Discloseable transaction: disposal of the entire equity interests in and the sale loan due by ace season holdings limited (in pdf)

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 Bermuda with limited liability)

The Board announces that on 29 March 2017, the Vendor, a wholly owned subsidiary of the Company, and the Purchaser entered into the Sale and Purchase Agreement in relation to the disposal of the Sale Shares and the Sale Loan to the Purchaser for an aggregate Purchase Price of HK$85,000,000. The Disposal is subject to the satisfaction of the conditions as set out in the paragraph headed "Conditions" below.

As the relevant percentage ratios exceed 5% but all below 25%, the Sale and Purchase Agreement and the transactions contemplated thereunder shall constitute a discloseable transaction on the part of the Company under Chapter 14 of the Listing Rules.

On 29 March 2017 (after trading hours), the Vendor, a wholly owned subsidiary of the Company, and the Purchaser entered into the Sale and Purchase Agreement in relation to the disposal of the Sale Shares and the Sale Loan to the Purchaser for an aggregate Purchase Price of HK$85,000,000. The principal terms of the Sale and Purchase Agreement are summarized below.

The Purchaser is a company incorporated in the Cayman Islands with limited liability and to the best of the Directors' knowledge, the Purchaser is a Hong Kong listed company and the Purchaser and its subsidiaries are principally engaged in development, engineering, manufacturing and sale of toys, consumer electronic products and commercial kitchen products. To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are Independent Third Parties.

The Vendor is a company incorporated in the British Virgin Islands with limited liability and is principally engaged in investment holding. The Vendor is a wholly owned subsidiary of the Company.

Pursuant to the Sale and Purchase Agreement, the Purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to sell (i) the Sale Shares representing the entire issued share capital of the Target Company; and (ii) the Sale Loan. As at the date of this announcement, the Sale Loan amounts to approximately HK$92,724,000.

The Target Company is a company incorporated in the British Virgin Islands with limited liability and is principally engaged in investment holding. The Target Company is the holding company of NPH Holdings Limited and other subsidiaries, which principally engaged in sales of Chinese and other medicines pharmaceutical products, health products, ginseng and dried seafood products to wholesalers and retailers as well as Chinese clinical services under the brand name of "Nam Pei Hong".

Upon completion of the Disposal, the Group will cease to have any interests in the Target Group and their financial results will no longer be consolidated into the Company's consolidated financial statements.

Subject to the terms and conditions of the Sale and Purchase Agreement, the aggregate Purchase Price payable to the Vendor by the Purchaser shall be HK$85,000,000 in cash and shall be payable by the Purchaser to the Vendor (or its nominee) in the following manner (or in such other manner as the parties thereto may agree in writing):

1. as to HK$75,000,000, being the deposit (the "Deposit") and the part payment towards the Purchase Price for the sale and purchase of the Sale Shares and the Sale Loan, shall be payable by the Purchaser to the Vendor (or its nominee) upon signing of the Sale and Purchase Agreement; and

2. as to the remaining balance of the Purchase Price of HK$10,000,000, which shall be payable by the Purchaser to the Vendor (or its nominee) upon Completion.

The Purchase Price was arrived at after arm's length negotiation between the Vendor and the Purchaser with reference to (i) "Reasons for the Transaction and use of proceeds" as disclosed below; and (ii) the unaudited consolidated net tangible liabilities of the Target Group as at 31 December 2016 of approximately HK$14,958,000, the Sale Loan as at the date of this announcement of approximately HK$92,724,000 and intangible value of the trademark of "Nam Pei Hong" as agreed between the Vendor and the Purchaser.

Completion is conditional upon the following conditions being fulfilled and remaining fulfilled or waived by the Purchaser:

1. the Purchaser being reasonably satisfied with the results of the due diligence review (the "Due Diligence Review") to be conducted on the assets, liabilities, operations and affairs of the Target Group as it may reasonably consider appropriate provided that such Due Diligence Review shall not adversely affect the daily business operations of the Target Group;

2. the publication of an announcement of the Company in relation to the Sale and Purchase Agreement and the transactions contemplated thereunder in compliance with Chapter 14 of the Listing Rules;

3. if necessary, the passing by the shareholders of the Purchaser who are entitled to vote and not required to be abstained from voting under the Listing Rules at a general meeting of the Purchaser to be convened and held of the necessary ordinary resolution(s) to approve the Sale and Purchase Agreement and the transactions contemplated thereby;

4. the warranties given by the Vendor under the Sale and Purchase Agreement remaining true and accurate in all material respects;

5. all licenses, permissions, authorisations, certificates, regulatory approvals and consents in relation to the Sale and Purchase Agreement and the transactions contemplated therein under any applicable laws, statutes, regulations and ordinances having been obtained by the Purchaser and the Vendor and the parties hereto; and

6. no material adverse change (or effects) occurred on the Target Group prior to Completion.

If any of the conditions have not been satisfied (or, as the case may be, waived by the Purchaser) on or before of 30 September 2017 or such other date as the parties may agree in writing (the "Longstop Date"), the Sale and Purchase Agreement shall cease and determine and none of the parties shall have any obligations and liabilities thereunder save for any antecedent breaches of the terms thereof and the Vendor shall at the written request of the Purchaser refund the Deposit in full without interest to the Purchaser and whereupon neither party shall take any action to claim for damages or to enforce specific performance or any other rights and remedies.

Completion is expected to take place on the third Business Day after the fulfilment (or waiver) of the conditions (or such later date as the parties to the Sale and Purchase Agreement may agree) mentioned above.

Upon Completion, the Target Company will cease to be a wholly owned subsidiary of the Company and the Company will cease to have any interests in the Target Group and their financial results will no longer be consolidated into the Company's consolidated financial statements.

The Target Company is a company incorporated in the British Virgin Islands with limited liability and is principally engaged in investment holding. The Target Group is principally engaged in sales of Chinese and other medicines pharmaceutical products, health products, ginseng and dried seafood products to wholesalers and retailers as well as Chinese clinical services under the brand name of "Nam Pei Hong" which is highly recognized in Hong Kong and Southern Mainland China.

Set below is the unaudited consolidated financial information of the Target Group:

HK$ HK$

(Unaudited) (Unaudited)

Revenue 160,852,000 149,747,000

Loss before tax 1,263,000 1,120,000

Loss after taxation 1,263,000 1,120,000

Net liabilities 7,843,000 8,915,000