ADAM.L Regulatory News (ADAM)

CHINA PRIVATE EQUITY INVESTMENT HOLDINGS LIMITED

("CPE" or the "Company")

PROPOSED ACQUISITION AND TEMPORARY SUSPENSION OF TRADING IN SHARES PENDING PUBLICATION OF AN ADMISSION DOCUMENT

CPE is pleased to announce that on 30 December 2013 it signed a conditional agreement with Elypsis Solutions Limited ("Elypsis") to acquire interests in four special purpose vehicles which, in turn, hold interests in four domestic Chinese businesses. Elypsis is a wholly owned subsidiary of Asia Private Credit Fund Limited, which is managed by an affiliate of Adamas Asset Management HK Limited.

Due to the size of the transaction in relation to the Company, the Proposed Acquisition will constitute a reverse takeover under the AIM Rules. Completion of the Proposed Acquisition therefore requires the publication of an Admission Document in relation to the Enlarged Group. As a result, trading in the Ordinary Shares will be suspended with effect from 7.30am on 31 December 2013 pending the publication of the Admission Document.

The Conditional Agreement is subject, inter alia, to:

· completion of due diligence by CPE and Elypsis on each other;

· the successful negotiation and execution of a sale and purchase agreement in relation to the Proposed Acquisition;

· the raising of a minimum of £3 million through the issue of new Ordinary Shares on Admission;

· the receipt of all appropriate regulatory approvals;

· the approval of Shareholders at the General Meeting; and

· Admission.

On completion of the Sale and Purchase Agreement and following the proposed fundraising, Elypsis, and/or its affiliates, will hold approximately 1,445,416,667 ordinary shares, representing approximately 86% of the issued share capital of the Company and subject to shareholder approval, the Company will change its name to Adamas Finance Asia Limited.

The Proposals

· CPE is proposing to acquire interests in four special purpose vehicles which hold interests in CJRE, Global Pharm, HKMI and Meize Energy, further details of which are set out below.

· The consideration for the Proposed Acquisition will be the issue to Elypsis and/or its affiliates of an aggregate of 1,445,416,667 new Ordinary Shares at a price of US$0.06 per share.

· In addition, the Company will issue to Elypsis, or its affiliates, warrants to subscribe for 722,708,333 new Ordinary Shares at US$0.06 per share exercisable between one and six years of Admission.

· On Admission CPE Shareholders will be issued with new Ordinary Shares on the basis of one new Ordinary Share for every three Ordinary Shares held for nil consideration. 

· CPE Shareholders will also receive warrants to subscribe for one new Ordinary Share for every two Ordinary Shares (excluding the Bonus Issue) exercisable at US$0.06 per share within 12 months of Admission. The record date for the Bonus Issue and the issue of warrants will be the last business day before Admission.

· The Company is required to raise a minimum of £3 million through the issue of new Ordinary Shares on Admission.

· A resolution to change the name of the Company to Adamas Finance Asia Limited will be proposed at the General Meeting.

· The Company intends to enter into an agreement with an affiliate of Adamas Asset Management to provide management services in respect of the assets of the Enlarged Group.

· Full details of the Company's investing policy will be set out in the Admission Document.

Background

In November 2012 the Company announced that it had entered into a memorandum of understanding relating to the formation of a strategic partnership with Adamas (then under an affiliated company which was named Gen2 Capital Partners Limited).

Under the partnership, Adamas would act as a strategic consultant to the Company. In addition, the Board had identified a number of assets controlled by Adamas that they considered would be attractive additions to the Company and the memorandum of understanding recognised an injection of assets from Adamas as one of the objectives of the partnership and that Adamas may become a significant Shareholder in due course.

The relationship between the Company and Adamas strengthened in July 2013 when each party announced a programme to co-invest a total of up to $20 million over a seven year period in opportunities in predominantly income-generating assets located in Greater China.

Proposed Acquisition

Pursuant to the Conditional Agreement, the Company has conditionally agreed to acquire the issued share capital of Lead Winner Limited, Dynamite Win Limited and Swift Wealth Investment Limited, and 75 per cent. of the issued share capital of Blazer Delight Limited, which hold indirect interests, respectively, in CJRE, HKMI, Meize Energy and Global Pharm.

The indirect interests to be acquired by the Company are as follows:

CJRE

CJRE holds a 15 per cent. interest in a substantial resort and residential development project; Tian Tong Shanin Zhangzhou, Fujian Province, China. The project is focused on a hot spring resort with ancillary residential, commercial and recreational facilities in a prime area. The project was the only resort granted the title of "Best Ecological Hot Spring Resort in Asia" by World Real Estate Academy, China Real Estate Enterprises League and World Executive Group on 29 September 2013.

Global Pharm

Global Pharm is a pharmaceutical company headquartered in Shenzhen, China. The business operates through four units, namely Traditional Chinese Medicine ("TCM") herb cultivation, TCM processing, pharmaceutical distribution and a retail chain.

Global Pharm has appointed Citigroup Global Markets Asia Limited as lead arranger for an IPO on the Hong Kong Stock Exchange which is targeted to occur in the first half of 2014.

HKMI

HKMI's primary asset is one of the largest dolomite magnesium limestone mines in the province of Shanxi, China. The mine is open-pit with reserves of 123 million tonnes with a grade of 20.49 per cent. magnesium oxide.

HKMI is planning to file for an IPO on the Hong Kong Stock Exchange in 2014.

Meize Energy

Meize Energy is a privately-owned wind turbine blade design and manufacturing company. The company's products include 1.5MW, 2.0MW and 2.5MW wind turbine blades. Current production capacity is 300 to 400 sets per annum, which makes Meize Energy one of the ten largest wind turbine blade manufacturers in China by capacity.

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Definitions

The following definitions apply in this announcement unless the context otherwise requires: