China Saite : Announcements and Notices - Subscription of New Shares under General Mandate

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 purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

CHINA SAITE GROUP COMPANY LIMITED

中 國 賽 特 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 153)

SUBSCRIPTION OF NEW SHARES

UNDER GENERAL MANDATE

THE SUBSCRIPTION

On 11 July 2019 (after trading hours of the Stock Exchange), the Company entered into the Subscription Agreement with the Subscriber pursuant to which the Subscriber has agreed to subscribe for, and the Company has agreed to allot and issue, 230,000,000 Subscription Shares at the Subscription Price of HK$0.38 per Subscription Share.

The Subscription Shares represent (i) approximately 8.88% of the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 8.15% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming there will be no other changes in the issued share capital of the Company between the date of this announcement and the completion of the Subscription).

The Subscription Price of HK$0.38 per Subscription Share represents: (i) a premium of approximately 54.47% to the closing price of HK$0.246 per Share as quoted on the Stock Exchange on the Last Trading Day; and (ii) a premium of approximately 61.43% to the average closing price of approximately HK$0.2354 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the Last Trading Day.

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The Subscription provides additional and on-time fundings with less cost of capital and time constraint, compared to the current capital and debt structure, which reduces cost of fundings and bridges working capital gap between uncertain and long fund return cycle of business projects in the PRC and fixed maturity date from debtors, especially under the current economic uncertainty. Each of the gross proceeds and net proceeds from the issue of the Subscription Shares is estimated to be approximately HK$87,400,000 and HK$87,380,000 respectively. The Company intends to use the net proceeds for repayment of certain outstanding financial indebtedness of the Company.

Completion of the Subscription is subject to fulfilment of the conditions under the Subscription Agreement. As the Subscription may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

SUBSCRIPTION AGREEMENT

On 11 July 2019 (after trading hours of the Stock Exchange), the Company and the Subscriber entered into the Subscription Agreement, the principal terms of which are set out as follows:

Date:	11 July 2019
Parties:	(i)	the Company, as issuer
	(ii)	the Subscriber, as subscriber

The Subscriber is principally engaged in business management and consultancy. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of the Subscriber and its ultimate owner(s) is an Independent Third Party.

Subscription Shares

Pursuant to the terms of the Subscription Agreement, the Subscriber has agreed to subscribe for, and the Company has agreed to allot and issue 230,000,000 Subscription Shares, representing:

1. approximately 8.88% of the existing issued share capital of the Company as at the date of this announcement; and
2. approximately 8.15% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares (assuming there will be no other changes in the issued share capital of the Company between the date of this announcement and the completion of the Subscription).

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Subscription price

The Subscription Price of HK$0.38 per Subscription Share represents:

1. a premium of approximately 54.57% to the closing price of HK$0.246 per Share as quoted on the Stock Exchange on the Last Trading Day; and
2. a premium of approximately 61.43% to the average closing price of approximately HK$0.2354 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the Last Trading Day.

The Subscription Price was determined after arm's length negotiation between the Company and the Subscriber with reference to the prevailing market conditions and the recent price performance and liquidity of the Shares. The Board considers that the terms of the Subscription Agreement (including the Subscription Price) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

General Mandate

The Subscription Shares will be allotted and issued by the Company pursuant to the General Mandate and is therefore not subject to Shareholders' approval. The Company is authorised to allot, issue or otherwise deal with up to 518,149,587 new Shares under the General Mandate. As at the date of this announcement, the Company has not allotted or issued any Share under the General Mandate. After completion of issue and allotment of the Subscription Shares, the remaining balance of the General Mandate will be 288,149,587 Shares.

Ranking of Subscription Shares

The Subscription Shares will rank, upon issue, pari passu in all respects with the Shares in issue on the date of allotment and issue of the Subscription Shares.

Conditions precedent

Completion of the Subscription is subject to the fulfilment or waiver (as the case may be) of the following conditions:

1. the Stock Exchange having approved the issue of the Subscription Shares and the Listing Committee of the Stock Exchange having granted the listing of, and the permission to deal in, the Subscription Shares and such listing and permission having not been revoked;
2. the passing by the Board of the necessary resolutions to approve the Subscription and the consummation of the transactions contemplated under the Subscription Agreement;
3. all the required approvals, authorisations, consents having been obtained from, and all the required registrations and filings having been completed with (if applicable), the government authorities or regulatory bodies or any relevant third party in connection with the transactions contemplated under the Subscription Agreement;

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1. the warranties and representations of the Company contained in the Subscription Agreement remaining true, accurate and not misleading in each case in all material respects at any time between the date of the Subscription Agreement and the Completion Date (both dates inclusive) and as if made at such time;
2. the warranties and representations of the Subscriber contained in the Subscription Agreement remaining true, accurate and not misleading in each case in all material respects at any time between the date of the Subscription Agreement and the Completion Date (both dates inclusive) and as if made at such time; and
3. there having been no circumstances which would give rise to a material adverse effect since the date of the Subscription Agreement on (i) the business, operations, assets, liabilities (including contingent liabilities), financial condition, financial results or prospects of the Group as a whole, or (ii) the ability of the Company to perform its obligations under the Subscription Agreement.

The Company is entitled to waive condition (v) above at its absolute discretion by way of written notice to the Subscriber, and the Subscriber is entitled to waive conditions (iii) and (iv) above at its absolute discretion by way of written notice to the Company.

In the event that any of the above conditions is not fulfilled or waived in accordance with the above clause on or before 15 August 2019 (or such later date as may be agreed by the Company and the Subscriber), the Subscription Agreement may be terminated by either party by notice in writing to the other party and all rights and obligations thereunder shall cease and terminate and none of the parties thereto shall have any claim against the other, save for any antecedent breach thereof.

Completion of the Subscription

Completion of the Subscription shall take place within 5 Business Days after the date that the conditions precedent of the Subscription Agreement have been fulfilled or waived (as the case may be) or such other date as may be agreed by the Company and the Subscriber.

APPLICATION FOR LISTING

Application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

The Subscription provides additional and on-time fundings with less cost of capital and time constraint, compared to the current capital and debt structure, which reduces cost of fundings and bridges working capital gap between uncertain and long fund return cycle of business projects in the PRC and fixed maturity date from debtors, especially under the current economic uncertainty.

As such, the Directors consider that the terms of the Subscription Agreement (including the Subscription Price) and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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USE OF PROCEEDS

Each of the gross proceeds and net proceeds from the issue of the Subscription Shares is estimated to be approximately HK$87,400,000 and HK$87,380,000 respectively. The Company intends to use the net proceeds for repayment of certain outstanding financial indebtedness of the Group.

The net price of each Subscription Share will be approximately HK$0.3799.

EQUITY FUND RAISING ACTIVITIES OF THE COMPANY DURING THE PAST 12 MONTHS

The Company has conducted the following fund raising activities in the past 12 months preceding the date of this announcement:

Date of	Fund raising		Intended use of
announcement	activities	Net proceeds	proceeds	Actual use of proceeds

27 February 2019	Issue of 260,000,000	Approximately	For general working
	new Shares at the	HK$129,950,000	capital purposes and
	subscription price		for future
	of HK$0.5 per		development of the
	Share under		Group's business
	general mandate

The fund was utilized for development of the Group's business

Saved as disclosed above, the Company has not conducted any equity fund raising activities in the past 12 months immediately preceding the date of this announcement.

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