OREANDA-NEWS. August 29, 2012. Sichuan Petrochemical entered into the Finance Lease Agreement with Kunlun Financial Leasing, pursuant to which Sichuan Petrochemical has agreed to lease from Kunlun Financial Leasing the Lease Assets, which shall be transferred from Sichuan Petrochemical to Kunlun Financial Leasing at the consideration of RMB3,000 million (equivalent to approximately HKD 3,659 million).

Pursuant to the Finance Lease Agreement, the transfer of the Lease Assets from Sichuan Petrochemical to Kunlun Financial Leasing shall complete on or before 31 December 2012.

The lease period for the Lease Assets is eight years (96 months) commencing from the date on which the Purchase Consideration is fully paid by Kunlun Financial Leasing subject to the fulfillment of the conditions precedent set out in this announcement.

The lease rent consists of the principal amount of RMB3,000 million (equivalent to approximately HKD 3,659 million) and lease interests. The annual lease interest rate shall be a floating interest rate which is equivalent to the annual RMB benchmark lending rate for term loans of more than five years promulgated by the PBOC from time to time.

During the period from the day on which Kunlun Financial Leasing pays the first instalment of the Purchase Consideration to the day on which the lease period commences (i.e. the day on which the Purchase Consideration is fully paid), pre-lease interests will be charged on the amount of Purchase Consideration that has been paid by Kunlun Financial Leasing at the same rate as that for the lease interests as set out in this announcement.

As at the date of this announcement, the RMB benchmark lending rate for term loans of more than five years promulgated by the PBOC is 6.55% per annum. Based on this interest rate and 
assuming the Purchase Consideration will be paid by Kunlun Financial Leasing in three equal instalments every two months after the execution of the Finance Lease Agreement in accordance with the notice of payment issued by Sichuan Petrochemical, the total amounts of lease interests and pre-lease interests for the entire term of the Finance Lease Agreement are approximately RMB1,061 million (equivalent to approximately HKD 1,294 million) and RMB33 million (equivalent to approximately HKD 40 million), respectively. The Lease Consideration for the entire term of the Finance Lease Agreement is approximately RMB4,094 million (equivalent to approximately HKD 4,993 million).

In the event that PBOC adjusts the RMB benchmark lending rate for term loans of more than five years, the rate for lease interests and pre-lease interests under the Finance Lease Agreement will be adjusted accordingly. Kunlun Financial Leasing will issue a notice of adjustment to the pre-lease interests and the lease rent to Sichuan Petrochemical.

Titles of the Lease Assets shall vest in Kunlun Financial Leasing throughout the lease period. Subject to there being no default by Sichuan Petrochemical under the Finance Lease Agreement, or that such default has been rectified by Sichuan Petrochemical and accepted by Kunlun Financial Leasing, and upon the expiry of the Finance Lease Agreement, Sichuan Petrochemical has an option to purchase the Lease Assets from Kunlun Financial Leasing at a nominal price of RMB10,000 (equivalent to approximately HKD 12,195). Upon the receipt of full payment by Kunlun Financial Leasing, titles of the Lease Assets shall vest in Sichuan Petrochemical on an as-is basis.