Kong Sun Plans to Issue 5.177 billion New Shares to Controlling Shareholder Pohua to Raise Approximately HK$3.415 billion for Investment in Photovoltaic Power Stations and Debt Reduction

HONG KONG, Jan. 5, 2016 /PRNewswire/ -- Kong Sun Holdings Limited ("Kong Sun" or the "Company", SEHK stock code: 295, which together with its subsidiaries is referred to as the "Group"), which invests in and operates photovoltaic ("PV") power stations, is pleased to announce that the Company has conditionally agreed to issue 5.177 billion new shares at HK$0.66 each to its controlling shareholder Pohua JT Private Equity Fund L.P. ("Pohua").  The shares represent approximately 52.89% of the Company's existing issued share capital, or approximately 34.60% of its enlarged share capital upon the completion of the deal.

The subscription price reflects a premium of about 3.1% to the average closing price of HK$0.64 in the past five trading days before the announcement date and a premium of about 6.4% to the closing price of HK$0.62 on the announcement date. The deal, which is the controlling shareholder's move to show its support to and confidence in Kong Sun, will boost Pohua's equity stake in the Company from 59.83% to 73.73%.

The net proceeds from the issue of new shares will be approximately HK$3.415 billion (equivalent to approximately RMB2.851 billion), which together with the Group's existing cash on hand of RMB1.030 billion, will bring the total to approximately RMB3.881 billion. The fund will be used by the Company to invest in photovoltaic power station projects and pay off the HK$1.5 billion loan it had taken out from Pohua and other borrowings. The Company expects the repayment of the 3-years term loan to Pohua would save HK$87 million per annum in interest expense, lower its gearing ratio and enhance its profitability.

Dr. Liu Wen Ping, Executive Director of Kong Sun, commented, "We are delighted to gain the support from our controlling shareholder Pohua. Its subscription for our new shares reflects its confidence in the prospect of our business and the photovoltaic power industry. We will make good use of the proceeds from the deal by investing in promising photovoltaic power plant projects with the aim of strengthening the Company's profitability and consistently generating good returns to shareholders."

As the subscription for the new shares constitutes a connected transaction under the listing rules, the transaction is subject to the approvals of the independent shareholders at an extraordinary general meeting.

List of grid-connected photovoltaic projects:

* To be connected to the power grid on or before 31 January 2016.

About Kong Sun Holdings Limited

Kong Sun principally engages in the investment and operation of photovoltaic power station projects across various provinces and regions of China. It currently owns grid-connected projects in Hami, Yingjisha, Kuche, Wushi, Hejing, Makit County and Artux of Xinjiang, Yumen, Jiuquan, Lanzhou of Gansu, Weixian of Hebei, Ordos and Tongliao of Inner Mongolia, Guixi of Jiangxi, Huzhou of Zhejiang, Hefei*, Luan* and Suzhou* of Anhui as well as several photovoltaic power plants under development across China.

In addition, since 2014, Kong Sun has entered into a number of memorandum of understanding and agreements for the investment in and development of photovoltaic power plants across China.

Kong Sun is a constituent of MSCI Global Small Cap Indexes - China. It has also been selected as constituent of the Hang Seng Global Composite Index & Hang Seng Composite Index.