UNITED ENVIROTECH LTD. (Incorporated in the Republic of Singapore) (Company Registration No G)

Transcription

1 UNITED ENVIROTECH LTD. (Incorporated in the Republic of Singapore) (Company Registration No G) (1) PRE-CONDITIONAL VOLUNTARY OFFERS BY ROTHSCHILD (SINGAPORE) LIMITED FOR AND ON BEHALF OF CKM (CAYMAN) COMPANY LIMITED, FOR UNITED ENVIROTECH LTD. (2) PROPOSED PLACEMENT OF 30,303,031, 60,606,061 OR 90,909,091 ORDINARY SHARES IN THE CAPITAL OF UNITED ENVIROTECH LTD. AT THE PLACEMENT PRICE OF S$1.65 PER SHARE 1. INTRODUCTION 1.1. The board of directors (the Board ) of United Envirotech Ltd. (the Company ) refers to the announcement (the Pre-Conditional VGO Announcement ) made on 12 November 2014 (the Announcement Date ) by Rothschild (Singapore) Limited ( Rothschild ) for and on behalf of CKM (Cayman) Company Limited (the Offeror ) in relation to the preconditional voluntary offers for: all the issued and paid-up ordinary shares in the capital of the Company (the Shares ) other than those already owned, controlled or agreed to be acquired by the Offeror in accordance with Section 139 of the Securities and Futures Act, Chapter 289 of Singapore (the SFA ) and Rule 15 of The Singapore Code on Take-overs and Mergers (the Code ) (the Offer ); and all the convertible bonds ( Convertible Bonds ) due 2016 held by KKR China Water Investment Holdings Limited ( KKRCW ) in accordance with Rule 19 of the Code (the Convertible Bonds Offer ) The principal terms of the Offer and the Convertible Bonds Offer are set out in the Pre- Conditional VGO Announcement, a copy of which is annexed to this Announcement. EACH OF THE SHAREHOLDERS ("SHAREHOLDERS") AND THE BONDHOLDER (THE "CB HOLDER") OF THE COMPANY SHOULD NOTE THAT, AS STATED IN THE PRE-CONDITIONAL VGO ANNOUNCEMENT, THE OFFER AND THE CONVERTIBLE BONDS OFFER WILL NOT BE MADE UNLESS AND UNTIL SATISFACTION OR WAIVER (AS THE CASE MAY BE) OF THE OFFER PRE-CONDITIONS AS DEFINED AND SET OUT IN THE PRE-CONDITIONAL VGO ANNOUNCEMENT (THE "OFFER PRE-CONDITIONS") HAVE OCCURRED. ACCORDINGLY, ALL REFERENCES TO THE OFFER AND THE CONVERTIBLE BONDS OFFER IN THE PRE-CONDITIONAL VGO ANNOUNCEMENT REFER TO THE POSSIBLE OFFERS WHICH WILL ONLY BE MADE IF AND WHEN THE OFFER PRE-CONDITIONS ARE SATISFIED OR WAIVED (AS THE CASE MAY BE). As further set out in the Pre-Conditional VGO Announcement, if and when the Offer Pre- Conditions are satisfied or waived (as the case may be), Rothschild, for and on behalf of the Offeror, will announce a firm intention on the part of the Offeror to make the Offer and the Convertible Bonds Offer (the "Formal Offer Announcement Date"). In the event that the Offer Pre-Conditions are not satisfied or waived (as the case may be) by the Offeror on or before 11 May 2015 (or such later date as the Offeror may determine in consultation with

2 the Securities Industry Council), the Offer and the Convertible Bonds Offer will not be made and Rothschild will issue an announcement, for and on behalf of the Offeror, confirming that fact as soon as reasonably practicable thereafter As set out in the Pre-Conditional VGO Announcement, further information on the Offer (if and when made) will be set out in the offer document to be issued by Rothschild for and on behalf of the Offeror (the "Offer Document") to Shareholders. Details on the Convertible Bonds Offer will be set out in a letter to the CB Holder to be despatched to the CB Holder together with the Offer Document (the Letter to CB Holder ). The Offer Document, which will contain the terms and conditions of the Offer and enclose the appropriate form(s) of acceptance, will be despatched to Shareholders not earlier than 14 days and not later than 21 days from the Formal Offer Announcement Date. The Board will in due course appoint an independent financial adviser (the Independent Financial Adviser ) to advise the directors of the Company (the Director ) who are considered independent for the purposes of the Offer and the Convertible Bonds Offer (the Independent Directors ). A circular containing, inter alia, the advice of the Independent Financial Adviser and the recommendation of the Independent Directors in relation to the Offer and the Convertible Bonds Offer will be sent to Shareholders and the CB Holder within 14 days from the date of despatch of the Offer Document. IN THE MEANTIME, SHAREHOLDERS AND THE CB HOLDER ARE ADVISED TO EXERCISE CAUTION WHEN DEALING IN THE SHARES OR CONVERTIBLE BONDS HELD BY THEM (AS THE CASE MAY BE) OR OTHERWISE REFRAIN FROM TAKING ANY ACTION IN RELATION TO THE SHARES OR CONVERTIBLE BONDS HELD BY THEM (AS THE CASE MAY BE) WHICH MAY BE PREJUDICIAL TO THEIR INTERESTS, UNTIL THEY OR THEIR PROFESSIONAL ADVISERS HAVE CONSIDERED THE INFORMATION AND THE RECOMMENDATIONS OF THE INDEPENDENT DIRECTORS AS WELL AS THE ADVICE OF THE INDEPENDENT FINANCIAL ADVISER AND HAVE SOUGHT APPROPRIATE INDEPENDENT ADVICE WHEN DEALING IN THEIR SHARES OR CONVERTIBLE BONDS (AS THE CASE MAY BE). 2. PROPOSED PLACEMENT 2.1. The Board also wishes to announce that the Company has on 11 November 2014 entered into a conditional placing agreement (the Placing Agreement ) with the Offeror, pursuant to which the Company has agreed to allot and place, and the Offeror has agreed to subscribe for, new Shares in the following manner (the Proposed Placement ): a minimum of 30,303,031 new Shares; and at the Offeror s sole discretion, additional 30,303,030 or 60,606,060 new Shares. The Offeror must notify the Company in writing (at least two (2) Business Days 1 prior to the Completion Date (as defined in paragraph 5.3 below)), of the exact number of new Shares (such number not being less than 30,303,031 to be subscribed for by it pursuant to this paragraph 2.1) (such number of new Shares hereinafter referred to as the Placement Shares ). For the avoidance of doubt, all Placement Shares to be issued under the Placing Agreement shall be issued in one tranche on the Completion Date. 1 Business Day means any day other than a Saturday, Sunday or other day on which commercial banks in the PRC (as defined in footnote 4 below), Singapore, the Hong Kong Special Administrative Region of the PRC or New York are required or authorised by law or executive order to be closed.

3 2.2. The issue price for each Placement Share shall be S$1.65 (the Placement Price ), which will provide the Company with Net Proceeds (as defined and further set out in paragraph 6.1 below) of approximately S$50 million, S$100 million or S$150 million (as the case may be). The Placement Price represents: (c) (d) a premium of approximately 11.5% to the volume weighted average price ( VWAP ) of S$1.48 for each Share, based on trades done on the Singapore Exchange Securities Trading Limited (the SGX-ST ) on 7 November 2014 (the Reference Date ), being the market day immediately preceding the date the Placement Agreement was signed 2 ; a premium of approximately 22.2% over S$1.35, being the VWAP of the Shares on the SGX-ST over the one-month period prior to and including the Reference Date; a premium of approximately 21.3% over S$1.36, being the VWAP of the Shares on the SGX-ST over the three-month period prior to and including the Reference Date; and a premium of approximately 19.6% over S$1.38, being the VWAP of the Shares on the SGX-ST over the six-month period prior to and including the Reference Date. Note: (1) The figures set out above in relation to the VWAP of the Shares are based on data extracted from Bloomberg L.P The Placement Shares shall be issued fully paid-up and free from all Encumbrances 3 whatsoever and shall rank pari passu in all respects with and carry all rights similar to the Shares existing as at the date of the Placing Agreement Notwithstanding any provisions in the Placing Agreement to the contrary, the Company and the Offeror agree that the Offeror shall be entitled to designate its wholly-owned subsidiary as the person to whom the Placement Shares shall be allotted and issued under the Placing Agreement provided that the Offeror must notify the Company in writing (at least two (2) Business Days prior to the Completion Date) that its wholly-owned subsidiary shall be the person to whom the Placement Shares shall be allotted and issued to. Further information on the Offeror as well as its shareholders as at the Announcement Date (being KKRCW and CITIC Environment (International) Company Limited ( CITIC )) is set out in paragraph 4 below. 2 3 Trading in Shares was halted at 4.34 p.m. on 7 November Encumbrance means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, deed of trust, title retention, security interest or other encumbrance of any kind securing, or conferring any priority of payment in respect of, any obligation of any person, including any right granted by a transaction which, in legal terms, is not the granting of security but which has an economic or financial effect similar to the granting of security under applicable law, any lease, sublease, occupancy agreement, easement or covenant granting a right of use or occupancy to any person, (c) any proxy, power of attorney, voting trust agreement, interest, option, right of first offer, negotiation or refusal or transfer restriction in favour of any person and (d) any adverse claim as to title, possession or use.

4 2.5. As further set out in paragraph 8 below, the Company will be convening an extraordinary general meeting ( EGM ) to seek the approval of the Independent Shareholders (as defined in paragraph 7.3 below) for the Proposed Placement, and the circular (the Circular ) containing, inter alia, information pertaining to the Proposed Placement, the IFA Opinion (as defined in paragraph 9.1 below) and the notice of the EGM will be despatched to Shareholders in due course. 3. RATIONALE AND BENEFIT OF THE PROPOSED PLACEMENT 3.1 The Company is undertaking the Proposed Placement for the following rationale: Financial Position. The Proposed Placement will raise funds for additional working capital requirements for the Company and its subsidiaries (collectively, the Group ) and to strengthen the Group s financial position and flexibility to capitalise on growth opportunities. These funds may be used for: (i) (ii) (iii) the possible redemption of its medium term notes by noteholders because of their rights of redemption in event of a change in control of the Company, which will be triggered in the event the Offer becomes unconditional; the acquisition of water and wastewater treatment plants; and/or funding of the Company s working capital. Partnering with CITIC. The Company is also of the view that the Offeror, and in particular, CITIC Limited, being one of the largest state-owned enterprises in PRC 4, will be an invaluable partner in the future growth of the Company. This is particularly important given that the industry is both capital intensive as well as increasingly dominated by large players. Amongst the advantages that CITIC offers includes: (i) (ii) an extensive business network in PRC, together with the opportunity to collaborate with CITIC's expertise and excellent track record, in order to support the Company s business development strategy and growth plans; and given the capital intensive nature of water and wastewater treatment investments, the opportunity to tap into CITIC s excellent relationship with onshore financial institutions in PRC in order to expand the Company's capabilities in the sector. (c) Placement at Premium. The Proposed Placement is also being undertaken at a Placement Price that offers a significant premium to the historical VWAP of its Shares (please see paragraph 2.2 above for the premium with respect to the 6- month VWAP, the 3-month VWAP and the 1-month VWAP). 4. INFORMATION ON THE OFFEROR 4.1. The Offeror is an exempted company with limited liability incorporated under the laws of the Cayman Islands on 30 September Its principal activities are those of an investment holding company. As at the Announcement Date, the Offeror has an 4 PRC means the People s Republic of China, and for the purpose of the Placing Agreement shall exclude the Hong Kong Special Administrative Region of the PRC, Taiwan and the Macau Special Administrative Region.

5 authorized share capital of S$13,000 divided into 1,300,000,000 shares of a par value of S$ each and an issued and paid-up share capital of S$ comprising two ordinary shares (the Offeror Shares ), and each of KKRCW and CITIC owns one Offeror Share. As at the Announcement Date, the board of directors of the Offeror (the Offeror Board ) comprise two nominees of CITIC (namely, Mr Hao Weibao and Mr Wang Song) and two nominees of KKRCW (namely, Mr David Haifeng Liu and Mr Zhao Fu). Post-completion of the Proposed Transaction 5, according to the Pre-Conditional VGO Announcement, the Offeror expects the Offeror Board to comprise (i) five nominees of CITIC (namely, Mr Hao Weibao, Mr Zhang Yong, Mr Wang Song, Ms Ren Xia, and Ms Mao Yimin), (ii) two nominees of KKRCW (namely, Mr David Haifeng Liu and Mr Zhao Fu), and (iii) Dr Lin Yucheng (the Company Chairman and Chief Executive Officer) ( Dr Lin ) and (iv) Ms Pan Shuhong (the Company Vice President and Chief Investment Officer) ( Ms Pan ) (Dr Lin and Ms Pan collectively, the Key Management Shareholders ). Information on KKRCW 4.2. KKRCW, a controlling Shareholder 6, is a company incorporated under the laws of the British Virgin Islands. Its principal activities are those of an investment holding company. As at the Announcement Date, KKRCW is authorised to issue a maximum of 50,000 ordinary shares with a par value of US$1.00 each and currently, 15,001 ordinary shares with a par value of US$1.00 each have been issued for an aggregate subscription price of US$153,800,001. KKRCW is an indirect wholly-owned subsidiary of KKR China Water Holdings I Limited, which in turn is approximately 93.2% held by KKR Asian Fund L.P.. The investment manager for KKR Asian Fund L.P. is Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, KKR ). KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners' capital and brings opportunities to others through its capital markets business. References to KKR s investments may include the activities of its sponsored funds. For additional information about KKR (NYSE: KKR), please visit KKR's website at As at the Announcement Date, the sole director of KKRCW is Mr William J. Janetschek, the Chief Financial Officer of KKR. Since KKR s initial investment in the Company through KKRCW s subscription of the Convertible Bonds in 2011, KKR has been a value-added partner of the Company. KKR has played an active role in assisting and supporting the Company on all its significant investments since 2011 and has contributed not just its investment and mergers and acquisition expertise but also its capital markets network and know-how. Information on CITIC 5 6 Proposed Transaction refers to: the Proposed Placement, the Offer, and (c) the Convertible Bonds Offer. The term controlling shareholder is as defined in the Listing Manual of the SGX-ST (the Listing Manual ).

6 4.3. CITIC is an exempted company with limited liability incorporated under the laws of the Cayman Islands on 29 September Its principal activities are those of an investment holding company. As at the Announcement Date, CITIC has an authorised share capital of S$13,000 divided into 1,300,000,000 shares of a par value of S$ each and an issued and paid-up share capital of S$ comprising one ordinary share, and is wholly-owned by CITIC Environment Protection Co. Ltd. ( CITIC EP ). As at the Announcement Date, the directors of CITIC are Mr Hao Weibao, Mr Zhang Yong and Mr Wang Song. CITIC EP is an indirect subsidiary of CITIC Corporation Limited, which in turn, is a whollyowned subsidiary of CITIC Limited. CITIC Limited, 78% owned by CITIC Group Corporation in Beijing and listed in Hong Kong (SEHK: 267), is one of the largest companies on the Hang Seng Index. As PRC s largest conglomerate, its businesses include financial services, resources and energy, manufacturing, real estate and infrastructure, engineering contracting, and other businesses in PRC and overseas. For more information about CITIC Limited, please visit its company website at As at the Announcement Date, the members on the board of directors of CITIC EP are Mr Wang Jiong (President and Vice Chairman of CITIC Corporation Limited, President and Vice Chairman of CITIC Limited and Chairman of CITIC EP), Mr Nie Xuequn (Vice Chairman of CITIC EP), (c) Mr Hao Weibao (President of CITIC EP), (d) Mr Chen Bin (Vice President of CITIC EP) and (e) Mr Luo Wei (Assistant President of CITIC EP). As at the Announcement Date, the members on the board of directors of CITIC Corporation Limited are (i) Mr Chang Zhenming (Chairman and Executive Director of CITIC Corporation Limited and Chairman of CITIC Limited), (ii) Mr Wang Jiong, (President and Vice Chairman of CITIC Corporation Limited, President and Vice Chairman and Executive Director of CITIC Limited and Chairman of CITIC EP), (iii) Mr Dou Jianzhong (Vice President and Executive Director of CITIC Corporation Limited, and Vice President and Executive Director of CITIC Limited), (iv) Mr Yang Jinming (Non- Executive Director), (v) Mr Yu Zhensheng (Non-Executive Director), (vi) Ms Cao Pu (Non- Executive Director) and (vii) Mr Liu Yeqiao (Non-Executive Director). As at the Announcement Date, the members on the board of directors of CITIC Limited are (1) Mr Chang Zhenming (Chairman and Executive Director of CITIC Corporation Limited and Chairman of CITIC Limited), (2) Mr Wang Jiong (President and Vice Chairman of CITIC Corporation Limited, President and Vice-Chairman and Executive Director of CITIC Limited, and Chairman of CITIC EP), (3) Mr Dou Jianzhong (Vice President and Executive Director of CITIC Corporation Limited, and Vice President and Executive Director of CITIC Limited), (4) Mr Zhang Jijing (Vice President and Executive Director of CITIC Limited), (5) Mr Yang Jinming (Non-Executive Director), (6) Mr Yu Zhensheng (Non-Executive Director), (7) Ms Cao Pu (Non-Executive Director), (8) Mr Liu Zhongyuan (Non-Executive Director), (9) Mr Alexander Reid Hamilton (Independent Non- Executive Director), (10) Mr Francis Siu Wai Keung (Independent Non-Executive Director) and (11) Dr Xu Jinwu (Independent Non-Executive Director). Capitalisation of the Offeror 4.4. The information relating to the proposed capitalisation of the Offeror and its resultant shareholdings has been extracted from paragraphs 6.5 and 6.8 of the Pre-Conditional VGO Announcement and are reproduced below. All terms and expressions used in the extract below shall have the same meanings as those defined in the Pre-Conditional VGO Announcement, unless stated otherwise.

7 6.5 Capitalisation of the Offeror On the Signing Date, KKRCW, CITIC, the Key Management Shareholders and CITIC EP, have entered into a consortium agreement with the Offeror to govern the relationship of KKRCW, CITIC and the Key Management Shareholders (collectively, the Offeror Shareholders and each, an Offeror Shareholder ) as shareholders of the Offeror (the Consortium Agreement ). Pursuant to the Consortium Agreement, the Offeror Shareholders have agreed that the Offeror will be capitalised as follows: pursuant to a loan agreement (the CITIC Loan Agreement ) entered into between CITIC and the Offeror on the Signing Date, CITIC will extend to the Offeror a loan of an aggregate amount of up to S$1,266,000,000 (the CITIC Loan ) to fund the payment obligations of the Offeror in connection with the Proposed Transaction. Following the completion of the Offer and the Placement Completion, CITIC will capitalise (the CITIC Loan Capitalisation ) that portion of the CITIC Loan actually drawn down by the Offeror (and utilised by the Offeror in connection with the Proposed Transaction) into new Offeror Shares at an issue price equal to the Offer Price for each Offeror Share (the Offeror Share Issue Price ) pursuant to the subscription agreement entered into between the Offeror and CITIC on the Signing Date. Further: (i) (ii) CITIC Corporation Limited has, on the Signing Date, given a guarantee to KKRCW to guarantee the obligations of CITIC (I) under the CITIC Loan Agreement (including all the payment obligations of the Offeror under or in connection with the Offer, the Convertible Bonds Offer and the Proposed Placement) and (II) in relation to the KKRCW Put Option (as defined in Section 6.7(i) below); and CITIC has agreed under the Consortium Agreement to perform all necessary actions and execute all necessary documents to enable Rothschild, or failing which, another appropriate third party to provide an unconditional cash confirmation in the Formal Offer Announcement and the Offer Document that sufficient cash resources are available to the Offeror to satisfy full acceptance of the Voluntary Offer and the CB Offer in compliance with Rules 3.5 and 23.8 of the Code (save for the relevant amounts (I) that are subject to the share swaps by KKR and the Key Management Shareholders as described in Sections 6.5 to (d) below, (II) in respect of the new UEL Shares which may be issued upon the exercise of the UEL CEO s UEL Options and (III) in respect of the Unreleased Post-Amendment UEL Options). pursuant to KKRCW s Irrevocable Undertaking and the subscription agreement entered into between KKRCW and the Offeror on the Signing Date (the KKRCW Subscription Agreement ), KKRCW has agreed to: (i) (ii) (iii) tender all its 285,609,818 UEL Shares in acceptance of the Offer; tender all the Relevant Convertible Bonds in acceptance of the Convertible Bonds Offer; subject to the Inter-Consortium Members Transfers, accept payment by the Offeror of approximately 66.67% of the aggregate consideration that

8 KKRCW would receive as a result of tendering all its 285,609,818 UEL Shares in acceptance of the Offer and all the Relevant Convertible Bonds in acceptance of the Convertible Bonds Offer (collectively, the KKRCW Acceptances ), in the form of new Offeror Shares at the Offeror Share Issue Price; and (iv) subject to the Inter-Consortium Members Transfers, accept payment by the Offeror of the remaining approximately 33.33% of the aggregate consideration payable by the Offeror to KKRCW as a result of the KKRCW Acceptances, in the form of cash; (c) pursuant to the Irrevocable Undertaking given by the UEL CEO and the subscription agreement entered into between the Offeror and the UEL CEO on the Signing Date (the Lin Subscription Agreement ), the UEL CEO has agreed to: (i) (ii) (iii) tender all his 71,761,000 UEL Shares in acceptance of the Offer; subject to the Inter-Consortium Members Transfers, accept payment by the Offeror of approximately 59.70% 7 of the aggregate consideration that the UEL CEO would receive as a result of tendering all his 71,761,000 UEL Shares in acceptance of the Offer (the UEL CEO Acceptance ), in the form of new Offeror Shares at the Offeror Share Issue Price; and subject to the Inter-Consortium Members Transfers, accept payment by the Offeror of the remaining approximately 40.30% 8 of the aggregate consideration payable by the Offeror to the UEL CEO as a result of the UEL CEO Acceptance, in the form of cash; (d) pursuant to the Irrevocable Undertaking given by the UEL CIO and the subscription agreement entered into among the Offeror, the UEL CIO and Joyfield (an affiliate of the UEL CIO) on the Signing Date (the Pan Subscription Agreement and together with the Lin Subscription Agreement, shall collectively be known as the Key Management Shareholder Subscription Agreements ), the UEL CIO and Joyfield have agreed to: (i) (ii) (iii) tender all the 85,593,383 UEL Shares held by the UEL CIO and Joyfield (in the aggregate) in acceptance of the Offer; subject to the Inter-Consortium Members Transfers, accept payment by the Offeror of approximately 66.67% of the aggregate consideration that the UEL CIO and Joyfield would receive as a result of tendering all the 85,593,383 UEL Shares that the UEL CIO and Joyfield collectively hold in acceptance of the Offer (the UEL CIO Acceptance ), in the form of new Offeror Shares to be issued to the UEL CIO at the Offeror Share Issue Price; and subject to the Inter-Consortium Members Transfers, accept payment by the Offeror of the remaining approximately 33.33% of the aggregate % of the aggregate consideration that the UEL CEO would receive is equivalent to the sum of 66.77% of the UEL CEO s 71,761,000 UEL Shares and the UEL CEO s UEL Options of 15,000, % of the aggregate consideration that the UEL CEO would receive is equivalent to the sum of 33.33% of the UEL CEO s 71,761,000 UEL Shares and the UEL CEO s UEL Options of 15,000,000.

9 consideration payable by the Offeror to the UEL CIO and Joyfield as a result of the UEL CIO Acceptance, in the form of cash; and (e) in the event, however, following the completion of the Proposed Transaction and the CITIC Loan Capitalisation, CITIC fails to hold at least 51% of the Offeror, each of KKRCW and the Key Management Shareholders will transfer a proportionate number of Offeror Shares held by them (such number not exceeding (i) in the case of KKRCW, 26,902,401 Offeror Shares held by it, (ii) in the case of the UEL CEO, 5,784,067 Offeror Shares held by him and (iii) in the case of the UEL CIO, 5,706,225 Offeror Shares held by her) to CITIC at the Offeror Share Issue Price, to enable CITIC to hold at least 51% of the Offeror, immediately following such transfers (the Inter-Consortium Members Transfers ). If following the completion of the Proposed Transaction, the CITIC Loan Capitalisation and the Inter-Consortium Members Transfers, CITIC still does not hold at least a majority of the Offeror, CITIC will undertake further acquisitions or subscriptions of Offeror Shares so as to increase its shareholding stake in the Offeror to at least 51%, as further described in Section 6.8 below. 6.8 Resultant Shareholding in the Offeror Resultant Shareholding in the Offeror assuming that the Placement Completion occurs ( Scenario 1 ) Following the close of the Offer, the Placement Completion, the CITIC Loan Capitalisation and the Inter-Consortium Members Transfers (if necessary), it is expected that the percentage of shareholding to be held by each Offeror Shareholder in the Offeror will be as follows: No. Name of Percentage 9 of Enlarged Shareholder Issued Share Capital in the Offeror (%) CITIC Between 50.6 to KKRCW Between 23.8 to Dr Lin Yucheng Between 3.8 to Ms Pan Shuhong Between 5.0 to 7.7 The final percentage of shareholding to be held by each Offeror Shareholder would depend on the number of Placement Shares to be issued to the Offeror, and whether the Inter-Consortium Members Transfers occur. A diagrammatic illustration of the shareholding positions set out above is shown in page (v) of Appendix C to this Announcement Any discrepancies in this table between the listed percentages and the totals thereof are due to rounding. The enlarged issued share capital in the Offeror has been computed on the assumption that out of the 70,950,000 Options outstanding, only 18,366,500 Options will be exercised into new UEL Shares and tendered in acceptance of the Offer (after subtracting 45,083,500 Unreleased Post-Amendment UEL Options and 7,500,000 of the UEL CEO s UEL Options). This assumption is on the basis that (i) the UEL CEO undertakes not to convert any of his 15,000,000 Options into new UEL Shares during the Offer Period, and (ii) none of the 45,083,500 Unreleased Post-Amendment UEL Options will be exercised into new UEL Shares during the Offer Period, out of which 7,500,000 comprise the Options held by the UEL CEO.

10 If after the close of the Offer (but prior to the Placement Completion and the Inter-Consortium Members Transfers), CITIC holds 50% or less of all the Offeror Shares in issue and subsequently increases its stake in the Offeror through (i) the Placement Completion and the CITIC Loan Capitalisation and (ii) the Inter-Consortium Members Transfers, so as to acquire statutory control (i.e. more than 50%) of the Offeror, SIC has on the SIC Ruling Date ruled that such increase in shareholding in the Offeror by CITIC will not result in CITIC triggering a mandatory takeover obligation under Rule 14 of the Code, provided that: (i) (ii) (I) the Placement Completion and the CITIC Loan Capitalisation and (II) the Inter-Consortium Members Transfers are effected not later than ten business days 11 after the close of the Offer, and that the Offeror releases a public announcement on the resulting shareholding of the Offeror and UEL thereafter; and details of Scenario 1 will be set out in the Offer Document. Resultant Shareholding in the Offeror assuming that Placement Completion does not occur ( Scenario 2 ) Following the close of the Offer, if the Relevant Placement Conditions are not satisfied or fulfilled and the Proposed Placement does not occur, the percentage of shareholding to be held by each Offeror Shareholder in the Offeror will be as follows: No. Name of Shareholder Percentage 12 of Enlarged Issued Share Capital in the Offeror (%) CITIC Between 45.7 to KKRCW Between 24.5 to Dr Lin Yucheng Between 3.9 to Ms Pan Shuhong Between 5.2 to 8.4 The final percentage of shareholding to be held by each Offeror Shareholder would depend on whether the Inter-Consortium Members Transfers occur. A diagrammatic illustration of the shareholding positions set out above is shown in page (iv) of Appendix C to this Announcement. If after the close of the Offer, CITIC holds 50% or less in the Offeror and subsequently increases its stake in the Offeror through (i) the Inter-Consortium Members Transfers and (ii) further acquisitions or subscriptions by CITIC of 11 For this purpose, business day means any day other than a Saturday, Sunday or other day on which commercial banks in the People s Republic of China, Singapore, Hong Kong or New York are required or authorised by law or executive order to be closed. 12 Any discrepancies in this table between the listed percentages and the totals thereof are due to rounding. 13 The enlarged issued share capital in the Offeror has been computed on the assumption that out of the 70,950,000 Options outstanding, only 18,366,500 Options will be exercised into new UEL Shares and tendered in acceptance of the Offer (after subtracting 45,083,500 Unreleased Post-Amendment UEL Options and 7,500,000 of the UEL CEO s UEL Options). This assumption is on the basis that (i) the UEL CEO has undertaken not to convert any of his 15,000,000 Options into new UEL Shares during the Offer Period, and (ii) none of the 45,083,500 Unreleased Post-Amendment UEL Options will be exercised into new UEL Shares during the Offer Period, out of which 7,500,000 comprise the Options held by the UEL CEO.

11 Offeror Shares, so as to acquire statutory control (i.e. more than 50%) of the Offeror, SIC has on the SIC Ruling Date ruled that such increase in shareholding in the Offeror by CITIC will not result in CITIC triggering a mandatory takeover obligation under Rule 14 of the Code, provided that: (i) (ii) completion of (A) the Inter-Consortium Members Transfers and (B) the said acquisitions or subscriptions take place not later than one month after the close of the Offer, and that the Offeror releases a public announcement on the resulting shareholding of the Offeror and UEL thereafter; and details of Scenario 2 will be set out in the Offer Document. The SIC has on the SIC Ruling Date further ruled that for so long as the Offeror holds more than 49% of all the UEL Shares in issue following the close of the Offer, and CITIC holds more than 50% of all the Offeror Shares in issue, any acquisition (whether directly or indirectly) by CITIC of (I) Offeror Shares, (II) shares in the Relevant Offeror Subs or (III) UEL Shares, whether pursuant to CITIC s right of first refusal under the Consortium Agreement, the KKRCW Put Option, the Key Management Shareholder s Put Option or on or off-market purchases (whether through private placements or rights issues) or otherwise, would not result in CITIC triggering a mandatory takeover obligation under Rule 14 of the Code. 5. CONDITIONS FOR THE PROPOSED PLACEMENT 5.1. The Proposed Placement is conditional upon the following conditions having been satisfied or fulfilled in accordance with the Placing Agreement (the Placement Conditions ): (c) (d) the Company having obtained the approval in-principle from the SGX-ST for the listing of and quotation for up to 90,909,091 new Shares on the Official List of the SGX-ST (the Listing Approval ) and such Listing Approval not having been revoked or amended and being in full force and effect and, where the Listing Approval is subject to any other conditions, to the extent such other conditions are required to be fulfilled on or before the Completion Date, they are so fulfilled; the Company having obtained such approval(s) from its Shareholders in a general meeting in connection with the Placing Agreement and the Proposed Placement and the transactions contemplated therein as may be required under the Listing Manual of the SGX-ST (the Listing Manual ) and/or applicable law, including without limitation, Shareholders approvals required under Rules 805, 812 and 906 of the Listing Manual; the receipt by the Directors of an opinion from an independent financial adviser confirming that the terms of the Proposed Placement (i) are on normal commercial terms, and (ii) are not prejudicial to the interest of the Company and its minority Shareholders, in accordance with Rule 921(4) of the Listing Manual; the satisfaction and fulfillment by CITIC of the following filing and approval processes in the PRC: (i) obtaining the approval of the PRC Ministry of Finance in relation to the Proposed Transaction;

12 (ii) (iii) (iv) (v) (vi) obtaining the approval of the PRC National Development and Reform Commission in relation to the Proposed Transaction; obtaining the approval of and making requisite filings with the PRC Ministry of Commerce (the MOC ) in relation to the incorporation of offshore entities in connection with the Proposed Transaction; the applicable approval and/or registration with the PRC State Administration for Foreign Exchange ( SAFE ) in relation to the incorporation of offshore entities in connection with the Proposed Transaction, being obtained and/or completed; the applicable approval and/or registration with SAFE in relation to any cross-border guarantee to be provided by CITIC s affiliates in connection with the Proposed Transaction, being obtained and/or completed; and obtaining the approval of the Anti-Monopoly Bureau of the MOC in relation to anti-monopoly issues that may arise in connection with the Proposed Transaction; and (e) the Offer becoming or being declared unconditional in accordance with its terms If: (e) (f) any of the conditions set out in paragraphs 5.1 to (d) above is not satisfied by 11 May 2015, being the CP Satisfaction Date 14 ; or the condition set out in paragraph 5.1(e) above is not satisfied, then the Placing Agreement shall ipso facto cease and determine and neither the Company nor the Offeror shall have any claim against the other for costs, damages, compensation or otherwise, save for any claim by a party against the other arising from an antecedent breach of the terms of the Placing Agreement Completion shall take place after the satisfaction or fulfillment of all the Placement Conditions (as described in paragraph 5.1 above), on a date (the Completion Date ) falling on a Business Day as may be notified in writing by the Offeror to the Company at least two (2) Business Days prior to the designated date, provided that such designated date shall not be later than the Long Stop Date The Company and the Offeror have acknowledged that no prospectus or offer information statement will be issued in relation to the Proposed Placement of the Placement Shares and that the Placement Shares will be issued in Singapore pursuant to an exemption invoked under Section 272B of the SFA As mentioned in paragraph 5.1 above, the Proposed Placement is conditional upon Listing Approval being obtained. Accordingly, the Company will be making an application to the SGX-ST for the listing and quotation of the Placement Shares on the Official List of the SGX-ST. The Placement Shares to be placed by the Company to the Offeror will represent approximately 2.56%, 5.00% or 7.31% of the enlarged total number of Shares CP Satisfaction Date means 6 months from the date of the Placing Agreement or such other date as the Company and the Offeror may agree in writing. Long Stop Date means a date falling not later than five (5) Business Days after the final closing date of the Offer.

13 (after taking into account the Placement Shares to be issued by the Company) NET PROCEEDS AND USE OF PROCEEDS OF THE PROPOSED PLACEMENT 6.1. Based on the Placement Price, the estimated net proceeds (the Net Proceeds ) after taking into account professional expenses of approximately S$50,000, in respect of the Proposed Placement would be approximately S$50 million, S$100 million or S$150 million, assuming that the number of Placement Shares is 30,303,031, 60,606,061 or 90,909,091 new Shares (as the case may be) being successfully allotted and issued The Company intends to use the Net Proceeds for the following purposes: the possible redemption of its medium term notes by noteholders because of their rights of redemption in event of a change in control of the Company, which will be triggered in the event the Offer becomes unconditional; the acquisition of water and wastewater treatment plants; and/or (c) funding of the Company s working capital The Company will make an announcement as to the use of the Net Proceeds as and when such proceeds are materially disbursed and whether such a use is in accordance with the stated use and in accordance with the percentage allocated. Where there is any material deviation from the stated use of proceeds, the Company will announce the reasons for such deviation Pending the deployment of the Net Proceeds, such proceeds may be placed as deposits with financial institutions or invested in short term money markets or debt instruments or for any other purposes on a short term basis as the Board may deem fit, from time to time. 7. INTERESTED PERSON TRANSACTION 7.1 Under Chapter 9 of the Listing Manual, an immediate announcement and subsequent Shareholders approval is required in respect of a transaction between an entity at risk and its interested persons (the interested person transaction ) if the value of that transaction exceeds 5% of the latest audited net tangible assets ( NTA ) of the Group. 7.2 As at Announcement Date, KKRCW is a controlling Shareholder directly holding 285,609,818 Shares, representing approximately 29.65% 17 of the Company s total issued share capital (excluding treasury shares), after the Convertible Bond Conversion (as defined in the Pre-Conditional VGO Announcement) and as at the Announcement Date. As the Offeror is an associate of KKRCW, subscription of the Placement Shares by the Offeror pursuant to the Placing Agreement is an interested person transaction under Chapter 9 of the Listing Manual. 7.3 Dr Lin is a Director and substantial Shareholder directly holding 71,761,000 Shares, representing approximately 7.45% of the Company s total issued share capital (excluding treasury shares) as at the Announcement Date. Ms Pan is a substantial Shareholder of the Company holding (directly and through her affiliate Joyfield Group Limited) 85,593,383 Shares, representing approximately 8.88% of the Company s total issued share capital (excluding treasury shares) as at the Announcement Date. Even though the Offeror will not be considered an associate of either Dr Lin and Ms Pan (as neither Dr Lin nor Ms Pan nor their immediate family will hold more than 30% of the Offeror), the Offeror is a corporation in whose shares the Company s directors and substantial shareholders (i.e., KKRCW, Dr Lin and Ms Pan) have an aggregate interest of at least 10%, The enlarged total number of Shares refers to 1,152,237,557 Shares plus the Placement Shares to be issued by the Company. The total number of issued shares in the capital of the Company as at the Announcement Date is 963,361,368.

14 accordingly, references to Independent Shareholders in this Announcement will mean Shareholders other than KKRCW, Dr Lin, Ms Pan and their respective associates. 7.4 Based on the audited consolidated financial statements of the Group for the financial year ended 31 March 2014 ( FY13/14 ), the NTA of the Group is approximately S$317,818, The aggregate maximum consideration payable by the Offeror to the Company pursuant to the Proposed Placement is S$150,000,000.15, representing approximately 47.2% of the NTA of the Group for FY13/14. Therefore, Independent Shareholders approval is required for the Proposed Placement to the Offeror pursuant to Rule 906(1) of the Listing Manual. 7.6 The Company has not entered into any interested person transaction or any transaction (excluding transactions less than S$100,000) with the Offeror from the beginning of the financial year (being 1 April 2014) up to and including the date of this Announcement. 7.7 According to paragraphs 5.1 and 5.2 of the Pre-Conditional VGO Announcement, the IU Independent Shareholders 18 have provided certain undertakings to the Offeror (each an Irrevocable Undertaking ). Each of the Irrevocable Undertaking by the IU Independent Shareholders include an undertaking by each of them to vote, or procure the voting of, such number of Shares which are the subject of their undertakings in favour of the resolution(s) to approve the Proposed Placement at the EGM. Each of the Irrevocable Undertakings by the IU Independent Shareholders will terminate on the earlier of (i) the Long-Stop Date (as defined in the Pre-Conditional VGO Announcement) (or such later date as the Offeror may determine in consultation with the Securities Industry Council) and (ii) the date on which the Offer lapses (as defined in the Pre-Conditional VGO Announcement) or is withdrawn (other than by reason of a breach of their respective Irrevocable Undertakings). 8. SHAREHOLDERS APPROVALS AND DESPATCH OF CIRCULAR 8.1 Section 161 of the Companies Act, Chapter 50 of Singapore (the Companies Act ) provides that the Directors shall not, without the prior approval of the Company in general meeting, exercise any power of the Company to issue shares. Rule 805 of the Listing Manual further provides that the Company must obtain the prior approval of Shareholders in a general meeting for, inter alia, an issue of Shares or convertible securities or grant of options carrying rights to subscribe for Shares of the Company. The Company is therefore seeking Independent Shareholders approval for the Proposed Placement. 8.2 In addition to the foregoing, the Proposed Placement will require Independent Shareholders approval for the following reasons: Rule IU Independent Shareholders refer to the following Shareholders and such number of Shares in respect of which they have provided an Irrevocable Undertaking to the Offeror: Mr Pang Lim, 22,546,000 Shares; Mr Zhuo Jing Ming, 6,000,000 Shares; (c) Mr Tan Choon Wann, 4,000,000 Shares; (d) Mr Yeo Chung Sun, 4,000,000 Shares; (e) Mr Zheng He Peng, 3,000,000 Shares; (f) Mr Paul Leong Kah Fook, 2,900,000 Shares; (g) Mr Tan Swee Peng, 2,700,000 Shares; (h) Mr Gregory Leong Goh Han, 2,205,000 Shares; and (i) Mr Tay Siak Chwee, 915,000 Shares.

15 Rule 812 of the Listing Manual states, inter alia, that an issue of Shares must not be placed to certain persons, inter alia, the Directors, substantial Shareholders and corporations in whose shares the Company s Directors and substantial Shareholders have an aggregate interest of at least 10%, unless specific Shareholders approval for such a placement has been obtained. As set out in paragraph 4.4 above, the Offeror will be a corporation in whose shares KKRCW (a substantial Shareholder of the Company) has an interest of at least 10%, and thus, Independent Shareholders approval is therefore required for the issue of Placement Shares to the Offeror pursuant to Rule 812(1)(d) of the Listing Manual. Rule 906 (c) (d) Rules 905 and 906 of the Listing Manual provides, inter alia, that an immediate announcement and subsequent Shareholders approval is required in respect of a transaction between an entity at risk and its interested persons (the interested person transaction ) if the value of that transaction exceeds 5% of the latest audited NTA of the Group. As the aggregate maximum consideration payable by the Offeror to the Company pursuant to the Proposed Placement is S$150,000,000.15, representing approximately 47.2% of the NTA of the Group for FY13/14, Independent Shareholders approval is therefore required for the Proposed Placement to the Offeror pursuant to Rule 906 of the Listing Manual. 8.3 As such, the Company will be convening an EGM to seek the approval of the Independent Shareholders for the Proposed Placement, and the Circular containing, inter alia, information pertaining to the Proposed Placement, the IFA Opinion and the notice of EGM will be despatched to Shareholders in due course. 9. INDEPENDENT FINANCIAL ADVISER 9.1 Pursuant to Rule 921(4) of the Listing Manual, the Circular shall provide an opinion, in the form of a separate letter, from an independent financial adviser who is acceptable to the SGX-ST (the IFA ), stating whether the Proposed Placement to the Offeror (i) is on normal commercial terms; and (ii) is not prejudicial to the interest of the Company and its minority Shareholders. In this respect, the Company will be engaging an IFA in due course to provide an opinion to the Directors on whether the placement of the Placement Shares to the Offeror is on normal commercial terms and is not prejudicial to the interests of the Company and its minority Shareholders (the "IFA Opinion ). 9.2 The IFA Opinion will be included in the Circular to be despatched to Shareholders in connection with the Proposed Placement. 10. STATEMENT OF AUDIT COMMITTEE The Audit Committee will form its view as to whether the Proposed Placement is on normal commercial terms and is not prejudicial to the interests of the Company and its minority Shareholders after considering the IFA Opinion referred to in paragraph 9.1 above (the "AC Opinion"). The AC Opinion will be set out in the Circular. 11. FINANCIAL EFFECTS

16 11.1 As at the Announcement Date, the issued and paid-up capital of the Company is S$485,445,384 divided into 963,361,368 Shares. When completed, the Proposed Placement will increase the issued and paid-up share capital of the Company by: (c) S$485,445,384 to S$535,395,385, divided into 993,664,399 Shares (excluding treasury shares) assuming that the minimum number of 30,303,031 new Shares are allotted and issued to the Subscriber; S$485,445,384 to S$585,395,384, divided into 1,023,967,429 Shares (excluding treasury shares) assuming that 60,606,061 new Shares are allotted and issued to the Subscriber; and S$485,445,384 to S$635,395,384, divided into 1,054,270,459 Shares (excluding treasury shares) assuming that the maximum number of 90,909,091 new Shares are allotted and issued to the Subscriber The earnings per share ( EPS ) of the Company based on the audited accounts of the Company for FY13/14 and the existing issued Shares (excluding treasury shares) of 963,361,368 is S$ The EPS of the Company for FY13/14, after adjusting for the issue of the Placement Shares, assuming that the issuance of the Placement Shares had been effected on 1 April 2013, will be approximately: (c) S$0.020 in the case of an issuance of 30,303,031 new Shares; S$0.020 in the case of an issuance of 60,606,061 new Shares; and S$0.019 in the case of an issuance of 90,909,091 new Shares. Note: (1) Figures are rounded to the nearest three decimal places The net asset value ( NAV ) per Share of the Company based on the audited accounts of the Company for FY13/14 and the existing issued Shares (excluding treasury shares) of 963,361,368 is S$0.33. The NAV per Share of the Company for FY13/14 after adjusting for the issue of the Placement Shares, assuming that the issuance of the Placement Shares had been effected on 31 March 2014, will be approximately: (c) S$0.37 in the case of an issuance of 30,303,031 new Shares; S$0.41 in the case of an issuance of 60,606,061 new Shares; and S$0.45 in the case of an issuance of 90,909,091 new Shares. Note: (1) Figures are rounded to the nearest two decimal places It should be noted that such financial effects are for illustrative purposes only and do not purport to be indicative or a projection of the results and financial position of the Company after completion of the Proposed Placement.

17 12. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS 12.1 Save as disclosed in this Announcement, none of the Directors or (insofar as the Directors are aware) the substantial Shareholders of the Company have any interest, direct or indirect, in the Proposed Placement. Interest of Directors 12.2 The following Directors have an interest in the Proposed Placement in the manner as described hereto: (c) (d) Mr David Haifeng Liu, in his capacity as a global partner of KKR and a nominee of KKRCW to the Board; Mr Zhao Fu, in his capacity as a director of KKR and a nominee of KKRCW to the Board); Dr Li Yan, in his capacity as a principal of KKR Capstone, an affiliate of KKRCW and a nominee of KKRCW to the Board; and Dr Lin, given that he will become a substantial shareholder in the Offeror following completion of the Offer, Convertible Bonds Offer and the Proposed Placement As such, Mr David Haifeng Liu, Mr Zhao Fu, Dr Li Yan and Dr Lin are not independent for the purpose of the Proposed Placement and shall abstain from making a recommendation on the Proposed Placement to Shareholders. Interest of Substantial Shareholders 12.4 For the reasons set out in paragraphs 7.2 and 7.3 above, KKRCW, Dr Lin and Ms Pan will not be considered independent for the purpose of the Proposed Placement. Accordingly, each of KKRCW, Dr Lin, Ms Pan and their respective associates will abstain from voting on the resolutions approving, ratifying and authorising the Proposed Placement. 13. GENERAL 13.1 Save for the issue of the Placement Shares to the Offeror, none of the Placement Shares will be issued to any of the other persons listed in Rules 812(1) to (d) of the Listing Manual and will be in compliance with Rule The Company will make the necessary announcements once the Listing Approval has been obtained from the SGX-ST. 14. FINANCIAL ADVISER The Company had appointed Stirling Coleman Capital Limited as its financial adviser in relation to the Proposed Transaction. 15. TRADING CAUTION Shareholders are advised to exercise caution in trading their Shares. The Proposed Placement is subject to the satisfaction or fulfilment of the Placement Conditions. There is no certainty or assurance as at the Announcement Date that the Proposed Placement