Silver Grant International Industries : CONNECTED TRANSACTION PROPOSED PLACING AND SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE (in PDF)

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.

This announcement is for information purposes only and does not constitute and invitation or offer to acquire, purchase or subscribe for any securities of the Company.

SILVER GRANT INTERNATIONAL INDUSTRIES LIMITED

銀 建 國 際 實 業 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 171)

CONNECTED TRANSACTION

PROPOSED PLACING AND SUBSCRIPTION OF CONVERTIBLE BONDS

UNDER SPECIFIC MANDATE

Placing Agent

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

PROPOSED PLACING AND SUBSCRIPTION OF CONVERTIBLE BONDS

(I) Placing of Convertible Bonds to Independent Placee(s)

On 20 May 2019 (after trading hours), the Company entered into the Placing Agreement with the Placing Agent, pursuant to which the Company conditionally agreed to place, through the Placing Agent on a best effort basis, the Convertible Bonds in the aggregate principal amount of up to HK$200,000,000 at the Conversion Price of HK$2.33 per Share to the placee(s) to be procured by the Placing Agent.

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(II) Subscriptions of Convertible Bonds by Connected Subscribers

On 20 May 2019 (after trading hours), the Company entered into the Subscription Agreements with each of Regent Star, Mr. Gao, Wonderfulsky, Ms. Luk and Excel Bright. Pursuant to the respective Subscription Agreements, the Company conditionally agreed to issue Convertible Bonds in the principal amount of HK$450,000,000, HK$200,000,000, HK$100,000,000, HK$100,000,000 and HK$100,000,000 at the Conversion Price of HK$2.33 per Share to Regent Star, Mr. Gao, Wonderfulsky, Ms. Luk and Excel Bright, respectively.

The performance of the Company's obligations under the Subscription Agreements and the Convertible Bonds to be entered by the Independent Placee(s) and entered by the Connected Subscribers are secured by the Guarantee provided by Mr. Chu.

The Subscription Agreements to be entered by the Independent Placee(s) and entered by each of the Connected Subscribers are independent and not inter-conditional upon each other.

The terms of the Convertible Bonds to be issued under the Placing and the Subscriptions are identical in all material aspects.

Upon completion of the Placing and the Subscriptions and assuming the aggregate principal amount of up to HK$1,150,000,000 of the Convertible Bonds is issued by the Company and there is full conversion of the Convertible Bonds at the Conversion Price of HK$2.33 per Share, an aggregate of 493,562,227 Conversion Shares shall be allotted and issued, representing approximately 21.4% of the total number of Shares in issue as at the date of this announcement and approximately 17.6% of the total number of Shares in issue as enlarged by the allotment and issue of the Conversion Shares (assuming no other change in the issued share capital of the Company). The Conversion Shares will be allotted and issued pursuant to the Specific Mandate upon conversion of the Convertible Bonds.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, the Connected Subscribers are connected persons of the Company for the reasons as detailed in the section headed "Information of the Company and the Connected Subscribers". Accordingly, the transactions contemplated under the Subscription Agreements entered with the Connected Subscribers constitute connected transactions of the Company under the Listing Rules and is subject to announcement, reporting and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

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GENERAL

The EGM will be held and convened for the Shareholders to consider and, if thought fit, approve the Placing and the grant of the Placing Specific Mandate; and for the Independent Shareholders consider and, if thought fit, approve the Subscriptions and the grant of the Subscription Specific Mandate.

A circular containing, among other things, (i) further details of the Placing and the Subscriptions;

(ii)a letter of advice from the Independent Board Committee to the Independent Shareholders in respect of the Subscriptions; (iii) a letter of recommendation from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Subscriptions; and (iv) a notice convening the EGM, will be despatched to the Shareholders on or around 10 June 2019.

Shareholders are advised to note that completion of the Placing and the Subscriptions are subject to the fulfillment or waiver (if applicable) of the conditions precedent set out in the Placing Agreement and the Subscription Agreements. The Placing and/or the Subscriptions may or may not proceed. Shareholder are therefore urged to exercise caution when dealing in the Shares and other securities of the Company.

PROPOSED PLACING AND ISSUE OF CONVERTIBLE BONDS

(I)Placing of Convertible Bonds to Independent Placee(s)

On 20 May 2019 (after trading hours), the Company entered into the Placing Agreement with the Placing Agent, the principal terms of which are as follows:

Date:	20 May 2019 (after trading hours)
Parties:	the Company (as issuer)
	CMB International Capital Limited (as placing agent)

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owner(s) are Independent Third Parties.

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The Placing:

Pursuant to the Placing Agreement, the Company conditionally agreed to place, through the Placing Agent on a best effort basis, the Convertible Bonds of an aggregate principal amount of up to HK$200,000,000 at the Conversion Price of HK$2.33 to the placee(s) to be procured by the Placing Agent.

The Company will, through the Placing Agent, place the Convertible Bonds to the placee(s) who are Independent Third Parties to the best knowledge, information and belief of the Directors and having made reasonable enquiries, and enter into Subscription Agreement(s) with such Independent Placee(s).

Save for the date of agreement, identity of the subscriber(s) and the principal amount of the Convertible Bonds to be subscribed, the principal terms of the Subscription Agreement(s) to be entered by the Independent Placee(s) shall be substantially same as those of the Subscription Agreements entered with the Connected Subscribers in all material aspects. Principal terms of the Subscription Agreements are set out in the section headed "(II) Subscription of Convertible Bonds by Connected Subscribers" below.

Conditions Precedent:

Completion of the Placing is conditional upon fulfillment or wavier (if applicable) of the following conditions:

(a)prior to the Independent Placee(s) having entered into the Subscription Agreement(s) with the Company: (i) the Placing Agent being satisfied with all documentation for the Placing;

(ii)the Placing Agent being satisfied with the customary know-your-customer checks on the Company; (iii) in the determination of the Placing Agent, the absence of any material adverse change in the financial condition, operations or prospects of the Company; (iv) the Placing Agent being satisfied with the market conditions; and (v) the Placing Agent having received all required governmental and other approvals in relation to the Placing on its part;

(b)the Independent Placee(s) having entered into the Subscription Agreement(s) with the Company;

(c)the Shareholders of the Company having passed the resolution(s) to authorise the Board to approve the Placing Agreement, the Subscription Agreement(s) to be entered into between the Independent Placee(s) and the Company and the transactions contemplated thereunder at the EGM; and

(d)the Listing Committee of the Stock Exchange having granted the approval for the listing of, and permission to deal in, the Conversion Shares to be issued and allotted upon the exercise of the conversion rights attached to the Convertible Bonds.

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In the event the above conditions cannot be fulfilled on or before 31 July 2019 (or such other date as the Company and the Placing Agent may agree in writing), the Placing Agreement will lapse and become null and void and the parties will be released from all obligations hereunder, save for liabilities for any antecedent breaches thereof.

Independent Placee(s):

The Convertible Bonds will be placed to Independent Placee(s) who are and whose ultimate beneficial owners are expected to be Independent Third Parties and not acting in concert (as such term is defined in Takeovers Code) with the connected persons of the Company.

In the event the number of Independent Placee(s) procured by the Placing Agent is less than six, the Company will make further announcement to disclose the information of the Independent Placees in accordance with the requirements of the Listing Rules as and when appropriate.

Placing Period:

Commencing from the date of the Placing Agreement and terminating at completion on 31 July 2019 (or such other period as agreed by the Company and the Placing Agent in writing).

Placing Commission:

The Company shall pay to the Placing Agent a fee equal to USD120,000 (equivalent to approximately HK$936,000) within five business days after completion of the Subscription Agreement(s) to be entered into between the Company and the Independent Placee(s). Such fee is determined after arm's length negotiations based on current market conditions and taking into account other similar transactions. The Directors are of the view that the placing commission payable for the placing is fair and reasonable.

Termination:

The Placing Agreement shall be terminated upon the earliest of:

(i)completion of the issue and placement of the Convertible Bonds pursuant to the Placing Agreement and the Subscription Agreement(s) to be entered into between the Company and the Independent Placee(s);

(ii)failure to fulfil all conditions under the Placing Agreement on or before the 31 July 2019; or

(iii)in the event of any breach by the Company of any of the representations and warranties in the Placing Agreement or any event has occurred or any matter has arisen on or after the date of the Placing Agreement and prior to the completion of the issue and placement

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