Prosperity H K : Announcements and Notices - Major and Connected Transaction in Relation to the Provision of Further Financial Assistance to Guangdong Sendao Group

E160240A_Prosperity Intl 1..29

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.

PROSPERITY INTERNATIONAL HOLDINGS (H.K.) LIMITED

昌 興 國 際 控 股（香 港）有 限 公 司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 803)

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE PROVISION OF FURTHER FINANCIAL ASSISTANCE TO GUANGDONG SENDAO GROUP

PROVISION OF FURTHER FINANCIAL ASSISTANCE

Reference is made to the Announcements and the Circulars in relation to the provision of the Previous Securities by Fuchun Dongfang, a 55%-owned subsidiary of the Company, for the benefit of the Guangdong Sendao Group as security for the Previous Loan Facilities taken out by the Guangdong Sendao Group.

(A) The LD Facility Framework Agreement

On 22 January 2016, Fuchun Dongfang as security provider entered into the LD Facility Framework Agreement with, among others, Shanghai LD as lender, pursuant to which Fuchun Dongfang agreed to provide the LD Security for the benefit of Guangdong Sendao as security for the LD Loan Facility taken out by Guangdong Sendao.

The LD Security granted by Fuchun Dongfang comprises the LD Property Mortgages. The amount secured by the LD Security is approximately RMB100,040,000 (equivalent to approximately HK$119,000,000).

* for identification purpose only

(B) The LQ-2 Property Mortgage Agreement

On 22 January 2016, Fuchun Dongfang as security provider entered into the LQ-2 Property Mortgage Agreement with Ms. Liu as mortgagee, pursuant to which Fuchun Dongfang agreed to provide the LQ-2 Security for the benefit of Guangdong Sendao, Mr. Guo Jianji and Ms. Wang as security for the LQ-2 Loan Facility taken out by Guangdong Sendao, Mr. Guo Jianji and Ms. Wang.

The LQ-2 Security granted by Fuchun Dongfang comprises the LQ-2 Property Mortgage. The amount secured by the LQ-2 Security is approximately RMB25,896,200 (equivalent to approximately HK$30,800,000).

IMPLICATIONS UNDER THE LISTING RULES

Guangdong Sendao holds 45% of the equity interests of Fuchun Dongfang. As at the date of this announcement, Guangdong Sendao is owned as to approximately 97.6% and 2.4% by Mr. Guo Jianji and Ms. Wang respectively. Ms. Wang is the spouse of Mr. Guo Jianji and therefore an associate of Mr. Guo Jianji. Therefore, each of Guangdong Sendao, Mr. Guo Jianji and Ms. Wang is a connected person of the Company at the subsidiary level under Rule 14A.07 of the Listing Rules. Accordingly, the provision of each of the LD Security and the LQ-2 Security by Fuchun Dongfang for the benefit of Guangdong Sendao Group constitutes financial assistance by the Group to the connected persons of the Company and hence each of them constitutes a connected transaction for the Company under Rule 14A.24(4) of the Listing Rules.

The Board has approved the provision of the LD Security and the LQ-2 Security as well as the transactions contemplated under the LD Facility Framework Agreement (including the LD Property Mortgage Agreements) and the LQ-2 Property Mortgage Agreement. In addition, the Directors (including all the independent non-executive Directors) have confirmed that the terms of the LD Facility Framework Agreement, the LD Property Mortgage Agreements and the LQ-2 Property Mortgage Agreement are fair and reasonable, the provision of the LD Security and the LQ-2 Security is on normal commercial terms and in the interests of the Company and the Shareholders as a whole. Pursuant to Rule 14A.101 of the Listing Rules, the provision of the LD Security and the LQ-2 Security is therefore subject to the reporting and announcement requirements but exempt from the circular, independent financial advice and independent shareholders' requirements under Chapter 14A of the Listing Rules.

In respect of the provision of the LD Security, as one or more of the applicable percentage ratios is more than 5% but all of the applicable percentage ratios are less than 25%, the provision of the LD Security on its own is a discloseable transaction for the Company under Chapter 14 of the Listing Rules. In respect of the provision of the LQ-2 Security, as the applicable percentage ratios are less than 5%, the provision of the LQ-2 Security on its own is not a notifiable transaction for the Company under Chapter 14 of the Listing Rules. Pursuant to Rule 14.22 of the Listing Rules, the provision of the LD Security and the LQ-2 Security would have to be aggregated with the provision of the Previous Securities as all of them were given in favour of the Guangdong Sendao Group. As one or more of the applicable percentage ratios in respect of the provision of the Security is more than 25% but all of the applicable percentage ratios are less than 100%, the provision of the Security, after aggregation, remains to be a major transaction for the Company under Chapter 14 of the Listing Rules.

Given that none of the Shareholders has a material interest in the provision of the LD Security and the LQ-2 Security, none of them would be required to abstain from voting if a general meeting of the Company were to be convened to approve the provision of the LD Security and the LQ-2 Security as well as the transactions contemplated under the LD Facility Framework Agreement (including the LD Property Mortgage Agreements) and the LQ-2 Property Mortgage Agreement. Pursuant to Rule 14.44 of the Listing Rules, on 22 January 2016, the Company has obtained a written approval from the Closely Allied Group who together are interested in 5,780,241,735 Shares (representing approximately 59.01% of the issued share capital of the Company as at the date of this announcement), to approve the provision of the LD Security and the LQ-2 Security as well as the transactions contemplated under the LD Facility Framework Agreement (including the LD Property Mortgage Agreements) and the LQ-2 Property Mortgage Agreement.

DESPATCH OF CIRCULAR

A circular containing further information on the LD Security and the LQ-2 Security will be despatched to the Shareholders as soon as possible which is expected to be on or before 17 February 2016.

INTRODUCTION

Reference is made to the Announcements and the Circulars in relation to the provision of the Previous Securities by Fuchun Dongfang, a 55%-owned subsidiary of the Company, for the benefit of the Guangdong Sendao Group as security for the Previous Loan Facilities taken out by the Guangdong Sendao Group.

On 22 January 2016, Fuchun Dongfang as security provider entered into the LD Facility Framework Agreement in relation to the LD Loan Facility and the LQ-2 Property Mortgage Agreement in connection with the LQ-2 Loan Facility, details of which are set out below.

THE LD FACILITY FRAMEWORK AGREEMENT

Date

22 January 2016

Parties

1. Shanghai LD, as lender

2. Guangdong Sendao, as borrower

3. Fuchun Dongfang, as security provider

4. Mr. Guo Jianji, as personal guarantor

5. Ms. Wang, as personal guarantor

Principal amount of the loan

A loan up to the maximum amount of RMB50,000,000 (equivalent to approximately HK$59,500,000) to be made through a bank entrusted by Shanghai LD to Guangdong Sendao, which comprises the LD RMB22M Entrusted Loan Facility and the LD RMB28M Entrusted Loan Facility.

Interest rate

The interest rate will be agreed separately under the LD RMB22M Entrusted Loan Facility Agreement and the LD RMB28M Entrusted Loan Facility Agreement.

Term

Two years or less from the date of drawdown.

Security created in connection with the loan

1. the LD Property Mortgages

2. personal guarantee from Mr. Guo Jianji

3. personal guarantee from Ms. Wang

Assets under mortgage

All the rights and benefits (including the land use rights and ownership of properties) of the LD Mortgaged Property. The LD Mortgaged Property consists of:

(a) the LD RMB22M Mortgaged Property, i.e., (i) 10 retail outlets at Rooms 316, 318, 322-329 on the 3rd floor of Oriental Landmark, located at No.68 Wen De Road North;

(ii) 5 office premises at Rooms 2407, 2501-2503, 2605 of Block A of Oriental Landmark, located at No.71 Wen Ming Road; and (iii) 6 car parking spaces located on