Yee Hop : Announcements and Notices - Discloseable Transaction

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Yee Hop Holdings Limited

義合控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1662) ANNOUNCEMENT DISCLOSEABLE TRANSACTION

Reference is made to the announcement of the Company dated 12 April 2017 about the MOU in relation to the establishment of the Target Company.

DISCLOSEABLE TRANSACTION The Subscription

The Board is pleased to announce that on 19 September 2017, YH Inv Holdings, an indirect wholly-owned subsidiary of the Company, entered into the Subscription Agreement with King Genesis Enterprises, pursuant to which YH Inv Holdings agreed to subscribe for 4,400,000 shares of the Target Company, representing 40% of the enlarged issued share capital of the Target Company, at an aggregate subscription amount of GBP4,400,000 (equivalent to approximately HK$46.64 million).

After the Subscription, the Target Company will be owned as to 40% by YH Inv Holdings and in aggregate 60% by King Genesis Enterprises and Top Capital.

Listing Rules Implications

As the highest applicable percentage ratio as defined in the Listing Rules exceeds 5% but less than 25%, the Subscription constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Subscription is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

DISCLOSEABLE TRANSACTION Introduction

Reference is made to the announcement of the Company dated 12 April 2017 about the MOU in relation to the establishment of the Target Company.

The Board is pleased to announce that on 19 September 2017, YH Inv Holdings, an indirect wholly-owned subsidiary of the Company, entered into the Subscription Agreement with King Genesis Enterprises, pursuant to which YH Inv Holdings agreed to subscribe for 4,400,000 shares of the Target Company, representing 40% of the enlarged issued share capital of the Target Company, at an aggregate subscription amount of GBP4,400,000 (equivalent to approximately HK$46.64 million).

The principal terms of the Subscription Agreement are summarised below:

The Subscription Agreement

Date of the Subscription Agreement

19 September 2017

Parties to the Subscription Agreement

1. King Genesis Enterprises, a wholly-owned subsidiary of Top Capital incorporated in Hong Kong with limited liability and principally engaged in investment holding; and

2. YH Inv Holdings, an indirect wholly-owned subsidiary of the Company incorporated in the BVI with limited liability and principally engaged in investment holding.

   To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of King Genesis Enterprises and its ultimate beneficial owner(s) is an Independent Third Party.

   Subject matter of the Subscription Agreement

   Subject to the terms and conditions of the Subscription Agreement, YH Inv Holdings and King Genesis Enterprises shall subscribe by cash for 4,400,000 and 6,599,999 Subscription Shares, representing 40% and approximately 60% of the issued share capital of the Target Company upon Completion, respectively. The Subscription Amount shall be GBP11,000,000 (equivalent to approximately HK$116.60 million), in which YH Inv Holdings shall pay GBP4,400,000 (equivalent to approximately HK$46.64 million) and King Genesis Enterprises shall pay GBP6,600,000 (equivalent to approximately HK$69.96 million).

   Pursuant to the terms and conditions of the Subscription Agreement, King Genesis Enterprises shall procure that the Target Company shall allot and issue the Subscription Shares to each YH Inv Holdings and King Genesis Enterprises which shall be issued and allotted as fully paid free from all encumbrances whatsoever and with the rights and obligations as set out in the Articles.

   Upon Completion, the Target Company will be owned as to 40% by YH Inv Holdings and in aggregate 60% by King Genesis Enterprises and Top Capital. It will not become a subsidiary of the Company and its financial results will not be consolidated into the financial results of the Group.

   Completion of the Subscription

   Completion shall take place on the Completion Date which will be the 5th Business Days after the fulfillment (or waiver) of the last conditions precedent disclosed below.

   Conditions Precedent

   Completion shall be subject to the following conditions precedent:

3. YH Inv Holdings having received from King Genesis Enterprises unaudited consolidated accounts of the Target Company prepared up to 31 July 2017;

4. YH Inv Holdings having completed the due diligence review on the business, financial, legal and other aspects of the Target Company and its subsidiaries and being satisfied (in its sole and absolute discretion) with the result thereof;

5. the warranties given by YH Inv Holdings and King Genesis Enterprises under the Subscription Agreement remaining true and accurate in all material respects and not misleading in any material respect as of the date of Completion by reference to the facts and circumstances subsisting as at the date of Completion; and

6. there not having occurred any event or series of events since the date of the Subscription Agreement, individually or collectively, would probably have a material adverse effect on the business or financial conditions of the Target Company or any of its subsidiaries.

7. The above conditions shall be fulfilled or waived no later than the Long Stop Date. YH Inv Holdings and King Genesis Enterprises may by agreement in writing at any time before Completion waive any of the conditions precedent with or without any condition. If any of such conditions is not fulfilled (or waived) on or before the Long Stop Date, YH Inv Holdings and King Genesis Enterprises shall be entitled to terminate the Subscription Agreement, whereupon the Subscription Agreement shall become null and void and of no further effect.

   Capital Commitment under the Subscription Agreement

   Under the Subscription Agreement, the capital requirement of the Target Company is expected to be GBP16,000,000 (equivalent to approximately HK$169.60 million), in which GBP6,400,000 (equivalent to approximately HK$67.84 million) shall be borne by YH Inv Holdings and GBP9,600,000 (equivalent to approximately HK$101.76 million) shall be borne by King Genesis Enterprises.

   The capital commitment of GBP16,000,000 (equivalent to approximately HK$169.60 million), GBP11,000,000 (equivalent to approximately HK$116.60 million) shall be met firstly by the equity injection through the Subscription and the balance subsequently by shareholder loans to be provided by the shareholders of Perfect View in proportion of their shareholdings.

   The capital requirement of GBP16,000,000 (equivalent to approximately HK$169.60 million) was arrived at after arm's length negotiations between YH Inv Holdings and King Genesis Enterprises and determined after considering the estimated capital investment by the Target Company in relation to the Development Project as provided by King Genesis Enterprises. The Directors are of the view that the aggregate amount of GBP16,000,000 is fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

   It is expected that the Group's capital contribution to the Target Group will be financed by internal resources and/or other external financing.

   Composition of the board of directors of the Target Company

   Unless YH Inv Holdings and King Genesis Enterprises unanimously agree otherwise, the board of directors of the Target Company shall be composed of no more than five directors. YH Inv Holdings and King Genesis Enterprises are entitled to appoint two and three directors respectively. The Chairman shall be a director nominated by King Genesis Enterprises.

   Except with the prior written consent of YH Inv Holdings and King Genesis Enterprises, no affirmative resolution of the board of directors of the Target Company shall be adopted in respect of certain important matters, such as the issuing of shares, securities or investment interest, modification of the Articles, winding-up, borrowing or the making of any loan for the benefit of any third party.

   Each of YH Inv Holdings and King Genesis Enterprises is entitled to the removal any of its appointee director and to provide for a successor nominee by written notice to the Target Company and to the other shareholders of the Target Company.

   The above-mentioned arrangement is arrived at after arm's length negotiations between YH Inv Holdings and King Genesis Enterprises with the aim of making the best of the competitive edge and management experience.

   Profit Distribution of the Target Company

   Under the Subscription Agreement, the Target Company shall apply the fund from its profit firstly to repay its senior bank debt facilities, secondly to repay the loan(s) from the shareholders (if any) and lastly to pay dividend or distribution to its shareholders in proportion to their shareholding.

   Information of the Target Company

   The Target Company is a company incorporated in Hong Kong on 6 July 2016 for the purpose of the Development Project. As at the date of this announcement, the Target Company has an issued share capital of HK$1 represented by one share and is wholly-owned by Top Capital.

   The Target Company currently owns the entire issued share capital of Windmill, which is a single purpose vehicle formed to invest and develop the Development Project.