Palace Banquet : 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.

PALACE BANQUET HOLDINGS LIMITED

首灃控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1703)

PLACING OF NEW SHARES

UNDER GENERAL MANDATE

Placing Agent

On 18 September 2020 (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 effort basis, up to 200,000,000 Placing Shares at the Placing Price of HK$0.25 per Placing Share to not less than six Placees who are professional, institutional, or other investors and whose ultimate beneficial owners who are not connected persons of the Company. The Placing Shares will be allotted and issued pursuant to the General Mandate.

Assuming the Placing Shares are fully placed, the maximum number of 200,000,000 Placing Shares under the Placing represents approximately 20.00% of the issued share capital of the Company as at the date of this announcement, and approximately 16.67% of the issued share capital of the Company as enlarged by the issue of the Placing Shares.

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The Board considers that the Placing represents a good opportunity for the Company to raise additional funds for general working capital and to widen the Company's shareholder base. The terms of the Placing Agreement (including the Placing Price and the placing commission) were determined after arm's length negotiations between the Company and the Placing Agent. The Directors (including the independent non-executive Directors) consider that the terms of the Placing Agreement (including the Placing Price and the placing commission) are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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$50 million and approximately HK$49 million, respectively. The Company intends to use such net proceeds for the general working capital of the Group and improve the cash position of the Group which then can help establishing and strengthening the existing and future business of the Group.

Shareholders and potential investors should note that completion of the Placing is subject to fulfillment of the conditions under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

THE PLACING AGREEMENT

Date

18 September 2020 (after trading hours of the Stock Exchange)

Parties
Issuer:	The Company
Placing Agent:	Tai Shing Stock Investment Company Limited

To the best knowledge, information and belief of the Board, having made all reasonable enquiries, the Placing Agent, its associates and their respective ultimate beneficial owner(s) are Independent Third Parties. As at the date of this announcement, the Placing Agent is not interested in any Shares.

Placing

The Placing Agent has conditionally agreed to place, or procure the placing of, up to 200,000,000 Placing Shares at the Placing Price of HK$0.25 per Placing Share on a best effort basis and will receive a placing commission of 2% of the Placing Price multiplied by the actual number of Placing Shares placed by the Placing Agent (i.e. the gross proceeds from the Placing).

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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 to professional, institutional, or other investors that are third parties independent of the Company and its connected persons. It is expected that the Placing Shares will be placed to not less than six Placees.

Number of Placing Shares

Assuming the Placing Shares are fully placed, the maximum number of 200,000,000 Placing Shares under the Placing represents approximately 20.00% of the issued share capital of the Company as at the date of this announcement, and approximately 16.67% of the issued share capital of the Company as enlarged by the issue of the Placing Shares. The maximum aggregate nominal value of the Placing Shares under the Placing will be HK$2,000,000.

Placing Price

The Placing Price is HK$0.25 per Placing Share which represents:

1. a discount of approximately 16.67% to the closing price of HK$0.30 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and
2. a discount of approximately 19.09% to the average closing price of HK$0.309 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.

Placing Shares

The Placing Shares will be allotted and issued under the General Mandate granted to the Board at the AGM held on 20 September 2019 pursuant to which the Board is authorised to allot, issue and deal with up to 200,000,000 Shares. As at the date of this announcement, the Company had not utilised the General Mandate and the maximum of 200,000,000 Placing Shares under the Placing represents approximately 100% of the entire General Mandate.

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

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Ranking of Placing Shares

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

Application for listing

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, inter alia:

1. the Board having approved the Placing and the entering into and performance of the Company's obligations under the Placing Agreement;
2. the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in the Placing Shares;
3. the Company obtaining all necessary consent and approval (if any) from the relevant authorities in respect of the transactions contemplated under the Placing Agreement, if applicable; and
4. all representations and warranties as set out in the Placing Agreement remain true and correct and that the Company has not breached any of the undertakings set out therein.

The parties to the Placing Agreement shall use their best endeavours to procure the conditions to be fulfilled at or before 8:00 a.m. (Hong Kong time) on 30 September 2020. If (i) the above condition is not satisfied and on or before 8:00 a.m. on 29 September 2020, or such later date as may be agreed between the Company and the Placing Agent, or (ii) completion of the Placing does not take place on a date no later than tenth (10th) Business Day after the date of the Placing Agreement, or such later date to be agreed between the Company and the Placing Agent, the obligations and liabilities of the Placing Agent and the Company under the Placing shall be null and void and neither the Company nor the Placing Agent shall have any claim against the other for costs, damages, compensation or otherwise.

Completion

Completion of the Placing shall take place on the first Business Day after the date upon which the last of the Conditions to be satisfied shall have been so satisfied, provided that it shall take place on a date no later than the tenth (10th) Business Day after the date of this Agreement (or such other time and/or date as the Company and the Placing Agent may agree in writing) (the "Completion Date").

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Termination of the Placing Agreement

If any of the following events occur at any time prior to 8:30 a.m. on the Completion Date, the Placing Agent may terminate the Placing Agreement without liability to the Company by the Placing Agent giving notice in writing to the Company, which notice may be given at any time prior to 8:00 a.m. (Hong Kong time) on the Completion Date:

1. there develops, occurs or comes into force:
2. 1. any new law or regulation in existing laws or regulations in any relevant jurisdiction which in the opinion of the Placing Agent has or is likely to have a material adverse effect on the financial position of the Company and/or of the Group as a whole; or
   2. any event, development or change (whether or not forming part of a series of events or changes occurring or continuing before, or and/or after the date hereof and including an event of change in relation to or a development of an existing state of affairs) in local, national or international monetary, economic, financial, political or military conditions which in the opinion of the Placing Agent is or would be materially adverse to the success of the Placing; or
   3. any event, development or change (whether or not forming part of a series of events or changes occurring or continuing before, or and/or after the date hereof and including an event of change in relation to or a development of an existing state of affairs) in local, national or international securities market conditions or currency exchange rates or foreign exchange rates or foreign exchange controls which in the sole judgement of the Placing Agent is or would be materially adverse to the success of the Placing; or makes it impracticable or inadvisable or inexpedient to proceed therewith; or
   4. a general moratorium on commercial banking activities in Hong Kong declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in Hong Kong; or
   5. a change or development in Taxation which constitutes a material adverse effect on the Group as a whole or the Placing Shares or the transfer thereof; or
   6. any outbreak or escalation of hostilities or act of terrorism involving Hong Kong or the declaration by Hong Kong of a national emergency or war; or
   7. any suspension of dealings in the Shares for more than three (3) Business Days (other than as a result of the Placing); or

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1. 1. any moratorium, suspension or material restriction on trading in shares or securities generally on the Stock Exchange due to exceptional financial circumstances or otherwise at any time prior to the Closing Date; or
   2. instigation of any litigation or claim of material importance by any third party against any member of the Group; or
2. any breach of any of the representations, warranties and undertakings by the Company set out in the Placing Agreement comes to the knowledge of the Placing Agent or any event occurs or any matter arises on or after the date of the Placing Agreement and prior to the Completion Date which if it had occurred or arisen before the date of the Placing Agreement would have rendered any of the representations, warranties and undertakings untrue or incorrect in any respect or any such breach or failure is material or (in the opinion of the Placing Agent) is or would materially and adversely affect the financial position or business of the Company and/or of the Group as a whole or is or would be materially adverse to the success of the Placing, or there has been a breach of, or failure to perform, any other provision of the Placing Agreement on the part of the Company; or
3. there is any such adverse change, or development involving a prospective adverse change in the general affairs, condition, results of operations or prospects, management, business, stockholders' equity or in the financial or trading position of the Company and/or of the Group as a whole which in the opinion of the Placing Agent is materially adverse to the success of the Placing.

REASONS FOR THE PLACING AND USE OF PROCEEDS

The Group is a full-service restaurant group in Hong Kong offering Cantonese dining service and banquet service, including wedding banquet service. The Group currently operates Chinese full- service restaurants under two brand names, namely, brands with the word(s) "煌府 (Palace)" and "Royal Courtyard (煌苑)".

The Board considers that the Placing represents a good opportunity for the Company to raise additional funds for general working capital and to widen the Company's shareholder base. The terms of the Placing Agreement (including the Placing Price and the placing commission) were determined after arm's length negotiations between the Company and the Placing Agent. The Directors (including the independent non-executive Directors) consider that the terms of the Placing Agreement (including the Placing Price and the placing commission) are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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$50 million and approximately HK$49 million, respectively. The Company intends to use such net proceeds for the general working capital of

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the Group and improve the cash position of the Group which then can help establishing and strengthening the existing and future business of the Group. The net placing price per Placing Share will be HK$0.244.

EQUITY FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST 12 MONTHS

The Company has not conducted any equity fund raising activities in the past 12 months from 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:

	(i) As at date of	(ii) Immediately upon
Name of Shareholders	this announcement	completion of the Placing
		Approximate %		Approximate %
	Number of	of total Shares	Number of	of total Shares
	Shares held		in issue	Shares held		in issue
Agile Valley Limited	662,500,000	66.25		662,500,000	55.21
Bright Firewood Limited	22,500,000	2.25		22,500,000	1.87
Vast Exquisite Limited	15,000,000	1.50		15,000,000	1.25
Public Shareholders:
The Placees	-		-	200,000,000	16.67
Other public Shareholders	300,000,000	30.00		300,000,000	25.00
Total	1,000,000,000	100.00	1,200,000,000	100.00

Shareholders and potential investors should note that completion of the Placing is subject to fulfillment of the conditions under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

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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 20 September
	2020
"Board"	the board of Directors of the Company
"Business Day(s)"	a day other than a Saturday, Sunday or public holiday or a day
	on which typhoon signal no. 8 or above or a "black" rainstorm
	warning is hoisted in Hong Kong, on which banks are open for
	commercial business in Hong Kong
"Company"	Palace Banquet Holdings Limited (首 灃 控 股 有 限 公 司), an
	exempted company incorporated in the Cayman Islands with
	limited liability on 7 June 2018, the Shares of which are listed on
	the Main Board of the Stock Exchange (stock code: 1703)
"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 by the Shareholders at
	the AGM to allot, issue and deal with up to 20% of the then issued
	share capital of the Company as at the date of the AGM
"Group"	the Company and its subsidiaries from time to time
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	Hong Kong Special Administrative Region of the People's
	Republic of China
"Independent Third Party(ies)"	an individual(s) or a company(ies) who or which is/are independent
	of and not connected with (within the meaning of the Listing
	Rules) the Company as far as the Directors are aware after having
	made all reasonable enquiries
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange

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"Placee(s)"	any individuals, corporate, 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 200,000,000 Placing Shares pursuant to the
	terms of the Placing Agreement
"Placing Agent"	Tai Shing Stock Investment Company Limited, a licensed
	corporation to carry on business in Type 1 (dealing in securities),
	Type 4 (advising on securities) and Type 9 (asset management)
	regulated activity under the Securities and Futures Ordinance
	(Chapter 571 of the Laws of Hong Kong)
"Placing Agreement"	the conditional placing agreement entered into between the
	Company and the Placing Agent dated 18 September 2020 in
	relation to the Placing
"Placing Price"	HK$0.25 per Placing Share
"Placing Shares"	up to 200,000,000 new Shares to be placed pursuant to the Placing
	Agreement
"Share(s)"	the ordinary share(s) of HK$0.01 each in the share capital of the
	Company
"Shareholder(s)"	the holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"%"	per cent.
	By Order of the Board
	Palace Banquet Holdings Limited
	Chan Shou Ming
	Chairman and Executive Director

Hong Kong, 18 September 2020

As at the date of this announcement, the executive directors of the Company are Mr. Chan Shou Ming, Ms. Chen Xiao Ping, Ms. Qian Chunlin and Mr. Tam Kar Wai; and the independent non- executive directors of the Company are Mr. Chan Koon Yuen Windaus, Mr. Ng Kwok Tung and Mr.Yue Ming Wai Bonaventure.

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