Subject: Project Updates
From: 王昕 <[email-masked]>
To: "'James Bulger'" <[email-masked]>, "'Devon Archer'" <[email-masked]>, "'Hunter Biden'" <[email-masked]>, <[email-masked]>, "'Michael Leonard'" <[email-masked]>, "'Sebastian Momtazi'" <[email-masked]>
Cc: "'Jason Zhu'" <[email-masked]>, "'Jonathan.li'" <[email-masked]>,'Ming Xue 薛明' <[email-masked]>,'Xinzhong李新中 Li' <[email-masked]>,'王昕' <[email-masked]>
Date: Wed, 8 Apr 2015 16:50:34 +0800

Dear Shareholders,

Since we have not been able to coordinate a convenient time for everyone to catch up over the phone, I thought we would update you on our most active deals via email.  We are happy to get on a call with you individually or collectively should you have any questions or comments.  

Project Name

Status

Action Items

Hanson (acquisition of US auto parts company with AVIC)

AVIC submitted the final bid on the 6th of April though further negotiations are expected to bring the price up slightly (the increase will still be within our valuation range).  

On the financing front, we have secured a letter of intent from the Bank of China New York Branch for a 3-year term loan (with option to extend for another 2 years) of circa US$160 million.  Termsheet discussions are ongoing.  

On the fundraising front, we are in advanced discussions with Guoxin and CDB Capital for US$150mm and US$50 mm respectively.  Discussions are also ongoing with a few other interested parties.

Any additional information on the bid from the US-side would be helpful.

Aleris (acquisition of US aluminum processing company with Zhongwang)

Waiting for additional financial information following last week’s conference call with Aleris CFO. 

Will perform in-depth analysis on receipt of additional information and come up with initial valuation range.

Follow up with Aleris re. additional deliverables.

EDP (acquisition of Energias de Portugal)

We have a mandate to acquire shares in EDP.     

We understand one of EDP’s largest shareholders is Capital Research and Management, if any of you have any contacts there, email me please. 

SOE Fund

EUROPE - we intend to kick-start fundraising activities in Europe towards the end of the month. A suite of meetings have been arranged and we intend to have an initial closing at US$200 to US$300 million.  

CHINA – pitchbook ready for distribution. Roadshow to take place in due course.

U.S. – to finalise placement arrangement with Burnham. 

To follow up with Burnham re. feedback on their proposal and timeline for roadshow.

Sinopec dispute

We remain in close discussions with Sinopec regarding a settlement.  We are meeting with their lawyers later this week to discuss a proposal whereby we agree to pay late payment penalties (which, depending on whether the days are calculated as business or calendar days, will range from RMB 10 to 23 million) but not the 3% liquidated damages for the non-subscription. 

The HK arbitration has started.  We are scheduled to appear before the HKIAC on the 10th to discuss selection of arbitrators and arbitration language (expected to be a time-consuming process).  

 

Xin