Midland IC&I : MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE ISSUED SHARES OF MOST WEALTH (HONG KONG) LIMITED INVOLVING ISSUE OF CONSIDERATION SHARES AND CONVERTIBLE NOTE

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 securities of the Company.

MIDLAND IC&I LIMITED *

美 聯 工 商 舖 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 459) MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE ISSUED SHARES OF MOST WEALTH (HONG KONG) LIMITED INVOLVING ISSUE OF CONSIDERATION SHARES AND CONVERTIBLE NOTE Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders THE ACQUISITION AND THE PROPERTY

The Board is pleased to announce that on 10 January 2017 (after trading hours), the Purchaser, a wholly-owned subsidiary of the Company, and the Seller entered into the Acquisition Agreement, pursuant to which the Purchaser has conditionally agreed to acquire and the Seller has conditionally agreed to sell the entire issued shares of the Target Company.

The principal asset of the Target Company is the entire interest in a property located at Nos. 33 and 35 Java Road, Hong Kong. The Property is currently under the Property Enhancement Project and is expected to be used as serviced apartments and shops on or before the Target Date. Completion of the Acquisition is subject to a number of conditions as set out in this announcement below.

*For identification purposes only

The Consideration is agreed at HK$400.0 million (subject to the Cash Adjustment) which is at a discount of HK$15.0 million or approximately 3.6% to the preliminary estimated market value of the Property upon completion of the Property Enhancement Project of HK$415.0 million. The Consideration will be settled at Completion by a combination of (i) the allotment and issue of the Consideration Shares in the amount of HK$200.0 million; and (ii) the issue of the Convertible Note in the amount of HK$200.0 million. At Completion, 4,347,826,086 Consideration Shares will be allotted and issued at the Issue Price of HK$0.046 per Consideration Share by the Company to the Seller. The Convertible Note is interest-free, unsecured, with a maturity of four years from its date of issue and carrying rights to convert into Conversion Shares at the initial Conversion Price of HK$0.046 per Conversion Share. Upon full conversion of the Convertible Note at the initial Conversion Price, a total number of 4,347,826,086 Conversion Shares will be allotted and issued.

LISTING RULES IMPLICATIONS

As one or more of the relevant percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the Acquisition exceed 25% but all of them are less than 100%, the Acquisition constitutes a major transaction for the Company and is subject to the reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

In addition, as the Seller is an associate of Ms. Tang Mei Lai, Metty, a non-executive Director, and Ms. Wong Ching Yi, Angela, an executive Director, the Seller is therefore a connected person of the Company under the Listing Rules, and the Acquisition also constitutes a connected transaction for the Company and is subject to the reporting, announcement, circular and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

DESPATCH OF CIRCULAR

The Company will despatch the Circular in accordance with the requirements under the Listing Rules as soon as practicable containing, among other things, (i) further information on the Acquisition Agreement (and the transactions contemplated thereunder); (ii) the accountant's report on the Target Company; (iii) the unaudited pro forma financial information of the Enlarged Group; (iv) the valuation report on the Property; (v) the recommendation of the Independent Board Committee; (vi) the advice of the Independent Financial Adviser regarding the terms of the Acquisition Agreement (and the transactions contemplated thereunder); and (vii) other information as required to be contained in the Circular under the Listing Rules. The Circular together with a notice of the EGM and a form of proxy are expected to be despatched to the Shareholders on or before 2 February 2017.

WARNING Completion of the Acquisition is subject to the satisfaction and/or waiver of the conditions precedent under the Acquisition Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

1. INTRODUCTION

   The Board is pleased to announce that on 10 January 2017 (after trading hours), the Purchaser, a wholly-owned subsidiary of the Company, and the Seller entered into the Acquisition Agreement, pursuant to which the Purchaser has conditionally agreed to acquire and the Seller has conditionally agreed to sell the entire issued shares of the Target Company. The principal asset of the Target Company is the entire interest in the Property. The Property is currently under the Property Enhancement Project and is expected to be used as serviced apartments and shops on or before the Target Date.

2. THE ACQUISITION The Acquisition Agreement

   Date: 10 January 2017 (after trading hours)

   Parties:	(i)	the Purchaser, a wholly-owned subsidiary of the Company;
   (ii)	the Purchaser's guarantor: the Company; and
   (iii)	the Seller: Mr. Wong

   The Seller is Mr. Wong, who is the spouse of Ms. Tang Mei Lai, Metty (a non-executive Director) and the father of Ms. Wong Ching Yi, Angela (an executive Director). As at the date of this announcement, Mr. Wong is also a Shareholder holding 929,150,720 Shares, representing approximately 6.78% of the existing issued share capital of the Company. Mr. Wong is the chairman and a non-executive director of Midland Holdings and holds 185,830,144 Midland Holdings Shares, representing approximately 25.88% of the issued share capital of Midland Holdings as at the date of this announcement.

   Assets to be acquired

   Pursuant to the Acquisition Agreement, the Purchaser has conditionally agreed to acquire and the Seller has conditionally agreed to sell the entire issued shares of the Target Company. The principal asset of the Target Company is the entire interest in the Property which is currently under the Property Enhancement Project and is expected to be used as serviced apartments and shops on or before the Target Date.

   Upon Completion, the Target Company will become a wholly-owned subsidiary of the Company.

   The Consideration

   The Consideration is agreed at HK$400.0 million, subject to the Cash Adjustment mentioned below. The Consideration was agreed after arm's length negotiations between the Purchaser and the Seller having taken into account, among others, (i) the prevailing market conditions and the preliminary estimated market value of the Property upon completion of the Property Enhancement Project of HK$415.0 million; (ii) the undertaking by the Seller to procure completion of the Property Enhancement Project; and (iii) the prospects of the business activity of the Target Company.

   The Consideration will be settled at Completion by a combination of (i) the allotment and issue of the Consideration Shares in the amount of HK$200.0 million; and (ii) the issue of the Convertible Note in the amount of HK$200.0 million. At Completion, 4,347,826,086 Consideration Shares will be allotted and issued at the Issue Price of HK$0.046 per Consideration Share by the Company to the Seller. The Convertible Note is interest-free, unsecured, with a maturity of four years from its date of issue and carrying rights to convert into Conversion Shares at the initial Conversion Price of HK$0.046 per Conversion Share. Upon full conversion of the Convertible Note at the initial Conversion Price, a total number of 4,347,826,086 Conversion Shares will be allotted and issued. A summary of the principal terms of the Convertible Note is set out in section (D) headed "The Convertible Note" in this announcement below.

   The Cash Adjustment will be paid in cash and settled on a dollar-for-dollar basis by: (i) the Purchaser to the Seller if the net amount of the Other Assets and Liabilities of the Target Company is positive at Completion; or (ii) the Seller to the Purchaser if the net amount of the Other Assets and Liabilities of the Target Company is negative at Completion. The Cash Adjustment, if payable by the Purchaser, will not exceed HK$20.0 million.

   Conditions precedent

   Completion is subject to the following conditions being satisfied (or waived, if applicable):

3. the Purchaser having issued a written notice to the Seller that the Purchaser is satisfied with the due diligence review on the Target Company and its assets, including that the solicitors of the Purchaser having approved the title of the Target Company to the Property;

4. the ordinary resolution(s) for approving the Acquisition Agreement and the transactions contemplated thereunder having been duly passed by the Shareholders or, where applicable, the Independent Shareholders at EGM;

5. the Listing Committee having granted the listing of, and permission to deal in, the Consideration Shares and the Conversion Shares on the Stock Exchange;

6. no indication from the Stock Exchange having been received to the effect that the listing of Shares will or may be withdrawn or objected to for any reason attributable to the transactions contemplated under the Acquisition Agreement or the Completion;