July 10, 2013, Hunan Jiangnan Red Arrow Co., Ltd (000519) (Jiangnan Red Arrow) obtained approval from China Securities Regulatory Commission (CSRC) Merger and Reorganization Examination Committee for its material assets reorganization. Under the approval, Jiangnan Red Arrow will issue 410,147,747 shares to purchase the entire stake of Zhongnan Diamond Co., Ltd (Zhongnan Diamond) for CNY 3,970,230,200 and raise supporting funds for no more than CNY 1,323,310,000.

Both Jiangnan Red Arrow and Zhongnan Diamond are subordinate enterprises of China North Industries Group Corporation. Jiangnan Red Arrow is principally engaged in manufacturing and selling auto parts (cylinder liner and piston) and Zhongnan Diamond is primarily engaged in manufacturing and selling superhard materials. After this reorganization, Jiangnan Red Arrow will retain original core business.

Jingtian & Gongcheng acted as the legal counsel of the independent financial adviser CITIC Securities.