Far East Hotels and Entertainment : PLACING OF NEW SHARES UNDER GENERAL MANDATE

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 an invitation or offer to acquire, purchase or subscribe for securities of the Company.

FAR EAST HOTELS AND ENTERTAINMENT LIMITED

Ⴣ؇ৢֳྼุϞࠢʮ̡

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00037)

PLACING OF NEW SHARES UNDER GENERAL MANDATE

Placing Agent

On 1 March 2021 (after trading hours of the Stock Exchange), the Company entered into the Placing Agreement with the Placing Agent pursuant to which the Company has conditionally agreed to place, through the Placing Agent on a best efforts basis, up to 122,142,135 Placing Shares at the Placing Price of HK$0.106 per Placing Share to currently expected to be not less than six Placees who are professional, institutional or other investors that are third parties independent of the Company and its connected persons. The Placing Shares will be allotted and issued pursuant to the General Mandate.

Assuming there will be no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, the maximum number of 122,142,135 Placing Shares under the Placing represents (i) 20.00% of the issued share capital of the Company as at the date of this announcement; and (ii) approximately 16.67% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares.

The Placing Price of HK$0.106 per Placing Share represents (i) a discount of approximately 16.54% to the closing price of HK$0.127 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and (ii) a discount of approximately 19.70% to the average closing price of approximately HK$0.132 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Placing Agreement.

Assuming that all the Placing Shares are fully placed, the estimated gross proceeds and net proceeds (after deducting the placing commission and other related expenses and professional fees) from the Placing will amount to approximately HK$12.9 million and approximately HK$12.7 million, respectively.

The Company intends to apply the net proceeds from the Placing for general working capital. The Directors are of the view that the terms of the Placing Agreement are fair and reasonable, and the Placing will strengthen the Group's financial position, broaden the Company's shareholder base and is in the interests of the Company and the Shareholders as a whole.

Given that completion of the Placing, which is subject to fulfillment of the conditions under the Placing Agreement, may or may not take place, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

THE PLACING AGREEMENT

Date

1 March 2021 (after trading hours of the Stock Exchange)

Parties

Issuer : the Company

Placing Agent : Kingston Securities Limited

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

Placing

The Placing Agent has conditionally agreed to place, or procure the placing of, up to 122,142,135 Placing Shares at the Placing Price of HK$0.106 per Placing Share on a best efforts basis and will receive a placing commission of 1% of the aggregate amount equal to the Placing Price multiplied by the actual number of Placing Shares placed by the Placing Agent (i.e. the gross proceeds from the Placing).

The placing commission payable to the Placing Agent under the Placing Agreement is arrived at after arm's length negotiations between the Company and the Placing Agent with reference to the prevailing market commission rate for similar transactions. The Directors are of the view that the placing commission is fair and reasonable.

Placees

The Placing Agent will place the Placing Shares, on a best efforts basis, to professional, institutional or other investors that are third parties independent of the Company and its connected persons. It is currently expected that the Placing Shares will be placed to not less than six Placees.

Number of Placing Shares

Assuming there will be no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, the maximum number of 122,142,135 Placing Shares under the Placing represents (i) 20.00% of the issued share capital of the Company as at the date of this announcement; and (ii) approximately 16.67% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares.

Placing Price

The Placing Price is HK$0.106 per Placing Share which represents:

• (a) a discount of approximately 16.54% to the closing price of HK$0.127 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and

• (b) a discount of approximately 19.70% to the average closing price of approximately HK$0.132 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Placing Agreement.

The Placing Price was determined on an arm's length basis between the Company and the Placing Agent and with reference to the prevailing market price of the Shares. The Directors consider that the Placing Price is fair and reasonable based on the current market conditions.

General Mandate

The Placing Shares will be allotted and issued under the General Mandate granted to the Board at the AGM held on 9 September 2020, pursuant to which the Board is authorised to allot, issue and deal with up to 122,142,135 Shares. As at the date of this announcement, the Company has not utilised the General Mandate and the maximum number of 122,142,135 Placing Shares under the Placing represents the entire General Mandate.

The allotment and issue of the Placing Shares is not subject to any additional Shareholders' approval.

Ranking of Placing Shares

The Placing Shares will rank pari passu in all respects with the existing Shares in issue on the date of allotment and issue of the Placing Shares.

Application for listing of Placing Shares

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Placing Shares.

Conditions precedent

Completion of the Placing Agreement is conditional upon:

• (i) the Listing Committee of the Stock Exchange having granted the approval of the listing of, and permission to deal in the Placing Shares; and

• (ii) the obligations of the Placing Agent under the Placing Agreement becoming unconditional and not being terminated in accordance with the terms of the Placing Agreement, including provisions regarding force majeure events as mentioned below.

If the above conditions are not satisfied and/or waived (other than the above condition (i) which cannot be waived) in whole or in part by the Placing Agent on or before 5:00 p.m. on 1 April 2021 or such later date to be agreed between the Company and the Placing Agent in writing, the Placing will be terminated and will not proceed and all obligations and liabilities of the parties under the Placing Agreement will forthwith cease and determine and no party will have any claim against the other (save for any antecedent breaches of the Placing Agreement).

Completion

Completion of the Placing will take place within four (4) Business Days after the fulfilment of the conditions as set out above or such other date to be agreed between the Company and the Placing Agent in writing (the "Completion Date").

Termination

Pursuant to the Placing Agreement, the Placing Agent is entitled to terminate the arrangements set out in the Placing Agreement by notice in writing prior to 9:00 a.m. on the Completion Date, if in its absolute opinion, the success of the Placing would be materially and adversely affected by any of the following force majeure events:

(i)the introduction of any new laws or regulations or any change in existing laws or regulations (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the

Group as a whole; or

(ii) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before and/or after the date hereof) of a political, military, financial, economic, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national, international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances (inclusive of any pandemics or epidemics) which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or adversely prejudices the success of the placing of the Placing Shares to potential investor(s) or otherwise makes it inexpedient or inadvisable for the Company or the Placing Agent to proceed with the Placing; or

(iii)any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction on trading in securities) occurs which affect the success of the Placing (such success being the placing of the Placing Shares to potential investor(s)) or otherwise in the absolute opinion of the Placing Agent makes it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the Placing.

Pursuant to the Placing Agreement, if, at or prior to 9:00 a.m. on the Completion Date,

• (i) the Company commits any material breach of any of the obligations or undertakings expressed or assumed under the Placing Agreement; or

• (ii) any suspension in the trading of the Shares on the Stock Exchange for more than ten consecutive trading days save for the purposes of clearing of any announcement(s) relating to the Placing, if applicable; or

• (iii) the Placing Agent shall become aware of the fact that any of the representations or warranties given by the Company contained in the Placing Agreement was, when given, untrue or inaccurate in any material respect or would in any material respect be untrue or inaccurate if repeated and the Placing Agent shall, in its absolute opinion, determine that any such untrue representation or warranty represents or is likely to represent a material adverse change in the financial or trading position or prospects of the Group taken as a whole or will otherwise likely to have a material prejudicial effect on the Placing,

the Placing Agent shall be entitled (but not bound) by notice in writing to the Company to elect to treat such matter or event as releasing and discharging the Placing Agent from its obligations under the Placing Agreement.

Upon giving of notice pursuant to the paragraph above, all obligations of the Placing Agent under the Placing Agreement shall cease and determine and no party shall have any claim against any other party of the Placing Agreement in respect of any matter or thing arising out of or in connection with the Placing Agreement, save for any antecedent breaches.

REASONS FOR THE PLACING AND USE OF PROCEEDS

The principal activity of the Company is investment holding. The activities of its principal subsidiaries consist of hotel operation, property investment and development, as well as securities dealing.

Assuming that all the Placing Shares are fully placed, the estimated gross proceeds and net proceeds (after deducting the placing commission and other related expenses and professional fees) from the Placing will amount to approximately HK$12.9 million and approximately HK$12.7 million respectively. The net price per Placing Share will be approximately HK$0.104.

The Company intends to apply the net proceeds from the Placing for general working capital.

The Directors are of the view that the terms of the Placing Agreement are fair and reasonable, and the Placing will strengthen the Group's financial position, broaden the Company's shareholder base and is in the interests of the Company and the Shareholders as a whole.

EQUITY FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS

The Company has not conducted any equity fund raising activities in the twelve (12) months immediately preceding the date of this announcement.

SHAREHOLDING STRUCTURE OF THE COMPANY UPON COMPLETION OF THE PLACING

The shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately upon completion of the Placing (assuming the maximum number of Placing Shares are placed and there is no change in the share capital of the Company from the date of this announcement up to the completion of the Placing) are set out as follows:

Shareholders

(i) As at the date of this announcement

(ii) Immediately upon completion of the Placing

Number of	Approximate	Number of	Approximate
Shares	%	Shares	%
Mr. Derek Chiu	131,195,875	21.48	131,195,875	17.90
(Note 1)
Mr. Deacon Te Ken Chiu	113,726,476	18.62	113,726,476	15.52
(deceased)	(Note 2)
Madam Chiu Ju Ching Lan	188,000	0.03	188,000	0.03
Mr. Choy Wai Shek	3,000,000	0.49	3,000,000	0.41
Raymond
Placees	-	0.00	122,142,135	16.67
Other public shareholders	362,600,324	59.38	362,600,324	49.47
Total	610,710,675	100.00	732,852,810	100.00
Notes:

• 1. As at the date of this announcement, Mr. Derek Chiu, an executive Director who is also the managing director and the chief executive of the Company, beneficially owned 52,765,576 Shares. The remaining 78,430,299 Shares were held by Energy Overseas Ltd., a company wholly owned by Mr. Derek Chiu.

• 2. The late Mr. Deacon Te Ken Chiu beneficially owned 12,491,424 Shares. Of the remaining 101,235,052 Shares, (i) 100,939,842 Shares were held by various private companies wholly owned by the late Mr. Deacon Te Ken Chiu of which 72,182,400 Shares were held by Achiemax Limited; and (ii) 295,210 Shares were held by Far East Consortium Limited, a wholly-owned subsidiary of Far East Consortium International Limited. The late Mr. Deacon Te Ken Chiu was a controlling shareholder of these companies and a director of Achiemax Limited.

Given that completion of the Placing, which is subject to fulfillment of the conditions under the Placing Agreement, may or may not take place, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

DEFINITIONS

In this announcement, the following expressions have the meaning set out below unless the context requires otherwise:

"AGM"	the annual general meeting of the Company held on 9
September 2020
"Board"	the board of Directors
"Business Day(s)"	any day on which banks in Hong Kong are open for business
(other than Saturday and any day on which a tropical
cyclone warning No. 8 or above is hoisted or remains hoisted
between 9:00 a.m. and 12:00 noon and is not lowered at or
before 12:00 noon or on which a "black" rainstorm warning
signal is hoisted or remains in effect between 9:00 a.m. and
12:00 noon and is not discontinued at or before 12:00 noon)
"Company"	Far East Hotels and Entertainment Limited, a company
incorporated in Hong Kong with limited liability, the Shares
of which are listed on the Main Board of the Stock Exchange
(stock code: 37)
"connected person(s)"	has the meaning ascribed thereto in the Listing Rules
"Director(s)"	the director(s) of the Company
"General Mandate"	the general mandate granted to the Directors pursuant to the
resolutions of the Shareholders passed at the AGM to allot,
issue and deal with up to 20% of the then issued Shares (i.e.
122,142,135) as at the date of the AGM
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollar, the lawful currency of Hong Kong
"Hong Kong"	Hong Kong Special Administrative Region of the People's
Republic of China
"Listing Committee"	has the meaning ascribed thereto in the Listing Rules
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange

"Placee(s)"	any professional, institutional or other investor(s) procured
by the Placing Agent or its agents to subscribe for any of the
Placing Shares pursuant to the Placing Agreement
"Placing"	the placing of up to 122,142,135 Placing Shares by the
Placing Agent on a best efforts basis pursuant to the terms of
the Placing Agreement
"Placing Agent"	Kingston Securities Limited, a licensed corporation to
carry on business in Type 1 (dealing in securities) regulated
activity under the SFO
"Placing Agreement"	the conditional placing agreement entered into between the
Company and the Placing Agent dated 1 March 2021 in
relation to the Placing
"Placing Price"	HK$0.106 per Placing Share
"Placing Shares"	up to 122,142,135 new Shares to be placed pursuant to the
Placing Agreement
"SFO"	the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong)
"Share(s)"	the ordinary share(s) of the Company
"Shareholder(s)"	the holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"%"	per cent.
Hong Kong, 1 March 2021

By Order of the Board

Far East Hotels and Entertainment Limited

Derek Chiu

Executive Director, Managing Director and Chief Executive

As at the date of this announcement, the executive Directors are Mr. Derek Chiu (Managing Director and Chief Executive) and Ms. Amanda Chiu; the non-executive Directors are Madam Chiu Ju Ching Lan and Mr. Alex Chiu; and the independent non-executive Directors are Mr.

Ip Shing Hing, Mr. Ng Wing Hang Patrick and Mr. Choy Wai Shek Raymond.