• Proposed Amendments to the Terms and Conditions of Convertible Bonds

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This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

China Ecotourism Group Limited

中 國 生 態 旅 遊 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 1371)

PROPOSED AMENDMENTS TO THE TERMS

AND CONDITIONS OF CONVERTIBLE BONDS

BONDHOLDER LETTER AGREEMENT

The Board announces that on 1 November 2021, the Company and the Bondholder entered into the Bondholder Letter Agreement, whereby the Company and the Bondholder have conditionally agreed to further amend certain terms and conditions of the New Option 1 Bonds, including the repayment schedule and the principal amount to be repaid at different repayment dates. Save for the Proposed Amendments, some minor clarifications to certain provisions of the New Option 1 Bonds and the corresponding necessary contextual changes to the Trust Deed pursuant to the Bondholder Letter Agreement, all other terms and conditions of the New Option 1 Bonds shall remain in full force and effect.

Pursuant to the Bondholder Letter Agreement, the Bondholder, as the sole holder of 100% of the Principal Amount Outstanding of the New Option 1 Bonds, shall instruct the Trustee to concur in the Proposed Amendments and execute the Fifth Supplemental Trust Deed. The Proposed Amendments shall become effective upon the entering of the Fifth Supplemental Trust Deed, which in turn is subject to and conditional upon (i) the Stock Exchange granting the approval for the Proposed Amendments as required under Rule 28.05 of the Listing Rules; and (ii) the Listing Committee of the Stock Exchange granting the approval for the listing of, and permission to deal in, the Conversion Shares.

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GENERAL MANDATE TO ISSUE THE CONVERSION SHARES

As at the date of this announcement and since the date of issue of the New Option 1 Bonds, no Conversion Shares have been issued. Based on the Conversion Price and assuming full conversion of the New Option 1 Bonds, an aggregate of 72,402,366 Conversion Shares will be issued by the Company, representing approximately 2.34% of the issued share capital of the Company as at the date of this announcement, and approximately 2.29% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares upon full conversion of the New Option 1 Bonds (assuming there are no other changes in the issued share capital of the Company from the date of this announcement up to the full conversion of the New Option 1 Bonds). The Conversion Shares will be issued pursuant to the 2021 General Mandate.

APPLICATION FOR LISTING

A new application has been made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares which may fall to be issued upon conversion of the New Option 1 Bonds.

IMPLICATIONS UNDER THE LISTING RULES

Pursuant to Rule 28.05 of the Listing Rules, any alterations in the terms of convertible debt securities after issue must be approved by the Stock Exchange, except where the alterations take effect automatically under the existing terms of such convertible debt securities. The Company has applied to the Stock Exchange for its approval of the Proposed Amendments pursuant to the requirements under the Listing Rules.

Shareholders and potential investors of the Company should be aware that the Proposed Amendments are subject to the fulfilment of the conditions precedent and the entering of the Fifth Supplemental Trust Deed, and therefore the Proposed Amendments may or may not take effect. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares and the securities of the Company.

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INTRODUCTION

This announcement is made by the Company pursuant to Rule 28.05 of the Listing Rules. Reference is made to the announcements of the Company dated 10 March 2017, 16 March 2017, 24 March 2017, 7 April 2017, 7 November 2017, 26 April 2018, 22 March 2019, 28 March 2019, 1 November 2019, 4 November 2019, 23 April 2020, 28 April 2020, 27 April 2021 and 3 May 2021 relating to the New Option 1 Bonds.

The Board announces that on 1 November 2021, the Company and the Bondholder entered into the Bondholder Letter Agreement, whereby the Company and the Bondholder have conditionally agreed to further amend certain terms and conditions of the New Option 1 Bonds. Pursuant to the Bondholder Letter Agreement, the Bondholder, as the sole holder of 100% of the Principal Amount Outstanding of the New Option 1 Bonds, shall instruct the Trustee to concur in the Proposed Amendments and execute the Fifth Supplemental Trust Deed. Subject to fulfillment of the conditions precedent set out below, the Proposed Amendments will be effected by the Company and the Trustee entering into the Fifth Supplemental Trust Deed.

BONDHOLDER LETTER AGREEMENT

Set out below are the principal terms of the Bondholder Letter Agreement.

Date:	1 November 2021
Parties:	(i)	the Company as the issuer
	(ii)	the Bondholder as the holder of the New Option 1 Bonds,
		namely BFAM Asian Opportunities Master Fund, LP

The Bondholder is currently BFAM Asian Opportunities Master Fund, LP. BFAM Asian Opportunities Master Fund, LP is a limited partnership acting through its general partner, BFAM Asian Opportunities Master GP Limited, and managed by BFAM Partners (Cayman) Limited through its sub-advisor BFAM Partners (Hong Kong) Limited, which is a licensed corporation under the SFO licensed to carry out Type 9 (asset management) regulated activity under the SFO. BFAM Partners (Hong Kong) Limited is wholly owned by BFAM Partners (Cayman) Limited which is wholly owned by Mr. Fuchs, Benjamin Aaron. Limited partners of BFAM Asian Opportunities Master Fund, LP are BFAM Asian Opportunities Fund, LP and BFAM Asian Opportunities Fund Limited, each of which is a feeder fund. The Bondholder has confirmed to the Company that, as at the date of this announcement, each of the investors of the feeder funds and the Bondholder is a third party independent of the Company and is not a connected person of the Company.

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Proposed Amendments
	Original terms (as supplemented
	and amended by the First
	Supplemental Trust Deed, the
	Second Supplemental Trust
	Deed, the Third Supplemental
	Trust Deed and the Fourth
	Supplemental Trust Deed)	Proposed Amendments
Repayment date:	Repayment in four remaining	Repayment in three remaining
	instalments:	instalments (Note):

	15%, 15%, 15% and 40% of the
	Principal Amount Outstanding as
	at the Third Amendment Date (or,
	if lower, such amount as would
	result in the Principal Amount
	Outstanding being reduced
	to zero) on 31 July 2021, 7
	November 2021, 7 May 2022 and
	the maturity date (i.e. 7 November
	2022) respectively
Conversion Price:	HK$2.00 per Conversion Share
	subject to adjustment in the
	manner provided in the Trust Deed

5%, 10% and 55% of the Principal Amount Outstanding as at the Third Amendment Date (or, if lower, such amount as would result in the Principal Amount Outstanding being reduced to zero) on 7 January 2022, 7 May 2022 and the maturity date (i.e. 7 November 2022) respectively

With effect from 10 June 2021, HK$1.69 per Conversion Share subject to adjustment in the manner provided in the Trust Deed ("Amended Conversion Price")

Note: Pursuant to the original terms (as supplemented and amended by the First Supplemental Trust Deed, the Second Supplemental Trust Deed, the Third Supplemental Trust Deed and the Fourth Supplemental Trust Deed) of the New Option 1 Bonds, 15% of the Principal Amount Outstanding as at the Third Amendment Date has been repaid on 7 November 2020 and a further 15% of the Principal Amount Outstanding as at the Third Amendment Date has been repaid on 31 July 2021.

Save for the Proposed Amendments, some minor amendments to clarify certain provisions of the New Option 1 Bonds and the corresponding necessary contextual changes to the Trust Deed pursuant to the Bondholder Letter Agreement, all other terms and conditions of the New Option 1 Bonds shall remain in full force and effect.

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Conditions Precedent

The Proposed Amendments shall become effective upon the entering of the Fifth Supplemental Trust Deed, which in turn is subject to and conditional upon (i) the Stock Exchange granting the approval for the Proposed Amendments as required under Rule 28.05 of the Listing Rules; and

1. the Listing Committee of the Stock Exchange granting the approval for the listing of, and permission to deal in, the Conversion Shares.

If the conditions precedent set out above are not fulfilled on or before 7 November 2021 (or such later date as may be mutually agreed between the Company and the Bondholder and communicated in writing to the Trustee), the Bondholder Letter Agreement shall terminate and the Fifth Supplemental Trust Deed will not be entered into and the Proposed Amendments will not take effect.

Conversion Price

The Conversion Price of HK$1.69 per Conversion Share represents:

1. a premium of approximately 1,436% over the closing price of HK$0.110 per Share as quoted on the Stock Exchange on 1 November 2021, being the date of this announcement;
2. a premium of approximately 1,408% over the average closing price of HK$0.1121 per Share as quoted on the Stock Exchange for the last five (5) trading days up to and including the date of this announcement; and
3. a premium of approximately 1,439% over the average closing price of HK$0.1098 per Share as quoted on the Stock Exchange for the last ten (10) trading days up to and including the date of this announcement.

REASONS FOR AND BENEFITS OF THE PROPOSED AMENDMENTS

The Group is a provider of technology and operation services for lottery systems, terminal equipment and gaming products in the China's lottery market. The Group's businesses involve various lottery products ranging from video lottery, computer-generated ticket games and KENO- type lottery to new media lottery, etc. The Group has vigorously expanded the ecotourism business, actively promoted the transformation of the Group's business to ecotourism, and has taken series of actions to lay a solid foundation for the future development.

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