China Beidahuang Industry : DISCLOSEABLE TRANSACTION ACQUISITION OF 100% EQUITY INTEREST IN TARGET COMPANY (in PDF)

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China Beidahuang Industry Group Holdings Limited

中 國 北 大 荒 產 業 集 團 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 00039)

DISCLOSEABLE TRANSACTION ACQUISITION OF 100% EQUITY INTEREST IN TARGET COMPANY THE EQUITY TRANSFER AGREEMENT

The Board wishes to announce that on 13 January 2017, the Company as the purchaser, the Vendor and the Guarantors entered into the Equity Transfer Agreement, pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell 100% equity interest in the Target Company at a consideration of RMB220,000,000, subject to the terms and conditions of the Equity Transfer Agreement. To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of the Vendor and the Guarantors is an Independent Third Party.

The Target Company is principally engaged in property holding and leasing. As at the date of this announcement, the Target Company legally and beneficially owns the Property.

Upon Completion, the Target Company will become a wholly-owned subsidiary of the Group and its results and net assets will be consolidated into the financial statements of the Company after Completion.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Acquisition exceed 5% but all of them are less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements but is exempt from the circular and Shareholders' approval under Chapter 14 of the Listing Rules.

INTRODUCTION

On 13 January 2017, the Company as the purchaser, the Vendor and the Guarantors entered into the Equity Transfer Agreement, pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell 100% equity interest in the Target Company at a consideration of RMB220,000,000, subject to the terms and conditions of the Equity Transfer Agreement.

THE EQUITY TRANSFER AGREEMENT Date

13 January 2017

Parties

1. The Company;

2. The Vendor; and

3. The Guarantors.

As at the date of this announcement and to the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of the Vendor and the Guarantors is an Independent Third Party.

Assets to be acquired

Pursuant to the Equity Transfer Agreement, the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose of the entire equity interests in the Target Company at a consideration of RMB220,000,000. The Target Company has a registered and paid-up capital of RMB80,000,000 which is legally and beneficially owned by the Vendor as at the date of this announcement.

The Target Company legally and beneficially owns the Property. The Property has been pledged to a bank in the PRC to secure a general banking facility granted to the Target Company. As at the date of this announcement, the Target Company has not drawn up any of the said banking facility. The Vendor guaranteed that the Target Company will not draw up any of the said banking facility before and up to Completion.

Consideration

The total consideration for the Acquisition is RMB220,000,000, which will be payable in two

(2) installments by the Company to the Vendor and in the following manner:

1. RMB190,000,000, being partial payment of the Consideration, will be settled in cash within one (1) month upon signing of the Equity Transfer Agreement; and

2. RMB30,000,000, being the remainder of the Consideration, will be settled by way of the Company allotting and issuing 76,686,332 Consideration Shares at the Issue Price of HK$0.44 per Consideration Share to the Vendor or her designated nominee(s) on or before 28 February 2017.

   The Consideration was determined after arm's length negotiations between the Company and the Vendor with reference to the estimated market value of the Property of approximately RMB220,550,100 (equivalent to approximately HK$248,059,948) as at 24 October 2016 based on a valuation report prepared on an open market basis by an independent property valuer.

   Conditions precedent to the Acquisition

   Completion of the Acquisition is subject to satisfaction or waiver (as the case may be) of the following conditions precedent:

3. all approvals, consents and waivers have been obtained from the Board for the Acquisition;

4. all necessary approvals, consents and waivers have been obtained from all government bodies (if applicable) and third parties for the Acquisition;

5. the Company has been satisfied with and accepted the due diligence results for the Target Company;

6. the Vendor and the Guarantors have not materially breached any representations, warranties and undertakings made in the Equity Transfer Agreement;

7. prior to Completion, the Vendor, the Guarantors and the Target Company have not violated any material terms and conditions of the Equity Transfer Agreement;

8. no laws or orders have prohibited any of the transactions contemplated in the Equity Transfer Agreement or the ancillary documents (if applicable);

9. the Company has been satisfied with and accepted the valuation report of the Property issued by an independent property valuer appointed by the Company;

10. the Vendor has completed the equity transfer procedure of the entire equity interest of the Target Company in favour of the Company according to the instructions of the Company; and

11. the Stock Exchange has granted the approval for the listing of, and permission to deal in, the Consideration Shares.