CM Energy Tech Co., Ltd. — Capital/Financing Update 2019

Jan 11, 2019

THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and HKSCC take no responsibility for the contents of the Prospectus Documents, 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 the Prospectus Documents.

If you are in any doubt as to any aspect of the Prospectus Documents or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in the Company, you should at once hand the Prospectus Documents to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Dealings in the Rights Shares in both their nil-paid and fully-paid forms may be settled through CCASS established and operated by HKSCC. You should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for details of the settlement arrangements and how such arrangements may affect your rights and interests.

A copy of each of the Prospectus Documents, together with the documents specified in the paragraph headed “13. Documents delivered to the Registrar of Companies in Hong Kong” in Appendix III to this Prospectus, have been registered with the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of any of the Prospectus Documents.

Subject to the granting of listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange, the Rights Shares in both their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Rights Shares on the Stock Exchange or, under contingent situation, such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and the CCASS Operational Procedures in effect from time to time.

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TSC Group Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 206)

RIGHTS ISSUE ON THE BASIS OF ONE (1) RIGHTS SHARE FOR EVERY ONE (1) EXISTING SHARE HELD ON THE RECORD DATE

Financial Adviser to the Rights Issue

Underwriters of the Rights Issue

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Capitalised terms used in this cover page shall have the same meanings as those defined in this Prospectus.

The latest time for acceptance of and payment for the Rights Shares is 4:00 p.m. on Friday, 25 January 2019. The procedures for acceptance and payment for the Rights Shares and for application and payment for excess Rights Shares are set out on pages 15 to 19 of this Prospectus.

It should be noted that the Rights Issue is only partially underwritten and that the Underwriting Agreement contains provisions granting Tonghai Securities the right to terminate the obligations of the Underwriters thereunder on the occurrence of certain events including force majeure. These certain events are set out in the section headed “Termination of the Underwriting Agreement” on pages 8 to 9 of this Prospectus. If the Underwriting Agreement is terminated by Tonghai Securities or does not become unconditional, the Rights Issue will not proceed.

Shareholders should note that the Shares have been dealt in on an ex-rights basis commencing from Wednesday, 2 January 2019 and that dealings in Shares have taken place while the conditions to which the Underwriting Agreement is subject remain unfulfilled or waived (as appropriate). Any Shareholders or other persons dealing in Shares up to the date on which all conditions to which the Rights Issue is subject are fulfilled or waived (as appropriate) (which is expected to be 4:00 p.m. on Tuesday, 29 January 2019), will accordingly bear the risk that the Rights Issue cannot become unconditional and may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares, who is in any doubt about his/her/its position, is recommended to consult his/her/its own professional advisers.

11 January 2019

CONTENTS

		Page
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		ii
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
TERMINATION OF THE UNDERWRITING AGREEMENT . . . . . . . . . . . . . . .		8
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		10
APPENDIX I	– FINANCIAL INFORMATION OF THE GROUP . . . . .	I-1
APPENDIX II	– UNAUDITED PRO FORMA FINANCIAL
	INFORMATION OF THE GROUP . . . . . . . . . . . . . .	II-1
APPENDIX III	– GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . .	III-1

– i –

EXPECTED TIMETABLE

The expected timetable for the Rights Issue is set out below. The expected timetable is subject to change, and any changes will be announced by the Company as and when appropriate.

Event	2019
First day of dealings in nil-paid Rights Shares	. . . . . . . . . . . . . . . . . Tuesday, 15 January
Latest time for splitting nil-paid Rights Shares	. . . . . . . . . . . . . . . 4:30 p.m. on Thursday,
	17 January
Last day of dealings in nil-paid Rights Shares .	. . . . . . . . . . . . . . . . . Tuesday, 22 January
Latest time for acceptance of, and payment for,
the Rights Shares and the applications for
excess Rights Shares . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . 4:00 p.m. on Friday,
	25 January
Latest Time for Termination and for
the Rights Issue to become unconditional . .	. . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday,
	29 January
Announcement of results of the Rights Issue . .	. . . . . . . . . . . . . . . . . . Friday, 1 February
Refund cheques to be despatched in relation to
wholly or partially unsuccessful applications
for excess Rights Shares on or before . . . . . .	. . . . . . . . . . . . . . . . . Monday, 4 February
Certificates for fully paid Rights Shares to be
despatched on or before . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . Monday, 4 February
Commencement of dealings in the fully-paid Rights Shares . . . . . . . 9:00 a.m. on Friday,
	8 February

– ii –

EXPECTED TIMETABLE

EFFECT OF BAD WEATHER ON THE LATEST TIME FOR ACCEPTANCE OF AND PAYMENT FOR THE RIGHTS SHARES

The Latest Time for Acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will not take place as shown if there is a tropical cyclone warning signal no. 8 or above, or a “black” rainstorm warning:

• (1) in force in Hong Kong at any local time before 12:00 noon and no longer in force after 12:00 noon on the Last Acceptance Date. Instead the Latest Time for Acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will be extended to 5:00 p.m. on the same Business Day;

• (2) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on the Last Acceptance Date. Instead the Latest Time for Acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warnings in force in Hong Kong at any time between 9:00 a.m. and 4:00 p.m.

If the Latest Time for Acceptance and application and payment for excess Rights Shares does not take place on the Last Acceptance Date, the dates mentioned in the expected timetable may be affected.

The expected timetable set out above is indicative only and is subject to change, and any changes will be announced by the Company in separate announcement(s) as and when appropriate.

– iii –

DEFINITIONS

In this Prospectus, unless the context otherwise requires, the following expressions shall have the following meanings:

• “acting in concert”

• has the meaning ascribed to it under the Takeovers Code

• “AOG”

• Alliance Offshore Group Ltd., a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company

• “Articles”

• the articles of association of the Company

• “associate(s)”

• has the same meaning ascribed to it under the Listing Rules

• “Authorised Share Capital Increase”

• the proposed increase in the authorised share capital of the Company from HK$200 million divided into 2,000,000,000 Shares to HK$1,000 million divided into 10,000,000,000 Shares

• “Board”

• the board of Directors

• “Business Day(s)”

• any weekday(s) (other than a Saturday, Sunday or public holiday or a day on which a tropical cyclone warning signal No. 8 or above or a black rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 4:00 p.m.) on which banks are generally open for business in Hong Kong

• “CCASS”

• Central Clearing and Settlement System established and operated by HKSCC

• “CCBI”

• CCB International Capital Limited, a corporation licensed to carry on business in Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

• “Circular”

• the circular of the Company dated 11 December 2018, in relation to, among other things, the Rights Issue

– 1 –

DEFINITIONS

• “CM Group”

• “CM Industry”

• “Companies Law”

• “Companies Miscellaneous Provisions Ordinance”

• “Companies Ordinance”

• “Company”

• “connected person(s)”

• “controlling shareholder(s)”

• “Director(s)”

• “EAF(s)”

• “EGM”

• “Enlarged Group”

• China Merchants Group Limited* (招商局集團有限公 司), a company incorporated in the PRC with limited liability. It is wholly owned by the State-owned Assets Supervision and Administration Commission of the State Council of the PRC

• China Merchants Industry Holdings Co., Ltd., a company incorporated in Hong Kong with limited liability and is indirectly wholly owned by CM Group

• the Companies Law of the Cayman Islands

• the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong)

• the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)

• TSC Group Holdings Limited, a company incorporated in Cayman Islands with limited liability and the shares of which are listed on the main board of the Stock Exchange (stock code: 206)

• has the meaning ascribed thereto under the Listing Rules

• has the meaning ascribed thereto under the Listing Rules

• the director(s) of the Company

• the excess application form(s) of application for use by the Qualifying Shareholders who wish to apply for excess Rights Shares

• the extraordinary general meeting of the Company convened and held on 28 December 2018 at which resolution(s) will be proposed to consider, and, if thought fit, to approve, among other things, the Authorised Share Capital Increase and the Rights Issue

the Group and the Target Group

– 2 –

DEFINITIONS

• “Excluded Shareholder(s)”

• “Fund”

• “Group”

• “HKSCC”

• “Hong Kong”

• “Independent Shareholder(s)”

• “Independent Third Party(ies)”

• “Irrevocable Undertaking”

• “JV” or “Target Company”

• “Last Acceptance Date”

• “Last Trading Day”

the Overseas Shareholder(s) whose registered addresses in the Company’s register of members as at the Record Date are in places where the Directors, after making enquiries, consider it necessary or expedient on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place not to offer the Rights Shares to such Shareholder(s), if any

• China Merchants & Great Wall Ocean Strategy & Technology Fund (L.P.), an exempted limited partnership registered in the Cayman Islands

• the Company and its subsidiaries

• Hong Kong Securities Clearing Company Limited

• Hong Kong Special Administrative Region of the PRC

• any Shareholder(s) who are not required to abstain from voting at the EGM under the Listing Rules

• parties that are independent of the Company and its connected persons

• an irrevocable undertaking dated 8 November 2018 given by Prime Force in favour of the Company as described in the section headed “Irrevocable Undertaking”

• Wealthy Marvel Enterprises Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Fund as at the Latest Practicable Date

• 25 January 2019, being the last day for acceptance and payment of the Rights Shares, or such other date as the Company may determine and notify the Underwriters in writing

8 November 2018, being the last trading day of the Shares on the Stock Exchange immediately prior to the publication of the Rights Issue Announcement

– 3 –

DEFINITIONS

• “Latest Practicable Date”

• 4 January 2019, being the latest practicable date prior to the printing of this Prospectus for the purpose of ascertaining information contained herein

• “Latest Time for Acceptance”

• 4:00 p.m. on the Last Acceptance Date

• “Latest Time for Termination”

• 4:00 p.m. on 29 January 2019 or such later time or date as may be agreed between the Underwriters and the Company in writing, being the latest time to terminate the Underwriting Agreement

• “Listing Committee” has the same meaning ascribed to it under the Listing Rules

• “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange

• “Overseas Shareholder(s)” Shareholder(s) whose address(es) on the register of members of the Company on the Record Date are outside Hong Kong

• “PAL(s)”

• the provisional allotment letter(s) to be issued to the Qualifying Shareholders for the Rights Issue

• “Posting Date”

• Friday, 11 January 2019 or such other day as may be agreed between the Company and the Underwriters, being the date of despatch of the Prospectus Documents to the Qualifying Shareholders or the Prospectus to the Excluded Shareholders (as the case may be)

• “PRC”

• the People’s Republic of China, and for the purpose of this Prospectus, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Prime Force”

• Prime Force Investment Corporation, a company incorporated in the British Virgin Islands, which is wholly owned by the Fund and is the controlling shareholder of the Company

• “Prospectus”

this prospectus

• “Prospectus Documents”

• this Prospectus, the PAL(s) and the EAF(s)

– 4 –

DEFINITIONS

• “Qualifying Shareholders”

• “Record Date”

• “Registrar”

• “Rig Asset(s)”

• “Rights Issue”

• “Rights Issue Announcement”

• “Rights Share(s)”

• “SFC”

• “SFO”

• “Share(s)”

• “Shareholder(s)”

• “Specific Mandate”

• Shareholder(s), whose names appear on the register of members of the Company as at the Record Date, other than the Excluded Shareholder(s)

• 10 January 2019, being the date by reference to which entitlements to the Rights Issue will be determined

• the Company’s branch share registrar and transfer office in Hong Kong, which is Tricor Investor Services Limited of Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong

• two units of self-elevating drilling units

• the proposed issue of Rights Shares on the basis of one (1) Rights Share for every one (1) existing Share held by the Qualifying Shareholders on the Record Date at the Subscription Price payable in full on acceptance and otherwise subject to the conditions set out in the Underwriting Agreement and the Prospectus Documents

• the announcement of the Company dated 8 November 2018 in relation to, among others, the Rights Issue

• new Share(s) to be allotted and issued under the Rights Issue, being up to 1,473,156,204 new Shares

• the Securities and Futures Commission of Hong Kong

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ordinary share(s) of HK$0.10 each in the share capital of the Company

• holder(s) of the Share(s)

• the specific mandate granted to the Directors by the independent shareholders pursuant to an ordinary resolution passed at the extraordinary general meeting held on 5 February 2018

– 5 –

DEFINITIONS

• “SPV1”

• “SPV2”

• “Stock Exchange”

• “Subscription”

• “Subscription and Joint Venture Agreement”

• “Subscription and Joint Venture Agreement Announcement”

• “Subscription Price”

• “subsidiary”

• “Takeovers Code”

• “Target Group”

• “Tonghai Securities”

• “Underwriters”

• Well Target Five Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of JV as at the Latest Practicable Date

• Well Target Six Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of JV as at the Latest Practicable Date

• The Stock Exchange of Hong Kong Limited

• the subscription of 50,000,000 shares of US$1.00 each in the JV pursuant to the Subscription and Joint Venture Agreement

• the share subscription and joint venture agreement dated 23 November 2018 entered into between the Fund, AOG and the JV

• the announcement of the Company dated 25 November 2018 in relation to the Subscription and Joint Venture Agreement

• the subscription price in respect of each Rights Share, being HK$0.45 per Rights Share

• has the meaning ascribed to it under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)

• the Hong Kong Code on Takeovers and Mergers (as amended and supplemented from time to time)

• the Target Company and its subsidiaries, collectively

• China Tonghai Securities Limited (formerly known as Oceanwide Securities Company Limited), a licensed corporation to carry on business in Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO

• Tonghai Securities and CCBI

– 6 –

DEFINITIONS

• “Underwriting Agreement”

• “Underwritten Shares”

• “Untaken Shares”

• “HK$”

• “%”

the underwriting agreement dated 8 November 2018 and entered into between the Company and the Underwriters in relation to the Rights Issue

• up to 589,000,000 Rights Shares to be underwritten by Tonghai Securities subject to the terms and conditions of the Underwriting Agreement (representing the shortfall between maximum number of Rights Shares to be issued pursuant to the Rights Issue and the number of Rights Shares to be taken up by Prime Force pursuant to the Irrevocable Undertaking and indicated as may be taken up by Prime Force pursuant to excess application)

• Rights Shares not taken up by the Qualifying Shareholders under PALs or EAFs at or before the Latest Time for Acceptance

• Hong Kong dollar(s), the lawful currency of Hong Kong

• per cent

• For identification purpose only

– 7 –

TERMINATION OF THE UNDERWRITING AGREEMENT

• If, at any time prior to the Latest Time for Termination, there occurs in the

• reasonable opinion of Tonghai Securities: (i) the success of the Rights Issue or the taking up of the Rights Shares by the Shareholders would be in any material respect adversely affected by:

  • (a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in all material respects adversely affect the business or the financial or trading position or prospects of the Group as a whole or the Rights Issue; or

  • (b) 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 of the Underwriting Agreement) of a political, military, financial, economic, currency or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities, armed conflict or act of terrorism, or affecting local securities market or the occurrence of any combination of circumstances which in any material respect adversely affects the business or the financial or trading position or prospects of the Group as a whole or in any material respect adversely prejudices the success of the Rights Issue or the taking up of the Rights Shares by the Shareholders or otherwise makes it inexpedient or inadvisable for the Company or the Underwriters to proceed with the Rights Issue; or

• (ii) any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or material restriction or trading in securities) occurs which in the absolute opinion of Tonghai Securities in any material respect affect the success of the Rights Issue (such success being the taking up of the Rights Shares by the Shareholders) or otherwise in the absolute opinion of Tonghai Securities makes it inexpedient or inadvisable or inappropriate for the Company or the Underwriters to proceed with the Rights Issue; or

• (iii) any change in the circumstances of the Company, its controlling Shareholder or any members of the Group which in the absolute opinion of Tonghai Securities may have material adversely effect on the prospect of the Company; or

• (iv) any event of force majeure occurs, including without limiting the generality thereof, any act of God, war, fire, flood, explosion, epidemic, terrorism, which in any material respect adversely affect the business or the financial or trading position or prospects of the Group as a whole or the Rights Issue; or

• (v) any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole occurs, whether or not ejusdem generis with any of the foregoing; or

– 8 –

TERMINATION OF THE UNDERWRITING AGREEMENT

• (vi) any matter occurs which, had it arisen or been discovered immediately before the date of the Prospectus and not having been disclosed in the Prospectus, would have constituted, in the absolute opinion of Tonghai Securities, a material omission in the context of the Rights Issue; or

• (vii) any suspension in the trading of securities generally or the Company’s securities on the Stock Exchange for a period of more than five (5) consecutive trading days occurs, excluding any halt or suspension in connection with the Rights Issue; or

• (viii) any moratorium, suspension or material restriction on trading of the Shares on the Stock Exchange occurs due to exceptional financial circumstances or otherwise; or

• (ix) there occurs an event or a matter arising which, if it had occurred or arisen before the date of the Underwriting Agreement, would have rendered any of the warranties given by the Company untrue, incorrect, incomplete or misleading in any respect,

Tonghai Securities shall be entitled by notice in writing issued to the Company, served prior to the Latest Time for Termination, to terminate the Underwriting Agreement.

Upon giving the notice of termination in accordance with the terms of the Underwriting Agreement, all obligations of the Underwriters shall cease and determine and none of the parties to the Underwriting Agreement shall have any claim against the other party in respect of any matter or thing arising out of or in connection with the Underwriting Agreement, but without prejudice to the rights of the Company and the Underwriters in respect of any breach of the Underwriting Agreement occurring prior to such termination, and provided that the Company shall remain liable to pay to the Underwriters such fees and expenses according to the terms of the Underwriting Agreement. Indemnities given by the Company in the Underwriting Agreement shall survive notwithstanding termination of the Underwriting Agreement. If Tonghai Securities terminates the Underwriting Agreement, the Rights Issue will not proceed.

– 9 –

LETTER FROM THE BOARD

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TSC Group Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 206)

Executive Directors: Mr. Wang Hongyuan (Executive Chairman) Mr. Jiang Bing Hua (Co-Chairman) Mr. Zhang Menggui, Morgan Non-executive Directors: Mr. Wang Jianzhong Mr. Lou Dongyang Independent Non-Executive Directors: Mr. Chan Ngai Sang, Kenny Mr. Zou Zhendong Mr. Chen Weidong

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands Operations Headquarters: 13788 West Road, Suite 100 Houston Texas 77041 United States of America

Principal place of business in Hong Kong: Units 2706-2709, 27/F One Harbourfront 18 Tak Fung Street Hunghom, Kowloon Hong Kong

11 January 2019

To the Shareholders

Dear Sir or Madam,

RIGHTS ISSUE ON THE BASIS OF ONE (1) RIGHTS SHARE FOR EVERY ONE (1) EXISTING SHARE HELD ON THE RECORD DATE

INTRODUCTION

Reference are made to the Rights Issue Announcement, the announcements of the Company dated 30 November 2018, 6 December 2018 and 7 December 2018 and the Circular dated 11 December 2018, in relation to, among other things, the Rights Issue. The Company will allot and issue not more than 1,473,156,204 Rights Shares at the Subscription Price of HK$0.45 per Rights Share on the basis of one (1) Rights Share for every one (1) existing Share held on the Record Date. The aggregated Subscription Price for the Rights Shares will be not more than approximately HK$662.92 million. The estimated net proceeds from the Rights Issue, if fully subscribed and after deducting the estimated expenses, will be approximately HK$659.75 million, assuming that there is no

– 10 –

LETTER FROM THE BOARD

change in the number of issued Shares on or before the Record Date. The Rights Issue is only partially underwritten. The Rights Issue was approved by the Independent Shareholders at the EGM and the Authorised Share Capital Increase has become effective on 28 December 2018.

The purpose of this Prospectus is to provide you with, among other things, details of the Rights Issue and application and payment for excess Rights Shares, financial information and general information of the Group.

Rights Issue Statistics

Basis of the Rights Issue : One (1) Rights Share for every one (1) existing Share held on the Record Date Subscription Price : HK$0.45 per Rights Share Net price per Rights Share : HK$0.45 per Rights Share (assuming full subscription under the Rights Issue) Number of Shares in issue : 1,473,156,204 Shares as at the Latest Practicable Date Number of Rights Shares to : Up to 1,473,156,204 Rights Shares (assuming no be issued pursuant to the change in the number of issued Shares on or before Rights Issue the Record Date and full subscription under the Rights Issue) Aggregate nominal value of : Up to HK$147,315,620 (assuming no change in the the Rights Shares number of issued Shares on or before the Record Date and full subscription under the Rights Issue) Total number of issued : Up to 2,946,312,408 Shares (assuming no change in the Shares upon completion number of issued Shares on or before the Record Date of the Rights Issue and full subscription under the Rights Issue) Number of Underwritten : The underwriting obligations of Tonghai Securities Shares and the obligations of CCBI to procure subscription for Untaken Shares are several.

Tonghai Securities has agreed to subscribe for, or procure the subscription for, up to 589,000,000 Rights Shares, being all the Underwritten Shares.

CCBI has agreed to procure the subscription for, on a best effort basis, up to 118,970,204 Shares, being any untaken Right Shares other than Rights Shares to be taken up by Prime Force pursuant to the Irrevocable Undertaking and the Underwritten Shares underwritten by Tonghai Securities.

– 11 –

LETTER FROM THE BOARD

For the avoidance of doubt, should CCBI fails to procure the subscription for any of the aforementioned Rights Shares, the underwriting obligations of Tonghai Securities shall remain unaffected.

Underwriters : (i) Tonghai Securities; and

• (ii) CCBI

Please refer to the section headed “Information about the Underwriters” below for information on the Underwriters.

As at the Latest Practicable Date, the Company has no outstanding warrants, options, derivatives or securities convertible into or exchangeable for Shares.

As no new Shares were issued and no repurchase of the Shares took place on or before the Record Date, a total of 1,473,156,204 Rights Shares will be issued pursuant to the terms of the Rights Issue represents 100% of the number of existing issued Shares and 50% of the number of issued Shares as enlarged immediately upon completion of the Rights Issue.

The Rights Issue is only partially underwritten. Pursuant to the Company’s constitutional documents and the Companies Law, there are no requirements for minimum levels of subscription in respect of the Rights Issue. Subject to fulfillment of the conditions of the Rights Issue, the Rights Issue will proceed regardless of the ultimate subscription level. Based on the Irrevocable Undertaking and underwriting obligations of Tonghai Securities under the Underwriting Agreement, it is anticipated that at least 1,354,186,000 Rights Shares will be taken up.

In the event the Rights Issue is undersubscribed, any Rights Shares not taken up will not be issued by the Company and the size of the Rights Issue will be reduced accordingly. Investors are advised to exercise caution when dealing in the Shares.

The Subscription Price

The Subscription Price of HK$0.45 per Rights Share is payable in full by a Qualifying Shareholder upon acceptance of the relevant provisional allotment of the Rights Shares under the Rights Issue, upon an application of excess Rights Shares, or where a transferee of the nil-paid Rights Shares subscribes for the Rights Shares. The Subscription Price represents:

• a premium of approximately 8.4% to the closing price of HK$0.415 per Share as quoted on the Stock Exchange on the Latest Practicable Date;

• a discount of approximately 6.3% to the closing price of HK$0.48 per Share as quoted on the Stock Exchange on the Last Trading Day;

• a discount of approximately 8.2% to the average closing price of HK$0.49 per Share for the five consecutive trading days up to and including the Last Trading Day;

– 12 –

LETTER FROM THE BOARD

• a discount of approximately 6.3% to the average closing price of HK$0.48 per Share for the ten consecutive trading days up to and including the Last Trading Day;

• a discount of approximately 4.3% over the theoretical ex-rights price of approximately HK$0.47 per Share after the Rights Issue, based on the closing price of HK$0.48 per Share as quoted on the Stock Exchange on the Last Trading Day;

• a premium of approximately 55.2% over the consolidated net asset value of the Company per Share of approximately HK$0.29 as at 30 June 2018; and

• the cumulative value dilution within 12 months immediately preceding the date of the Right Issue Announcement is 11.0% based on the closing price of HK$0.48 per Share as quoted on the Stock Exchange on the Last Trading Day.

The Subscription Price was determined, among others, after arm’s length negotiation between the Company and the Underwriters with reference to the market price of the Shares prior to and including the Last Trading Day, the financial position of the Group and the prevailing market conditions.

Since the Rights Issue will entitle the Qualifying Shareholders to participate in future growth of the Company on equal terms and to maintain their respective pro rata shareholdings in the Company, and the proceeds are intended to be used as set out in the section below headed “Reasons for the Rights Issue and intended use of proceeds”, the Directors (excluding the independent non-executive Directors who will form their views after considering the opinion of the Independent Financial Adviser) consider the terms of the Rights Issue, including the Subscription Price, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Qualifying Shareholders

The Rights Issue will only be available to the Qualifying Shareholders and not be available to the Excluded Shareholders. The Company will despatch the Prospectus Documents to the Qualifying Shareholders on the Posting Date and will despatch this Prospectus only (but not the PAL and the EAF) to the Excluded Shareholders for their information only.

To qualify for the Rights Issue, a Shareholder must be registered as a member of the Company on the Record Date and not be an Excluded Shareholder on the Record Date.

Rights of the Overseas Shareholders (if any)

The Prospectus Documents will not be registered or filed under the applicable securities law of any jurisdiction other than Hong Kong. Overseas Shareholders may not be eligible to take part in the Rights Issue as explained below.

As at the Latest Practicable Date, other than Prime Force whose registered address was located in the BVI, the Company did not have any Overseas Shareholders whose addresses appeared on the register of members of the Company as being outside of Hong Kong. Pursuant to Rule 13.36(2)(a) of the Listing Rules, the Company has made enquiries

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LETTER FROM THE BOARD

regarding any legal restrictions under applicable securities legislation of the BVI with respect of the offer of the Rights Shares to Prime Force. Based on the legal opinion from the legal advisers of the Company as to BVI laws, there are no legal restrictions that would prohibit the Rights Issue being made to Shareholders with registered addresses in the BVI and no securities laws or other similar laws in the BVI that limits the Rights Issue being made to the such Shareholders. Accordingly, the Rights Issue will be extended to Prime Force and the Prospectus Documents will be sent to Prime Force.

Based on the legal advice received, save in respect of Prime Force, the Board is of the opinion that it would be necessary or expedient not to offer the Rights Shares to any Overseas Shareholders (if any) on account either of the legal restrictions of the relevant overseas regulatory body or stock exchange, no provisional allotment of the Rights Shares will be made to such Overseas Shareholders (if any). In such circumstances, the Rights Issue will not be extended to the Excluded Shareholders (if any).

Arrangements will be made for the Rights Shares, which would otherwise have been provisionally allotted to the Excluded Shareholders (if any), to be sold in their nil-paid form as soon as practicable after dealings in the nil-paid Rights Shares commence, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses, will be paid pro rata (but rounded down to the nearest cent) to the relevant Excluded Shareholders in Hong Kong dollars, except that the Company will retain individual amounts of less than HK$100 for its own benefit. Any unsold entitlements of the Excluded Shareholders (if any) will be made available for excess application by the Qualifying Shareholders (if any).

Overseas Shareholders (if any) should note that they may or may not be entitled to the Rights Issue, subject to the results of enquiries made by the Directors pursuant to Rule 13.36(2)(a) of the Listing Rules. Accordingly, the Overseas Shareholders (if any) should exercise caution when dealing in the Shares.

Basis of provisional allotments

The basis of the provisional allotment shall be one (1) Rights Share (in nil-paid form) for every one (1) existing Share held by the Qualifying Shareholders as at the close of business on the Record Date.

Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing a PAL and lodging the same with a remittance for the Rights Shares being applied for with the Registrar on or before the Latest Time for Acceptance, i.e. by 4:00 p.m. on Friday, 25 January 2019.

Status of the Rights Issue

The Rights Shares (when allotted, fully paid or credited as fully paid and issued) will rank pari passu in all respects among themselves and with the Shares in issue on the date of allotment and issue of the Rights Shares. Holders of the fully paid Rights Shares will be entitled to receive all future dividends and distributions the record dates of which are on or after the date of allotment and issue of the fully paid Rights Shares. Dealings in the Rights Shares will be subject to payment of stamp duty, Stock Exchange trading fee, transaction levy, investor compensation levy or any other applicable fees and charges in Hong Kong.

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LETTER FROM THE BOARD

Share certificate for the Rights Issue and refund cheques

Subject to fulfilment of the conditions of the Rights Issue, share certificates for the fully-paid Rights Shares are expected to be sent on or before Monday, 4 February 2019, to those entitled thereto by ordinary post, at their own risk, to their registered addresses. Each Shareholder will receive one share certificate for all allotted Rights Shares.

Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares (if any) are expected to be posted on or before Monday, 4 February 2019, by ordinary post to the applicants, at their own risk, to their registered addresses.

Fractional entitlement to the Rights Shares

On the basis of provisional allotment of one (1) Rights Share for every one (1) existing Share held on the Record Date, no fractional entitlements to the Rights Shares will arise under the Rights Issue.

Procedures for acceptance, transfer and splitting of provisional allotments of the Rights Shares

A PAL is enclosed with this Prospectus which entitles the Qualifying Shareholder(s) to whom it is addressed to subscribe for the number of Rights Shares shown therein. If a Qualifying Shareholder wishes to accept all the Rights Shares provisionally allotted to him/her/it as specified in the PAL, he/she/it must lodge the PAL in accordance with the instructions printed thereon, together with a remittance for the full amount payable on acceptance with the Registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by no later than 4:00 p.m. on Friday, 25 January 2019. All remittances must be made in Hong Kong dollars by cheques which must be drawn on an account with, or by cashier’s orders which must be issued by, a licensed bank in Hong Kong and made payable to “TSC GROUP HOLDINGS LIMITED — RIGHTS ISSUE ACCOUNT” and crossed “Account Payee Only”.

It should be noted that unless the duly completed PAL, together with the remittance, has been lodged with the Registrar by no later than 4:00 p.m. on Friday, 25 January 2019, whether by the original allotted or any person to whom the rights have been transferred, that provisional allotment and all rights thereunder will be deemed to have been declined and will be cancelled and such Rights Shares will be available for excess application under the EAFs by other Qualifying Shareholders. The Company may, at its sole discretion, treat a PAL as valid and binding on the person(s) by whom or on whose behalf it is lodged even if the PAL is not completed in accordance with the relevant instructions. The Company may require such incomplete PAL to be completed by the relevant applicants at a later stage.

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LETTER FROM THE BOARD

If a Qualifying Shareholder wishes to accept only part of his/her/its provisional allotment or transfer part or all of his/her/its rights to subscribe for the Rights Shares provisionally allotted to him/her/it under the PAL or to transfer part or all of his/her/its rights to one or more than one person, the entire PAL must be surrendered and lodged for cancellation by no later than 4:30 p.m. on Thursday, 17 January 2019 to the Registrar, who will cancel the original PAL and issue new PALs in the denominations required which will be available for collection from the Registrar at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, after 9:00 a.m. on the second Business Day after the surrender of the original PAL. It should be noted that Hong Kong ad valorem stamp duty is payable in connection with the transfer of your rights to subscribe for the relevant Rights Shares to the transferee(s) and the acceptance by the transferee(s) of such rights.

The PAL contains further information regarding the procedures to be followed for acceptance and/or transfer of the whole or part of the provisional allotment of the Rights Shares by the Qualifying Shareholders, all cheques and cashier’s orders accompanying completed PALs will be presented for payment immediately upon receipt and all interest earned on such monies (if any) will be retained for the benefit of the Company. Completion and return of the PAL will constitute a warranty and representation to the Company that all registration, legal and regulatory requirements of all relevant jurisdictions other than Hong Kong in connection with the PAL and any acceptance of it have been, or will be, duly complied with. The Company reserves the right to refuse to accept any application for the Rights Shares where it believes that in doing so would violate the applicable securities legislations or other laws or regulations of any jurisdiction. For the avoidance of doubt, neither HKSCC nor HKSCC Nominees Limited is subject to any of the representations and warranties. Completion and return of the PAL with a cheque or a cashier’s order in payment for the Rights Shares, whether by a Qualifying Shareholder or by any nominated transferee, will constitute a warranty by the subscriber that the cheque or the cashier’s order will be honored on first presentation. Without prejudice to the other rights of the Company in respect thereof, the Company reserves the right to reject any PAL in respect of which the accompanying cheque and/or casher’s order is dishonored on first presentation, and, in such event, the relevant provisional allotment and all rights and entitlements thereunder will be deemed to have been declined and will be cancelled.

No action has been taken to obtain permission of the offering of the Rights Shares or the distribution of the Prospectus Documents in any jurisdiction other than Hong Kong. Accordingly, no person receiving a copy of the Prospectus Documents in any jurisdiction outside Hong Kong may treat it as an offer or invitation to apply for the Rights Shares, unless in the relevant jurisdictions, such an offer or invitation could lawfully be made without compliance with any registration or other legal and regulatory requirements. It is the responsibility of anyone outside Hong Kong wishing to make on his/her/its behalf an application for the Rights Shares to satisfy himself/herself/itself as to the observance of the laws and regulations of all relevant jurisdiction, including the obtaining of any governmental or other consents, and to pay any taxes and duties required to be paid in such jurisdiction in connection therewith. The Company reserves the right to refuse to accept any application for the Rights Shares where it believes that doing so would violate the applicable securities or other laws or regulations of any jurisdiction.

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LETTER FROM THE BOARD

If Tonghai Securities exercises the right to terminate the Underwriting Agreement at or before the Latest Time for Termination or if the conditions of the Underwriting Agreement are not fulfilled or waived (as the case may be), the monies received in respect of acceptances of the Rights Shares will be returned to the Qualifying Shareholders or such other persons to whom the nil-paid Rights Shares shall have been validly transferred, or in case of joint acceptances, to the first-named person, without interest by means of cheques despatched by ordinary post to their respective registered address at their own risk as soon as practicable thereafter.

No receipt will be issued in respect of any application monies received.

For further details of the procedures for acceptance, transfer and splitting of allotments of the Shares, please refer to the PAL.

Application for excess Rights Shares

Qualifying Shareholders shall be entitled to apply, by way of excess application, for (i) the Rights Shares representing the entitlement of the Excluded Shareholders and which cannot be sold at a net premium; and (ii) any Rights Shares provisionally allotted but not validly accepted by the Qualifying Shareholders. Applications for excess Rights Shares may be made by completing the EAF for the excess Rights Shares and lodging the same with a separate remittance for the excess Rights Shares being applied for.

The Board will allocate the excess Rights Shares at its discretion, but on a fair and equitable basis as far as practicable on the following principles:

• no preference will be given to applications for topping-up odd-lot holdings to whole-lot holdings as the giving of such preference may potentially be abused by certain investors by splitting their Shares and thereby receiving more Rights Shares than they would receive if such preference is not given, which is an unintended and undesirable result; and

• subject to availability of the excess Rights Shares, the excess Rights Shares will be allocated to the Qualifying Shareholders who have applied for excess application on a pro rata basis based on the number of excess Rights Shares applied for by them. No reference will be made to Rights Shares subscribed through PALs, or the number of Shares held by the Qualifying Shareholders.

In the event that the Directors note unusual patterns of excess Rights Shares applications, the Directors will review those applications and if the Directors have reason to believe that any application may have been made with the intention to abuse the above mechanism, such application(s) for excess Rights Shares may be rejected at the sole discretion of the Directors.

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LETTER FROM THE BOARD

Beneficial owners of Shares whose shares are held by a nominee company (including HKSCC Nominees Limited) should note that for the purpose of the Rights Issue, the Board will regard the nominee company as a single Shareholder according to the register of members of the Company. Accordingly, the beneficial owners of Shares whose shares are registered in name of nominee companies should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to beneficial owners individually and are advised to consider whether they would like to arrange registration of the relevant Shares in the name of the beneficial owner(s) prior to the Record Date.

If a Qualifying Shareholder wishes to apply for any Rights Shares in addition to his/her/its provisional allotment, he/she/it must complete and sign the EAF in accordance with the instructions printed thereon and lodge the same with a separate remittance for the amount payable on application in respect of the excess Rights Shares being applied for with the Registrar at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong by no later than the Latest Time for Acceptance. All remittances must be made in Hong Kong dollars by cheques which must be drawn on a bank account with, or by cashier’s orders which must be issued by, a licensed bank in Hong Kong and made payable to “TSC GROUP HOLDINGS LIMITED — EXCESS APPLICATION ACCOUNT” and crossed “Account Payee Only”. The Registrar will notify the relevant Qualifying Shareholders of any allotment of excess Rights Shares made to them.

The allocation of excess Rights Shares (if any) to the Qualifying Shareholders will be announced by the Company on Friday, 1 February 2019. If no excess Rights Shares are allotted to a Qualifying Shareholder who has applied for excess Rights Shares, it is expected that the amount tendered on application will be refunded to that Qualifying Shareholder in full without interest by means of a cheque dispatched by ordinary post to his/her/its registered address on or before Monday, 4 February 2019 at his/her/its own risk. If the number of excess Rights Shares allotted to a Qualifying Shareholders is less than that applied for, it is expected that the surplus application monies will also be refunded to that Qualifying Shareholder without interest by means of a cheque dispatched by ordinary post to his/her/its registered address on or before Monday, 4 February 2019 at his/her/its own risk.

Completion and return of the EAF together with a cheque or cashier’s order in payment for the excess Rights Shares which are the subject of the EAF will constitute a warranty by the applicant that such cheque or cashier’s order will be honored on first presentation. All cheques and cashier’s orders will be presented for payment immediately following receipt and all interest earned on such monies (if any) will be retained for the benefit of the Company. If any cheque or cashier’s order is dishonored on first presentation, without prejudice to the other rights of the Company, the EAF is liable to be rejected.

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LETTER FROM THE BOARD

Completion and return of the EAF will constitute a warranty and representation to the Company that all registration, legal and regulatory requirements of all relevant jurisdictions in connection with the EAF and any acceptance of it have been, or will be, duly complied with. For the avoidance of doubt, neither HKSCC nor HKSCC Nominees Limited is subject to any of the above representations and warranties.

The EAF is for use only by the person(s) to whom it is addressed and is not transferable. All documents, including refund cheques for wholly or partially unsuccessful applications for excess Rights Shares, will be dispatched by ordinary post at the risk of the persons entitled thereto to their respective registered addresses as shown in the register of members of the Company on the Record Date. No action has been taken to obtain permission of the offering of the Rights Shares or the distribution of the Prospectus Documents in any jurisdiction other than Hong Kong. Accordingly, it is the responsibility of any person outside Hong Kong wishing to make an application for excess Rights Shares to satisfy himself/herself/itself before making the application for excess Rights Shares as to the full observance of the laws and regulations of the relevant jurisdiction, including the obtaining of any government or other consents, and to pay taxes and duties required to be paid in any such jurisdiction in connection therewith. The Company reserves the right to refuse to accept any application for excess Rights Shares where it believes in doing so would violate the applicable securities or other laws or regulations of any jurisdiction.

If Tonghai Securities exercises the right to terminate the Underwriting Agreement at or before the Latest Time for Termination or if the conditions of the Rights Issue are not fulfilled and/or waived (as the case may be), the monies received in respect of the relevant applications for excess Rights Shares will be returned to the applicants, or in case of joint applicants, to the first-named person, without interest by means of cheques despatched by ordinary post to their respective addresses at their own risk on or before Monday, 4 February 2019.

For further details of the procedures for excess application of the Rights Issue, please refer to the EAF.

Rights Issue on a partially underwritten basis

The Rights Issue is only partially underwritten. Any Shareholder who applies to take up all or part of his entitlement under the PAL or apply for excess Rights Shares under the EAF may also unwittingly incur an obligation to make a general offer under the Takeovers Code, unless a waiver from the Executive (as defined in the Takeovers Code) has been obtained.

Accordingly, the Rights Issue will be made on the term that the Company will provide for the Shareholders to apply on the basis that if the Rights Shares are not fully taken up, the applications of any Shareholder for his/her entitlement under the PAL or for excess Rights Shares under the EAF will be scaled down to a level which does not trigger an obligation on part of the relevant Shareholder, except HKSCC Nominees Limited, to make a general offer under the Takeovers Code.

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LETTER FROM THE BOARD

Irrevocable Undertaking

As at the Latest Practicable Date, Prime Force, the controlling shareholder of the Company, holds 765,186,000 Shares, representing approximately 51.94% of the existing issued Shares.

On 8 November 2018, Prime Force entered into the Irrevocable Undertaking in favour of the Company. Pursuant to the Irrevocable Undertaking, Prime Force irrevocably undertakes, among other things, that (i) it will take up or procure they are taken up on the terms of the Prospectus Documents the 765,186,000 Rights Shares which will constitute the provisional allotment of Rights Shares in respect of the Shares beneficially owned by Prime Force pursuant to the terms of the Rights Issue; (ii) it will not, and shall procure that companies controlled by it (whether directly or indirectly) not to, dispose of or transfer the Rights Shares to be provisionally allotted to it; and (iii) it shall remain the beneficial owner of the 765,186,000 Shares currently held by it at close of business on the Record Date and shall not dispose of or transfer its beneficial interests in any of the Shares owned by it or otherwise deal in any interests in the Shares or interests therein before the Record Date.

Apart from the Irrevocable Undertaking, Prime Force indicated that it may subscribe for or procure the subscription of an addition of 118,970,000 Rights Shares by way of excess application through completing the EAF for excess Rights Shares. As at the Latest Practicable Date, Prime Force is the legal and beneficial owner of 765,186,000 Shares registered under its own name in the register of members of the Company. Pursuant to the Irrevocable Undertaking, among other things, Prime Force shall not transfer, deal in or acquire any Shares prior to the Record Date. Accordingly, in the event that Prime Force applies for Rights Shares by way of excess application, it will be required to complete and submit an EAF in its own name. The Company will be able to identify Prime Force’s application for excess Rights Shares by the EAF submitted by it, and disregard its excess applications to the extent the total number of excess Rights Shares it applies for exceeds the total number of Rights Shares offered minus the number of Shares to be taken up by Prime Force under its assured entitlements in accordance with Rule 7.21(3)(b) of the Listing Rules.

In addition, the Company was informed that China International Marine Containers (Hong Kong) Limited (“ CIMC HK ”), a substantial shareholder of the Company, indicated that it will subscribe the 92,800,000 Rights Shares which constitute the provisional allotment of Rights Shares in respect of the Shares beneficially owned by CIMC HK pursuant to the terms of the Rights Issue.

Save for the above, the Company has not received any information from any substantial shareholders (as defined in the Listing Rules) of the Company of their intention to take up the Rights Shares to be provisionally allotted or offered to them under the Rights Issue as at the Latest Practicable Date.

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LETTER FROM THE BOARD

Application for listing of the Rights Shares

The Company has made an application to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Rights Shares (in both nil-paid and fully-paid forms) to be issued and allotted pursuant to the Rights Issue. No part of the securities of the Company is listed or dealt in, and no listing of or permission to deal in any such securities is being or is proposed to be sought, on any other stock exchanges.

Both the nil-paid Rights Shares and the fully-paid Rights Shares will be traded in board lots of 1,000 Shares in the market. Dealings in the Rights Shares in both nil-paid and fully-paid forms will be subject to the payment of stamp duty, Stock Exchange trading fee, SFC transaction levy or any other applicable fees and charges in Hong Kong.

Subject to the granting of the listing of, and the permission to deal in, the Rights Shares (in both their nil-paid and fully-paid forms) on the Stock Exchange, the Rights Shares (in both their nil-paid and fully-paid forms) will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in each of their nil-paid and fully-paid forms on the Stock Exchange, or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Shareholders should seek advice from their licensed securities dealer(s) or other professional adviser(s) for details of those settlement arrangements and how such arrangements will affect their rights and interests.

All necessary arrangements will be made to enable the Rights Shares (in both their nil-paid and fully-paid forms) to be admitted into CCASS.

Conditions of the Rights Issue

The Rights Issue is conditional upon (i) the Authorised Share Capital Increase becoming effective on or before the Record Date, and (ii) the Underwriting Agreement having become unconditional and not being terminated in accordance with its terms. For the avoidance of doubt, the Rights Issue is not conditional upon the completion of the Subscription and Joint Venture Agreement as described in the section headed “C. The Subscription and Joint Venture Agreement” in the Letter from the Board in the Circular. As at the Latest Practicable Date, the condition as set out in (i) above had been satisfied.

For conditions of the Underwriting Agreement, please refer to the section headed “Underwriting Arrangement — Conditions of the Underwriting Agreement” below.

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LETTER FROM THE BOARD

UNDERWRITING ARRANGEMENT

On 8 November 2018 (after trading hours), the Underwriters and the Company entered into the Underwriting Agreement in respect of the underwriting arrangement for the Rights Issue. The Rights Issue will only be partially underwritten by Tonghai Securities in accordance with the terms of the Underwriting Agreement as set out below:

Underwriting Agreement

• Date : 8 November 2018 (after trading hours) Parties : (1) the Company;

• (2) Tonghai Securities (formerly known as Oceanwide Securities Company Limited) (as underwriter); and

• (3) CCBI (as underwriter) (together with Tonghai Securities, the “ Underwriters ”).

For further information on the Underwriters, please refer to the section headed “Information about the Underwriters”.

• Number of : The underwriting obligations of Tonghai Securities Underwritten Shares and the obligations of CCBI to procure subscription for untaken Rights Shares are several.

Tonghai Securities has agreed to subscribe for, or procure the subscription for, up to 589,000,000 Rights Shares, being all the Underwritten Shares.

CCBI has agreed to procure the subscription for, on a best effort basis, up to 118,970,204 Shares, being any untaken Right Shares other than Rights Shares to be taken up by Prime Force pursuant to the Irrevocable Undertaking and the Underwritten Shares underwritten by Tonghai Securities.

For the avoidance of doubt, should CCBI fails to procure the subscription for any of the aforementioned Rights Shares, the underwriting obligations of Tonghai Securities shall remain unaffected.

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LETTER FROM THE BOARD

Underwriting Commission

: Underwriting commission equal to 0.8% of the aggregate Subscription Price in respect of the Underwritten Shares is payable to Tonghai Securities.

Underwriting commission equal to 0.8% of the aggregate Subscription Price in respect of the Rights Shares actually subscribed for through CCBI is payable to CCBI.

Any sub-underwriting fees and expenses relating to the sub-underwriting(s) shall be borne by the respective Underwriters.

The number of Shares taken or underwritten by Prime Force and Tonghai Securities is closed to the maximum number of Right Shares. The Board is of the view that the chance of the Right Shares been fully taken is high and there is no need to pay an extra cost in engaging another underwriter to commit hard underwriting of the untaken Right Shares.

Each of the Underwriters shall be entitled to deduct part or all of the underwriting commission, out-of-pocket expenses and any other fees and expenses which the Company has agreed to pay to it from any amount to be paid by such Underwriter to the Company under the Underwriting Agreement.

The terms of the Underwriting Agreement, including the commission rate of 0.8%, were determined after arm’s length negotiations between the Company and the Underwriters with reference to, among other things, the size of the Rights Issue, the current market conditions and the prevailing market rate for the underwriting commission of comparable transactions. The Directors consider that the terms of the Underwriting Agreement including the terms governing the underwriting commission are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Underwriter’s Undertaking

Under the Underwriting Agreement, each of the Underwriters has undertaken with the Company that it shall use its reasonable endeavor to procure that each of the subscribers or purchasers (in each case together with their respective ultimate beneficial owners) of Untaken Shares procured by it: (i) shall be third party(ies) independent of, not acting in concert (as such term is defined in the Takeovers Code) with and shall not be connected with the Directors, chief executive or substantial shareholders of the Company or their respective associates; (ii) shall not own 10% or more of the issued share capital of the Company immediately upon completion of the Rights Issue and are not otherwise core connected persons (as defined in the Listing Rules) of the Company. Each of the Underwriters has also agreed that it shall procure, and shall ensure that the sub-underwriters (if any) to procure independent placees to take up the Rights Shares pursuant to the Listing Rules.

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LETTER FROM THE BOARD

Conditions of the Underwriting Agreement

The obligations of the Underwriters under the Underwriting Agreement are conditional upon:

• (a) the meeting(s) of the Board properly and validly convened, or the written resolution(s) of the Directors properly and validly passed, to approve and implement the Authorised Share Capital Increase and the Rights Issue;

• (b) the passing of all necessary resolution(s) by the Shareholders and/or the Independent Shareholders (as the case may be) at the EGM duly approving and confirming:

• (i) the Authorised Share Capital Increase; and

• (ii) the Rights Issue;

each in accordance with the Articles and the Listing Rules;

• (c) the Authorised Share Capital Increase becoming effective on or before the Record Date;

• (d) the Stock Exchange having authorized the registration with, and the registration with, the Registrar of Companies in Hong Kong respectively one copy of each of the Prospectus Documents duly signed by two Directors (or by their agents duly authorised in writing) as having been approved by resolution of the Board (and all other documents required to be attached thereto) not later than the Posting Date and otherwise in compliance with the Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong);

• (e) the posting of the Prospectus Documents to Qualifying Shareholders and the posting of this Prospectus to the Excluded Shareholders, if any and for information purposes only, on or before the Posting Date;

• (f) the Listing Committee of the Stock Exchange granting, or agreeing to grant (subject to allotment), and not having revoked, the listing of and permission to deal in the Rights Shares in their nil-paid and fully-paid forms, either unconditionally or subject to such conditions as the Company may accept;

• (g) each condition to enable the nil-paid Rights Shares and the fully-paid Rights Shares to be admitted as eligible securities for deposit, clearance and settlement in CCASS having been satisfied prior to the first day of dealings in nil-paid Rights Shares or the fully-paid Rights Shares (as the case may be) and no notification having been received by the Company from HKSCC by such date that such admission or facility for holding and settlement has been or is to be refused;

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LETTER FROM THE BOARD

• (h) the Shares remaining listed on the Stock Exchange and the listing of the Shares not having been withdrawn or the trading of the Shares not having been suspended for a consecutive period of more than five (5) trading days and no indication being received before the Latest Time for Termination from the Stock Exchange and/or the SFC to the effect that such listing may be withdrawn or objected to;

• (i) the representations and warranties or undertakings given by the Company in the Underwriting Agreement being true, accurate and not misleading in all material respects on and as of the date of the Underwriting Agreement and at any time before the Latest Time for Termination, as though they have been given and made at such time by reference to the facts and circumstances then subsisting;

• (j) the issue of the Rights Shares and the obligations of the Underwriters to underwrite the Underwritten Shares not being prohibited by any statute, order, rule, directive or regulation promulgated after the date of the Underwriting Agreement by any legislative, executive or regulatory body or authority of Hong Kong and/or the Cayman Islands and compliance by the sub-underwriters(s) with all their respective obligations under the sub-underwriting agreement(s) to be entered into by the Underwriters with such sub-underwriters(s), if any, and such sub-underwriting agreement being in full force and effect and not being terminated;

• (k) the Underwriting Agreement not being terminated by Tonghai Securities in accordance with the terms thereof;

• (l) no stop order or similar order having been issued by any court or other judicial, governmental or regulatory authority in relation to the Rights Issue nor the sale and subscription and/or purchase of the Rights Shares in accordance with the provisions of this Underwriting Agreement and the execution and performance of the Underwriting Agreement by the Company being prohibited by any statute, order, rule, regulation or directive issued by, or objected to by any legislative, executive or regulatory body or authority of Hong Kong;

• (m) procurement of one or more sub-underwriter(s) to enter into sub-underwriting agreement(s) with Tonghai Securities; and

• (n) compliance with and performance of undertakings and obligations of Prime Force under the Irrevocable Undertaking.

Tonghai Securities may at any time in writing waive any of the above conditions (save for those required by law) or extend the time or date for fulfilment of any such condition subject to such terms and conditions determined by it.

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LETTER FROM THE BOARD

If any of the conditions above has not been satisfied or otherwise waived (as the case maybe) on or before the relevant time and date specified in that respective condition or, if no such date is so specified or referred to, is not fulfilled on or prior to the Latest Time for Termination (or such later date(s) as the Underwriters and the Company may agree in writing), the Rights Issue will not proceed and all liabilities of the parties to the Underwriting Agreement shall cease and determine. In such event, none of the parties shall have any claim against the other parties (other than for antecedent breaches and claims) provided that, among other things, the Company shall remain liable to pay the Underwriters’ reasonable out-of-pocket expenses in accordance with the terms of the Underwriting Agreement.

As the Rights Issue is subject to the above conditions, it may or may not proceed accordingly. If Tonghai Securities terminates the Underwriting Agreement, the Rights Issue will not proceed.

As at the Latest Practicable Date, the conditions as set out in paragraphs (a), (b) and (c) above had been satisfied.

Termination of the Underwriting Agreement

Please refer to the section headed “Termination of the Underwriting Agreement” in this Prospectus.

INFORMATION ABOUT THE UNDERWRITERS

Tonghai Securities, formerly known as Oceanwide Securities Company Limited, is a company incorporated in Hong Kong with limited liability and a corporation licensed to carry on business in Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO, and its ordinary course of business includes underwriting of securities. As at the Latest Practicable Date, Tonghai Securities did not hold any Shares.

CCBI is a company incorporated in Hong Kong with limited liability and a corporation licensed to carry on business in Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, and its ordinary course of business includes underwriting of securities. As at the Latest Practicable Date, CCBI did not hold any Shares.

Each of the Underwriters has confirmed that (1) it is independent of and not connected with the Company or its connected persons and not acting in concert with any of the Underwriters or other Shareholders and their respective ultimate beneficial owners; and (2) it has complied with Rule 7.19(1)(a) of the Listing Rules that it is licensed under the SFO for Type 1 regulated activity and its ordinary business includes underwriting of securities. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Underwriters, their respective ultimate beneficial owner(s) and/or associates are Independent Third Parties.

– 26 –

LETTER FROM THE BOARD

EFFECT OF THE RIGHTS ISSUE ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

Assuming no new Shares (other than the Rights Shares) are allotted and issued from the Latest Practicable Date up to the completion of the Rights Issue, set out below are the shareholding structure of the Company as at the Latest Practicable Date and immediately after the completion of the Right Issue:

Assuming all Rights Shares are taken up by the Qualifying Shareholders:

Prime Force Global Energy Investors, LLC.(1) Directors Windmere International Limited(2) China International Marine Containers (Hong Kong) Limited (“CIMC (HK)”) Treasure Maker Investments Limited(3) Other public Shareholders Total	As at the Latest Practicable Date No. of Shares Approximate % 765,186,000 51.94 120,046,200 8.15 9,812,000 0.67 66,072,800 4.49 92,800,000 6.30 5,095,000 0.35 414,144,204 28.11 1,473,156,204 100.00	Immediately after completion of the Rights Issue No. of Shares Approximate % 1,530,372,000 51.94 240,092,400 8.15 19,624,000 0.67 132,145,600 4.49 185,600,000 6.30 10,190,000 0.35 828,288,408 28.11 2,946,312,408 100.00	Immediately after completion of the Rights Issue No. of Shares Approximate % 1,530,372,000 51.94 240,092,400 8.15 19,624,000 0.67 132,145,600 4.49 185,600,000 6.30 10,190,000 0.35 828,288,408 28.11 2,946,312,408 100.00
			100.00

– 27 –

LETTER FROM THE BOARD

Assuming no Rights Shares are taken up by the Qualifying Shareholders (other than Prime Force and the Underwriters and/or subscribers procured by them for all the Underwritten Shares pursuant to the Underwriting Agreement):

Prime Force Global Energy Investors, LLC.(1) Directors Windmere International Limited(2) The Underwriters (and/or subscriber(s) procured by them) CIMC (HK) Treasure Maker Investments Limited(3) Other public Shareholders Total	Immediately after completion of the Rights Issue (assuming Prime Force does not apply for any excess Rights Shares) No. of Shares Approximate % 1,530,372,000 54.13 120,046,200 4.25 9,812,000 0.35 66,072,800 2.34 589,000,000 20.83 92,800,000 3.28 5,095,000 0.18 414,144,204 14.65 2,827,342,204 100.00	Immediately after completion of the Rights Issue (assuming Prime Force applies for 118,970,000 excess Rights Shares) No. of Shares Approximate % 1,649,342,000 55.98 120,046,200 4.07 9,812,000 0.33 66,072,800 2.24 589,000,000 19.99 92,800,000 3.15 5,095,000 0.17 414,144,204 14.06 2,946,312,204 100.00	Immediately after completion of the Rights Issue (assuming Prime Force applies for 118,970,000 excess Rights Shares) No. of Shares Approximate % 1,649,342,000 55.98 120,046,200 4.07 9,812,000 0.33 66,072,800 2.24 589,000,000 19.99 92,800,000 3.15 5,095,000 0.17 414,144,204 14.06 2,946,312,204 100.00
			100.00

Notes:

• (1) Global Energy Investors, LLC. is the beneficial owner of 120,046,200 Shares. The entire share capital of Global Energy Investors, LLC. is beneficially owned as to 50% each by Mr. Zhang Menggui, Morgan and Mr. Jiang Bing Hua, both executive Directors.

• (2) Windmere International Limited is the beneficial owner of 66,072,800 Shares and is wholly-owned by Mr. Brian Chang. Mr. Brian Chang was a non-executive Director and he resigned from the position with effect from 9 February 2018.

• (3) The Company adopted a share award plan on 16 January 2015. Treasure Maker Investments Limited is the trustee of such share award plan and it holds 5,095,000 Shares on trust under the share award plan.

REASONS FOR THE RIGHTS ISSUE AND INTENDED USE OF PROCEEDS

The Group has principally been engaged in the business of designing and manufacturing of rig equipment, manufacture and trading of oilfield expendables and offshore rig construction and services.

– 28 –

LETTER FROM THE BOARD

With the relative improvement of oil price as compared to the average level in the past 4 years, and improvement in related offshore rig services charter rates, the Group is seeking to leverage its expertise and experience on the recovery in the drilling and offshore rig services sectors. The Group’s long term strategic objective is to be a full service solution provider for the offshore marine industry. The Group plans to achieve this objective by expanding its operations vertically upstream and downstream, as well as horizontally throughout different segments of the oil & gas value chain.

The Company currently plans to expand its operating business through potential acquisition of offshore drilling rigs and related rig charter business. The Company will explore opportunities for forming strategic partnerships or other forms of co-operations with established operators with successful track record of offshore drilling rigs.

The new operating model of the Company will help switch from reliance on downstream capital expenditure to operational expenditure, which the Company sees signs of quicker recovery and promote the Company’s transformation. At this stage, asset acquisition will also have room for appreciation in the long run. The company’s participation in downstream companies will further promote the extension of the value chain.

The Company intends to employ equity financing to finance such expansion. This is because the Company does not currently have the necessary financial resources and the unutilized proceeds from the previous fund raising exercise will not be sufficient for undertaking the desired projects. Accordingly, the Company would need to raise new funds to achieve its business objectives. The Directors have considered alternative fund raising methods, which include: (i) allotting and issuing new shares or issuing convertible bonds. Such issues, as opposed to the Rights Issue, will not allow the existing Shareholders to maintain their respective shareholdings in the Company. In addition, based on the feedback from investors from roadshows and meetings conducted recently, the Directors are of the view that it would be difficult to raise sufficient funds in supporting the Company’s development plan using such method; (ii) loans from banks. The Directors are of the view that it would be difficult for the Group to obtain a significant amount of additional bank loans given that the Group has suffered losses in recent years and substantially all of its assets and properties are already secured or guaranteed for the current bank borrowings of the Group. As such, the Directors did not pursue the above equity and debt fund raising methods which are considered not appropriate and are of the view that the Rights Issue is the best available option under the current situation of the Company.

– 29 –

LETTER FROM THE BOARD

Assuming full subscription under the Rights Issue, the gross proceeds and net proceeds from the Rights Issue are expected to be approximately HK$662.92 million and approximately HK$659.75 million, respectively. Assuming nil subscription under the Rights Issue (save for Prime Force pursuant to the Irrevocable Undertaking and the Underwriting Agreement in respect of the Underwritten Shares), the gross proceeds and net proceeds from the Rights Issue are expected to be no less than approximately HK$609.38 million and approximately HK$604.05 million, respectively. The net proceeds will be used for the following:

• approximately 70% of the net proceeds or approximately HK$422.8 million will be used for, subject to the approval by the Independent Shareholders at the EGM and the fulfillment of the conditions under the Subscription and Joint Venture Agreement, settling the subscription price of US$50 million (equivalent to approximately HK$390 million) to be payable by AOG, pursuant to the Subscription and Joint Venture Agreement, thereby acquiring the Rig Assets through the JV; and approximately US$4.2 million (equivalent to approximately HK$32.8 million) of the remaining proceeds are intended to be used in other investment opportunities in the oil and gas industry, including upstream and downstream of the industry value chain, by way of, among others, other joint ventures with its controlling shareholder in oil and gas production businesses and/or acquisition of other rig assets, which are expected to be utilized after 2019. The Subscription and Joint Venture Agreement and the transactions contemplated thereunder have been approved at the EGM on 28 December 2018. As at the Latest Practicable Date, except the Subscription and Joint Venture Agreement and the transactions contemplated thereunder, no other agreement, arrangement, understanding or negotiation has been signed or made by the Company in relation to the application of the remaining 70% of the proceeds other than the Subscription. For information on the formation of the JV, the Subscription and Joint Venture Agreement and the transactions contemplated thereunder, please refer to the section headed “C. The Subscription and Joint Venture Agreement” in the letter from the Board in the Circular.

– 30 –

LETTER FROM THE BOARD

• approximately 20% of the net proceeds or approximately HK$120.8 million will be used for repayment of the existing debts of the Group, approximately HK$78.3 million will fall due by 2019 and approximately HK$42.5 million will fall due after 2019; and

• the remainder 10% or approximately HK$60.4 million will be used for general working capital of the Group of which approximately HK$20.4 million will be used for equipment expenditure and material procurement expenses for new orders, approximately HK$30 million will be used for repayment of debts to suppliers and approximately HK$10 million will be used for employees’ salaries and office expenses.

In the event that there is an undersubscription of the Rights Issue, the net proceeds of the Rights Issue will be utilized in proportion to the above uses, and the Company may consider meeting any shortfall of the potential acquisition of offshore drilling rigs from available debt facilities, internal resources, and/or other financial resources.

After completion of the Rights Issue, if the actual use of proceeds of the Rights Issue significantly deviates from the intended use as disclosed above (or as subsequently disclosed by the Company), the Company will appropriately disclose such information as soon as reasonably practicable.

In view of the above, the Board considers that it is in the interests of the Company and the Shareholders to proceed with the Rights Issue.

– 31 –

LETTER FROM THE BOARD

FUND RAISING EXERCISE IN THE PRECEDING 12-MONTH PERIOD

The Company has conducted the following equity fund raising activities during the 12 months immediately preceding the Latest Practicable Date:

Date of Rights Issue		Estimated net			Actual use of proceeds	Actual use of proceeds
Announcement	Event	proceeds raised	Intended use of proceeds		(up to 31 December 2018)
14 December 2017	Issue of 765,186,000 Shares	Approximately	(1)	Repayment of a portion of the	(1)	Expansion of the Group’s
	under Specific Mandate	HK$505.07 million		debts of the Group		business in approximately
				(approximately HK$101.01		HK$178.5 million;
				million, representing
				approximately 20% of proceed);	(2)	Repayment of unsecured notes
						issued by the Company in
			(2)	Expansion of the Group’s		approximately HK$217 million;
				business and/or potential		and
				acquisition to be decided by the
				Board after issue of the Shares	(3)	General working capital of the
				(approximately HK$136.55		Group approximately HK$31.27
				million, representing		million.
				approximately 27.04% of
				proceed);	As at 31 December 2018, the amount of
					unutilized proceeds was
			(3)	Repayment of unsecured notes	approximately HK$78.3 million, it is
				issued by the Company	intended that:
				(approximately HK$217 million,
				representing approximately	•	approximately HK$39.2 million
				42.96% of the proceed); and		of which will be used for
						repayment of debts to the
			(4)	General working capital of the		suppliers, commencing from
				Group (approximately HK$50.51		December 2018;
				million, representing
				approximately 10% of the	•	approximately HK$15.6 million
				proceed)		of which will be used for
						equipment expenditure and
						material procurement expenses
						for new orders, commencing
						from December 2018; and
					•	approximately HK$23.5 million
						of which will be used for
						employees’ salaries and office
						expenses for the two months
						ending January 2019.

– 32 –

LETTER FROM THE BOARD

Further, on 15 March 2018, the Company issued 850,000 new Shares pursuant to the exercise of options under the share option scheme of the Company adopted on 20 October 2005.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this Prospectus.

WARNING OF THE RISKS OF DEALING IN THE SHARES AND THE NIL-PAID RIGHTS SHARES

The Rights Issue is conditional, inter alia , upon the fulfillment of the conditions (or, in respect of certain conditions, waiver thereof) as set out in the paragraph headed “Conditions of the Rights Issue” above. Accordingly, the Rights Issue may or may not proceed.

The Shares have been dealt in on an ex-rights basis from Wednesday, 2 January 2019. Dealing in the Rights Shares in the nil-paid form will take place from 9:00 a.m. on Tuesday, 15 January 2019 to 4:00 p.m. on Tuesday, 22 January 2019 (both days inclusive). If the conditions of the Rights Issue are not fulfilled (or, in respect of certain conditions, waived) on or before 4:00 p.m. on Tuesday, 29 January 2019 (or such later time and/or date as the Company and the Underwriters may determine), or the Underwriting Agreement is terminated by Tonghai Securities, the Rights Issue will not proceed.

Shareholders and potential investors contemplating buying or selling Shares from the Latest Practicable Date up to the date on which all the conditions of the Rights Issue are fulfilled (including the date on which Tonghai Securities’ right of termination of the Underwriting Agreement ceases), and/or any dealings in the Rights Shares in their nil-paid form from 9:00 a.m. on Tuesday, 15 January 2019 to 4:00 p.m. on Tuesday, 22 January 2019 (both dates inclusive), will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed.

Shareholders and potential investors are advised to exercise due caution when dealing in the Shares and/or the Rights Shares in their nil-paid form and if they are in any doubt about their position, they should consult their professional advisers.

By Order of the Board TSC Group Holdings Limited Wang Hongyuan Executive Chairman

– 33 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

The audited consolidated financial statements of the Group for the three years ended 31 December 2017 and the six months ended 30 June 2018 together with the relevant notes thereto are disclosed in the following documents which have been published on the website of the Stock Exchange (www.hkex.com.hk) and the website of the Company (www.t-s-c.com):

• pages 84 to 174 in the annual report of the Company for the year ended 31 December 2017 published on 19 April 2018;

• pages 79 to 159 in the annual report of the Company for the year ended 31 December 2016 published on 18 April 2017;

• pages 56 to 130 in the annual report of the Company for the year ended 31 December 2015 published on 7 April 2016;

• pages 2 to 32 in the interim report of the Company for the six months ended 30 June 2018 published on 5 September 2018.

Each of the said consolidated financial statements of the Group is incorporated by reference to this Prospectus and forms part of this Prospectus.

2. INDEBTEDNESS STATEMENT

The Group

As at the close of business on 30 November 2018, being the latest practicable date for the purpose this indebtedness statement, the indebtedness of the Group was as follows:

• (i) Secured bank borrowings of approximately US$17,292,000 of which approximately US$9,078,000 was guaranteed; and

• (ii) Unsecured and guaranteed bank borrowings of approximately US$1,441,000.

The Group’s secured bank borrowings were secured by a legal charge on the Group’s property, plant and equipment and land use rights.

Save as aforesaid or as otherwise mentioned herein, and apart from trade payables in the ordinary course of business, the Group did not have any outstanding borrowings, mortgages, charges, debentures, loan capital and overdraft, debt securities or other similar indebtedness, finance leases or hire purchase commitment, liabilities under acceptances or acceptance credits or any guarantees or other material contingent liabilities as at the close of business on 30 November 2018, being the latest practicable date for the purpose of this statement of indebtedness prior to printing of this Prospectus.

– I-1 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

3. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirmed that there had been no material adverse change in the financial or trading position of the Group since 31 December 2017, being the date to which the latest published audited consolidated financial statements of the Group were made up.

4. WORKING CAPITAL

As at the Latest Practicable Date, the Directors, after due and careful consideration, are of the opinion that, taking into account the financial resources available to the Group including internally generated funds and the estimated net proceeds from the Rights Issue, the Group has sufficient working capital for its present requirements for the next twelve months from the date of this Prospectus in the absence of unforeseeable circumstances.

5. BUSINESS TREND AND FINANCIAL PROSPECTS OF THE GROUP

The Group is a global product, services and solutions provider serving both the worldwide onshore and offshore oil and gas exploration and production industries. The Group is principally engaged in the two major segments: (1) Capital Equipment and Packages business, including design, manufacture, installation, and commissioning of capital equipment and packages for onshore and offshore rigs, (2) maintenance, repair and operations (“ MRO ”) of products and services, including MRO supplies and MRO services.

Revenue of the Group for the first six months of 2018 decreased by 35.6% to US$29.6 million from US$45.9 million in the corresponding period of 2017. The net loss for the first six months of 2018 was US$6.8 million, while the net loss for the corresponding period in 2017 was US$3.7 million. The increment of such loss was mainly due to the decreased revenue in the Capital Equipment and Packages segment as well as MRO supplies segment. The revenue from the Capital Equipment and Packages segment in the first half year of 2018 dropped by 28.3% compared with that in the first half year of 2017 and the revenue from MRO supplies dropped by 41.8%.

– I-2 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Though faced with incremental loss in the past, the financial performance of the Group is expected to improve gradually due to a more optimistic oil market: the price of Brent crude oil gradually increased by 7.7% compared with the price in January 2018 and 60% compared with the price in June 2017. With the rebound of oil prices, worldwide offshore drilling and capital expenditure on upstream have increased as well, which will gradually eliminate the burden of prevailing depressed drilling market on the Group's revenue. The Group’s financial performance will gradually improve with oil prices remaining reasonable. Moreover, due to continuously decreased capital investment during the past four years, more than 40% of jack-up drilling rigs are more than 30 years. Due to the low demand for drilling rigs during the past four years, many of these aged rigs have been stacked with minimal maintenance and the cost of bringing these stacked rigs back into the market is at least similar or higher than bringing new built rigs into operations. This recovery in the trend will increase orders and enhance performance of the Group.

The future performance of the Group will further improve with the synergy between the Group and the Fund, who became the major shareholder of the Group in February 2018 through issuance of new shares. The fund brings financial advantage, a professional team, business network and, together with the Group’s industry experience, insight and brand will help the Group expand and expand through investment opportunities in the oil and gas industry chain. Also, through the issuance of additional shares and settlement of due claims, the capital structure of the Group is optimized and liquidity risk has been significantly reduced.

Upon the completion of the Rights Issue, the Group will make use of the proceeds to expand its operating business through potential acquisition of offshore drilling rigs and related rig charter business. The Group will explore opportunities for forming strategic partnerships or other forms of co-operations with established operators with successful track record of offshore drilling rigs. The Group’s long term strategic objective is to be a full service solution provider for the offshore marine industry.

– I-3 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(A) UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS

The following is the unaudited pro forma statement of adjusted consolidated net tangible assets of the Group (the “ Unaudited Pro Forma Financial Information ”) which has been prepared to illustrate the effect of the Rights Issue on the unaudited consolidated net tangible assets of the Group attributable to equity shareholders of the Company as if the Rights Issue had been completed on 30 June 2018.

The Unaudited Pro Forma Financial Information is prepared based on the consolidated net assets of the Group attributable to equity shareholders of the Company as at 30 June 2018 as extracted from the interim report of the Company for the six months ended 30 June 2018 and is adjusted for the effect of the Rights Issue as if the Rights Issue had been completed on 30 June 2018.

The Unaudited Pro Forma Financial Information is prepared for illustrative purpose only, and because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of the Group attributable to equity shareholders of the Company immediately after completion of the Rights Issue or any future date after completion of the Rights Issue.

				Consolidated
	Consolidated		Unaudited pro	net tangible
	net tangible		forma adjusted	assets
	assets		consolidated net	attributable to
	attributable to		tangible assets	equity
	equity		attributable to	shareholders of	Unaudited pro forma
	shareholders of	Estimated net	equity	the Company	adjusted consolidated net
	the Company as	proceeds from	shareholders of	per share as at	tangible assets	per share
	at 30 June 2018	the Rights Issue	the Company	30 June 2018	as at 30 June 2018
	(Note 1)	(Note 2)		(Note 3)	(Note 4)	(Note 6)
	US$’000	US$’000	US$’000	US cents	US cents	HK cents
Based on 1,473,156,204 Rights
Shares to be issued at
the Subscription Price of
HK$0.45 per Rights Share	54,841	83,983	138,824	3.7	4.7	36.8

Notes

1. The consolidated net tangible assets attributable to equity shareholders of the Company of approximately US$54,841,000 as at 30 June 2018 is based on consolidated net assets attributable to equity shareholders of the Company of approximately US$55,549,000 after deducting intangible assets of approximately US$708,000 as extracted from the interim report of the Company for the six months ended 30 June 2018.

2. The estimated net proceeds from the Rights Issue of approximately US$83,983,000 are calculated based on 1,473,156,204 Rights Shares to be issued at the Subscription Price of HK$0.45 per Rights Share as at the Latest Practicable Date and after deduction of estimated related expenses, including among others, professional fees, which are directly attributable to the Rights Issue, of approximately US$681,000.

– II-1 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

1. The consolidated net tangible assets attributable to equity shareholders of the Company per share as at 30 June 2018 is based on the consolidated net tangible assets attributable to equity shareholders of the Company as at 30 June 2018 of approximately US$54,841,000 divided by 1,473,156,204 ordinary shares of the Company in issue as at 30 June 2018.

2. The unaudited pro forma adjusted consolidated net tangible assets per share as at 30 June 2018 after completion of the Rights Issue is determined based on the unaudited pro forma adjusted consolidated net tangible assets attributable to equity shareholders of the Company of approximately US$138,824,000 divided by 2,946,312,408 ordinary shares of the Company in issue after completion of the Rights Issue as at 30 June 2018, which comprises of 1,473,156,204 Rights Shares.

3. No adjustments have been made to the unaudited pro forma adjusted consolidated net tangible assets to reflect any trading results or other transactions of the Group entered into subsequent to 30 June 2018.

4. For the purpose of the Unaudited Pro Forma Financial Information, conversion of US$ and HK$ is calculated at the exchange rate of US$1 to HK$7.83. The exchange rate is for illustrative purpose only and does not constitute a representation that any amount has been, could have been, may be exchanged at this or any other rate or at all.

– II-2 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(B) REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The following is the text of a report received from the reporting accountants, KPMG, Certified Public Accountants, Hong Kong, in respect of the Group’s pro forma financial information for the purpose in this Prospectus.

==> picture [77 x 32] intentionally omitted <==

INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION

To the Directors of TSC Group Holdings Limited

We have completed our assurance engagement to report on the compilation of pro forma financial information of TSC Group Holdings Limited (the “ Company ”) and its subsidiaries (collectively the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purposes only. The pro forma financial information consists of the unaudited pro forma statement of adjusted consolidated net tangible assets as at 30 June 2018 and related notes as set out in Part A of Appendix II to the prospectus dated 11 January 2019 (the “ Prospectus ”) issued by the Company. The applicable criteria on the basis of which the Directors have compiled the pro forma financial information are described in Part A of Appendix II to the Prospectus.

The pro forma financial information has been compiled by the Directors to illustrate the impact of the proposed issue of 1,473,156,204 rights shares at HK$0.45 each on the basis of one rights share for every one existing share held on the record date (the “ Rights Issue ”) on the Group’s financial position as at 30 June 2018 as if the Rights Issue had taken place at 30 June 2018. As part of this process, information about the Group’s consolidated net tangible assets as at 30 June 2018 has been extracted by the Directors from the consolidated interim financial statements of the Company for the period then ended, on which no audit or review report has been published.

Directors’ Responsibilities for the Pro Forma Financial Information

The Directors are responsible for compiling the pro forma financial information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” (“ AG 7 ”) issued by the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”).

– II-3 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

The firm applies Hong Kong Standard on Quality Control 1 “Quality Control for Firms That Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements” issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountants’ Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements (“ HKSAE ”) 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountants plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the pro forma financial information in accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the HKICPA.

For purpose of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information.

The purpose of pro forma financial information included in an investment circular is solely to illustrate the impact of a significant event or transaction on the unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the events or transactions at 30 June 2018 would have been as presented.

– II-4 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

A reasonable assurance engagement to report on whether the pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

• the related pro forma adjustments give appropriate effect to those criteria; and

• the pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountants’ judgement, having regard to the reporting accountants’ understanding of the nature of the Group, the event or transaction in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

• (a) the pro forma financial information has been properly compiled on the basis stated;

• (b) such basis is consistent with the accounting policies of the Group; and

• (c) the adjustments are appropriate for the purposes of the pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

KPMG

Certified Public Accountants Hong Kong

11 January 2019

– II-5 –

APPENDIX III

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This Prospectus, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this Prospectus is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this Prospectus misleading.

2. SHARE CAPITAL

• (a) As at the Latest Practicable Date:

Nominal value per Share (HK$) Authorised: 0.10 Issued and fully paid: 0.10	Number of Shares 10,000,000,000 1,473,156,204	Nominal amount (HK$) 1,000,000,000.00
		147,315,620.40

• (b) Immediately after completion of the Rights Issue (assuming there is no change in the issued share capital of the Company from the Latest Practicable Date up to completion of the Rights Issue):

Nominal value per Share (HK$) Authorised: 0.10 Issued and fully paid: −As at the Latest Practicable Date 0.10 −Rights Shares to be issued pursuant to Rights Issue 0.10 Shares upon completion of the Rights Issue 0.10	Number of Shares 10,000,000,000 1,473,156,204 1,473,156,204 2,946,312,408	Nominal amount (HK$) 1,000,000,000.00
		147,315,620.40 147,315,620.40
		294,631,240.80

– III-1 –

APPENDIX III

GENERAL INFORMATION

All the Shares rank pari passu with each other in all respects including the rights as to voting, dividends and return of capital.

The Rights Shares, when allotted, issued and fully-paid, will rank pari passu with the Shares then in issue in all respects. Holders of such Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid with a record date which falls on or after the date of allotment and issue of the fully-paid Rights Shares.

The issued Shares are listed on the Stock Exchange. None of the securities of the Company is listed or dealt in, and no listing or permission to deal in the securities of the Company is being or is proposed to be sought, on any other stock exchange.

As at the Latest Practicable Date, there is no arrangement under which future dividends are or will be waived or agreed to be waived.

3. DIRECTORS AND SENIOR MANAGEMENT OF THE COMPANY

Particulars of the Directors and senior management of the Company

Name	Address
Executive Directors
Mr. Wang Hongyuan	Units 2706-2709, 27/F, One Harbourfront,
	18 Tak Fung Street, Hunghom,
	Kowloon, Hong Kong
Mr. Jiang Bing Hua	At the Intersection of Changjiang Road
	and Jingang Shan Road,
	Kong Gang Industrial Park,
	Chengyang District, Qingdao City,
	Shandong Province, China
Mr. Zhang Menggui, Morgan	13788 West Road – Ste.#100
	Houston, TX 77041 USA
Non-executive Directors
Mr. Wang Jianzhong	No. 33, Keji Road, Hi-tech Industrial
	Development Zone, Yantai 264670,
	Shandong, China
Mr. Lou Dongyang	No. 1-7, Sai Tso Wan Road, Tsing Yi Island,
	N.T., Hong Kong.

– III-2 –

APPENDIX III

GENERAL INFORMATION

Name

Address

Independent Non-executive Directors Mr. Chan Ngai Sang, Kenny Room 610, Grand City Plaza, 1 Sai Lau Kok Road, Tsuen Wan, New Territories Mr. Zou Zhendong 28/F Jingguang Tower, Hujialou Chaoyang District, Beijing, China Mr. Chen Weidong Room 2-303, No. 9, Chegongzhuang Street, Xicheng District, Beijing, China Senior management Mr. YANG Guohui, Units 2706-2709, 27/F, One Harbourfront, chief operating officer of 18 Tak Fung Street, Hunghom, the Company Kowloon, Hong Kong Mr. XIE Shaohua, Units 2706-2709, 27/F, One Harbourfront, chief financial officer of 18 Tak Fung Street, Hunghom, the Company Kowloon, Hong Kong Mr. WANG Yong, Suite 2003, 20/F Beichen Xinjiyuan, president of the Group No.2 Office BLDG, Jia-13 Beiyuan Road Beijing, China

Biographies of the Directors

Executive Directors

Mr. WANG Hongyuan, aged 43, has been appointed as the executive chairman and chief executive officer of the Group since 9 February 2018. He is also a deputy general manager of China Merchants (“ CM ”) Industry, the general manager of China Merchant Great-Wall Capital Management Ltd and a supervisor of China International Marine Containers (Group) Co., Ltd. (A share Stock Code: 000039, H share Stock Code: 2039). Mr. Wang worked in the business development department of CM Group from 2003 to 2005, worked in China Merchants Holdings (International) Company Limited from 2005 to 2013, served as the general manager assistant of China Merchants Food Supply Chain Management Co., Ltd.* (招商局食 品供應鏈管理有限公司) in 2014, and the director assistant of the capital management department of CM Group from 2015 to 2016. He has extensive experience in strategic planning, mergers and acquisitions, capital operations and investments in sectors such as offshore marine and shipping, port and bonded logistics, cold chain and food supply chain management. He obtained a bachelor’s degree in ocean vessel driving and a master’s degree in transportation management from Dalian Maritime University in the PRC in 1997 and 2004, respectively. He is one of the directors of each of the Subscriber or Prime Force Investment Corporation, China Merchants Great-Wall GP Limited and China Merchant Great-Wall Capital Management Ltd.

– III-3 –

APPENDIX III

GENERAL INFORMATION

Mr. JIANG Bing Hua, aged 68, has been appointed as the Co-Chairman of the Group since 9 February 2018. He is a co-founder of the Group. He is an executive Director of the Group and he is responsible for the Group’s overall strategy planning and business development. He obtained his bachelor’s degree in offshore structure engineering from the Tianjin University (天津大學) in the PRC in 1980 and acquired his master’s degree in business administration from the University of Dallas in the U.S.A. in 1993. He has 44 years of experience in the oil and gas industry. Prior to founding the Group, he worked for the Sinopec group, the group of China National Petroleum Corporation and China National Offshore Oil Corporation in various positions such as driller, drilling superintendent, drilling manager, operation manager and company representative.

Mr. ZHANG Menggui, Morgan, aged 59, is a co-founder and has been appointed as an executive Director of the Group since 22 June 2017. He obtained his bachelor’s degree majoring in drilling engineering from the China University of Petroleum (中國石油大學) in 1982 and acquired his master’s degree in petroleum engineering from the University of Alaska-Fairbanks in the U.S.A. in 1989 and he received an executive master’s in business administration (“ EMBA ”) from China Europe International Business School in 2012. He has 35 years of experience in the oil and gas industry. Prior to founding the Group, he worked for a subsidiary of the group of China National Petroleum Corporation in China and for Cook Inlet Region Inc. in Alaska. He currently is a member of several oil industry associations and professional organizations including the Society of Petroleum Engineers and the American Drilling Engineers. He is the elder brother of Mr. Zhang Mengzhen, Michael, the President of TSC Manufacturing and Supply, LLC. (“ TSC M&S ”), a subsidiary of the Group.

Non-executive Directors

Mr. WANG Jianzhong, aged 45, has been appointed as a non-executive Director with effect from 4 July 2016. He graduated from Beijing Normal University in China with a Master degree in Management, Business Administration in 1998. He started working in 1998 and he is currently the president of China International Marine Containers (“ CIMC ”) Raffles Offshore (Singapore) Limited (“ CIMC Raffles ”). From 1998 to 2006, he was senior manager of capital operation department of China Ocean Shipping (Group) Corporation (“ COSCO ”). From 2006 to 2007, he was deputy general manager of Taicang CIMC Container Co., Ltd. From 2007 to 2014, he was general manager of the enterprise management department of CIMC, where he notably created and promoted the CIMC “LEAN ONE” management model – based on the LEAN concept which significantly improved the group’s annual revenue. The LEAN ONE Concept attracted favourable reviews from the “Harvard Business Review” and “Tsinghua Business Review”. From 2010 to 2014, he acted as secretary general of group leadership council of CIMC (中集集團 升級領導委員會) to promote upgraded changes for CIMC. From June 2014 to December 2015, he was vice president of CIMC Raffles. From December 2015 to date, he has been president of CIMC Raffles.

– III-4 –

APPENDIX III

GENERAL INFORMATION

Mr. LOU Dongyang, aged 43, is has been appointed a non-executive Director since April 2018. He is also the chief financial officer of China Merchants Industry Holdings Co., Ltd. Mr. Lou has served as an assistant engineer in the Chemical Engineering Office of the Institute of Standardization of Nuclear Industry and as secretary-general for the National Technical Committee for Standardization of Radioisotopes (全國放射性同位素標準化技術委員會) from July 1997 to October 2001, as an engineer in the Planning Department in China Isotope Company from October 2001 to August 2003, as a specialist of the board of supervisors for Key Large State-Owned Enterprises under the State Council from August 2003 to August 2004, as principal staff member of the board of supervisors for Key Large State-Owned Enterprises under the State Council from September 2008 to September 2012, as the assistant to the department director of the intellectual property administrative department of China Merchants Group Limited (“ CM Group ”) from September 2012 to May 2015, as the assistant to the department director of the finance department (intellectual property department) of CM Group from May 2015 to October 2015, and as the deputy general manager of the finance department (intellectual property department) of CM Group from October 2015 to November 2017. Mr. Lou obtained a bachelor’s degree in applied chemistry from Peking University in 1997 and a master’s degree in business administration also from Peking University in 2002.

Independent Non-executive Directors

Mr. CHAN Ngai Sang, Kenny, aged 54, has been appointed an independent non-executive Director since October 2005. He is a partner and founder of Kenny Chan & Co., a firm of Certified Public Accountants. He has over 27 years’ experience in accounting, taxation, auditing and corporate finance and has been involved in several mergers, acquisitions and initial public offering projects. He holds a bachelor of commerce degree from the University of New South Wales and is a member of Chartered Accountants Australia and New Zealand, the Association of International Accountants, CPA Australia, the Hong Kong Institute of Certified Public Accountants and the Taxation Institute of Hong Kong. He is also a fellow member of the Hong Kong Institute of Directors. He served as president of the Hong Kong Branch of the Association of International Accountants in the years 2012-2015 and also serves on several tribunals of the The Government of the Hong Kong Special Administrative Region including the Mandatory Provident Fund Schemes Appeal Board, Occupational Retirement Schemes Appeal Board, Youth Programme Co-ordinating Committee of the Commission on Youth and the Fight Crime Committee of Tsuen Wan District. He is an independent non-executive director of Convoy Financial Holdings Limited, Minsheng Education Group Company Limited & AMCO United Holding Limited, all are listed on the Main Board of the Stock Exchange, and Combest Holdings Limited, WLS Holdings Limited & Sing On Holdings Limited, all are listed on the Growth Enterprise Market of the Stock Exchange.

– III-5 –

APPENDIX III

GENERAL INFORMATION

Mr. ZOU Zhendong, aged 49, has been appointed an independent non-executive Director since May 2018. He is also serving as the independent director of Bestsun Energy Co. Ltd., an A share company listed in the Shanghai Stock Exchange, the senior partner of Sinowing Law LLP, Legal Representative of Sinowing (Beijing) AMC Co., Ltd., and further and concurrently as a member of the High-tech and E-Commerce Committee & International Business Committee of All China Lawyers Association. Mr. Zou used to work as the officer for the Chinese People’s Association for Friendship with Foreign Countries, as the staff for China Native Produce & Animal By-Products Import & Export Corp., as the director of the 4th Department for China Commercial Foreign Trade Corporation, and as the partner in charge of international business department and IPR department for Beijing Dacheng Law Firm (aka Dentons for the moment). Mr. Zou was awarded a Bachelor Degree by the Renmin University of China in 1992, with major in international politics and minor in international economics. As being jointly elected by the Ministry of Justice of the People’s Republic of China and Lord Chancellor’s Office of the United Kingdom, Mr. Zou has worked and trained himself in London.

Mr. CHEN Weidong, aged 63, has been appointed as an independent non-executive Director with effect from June 2018. Mr. Chen has over 30 years’ experience in offshore oil and gas industry. He supervised and organized 4 published books on petroleum economics and geopolitics. Mr. Chen is now serving as Guest Professor at Renmin University of China, Invited Researcher at Energy Security Center of Graduate School of Chinese Academy of Social Sciences, Dean of Minde Institute and Chair of DFS Energy Consultant (Beijing) Ltd. Mr. Chen used to work as Chief Energy Researcher of CNOOC Energy Economics Inst. Executive Vice President, Secretary of Board of Directors, and Chief Strategy Officer of China Oilfield Services Limited (a H-share company listed on the main board of the Stock Exchange of Hong Kong Limited from 2002, stock code: 2883). Mr. Chen obtained a bachelor’s degree in geophysical exploration studies from Ocean University of China (formerly as Shandong College of Oceanology) in the People’s Republic of China in 1982 and an MBA from Peking University in July 2001. He graduated from China University of Political Science and Law with a master diploma in July 2005.

– III-6 –

APPENDIX III

GENERAL INFORMATION

Biographies of the senior management of the Company

Mr. YANG Guohui, aged 45, appointed as an executive Director and chief operating officer of the Company with effect from 9 February 2018 and he has resigned as an executive Director with effect from 1 April 2018 due to work reallocation. Mr. Yang remains as the chief operating officer of the Group. He is also an executive director of China Merchants Capital Management (International) Limited. He worked for various positions such as an engineer, a manager in workforce planning and a manager in assets transactions under the group companies of Transocean Ltd. during the period from 2001 to 2013. He then worked as the general manager of ESSM Pte Ltd. from September 2013 to October 2014 and chief operating officer for Scott & English Energy Pte Ltd. in Singapore from August 2015 to 2017. He obtained a master’s degree in engineering from University of Petroleum in 1999. He also obtained a master’s degree in business administration from Nanyang Technological University, Singapore in 2017. He is part of the management team of China Merchant Great-Wall Capital Management Ltd, which holds in aggregate 81% beneficial interests in Meris Global Investments Limited. Meris Global Investments Limited is a co-investment vehicle of the management team of China Merchant Great-Wall Capital Management Ltd.

Mr. XIE Shaohua, aged 47, appointed as chief financial officer of the Company with effect from 1 July 2018. Mr. Xie graduated from Central University of Finance and Economics in 1993 and received master degrees at the University of International Business and Economics and The Chinese University of Hong Kong in 2003 and 2005 respectively. Mr. XIE is a Chinese senior accountant. In 2016, he was awarded by the Ministry of Finance as a national leading accounting talents. From November 1998 to October 2002, he worked in the finance department of SINOTRANS & CSC Group Company. From November 2002 to May 2007, he served as the deputy general manager of the finance department of Sinotrans Limited (H shares, stock code: 00598). From September 2007 to June 2018, he was appointed as deputy general manager and chief financial officer of Sinotrans Shipping Co., Ltd. (red chip, stock code: 00368).

Mr. WANG Yong, aged 56, is the President of the Group with effect from 28 April 2016. He is responsible for the daily operations and business activities of the Group. He is also the director and chief executive officer of a subsidiary, OIM Pte. Ltd. He joined the Company in April 2012 as the senior Group vice president and Group chief operations officer. Prior to joining the Company, he was the general manager for Weatherford International China. In his 17 years with Weatherford International, he held several managerial roles including global business alignment manager and business development manager. He started his career in the oil industry as a drilling engineer for China National Petroleum Corporation after graduating from the China Petroleum University in 1982. He also spent five years in the China Petroleum University teaching drilling engineering courses before completing his first master’s degree in petroleum engineering from the Louisiana State University in 1993. He also holds an EMBA from the China Europe International Business School.

– III-7 –

APPENDIX III

GENERAL INFORMATION

4. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executives’ interests and short positions in Shares, underlying Shares and debentures

As at the Latest Practicable Date, save as disclosed in this Prospectus, none of the Directors or the chief executive of our Company or their respective associates had or was deemed to have any interests and short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO), (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she is taken or deemed to have under such provisions of the SFO); (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules:

Long Position in the Shares

			Approximate
			percentage of
		Number of	shareholding in
Name of Director	Capacity	Shares	the Company(2)
Mr. Zhang Menggui,	Corporate interest	120,046,200	8.15%
Morgan(1)
	Beneficial interest	4,656,000	0.31%
Mr. Jiang Bing Hua(1)	Corporate interest	120,046,200	8.15%
	Beneficial interest	4,656,000	0.31%
Mr. Chan Ngai Sang,	Beneficial interest	500,000	0.03%
Kenny

Notes:

1. Global Energy Investors, LLC. is the beneficial owner of 120,046,200 Shares. The entire share capital of Global Energy Investors, LLC. is beneficially owned as to 50% each by Mr. Zhang Menggui, Morgan and Mr. Jiang Bing Hua, both executive Directors. Accordingly, Mr. Zhang Menggui, Morgan and Mr. Jiang Bing Hua are deemed to be interested in the 120,046,200 Shares beneficially owned by Global Energy Investors, LLC. under Part XV of the SFO.

2. The percentage is calculated on the basis of 1,473,156,204 Shares in issue as at the Latest Practicable Date.

– III-8 –

APPENDIX III

GENERAL INFORMATION

(b) Substantial Shareholders’ interests and other persons’ interests and short positions in Shares and underlying Shares

As at the Latest Practicable Date, save as disclosed in this Prospectus, so far as was known to the Directors, persons other than a Director or chief executives of the Company who had, or were deemed to have, interests or short positions in the Shares or underlying Shares which were required to be disclosed to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO, or required to be recorded in the register maintained by the Company under Section 336 of the SFO, or were directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company, were as follows:

Long Position in Shares and underlying Shares

			Approximate
		Number of	percentage of
		Shares/	shareholding
	Capacity/	underlying	in the
Name of Shareholder	Nature of Interest	Shares held	Company(9)
China Great Wall AMC	Corporate	765,186,000	51.94%
(International) Holdings
Company Limited(1)
China Great Wall Asset	Corporate	765,186,000	51.94%
Management Co., Ltd(1)
Fund(1)(2)(3)(4)	Corporate	765,186,000	51.94%
China Merchants Great-Wall GP	Corporate	765,186,000	51.94%
Limited(2)
Great Wall International	Corporate	765,186,000	51.94%
Investment V Limited(3)
Prime Force(4)	Corporate	765,186,000	51.94%
China Merchants Group	Corporate	765,186,000	51.94%
Limited(4)
Madam Chen Fengying(5)	Interest of spouse	124,702,200	8.46%
Madam Zhang Jiuli(6)	Interest of spouse	124,702,200	8.46%
Global Energy Investors, LLC.(7)	Corporate	120,046,200	8.15%

– III-9 –

APPENDIX III

GENERAL INFORMATION

			Approximate
		Number of	percentage of
		Shares/	shareholding
	Capacity/	underlying	in the
Name of Shareholder	Nature of Interest	Shares held	Company(9)
China International Marine	Corporate	92,800,000	6.30%
Containers (Group)
Company Limited(8)
China International Marine	Corporate	92,800,000	6.30%
Containers (Hong Kong)
Limited(8)

Notes:

1. China Great Wall AMC (International) Holdings Company Limited (“ GWAMC International ”) holds 25% of the equity interest in China Merchants Great-Wall GP Limited (“ Fund GP ”) and is a wholly owned subsidiary of China Great Wall Asset Management Co., Ltd. (“ GW Asset Management ”). Therefore, both GWAMC International and GW Asset Management are both deemed to be interested in the 765,186,000 Shares that the Fund is interested in under Part XV of the SFO.

2. Fund GP is the general partner of the Fund and is therefore deemed to be interested in the 765,186,000 Shares that the Fund is interested in under Part XV of the SFO.

3. Great Wall International Investment V Limited holds approximately 39.986% of the limited partnership interests in the Fund and is therefore deemed to be interested in the 765,186,000 Shares that the Fund is interested in under Part XV of the SFO.

4. China Merchants Capital Management (International) Limited holds 45% of the equity interest in Fund GP and is a wholly owned subsidiary of China Merchants Capital Management Co. Ltd., which in turn is wholly owned by China Merchants Capital Investment Co., Ltd. China Merchants Capital Holdings (International) Limited holds approximately 9.996% of the limited partnership interests in the Fund and is a wholly owned subsidiary of China Merchants Capital Holdings Co. Ltd., which in turn is wholly owned by China Merchants Capital Investment Co., Ltd.

China Merchants Industry Holdings Co., Ltd. (“ CM Industry ”) holds 30% of the equity interest in Fund GP and approximately 29.989% of the limited partnership interests in the Fund and is a wholly owned subsidiary of China Merchants Holdings (Hong Kong) Company Ltd. (“ CM HK ”).

Both China Merchants Capital Investment Co., Ltd. and CM HK are wholly owned subsidiaries of China Merchants Steam Navigation Company Limited, which is the wholly owned subsidiary of China Merchants Group Limited (招商局集團有限公司) (“ CM Group* ”).

Therefore, each of China Merchants Capital Management (International) Limited, China Merchants Capital Management Co. Ltd., China Merchants Capital Investment Co., Ltd., China Merchants Capital Holdings (International) Limited, China Merchants Capital Holdings Co. Ltd., CM Industry, CM HK, China Merchants Steam Navigation Company Limited, CM Group are deemed to be interested in the 765,186,000 Shares that the Fund is interested in under Part XV of the SFO.

Prime Force is a company incorporated in the British Virgin Islands and is wholly-owned by the Fund and the Fund is therefore deemed to be interested in the 765,186,000 Shares that Prime Force is interested in under Part XV of the SFO.

– III-10 –

APPENDIX III

GENERAL INFORMATION

1. These interests represent the same block of Shares and share options held by Mr. Zhang Menggui, Morgan as shown in the above sub-section headed “(a) Directors’ and chief executives’ interests and short positions in Shares, underlying Shares and debentures”. Since Madam Chen Fengying is the spouse of Mr. Zhang Menggui, Morgan, she is deemed to be interested in the Shares and share options held by him under Part XV of the SFO.

2. These interests represent the same block of Shares and share options held by Mr. Jiang Bing Hua as shown in the sub-section headed “(a) Directors’ and chief executives’ interests and short positions in Shares, underlying Shares and debentures” above. Since Madam Zhang Jiuli is the spouse of Mr. Jiang Bing Hua, she is deemed to be interested in the Shares and share options held by him under Part XV of the SFO.

3. This interest represents the same block of corporate interest held by Mr. Zhang Menggui, Morgan and Mr. Jiang Bing Hua as shown in the sub-section headed “(a) Directors’ and chief executives’ interests and short positions in Shares, underlying Shares and debentures” above.

4. China International Marine Containers (Hong Kong) Limited (“ CIMC HK ”) is the beneficial owner of 92,800,000 Shares. CIMC HK is a wholly-owned subsidiary of China International Marine Containers (Group) Company Limited (“ CIMC Group ”). Therefore, CIMC Group is deemed to be interested in the 92,800,000 Shares of the Company held by CIMC HK under Part XV of the SFO.

5. The percentage is calculated on the basis of 1,473,156,204 Shares in issue as at the Latest Practicable Date.

Long Position in shares of a subsidiary of the Company

	Name of	Percentage of
Name of subsidiary	substantial shareholder	shareholding
Jurun Limited	Xingbo Limited	21%
TSC Manufacturing and	Independence Drilling S.A.	40%
Supply De Colombia S.A.S
ATS Energy LLC	Axion Services Inc.	33%
	Petromax Industry Inc.	16%
Texas Unconventional	Mr. Yang Anping	20%
Resources LLC
OIM Pte. Ltd.	Offshore CC FZE	5%

– III-11 –

APPENDIX III

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or a proposed Director was a director or employee of a company which had, or was deemed to have, an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

Save as disclosed above, so far as was known to the Directors or the chief executive of the Company, as at the Latest Practicable Date, no persons other than a Director or chief executives of the Company who had, or were deemed to have, interests or short positions in the Shares or underlying Shares which were required to be disclosed to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO, or required to be recorded in the register maintained by the Company under Section 336 of the SFO, or were directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company.

5. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which would not expire or would not be determinable by such member of the Group within one year without payment of compensation other than statutory compensation.

6. OTHER INTERESTS OF THE DIRECTORS

Save as disclosed in this Prospectus, as at the Latest Practicable Date:

• (a) none of the Directors had any interest, direct or indirect, in any assets which have been, since 31 December 2017, being the date of the latest published audited accounts of the Group, up to the Latest Practicable Date, acquired or disposed of by, or leased to any member of the Group, or are proposed to be acquired or disposed of by, or leased to, any member of the Group; and

• (b) none of the Directors was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group.

7. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective close associates had any interest in any business, apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with the business of the Group pursuant to Rule 8.10 of the Listing Rules.

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APPENDIX III

GENERAL INFORMATION

8. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration or claims of material importance to the Group and no litigation, arbitration or claims of material importance to the Group was known to the Directors to be pending or threatened by or against any member of the Group.

9. MATERIAL CONTRACTS

The following contracts (being contracts entered into outside the ordinary course of business carried by the Group) had been entered into by members of the Group within the two years immediately preceding the date of this Prospectus and up to the Latest Practicable Date:

• (a) the subscription agreement dated 14 December 2017 entered into between the Company and the Fund as the subscriber, pursuant to which the Company had conditionally agreed to allot and issue to the Fund or Prime Force, the nominee of the Fund, and the Fund had conditionally agreed to subscribe for, or nominate Prime Force to subscribe for, at the completion of the subscription contemplated under the subscription agreement, 765,186,000 subscription Shares at the subscription price of HK$512,674,620, being HK$0.67 per subscription Share;

• (b) the Underwriting Agreement;

• (c) agreement between the Company and Beijing He Ju Tian Yang Investment Management Centre* (北京合聚天揚投資管理中心（有限合伙）) dated 21 July 2017, upon which the Company will transfer 40,000,000 ordinary shares of RMB1.00 (One) each, which is equivalent to 21.05% of TSC Oil and Gas Services Group Holdings Ltd. (青島天時油氣裝備服務集團股份有限公司) at a consideration of RMB25,684,000. The completion of the agreement has not yet taken place; and

• (d) agreement between the Company and Zheng Yuan Heng Tong (Tianjin) Petroleum Technology Limited* (正源恆通（天津）石油科技有限合伙公司) dated 21 July 2017, upon which the Company will transfer 53,200,000 ordinary shares of RMB1.00 (One) each, which is equivalent to 28.00% of TSC Oil and Gas Services Group Holdings Ltd. (青島天時油氣裝備服務集團股份有限公司) at a consideration of RMB34,159,720. The completion of the agreement has not yet taken place.

– III-13 –

APPENDIX III

GENERAL INFORMATION

10. EXPERT’S QUALIFICATION AND CONSENT

The following are the qualifications of the experts whose names, opinions and/or reports are contained in this Prospectus:

Name

Qualification

KPMG

Certified Public Accountants

KPMG has given and confirmed that it has not withdrawn its written consent to the issue of this Prospectus with the inclusion herein of its letter, report, advice, opinion and/or references to its name, in the form and context in which they respectively appear.

As at the Latest Practicable Date, KPMG (i) had no shareholding in any member of the Group and did not have any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group; (ii) had no direct or indirect interest in any assets which had been, since 31 December 2017 (being the date to which the latest published audited consolidated financial statements of the Group were made up), acquired, disposed of by, or leased to any member of the Group; and (iii) had given and had not withdrawn its consent to the issue of this Prospectus with the inclusion of its letter, opinions and/or reports and the reference to its name included herein in the form and context in which they respectively appear.

11. CORPORATE INFORMATION AND THE PARTIES INVOLVED IN THE RIGHTS ISSUE

Registered office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Operation headquarters:

13788 West Road Suite 100 Houston Texas 77041 United States of America

– III-14 –

APPENDIX III

GENERAL INFORMATION

Principal place of business in	Units 2706-2709, 27/F
Hong Kong:	One Harbourfront
	18 Tak Fung Street
	Hunghom
	Kowloon, Hong Kong
Underwriters:	China Tonghai Securities Limited
	CCB International Capital Limited
Financial adviser to the	CCB International Capital Limited
Company:
Legal adviser to the Company	Luk & Partners
as to Hong Kong law in	In Association with Morgan, Lewis & Bockius
relation to the Rights Issue:	Suites 1902-09, 19th Floor
	Edinburgh Tower
	The Landmark
	15 Queen’s Road Central
	Hong Kong
Reporting accountant:	KPMG
	8th Floor
	Prince's Building
	10 Chater Road, Central
	Hong Kong
Principal bankers:	Industrial and Commercial Bank of China,
	Qingdao Branch
	China CITIC Bank International Ltd.
	Standard Chartered Bank
	Industrial and Commercial Bank of China
	(Asia) Limited
	China Construction Bank, Qingdao Branch
	China Construction Bank, Shaanxi Branch
	Hi-Tech Development Zone Sub-branch
	Bank of Communications, Qingdao Branch
	Agricultural Bank of China, Qingdao Branch
	Evergrowing Bank
	East West Bank
	The Royal Bank of Scotland

– III-15 –

APPENDIX III

GENERAL INFORMATION

Principal share registrar: Conyers Trust Company (Cayman) Limited Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands Hong Kong branch share Tricor Investor Services Limited registrar and transfer office: Level 22 Hopewell Centre 183 Queen’s Road East Hong Kong Authorised representatives: Mr. Zhang Menggui, Morgan 1139 Villa Bergamo Ct., Houston, TX77094, U.S.A. Mr. Jiang Bing Hua 2018 Cresent Palm Ct., Houston TX 77077, U.S.A. Company secretary: Ms. Cheung Wai Sze, Candy (a fellowship member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries)

12. BINDING EFFECT

The Prospectus Documents and all acceptances of any offer or application contained therein and governed by and shall be constructed in accordance with the laws of Hong Kong. The Prospectus Documents shall have the effect, if an application is made in pursuance hereof, of rendering all persons concerned bound by all provisions (other than the penal provisions) of section 44A and 44B of the Companies Miscellaneous Provision Ordinance so far as applicable.

13. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG

A copy of each of the Prospectus Documents, having attached thereto the written consent referred to in the paragraph headed “10. Expert’s qualification and consent” in this appendix, have been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies Miscellaneous Provision Ordinance.

14. MISCELLANEOUS

This Prospectus is prepared in both English and Chinese. In the event of inconsistency, the English text shall prevail over its Chinese text unless otherwise specified.

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APPENDIX III

GENERAL INFORMATION

15. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 6:00 p.m. on any weekday (except public holidays) at the offices of the Company’s principal place of business in Hong Kong from the date of this Prospectus up to and including the date which is 14 days from the date of this Prospectus:

• (1) the memorandum and articles of association of the Company;

• (2) annual reports of the Group for the financial years ended 31 December 2015, 2016 and 2017 and the interim report of the Group for the six months ended 30 June 2018;

• (3) the report on the unaudited pro forma financial information of the Group from KPMG, the text of which is set out in Appendix II to this Prospectus;

• (4) the written consents referred to in the paragraph headed “10. Experts’ qualification and consents” in this appendix;

• (5) the service contracts and letters of appointment referred to in the section headed “5. Directors’ service contracts” in this appendix;

• (6) the material contracts referred to in the section headed “9. Material contracts” in this appendix;

• (7) the Circular; and

• (8) the Prospectus Documents.

• For identification purpose only

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