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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13E-3
RULE 13e-3 TRANSACTION STATEMENT UNDER SECTION 13(E)
OF THE SECURITIES EXCHANGE ACT OF 1934

China Hydroelectric Corporation
(Name of the Issuer)

China Hydroelectric Corporation
CPT Wyndham Holdings Ltd.
CPT Wyndham Sub Ltd.
CPI Ballpark Investments Ltd
NewQuest Asia Fund I, L.P.
NewQuest Asia Fund II, L.P.
China Environment Fund III, L.P.
(Names of Persons Filing Statement)

Ordinary Shares, par value $0.001 per share
American Depositary Shares, each representing three Ordinary Shares
(Title of Class of Securities)

16949D101
(CUSIP Number)

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

            This statement is filed in connection with (check the appropriate box):

            Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: o

            Check the following box if the filing is a final amendment reporting the results of the transaction: o

Calculation of Filing Fee

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INTRODUCTION

        This Rule 13e-3 transaction statement on Schedule 13E-3, together with the exhibits hereto (this "Transaction Statement"), is being filed with the Securities and Exchange Commission (the "SEC") pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), jointly by the following persons (each, a "Filing Person," and collectively, the "Filing Persons"): (a) China Hydroelectric Corporation, a Cayman Islands exempted company with limited liability (the "Company"), the issuer of the registered ordinary shares, par value $0.001 per share (each, a "Share" and, collectively, the "Shares"), including the Shares represented by the American depositary shares, each representing three Shares ("ADSs"), that is subject to the transaction pursuant to Rule 13e-3 under the Exchange Act; (b) CPT Wyndham Holdings Ltd., a Cayman Islands exempted company with limited liability ("Parent"); (c) CPT Wyndham Sub Ltd., a Cayman Islands exempted company with limited liability ("Merger Sub"); (d) CPI Ballpark Investments Ltd, a Mauritius limited liability company ("CPI Ballpark"); (e) NewQuest Asia Fund I, L.P., a Cayman Islands exempted limited partnership; (f) NewQuest Asia Fund II, L.P., a Cayman Islands exempted limited partnership (together with NewQuest Asia Fund I, L.P., the "NewQuest Funds" or the "Sponsors" and, together, with CPI Ballpark, "NewQuest"); and (g) China Environment Fund III, L.P., a Cayman Islands exempted limited partnership ("CEF"). NewQuest, CEF, Parent and Merger Sub are collectively referred to herein as the "Buyer Group".

        On January 13, 2014, Parent, Merger Sub and the Company entered into an agreement and plan of merger (as may be amended form time to time, the "merger agreement"), which included a plan of merger required to be filed with the Registrar of Companies of the Cayman Islands, substantially in the form attached as Annex A to the merger agreement (the "plan of merger"). If the merger agreement is approved and authorized by the Company's shareholders and the other conditions to the closing of the merger (as described below) are satisfied, Merger Sub will merge with and into the Company (the "merger"), with the Company continuing as the surviving company after the merger as a wholly owned subsidiary of Parent.

        Under the terms of the merger agreement, at the effective time of the merger (the "effective time"), each outstanding Share (including Shares represented by ADSs) other than Excluded Shares (as defined below) will be cancelled in exchange for the right to receive $1.17 per Share or $3.51 per ADS (less $0.05 per ADS cancellation fees pursuant to the terms of the deposit agreement dated January 25, 2010, by and among the Company, the ADS depositary and the holders and beneficial owners of ADSs issued thereunder), in each case, in cash and without interest, and net of any applicable withholding taxes. "Excluded Shares" are (i) Shares and ADSs beneficially owned (as determined pursuant to Rule 13d-3 under the Exchange Act by Parent or any wholly-owned subsidiary of Parent (including Merger Sub) immediately prior to the effective time, including each Share or ADS to be contributed to Parent by the Rollover Shareholders (as defined below) in connection with the rollover and support agreement dated as of January 13, 2014 (as may be amended form time to time, the "rollover agreement") entered into by Parent and the Rollover Shareholders and each Share or ADS which may be contributed to Parent by certain other shareholders of the Company in accordance with certain additional rollover agreements, if any, which are entered into, with the prior consent of the special committee, by such shareholders and Parent from the date of the merger agreement until the closing date of the merger, and (ii) Shares ("Dissenting Shares") owned by holders of Shares who have validly exercised and not effectively withdrawn or lost their dissenters' rights pursuant to Section 238 of the Companies Law (2013 Revision) of the Cayman Islands (the "Cayman Companies Law") ("Dissenting Shareholders"). At the effective time, the Excluded Shares (other than Dissenting Shares) will be cancelled for no consideration.

        In addition, at the effective time, each outstanding vested and unexercised option to purchase Shares granted under the Company's 2008 Share Incentive Plan (the "Company Incentive Plan") will be cancelled and converted into the right to receive, as soon as practicable after the effective time, a

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cash amount equal to the number of Shares underlying such vested option immediately prior to the effective time of the merger multiplied by the amount by which $1.17 exceeds the exercise price per Share of such vested option. At the effective time, each outstanding unvested option to purchase Shares granted under the Company Incentive Plan will be cancelled for no consideration.

        Furthermore, concurrently with the execution and delivery of the merger agreement, certain existing shareholders of the Company, namely CPI Ballpark and CEF (collectively, the "Rollover Shareholders"), have entered into a rollover and support agreement with Parent, pursuant to which they have agreed with Parent, among other things, that (a) they will vote all of their Shares in favor of the proposal to approve and authorize the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger, and (b) the Shares (including Shares represented by ADSs) held by them will be contributed to Parent and cancelled for no consideration in the merger and that they will subscribe for newly issued ordinary shares of Parent immediately prior to the closing of the merger. Each Dissenting Share will be cancelled for the right to receive the fair value of such Dissenting Share as determined in accordance with Section 238 of the Cayman Companies Law.

        The merger remains subject to the satisfaction or waiver of the conditions set forth in the merger agreement, including obtaining the requisite authorization and approval of the shareholders of the Company. In order for the merger to be completed, the merger agreement, the plan of merger and the merger must be authorized and approved by a special resolution of the Company passed by an affirmative vote of at least two-thirds of such shareholders of the Company entitled to do so, voting in person or by proxy as a single class at the extraordinary general meeting of shareholders of the Company.

        The Company will make available to its shareholders a proxy statement (the "proxy statement," a preliminary copy of which is attached as Exhibit (a)(1) to this Transaction Statement), relating to the extraordinary general meeting of shareholders of the Company, at which the shareholders of the Company will consider and vote upon, among other proposals, a proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated by the merger agreement, including the merger. A copy of the merger agreement is attached to the proxy statement as Annex A and is incorporated herein by reference. As of the date hereof, the proxy statement is in preliminary form and is subject to completion.

        The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the proxy statement of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the proxy statement, including all annexes thereto, is incorporated in its entirety herein by this reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the proxy statement and the annexes thereto. Capitalized terms used but not defined in this Transaction Statement shall have the meanings given to them in the proxy statement.

        All information contained in this Transaction Statement concerning each Filing Person has been supplied by such Filing Person. No Filing Person, including the Company, has produced any disclosure with respect to any other Filing Person.

        The filing of this Transaction Statement shall not be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is "controlled" by any other Filing Person, or that any other Filing Person is an "affiliate" of the Company within the meaning of Rule 13e-3 under Section 13(e) of the Exchange Act.

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Item 1    Summary Term Sheet

        The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet"



•

"Questions and Answers about the Extraordinary General Meeting and the Merger"

Item 2    Subject Company Information

        (a)    Name and Address.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Summary Term Sheet—The Parties Involved in the Merger"

        (b)    Securities.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Questions and Answers about the Extraordinary General Meeting and the Merger"



•

"The Extraordinary General Meeting—Record Date; Shares and ADSs Entitled to Vote"



•

"Security Ownership of Certain Beneficial Owners and Management of the Company"

        (c)    Trading Market and Price.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Market Price of the ADSs, Dividends and Other Matters—Market Price of the ADSs"

        (d)    Dividends.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Market Price of the ADSs, Dividends and Other Matters—Dividend Policy"

        (e)    Prior Public Offerings.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Transactions in the Shares and ADSs—Prior Public Offerings"

        (f)    Prior Stock Purchases.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Transactions in the Shares and ADSs"



•

"Special Factors—Related Party Transactions"

Item 3    Identity and Background of Filing Person

        (a)    Name and Address.    China Hydroelectric Corporation is the subject company. The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—The Parties Involved in the Merger"



•

"Annex D—Directors and Executive Officers of Each Filing Person"

        (b)    Business and Background of Entities.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—The Parties Involved in the Merger"



•

"Annex D—Directors and Executive Officers of Each Filing Person"

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        (c)    Business and Background of Natural Persons.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—The Parties Involved in the Merger"



•

"Annex D—Directors and Executive Officers of Each Filing Person"

Item 4    Terms of the Transaction

        (a)-(1)    Material Terms—Tender Offers.    Not applicable.

        (a)-(2)    Material Terms—Merger or Similar Transactions.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet"



•

"Questions and Answers about the Extraordinary General Meeting and the Merger"



•

"Special Factors"



•

"The Extraordinary General Meeting"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

        (c)    Different Terms.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"The Extraordinary General Meeting—Proposals to be Considered at the Extraordinary General Meeting"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

        (d)    Appraisal Rights.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Dissenters' Rights of Shareholders"



•

"Questions and Answers about the Extraordinary General Meeting and the Merger"



•

"Dissenters' Rights"



•

"Annex C—Companies Law (2013 Revision) of the Cayman Islands—Section 238"

        (e)    Provisions for Unaffiliated Security Holders.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Provisions for Unaffiliated Security Holders"

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        (f)    Eligibility of Listing or Trading.    Not applicable.

Item 5    Past Contracts, Transactions, Negotiations and Agreements

        (a)    Transactions.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Special Factors—Related Party Transactions"



•

"Transactions in the Shares and ADSs"

        (b)    Significant Corporate Events.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"



•

"Special Factors—Purpose of and Reasons for the Merger"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

        (c)    Negotiations or Contacts.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Special Factors—Background of the Merger"



•

"Special Factors—Plans for the Company after the Merger"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

        (e)    Agreements Involving the Subject Company's Securities.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Plans for the Company after the Merger"



•

"Summary Term Sheet—Rollover Agreement"



•

"Summary Term Sheet—Financing of the Merger"



•

"Summary Term Sheet—Share Ownership of the Company Directors and Officers and Voting Commitments"



•

"Special Factors—Background of the Merger"



•

"Special Factors—Plans for the Company after the Merger"



•

"Special Factors—Financing of the Merger"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"Special Factors—Voting by the Rollover Shareholders at the Extraordinary General Meeting"



•

"The Merger Agreement and Plan of Merger"



•

"Transactions in the Shares and ADSs"



•

"Annex A—Agreement and Plan of Merger"

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Item 6    Purposes of the Transaction and Plans or Proposals

        (b)    Use of Securities Acquired.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet"



•

"Questions and Answers about the Extraordinary General Meeting and the Merger"



•

"Special Factors—Purpose of and Reasons for the Merger"



•

"Special Factors—Effects of the Merger on the Company"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

        (c)(1)-(8)    Plans.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—The Merger"



•

"Summary Term Sheet—Purposes and Effects of the Merger"



•

"Summary Term Sheet—Plans for the Company after the Merger"



•

"Summary Term Sheet—Financing of the Merger"



•

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"



•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"



•

"Special Factors—Purpose of and Reasons for the Merger"



•

"Special Factors—Effects of the Merger on the Company"



•

"Special Factors—Plans for the Company after the Merger"



•

"Special Factors—Financing of the Merger"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

Item 7    Purposes, Alternatives, Reasons and Effects

        (a)    Purposes.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Purposes and Effects of the Merger"



•

"Summary Term Sheet—Plans for the Company after the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"



•

"Special Factors—Purpose of and Reasons for the Merger"

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        (b)    Alternatives.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"



•

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"



•

"Special Factors—Purpose of and Reasons for the Merger"



•

"Special Factors—Effects on the Company if the Merger is not Completed"



•

"Special Factors—Alternatives to the Merger"

        (c)    Reasons.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Purposes and Effects of the Merger"



•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"



•

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"



•

"Special Factors—Purpose of and Reasons for the Merger"



•

"Special Factors—Effects of the Merger on the Company"

        (d)    Effects.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Purposes and Effects of the Merger"



•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"



•

"Special Factors—Effects of the Merger on the Company"



•

"Special Factors—Plans for the Company after the Merger"



•

"Special Factors—Effects on the Company if the Merger is not Completed"



•

"Special Factors—Effects of the Merger on the Company—Company's Net Book Value and Net Earnings"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"Special Factors—Material U.S. Federal Income Tax Consequences"



•

"Special Factors—Material PRC Income Tax Consequences"



•

"Special Factors—Material Cayman Islands Tax Consequences"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

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Item 8    Fairness of the Transaction

        (a)-(b)    Fairness; Factors Considered in Determining Fairness.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Recommendations of the Special Committee and the Board of Directors"



•

"Summary Term Sheet—Position of the Buyer Group as to Fairness"



•

"Summary Term Sheet—Share Ownership of the Company Directors and Officers and Voting Commitments"



•

"Summary Term Sheet—Opinion of the Special Committee's Financial Advisor"



•

"Summary Term Sheet—Interests of the Company's Executive Officers and Directors in the Merger"



•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"



•

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"



•

"Special Factors—Opinion of the Special Committee's Financial Advisor"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"Annex B—Opinion of Houlihan Lokey (China) Limited as Financial Advisor"

        (c)    Approval of Security Holders.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Shareholder Vote Required to Authorize and Approve the Merger Agreement and Plan of Merger"



•

"Questions and Answers about the Extraordinary General Meeting and the Merger"



•

"Special Factors—Voting by the Rollover Shareholders at the Extraordinary General Meeting"



•

"The Extraordinary General Meeting—Vote Required"

        (d)    Unaffiliated Representative.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"



•

"Special Factors—Opinion of the Special Committee's Financial Advisor"



•

"Annex B—Opinion of Houlihan Lokey (China) Limited as Financial Advisor"

        (e)    Approval of Directors.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Recommendations of the Special Committee and the Board of Directors"



•

"Questions and Answers about the Extraordinary General Meeting and the Merger"



•

"Special Factors—Background of the Merger"

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•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"

        (f)    Other Offers.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Special Factors—Background of the Merger"



•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"

Item 9    Reports, Opinions, Appraisals and Negotiations

        (a)    Report, Opinion or Appraisal.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Opinion of the Special Committee's Financial Advisor"



•

"Special Factors—Background of the Merger"



•

"Special Factors—Opinion of the Special Committee's Financial Advisor"



•

"Annex B—Opinion of Houlihan Lokey (China) Limited as Financial Advisor"

        (b)    Preparer and Summary of the Report, Opinion or Appraisal.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Opinion of the Special Committee's Financial Advisor"



•

"Special Factors—Opinion of the Special Committee's Financial Advisor"



•

"Annex B—Opinion of Houlihan Lokey (China) Limited as Financial Advisor"

        (c)    Availability of Documents.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Where You Can Find More Information"

        The reports, opinions or appraisals referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of the Shares or his, her or its representative who has been so designated in writing.

Item 10    Source and Amount of Funds or Other Consideration

        (a)    Source of Funds.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Financing of the Merger"



•

"Special Factors—Financing of the Merger"



•

"The Merger Agreement and Plan of Merger"



•

"Annex A—Agreement and Plan of Merger"

        (b)    Conditions.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Financing of the Merger"



•

"Special Factors—Financing of the Merger"

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        (c)    Expenses.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Summary Term Sheet—Fees and Expenses"



•

"Special Factors—Fees and Expenses"



•

"The Merger Agreement and Plan of Merger—Fees and Expenses"

        (d)    Borrowed Funds.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Summary Term Sheet—Financing of the Merger"



•

"Special Factors—Financing of the Merger"



•

"The Merger Agreement and Plan of Merger—Financing"

Item 11    Interest in Securities of the Subject Company

        (a)    Securities Ownership.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Share Ownership of the Company Directors and Officers and Voting Commitments"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"Security Ownership of Certain Beneficial Owners and Management of the Company"

        (b)    Securities Transactions.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"Transactions in the Shares and ADSs"

Item 12    The Solicitation or Recommendation

        (d)    Intent to Tender or Vote in a Going-Private Transaction.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Share Ownership of the Company Directors and Officers and Voting Commitments"



•

"Questions and Answers about the Extraordinary General Meeting and the Merger"



•

"Special Factors—Voting by the Rollover Shareholders at the Extraordinary General Meeting"



•

"The Extraordinary General Meeting—Vote Required"



•

"Security Ownership of Certain Beneficial Owners and Management of the Company"

        (e)    Recommendations of Others.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—Recommendations of the Special Committee and the Board of Directors"



•

"Summary Term Sheet—Position of the Buyer Group as to Fairness"



•

"Summary Term Sheet—Share Ownership of the Company Directors and Officers and Voting Commitments"

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•

"Special Factors—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"



•

"Special Factors—Position of the Buyer Group as to the Fairness of the Merger"



•

"The Extraordinary General Meeting—Our Board's Recommendation"

Item 13    Financial Statements

        (a)    Financial Information.    The audited financial statements of the Company for the year ended December 31, 2012 are incorporated herein by reference to the Company's Form 20-F for the year ended December 31, 2012, as amended, originally filed on April 18, 2013 (see page F-1 and following pages).

        The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Financial Information"



•

"Where You Can Find More Information"

        (b)    Pro Forma Information.    Not applicable.

Item 14    Persons/Assets, Retained, Employed, Compensated or Used

        (a)    Solicitation or Recommendations.    The information set forth in the proxy statement under the following caption is incorporated herein by reference:

•

"The Extraordinary General Meeting—Solicitation of Proxies"

        (b)    Employees and Corporate Assets.    The information set forth in the proxy statement under the following captions is incorporated herein by reference:

•

"Summary Term Sheet—The Parties Involved in the Merger"



•

"Special Factors—Interests of Certain Persons in the Merger"



•

"Annex D—Directors and Executive Officers of Each Filing Person"

Item 15    Additional Information

        (c)    Other Material Information.    The information contained in the proxy statement, including all annexes thereto, is incorporated herein by reference.

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Item 16    Exhibits

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SIGNATURES

        After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: February 7, 2014

[Signature Page to Schedule 13E-3]

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        After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: February 7, 2014

[Signature Page to Schedule 13E-3]

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        After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: February 7, 2014

[Signature Page to Schedule 13E-3]

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        After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: February 7, 2014

[Signature Page to Schedule 13E-3]

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Exhibit Index

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Exhibit (a)-(1)

		China Hydroelectric Corporation

[    •    ], 2014

Shareholders of China Hydroelectric Corporation

Re: Notice of Extraordinary General Meeting of Shareholders

Dear Shareholder:

        You are cordially invited to attend an extraordinary general meeting of shareholders of China Hydroelectric Corporation (the "Company") to be held on [    •    ], 2014, beginning at [    •    ] a.m. (Hong Kong time), at 31st Floor, AIA Central, 1 Connaught Road Central, Hong Kong. The attached notice of the extraordinary general meeting and proxy statement provide information regarding the matters to be acted on at the extraordinary general meeting, including at any adjournment or postponement thereof.

        At the extraordinary general meeting you will be asked to consider and vote upon a proposal to authorize and approve the agreement and plan of merger dated as of January 13, 2014 (as may be amended from time to time, the "merger agreement"), among the Company, CPT Wyndham Holdings Ltd. ("Parent") and CPT Wyndham Sub Ltd. ("Merger Sub"), the plan of merger required to be filed with the Registrar of Companies of the Cayman Islands, substantially in the form attached as Annex A to the merger agreement (the "plan of merger") and the transactions contemplated thereby, including the merger described below (the "merger"). Copies of the merger agreement and the plan of merger are attached as Annex A to the accompanying proxy statement.

        Under the terms of the merger agreement, Merger Sub, a company wholly-owned by Parent, will be merged with and into the Company, with the Company continuing as the surviving company after the merger. Merger Sub is a Cayman Islands company formed solely for purposes of the merger. Parent is a Cayman Islands company which, at the effective time of the merger, will be beneficially owned by CPI Ballpark Investments Ltd ("CPI Ballpark"), an affiliate of NewQuest Asia Fund I, L.P., one or more entities controlled by NewQuest Asia Fund II, L.P. (together with NewQuest Asia Fund I, L.P., the "NewQuest Funds" or the "Sponsors", and together with CPI Ballpark, "NewQuest") and one or more entities controlled by China Environment Fund III, L.P. ("CEF"). NewQuest, CEF, Parent and Merger Sub are collectively referred to herein as the "Buyer Group". As of the date of this proxy statement, NewQuest and CEF beneficially own approximately 59.0% of the Company's outstanding ordinary shares, referred to herein as the "Shares." If the merger is completed, the Company will continue its operations as a privately held company and will be beneficially owned by NewQuest and CEF and, as a result of the merger, the Company's American depositary shares, each representing three Shares ("ADSs"), will no longer be listed on the New York Stock Exchange (the "NYSE") and the ADS program for the Shares will terminate.

        If the merger is completed, at the effective time of the merger, each outstanding Share, other than Excluded Shares (as defined below), will be cancelled in exchange for the right to receive $1.17 in cash and each outstanding ADS, other than any ADS that represents Excluded Shares, will represent the right to surrender the ADS in exchange for $3.51 in cash (less $0.05 per ADS cancellation fees pursuant to the terms of the deposit agreement dated as of January 25, 2010 (the "ADS deposit agreement") among the Company, The Bank of New York Mellon, as depositary (the "ADS depositary"), and the holders and beneficial owners of ADSs issued thereunder), in each case, without interest and net of any applicable withholding taxes. "Excluded Shares" are (i) Shares and ADSs beneficially owned (as determined pursuant to Rule 13d-3 under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act")), by Parent or any wholly-owned subsidiary of Parent (including Merger Sub) immediately prior to the effective time of the merger, including each Share or

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ADS to be contributed to Parent by the Rollover Shareholders (as defined below) in connection with the rollover and support agreement dated as of January 13, 2014 entered into by Parent and the Rollover Shareholders and each Share or ADS to be contributed to Parent by certain other shareholders of the Company in accordance with certain additional rollover agreements, if any, which are entered into, with the prior consent of the special committee, by such shareholders and Parent from the date of the merger agreement until the closing date of the merger, and (ii) Shares ("Dissenting Shares") owned by holders of Shares who have validly exercised and not effectively withdrawn or lost their dissenters' rights pursuant to Section 238 of the Cayman Companies Law ("Dissenting Shareholders"). The Excluded Shares (other than Dissenting Shares) will be cancelled for no consideration.

        If the merger is completed, at the effective time of the merger, each outstanding vested and unexercised option to purchase Shares granted under the Company's 2008 Share Incentive Plan (the "Company Incentive Plan") will be cancelled and converted into the right to receive, as soon as practicable after the effective time of the merger, a cash amount equal to the number of Shares underlying such vested option immediately prior to the effective time of the merger multiplied by the amount by which $1.17 exceeds the exercise price per Share of such vested option. At the effective time of the merger, each outstanding unvested option to purchase Shares granted under the Company Incentive Plan will be cancelled for no consideration.

        A special committee of the board of directors of the Company, composed solely of directors unrelated to any member of the Buyer Group or any member of the management of the Company (the "special committee"), reviewed and considered the terms and conditions of the merger agreement and the transactions contemplated thereby, including the merger. The special committee unanimously recommended that the board of directors of the Company (the "board of directors") approve the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger.

        On January 12, 2014, the board of directors, after carefully considering all relevant factors, including the unanimous determination and recommendation of the special committee, unanimously (a) determined that it is fair to and in the best interests of the Company and its unaffiliated security holders, and declared it advisable, to enter into the merger agreement, (b) authorized and approved the execution, delivery and performance of the merger agreement, the plan of merger and the consummation of the transactions contemplated thereby, including the merger, and (c) resolved to direct that the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, be submitted to a vote at an extraordinary general meeting of the shareholders of the Company.

        After careful consideration and upon the unanimous recommendation of the special committee of the board of directors of the Company, the Company's board of directors authorized and approved the merger agreement and recommends that you vote FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, FOR the proposal to authorize each of the members of the special committee and the chief financial officer of the Company to do all things necessary to give effect to the merger agreement and FOR the proposal to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received to pass the special resolution during the extraordinary general meeting.

        In considering the recommendation of the special committee and the board of directors, you should be aware that some of the Company's directors have interests in the merger that are different from, or in addition to, the interests of its unaffiliated security holders generally. Mr. Amit Gupta (the chairman of the board of directors) and Ms. Min Lin (one of the directors) are affiliates of CPI Ballpark and NewQuest (members of the Buyer Group) and Mr. Yun Pun (Felix) Wong (one of the directors) is an affiliate of CEF (a member of the Buyer Group). CEF and CPI Ballpark are referred to herein as the "Rollover Shareholders". The Rollover Shareholders have agreed with Parent that (a) they will vote all of their Shares in favor of the proposal to approve and authorize the merger

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agreement, the plan of merger and the transactions contemplated thereby, including the merger, and (b) the Shares (including Shares represented by ADSs) held by them will be contributed to Parent and cancelled for no consideration in the merger and that they will subscribe for newly issued ordinary shares of Parent immediately prior to the closing of the merger.

        The accompanying proxy statement provides detailed information about the merger and the extraordinary general meeting. We encourage you to read the entire document and all of the attachments and other documents referred to or incorporated by reference herein carefully. You may also obtain more information about the Company from documents the Company has filed with the U.S. Securities and Exchange Commission, referred to herein as the "SEC," which are available for free at the SEC's website www.sec.gov.

        Regardless of the number of Shares that you own, your vote is very important. The merger cannot be completed unless the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, are approved by an affirmative vote of shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting. Given the Rollover Shareholders' ownership as described above, based on the number of Shares expected to be outstanding on the Share record date, 12,507,945 Shares (representing approximately 7.71% of the total issued and outstanding Shares expected to be outstanding and entitled to vote on the Share record date) owned by shareholders and on behalf of ADS holders other than Rollover Shareholders must be voted in favor of the special resolutions to be proposed at the extraordinary general meeting for them to be approved, assuming all unaffiliated security holders will be present and voting in person or by proxy at the extraordinary general meeting.

        Voting at the extraordinary general meeting will take place by poll voting, as the chairman of the Company's board of directors has undertaken to demand poll voting at the meeting.

        As the record holder of the Shares represented by ADSs, the ADS depositary will endeavor to vote (or will endeavor to cause the vote of) the Shares it holds on deposit at the extraordinary general meeting in accordance with the voting instructions timely received from holders of ADSs at the close of business in New York City on [    •    ], 2014, the ADS record date. The ADS depositary must receive such instructions no later than 5:00 p.m. (New York City time) on [    •    ], 2014. If the ADS depositary timely receives voting instructions from an ADS holder which fail to specify the manner in which the ADS depositary is to vote the Shares represented by the holder's ADS, the ADS depositary may deem such holder to have instructed the ADS depositary to vote all Shares underlying such uninstructed ADSs FOR the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, and FOR any adjournment of the extraordinary general meeting.

        Holders of ADSs will not be able to attend the extraordinary general meeting unless they cancel their ADSs and become holders of Shares prior to the close of business in the Cayman Islands on [    •    ], 2014, the Share record date. ADS holders who wish to cancel their ADSs need to make arrangements to deliver the ADSs to the ADS depositary for cancellation before the close of business in New York City on [    •    ], 2014 together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of the Shares), (b) payment of the ADS cancellation fees ($0.05 per ADS to be cancelled) and any applicable taxes, and (c) a certification that the ADS holder either (i) held the ADSs as of the applicable ADS record date for the extraordinary general meeting and has not given, and will not give, voting instructions to the ADS depositary as to the ADSs being cancelled, or has given voting instructions to the ADS depositary as to the ADSs being cancelled but undertakes not to vote the corresponding Shares at the extraordinary general meeting, or (ii) did not hold the ADSs as of the applicable ADS record date for the extraordinary general meeting and undertakes not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf. Upon cancellation of the ADSs, the ADS depositary will arrange for the Hong Kong office of Hong Kong and Shanghai Banking Corp., the custodian holding the Shares, to transfer registration

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of the Shares in the Company's register of members to the former ADS holder (or a person designated by the former ADS holder). If after the registration of Shares in your name you wish to receive a certificate evidencing the Shares registered in your name, you will need to request the registrar of the Shares, Appleby Trust (Cayman) Ltd., to issue and mail a certificate to your attention. If the merger is not completed, the Company would continue to be a public company in the U.S. and the Company's ADSs would continue to be listed on the NYSE. The Company's Shares are not listed and cannot be traded on any stock exchange other than the NYSE, and in such case only in the form of ADSs. As a result, if you have cancelled your ADSs to attend the extraordinary general meeting and the merger is not completed and you wish to be able to sell your Shares on a stock exchange, you would need to deposit your Shares into the Company's ADS program for the issuance of the corresponding number of ADSs, subject to the terms and conditions of applicable law and the ADS deposit agreement, including, among other things, payment of relevant fees of the ADS depositary for the issuance of ADSs and any applicable share transfer taxes (if any) and related charges pursuant to the ADS deposit agreement.

        Completing the proxy card in accordance with the instructions set forth on the proxy card will not deprive you of your right to attend the extraordinary general meeting and vote your Shares in person. Please note, however, that if your Shares are held of record by a broker, bank or other nominee and you wish to vote at the extraordinary general meeting in person, you must obtain from the record holder a proxy issued in your name. If you submit a signed proxy card without indicating how you wish to vote, the Shares represented by your proxy card will be voted FOR the resolution to authorize and approve the merger agreement, the plan of merger, and the transactions contemplated thereby, including the merger, FOR the proposal to authorize each of the members of the special committee and the chief financial officer of the Company to do all things necessary to give effect to the merger agreement and FOR any adjournment of the extraordinary general meeting. The ADS depositary will endeavor, in so far as practicable, to vote or cause to be voted the number of Shares represented by your ADSs in accordance with your voting instructions. However, the ADS depositary has advised us that it will not vote or attempt to exercise the right to vote any Shares other than in accordance with those instructions. Notwithstanding the foregoing, pursuant to the ADS deposit agreement, if the ADS depositary timely receives your voting instructions which fail to specify the manner in which the ADS depositary is to vote the Shares underlying your ADS(s), the ADS depositary may deem you to have instructed the ADS depositary to vote in favor of the items set forth in such voting instructions.

        Shareholders who dissent from the merger will have the right to seek payment of the fair value of their Shares if the merger is completed, but only if they deliver to the Company, before the vote is taken, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of dissenters' rights, which is attached as Annex C to the accompanying proxy statement. The fair value of their Shares as determined under that statute could be more than, the same as, or less than the merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares.

        ADS HOLDERS WILL NOT HAVE THE RIGHT TO DISSENT FROM THE MERGER AND RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT ATTEMPT TO EXERCISE ANY DISSENTERS' RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS' RIGHTS MUST SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY'S FEES REQUIRED FOR THE CANCELLATION OF THE ADSs, PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES IN THE COMPANY'S REGISTER OF MEMBERS, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE ADSs (OR, ALTERNATIVELY, THAT THEY WILL NOT VOTE THE SHARES) BEFORE THE CLOSE OF BUSINESS IN NEW YORK CITY ON [    •    ], 2014, AND BECOME REGISTERED HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON [    •    ], 2014. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS' RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE

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CAYMAN COMPANIES LAW. IF THE MERGER IS NOT COMPLETED, THE COMPANY WOULD CONTINUE TO BE A PUBLIC COMPANY IN THE U.S. AND THE COMPANY'S ADSs WOULD CONTINUE TO BE LISTED ON THE NYSE. THE COMPANY'S SHARES ARE NOT LISTED AND CANNOT BE TRADED ON ANY STOCK EXCHANGE OTHER THAN THE NYSE, AND IN SUCH CASE ONLY IN THE FORM OF ADSs. AS A RESULT, IF A FORMER ADS HOLDER HAS CANCELLED HIS OR HER ADSs TO EXERCISE DISSENTERS' RIGHTS AND THE MERGER IS NOT COMPLETED AND SUCH FORMER ADS HOLDER WISHES TO BE ABLE TO SELL HIS OR HER SHARES ON A STOCK EXCHANGE, SUCH FORMER ADS HOLDER WOULD NEED TO DEPOSIT HIS OR HER SHARES INTO THE COMPANY'S ADS PROGRAM FOR THE ISSUANCE OF THE CORRESPONDING NUMBER OF ADSs, SUBJECT TO THE TERMS AND CONDITIONS OF APPLICABLE LAW AND THE ADS DEPOSIT AGREEMENT, INCLUDING, AMONG OTHER THINGS, PAYMENT OF RELEVANT FEES OF THE ADS DEPOSITARY FOR THE ISSUANCE OF ADSs AND ANY APPLICABLE SHARE TRANSFER TAXES (IF ANY) AND RELATED CHARGES PURSUANT TO THE ADS DEPOSIT AGREEMENT.

        Neither the SEC nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this letter or in the accompanying notice of the extraordinary general meeting or proxy statement. Any representation to the contrary is a criminal offense.

        If you have any questions or need assistance in voting your Shares, you can contact [    •    ], the firm assisting us with this proxy solicitation at [    •    ] or toll free at [    •    ].

        Thank you for your cooperation and continued support.

        The proxy statement is dated [    •    ], 2014, and is first being mailed to the shareholders on or about [    •    ], 2014.

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NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON [    •    ], 2014

Dear Shareholder:

        Notice is hereby given that an extraordinary general meeting of the shareholders of China Hydroelectric Corporation, referred to herein alternately as "the Company", "us," or "we" and all terms correlative thereto, will be held on [    •    ], 2014, beginning at [    •    ] a.m. (Hong Kong time), at 31st Floor, AIA Central, 1 Connaught Road Central, Hong Kong.

        Only registered holders of ordinary shares of the Company, par value $0.001 per share ("Shares"), at the close of business in the Cayman Islands on [    •    ], 2014, the Share record date, or their proxy holders are entitled to vote at the extraordinary general meeting or any adjournment or postponements thereof. At the meeting, you will be asked to consider and vote upon the following resolutions:

•

as a special resolution:

THAT the agreement and plan of merger dated January 13, 2014 (the "merger agreement") by and among CPT Wyndham Holdings Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands ("Parent"), CPT Wyndham Sub Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands and a direct wholly-owned subsidiary of Parent ("Merger Sub") and the Company, and the plan of merger required to be filed with the Registrar of Companies of the Cayman Islands, substantially in the form attached as Appendix 1 to the merger agreement (the "plan of merger") (copy of such merger agreement and plan of merger being in the form attached to the proxy statement accompanying this notice of extraordinary general meeting, which will also be produced and made available for inspection at the extraordinary general meeting), pursuant to which Merger Sub will be merged with and into the Company (the "merger"), with the Company continuing as the surviving company and becoming a wholly owned subsidiary of Parent, and the transactions contemplated thereby, including the merger, be authorized and approved by the Company;

THAT each of the members of the special committee of the board of directors of the Company, namely, Ms. Moonkyung Kim, Mr. Jui Kian Lim and Mr. Allard Nooy, and the chief financial officer of the Company be authorized to do all things necessary to give effect to the merger agreement; and

•

if necessary, as an ordinary resolution:

THAT, the chairman of the extraordinary general meeting be instructed to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

        Please refer to the proxy statement, which is attached to and made a part of this notice. A list of the shareholders of the Company will be available at its principal executive offices at 901 Marco Polo Plaza Building, No. 80 Anli Road, Chaoyang District, Beijing, 100101, the People's Republic of China, during ordinary business hours for the two business days immediately prior to the extraordinary general meeting.

        Certain existing shareholders of the Company, namely CPI Ballpark Investments Ltd ("CPI Ballpark") and China Environment Fund III, L.P. ("CEF" and, together with CPI Ballpark, the "Rollover Shareholders"), have entered into the rollover and support agreement dated as of January 13, 2014, with Parent, pursuant to which they have agreed with Parent, among other things, that: (a) they will vote all of their Shares in favor of the proposal to approve and authorize the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, and (b) the Shares (including Shares represented by ADSs) held by them will be contributed to Parent and cancelled for no consideration in the merger and that they will subscribe for newly issued ordinary shares of Parent immediately prior to the closing of the merger. As of the date of the proxy statement, the Rollover Shareholders, as a group, beneficially own 95,576,057 Shares (including Shares represented

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by ADSs), which represent approximately 59.0% of the total issued and outstanding Shares entitled to vote as of the date of this proxy statement. The Rollover Shareholders, together with NewQuest Asia Fund I, L.P. and NewQuest Asia Fund II, L.P. (collectively, the "NewQuest Funds" and the NewQuest Funds together with CPI Ballpark, "NewQuest"), will beneficially own Parent and the Company immediately following the consummation of the merger. NewQuest, CEF, Parent and Merger Sub are collectively referred to herein as the "Buyer Group."

        After careful consideration and upon the unanimous recommendation of a special committee of the board of directors of the Company, composed solely of directors who are unaffiliated with any member of the Buyer Group (or any of their affiliates) or any of the management members of the Company, the Company's board of directors approved the merger agreement and recommends that you vote FOR the proposal to approve and authorize the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, FOR the proposal to authorize each of the members of the special committee and the chief financial officer of the Company to do all things necessary to give effect to the merger agreement, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

        Regardless of the number of Shares that you own, your vote is very important. The merger cannot be completed unless the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, are approved by an affirmative vote of shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting. Given the Rollover Shareholders' ownership as described above, based on the number of Shares expected to be outstanding on the Share record date, 12,507,945 Shares (representing approximately 7.71% of the total issued and outstanding Shares expected to be outstanding and entitled to vote on the Share record date) owned by shareholders and on behalf of ADS holders other than Rollover Shareholders must be voted in favor of the special resolutions to be proposed at the extraordinary general meeting for them to be approved, assuming all unaffiliated security holders will be present and voting in person or by proxy at the extraordinary general meeting.

        Even if you plan to attend the extraordinary general meeting in person, we request that you submit your proxy in accordance with the instructions set forth on the proxy card as promptly as possible. To be valid, your proxy card must be completed, signed and returned to the Company's offices (to the attention of: Ms. Liya Chen) at 901 Marco Polo Plaza Building, No. 80 Anli Road, Chaoyang District, Beijing, 100101, People's Republic of China no later than [    •    ], 2014 at [    •    ] a.m. (Hong Kong time). The proxy card is the "instrument of proxy" as referred to in the Company's articles of association. Voting at the extraordinary general meeting will take place by poll voting as the chairman of the Company's board of directors has undertaken to demand poll voting at the extraordinary general meeting. Each shareholder has one vote for each Share held as of the close of business in the Cayman Islands on [    •    ], 2014. If you receive more than one proxy card because you own Shares that are registered in different names, please vote all of your Shares shown on each of your proxy cards in accordance with the instructions set forth on the proxy card.

        Completing the proxy card in accordance with the instructions set forth on the proxy card will not deprive you of your right to attend the extraordinary general meeting and vote your Shares in person. Please note, however, that if your Shares are held of record by a broker, bank or nominee and you wish to vote at the extraordinary general meeting in person, you must obtain from the record holder a proxy issued in your name.

        If you abstain from voting, fail to cast your vote in person, fail to complete and return your proxy card in accordance with the instructions set forth on the proxy card, or fail to give voting instructions to your broker, dealer, commercial bank, trust company or other nominee, your vote will not be counted.

        When proxies are properly dated, executed and returned by holders of Shares, the Shares they represent will be voted at the extraordinary general meeting in accordance with the instructions of the

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shareholders. If no specific instructions are given by such holders, the Shares will be voted "FOR" the proposals as described above, unless you appoint a person other than the chairman of the meeting as proxy, in which case the Shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines.

        If you own ADSs as of the close of business in New York City on [    •    ], 2014, the ADS record date (and do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs as explained below), you cannot vote at the extraordinary general meeting directly, but you may instruct the ADS depositary (as the holder of the Shares underlying the ADSs) how to vote the Shares underlying your ADSs. The ADS depositary must receive such instructions no later than 5:00 p.m. (New York City time) on [    •    ], 2014 in order to ensure your Shares are properly voted at the extraordinary general meeting. The ADS depositary will endeavor, in so far as practicable, to vote or cause to be voted the number of Shares represented by your ADSs in accordance with your voting instructions. However, the ADS depositary has advised us that it will not vote or attempt to exercise the right to vote any Shares other than in accordance with those instructions. Notwithstanding the foregoing, pursuant to the ADS deposit agreement, if the ADS depositary timely receives your voting instructions which fail to specify the manner in which the ADS depositary is to vote the Shares underlying your ADS(s), the ADS depositary may deem you to have instructed the ADS depositary to vote in favor of the items set forth in such voting instructions.

        Alternatively, if you own ADSs as of the close of business in New York City on the ADS record date, you may vote at the extraordinary general meeting if you cancel your ADSs and become a registered holder of Shares prior to the close of business in the Cayman Islands on [    •    ], 2014. If you wish to cancel your ADSs for the purpose of voting Shares, you need to make arrangements to deliver your ADSs to the ADS depositary for cancellation before the close of business in New York City on [    •    ], 2014 together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of Shares), (b) payment of the ADS cancellation fees ($0.05 per ADS to be cancelled) and any applicable taxes, and (c) a certification that you held the ADSs as of the ADS record date and you have not given, and will not give, voting instructions to the ADS depositary as to the ADSs being cancelled or have given voting instructions to the ADS depositary as to the ADSs being cancelled but undertake not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf.

        Shareholders who dissent from the merger will have the right to seek payment of the fair value of their Shares if the merger is completed, but only if they deliver to the Company, before the vote is taken, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of dissenters' rights, which is attached as Annex C to the accompanying proxy statement. The fair value of their Shares as determined under that statute could be more than, the same as, or less than the merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares.

        ADS HOLDERS WILL NOT HAVE THE RIGHT TO DISSENT FROM THE MERGER AND RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT ATTEMPT TO EXERCISE ANY DISSENTERS' RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS' RIGHTS MUST SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY'S FEES REQUIRED FOR THE CANCELLATION OF THE ADSs, PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES IN THE COMPANY'S REGISTER OF MEMBERS, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE ADSs (OR, ALTERNATIVELY, THAT THEY WILL NOT VOTE THE SHARES) BEFORE THE CLOSE OF BUSINESS IN NEW YORK CITY ON [    •    ], 2014, AND BECOME REGISTERED HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON [    •    ], 2014. THEREAFTER, SUCH FORMER ADS

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HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS' RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW.

        PLEASE DO NOT SEND YOUR SHARE CERTIFICATES AT THIS TIME. IF THE MERGER IS COMPLETED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR SHARE CERTIFICATES.

        If you have any questions or need assistance in voting your Shares, you can contact [    •    ], the firm assisting us with this proxy solicitation at [    •    ] or to toll free at [    •    ].

        The merger agreement and the merger are described in the accompanying proxy statement. A copy of the merger agreement is included as Annex A to the accompanying proxy statement. We urge you to read the entire proxy statement carefully.

        Notes:

1.

In the case of joint holders the vote of the senior holder who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the joint holders and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company.



2.

The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorized.



3.

A proxy need not be a member (registered shareholder) of the Company.



4.

The chairman of the meeting may at his discretion direct that a proxy card shall be deemed to have been duly deposited where sent by email or telefax upon receipt of email or telefax confirmation that the signed original thereof has been sent. A proxy card that is not deposited in the manner permitted shall be invalid.



5.

Votes given in accordance with the terms of a proxy card shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at the registered office of the Company at c/o Appleby Trust (Cayman) Ltd., Clifton House, 75 Fort Street, P.O. Box 1350, Grand Cayman KY1-1108, Cayman Islands; Attention: China Hydroelectric Corporation before the commencement of the general meeting, or adjourned meeting at which the proxy is used.

Registered Office:

Appleby Trust (Cayman) Ltd.
Clifton House, 75 Fort Street
P.O. Box 1350
Grand Cayman KY1-1108
Cayman Islands
Attention: China Hydroelectric Corporation

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PROXY STATEMENT

Dated [    •    ], 2014

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SUMMARY VOTING INSTRUCTIONS

        Ensure that your shares of China Hydroelectric Corporation can be voted at the extraordinary general meeting by submitting your proxy or contacting your broker, dealer, commercial bank, trust company or other nominee.

        If your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee:    check the voting instruction card forwarded by your broker, dealer, commercial bank, trust company or other nominee to see which voting options are available or contact your broker, dealer, commercial bank, trust company or other nominee in order to obtain directions as to how to ensure that your shares are voted at the extraordinary general meeting.

        If your shares are registered in your name:    submit your proxy as soon as possible by signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope, so that your shares can be voted at the extraordinary general meeting unless you appoint a person other than the chairman of the meeting as proxy, in which case the shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines.

        If you submit your proxy card without indicating how you wish to vote, the shares represented by your proxy will be voted in favor of the resolutions to be proposed at the extraordinary general meeting.

If you have any questions, require assistance with voting your proxy card,

or need additional copies of proxy material,

please contact [    •    ], the firm assisting us with this proxy solicitation at [    •    ] or toll free at

[    •    ]

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TABLE OF CONTENTS

i

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ii

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SUMMARY TERM SHEET

        This "Summary Term Sheet," together with the "Questions and Answers about the Extraordinary General Meeting and the Merger," highlights selected information contained in this proxy statement regarding the merger and may not contain all of the information that may be important to your consideration of the merger. You should carefully read this entire proxy statement and the other documents to which this proxy statement refers for a more complete understanding of the matters being considered at the extraordinary general meeting. In addition, this proxy statement incorporates by reference important business and financial information about the Company. You are encouraged to read all of the documents incorporated by reference into this proxy statement and you may obtain such information without charge by following the instructions in "Where You Can Find More Information" beginning on page [    •    ]. In this proxy statement, the terms "we," "us," "our," and the "Company" refer to China Hydroelectric Corporation and its subsidiaries. All references to "dollars" and "$" in this proxy statement are to U.S. dollars, and all references to "RMB" or "¥" in this proxy statement are to Renminbi, the lawful currency of the People's Republic of China.

The Parties Involved in the Merger

The Company

        China Hydroelectric Corporation is an owner, developer and operator of small hydroelectric power projects in the People's Republic of China. Through its geographically diverse portfolio of operating assets, the Company generates and sells electric power to local power grids. The Company's primary business is to identify, evaluate, acquire, develop, construct and finance hydroelectric power projects. The Company currently owns 25 hydropower stations in China with total installed capacity of 517.8 MW, of which it acquired 21 stations and constructed four. These hydroelectric power projects are located in four provinces: Zhejiang, Fujian, Yunnan and Sichuan.

        The Company's principal executive office is located at 901 Marco Polo Plaza Building, No. 80 Anli Road, Chaoyang District, Beijing, 100101, the People's Republic of China, and our telephone number at this address is +86 10 5963 6881.

        For a description of our history, development, business and organizational structure, see our Annual Report on Form 20-F for the fiscal year ended December 31, 2012, as amended, originally filed on April 18, 2013, which is incorporated herein by reference. Please see "Where You Can Find More Information" beginning on page [    •    ] for a description of how to obtain a copy of our Annual Report.

Parent

        CPT Wyndham Holdings Limited ("Parent"), a Cayman Islands exempted company incorporated with limited liability, was formed solely for the purpose of entering into the merger agreement and consummating the transactions contemplated thereby. Parent does not currently hold any Shares. The registered office of Parent is located at the offices of Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands. The telephone number of Parent is +1 (345) 943-3100.

Merger Sub

        CPT Wyndham Sub Ltd. ("Merger Sub"), a Cayman Islands exempted company incorporated with limited liability and a direct, wholly-owned subsidiary of Parent, was formed by Parent solely for the purpose of entering into the merger agreement and consummating the transactions contemplated thereby. Merger Sub does not currently hold any Shares. The registered office of Merger Sub is located at the offices of Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town,

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Grand Cayman KY1-9005, Cayman Islands. The telephone number of Merger Sub is +1 (345) 943-3100.

The Buyer Group

        CPI Ballpark Investments Ltd ("CPI Ballpark"), a limited liability company organized under the laws of the Republic of Mauritius and a direct, wholly-owned subsidiary of NewQuest Asia Fund I, L.P., was formed by NewQuest Asia Fund I, L.P. for the purpose of engaging in the business of investments in equity, equity-linked and debt securities of varying types issued by U.S. corporate or foreign issuers. CPI Ballpark currently holds 87,737,462 Shares (including Shares represented by ADSs), representing approximately 54.1% of the Company's issued and outstanding Shares (as defined below). The business address of CPI Ballpark is 10th Floor, Raffles Tower, 19 Cybercity, Ebene, Republic of Mauritius. The telephone number of CPI Ballpark is +230 404-6000.

        NewQuest Asia Fund I, L.P., a Cayman Islands exempted limited partnership, engages in the business of investments in equity, equity-linked and debt securities of varying types issued by U.S. corporate or foreign issuers. NewQuest Asia Fund I, L.P.'s general partner is NewQuest Asia Fund I (G.P.) Ltd. NewQuest Asia Fund I, L.P. does not currently hold any Shares directly. The registered office of NewQuest Asia Fund I, L.P. is located at the offices of Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands. The telephone number of NewQuest Asia Fund I, L.P. is +1 (345) 943-3100.

        NewQuest Asia Fund II, L.P., a Cayman Islands exempted limited partnership, engages in the business of investments in equity, equity-linked and debt securities of varying types issued by U.S. corporate or foreign issuers. NewQuest Asia Fund II, L.P.'s general partner is NewQuest Asia Fund II GP Ltd. NewQuest Asia Fund II, L.P. does not currently hold any Shares. The registered office of NewQuest Asia Fund II, L.P. is located at the offices of Trident Trust Company (Cayman) Limited, PO Box 847, One Capital Place, George Town, Grand Cayman KY1-1103, Cayman Islands. The telephone number of NewQuest Asia Fund II, L.P. is +1 (345) 949-0880.

        NewQuest Asia Fund II, L.P., together with NewQuest Asia Fund I, L.P. are referred to herein as the "NewQuest Funds" or the "Sponsors", and together with CPI Ballpark, "NewQuest".

        China Environment Fund III, L.P. ("CEF"), a Cayman Islands exempted limited partnership, engages in the business of investments in equity, equity-linked and debt securities. CEF currently holds 7,838,595 Shares, representing approximately 4.8% of the Company's issued and outstanding Shares. The general partner of CEF is China Environment Fund III Management, L.P. ("CEF Management"). The business address of CEF is Unit 2301, 23/F, New World Tower 1, 16-18 Queen's Road Central, Central, Hong Kong. The telephone number of CEF is +852 3628 3859.

        NewQuest, CEF, Parent and Merger Sub are referred to herein as the "Buyer Group".

The Merger (Page [    •    ])

        The Company, Parent, and Merger Sub have entered into an agreement and plan of merger dated as of January 13, 2014 (as may be amended from time to time, the "merger agreement"), pursuant to which Merger Sub will be merged with and into the Company (the "merger"), with the Company continuing as the surviving company and becoming a wholly owned subsidiary of Parent, which will be beneficially owned by NewQuest and CEF. You are being asked to vote upon a proposal to approve and authorize the merger agreement, the plan of merger substantially in the form attached as Appendix 1 to the merger agreement (the "plan of merger") required to be filed with the Registrar of Companies of the Cayman Islands (the "Cayman Registrar") in connection with the merger, and the transactions contemplated thereby, including the merger.

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        Pursuant to the terms of the merger agreement, assuming the merger agreement is authorized and approved by the requisite vote of the shareholders of the Company and the other conditions to completion of the merger are satisfied or waived in accordance with the terms of the merger agreement, the following will occur:

•

the Company will file the plan of merger with the Cayman Registrar and the merger will be effective on the date as specified in the plan of merger;



•

Merger Sub will merge with and into the Company, with the Company continuing as the surviving company (the "surviving company") in the merger; and



•

each ordinary share of the Company, par value $0.001 per share ("Share"), issued and outstanding immediately prior to the effective time of the merger (including Shares represented by American depositary shares ("ADSs"), each representing three Shares), will be cancelled and cease to exist and will be converted into and exchanged for the right to receive the consideration further described below, except for the Excluded Shares (each as defined below).

        Following and as a result of the merger:

•

the Company, as the surviving company, will continue to do business under the name "China Hydroelectric Corporation" and will be a direct wholly-owned subsidiary of Parent;



•

the Company's ADS program for the Shares will be terminated and the ADSs will cease to be listed on the New York Stock Exchange (the "NYSE"), and price quotations with respect to sales of the ADSs in the public market will no longer be available;



•

ninety (90) days after the filing of Form 15 in connection with the completion of the merger or such longer period as may be determined by the SEC, registration of the Shares under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), will be terminated;



•

the Company will no longer be required to file periodic reports with the SEC or otherwise be subject to the United States federal securities laws, including the Sarbanes-Oxley Act of 2002, applicable to public companies, and the Company's shareholders will no longer enjoy the rights or protections that the United Sates federal securities laws provide, including reporting obligations for directors, officers and principal securities holders of the Company; and



•

the Company's shareholders (other than the Rollover Shareholders (as defined below)) will no longer have any interest in, and will no longer be shareholders of, the Company, and will not participate in any of the Company's future earnings or growth.

        A copy of the merger agreement is attached as Annex A to this proxy statement. You should read the merger agreement in its entirety because it, and not this proxy statement, is the legal document that governs the merger.

Merger Consideration (Page [    •    ])

        Under the terms of the merger agreement, at the effective time of the merger (the "effective time"), each Share issued and outstanding immediately prior to the effective time will be cancelled and cease to exist and will be converted into and exchanged for the right to receive $1.17 and each of the ADSs issued and outstanding immediately prior to the effective time will be cancelled in exchange for the right to receive $3.51 (less $0.05 per ADS cancellation fees) pursuant to the terms of the deposit agreement dated as of January 25, 2010 (the "ADS deposit agreement") among the Company, The Bank of New York Mellon (the "ADS depositary") and all holders and beneficial owners of ADSs issued thereunder, in each case, in cash, without interest and net of any applicable withholding taxes. Notwithstanding the foregoing, the following Shares (including Shares represented by ADSs), which are

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referred to herein as "Excluded Shares," will not be converted into the right to receive the consideration described in the immediately preceding sentence:

i.

Shares and ADSs beneficially owned (as determined pursuant to Rule 13d-3 under the Exchange Act) by Parent or any wholly-owned subsidiary of Parent (including Merger Sub) immediately prior to the effective time, including each Share or ADS to be contributed to Parent by the Rollover Shareholders in connection with the Rollover Agreement (as defined below) and each Share or ADS to be contributed to Parent by certain other shareholders of the Company in connection with certain additional rollover agreements, if any, which may be entered into, with the prior consent of the special committee, by such shareholders and Parent from the date of the merger agreement until the closing date of the merger, which will be canceled for no consideration; and



ii.

Shares owned by holders of Shares including Shares represented by ADSs who have validly exercised and not effectively withdrawn or lost their dissenters' rights pursuant to Section 238 of the Companies Law (2013 Revision) of the Cayman Islands (the "Cayman Companies Law"), which will be cancelled and will entitle the former holders thereof to receive the fair value thereon in accordance with such holder's dissenters' rights under the Cayman Companies Law ("Dissenting Shares").

Treatment of Share Options (Page [    •    ])

        In addition, at the effective time, each outstanding vested and unexercised option to purchase Shares granted under Company's 2008 Share Incentive Plan (the "Company Incentive Plan") will be cancelled and converted into the right to receive, as soon as practicable after the effective time, a cash amount equal to the number of Shares underlying such vested option immediately prior to the effective time multiplied by the amount by which $1.17 exceeds the exercise price per Share of such vested option. At the effective time, each outstanding unvested option to purchase Shares granted under the Company Incentive Plan will be cancelled for no consideration.

Rollover Agreement (Annex [    •    ])

        Concurrently with the execution and delivery of the merger agreement, CPI Ballpark and CEF (together the "Rollover Shareholders") entered into a rollover and support agreement dated as of January 13, 2014 (as may be amended from time to time, the "Rollover Agreement") with the Parent, pursuant to which the Rollover Shareholders agreed that: (a) they will vote all of their Shares in favor of the proposal to approve and authorize the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger and (b) the Shares (including Shares represented by ADSs) held by them (the "Rollover Shares") will be contributed to Parent and cancelled for no consideration in the merger and that they will subscribe for newly issued ordinary shares of Parent immediately prior to the closing of the merger.

Record Date and Voting (Page [    •    ])

        You are entitled to vote at the extraordinary general meeting if you own Shares as of the close of business in the Cayman Islands on [    •    ], 2014, the Share record date for voting at the extraordinary general meeting. If you own Shares at the close of business in the Cayman Islands on the Share record date, the deadline for you to lodge your proxy card and vote is [    •    ], 2014 at [    •    ] a.m. (Hong Kong time). If you own ADSs as of the close of business in New York City on [    •    ], 2014, the ADS record date (and do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs as explained below), you cannot vote at the extraordinary general meeting directly, but you may instruct the ADS depositary (as the holder of the Shares underlying the ADSs) how to vote the Shares underlying your ADSs. The ADS depositary must receive such instructions no

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later than 5:00 p.m. (New York City time) on [    •    ], 2014 in order to vote the underlying Shares at the extraordinary general meeting. Alternatively, if you own ADSs as of the close of business in New York City on the ADS record date, you may vote at the extraordinary general meeting if you surrender your ADSs to the ADS depositary, pay the ADS cancellation fees required for such surrender, provide instructions for the registration of the corresponding Shares, and certify that you have not given, and will not give, voting instructions as to the ADSs before 5:00 p.m. (New York City time) on [    •    ], 2014 and become a holder of Shares by the close of business in the Cayman Islands on [    •    ], 2014, the Share record date. In addition, if you hold your ADSs through a broker, bank or nominee, you must rely on the procedures of the financial intermediary through which you hold your ADSs if you wish to vote at the extraordinary general meeting. Each outstanding Share on the record date entitles the holder thereof to one vote on each matter submitted to the shareholders for approval at the extraordinary general meeting and any adjournment or postponement thereof. We expect that, as of the Share record date, there would be [    •    ] Shares entitled to be voted at the extraordinary general meeting. See "—Voting Information" below.

Shareholder Vote Required to Authorize and Approve the Merger Agreement and Plan of Merger (Page [    •    ])

        In order for the merger to be completed, the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger must be authorized and approved by a special resolution of the Company's shareholders, which requires an affirmative vote of shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting, referred to herein as a "special resolution."

        As of the date of this proxy statement, the Rollover Shareholders as a group beneficially own in the aggregate 95,576,057 Shares, which represents approximately 59.0% of the total outstanding Shares entitled to vote as of the date of this proxy statement. Please see "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page [    •    ] for additional information. Pursuant to the terms of the Rollover Agreement, these Shares will be voted in favor of the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger at the extraordinary general meeting of the Company. Given the Rollover Shareholders' ownership as described above and based on the number of Shares expected to be outstanding on the Share record date, 12,507,945 Shares (representing approximately 7.71% of the total issued and outstanding Shares expected to be outstanding and entitled to vote on the Share record date) owned by shareholders and on behalf of ADS holders other than Rollover Shareholders must be voted in favor of the special resolutions to be proposed at the extraordinary general meeting for them to be approved, assuming all unaffiliated security holders will be present and voting in person or by proxy at the extraordinary general meeting.

        If your Shares are held in the name of a broker, bank or other nominee, your broker, bank or other nominee will not vote your Shares in the absence of specific instructions from you. These non-voted Shares are referred to as "broker non-votes."

Voting Information (Page [    •    ])

        Before voting your Shares, we encourage you to read this proxy statement in its entirety, including all of the annexes, attachments, exhibits and materials incorporated by reference, and carefully consider how the merger will affect you. To ensure that your Shares can be voted at the extraordinary general meeting, please complete the enclosed proxy card in accordance with the instructions set forth on the proxy card as soon as possible. The deadline for you to lodge your proxy is [    •    ], 2014 at [    •    ] a.m. (Hong Kong time). If a broker holds your Shares in "street name," your broker should provide you with instructions on how to vote your Shares.

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        If you own ADSs as of the close of business in New York City on [    •    ], 2014, the ADS record date (and do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs as explained below), you cannot vote at the extraordinary general meeting directly, but you may instruct the ADS depositary (as the holder of the Shares underlying the ADSs) how to vote the Shares underlying your ADSs. The ADS depositary must receive such instructions no later than 5:00 p.m. (New York City time) on [    •    ], 2014 in order to ensure your Shares are properly voted at the extraordinary general meeting. The ADS depositary has advised us that it will not vote or attempt to exercise the right to vote any Shares other than in accordance with those instructions. Notwithstanding the foregoing, pursuant to the ADS deposit agreement, if the ADS depositary timely receives your voting instructions which fail to specify the manner in which the ADS depositary is to vote the Shares underlying your ADS(s), the ADS depositary may deem you to have instructed the ADS depositary to vote in favor of the items set forth in such voting instructions.

        Alternatively, if you own ADSs as of the close of business in New York City on the ADS record date, you may vote at the extraordinary general meeting if you cancel your ADSs and become a registered holder of Shares prior to the close of business in the Cayman Islands on [    •    ], 2014. If you wish to cancel your ADSs for the purpose of voting Shares, you need to make arrangements to deliver your ADSs to the ADS depositary for cancellation before the close of business in New York City on [    •    ], 2014 together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of Shares), (b) payment of the ADS cancellation fees $0.05 per ADS to be cancelled) and any applicable taxes, and (c) a certification that you held the ADSs as of the ADS record date and you have not given, and will not give, voting instructions to the ADS depositary as to the ADSs being cancelled or have given voting instructions to the ADS depositary as to the ADSs being cancelled but undertake not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf. Upon cancellation of the ADSs, the ADS depositary will arrange for the Hong Kong office of the Hong Kong and Shanghai Banking Corp., the custodian holding the Shares, to transfer registration of the Shares in the Company's register of members to the former ADS holder (or a person designated by the former ADS holder). If after registration of Shares in your name, you wish to receive a certificate evidencing the Shares registered in your name, you will need to request the registrar of the Shares, Appleby Trust (Cayman) Ltd., to issue and mail a certificate to your attention.

Dissenters' Rights of Shareholders (page [    •    ])

        Shareholders who dissent from the merger will have the right to seek payment of the fair value of their Shares if the merger is completed, but only if they deliver to the Company, before the vote is taken, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of dissenters' rights, which is attached as Annex C to the accompanying proxy statement. The fair value of their Shares as determined under that statute could be more than, the same as, or less than the merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares.

        ADS HOLDERS WILL NOT HAVE THE RIGHT TO DISSENT FROM THE MERGER AND RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT ATTEMPT TO EXERCISE ANY DISSENTERS' RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS' RIGHTS MUST SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY'S FEES REQUIRED FOR THE CANCELLATION OF THE ADSs, PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES IN THE

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COMPANY'S REGISTER OF MEMBERS, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE ADSs (OR, ALTERNATIVELY, THAT THEY WILL NOT VOTE THE SHARES) BEFORE THE CLOSE OF BUSINESS IN NEW YORK CITY ON [    •    ] AND BECOME REGISTERED HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON [    •    ]. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS' RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW.

        We encourage you to read the section of this proxy statement entitled "Dissenters' Rights" as well as Annex C to this proxy statement carefully and to consult your Cayman Islands legal counsel if you desire to exercise your dissenters' rights.

Purposes and Effects of the Merger (page [    •    ])

        The purpose of the merger is to enable Parent to acquire 100% control of the Company in a transaction in which the Company's shareholders other than the shareholders who are members of the Buyer Group or who have validly exercised and not effectively withdrawn or lost their dissenters' rights pursuant to Section 238 of the Cayman Companies Law will be cashed out in exchange for $1.17 per Share, so that Parent will bear the rewards and risks of the sole ownership of the Company after the merger, including any future earnings and growth of the Company as a result of improvements to the Company's operations or acquisitions of other businesses. Please see "Special Factors—Buyer Group's Purpose of and Reasons for the Merger" beginning on page [    •    ] for additional information.

        ADSs representing the Shares are currently listed on the New York Stock Exchange (the "NYSE") under the symbol "CHC". It is expected that, immediately following the completion of the merger, the Company will cease to be a publicly traded company and will instead become a privately-held company directly owned by Parent and beneficially owned by NewQuest and CEF. Following the completion of the merger, the ADSs will cease to be listed on the NYSE, and price quotations with respect to sales of the ADSs in the public market will no longer be available. In addition, registration of the Shares under the Exchange Act may be terminated upon the Company's application to the SEC if the Shares are not listed on a national securities exchange and there are fewer than 300 record holders of the Shares. Ninety days after the filing of Form 15 in connection with the completion of the merger or such longer period as may be determined by the SEC, registration of the Shares under the Exchange Act will be terminated and the Company will no longer be required to file periodic reports with the SEC or otherwise be subject to the United States federal securities laws, including the Sarbanes-Oxley Act of 2002, applicable to public companies. Furthermore, following the completion of the merger, the ADS program for the Shares will terminate. Please see "Special Factors—Effects of the Merger on the Company" beginning on page [    •    ] for additional information.

Plans for the Company after the Merger (Page [    •    ])

        Following the completion of the merger, the Buyer Group anticipates that the Company will continue to conduct its operations substantially as they are currently being conducted, except that it will cease to be a publicly traded company and will instead be a wholly-owned subsidiary of Parent and beneficially owned by NewQuest and CEF. The Company will no longer be subject to the Exchange Act, or the NYSE compliance and reporting requirements and accordingly will not incur the related direct and indirect costs and expenses associated with being subject to the Exchange Act and NYSE compliance and reporting requirements.

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        The Buyer Group has advised the Company that, except for the transactions contemplated by the merger agreement and transactions already under consideration by the Company, there are no present plans or proposals that relate to or would result in:

•

an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries;



•

the sale or transfer of a material amount of the assets of the Company or any of its subsidiaries; or



•

any other material changes in the Company's business, including with respect to the Company's corporate structure or business.

Recommendations of the Special Committee and the Board of Directors (Page [    •    ])

        The special committee unanimously (a) determined that the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, are fair (both substantively and procedurally) to, and in the best interests of, the Company and its unaffiliated security holders and ADS holders, (b) declared it advisable to enter into the merger agreement and the plan of merger, (c) approved the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, and (d) recommended that the board of directors of the Company approve the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger. Based in part on the unanimous recommendation of the special committee, our board of directors determined that the merger is substantively and procedurally fair to, and in the best interests of, the Company and its unaffiliated security holders and ADS holders, and approved the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger.

        ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT, THE APPROVAL OF THE PLAN OF MERGER AND THE APPROVAL OF THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, FOR THE PROPOSAL TO AUTHORIZE EACH OF THE MEMBERS OF THE SPECIAL COMMITTEE AND THE CHIEF FINANCIAL OFFICER OF THE COMPANY TO DO ALL THINGS NECESSARY TO GIVE EFFECT TO THE MERGER AGREEMENT, AND FOR THE PROPOSAL TO INSTRUCT THE CHAIRMAN OF THE EXTRAORDINARY GENERAL MEETING TO ADJOURN OR POSTPONE THE EXTRAORDINARY GENERAL MEETING IN ORDER TO ALLOW THE COMPANY TO SOLICIT ADDITIONAL PROXIES IN THE EVENT THAT THERE ARE INSUFFICIENT PROXIES RECEIVED AT THE TIME OF THE EXTRAORDINARY GENERAL MEETING TO PASS THE SPECIAL RESOLUTIONS TO BE PROPOSED AT THE EXTRAORDINARY GENERAL MEETING.

        For a detailed discussion of the material factors considered by our board of directors and the special committee in determining to recommend the approval of the merger agreement, the approval of the plan of merger and the approval of the transactions contemplated thereby and in determining that the merger is substantively and procedurally fair to our unaffiliated security holders and ADS holders, see "Special Factors—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors" beginning on page [    •    ] and "Special Factors—Effects of the Merger on the Company" beginning on page [    •    ] for additional information. The foregoing summary is qualified in its entirety by reference to these sections.

Position of Buyer Group as to Fairness (Page [    •    ])

        Each member of the Buyer Group believes that the merger is fair (both substantively and procedurally) to the Company's unaffiliated security holders. Their belief is based upon the factors

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discussed under the caption "Special Factors—Position of the Buyer Group as to the Fairness of the Merger" beginning on page [    •    ].

        Each member of the Buyer Group is making the statements included in this paragraph solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of each member of the Buyer Group as to the fairness of the merger are not intended to be and should not be construed as a recommendation to any shareholder of the Company as to how that shareholder should vote on the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger.

Financing of the Merger (Page [    •    ])

        The Company and the Buyer Group estimate that the total amount of funds necessary to complete the merger and the related transactions at the closing of the merger, including for (a) the payment of the merger consideration to the Company's unaffiliated security holders and (b) expenses in connection with the transactions contemplated by the merger agreement and the related financing transactions will be approximately $[    •    ] million, assuming no exercise of dissenters' rights by shareholders of the Company. The Buyer Group expects to provide this amount through aggregate equity commitments of at least $79.5 million, severally and not jointly, from the Sponsors pursuant to the equity commitment letter and the remainder from a combination of cash from resources of the Company, its subsidiaries and the Buyer Group. In calculating this amount, the Company and the Buyer Group do not consider the value of the Rollover Shares which will be contributed to Parent and cancelled for no consideration in the merger.

Limited Guarantee (Page [    •    ])

        The Sponsors have each severally but not jointly agreed to guarantee their respective percentage of the obligations of Parent under the merger agreement to pay, under certain circumstances, a reverse termination fee to the Company and reimburse certain expenses.

Share Ownership of the Company Directors and Officers and Voting Commitments (Page [    •    ])

        As of the date of this proxy statement, our directors and executive officers collectively beneficially own approximately [    •    ] Shares (including Shares represented by ADSs), or [    •    ]% of the total outstanding Shares. Please see "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page [    •    ] for additional information regarding the ownership of Shares by the other directors and executive officers of the Company.

        Pursuant to the merger agreement, Parent has agreed to, and agreed to cause each other member of the Buyer Group to, vote all of the Shares beneficially owned by them in favor of the approval of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger.

        Pursuant to the Rollover Agreement, each of the Rollover Shareholders has agreed with Parent to vote or otherwise cause to be voted all of the Shares that it owns (x) in favor of the approval of the merger agreement, the plan of merger and the transactions contemplated thereby and any related action reasonably required in furtherance thereof and (y) against any other acquisition proposal.

Opinion of the Special Committee's Financial Advisor (Page [    •    ])

        On January 12, 2014, Houlihan Lokey (China) Limited, ("Houlihan Lokey"), rendered an oral opinion to the special committee (which was confirmed in writing by delivery of Houlihan Lokey's written opinion dated January 12, 2014), as to the fairness, from a financial point of view, of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the

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merger pursuant to the merger agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares) as of January 12, 2014, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion.

        Houlihan Lokey's opinion was directed to the special committee and only addressed the fairness from a financial point of view of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the merger pursuant to the merger agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares) and does not address any other aspect or implication of the merger. The summary of Houlihan Lokey's opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex B to this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. However, neither Houlihan Lokey's opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute advice or a recommendation to the special committee or any shareholder or ADS holder as to how to act or vote with respect to the merger or related matters. Please see "Special Factors—Opinion of the Special Committee's Financial Advisor" beginning on page [    •    ] for additional information.

Interests of the Company's Executive Officers and Directors in the Merger (Page [    •    ])

        In considering the recommendations of the board of directors, the Company's shareholders should be aware that certain of the Company's directors and executives have interests with respect to the merger that are, or may be, different from or in addition to those of the Company's shareholders generally. These interests include, among others:

•

Mr. Amit Gupta, the chairman of the board of directors of the Company, is also a director on the board of CPI Ballpark and a co-founder, partner and Chief Operating Officer of NewQuest Capital Partners, an affiliate of the NewQuest Funds;



•

Ms. Min Lin, a director of the Company, is also a co-founder and partner of NewQuest Capital Partners (Ms. Lin was appointed as a director of the Company on January 15, 2014 to fill a vacancy on the board of directors resulting from the resignation of a director in September 2013);



•

Mr. Yun Pun (Felix) Wong, a director of the Company, is also the CFO and an executive director at Tsing Capital, a venture capital firm which manages CEF;



•

cash-out of in-the-money vested and unexercised options to purchase Shares or ADSs granted under the Company Incentive Plan held by certain of the Company's directors and executive officers;



•

continued indemnification rights, rights to advancement of fees and directors and officers liability insurance to be provided by the surviving company to former directors and officers of the Company;



•

the monthly compensation of $7,500 of members of the special committee in exchange for their services in such capacity (and, in the case of the chairperson of the special committee, monthly compensation of $11,500) (the payment of which is not contingent upon the completion of the merger or the special committee's or the board's recommendation of the merger); and

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•

the continuation of service of the executive officers of the Company with the surviving company in positions that are substantially similar to their current positions, allowing them to benefit from remuneration arrangements with the surviving company.

        At the effective time, each outstanding vested and unexercised option to purchase Shares granted under the Company Incentive Plan will be cancelled and converted into the right to receive, as soon as practicable after the effective time, a cash amount equal to the number of Shares underlying such option immediately prior to the effective time multiplied by the amount by which $1.17 exceeds the exercise price per Share of such vested and unexercised option. At the effective time, each outstanding unvested option to purchase Shares or ADSs granted under the Company Incentive Plan will be cancelled for no consideration.

        As of the date of this proxy statement, the Company's directors and executive officers, as a group, held an aggregate of [    •    ] Shares and vested and unexercised options to purchase [    •    ] Shares. Together, the Shares held by such person represent approximately [    •    ]% of the total Shares that are subject to purchase as part of the merger. The maximum total amount of all cash payments our directors and executive officers may receive in respect of their Shares and vested and unexercised options to purchase Shares, if the merger is consummated, is approximately $[    •    ] million. Please see "Special Factors—Interests of Certain Persons in the Merger" beginning on page [    •    ] for additional information.

        The special committee and our board of directors were aware of these potential conflicts of interest and considered them, among other matters, in reaching their decisions and recommendations with respect to the merger agreement and related matters. Please see "Special Factors—Interests of Certain Persons in the Merger" beginning on page [    •    ] for additional information.

Conditions to the Merger (Page [    •    ])

        The respective obligations of the parties to consummate the merger are subject to the satisfaction or written waiver (at or prior to the closing of the merger) of the following conditions:

•

The Company shall have obtained shareholder approval for the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger (the "Transactions").



•

No governmental authority shall have enacted, issued, promulgated, enforced or entered any law or order (whether temporary, preliminary or permanent) which is then in effect and has the effect of enjoining, restraining, prohibiting or otherwise making illegal the consummation of the Transactions.

        The obligations of Parent and Merger Sub to consummate the Transactions are subject to the satisfaction or written waiver (at or prior to the closing of the merger) of the following additional conditions:

•

(1) the representations and warranties of the Company contained in the merger agreement regarding the Company's organization and good standing, authority to enter into the merger agreement, the company's financial condition (subject to a material adverse effect limitation) and fees and commissions being true and correct in all respects, (2) the representations and warranties regarding the Company's capitalization being true and correct in all respects except for de minimis inaccuracies that do not increase the aggregate amount of the merger consideration and amounts payable in respect of the Company's options by more than $250,000 and (3) each of the other representations and warranties of the Company contained in the merger agreement being true and correct (without giving effect to any limitation as to "materiality" or "Company Material Adverse Effect" as defined in the merger agreement), in each case, as of the date of the merger agreement and as of the closing of the merger; except to the extent such representation or warranty is expressly made as of a specific date, in which case,

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such representation or warranty shall be true and correct as of such specific date only and in the case of (3) above, where the failure of such representations and warranties of the Company to be so true and correct would not constitute a Company Material Adverse Effect.

•

The Company having performed or complied in all material respects with all of the agreements and covenants required by the merger agreement.



•

The Company having delivered to Parent, on the closing date of the merger, a certificate, signed by an executive officer of the Company, certifying the fulfilment of the above conditions.



•

No Company Material Adverse Effect (as defined in the merger agreement), having occurred since the date of the merger agreement.

        The obligations of the Company to consummate the Transactions are subject to the satisfaction or written waiver (at or prior to the closing of the merger) of the following additional conditions:

•

The representations and warranties of Parent and Merger Sub contained in the merger agreement being true and correct (without giving effect to any limitation as to "materiality" set forth therein), as of the date of the merger agreement and as of the closing of the merger; except (i) to the extent such representation or warranty is expressly made as of a specific date, such representation or warranty shall be true and correct as of such specific date only, and (ii) where the failure of such representations and warranties of Parent and Merger Sub to be so true and correct, individually or in the aggregate, would not prevent, materially delay or materially impede or impair the ability of Parent and Merger Sub to consummate the merger.



•

Parent and Merger Sub having performed or complied in all material respects with all of the agreements and covenants required by the merger agreement to be performed or complied with by it.



•

Parent having delivered to the Company on the closing date of the merger, a certificate, signed by a designated director of Parent, certifying the fulfilment of the above conditions.

Acquisition Proposals (Page [    •    ])

        Neither the Company nor its subsidiaries nor any officer, director, or representative of the Company or any of its subsidiaries will, directly or indirectly, (a) solicit, initiate or encourage, or take any other action to facilitate, any inquiries or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, any competing transaction (as defined in the merger agreement), (b) enter into, maintain or continue discussions or negotiations with, or provide any nonpublic information relating to the Company or the merger to, any person or entity in furtherance of, or in order to obtain, a proposal or offer for a competing transaction, (c) agree to, approve, endorse or recommend any competing transaction or enter into any letter of intent or contract or commitment contemplating or otherwise relating to any competing transaction other than a superior proposal, or (d) authorize or permit any of the officers, directors or representatives of the Company or any of its subsidiaries acting directly or indirectly under the direction of the Company or any of its subsidiaries, to take any action set forth in (a) through (c) above. The Company will immediately cease and cause to be terminated all discussions with any third parties existing as of the date of the merger agreement regarding a competing transaction.

        Subject to certain additional conditions, at any time prior to the receipt of the shareholder approval for the merger, the Company may, acting under the direction of the board of directors furnish information to, and enter into discussions with, a person who has made an unsolicited, written, bona fide proposal or offer with respect to a competing transaction that did not arise or result from any breach of the above paragraph if, prior to furnishing such information and entering into such discussions, the board of directors (after taking into account the recommendation of the special

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committee) has determined, in its good faith judgment (after having received the advice of a financial advisor of internationally recognized reputation and of outside legal counsel, which, for the avoidance of doubt, may include the financial advisor and outside legal counsel to the special committee) that (A) such proposal or offer constitutes, or may reasonably be expected to lead to, a superior proposal (as defined in the merger agreement) and (B) the failure to furnish such information to, or enter into such discussions with, the person who made such proposal or offer would be inconsistent with the board of directors' fiduciary duties.

Termination of the Merger Agreement (Page [    •    ])

        The merger agreement may be terminated and the Transactions may be abandoned at any time prior to the effective time, whether before or after receipt of shareholder approval:

•

by mutual written consent of Parent and the Company (in the case of the Company, acting with approval of the special committee); or



•

by either Parent or the Company (in the case of the Company, acting at the direction of the special committee) if:



•

the merger is not completed before November 30, 2014; provided, however, that the right to terminate the merger agreement shall not be available to any party whose failure to fulfill any obligation or other breach has been a material cause of, or resulted in, the merger not being completed prior to such time;



•

any governmental authority having enacted, issued, promulgated, enforced or entered any law or order, (which shall have become final and non-appealable) and that would have the effect of making the merger illegal or otherwise prohibited; provided, however, that the right to terminate the merger agreement shall not be available to any party whose failure to fulfill any obligation or other breach has been a material cause of, or resulted in, the issuance of such final, non-appealable law or order by the governmental authority; or



•

shareholder approval shall not have been obtained upon a vote held at the extraordinary general meeting or any adjournment thereof convened for that purpose; or



•

by the Company (acting at the direction of the special committee):



•

upon a breach by Parent or Merger Sub of any representation, warranty, covenant or agreement set forth in the merger agreement such that the corresponding closing condition would not be satisfied and such breach is incapable of being cured or has not been cured within 30 calendar days of the receipt by Parent of written notice thereof from the Company; provided, that the Company shall not have the right to terminate if, at the time of such termination, the Company is itself in breach of any representation, warranty, covenant or agreement of the Company;



•

if all of the conditions to closing have been satisfied and the Parent and Merger Sub fail to complete the closing within three business days following the date that the closing should have occurred;



•

if, prior to the receipt of approval from the Company shareholders, (1) the board of directors (after taking into account the recommendation of the special committee), has authorized the Company to terminate the merger agreement to enter into an alternative acquisition agreement with respect to a superior proposal, and (2) the Company has concurrently with the termination of the merger agreement entered into, or immediately after termination of the merger agreement, enters into, an alternative acquisition agreement with respect to such superior proposal; provided, however, that the Company shall not be entitled to terminate the merger agreement unless the Company has complied in all

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respects with the conditions in the merger agreement relating to competing transactions and has paid the termination fee; or

•

if the board of directors (after taking into account the recommendation of the special committee) determines in good faith that the closing condition requiring the Company to have obtained shareholder approval or the closing condition requiring the absence of any legal restraint on the consummation of the Transactions would be incapable of being satisfied; or



•

by the Parent:



•

upon a breach by the Company of any representation, warranty, covenant or agreement set forth in the merger agreement such that the corresponding closing conditions would not be satisfied and such breach is incapable of being cured by November 30, 2014 or has not been cured, in the case of certain breaches, within five calendar days after the Company receives written notice of such breach from Parent, and in the case of any other breach by the Company, within 30 calendar days of the receipt by the Company of written notice thereof from Parent; provided, that Parent shall not have the right to terminate the merger agreement if, at the time of such termination, Parent is itself in breach of any representation, warranty, covenant or agreement of Parent; or



•

if, prior to obtaining Company shareholder approval for the merger and the Transactions, the board of directors shall have changed its recommendation to the shareholders with respect to the merger agreement and the Transactions.

Termination Fee (Page [    •    ])

        The Company is obligated to pay to Parent a termination fee of $2.5 million:

•

if the merger agreement is terminated by the Company in order to enter into a definitive agreement relating to a superior proposal;



•

if the merger agreement is terminated by Parent due to a breach by the Company of its representations, warranties, covenants or agreements in the merger agreement, or a failure of any of the Company's representations or warranties in the merger agreement to be true and correct, such that the corresponding condition to closing cannot be satisfied;



•

if the board of directors has changed its recommendation to the shareholders with respect to the merger agreement and the Transactions; or



•

if the merger agreement is terminated because the merger is not completed before November 30, 2014 or shareholder approval for the merger agreement and the Transactions was not obtained, and subject to certain conditions, the Company enters into or consummates a competing transaction within one year of such termination.

        Parent is obligated to pay the Company a termination fee of $3 million:

•

if the merger agreement is terminated by the Company due to a breach by Parent or Merger Sub of its representations, warranties, covenants or agreements in the merger agreement, or a failure of any of Parent's or Merger Sub's representations or warranties in the merger agreement to be true and correct, such that the corresponding condition to closing cannot be satisfied; or



•

if the merger agreement is terminated by the Company due to the Parent's failure to consummate the merger within three business days following the time when the merger should have been consummated pursuant to the merger agreement.

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        Parent is obligated to pay the Company up to $1 million in expense reimbursement if the merger agreement is terminated due to the non-satisfaction of a regulatory requirement (including any required approval or clearance of any governmental authority) due to any action or inaction of Parent, Merger Sub or any of their affiliates.

Material U.S. Federal Income Tax Consequences (Page [    •    ])

        The receipt of cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under other applicable tax laws. See "Special Factors—Material U.S. Federal Income Tax Consequences" beginning on page [    •    ]. The tax consequences of the merger to you will depend upon your own personal circumstances. You should consult your tax advisors for a full understanding of the U.S. federal, state, local, non-U.S. and other tax consequences of the merger to you.

Material PRC Income Tax Consequences (Page [    •    ])

        The Company does not believe that it should be considered a resident enterprise under the PRC Enterprise Income Tax Law (the "EIT Law") or that the gain recognized on the receipt of consideration for our Shares or ADSs should be subject to PRC tax to holders of such Shares and ADSs that are not PRC residents. If, however, the PRC tax authorities were to determine that the Company should be considered a resident enterprise or that the receipt of consideration for our Shares or ADSs should otherwise be subject to PRC tax, then gain recognized on the receipt of consideration for our Shares or ADSs pursuant to the merger or through the exercise of dissenters' rights by our shareholders or ADS holders who are not PRC residents could be treated as PRC-source income that would be subject to PRC income tax at a rate of 20% in the case of individuals or 10% in the case of corporations (subject to applicable treaty relief). You should consult your own tax advisor for a full understanding of the tax consequences of the merger or the exercise of dissenters' rights to you, including any PRC tax consequences. Please see "Special Factors—Material PRC Income Tax Consequences" beginning on page [    •    ] for additional information.

Material Cayman Islands Tax Consequences (Page [    •    ])

        The Cayman Islands currently has no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. No taxes, fees or charges will be payable (either by direct assessment or withholding) to the government or other taxing authority in the Cayman Islands under the laws of the Cayman Islands in respect of the merger or the receipt of cash for Shares under the terms of the merger agreement. This is subject to the qualification that (a) Cayman Islands stamp duty may be payable if any original transaction documents are brought to or executed or produced before a court in the Cayman Islands (for example, for enforcement); (b) registration fees will be payable to the Cayman Registrar to register the plan of merger; and (c) fees payable to the Cayman Islands Government Gazette Office to publish the notice of the merger in the Cayman Islands Government Gazette. Please see "Special Factors—Material Cayman Islands Tax Consequences" beginning on page [    •    ] for additional information.

Regulatory Matters (Page [    •    ])

        The Company does not believe that any material federal, state or non-U.S. regulatory approvals, filings or notices are required in connection with the merger other than the approvals, filings or notices required under the federal securities laws and the filing of the plan of merger (and supporting documentation as specified in the Cayman Companies Law) with the Cayman Registrar and in the event the merger becomes effective, a copy of the certificate of merger being given to the shareholders and creditors of the Company and Merger Sub as at the time of the filing of the plan of merger and notice of merger published in the Cayman Islands Government Gazette.

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Litigation Related to the Merger (Page [    •    ])

        We are not aware of any lawsuit that challenges the merger, the merger agreement or any of the transactions contemplated thereby.

Accounting Treatment of the Merger (Page [    •    ])

        The merger is expected to be accounted for, at historical cost, as a merger of entities under common control in accordance with Accounting Standards Codification 805-50, "Business Combinations—Related Issues."

Market Price of the Shares (Page [    •    ])

        The closing price of the ADSs on the NYSE on September 3, 2013, the last trading date immediately prior to the Company's announcement on September 4, 2013 that it had received a going private proposal, was $2.23 per ADS. The merger consideration of $3.51 per ADS to be paid in the merger represents a premium of approximately 57.4% over that closing price.

Fees and Expenses (Page [    •    ])

        All expenses incurred in connection with the merger agreement, the merger and the other transactions contemplated thereby will be borne by the party incurring such expenses except as otherwise provided in the merger agreement.

Remedies (Page [    •    ])

        The Company, Parent and Merger Sub have agreed that irreparable damage, for which monetary damages would not be an adequate remedy, would occur in the event that any of the provisions of the merger agreement are not performed in accordance with their specific terms or are otherwise breached by the parties thereto. The Company, Parent and Merger Sub have accordingly agreed that they shall be entitled to injunctions, or any other appropriate form of specific performance or equitable relief, to prevent breaches of the merger agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction, this being in addition to any other remedy to which they are entitled under the terms of the merger agreement at law or in equity.

        The Company, the Parent and the Merger Sub have agreed not to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such party under the merger agreement. Any party seeking injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement shall not be required to post a bond or undertaking in connection with such order or injunction sought.

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QUESTIONS AND ANSWERS ABOUT THE EXTRAORDINARY GENERAL MEETING AND THE MERGER

        The following questions and answers address briefly some questions you may have regarding the extraordinary general meeting and the merger. These questions and answers may not address all questions that may be important to you as a shareholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

Q:    Why am I receiving this proxy statement?

A:

On January 13, 2014, we entered into the merger agreement with Parent and Merger Sub. You are receiving this proxy statement in connection with the solicitation of proxies by the board of directors of the Company in favor of the proposal to approve and authorize the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, at an extraordinary general meeting of shareholders or at any postponements or adjournments of the extraordinary general meeting.

Q:    What am I being asked to vote on?

A:

You will be asked to consider and vote on the following proposals:

(a)

as a special resolution, to approve and authorize the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger;

(b)

as a special resolution, to authorize each member of the special committee, namely, Ms. Moonkyung Kim, Mr. Jui Kian Lim and Mr. Allard Nooy, and the chief financial officer of the Company to do all things necessary to give effect to the merger agreement; and

(c)

as an ordinary resolution, if necessary, to approve that the chairman of the extraordinary general meeting be instructed to adjourn the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolution to be proposed at the extraordinary general meeting.

Q:    What is the merger?

A:

The merger is a going private transaction pursuant to which Merger Sub will merge with and into the Company. Once the merger agreement is authorized and approved by the shareholders of the Company and the other closing conditions under the merger agreement have been satisfied or waived, Merger Sub will merge with and into the Company, with the Company continuing as the surviving company after the merger. If the merger is completed, the Company will continue its operations as a privately held company, beneficially owned by the Buyer Group, and as a result of the merger, the ADSs will no longer be listed on the NYSE, and the ADS program for the Shares will terminate.

Q:    What will I receive in the merger if I own Shares or ADSs and am not a member of the Buyer Group?

A:

If you own Shares immediately prior to the effective time and are not a member of the Buyer Group and the merger is completed, you will be entitled to receive $1.17 in cash, without interest and net of any applicable withholding taxes, for each Share you own (unless you validly exercise and have not effectively withdrawn or lost your dissenters' rights under Section 238 of the Cayman Companies Law, which is attached as Annex C of this proxy statement, with respect to the merger,

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in which event you will be entitled to the value of each Share appraised pursuant to Section 238 of the Cayman Companies Law).

If you own ADSs immediately prior to the effective time and are not a member of the Buyer Group and the merger is completed, you will be entitled to receive $3.51 per ADS (less $0.05 per ADS cancellation fees pursuant to the terms of the ADS deposit agreement) in cash, without interest and net of any applicable withholding taxes, for each ADS you own.

Please see "Special Factors—Material United States Federal Income Tax Consequences," "Special Factors—Material PRC Income Tax Consequences" and "Special Factors—Material Cayman Islands Tax Consequences" beginning on page [    •    ] for a more detailed description of the tax consequences of the merger. You should consult your own tax advisor for a full understanding of how the merger will affect your U.S. federal, state, local, non-U.S. and other taxes.

Q:    How will the Company's share options be treated in the merger?

A:

If the merger is completed, at the effective time, each outstanding vested and unexercised option to purchase Shares granted under the Company Incentive Plan will be cancelled and converted into the right to receive, as soon as practicable after the effective time, a cash amount equal to the number of Shares underlying such option immediately prior to the effective time multiplied by the amount by which $1.17 exceeds the exercise price per Share of such vested option. At the effective time, each outstanding unvested option to purchase Shares granted under the Company Incentive Plan will be cancelled for no consideration.

Q:    After the merger is completed, how will I receive the merger consideration for my Shares?

A:

If you are a registered holder of Shares immediately prior to the effective time and are not a member of the Buyer Group, promptly after the effective time (in any event within five business days after the effective time), a paying agent appointed by Parent will mail to you (a) a form of letter of transmittal specifying how the delivery of the merger consideration to you will be effected and (b) instructions for effecting the surrender of share certificates (or affidavit and indemnity of loss in lieu of the share certificates) in exchange for the applicable merger consideration. You will receive cash for your Shares from the paying agent after you comply with these instructions. Upon surrender of your share certificates (or affidavit and indemnity of loss in lieu of the share certificates), you will receive an amount equal to the number of your Shares multiplied by $1.17 in cash, without interest and net of any applicable withholding tax, in exchange for the cancellation of your Shares.

In the event of a transfer of ownership of Shares that is not registered in the register of members of the Company, a check for any cash to be exchanged upon due surrender of the share certificate will be issued to such transferee if the share certificates (if any) which immediately prior to the effective time represented such Shares are presented to the paying agent, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable share transfer taxes have been paid or are not applicable.

If your Shares are held in "street name" by your broker, bank or other nominee, you will receive instructions from your broker, bank or other nominee on how to surrender your Shares and receive the merger consideration for those Shares.

Q:    After the merger is completed, how will I receive the merger consideration for my ADSs?

A:

If you are not a member of the Buyer Group and you are a registered holder of ADSs that are evidenced by certificates, also referred to as American depositary receipts ("ADRs"), unless you have surrendered your ADRs to the ADS depositary for cancellation prior to the effective time,

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upon your surrender of the ADRs (or an affidavit and indemnity of loss in lieu of the ADRs) together with a duly completed letter of transmittal (which will be supplied to you by the ADS depositary after the effective time), the ADS depositary will send you the per ADS merger consideration of $3.51 (less $0.05 per ADS cancellation fees pursuant to the terms of the ADS deposit agreement), without interest and net of any applicable withholding taxes, for each ADS evidenced by the ADRs in exchange for the cancellation of your ADRs after the completion of the merger. If you hold your ADSs in un-certificated form, that is, without an ADR, unless you have surrendered your ADSs to the ADS depositary for cancellation prior to the effective time, the ADS depositary will automatically send you the per ADS merger consideration of $3.51 (less $0.05 per ADS cancellation fees pursuant to the terms of the ADS deposit agreement), without interest and net of any applicable withholding taxes, in exchange for the cancellation of each of your ADSs after the completion of the merger.

In the event of a transfer of ownership of ADSs that is not registered in the register of ADS holders maintained by the ADS depositary, the cash to be exchanged upon cancellation of the ADSs will be issued to such transferee only if the ADRs, if applicable, are presented to the ADS depositary, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable ADS transfer taxes have been paid or are not applicable. The per ADS merger consideration may be subject to backup withholding taxes if the ADS depositary has not received from the transferee a properly completed and signed U.S. Internal Revenue Service Form W-8 or W-9.

If your ADSs are held in "street name" by your broker, bank or other nominee at the Depository Trust Company ("DTC"), you will not be required to take any action to receive the merger consideration for your ADSs as the ADS depositary will arrange for the surrender of the ADSs and the remittance of the per ADS merger consideration to DTC (the clearance and settlement system for the ADSs) for distribution by DTC to your broker, bank or nominee on your behalf. If you have any questions concerning the receipt of the per ADS merger consideration, please contact your broker, bank or nominee.

Q:    When and where will the extraordinary general meeting be held?

A:

The extraordinary general meeting will take place on [    •    ], 2014, beginning at [    •    ] a.m., (Hong Kong time), at 31st Floor, AIA Central, 1 Connaught Road Central, Hong Kong.

Q:    What vote of our shareholders is required to authorize and approve the merger agreement and the plan of merger?

In order for the merger to be completed, the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, must be authorized and approved by a special resolution of the Company's shareholders, which requires an affirmative vote of shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting.

At the close of business in the Cayman Islands on [    •    ], 2014, the Share record date for the extraordinary general meeting, 162,126,002 Shares are expected to be outstanding and entitled to vote at the extraordinary general meeting.

As of the date of this proxy statement, the Rollover Shareholders, as a group, beneficially owns 95,576,057 Shares, which represent approximately 59.0% of the total outstanding shares entitled to vote as of the date of this proxy statement. Pursuant to the terms of the Rollover Agreement, these Shares will be voted in favor of the authorization and approval of the merger agreement, the plan of merger and transactions contemplated thereby, including the merger at the extraordinary general meeting of the company. The voting obligations of the Rollover Shareholders contained in

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the Rollover Agreement terminate (i) upon the effective time or (ii) six months following the valid termination of the merger agreement in accordance with its terms. See "Special Factors—Voting by the Rollover Shareholders at the Extraordinary General Meeting" beginning on page [    •    ] for additional information on such voting arrangements and how they may impact the approval and adoption of the merger agreement and the transactions contemplated thereby at the extraordinary general meeting.

Given the Rollover Shareholders' ownership as described above and assuming their compliance with their voting obligations under the Rollover Agreement, based on the number of Shares expected to be outstanding on the Share record date, 12,507,945 Shares (representing approximately 7.71% of the total issued and outstanding Shares expected to be outstanding and entitled to vote on the Share record date) owned by shareholders and on behalf of ADS holders other than Rollover Shareholders must be voted in favor of the special resolutions to be proposed at the extraordinary general meeting for them to be approved, assuming all unaffiliated security holders will be present and voting in person or by proxy at the extraordinary general meeting.

Q:    What vote of our shareholders is required to approve the proposal to adjourn and postpone the extraordinary general meeting, if necessary, to solicit additional proxies?

A:

The proposal to adjourn and postpone the extraordinary general meeting, if necessary, to solicit additional proxies must be authorized and approved by an affirmative vote of shareholders representing a majority of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting. Based on the number of Shares we expect to be issued and outstanding and entitled to vote on the record date, 81,063,002 Shares must be voted in favor of the proposal to adjourn and postpone the extraordinary general meeting to allow us, if necessary, to solicit additional proxies.

Q:    How does the Company board of directors recommend that I vote on the proposals?

A:

After careful consideration and upon the unanimous recommendation of the special committee, our board of directors recommends that you vote:

(a)

FOR the proposal to authorize and approve the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger;

(b)

FOR the proposal to authorize each of the members of the special committee and the chief financial officer of the Company to do all things necessary to give effect to the merger agreement; and

(c)

FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

You should read "Special Factors—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors" beginning on page [    •    ] for a discussion of the factors that our special committee and board of directors considered in deciding to recommend the approval of the merger agreement. In addition, in considering the recommendation of our special committee and board of directors with respect to the merger agreement, you should be aware that some of the Company's directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our shareholders generally. See "Special Factors—Interests of Certain Persons in the Merger" beginning on page [    •    ].

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Q:    Who is entitled to vote at the extraordinary general meeting?

A:

The Share record date is the close of business on [    •    ], 2014 in the Cayman Islands. Only shareholders entered in the register of members of the Company at the close of business on the record date or their proxy holders are entitled to vote at the extraordinary general meeting or any adjournment or postponement thereof. The record date for ADS holders entitled to instruct the ADS depositary to vote at the extraordinary general meeting is [    •    ], 2014 in New York City. Only ADS holders of the Company at the close of business in New York City on the ADS record date are entitled to instruct the ADS depositary to vote at the extraordinary general meeting.

Q:    What constitutes a quorum for the extraordinary general meeting?

A:

The presence, in person or by proxy, of one or more shareholders holding not less than one-third in nominal value of the issued and outstanding Shares that are entitled to vote on the record date will constitute a quorum for the extraordinary general meeting.

Q:    What effects will the merger have on the Company?

A:

As a result of the merger, the Company will cease to be a publicly-traded company and will be beneficially owned by the Buyer Group. You will no longer have any interest in our future earnings or growth. Following consummation of the merger, the registration of our Shares and our reporting obligations with respect to our Shares under the Exchange Act, will be terminated upon application to the SEC. In addition, upon completion of the merger, our ADSs will no longer be listed or traded on any stock exchange, including the NYSE and the ADS program for the Shares will terminate.

Q:    When do you expect the merger to be completed?

A:

We are working toward completing the merger as quickly as possible and currently expect the merger to close in the second quarter of 2014. In order to complete the merger, we must obtain shareholder approval of the merger at the extraordinary general meeting and the other closing conditions under the merger agreement must be satisfied or waived in accordance with the merger agreement.

Q:    What happens if the merger is not completed?

A:

If our shareholders do not approve the merger agreement and the transactions contemplated thereby, including the merger, or if the merger is not completed for any other reason, our shareholders will not receive any payment for their Shares or ADSs pursuant to the merger agreement, nor will the holders of any options receive payment pursuant to the merger agreement. In addition, the Company will remain a publicly traded company. The ADSs will continue to be listed and traded on the NYSE, provided that the Company continues to meet the NYSE's listing requirements. In addition, the Company will remain subject to SEC reporting obligations. Therefore, our shareholders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of our Shares.

Under specified circumstances, the Company may be required to pay Parent a termination fee, or Parent may be required to pay the Company a termination fee or reimburse the Company and its affiliates for certain of their expenses in connection with the merger, in each case, as described under the caption "The Agreement and Plan of Merger—Termination Fee" beginning on page [    •    ].

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Q:    What do I need to do now?

A:

We urge you to read this proxy statement carefully, including its annexes, exhibits, attachments and the other documents referred to or incorporated by reference herein and to consider how the merger affects you as a shareholder. After you have done so, please vote as soon as possible.

Q:    How do I vote if my Shares are registered in my name?

A:

If Shares are registered in your name as of the Share record date, you should simply indicate on your proxy card how you want to vote, and sign and mail your proxy card in the accompanying return envelope as soon as possible. The deadline to lodge your proxy card is [    •    ], 2014 at [    •    ] a.m. (Hong Kong time).

Alternatively, you can attend the extraordinary general meeting and vote in person. If you decide to sign and send in your proxy card, and do not indicate how you want to vote in your proxy card, the Shares represented by your proxy will be voted FOR the proposal to approve the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, FOR the proposal to authorize each of the members of the special committee and the chief financial officer of the Company to do all things necessary to give effect to the merger agreement, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting, unless you appoint a person other than the chairman of the meeting as proxy, in which case the Shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines. If your Shares are held by your broker, bank or other nominee, please see below for additional information.

Q:    How do I vote if I own ADSs?

A:

If you own ADSs as of the close of business in New York City on [    •    ], 2014, the ADS record date (and do not cancel such ADSs and become a registered holder of the Shares underlying such ADSs as explained below), you cannot vote at the meeting directly, but you may instruct the ADS depositary (as the holder of the Shares underlying your ADSs) how to vote the Shares underlying your ADSs by completing and signing the ADS voting instruction card and returning it in accordance with the instructions printed on it as soon as possible but, in any event, so as to be received by the ADS depositary no later than 5:00 p.m. (New York City time) on [    •    ], 2014. The ADS depositary will endeavor, in so far as practicable, to vote or cause to be voted the number of Shares represented by your ADSs in accordance with your voting instructions. However, the ADS depositary has advised us that it will not vote or attempt to exercise the right to vote any Shares other than in accordance with those instructions. Notwithstanding the foregoing, pursuant to the ADS deposit agreement, if the ADS depositary timely receives your voting instructions which fail to specify the manner in which the ADS depositary is to vote the Shares underlying your ADS(s), the ADS depositary may deem you to have instructed the ADS depositary to vote in favor of the items set forth in such voting instructions.

Alternatively, if you own ADSs as of the close of business in New York City on the ADS record date you may vote at the extraordinary general meeting if you cancel your ADSs prior to the close of business in New York City on [    •    ], 2014 and become a registered holder of Shares by the close of business in the Cayman Islands on [    •    ], 2014, the Share record date. If your ADSs are held by your broker, bank or other nominee, see below.

If you wish to cancel your ADSs, you need to make arrangements to deliver your ADSs to the ADS depositary for cancellation prior to the close of business in New York City on [    •    ], 2014

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together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of Shares), (b) payment of the ADS cancellation fees ($0.05 per ADS to be cancelled) and any applicable taxes, and (c) a certification that the ADS holder either (i) held the ADSs as of the applicable ADS record date for the extraordinary general meeting and has not given, and will not give, voting instructions to the ADS depositary as to the ADSs being cancelled, or has given voting instructions to the ADS depositary as to the ADSs being cancelled but undertakes not to vote the corresponding Shares at the extraordinary general meeting, or (ii) did not hold the ADSs as of the applicable ADS record date for the extraordinary general meeting and undertakes not to vote the corresponding Shares at the extraordinary general meeting. Upon cancellation of the ADSs, the ADS depositary will arrange for the Hong Kong office of the Hong Kong and Shanghai Banking Corp., the custodian holding the Shares, to transfer registration of the Shares to the former ADS holder. If after registration of Shares in the Company's register of members in your name you wish to receive a certificate evidencing the Shares registered in your name, you will need to request the registrar of the Shares, Appleby Trust (Cayman) Ltd., to issue and mail a certificate to your attention.

If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf.

Q:    If my Shares or ADSs are held in a brokerage account, will my broker vote my Shares on my behalf?

A:

Your broker, bank or other nominee will only vote your Shares on your behalf or give voting instructions with respect to the Shares underlying your ADSs if you instruct it how to vote. Therefore, it is important that you promptly follow the directions provided by your broker, bank or nominee regarding how to instruct it to vote your Shares. If you do not instruct your broker, bank or other nominee how to vote your Shares that it holds, those Shares may not be voted.

Q:    What will happen if I abstain from voting or fail to vote on the proposal to approve the merger agreement?

A:

If you abstain from voting, fail to cast your vote in person, fail to complete and return your proxy card in accordance with the instructions set forth on the proxy card, or fail to give voting instructions to your broker, dealer, commercial bank, trust company or other nominee, your vote will not be counted. However, ADS holders may be deemed to have given voters instructions as described above.

Q:    May I change my vote?

A:

Yes. If you are a holder of Shares, you may change your vote in one of the following three ways:

•

First, you may revoke a proxy by written notice of revocation given to the Company before the extraordinary meeting commences. Any written notice revoking a proxy should be sent to 901 Marco Polo Plaza Building, No. 80 Anli Road, Chaoyang District, Beijing, 100101, the People's Republic of China, Attention: Ms. Liya Chen.

•

Second, you may complete, date and submit a new proxy card bearing a later date than the proxy card sought to be revoked to the Company no later than [    •    ] a.m. (Hong Kong time) on [    •    ], 2014, which is the deadline to lodge your proxy card.

•

Third, you may attend the extraordinary general meeting and vote in person. Attendance, by itself, will not revoke a proxy. It will only be revoked if the shareholder actually votes at the extraordinary general meeting.

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If you hold Shares through a broker, bank or other nominee and have instructed the broker, bank or other nominee to vote your Shares, you must follow directions received from the broker, bank or other nominee to change your instructions.

Holders of our ADSs may revoke their voting instructions by notification to the ADS depositary in writing at any time prior to 5:00 p.m. (New York City time) on [    •    ], 2014. A holder of ADSs can do this in one of two ways:

(a)

First, a holder of ADSs can revoke its voting instructions by written notice of revocation timely delivered to the ADS depositary.



(b)

Second, a holder of ADSs can complete, date and submit a new ADS voting instruction card to the ADS depositary bearing a later date than the ADS voting instruction card sought to be revoked.

If you hold your ADSs through a broker, bank or nominee and you have instructed your broker, bank or nominee to give ADS voting instructions to the ADS depositary, you must follow the directions of your broker, bank or nominee to change those instructions.

Q:    What should I do if I receive more than one set of voting materials?

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement or multiple proxy or voting instruction cards. For example, if you hold your Shares or ADSs in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold Shares or ADSs. If you are a holder of record and your Shares or ADSs are registered in more than one name, you will receive more than one proxy card. Please submit each proxy card that you receive.

Q:    Should I send in my share certificates or my ADRs now?

A:

No. After the merger is completed, you will be sent a form of letter of transmittal with detailed written instructions for exchanging your share certificates for the merger consideration. Please do not send in your certificates now. Similarly, you should not send in the ADRs that represent your ADSs at this time. Promptly after the merger is completed, the ADS depositary will call for the surrender of all ADRs for delivery of the merger consideration. ADR holders will be receiving a similar form of letter of transmittal and written instructions from the ADS depositary relating to the foregoing.

All holders of uncertificated Shares and uncertificated ADSs (i.e., holders whose Shares or ADSs are held in book entry) will automatically receive their cash consideration shortly after the merger is completed without any further action required on the part of such holders.

If your Shares or your ADSs are held in "street name" by your broker, bank or other nominee you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your share certificates or ADRs in exchange for the merger consideration.

Q:    What happens if I sell my Shares or ADSs before the extraordinary general meeting?

A:

The record date for voting at the extraordinary general meeting is earlier than the date of the extraordinary general meeting and the date that the merger is expected to be completed. If you transfer your Shares of the Company after the record date for voting but before the extraordinary general meeting, you will retain your right to vote at the extraordinary general meeting unless you have given, and not revoked, a proxy to your purchaser, but will transfer the right to receive the per Share merger consideration of $1.17 in cash without interest to the person to whom you transfer your Shares, so long as such person is registered as the owner of such Shares when the

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merger is completed. In such case, your vote is still very important and you are encouraged to vote.

The record date of ADSs for the extraordinary general meeting is [    •    ], 2014 in New York City. If you transfer your ADSs after the ADS record date but before the extraordinary general meeting, you will retain your right to instruct the ADS depositary to vote at the extraordinary general meeting, but will transfer the right to receive the per ADS merger consideration of $3.51 in cash without interest to the person to whom you transfer your ADSs, so long as such person owns such ADSs when the merger is completed.

Q:    Am I entitled to dissenters' rights?

A:

Shareholders who dissent from the merger will have the right to seek payment of the fair value of their Shares if the merger is completed, but only if they deliver to the Company, before the vote is taken, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of dissenters' rights, which is attached as Annex C to the accompanying proxy statement. The fair value of their Shares as determined under that statute could be more than, the same as, or less than the merger consideration they would receive pursuant to the merger agreement if they do not exercise dissenters' rights with respect to their Shares.

ADS holders will not have the right to dissent from the merger and receive payment of the fair value of the Shares underlying their ADSs. The ADS depositary will not attempt to exercise any dissenters' rights with respect to any of the Shares that it holds, even if an ADS holder requests the ADS depositary to do so. ADS holders wishing to exercise dissenters' rights must surrender their ADSs to the ADS depositary, pay the ADS depositary's fees required for such surrender, provide instructions for the registration of the corresponding Shares in the Company's register of members, and certify that they have not given, and will not give, voting instructions as to the ADSs (or alternatively, they will not vote the Shares) before the close of business in New York City on [    •    ], 2014, and become registered holders of Shares by the close of business in the Cayman Islands on [    •    ], 2014. Thereafter, such former ADS holders must comply with the procedures and requirements for exercising dissenters' rights with respect to the Shares under Section 238 of the Cayman Companies Law.

We encourage you to read the section of this proxy statement entitled "Dissenters' Rights" beginning on page [    •    ] as well as "Annex C—Cayman Companies Law (2013 Revision) of the Cayman Islands—Section 238" to this proxy statement carefully and to consult your own Cayman Islands legal counsel if you desire to exercise your dissenters' rights.

Q:    If I own ADSs and seek to exercise dissenters' rights, how do I convert my ADSs to Shares, and when is the deadline for completing the conversion of ADSs to Shares?

A:

If you own ADSs and wish to exercise dissenters rights, you must surrender your ADSs at the ADS depositary's office at 101 Barclay Street, New York, New York 10286. Upon your payment of its fees, including the applicable ADS cancellation fee ($0.05 per ADS being cancelled) and any applicable taxes, and a certification that you have not given, and will not give, voting instructions to the ADS depositary in respect of the ADSs being cancelled (or, alternatively, that you will not vote the Shares), the ADS depositary will arrange to transfer the Shares in the Company's register of members and will transfer any other deposited securities underlying the ADSs to such ADS holder or a person designated by such ADS holder.

The deadline for surrendering ADSs to the ADS depositary for these purposes is the close of business in New York City on [    •    ], 2014.

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You must become a registered holder of your Shares and deliver to the Company, before the vote is taken at the extraordinary general meeting, a written objection to the merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law, which is attached as Annex C of this proxy statement, for the exercise of dissenters' rights.

Q:    Will any proxy solicitors be used in connection with the extraordinary general meeting?

A:

Yes. To assist in the solicitation of proxies, the Company has engaged [    •    ] as its proxy solicitor.

Q:    Do any of the Company's directors or executive officers have interests in the merger that may differ from those of other shareholders?

A:

Yes. Some of the Company's directors or executive officers have interests in the merger that may differ from those of other shareholders. Please see "Special Factors—Interests of Certain Persons in the Merger" beginning on page [    •    ] for a more detailed discussion of how some of our Company's directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our shareholders generally.

Q:    How will our directors vote on the proposal to authorize and approve the merger agreement and the plan of merger?

A:

Each of our directors who beneficially owns Shares (including Shares represented by ADSs) has informed us that, as of the date of this proxy statement, he or she intends to vote all of his or her Shares in favor of approval and authorization of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger as of the date of this proxy statement, our directors and executive officers beneficially owned, in the aggregate, [    •    ] Shares, or, collectively, approximately [    •    ]% of the outstanding Shares. Please see "Security Ownership of Certain Beneficial Owners and Management of the Company" beginning on page [    •    ] for additional information.

Q:    Who can help answer my questions?

A:

If you have any questions about the merger, if you need assistance in voting your Shares or if you need additional copies of this proxy statement or the enclosed proxy card, you should contact [    •    ], our proxy solicitor at [    •    ] or toll free at [    •    ].

In order for you to receive timely delivery of any additional copy of this proxy statement or the enclosed proxy card in advance of the extraordinary general meeting, you must request no later than five business days prior to the extraordinary general meeting.

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SPECIAL FACTORS

Background of the Merger

        Events leading to the execution of the merger agreement described in this Background of the Merger occurred primarily in Hong Kong. As a result, Hong Kong time is used for all dates and times given.

        The board of directors and senior management of the Company have been reviewing periodically the Company's long-term strategic plan with the goal of maximizing shareholder value. As part of this ongoing process, the board of directors and senior management also have periodically reviewed strategic alternatives that may be available to the Company and members of the board of directors have been periodically approached by third parties regarding possible strategic transactions involving the Company.

Historical Relationship Between CPI Ballpark and the Company

        CPI Ballpark has been a shareholder of the Company since January 2008 when it, together with other institutional investors, subscribed for Series A convertible redeemable preferred shares issued by the Company. In July 2008, CPI Ballpark, among other institutional investors, participated in the subscription for Series B convertible redeemable preferred shares issued by the Company. In total, NewQuest had invested approximately $95 million in these Company financings prior to the Company's initial public offering (the "IPO") in January 2010.

        In August 2012, as a result of CPI Ballpark's and certain other shareholders' belief that the decline in the Company's share price of more than 95% since the IPO, to less than $0.70 per ADS, was caused by a lack of leadership, poor performance and the absence of a growth strategy of the then board of directors, CPI Ballpark and certain other shareholders (the "voting consortium"), collectively representing approximately 40.8% of the then outstanding Shares entered into a voting agreement and called an extraordinary general meeting of the Company's shareholders to replace certain directors of the Company with a slate of directors nominated by the voting consortium. On September 28, 2012, the extraordinary general meeting of the shareholders was held and shareholders of the Company voted to remove certain directors and to elect to the board of directors the persons nominated by the voting consortium, including one director nominated by CPI Ballpark. The director nominated by CPI Ballpark was one of a total of seven directors on the board of directors at that time and, on October 15, 2012, he was appointed as chairman by the board of directors. The formation of the voting consortium and related matters, including the termination of the voting consortium, were promptly disclosed by CPI Ballpark and the other shareholders through amendments to the Schedule 13D filed with the SEC between August 21, 2012 and October 2, 2012.

        On December 3, 2012, CPI Ballpark and Swiss Re Financial Products Corporation ("Swiss Re") entered into an agreement of purchase and sale, pursuant to which Swiss Re sold 10,114,508 Shares (represented by 3,371,502 ADSs and two Shares) to CPI Ballpark at a price of approximately $0.67 per Share. NewQuest disclosed this transaction in its Schedule 13D filed with the SEC on December 5, 2012. In the Schedule 13D, NewQuest disclosed that CPI Ballpark had entered into this transaction because it believed at the time that the Shares were undervalued, and depending on overall market conditions, other investment opportunities available to CPI Ballpark and its affiliates, and the availability of Shares or ADSs at prices that would make the purchase of additional Shares or ADSs desirable, CPI Ballpark and its affiliates may endeavor to increase their position in the Company through, among other things, the purchase of Shares or ADSs on the open market or in private transactions or otherwise, on terms that are deemed advisable by CPI Ballpark and its affiliates.

        Prior to and following the Swiss Re transaction, NewQuest continued from time to time to evaluate its investment in the Company by considering, among other things, whether to reduce, increase or maintain CPI Ballpark's shareholding and other potential investment opportunities relating to the

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Company, including possible transactions involving third parties that had approached NewQuest and expressed interests in the Company. NewQuest had preliminary and separate discussions with two strategic parties operating in the same industry as the Company (referred to as "Bidder A" and "Bidder B") regarding potential investments in the Company. Following introductions between Bidder A and the Company and NewQuest that were initiated by Bidder A's financial advisor in November 2012 at the Company's annual general meeting, Bidder A entered into a confidentiality agreement with the Company in January 2013 and engaged the Company and NewQuest in preliminary discussions regarding potential investment opportunities. An investment bank had introduced NewQuest to Bidder B in June 2011 and in subsequent discussions, Bidder B had expressed to NewQuest its interest in a transaction involving the Company. NewQuest informed the then management of the Company about Bidder B's interests in the Company. In March 2013, Bidder B and an affiliate of NewQuest entered into a mutual nondisclosure agreement in order for the parties to evaluate a possible transaction involving Bidder B and NewQuest's investment in the Company and other possible transactions with the Company. These discussions with Bidder A and Bidder B were of a preliminary nature and did not lead to any firm offer or proposal for, or any in-depth discussions relating to the terms of, any understanding or agreement with respect to any specific transactions.

        On July 3, 2013, in connection with Vicis Capital Master Fund's ("Vicis") desire to exit its position in the Company to meet certain liquidity needs, CPI Ballpark and Vicis entered into a purchase agreement, pursuant to which Vicis sold its investment in the Company to CPI Ballpark in the form of (i) 3,918,666 Shares at a price of approximately $0.77 per Share, (ii) an option to purchase an additional 34,959,893 Shares owned by Vicis at exercise prices ranging from approximately $0.83 to $1.15 per share depending on the date of exercise (the "Vicis Option"), and (iii) a warrant to acquire 10,004,157 Shares that was issued by the Company at an exercise price of $1.15 per share, which warrant expired on December 31, 2013 (the "Vicis Warrant"). As a result of this purchase, CPI Ballpark acquired beneficial ownership of all of Vicis' holdings in the Company, increasing CPI Ballpark's beneficial ownership in the Company from approximately 30% to approximately 56.8% (assuming exercise of the Vicis Option and the Vicis Warrant). On the same day, NewQuest filed an amendment to its Schedule 13D disclosing the purchase and its beneficial ownership of 56.8% of the Company's outstanding Shares. NewQuest entered into this transaction with Vicis because it believed that the price offered by Vicis in connection with Vicis' plan to exit its investment in the Company was compelling. The transaction was structured as the purchase of an option because, at the time, NewQuest did not have the required internal approvals to complete the entire purchase. NewQuest had not, at that time, determined to pursue a potential going private transaction, had not sought to obtain (and did not have) internal approvals required to submit any going private proposal to the Company, and did not have either the funds or financing commitments necessary to pursue such a transaction. Additionally, following the transaction with Vicis, NewQuest did not have control of the Company's board of directors and CPI Ballpark's acquisition of Vicis' Shares did not result in NewQuest having secured the votes necessary to approve a merger transaction under Cayman Companies Law, which requires a merger to be approved by the board of directors of a Caymans Island company and by the company's shareholders representing two-thirds of the votes present and voting at the shareholders' meeting.

        Subsequent to the July 3, 2013 transaction, CPI Ballpark and Vicis mutually agreed to reduce the exercise price for the Vicis Option if CPI Ballpark would exercise a portion of the option on or before July 31, 2013. On July 31, 2013, CPI Ballpark exercised the Vicis Option for 28,000,000 Shares (representing approximately 17.3% of the Company's outstanding Shares) at an exercise price of approximately $0.70 per share. CPI Ballpark did not exercise the entire Vicis Option because, at that time, it had not received confirmation that it would be able to do so without obtaining certain PRC regulatory approvals. In connection with such exercise, Vicis and CPI Ballpark agreed to amend the Vicis Option to provide for the exercise of the remaining 6,959,893 Shares held by Vicis at an exercise price of (a) approximately $0.75 per share, if the option was exercised on or before September 30,

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2013, and (b) $1.00 per share, if the option was exercised after September 30, 2013, but on or before April 3, 2014. On the same day, NewQuest filed an amendment to its Schedule 13D to reflect its partial exercise of the Vicis Option. NewQuest's beneficial ownership reported on its Schedule 13D amendment remained at 56.8%, unchanged from the beneficial ownership reported on its Schedule 13D amendment filed on July 3, 2013.

        On September 24, 2013, following the receipt of (a) legal advice that the option exercise did not require prior PRC regulatory approvals, and (b) proceeds from the sale of a portfolio investment by its affiliated fund, which could be used for the option exercise, CPI Ballpark exercised the remaining portion of the Vicis Option for 6,959,893 Shares (representing approximately 4.3% of the Company's outstanding Shares) at an exercise price of $0.75 per share. On the same day, NewQuest filed an amendment to its Schedule 13D to reflect its exercise of the remaining portion of the Vicis Option. NewQuest's beneficial ownership reported on its Schedule 13D amendment was 56.8%, unchanged from the beneficial ownership reported on its Schedule 13D amendment filed on July 3, 2013.

        On December 31, 2013, the Vicis Warrant expired without any exercise by CPI Ballpark. On January 3, 2014, NewQuest filed an amendment to its Schedule 13D to disclose the expiration of the Vicis Warrant. NewQuest's beneficial ownership reported on its Schedule 13D amendment was 54.1%, adjusted for the expiration of the Vicis Warrant.

The Going Private Proposal, Formation of the Special Committee and Events Leading to Execution of the Merger Agreement

        On September 4, 2013, following its receipt of required approvals and preliminary financing support letters from its investors on September 3, 2013, CPI Ballpark submitted a preliminary, non-binding proposal to the board of directors to acquire all of the outstanding Shares not owned by CPI Ballpark for $0.99 per Share and $2.97 per ADS, in cash, subject to certain conditions (the "Going Private Proposal"). In its proposal, CPI Ballpark stated that, among other things: (a) it would be the sole sponsor for the proposed going private transaction; (b) it expected that the transaction would be financed with a combination of capital from its affiliated funds and additional financing to be finalized with its financing partners; (c) it believed that it was prudent and in the best interests of the Company for the Company's board of directors to form a special committee of independent directors to consider the proposed transaction; and (d) it had engaged Weil, Gotshal & Manges LLP ("Weil") as its legal counsel in connection with the proposed transaction. The Going Private Proposal also made clear that CPI Ballpark was interested only in acquiring the Shares that it did not already beneficially own and which were not expected to be rolled over in connection with the transaction, and did not have any current intention to sell its stake in the Company to a third party. The Going Private Proposal was subject to (i) CPI Ballpark obtaining fully committed financing necessary to complete the proposed transaction, (ii) CPI Ballpark completing its due diligence review, (iii) CPI Ballpark and a special committee of independent directors of the Board reaching agreement on terms of the definitive agreements necessary to effect the proposed transaction, and (iv) shareholders of the Company approving the proposed transaction by at least a two-thirds majority of the votes cast.

        On the same day, the Company issued a press release regarding its receipt of the Going Private Proposal and the transaction proposed therein, and furnished the press release as an exhibit to its Current Report on Form 6-K. Also on the same day, NewQuest filed with an amendment to its Schedule 13D announcing the submission of the Going Private Proposal to the board of directors. NewQuest's beneficial ownership reported on its Schedule 13D amendment was 56.8%, unchanged from the beneficial ownership reported on its Schedule 13D amendment filed on July 3, 2013.

        On September 5, 2013, the board of directors held a meeting to discuss, among other things, the Going Private Proposal. At this meeting, O'Melveny & Myers LLP ("O'Melveny"), the Company's outside legal counsel, provided the board of directors with an overview of the procedures, process and

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duties of directors under applicable law in connection with the Going Private Proposal, including various "best practices" for boards of directors when considering similar transactions, including the desirability of establishing a committee of independent directors to evaluate the Going Private Proposal given the inherent conflicts of interest that may arise from the involvement of CPI Ballpark, the Company's largest shareholder, in the Going Private Proposal. At the meeting, the board of directors determined it was in the best interests of the Company to form a special committee consisting of directors who were independent of, and unaffiliated with, NewQuest and were not employees of the Company or any of its subsidiaries. Thereafter, O'Melveny provided an overview of the Going Private Proposal and Mr. Amit Gupta, the chairman of the board of directors, disclosed his interests in the Going Private Proposal, including the fact that he is a director on the board of CPI Ballpark and a co-founder, partner and Chief Operating Officer of NewQuest Capital Partners, an affiliate of the NewQuest Funds. At this meeting, the board of directors discussed the various qualifications of the members of Company's board of directors to serve on the special committee, including whether certain directors were sufficiently independent for purposes of serving on the special committee. The meeting was adjourned without appointing any members to the special committee.

        On September 6, 2013, members of the board of directors (other than Mr. Gupta, who recused himself from the meeting) held a subsequent meeting to identify and appoint qualified independent directors to serve on the special committee that it had resolved to create at the meeting held on the previous day. At this meeting, O'Melveny summarized the contents of various materials that they had provided to the board of directors earlier, including (i) key principles for determining "independence" for members of a special committee, (ii) legal principles for members of a special committee evaluating a "conflict" transaction, and (iii) special committee "best practices" in a going-private transaction. After deliberations regarding the qualification of various directors of the Company to serve on a special committee, whether such directors' activities and associations outside their office presented any potential for an actual or perceived conflict of interest, the board of directors (other than Mr. Gupta) passed a resolution appointing Ms. Moonkyung Kim, Mr. Allard Nooy and Mr. Jui Kian Lim as members of the special committee, with Ms. Kim designated as its chairperson.

        Beginning on September 6, 2013, the special committee began interviewing and considering proposals from various prospective U.S. legal advisers, following which process it determined to retain Davis Polk & Wardwell ("Davis Polk") as its U.S. legal adviser and formally executed an engagement letter with Davis Polk on September 10, 2013.

        Between September 11, 2013 and September 14, 2013, the special committee interviewed four global investment banks which had submitted their qualifications and fee proposals to act as the special committee's financial adviser. After deliberation on the experience, qualifications and reputations of each of the potential financial advisers, the special committee decided to engage Houlihan Lokey (China) Limited ("Houlihan Lokey") as its financial adviser and authorized Davis Polk to negotiate an engagement letter with Houlihan Lokey on behalf of the special committee. The special committee's decision to appoint Houlihan Lokey as its financial adviser was based on, among other factors: (a) Houlihan Lokey's extensive experience in going private transactions, strong reputation, excellent credentials of the deal team and significant involvement of the senior members of the team; (b) Houlihan Lokey had made the most detailed presentation to the special committee, providing relevant market studies and Company specific information; and (c) Houlihan Lokey's competitive fee proposal. In connection with the special committee's retention of Houlihan Lokey, Houlihan Lokey disclosed the engagement of Houlihan Lokey Capital, Inc., an affiliate of Houlihan Lokey, by Vicis regarding, among other things, Vicis's potential divestment of its interest in Company securities, which engagement was staffed by a separate team of Houlihan Lokey Capital, Inc. employees. The special committee waived any potential conflict of interest arising from the engagement of Houlihan Lokey Capital, Inc. by Vicis. Houlihan Lokey informed the special committee that Houlihan Lokey Capital, Inc. was not directly involved in the sale of Vicis's Company securities; however, under the

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terms of its engagement, Houlihan Lokey Capital, Inc. may receive a fee from Vicis relating to such sale, separate and apart from the fees Houlihan Lokey will earn from the Company relating to its engagement by the special committee.

        On September 14, 2013, the board of directors adopted a special committee charter providing the special committee a broad mandate of authority to, among other things: (i) consider, review and evaluate the terms and conditions of the Going Private Proposal or any alternative transaction, including negotiating the definitive agreement or agreements; (ii) advise the board of directors of the Company whether the Going Private Proposal or any alternative transaction was advisable and fair to, and in the best interests of, the Company and its unaffiliated security holders; (iii) negotiate the terms of the Going Private Proposal or any alternative transaction; (iv) recommend to the board of directors what action, if any, should be taken by the Company with respect to the Going Private Proposal or any alternative transaction; and (v) retain such legal counsels, financial advisors, consultants and other agents as the special committee from time to time deem necessary, appropriate or advisable. The board of directors further resolved that it would not approve any transaction or otherwise recommend a transaction for approval by the Company's shareholders without a prior favorable recommendation of such transaction by the special committee.

        On September 17, 2013, Davis Polk engaged Walkers ("Walkers") to act as the special committee's outside counsel for matters relating to Cayman Islands law.

        On September 23, 2013, the special committee and Houlihan Lokey formally executed an engagement letter.

        On September 25, 2013, the Company issued a press release announcing the establishment of the special committee, the appointment of Ms. Kim as its chairperson, and that the special committee had engaged Houlihan Lokey as its financial adviser and Davis Polk as its legal counsel to assist the special committee in evaluating the Going Private Proposal and any alternative transactions, and furnished the press release as an exhibit to its Current Report on Form 6-K.

        Following negotiations between Davis Polk and Weil, on September 25, 2013, the Company, through the special committee entered into a confidentiality agreement with NewQuest Capital Advisers (HK) Limited. Thereafter, NewQuest commenced its financial, accounting and legal due diligence investigation of the Company.

        On September 25, 2013, at the request of a financial investor in Bidder A and Bidder A's legal counsel, NewQuest attended a meeting with this financial investor and Bidder A's legal counsel. At this meeting, it was indicated to NewQuest that Bidder A was interested in participating with NewQuest in the transactions contemplated by the Going Private Proposal. In response, the representative of NewQuest at the meeting noted that NewQuest would be concerned with any factors that could adversely impact deal certainty, including Bidder A's potential financing requirements and its regulatory and shareholder approvals that may be implicated in any transaction involving Bidder A.

        On October 3, 2013, NewQuest informed the special committee of its meeting with representatives of Bidder A on September 25, 2013 by written communication sent by Weil, stating that, at that point, NewQuest did not expect that additional financing would be required in connection with its proposed transaction and would want to carefully evaluate whether any participation or involvement by Bidder A may delay the transaction process between NewQuest and the special committee or affect the deal certainty that NewQuest expected to be able to deliver on its own. This email further stated that, as requested by Bidder A, NewQuest may engage in further discussions with Bidder A's representatives, shareholders and advisers to better understand the terms of any concrete proposal that they were able to put forward.

        On October 8, 2013, the special committee held a telephonic meeting with Davis Polk and Houlihan Lokey to discuss the information provided by NewQuest regarding its contacts with Bidder A.

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At this meeting, after discussion with its advisers, the special committee decided to request that NewQuest discontinue any current discussions with Bidder A, given the standstill provision contained in the confidentiality agreement between Bidder A and the Company. The special committee further determined that if Bidder A would like to request a waiver to the standstill provision, Bidder A should make this request directly to the special committee and the special committee would consider such request on its merits and in the best interests of the shareholders of the Company. The special committee authorized Davis Polk to communicate these decisions to NewQuest and Weil, which it did on the same day. When Bidder A's legal counsel again contacted NewQuest in the following days, NewQuest informed Bidder A that the special committee had instructed NewQuest not to engage with Bidder A to discuss any potential transactions.

        On October 13, 2013, Houlihan Lokey was contacted by Bidder B's legal counsel, requesting that representatives of Bidder B meet with the special committee on October 18, 2013 and indicating that Bidder B was planning to make a proposal to the special committee with respect to an alternative transaction.

        On October 17, 2013, the special committee met with Houlihan Lokey, Davis Polk and Walkers, in Davis Polk's offices. At this meeting, among other things: (a) Davis Polk provided the special committee with an overview of the customary roles and obligations of the special committee with respect to its evaluation of the Going Private Proposal and any alternative transactions, as well as the general process and disclosure obligations in connection with any going-private transaction under U.S. securities laws; (b) Walkers provided the special committee with an overview regarding the process of and the key issues in a Cayman Islands statutory merger and the directors' fiduciary duties under Cayman Islands law, including with respect to the running of a market check process; and (c) Houlihan Lokey provided the special committee with an overview of the general process for a going-private transaction, an update on the process which Houlihan Lokey had established to commence its fairness analysis with respect to the Going Private Proposal, predicated upon the receipt of final financial projections by Company management, and a briefing on the communications it had received from representatives of Bidder B regarding an alternative transaction. After further discussion with its advisers, the special committee instructed Houlihan Lokey to commence compiling a list of potential bidders for the Company which could be contacted in a market check process to evaluate the general level of investor interest in an alternative transaction, in order to benchmark the price offered in the Going Private Proposal and to explore any alternative transactions that may offer a greater value to the security holders of the Company which were unaffiliated to NewQuest and may be in the best interests of the Company, before the special committee commenced engaging in negotiations with NewQuest with respect to the Going Private Proposal. The special committee also authorized Davis Polk and Houlihan Lokey to meet with representatives of Bidder B to receive and discuss its proposal with respect to an alternative transaction.

        On October 18, 2013, Davis Polk and Houlihan Lokey met with representatives of Bidder B's financial investors and its legal counsel in Davis Polk's offices. At this meeting, the representatives of Bidder B delivered a preliminary, non-binding proposal by Bidder B to acquire all of the outstanding Shares (including Shares represented by ADSs) or make tender offer for the Shares with a minimum acceptance condition of 50.1% of the total outstanding Shares for $3.25 per ADS, in cash, subject to Bidder B's due diligence investigation of the Company. At this meeting, Bidder B's legal counsel put forth its view that NewQuest had not complied with Rule 13e-3 under the Exchange Act ("Rule 13e-3"), in connection with its prior acquisition of Shares in 2013. Bidder B's counsel cited the enforcement proceeding and settlement order initiated by the SEC in In the Matter of William A. Wilkerson and the Phoenix Group of Florida, Inc., SEC Release 34-48703 (October 27, 2003) ("Wilkerson"), and put forth its view that the circumstances of NewQuest's prior acquisition were "square on the facts" with Wilkerson. Bidder B's counsel stated that the special committee should

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consider the possibility of any resulting enforcement or other actions by the SEC in its evaluation of the Going Private Proposal.

        On October 21, 2013, the special committee held a telephonic meeting with Davis Polk and Houlihan Lokey to discuss the meeting with Bidder B's representatives. At this meeting, Davis Polk summarized the terms of Bidder B's acquisition proposal and the statements made by Bidder B's counsel regarding its view that NewQuest had not complied with Rule 13e-3 and the applicability of Wilkerson to any transaction contemplated by the Going Private Proposal. After discussion with its advisers, the special committee determined that, irrespective of the merits of Bidder B's allegations relating to U.S. securities law matters, Bidder B should be permitted to commence due diligence on the Company in order for it to confirm its offer and instructed Davis Polk to prepare and commence negotiating a confidentiality agreement between Bidder B and the Company (containing appropriate protections for competitively sensitive information, given Bidder B's status as a strategic competitor of the Company). At this meeting, the special committee also authorized Davis Polk to contact Weil and O'Melveny to obtain their views with respect to the U.S. securities laws matters that had been raised by Bidder B's counsel.

        On October 22, 2013, Davis Polk sent a draft confidentiality agreement to Bidder B's counsel and thereafter commenced negotiating this agreement.

        On October 22, 2013, Davis Polk held separate telephonic meetings with Weil and O'Melveny to discuss the U.S. securities laws matters that had been raised by Bidder B's counsel. Between October 22, 2013 and October 28, 2013, Davis Polk had separate discussions with Weil and O'Melveny regarding these matters. In the discussions between Davis Polk and O'Melveny, O'Melveny noted that the Rule 13e-3 analysis would be largely dependent on the relevant facts and circumstances of the transaction at issue and that their initial assessment, without the benefit of knowing the relevant facts and circumstances, was that CPI Ballpark's exercise of the Vicis Option in July and September 2013 could elicit questions regarding the relevant facts from the staff of the SEC during the comment process if and when a Schedule 13E-3 was filed in connection with the Going Private Proposal. In the discussions between Davis Polk and Weil, Weil discussed that Bidder B's allegations did not take into account the relevant facts surrounding CPI Ballpark's purchase of the Shares owned by Vicis (which are described above under "—Historical Relationship between CPI Ballpark and the Company"), which facts are distinguishable from those relevant to the transactions cited in Wilkerson. At NewQuest's instruction, Weil also reiterated NewQuest's position that it would not be interested in selling its Shares to Bidder B.

        On October 29, 2013, the special committee held a telephonic meeting with Davis Polk and Houlihan Lokey. At this meeting, Houlihan Lokey informed the special committee that they had identified approximately 90 potential bidders, described the criteria which they had used in selecting potential bidders, and summarized the proposed process, steps and timeline for the conduct of the market check. At this meeting, Davis Polk provided an overview of the advice previously provided by Walkers to the special committee regarding the duties of the directors regarding the conduct of the market check. The members of the special committee asked its legal and financial advisers various questions regarding the proposed market check including timelines, process and the protection of the Company's competitively sensitive information with respect to the involvement of any direct competitors of the Company in the market check. At this meeting, the special committee and its advisers discussed the merits of the special committee engaging a tax adviser to advise it with respect to the tax implications of various possible structures for any alternative transaction, including any potential asset sale versus a sale of Shares. After further discussion, the special committee authorized Davis Polk and Houlihan Lokey to prepare a process letter to be sent to the shortlisted potential bidders in connection with the market check and decided to appoint a tax adviser after the completion of the market check to advise the special committee on the tax implications of any bids which had been submitted.

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        On November 4, 2013, the special committee held a telephonic meeting with Davis Polk and Houlihan Lokey to discuss the process letter and the updated list of potential bidders in connection with the market check. After questions by the special committee and further discussion, the special committee, with the advice of Houlihan Lokey, concluded that the market check would reasonably cover the pool of potential buyers who may have an interest in pursuing an alternative transaction with the Company. At this meeting, the special committee authorized Houlihan Lokey to commence the market check process.

        On November 4, 2013, the Company provided to Houlihan Lokey certain financial projections for the years ending December 31, 2013 through December 31, 2018. See "Certain Financial Projections" for additional information.

        On November 5, 2013, following negotiations between Davis Polk and Bidder B's legal counsel, the Company through the special committee entered into a confidentiality agreement with Bidder B, which included appropriate protections for competitively sensitive information, given Bidder B's status as a strategic competitor of the Company and a standstill. Thereafter, Bidder B commenced its financial, accounting and legal due diligence investigation of the Company. During the remainder of November 2013, Davis Polk and Bidder B's legal counsel held numerous telephonic meetings to discuss and coordinate due diligence matters.

        On November 7, 2013, the market check was formally commenced when Houlihan Lokey began sending the process letter to 89 potential bidders (including 43 strategic bidders and 46 financial bidders), as authorized by the special committee. Bidder A was also sent a process letter on November 7, 2013. The process letter included a deadline of December 9, 2013 for bidders to submit their preliminary indications of interest based on publicly available information with respect to an alternative transaction with the Company.

        On November 12, 2013, Davis Polk, Weil and the general counsel of NewQuest met in Weil's offices to discuss their respective analyses of the application of Rule 13e-3 and Wilkerson to NewQuest's prior acquisition of Shares in 2013. At this meeting, Davis Polk and Weil each concluded that the facts of Wilkerson were distinguishable from the facts of the relevant NewQuest Share acquisitions.

        On November 12, Houlihan Lokey had a call with Company management to conduct due diligence on the Company's business and financial projections received on November 4, 2013.

        On November 15, 2013, the special committee met with Houlihan, Davis Polk and Walkers, in Davis Polk's offices. At this meeting, (a) Houlihan Lokey updated the special committee on the progress of the market check and presented its preliminary financial analysis, based on the historical financial data published by the Company and the Company's financial projections prepared by Company management, (b) Walkers presented an overview to the special committee on the availability of dissenters' rights and the required procedures under the Cayman Companies Law for exercising dissenters' rights and various alternative structures that may be possible with respect to the Company under Cayman Islands law, and (c) Davis Polk summarized its discussions with Weil and O'Melveny with respect to the application of Rule 13e-3 and Wilkerson to NewQuest's prior acquisition of Shares in 2013 and its conclusion that the facts of those acquisitions were distinguishable from the facts of Wilkerson.

        On November 16, 2013, the special committee received an email from a potential strategic bidder ("Bidder D") indicating interest in participating in the transaction.

        On November 20, 2013, NewQuest sent a letter to the special committee which, among other things: (a) indicated that NewQuest was aware that the special committee had initiated the market check process; (b) informed the special committee that NewQuest did not intend to sell its Shares and would not vote its Shares in favor of any alternative transaction which may require the sale of its

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Shares; (c) indicated that it believed that proceeding with any sale of the Company through an asset sale or other alternative transaction without the approval of a majority of the Company's shareholders would not be consistent with the directors' fiduciary duties and therefore could be subject to challenge; and (d) expressed NewQuest's desire to ensure that discussions between it and the special committee moved ahead at a swift pace. This letter attached a draft merger agreement and requested that the special committee instruct its advisers to commence negotiation of that draft.

        On November 21, 2013, after discussion with Houlihan Lokey and Davis Polk, the special committee authorized Davis Polk to (a) inform Weil that the special committee would only permit negotiation of a merger agreement after it obtained the initial results of the market check, and (b) inform Bidder B's counsel that Bidder B should complete its due diligence investigation of the Company and submit its best and final bid along with a draft acquisition agreement to the special committee by no later than December 31, 2013. On the same day, Davis Polk sent both of these communications to Weil and Bidder B's counsel, on behalf of the special committee.

        On November 21, 2013 and November, 22, 2013, Houlihan Lokey had calls to further discuss with the Company's management, among other topics, the Company's business operations, financial projections, future development strategy, industry dynamics, and their views on the proposed transaction.

        On November 25, 2013, Davis Polk and Bidder B's legal counsel held a telephonic meeting, which discussed, among other things: (a) Bidder B's due diligence process, including the procedures which would need to be put in place for Bidder B's advisers to receive access to competitively sensitive information, as set forth in the confidentiality agreement between the Company and Bidder B; and (b) the special committee's instruction that Bidder B would have until December 31, 2013 to complete its due diligence investigation of the Company and to make its final and best acquisition proposal. At this meeting, Bidder B's legal counsel asked whether the board of directors of the Company would have the corporate authority to approve a sale of the Company's assets without shareholder approval and whether the board of directors would be bound to approve and/or recommend to the shareholders an alternative transaction which had been recommended by the special committee. Davis Polk responded that, according to the special committee's Cayman Islands counsel, the board of directors of the Company would have the corporate authority to approve a sale of the Company's assets without shareholder approval and that separate board approval would be required for any alternative transaction which had been recommended by the special committee.

        On November 27, 2013, after discussion with Davis Polk, the special committee authorized Davis Polk to (a) reiterate to Bidder B's legal counsel that Bidder B's best and final proposal should be submitted to the special committee no later than December 31, 2013, and (b) provide Bidder B's legal counsel with the list of competitive information under the confidentiality agreement and the form of adviser undertaking for access to such competitive information, in the form which had been prepared by Davis Polk and reviewed and approved by the special committee. On the same day, Davis Polk sent this communication to Bidder B's counsel, on behalf of the special committee.

        On December 6, 2013, Bidder B sent a letter to the special committee, which, among other things, sought permission to print and download certain listed financial information files from the online data room set up by the Company, obtain access to certain additional project sites of the Company, and obtain access to certain competitive information without providing the required advisers' undertaking. This letter requested a copy of the resolutions of the board of directors authorizing the scope and powers of the special committee in order to better understand the power of the board, separate and apart from the special committee to approve or reject an acquisition proposal which had been recommended by the special committee. Further, this letter stated that: (a) Bidder B believed that a "level playing field" would require all bidders to submit their best and final proposals at the same time and provide either all or, alternatively, none of the bidders, with the right to match the highest or best

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offer after the proposal deadline; (b) if Bidder B was selected as the winning bidder, it expected to promptly execute an exclusivity agreement and negotiate the definitive transaction documents; and (c) if the current process would proceed otherwise, Bidder B may be forced to reconsider whether it would be in a position to submit its best and final offer.

        On December 6, 2013, Bidder A submitted to the special committee in accordance with the market check procedures a preliminary, non-binding proposal to acquire all of the outstanding Shares or make a tender offer (which Bidder A subsequently clarified in response to a question from Houlihan Lokey would have a minimum acceptance condition of one-third of the total outstanding Shares) for $1.1667 per Share or $3.50 per ADS, in cash. In its offer, among other things, Bidder A: (a) outlined its flexibility with respect to the potential structure of the acquisition and the possibility to work with other parties, including NewQuest (including by forming a buyer group to implement an alternative transaction); and (b) stated its expectation of receiving financing supported by a letter of intent from a PRC bank issued to Bidder A. Following Bidder A's submission of its preliminary, non-binding proposal to the special committee, Bidder A's legal counsel contacted NewQuest to inform NewQuest that Bidder A had submitted a proposal to the special committee.

        On December 9, 2013, Bidder C (a financial investor bidder) submitted to the special committee in accordance with the market check procedures a preliminary, non-binding proposal to acquire all of the outstanding Shares or all of the Company's assets for $1.2367 per Share or $3.71 per ADS, in cash, or make a tender offer (which Bidder C subsequently clarified in response to a question from Houlihan Lokey would have a minimum acceptance condition of 10% of the total outstanding Shares) for $1.14 per Share or $3.42 per ADS, in cash. In its offer, Bidder C stated that, among other things: (a) it was not contemplating the formation of a consortium for its minority tender offer proposal, but was willing to consider forming a consortium for its proposal to acquire all of the outstanding Shares or all of the Company's assets, including with existing shareholders of the Company; and (b) the transaction was expected to be financed with a combination of capital from Bidder C's existing internal funds and funds that had already been committed to fund a transaction.

        On December 9, 2013, Bidder D submitted to the special committee in accordance with the market check procedures a preliminary, non-binding proposal to acquire all of the outstanding Shares for $1.05 per Share or $3.15 per ADS, in cash. In its offer, Bidder D stated that, among other things, it expected that the transaction would be subject to financing and Bidder D expected to obtain financing from its relationship banks.

        On December 12, 2013, NewQuest requested a meeting with the special committee to discuss its Going Private Proposal.

        On December 13, 2013, the special committee met with Houlihan Lokey, Davis Polk and Walkers, in Davis Polk's offices. At this meeting, Houlihan Lokey provided an update to the special committee of its financial analysis of the Company and presented a comparison of each of the proposals received from Bidder A, Bidder C and Bidder D through the market check process, together with the proposal received from Bidder B and the Going Private Proposal. The special committee asked various questions of Houlihan Lokey and Davis Polk regarding the comparison of each of the bids received and discussed the process and issues in connection with bid selection and conduct of due diligence by potential bidders. At this meeting, the special committee discussed the deadline for the final offer from Bidder B and Bidder B's due diligence and special committee authority related requests. The special committee decided on the need to maintain the existing bid deadline for Bidder B and protective measures in the due diligence process, and authorized Davis Polk to communicate this to Bidder B together with providing the requested extracts of the board resolutions establishing the special committee's authority. At this meeting, the special committee decided to accept NewQuest's invitation to meet with the special committee and discuss the Going Private Proposal. Also, at this meeting, the special committee and its advisers discussed the need for the special committee to obtain advice from a tax adviser to

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evaluate any sale of assets and distribution of proceeds to the Company's shareholders as an alternative transaction structure, and discussed the feasibility of such alternative transaction structures with its advisers. The special committee instructed Houlihan Lokey and Davis Polk to speak directly with the tax department of a big four accounting firm (the "Tax Adviser"), regarding the preparation of a tax analysis of sale of assets and distribution of proceeds to shareholders, to enable the special committee to evaluate this potential acquisition structure. On December 30, 2013, the special committee, on behalf of the Company entered into an engagement agreement with the Tax Adviser.

        On December 16, 2013, Davis Polk communicated the special committee's response to Bidder B's letter dated December 6, 2013 to Bidder B's counsel, as authorized in the December 13, 2013 meeting with the special committee.

        Also on December 16, 2013, the special committee, Houlihan Lokey and Davis Polk met with NewQuest and Weil, in Davis Polk's offices, to discuss the Going Private Proposal. During this meeting, the special committee indicated to NewQuest that it had received a number of alternative acquisition proposals with an offer price higher than the $0.99 per Share or $2.97 per ADS being offered by NewQuest and asked that NewQuest increase its offer price if it wished to commence negotiation of a merger agreement.

        On December 18, 2013, Davis Polk and Bidder B's counsel held a telephonic meeting to discuss the special committee's response to Bidder B's letter dated December 6, 2013. At this meeting, Davis Polk and Bidder B's counsel discussed limiting Bidder B's request for access to competitively sensitive information to limited financial information which was relevant to confirmation of Bidder B's valuation analysis. At this meeting, Bidder B's counsel stated that given some delay in Bidder B's due diligence effort and, in light of the holidays, it was possible that Bidder B may be delayed by a few days after the December 31, 2013 deadline. Davis Polk responded that the special committee was specifically focused on that deadline and may consider a bid received after that date to be non-qualifying. At this meeting, Davis Polk informed Bidder B's counsel that some of the bids received by the special committee had contemplated a minority stake acquisition (i.e., a transaction in which NewQuest does not agree to participate) as an alternative to the acquisition of all or a majority of the Shares and on behalf of the special committee invited Bidder B to submit its own minority acquisition alternative when it submitted its best and final bid on or before December 31, 2013. Davis Polk further stated that if a minority stake acquisition was something Bidder B wished to consider, its bid should describe its proposed structure for a minority acquisition, the minimum acceptance condition and specifically what (if any) minority shareholder rights Bidder B would be seeking from the Company in connection with such acquisition and Bidder B should assume that it would not receive any contractual minority rights from CPI Ballpark in any such transaction.

        On December 19, 2013, NewQuest provided to the special committee an update to the Going Private Proposal and indicated that it was prepared to offer $1.07 per Share or $3.21 per ADS, in cash, subject to agreement on certain key terms of its proposed merger agreement with the Company. These key terms included the following: (a) no closing condition requiring "majority of the minority" approval of the merger by the unaffiliated security holders; (b) 100% equity financing, with NewQuest funds to provide customary equity commitment letters, and no debt or other third party financing; (c) potential rollover of up to 10% of the outstanding Shares to be determined by NewQuest and subject to its agreement on terms of any rollover arrangement with any potential rollover shareholders; (d) all vested share options with exercise prices that are less than the merger consideration to be cashed out, with the holders entitled to receive the spread value for each such option based on the merger consideration; (e) a no "material adverse effect" closing condition; (f) Company termination fee equal to 3% of the equity value of the Company (calculated by multiplying the total number of issued and outstanding Shares by the merger consideration), payable by the Company on termination to accept a superior proposal, make a change in recommendation of the board of directors, for uncured breach by the Company, or closing of an alternative transaction within one year after termination of the merger

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agreement for failure to receive the shareholder approval or expiration of the end date; and (g) Parent termination fee equal to the Company termination fee, payable by Parent on termination for uncured breach by Parent or Merger Sub or failure of Parent to close within specified period after satisfaction of closing conditions. In its update, NewQuest indicated that it was prepared to engage the special committee in further discussions regarding a potential further increase in its offer price solely on the basis and with the understanding that the special committee would immediately commence the negotiation of the key merger agreement terms, such that the parties would be in a position to finalize a definitive merger agreement by January 10, 2014. NewQuest's revised proposal stated that if the special committee determined that it was not in a position to engage with NewQuest on the foregoing basis, NewQuest would need to re-evaluate its proposal, including whether or not to continue to pursue it in the manner outlined in the Going Private Proposal.

        On December 19, 2013, the special committee, Houlihan Lokey and Davis Polk held a telephonic meeting in which, among other things, the special committee: (a) instructed Davis Polk to work to further narrow the legal due diligence list(s) provided by Bidder B's counsel to critical valuation items (with Bidder B to be permitted to reserve remaining applicable items for confirmatory due diligence if selected as the preferred bidder); (b) reaffirmed the December 31, 2013 deadline for receipt of Bidder B's bid; (c) instructed Houlihan Lokey to request that Bidder A and Bidder C describe in further detail the structure of its proposed acquisition of a minority stake and the specific minority shareholder rights it would expect to receive from the Company in such a transaction, and request that Bidder A describe in further detail the nature of the financing commitments it expected to receive by January 31, 2014 as referred to in its proposal; (d) decided to eliminate Bidder D from the market check process, based on the special committee's consideration of Bidder D's proposal and its supplemental responses that it was only interested in the acquisition of all of the outstanding Shares and the fact that Bidder D's offer price of $3.15 per ADS was below the price of $3.21 per ADS that NewQuest would be prepared to offer; (e) determined that, given upcoming travel schedules and holidays and in order to reduce strain on the Company's management, and pending receipt of the further requested information, the decision on whether due diligence access would be granted to Bidder A and/or Bidder C would be deferred until January 3, 2014; and (f) discussed the update to the Going Private Proposal received from NewQuest (including the key merger agreement terms outlined in the update) with its advisers.

        During the following week, Houlihan Lokey contacted each of Bidder A, Bidder C and Bidder D to communicate the applicable instructions and decisions of the special committee described in (c), (d) and (e) in the paragraph above. In response, Bidder C submitted an extensive list of minority rights, including proportionate representation on the board of directors, continuation of the current number of independent directors to "break the tie" and preserve the minority shareholder interests, pre-emptive rights on equity or equity-linked issuances (including at asset level entities but subject to customary exceptions), no disproportionate treatment covenants and approval rights over a large range of value protective and business/operational matters, and Bidder A indicated that it would be seeking proportionate representation on the board of directors, pre-emptive rights on share issuances (subject to customary exceptions) and no disproportionate treatment and non-arms' length related party transactions covenants. In relation to its proposed financing, Bidder A stated that it intended to secure a standby letter of credit from an onshore PRC bank which had provided a letter of intent for up to RMB500 million (approximately $82 million) credit facility, and to use the standby letter of credit as security to obtain a U.S. dollar credit facility from an offshore lender in order to finance the transaction. On December 26, 2013 Houlihan Lokey informed Bidder D, on behalf of the special committee, that after careful deliberation by the special committee, Bidder D's offer had been considered inadequate and had been rejected by the special committee.

        On December 20, 2013, Davis Polk sent an email to Bidder B's counsel reaffirming that the December 31, 2013 bid deadline was a hard deadline and a bid received after that date would be treated as a non-qualifying bid and rejected by the special committee and requesting that Bidder B

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send its revised due diligence list of only those outstanding items which were critical to its valuation analysis.

        On December 20, 2013, Davis Polk sent an email to Weil containing the special committee's response to NewQuest's update to the Going Private Proposal, which stated that, among other things: (a) the price of $1.07 per Share or $3.21 per ADS was inadequate and was materially below other bids received by the special committee; (b) any transaction should be subject to "majority of the minority" approval of the merger by the unaffiliated security holders; (c) the Company should be a third party beneficiary of the equity commitment letter to be provided by the Sponsors with a right of specific performance; (d) the rollover terms and identity of any rollover shareholders, including the number of Shares covered by any rollover agreement, should be subject to prior approval by the special committee; (e) the no "material adverse effect" condition to contain broad customary exceptions; (f) there should be no "force the vote" if the board of directors changed its recommendation of the merger; (g) the special committee should be permitted to continue discussions with other current bidders after signing of a merger agreement with NewQuest under a "go-shop" arrangement and the special committee should be permitted to waive any standstill if required by fiduciary duties; (h) the definition of "superior proposal" which would permit the board of directors to terminate the merger agreement and accept such proposal should include a proposal to acquire a minority stake in the Company at a price higher than the price agreed with NewQuest; (i) the Company termination fee should be 2% of the transaction value (calculated as the total cash merger consideration to be paid by NewQuest) or 1% of transaction value if the merger agreement is terminated under the "go shop"; (j) the Parent termination fee should be three times the Company termination fee; (k) the merger agreement should provide protection to the unaffiliated security holders in the event that the merger agreement is terminated due to the non-satisfaction of a regulatory requirement (including any required approval or clearance of any governmental authority) due to any actions or inactions of NewQuest; (l) NewQuest should agree to provide customary covenants regarding maintenance of employee benefits; and (m) each party should be able to seek specific performance of the merger agreement.

        On December 24, 2013, Weil sent a reply to Davis Polk, which stated that, among other things: (a) NewQuest was prepared to engage in discussions regarding an increase of its offer price on the basis outlined in the meeting of December 16, 2013; (b) NewQuest's proposal offered transaction certainty that could not be matched by any other potential offer; (c) applicable law does not require shareholder approval by "majority of the minority" and that NewQuest would not agree to any transaction with such a requirement; (d) NewQuest's agreement that the Company would be a third party beneficiary of the equity commitment letter to be provided by the Sponsors with a right of specific performance; (e) NewQuest's agreement to disclose the identity of any rollover shareholder(s) and the terms (including number of rollover shares) of any rollover arrangements and that NewQuest had not, at that time, reached any agreement with any rollover shareholder(s); (f) NewQuest's acceptance of the proposed "material adverse effect" exceptions; (g) NewQuest's requirement for customary "force the vote" provisions; (h) NewQuest would not proceed on any transaction with a "go-shop" for any bidders, however if any bidder made a "superior proposal," the Company would be able to change its recommendation or terminate the merger agreement pursuant to its "fiduciary-out" provisions; (i) "superior proposal" would not include any proposal to acquire a minority stake, as third parties are free to make open market purchases or a tender offer for a minority stake regardless of the merger agreement to the extent that they are not prohibited by a standstill; (j) subject to the special committee's agreement with NewQuest's positions on "majority of the minority," "go shop" and the scope of "superior proposal," NewQuest was prepared to consider a termination fee that is lower than 3% of equity value; (k) NewQuest willingness to consider a Parent termination fee of up to 1.5 times the Company termination fee; (l) NewQuest's willingness to accept a shortened end date for the merger agreement to address the special committee's concerns over any regulatory impediment to closing of the merger due to any actions or inactions of NewQuest; (m) NewQuest's agreement to provide customary covenants regarding maintenance of employee benefits; and (h) NewQuest's

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agreement to provide for specific performance by Parent to draw down on the equity commitment letter.

        On December 27, 2013, Davis Polk sent a request to Weil for several clarifications regarding NewQuest's response of December 24, 2013.

        After the meeting of the special committee and its advisers on December 13, 2013 and during the remainder of December 2013, as authorized in the December 13, 2013 meeting and in order to more fully assess the potential value available to the shareholders of the Company in any proposed asset purchase transaction, Houlihan Lokey, Davis Polk and the special committee held a number of discussions with the Tax Adviser to analyze the potential tax impact and execution issues in connection with such an asset transaction and compare it to a share transaction. Based on the Tax Adviser's preliminary tax analysis, provided to the special committee in writing on December 31, 2013 and various follow up questions from the special committee and its advisers during the following ten days, the Tax Adviser assessed the potential PRC tax impact on the Company in an asset sale transaction as between approximately 10-25%. The Tax Adviser noted that a 10% PRC withholding tax would be imposed on capital gains derived from the Company's sale of its PRC subsidiaries, in addition to stamp duty of 0.05% of the purchase price payable by both the Company and the potential buyer. However, the Tax Adviser also noted that in the last two asset sales by the Company, the tax bureau in Fujian had assessed the Company as a PRC Tax Resident Enterprise and charged corporate income tax of 25% on the capital gains and that, in practice, at least in Fujian, it would potentially be difficult to convince the local tax authority not to impose the 25% tax on future asset sales. The special committee also asked the Tax Adviser to consider the potential taxes on any distribution of the proceeds of an asset transaction received by the Company to its shareholders, assuming hypothetical shareholders in the Cayman Islands and the United States. The Tax Adviser concluded that for taxpayers who are Cayman Islands tax residents, there would be no Cayman tax consequences associated with an asset transaction. The Tax Adviser stated that the U.S. tax consequences for Company shareholders who are U.S. tax residents would depend on a number of factors such as the status of the Company (i.e., whether the Company is treated as a Controlled Foreign Company for U.S. tax purposes) and also the characteristics of the U.S. taxpayers (i.e., whether they are limited partnership, trusts, corporation or individuals, etc.) and was not able to provide general conclusions on U.S. tax consequences the Company's shareholders. The Tax Adviser was unable to identify any known examples of a U.S.-listed company that has disposed of all of its assets in the PRC and then distributed the sales proceeds to its offshore shareholders. You may not rely for any purpose on the information with respect to tax matters described in this paragraph, including tax advice, tax opinions, tax returns or the tax treatment or tax structure of any transaction.

        On December 31, 2013, Bidder B submitted to the special committee its preliminary, non-binding proposal to acquire all of the Company's assets (through the acquisition of each of its subsidiaries) for an aggregate equity purchase price of $228.56 million, equivalent to $1.41 per Share or $4.23 per ADS, in cash. This proposal was based on an assumption of $29.53 million of current assets (including $17.64 million of cash) and no more than $337.12 million of total liabilities, including $252.91 million in debt, as reflected on the Company's September 30, 2013 balance sheet. In its proposal, Bidder B noted that this per Share/ADS offer price available for distribution to the Company's shareholders in an all asset purchase transaction would be net of taxes payable by the Company, (i.e., PRC capital gains tax and PRC or HK stamp duties), which based on its preliminary analysis, Bidder B did not expect to be significant. As an alternative to an all assets sale transaction, Bidder B also offered (a) to acquire part of the Company's assets, followed by the distribution of proceeds to the Company's shareholders via special dividend or use of the net purchase price to implement a share buyback, reverse stock split, redemption or similar corporate action to remit proceeds to the minority shareholders based on 10.0x EV/Normalized EBITDA valuation, assuming a Normalized EBITDA of $53.615 million, subject to finalization of assets to be included in such transaction and confirmatory due diligence, including to

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allocate net liabilities to each individual asset and the same tax considerations as an all asset sale transaction, or (b) to acquire all of the outstanding Shares (including Shares represented by ADSs) (assuming NewQuest's willingness to sell), or (if NewQuest was not willing to sell) to make a tender offer for the outstanding Shares, with a minimum acceptance condition of 50.1% of the total outstanding Shares, in each case, for $1.34 per Share or $4.02 per ADS, in cash. Bidder B's revised proposal also stated that, among other things, (1) Bidder B expected that negotiation of definitive documents and completion of its confirmatory due diligence could be completed within four weeks, and (2) an asset purchase transaction (all or partial) would require local PRC Ministry of Commerce ("MOFCOM") approval before closing, which Bidder B expected could be received within 1-2 months after signing of definitive documents, (c) an asset purchase transaction (all or partial), unlike any Share purchase transaction, will not require Company shareholder approval or proxy solicitation or SEC review, and (d) if selected as the winning bidder, Bidder B expected to receive a 30-day exclusivity period and agreement by the Company to reimburse Bidder B's expenses in connection with the transaction prior to negotiation of definitive documents and completion of its confirmatory due diligence.

        On January 2, 2014, Davis Polk, as authorized by the special committee, sent a summary of the key terms of the Bidder B's revised proposal to Weil and NewQuest (on a no-names basis, describing Bidder B as a strategic bidder which had conducted due diligence on the Company), and requested that NewQuest meet with the special committee and specifically address the value elements of the revised Bidder B proposal versus the price of $3.21 per ADS that NewQuest would be prepared to offer and whether NewQuest had an interest in exploring a joint Share purchase transaction with Bidder B, as contemplated as an alternative transaction in the revised Bidder B proposal. Davis Polk, as authorized by the special committee, also informed Weil that, in addition to the revised Bidder B proposal, the special committee had received a number of other proposals from bidders who had participated in the market check and had not yet received due diligence access to the Company.

        On January 4, 2014, the special committee, Houlihan Lokey, Davis Polk and Walkers met with representatives of Bidder B (including its chairman) and its legal counsel, in Davis Polk's offices. At this meeting, the special committee and its advisers asked various questions with respect to Bidder B's revised proposal in order to evaluate the firmness of Bidder B's offer price and the proposal's level of execution and closing certainty. In response to these questions, among other things, Bidder B's chairman stated that: (a) Bidder B was prepared to execute a transaction with no confirmatory due diligence and was confident of negotiating definitive documents and obtaining its own board and shareholder approvals very quickly; (b) the September 30, 2013 balance sheet assumptions underlying the all asset transaction proposal would not be used to reduce the offer price unless there was a significant change; (c) Bidder B had some flexibility to increase its offer price; (d) Bidder B would be prepared to contemplate a proposal to acquire a minority stake in the Company, but only if it obtained rights to take control of the management of the Company and that it would be amenable to a consortium transaction with NewQuest on a similar basis; (e) based on the preliminary analysis of its tax adviser, Bidder B expected minimal PRC capital gains tax and stamp duty leakage in connection with an asset transaction; and (f) based on Bidder B's prior experience of making hydroelectric plant acquisitions in the PRC, Bidder B believed that it could obtain required PRC governmental (including local MOFCOM approval) within one month. Davis Polk asked whether Bidder B would be prepared to close an all asset transaction even if all of the Company's subsidiaries had not been transferred due to the failure to receive all of the required PRC governmental approvals. Bidder B's counsel responded that this had not been discussed between Bidder B and its advisers. The special committee then asked if Bidder B would be prepared to pay a non-refundable earnest deposit in order for the special committee to agree to terminate its discussions with NewQuest and enter into a short period of exclusivity with Bidder B in order for it to negotiate definitive transaction documents. Bidder B's chairman stated that Bidder B would be prepared to agree to this. Following a private discussion between Bidder B and its counsel, Bidder B's counsel then clarified that Bidder B was willing to

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consider paying an earnest deposit and Bidder B would require the completion of confirmatory legal due diligence prior to such payment, however confirmatory legal due diligence would not be used to reduce Bidder B's offer price.

        Later on January 4, 2014, the special committee, Houlihan Lokey, Davis Polk and Walkers met with representatives of NewQuest and Weil, in Davis Polk's offices. NewQuest opened the meeting by stating that its objective was to make a determination of whether to proceed with a transaction with the Company or whether to cease discussions and potentially withdraw the Going Private Proposal. With respect to its proposal, NewQuest, among other things: (a) informed the special committee that NewQuest was not interested in participating in a consortium transaction with Bidder B or selling any of its Shares to Bidder B or any other third party; (b) stated that there would be a number of regulatory (including approvals from local MOFCOM and State Administration of Foreign Exchange of the PRC and individual plant licensing issues), tax, management retention and other execution challenges to any asset sale transaction with Bidder B or any other party; and (c) stated that if the special committee was not prepared to recommend a transaction with NewQuest, then any decision to further investigate an asset sale transaction or other alternative transaction should only be considered by the full board of directors of the Company. Following a private discussion with its advisers, the special committee determined that it would not be prepared to consider a transaction with NewQuest at a price of $1.07 per Share or $3.21 per ADS. The special committee also determined that NewQuest would need to pay a meaningful premium over its current offer price before the special committee would be prepared to no longer insist on a "majority of minority" shareholder approval condition to the merger. The meeting resumed and the special committee informed NewQuest of these determinations. NewQuest responded that it would be prepared to meaningfully increase its offer price and, while it was not in the position to confirm its final and best price at that time, it expected to be able to do so as early as possible in the week commencing January 5, 2014, after discussion with its limited partners. In the meantime, the special committee and NewQuest agreed that their respective counsel would commence negotiation of the full merger agreement, on the assumption that NewQuest would meaningfully increase its offer price and this best and final offer (together with a fully negotiated merger agreement) would be sent for the board of directors' consideration in conjunction with any asset purchase transaction or other alternative transaction, which the special committee may also refer to the board of directors for its consideration.

        On January 5, 2014, Weil provided a revised draft of the merger agreement to Davis Polk, reflecting comments on the key merger agreement terms exchanged between the parties since December 19, 2013, and a draft equity commitment letter and limited guarantee from the Sponsors.

        On January 6, 2014, Davis Polk provided a revised draft of the merger agreement to Weil.

        During the week of January 6, 2014, representatives of CPI Ballpark discussed with representatives of CEF the potential opportunity for CEF to rollover its Shares in connection with the merger and the terms of the rollover agreement. The parties finalized the terms of the rollover agreement on January 12, 2014, and Parent, CPI Ballpark and CEF entered into the rollover agreement on January 13, 2014.

        From January 7, 2014 through January 9, 2014, Davis Polk and Weil continued to negotiate the merger agreement, equity commitment letter and limited guarantee.

        On January 7, 2014, Bidder B's legal counsel held a telephonic meeting with Davis Polk to further clarify certain statements made by Bidder B's chairman in the meeting with the special committee on January 4, 2014 in relation to Bidder B's revised proposal. Bidder B's legal counsel stated that, among other things: (a) Bidder B's tolerance for any increase in net liabilities compared to the Company's September 30, 2014 balance sheet would be in the range of 1-2%, and beyond that, Bidder B would need to understand the reasons and revisit impact on its proposed price, if any; (b) Bidder B would need to complete confirmatory due diligence (both legal and financial) before signing a definitive

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transaction agreement with the Company, but that this was not intended as a backdoor means to revisit the offer price and Bidder B expected to be able to complete this on an expedited basis if selected as the winning bidder; and (c) Bidder B would agree to discuss an earnest deposit, but it could not be non-refundable in all circumstances.

        On January 10, 2014, the special committee, through Houlihan Lokey, received a revised, non-binding proposal from Bidder A, offering to increase Bidder A's offer price to acquire all of the outstanding Shares or a one-third or more minority stake to $1.333 per Share or $4.00 per ADS, in cash. The letter attached an additional letter of intent from another PRC onshore bank, for an up to RMB900 million (approximately $148 million) credit facility and a financing support letter dated January 15, 2009 from an offshore financial institution. In its revised proposal, Bidder A stated that it intended to use its onshore credit facilities to secure offshore financing for the acquisition and access the $120 million tranche B loan facility described in the offshore financing support letter if additional funding was required. Bidder A further indicated that if the special committee did not engage with Bidder A, it would be prepared to commence an unsolicited tender offer for the Shares and ADSs.

        On January 10, 2014, a few hours after the special committee's receipt of the revised Bidder A proposal, Weil, on behalf of NewQuest, communicated orally to Davis Polk, which was then confirmed in a written communication sent by Weil on behalf of CPI Ballpark to the special committee and its advisers, that NewQuest was prepared to enter into a merger agreement at a price of $1.17 per Share or $3.51 per ADS, in cash. NewQuest's revised proposal stated that this represented NewQuest's best and final offer and that if the parties did not execute a merger agreement and announce the transaction before 10:00 a.m. on Monday, January 13, 2014, the special committee may assume that the Going Private Proposal would be withdrawn.

        Later on January 10, 2014, the special committee held a telephonic meeting with Houlihan Lokey and Davis Polk to discuss how to respond to the revised proposals from Bidder A and NewQuest. At this meeting, the participating members of the special committee (one member of the special committee was unable to join due to a scheduling conflict, but later confirmed his concurrence with the other members after the meeting) together with their advisers discussed the pros and cons of allowing the then almost certain NewQuest offer to expire and engaging with Bidder A. At this meeting, after discussion with its advisers, the special committee decided that the credibility of the revised Bidder A proposal should be determined as soon as possible and before the revised NewQuest proposal was scheduled to be withdrawn. In order to test the credibility of the revised Bidder A proposal, the special committee authorized the issuance of a letter requesting that Bidder A indicate its willingness by 10:00 p.m. on January 10, 2014 to pay a $13 million non-refundable deposit to the Company or obtain an unconditional letter of credit drawn in the same amount in favor of the Company, in either case, before 4:00 p.m. (New York Time) on January 10, 2014. At this meeting, the special committee authorized the communication of the summary of the revised Bidder A proposal to NewQuest (on a no-names basis) to reconfirm NewQuest's deadline. Finally, the special committee determined that if an indication of willingness or a deposit or letter of credit was not received by the times indicated above, it would proceed with its consideration of the revised NewQuest proposal and the alternate proposals from Bidder A and Bidder B, in advance of meeting of the board of directors that was scheduled for 9:00 p.m. on Sunday, January 12, 2014 to consider the special committee's recommendations, and in the event that a deposit was received from Bidder A, the special committee would ask to reschedule the board of directors meeting to allow further consideration of the revised Bidder A proposal.

        Later on January 10, 2014, in response to notification of the revised Bidder A proposal by Davis Polk, as authorized by the special committee, Weil reaffirmed on behalf of CPI Ballpark that the revised Bidder A proposal did not change any aspect of the communication sent by Weil on behalf of CPI Ballpark to the special committee earlier that day.

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        Later on January 10, 2014, in response to the letter from the special committee with respect to Bidder A's revised proposal, Bidder A's legal counsel stated that Bidder A was not willing to provide the requested deposit or letter of credit and that Bidder A would be prepared to go public with its offer directly to the shareholders of the Company.

        On January 11, 2014, Davis Polk and Weil negotiated the remaining outstanding issues in the merger agreement and the ancillary documents, including the rollover agreement. Later on January 11, 2014, Weil provided a revised draft merger agreement and ancillary documents to Davis Polk which were in substantially agreed form.

        Early in the morning of January 12, 2014, the special committee received a revised proposal from Bidder B increasing its implied offer price for the acquisition of all of the Company's assets to $1.58 per Share or $4.74 per ADS, in cash, representing an aggregate equity purchase price of $256.1 million, and its offer price for the purchase of at least 50.1% of the outstanding shares to $1.51 per Share or $4.53 per ADS, in cash, representing an aggregate equity purchase price of $244.8 million.

        On January 12, 2014, the special committee, Houlihan Lokey, Davis Polk and Walkers held a telephonic meeting to discuss the current proposals from NewQuest, Bidder A and Bidder B. At this meeting, the special committee and Davis Polk asked various questions of Walkers on issues relating to the fiduciary duties of the special committee in considering the revised NewQuest proposal merger and the alternative proposals from Bidder A and Bidder B and the availability of dissenters' rights by security holders under the Cayman Companies Law. Walkers advised the special committee regarding its fiduciary duties with respect to its evaluation of various acquisition proposals and the availability and procedures for the exercise of dissenters' rights by security holders under the Cayman Companies Law. At this meeting, Davis Polk provided a summary of the key terms of the merger agreement and the ancillary documents, which were in substantially agreed form and had been presented for discussion and review by the special committee, and reviewed with the special committee certain factors relevant to the decision whether to approve and authorize the merger agreement and the merger, including those that were positive and factors it considered as negative. Davis Polk noted that the merger would not be subject to a "majority of the minority" shareholder approval requirement, but the merger agreement contained a number of negotiated terms, including an increased purchase price and protections for the unaffiliated security holders that were reasonable in scope, including, among other things: (a) the board of directors' ability (after taking into account the recommendation of the special committee) to evaluate bona fide, unsolicited alternative acquisition proposals that may arise after signing of the merger agreement, to furnish confidential information to and conduct negotiations with such third parties and, in certain circumstances, consistent with the board of directors' fiduciary obligations, to grant a limited waiver of any standstill and/or terminate the merger agreement, subject to compliance with the terms and conditions of the merger agreement, including the payment to Parent of a termination fee; (b) the $2.5 million (which represented approximately 3.2% of the aggregate transaction value) termination fee payable by the Company to Parent in connection with the termination of the merger agreement to enter into a superior proposal, which was reasonable in the context of termination fees payable in other transactions and in light of the overall terms of the merger agreement; (c) the ability of the board of directors (after taking into account the recommendation of the special committee) to change its recommendation that the shareholders vote to approve the merger agreement, under certain circumstances, including with respect to a superior proposal or an intervening event, and the Company would no longer be required to convene the shareholders' meeting to approve the merger; (d) the ability of the board of directors to terminate the merger agreement in the event that it determines that the shareholder approval condition or the absence of legal restraint condition is incapable of being satisfied; (e) NewQuest's agreement not to sell or agree to sell within six months after the closing of the merger more than 50% of the Shares or assets or businesses of the Company to Bidder A, Bidder B or Bidder C at a valuation (including any contingent consideration) which is greater than the valuation of the Company implied by the merger consideration; and (f) Parent's

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obligation to pay up to $1 million in expense reimbursement to the Company if the merger agreement is terminated due to the non-satisfaction of a regulatory requirement (including any required approval or clearance of any governmental authority) due to the actions or inactions of Parent, Merger Sub or any of their affiliates.

        At this meeting, Houlihan Lokey reviewed and discussed with the special committee its financial analyses with respect to the Company and the updated NewQuest proposal to acquire the Shares and the ADSs (other than the Excluded Shares) at an offer price of $1.17 per Share and $3.51 per ADS. Houlihan Lokey described the factors it had considered to evaluate the competing offers from Bidder A and Bidder B, including (but not limited to) transaction structure, timing of the competing offers and certainty of consummation. At the request of the special committee, Houlihan Lokey rendered an oral opinion to the special committee (which was confirmed in writing by delivery of Houlihan Lokey's written opinion dated January 12, 2014), to the effect that, as of January 12, 2014, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion, the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the merger pursuant to the merger agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares, including Excluded Shares represented by ADSs), was fair, from a financial point of view, to such holders. Please see "—Opinion of the special committee's Financial Adviser" beginning on page [    •    ] for additional information regarding the financial analyses performed by Houlihan Lokey and the opinion rendered by Houlihan Lokey to the special committee. The full text of the written opinion of Houlihan Lokey to the special committee, dated January 12, 2014, is attached as Annex B to this proxy statement.

        Following a comprehensive and detailed discussion of the special committees' fiduciary duties, the terms of the merger agreement, Houlihan Lokey's financial presentation and delivery of its fairness opinion, as well as a variety of potential positive and negative factors with respect to the merger, the special committee unanimously: (a) determined that in light of the deadline imposed on NewQuest's revised proposal (which by its terms was due to expire at 10:00 am on January 13, 2014), it was in the best interests of the Company and its unaffiliated security holders to not allow NewQuest's revised proposal to expire on its terms, unless the board of directors was willing to continue to explore the alternative transaction proposals made by Bidder A and Bidder B at the current time, and (b) recommended to the board of directors that, unless the board of directors was prepared to entertain any of the alternative transaction proposals from Bidder A or Bidder B at the current time, the board of directors should approve and adopt the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger.

        Later in the evening on January 12, 2014, the board of directors convened a telephonic meeting with Houlihan Lokey, Davis Polk, Walkers, O'Melveny and Cayman Islands counsel to the Company, Appleby Global ("Appleby"). The special committee summarized for the board of directors the key events leading up to the board meeting, including, among others, the market check process, the offers from competing bidders (including the revised proposals from Bidder A and Bidder B), and the negotiation process with NewQuest, including the fact that NewQuest's revised proposal would expire on its terms at 10:00am on Monday, January 13, 2014. The special committee then described to the board of directors the various reasons why the special committee was unable to conclude that there could be any assurance that either of the alternative transaction proposals form Bidder A or Bidder B would be capable of being executed and/or would provide greater value and be in the best interests of the Company and its unaffiliated security holders than the NewQuest transaction (which are further described below under "Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors"). The special committee noted that it had negotiated a fully executable transaction with NewQuest on the terms and conditions set forth in the merger agreement and ancillary documents which had been presented in final form to the board of directors. Houlihan Lokey then

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provided the board of directors with a description of Houlihan Lokey's financial analysis regarding the proposed transaction, and discussed with the board the various methodologies Houlihan Lokey had used and assumptions it had made in evaluating and making its determination with respect to the fairness (from a financial point of view) of the proposed merger consideration. Following a period where questions were asked and discussion ensued, representatives of Houlihan Lokey stated that, as of January 12, 2014 and based on the information available to Houlihan Lokey and Houlihan Lokey's analysis of the financial condition and prospects of the Company, it had rendered its opinion to the special committee to the effect that the merger consideration to be received by the holders of Shares and ADSs (other than the Excluded Shares) in connection with the merger agreement is fair to such holders from a financial point of view. The special committee further stated that the special committee had worked very hard in evaluating the Going Private Proposal, negotiating a final price that was significantly higher than the original offer price in the Going Private Proposal, and evaluating and exploring alternatives to the merger. The special committee, together with Davis Polk, then provided the board with a summary of the key terms of the merger agreement and the ancillary documents. Davis Polk noted to the board that the terms and conditions of the merger agreement were the product of extensive negotiations between the special committee and its advisers, on the one hand, and NewQuest and its advisers, on the other hand. At the request of the board of directors, Davis Polk then highlighted the following provisions in the merger agreement that provided additional protection to the unaffiliated security holders: (a) the ability of the board of directors (acting at the recommendation of the special committee) to terminate the merger agreement in the event that it determines that the required shareholder approval condition or the absence of legal restraint condition is incapable of being satisfied, and (b) NewQuest's obligation to pay up to $1 million in expense reimbursement to the Company if the merger agreement is terminated due to the non-satisfaction of a regulatory requirement (including any required approval or clearance of any governmental authority) due to any action or inaction by Parent, Merger Sub or their affiliates. At the request of the board of directors, Appleby then advised the board of directors on the fiduciary duties of the directors in connection with its consideration of the NewQuest proposal and the alternative transaction proposals. Certain directors then declared to the board of directors their respective interests in relation to the matters to be considered at the meeting of the board of directors. In particular, it was disclosed or made known to the board that (i) Mr. Gupta and Mr. Wong were representatives of members of the Buyer Group that would acquire the Company through the consummation of the merger, and (ii) that the directors hold outstanding Shares and options to acquire Shares and, as a result, would be entitled to receive or benefit from consideration for such equity interest in the Company in the merger. It was then noted that the Company had adopted an audit committee charter, which requires the audit committee to review and approve all related party transactions as defined in Item 404 of Regulation S-K on an ongoing basis. O'Melveny then noted that the current directors at the meeting comprised all of the members of the audit committee, following which time the members of the audit committee unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, were advisable, fair to, and in the best interests of, the Company and the shareholders of the Company other than the buyer group, and unanimously resolved to recommend that the Board approve the merger agreement, the other transaction documents contemplated under the merger agreement, and the transactions contemplated thereby, including the merger.

        After further discussion, and following the unanimous recommendation of the special committee, the board concluded that overall, the risks, uncertainties, restrictions and potentially negative factors associated with the merger were outweighed by the potential benefits of the proposed merger, and determined that the board of directors was not prepared to entertain any of the alternative transaction proposals at the current time. Following the recommendations of the special committee and the audit committee, the board of directors unanimously approved the merger agreement, the other transaction

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documents contemplated under the merger agreement, and the transactions contemplated thereby, including the merger.

        On January 13, 2014, the equity commitment letter was executed by the parties thereto. Following the execution of this agreement, Parent, Merger Sub and the Company executed the merger agreement. Simultaneously, the rollover agreement and the limited guarantee were executed by the parties thereto, respectively.

        On January 13, 2014, the Company issued a press release announcing the execution of the merger agreement, and the press release, the merger agreement and the limited guarantee were furnished to the SEC as exhibits to its Current Report on Form 6-K. Also on January 13, 2014, NewQuest and CEF filed with the SEC a statement on Schedule 13D announcing the execution of the merger agreement and the ancillary agreements.

        On January 21, 2014, the Company issued a press release announcing the appointment of Ms. Min Lin by the Company's board of directors as a non-executive director, effective as of January 15, 2014. Ms. Lin's appointment filled a vacancy on the board of directors that resulted from the resignation of a previous director in September 2013. Ms. Lin is a partner at NewQuest Capital Advisers (HK) Limited. The press release was furnished to the SEC as an exhibit to the Company's Current Report on Form 6-K.

Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors

        The special committee and the board of directors believe that, as a privately-held entity, the Company's management may have greater flexibility to focus on improving the Company's financial performance without the constraints caused by the public equity market's valuation of the Company and emphasis on short-term period-to-period performance. As a publicly-traded entity, the Company faces pressure from public shareholders and investment analysts to make decisions that might produce better short-term results, but over the long term lead to a reduction in the per ADS price of its publicly traded equity securities.

        The special committee and the board of directors also believe that it is appropriate for the Company to undertake the merger and terminate the registration of the ADSs at this time because the limited trading volume of the Company's ADSs on the NYSE does not justify the costs of remaining a public company, including the cost of complying with the Sarbanes-Oxley Act of 2002 and other US federal securities laws. For the year ended December 31, 2012, such costs totaled approximately $[    •    ] million, including fees and expenses relating to consulting services associated with Sarbanes-Oxley compliance, fees and expenses of public accountants and fees and expenses of U.S. securities counsel. In addition to the direct out-of-pocket costs associated with SEC reporting and compliance, the Company's management and accounting staff, which comprises a handful of individuals, need to devote significant time to these matters.

        Furthermore, as an SEC-reporting company, the Company is required to disclose a considerable amount of business information to the public, some of which would be considered proprietary and would not be disclosed by a non-reporting company. As a result, our actual or potential competitors, customers, lenders and vendors all have ready access to this information which potentially may help them compete against us or make it more difficult for us to negotiate favorable terms with them, as the case may be.

        Based on the foregoing considerations, the board of directors has concluded that it is more beneficial to the Company to undertake the merger and become a private company as a result of the merger than to remain a public company.

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        The board of directors, acting upon the unanimous recommendation of the special committee, which special committee acted with the advice and assistance of its financial and legal advisors, evaluated the merger, including the terms and conditions of the merger agreement.

        At a meeting on January 12, 2014, the special committee unanimously: (a) determined that in light of the deadline imposed on NewQuest's revised proposal (which by its terms was due to expire at 10:00 a.m. (Hong Kong time) on January 13, 2014), it was in the best interests of the Company and its unaffiliated security holders to not allow NewQuest's revised proposal to expire on its terms, unless the board of directors was willing to continue to explore the alternative transaction proposals which had been made by Bidder A and Bidder B at the current time, and (b) recommended that, unless the board of directors was prepared to entertain any of the alternative transaction proposals which had been made by Bidder A or Bidder B at the current time, the board of directors should adopt resolutions that:

•

determined that the merger, on the terms and subject to the conditions set forth in the merger agreement, is substantively and procedurally fair to, and in the best interests of, the Company and its unaffiliated security holders, and declared it advisable to enter into the merger agreement and the plan of merger;



•

approved the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger; and



•

recommended that the Company's shareholders vote FOR the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger.

        At a meeting on January 12, 2014, the board of directors approved the resolutions recommended by the special committee.

        In the course of reaching their respective determinations, the special committee and the board of directors considered the following substantive factors and potential benefits of the merger, each of which the special committee and the board of directors believed supported their respective decisions, but which are not listed in any relative order of importance:

•

the all-cash merger consideration, which will allow the unaffiliated security holders to immediately realize liquidity for their investment and provide them with certainty of the value of their Shares and ADSs;



•

the current and historical market prices of the ADSs, including the fact that the $3.51 per ADS merger consideration to be paid to the unaffiliated security holders represents (i) a 57.4% premium to the closing price of $2.23 per ADS as quoted by the NYSE on September 3, 2013, the last trading day immediately prior to the Company's announcement on September 4, 2013 that it had received the initial "going private" proposal from NewQuest, (ii) a 60.5% premium over the volume-weighted average trading price of the ADSs during the 30 trading days prior to, and including, September 3, 2013, (iii) a 28.6% premium to the closing price of the ADSs on January 10, 2014, the last trading day immediately before the date of the special committee meeting, and (iv) a 31.3% premium to the volume-weighted average closing price of the ADSs during the 30 trading days prior to the Company's announcement on January 13, 2014 that it had entered into the merger agreement;



•

the possibility that it could take a considerable period of time before the trading price of the ADSs would reach and sustain at least the $3.51 per ADS merger consideration, as adjusted for present value;



•

the belief, based on the special committee's knowledge of the Company's business, financial condition, results of operations, prospects and competitive position, and after a review of

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strategic alternatives with its advisors, including the possibility of remaining independent either with or without a leveraged recapitalization, and combinations with other merger partners, that other alternatives were less favorable to the unaffiliated security holders than the merger agreement given the potential risks, rewards and uncertainties associated with those alternatives, including remaining as a publicly listed company or pursuing another bidder for either the entire Company or a minority stake in the Company;

•

the financial analysis reviewed by Houlihan Lokey with the special committee, and the oral opinion to the special committee (which was confirmed in writing by delivery of Houlihan Lokey's written opinion dated January 12, 2014), with respect to the fairness, from a financial point of view, of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the merger pursuant to the merger agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares, including Excluded Shares represented by ADSs), as of January 12, 2014, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. See "The Merger—Opinion of Houlihan Lokey (China) Limited";



•

the negotiations with respect to the merger consideration and the special committee's determination that, following extensive negotiations by the special committee with NewQuest, $1.17 per Share or $3.51 per ADS was the highest price that NewQuest would agree to pay (representing an increase of approximately 18.2% from the offer price of $0.99 per Share and $2.97 per ADS initially offered by NewQuest), with the special committee basing its belief on a number of factors, including the duration and tenor of negotiations and the experience of the special committee and its advisors;



•

NewQuest's clearly and repeatedly stated intention to withdraw its $3.51 per ADS offer should it expire by its terms at 10:00 a.m. (Hong Kong time) on January 13, 2014, in which event the unaffiliated security holders would be denied the only almost-certain opportunity available to them to monetize their investment in the Company in the current time frame;



•

the special committee's inability to conclude that there could be any assurance that a minority stake acquisition by Bidder A would be capable of being executed and would provide greater value than the proposed merger and be in the best interests of the Company and the unaffiliated security holders, based on the following factors (as further described in "Special Factors—Background of the Merger"):



•

Bidder A had previously offered to acquire all of the outstanding Shares or a minority stake for $3.50 per ADS, as its best and revised offer and had shortly before the execution of the merger agreement, unprompted by any discussions with the special committee or any due diligence access, purported to significantly increase its offer price to $4.00 per ADS, which led the special committee to question the bona fides of the proposal;



•

Bidder A's reluctance to agree to a completely non-refundable earnest deposit as a condition for the Company entering into discussions with Bidder A and allowing the revised proposal from NewQuest to expire on its terms;



•

the fact that Bidder A had not conducted recent due diligence on the Company and there was a significant risk that Bidder A may conclude after due diligence to reduce its price or not proceed with a transaction, including after a more fulsome understanding by Bidder A of the contingent liabilities and litigation to which the Company is subject;



•

the due diligence investigation of the Company by Bidder B had placed significant pressure on the Company's management's time and resources, and granting due diligence access to

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Bidder A would risk further diverting the resources of the Company's management, which may have been disruptive to the Company's business;

•

the financing documentation attached to the revised Bidder A proposal appeared to be stale (the financing support letter provided from an offshore financial institution was about four years old), unreliable and not specific to an acquisition transaction with the Company;



•

the special committee was concerned that a sophisticated investor would not be prepared to consummate the acquisition of a significant minority stake in the Company without the consent and cooperation of the Company's majority shareholder who had stated clearly that it would not grant such consent;



•

the fact that upon announcement of the merger agreement, Bidder A would no longer be bound by any standstill obligations to the Company and would be free (as it had intimated it would be prepared to do) to directly approach the unaffiliated security holders and offer them the chance to monetize their investment in the Company at a price higher than the $3.51 per ADS merger consideration, thereby preserving the transaction with NewQuest as a floor value realizable by the unaffiliated security holders as well as a contingent but potential further upside if Bidder A were to make a tender offer at an offer price higher than the $3.51 per ADS merger consideration; and



•

the fact that under the terms of the merger agreement, in the event that Bidder A acquired a sufficient number of Shares pursuant to a tender offer such that the authorization and approval by way of a special resolution of the merger agreement, the plan of merger and the transactions contemplated under the merger agreement, including the merger, was no longer capable of being satisfied, the board of directors (after taking into account the recommendation of the Special Committee) would have the right to terminate the merger agreement without payment of any termination fee to Parent;



•

the special committee's inability to conclude that there could be any assurance that an asset sale transaction with Bidder B would be capable of being executed and would provide greater value than the proposed merger and be in the best interests of the Company and the unaffiliated security holders, based on the following factors (as further described in "Special Factors—Background of the Merger"):



•

the special committee had engaged a big four accounting firm, the Tax Adviser, as a tax adviser to analyze potential taxes and regulatory risks of an asset sale transaction. The Tax Adviser's preliminary analysis concluded that proceeds from an asset sale would be subject to stamp duty at 0.05-0.1% and PRC taxes on capital gain of 10-25%. In particular, the Tax Adviser noted that in the last two asset sales by the Company, the tax bureau in Fujian province had assessed 25% tax on the capital gains. The Tax Adviser further advised that the exact magnitude of the PRC taxes was difficult to assess given local municipalities' discretion in these matters;



•

an asset sale transaction would require the sale proceeds to be distributed to the shareholders of the Company through a dividend, liquidation and/or other means of distribution that would require regulatory approvals and certain professional and tax costs that a Share acquisition or merger transaction would not be subject to. The Tax Adviser was unable to quantify the potential taxes or withholding which may be imposed on a U.S. taxpayer in connection with such distribution of proceeds, relative to U.S. capital gains taxes which may be payable or withheld in a Share acquisition or merger transaction. You may not rely for any purpose on the information with respect to tax matters described in this paragraph and the immediately preceding paragraph, including tax advice, tax opinions, tax returns or the tax treatment or tax structure of any transaction;

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•

an asset sale transaction would be considerably more complex, time-consuming and expensive to execute compared to a Share acquisition or merger transaction and would require multiple PRC governmental approvals (including local MOFCOM) and other governmental approvals), involving an uncertain level of regulatory risk which would not arise in a Share acquisition or merger transaction and Party B had not provided any assurance that it would be willing to consummate such a transaction if certain of the multiple PRC governmental approvals required could not be obtained;



•

an asset sale transaction of the nature proposed by Bidder B was believed by the special committee to be unprecedented, as there were no known examples of a U.S.-listed company that had disposed of all of its assets in the PRC and then distributed the sales proceeds to its offshore shareholders;



•

the special committee's inability to conclude that the implied $4.74 per ADS price offered by Bidder B would not be reduced based on fluctuations in net liabilities of the Company compared to the Company's September 30, 2013 balance sheet on which Bidder B's proposal based its assumptions, in particular given the historical seasonal fluctuations of the Company's business;



•

the special committee's inability to conclude that the implied $4.74 per ADS price offered by Bidder B would not be reduced on completion of Bidder B's confirmatory legal and financial due diligence, including after a more fulsome understanding by Bidder B of the contingent liabilities and litigation to which the Company is subject;



•

Bidder B's reluctance to agree to a completely non-refundable earnest deposit as a condition for the Company entering into exclusivity and terminating discussions with NewQuest; and



•

the fact that under the terms of the merger agreement, the board of directors (taking into account the recommendation of the special committee) would still be able to determine whether a bona fide, unsolicited proposal for an asset purchase transaction received from Bidder B or any other third party constituted a superior proposal, which in certain circumstances would permit the board of directors to change its recommendation in favor of the approval and adoption of the merger agreement, the plan of merger and the transactions contemplated thereby and terminate the merger agreement to pursue such superior proposal in the best interests of the unaffiliated security holders, consistent with the board of directors' fiduciary duties.



•

the belief of the special committee that the terms of the merger agreement, including the parties' representations, warranties and covenants and the conditions to their respective obligations, are reasonable;



•

the likelihood that the merger would be completed based on, among other things (not in any relative order of importance):



•

the absence of a financing condition in the merger agreement;



•

the likelihood and anticipated timing of completing the merger in light of the scope of the conditions to completion, including the absence of significant required regulatory approvals;



•

the fact that the merger agreement provides that, in the event of a failure of the merger to be completed under certain circumstances, Parent will pay the Company a $3 million reverse termination fee and that, under the limited guarantee, each of the Sponsors has committed to guarantee its pro rata share of the reverse termination fee;



•

the fact that the merger agreement provides that in the event the actions or inactions of Parent, Merger Sub or any of their affiliates have caused a regulatory requirement for the

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consummation of the merger (including any approval or clearance by any governmental authority) not to be satisfied, Parent will reimburse to the Company all expenses incurred by the Company in connection with the transaction up to a maximum amount of $1 million and that, under the limited guarantee, each of the Sponsors has committed to guarantee its pro rata share of this expense reimbursement obligation; and

•

the Company's ability (acting at the direction of the special committee) to seek specific performance to prevent breaches of the merger agreement and to enforce specifically the terms of the merger agreement and certain of the ancillary documents, including the commitment of the Sponsors to subscribe for shares of Parent and make the equity contributions to Parent pursuant to the equity commitment letter and the obligation of the Sponsors to perform their respective obligations under the limited guarantee;



•

the board of directors' ability (after taking into account the recommendation of the special committee) to evaluate bona fide, unsolicited alternative acquisition proposals that may arise between the date of the merger agreement and the date of the approval of the merger by the Company's shareholders, to furnish confidential information to and conduct negotiations with such third parties with respect to a proposal that may reasonably be expected to lead to a superior proposal and, in certain circumstances consistent with the board of directors' fiduciary obligations, to grant a limited waiver of any standstill and/or terminate the merger agreement, subject to compliance with the terms and conditions of the merger agreement, including the payment to Parent of a termination fee, in order to accept an alternative transaction proposed by a third party that is a superior proposal;



•

the belief that the $2.5 million termination fee that would be payable by the Company to Parent in connection with the termination of the merger agreement to enter into a superior proposal (which represents approximately 3.2% of the aggregate fully diluted equity value of the transaction under the merger agreement) was reasonable in the context of termination fees payable in other transactions and in light of the overall terms of the merger agreement;



•

the board of directors' ability (after taking into account the recommendation of the special committee), under certain circumstances, including with respect to a superior proposal or an intervening event, to change its recommendation that the shareholders vote to authorize and approve the merger agreement, and that, following any such change of recommendation, the Company would no longer be required to convene the shareholders' meeting to approve the merger;



•

the fact that under the terms of the merger agreement, in the event that a third party acquired a sufficient number of Shares pursuant to a tender offer such that the authorization and approval by way of a special resolution of the merger agreement was no longer capable of being satisfied, the board of directors (after taking into account the recommendation of the Special Committee) would have the right to terminate the merger agreement without payment of any termination fee to Parent;



•

the agreement of NewQuest as set forth in the merger agreement not to sell or agree to sell within six months after the closing of the merger more than 50% of the shares, assets or businesses of the Company to Bidder A, Bidder B or Bidder C at a valuation (including any contingent consideration) which is greater than the valuation of the Company implied by the merger consideration; and



•

the availability of dissenters' rights to those unaffiliated security holders who comply with all of the required procedures under the Cayman Companies Law for exercising dissenters' rights, which allow such holders to seek payment of the fair value of their Shares as determined by the Grand Court of the Cayman Islands.

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In addition, the special committee and the board of directors believed that sufficient procedural safeguards were and are present to ensure that the merger is procedurally fair to the unaffiliated security holders and to permit the special committee and the board of directors to represent effectively the interests of such unaffiliated security holders. These procedural safeguards, which are not listed in any relative order of importance, are discussed below:

•

in considering the merger, the special committee acted solely to represent the interests of the unaffiliated security holders, and the special committee had independent control of the extensive negotiations with NewQuest and its legal and financial advisors on behalf of such unaffiliated security holders;



•

all of the directors serving on the special committee during the entire process were and are independent directors and free from any affiliation with the Buyer Group. In addition, none of such directors is or ever was an employee of the Company or any of its subsidiaries or affiliates and none of such directors has any financial interest in the merger that is different from that of the unaffiliated security holders other than (i) the directors' receipt of board compensation in the ordinary course, (ii) special committee members' compensation in connection with its evaluation of the merger (which is not contingent upon the completion of the merger or the special committee's or board's recommendation of the merger), and (iii) the directors' indemnification and liability insurance rights under the memorandum and articles of association of the Company and the merger agreement;



•

following its formation, the special committee's independent control of the transaction evaluation and sale process with the advice and assistance of its legal and financial advisors;



•

the special committee was empowered to consider, attend to, make recommendations to the board of directors for its approval and take any and all actions in connection with the initial proposal from NewQuest and the transactions contemplated thereby and any alternative transaction from the date the committee was established, and no evaluation, negotiation, or response regarding the transaction or any documentation in connection therewith from that date forward was considered by the board of directors for authorization and approval unless the special committee had recommended such action to the board of directors;



•

the special committee had the authority to reject the terms of the proposal from NewQuest and the transactions contemplated thereby, including the merger, and any alternative transaction;



•

the special committee met regularly to consider and review the terms of the merger and the alternative transaction proposals;



•

the recognition by the special committee that it had no obligation to recommend the authorization and approval of the proposal from NewQuest and the transactions contemplated thereby, including the merger, or any alternative transaction;



•

the recognition by the special committee that, under the terms of the merger agreement, the board of directors has the ability to consider any bona fide, unsolicited alternative acquisition proposal that may reasonably be expected to lead to a superior proposal until the date the shareholders vote upon and authorize and approve the merger agreement; and



•

the availability of dissenter rights to the shareholders, other than the Rollover Shareholders, who comply with all of the required procedures under the Cayman Companies Law for exercising dissenter rights, which allow such holders to receive the fair value of their Shares as determined by the Grand Court of the Cayman Islands.

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The special committee and the board of directors also considered a variety of potentially negative factors discussed below concerning the merger agreement and the merger, which are not listed in any relative order of importance:

•

the fact that authorization and approval of the merger agreement are not subject to the authorization and approval of holders of a majority of the Company's outstanding Shares unaffiliated with the Buyer Group;



•

the fact that the Company's unaffiliated security holders will have no ongoing equity participation in the Company following the merger, and that they will cease to participate in the future earnings or growth, if any, or to benefit from increases, if any, in the value of the Shares, and will not participate in any potential future sale of the Company to a third party or any potential recapitalization of the Company which could include a dividend to shareholders;



•

the restrictions on the conduct of the Company's business prior to the completion of the merger. See "The Merger Agreement and Plan of Merger—Conduct of Business Prior to Closing" beginning on page [    •    ] for additional information;



•

the risks to consummation of the merger if any regulatory approval or clearance required to consummate the merger cannot be obtained;



•

the risks and costs to the Company if the merger does not close, including the diversion of management and employee attention, potential employee attrition and the ability to attract and retain key management and technical personnel and the potential disruptive effect on business and customer relationships;



•

the fact that under the terms of the merger agreement, the Company cannot solicit other acquisition proposals and must pay to Parent a termination fee of $2.5 million if the board of directors were to change its recommendation to its shareholders to vote in favor of the merger or if the merger agreement is terminated under certain circumstances, which, in addition to being costly, might have the effect of discouraging other parties from proposing an alternative transaction that might be more advantageous to the unaffiliated security holders than the merger;



•

the fact that Parent and Merger Sub are newly formed corporations with essentially no assets other than the equity financing commitments for the merger, and that the Company's legal remedy in the event of breach of the merger agreement by Parent or Merger Sub may be limited to receipt of a reverse termination fee of $3 million, and under certain circumstances the Company may not be entitled to a reverse termination fee at all;



•

the fact that certain shareholders of the Company who are also members of the Buyer Group may have interests in the transaction that are different from, or in addition to, those of the unaffiliated security holders (please see "—Interests of Certain Persons in the Merger" beginning on page [    •    ] for additional information);



•

the fact that since the Company became publicly listed in January 2010, the highest historical closing price of our ADSs ($13.45 per ADS) exceeds the merger consideration offered to our unaffiliated security holders; and



•

the taxability of an all-cash transaction to the unaffiliated security holders that are U.S. holders as defined below in "Special Factors—Material U.S. Federal Income Tax Consequences."

        The foregoing discussion of information and factors considered by the special committee and the board of directors is not intended to be exhaustive, but includes the material factors considered by the special committee and the board of directors. In view of the wide variety of factors considered by the special committee and the board of directors, neither the special committee nor the board of directors found it practicable to quantify or otherwise assign relative weights to the foregoing factors in reaching

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its conclusions. In addition, individual members of the special committee may have given different weights to different factors and may have viewed some factors more positively or negatively than others. The special committee recommended that our board of directors authorize and approve, and the board of directors authorized and approved, the merger agreement based upon the totality of the information presented to and considered by it.

        In reaching its conclusion regarding the fairness of the merger to the unaffiliated security holders and its decision to recommend the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, the special committee considered financial analyses presented by Houlihan Lokey as an indication of the going concern value of the Company. These analyses included, among others, discounted cash flow analysis, selected public company analysis, selected transactions analysis, analysis of sales and EBITDA multiples and premium analysis. All of the material analyses as presented to the special committee on January 12, 2014 are summarized below under the caption "Special Factors—Opinion of the Special committee's Financial Advisor" beginning on page [    •    ]. The special committee expressly adopted these analyses and the opinion of Houlihan Lokey, among other factors considered, in reaching its determination as to the fairness of the transactions contemplated thereby, including the merger.

        Neither the special committee nor the board of directors considered the liquidation value of the Company's assets because each considers the Company to be a viable going concern business where value is derived from cash flows generated from its continuing operations. In addition, the special committee and the board of directors of the Company believe that the value of the Company's assets that might be realized in a liquidation would be significantly less than its going concern value. Each of the special committee and the board of directors of the Company believes the analyses and additional factors it reviewed provided an indication of the Company's going concern value. Each of the special committee and the board of directors of the Company also considered the historical market prices of the ADSs as described under the caption "Market Price of the ADSs, Dividends and Other Matters—Market Price of the ADSs" beginning on page [    •    ]. Each of the special committee and the board of directors of the Company considered the purchase prices paid in previous purchases as described under the caption "Transactions in the Shares and ADSs." Neither the special committee nor the board of directors considered the Company's net book value, which is defined as total assets minus total liabilities, attributable to the shareholders of the Company, as a factor. The Company's net book value per Share as of December 31, 2012 is $2.4196, based on the weighted average number of outstanding Shares during the fiscal year ended December 31, 2012. Net book value does not take into account the future prospects of the Company, market conditions, trends in the industry related to the development and operation of small hydroelectric power projects in China or the business risks inherent in competing with larger companies in that industry.

        In reaching its determination that the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, are fair to and in the best interests of the Company and the unaffiliated security holders and its decision to authorize and approve the merger agreement and recommend the authorization and approval of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, by the Company's shareholders, the board of directors, on behalf of the Company, considered the analysis and recommendation of the special committee and the factors examined by the special committee as described above under this section and under "—Background of the Merger" and adopted such recommendations and analysis. During its consideration of the transaction with NewQuest and the alternative transaction proposals, the board of directors was also aware that some of the Company's directors and shareholders, including Mr. Amit Gupta, Mr. Felix Wong, CPI Ballpark and CEF, and other employees of the Company, have interests with respect to the merger that are, or may be, different from, or in addition to those of the Company's unaffiliated security holders generally, as described in "—Interests of Certain Persons in the Merger" beginning on page [    •    ]. For the foregoing reasons, each of the Company and the board of

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directors believes that the merger agreement, the plan of merger and the transactions contemplated thereby are substantively and procedurally fair to and in the best interests of the Company and the unaffiliated security holders.

        Except as discussed in "Special Factors—Background of the Merger," "Special Factors—Reasons for the Merger and Recommendation of the Special Committee and the Board of Directors," and "Special Factors—Opinion of the Special Committee's Financial Advisor," no director who is not an employee of the Company has retained an unaffiliated representative to act solely on behalf of the unaffiliated security holders for purposes of negotiating the terms of the transaction and/or preparing a report concerning the fairness of the transaction.

Position of the Buyer Group as to the Fairness of the Merger

        Under SEC rules governing "going private" transactions, each member of the Buyer Group is required to express its belief as to the fairness of the merger to the unaffiliated security holders of the Company. Each member of the Buyer Group is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The Buyer Group's views as to the fairness of the merger are not intended to be and should not be construed as a recommendation to any shareholder or ADS holder of the Company as to how that shareholder or ADS holder should vote on the proposal to approve and authorize the merger agreement, the plan of merger, and transactions contemplated thereby, including the merger. The Buyer Group has interests in the merger that are different from, and/or in addition to, those of the unaffiliated security holders of the Company by virtue of their continuing interests in the surviving corporation after the completion of the merger. These interests are described under the caption ["—Interests of Certain Persons in the Merger—Interests of the Buyer Group"] beginning on page [    •    ].

        The Buyer Group believes the interests of the Company's unaffiliated security holders were represented by the special committee, which negotiated the terms and conditions of the merger agreement with the assistance of its independent legal and financial advisors. The Buyer Group attempted to negotiate a transaction that would be most favorable to them and not to the Company's unaffiliated security holders and, accordingly, did not negotiate the merger agreement with a goal of obtaining terms that were fair to such holders. None of members of the Buyer Group participated in the deliberations of the special committee regarding, or received any advice from the special committee's independent legal or financial advisors as to, the fairness of the merger to the Company's unaffiliated security holders. Furthermore, the Buyer Group did not undertake or engage any financial advisor to perform any independent evaluation or other analyses of the fairness of the merger consideration to the Company's unaffiliated security holders. No financial advisor provided the Buyer Group with any analysis or opinion with respect to the fairness of the merger consideration to the Company's unaffiliated security holders.

        Based on their knowledge and analysis of available information regarding the Company, as well as discussions with the Company's senior management regarding the Company and its business and the factors considered by, and findings of, the special committee and the Company's board of directors discussed under the caption "—Reasons for the Merger and Recommendation of Our Board of Directors" beginning on page [    •    ], the Buyer Group believes that the merger is both substantively and procedurally fair to the unaffiliated security holders of the Company based on their consideration of the following factors, which are not listed in any relative order of importance, among others:

•

the fact that the merger consideration is all cash, which provides a specific amount of cash consideration for Shares and ADSs held by, and liquidity to, unaffiliated security holders and allows the unaffiliated security holders not to be exposed to risks and uncertainties relating to the prospects of the Company;

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•

the current and historical market prices of the Company's ADSs, including the fact that the merger consideration of $1.17 per Share and $3.51 per ADS represents a (i) 57.4% premium over the closing price of the Company's ADSs on September 3, 2013, the trading day immediately prior to the Company's announcement on September 4, 2013 that it had received the Going Private Proposal; and (ii) a 60.5% premium over the volume-weighted average trading price of the Company's ADSs during the 30 trading days prior to, and including, September 3, 2013;



•

the Company's ADSs traded as low as $0.33 per share or $0.98 per ADS during the 52-week period prior to the Company's announcement on September 4, 2013 that it had received the Going Private Proposal;



•

the fact that the merger consideration, other terms and conditions of the merger agreement and the transactions contemplated thereby were the result of extensive negotiations over an extended period of time between the special committee and its advisors, on the one side, and the Buyer Group and its advisors, on the other side, which resulted in an increase of the merger consideration by approximately 18.2% from $0.99 per Share and $2.97 per ADS to $1.17 per Share and $3.51 per ADS;



•

the fact that the merger is not subject to any financing contingencies and will be fully funded by committed equity financing from the Sponsors subject only to the satisfaction of conditions to closing under the merger agreement;



•

the fact that the special committee and, acting upon the unanimous recommendation of the special committee, the Company's board of directors unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, are in the best interests of the Company's unaffiliated security holders;



•

the fact that the special committee, consisting entirely of directors who are not officers or employees of the Company and who are not affiliated with any member of the Buyer Group, was established and given authority to, among other things, review, evaluate and negotiate the terms of the merger and to recommend to the Company's board of directors what action should be taken by the Company, including not to engage in the merger;



•

the fact that the members of the special committee do not have any interests in the merger different from, or in addition to, those of the Company's unaffiliated security holders, other than (i) the directors' receipt of board compensation in the ordinary course, (ii) special committee members' compensation in connection with its evaluation of the merger (which is not contingent upon the completion of the merger or the special committee's or board's recommendation of the merger), and (iii) the directors' indemnification and liability insurance rights under the merger agreement;



•

the fact that the special committee retained and was advised by its legal and financial advisors who are experienced in advising committees such as the special committee in similar transactions;



•

the fact that the special committee and the Company's board of directors had no obligation to recommend the approval and authorization of the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, or any other transaction;



•

notwithstanding that the opinion of Houlihan Lokey was provided solely for information purposes, and members of the Buyer Group are not entitled to, and did not rely on such opinion, the fact that the special committee received from its financial advisor, Houlihan Lokey, an opinion, dated January 12, 2014, as to the fairness, from a financial point of view, of the $1.17 per Share and $3.51 per ADS merger consideration to be received by holders of Shares

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and ADSs (in each case other than holders of Excluded Shares and Dissenting Shares) in the merger, as of January 12, 2014, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing their opinion;

•

the fact that in certain circumstances under the terms of the merger agreement, the special committee and the board of directors of the Company are able to change, withhold, withdraw, qualify or modify their recommendation of the merger;



•

the fact that the fee payable by the Company to Parent if the merger agreement is terminated under certain circumstances will not exceed $2.5 million, or approximately 1.32% of the Company's total equity value implied by the merger consideration;



•

the fact that the Company is able to, subject to compliance with the terms and conditions of the merger agreement, terminate the merger agreement prior to the completion of the merger in order to accept an alternative transaction proposed by a third party that is a "superior proposal" (as defined in the merger agreement and further explained under the caption "The Merger Agreement—No Solicitation of Competing Transactions" beginning on page [    •    ]);



•

the fact that the Company, under certain circumstances, is able to specifically enforce the terms of the merger agreement as well as the equity commitment letter;



•

the availability of dissenters' rights to the unaffiliated security holders who comply with all of the required procedures under the Cayman Companies Law for exercising dissenters' rights, which allow such holders to receive the fair value of their Shares as determined by the Grand Court of the Cayman Islands;



•

the fact that adoption of the merger agreement is subject to approval by the affirmative vote of the shareholders holding at least two-thirds of the Shares present and voting in person or by proxy as a single class in accordance with the Cayman Companies Law and the Company's memorandum and articles of association;



•

the fact that each of the Sponsors has agreed to guarantee a pro rata share of the obligations of Parent under the merger agreement to pay a reverse termination fee to the Company and reimburse certain expenses of the Company if the merger agreement is terminated under certain circumstances;



•

the fact that the board of directors of the Company was fully informed about the extent to which the interests of the certain shareholders of the Company who are also members of the Buyer Group in the merger differed from those of the Company's other shareholders and ADS holders; and



•

the fact that no members of the Buyer Group nor any of their advisors participated in or sought to influence the deliberative process of the special committee.

        The Buyer Group did not consider the Company's net book value, which is defined as total assets minus total liabilities, as a factor because it believed that net book value is not a material indicator of the Company's value as a going concern but rather is indicative of historical costs.

        In its consideration of the fairness of the merger, the Buyer Group did not undertake an appraisal of the assets of the Company to determine the Company's liquidation value for the Company's unaffiliated security holders due to the impracticability of determining a liquidation value given the significant execution risk involved in any breakup, since it considered the Company to be a viable going concern where value is derived from cash flows generated from its continuing operations, and because the Buyer Group intends that the Company will continue to operate its business following the merger.

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        The Buyer Group did not seek to establish a pre-merger going concern value for the Company's Shares and ADSs to determine the fairness of the merger consideration to the Company's unaffiliated security holders because following the merger the Company will be of a different nature as a private company. However, to the extent the pre-merger going concern value was reflected in the pre-announcement price of the Company's ADSs, the merger consideration represented a premium to the going concern value of the Company.

        Members of the Buyer Group did not consider the potential for alternative transactions involving the Company, including any offers or proposals by any unaffiliated third parties with respect to (a) a merger or consolidation of the Company with or into another company, (b) a sale of all or a substantial part of the Company's assets, or (c) the purchase of the Company voting securities that would enable the holder to exercise control over the Company, because (i) the Buyer Group did not intend to consider or participate in any alternative transaction involving a sale or reduction of its investment in the Company, including any such transaction proposed by Bidder A or Bidder B, and (ii) the Buyer Group believes that, on the bases of significant uncertainty relating to their execution and consummation, none of the alternative transactions proposed by Bidder A or Bidder B constituted firm offers or proposals that are comparable to the merger. As a result, members of the Buyer Group did not evaluate the prices potentially attainable in any alternative transaction.

        The foregoing discussion of the information and factors considered and given weight by the Buyer Group in connection with its evaluation of the substantive and procedural fairness of the merger to the Company's unaffiliated security holders is not intended to be exhaustive, but is believed to include all material factors considered by the Buyer Group. The Buyer Group found it impracticable to assign, and did not assign, relative weights to the foregoing factors considered in reaching its conclusions as to the substantive and procedural fairness of the merger to the Company's unaffiliated security holders. Rather, the Buyer Group made the fairness determinations after considering all of the foregoing as a whole.

        The Buyer Group believes these factors provide a reasonable basis for its belief that the merger is both substantively and procedurally fair to the Company's unaffiliated security holders. This belief, however, is not intended to be and should not be construed as a recommendation by the Buyer Group to any shareholder or ADS holder of the Company to approve and authorize the merger agreement. The Buyer Group does not make any recommendation as to how such shareholders or ADS holders should vote relating to the proposal to approve and authorize the merger agreement, the plan of merger and the transactions contemplated thereby, including the merger, at the extraordinary general meeting.

Certain Financial Projections

        The Company's management does not, as a matter of course, make available to the public future financial projections. However, in connection with their financial analysis of the merger, the Company's management provided certain financial projections for fiscal years 2013 through 2018 to the special committee, the board of directors and Houlihan Lokey. See "—Background of the Merger." Houlihan Lokey's financial analysis below contains material portions of these financial projections. These financial projections, which were based on the Company's management's projection of the Company's future financial performance as of the date provided, were prepared for internal use and to assist Houlihan Lokey with their financial analysis, and were not prepared with a view toward public disclosure or compliance with published guidelines of the SEC or the American Institute of Certified Public Accountants regarding forward-looking information or U.S. generally accepted accounting principles, or U.S. GAAP.

        In compiling the projections, the Company's management took into account historical performance, combined with estimates regarding gross revenues, gross profit, adjusted EBITDA and

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net income. Although the projections are presented with numerical specificity, they reflect numerous assumptions and estimates as to future events made by the Company's management that the Company's management believed were reasonable at the time the projections were prepared. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. In addition, factors such as industry performance, the market for our existing and new services, the competitive environment, expectations regarding future acquisitions or any other transaction and general business, economic, regulatory, market and financial conditions, all of which are difficult to predict and beyond the control of the Company's management, may cause the projections or the underlying assumptions not to be reflective of actual future results.

        In addition, the projections do not take into account any circumstances or events occurring after the date that they were prepared and, accordingly, do not give effect to completion of the merger or any changes to our operations or strategy that may be implemented or that were not anticipated after the time the projections were prepared. As a result, there can be no assurance that the projections will be realized, and actual results may be materially different than those contained in the projections.

        Neither the Company's independent registered public accounting firm nor any other independent accountants have compiled, examined or performed any procedures with respect to these financial projections, nor have they expressed any opinion or given any form of assurance on the financial projections or their achievability. These projections are not included in this proxy statement in order to induce any holder of Shares or ADSs to vote in favor of the authorization and approval of the merger agreement or to elect not to dissent and receive payment of the fair value for his or her Shares.

        The following table summarizes the financial projections prepared by the Company's management and considered by the special committee and Houlihan Lokey in connection with their analysis of the merger:

Management Projections(1),(2)

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        BY INCLUDING IN THIS PROXY STATEMENT A SUMMARY OF ITS INTERNAL FINANCIAL PROJECTIONS, THE COMPANY UNDERTAKES NO OBLIGATIONS TO UPDATE, OR PUBLICLY DISCLOSE ANY UPDATE TO, THESE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE PROJECTIONS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE SHOWN TO BE IN ERROR OR CHANGE EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAW.

        NONE OF THE COMPANY OR OUR AFFILIATES, ADVISORS, OFFICERS, DIRECTORS OR REPRESENTATIVES HAS MADE OR MAKES ANY REPRESENTATION TO ANY SHAREHOLDER OR OTHER PERSON REGARDING THE ULTIMATE PERFORMANCE OF THE COMPANY COMPARED TO THE INFORMATION CONTAINED IN THE PROJECTIONS OR THAT PROJECTED RESULTS WILL BE ACHIEVED.

        The financial projections are forward-looking statements. For information on factors which may cause our future financial results to materially vary, see "Cautionary Note Regarding Forward-Looking Statements" on page [    •    ] and "Item 3. Key Information—D. Risk Factors" included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2012, incorporated by reference into this proxy statement.

Opinion of the Special Committee's Financial Advisor

The Merger—Opinion of Houlihan Lokey

        On January 12, 2014, Houlihan Lokey rendered an oral opinion to the special committee (which was confirmed in writing by delivery of Houlihan Lokey's written opinion dated January 12, 2014), to the effect that, as of January 12, 2014, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion, the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the merger pursuant to the merger agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares), was fair, from a financial point of view, to such holders.

        Houlihan Lokey's opinion was directed to the special committee and only addressed the fairness from a financial point of view of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the merger pursuant to the merger agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares) and does not address any other aspect or implication of the merger. The summary of Houlihan Lokey's opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex B to this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. However, neither Houlihan Lokey's opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not

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constitute advice or a recommendation to the special committee or any shareholder or ADS holder as to how to act or vote with respect to the merger or related matters.

        In arriving at its opinion, Houlihan Lokey, among other things:

•

reviewed an execution version of the merger agreement;



•

reviewed certain publicly available business and financial information relating to the Company that Houlihan Lokey deemed to be relevant;



•

reviewed certain information relating to the historical, current and future operations, financial condition and prospects of the Company made available to Houlihan Lokey by the Company, including financial projections prepared by the management of the Company relating to the Company for the years ending 2013 through 2018;



•

spoke with certain members of the management of the Company and certain of the Company's representatives and advisors regarding the business, operations, financial condition and prospects of the Company, the merger and related matters;



•

compared the financial and operating performance of the Company with that of other public companies that Houlihan Lokey deemed to be relevant;



•

considered the publicly available financial terms of certain transactions that Houlihan Lokey deemed to be relevant;



•

reviewed the current and historical market prices and trading volume for certain of the Company's publicly traded securities, and the current and historical market prices and trading volume of the publicly traded securities of certain other companies that Houlihan Lokey deemed to be relevant; and



•

conducted such other financial studies, analyses and inquiries and considered such other information and factors as Houlihan Lokey deemed appropriate.

        Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and does not assume any responsibility with respect to such data, material and other information. In addition, management of the Company has advised Houlihan Lokey, and Houlihan Lokey assumed, that the financial projections reviewed by Houlihan Lokey have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the future financial results and condition of the Company, and Houlihan Lokey expresses no opinion with respect to such projections or the assumptions on which they are based.

        Houlihan Lokey relied upon and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would be material to its analyses or its opinion, and that there is no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading. Further, management of the Company has advised Houlihan Lokey that (i) the financial projections provided to Houlihan Lokey are the only projections prepared by management of the Company (or any affiliated entity) in connection with the merger, (ii) they have not received, reviewed, approved, commented on or otherwise contributed to any other projections or similar information prepared by any other party in connection with the merger, nor have they updated or otherwise revised the financial projections since the last date they were provided to Houlihan Lokey and (iii) to the best of their knowledge and belief, no other projections or similar information have been provided to any party involved in the merger, and the special committee

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received all projections and/or similar information that have been received by any other party involved in the merger.

        Houlihan Lokey relied upon and assumed, without independent verification, that (i) the representations and warranties of all parties to the merger agreement and all other related documents and instruments that are referred to therein are true and correct, (ii) each party to the merger agreement and such other related documents and instruments will fully and timely perform all of the covenants and agreements required to be performed by such party, (iii) all conditions to the consummation of the merger will be satisfied without waiver thereof, and (iv) the merger will be consummated in a timely manner in accordance with the terms described in all such agreements and other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey also relied upon and assumed, without independent verification, that (a) the merger will be consummated in a manner that complies in all respects with all applicable international, federal and state statutes, rules and regulations, and (b) all governmental, regulatory, and other consents and approvals necessary for the consummation of the merger will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the merger or the Company that would be material to its analyses or its opinion. Houlihan Lokey also relied upon and assumed, without independent verification, at the direction of the Company, that any adjustments to the per Share merger consideration or per ADS merger consideration pursuant to the merger agreement will not be material to Houlihan Lokey's analyses or its opinion.

        Furthermore, in connection with its opinion, Houlihan Lokey was not requested to make, and did not made, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of the Company or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey did not estimate, and expresses no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey did not undertake an independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which the Company is or may be a party or is or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which the Company is or may be a party or is or may be subject.

        Houlihan Lokey's opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of January 12, 2104. Houlihan Lokey did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw is opinion, or otherwise comment on or consider events occurring or coming to Houlihan Lokey's attention after the date of its opinion.

        Houlihan Lokey's opinion is furnished for the use of the special committee (solely in its capacity as such) in connection with its evaluation of the merger and may not be used for any other purpose without Houlihan Lokey's prior written consent. Houlihan Lokey's opinion should not be construed as creating any fiduciary duty on Houlihan Lokey's part to any party. Houlihan Lokey's opinion is not intended to be, and does not constitute, a recommendation to the special committee, the Company's board of directors, any security holder or any other person as to how to act or vote with respect to any matter relating to, or whether to tender Shares or ADSs in connection with, the merger or otherwise.

        Houlihan Lokey has not been requested to opine as to, and its opinion does not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of the special committee, the Company's board of directors, the Company, its security holders or any other party to proceed with or effect the merger, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the merger or otherwise (other than the per Share merger consideration and the per ADS merger

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consideration to the extent expressly specified herein), including, without limitation, the terms or aspects of any arrangements involving the Rollover Shareholders (as defined in the merger agreement) and Additional Rollover Shareholders (if any and as defined in the Agreement), voting agreements or any potential financing for the merger or the likelihood of consummation thereof, (iii) the fairness of any portion or aspect of the merger to the holders of any class of securities, creditors or other constituencies of the Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of Houlihan Lokey's opinion, (iv) the relative merits of the merger as compared to any alternative business strategies that might exist for the Company or any other party or the effect of any other transaction in which the Company or any other party might engage, (v) the fairness of any portion or aspect of the merger to any one class or group of the Company's or any other party's security holders or other constituents vis-à-vis any other class or group of the Company's or such other party's security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) whether or not the Company, its security holders or any other party is receiving or paying reasonably equivalent value in the merger, (vii) the solvency, creditworthiness or fair value of the Company or any other participant in the merger, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the merger, any class of such persons or any other party, relative to the per Share merger consideration, the per ADS merger consideration or otherwise. Furthermore, no opinion, counsel or interpretation is intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of the special committee, on the assessments by the special committee, the Company's board of directors, the Company and their respective advisors, as to all legal, regulatory, accounting, insurance and tax matters with respect to the Company and the merger or otherwise.

        In preparing its opinion to the special committee, Houlihan Lokey performed a variety of analyses, including those described below. The summary of Houlihan Lokey's analyses is not a complete description of the analyses underlying Houlihan Lokey's opinion. The preparation of a fairness opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither a fairness opinion nor its underlying analyses is readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors or focusing on information presented in tabular format, without considering all analyses, methodologies and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Houlihan Lokey's analyses and opinion. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques.

        In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of the opinion. Houlihan Lokey's analyses involved judgments and assumptions with regard to industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are beyond the control of the Company, such as the impact of competition on the business of the Company and on the industry generally, industry growth and the absence of any material change in the financial condition and prospects of the

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