the Trust Loan in installments. The Trust Loan bears interest at a rate of 9.2% per annum for a term of 12 months. The term of each installment of Trust Loan is 12 months from the date of establishment of the trust unit corresponding to the installment of loan to the date of establishment of trust. From the date of expiry of every 12 months commencing from the date of establishment of the Trust Loan, Ping An Trust is entitled to determine, based on the actual conditions, whether to extend the term of the Trust Loan 30 working days in advance provided that the maximum term of the Trust Loan shall not exceed 36 months. PLEDGE AGREEMENT Date: 4 July 2018 (after trading hours) Parties: (1) Henan Zhiteng (as the pledgor under the Pledge Agreement) (2) Ping An Trust (as the pledgee under the Pledge Agreement) The principal terms of the Pledge Agreement are as follows: Term: The Pledge shall become effective from the date of the Pledge Agreement and expire on the date of extinction of right of pledge upon full settlement of Trust Loan under the Trust Loan Agreement. Right of pledge: 65% equity interest held by Henan Zhiteng in Central China Huayi (equivalent to the actual capital contribution of RMB65,000,000) 3

4 Scope of pledge security: In addition to the principal of the main creditor s right under the Trust Loan Agreement, it also covers the interests arising therefrom (the interests referred to in the agreement include interests, default interests (if any) and compound interests (if any)), repurchase premium (if any), other types of capital occupation costs (if any), indemnity, compensation, liquidated damages, damages, commission charges, insurance premiums, and other expenses incurred for signing or fulfilling the master agreement or this agreement, and the costs incurred by the pledgee in realizing the security rights and creditor s rights (including but not limited to disposal expenses, taxes, legal fees, arbitration fees, property preservation fees, assessment fees, auction fees, implementation fees, delivery fees, announcements fees, attorney fees, and travel expenses). MORTGAGE AGREEMENT Date: 4 July 2018 (after trading hours) Parties: (1) Central China Huayi (as the mortgagor under the Mortgage Agreement) (2) Ping An Trust (as the mortgagee under the Mortgage Agreement) The principal terms of the Mortgage Agreement are as follows: Term: The Mortgage shall become effective from the date of the Mortgage Agreement and expire on the date of full repayment of payables within the scope of mortgage security under the Mortgage Agreement and cancellation of registration of the mortgage right of the mortgagee. 4

5 Collaterals: the nine land parcels with the land certificate numbers of Mou Guo Yong (2016) No. 043, Mou Guo Yong (2016) No. 044, Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No and the construction in process thereon (if any) (with a gross site area of 402,212 m 2 ) Scope of mortgage security: In addition to the principal of the main creditor s right under the Trust Loan Agreement, it also covers the interests arising therefrom (the interests referred to in the agreement include interests, default interests (if any) and compound interests (if any)), repurchase premium (if any), other types of capital occupation costs (if any), indemnity, compensation, liquidated damages, damages, commission charges, insurance premiums, and other expenses incurred for signing or fulfilling the master agreement or this agreement, and the costs incurred by the mortgagee in realizing the security rights and creditor s rights (including but not limited to disposal expenses, taxes, legal fees, arbitration fees, property preservation fees, assessment fees, auction fees, implementation fees, delivery fees, announcements fees, attorney fees, and travel expenses). GUARANTEE AGREEMENT Date: 4 July 2018 (after trading hours) Parties: (1) CCRE China (as the guarantor under the Guarantee Agreement) (2) Ping An Trust (as the creditor under the Guarantee Agreement) 5

6 Term: Scope of pledge security: The Guarantee shall become effective from the date of the Guarantee Agreement and expire two years from the payment due date of the last installment of the Trust Loan under the Trust Loan Agreement. In addition to the principal of the main creditor s right under the Trust Loan Agreement, it also covers the interests arising therefrom (the interests referred to in the agreement include interests, default interests (if any) and compound interests (if any)), repurchase premium (if any), other types of capital occupation costs (if any), indemnity, compensation, liquidated damages, damages, commission charges, insurance premiums, and other expenses incurred for signing or fulfilling the master agreement or this agreement, and the costs incurred by the creditor in realizing the security rights and creditor s rights (including but not limited to disposal expenses, taxes, legal fees, arbitration fees, property preservation fees, assessment fees, auction fees, implementation fees, delivery fees, announcements fees, attorney fees, and travel expenses). INFORMATION ABOUT THE GROUP, CCRE CHINA, HENAN ZHITENG, CENTRAL CHINA HUAYI, CENTRAL CHINA HENGXIN AND PING AN TRUST The Group is principally engaged in real estate development and sales in Henan Province, the PRC. CCRE China is a limited liability company established in the PRC. It is an indirect whollyowned subsidiary of the Company and is mainly engaged in real estate development and sales and real estate investment in Henan Province, the PRC. Henan Zhiteng is a limited liability company established in the PRC. It is an indirect whollyowned subsidiary of the Company and is mainly engaged in consulting in relation to property investment and management in Henan Province, the PRC. Central China Huayi is a limited liability company established in the PRC. It is an indirect wholly-owned subsidiary of the Company and is mainly engaged in development and operation of real estate for cultural tourism in Henan Province, the PRC. 6

7 Central China Hengxin is a limited liability company established in the PRC and a jointly controlled entity held as to 54.55% by the Company. It is mainly engaged in real estate projects of redevelopment of old districts in Henan Province, the PRC. Ping An Trust is a licensed commercial bank in the PRC and provides a variety of financial products and services to corporate and personal banking customers. To the best of the Directors knowledge, information and belief having made all reasonable enquiries, Ping An Trust and its ultimate beneficial owners are Independent Third Parties of the Company. REASONS FOR AND BENEFITS OF ENTERING INTO THE TRUST LOAN AGREEMENT, PLEDGE AGREEMENT, MORTGAGE AGREEMENT AND GUARANTEE AGREEMENT Central China Huayi is the legal and beneficial owner of the Land Parcels which are currently under construction and will be developed into Jinwa Village Project (the Jinwa Village Project ) consisting of residential and commercial units. It is anticipated that the Jinwa Village Project upon completion will make a substantial contribution to the Group s profit. Since Central China Hengxin obtained the Trust Loan from Ping An Trust for the purpose of development of the Jinwa Village Project, the Directors consider that the provision of Pledge by Henan Zhiteng, the provision of Mortgage by Central China Huayi and the provision of Guarantee by CCRE China will facilitate funding of the Jinwa Village Project and which in turn will be beneficial to the Company. The Directors, after due consideration, are of the view that the entering into of the Pledge Agreement, Mortgage Agreement and Guarantee Agreement will not undermine the interests of the Company. The Directors are of the view that the terms of the Pledge Agreement, Mortgage Agreement and Guarantee Agreement are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. IMPLICATIONS UNDER THE LISTING RULES As the applicable percentage ratios in respect of the amount under the Pledge, Mortgage and Guarantee are more than 5% but not less than 25%, the provision of the Pledge, Mortgage and Guarantee constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. 7

8 DISCLOSURE PURSUANT TO RULE OF THE LISTING RULES The disclosure is also made pursuant to Rule of the Listing Rules as the Security provided by the Group for the financing of Central China Hengxin, an jointly controlled entity of an affiliated company of the Company as defined under Rule 13.11(2) of the Listing Rules, exceeds 8% of the assets ratio as defined under Rule 14.07(1) of the Listing Rules. DEFINITIONS In this announcement, the following terms shall have the following meanings unless the context otherwise requires: Board the board of Directors CCRE China Central China Real Estate Group (China) Company Limited*, a wholly foreign-owned enterprise with limited liability established in the PRC, and an indirect wholly-owned subsidiary of the Company Central China Hengxin Central China Hengxin Property Company Limited*, a company established in the PRC with limited liability and a jointly controlled entity held as to 54.55% by the Company as at the date of this announcement Central China Huayi Henan CCRE Huayi Brothers Culture Tourism Industry Company Limited*, a company incorporated under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company Company Central China Real Estate Limited *, an exempted company established under the laws of the Cayman Islands with limited liability, whose shares are listed on the Main Board of the Stock Exchange connected person(s) having the meaning ascribed to it under the Listing Rules 8

9 Director(s) the director(s) of the Company Group the Company and its subsidiaries Guarantee the guarantee provided by CCRE China to Ping An Trust pursuant to the Guarantee Agreement Guarantee Agreement the guarantee agreement dated 4 July 2018 entered into between CCRE China and Ping An Trust, pursuant to which, CCRE China agreed to provide the Guarantee in favour of Ping An Trust as guarantee for the repayment obligations of Central China Hengxin under the Trust Loan Agreement Henan Zhiteng Henan Zhiteng Business Service Company Limited*, a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company HK$ Hong Kong dollar, the lawful currency of Hong Kong Hong Kong the Hong Kong Special Administrative Region of the PRC Independent Third Party(ies) third party(ies) independent of the Company and its connected persons and is/are not connected person(s) of the Company Land Parcels the nine land parcels with the land certificate numbers of Mou Guo Yong (2016) No. 043, Mou Guo Yong (2016) No. 044, Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No , Yu (2017) Real Estate Title of Zhongmou County No and the construction in process thereon (if any) (with a gross site area of 402,212 m 2 ) 9

10 Listing Rules the Rules Governing the Listing of Securities on the Stock Exchange Mortgage the mortgage provided by Central China Huayi with its nine land parcels and the construction in process thereon (if any) (with a gross site area of 402,212 m 2 ) to Ping An Trust pursuant to the Mortgage Agreement Mortgage Agreement the mortgage agreement dated 4 July 2018 entered into between Central China Huayi and Ping An Trust, pursuant to which, Central China Huayi agreed to provide the Mortgage in favour of Ping An Trust as guarantee for the repayment obligations of Central China Hengxin under the Trust Loan Agreement Percentage Ratio(s) the Percentage ratio(s) as described under Rule of the Listing Rules Ping An Trust Zhengzhou Longxi Sub-branch of Ping An Trust Co., Ltd.*, a company established in the PRC with limited liability Pledge the pledge provided by Henan Zhiteng with its 65% equity interest in Central China Huayi (equivalent to the actual capital contribution of RMB65,000,000) to Ping An Trust Pledge Agreement the pledge agreement dated 4 July 2018 entered into between Henan Zhiteng and Ping An Trust, pursuant to which, Henan Zhiteng agreed to provide the Pledge in favour of Ping An Trust as guarantee for the repayment obligations of Central China Hengxin under the Trust Loan Agreement PRC the People s Republic of China RMB Renminbi, the lawful currency of the PRC 10

11 Security the Guarantee provided by CCRE China in favor of Ping An Trust pursuant to the Guarantee Agreement, the Pledge provided by Henan Zhiteng in favor of Ping An Trust pursuant to the Pledge Agreement and the Mortgage provided by Central China Huayi in favor of Ping An Trust pursuant to the Mortgage Agreement, as security for the repayment obligations of Central China Hengxin under the Trust Loan Share(s) ordinary share(s) with a nominal value of HK$0.10 each in the share capital of the Company Shareholder(s) holder(s) of the Shares Stock Exchange The Stock Exchange of Hong Kong Limited Trust Loan the trust loan in the amount of RMB1,600,000,000 (equivalent to approximately HK$1,904,000,000) granted by Ping An Trust to Central China Hengxin in accordance with the terms of the Trust Loan Agreement and subject to the conditions therein Trust Loan Agreement the trust loan agreement dated 4 July 2018 entered into between Central China Hengxin and Ping An Trust, pursuant to which, Ping An Trust agreed to grant the Trust Loan to Central China Hengxin % per cent By order of the Board Central China Real Estate Limited Wu Po Sum Chairman Hong Kong, 4 July

12 For the purpose of this announcement, translations of Renminbi into Hong Kong dollars or vice versa have been calculated by using an exchange rate of RMB1.00 equal to HK$1.19. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were, may have been or will be exchanged at such rate or any other rates or at all. As at the date of this announcement, the Board comprises nine Directors, of which Mr. Wu Po Sum, Mr. Liu Weixing and Ms. Yan Yingchun are executive Directors, Mr. Lucas Ignatius Loh Jen Yuh, Mr. Puah Tze Shyang and Ms. Wu Wallis (alias Li Hua) are non-executive Directors, Mr. Cheung Shek Lun, Mr. Xin Luo Lin and Dr. Sun Yuyang are independent non-executive Directors. * For identification purposes only 12