Partial disposal of interest in Kepu

17 May 2012

LED International Holdings Limited

("LED" or the "Company")

Partial disposal of interest in Kepu

The board of directors of LED (the "Board") is pleased to announce that the Company has entered into a Share Purchase Agreement and Operations Licensing Agreement with Mr. Weng Xiao Yong ("Weng") relating to the partial disposal and the licensing of operations of Kepu Electronic Technology (Shenzhen) Company Limited ("Kepu") (the "Disposal").

Highlights:

Kepu is the wholly owned subsidiary of LED International (Far East) Limited which is in turn a wholly owned direct subsidiary of the Company. As announced on 1 May 2007, the Company had acquired the entire issued share capital of Kepu for the total consideration of RMB30 million from Sun Wah Enterprise Investment Holdings Limited ("Sun Wah"). The acquisition consideration of RMB30 million was paid by RMB15 million in cash and the balance would be paid by the allotment of ordinary shares in the Company ("Ordinary Shares"). It was subsequently determined that 19,320,000 Ordinary Shares should be allotted and Sun Wah nominated Weng to take up the allotment (the "Consideration Shares"). The Consideration Shares were never issued to Weng although the goodwill arising from acquisition of Kepu has been capitalised in LED's accounts some time ago and shown as 'shares to be issued'.

Kepu specialises in the research, development and manufacturing of its own brand of opto-electronic products, such as LED modules, LED unit boards and LED bar-screens, which are used in consumer electronic goods such as air-conditioners, microwave ovens, conventional ovens, refrigerators, washing machines and fixed line telephones.

As a part of its ongoing business review, the Board has determined that the activities of Kepu present considerable, but different opportunities from LED's primary focus of its energy management contract ("EMC") business model. As currently structured, the Company does not have the resources to take full advantage of the opportunities available to Kepu. For this reason, the Company has taken the decision to sell part of its interest in Kepu and to license out Kepu's operations. This will provide the Company with further resources to promote and focus on EMC business model.

Under the terms of the Disposal, the Company has sold 40% of its shareholding in LED International (Far East) Limited to Weng. The consideration for the sale shall be the forfeiture by Weng of his rights to the Consideration Shares. In addition, Weng has also entered into a license agreement in relation to the daily operations and management of Kepu (the manufacture of LED display units) for the sum of RMB600,000 (approx. £60,000) per annum, payable in two instalments (the "Licence Agreement"). Under the terms of the Licence Agreement, Weng will assume all responsibility for the management and operation of Kepu and will be responsible for all expenses and operating costs incurred by Kepu.

LED's Chief Executive Officer, Stephen Chan, said: "I am pleased that we have been able to conclude a partial sale of our interest in Kepu. This will provide us with further resources to focus on our EMC business model which we feel is the right direction for the Company at present and will provide us with important recurring revenues."

**Ends**

For further information:

Notes to Editors:

LED International Holdings Limited and its subsidiaries specialize in the development, manufacture and sale of low-powered LED screens, outdoor signs, lamps, lighting and building illumination; and high-powered/medium-powered LED energy efficient indoor and outdoor lighting products.

Under EMC contracts, LED fits energy saving products to the customer's premises, including lighting and reactance filtering equipment supplied by LED, and subsequent savings made by the customer in its electricity bills are then shared between LED and the customer thereby enabling the LED to generate recurring revenue rather than one-off sales revenue.

For more information, please visit: http://www.led-intl.com