Chuan : MAJOR TRANSACTION IN RELATION TO FORMATION OF JOINT VENTURE

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Chuan Holdings Limited

川 控 股 有 限 公 司 *

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1420)

MAJOR TRANSACTION IN RELATION TO

FORMATION OF JOINT VENTURE

FORMATION OF JOINT VENTURE

The Board is pleased to announce that on 7 May 2021, Longlands, a wholly-owned subsidiary of the Company, entered into the Shareholders' Agreement with Mr. Tng, Mr. Yang and the JV Company for the establishment, operation and management of the JV Company, whose main purpose is to further invest in the Project Joint Venture, which the JV Company will own 30% equity interest. The Project Joint Venture intends to own and carry out the redevelopment of the Property, currently known as Maxwell House, a 13-storey residential and commercial mixed-use building comprising 145 strata units located at 20 Maxwell Road, Singapore 069113 with a land area of 3,883.3 square metres, which will be used for the redevelopment of a commercial and residential mixed-use development project.

• For identification purposes only

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As at the date of this announcement, the JV Company is owned as to one-third each by Longlands, Mr. Tng, and Mr. Yang, respectively. Pursuant to the Shareholders' Agreement, among other things, each of Longlands, Mr. Tng and Mr. Yang agreed to provide a capital commitment in a sum of not more than S$17,000,000 (equivalent to approximately HK$98,940,000) based on their pro-rata interest in the JV Company, which comprises a combination of paid-up share capital and provision of unsecured interest-free shareholders' loans to the JV Company. Immediately after the execution of the Shareholders' Agreement, the JV Company will increase its initial paid-up capital to S$300,000 (equivalent to approximately HK$1,746,000) of which each of Longlands, Mr. Tng and Mr. Yang will contribute S$99,999 (equivalent to approximately HK$581,994) each in cash for the subscription of 99,999 ordinary shares in the JV Company, making them each holding 100,000 ordinary shares in the JV Company. It is contemplated that the balance of the capital contribution will be by way of the provision of unsecured interest-free shareholders' loans by each of Longlands, Mr. Tng and Mr. Yang in the amount of not more than S$16,900,000 (equivalent to approximately HK$98,358,000) each in various instalments in such amounts in proportions of their shareholding on such dates as from time to time to be determined by the board of directors of the JV Company for the purpose of financing the redevelopment project of the Property. The amount of the contribution is determined based on the capital needs for the proposed redevelopment project of the Property. The unsecured interest-free shareholders' loans are repayable on demand. The JV Company will remain as an associate of the Company and its operating results, assets and liabilities will not be consolidated in the financial statements of the Group. The Group will finance its part of the capital commitment from its internal resources.

IMPLICATION OF THE LISTING RULES

As one or more of the applicable percentage ratios (as calculated under Rule 14.07 of the Listing Rules) in respect of the transactions contemplated under the Shareholders' Agreement exceed 25% but less than 100%, the entering into of the Shareholders' Agreement constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and are therefore subject to reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

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Pursuant to Rule 13.13 of the Listing Rules, a general disclosure obligation arises where the relevant advance to an entity by the Group exceeds 8% under the assets ratio as defined under Rule 14.07(1) of the Listing Rules. As the unsecured interest-free shareholders' loan in the amount of not more than S$16,900,000 (equivalent to approximately HK$98,358,000) each, when granted by Longlands to the JV Company, will exceed 8% under the assets ratio of the Company, pursuant to Rule 13.13 of the Listing Rules, the Company is under a general obligation to disclose the details of the shareholders' loans and therefore the above disclosure is also made in compliance with such rule.

WRITTEN SHAREHOLDER'S APPROVAL

Since no Shareholder is required to abstain from voting if the Company shall be required to convene a general meeting for approving the Shareholders' Agreement, the Company has obtained a written approval approving the Shareholders' Agreement in lieu of holding general meeting pursuant to Rule 14.44 of the Listing Rules from its controlling Shareholder, Brewster Global, which holds, as at the date of this announcement, 529,125,000 Shares in the Company (representing approximately 51.05% of the total issued share capital of the Company) carrying rights to vote at a general meeting. Therefore, no general meeting of the Company will be convened to approve the Shareholders' Agreement.

A circular to Shareholders containing, among other things, further information in respect of the transactions contemplated under the Shareholders' Agreement will be despatched to the Shareholders on or before 31 May 2021.

FORMATION OF JOINT VENTURE

The Board is pleased to announce that on 7 May 2021, Longlands, a wholly-owned subsidiary of the Company, entered into the Shareholders' Agreement with Mr. Tng, Mr. Yang and the JV Company for the establishment, operation and management of the JV Company, which our Group will own one-third equity interest.

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THE SHAREHOLDERS' AGREEMENT

The principal terms of the Shareholders' Agreement are summarised below.

Date:	7 May 2021
Parties:	(1)	Longlands;
	(2)	Mr. Tng;
	(3)	Mr. Yang; and
	(4)	the JV Company.
	To the best of the knowledge, information and belief of the
	Directors having made all reasonable enquiries, each of
	Mr. Tng and Mr. Yang is an Independent Third Party.
Scope of business:	The	principal scope of business of the JV Company
	is investment holding, which will hold shares of the
	company(ies) that will engage in the business of investment
	holding, property investment and/or redevelopment in
	Singapore. As at the date of this announcement, the JV
	Company intends to further invest in the Project Joint
	Venture, which the Joint Venture Company will own 30%
	equity interest. The Project Joint Venture intends to own and
	carry out the redevelopment of the Property as a commercial
	and residential mixed-use development project.
Capital commitment:	As at the date of this announcement, the JV Company is
	owned as to one-third each by Longlands, Mr. Tng, and
	Mr. Yang, respectively.

Pursuant to the Shareholders' Agreement, among other things, each of Longlands, Mr. Tng and Mr. Yang, agreed to provide a capital commitment in a sum of not more than S$17,000,000 (equivalent to approximately HK$98,940,000) based on their pro-rata interest in the JV Company, which comprises a combination of paid-up share capital and provision of shareholders' loans to the JV Company.

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Immediately after the execution of the Shareholders' Agreement, the JV Company will increase its initial paid-up capital to S$300,000 (equivalent to approximately HK$1,746,000), of which each of Longlands, Mr. Tng and Mr. Yang will contribute S$99,999 (equivalent to approximately HK$581,994) each in cash for the subscription of 99,999 ordinary shares in the JV Company, making them each holding 100,000 ordinary shares in the JV Company. The consideration for the subscription of shares in the JV Company is determined with reference to the nominal value of the enlarged issued share capital of the JV Company.

It is contemplated that the balance of the capital contribution will be by way of the provision of unsecured interest-free shareholders' loans by each of Longlands, Mr. Tng and Mr. Yang in the amount of not more than S$16,900,000 (equivalent to approximately HK$98,358,000) each in various instalments in such amounts in proportions of their shareholding on such dates as from time to time to be determined by the board of directors of the JV Company for the purpose of financing the redevelopment project of the Property. The amount of the contribution is determined based on the capital needs for the proposed redevelopment project of the Property. The unsecured interest-free shareholders' loans are repayable on demand.

The JV Company will remain as an associate of the Company and its operating results, assets and liabilities will not be consolidated in the financial statements of the Group. The Group will finance its part of the capital commitment from its internal resources.

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