Far East Holding Successfully Issues Exchangeable Bonds of RMB 3 billion oversubscribed by Investors

On August 3, 2016, Far East Holding Group Co., Ltd. (hereinafter referred to as "Far East Holding") successfully issued non-public exchangeable bonds (Phase I) at Shanghai Stock Exchange. Approved by Shanghai Stock Exchange Letter [2016] No. 330 Document, Far East Holding has been agreed for a non-public issuance of exchangeable bonds by phase with a total amount no more than RMB 3 billion, and Haitong Securities Company Limited and Huatai United Securities Co., Ltd. are joint underwriters. Various investors participated actively in the subscription of the first-phase exchangeable bonds in the market, with the subscribed amount and rate far above the expectations. The oversubscribed amount achieved nearly four times in the private market, with RMB 560 million realized as the final funds raised that reflects full confidence by market investors about Far East.

Adhering to the "main business + investment" development strategy, Far East Holding is committed to becoming a "global investment management and smarter energy expert, or a smarter energy and intelligent city system service provider". In terms of its main business, Smarter Energy has begun to make a layout in energy Internet since 2013, and continuously implemented intensive and extensive measures around the strategic direction of transformation. For the online measures, it built “one network and two platforms” supported by entity economy, through its wholly owned subsidiaries: Far East Trading Pay Network Co., Ltd., and Far East Material Trading Center. For the offline measures, it improves the layout in the energy Internet by epitaxial acquisition, including acquiring a class-A electric power design institute - Intelligence Power- to enter distributed power generation and power sale filed; improves the layout in power distribution end through acquiring SEMEUREKA; and accesses to power and energy storage battery industry through buying out Far East First. Such a series of initiatives have reinforced the company's future development strategies. In terms of investment, it looks for high-quality subjects in a global vision, based on the positioning as a global investment management expert, focusing on smarter energy, big health, big spending, food and beverage, family assets’ financial management, advanced manufacturing, industrial automation, TMT and other industries, to further optimize the resources allocation in the globe.

Far East Holding provided a stock pledge to Smarter Energy for the first-phase non-publically issued exchangeable bonds, with 60 million as the number of the pledged shares, and the preset size no more than RMB 1 billion. Eventually, according to the relevant provisions in the market value of the pledged stocks and prospectus, the actually issued scale for the first-phase exchangeable bonds are RMB 560 million, with the term of three years; the issued scale for Variety A is RMB 200 million, with the annual interest rate of 1%; and the issued scale for Variety B is RMB 360 million, with the interest rate of 4.09%.

The successful issuance of the exchangeable bonds offers a new liquidity management tool to Far East Holding Group that combines market value management and debt financing, leading to an issued rate substantially lower than ordinary corporate bond rate or bank loan rate in the same time. Exchangeable bonds lock in stock conversion price in the future in advance, which determines the holders are mostly investment institutions optimistic about the company in long-term and more identifying with the stock conversion premium. The subscribed amount nearly RMB 2 billion reflects full confidence by market investors about Smarter Energy stocks, who are positive about the company’s transformation, upgrading and development in long-term, and also greatly raise the confidence and expectations about capital market.