Centron Telecom Holdg : Connected Transactions——Disposal of Equity Interest

3510960-m01annc

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CENTRON TELECOM INTERNATIONAL HOLDING LIMITED

星辰通信國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1155)

CONNECTED TRANSACTIONS - DISPOSAL OF EQUITY INTEREST

The Board is pleased to announce that on 31 December 2015 (after trading hours), the Vendor, a wholly owned subsidiary of the Company, entered into the Equity Transfer Agreement with the Purchasers for the disposal of 56.985% equity interest in the Target Company, which is an indirect non-wholly owned subsidiary of the Company, at an aggregate consideration of RMB9,117,600. Four of the Purchasers are directors of the Target Company. Accordingly, they are connected persons of the Company at the subsidiary level. The aggregate consideration payable by such connected persons to the Vendor is RMB6,012,960.

LISTING RULES IMPLICATIONS

The transactions with such connected persons under the Disposal are connected transactions on the part of the Company under Chapter 14A of the Listing Rules.

As the terms of the Disposal are on normal commercial terms and all applicable percentage ratio (as defined in the Listing Rules) in respect of the transactions with the connected persons under the Disposal, on an aggregated basis, are less than 5%, the Disposal is subject to the reporting and announcement requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

The Board is pleased to announce that on 31 December 2015 (after trading hours), the Vendor, a wholly owned subsidiary of the Company, entered into the Equity Transfer Agreement with the Purchasers.

EQUITY TRANSFER AGREEMENT

Date: 31 December 2015 (after trading hours)

Parties: (i) the Vendor (namely, 福建先創電子有限公司 (Centron Communications Technologies Fujian Company Limited*)), a wholly owned subsidiary of the Company; and

(ii) the Purchasers (being the Purchaser A, the Purchaser B, the Purchaser C, the Purchaser D, the Purchaser E, the Purchaser F, the Purchaser G, the Purchaser H, the Purchaser I and the Purchaser J).

The Purchaser A, the Purchaser B, the Purchaser C and the Purchaser G are directors of the Target Company. Accordingly, they are connected persons of the Company at the subsidiary level.

The Purchaser E, the Purchaser F, the Purchaser H, the Purchaser I and the Purchaser J are management of the Target Company.

The Purchaser A, the Purchaser B, the Purchaser E, the Purchaser F, the Purchaser H, the Purchaser I and the Purchaser J are shareholders of the Target Company as at the date of the Equity Transfer Agreement. For further details of the shareholding structure of the Target Company as at the date of the Equity Transfer Agreement, please refer to the paragraphs headed "Information about the Target Company" below.

To the best of Directors' knowledge, information and belief, having made all reasonable enquiries, the Purchaser D is a third party independent of the Company and its connected persons.

Asset to be disposed of

Pursuant to the Equity Transfer Agreement, the Vendor has agreed to sell and the Purchasers have agreed to acquire 56.985% of the equity interest in The Target Company.

Details of the equity interest to be acquired by each of the Purchasers are as follows:

Purchasers	Percentage of equity interest in the Target Company	Consideration
Purchaser A	12.977%	RMB2,076,320
Purchaser B	11.354%	RMB1,816,640
Purchaser C	8.250%	RMB1,320,000
Purchaser D	7.404%	RMB1,184,640
Purchaser E	5.000%	RMB800,000
Purchaser F	5.000%	RMB800,000
Purchaser G	5.000%	RMB800,000
Purchaser H	1.000%	RMB160,000
Purchaser I	0.500%	RMB80,000
Purchaser J	0.500%	RMB80,000
Total	56.985%	RMB9,117,600
Consideration

The aggregate consideration of the Disposal is RMB9,117,600. The aggregate consideration payable by the Purchaser A, the Purchaser B, the Purchaser C and the Purchaser G (who are the connected persons of the Company) is RMB6,012,960.

The Purchase A, the Purchaser D, the Purchaser G , the Purchaser H , the Purchaser I and the Purchaser J will settle their respective consideration in full by cash within 7 working days upon the signing of the Equity Transfer Agreement.

The Purchase B, the Purchaser C, the Purchaser E and the Purchaser F will pay their respective consideration in cash to the Vendor according to the following manners:

1. as to 62.5% of the consideration shall be settled within 7 working days upon the signing of the Equity Transfer Agreement;

2. as to 18.75% of the consideration shall be settled within 365 days upon the signing of the Equity Transfer Agreement; and

   
   

3. the remaining balance of the consideration shall be settled within 730 days upon the signing of the Equity Transfer Agreement.

The consideration payable by the Company under the Equity Transfer Agreement is determined based on arm's length negotiation between the Purchasers and the Vendor with reference to (i) the net asset value of the Target Company of approximately RMB15.0 million as at 31 October 2015 which were prepared under the PRC generally accepted accounting principles and audited by a local PRC auditors of the Target Company; (ii) the unaudited and projected financial performance of the Target Company for the two months ended 31 December 2015; and (iii) the current market conditions.

Pledge of equity interest

Each of the Purchaser B, the Purchaser C, the Purchaser E and the Purchaser F has entered into a side letter with the Vendor on 31 December 2015. Pursuant to the side letters, each of the Purchaser B, the Purchaser C, the Purchaser E and the Purchaser F agreed to pledge their respective equity interest in the Target Company to the Vendor for the purpose of securing payment to the Vendor on the completion date of the Equity Transfer Agreement. The pledge shall be released upon settlement of consideration by the Purchaser B, the Purchaser C, the Purchaser E and the Purchaser F in full.

Completion

The Equity Transfer Agreement became effective upon the signing of the Equity Transfer Agreement by the Purchasers and the Vendor. The completion of the Equity Transfer Agreement shall take place on the completion date of registration of the change in shareholding in the Target Company with relevant government authority in the PRC. The Vendor and the Purchasers shall make an application to the relevant industry and commerce bureau in relation to the transfer of equity interest within 30 days upon the signing of the Equity Transfer Agreement. The Purchasers shall assist the Vendor in matters relating to the application.

Upon completion, the Vendor will be interested in 10% equity interest in the Target Company.