Acquisitions And Disposals: : Major Transaction: : Proposed Acquisition Of Land In Yangzhou For Property Development

(Co. Reg. No. 196800586R)

(Incorporated in the Republic of Singapore)

The Board of Directors of Lion Asiapac Limited (the "Company", and collectively with its subsidiaries, the "Group") wishes to announce that it has on 17 December 2012 received formal notification from the Yangzhou Municipal State-owned Land Resource Administration Bureau ("Land Bureau") that it has won the tender (the "Tender") for the acquisition of the Land (as defined below) and the development of the Project (as defined below) (the acquisition and the development together, the "Proposed Transaction").
It is intended that a sino-foreign joint venture company ("JVCo"), to be established by two (2) wholly-owned subsidiaries of the Company, Lion Asiapac Management Consultancy (Shanghai) Co., Ltd. ("LAPS") and LAP Development Pte. Ltd. ("LAPD"), shall acquire the Land and develop the Project.
Further information on the JVCo, the Land and the Project are set out below.

Unless otherwise stated, the following exchange rates have been used in this Announcement: RMB 1.00 = S$0.196

(Source: The Business Times dated 14 December 2012)

2.1 The JVCo
The JVCo shall be operated by LAPS and LAPD in accordance with Company Law of the People's Republic of China ("PRC"), the Law of the PRC on Sino-foreign Equity Joint Ventures, the Implementing Rules thereunder as well as other relevant laws and regulations of the PRC.
The initial registered capital of the JVCo will comprise US$30 million (approximately S$39 million), of which LAPS and LAPD shall each contribute 50% (i.e. US$15 million or approximately S$19.5 million). The initial registered capital of the JVCo will be used to fund the payment of the Tender Price (as defined below).
The JVCo shall, subject to compliance with all relevant PRC laws and regulations, enter into relevant documents with the Land Bureau in respect of the JVCo's purchase of the Land, completion of the transfer of legal title for the Land and the development of the Project.
2.2 The Land and the Project
The land (the "Land"), which is situated at Harbourside New City of Yangzhou Economic and Technological Development Zone, Jiangsu Province, PRC, has a total land area of 80,137 m2 and comprises two (2) land parcels, being (a) a land plot for residential development and having a land area of 52,000 m2 and (b) a land plot for commercial development and having a land area
of 28,137 m2.
The proposed development will be a mixed-use development comprising residential units as well as shops and offices for commercial use (the "Project").

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2.3 Tender Price
The Tender was won at the bid price of RMB 168 million (approximately S$33 million) (the "Tender Price"). Such amount will be paid by LAPS and LAPD, through the injection of capital into the JVCo pursuant to the Proposed Transaction, to the Land Bureau in accordance with a payment schedule stipulated by the Land Bureau to acquire the Land.
The Tender Price was arrived at after considering the economic potential of the Land and the Project based on stabilised operations after rental renewal cycle and enhancing yield over time. Factors such as the expected net lettable area, rental rates and property yields, market positioning and trade and tenant mix were also taken into account.
2.4 Rationale
The Company is presently engaged in the businesses of supplying quicklime and scrap metal trading. The Proposed Transaction, which is not in the ordinary course of business of the Company, is in line with the Group's strategy to undertake new investment projects that will broaden the Group's asset and earning bases, as well as to provide an alternative source of recurring income and earnings.
The Proposed Transaction will be funded from the cash reserves of the Group.
The directors of the Company ("Directors") are of the opinion that the Group's intended expansion into the property development market in Yangzhou through the Proposed Transaction at this time is in the best interests of the Group due to Yangzhou's strategic location coupled with its modern transportation network as well as its excellent infrastructure and business environment.
In 2011, growth rate for real estate development in Yangzhou reached 13.8% over a 10-year period. Yangzhou has a population of 4.6 million and a land mass of 6,634 km2, with a built-up area of 420 km2. Industrial sectors in Yangzhou include electronics/IT, new material and biotechnology, automobile, shipbuilding, electrical cable, chemical, textile and food processing. In
2011, Yangzhou reported GDP of RMB 263 billion, being 19% higher than that of previous year, and its GDP per capita exceeded US$9,000.
Additional factors such as Yangzhou's close proximity and easy accessibility to other more established cities such as Shanghai, Suzhou and Wuxi, where property prices are at least two (2) to three (3) times higher than in Yangzhou, also makes Yangzhou an attractive choice for property-investment for many potential investors.
Based on the abovementioned factors, the Directors are of the view that the Proposed Transaction provides an excellent and timely opportunity for the efficient deployment of the Group's surplus financial resources in order to achieve a better return for the Company's shareholders (the "Shareholders").

3.1 Relative Figures Pursuant to Rule 1006 of the Listing Manual
Under Rule 1014 of the Listing Manual, Shareholders' approval is required for a transaction (a "major transaction") if any of the relative figures computed on the bases set out in Rule 1006 of the Listing Manual exceeds 20% and such a transaction must be made conditional upon Shareholders' approval for the same.
The relative figures as computed on the bases as set out in Rule 1006 of the Listing Manual, based on the audited consolidated accounts of the Group for the financial year ended 30 June
2012 ("FY 2012"), are as follows:

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Having regard to the above, the Proposed Transaction is a "major transaction" under Rule 1014 of the Listing Manual. Accordingly, the Proposed Transaction is subject to and conditional upon the approval of the Shareholders.
3.2 Waiver from Rule 1014 of the Listing Manual
As the sale of the Land by the Land Bureau was effected via open tender and the deadline for the submission of the tender for the Land was only approximately four (4) weeks, it would not have been possible for the Company to convene a Shareholders' meeting to consider and approve the Proposed Transaction prior to such deadline. As such, the Company had applied and received a waiver from the SGX-ST ("SGX Waiver") from the requirement to seek the prior approval of the Shareholders for the Proposed Transaction pursuant to Rule 1014 of the Listing Manual.
The SGX Waiver is subject to the following:
(a) an announcement of the SGX Waiver together with the conditions imposed pursuant to Rule 107 of the Listing Manual being made at the same time the Proposed Transaction is announced by the Company;
(b) an extraordinary general meeting ("EGM") being held to seek Shareholders' ratification of the Proposed Transaction; and
(c) written undertakings from the controlling Shareholders, Omali Corporation Sdn. Bhd. ("Omali") and AMB Venture Sdn. Bhd. ("AMB Venture"), to vote in favour of the ratification of the Proposed Transaction at the EGM to be convened be obtained.
The Company had on 23 November 2012 obtained written undertakings from Omali and AMB Venture as required by the SGX Waiver. The EGM will be held in due course to ratify the Proposed Transaction.

4.1 Profits
As the Project relates to the development of the Land and is not generating any income or cashflow, the net profits attributable to the Proposed Transaction as at 30 June 2012 cannot be ascertained.

1 Not applicable as this basis is not applicable to an acquisition of assets, as is the case here.

2 Not applicable as this is a new development project and hence no revenue or profits is generated yet.

3 Computed based on the bid price of RMB 168 million + working capital requirement of 20% of the bid price. Market capitalisation of the Company as of 14 December 2012 is S$71 million.

4 Not applicable as it is not contemplated that the Company will be issuing equity securities as consideration for the

Proposed Transaction.

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Assuming that the Proposed Transaction had been completed on 30 June 2012, and based on the latest audited consolidated financial statements for FY 2012, the proforma financial effects on the consolidated NTA per share of the Group are as follows:

Note:

NTA per share is calculated based on 405,522,724 issued shares as at 30 June 2012 (excluding treasury shares).

4.3 Earnings per share
Assuming that the Proposed Transaction had been completed on 1 July 2011, and based on the latest audited consolidated financial statements for FY 2012, the proforma financial effects on the consolidated earnings per share of the Group are as follows:

Note:

Based on the weighted average number of shares of 405,522,724 issued shares as at 30 June

2012.

4.4 Gearing
Assuming that the Proposed Transaction had been completed on 1 July 2011, and based on the latest audited consolidated financial statements for FY 2012, the proforma financial effects on the gearing of the Group are as follows:

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None of the Directors or controlling Shareholders of the Company has any interest, direct or indirect, in the Proposed Transaction.

As stated in Section 3 of this Announcement, the Proposed Transaction constitutes a "major transaction" under Chapter 10 of the Listing Manual and accordingly will be subject to Shareholders' ratification of the same. The circular to the Shareholders containing, inter alia, further details of the Proposed Transaction and a notice of the EGM (the "Circular"), will be despatched to Shareholders in due course.
In the meantime, Shareholders and the public are advised to exercise caution before making any decision in respect of their shares. Shareholders who are in any doubt about the contents of this Announcement should consult their stockbroker, bank manager, solicitor or other professional adviser.
BY ORDER OF THE BOARD LION ASIAPAC LIMITED
Tan Yen Hui
Company Secretary
Singapore, 17 December 2012

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