Discloseable Transaction In Relation To The Provision Of Loan Facilities To An Independent Third Party

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ETS GROUP LIMITED

易 通 訊 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8031)

DISCLOSEABLE TRANSACTION

IN RELATION TO THE PROVISION OF

LOAN FACILITY TO AN INDEPENDENT THIRD PARTY

PROVISION OF LOAN FACILITY

The Board announces that on 6 October 2021 (after trading hours of the Stock Exchange), the Lender, an indirect wholly-owned subsidiary of the Company, entered into the Second Facility Letter with the Borrower and the Mortgagor, pursuant to which the Lender agreed to grant a secured loan in the principal amount of HK$15,000,000 to the Borrower for a term of 12 months at an interest rate of 12% per annum.

As security for the payment of all sums advanced by the Lender to the Borrower and outstanding in respect of the Second Loan and all interest accrued thereon and all other moneys and obligations in respect of moneys which the Borrower and/or the Mortgagor covenanted to pay to the Lender under the Second Facility Letter, the Borrower and the Mortgagor entered into the First Legal Charge over the Property in favour of the Lender subject to and upon the terms set out therein.

Pursuant to the terms and conditions of the Rent Assignment, the Mortgagor as the legal and beneficial owner of the Property also assigns to the Lender, among other things, all its rights, title, interest and benefits in its capacity as a lessor pursuant to the lease of the Property as security.

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GEM LISTING RULES IMPLICATIONS

As the applicable percentage ratio(s) (as defined under the GEM Listing Rules) in respect of the transactions contemplated under the Second Facility Letter is/are more than 5% but less than 25%, the entering into of the Second Facility Letter constitutes a discloseable transaction on the part of the Company under the GEM Listing Rules and is subject to the notification and announcement requirements but exempt from the Shareholders' approval requirements under Chapter 19 of the GEM Listing Rules.

PROVISION OF LOAN FACILITY

The Board announces that on 6 October 2021 (after trading hours of the Stock Exchange), the Lender, an indirect wholly-owned subsidiary of the Company, entered into the Second Facility Letter with the Borrower and the Mortgagor, pursuant to which the Lender agreed to grant a secured loan in the principal amount of HK$15,000,000 to the Borrower for a term of 12 months at an interest rate of 12% per annum.

The Second Facility Letter

The principal terms of the Second Facility Letter are set out as follows:

Date:	6 October 2021
Parties:	(a) Gear Credit Limited, as the Lender;
	(b) Ms. Tam Suk Fan Sindy, as the Borrower; and
	(c) Stavertt Pacific Company Limited, as the Mortgagor
Principal amount of	HK$15,000,000
the Second Loan:
	The Second Loan will be funded by internal resources of the
	Group.
Interest rate:	12% per annum, payable monthly
Purpose:	The Second Loan is to fully repay the First Loan under the First
	Facility Letter
Drawdown period:	The offer will be automatically withdrawn if the Borrower does
	not drawdown the Second Loan within seven (7) days from the
	date of the Second Facility Letter

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Prepayment:	The Borrower shall have an option at any time to make early
	repayment of the whole or part of the Second Loan after the
	date of the loan drawdown, provided that (a) the Borrower
	shall have given to the Lender prior notice within reasonable
	time in writing of her intention to make such early repayment,
	specifying the amount to be repaid and the date on which the
	early repayment is to be made; and (b) the Borrower shall,
	on the date of early repayment, pay to the Lender all accrued
	interest on the amount to be early repaid
Repayment:	Interest will be paid on monthly basis over the term of the loan
	and principal amount of the Second Loan will be repaid in one
	lump sum on 12 calendar months after the date of advance
Security:	Secured by the First Legal Charge over the property located at
	Office No. 01 on 7/F, Tung Wai Commercial Building, Nos.
	109-111 Gloucester Road, Hong Kong and the Rent Assignment

First Legal Charge and Rent Assignment

As security for the payment of all sums advanced by the Lender to the Borrower and outstanding in respect of the Second Loan and all interest accrued thereon and all other moneys and obligations in respect of moneys which the Borrower and/or the Mortgagor covenanted to pay to the Lender under the Second Facility Letter, the Borrower and the Mortgagor entered into the First Legal Charge over the Property with a market value of approximately HK$30,000,000 based on a valuation conducted by an independent property surveyor on 23 September 2021 in favour of the Lender.

Pursuant to the terms of the First Legal Charge, the total amount recoverable under the First Legal Charge shall be limited to the principal sum of HK$15,000,000 with interest accrued thereon and all costs, charges and expenses referred therein.

Pursuant to the terms and conditions of the Rent Assignment, the Mortgagor as the legal and beneficial owner of the Property assigns to the Lender, among other things, all its rights, title, interest and benefits in its capacity as a lessor pursuant to the lease of the Property as security. The existing rental amount generated from the Property is approximately HK$37,000 per month.

Taking into consideration of the above, the Board considers that the First Legal Charge and the Rent Assignment provided are sufficient to protect the interests of the Company and the Shareholders as a whole.

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INFORMATION OF THE BORROWER AND THE MORTGAGOR

The Borrower is a merchant. The Mortgagor is a company incorporated in the British Virgin Islands with limited liability and is wholly-owned by Sino Celestial Limited, which is in turn owned as to 50% by the Borrower and 50% by Kwan Shan, being the spouse of the Borrower, respectively.

Reference is made to the announcement of the Company dated 31 July 2020 in relation to, among other things, the First Loan. As disclosed in the said announcement, on 31 July 2020, the Lender entered into the First Facility Letter with the Borrower and the Mortgagor, pursuant to which the Lender agreed to grant a secured loan in the principal amount of HK$15,000,000 to the Borrower for a term of 12 months at an interest rate of 13% per annum. As security for payment of all moneys, obligations and liabilities due, owing or incurred to the Lender under the First Facility Letter, the Borrower and the Mortgagor executed a first legal charge over the Property, and the Mortgagor executed an assignment of rent in respect of the Property, in favour of the Lender.

Pursuant to the terms and conditions of the Second Facility Letter, the Second Loan will be used to fully repay the First Loan under the First Facility Letter.

To the best knowledge, information and belief of the Directors, after having made all reasonable enquiries, save as disclosed above, each of the Borrower, the Mortgagor and its ultimate beneficial owner(s) (where applicable) is an Independent Third Party.

REASONS FOR AND BENEFITS OF THE ENTERING INTO OF THE SECOND FACILITY LETTER

The Company is an investment holding company and the Group is principally engaged in providing comprehensive multi-media contact services, contact centre system, staff insourcing and financial services in Hong Kong. The Lender, being an indirect wholly-owned subsidiary of the Company, is principally engaged in the provision of financial services including commercial and personal lending. The Lender is a registered money lender holding a money lender's licence under the Money Lenders Ordinance (Chapter 163 of the laws of Hong Kong). The Directors are of the view that the entering into of the Second Facility Letter is a transaction carried out as part of the ordinary and usual course of business of the Group.

The entering into of the Second Facility Letter is subject to, inter alia, the satisfaction of credit assessment of the Borrower and the Mortgagor by the Lender including but not limited to assessing the value of the Property by an independent property surveyor. Taking into account that the Second Loan was granted for a short term with collaterals provided by the Mortgagor, the Directors consider that the credit risks are low.

Taking into consideration that (i) the provision of money lending services to the Borrower by the Lender pursuant to the Second Facility Letter is in the ordinary and usual course of business of the Group and will generate stable revenue to the Group from the interest income;

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and (ii) the terms of the Second Facility Letter (including the interest rate) were determined after arm's length negotiations between the Group, the Borrower and the Mortgagor with reference to the prevailing commercial practice, the financial background of the Borrower and the Mortgagor, the market value of the security provided and the amount of the Second Loan, the Directors (including the independent non-executive Directors) consider that (i) the Second Facility Letter was entered into in the ordinary and usual course of business of the Group on normal commercial terms; and (ii) the terms and conditions of the Second Facility Letter are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

GEM LISTING RULES IMPLICATIONS

As the applicable percentage ratio(s) (as defined under the GEM Listing Rules) in respect of the transactions contemplated under the Second Facility Letter is/are more than 5% but less than 25%, the entering into of the Second Facility Letter constitutes a discloseable transaction on the part of the Company under the GEM Listing Rules and is subject to the notification and announcement requirements but exempt from the Shareholders' approval requirements under Chapter 19 of the GEM Listing Rules.

DEFINITIONS

Unless the context requires otherwise, capitalised terms used in this announcement shall have the following meanings:

"Board"	board of Directors
"Borrower"	Tam Suk Fan Sindy, the borrower under the First Facility
	Letter and the Second Facility Letter, being an Independent
	Third Party
"Company"	ETS Group Limited, being a company incorporated in the
	Cayman Islands with limited liability, the issued shares of
	which are listed on GEM (stock code: 8031)
"Director(s)"	director(s) of the Company
"First Facility Letter"	the facility letter dated 31 July 2020 and entered into
	amongst the Lender, the Borrower and the Mortgagor in
	relation to the grant of the First Loan in the principal amount
	of HK$15,000,000 to the Borrower for a term of 12 months
	at an interest rate of 13% per annum
"First Legal Charge"	the first legal charge over the Property dated 6 October 2021
	and executed by the Borrower and the Mortgagor in favour
	of the Lender as security for the Second Facility Letter

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