KKR PREPARES BID, page-3

Hi Guys,

It is now looking very interesting and if word is leaking out that KKR are leading a consortium of institutions to buy out QIN it would appear that there is definitely substance to this potential outcome.

This has further credibility, IMO, as FW is apparently involved and any institution would want him and his equity as part of a change of control transaction to ensure smooth operational performance thereafter.

It does make a lot of sense and if QIN and Santonal have been in discussions for some time then it is plausible that a modification/ advancement of those discussions has occurred.

For me, I don't think that $1.70 per QIN share would be at all attractive.

My best outcome, would be for a Western consortium (not Chinese) to take a large stake in QIN but to not achieve full control, thus allowing the company to remain publicly listed and for me to retain my investment alongside these guys and to fully benefit from the upside I see coming in the years ahead.

If an offer is made at a price, of say, $1.70 then there is an immediately distressed group of short sellers that need to buy 56.5m shares at close to that price. There will also be people arb'ing any material gap and then there will be some anticipating that any initial offer will need to be raised higher to take full control (I wouldn't sell at $1.70) so it could be epic.

Cheers
John