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OFFON

SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

(981)
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Semiconductor Manufacturing 'l : COMPLETION OF THE ISSUE OF US$200 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2022 TO BE CONSOLIDATED AND FORM A SINGLE SERIES WITH THE EXISTING US$450 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2022

12/09/2019 | 11:16pm EDT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or a solicitation of an offer to acquire, purchase or subscribe for securities or an invitation to enter into an agreement to do any such things, nor is it calculated to invite any offer to acquire, purchase or subscribe for any securities. This announcement is not an offer of securities for sale in the PRC, Hong Kong and the United States or elsewhere. The Bonds are not available for general subscription in Hong Kong or elsewhere.

This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The Shares and the Bonds mentioned herein have not been, and will not be, registered under the Securities Act, and may not be offered or sold in the United States except pursuant to registration or an exemption from the registration requirements of the Securities Act. No public offering of the Shares and the Bonds will be made in the United States.

Semiconductor Manufacturing International Corporation

中 芯 國 際 集 成 電 路 製 造 有 限 公 司 *

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 981)

COMPLETION OF THE ISSUE OF US$200 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2022 TO BE CONSOLIDATED AND FORM A SINGLE SERIES WITH THE EXISTING US$450 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2022

Sole Global Coordinator

Sole Bookrunner and Manager

- 1 -

Reference is made to the announcement of the Company dated 19 November 2019 in relation to, among others, the proposed issue of the Placed Bonds (the ''Announcement''). Unless the context otherwise requires, capitalised terms used in this announcement shall have the same meanings as those defined in the Announcement.

The Company is pleased to announce that all of the conditions precedent for the issue of the Placed Bonds under the Placed Bonds Subscription Agreement have been fulfilled and completion of the issue of the Placed Bonds in the principal amount of US$200 million took place on 9 December 2019. The Company has obtained conditional approval from the Stock Exchange for the listing of, and permission to deal in, the 167,950,270 Placed Conversion Shares and has also received approval from the Singapore Exchange for the listing and quotation of the Placed Bonds. The Placed Bonds are listed on the Singapore Exchange on 10 December 2019. The estimated net proceeds (net of fees, commissions and expenses) from the issue of the Placed Bonds are approximately US$229.5 million.

The Manager has informed the Company that the Placed Bonds have been offered and sold to six or more independent placees (who are independent individual, corporate and/or institutional investors). To the best of the Company's knowledge, information and belief, having made all reasonable enquiries, each of the placees (and their respective ultimate beneficial owners) is independent third parties not connected with the Company or any of its subsidiaries or any of their respective directors, chief executives or substantial shareholders or any of their respective associates.

Based on the Effective Conversion Price of HK$10.73 per Share as at the date of the Placed Bonds Subscription Agreement and assuming full conversion of the Placed Bonds at such Effective Conversion Price, the Placed Bonds will be convertible into approximately 167,950,270 Placed Conversion Shares, representing (i) approximately 3.32% of the issued share capital of the Company on the Last Trading Day and (ii) approximately 3.22% of the issued share capital of the Company as enlarged assuming the full conversion of the Placed Bonds at the Effective Conversion Price as at the date of the Placed Bonds Subscription Agreement (assuming that there is no change in the issued share capital of the Company, save for the issue of the Placed Conversion Shares).

Pursuant to the Datang Purchase Agreement and the China IC Fund Purchase Agreement which granted the pre-emptive rights to Datang and China IC Fund, respectively, each of Datang and China IC Fund had elected or is deemed to have elected (as the case may be) not to exercise its pre-emptive rights in relation to the issue of the Placed Bonds and the Datang Pre-emptive Subscription or the China IC Fund Pre-emptive Subscription (as the case may be).

- 2 -

The following table illustrates (i) the existing shareholding structure of the Company; (ii) the shareholding structure immediately after the issue of the Placed Bonds and assuming no conversion of the Placed Bonds into Placed Conversion Shares; and (iii) the shareholding structure immediately after the issue of the Placed Bonds and full conversion of the Placed Bonds.

Immediately after the Placed Bonds

Assuming full conversion of

the Placed Bonds at the

Effective Conversion Price

as at the date of the Placed

Existing (as at

Assuming no conversion of

Bonds Subscription Agreement

9 December 2019)

the Placed Bonds (Note 1)

(Note 2)

% of issued

% of issued

% of issued

share capital of

share capital of

share capital of

Shareholder

No. of Shares

the Company

No. of Shares

the Company

No. of Shares

the Company

Datang (Note 3)

859,522,595

17.00%

859,522,595

17.00%

859,522,595

16.46%

China IC Fund (Note 4)

797,054,901

15.77%

797,054,901

15.77%

797,054,901

15.26%

Holders of Placed Bonds

0

0.00%

0

0.00%

167,950,270

3.21%

Other Shareholders

3,398,687,159

67.23%

3,398,687,159

67.23%

3,398,687,159

65.07%

Total

5,055,264,655

100.00%

5,055,264,655

100.00%

5,223,214,925

100.00%

Notes:

  1. Assuming that other than the Placed Bonds, no Shares are issued or repurchased by the Company, no issuance of Pre-emptive Bonds, no share options are exercised, no Restricted Share Units are granted and no conversion into Shares of any securities. As at 31 October 2019, the Company has 21,223,764 outstanding share options.
  2. Assuming that other than the Placed Bonds, no Shares are issued or repurchased by the Company, no issuance of Pre-emptive Bonds, no share options are exercised, no Restricted Share Units are granted and no conversion into Shares of any securities other than the Placed Bonds. As at 31 October 2019, the Company has 21,223,764 outstanding share options.
  3. All such Shares are held by Datang HK, a wholly-owned subsidiary of Datang.
  4. All such Shares are held by Xinxin HK, a wholly-owned subsidiary of China IC Fund.

GRANT OF WAIVER

Rule 13.36(6) of the Listing Rules provides that an issuer may not issue securities convertible into new shares of the issuer for cash consideration pursuant to a general mandate given under rule 13.36(2)(b) of the Listing Rules, unless the initial conversion price is not lower than the benchmarked price (as defined in rule 13.36(5) of the Listing Rules) of the shares at the time of the placing.

- 3 -

As disclosed in the Announcement, the price at which the conversion shares will be issued upon conversion of the Placed Bonds was initially HK$0.925 per Share pursuant to the terms and conditions of the Placed Bonds. As a result of share consolidation undertaken by the Company, the details of which are more fully disclosed in the announcement of the Company dated 6 December 2016, such conversion price was adjusted to HK$9.25 per Share. The existing conversion price of HK$9.25 per Share is prima facie lower than the benchmarked price (as defined in rule 13.36(5) of the Listing Rules) of the Shares at the time of the placing.

As disclosed in the Announcement, the Effective Conversion Price as at the date of the Announcement was HK$10.73 per Share, which was not lower than the benchmarked price (as defined in rule 13.36(5) of the Listing Rules) of the Shares at the time of the placing.

The Company has applied for, and the Stock Exchange has granted, a waiver from strict compliance with the requirements of rule 13.36(6) of the Listing Rules taking into account, among others, the following specific circumstances:

  1. this is a tap issuance and the Placed Bonds to be issued in the tap issuance will be consolidated and form a single series with the Existing Bonds. Therefore, all the terms and conditions, except for the issue price, are fixed and have to be the same as those governing the Existing Bonds. As such, the time costs for preparation and execution of the Placed Bonds, together with the economic costs, could be reduced;
  2. the Existing Bonds are listed on the Singapore Exchange and due to the high trading price of the Existing Bonds, the Placed Bonds in the tap issuance will be issued with high premium on the par value. Therefore, shares to be converted under the Placed Bonds can be considered to be issued with high premium on the initial conversion price as well; and
  3. both the Existing Bonds and the Placed Bonds are zero coupon convertible bonds due 2022 which aligns with the Company's objective for the new financing and the tap issuance will increase the principal size of the Existing Bonds, which brings additional liquidity in the current market for the bondholders.

By order of the Board

Semiconductor Manufacturing International Corporation

Gao Yonggang

Executive Director, Chief Financial Officer and

Joint Company Secretary

Shanghai, PRC

10 December 2019

- 4 -

As at the date of this announcement, the directors of the Company are:

Executive Directors

ZHOU Zixue (Chairman)

ZHAO Haijun (Co-Chief Executive Officer) LIANG Mong Song (Co-Chief Executive Officer)

GAO Yonggang (Chief Financial Officer and Joint Company Secretary)

Non-executive Directors

CHEN Shanzhi

ZHOU Jie

REN Kai

LU Jun

TONG Guohua

Independent Non-executive Directors

William Tudor BROWN

CONG Jingsheng Jason

LAU Lawrence Juen-Yee

FAN Ren Da Anthony

YOUNG Kwang Leei

  • For identification purposes only

- 5 -

Disclaimer

SMIC - Semiconductor Manufacturing International Corporation published this content on 10 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 December 2019 04:15:04 UTC


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Net income 2021 741 M - -
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P/E ratio 2021 283x
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Mean consensus HOLD
Number of Analysts 24
Last Close Price 26,40 $
Average target price 3,19 $
Spread / Average Target -87,9%
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Managers and Directors
Hai Jun Zhao Co-Chief Executive Officer & Executive Director
Meng Song Liang Co-Chief Executive Officer & Executive Director
Yong Gang Gao CFO, Secretary, Executive Director & EVP
Zi Xue Zhou Chairman
Mei Sheng Zhou Executive VP-Technology Research & Development
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