Major Transaction in relation to the Disposal

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.

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 00138)

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL

THE DISPOSAL

On 26 April 2019, the Vendor and the Purchaser entered into the Provisional Agreement, pursuant to which the Vendor agreed to dispose of the Sale Share and to assign the Shareholder's Loan to the Purchaser. The Consideration for the Disposal is HK$158,750,000. To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons. The Target Company is the legal and beneficial owner of the Target Properties.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios for the Disposal exceeds 25% but all the applicable percentage ratios are less than 75%, the Disposal constitutes a major transaction for the Company under the Listing Rules and therefore is subject to the reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

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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 Shareholders or any of their respective associates have any material interest in the Disposal. As such, no Shareholder would be required to abstain from voting in favour of the resolution approving the Disposal if the Company were to convene a special general meeting to approve the Disposal.

Pursuant to Rule 14.44 of the Listing Rules, written shareholders' approval may be accepted in lieu of holding a general meeting. The Company has obtained the written approval from a closely allied group of Shareholders comprising Mr. Mak, Capital Force, New Capital and Capital Winner, which together are beneficially interested in an aggregate of 468,944,731 Shares, representing approximately 53.70% of the total number of issued Shares as at the date of this announcement, to approve the Disposal. Of the 468,944,731 Shares beneficially interested by these Relevant Shareholders, 22,919,652 Shares, 96,868,792 Shares, 171,357,615 Shares and 177,798,672 Shares are beneficially owned by Mr. Mak, Capital Force, New Capital and Capital Winner respectively, representing approximately 2.63%, 11.09%, 19.63% and 20.35%, respectively of the total number of issued Shares as at the date of this announcement. Accordingly, no general meeting of the Company will be convened for the purpose of approving the Disposal.

A circular of the Company containing, among others, (i) further details of the Disposal, and

(ii)other information required to be disclosed under the Listing Rules, will be despatched to the Shareholders on or before 21 May 2019, in accordance with the Listing Rules.

On 26 April 2019, the Vendor and the Purchaser entered into the Provisional Agreement in relation to the Disposal. The principal terms of the Disposal are set out below.

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Provisional Agreement

Pursuant to the Provisional Agreement, the Vendor will dispose of the Sale Share and assign the Shareholder's Loan to the Purchaser upon the terms contained therein.

The Vendor and the Purchaser will enter into the Formal Agreement on or before 10 May 2019 (or such later date as agreed in writing between the Vendor and the Purchaser).

The Consideration

The Consideration is HK$158,750,000, payable in cash.

The Consideration was determined after arm's length negotiation between the Vendor and the Purchaser with reference to the prevailing market price of properties at nearby location.

The Directors (including the independent non-executive Directors) believe that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Terms of Payment

The Consideration is payable as follows:

(a)An initial deposit of HK$4,762,500 was paid by the Purchaser upon signing of the Provisional Agreement;

(b)a further deposit of HK$11,112,500 will be paid by the Purchaser on or before 10 May 2019; and

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(c)the balance of the Consideration of HK$142,875,000 (the "Balance") will be paid by the Purchaser, subject to the adjustment as explained below, on Completion.

If, according to the Completion Management Accounts, the Target Company has any outstanding borrowings, indebtedness or liabilities (other than the Shareholder's Loan), the Balance will be pro tanto reduced by the amount of such outstanding borrowings, indebtedness or liabilities.

Completion

Completion of the Disposal is conditional upon of the following:

(a)the Purchaser having completed its due diligence investigation on the business, financial, legal and all other aspects of the Target Company and satisfied with the results thereof;

(b)the Vendor, at the Vendor's own cost, having procured the Target Company to prove and give a good title to the Target Properties in accordance with Sections 13 and 13A of the Conveyancing and Property Ordinance (Chapter 219 of the Laws of Hong Kong);

(c)all the representations, undertakings and warranties given by the Vendor under this Provisional Agreement and the Formal Agreement are and shall remain true, accurate, correct and complete and not misleading in all respects up to the Completion; and

(d)the release or discharge of the existing mortgages on the Target Properties on or before the Completion Date.

If any of the foregoing conditions is not fulfilled (or waived by the Purchaser) on or before the Completion Date, the Purchaser shall be entitled to cancel the Disposal whereupon the Vendor shall, and shall procure the Vendor's solicitors to return all the deposit paid by the Purchaser under the Provisional Agreement to the Purchaser forthwith.

Completion of the Disposal shall take place on 31 July 2019 (or such other date and time as the Vendor and the Purchaser may agree in writing).

After the Completion, the Vendor will not hold any equity interest in the Target Company. The Target Company will cease to be a subsidiary of the Vendor and accordingly, the accounts of the Target Company will cease to be consolidated into the accounts of the Group.

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INFORMATION OF THE TARGET COMPANY AND THE TARGET PROPERTIES

As at the date of this announcement, the Target Company is the legal and beneficial owner of the Properties which comprise the Target Properties and the Retained Properties. Prior to Completion, the Target Company will transfer the Retained Properties to other subsidiary or subsidiaries of the Vendor.

The Target Properties have been occupied by the Group for self-use purpose until October 2018. The Target Properties are vacant at present.

Set out below is the financial information of the Target Company for the two financial years ended 31 December 2017 and 2018:

Based on the accounts of the Target Company, the net book value of the Target Properties is approximately HK$78 million as at 31 December 2018.

REASONS FOR AND BENEFITS DERIVED FROM THE DISPOSAL

The Target Properties were acquired by the Target Company in 2011 and are held by the Group for self-use purpose until October 2018. In October 2018, the Company moved its office address from the Target Properties to its present address in Fotan, Shatin, New Territories. Thereafter, the Target Properties are vacant. As the Company no longer requires the Target Properties for its own use, the Board is of the opinion that the Company should realise its investment in the Target Properties and the proceeds from the Disposal will further enhance the financial position of the Group.

The Directors (including the independent non-executive Directors) consider that the terms of the Provisional Agreement and the Disposal are on normal commercial terms, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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