2021-10-04 Announcements and Notices - CONTINUING CONNECTED TRANSACTIONS (1) REVISION OF ANNUAL CAPS UNDER THE BUSINESS FRAMEWORK AGREEMENT; AND (2) INVENTORY PROPERTY UNDERWRITING AGREEMENT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

C&D INTERNATIONAL INVESTMENT GROUP LIMITED

建 發 國 際 投 資 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(STOCK CODE: 1908)

CONTINUING CONNECTED TRANSACTIONS

1. 1. REVISION OF ANNUAL CAPS UNDER THE BUSINESS FRAMEWORK AGREEMENT; AND
2. INVENTORY PROPERTY UNDERWRITING AGREEMENT

REVISION OF ANNUAL CAPS UNDER THE BUSINESS FRAMEWORK AGREEMENT

Reference is made to the Announcement, in relation to, among other things, the Business Framework Agreement entered into among the Company, C&D Real Estate and C&D Property on 23 December 2020, pursuant to which, among other things, the C&D Property Group shall provide the property management services, the community value-added and synergy services, and the value-added services to non-property owners to (i) the Remaining Xiamen C&D Group; and (ii) the Group, for the period from 30 December 2020 to 31 December 2022.

Based on the business needs, growth and operating development conditions of the Group and the general economic outlook of the industry and the PRC, and having considered the business volume, service quality and capacity of the historical business between C&D Property Group and the Group, the Board envisages that the transaction amounts for the two years ending 31 December 2022 under the Business Framework Agreement is expected to increase beyond the annual caps set forth in the Announcement. On 4 October 2021 (after trading hours), the Company, C&D Real Estate and C&D Property entered into the Supplemental Agreement to revise the existing annual caps as approved under the Business Framework Agreement.

INVENTORY PROPERTY UNDERWRITING AGREEMENT

On 4 October 2021 (after trading hours), the Company and C&D Property entered into the Inventory Property Underwriting Agreement, pursuant to which the C&D Property Group shall provide inventory property sales agency services to the Group for first-hand residential properties and/or parking spaces developed by the Group. The C&D Property Group shall pay the Group the full amount representing the market value of the inventory properties contemplated under the Inventory Property Underwriting Agreement to buy out the selling right of the inventory properties and obtain sole and exclusive rights for providing inventory property sales agency services to the Group in relation to the inventory properties.

- 1 -

LISTING RULES IMPLICATIONS

As (i) C&D Real Estate is the controlling shareholder of the Company; and (ii) C&D Property is a subsidiary of Well Land, the controlling shareholder of the Company, and thus an associate of the Company, each of C&D Real Estate and C&D Property is a connected person of the Company under the Listing Rules. The transactions contemplated under each of the Supplemental Agreement and the Inventory Property Underwriting Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

Revision of annual caps under the Business Framework Agreement

Pursuant to Rule 14A.54 of the Listing Rules, since it is proposed that certain terms of the Business Framework Agreement shall be amended which constitute a material change to its terms by way of the Supplemental Agreement, the Company is required to re-comply with the relevant requirements of Chapter 14A of the Listing Rules. Since one or more of the applicable percentage ratios under the Listing Rules in respect of the revised annual caps under the Supplemental Agreement exceeds 0.1% but is less than 5%, the transactions contemplated under the Supplemental Agreement between the Group and the C&D Property Group will be subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

The Inventory Property Underwriting Agreement

Since one or more of the applicable percentage ratios under the Listing Rules in respect of the annual caps under the Inventory Property Underwriting Agreement are expected to be more than 5% on an annual basis, the transactions contemplated under the Inventory Property Underwriting Agreement will be subject to the reporting, annual review, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. An EGM will be held to seek approval from the Independent Shareholders for the transactions contemplated under the Inventory Property Underwriting Agreement.

Well Land (which held 765,134,106 issued Shares, representing approximately 59.92% shareholding of the Company as at the date of this announcement), a subsidiary of C&D Real Estate and a controlling shareholder of C&D Property, shall abstain from voting on the proposed resolutions to approve the transactions contemplated under the Inventory Property Underwriting Agreement at the EGM. Save for the aforesaid and to the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, as at the date of this announcement, no other Shareholder is interested in the transactions contemplated under the Inventory Property Underwriting Agreement.

- 2 -

An Independent Board Committee consisting of all the independent non-executive Directors will be established to consider and advise the Independent Shareholders on the transactions contemplated under the Inventory Property Underwriting Agreement. An independent financial adviser will be appointed by the Company to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Inventory Property Underwriting Agreement are fair and reasonable, and the transactions contemplated under the Inventory Property Underwriting Agreement are on normal commercial terms or better, in the ordinary and usual course of business of the Company, and in the interests of the Company and the Shareholders as a whole.

GENERAL

The Company will despatch a circular in relation to the transactions contemplated under the Inventory Property Underwriting Agreement to the Shareholders on or before 30 November 2021, which is more than 15 business days after publication of this announcement, as the Company requires more time to prepare the information to be included in the circular.

REVISION OF ANNUAL CAPS UNDER THE BUSINESS FRAMEWORK AGREEMENT

Reference is made to the Announcement, in relation to, among other things, the Business Framework Agreement entered into among the Company, C&D Real Estate and C&D Property on 23 December 2020, pursuant to which, among other things, the C&D Property Group shall provide the property management services, the community value-added and synergy services, and the value-added services to non-property owners to (i) the Remaining Xiamen C&D Group; and (ii) the Group, for the period from 30 December 2020 to 31 December 2022. The Company has been monitoring the transactions conducted pursuant to the Business Framework Agreement from time to time.

Based on the business needs, growth and operating development conditions of the Group and the general economic outlook of the industry and the PRC, and having considered the business volume, service quality and capacity of the historical business between C&D Property Group and the Group, the Board envisages that the transaction amounts for the two years ending 31 December 2022 under the Business Framework Agreement is expected to increase beyond the annual caps set forth in the Announcement. On 4 October 2021 (after trading hours), the Company, C&D Real Estate and C&D Property entered into the Supplemental Agreement to revise the existing annual caps as approved under the Business Framework Agreement. The principal terms of the Supplemental Agreement are as follows:

Date

4 October 2021 (after trading hours)

Parties

1. C&D Real Estate
2. The Company
3. C&D Property

- 3 -

Revision of the annual caps

Pursuant to the Supplemental Agreement, the proposed revised annual caps of the service fees payable to the C&D Property Group by the Group for the two years ending 31 December 2022 are amended as follows:

Save for the above amendments, all other terms and conditions of the Business Framework Agreement in relation to the transactions between the Group and the C&D Property Group shall remain unchanged and the Business Framework Agreement shall remain valid and in full force. For details of the services provided by the C&D Property Group and the relevant pricing basis, please refer to the Announcement.

In determining the proposed revised annual caps under the Supplemental Agreement, the Directors have considered the following factors:

1. the historical transaction amounts paid to the C&D Property Group in respect of each of the property management services, the community value-added and synergy services, and the value-added services to non-property owners by the Group for such services. For the year ended 31 December 2020 and the six months ended 30 June 2021, the historical transaction amounts in respect of the payment for the services to the C&D Property Group by the Group were approximately RMB258,993,000 and RMB178,262,000, respectively;
2. the proportion of historical transaction amounts in respect of each of the property management services, the community value-added and synergy services, and the value- added services to non-property owners paid by the Group to the C&D Property Group and the pace of increment of the historical transaction amounts paid by the Group to the C&D Property Group. For the six months ended 30 June 2021, the Group expanded its real estate business to Yiyang (益陽), Hefei (合肥), Nantong (南通), Jiangyang (江陽), Suqian (宿遷), Xuzhou (徐州), Yancheng (鹽城), Jinhua (金華), Lingbo (寧波), Taizhou (台州), Wenzhou (溫州), Shangrao (上饒), Jiujiang (九江), Nanchang (南昌), Jiangmen (江門) and Liuzhou (柳州), and the estimated growth of property management services and value-added services to non-property owners provided by the C&D Property Group in the above regions will be faster than originally expected. As the C&D Property Group will also develop new services segments for the existing community value-added and synergy services in the future, the growth in demand for community value-added and synergy services provided by the C&D Property Group is expected to be faster than originally expected; and

- 4 -

1. any potential increment of the demands for the services to be provided by the C&D Property Group based on the above expected expansion in geographical coverage of the Group and the expected growth in the property development services business (as measured by the growth in the contract sales) of the Group in the future.

INVENTORY PROPERTY UNDERWRITING AGREEMENT

On 4 October 2021 (after trading hours), the Company and C&D Property entered into the Inventory Property Underwriting Agreement, pursuant to which the C&D Property Group shall provide inventory property sales agency services to the Group for first-hand residential properties and/or parking spaces developed by the Group. The C&D Property Group shall pay to the Group the full amount representing the market value of the inventory properties contemplated under the Inventory Property Underwriting Agreement to buy out the selling right of the inventory properties and obtain sole and exclusive rights for providing inventory property sales agency services to the Group in relation to the inventory properties. The major terms of the Inventory Property Underwriting Agreement are as follows:

Date

4 October 2021 (after trading hours)

Parties

1. The Company
2. C&D Property

Term

From the date upon which the Inventory Property Underwriting Agreement becomes effective to 31 December 2023.

Scope

In principle, the C&D Property Group provides inventory property sales agency services to the Group in relation to sales of the first-hand inventory residential properties and/or parking spaces developed by the Group. The C&D Property Group should seek prospective purchasers of the inventory properties developed by the Group and procure the acquisition of the inventory properties by the purchaser(s) at a selling price no less than that determined by the Group. Based on the selling price determined by the Group, the purchaser(s) will pay the corresponding purchase price of the property to the Group. If the actual transaction price is higher than the price determined by the Group, the purchaser(s) shall pay the excess portion directly to the C&D Property Group as its income.

The inventory properties under the Inventory Property Underwriting Agreement are the unsold residential inventory properties and/or parking spaces developed by the Group. The parties shall review and adjust the scope of the properties under the Inventory Property Underwriting Agreement every six months. Details of such properties such as scope and amount will be provided by the Group and included in the scope of cooperation of the Inventory Property Underwriting Agreement after mutual confirmation by both parties. After

- 5 -