Announcements and Notices - Subscription of New Shares and Resumption of Trading

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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

GLOBAL BIO-CHEM TECHNOLOGY GROUP COMPANY LIMITED

大 成 生 化 科 技 集 團 有 限 公 司 *

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 00809)

SUBSCRIPTION OF NEW SHARES

AND

RESUMPTION OF TRADING

SUBSCRIPTION OF NEW SHARES

On 19 July 2019, the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to allot and issue an aggregate of 1,279,799,672 new Shares at the Subscription Price of HK$0.10 per Subscription Share.

The Subscription Shares represent 20.0% of the existing issued share capital of the Company and approximately 16.7% of the total issued share capital of the Company as enlarged by the Subscription.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange has been halted with effect from 19 July 2019 at 3:03 p.m. pending the release of this announcement. The Company has applied to the Stock Exchange for resumption of trading in the Shares with effect from 22 July 2019 at 9:00 a.m.

*  For identification purpose only

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THE SUBSCRIPTION AGREEMENT

Date

19 July 2019

Parties

1. the Company (as issuer); and
2. the Subscriber (as subscriber).

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner(s) are third parties independent of, and not connected with the Company and its connected persons.

Subscription

The Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to allot and issue 1,279,799,672 new Shares at the Subscription Price of HK$0.10 per Subscription Share to the Subscriber, with an aggregate consideration of approximately HK$127,980,000. Such consideration shall be satisfied by cheque or telegraphic transfer on the date of Subscription Completion.

Subscription Shares

The Subscription Shares represent:

1. 20.0% of the existing issued share capital of the Company as at the date of this announcement; and
2. approximately 16.7% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares only (assuming there will be no change in the issued share capital of the Company between the date of this announcement and the date of Subscription Completion, save for the allotment and issue of the Subscription Shares).

The Subscription Shares, when allotted and issued, will rank pari passu in all respects among themselves free from all liens, charges, guarantee, adverse interests and adverse claims, and with the Shares in issue on the date of allotment and issue of the Subscription Shares including all dividends declared or payable or distributions made or proposed on or after the date of execution of the Subscription Agreement.

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Conditions precedent to the Subscription Completion

Subscription Completion is conditional upon fulfilment of the following conditions prior to 4 p.m. on or before the Long Stop Date:

1. the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, the Subscription Shares;
2. the Company obtains all approvals and/or filings required for the Subscription Shares and other related transactions under the Subscription Agreement in accordance with the relevant laws and regulations of the PRC involving state-owned enterprises; and
3. all the warranties given under the Subscription Agreement remaining true, accurate and not misleading in all material respects from the date of the Subscription Agreement up to Subscription Completion.

If the Company cannot fulfil any of the above conditions precedent, the Company shall serve a written notice to inform the Subscriber. The Subscriber may at its absolute discretion waive condition precedent (c) above. In the event that any of the conditions of the Subscription is not fulfilled or waived prior to 4 p.m. on the Long Stop Date (or such later date as may be agreed between the Company and the Subscriber in writing), the Subscription Agreement will terminate and all obligations of the Company and the Subscriber under the Subscription Agreement shall cease and determine and neither the Company nor the Subscriber shall have any claim against the other in respect of any matter arising out of or in connection with the Subscription Agreement except for any antecedent breach of any obligation and any liabilities under the Subscription Agreement.

Subscription Completion

Subscription Completion will take place on the first Business Day after the date on which all the conditions of the Subscription are fulfilled or waived (or such other date as may be agreed between the Company and the Subscriber in writing).

Lock-up arrangement for the Subscription Shares

Pursuant to the Subscription Agreement, the Subscriber undertook that, without the prior written consent of the Company, during a period commencing from and including the date of Subscription Completion and ending on and including the date which is one year from the date of Subscription Completion, the Subscriber shall not, and shall procure that none of its associates or companies controlled by it or nominees or trustees holding in trust for it shall sell, transfer or otherwise dispose of (or enter into any agreement to dispose of) any Subscription Shares, or the interest in the Subscription Shares, held by the Subscriber.

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SUBSCRIPTION PRICE

The Subscription Price is HK$0.10 per Subscription Share, which represents:

1. a discount of approximately 18.7% to the closing price of HK$0.1230 per Share as quoted on the Stock Exchange immediately before the trading halt at 3:03 p.m. on 19 July 2019, being the date of the Subscription Agreement; and
2. a discount of approximately 16.5% to the average closing price of HK$0.1198 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day.

The closing price of the Shares on the Last Trading Day was HK$0.113.

Taking into account the estimated expenses of the Subscription in the amount of approximately HK$80,000, the net price to the Company of each Subscription Share is estimated to be approximately HK$0.0999. The Subscription Price was arrived at after arm's length negotiations between the Company and the Subscriber with reference to (i) recent market price of the Shares and current market condition; and (ii) the financial situation of the Company. The Directors consider that the Subscription Price is fair and reasonable.

GENERAL

General Mandate

The Subscription Shares will be allotted and issued under the General Mandate to allot, issue and deal with Shares granted to the Directors by resolution of the Shareholders passed at the annual general meeting of the Company held on 28 June 2019, on which date the total number of Shares in issue was 6,398,998,360. As at the date of this announcement, the Board has not utilised the aforesaid General Mandate and the available number of Shares that can be issued under the General Mandate is 1,279,799,672 Shares. The 1,279,799,672 Subscription Shares to be allotted and issued will utilise 100.0% of the aforesaid General Mandate. As the Subscription Shares are to be issued under the General Mandate, the Subscription is not subject to Shareholders' approval.

Application for listing

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

REASONS FOR THE SUBSCRIPTION

By entering into the Subscription Agreement, the Group can raise capital to facilitate its general working capital and further strengthen its financial position.

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USE OF NET PROCEEDS

The gross proceeds from the Subscription are approximately HK$127,980,000. The estimated net proceeds from the Subscription, after the deduction of relevant expenses, will be approximately HK$127,900,000. The estimated net proceeds from the Subscription are intended to use for general working capital of the Group with further details as set forth below.

The details on the intended use of the net proceeds from the Subscription are as follows:

FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST 12 MONTHS

The Company has not conducted any fund raising activities in the 12 months immediately preceding the date of this announcement.

EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

As at the date of this announcement, the Company has 6,398,998,360 Shares in issue. Set out below is a table showing the shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately after the Subscription Completion (assuming there will be no change in the issued share capital of the Company between the date of this announcement and the date of Subscription Completion, save for the allotment and issue of the Subscription Shares).

*  For identification purpose only

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