ADAM.L Regulatory News (ADAM)

CHINA PRIVATE EQUITY INVESTMENT HOLDINGS LIMITED

POSTING OF ADMISSION DOCUMENT, NOTICE OF GENERAL MEETING

AND RESUMPTION OF TRADING

Further to the announcement on 31 December 2013, CPE is pleased to announce that it has signed a conditional Acquisition Agreement with 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.

Due to the size of the transaction in relation to the Company, the Proposed Acquisition constitutes a reverse takeover under the AIM Rules and requires approval by the shareholders of the Company. The Admission Document relating to the Proposed Acquisition will be posted to Shareholders today and is available for download from www.cpe-invest.com.

The Admission Document incorporates notice of a General Meeting of the Company to be held at 1801-03, 18F, Tai Yau Building, 181 Johnston Road, Wanchai, Hong Kong at 8.00 a.m. (GMT)/4.00 p.m. (HKT) on 18 February 2014.

Following the publication of the Admission Document, trading in the Ordinary Shares will recommence with effect from 8.00 a.m. today.

The Proposals

· Pursuant to the Acquisition Agreement, CPE has agreed to acquire interests in four special purpose vehicles which hold interests in CJRE, Global Pharm, HKMH and Meize Energy, further details of which are set out below.

· The consideration for the Proposed Acquisition will be the issue to Elypsis by the Company of 1,445,416,667 new Ordinary Shares at a price of US$0.06 per Ordinary Share. In addition, the Company will issue to Elypsis warrants to subscribe for 722,708,333 new Ordinary Shares at US$0.06 per share exercisable between one and six years following Admission.

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

· CPE Shareholders will also receive warrants to subscribe for one new Ordinary Share for every two Ordinary Shares held by them (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 close of business in the UK on 18 February 2014.

· The Company has entered into the Subscription Agreements with certain new investors, conditional only on Admission, for the issue of an aggregate of 83,600,000 new Ordinary Shares at a price of US$0.06, raising US$5.02 million (approximately £3.02 million).

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

· Conditional on Admission, the Company has entered into a Services Agreement with Adamas Global Alternative Investment Management Inc., which is an affiliate of Adamas Asset Management, to provide investment management services to the Company in respect of the assets of the Enlarged Group.

Proposed Acquisition

Pursuant to the Acquisition Agreement, the Company has conditionally agreed to acquire the issued share capital of Lead Winner Limited, Dynamite Win Limited and Swift Wealth Investments 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:

* Valuations by Roma Appraisals Limited as at 31 December 2013

CJRE

CJRE owns a substantial resort and residential development project; the Tian Tong Shan Villa Project in Zhangzhou City, Fujian Province, China. The project is focused on a hot spring resort with ancillary residential, commercial and recreational facilities. 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 28 September 2013.

Global Pharm

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

Global Pharm has appointed a tier-one investment bank as lead arranger for an IPO on the Hong Kong Stock Exchange which is targeted to occur in the first half of 2014.

HKMH

HKMH's primary asset is a large dolomite magnesium limestone mine in the province of Shanxi, China. HKMH 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 and 2.0MW wind turbine blades with the 2.5MW version in the research and development phase.

Bonus Issue and Warrants

On Admission, the Company will allot and issue, for nil consideration, Bonus Shares to CPE Shareholders on the basis of one new Bonus Share for every three Ordinary Shares held on the Record Date. Entitlements to Bonus Shares will be rounded down and fractional entitlements will be ignored.

The Company will also issue, conditional on Admission, warrants to subscribe for new Ordinary Shares with an exercise price of US$0.06 per share:

· to existing Shareholders on the basis of one Shareholder Warrant for every two Ordinary Shares held by them respectively on the Record Date, which are capable of exercise at any time within 12 months of Admission on the basis of one Shareholder Warrant for every two Ordinary Shares held on the Record Date. Entitlements to Shareholder Warrants will be rounded down and fractional entitlements will be ignored; and

· to Elypsis on the basis of one Consideration Warrant for every two Consideration Shares issued to it pursuant to the Acquisition and which are capable of exercise at any time between the dates of the first and sixth anniversaries of Admission.

Fundraising

The Company has entered into the Subscription Agreements which, conditional only on Admission, will result in the issue of 83,600,000 new Ordinary Shares at a price of US$0.06 per Ordinary Share, raising US$5.02 million (approximately £3.02 million). Under the Subscription Agreements, the subscription monies will be held in escrow pending Admission. The Company is required to undertake the Fundraising pursuant to AIM Rule 8.

Investing Policy

Following Admission, the Investing Policy of the Company will be as follows:

· The transactions will be structured as senior debt, bridge loans, mezzanine finance and other types of structured private financing.

· Target companies will be SMEs in Asia with a focus of Greater China.

· The Company is generally sector agnostic, but will focus on agriculture, clean energy, consumer, food and beverage, healthcare, new materials, real estate and resources.

· The average maturity of the transactions will range from 24 to 36 months.

· Each new asset will have a targeted internal rate of return of 20 per cent. per annum.

· The investment in each new asset will not represent more than 20 per cent. of the Company's net asset value immediately following the transaction.

· The Company has an indefinite life and is targeting both capital and income returns over time for its shareholders.

· Assets will be managed actively, including through appropriate investor protections which will be negotiated on each transaction.

· The Company is designed for investors seeking access to yield-producing investment opportunities in Asia.

· The Company will not use debt to finance individual investments, but may take on debt at the Company-level with no specific limit.

Services Agreement

The Company and Adamas GAIM entered into a Services Agreement on 29 January 2014 pursuant to which, conditional on Admission, Adamas GAIM has been given sole responsibility for the management of the Company's assets in accordance with the Company's investing policy, subject to the overall control and supervision of the Directors.

Adamas GAIM is entitled to receive from the Company, in respect of its services provided under the Services Agreement, a management fee which is calculated and paid bi-annually in advance calculated at the higher of either an annual rate of one per cent. of the higher of net asset value of the Company's portfolio of assets, calculated on the relevant half year date (being either 30 June or 31 December), or one per cent. of the market capitalisation of the Ordinary Shares. The Services Agreement is for an initial term of three years, thereafter being terminable upon 12 months' written notice. The Services Agreement is subject to earlier termination in specified circumstances.

Board

The current Directors and their titles are:

John Croft (Executive Chairman)

Conor MacNamara (Non-Executive Director)

Ernest Wong (Executive Director)

With effect from Admission and the commencement of the Services Agreement, John Croft will become Non-Executive Chairman and Ernest Wong will become a Non-Executive Director.

Irrevocable Undertakings

The Company has received irrevocable undertakings to vote in favour of the resolutions to be proposed at the General Meeting in respect of holdings totalling 36,982,516 Ordinary Shares, representing 29.3 per cent. of the issued share capital, including an undertaking from John Croft, the only Director who holds Ordinary Shares, in respect of his holding of 254,590 Ordinary Shares.

Admission Statistics

Expected Timetable of Principal Events

All references to times in this announcement are to UK time unless otherwise stated.

Save for the date of publication of the Admission Document, each of the times and dates above is subject to change. Any such change, including any consequential change in the Admission statistics above, will be notified to Shareholders by an announcement on a Regulatory Information Service.

Enquiries:

Definitions

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

An exchange rate of £1: US$1.66 has been used in this announcement.