China New Town Development Company Limited 中國新城鎮發展有限公司

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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. China New Town Development Company Limited 中國新城鎮發展有限公司 (Incorporated as a business company limited by shares under the laws of the British Virgin Islands) Hong Kong Stock Code: 1278 DISCLOSEABLE TRANSACTION SUBSCRIPTION OF INTEREST IN AN INVESTMENT FUND SUBSCRIPTION OF INTEREST IN AN INVESTMENT FUND The Board is pleased to announce that on 21 January 2018, New Town Education (an indirect wholly-owned subsidiary of the Company) and the General Partner entered into the Subscription Agreement, pursuant to which, among other things, New Town Education has applied to subscribe for and purchase the Interest at the amount of US$40 million (equivalent to HK$312 million). Further, on the same date, New Town Education (an indirect wholly-owned subsidiary of the Company) and the General Partner entered into the Commitment Agreement, pursuant to which, among other things, New Town Education will make a total commitment to the Investment Fund equal to the aggregate total commitments of all other partners' commitment to the Investment Fund, provided that New Town Education s maximum commitment to the Investment Fund is US$50 million (equivalent to HK$390 million), unless New Town Education otherwise agrees in writing. LISTING RULES IMPLICATIONS As the applicable percentage ratios calculated under Rule of the Listing Rules in respect of the Subscription Agreement and the Commitment Agreement are more than 5% but less than 25%, the entering into of the Subscription Agreement and the Commitment Agreement constitutes a discloseable transaction of the Company and is therefore subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

2 SUBSCRIPTION OF INTEREST IN AN INVESTMENT FUND The Board is pleased to announce that on 21 January 2018, New Town Education (an indirect wholly-owned subsidiary of the Company) and the General Partner entered into the Subscription Agreement, pursuant to which, among other things, New Town Education has applied to subscribe for and purchase the Interest at the amount of US$40 million (equivalent to HK$312 million). Further, on the same date, New Town Education (an indirect wholly-owned subsidiary of the Company) and the General Partner entered into the Commitment Agreement, pursuant to which, among other things, New Town Education will make a total commitment to the Investment Fund equal to the aggregate total commitments of all other partners' commitment to the Investment Fund, provided that New Town Education s maximum commitment to the Investment Fund is US$50 million (equivalent to HK$390 million), unless New Town Education otherwise agrees in writing. The General Partner has notified the Company, the indicative total commitment (including New Town Education s commitment of US$40 million) at Initial Closing is around US$65 million. THE SUBSCRIPTION AGREEMENT The principal terms of the Subscription Agreement are summarized below: Date 21 January 2018 Parties (i) New Town Education (an indirect wholly-owned subsidiary of the Company); and (ii) General Partner Name of the Investment Fund Kaiyuan Education Fund LP Investment Objectives and Strategies The Investment Fund is being established for the purpose of seeking long term capital appreciation principally by making privately negotiated investments in companies, projects and businesses in the education industry within the Greater China region and such other global regions as identified by the General Partner in its discretion from time to time

3 Subscription Amount New Town Education has agreed to subscribe for and purchase the Interest at the amount of US$40 million (equivalent to HK$312 million). The subscription amount was determined after arm s length negotiation with reference to the anticipated capital requirements of the Investment Fund and is payable within 10 business days if General Partner serves a drawdown notice during the Commitment Period THE COMMITMENT AGREEMENT The principal terms of the Commitment Agreement are summarized below: Date 21 January 2018 Parties (i) New Town Education (an indirect wholly-owned subsidiary of the Company); and (ii) General Partner Total Commitment New Town Education will make a total commitment to the Investment Fund equal to the aggregate total commitments of all other partners on the Final Closing, however, New Town Education will make an initial commitment of US$40 million on the Initial Closing (i.e. the subscription of the Interest under the Subscription Agreement). If the Investment Fund receives aggregate commitments of less than US$40 million from all other partners as at the Final Closing, New Town Education s commitment will be reduced. If the Investment Fund receives aggregate commitments of more than US$40 million from all other partners as at the Final Closing, New Town Education s commitment will be increased but will not be higher than US$50 million which was determined in the Company s sole discretion (including the

4 subscription of the Interest under the Subscription Agreement) unless New Town Education otherwise agrees in writing. Payment At any time during the Commitment Period, the General Partner may serve a drawdown notice requiring New Town Education to pay a capital contribution up to its commitment and New Town Education must pay the amount due under the drawdown notice no later than 10 business days. INFORMATION ON THE GROUP AND THE GENERAL PARTNER The Company is the listed platform of China Development Bank Capital in the business segment of new urbanization, which invests, develops and operates diversified urbanization projects nationwide in China. Incorporated in Hong Kong, New Town Education is an indirect wholly-owned subsidiary of the Company, principally engaged in investment in education related business. The General Partner is an exempted company organized under the laws of the Cayman Islands with limited liability and principally engaged in investment management and consultancy services. As at the date of this announcement, the General Partner is wholly owned by Kaiyuan Education Fund GP Holdings Limited, which is in turn owned by New Town Education, China-West Education Investment Holdings Company Limited, Excel Access International Limited and Smart Sphere Limited as to 40%, 15%, 25% and 20% respectively. To the best knowledge of the Directors having made reasonable enquiry, save that New Town Education is interested in 40% in the General Partner, each of the General Partner, China-West Education Investment Holdings Company Limited, Excel Access International Limited and Smart Sphere Limited and their respective ultimate beneficial owners are Independent Third Party. REASONS FOR AND BENEFITS OF THE ENTERING INTO OF THE SUBSCRIPTION AGREEMENT AND COMMITMENT AGREEMENT Building on the strategic resources of the Company s principal business of township development and urbanization investment in China s leading cities, the Company has for long been strategically looking for downstream expansion opportunities in China s private education sector. The Company is of the view that this sector has promising future prospects and favorable fundamentals, and is highly synergetic with the

5 Company s township development business. Specifically, the Group s extensive business network, solid governmental relationship and access to scarce land resources in China s leading cities could nurture the growth of education operators; conversely bringing in quality education resources enhances town value and thus the Group s core competency as a town developer. The Investment Fund will be actively managed by the General Partner, which in turn is a market-oriented dedicated platform of which the Company is a strategic shareholder. The Investment Fund is well-positioned to blend in multiple strategic resources and independently develops and offers cutting-edge private education solutions with international curriculum elements, which is currently among the fastest growing education segment especially in China s leading cities and its emerging households. The subscription of the Interest is expected to, in the long run, create value through stable operating income generated from education businesses as well as value appreciation of such assets. It will also strategically balance the Company s asset mix as well as augment its potential product offering in a downstream urbanization value chain, thus enhancing the Group s core business and shareholders value. The Directors are of the view that the terms of the Subscription Agreement and the Commitment Agreement were negotiated on an arm s length basis between the parties and are normal commercial terms, fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. LISTING RULES IMPLICATIONS As the applicable percentage ratios calculated under Rule of the Listing Rules in respect of the Subscription Agreement and the Commitment Agreement are more than 5% but less than 25%, the entering into of the Subscription Agreement and the Commitment Agreement constitutes a discloseable transaction of the Company and is therefore subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions have the following meanings: Board the board of Directors Company China New Town Development Company Limited, a company incorporated in the British Virgin Islands with limited liability, the shares of which are listed on the SEHK

6 Commitment Period Commitment Agreement from the date of Initial Closing up to the fifth (5 th ) anniversary of the Final Closing, subject to an extension at the discretion of the General Partner for up to one (1) additional 12 month period the commitment agreement dated 21 January 2018 entered into by New Town Education and the General Partner Directors Final Closing the directors of the Company the final closing for the subscription of Interests, which will take place on such date as the General Partner may determine but will be no later than 12 months after the Initial Closing General Partner Group Independent Third Party the general partner of the Investment Fund, initially being Kaiyuan Education Fund GP Limited the Company and its subsidiaries third parties who are independent of, and not connected with, the Company and its connected persons Initial Closing the first closing date for the subscription of Interests, being 26 January 2018, or such other date determined by the General Partner in its discretion Interest the limited partnership interest in the Investment Fund Investment Fund Kaiyuan Education Fund LP, which is a closed-ended fund established as an exempted limited partnership under the laws of the Cayman Islands

7 Subscription Agreement the subscription agreement dated 21 January 2018 entered into by New Town Education and the General Partner Listing Rules New Town Education PRC SEHK the Rules Governing the Listing of Securities on the SEHK New Town Education Company Limited, an indirect wholly-owned subsidiary of the Company the People s Republic of China excluding Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan for the purpose of this announcement The Stock Exchange of Hong Kong Limited % percent By order of the Board China New Town Development Company Limited Liu Heqiang Chief Executive Officer Hong Kong, 21 January 2017 As at the date of this announcement, the executive directors of the Company are Mr. Liu Heqiang (Chief Executive Officer), Ms. Yang Meiyu, Mr. Ren Xiaowei and Mr. Shi Janson Bing; the nonexecutive directors of the Company are Mr. Wei Wei (Chairman), Mr. Zuo Kun (Vice Chairman), Mr. Li Yao Min (Vice Chairman) and Mr. Xie Zhen; and the independent non-executive directors of the Company are Mr. Henry Tan Song Kok, Mr. Kong Siu Chee, Mr. Zhang Hao and Mr. E Hock Yap.

8 For the purpose of this announcement, an exchange rate of US$1.00 = HK$7.80 is used. Such exchange rate is for the purpose of illustration only and does not constitute a representation that any amount has been, could have been or may be converted at such or any other rates or at all.