Guodian Technology & Environment : MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF 70% OF THE EQUITY INTEREST IN A SUBSIDIARY THROUGH PUBLIC TENDER

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.

國 電 科 技 環 保 集 團 股 份 有 限 公 司

GUODIAN TECHNOLOGY & ENVIRONMENT GROUP CORPORATION LIMITED*

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 01296)

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF 70% OF THE EQUITY INTEREST IN A SUBSIDIARY THROUGH PUBLIC TENDER

DISPOSAL OF THE TARGET EQUITY INTEREST

Reference is made to the Company's announcements dated 7 August 2019 and 10 October 2019.

The Board announces that, on 19 April 2021, Lucency, being a wholly-owned subsidiary of the Company, and Goldwind Environmental entered into the Transaction Agreement, pursuant to which Lucency agreed to dispose of, and Goldwind Environmental agreed to acquire, 70% of the equity interest in Guodian Galaxy Water at a consideration of RMB514,983,000. As at the date of this announcement, Guodian Galaxy Water was 70% and 30% owned by Lucency and Galaxy Investment, respectively.

LISTING RULES IMPLICATIONS

Guodian Galaxy Water is a significant subsidiary of the Company, and Galaxy Investment, being a 30% shareholder of Guodian Galaxy Water, is a connected person of the Company at the subsidiary level under Chapter 14A of the Listing Rules. As Galaxy Investment intends to dispose of its 30% equity interest in Guodian Galaxy Water together with Lucency, the Disposal constitutes a connected transaction of the Company. According to Rule 14A.101 of the Listing Rules, the Disposal is subject to the reporting and announcement requirements, but exempt from the circular, independent financial advice and shareholder's approval requirements under Chapter 14A of the Listing Rules.

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However, pursuant to Chapter 14 of the Listing Rules, as the highest applicable percentage ratio in respect of the Disposal exceeds 25% but is less than 75%, the Disposal constitutes a major transaction of the Company and is subject to the reporting, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

According to Rule 14.44 of the Listing Rules, Shareholders' approval for the Disposal may be obtained by way of written Shareholders' approval in lieu of holding a general meeting if (i) no Shareholder is required to abstain from voting in the event that a general meeting is convened for approving the Disposal; and (ii) written Shareholders' approval has been obtained from a Shareholder or a closely allied group of Shareholders who together hold more than 50% of the voting rights at that general meeting to approve the Disposal. The Directors confirm that, to the best of their knowledge, information and belief after having made all reasonable enquiries, no Shareholder has a material interest in the Disposal and thus no Shareholder is required to abstain from voting should the Disposal be put forward to the Shareholders for approval at a general meeting. China Energy and Guodian Power, which together held approximately 78.40% of the issued share capital of the Company as at the date of this announcement, have approved the Disposal by way of written approval. As a result, the Company will not convene a general meeting for approving the Disposal.

A circular containing further information of the Disposal is expected to be despatched to the Shareholders on or before 11 May 2021 as additional time is required by the Company for the preparation of the relevant information for inclusion in the circular.

1. INTRODUCTION
   Reference is made to the Company's announcements dated 7 August 2019 and 10 October 2019.
   The Board announces that, on 19 April 2021, Lucency, being a wholly-owned subsidiary of the Company, and Goldwind Environmental entered into the Transaction Agreement, pursuant to which Lucency agreed to dispose of, and Goldwind Environmental agreed to acquire, 70% of the equity interest in Guodian Galaxy Water at a consideration of RMB514,983,000.
2. DETAILS OF THE TRANSACTION AGREEMENT Details of the Transaction Agreement are set out below:
   Date
   19 April 2021

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Parties

1. Lucency (as transferor); and
2. Goldwind Environmental (as transferee).

Please refer to the sections headed "3. Information of Guodian Galaxy Water" and "6. Information of the Parties" in this announcement for further details of the parties to the Transaction Agreement.

Subject Matter

Pursuant to the Transaction Agreement, Lucency agreed to dispose of, and Goldwind Environmental agreed to acquire, 210,000,000 shares in Guodian Galaxy Water, representing 70% of the equity interest in Guodian Galaxy Water.

Consideration

The consideration in respect of the Disposal shall be RMB514,983,000, which shall be satisfied by Goldwind Environmental in the following manner:

1. 55% of the Consideration, being RMB283,240,650, shall be deposited into the designated settlement account of Beijing Equity Exchange within five business days from the following day after the Effective Date, and Beijing Equity Exchange shall transfer the amount to Lucency within three business days after completing the changes in industrial and commercial registration; and
2. 45% of the Consideration, being RMB231,742,350, together with interest thereon (if any) during the deferred payment period and calculated based on the current benchmark interest rate for loans at the time of signing the Transaction Agreement, shall be deposited into the designated beneficiary's account of Lucency within one year from the Effective Date.

The consideration was determined based on the information disclosure announcement on transfer of property rights published by Beijing Equity Exchange.

Completion

The following matters shall be completed within 10 business days upon Beijing Equity Exchange issuing the proof for the transfer of the equity interest in respect of the Disposal:

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1. the dismissal and change of the directors, supervisors, senior management personnel and legal representatives of Guodian Galaxy Water;
2. the transfer of the online banking keys of Guodian Galaxy Water and its subsidiaries;
3. the change and transfer of the corporate seal of Guodian Galaxy Water and other relevant procedures;
4. Guodian Galaxy Water updating its register of members and registering Goldwind Environmental as its shareholder holding 210,000,000 shares; and
5. Guodian Galaxy Water convening a general meeting to approve the amendments to its articles of association and completing the relevant industrial and commercial filing procedures with the registration authorities.

The following matters shall be completed within 20 business days upon Beijing Equity Exchange issuing the proof for the transfer of the equity interest in respect of the Disposal:

1. the dismissal and change of the directors, supervisors, senior management personnel and legal representatives of the subsidiaries of Guodian Galaxy Water;
2. the change and transfer of the corporate seals of the subsidiaries of Guodian Galaxy Water and other relevant procedures;
3. the change of tax registration or filing of Guodian Galaxy Water and its subsidiaries;
4. the change in registration of the legal representatives of the bank accounts of Guodian Galaxy Water and its subsidiaries; and
5. all other procedures involving the change of shareholders and legal representatives.

Lucency shall transfer all assets, control rights and management rights of Guodian Galaxy Water and its subsidiaries to Goldwind Environmental on the date of completion of the industrial and commercial registration in respect of the Disposal, upon which Goldwind Environmental shall take over the control and management of Guodian Galaxy Water and its subsidiaries.

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Upon Completion, Lucency and Goldwind Environmental shall jointly appoint an accounting firm to conduct a special audit of the changes in profits and losses, creditors' rights and debts of Guodian Galaxy Water and its subsidiaries during the Transitional Period. The profits and losses arising from the normal operations of Guodian Galaxy Water (including its subsidiaries) during the Transitional Period shall be enjoyed and borne by Goldwind Environmental in accordance with its shareholding percentage. If, as a result of Lucency's failure to exercise good management, Guodian Galaxy Water and its subsidiaries incur any debts that they should not have, Goldwind Environmental shall notify Lucency within 10 business days upon issuance of the special audit report, and the parties shall negotiate and confirm in writing the assumption of the relevant debts within a month. If the parties determine that Lucency shall assume the relevant debts, Lucency shall return the corresponding amount to Guodian Galaxy Water and its subsidiaries in accordance with its shareholding percentage.

As at 15 March 2021, Guodian Galaxy Water owed Lucency financing debts of RMB579,500,000, project quality guarantee funds of RMB9,578,800 and interests on shareholder's loans of RMB8,732,900, and a wholly-owned subsidiary of Guodian Galaxy Water owed Lucency project management service fees of RMB1,000,000.

3. INFORMATION OF GUODIAN GALAXY WATER

Guodian Galaxy Water is a joint stock limited company established in PRC with a registered capital of RMB300 million. As at the date of this announcement, Guodian Galaxy Water was 70% and 30% owned by Lucency and Galaxy Investment, respectively. Guodian Galaxy Water is principally engaged in sewage treatment, raw water supply and tap water purification businesses.

Based on the audited financial statements prepared in accordance with the International Financial Reporting Standards, the extracted consolidated financial results of Guodian Galaxy Water for the two years ended 31 December 2020 and

31 December 2019 are summarized as follows:

	For the year ended 31 December
	2019	2020
	RMB'000	RMB'000
Net profit before tax	20,159	37,532
Net profit after tax	3,706	19,220

As at 31 December 2020, the net asset value of Guodian Galaxy Water extracted from the audited financial statements of the Group prepared in accordance with the International Financial Accounting Standards was RMB755.553 million.

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1. FINANCIAL EFFECTS OF THE DISPOSAL AND PROPOSED USE OF PROCEEDS
   Upon Completion, Guodian Galaxy Water will cease to a subsidiary of the Company and its financial results will no longer be consolidated into the financial statements of the Group. The net asset value of Guodian Galaxy Water as at 31 December 2020 amounted to RMB755.553 million. Based on the Consideration of RMB514,983,000 in respect of the Disposal, the Group is expected to record a loss on the Disposal of RMB66.191 million. The actual gain or loss as a result of the Disposal to be recorded by the Group is subject to final audit to be performed by the auditors of the Company.
   The proceeds of the Disposal are intended to be used as loan repayment and new investment project.
2. REASONS FOR AND BENEFITS OF THE DISPOSAL
   The Company intends to, through the disposal of the Target Equity Interest, realise corporate transformation so as to focus on water and sewage treatment businesses in industrial fields, such as mine water and coal chemical wastewater treatment.
   The Directors (including the independent non-executive Directors) consider that the Transaction Agreement is on normal commercial terms, fair and reasonable, and in the interest of the Group and the Shareholders as a whole.
3. INFORMATION OF THE PARTIES Information of the Company
   The Company, together with its subsidiaries, is primarily engaged in the provision of integrated clean technology solutions and services within the PRC through its two main business segments, with established market leading or dominant positions in the environmental protection, energy conservation and renewable energy equipment manufacturing and related services industries in the PRC.

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Information of Lucency

Lucency, a wholly-owned subsidiary of the Company, is a limited liability company established in PRC with a registered capital of RMB500 million. Lucency is principally engaged in the franchise operation of zero wastewater discharge and sewage treatment.

Information of Galaxy Investment

Galaxy Investment is a limited liability company established in the PRC with a registered capital of RMB200 million. As at the date of this announcement, Galaxy Investment was approximately 51.6%, 45.3% and 3.1% owned by Qingdao Galaxy Group Co., Ltd.* ( 青 島 銀 河 集 團 有 限 公 司), Qingdao Huayin Real Estate Development Co., Ltd.* ( 青 島 華 銀 房 地 產 開 發 有 限 公 司) and other individuals, respectively. Galaxy Investment is principally engaged in investment businesses. Galaxy Investment is a 30% shareholder of Guodian Galaxy Water and a connected person of the Company under Chapter 14A of the Listing Rules.

Information of Goldwind Environmental

Goldwind Environmental is a limited liability company established in the PRC with a registered capital of RMB2 billion. As at the date of this announcement, Goldwind Environmental was wholly owned by Xinjiang Goldwind Science & Technology Co., Ltd.* ( 新 疆 金 風 科 技 股 份 有 限 公 司), the A shares of which are listed on the Shenzhen Stock Exchange (stock code: 002202) and the H shares of which are listed on the Main Board of the Stock Exchange (stock code: 02208). Goldwind Environmental is principally engaged in investment, design, construction, operation and management of water projects, as well as development, sales and maintenance of relevant equipment and materials.

To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, Goldwind Environmental is an Independent Third Party.

7. LISTING RULES IMPLICATIONS

Guodian Galaxy Water is a significant subsidiary of the Company, and Galaxy Investment, being a 30% shareholder of Guodian Galaxy Water, is a connected person of the Company at the subsidiary level under Chapter 14A of the Listing Rules. As Galaxy Investment intends to dispose of its 30% equity interest in Guodian Galaxy Water together with Lucency, the Disposal constitutes a connected transaction of the Company. According to Rule 14A.101 of the Listing Rules, the Disposal is subject to the reporting and announcement requirements, but exempt from the circular, independent financial advice and shareholder's approval requirements under Chapter 14A of the Listing Rules.

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However, pursuant to Chapter 14 of the Listing Rules, as the highest applicable percentage ratio in respect of the Disposal exceeds 25% but is less than 75%, the Disposal constitutes a major transaction of the Company and is subject to the reporting, announcement, circular and shareholders' approval requirements under Chapter 14 of the Listing Rules.

According to Rule 14.44 of the Listing Rules, Shareholders' approval for the Disposal may be obtained by way of written Shareholders' approval in lieu of holding a general meeting if (i) no Shareholder is required to abstain from voting in the event that a general meeting is convened for approving the Disposal; and (ii) written Shareholders' approval has been obtained from a Shareholder or a closely allied group of Shareholders who together hold more than 50% of the voting rights at that general meeting to approve the Disposal. The Directors confirm that, to the best of their knowledge, information and belief after having made all reasonable enquiries, no Shareholder has a material interest in the Disposal and thus no Shareholder is required to abstain from voting should the Disposal be put forward to the Shareholders for approval at a general meeting. China Energy and Guodian Power, which together held approximately 78.4% of the total share capital of the Company as at the date of this announcement, have approved the Disposal by way of written approval. As a result, the Company will not convene a general meeting for approving the Disposal.

A circular containing further information of the Disposal is expected to be despatched to the Shareholders on or before 11 May 2021 as additional time is required by the Company for the preparation of the relevant information for inclusion in the circular.

8. DEFINITIONS

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

"Beijing Equity Exchange"	China Beijing Equity Exchange ( 北 京 產 權 交 易
	所 有 限 公 司)
"Board"	the board of directors of the Company
"China Energy"	China Energy Investment Group Co., Ltd.* ( 國 家
	能 源 投 資 集 團 有 限 公 司), a limited liability
	company established in the PRC and a controlling
	shareholder of the Company

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"Company"	Guodian Technology & Environment Group
	Corporation Limited* ( 國 電 科 技 環 保 集 團
	股 份 有 限 公 司), a joint stock limited liability
	company established in the PRC, the H Shares of
	which are listed on the Main Board of the Stock
	Exchange (stock code: 01296)
"Completion"	completion of the Disposal in accordance with the
	terms of the Transaction Agreement
"Consideration"	the consideration in respect of the Disposal, being
	RMB514,983,000
"connected person(s)"	has the meaning ascribed thereto under the Listing
	Rules
"Director(s)"	the director(s) of the Company
"Disposal"	the disposal of the Target Equity Interest by
	Lucency to Goldwind Environmental pursuant to
	the terms of the Transaction Agreement
"Effective Date"	the effective date of the Transaction Agreement,
	being the date on which the Transaction Agreement
	is (i) duly signed (with corporate seals affixed)
	by the authorised representatives of Lucency and
	Goldwind Environmental ; and (ii) approved by the
	Board and the Shareholders
"Galaxy Investment"	Qingdao Galaxy Investment Co., Ltd.* ( 青 島 銀
	河 投 資 有 限 公 司), a limited liability company
	established in the PRC and a connected person of
	the Company
"Goldwind Environmental"	Goldwind Environmental Protection Co., Ltd.* ( 金
	風 環 保 有 限 公 司), a limited liability company
	established in the PRC
"Group"	the Company and its subsidiaries

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"Guodian Galaxy Water"	Guodian Galaxy Water Co., Ltd.* ( 國 電 銀 河 水
	務 股 份 有 限 公 司), a joint stock limited liability
	company established in the PRC, and 70% and
	30% owned by Lucency and Galaxy Investment,
	respectively, as at the date of this announcement
"Guodian Power"	GD Power Development Co., Ltd.* ( 國 電 電 力 發
	展 股 份 有 限 公 司), a joint stock limited liability
	company established in the PRC, the shares of
	which are listed on the Shanghai Stock Exchange
	(stock code: 600795)
"H Share(s)"	the overseas-listed foreign shares in the ordinary
	share capital of the Company, with a RMB
	denominated par value of RMB1.0 each, which are
	subscribed for and traded in Hong Kong dollars
	and listed on the Stock Exchange
"HK$"	Hong Kong dollars, the lawful currency of Hong
	Kong
"Hong Kong"	the Hong Kong Special Administrative Region of
	the PRC
"Listing Rules"	the Rules Governing the Listing of Securities on
	The Stock Exchange of Hong Kong Limited, as
	amended, supplemented or otherwise modified
	from time to time
"Lucency"	Beijing Lucency Enviro-Tech Co., Ltd.* ( 國 能 朗
	新 明 環 保 科 技 有 限 公 司), a limited liability
	company established in the PRC and a wholly-
	owned subsidiary of the Company
"PRC"	the People's Republic of China excluding, for the
	purpose of this announcement only, Hong Kong,
	the Macau Special Administrative Region and
	Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Shareholder(s)"	holder(s) of the shares of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited

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"Target Equity Interest"	210,000,000 shares in Guodian Galaxy Water,
	representing 70% of the equity interest in Guodian
	Galaxy Water
"Transaction Agreement"	the property rights transaction agreement ( 產 權
	交 易 合 同) dated 19 April 2021 and entered into
	between Lucency as transferor and Goldwind
	Environmental as transferee in relation to the
	Disposal
"Transitional Period"	the period from 31 May 2020 to the date of
	Completion
"%"	per cent

By order of the Board

Guodian Technology & Environment Group Corporation Limited*

Mr. CHEN Dongqing

Chairman

Beijing, PRC, 20 April 2021

As at the date of this announcement, the executive Directors are Mr. Chen Dongqing, Mr. Zhang Jun and Mr. Tang Chaoxiong; the non-executive Directors are Mr. Wang Zhongqu, Mr. Zhang Wenjian, Mr. Gu Yuchun and Ms. Ge Xiaojing; and the independent non-executive Directors are Mr. Shen Xiaoliu, Mr. Qu Jiuhui, Mr. Xie Qiuye and Mr. Yeung Chi Tat.

• For identification purposes only

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