Ngai Shun : Announcements and Notices - Major and Connected Transaction Disposal of 51% of the Issued Share Capital of Pearl Swirls Limited

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Ngai Shun Holdings Limited

毅 信 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01246)

MAJOR AND CONNECTED TRANSACTION

DISPOSAL OF 51% OF THE ISSUED SHARE CAPITAL OF PEARL SWIRLS LIMITED

Financial Advisers

Grand Harbour Corporate Finance Limited

THE AGREEMENT

On 18 July 2017 (after trading hours), the Company as the vendor entered into the Agreement with the Purchaser, pursuant to which the Company conditionally agreed to dispose of, and the Purchaser conditionally agreed to purchase, 51% of the issued share capital of Pearl Swirls, at a total consideration of HK$80,000,000 (subject to adjustment).

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios as calculated under Rule 14.07 of the Listing Rules in respect of the Disposal exceeds 25% but is less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to reporting, announcement and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

As at the date of this announcement, the Purchaser is interested in 49% of Pearl Swirls and is therefore a connected person of the Company at the subsidiary level. As (i) the Board has approved the Disposal, and (ii) the independent non-executive Directors have confirmed that (a) the terms of the Disposal are fair and reasonable, (b) the Disposal is on normal commercial terms, and (c) the Disposal is in the interest of the Company and the Shareholders as a whole, the Disposal is exempt from the circular, independent financial advice and shareholders' approval requirements under Rule 14A.101 of the Listing Rules.

An EGM will be convened and held for the Shareholders to approve the Agreement and the transactions contemplated thereunder. The Purchaser and its associates are interested in 115,300,000 Shares, representing approximately 1.27% of the total issued share capital of the Company as at the date of this announcement, are required to abstain from voting on the relevant resolution to approve the Agreement and the transactions contemplated thereunder at the EGM.

GENERAL

A circular containing, among other things, further details about the Agreement and the Disposal, and a notice of the EGM, will be despatched to the Shareholders on or before 9 August 2017.

Shareholders and potential investors of the Company should note that Completion is subject to the fulfilment (or, as the case may be, waiver) of the conditions precedent under the Agreement. The Disposal may or may not proceed. Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the Shares and other securities of the Company.

On 18 July 2017 (after trading hours), the Company as the vendor entered into the Agreement with the Purchaser, pursuant to which the Company conditionally agreed to dispose of, and the Purchaser conditionally agreed to purchase, 51% of the issued share capital of Pearl Swirls, at a total consideration of HK$80,000,000 (subject to adjustment). The principal terms of the Agreement are summarised below:

THE AGREEMENT

Date: 18 July 2017 (after trading hours)

Parties: (a) the Company, as the vendor; and

(b) the Purchaser, as the purchaser.

As at the date of this announcement, the Purchaser is interested in 49% of Pearl Swirls, a 51% owned non-wholly owned subsidiary of the Company. Accordingly, the Purchaser is a substantial shareholder of a non-wholly owned subsidiary of the Company and is a connected person of the Company at the subsidiary level.

Subject matter: The Company has conditionally agreed to dispose of and the Purchaser has conditionally agreed to acquire the Sale Shares, being 51% of the issued share capital of Pearl Swirls.

Consideration: The consideration for the Sale Shares is HK$80,000,000 and was determined by the parties after arm's length negotiations taking into account, amongst others, the net asset value of Ngai Shun Construction, a wholly-owned subsidiary of Pearl Swirls.

The consideration will be subject to the following adjustment:

1. in the event that 51% of the audited net asset value of Ngai Shun Construction as at the date of Completion (the ''Completion NAV'') is higher than HK$52,748,000, the consideration will be the higher of (A) the aggregate of (i) HK$80,000,000 and (ii) the excess of 51% of the Completion NAV over HK$52,748,000; and (B) HK$80,000,000; or

2. in the event that 51% of the Completion NAV is equal to or lower than the amount of HK$52,748,000, the consideration will remain at the sum of HK$80,000,000.

The Completion Account will be made available by the Company to the Purchaser within 60 calendar days after the date of Completion.

The consideration will be settled as follows:

1. a sum of HK$10,000,000 is payable upon the signing of the Agreement;

2. such outstanding amount owing to the Purchaser under the Loan will be used to set off against part of the consideration at Completion; and

3. the remaining balance of the consideration after deducting such amount in (i) and (ii) above will be payable in cash by the Purchaser at Completion.

The additional amount payable to the Vendor as a result of the adjustment to the consideration will be settled by the Purchaser by way of cash within 10 calendar days of the issue of the Completion Account.

Conditions precedent: Completion is conditional upon the satisfaction of the following conditions:

1. the warranties provided by the Company remaining true and accurate in all respects and not misleading in any respect as at Completion;

2. the Shareholders approving the Agreement and all the transactions contemplated thereunder;

3. all consents, approvals, permits, or authorisations (as the case may be) that are necessary pursuant to applicable laws, regulations or rules for the execution, implementation and Completion of the Agreement having been obtained, and all such consents, approvals, permits and authorisations not having been revoked or withdrawn; and

4. all consents or approvals that are necessary pursuant to the implementation and Completion of the Agreement having been obtained from the Stock Exchange, and such consents or approvals not having been revoked or withdrawn.

If for any reasons that the conditions precedent to the Agreement are not satisfied (or for condition (i), not waived by the Purchaser) by 29 September 2017 or such later date as may be agreed between the Company and the Purchaser, the Agreement will lapse whereupon the first instalment of the consideration received will be refunded, without interest, to the Purchaser within five (5) Business Days of such termination. Upon such termination, no party shall have any liability and obligation to the other parties, save in respect of the refund of the first instalment of the Consideration to the Purchaser and any antecedent breaches of the Agreement.

Completion: Completion shall take place the next Business Day immediately following the day on which all the conditions precedent have been fulfilled or waived, or such other date as the Company and the Purchaser shall agree in writing, provided that such date shall in no event be later than 29 September 2017 (or such other date as may be agreed amongst the Company and the Purchaser).

Upon Completion, the Company will no longer hold any interest in Pearl Swirls, and Pearl Swirls will cease to be a subsidiary of the Company.

INFORMATION ON THE PEARL SWIRLS GROUP

Pearl Swirls is a company incorporated in the British Virgin Islands with limited liability and is an investment holding company. Pearl Swirls is a 51% owned subsidiary of the Company.

Ngai Shun Construction is a company incorporated in Hong Kong with limited liability and is principally engaged in foundation piling business in Hong Kong as a foundation subcontractor. Ngai Shun Construction is a wholly-owned subsidiary of Pearl Swirls.