Asset Acquisitions and Disposals::CHANGES TO SHAREHOLDERS AND SHAREHOLDINGS IN JIANGYIN FOREVERSUN CHEMICAL LOGISTICS CO., LTD.

Section II: The transfer of 2% equity interest in China Holdco from Hengyang Holding Pte. Ltd. to CITIC Port Investment Co., Ltd.

2.1 Introduction

In connection with the Disposal, there is a possibility that two entities of the China Holdco Group (namely Chongqing New Hengyang Storage Co., Ltd. and Yueyang Hengyang Petrochemical Logistics Co., Ltd.) will be in breach of their loan covenants, as CITIC Port will be withdrawing its 51% corporate guarantees provided for two loans from Bank of China ("BOC Loans") drawn down by these two subsidiaries in 2018 and Sinopec Chemical (as the new 49% shareholder of China Holdco) has only agreed to provide corporate guarantees in accordance with its equity interest in China Holdco, that is, 49% of the BOC Loans. The aggregate facilities provided under the BOC Loans is RMB645.15 million and the total amount outstanding as at 30 June 2021 is RMB436.03 million. Under the terms of the two BOC Loans, the Bank of China shall have the right to request for immediate repayment of the BOC Loans in the event of any breach of the loan covenants.

The Group has, after consultation with the Bank of China, CITIC Port and Sinopec Chemical, agreed to transfer 2% equity interest in China Holdco (the "Transfer Subject") from Hengyang Holding Pte. Ltd. ("HHPL", the wholly-owned subsidiary of the Company) to CITIC Port for a nominal consideration of S$1 (the "Transfer"). HHPL has entered into a transfer agreement dated 1 September 2021 (the "Transfer Agreement") with CITIC Port for the Transfer. In consideration of the Transfer, CITIC Port will provide corporate guarantees for the two BOC Loans in accordance with its equity interest in China Holdco, that is, 2% of the BOC Loans. With two state-owned entities (namely, Sinopec Chemical and CITIC Port) collectively providing 51% corporate guarantees for the BOC Loans, the loan covenant relating to corporate guarantee for the BOC Loans will be complied with.

Upon the completion of the Transfer, the shareholders of China Holdco shall be as follows:

For ease of reference, please refer to the corporate structure of the Group immediately before the completion of both the Disposal and the Transfer, which is annexed hereto at Appendix A.Please refer to Appendix Bof the updated corporate structure of the Group immediately after the completion of both the Disposal and the Transfer.

2.2 The Transfer as a "Discloseable Transaction"

For the purposes of Chapter 10 of the Listing Manual (Section B: Rules of Catalist) of the Singapore Exchange Securities Trading Limited (the "SGX-ST") (the "Catalist Rules"), the relative figures for the Transfer computed using the applicable bases of comparison set out in Catalist Rule 1006 based on the latest announced consolidated financial statements of the Group, being the six-month financial period ended 30 June 2021 ("1H2021"), are set out below:

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Note: (1) Extracted from Bloomberg

Based on the relative figures for the Transfer as set out above, the Transfer constitutes a "Discloseable Transaction" as defined in Chapter 10 of the Catalist Rules and the Company is required to make an announcement with the following information required under Catalist Rule 1010.

2.3 Relevant disclosure on the Transfer under Catalist Rules 1010

The information required under Catalist Rule 1010 are as follows:

1. Particulars of the transaction, including the name of any company or business, where applicable. The information on the Transfer is set out in Section 2.1 of this announcement.
2. A description of the trade carried on, if any.
   The principal business of the China Holdco Group is set out in Section 1.1 of this announcement.
3. The aggregate value of the consideration, stating the factors taken into account in arriving at it and how it will be satisfied, including the terms of payment. In the case of financial assistance, the aggregate value of the financial assistance and any interest payable on the financial assistance.
   The cash consideration was arrived at, on a willing buyer willing seller basis, taking into consideration the following:
4. 1. China Holdco Group might be in breach of the loan covenants for the two BOC Loans without the Transfer and the corresponding 2% corporate guarantee from CITIC Port. In such event, the China Holdco Group might be required to repay the entire outstanding borrowings immediately. The BOC Loans were drawn down for the construction of the facilities in Chongqing and Yueyang which are currently still under construction. As at 31 August 2021, the Group's total cash and cash equivalent is not sufficient to repay the outstanding borrowings. The withdrawal of the BOC Loans will affect the operations of China Holdco Group negatively;
   2. Given that the China Holdco Group will not have sufficient cash to repay the BOC Loans in the event of a sudden withdrawal of the BOC Loans, Bank of China has the rights to

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seize the collaterals pledged for the BOC Loans (including the plant and equipment of Chongqing New Hengyang Storage Co., Ltd. and Yueyang Hengyang Petrochemical Logistics Co., Ltd.). Under such circumstances, no meaningful value will be assigned to the Transfer Subject;

1. 1. CITIC Port was not able to realise its expected return on its investment in China Holdco as Deqiao facility only formally resumed operations in September 2020, much later than expected;
   2. CITIC Port will be taking on contingent liabilities amounting to RMB12.9 million arising from the corporate guarantees that it will be providing for the BOC Loans in connection with its 2% equity interest in China Holdco;
   3. No interest or guarantee fee is payable by China Holdco to CITIC Port for the corporate guarantees; and
   4. CITIC Port will discharge the current counter-guarantee and collaterals provided by HHPL to CITIC Port.
2. Whether there are any material conditions attaching to the transaction including a put, call or other option and details thereof.
   CITIC Port has agreed to observe a three-year moratorium on the Transfer Subject. In addition, HHPL has the right of first refusal to acquire the Transfer Subject from CITIC Port in the event that CITIC Port intends to dispose of the Transfer Subject in the future by giving 30 days' notice to HHPL.
3. The value (book value, net tangible asset value and the latest available open market value) of the assets being acquired or disposed of, and in respect of the latest available valuation, the value placed on the assets, the party who commissioned the valuation and the basis and date of such valuation.

1. In the case of a disposal, the excess or deficit of the proceeds over the book value, and the intended use of the sale proceeds. In the case of an acquisition, the source(s) of funds for the acquisition.
   Based on the net book value of RMB18.79 million as at 30 June 2021, the S$1 consideration for the Transfer represents a deficit of RMB18.79 million (equivalent to S$3.91 million based on the Exchange Rate).

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1. The net profits attributable to the assets being acquired or disposed of. In the case of a disposal, the amount of any gain or loss on disposal.
   The Net Profit attributable to the Transfer Subject amounted to RMB0.193 million for 1H2021.
   Based on the nominal consideration of S$1 and the net asset value of RMB18.79 million attributable to the Transfer Subject as at 30 June 2021, the Company will be recognising a loss on disposal of RMB18.79 million in connection with the Transfer.
2. The effect of the transaction on the net tangible assets per share of the issuer for the most recently completed financial year, assuming that the transaction had been effected at the end of that financial year.
   Assuming that the Transfer had been effected on 31 December 2020, the consolidated net tangible assets per share of the Company as at 31 December 2020 would be RMB2.74 instead of RMB2.83.
3. The effect of the transaction on the earnings per share of the issuer for the most recently completed financial year, assuming that the transaction had been effected at the beginning of that financial year.
   Assuming that the Transfer had been effected on 1 January 2020, the earnings per share of the Company for FY2020 would be RMB0.0273 instead of RMB0.0272.
4. The rationale for the transaction including the benefits which are expected to accrue to the issuer as a result of the transaction.
   The rationale for and benefits of the Transfer are as follows:
5. 1. The Transfer will result in China Holdco having two state-owned entities (namely, Sinopec Chemical and CITIC Port) as its shareholders who will collectively own 51% equity interest in China Holdco. In connection therewith, Sinopec Chemical and CITIC Port will also be providing 51% corporate guarantees on the BOC Loans, thereby complying with the loan covenants on the BOC Loans;
   2. The current counter-guarantees and collaterals provided by HHPL to CITIC Port in relation to loans totalling RMB12.9 million as at 30 June 2021 will be discharged;
   3. China Holdco would be put in a better position to secure future financing and loans from banks in the PRC. Upon completion of the Transfer, counting CITIC Port's shareholding of 2% of the equity in the China Holdco together with Sinopec's 49% of the equity in China Holdco, China Holdco will be classified by the Chinese financial institutions as a company controlled by the Chinese SOE. With such a classification, China Holdco will be put in a better position to secure future financing support from the major banks in China; and
   4. The business connections and the opportunities that the CITIC Port is able to bring to China Holdco with CITIC Port remaining as a strategic investor in the China Holdco.
6. Whether any director or controlling shareholder has any interest, direct or indirect, in the transaction and the nature of such interests.
   None of the directors or controlling shareholders of the Company has any interest, direct or indirect, in the Transfer.
7. Details of any service contracts of the directors proposed to be appointed to the issuer in connection with the transaction.
   No director is proposed to be appointed to the Company in connection with the Transfer.

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