SHANGHAI, Feb. 12, 2015 /PRNewswire/ -- Semiconductor Manufacturing International Corporation ("SMIC"; "The Company"; NYSE: SMI; SEHK: 981), China's largest and most advanced semiconductor foundry announces that on 12 February 2015 (after trading hours), the Company entered into the Share Purchase Agreement with the Investor, China Integrated Circuit Industry Investment Fund Co., Ltd., whereby (i) the Company has conditionally agreed to allot and issue to the Investor, and the Investor has conditionally agreed to subscribe, through its wholly-owned subsidiary incorporated in Hong Kong (the "HKCo"), for 4,700,000,000 New Shares at the Subscription Price of HK$0.6593 per New Share. The aggregate consideration for the New Shares is HK$3,098.71 million.

The New Shares represent (i) approximately 13.10% of the existing issued share capital of the Company as at the date of this announcement and (ii) approximately 11.58% of the issued share capital of the Company as enlarged by the issue of the New Shares.

The Subscription Price of HK$3,098.71 million represents (i) a discount of approximately 7.14% to the closing price of HK$0.7100 per Share as quoted on the Hong Kong Stock Exchange on 12 February 2015, being the last full trading day immediately before the execution of the Share Purchase Agreement; (ii) a discount of approximately 6.61% to the average closing price of approximately HK$0.7060 per Share as quoted on the Hong Kong Stock Exchange for the last five consecutive trading days up to and including 12 February 2015; and (iii) a discount of approximately 5.41% to the average closing price of approximately HK$0.6970 per Share as quoted on the Hong Kong Stock Exchange for the last ten consecutive trading days up to and including 12 February 2015.

Completion of the Share Purchase Agreement is subject to the satisfaction or waiver of the conditions precedent therein. In addition, the Share Purchase Agreement may be terminated in certain circumstances. Please refer to the section headed "The Share Purchase Agreement" below for further information.

PRE-EMPTIVE RIGHTS OF DATANG

Reference is made to the Company's announcements dated 10 November 2008, 16 August 2010, 6 May 2011, 18 December 2013 and 22 August 2014 in relation to the Datang Subscription Agreement, pursuant to which in case of any issue of new Shares by the Company, Datang has a pre-emptive right to purchase a pro rata portion of such new Shares being issued by the Company and the Company is required to notify Datang of such proposed issue. Datang's pre-emptive right is applicable to the issue of the New Shares and any Country Hill Further Subscription. Pursuant to the Datang Subscription Agreement, completion of any such issue of the Datang Pre-emptive Shares to Datang upon exercise of its pre-emptive right will be further subject to the receipt of any required regulatory approvals. Any exercise by Datang of its pre-emptive right to subscribe for the Datang Pre- emptive Shares in connection with the Share Purchase Agreement and any Country Hill Further Subscription will be at a price equivalent to the Subscription Price and conditional on the obtaining of the necessary governmental approvals and the approval of independent Shareholders.

The Company has notified Datang in accordance with the terms of the Datang Subscription Agreement in respect of the issue of the New Shares and the possible Country Hill Further Subscription. Pursuant to the Datang Subscription Agreement, Datang is deemed to have elected not to exercise the pre-emptive right with respect to the Datang Pre-emptive Shares if it does not respond to the final notice within ten (10) business days following the date of the final notice.
If Datang fully exercises its pre-emptive right pursuant to the Datang Subscription Agreement, independent Shareholders' and necessary governmental approvals are successfully obtained, the maximum gross proceeds of the potential Datang Further Subscription will be approximately HK$864.94 million. The Company will make such further announcement as is necessary under the Listing Rules in relation to this.

PRE-EMPTIVE RIGHTS OF COUNTRY HILL

Reference is also made to the Company's announcement dated 18 April 2011, 18 December 2013 and 22 August 2014 in relation to the Country Hill Subscription Agreement, pursuant to which, in case of any issue of new Shares by the Company, Country Hill has a pre- emptive right to purchase a pro rata portion of such new Shares being issued and the Company is required to notify Country Hill of such proposed issue. Country Hill's pre- emptive right is applicable to the issue of the New Shares and any Datang Further Subscription. Pursuant to the Country Hill Subscription Agreement, completion of any such issue of the Country Hill Pre-emptive Shares to Country Hill upon exercise of its pre- emptive right will be further subject to the receipt of any required regulatory approvals. Any exercise by Country Hill of its pre-emptive right to subscribe for the Country Hill Pre- emptive Shares in connection with the issue of the New Share and any Datang Further Subscription will be at a price equivalent to the Subscription Price and conditional on the obtaining of the approval of the independent Shareholders.

The Company has notified Country Hill in accordance with the terms of the Country Hill Subscription Agreement in respect of the issue of the New Shares and the possible Datang Further Subscription. Pursuant to the Country Hill Subscription Agreement, Country Hill is deemed to have elected not to exercise the pre-emptive right with respect to the Country Hill Pre-emptive Shares if it does not respond to the final notice within ten (10) business days following the date of the final notice.

If Country Hill fully exercises its pre-emptive right pursuant to the Country Hill Subscription Agreement, independent Shareholders' approval is successfully obtained, the maximum gross proceeds of the potential Country Hill Further Subscription will be approximately HK$477.42 million. The Company will make such further announcement as is necessary under the Listing Rules in relation to this.

USE OF PROCEEDS

The gross proceeds from the issue of the New Shares will be approximately HK$3,098.71 million and the net proceeds will be approximately HK$3,094.71 million (HK$0.6584 per New Share). The Company intends to use the net proceeds from the issue of the New Shares, any Datang Pre-emptive Shares and any Country Hill Pre-emptive Shares for the purpose of capital expenditure, debt repayment and general corporate purposes.

LISTING RULES IMPLICATIONS

The New Shares will be issued pursuant to the general mandate granted to the Directors to allot and issue up to 20% of the then issued share capital of the Company, being 6,966,266,242 Shares, by the Shareholders at the annual general meeting of the Company held on 27 June 2014. The issue of the New Shares is not subject to Shareholders' approval.

As each of Datang and Country Hill is a substantial shareholder of the Company and thus a connected person of the Company, any Datang Further Subscription or any Country Hill Further Subscription will constitute a connected transaction of the Company and will be subject to independent Shareholders' approval under the Listing Rules. The Company will make such further announcement as is necessary if any agreement(s) is/are entered into by the Company with Datang or Country Hill regarding the above matters.

Shareholders and potential investors should note that the completion of the Investor Subscription, any Datang Further Subscription and any Country Hill Further Subscription are or will be subject to the fulfillment of the relevant conditions thereunder. As the Investor Subscription, any Datang Further Subscription and any Country Hill Further Subscription may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

For the full version of SMIC's announcement, please see: http://photos.prnasia.com/prnk/20150212/0861501181

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IR@smics.com