Sino Haijing : 25 Jan 2016 Discloseable Transaction - Acquisition of 85% Shareholding in Master Race Limited

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SINO HAIJING HOLDINGS LIMITED

中國海景控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01106)

DISCLOSEABLE TRANSACTION ACQUISITION OF 85% SHAREHOLDING IN MASTER RACE LIMITED

THE ACQUISITION

On 23 January 2016, the Purchaser (a wholly-owned subsidiary of the Company) entered into the Sale and Purchase Agreement with the Vendor pursuant to which the Vendor has agreed conditionally to sell, and the Purchaser has conditionally agreed to purchase the Sale Shares (representing 85% of the issued share capital of the Target Company) at the Consideration of HK$135,000,000.

The Target Company is wholly-owned by the Vendor as at the date of this announcement. Immediately upon Completion, the Target Group will become indirect non-wholly-owned subsidiaries of the Company and the financial results of the Target Group will be consolidated into the consolidated financial statements of the Company.

LISTING RULES IMPLICATIONS ON THE ACQUISITION

As one of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the Acquisition exceeds 5% but is less than 25%, the Acquisition therefore constitutes a discloseable transaction for the Company and is subject to reporting and announcement requirements but exempt from Shareholders' approval requirement under Chapter 14 of the Listing Rules.

THE SALE AND PURCHASE AGREEMENT

Date: 23 January 2016

Parties: Vendor: Cherry Square Limited

Purchaser: World Spark Holdings Limited, a wholly-owned subsidiary of the Company

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Vendor and its ultimate beneficial owner are Independent Third Parties.

Pursuant to the Sale and Purchase Agreement, the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell the Sale Shares, representing 85% of the issued share capital of the Target Company at the consideration of HK$135,000,000.

Assets to be acquired

The Sale Shares, being 85 shares of US$1 each in the share capital of the Target Company, representing 85% of the issued share capital of Target Company.

Consideration

The Consideration for the Sale Shares is HK$135,000,000, which shall be satisfied by the Purchaser to the Vendor in full by cash upon Completion.

The Consideration was arrived at after arm's length negotiations between the Vendor and the Company after taking into account, among others, (i) the historical track record of the cultural show 印象劉三姐 (Impression Liu Sanjie*); (ii) the potential earnings prospects of the Target Group, and (iii) the preliminary appraised value of the Target Group of HK$160 million) as at 19 January 2016 adopting income approach using discounted cash flow method prepared by Witz International Consultants Group Ltd., an independent professional valuer (the "Independent Valuer").

Conditions Precedent

Completion of the Acquisition is conditional upon the fulfillment of the following conditions on or before the Long Stop Date:

1. the Purchaser being satisfied with the result of its financial, legal and business due diligence conducted on of the Target Group;

   
   

2. all necessary consents, licences and approvals required to be obtained on the part of the Vendor and the Target Group in respect of the Sale and Purchase Agreement and the transactions contemplated thereby have been obtained and remain in full force and effect;

   
   

3. all necessary consents, licences and approvals required to be obtained on the part of the Purchaser in respect of the Sale and Purchase Agreement and the transactions contemplated thereby have been obtained and remain in full force and effect;

   
   

4. the representations, warranties and undertakings given by the Vendor have remained true and accurate in all respects and not misleading;

   
   

5. the Purchaser having obtained a legal opinion (in the form and substance to the reasonable satisfaction of the Purchaser) from the PRC legal adviser appointed by the Purchaser in respect of the transactions contemplated under the Sale and Purchase Agreement, including but not limited to the due incorporation and subsistence of, and the ownership of the equity interest in, Qianhai Chengkai and Guilin Jinxiu Shanhe, the legality of the business to be conducted by Qianhai Chengkai and Guilin Jinxiu Shanhe, and the legality and enforceability of the Exclusive Ticket Agency Agreement;

   
   

6. the Purchaser having obtained the Valuation Report (in the form and substance satisfactory to the Purchaser) from an independent professional valuer appointed by the Purchaser with the valuation of the Target Group of not less than HK$160 million;

   
   

7. the Purchaser being reasonably satisfied that there has not been any material adverse change on the Target Group since the date of the Sale and Purchase Agreement; and

   
   

8. Qianhai Chengkai having entered into the Exclusive Ticket Agency Agreement with 桂 林廣維文華旅遊文化產業有限公司 ("Guangwei Wenhua") pursuant to which Qianhai Chengkai will be granted an exclusive ticketing agency right for the cultural show namely Impression Liu Sanjie* (印象劉三姐) by Guangwei Wenhua for a term of 20 years.

The Purchaser may in its absolute discretion at any time waive any of the Conditions (a), (d) and (g). All other Conditions are incapable of being waived by either the Purchaser or the Vendor.

If any of the Conditions have not been fulfilled or waived (as the case may be) by the Long Stop Date, the Sale and Purchase Agreement shall be terminated and neither party to the Sale and Purchase Agreement shall have any liability thereunder, save and except any antecedent breaches.

Completion

Subject to the fulfilment or waiver (as the case maybe) of the Conditions (a) to (h) set out above, Completion shall take place on the Completion Date.

Pursuant to the terms of the Sale and Purchase Agreement, the Vendor undertakes to the Purchaser that after Completion, any indemnities against the Target Group under the Performance Undertaking (as defined under the section headed The Exclusive Ticket Agency Agreement in this announcement) of the Exclusive Ticket Agency Agreement shall be borne by the Vendor.

Upon Completion, the Company will own 85% shareholding in the Target Company and the financial results the Target Group will be consolidated into the Company's consolidated financial statements.