Apollo Future Mobility Group Limited — Capital/Financing Update 2011

Sep 28, 2011

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 appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the shares in the Company.

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MING FUNG JEWELLERY GROUP LIMITED 明豐珠寶集團有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 860)

DISCLOSEABLE TRANSACTION

The Board wishes to announce that on 28 September 2011, after trading hours, the Purchaser, a wholly-owned subsidiary of the Company, as purchaser, the Company as the Purchaser’s holding company, the Vendor as vendor and the Guarantor as guarantor entered into the Agreement pursuant to which the Purchaser has agreed to acquire, and the Vendor has agreed to sell, the Sale Shares and the Shareholders Loan at a total consideration of HK$400,000,000, which will be satisfied in full by the issue and allotment by the Company to the Vendor the Consideration Shares at Completion. The Guarantor will guarantee to the Purchaser the full, due and punctual performance by the Vendor of all its obligations under the Agreement.

On the basis that the issued share capital of the Company comprises 3,648,960,626 Shares as at the date of this announcement, the Consideration Shares represent (i) approximately 18.27% of the issued share capital of the company as at the date of this announcement; and (ii) approximately 15.45% of the issued share capital of the Company as enlarged by the allotment and issue of the Consideration Shares.

Subject to the satisfaction or (as the case may be) waiver of all the conditions precedent under the Agreement, Completion shall take place on the Completion Date or such other time as may be agreed between the Purchaser and the Vendor.

As the Acquisition exceeds 5% but does not exceed 25% of one or more of the applicable percentage ratios (as defined in the Listing Rules), the Acquisition constitutes a discloseable transaction for the Company under the Listing Rules.

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The Consideration Shares will be allotted and issued under a specific mandate to be sought at the EGM. The Board will seek approval from the Shareholders at the EGM for the grant of a specific mandate for the issue and allotment of the Consideration Shares.

Application will be made to the Stock Exchange for the listing of and permission to deal in the Consideration Shares and a circular containing, among other things, further details of the Agreement and other relevant information as required by the Listing Rules will be despatched to the Shareholders as soon as possible. A notice of the EGM will be despatched to the Shareholders together with the said circular.

THE ACQUISITION

Reference is made to the announcement of the Company dated 30 May 2011 in relation to, among other matters, the entering into the Letter of Intent between the Purchaser and the Vendor.

The Board wishes to announce that on 28 September 2011 after trading hours, the Purchaser, a wholly-owned subsidiary of the Company, as purchaser, the Company as the Purchaser’s holding company, the Vendor as vendor and the Guarantor as guarantor entered into the Agreement pursuant to which the Purchaser has agreed to acquire, and the Vendor has agreed to sell, the Sale Shares and the Shareholders Loan at a total consideration of HK$400,000,000, which will be satisfied in full by the issue and allotment by the Company to the Vendor the Consideration Shares at Completion. The Guarantor will guarantee to the Purchaser the full, due and punctual performance by the Vendor of all its obligations under the Agreement.

THE AGREEMENT

Date

28 September 2011

Parties

Purchaser	:	the Purchaser
Company	:	the Purchaser’s holding company
Vendor	:	the Vendor
Guarantor	:	the Guarantor

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the Guarantor, the Vendor and its ultimate beneficial owner are third parties independent of, and not connected to, the Company and its connected persons (as defined in the Listing Rules).

Assets to be acquired

Under the Agreement, the Purchaser has agreed to purchase and the Vendor has agreed to sell the Sale Shares, which represents the entire issued share capital of the Target Company and the Shareholders Loan.

The Target Company is an investment holding company wholly-owned by the Vendor as at the date of this announcement. For further information on the Target Company, please refer to the section headed “Information on the Target Group” below.

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Consideration

The consideration of HK$400,000,000 will be satisfied in full by the issue and allotment by the Company to the Vendor the Consideration Shares at Completion.

Under the Agreement, the Consideration Shares will, upon issue and fully paid, rank pari passu in all respects with all the existing Shares then in issue. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

On the basis that the issued share capital of the Company comprises 3,648,960,626 Shares as at the date of this announcement, the Consideration Shares represent (i) approximately 18.27% of the issued share capital of the company as at the date of this announcement; and (ii) approximately 15.45% of the issued share capital of the Company as enlarged by the allotment and issue of the Consideration Shares.

The Consideration Shares will be issued and allotted at an issue price of HK$0.60 per Consideration Share which represents (i) a premium of approximately 19.17% to the closing price of the Shares of HK$0.485 as quoted on the Stock Exchange as at the Last Trading Day; (ii) a premium of approximately 21.83% to the average closing price of the Shares of approximately HK$0.469 as quoted on the Stock Exchange for the 5 consecutive trading days up to and including the Last Trading Day; and (iii) a premium of approximately 18.83% to the average closing price of the Shares of approximately HK$0.487 as quoted on the Stock Exchange for the 10 consecutive trading days up to and including the Last Trading Day. Based on the closing price of the Shares of HK$0.485 as quoted on the Stock Exchange as at the Last Trading Day, the Consideration Shares would have a total market value of approximately HK$323,330,000.

The consideration and also the issue price of HK$0.60 per Consideration Share was arrived at based on normal commercial terms and after arm’s length negotiations between the parties to the Agreement and by reference to the warranty and guarantee by the Vendor and the Guarantor, on a joint and several basis, to the Purchaser, that the Total Net Profits shall not be less than HK$120,000,000.

The Board considers that the consideration for the Acquisition and the issue price of HK$0.60 per Consideration Shares is fair and reasonable and in the interests of the Group and the Shareholders as a whole.

Conditions precedent

Completion of the Agreement is conditional upon the following conditions precedent:

• (a) the Purchaser having completed and satisfied (acting reasonably) with the results of the Due Diligence Investigation;

• (b) the Purchaser having received and satisfied (acting reasonably) (in substance and form) a legal opinion issued by a firm of lawyers qualified to practise in Italy covering (i) the Project Company having been duly established and validly subsisting; (ii) the Project Company having obtained all the licences and permits which are necessary for conducting the Business and such licences and permits are in full force and effect; and (iii) 90.10% of the equity interest of the Project Company is legally and beneficially owned by the Company free from all charges, liens, equities, encumbrances, claims or restrictions of any nature whatsoever and together with all rights attaching to or accruing to it;

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• (c) the Purchaser having received and satisfied (acting reasonably) (in substance and form) a legal opinion issued by a firm of lawyers qualified to practise in the Luxembourg covering (i) the Company and the Vendor having been duly established and validly subsisting; and (ii) updated lists of directors and shareholders of each of the Luxembourg Company;

• (d) the approval by the Shareholders of the Company (or, as the case may be, the independent Shareholders of the Company) at the EGM of the Agreement and the transactions contemplated hereby (including without limitation the issue of the Consideration Shares) and all other consents and acts required under the Listing Rules having been obtained and completed;

• (e) the Listing Committee of the Stock Exchange having granted or having agreed to grant the listing of, and permission to deal in, the Consideration Shares;

• (f) if required, all approvals, consents, authorisations and licences (so far as are necessary) in relation to the transactions contemplated under the Agreement having been obtained from the relevant governmental authorities;

• (g) the Purchaser being satisfied (acting reasonably), from the date of the Agreement and at any time before Completion, that the Warranties remain true and accurate in all material respects, not misleading or in breach in any material respect and that no events have suggested that there were any breach in any material respect of any Warranties or other provisions of the Agreement by the Vendor;

• (h) there has not been any Material Adverse Change in respect of any member of the Target Group; and

• (i) if necessary, the obtaining of the approval by the shareholders of the Guarantor (or, as the case may be, the independent shareholders of the Guarantor) at the EGM of this Agreement and the transactions contemplated hereby (including without limitation the issue of the Consideration Shares) and all other consents and acts required under the Listing Rules having been obtained and completed.

The Vendor shall use its best endeavours to satisfy the above conditions (except conditions (d) and (e)) whereas the Purchaser shall use its reasonable endeavours to satisfy the above conditions (d) and (e) at any time on or before 5 p.m. on the Long Stop Date.

The Purchaser may, at its absolute discretion at any time, waive in writing any of the above conditions (except conditions (d) and (e)). If all the above conditions have not been satisfied or waived by 5 p.m. on the Long Stop Date then the Agreement shall lapse and has no further effect and the parties shall be released from all obligations under it.

Completion

Subject to the satisfaction or waiver of the above conditions, Completion shall take place at 4 p.m. on the Completion Date or at such other time as may be agreed between the parties to the Agreement.

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Profits and other guarantee

In consideration of the Purchaser agreeing to purchase the Sale Shares and the Shareholders Loan upon and subject to the terms and conditions contained in the Agreement, the Vendor and the Guarantor jointly and severally warrant and guarantee to the Purchaser that the Total Net Profits shall not be less than HK$120,000,000.

The Guarantor has also irrevocably, unconditionally and absolutely guaranteed to the Purchaser the full, due and punctual performance of all the obligations of the Vendor under or pursuant to the Agreement and, in the case of failure by the Vendor, fully, duly or punctually to perform such obligations, shall itself forthwith on demand perform such obligations with the Purchaser that the Guarantor will perform such obligations on the Vendor’s behalf and shall indemnify and keep indemnified on demand the Purchaser from and against the losses, reasonable costs and expenses which it may sustain, incur or suffer by reason of any default or delay on the part of the Vendor in the performance of the said obligations and fulfillments of the said Warranties pursuant to the terms of the Agreement.

INFORMATION ON THE TARGET GROUP

Corporate structure

As at the date of this announcement, the Target Company has an authorised share capital of EUR$540,000 divided into 54,000 shares of EUR$10 each, of which 4,000 share having been issued to and is fully paid up by the Vendor.

The corporate structure of the Target Company as at the date of this announcement is as follows:

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----- Start of picture text -----

Vendor
(Hong Kong)
100%
Target Company
LVMH
(Luxembourg)
90.1% 9.9%
Project Company
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The Project Company is the sole owner and manufacturer of fine writing instruments and accessories which bear the trademark “OMAS”.

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Financial information

Below is the audited financial information of the Target Company for the two years ended 31 December 2009 and 31 December 2010 extracted from its audited financial statements:

	For the	For the
	year ended	year ended
	31 December	31 December
	2009	2010
	(audited)	(audited)
	EUR$	EUR$
Profit (loss) before taxation and	(8,182.17)	(7,565.12)
extraordinary items	(approximately	(approximately
	HK$(88,300))	HK$(77,800))
Profit (loss) after taxation and	(8,182.17)	(7,565.12)
extraordinary items	(approximately	(approximately
	HK$(88,300))	HK$(77,800))
Net asset value	(45,578.54)	(60,618.89)
	(approximately	(approximately
	HK$(491,800))	HK$(623,800))

Below is the audited financial information of the Project Company for the two years ended 31 December 2009 and 31 December 2010 extracted from its audited financial statements:

	For the	For the
	year ended	year ended
	31 December	31 December
	2009	2010
	(audited)	(audited)
	EUR$	EUR$
Revenue	2,074,296.01	2,459,262.83
	(approximately	(approximately
	HK$22,381,700)	HK$25,305,800)
Profit (loss) before taxation and	(1,440,905.99)	(896,390.71)
extraordinary items	(approximately	(approximately
	HK$(15,547,400))	HK$(9,223,900))
Profit (loss) after taxation and	(1,480,324.60)	(938,659.57)
extraordinary items	(approximately	(approximately
	HK$(15,972,700))	HK$(9,658,800))
Net asset value	4,009,548.34	3,570,888.77
	(approximately	(approximately
	HK$43,263,000)	HK$36,744,400)

Note: The HK$ figures for the years ended 31 December 2009 and 2010 are translated at the average exchange rates in 2009 (Euro 1.00 = HK$10.79) and 2010 (Euro 1.00 = HK$10.29) respectively. The exchange rates are obtained from Bloomberg.

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REASONS FOR THE ACQUISITION

The principal activities of the Group comprise the manufacture, sale, trading, distribution, processing and retailing of jewellery products and luxury consumer goods including Gucci timepieces. The Directors considered that the Acquisition represented a good opportunity for the Company to strengthen its collaboration with the Guarantor and make use of its extensive and quality distribution networks in Greater China for promoting and distributing the products of the Project Company. It will also create a platform for business cooperation with LVMH, an international reputable brand of luxury consumer goods, and help broaden the Group’s source of income. The Board is of the view that the Project Company, being the sole owner and the manufacturer of the fine writing instruments and accessories which bear the trademark “OMAS”, has much potential for the Company’s business expansion in the sector of luxury consumer goods. The Directors believe that the Acquisition is in line with the business plan of the Group and, couple with the expertise of the Group in the manufacture, sale, trading, distribution, processing and retailing of jewellery products and luxury consumer goods, the Acquisition is in the best interest of the Company and the terms of the Agreement are in normal commercial terms, which are fair and reasonable and in the interests of the shareholders of the Company as a whole.

LISTING RULES IMPLICATIONS

As the Acquisition exceeds 5% but does not exceed 25% of one or more of the applicable percentage ratios (as defined in the Listing Rules), the Acquisition constitutes a discloseable transaction for the Company under the Listing Rules.

The Consideration Shares will be allotted and issued under a specific mandate to be sought at the EGM. The Board will seek approval from the Shareholders at the EGM for the grant of a specific mandate for the issue and allotment of the Consideration Shares.

Application will be made to the Stock Exchange for the listing of and permission to deal in the Consideration Shares and a circular containing, among other things, further details of the Agreement and a notice convening the EGM to consider and (if thought fit) to approve, among other matters, the Agreement and the transactions contemplated thereunder (including the grant of the specific mandate for the allotment and issue of the Consideration Shares) will be despatched to the Shareholders in accordance with the Listing Rules.

DEFINITIONS

“Acquisition” the proposed acquisition of the entire issued share capital of the Target Company under the Agreement

“Agreement” the agreement dated 28 September 2011 entered into between the Purchaser as purchaser, the Company as the Purchaser’s holding company, the Vendor as vendor, and the Guarantor as guarantor in relation to the sale and purchase of the entire issued share capital of the Target Company

• “associates” as defined in the Listing Rules

• “Board” the board of Directors

“Business” the sole owner and manufacturer of fine writing instruments and accessories which bear the trademark “OMAS”

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“Business Days”	a day (not a Saturday) on which licensed banks in Hong Kong are
	generally open for business during their normal business hours
“Company”	Ming Fung Jewellery Group Limited, a company incorporated
	under the laws of the Cayman Islands, the Shares of which are
	listed on the Stock Exchange (Stock Code: 860)
“Completion”	completion of the sale and purchase of the Sale Shares and the
	Shareholders Loan pursuant to the Agreement
“Completion Date”	the date which is the fifth (5th) Business Day after the date on
	which the conditions precedent under the Agreement are satisfied
	or waived or such other date as the Vendor and the Purchaser may
	agree in writing
“Consideration Shares”	666,666,667 new Shares to be allotted and issued to the Vendor or
	its nominee(s) as settlement of part of the consideration under the
	Agreement
“Directors”	directors of the Company
“Due Diligence	the legal, financial, business and other due diligence investigation
Investigation”	in respect of the assets, liabilities, businesses, prospects and other
	affairs of the Target Group
“EGM”	extraordinary general meeting of the Company
“Group”	the Company and its subsidiaries
“Guarantor”	Hengdeli Holdings Limited, a company incorporated under the
	laws of the Cayman Islands, the shares of which are listed on
	the Stock Exchange (Stock Code: 3389) and the ultimate holding
	company of the Vendor
“Hong Kong”	Hong Kong Special Administrative Region
“Last Trading Day”	27 September 2011, the trading day immediately preceding the
	date of the Agreement
“Letter of intent”	a non-legally binding letter of intent entered into on 30 May
	2011 between the Purchaser and the Vendor in relation to the
	Acquisition
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Long Stop Date”	31 January 2012 or such later date to be agreed between the
	Purchaser and the Vendor in writing

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“LVMH”	LVMH Italia S.P.A
“Material Adverse	any change which has a material and adverse effect on the
Change”	financial position, business or operations of the Target Group as a
	whole
“Project Company”	Omas SRL, a company incorporated under the laws of Italy owns
	as to 90.1% by the Target Company and 9.9% by LVMH as at the
	date of this announcement
“Purchaser”	Eternal Top Investment Limited, a company incorporated under
	the laws of Hong Kong and the wholly owned subsidiary of the
	Company
“Sale Shares”	the issued four thousand (4,000) shares of the value of EUR$10.00
	each in the authorized share capital of the Target Company legally
	and beneficially owned and held by and registered in the name of
	the Vendor
“Shareholders”	Shareholders of the Company
“Shareholders Loan”	the shareholder’s loan due by any member of the Target Group to
	the Vendor that remains outstanding as at the Completion Date
“Share(s)”	ordinary share(s) of HK$0.01 each of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Target Company”	Omas International S.A., a company incorporated under the laws
	of Luxembourg, the entire issued share capital of which is held by
	the Vendor as at the date of this announcement
“Target Group”	the Target Company and the Project Company and its subsidiaries
	for the time being and from time to time, and the expressions
	“member of the Target Group” and “Target Group Company”
	shall be construed accordingly
“Total Net Profits”	the total net profits of the Target Group after tax (excluding
	exceptional and extraordinary items) calculated on a consolidated
	basis for the financial years ending 2012, 2013 and 2014 provided
	that if such figure is less than zero, the Total Net Profit shall be
	deemed as zero
“Vendor”	Hengdeli International Company Limited, a company incorporated
	under the laws of Hong Kong and having its registered office at
	Room 301, 3rd Floor, Lippo Sun Plaza, 28 Canton Road, Tsim
	Sha Tsui, Kowloon, Hong Kong

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“Warranties” the warranties, representatives and undertakings given by the Vendor under the Agreement

“EUR$” EURO, the lawful currency of the European Union

“HK$” Hong Kong dollars, the lawful currency of Hong Kong

“%” per cent

By order of the board Ming Fung Jewellery Group Limited Wong Chi Ming, Jeffry Chairman

Hong Kong, 28 September 2011

As at the date of this announcement, the Board comprises Mr. Wong Chi Ming, Jeffry, Mr. Chung Yuk Lun and Mr. Yu Fei, Philip as executive Directors, and Mr. Jiang Chao, Mr. Chan Man Kiu and Mr. Tam Ping Kuen, Daniel as independent non-executive directors.

• For identification purpose only

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