Golik : INSIDE INFORMATION - POTENTIAL MAJOR TRANSACTION - LETTER OF INTENT IN RELATION TO THE POTENTIAL DISPOSAL

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INSIDE INFORMATION

POTENTIAL MAJOR TRANSACTION

LETTER OF INTENT IN RELATION TO

THE POTENTIAL DISPOSAL

THE POTENTIAL DISPOSAL

The Board is pleased to announce that on 16 October 2019 (after the trading hours of the Stock Exchange), the Vendor, a wholly-owned subsidiary of the Company, entered into the Letter of Intent with the Purchaser pursuant to which the Vendor intends to sell and the Purchaser intends to acquire the Target Project Equity. The Potential Disposal is subject to the signing of the Formal Agreement.

POTENTIAL LISTING RULES IMPLICATIONS

Subject to the results of the due diligence review on the Target Project Equity by the Purchaser and further negotiations between the Vendor and the Purchaser on the terms of the Formal Agreement, the Vendor and the Purchaser may enter into the Formal Agreement within the Period of the Letter of Intent. Should the Formal Agreement be entered into, the Company will issue further announcement in accordance with the requirements under the Listing Rules.

On the basis that the Formal Agreement is entered into with the Selling Price remaining unchanged and the trading prices of the Shares on the Stock Exchange during the period from the date of the Letter of Intent up to the date of the Formal Agreement remaining stable, it is expected that at least one of the applicable percentage ratios in the size test calculation (as defined under the Listing Rules) in respect of the Potential Disposal would exceed 25% but all such applicable percentage ratios would be less than 75% and the Potential Disposal would then constitute a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement, circular, the Shareholders' approval requirements under the Listing Rules.

The Potential Disposal is subject to the signing of the Formal Agreement. Therefore, the Potential Disposal may or may not proceed. Shareholders and potential investors of the Company should exercise caution when dealing in the Shares.

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This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

THE POTENTIAL DISPOSAL

The Board is pleased to announce that on 16 October 2019 (after the trading hours of the Stock Exchange), the Vendor, a wholly-owned subsidiary of the Company, entered into the Letter of Intent with the Purchaser, pursuant to which the Vendor intends to sell and the Purchaser intends to acquire the Target Project Equity. The Potential Disposal is subject to the signing of the Formal Agreement.

THE LETTER OF INTENT

Date

16 October 2019

Parties

1. The Vendor; and
2. the Purchaser

To the best of the Directors' knowledge, information and belief after making all reasonable enquiries based on the information provided by the Purchaser as of the date of this announcement, the Purchaser is an Independent Third Party.

Assets to be disposed of

100% equity interests in Steel Wealth and all debts owed by Steel Wealth to the Vendor, which must include the assets held by Steel Wealth in Dongguan, the PRC: (a) Dongguan Steel Wealth, a wholly-owned subsidiary of Steel Wealth; and (b) the Property.

Selling Price and Earnest Money

The Vendor and the Purchaser initially agreed that the Selling Price for the Target Project Equity is approximately HK$138,000,000. The Selling Price was determined based on normal commercial terms and after arm's length negotiations between the Vendor and the Purchaser with reference to the estimation of the fair value of the assets to be disposed of. The final price will be subject to, among others, the results of the due diligence review by the Purchaser and further agreement between the Vendor and the Purchaser.

A non-refundable Earnest Money of HK$20,000,000 is payable by the Purchaser to the Vendor on or before the date of signing of the Letter of Intent.

Due diligence review

The Purchaser shall perform due diligence review on the Target Project Equity. The Vendor shall provide all necessary assistance for the due diligence review and provide necessary files and information.

Exclusivity

During the Period of the Letter of Intent, the Vendor shall not contact, negotiate or agree with any third party that has expressed or may express interest in the Target Project Equity.

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Formal Agreement

The Potential Disposal is subject to the negotiation, finalisation and signing of the Formal Agreement with a view to signing the Formal Agreement within the Period of the Letter of Intent.

Legal effect

Save for those provisions relating to the exclusivity, expenses, confidentiality, the Earnest Money, governing law and legal effect, the Letter of Intent does not have any legal effect.

INFORMATION ON STEEL WEALTH

Steel Wealth is a limited company incorporated in Hong Kong which is a wholly-owned subsidiary of the Vendor and acts as an investment company. Steel Wealth wholly owns Dongguan Steel Wealth and the Property in Dongguan, the PRC.

INFORMATION OF THE GROUP

The Group is principally engaged in the manufacturing and sale of metal products and building construction materials. The Company is an investment holding company and provides corporate management services.

REASONS AND BENEFITS FOR ENTERING INTO THE LETTER OF INTENT

The Group believes that the Potential Disposal is one of the Group's restructuring strategies. If the Potential Disposal materialises, the Group will be able to reallocate more financial resources to its core business and for future development. The Board considers that the entering into of the Letter of Intent and the Potential Disposal are in the interests of the Company and the Shareholders as a whole.

POTENTIAL LISTING RULES IMPLICATIONS

Subject to the results of the due diligence review on the Target Project Equity by the Purchaser and further negotiations between the Vendor and the Purchaser on the terms of the Formal Agreement, the Vendor and the Purchaser may enter into the Formal Agreement within the Period of the Letter of Intent. Should the Formal Agreement be entered into, the Company will issue further announcement in accordance with the requirements under the Listing Rules.

On the basis that the Formal Agreement is entered into with the Selling Price remaining unchanged and the trading prices of the Shares on the Stock Exchange during the period from the date of the Letter of Intent up to the date of the Formal Agreement remaining stable, it is expected that at least one of the applicable percentage ratios in the size test calculation (as defined under the Listing Rules) in respect of the Potential Disposal would exceed 25% but all such applicable percentage ratios would be less than 75% and the Potential Disposal would then constitute a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement, circular, the Shareholders' approval requirements under the Listing Rules.

The Potential Disposal is subject to the signing of the Formal Agreement. Therefore, the Potential Disposal may or may not proceed. Shareholders and potential investors of the Company should exercise caution when dealing in the Shares.

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DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings:

"Board"	the board of Directors
"Company"	Golik Holdings Limited, an exempted company
	incorporated in Bermuda with limited liability, whose
	issued shares are listed on the Main Board of the Stock
	Exchange
"Director(s)"	director(s) of the Company
"Dongguan Steel Wealth"	Dongguan Steel Wealth Metal Co., Ltd. (東莞富威鋼鐵分
	條有限公司), a wholly foreign owned enterprise established
	in the PRC which is a wholly-owned subsidiary of Steel
	Wealth
"Earnest Money"	a non-refundable earnest money of HK$20,000,000 payable
	by the Purchaser to the Vendor on or before the date of signing
	of the Letter of Intent
"Formal Agreement"	the formal sale and purchase agreement which may be
	entered into between the Vendor and the Purchaser in
	relation to the Potential Disposal
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollar(s), the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the
	People's Republic of China
"Independent Third Party"	third party who is independent of the Company and its
	connected persons (as defined in the Listing Rules)
"Letter of Intent"	the letter of intent dated 16 October 2019 entered into
	between the Vendor and the Purchaser in relation to the
	Potential Disposal
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Period of Letter of Intent"	the period of three months from the date of signing the
	Letter of Intent, unless extended by the Vendor and the
	Purchaser in writing
"Potential Disposal"	the potential disposal of the Target Project Equity by the
	Vendor to the Purchaser pursuant to the Letter of Intent
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"PRC"	the People's Republic of China (for the purpose of this
	announcement, excluding Hong Kong, the Macau Special
	Administrative Region of the People's Republic of China
	and Taiwan)
"Property"	the properties located at Dongguan City, Guangdong
	Province, PRC, which consist of land use right of a plot of
	land with an area of 32,241 square metres and the plant on
	such plot of land
"Purchaser"	Madam Deng Qian, an Independent Third Party
"Selling Price"	the selling price for the Target Project Equity of
	approximately HK$138,000,000 initially agreed between
	the Vendor and the Purchaser, subject to final agreement
	between the Vendor and the Purchaser
"Share(s)"	ordinary share(s) of HK$0.10 each in the share capital of the
	Company
"Shareholder(s)"	holder(s) of Share(s)
"Steel Wealth"	Steel Wealth Metal Limited, a limited company incorporated
	in Hong Kong which is a wholly-owned subsidiary of the
	Vendor
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Target Project Equity"	100% equity interests in Steel Wealth and all debts owed by
	Steel Wealth to the Vendor, which must include the assets held
	by Steel Wealth in Dongguan, the PRC: (a) Dongguan Steel
	Wealth, a wholly-owned subsidiary of Steel Wealth; and (b)
	the Property
"Vendor"	Fulwealth Metal Factory Limited, a limited company
	incorporated in Hong Kong which is a wholly-owned
	subsidiary of the Company
"%"	Percentage

By Order of the Board

Golik Holdings Limited

Pang Tak Chung

Chairman

Hong Kong, 16 October 2019

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As at the date of this announcement, the Board comprises:

Executive Directors:	Mr. Pang Tak Chung, Mr. Ho Wai Yu, Sammy,
	Ms. Pang Wan Ping and Mr. Lau Ngai Fai
Independent Non-executive Directors:	Mr. Yu Kwok Kan, Stephen, Mr. Chan Yat Yan
	and Mr. Lo Yip Tong

* For identification purpose only

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