S&P International : DISCLOSEABLE TRANSACTION - AWARD OF CONSTRUCTION CONTRACT IN MALAYSIA

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.

S&P INTERNATIONAL HOLDING LIMITED 椰豐集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1695)

DISCLOSEABLE TRANSACTION

AWARD OF CONSTRUCTION CONTRACT IN MALAYSIA

On 2 March 2021 (after the securities trading hours of the Stock Exchange), S&P Industries Sdn. Bhd. (an indirect wholly-owned subsidiary of the Company and as the Project Owner) has awarded a construction contract to S P Mega-Mariharta Sdn. Bhd.. (as the Contractor) by way of the Letter of Award with Contract Sum of RM13.41 million (equivalent to approximately HK$25.66 million) in relation to construction works at the Group's Perak Plant for the purposes of facility expansion and upgrade.

As the highest Percentage Ratio in respect of the transactions contemplated under the Letter of Award is more than 5% but less than 25%, the entering into of the Letter of Award constitutes a discloseable transaction for the Company and is subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board is pleased to announce that on 2 March 2021 (after the securities trading hours of the Stock Exchange), S&P Industries Sdn. Bhd. (an indirect wholly-owned subsidiary of the Company and as the Project Owner) has awarded a construction contract to S P Mega-Mariharta Sdn. Bhd. (as the Contractor) by way of the Letter of Award with Contract Sum of RM13.41 million (equivalent to approximately HK$25.66 million) in relation to construction works at the Group's Perak Plant for the purposes of facility expansion and upgrade.

LETTER OF AWARD

The principal terms of the Letter of Award are set out below.

Date:

2 March 2021

Parties:

• (a) S&P Industries Sdn. Bhd. as the Project Owner; and

• (b) S P Mega-Mariharta Sdn. Bhd. as the Contractor.

Scope of Works:

Pursuant to the Letter of Award, the Contractor shall undertake construction works to construct coconut water collection station and warehouse in accordance with the Project Owner's design and specifications, at the Perak Plant.

The Contractor shall commence and complete the construction works by 2 March 2021 and 15 October 2021, respectively.

Consideration, Payment Terms and Retention Fund:

The Contract Sum is RM13.41 million (equivalent to approximately HK$25.66 million) payable in cash by the Project Owner to the Contractor based on the Contractor's monthly claim amount, which in turn is based on the percentage of completion of the contract works, less the applicable retention sum amount. An advance payment of RM1.00 million (equivalent to approximately HK$1.91 million) is payable to the Contractor upon award of the Letter of Award. The consideration was the bid price submitted by the Contractor and accepted by the Project Owner after a selective tendering process. The Letter of Award has been awarded to the Contractor after an objective evaluation by the Project Owner based on (i) the experience and competency of the Contractor; (ii) the expected scope and complexity of the construction works to be carried out; (iii) the costs of material and labour estimated to be incurred; and (iv) the prevailing market prices for carrying out construction works of comparable scale and complexity.

Pursuant to the Letter of Award, 5% of the total Contract Sum shall be retained by the Project Owner as retention fund, half of which shall be released to the Contractor upon receiving the certificate of practical completion of works and the balance shall be released upon (a) expiration of the applicable defects liability period or (b) issuance of the certificate of making good defect, which ever is latest and subject to all defects, imperfections or any other faults have been made good by the Contractor.

In the event that the Contractor fails to complete the contract works within the stipulated timeline, the Contractor shall be liable to pay liquidated damages to the Project Owner at the rate of RM5,000 (equivalent to approximately HK$9,565) per day inclusive of all festivals and public holidays.

The Contractor shall provide a bank guarantee for the sum of 5% on the Contract Sum for the due performance of the construction works.

The consideration payable by the Group pursuant to the transactions contemplated under the Letter of Award will be funded by the internal resources of the Group, including the remaining net proceeds of HK$9.90 million (equivalent to approximately RM4.70 million based on Bank Negara Malaysia's mid-rate as at 29 December 2017 (being the last trading day of 2017) of HK$1.00:RM0.51795)) from the IPO.

REASONS FOR AND BENEFITS OF THE TRANSACTION

As stated in the Company's prospectus dated 29 June 2017 in relation to the Company's IPO and listing on the Stock Exchange, it is part of our business strategies to produce our own coconut milk products going forward by expanding and upgrading our production facilities at the Perak Plant. The transaction is for the construction of coconut water collection station and warehouse. The construction will be funded by the internal resources of the Group, including the remaining net proceeds of HK$9.90 million (equivalent to approximately RM4.70 million) from the IPO originally allocated for recommissioning of the Johor Plant to investing in coconut water collection and internal resources of the Group. The change in use of the net proceeds and reason for such change has been described in details in the Company's announcement of the unaudited interim consolidated report for the six months ended 30 June 2020 dated 28 August 2020,

The transaction is, therefore, considered by the Directors to be in line with the Group's existing business strategy and represent a logical step forward in the pursuit of the Group's future business development opportunities.

The Letter of Award has been awarded to the Contractor after a tendering process and after arm's length negotiations between the Project Owner and the Contractor. The Directors (including the Independent Non-Executive Directors) consider that the terms (including the Contract Sum) of the Letter of Award and the transactions contemplated thereunder are normal commercial terms, fair and reasonable, and in the interests of the Company and the Shareholders as a whole.

GENERAL INFORMATION OF THE GROUP, THE PROJECT OWNER AND THE CONTRACTOR

The Company is an investment holding company. The Group is principally engaged in manufacturing and distribution of coconut related food and beverage products such as coconut cream powder, coconut milk, coconut water, low fat desiccated coconut and other related products.

The Project Owner is a company incorporated in Malaysia with limited liability and an indirect wholly-owned subsidiary of the Company, which is principally engaged in manufacturing and trading of coconut-derived products such as coconut cream powder, coconut milk, coconut water, low fat desiccated coconut and other related products.

To the best of the knowledge, information and belief of the Directors, after having made all reasonable enquiries, (i) the Contractor is a company incorporated in Malaysia with limited liability, whose principal business activity is construction of building, steel structure and civil engineering works; and (ii) the Contractor and its ultimate beneficial owner(s) is/are Independent Third Parties.

IMPLICATIONS UNDER THE LISTING RULES

As the highest Percentage Ratio for the Company in respect of the transactions contemplated under the Letter of Award is more than 5% but less than 25%, the entering into of the Letter of Award constitutes a discloseable transaction for the Company and is subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following words and expressions have the following respective meanings:

"Board"	the board of Directors
"Company"	S&P International Holding Limited, a company
incorporated in the Cayman Islands with limited liability,
the issued Shares of which are listed and traded on the
Main Board of the Stock Exchange (stock code: 1695)
"connected person(s)"	has the meaning ascribed to this term under the Listing
Rules
"Contract Sum"	the contract sum under the Letter of Award

"Contractor"	S P Mega-Mariharta Sdn. Bhd., a company incorporated in
Malaysia with limited liability
"Director(s)"	the Director(s) of the Company
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the
People's Republic of China
"Independent Third Parties"	third parties who are independent of the Company and the
connected persons of the Company
"IPO"	the initial public offering of the Company
"Letter of Award"	the letter of award dated 2 March 2021 issued by the
Project Owner and countersigned and acknowledged by
the Contractor in relation to the award of contract for
construction works to be undertaken by the Contractor at
the Perak Plant
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange
"Perak Plant"	the Group's main production facility located at Lot 3608
and Lot 3609, Jalan Bagan Datoh, Simpang Tiga, 36200
Selekoh, Perak, Malaysia
"Percentage Ratio(s)"	the applicable percentage ratio(s) as set out in Rule 14.07
of the Listing Rules to be applied for determining the
classification of a transaction under the Listing Rules
"Project Owner"	S&P Industries Sdn. Bhd, a company incorporated in
Malaysia with limited liability and an indirect wholly-
owned subsidiary of the Company
"RM"	Malaysian Ringgit, the lawful currency of Malaysia

"Share(s)"	the ordinary share(s) of nominal or par value of HK$0.01
each in the share capital of the Company
"Shareholder(s)"	the holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"subsidiary(ies)"	has the meaning ascribed to this term under the Listing
Rules
"%"	per cent

In this announcement, the exchange rate of HK$1: 00 to RM0.522714, being Bank Negara Malaysia's mid-rate as at 5:00 p.m. on 1 March 2021, has been used for currency translation, where applicable, for illustrative purpose only and does not constitute a representation that any amount has been, could have been or may be exchanged at such rate or any other rate or at all.

By order of the Board

S&P International Holding Limited

Tang Koon Fook Chairman and Executive Director

Hong Kong, 2 March 2021

As at the date of this announcement, the Board comprises seven Directors, including four Executive Directors, namely Mr. Tang Koon Fook (Chairman), Mr. Lee Sieng Poon, Mr. Yap Boon Teong and Ms. Wong Yuen Lee; and three Independent Non-Executive Directors, namely Mr. Fung Che Wai Anthony, Mr. Ng Hock Boon and Mr. Lim Sey Hock.