PPHL Pacific Plywood : CONNECTED TRANSACTION IN RELATION TO THE PROPOSED TERMINATION OF MR. SU'S UNDERTAKING (in PDF)

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This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of PACIFIC PLYWOOD HOLDINGS LIMITED nor is it a solicitation of any vote or approval in any jurisdiction.

PACIFIC PLYWOOD HOLDINGS LIMITED

太 平 洋 實 業 控 股 有 限 公 司*

(Incorporated in Bermuda with limited liability)

(Stock code: 767) CONNECTED TRANSACTION IN RELATION TO THE PROPOSED TERMINATION OF MR. SU'S UNDERTAKING Financial adviser to Pacific Plywood Holdings Limited

References are made to (i) the 2015 VSA Announcements, the 2015 VSA Circular and the Voluntary Announcement in connection with the P2P Acquisition; and (ii) the Joint Announcements. Capitalised terms used in this announcement shall have the same meanings as those defined in the 2015 VSA Circular and the Joint Announcements, unless defined otherwise.

THE P2P ACQUISITION

On 20 October 2015, the Company completed the acquisition of 96% of the issued share capital of Katar Global Limited. Katar Global Limited, through its wholly-owned subsidiaries and the Structured Contracts or the New Structured Contracts (as the case may be), is principally engaged in the operation of a P2P online financing platform in the PRC, matching borrowers with private lenders for various financial products through the internet under the "Caijia" ("財加 ") brand, which is conducted via the website (www.91caijia.com).

• For identification purposes only

  Details of the P2P Acquisition are set out in the 2015 VSA Announcements, the 2015 VSA Circular and the Voluntary Announcement.

  Adoption of the Revised Business Model

  As set out in the 2015 VSA Circular, the Company shall, within 3 months after completion of the P2P Acquisition, look for acquisition opportunities of foreign companies principally engaged in e-commerce related business with track records and if the Group is able to identify and complete such acquisition, the Group can immediately obtain sufficient foreign experiences to achieve the Qualification Requirement (as defined below) and then initiate the process of acquiring the entire equity interest in Beijing Huiju Management. However, if the Company is not able to identify any suitable acquisition targets, it shall consider either

• to establish e-commerce related business overseas by itself to gain foreign e-commerce experiences; or (ii) consider modifying the business model of Katar Global Group such that reliance on the P2P Platform is reduced and expanding the businesses outside of the PRC.

Hence, following completion of the P2P Acquisition and the change in the Registered Shareholders and after exploring various alternatives, the Company plans and intends to adopt the Revised Business Model in order to reduce its reliance on, and henceforth the risks associated with the adoption of, the New Structured Contracts in the operation of the P2P lending business.

Details of the Revised Business Model are set out under the sub-section headed "The Revised Business Model" under the section headed "Adoption of the Revised Business Model" of this announcement.

Termination of the New Structured Contracts and Mr. Su's Undertaking

Upon the adoption of the Revised Business Model, certain existing role and functions of Beijing Huiju Management and the Caijia Website will be shifted to and taken up by the ICP OPCO(s) and the branded website(s)/webpage(s) operated pursuant to the terms of the Cooperation Agreement(s).

Pursuant to the Revised Business Model, Beijing Huiju Management will then not be required to hold and maintain its ICP licence and the VIE Structure under the existing business model is no longer required. Hence, the New Structured Contracts and Mr. Su's Undertaking shall be terminated.

Details of the Beijing JuXin Cooperation Agreement are set out under the sub-section headed "The Beijing JuXin Cooperation Agreement" under the section headed "Adoption of the Revised Business Model" of this announcement.

Details of the termination of the New Structured Contracts and Mr. Su's Undertaking are set out under the section headed "Termination of Existing VIE Structure" of this announcement.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Allied Summit is the controlling shareholder of the Company and is beneficially owned as to approximately 80% by Mr. Su and 20% by Mr. Ng, thus Mr. Su is a connected person of the Company. Therefore, Mr. Su's Undertaking Termination constitutes a connected transaction of the Company and will be subject to the approval of the Independent Shareholders taken by way of poll at the SGM.

GENERAL

The SGM will be held for the purpose of considering and, if thought fit, approving the resolution(s) in respect of Mr. Su's Undertaking Termination and the Special Deals by way of poll. The Shares Vendor, the CN Chargor, the Guarantor, the Offeror and its ultimate beneficial owners, their respective associates and parties acting in concert with any of them and those who are involved in or interested in the Sale and Purchase Agreement, the Listed Shares Disposal Agreement, the CN Modification Deed, the CN Transfer Agreement, the Right of First Offer and the Revised Business Model and the transactions contemplated therein will be required to abstain from voting in respect of the resolution(s) approving Mr. Su's Undertaking Termination and the Special Deals and the respective transactions contemplated thereunder at the SGM.

Shareholders are strongly advised to read (i) the 2015 VSA Announcements and the 2015 VSA Circular which set out the details of the P2P Acquisition; and (ii) the Joint Announcements which set out, amongst others, details of the Sale and Purchase Agreement and the Special Deals, in conjunction with this announcement. The Circular, which will contain, among other things, information regarding the Revised Business Model and the Special Deals and the respective transactions contemplated thereunder, the recommendation from the Independent Board Committee and the advice of the Independent Financial Adviser on the Revised Business Model and the Special Deals and the respective transactions contemplated thereunder and the notice of the SGM, is expected to be despatched to the Shareholders on or before 28 February 2017. WARNING: THE OFFER IS A POSSIBILITY ONLY. AS THE OFFER WILL ONLY BE MADE, AMONG OTHERS, UPON THE SPECIAL DEALS BECOME UNCONDITIONAL AND THE SALE AND PURCHASE COMPLETION, ALL OF WHICH ARE SUBJECT TO A NUMBER OF CONDITIONS, THE OFFER MAY OR MAY NOT PROCEED. SHAREHOLDERS AND POTENTIAL INVESTORS ARE THEREFORE ADVISED TO EXERCISE CAUTION WHEN DEALING IN THE SHARES, AND IF THEY ARE IN DOUBT ABOUT THEIR POSITION, THEY SHOULD CONSULT THEIR PROFESSIONAL ADVISERS.

References are made to (i) the 2015 VSA Announcements, the 2015 VSA Circular and the Voluntary Announcement in connection with the P2P Acquisition; and (ii) the Joint Announcements. Capitalised terms used in this announcement shall have the same meanings as those defined in the 2015 VSA Circular and the Joint Announcements, unless defined otherwise.

(1) THE P2P ACQUISITION

On 20 October 2015, the Company completed the acquisition of 96% of the issued share capital of Katar Global Limited. Katar Global Limited, through its wholly-owned subsidiaries and the Structured Contracts or the New Structured Contracts (as the case may be), is principally engaged in the operation of a P2P online financing platform in the PRC, matching borrowers with private lenders for various financial products through the internet under the "Caijia" ("財加 ") brand, which is conducted via the website (www.91caijia.com) (the "Caijia Website"). Pursuant to the P2P Acquisition, Katar Global Limited shall procure the change of the registered shareholder to any nominees as designated by the Company and on 29 July 2016, the change in registered shareholder from Beijing KangDingAo to the Registered Shareholders was completed.