Discloseable and connected transaction at subsidiary level - in relation to the disposal of the entire issued shares of the disposal company

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.

OKG Technology Holdings Limited

歐科雲鏈控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1499)

DISCLOSEABLE AND CONNECTED TRANSACTION

AT SUBSIDIARY LEVEL -

IN RELATION TO THE DISPOSAL OF

THE ENTIRE ISSUED SHARES OF THE DISPOSAL COMPANY

Financial advisor to the Company

THE DISPOSAL

The Board is pleased to announce that on 7 May 2021 (after trading hours), the Vendor (a wholly-owned subsidiary of the Company) and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Vendor agreed to sell and the Purchaser agreed to acquire the Sale Shares, being the entire issued share capital of the Disposal Company for the Consideration of HK$8.0 million (subject to adjustments).

Upon Completion, the Disposal Company will cease to be a subsidiary of the Company and its assets, liabilities and financial results will no longer be consolidated into the financial statements of the Group.

LISTING RULES IMPLICATIONS

As one or more applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) exceed 5% but all relevant percentage ratios are less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements.

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As at the date of this announcement, the Purchaser is a director of the Vendor, relevant Disposal Group companies and some other subsidiaries of the Group. Therefore, the Purchaser is a connected person of the Company at the subsidiary level under Chapter 14A of the Listing Rules.

Since (i) the Purchaser is a connected person of the Company at the subsidiary level under the Listing Rules; and (ii) the Directors (including the independent non-executive Directors) have approved the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and confirmed that the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole, the Sale and Purchase Agreement and the transactions contemplated thereunder constitute a connected transaction which is subject to the reporting and announcement requirements but exempted from the circular, independent financial advice and shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.

None of the Directors have any material interest in the Sale and Purchase Agreement and the transactions contemplated thereunder, and accordingly, none of the Directors are required to abstain from voting on the Board resolutions approving the Sale and Purchase Agreement and the transactions contemplated thereunder.

Shareholders and potential investors of the Company are therefore urged to exercise caution when dealing in the Shares and other securities of the Company.

INTRODUCTION

On 7 May 2021 (after trading hours), the Vendor (a wholly-owned subsidiary of the Company) and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Vendor agreed to sell and the Purchaser agreed to acquire the Sale Shares, being the entire issued share capital of the Disposal Company, for the Consideration of HK$8.0 million (subject to adjustments).

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THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are set out below:

INFORMATION OF THE PARTIES

The Company is an investment holding company. The Group is principally engaged in provision of foundation works and ancillary services, construction wastes handling services, technology services, money lending business and investments in securities.

The Vendor, a company incorporated the British Virgin Islands and a wholly-owned subsidiary of the Company, is engaged in investment holding.

The Purchaser is an individual and Hong Kong resident. As at the date of this announcement, the Purchaser is a director of the Vendor, relevant Disposal Group companies and some other subsidiaries of the Group. Therefore, the Purchaser is a connected person of the Company at the subsidiary level under Chapter 14A of the Listing Rules.

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CONSIDERATION

Pursuant to the Sale and Purchase Agreement, the Purchaser will have to pay the Consideration which consists of the following to the Vendor as consideration for the Disposal:

1. a sum of HK$1.0 million as non-refundable deposit and partial payment of the Consideration to be paid on the signing of the Sale and Purchase Agreement by way of delivering a cheque to the Vendor; and
2. the balance of the Consideration to be paid on Completion by way of a cheque to the Vendor.

Adjustment mechanism

The Vendor shall procure the delivery of the consolidated accounts of the Disposal Group as at 31 March 2021, which includes the audited figures of Bright Access (the "Accounts") to the Purchaser within one month from the date of the Sale and Purchase Agreement. In the event that the tangible assets of the Disposal Group minus the liabilities of the Disposal Group (the "NAV") as shown in the Accounts (or the audited accounts of the Disposal Group) exceeds HK$7.1 million, then the parties agree that the Consideration payable by the Purchaser shall be adjusted upward by a sum calculated in accordance with the following formula:

A = NAV as shown in the Accounts (or the audited Accounts) - HK$7.1 million

where A is the additional consideration payable by the Purchaser

For the avoidance of doubt, there shall be no downward adjustment to the Consideration irrespective of the NAV amount shown in the Accounts.

Based on the unaudited consolidated net asset value of the Disposal Group as at 31 March 2021, the adjustment to Consideration (if any) would not affect the classification of the Disposal under Chapter 14 of the Listing Rules. Further announcement(s) will be made by the Company in the event that the adjustment to Consideration will cause different classification of the Disposal under Chapter 14 of the Listing Rules.

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The Consideration, was determined by the Vendor and the Purchaser after arm's length negotiation on normal commercial terms with reference to (i) the unaudited consolidated net asset value of the Disposal Group as at 31 March 2021 in the amount of approximately HK$7.1 million; and (ii) the amount of the valuation of the market value as at 31 March 2021, by using the asset approach, of the Disposal Group as determined by an independent valuer of approximately HK$7.3 million.

CONDITIONS PRECEDENT

The Sale and Purchase Agreement does not consist of any conditions precedent for Completion. Completion shall take place within two (2) months from the date of the Sale and Purchase Agreement.

FINANCIAL INFORMATION OF THE DISPOSAL GROUP

Set out below is the financial information of the Disposal Group extracted from its audited financial statements for the year ended 31 March 2020 and unaudited management accounts for the year ended 31 March 2021:

The unaudited total net asset value of the Disposal Group, as at 31 March 2021 was approximately HK$7.1 million.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Company is an investment holding company. The Group is principally engaged in provision of foundation works and ancillary services, construction wastes handling services, technology services, money lending business and investments in securities.

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