Wing Lee : Announcements and Notices - Discloseable and Connected Transaction

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.

MEGA MEDICAL TECHNOLOGY LIMITED

美 加 醫 學 科 技 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 876) DISCLOSEABLE AND CONNECTED TRANSACTION THE DISPOSAL

The Board is pleased to announce that on 24 January 2017 (after trading hours), the Purchaser and the Vendor, an indirect wholly owned subsidiary of the Company, entered into the Agreement, pursuant to which the Purchaser has agreed to acquire and the Vendor has agreed to dispose of the Sale Interests and the Sale Loan at the Consideration to be settled entirely by way of cash.

GENERAL

As one or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Disposal is more than 5% but all applicable percentage ratios less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements under the Listing Rules.

As at the date of this announcement, the Purchaser owns 30% of the entire issued share capital and is therefore a substantial shareholder of Common Glory, a subsidiary of the Company. Further, Ms. Shen, a director of the Disposal Company, Common Glory, Cancare and Cancare Industrial, all being subsidiaries of the Company, is the ultimate beneficial owner indirectly owning 100% equity interest of the Purchaser which is therefore an associate of Ms. Shen. Therefore, the Purchaser is a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As all the applicable percentage ratios (other than profit ratio) with respect to the Disposal are less than 25% and the consideration is less than HK$10,000,000, the Disposal is exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

The Board is pleased to announce that on 24 January 2017 (after trading hours), the Purchaser and the Vendor, a wholly owned subsidiary of the Company, entered into the Agreement, pursuant to which the Purchaser has agreed to acquire and the Company has agreed to dispose of the Sale Interests and the Sale Loan at the Consideration to be settled entirely by way of cash.

THE DISPOSAL

Set out below are the principal terms of the Agreement:

Date of the Agreement

24 January 2017

Parties to the Agreement

1. the Vendor (as vendor), an indirect wholly owned subsidiary of the Company and principally engaged in investment holding; and

2. the Purchaser (as purchaser), a company incorporated under the laws of BVI and principally engaged in investment holding. Mr. Wu Xiaolin, our executive Director, is one of the directors of the Purhcaser. As at the date of this announcement, the Purchaser owns 30% of the entire issued share capital and is therefore a substantial shareholder of Common Glory, a subsidiary of the Company. Further, Ms. Shen, a director of the Disposal Company, Common Glory, Cancare and Cancare Industrial, all being subsidiaries of the Company, is the ultimate beneficial owner, indirectly owning 100% equity interest of the Purchaser which is therefore an associate of Ms. Shen. Therefore, the Purchaser is a connected person of the Company under Chapter 14A of the Listing Rules.

Subject matter

Pursuant to the Agreement, the Purchaser has agreed to acquire and the Vendor has agreed to dispose of the Sale Interests, representing the entire issued share capital of the Disposal Company, and the Sale Loan.

Upon Completion, members of the Disposal Group will cease to be subsidiaries of the Company and their financial results will no longer be consolidated into the financial results of the Group.

Consideration

The consideration for the Sale Interests is HK$2,799,900 and the consideration of the Sale Loan is HK$100 (together the "Consideration") and shall be payable by the Purchaser in cash to the Company via bank transfer or cheque upon Completion.

The Consideration was arrived at after arm's length negotiations between the Purchaser and the Company and on an aggregate basis given that the disposal of Sale Interests and Sale Loan are inter-conditional. The consideration for the Sale Loan is arbitrary for the purpose to provide a nominal value for ease of executing the Agreement.

In arriving the Consideration, the Directors have taken into consideration of various factors including: (i) the valuation of the Disposed Group of approximately HK$2,800,000 as at 31 October 2016 conducted by an independent firm of professional valuer appointed by the Company, by discounted cash flow method under income approach; (ii) the recent financial position and performance of the Disposed Group; (iii) the outlook of the wire and cabling business in the PRC and (iv) the commercial reasons and benefits set out in the paragraph headed "Reasons for and benefits of the Disposal'' below.

The Directors (including the independent non-executive Directors) are of the view that the Consideration is fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

Completion

Completion shall take place within 14 business days from the signing of the Agreement (or a date which may be agreed by the Vendor and the Purchaser).

INFORMATION OF THE DISPOSAL GROUP

1. The Disposal Company

   The Disposal Company is an investment holding company incorporated in BVI on 28 April 2014 with limited liability and is wholly owned by the Company. As at the date of this announcement, apart from holding 70% equity interest in Common Glory and 100% equity interest in Cancare Industrial, the Disposal Company does not have any business operation.

2. Common Glory

   Common Glory is an investment holding company incorporated in BVI on 2 January 2013 with limited liability and is 70% owned by the Disposal Company and 30% owned by the Purchaser. As at the date of this announcement, apart from holding 100% equity interest in Cancare, Common Glory does not have any business operation.

3. Cancare

   Cancare is an investment holding company incorporated in Hong Kong on 8 December 2008 with limited liability and is wholly owned by Common Glory. As at the date of this announcement, apart from its 100% equity interest in ZWL Shenzhen and ZWL Yixing, Cancare did not have any business operation.

4. ZWL Shenzhen

   ZWL Shenzhen is a company established in the PRC on 26 March 2009 with limited liability and is wholly owned by Cancare. The principal business activity of ZWL Shenzhen is the production of electrical components, including electronic wire, PC connecting wire, power plug cable and other hardware accessories.

5. ZWL Yixing

   ZWL Yixing is a company established in the PRC on 30 November 2009 with limited liability and is wholly owned by Cancare. ZWL Yixing is a dormant company and does not have any business operation.

6. Cancare Industrial

Cancare Industrial is a company incorporated in Hong Kong on 20 June 2014 with limited liability and is wholly owned by the Disposal Company. Cancare Industrial is a dormant company and does not have any business operation.