CGNPC Uranium Resources and Vital Holdings Jointly Formulate Development Plans to Expand Business

Increasing scope and income sources

HONG KONG, Aug. 18, 2011 /PRNewswire-Asia/ -- Vital Group Holdings Limited ("Vital Holdings", stock code: 1164) is pleased to announce that after CGNPC Uranium Resources Co., Ltd. ("CGNPC Uranium Resources"), a subsidiary of China Guangdong Nuclear Power Holding Corporation ("China Guangdong Nuclear"), entered into a subscription agreement on 18 March 2011 through its wholly-owned subsidiary, China Uranium Development Company Limited ("China Uranium"), with Vital Holdings, China Uranium has successfully forged a strategic alliance with Vital Holdings and its subsidiaries (collectively, "Vital Group") and jointly formulated business plans and strategies which would enable its expansion of business and income sources.

Mr. YU Zhiping, managing director of CGNPC Uranium Resources said, "The uranium sector has a bright prospect. Energy consumption is growing with the global economy. China, one of the fastest growing countries in the world, sees a surge in energy consumption. According to the latest market report from World Nuclear Association, the consumption of uranium in China is expected to reach 10,000 tons in 2020. While the proportion of power generated by nuclear energy in China is still fairly low at 1.8% of the total power generated, the global nuclear power takes up 14% of the total power generated, which shows that the country has an enormous potential in the uranium sector. Currently, the total Installed capacity of nuclear power plants of China Guangdong Nuclear under operation is 6.108GW, and that of approved nuclear plants under construction 20.78GW, which is the top of the world. China Guangdong Nuclear is a clean energy company with the largest installed capacity of nuclear plants under construction."

"Meanwhile, China is determined to develop nuclear power under a safe environment due to the pressure from great energy demand and energy saving requirements. It is estimated that the installed nuclear power capacity of China will reach 70 GW in 2020. That is why we believe China still has much room for the development of nuclear power. The robust development of the sector will certainly drive the development of related industries, such as trade and investment of uranium. As for our own development, we will seize golden opportunities to expand businesses related to uranium. CGNPC Uranium Resources will strive to become a top-class supplier of nuclear fuel and guarantee an economical, safe and reliable supply to nuclear plants. As an important platform of our investment and trade of international uranium resources, Vital Holdings is an important part of CGNPC Uranium Resources and even China Guangdong Nuclear to realize its global strategy," added Mr. Yu.

Natural uranium is the material basis for nuclear development. The uranium price is one of the most active, sensitive and crucial element of the exploration, exploitation and trading of uranium resources. The uranium price has dropped significantly due to the Fukushima nuclear accident. Now the downside is over and the price has become stable. Countries including France, South Korea and China are seeking low-cost development of nuclear power and making it part of their mid-to-long term domestic energy policies. It is commonly agreed that we should spare no effort to develop nuclear power, optimize energy structure and ensure energy safety.

In recently years, China has attached high importance to the establishment of a uranium security system. In accordance with national policies, CGNPC Uranium Resources aims to explore and control uranium resources at home and abroad, develop a diversified, stable and independent channel to secure nuclear fuel supply as well as a safe, economical and reliable nuclear fuel system to drive up the demand for uranium and related products. CGNPC Uranium Resources will expand its business to make itself a competitive nuclear fuel enterprise, both domestically and globally.

Commenting on the 12th Five-year plan targets, Mr. Yu was confident and said, "During the 12th Five-year Plan period, we will continue to expand the uranium business, improve procurement and supply procedures, step up control of uranium resources at home and abroad, meet the uranium demand from local nuclear power generators and corporate reserves. We will also strengthen our channels for the supply of uranium and related products, explore various models and establish a security system that covers the whole nuclear fuel industry. As an important platform for our investment in uranium resources, Vital Holdings will play a key role in the above areas."  

China Uranium and Vital Holdings jointly announced on 31 March 2011 that CGNPC Uranium Resources plans to subscribe for a total of 1.67 billion shares (the "Subscription Shares") in Vital Holdings through its subsidiary China Uranium at HK$0.23 per share for a total consideration of approximately HK$384 million.

The shares represent approximately 51.85% of the entire share capital of Vital Holdings as enlarged by the Subscription Shares (assuming that the conversion rights attached to the Convertible Bonds (as defined below) have not been exercised). In addition, China Uranium will subscribe for the convertible bonds (the "Convertible Bonds") of Vital Holdings for HK$600 million at an initial conversion price of HK$0.23 per share, which was arrived at after arm's length negotiations between Vital Holdings and China Uranium. Vital Holdings has published and dispatched the circular in relation to the above matter to its shareholders on 23 May 2011.

China Uranium intends to continue the existing business of Vital Group and continue to employ the employees of Vital Group after closing of the Subscription Agreement, whilst actively assisting and cooperating with Vital Holdings in exploring investment and business opportunities with a view to developing Vital Holdings into a uranium resources investment and trading platform, including through the acquisition of assets. When such new business venture(s) and investments become reasonably self-sustainable, China Uranium may use all or part of the proceeds from the offering of Subscription Shares and Convertible Bonds, or other sources of capital, to fund such ventures or investments. .

Looking forward, Mr. Xu Xiaofan, Chairman of Vital Holdings said, "Vital Holdings believes that it would be able to leverage on the background and expertise of China Uranium in the uranium industry to explore business development and investment opportunities in this industry and accelerate its global expansion, aiming to become an international mining company."

About CGNPC Uranium Resources Co., Ltd.

CGNPC Uranium Resources Co., Ltd. ("CGNPC Uranium Resources") was incorporated in Beijing in August 2006 with a total registered capital of RMB1.2 billion, net assets of RMB1.8 billion and total assets of RMB3.3 billion. Based in Shenzhen, China Guangdong Nuclear is a state-owned nuclear power producer with material interests in nuclear fuel procurement and production.

CGNPC Uranium Resources is principally engaged in (i) managing nuclear supply of China Guangdong Nuclear; (ii) establishing an interest in and supporting development of commercial resources and reserves of natural uranium; and (iii) dealing with the import and export trade of PRC and overseas natural uranium and related products.

About Vital Group Holdings Limited

Vital Group Holdings Limited ("Vital Holdings") is a company incorporated in the Cayman Islands with limited liability. On 4 August 2003, Vital Holdings withdrew the listing of its shares on the GEM Board of the Stock Exchange and on the same date, Vital Holdings' shares were listed on the Main Board of the Stock Exchange by way of introduction.

Vital Group is principally engaged in (i) selling, distributing and manufacturing of pharmaceutical; (ii) selling, distributing and manufacturing of food products; and (iii) leasing, developing and selling of office premises and residential properties.

About China Guangdong Nuclear Power Holding Corporation

On 7 August 2011, The unit 2 of the Phase 2 of Lingao Nuclear Power Plant at the Daya Bay nuclear power base completed its 168-hour trial run. All technical indicators met requirements and started operations eight days ahead of schedule. The number of nuclear power generating units at the base increased from five to six, with a total installed capacity of 6.108 GW. The base is currently the largest in China with an annual generation of 45 billion kWh.

Disclaimer:

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Vital Holdings.

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