Announcements and Notices - Proposed Issue of Convertible Bonds Due 2020 in the Aggregate Principal Amount of US$10,000,000 under General Mandate

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.

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of China Environmental Technology Holdings Limited nor anything herein forms the basis for any contract or commitment whatsoever.

中國環保科技控股有限公司

(Incorporated in the Cayman Islands with limited liability)

On 1 November 2017 (after trading hours), the Company and the Subscriber entered into the Subscription Agreement pursuant to which, on the terms and subject to the conditions therein, the Company has agreed to issue, and the Subscriber has agreed to subscribe for, the Convertible Bonds in the aggregate principal amount of US$10,000,000 (equivalent to HK$78,000,000).

Completion is subject to the fulfillment or waiver of the Conditions Precedent set out in the Subscription Agreement. Detailed terms of the Subscription Agreement and the Convertible Bonds are set out in the paragraphs headed "Principal terms of the Subscription Agreement" and "Principal terms of the Convertible Bonds", respectively, below.

As at the date of this announcement, the Company has a total of 3,650,358,761 Shares in issue. Assuming there is no further issue or repurchase of the Shares, based on the initial Conversion Price of HK$0.206 per Conversion Share and assuming full conversion of the Convertible Bonds at the initial Conversion Price, the Convertible Bonds will be convertible into 378,640,776 Conversion Shares, representing approximately 10.37% of the existing issued share capital of the Company as at the date of this announcement and approximately 9.40% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares. The Conversion Shares will be allotted and issued pursuant to the General Mandate.

No listing of the Convertible Bonds will be sought on the Stock Exchange or any other stock exchanges. The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Conversion Shares.

The estimated net proceeds from the issue of the Convertible Bonds, after deduction of expenses payable in connection with the issue of the Convertible Bonds, are expected to be HK$77,800,000. The Company intends to use the net proceeds from the issue of the Convertible Bonds (i) for the repayment of the Group's outstanding bank loans in the principal amount of RMB50,000,000 and the interest thereon; (ii) for potential acquisition when such investment opportunity arises; and (iii) as general working capital of the Group.

On 1 November 2017 (after trading hours), the Company and the Subscriber entered into the Subscription Agreement pursuant to which, on the terms and subject to the fulfilment or wavier of the Conditions Precedent therein, the Company has agreed to issue, and the Subscriber has agreed to subscribe for, the Convertible Bonds in an aggregate principal amount of US$10,000,000 (equivalent to HK$78,000,000). No application will be made for the listing of the Convertible Bonds. Details of the Subscription Agreement and the terms of the Convertible Bonds are described below.

Principal terms of the Subscription Agreement are set out below:

Date : 1 November 2017 (after trading hours)

Parties : (1) the Company, as the issuer;

1. the Subscriber, as the subscriber. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Subscriber and its ultimate beneficial owners are Independent Third Parties.

   Subscription : Subject to the fulfillment (or waiver) of the Conditions

   Precedent set out below, the Subscriber shall subscribe for, and the Company shall issue, the Convertible Bonds in the aggregate principal amount of US$10,000,000 (equivalent to HK$78,000,000).

   Conditions Precedent : Completion is conditional upon:

2. the Subscriber shall and shall procure that its agents shall forthwith upon the signing of the Subscription Agreement conduct such financial, legal or other due diligence review of the assets, liabilities, operations and affairs of the Group as it may consider appropriate; and the Company shall provide and procure the Group and its agents to provide such assistance as the Subscriber or its agents and advisers may reasonably require in connection with such review;

3. all necessary consents and approvals, from the relevant authority(ies), if necessary, in relation to the subscription of the Convertible Bonds under the Subscription Agreement having been obtained by the Subscriber;

4. the issue of the Convertible Bonds under the Subscription Agreement having complied with the relevant laws and rules (including but not limited to the Listing Rules and the relevant laws of Hong Kong) in all material aspects;

5. the passing of the necessary resolutions by the Board, approving amongst other things, the execution of the Subscription Agreement, the issue of the Convertible Bonds to the Subscriber and the issue and allotment of the Conversion Shares upon exercise of the Conversion Rights (or otherwise pursuant to the Conditions) in accordance with the Subscription Agreement and the transactions contemplated under the Subscription Agreement;

6. at Completion, the warranties under the Subscription Agreement remaining true, accurate and correct and not misleading in all material respects;

7. all issued Shares remaining listed on, and not having been withdrawn from, the Stock Exchange and the Stock Exchange not having indicated that it will object to such listing and there being no events or circumstances existing based on which the Stock Exchange could reasonably be expected to raise such objection;

8. the listing of, and permission to deal in, all of the Conversion Shares upon conversion of the Convertible Bonds having been granted by the Listing Committee (either unconditionally or if subject to conditions, such conditions being fulfilled or satisfied before Completion) and such listing and permission remaining in full force and effect and not subsequently being revoked;

9. the Subscriber being satisfied with the results of the due diligence review;