Gemini Investments : Connected Transactions in relation to Capitalisation of Shareholder's Loan and Issue of Convertible Preference Shares

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Gemini Investments (Holdings) Limited

盛 洋 投 資（控 股）有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 174) CONNECTED TRANSACTIONS IN RELATION TO CAPITALISATION OF SHAREHOLDER'S LOAN AND ISSUE OF CONVERTIBLE PREFERENCE SHARES THE CAPITALISATION AND SUBSCRIPTION AGREEMENT

The Board announces that on 27 January 2017 (after trading hours), the Company entered into the Capitalisation and Subscription Agreement with the Subscriber (an indirect wholly-owned subsidiary of Sino-Ocean Group), pursuant to which the Company has conditionally agreed to issue and the Subscriber has conditionally agreed to subscribe for up to a maximum of 597,230,534 new Convertible Preference Shares by way of capitalisation of the Shareholder's Loan and the related interest accrued thereon up to the Completion Date. The Subscription Price is HK$3.0 per Convertible Preference Share, and the conversion price at which each Ordinary Share will be issued upon exercise of the conversion rights attaching to the Convertible Preference Shares is HK$3.0. The Conversion Shares will be issued by the Company under the specific mandate to be sought for approval by the Independent Shareholders at the EGM.

Completion of the Capitalisation and Subscription Agreement is conditional on, among other things, (i) the passing of an ordinary resolution by the Independent Shareholders at the EGM to approve the Capitalisation and Subscription Agreement and the transactions contemplated thereunder; and (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Conversion Shares.

IMPLICATIONS UNDER THE LISTING RULES

The issue of the Convertible Preference Shares to the Subscriber under the Capitalisation and Subscription Agreement constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules, and is subject to the reporting, announcement and independent shareholders' approval requirements. The Subscriber and its associates will be required to abstain from voting on the resolution approving the Capitalisation and Subscription Agreement and the transactions contemplated thereunder at the EGM.

The Independent Board Committee has been established by the Company to advise the Independent Shareholders in relation to the Capitalisation and Subscription Agreement and the transactions contemplated thereunder. First Shanghai Capital Limited has been appointed by the Company with the approval of the Independent Board Committee as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

GENERAL

A circular containing, among other things, (i) details of the Capitalisation and Subscription Agreement; (ii) the recommendation from the Independent Board Committee; (iii) the advice of the independent financial adviser to the Independent Board Committee and the Independent Shareholders; and (iv) a notice to convene the EGM, is expected to be despatched to the Shareholders on or before 21 February 2017.

THE CAPITALISATION AND SUBSCRIPTION AGREEMENT

The Board announces that on 27 January 2017 (after trading hours), the Company entered into the Capitalisation and Subscription Agreement with the Subscriber (an indirect wholly-owned subsidiary of Sino-Ocean Group), pursuant to which the Company has conditionally agreed to issue and the Subscriber has conditionally agreed to subscribe for up to a maximum of 597,230,534 new Convertible Preference Shares by way of capitalisation of the Shareholder's Loan and the related interest accrued thereon up to the Completion Date. The principal terms of the Capitalisation and Subscription Agreement are set out below:

Date: 27 January 2017 Parties: (a) the Company (as issuer); and

(b) Grand Beauty Management Limited (as subscriber).

Subject matter: Subject to the fulfilment of the conditions precedent as mentioned below, the Company will allot and issue up to a maximum of 597,230,534 new Convertible Preference Shares to the Subscriber at the Subscription Price of HK$3.0 per Convertible Preference Share.

The consideration payable by the Subscriber for the subscription of the Convertible Preference Shares will be satisfied in full by capitalising the Shareholder's Loan in the principal amount of HK$1,782,763,350 and the related interest accrued thereon up to the Completion Date.

The maximum number of Convertible Preference Shares that may be issued under the Capitalisation and Subscription Agreement is determined with reference to the sum of the outstanding principal amount of the Shareholder's Loan of approximately HK$1,782,763,350 as at the Completion Date and the related interest accrued thereon up to the Long Stop Date of approximately HK$8,928,251.

The actual number of Convertible Preference Shares to be allotted and issued by the Company on the Completion Date pursuant to the Capitalisation and Subscription Agreement shall be equivalent to the aggregate of the Shareholder's Loan and the related interest accrued thereon up to the Completion Date divided by the Subscription Price (round up to the nearest integral number of Convertible Preference Shares).

Subscription Price:

HK$3.0 per Convertible Preference Share, which was arrived at after arm's length negotiations between the Company and the Subscriber, having considered the prevailing market prices of the Ordinary Shares, the net asset value per Ordinary Share, and the Group's long-term business prospects and development.

The Subscription Price of HK$3.0 per Convertible Preference Share represents:

1. a premium of approximately 237.1% over the closing price of HK$0.890 per Ordinary Share as quoted on the Stock Exchange on 26 January 2017, being the last trading day of the Ordinary Shares immediately preceding the date of the Capitalisation and Subscription Agreement; and

2. a premium of approximately 240.1% over the average of the closing prices of approximately HK$0.882 per Ordinary Share for the 5 consecutive trading days of the Ordinary Shares immediately preceding the date of the Capitalisation and Subscription Agreement.

Conditions precedent:

Completion of the Capitalisation and Subscription Agreement is conditional upon the occurrence of the following by no later than the Long Stop Date (or such later date as may be agreed between the Company and the Subscriber):

1. the passing of an ordinary resolution by the Shareholders who are permitted to vote under the Listing Rules at a general meeting of the Company approving by way of a poll to approve the Capitalisation and Subscription Agreement and the transactions contemplated thereunder, including but not limited to the issue of the Convertible Preference Shares and the issue of the Conversion Shares upon conversion of the relevant Convertible Preference Shares;

2. the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, all of the Conversion Shares that fall to be issued upon conversion of the Convertible Preference Shares and such listing and permission remaining in full force and effect and not subsequently being revoked; and

3. all other necessary waivers, consents and approvals (if required) from the relevant governmental or regulatory authorities (including the Stock Exchange) in Hong Kong, with respect to the Company, for the Capitalisation and Subscription Agreement and the transactions contemplated therein having been obtained and fulfilled.

If the conditions precedent of the Capitalisation and Subscription Agreement are not fulfilled by the Long Stop Date or such later date as may be agreed between the Company and the Subscriber, the Capitalisation and Subscription Agreement shall cease to have any force and effect, and the Subscriber and the Company shall be released from all rights and obligations relating to the Capitalisation and Subscription Agreement, save for any antecedent breach thereof.

Completion: Completion of the subscription of the Convertible Preference Shares shall take place on the fifth Business Day (or such other date and time as may be agreed by the Company and the Subscriber) following the satisfaction of the conditions precedent of the Capitalisation and Subscription Agreement.

The Company will apply to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares. The Company will seek the grant of specific mandate from the Independent Shareholders at the EGM to allot and issue up to a maximum of 597,230,534 Convertible Preference Shares to the Subscriber and all the Conversion Shares issuable to the Converting Shareholders upon full conversion of the Convertible Preference Shares.

The estimated professional fees and other related expenses incurred incidental to the issue of the Convertible Preference Shares are approximately HK$1.7 million in aggregate. Assuming 597,230,534 Convertible Preference Shares are alloted and issued, the estimated net price per Convertible Preference Share after deducting the related expenses is approximately HK$2.997.