Announcements and Notices – [Connected Transaction / Discloseable Transaction] DISCLOSEABLE AND CONNECTED TRANSACTION: PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARES OF, AND SHAREHOLDERS’ AND DIRECTORS’ LOAN TO, THE TARGET COMPANY

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Tsui Wah Holdings Limited

翠 華 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1314)

DISCLOSEABLE AND CONNECTED TRANSACTION: PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARES OF,

AND SHAREHOLDERS' AND DIRECTORS' LOAN TO, THE TARGET COMPANY

THE ACQUISITION

The Board is pleased to announce that on 26 January 2017 (after trading hours), the Purchaser (a direct wholly-owned subsidiary of the Company) and the Vendors entered into the Acquisition Agreement, pursuant to which the Purchaser has conditionally agreed to acquire, and the Vendors have conditionally agreed to sell, the Sale Shares, representing the entire issued shares of the Target Company, and the Sale Loan, at the Initial Consideration of HK$255,000,000 (subject to adjustment).

LISTING RULES IMPLICATIONS

The Vendors are Mr. LEE Yuen Hong (an executive Director), Mr. HO Ting Chi (a past Director who retired on 26 August 2016), Mr. CHEUNG Yu To (an executive Director), Mr. CHEUNG Yue Pui (a past Director who retired on 26 August 2016) and Mr. CHEUNG Wai Keung (a past Director who resigned on 31 December 2015). Each of the Vendors is also a controlling shareholder of the Company. Accordingly, each of the Vendors is connected persons of the Company pursuant to Rule 14A.07 of the Listing Rules. Accordingly, the Acquisition Agreement and the transactions contemplated thereunder constitute a connected transaction of the Company pursuant to Chapter 14A of the Listing Rules.

As regards the Acquisition, as the highest applicable percentage ratio under Rule 14.07 of the Listing Rules is more than 5% but less than 25% and the total consideration is more than HK$10,000,000, the Acquisition constitutes (i) a non-exempt connected transaction of the Company and is subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules; and (ii) a discloseable transaction of the Company and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

GENERAL

An EGM will be convened and held by the Company to consider and, if thought fit, approve the Acquisition Agreement and the transactions contemplated thereunder.

In view of the Vendors' material interest in the Acquisition, the Vendors and their respective associate(s) will abstain from voting on the relevant resolutions at the EGM.

An Independent Board Committee (comprising all the independent non-executive Directors) has been formed to advise and provide recommendation to the Independent Shareholders on the Acquisition Agreement and the transactions contemplated thereunder. Centurion Corporate Finance Limited has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in the same respect.

A circular containing, among others, the particulars of the Acquisition Agreement together with a letter from the Independent Board Committee, a letter from the Independent Financial Adviser, a property valuation report, and a notice of the EGM is expected to be despatched to the Shareholders on or about 17 February 2017.

The Acquisition is subject to the fulfilment of a number of conditions precedent which are detailed in the sections headed ''The Acquisition - Conditions'' in this announcement. As the Acquisition may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

INTRODUCTION

The Board is pleased to announce that on 26 January 2017 (after trading hours), the Purchaser (a direct wholly-owned subsidiary of the Company) and the Vendors entered into the Acquisition Agreement, pursuant to which the Purchaser has conditionally agreed to acquire, and the Vendors have conditionally agreed to sell, the Sale Shares, representing the entire issued shares of the Target Company, and the Sale Loan, at the Initial Consideration of HK$255,000,000 (subject to adjustment).

THE ACQUISITION

Set out below are the principal terms of the Acquisition Agreement:

Date

26 January 2017 (after trading hours)

Parties

1. the Purchaser (a direct wholly-owned subsidiary of the Company), as the purchaser; and

2. the Vendors.

The Vendors are Mr. LEE Yuen Hong (an executive Director), Mr. HO Ting Chi (a past Director who retired on 26 August 2016), Mr. CHEUNG Yu To (an executive Director), Mr. CHEUNG Yue Pui (a past Director who retired on 26 August 2016) and Mr. CHEUNG Wai Keung (a past Director who resigned on 31 December 2015). Each of the Vendors is also a controlling shareholder of the Company.

Assets to be acquired

The Sale Shares, representing the entire issued shares of the Target Company, and the Sale Loan, free from all encumbrances together with all rights attached thereto, including the right to receive all dividends and other distributions declared, made or paid, on or after the Acquisition Completion Date. As at the date of this announcement, the Sale Shares are owned by the Vendors in the following proportion:

LEE Yuen Hong 4 Sale Shares (40% of the entire issued shares of the Target Company)

HO Ting Chi 3 Sale Shares (30% of the entire issued shares of the Target Company)

CHEUNG Yu To 1 Sale Share (10% of the entire issued shares of the Target Company)

CHEUNG Yue Pui 1 Sale Share (10% of the entire issued shares of the

Target Company)

CHEUNG Wai Keung 1 Sale Share (10% of the entire issued shares of the

Target Company)

As at the date of this announcement, the Property is the only major asset of the Target Company.

Consideration

The Acquisition Consideration shall be an amount equal to HK$255,000,000 (the ''Initial Consideration''), subject to adjustment as set out in the section headed ''The Acquisition - Adjustment of Acquisition Consideration'' below. For the avoidance of doubt, there shall be no upward adjustment to the Initial Consideration and hence, the Final Consideration shall not exceed HK$255,000,000 in all circumstances.

The Initial Consideration is HK$255,000,000, which was arrived at after arm's length negotiations between the Vendors and the Purchaser and taking into account factors including mainly, the market valuation of the Property as shown in the Draft Property Valuation Report and appraised by an independent property valuer of the Company.

Payment of Acquisition Consideration

The Initial Consideration shall be paid by the Purchaser to the Vendors upon the Acquisition Completion. The Acquisition Consideration will be settled in HK$ and be made by (a) cashier order(s) issued by a licensed bank in Hong Kong, or (b) by telegraphic transfer to the account(s) notified by or on behalf of the Vendors to the Purchaser, or (c) such other method as the Purchaser and Vendors may agree in writing.

For the purposes of apportionment, the consideration to be paid by the Purchaser to the Vendors for the benefit of the Sale Loan shall be an amount equal to the amount of the Sale Loan, and the consideration to be paid by the Purchaser to the Vendors for the Sale Shares shall be an amount equal to the balance of the Acquisition Consideration after deducting the amount of such consideration in respect of the benefit of the Sale Loan.

Adjustment of Acquisition Consideration

The Vendors shall procure the preparation and delivery of the Completion Accounts and shall calculate the final Consideration adjusted in accordance with the formula below based on the Completion Accounts (the ''Final Consideration'') in accordance with the terms of the Acquisition Agreement.

The adjustment shall be made in accordance with the following formula:

A = B - C - D

where:

''A'' means the Final Consideration;

''B'' means HK$255,000,000;

''C'' means the amount of all liabilities of the Target Company, including actual or contingent, accrued or deferred liabilities, but excluding the Sale Loan, as at the last day of the calendar month immediately preceding the Acquisition Completion Date as shown in the Completion Accounts; and

''D'' means the difference, if any, between the market value of the Property as shown in the Final Property Valuation Report and such value as shown in the Draft Property Valuation Report. For the avoidance of doubt, where the market value of the Property as shown in the Final Property Valuation Report is lower than the market value as shown in the Draft Property Valuation Report such difference in amount shall always be limited to the maximum amount of HK$5,000,000 for the purpose of this formula; and if it is higher than the market value as shown in the Draft Property Valuation Report, such difference amount shall always be deemed to be zero for the purpose of this formula.

In the event that the amount of the Final Consideration calculated with reference to the Final Property Valuation Report and the agreed Completion Accounts in accordance with the terms of the Acquisition Agreement is less than the Initial Consideration paid by the Purchaser thereunder, each of the Vendors shall, in accordance with their entitlement portion in the Final Consideration, pay the Purchaser a sum representing the difference between (a) the amount of the Final Consideration calculated with reference to the Final Property Valuation Report and the agreed Completion Accounts, and (b) the Initial Consideration paid by the Purchaser hereunder within 60 Business Days after the date on which the Final Consideration becomes final in accordance with the terms of the Acquisition Agreement.