G. A. Holdings Limited - Proxy Solicitation & Information Statement 2023

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant, or other professional adviser.

If you have sold or transferred all your shares in G.A. Holdings Limited (the “ Company ”), you should at once hand this circular to the purchaser(s) or transferee(s) to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular, for which the directors of the Company (the “ Directors ”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of the Stock Exchange 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, (1) the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and; (2) there are no other matters the omission of which would make any statement herein or this circular misleading.

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(Incorporated in the Cayman Islands with limited liability and carrying on business in Hong Kong under the trading name of German Automobiles International Limited)

(Stock Code: 8126)

(I) MAJOR TRANSACTION – FACILITIES GUARANTEES UNDER THE GUARANTEE AGREEMENT; AND (II) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the extraordinary general meeting (“ EGM ”) of the Company to be held at 11:00 a.m. on Friday, 8 December 2023, at Unit 1007, Level 10, Tower 1, Grand Century Place, 193 Prince Edward Road West, Mongkok, Kowloon, Hong Kong is set out on pages 34 to 35 of this circular.

Whether or not you are able to attend the EGM, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event, not less than 48 hours before the time appointed for holding the EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

This circular will remain on the “Latest Listed Company Information” page of the GEM website at www.hkgem.com for at least 7 days from the date of its posting and will be published on the Company’s website at www.ga-holdings.com.hk.

22 November 2023

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I – Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Appendix II – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	34

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the meanings set out below:

“Announcement” the announcement of the Company dated 16 October 2023 in relation to, among other things, the entering into of the Guarantee Agreement “Board” the board of Directors “BOC” Bank of China Limited Xiamen Branch (中國銀行股份有限公司廈門市分行) “CMS Bank” China Minsheng Banking Corporation Limited (中國民生銀行股份有限公司) “Company” G.A. Holdings Limited, a limited liability company incorporated in the Cayman Islands, the shares of which are listed on the GEM “connected person(s)” has the meaning ascribed to it in the GEM Listing Rules “Director(s)” director(s) of the Company “EGM” the extraordinary general meeting of the Company to be convened at 11:00 a.m. on Friday, 8 December 2023 to consider and if thought fit, to approve the Guarantee Agreement and the transactions contemplated thereunder “Existing Facilities A Framework the framework agreement dated 15 June 2023 entered into by Agreement” Xiamen Zhong Bao and BOC with an expiry date in the second quarter of 2024 which sets out the terms of the facility agreements in respect of Facilities A “Existing Facilities A Guarantee the facilities guarantee agreement entered into by BOC and Xiamen Agreement” BMW on 15 June 2023 in respect of Facilities A “Existing Facilities A Pledge the pledge agreement dated 15 June 2023 entered into by BOC and Agreement” GAPL in respect of Facilities A

“Existing Facilities B Framework Agreement”

the framework agreement dated 31 July 2023 entered into by Xiamen Zhong Bao and CMS Bank with an expiry date in the second quarter of 2024 which sets out the terms of the facility agreements in respect of Facilities B

“Existing Facilities B Guarantee the facilities guarantee agreement entered into by CMS Bank and Agreement” Xiamen BMW on 31 July 2023 in respect of Facilities B
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DEFINITIONS

“Existing Facilities Framework	the Existing Facilities A Framework Agreement and the Existing
Agreements”	Facilities B Framework Agreement
“Facilities A”	facilities including but not limited to a series of loans, notes,
	guarantees and letters of credit entered into or may be entered into
	by BOC and Xiamen Zhong Bao
“Facilities B”	facilities including but not limited to a series of loans, notes,
	guarantees and letters of credit entered into or may be entered into
	by CMS Bank and Xiamen Zhong Bao
“Facilities Guarantees”	the guarantees provided and/or to be provided (as the case may be)
	by Xiamen BMW and GAPL in favour of Xiamen Zhong Bao
	under the Guarantee Agreement
“GAPL”	German Automobiles Pte Ltd, a company incorporated in the
	Republic of Singapore with limited liability and the holding
	company of Xiamen BMW
“GEM”	the GEM of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on the GEM
“Group”	the Company and its subsidiaries
“Guarantee Agreement”	the guarantee agreement dated 16 October 2023 entered into among
	Xiamen BMW, GAPL and Xiamen Zhong Bao
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Mr. Zhao”	Mr. Zhao Guiming (趙貴明先生)
“Latest Practicable Date”	17 November 2023, being the latest practicable date prior to the
	printing of this circular for the purpose of ascertaining certain
	information contained herein
“New Facilities A Framework	the framework agreement to be entered into by Xiamen Zhong Bao
Agreement”	and BOC setting out the terms of the facility agreements in respect
	of Facilities A that may be entered into by Xiamen Zhong Bao and
	BOC after the expiry of the Existing Facilities A Framework
	Agreement and for the purpose of renewing the Existing Facilities
	A Framework Agreement

DEFINITIONS

“New Facilities A Guarantee Agreement”
the facilities guarantee agreement to be entered into by BOC and Xiamen BMW whereby Xiamen BMW shall provide a facility guarantee to BOC in respect of the Facilities A to be borrowed by Xiamen Zhong Bao from BOC
“New Facilities A Pledge Agreement”
the pledge agreement to be entered into by BOC and GAPL whereby GAPL shall pledge the Non-Business Operation Property to BOC in respect of the Facilities A to be borrowed by Xiamen Zhong Bao from BOC
“New Facilities B Framework Agreement”
agreement to be entered into by CMS Bank and Xiamen Zhong Bao setting out the terms of the facility agreements in respect of Facilities B that may be entered into by Xiamen Zhong Bao and CMS Bank after the expiry of the Existing Facilities B Framework Agreement and for the purpose of renewing the Existing Facilities B Framework Agreement
“New Facilities B Guarantee Agreement”
the facilities guarantee agreement to be entered into by CMS Bank and Xiamen BMW whereby Xiamen BMW shall provide a facility guarantee to CMS Bank in respect of the Facilities B to be borrowed by Xiamen Zhong Bao from CMS Bank
“New Facilities Framework Agreements”

the New Facilities A Framework Agreement and the New Facilities B Framework Agreement

“New Facilities Guarantee Agreements”
the New Facilities A Guarantee Agreement and the New Facilities B Guarantee Agreements
“Non-Business Operation Property”
a parcel of leasehold land located at Chaoyang District, Beijing, PRC and the residential building erected thereon, which is owned by GAPL
“PRC”

the People’s Republic of China

“Previous Guarantee Agreement”
the guarantee agreement dated 15 November 2021 entered into among Xiamen BMW, GAPL and Xiamen Zhong Bao
“SFO”
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Share(s)” ordinary share(s) in the share capital of the Company

“Shareholder(s)” the shareholder(s) of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited
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DEFINITIONS

“Xiamen BMW”	Xiamen BMW Automobiles Service Co., Ltd.* (廈門寶馬汽車維修
	有限公司), a company established in the PRC with limited liability
	and a wholly-owned subsidiary of GAPL which in turn is a wholly-
	owned subsidiary of the Company
“Xiamen Zhong Bao”	Xiamen Zhong Bao Automobiles Co., Ltd.* (廈門中寶汽車有限公
	司), a company established in the PRC with limited liability and a
	third party independent of the Company and the connected persons
	of the Company
“Zhong Bao Group”	Xiamen Zhong Bao and its related companies

For illustration purposes only, an exchange rate of RMB1 to HK$1.09 has been applied in this circular. No representation is made that any amount in RMB or HK$ was, could have been or could be converted at such rate or at any other rate or at all.

* for identification purpose only

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability and carrying on business in Hong Kong under the trading name of German Automobiles International Limited)

(Stock Code: 8126)

Executive Directors:

Mr. Yuen Kin Pheng (Chairman) Mr. Choy Choong Yew (Managing Director) Mr. Li Ze Qing Mr. Ma Hang Kon, Louis Mr. Zhang Xi

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent non-executive Directors:

Ms. Guan Xin Mr. Lin Ju Zheng Mr. Zhou Ming

Principal Place of Business in Hong Kong: Unit 1007, Level 10, Tower I Grand Century Place 193 Prince Edward Road West Mongkok, Kowloon, Hong Kong

Head office in Singapore:

51 Goldhill Plaza #15-05 Singapore 308900

22 November 2023

To the Shareholders

Dear Sir or Madam,

(I) MAJOR TRANSACTION – FACILITIES GUARANTEES UNDER THE GUARANTEE AGREEMENT; AND

(II) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement. Pursuant to the Guarantee Agreement, Xiamen BMW and GAPL have conditionally agreed to guarantee Xiamen Zhong Bao’s banking facilities to be incurred in its ordinary course of business up to a maximum aggregate amount of RMB101.0 million (equivalent to approximately

LETTER FROM THE BOARD

HK$110.1 million) during the period from 1 January 2024 to 31 December 2025, which constitutes a major transaction of the Company and thus is subject to the reporting, announcement and shareholders’ approval requirements pursuant to Chapter 19 of the GEM Listing Rules.

The purpose of this circular is to provide the Shareholders with, among other things, further information relating to the Guarantee Agreement and the transactions contemplated thereunder and other information required by the GEM Listing Rules.

THE GUARANTEE AGREEMENT

1. The principal terms and conditions of the Guarantee Agreement

On 16 October 2023 (after trading hours), Xiamen BMW, GAPL and Xiamen Zhong Bao entered into the Guarantee Agreement, pursuant to which Xiamen BMW and GAPL have conditionally agreed to guarantee Xiamen Zhong Bao’s banking facilities to be incurred in its ordinary course of business to a maximum aggregate amount of RMB101.0 million (equivalent to approximately HK$110.1 million) during the period from 1 January 2024 to 31 December 2025.

Please refer to the paragraph headed “2. Reasons for and benefits of the Guarantee Agreement” below in this circular for further details.

The Guarantee Agreement is conditional upon the Shareholders’ approval at the EGM. Subject to the approval by the Shareholders at the EGM, the Facilities Guarantees under the Guarantee Agreement will be entered into among Xiamen BMW, GAPL and Xiamen Zhong Bao.

The principal terms of the Guarantee Agreement are set out as follows:

Parties

(a) Xiamen BMW;
(b) GAPL; and
(c) Xiamen Zhong Bao.

Date

16 October 2023

Period

Two years from 1 January 2024 to 31 December 2025

LETTER FROM THE BOARD

Guarantee amount

The guarantee amount, totalling RMB101.0 million (equivalent to approximately HK$110.1 million), has been arrived at based on the estimated maximum aggregate principal amount of banking facilities of RMB92.0 million and possible interests and charges in any events of default payment to be incurred by Xiamen Zhong Bao under the New Facilities Framework Agreements in the ordinary course of its business and guaranteed by Xiamen BMW under the New Facilities Guarantee Agreements.

Your attention is drawn to the paragraph headed “3. Estimated maximum amount of interest and fees under the Facilities Guarantees” in this circular for the assumptions and calculations in respect of the maximum amount of interest and fees under the Facilities Guarantees and the analysis of the relevant financial figures.

Please also refer to the paragraphs under the heading “Financial Effect” in Appendix I to this circular for the financial effect of the Facilities Guarantees and the Board’s assessment of Xiamen Zhong Bao’s credit risk. The Board is of the view that the credit risk of Xiamen Zhong Bao is low.

In the event that Xiamen Zhong Bao were to default in making payments under the relevant banking facilities, Xiamen BMW, as guarantor, will be responsible to make payment of the above mentioned guarantee amount of RMB101.0 million (equivalent to approximately HK$110.1 million). In such case, the Company’s liabilities would be increased by the same amount, which will then be charged to the Group’s income statement. If the Group is demanded to make payment, the Company’s intention is to settle the same using its internal cash and resources as well as other available financing options including but not limited to bank borrowing. The Group’s gearing ratio expressed as a percentage of total borrowings (including bills payable, lease liabilities, short-term and long-term borrowings) less cash and cash equivalents (net debt), divided by total equity plus net debt as at 30 June 2023 was 0.47.

The Company will not recognise any financial guarantee expense as a result of the entering into of the Guarantee Agreement per se. However, the Company will recognise financial guarantee expense upon the bank’s granting of facilities to Xiamen Zhong Bao, and the expense amount will be arrived at after taking into account the fair value of the facilities at the time they are granted and will be amortised in profit or loss over the period of guarantee in accordance with the Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants. Recognition of such guarantee expense will not involve making any payment or cash outflow. For the year ended 31 December 2021, in connection with the granting of facilities guarantees under the Previous Guarantee Agreement, the Company recorded financial guarantee expenses amounting to approximately HK$3.9 million upon granting of facilities to Xiamen Zhong Bao. As at 30 September 2023, the aggregate principal amount guaranteed by the Group in favour of Xiamen Zhong Bao was RMB92.0 million (equivalent to approximately HK$100.3 million).

LETTER FROM THE BOARD

Fees, charges and security

The Guarantee Agreement does not require fees, charges or security of any kind from either party thereto, save for the pledge of the Non-Business Operation Property by GAPL under the Existing Facilities A Pledge Agreement and the New Facilities A Pledge Agreement.

The Non-Business Operation Property had (a) a net book value of RMB2.6 million as at 30 September 2023; and (b) an estimated market value of approximately RMB17.8 million, according to a valuation carried out by a valuer as at 16 July 2020.

Prior to the Guarantee Agreement, the Company has entered into four similar guarantee agreements involving the same parties dated 29 April 2016, 14 November 2017, 12 November 2019 and 15 November 2021. As disclosed in the circular dated 25 May 2016, BOC required the pledging of the Non-Business Operation Property during the negotiation of one of the underlying facilities to be entered into between BOC and Xiamen Zhong Bao. Since then, BOC has required the pledging of the same property in relation to facilities extended by it to Xiamen Zhong Bao.

The Non-Business Operation Property is a residential property of 222.0 square metres located on 1st to 2nd Floor, Building 69D, No.1 Xiangjiang North Road, Chaoyang District, Beijing and is used for short term accommodation for the Group’s employees during their business trips. The Non-Business Operation Property is not used for the Group’s business operations. Taking into account the current use and the net book value of the Non-Business Operation Property, the Board is of the view that there will be no adverse impact on the Group’s business operations and there will be no material impact on the Group’s financial position as a result of any enforcement of the pledge of the NonBusiness Operation Property by BOC if Xiamen Zhong Bao were to default in making payments under Facilities A.

The pledge of the Non-Business Operation Property would be exercisable by BOC where the debtor under the New Facilities A Framework Agreement (i.e. Xiamen Zhong Bao) has not paid BOC on any repayment dates decided in accordance with the New Facilities A Framework Agreement. BOC would have the right to negotiate with GAPL to discount the Non-Business Operation Property or use the proceeds from the auction or sale of the Non-Business Operation Property to pay off the defaulted Facilities A in priority. If the negotiation fails, BOC would have the right to request the people’s court of the PRC to auction or sell the Non-Business Operation Property in accordance with the relevant laws and regulations. In respect of each defaulted facility, BOC shall only exercise the pledge within the period of the respective litigation.

To the best of the Directors’ knowledge, information and belief, there is no material difference between the Existing Facilities A Pledge Agreement and the New Facilities A Pledge Agreement.

Conditions

The transactions contemplated under the Guarantee Agreement are conditional upon the Shareholders’ approval on the same having been obtained at the EGM.

LETTER FROM THE BOARD

2. Reasons for and benefits of the Guarantee Agreement

The Group’s business model

The Group is principally engaged in the sales of motor vehicles, provision of car-related technical services, servicing of motor vehicles and sales of auto parts.

As part of the Group’s business model since the Company’s listing in 2002, there has always been in place between the Group and its distribution agents technical and cooperation agreements for the Group’s motor vehicle trading business, as foreign companies were not allowed under PRC laws and regulations to engage in the business of trading motor vehicles directly in the PRC. The Group has entered into technical and cooperation agreements with local distributors whereby the Group shall provide technical expertise and management service to these distribution agents and they shall in return pay to the Group technical fee based on the number of motor vehicles sold to the customers in the PRC. The Group had cooperated and entered into agreements with a PRC distributor from January 2000 for a term of five years under which the Group provided management consultation and technical assistance to such PRC distributor and its distribution agents for the promotion and maintenance of locally manufactured passenger vehicles in exchange for technical fees. Similar agreements have been entered into between the Group and Zhong Bao Group since 2003.

Currently, Zhong Bao Group (including Xiamen Zhong Bao) is the only partner cooperating with the Group under the technical and cooperation agreement. Pursuant to the technical and cooperation agreement between the Group and Zhong Bao Group, the Group shall provide technical expertise, financial assistance and management service to Zhong Bao Group and Zhong Bao Group shall in return pay technical fee to the Group based primarily on the number of motor vehicles sold. No other customer of the Group pays such a technical fee to the Group.

To the best knowledge of the Directors having sought advice from the Company’s PRC lawyers, the arrangements under the technical and cooperation agreements between the Group and Zhong Bao Group were in compliance with the relevant PRC laws and regulations, namely, Contract Law of the People’s Republic of China; Administrative Regulations of The People’s Republic of China Governing the Registration of Legal Corporations; Notice of the State Administration of Taxation on Issuing the Measures for the Implementation of Special Tax Adjustments (for Trial Implementation) and Provisions of the Supreme People’s Court on Several Issues concerning the Application of Law in the Trial of Private Lending Cases (Interpretation No. 18 [2015] of the Supreme People’s Court).

In 2012 when foreign restriction over motor vehicles trading in the PRC was lifted, the Group began to sell motor vehicles directly to its end customers. In 2014, the Group ceased its sales of motor vehicles through its arrangement with Zhong Bao Group while it has continued to receive technical fees pursuant to the technical and cooperation agreements and generate income in relation to car servicing and sale of auto parts from Zhong Bao Group. In other words, from 2012, except for expanding into motor vehicles sales directly to its end customers, the Group’s business model, including its arrangement with Zhong Bao Group, which is principally engaged in the business of sales of motor vehicles in Xiamen Province, the PRC, has remained largely the same.

LETTER FROM THE BOARD

During the year ended 31 December 2022, Zhong Bao Group was one of the Group’s top five customers, contributing approximately 7.1% of the Group’s total revenue during the year ended 31 December 2022. During the same period, the Group generated income from car servicing and sale of motor vehicles and auto parts of HK$158,145,000, earned technical fee income of HK$10,010,000 and generated operating lease income of HK$153,000 from Zhong Bao Group. Please refer to the paragraph headed “3. Estimated maximum amount of interest and fees under the Facilities Guarantees” below in this circular for the breakdown and the percentages of the revenue contributed by Zhong Bao Group and Xiamen Zhong Bao as compared to the Group’s total revenue for the year ended 31 December 2022.

The Group has continued to cooperate with Xiamen Zhong Bao despite the removal of foreign restriction over motor vehicles trading in the PRC in 2012 as: (i) the Group has developed a longterm and stable business relationship with Xiamen Zhong Bao since 2003; (ii) Xiamen Zhong Bao was one of the Group’s top five customers with low credit risk and has provided the Group with a steady source of income; and (iii) the Group has been benefiting from Xiamen Zhong Bao’s local business network and customer base in Xiamen and Fuzhou for its servicing of motor vehicles and sale of auto parts businesses, which attract higher profit margin than sales of motor vehicles, and such benefit is expected to continue.

The financing arrangements under the technical and cooperation agreement with Zhong Bao Group include making short term advance payments for Zhong Bao Group’s daily operations from time to time (subject to the availability of the Group’ internal resources such as idle cash and the Group’s approval) and providing facility guarantees as financing support to Zhong Bao Group for its purchase of motor vehicles from suppliers which are part and parcel of the terms of the technical and cooperation agreement. While the Group receives no monetary consideration under the Guarantee Agreement, it receives technical fees under the technical and cooperation agreements with Zhong Bao Group. It is noted that Xiamen Zhong Bao shall only use the facilities to settle payments towards two specific major suppliers of automobiles in the PRC for the purposes stipulated under the Facilities Framework Agreements, for example as its working capital, unless otherwise agreed by the banks.

Furthermore, the provision of facility guarantees in relation to Zhong Bao Group, which is the Group’s distributor, is related to the Group’s ordinary and usual course of business. Other than the facilities guarantees provided and to be provided in relation to Zhong Bao Group, the Group does not provide similar guarantee to other customers or third parties.

The background

At the extraordinary general meeting of the Company held on 20 December 2021, the Shareholders approved the Previous Guarantee Agreement, details in relation to which are set out in the circular of the Company dated 3 December 2021.

Xiamen BMW has, pursuant to the Previous Guarantee Agreement, entered into and renewed facilities guarantee agreements in favour of BOC and CMS Bank in respect of the facilities they granted to Xiamen Zhong Bao. As at the date of this circular, the relevant facilities guarantee agreements are (i) the Existing Facilities A Guarantee Agreement; and (ii) the Existing Facilities B Guarantee Agreement.

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LETTER FROM THE BOARD

GAPL has, pursuant to the Previous Guarantee Agreement, entered into the Existing Facilities A Pledge Agreement whereby GAPL agreed to pledge the Non-Business Operation Property in favour of BOC in respect of Facilities A under the Existing Facilities A Framework Agreement. The NonBusiness Operation Property had a net book value of RMB2.6 million as at 30 September 2023.

The Existing Facilities Framework Agreements will expire in the second quarter of 2024. Upon their respective expiry,

(a) Xiamen Zhong Bao as the borrower is expected to renew the banking facilities with BOC and CMS Bank respectively and will enter into: (i) the New Facilities A Framework Agreement with BOC; and (ii) the New Facilities B Framework Agreement with CMS Bank; and
(b) Xiamen BMW will be expected to guarantee the underlying banking facilities under the New Facilities Framework Agreements and GAPL will be expected to pledge the Non-Business Operation Property for the underlying banking facilities under the New Facilities A Framework Agreement.

As the Previous Guarantee Agreement will expire on 31 December 2023, the terms of the Guarantee Agreement, if approved by the Shareholders at the EGM, will give the Directors the flexibility to, during its term, guarantee Xiamen Zhong Bao’s banking facilities to be incurred in its ordinary course of business up to a maximum aggregate amount of RMB101.0 million (equivalent to approximately HK$110.1 million) without having to seek Shareholders’ approval for entering into New Facilities Guarantee Agreements expected to be required of Xiamen BMW as and when the underlying facilities framework agreements expire.

Details of the principal terms of the Facilities Framework Agreements are set out in the paragraph headed “4. Details of the New Facilities Framework Agreements” below in this circular.

The reasons for and benefits of the Guarantee Agreement

The provision of the facilities guarantees under the Guarantee Agreement will help secure the Group’s source of technical service fee income and other businesses such as sales of auto parts, aftersales and car servicing from Zhong Bao Group. The Board notes that the Group has been in this business cooperation of providing corporate guarantees for the aforesaid purpose to this business partner and similar corporate guarantees have been granted to the same banks. Taking into account the Group’s business model and its long-term cooperation with Xiamen Zhong Bao and that no fees, charges or securities (save for the pledge of the Non-Business Operation Property) of any kind are required under the Guarantee Agreement, the Board considers that the Guarantee Agreement will promote and maintain the business relationship with Xiamen Zhong Bao. For the year ended 31 December 2022, Zhong Bao Group and Xiamen Zhong Bao respectively contributed approximately 7.1% and 2.4% of the Group’s total revenue.

The Board believes that the estimated maximum exposure and liabilities under the Guarantee Agreement of RMB101.0 million (approximately HK$110.1 million), which amounts to approximately 6.8% of the Group’s total assets as at 30 June 2023, should be considered in light of the credit risks associated with New Facilities Guarantee Agreements. In this regard, the Board

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LETTER FROM THE BOARD

notes that BOC and CMS Bank have inserted specific terms in the New Facilities Agreements which require Xiamen Zhong Bao to use the credit facilities to settle payment towards two specific major suppliers of automobiles in the PRC and that the banks will monitor that these terms are strictly adhered to by Xiamen Zhong Bao. In addition, the Board reviews annually matters including (i) Xiamen Zhong Bao’s turnover of inventory and level of obsolete stock (with reference to the net realizable value and any impairment as appropriate); and (ii) the ageing analysis of Xiamen Zhong Bao’s debtors in order to monitor the recoverability of the debtors balance. The other matters considered by the Board as part of its quantitative and qualitative assessments and the steps taken from time to time are more particularly set out in Appendix I on pages 25 to 27 of this circular. The financial assessments covering timelines as of December 2021, December 2022 and September 2023 indicates that the business and operations of Xiamen Zhong Bao has displayed a steady trend. The Board also makes qualitative assessment on Zhong Bao’s operations based on observations of its operations and discussions with its management and staff from time to time, and such assessment carried out as recently as October 2023 does not reveal anything contrary to the result of the quantitative assessment or anything of material concern. To the best knowledge of the Company, Xiamen Zhong Bao has never defaulted in repaying loan principals and interests. In light of the above, the Board believes that there are in place sufficient and timely measures for assessing Xiamen Zhong Bao’s credit risks, and based on the Company’s assessment carried out in accordance with these measures, the credit risk in respect of Xiamen Zhong Bao is low.

Having regard to the Group’s business model, the previous financial and operational performance of Zhong Bao Group, the estimated of maximum exposure and liabilities under the Guarantee Agreement in light of the low credit risk Xiamen Zhong Bao, the financial benefits of the Group’s long-term cooperation and business relationship with Zhong Bao Group, as well as the lack of operational significance of the Non-Business Operation Property, the Board considers that the terms of the Guarantee Agreement are fair and reasonable and the entering into of the Guarantee Agreement and the provision of the facilities guarantees under the Guarantee Agreement are in the interests of the Company and the Shareholders as a whole.

No consideration will be received by the Group under the Guarantee Agreement albeit the Group receives technical fees under the technical and cooperation agreements with Zhong Bao Group. Your attention is drawn to various sections of this circular for the financial significance of the Guarantee Agreement as well as the Group’s cooperation history and relationship with Zhong Bao Group, including but not limited to (i) the paragraph headed “3. Estimated maximum amount of interest and fees under the Facilities Guarantees” in this circular for the assumptions and calculations in respect of the estimated maximum amount of interest and fees under the Facilities Guarantees and the analysis of the relevant financial figures, including the breakdown and the percentages of the revenue contributed by Zhong Bao Group and Xiamen Zhong Bao as compared to the Group’s total revenue; and (ii) the paragraph headed “Financial Effect” in Appendix I to this circular for the financial effect of the Facilities Guarantees and the Board’s assessment of Xiamen Zhong Bao’s credit risk.

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LETTER FROM THE BOARD

3. Estimated maximum amount of interest and fees under the Facilities Guarantees

The total estimated maximum exposure for Facilities A and Facilities B is approximately RMB101.0 million (equivalent to approximately HK$110.1 million) based on the following assumptions and calculations:

(a) Assumptions

The calculation of the estimated maximum amount of interest and fees payable by the Group under the New Facilities Framework Agreements in the scenario where no repayment (and the corresponding interests) is made by Xiamen Zhong Bao during the loan period is based on the following assumptions:

(1) The maximum amount borrowed under Facilities A and Facilities B is drawn by Xiamen Zhong Bao on the first day when the relevant facilities agreements are entered into.
(2) The Company assumes the duty to pay off the default facilities and the liabilities and repay all of the principal in its entirety immediately.

The interest rates of Facilities A and Facilities B will be the prevailing market bank loan rate in the PRC. The forecasted maximum market bank loan rate for 2023 is approximately 6.0% and the actual bank loan rate used in the facilities in 2023 ranged from approximately 4.3% to approximately 5.2%.

(b) Calculation

The maximum exposure and liabilities under the Guarantee Agreement is calculated with reference to the information set out below:

		Facilities A	Facilities B
Principal (A)		RMB70 million	RMB22 million
Facility period		1 year	1 year
Maximum loan interest (B) (Note 1)		RMB4.20 million	RMB1.32 million
Guarantee period (Note 2)		4 years	4 years
Maximum penalty (C) (Note 3)		RMB2.10 million	RMB0.66 million
Facility fee (D) (Note 4)		RMB0.21 million	RMB0.07 million
			Total of Facilities
	Facilities A	Facilities B	A and Facilities B
Total principal (A)	RMB70 million	RMB22 million	RMB92 million
Other liabilities (B+C+D)	RMB6.51 million	RMB2.05 million	RMB8.56 million
Estimated maximum
exposure	RMB76.51 million	RMB24.05 million	RMB100.56 million

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LETTER FROM THE BOARD

Notes:

(1) Assuming the maximum market bank loan rate is approximately 6.0%.
(2) Each of Facilities A and Facilities B has a four-year guarantee period. Based on discussions with the banks and the Group’s experience in providing guarantees for intragroup transactions, the Group believes that it is a usual practice for PRC-based banks to require a guarantee period which extends beyond the period of the underlying banking facilities by two to three years. With respect to release of the guarantees given by the Group, the Group has been able to obtain confirmations from the banks to the effect that the relevant guarantees have been released upon repayment of the banking facilities, and accordingly, the Group expects that confirmation of release of the guarantee under the Previous Guarantee Agreement will be obtained from the relevant bank. The Group will endeavour to obtain the relevant confirmation of release with respect to the guarantees given in relation to Facilities A and Facilities B as and when appropriate.
(3) Means the damages of the banks in relation to the borrower’s breach of the facility agreement, calculated at 50% of the maximum loan interest. This percentage is assumed based on historical arrangement and further discussion with the relevant banks.
(4) Means the banks’ fees and expenses in relation to the borrower’s breach of the facility agreement, such as fees of the professional parties and administration fees, calculated at 0.3% of loan principal, which has been adopted with reference to the fees and expenses incurred by the Group for obtaining banking facilities from PRC-based banks and discussions with these on their usual practice in relation to fees and expenses.

(c) Financial significance

The tables below set out: (i) the comparison between the estimated maximum exposure and liabilities under the Guarantee Agreement and the total assets of the Group as at 30 June 2023; and (ii) the percentages of the revenue contributed by Zhong Bao Group and Xiamen Zhong Bao as compared to the Group’s total revenue of HK$2,362,390,000 for the year ended 31 December 2022.

(i) Comparison between the estimated maximum exposure and liabilities under the Guarantee Agreement and the total assets of the Group

	Amount
	HK$’000	%
The estimated maximum exposure and liabilities
under the Guarantee Agreement	110,090
Total assets of the Group as at 30 June 2023	1,609,807
Percentage		6.8%

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LETTER FROM THE BOARD

(ii) Comparison between the revenue contributed by Zhong Bao Group and Xiamen Zhong Bao and the Group’s total revenue

Revenue generated from car servicing and sales of motor vehicles and auto parts from Xiamen Zhong Bao Technical fees received from Xiamen Zhong Bao Total Revenue generated from car servicing and sales of motor vehicles and auto parts from Zhong Bao Group Technical fees received from Zhong Bao Group Total	Amount HK$’000 46,836 10,010 56,846 158,145 10,010 168,155	Percentage of the Group’s total revenue % 2.0% 0.4%
		2.4%
		6.7% 0.4%
		7.1%

The Company will re-comply with the relevant requirements under Chapter 19 of the GEM Listing Rules including applicable announcement and shareholders’ approval requirements, if the annual cap in respect of the aggregate amount guaranteed by the Group under the Guarantee Agreement (which is RMB101.0 million) is exceeded, or any of the annual caps in respect of the amount guaranteed by the Group in respect of each of Facilities A and Facilities B under relevant guarantee agreements (which is RMB76.51 million and RMB24.05 million respectively) is exceeded, or when there is anything that comes into the Company’s knowledge which will lead to any material change to the parameters used in the above assumptions and calculation in determining the maximum exposure for Facilities A and Facilities B.

4. Details of the New Facilities Framework Agreements

Xiamen Zhong Bao, as borrower, is expected to enter into the New Facilities Framework Agreements with BOC and CMS Bank respectively with principal terms substantially the same as the Existing Facilities A Framework Agreement and Existing Facilities B Framework Agreement (except for the periods of the facilities). The Company will review the agreements to be provided by the banks before approving the same to ensure they contain the same principal terms. In case of any discrepancy, the Company will discuss and negotiate with the banks before entering into the same. The Company will also ensure that the New Facilities Framework Agreements will supersede the respective previous agreements.

15 -

LETTER FROM THE BOARD

Set out below are the proposed principal terms of the New Facilities A Framework Agreement and the New Facilities B Framework Agreement:

Parties

(a) Xiamen Zhong Bao
(b) BOC

Proposed Principal Terms

(1) Xiamen Zhong Bao may borrow up to a maximum aggregated credit amount of RMB70 million during the usage period.
(2) The maximum aggregated credit amount may be utilised in one or more types of borrowing such as loans, import and export documents, promissory notes, discounted bills, letters of credit, letters of guarantee, or any types of credit facilities accepted by BOC.
(3) The credit amount is to be used to settle payments towards two major suppliers of automobiles in the PRC.
(4) The usage period of the maximum aggregated credit amount is one year which commences from the date of entering into the New Facilities A Framework Agreement.
(5) The credit facilities under Facilities A are revolving facilities and can be reused during the usage period once repaid.
(6) The fees of bills, bank guarantee, international trades and financing, discount rate of discounted bills, the interest rate and exchange rate in respect of loans and import and export documents chargeable by BOC (estimated to be 0.3% of the loan principal amount as set out in the paragraph headed “3. Estimated maximum amount of interest and fees under the Facilities Guarantees” in this circular) shall be determined in the contracts to be agreed between Xiamen Zhong Bao and BOC.
(7) BOC, at any time it chooses to, has the rights to investigate into the use of the credit limit as specified in the New Facilities A Framework Agreement. Under certain circumstances, BOC may also adjust the loan period of Facilities A.
(8) BOC may require Xiamen Zhong Bao to provide additional guarantee other than those to be provided by the Group.
(9) If Xiamen Zhong Bao fails to fulfil its obligations under the New Facilities A Framework Agreement, BOC may terminate the use of the credit limit under the New Facilities A Framework Agreement.
16 -

LETTER FROM THE BOARD

To the best of the Directors’ knowledge, information and belief, there is no material difference between the Existing Facilities A Framework Agreement and the New Facilities A Framework Agreement.

Parties

(a) Xiamen Zhong Bao
(b) CMS Bank

Proposed Principal Terms

(1) Xiamen Zhong Bao may borrow up to a maximum aggregated credit amount of RMB22.0 million during the usage period.
(2) The maximum aggregated credit amount may be utilised in one or more types of borrowing such as loans, import and export documents, promissory notes, discounted bills, letters of credit, letters of guarantee, or any types of credit facilities accepted by CMS Bank.
(3) The credit amount is to be used to settle payments towards two major suppliers of automobiles in the PRC.
(4) The usage period of the maximum aggregated credit amount is one year which commences from the date of entering into the New Facilities B Framework Agreement.
(5) The credit facilities under Facilities B are revolving facilities and can be reused during the usage period once repaid.
(6) The fees of bills, bank guarantee, international trades and financing, discount rate of discounted bills, the interest rate and exchange rate in respect of loans and import and export documents chargeable by CMS Bank (estimated to be 0.3% of the loan principal amount as set out in the paragraph headed “3. Estimated maximum amount of interest and fees under the Facilities Guarantees” in this circular) shall be determined in the contracts to be agreed between Xiamen Zhong Bao and CMS Bank.
(7) CMS Bank, at any time it chooses to, has the rights to investigate into the use of the credit limit as specified in the New Facilities B Framework Agreement. Under certain circumstances, CMS Bank may also adjust the loan period of Facilities B.
(8) CMS Bank may require Xiamen Zhong Bao to provide additional guarantee other than the one to be provided by the Group.
(9) If Xiamen Zhong Bao fails to fulfil its obligations under the New Facilities B Framework Agreement, CMS Bank may terminate the use of the credit limit under the New Facilities B Framework Agreement.
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LETTER FROM THE BOARD

To the best of the Directors’ knowledge, information and belief, save for the maximum aggregated credit amount during the usage period, there is no material difference between the Existing Facilities B Framework Agreement and the New Facilities B Framework Agreement.

INFORMATION OF THE PARTIES

Xiamen BMW, GAPL and the Company

Xiamen BMW, a wholly-owned subsidiary of the Company, is principally engaged in the provision of repair and maintenance and car-related technical services for high-end automobiles. GAPL is a wholly-owned subsidiary of the Company, the holding company of Xiamen BMW and is an investment holding company. The Company is an investment holding company. The Group is principally engaged in the sales of motor vehicles, provision of car-related technical services, servicing of motor vehicles and sales of auto parts.

Xiamen Zhong Bao

Xiamen Zhong Bao is principally engaged in the business of sales of motor vehicles in the PRC.

To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, (i) Xiamen Zhong Bao is entirely owned by Beijing Zhong Bao Excellent International Trading Co., Ltd.* (北京中寶卓越國際貿易有限公司), which is owned as to (x) 1% by Mr. Zhao and (y) 99% by iAuto International Limited, which in turn is 100% beneficially owned by Mr. Zhao; and (ii) Ms. Yang Liying, who is the spouse of Mr. Zhao, is interested in 23,000,000 Shares, representing approximately 4.8% of the issued share capital of the Company, and accordingly, Ms. Yang Liying shall abstain from voting at the EGM.

The Lenders to the Facilities

BOC, the lender to Facilities A, is a company established in the PRC and a branch company of Bank of China. Bank of China is principally engaged in banking and other related financial services.

CMS Bank, the lender to Facilities B, is a company established in the PRC and is principally engaged in commercial banking.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, BOC and CMS Bank are third parties independent of the Company and its connected persons.

GEM LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as set out and calculated under Rule 19.07 of the GEM Listing Rules) in respect of the Guarantee Agreement exceed(s) 25%, the transactions contemplated under the Guarantee Agreement constitutes a major transaction of the Company and will be subject to the applicable announcement and shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

* for identification purpose only

18 -

LETTER FROM THE BOARD

The Board would like to seek the approvals from the Shareholders at the EGM in relation to the Guarantee Agreement and the transactions contemplated thereunder.

To the best of the knowledge, information and belief of the Directors having made all enquiries, (a) save for Ms. Yang Liying who is interested in 23,000,000 Shares as at the Latest Practicable Date (representing approximately 4.8% of the issued share capital of the Company) as detailed in the paragraph headed “Information of the Parties – Xiamen Zhong Bao” in this circular, no Shareholders or any of their respective associates have any material interest in the Guarantee Agreement; and (b) Ms. Yang Liying controls or is entitled to exercise control over the voting right in respect her above-mentioned shareholding. As such, save for Ms. Yang Liying, no Shareholder would be required to abstain from voting on the resolution to be proposed at the EGM. Ms. Yang Liying shall abstain from voting at the EGM.

As the Guarantee Agreement is conditional upon the approval of the Shareholders at the EGM which approval may or may not be forthcoming, Shareholders and potential investors should exercise caution when dealing in the Shares.

THE EGM

The EGM will be held at 11:00 a.m. on Friday, 8 December 2023, at Unit 1007, Level 10, Tower 1, Grand Century Place, 193 Prince Edward Road West, Mongkok, Kowloon, Hong Kong to consider and, if thought fit, approve, among other things, the entering into of the Guarantee Agreement and the transactions contemplated thereunder. A notice convening the EGM is set out on pages 34 to 35 of this circular.

A proxy form is enclosed herewith for use at the EGM. Whether or not you intend to be present at the EGM, you are advised to complete the form of proxy and return it to the share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the EGM or any adjournment thereof. Completion and delivery of a form of proxy will not preclude you from attending and voting at the EGM or any adjournment in person should you so wish.

VOTING BY WAY OF POLL

According to Rule 17.47(4) of the GEM Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, the resolution proposed at the EGM will be taken by way of poll and the Company will announce the results of the poll in the manner prescribed under the Rule 17.47(5) of the GEM Listing Rules.

The results of the poll will be published on the websites of the Company and GEM as soon as practicable following the conclusion of the EGM.

RECOMMENDATIONS

The Board considers that the terms of the Guarantee Agreement are fair and reasonable and that the resolutions set out in the notice of the EGM are in the interest of the Company and the Shareholders as a whole. As such, the Board recommends the Shareholders to vote in favour of all resolutions at the EGM.

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LETTER FROM THE BOARD

OTHER INFORMATION

Your attention is also drawn to the information set forth in the appendices to this circular.

Yours faithfully By Order of the Board G.A. Holdings Limited Yuen Kin Pheng Chairman

20 -

FINANCIAL INFORMATION

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for the nine-month period ended 30 September 2023, the six-month period ended 30 June 2023 and the years ended 31 December 2020, 2021 and 2022 respectively are disclosed in the following documents which have been published on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.ga-holdings.com.hk):

third quarterly report of the Company for the nine months ended 30 September 2023 published on 14 November 2023 (pages 2-11) (https://www1.hkexnews.hk/listedco/listconews/gem/2023/1114/ 2023111400451.pdf);
interim report of the Company for the six months ended 30 June 2023 published on 14 August 2023 (pages 2-38) (https://www1.hkexnews.hk/listedco/listconews/gem/2023/0814/2023081400442.pdf);
annual report of the Company for the year ended 31 December 2022 published on 30 March 2023 (pages 57-145) (https://www1.hkexnews.hk/listedco/listconews/gem/2023/0330/2023033001996.pdf);
annual report of the Company for the year ended 31 December 2021 published on 30 March 2022 (pages 55-143) (https://www1.hkexnews.hk/listedco/listconews/gem/2022/0330/2022033002858.pdf);
annual report of the Company for the year ended 31 December 2020 published on 30 March 2021 (pages 44-135) (https://www1.hkexnews.hk/listedco/listconews/gem/2021/0330/2021033001662.pdf)

INDEBTEDNESS STATEMENT

As at the close of business on 30 September 2023, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had borrowings amounting to approximately HK$780.2 million, details of which are as follows:

BORROWINGS

The following table illustrates the unaudited financial information of the Group’s bank and other borrowings as at 30 September 2023:

Bank borrowings Other borrowings Bills payables Lease liabilities	HK$’000 441,939 98,117 129,393 110,708
	780,157

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FINANCIAL INFORMATION

APPENDIX I

Analysed as:

						Total
			Total secured			guaranteed and
	Secured	Unsecured	and unsecured	Guaranteed	Unguaranteed	unguaranteed
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Bank borrowings	285,224	156,715	441,939	351,756	90,183	441,939
Other borrowings	98,117	–	98,117	98,117	–	98,117
Bills payables	129,393	–	129,393	129,393	–	129,393
Lease liabilities	1,020	109,688	110,708	227	110,481	110,708
Total	513,754	266,403	780,157	579,493	200,664	780,157

As at 30 September 2023, the Group’s bank borrowings of approximately HK$21.8 million were secured by the Group’s leasehold lands and jointly guaranteed by Zhong Bao Group and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$26.6 million were secured by the Group’s leasehold lands and jointly guaranteed by a subsidiary of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$37.0 million were secured by the Group’s leasehold lands and bank deposit of approximately HK$3.6 million.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$54.5 million were secured by the Group’s leasehold lands and bank deposit of approximately HK$16.4 million and jointly guaranteed by Zhong Bao Group and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$23.5 million were secured by the Group’s leasehold lands.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$14.2 million were secured by the properties owned by Zhong Bao Group and jointly guaranteed by a subsidiary of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$23.5 million were secured by the properties owned by a related company of a substantial shareholder of the Company and guaranteed by a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$8.7 million were secured by the properties owned by a related company of a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$43.9 million were jointly guaranteed by the Company and a substantial shareholder of the Company.
22 -

FINANCIAL INFORMATION

APPENDIX I

As at 30 September 2023, the Group’s bank borrowings of approximately HK$21.8 million were secured by the Group’s bank deposits of approximately HK$6.9 million and jointly guaranteed by the Company, a subsidiary of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$8.7 million were guaranteed by Zhong Bao Group.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$32.7 million were guaranteed by certain subsidiaries of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$41.4 million were jointly guaranteed by Zhong Bao Group, certain subsidiaries of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$10.9 million were jointly guaranteed by Zhong Bao Group and certain subsidiaries of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$8.2 million were jointly guaranteed by Zhong Bao Group and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$10.9 million were jointly guaranteed by certain subsidiaries of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$20.9 million were secured by the Group’s bank deposits of approximately HK$21.8 million.
As at 30 September 2023, the Group’s bank borrowings of approximately HK$32.7 million were secured by the Group’s bank deposits of approximately HK$6.5 million and are jointly guaranteed by the Company, Zhong Bao Group and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s other borrowings of approximately HK$74.7 million were secured by the Group’s deposits of approximately HK$5.4 million and jointly guaranteed by Zhong Bao Group, a subsidiary of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s other borrowings of approximately HK$8.1 million were secured by the Group’s assets and guaranteed by a subsidiary of the Company.
As at 30 September 2023, the Group’s other borrowings of approximately HK$8.7 million were secured by the Group’s assets and jointly guaranteed by a substantial shareholder of Zhong Bao Group and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s other borrowings of approximately HK$6.6 million were secured by the Group’s assets and guaranteed by the Company.
23 -

FINANCIAL INFORMATION

APPENDIX I

As at 30 September 2023, the Group’s bills payables of approximately HK$8.7 million were secured by the Group’s leasehold lands and bank deposits of approximately HK$2.6 million and jointly guaranteed by a subsidiary of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bills payables of approximately HK$31.1 million were secured by the Group’s leasehold lands and bank deposits of approximately HK$9.3 million and jointly guaranteed by Zhong Bao Group and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bills payables of approximately HK$27.3 million were secured by the Group’s bank deposits of approximately HK$8.2 million and jointly guaranteed by Zhong Bao Group and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s bills payables of approximately HK$62.3 million were secured by the Group’s bank deposits of approximately HK$18.7 million and jointly guaranteed by Zhong Bao Group, certain subsidiaries of the Company and a substantial shareholder of the Company.
As at 30 September 2023, the Group’s lease liabilities of approximately HK$0.2 million were secured by the Group’s assets and guaranteed by the Company.
As at 30 September 2023, the Group’s lease liabilities of approximately HK$0.8 million were secured by the Group’s assets.

Pledge of assets

As at 30 September 2023, certain motor vehicles and plant and machinery with net carrying amount of approximately HK$25.7 million was pledged as collateral for the other borrowings of the Group.
As at 30 September 2023, certain motor vehicles with net carrying amount of approximately HK$2.4 million was pledged as collateral for the lease liabilities of the Group.
As at 30 September 2023, buildings with net carrying amount of approximately HK$18.2 million and HK$0.5 million, respectively, were pledged as collateral for the bank borrowings of the Group and Xiamen Zhong Bao, respectively.
As at 30 September 2023, leasehold land with net carrying amounts of approximately HK$63.9 million and HK$2.3 million, respectively, were pledged as collateral for the bank borrowings of the Group and Xiamen Zhong Bao, respectively.
As at 30 September 2023, the Group’s bank deposits of approximately HK$101.2 million and HK$9.9 million, respectively, were pledged in respect of borrowings facilities granted to the Group and providing securities to suppliers, respectively.

Contingent liabilities and guarantees

As at 30 September 2023, the Group had the following contingent liabilities and guarantees in the ordinary course of business:

24 -

FINANCIAL INFORMATION

APPENDIX I

Guarantees for bank loans to Zhong Bao Group

RMB131.6 million (equivalent to approximately HK$143.4 million)

Saved as disclosed above, no member of the Group is engaged in any litigation or claims known to the Directors to be pending or threatened materially against any members of the Group.

Save as aforesaid or as otherwise disclosed herein and apart from intra-group liabilities, the Group did not have any loan capital issued and outstanding or agreed to be issued, any bank overdrafts and liabilities under acceptances (other than normal trade bills) or other similar indebtedness, debentures, mortgages, charges or loans or acceptance credits or hire purchase commitments, guarantees or other material contingent liabilities as at the close of business on the Latest Practicable Date.

WORKING CAPITAL STATEMENT

The Directors are of the opinion that, after taking into account the present internal resources and available bank loan facilities of the Group, and the effect of the entering into of the Guarantee Agreement, the Group has sufficient working capital for at least the next twelve months from the date of publication of this circular.

FINANCIAL EFFECT

The entering into of the Guarantee Agreement and the provision of the Facilities Guarantees will not have any immediate adverse effect on the Group’s earnings, assets and liabilities. However, Xiamen BMW, as guarantor, will be responsible to make repayment of banking facilities with interests and charges amounting to approximately RMB101.0 million (equivalent to approximately HK$110.1 million) in case Xiamen Zhong Bao defaults in making payments under the relevant banking facilities.

In the event that Xiamen Zhong Bao were to default in making payments under the relevant banking facilities, the Company’s liabilities would be increased by approximately RMB101.0 million (equivalent to approximately HK$110.1 million) being the amount guaranteed under the New Facilities Guarantee Agreements, and the same amount will be charged to the Group’s income statement.

25 -

FINANCIAL INFORMATION

APPENDIX I

The Company maintains an up-to-date record of the repayment schedule of Xiamen Zhong Bao in relation to its banking facilities and makes inquiries with the finance department of Xiamen Zhong Bao about the timeliness of its repayment of banking facilities.

Assessment of Xiamen Zhong Bao’s credit risk

In assessing Xiamen Zhong Bao’s credit risk, the Board not only takes into consideration the long history of cooperation between the Group and Xiamen Zhong Bao starting from 2003, the Board also performs a financial assessment on Xiamen Zhong Bao’s asset, quality, leverage and liquidity ratios.

In particular, the Board examines the following matters related to Xiamen Zhong Bao as part of its assessment on the credit risk of Xiamen Zhong Bao annually:

(i) the turnover of inventory and the level of obsolete stock of Xiamen Zhong Bao;
(ii) an ageing analysis of Xiamen Zhong Bao’s debtors;
(iii) the carrying amount of assets of Xiamen Zhong Bao;
(iv) an estimation of the value of the plant and equipment of Xiamen Zhong Bao;
(v) the gearing ratio of Xiamen Zhong Bao to meet its short-term obligations as well as its long-term liabilities;
(vi) the past history of Xiamen Zhong Bao’s ability to repay its bank loans; and
(vii) the ability of Xiamen Zhong Bao in maintaining an adequate cash flow in its day-to-day operations and an adequate reserve of banking facilities.

In addition to the above financial assessment, from time to time the Board compares the available financial information of Xiamen Zhong Bao with other publicly available information. The above financial assessment carried out annually and from time to time covering timelines as of December 2021, December 2022 and September 2023 indicates that the business and operations of Xiamen Zhong Bao has displayed a steady trend.

The Board also makes qualitative assessment on Zhong Bao’s operations based on observations of its operations and discussions with its management and staff from time to time, and such assessment carried out as recently as September 2023 does not reveal anything contrary to the result of the quantitative assessment or anything of material concern. Based on the above, the Board is of the view that the credit risk of Xiamen Zhong Bao is low.

After considering the previous financial and operational performance of Xiamen Zhong Bao and that Xiamen Zhong Bao has never been noted for any default in repayment to the banks, the Directors are of the view that the provision of the Facilities Guarantees will not have any material negative financial effects on the earnings, assets and liabilities of the Group, unless the Company is required to settle the obligations under the Guarantee Agreement. It is expected that the (i) working capital (i.e. the net current assets and

26 -

FINANCIAL INFORMATION

APPENDIX I

liabilities) of the Group will not decrease; (ii) the gearing ratio expressed as a percentage of total borrowings, including bills payables, short-term and long-term bank borrowings will not increase; and (iii) there will be no cash flow impact. On the contrary it is also expected that the cash inflow from operating activities and earnings of the Group will increase as the Group continues to provide technical and management services and carry out car servicing activities.

MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change to the financial or trading position of the Group since 31 December 2022, being the date to which the latest published audited financial statements of the Company were made up.

FINANCIAL AND TRADING PROSPECTS

While the consumer economy in China showed signs of resurgence after lifting of the zero-COVID restrictions, the intensifying price war in the automobiles market continues.

Nevertheless, BMW continues to maintain a leading position in the premier brand automobiles market in the PRC, surpassing other premier brands. In recent years, BMW has been actively involved in the electric vehicle market, achieving a relatively high market penetration rate among other traditional premium brands. Despite the overall challenging environment in the automobiles industry, we believe that the Group’s operations would be stable in the near future.

27 -

GENERAL INFORMATION

APPENDIX II

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular 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 circular misleading.

DISCLOSURE OF INTERESTS

Interests of Directors

As at the Latest Practicable Date, the interests or short position of Directors in the Shares, underlying Shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO) which are notified to the Company and the Stock Exchange pursuant to the SFO (including interests or short positions which they are taken or deemed to have under the provisions of the SFO), or which are required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required pursuant to Rule 5.48 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

Long position in Shares

		Number of	Approximate
		ordinary shares	percentage of
Name	Capacity	held	shareholding
Ma Hang Kon, Louis	Personal interest	500,000	0.10%
Zhang Xi	Personal interest	500,000	0.10%

Save as disclosed above, as at Latest Practicable Date, none of the Directors or their associates has any interests or short positions in the Shares, underlying Shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO) which are notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under the provisions of the SFO), or which are required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required pursuant to Rule 5.46 to 5.67 of the GEM Listing Rules to be notified to the Company and the Stock Exchange.

Substantial Shareholders

As at Latest Practicable Date, the persons or corporations (other than Directors or chief executive of the Company) who have interests or short positions in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO,

28 -

APPENDIX II

GENERAL INFORMATION

or which were recorded in the register required to be kept under Section 336 of the SFO, or which represents 5% or more of the issued share capital of the Company or have otherwise notified to the Company were as follows:

			Approximate
		Number of	percentage of
Name	Capacity	shares held	shareholding
Loh Nee Peng	Beneficial owner and	107,780,320	22.63%
	interest of a controlled
	corporation (Note 1)
Loh & Loh Construction	Beneficial owner (Note 1)	45,284,000	9.51%
Group Ltd.
Big Reap Investment Limited	Beneficial owner (Note 1)	32,676,320	6.86%
Galligan Holdings Limited	Beneficial owner (Note 2)	39,700,000	8.34%
Butterfield Trust (Asia)	Trustee (Note 2)	39,700,000	8.34%
Limited

Notes:

The 107,780,320 Shares are held as to 32,676,320 Shares by Big Reap Investment Limited, 45,284,000 Shares by Loh & Loh Construction Group Ltd. as well as 29,820,000 Shares directly by Mr. Loh Nee Peng. Big Reap Investment Limited is interested as to 100% by Mr. Loh Nee Peng and Loh & Loh Construction Group Ltd. is interested as to 64% by Mr. Loh Nee Peng. By virtue of Part XV of the SFO, Mr. Loh Nee Peng is deemed to be interested in the Shares held by Big Reap Investment Limited and Loh & Loh Construction Group Ltd.
The 39,700,000 Shares are held by Galligan Holdings Limited which is interested as to 100% indirectly by Butterfield Trust (Asia) Limited. By virtue of the SFO, Butterfield Trust (Asia) Limited is deemed to be interested in the shares held by Galligan Holdings Limited.

Save as disclosed above, as at Latest Practicable Date, the Directors are not aware of any other person or corporation having an interests or short positions in the Shares and underlying Shares of the Company representing 5% or more of the issued share capital of the Company.

As at the Latest Practicable Date, none of the Directors was a director or employee of a company which has an interest or short position in the Shares, underlying Shares or debentures of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or the controlling shareholders of the Company had any interest in a business which competes or may compete with the business of the Group.

DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with the Company which does not expire or is not determinable by the Company within one year without payment of compensation (other than statutory compensation).

29 -

GENERAL INFORMATION

APPENDIX II

AUDIT COMMITTEE

The Audit Committee of the Company comprises three independent non-executive Directors, namely, Mr. Zhou Ming (chairman), Mr. Lin Ju Zheng and Ms. Guan Xin. The primary duties of the audit committee are mainly: (a) to review the Group’s annual reports, consolidated financial statements, interim reports and quarterly reports; (b) to review and supervise the financial reporting process, risk management and the internal control procedures of the Group; and (c) to liaise with the external auditor at least twice a year and provide advice and comments thereon to the board of Directors.

Mr. Zhou Ming

Mr. Zhou Ming ( 周明 ) (“ Mr. Zhou ”), aged 50, graduated from China University of Political Science and Law (中國政法大學) and holds a master degree in law from Peking University Law School (北京大學法學院). Mr. Zhou joined Global Law Office (Beijing) in 2001 and was admitted as a partner in 2007. He was appointed as an independent non-executive Director of the Company in November 2015.

Mr. Lin Zu Zheng

Mr. Lin Zu Zheng ( 林居正 ) (“ Mr. Lin ”), aged 76, holds a bachelor degree in foreign language majoring in English from Fujian No.2 Normal College (福建第二師範學院) (which merged with other colleges to become Fujian Normal University (福建師範大學)). He is a senior economist with extensive experience in banking operations and management. Before joining the Company, Mr. Lin occupied senior positions in one of the major banks in the PRC till December 2007. Mr. Lin was appointed as an independent non-executive Director in June 2010 and was re-designated as an executive Director in March 2012. On 23 March 2017, he was re-designated as a non-executive Director and on 1 June 2023, he was re-designated as an independent non-executive Director.

Ms. Guan Xin

Ms. Guan Xin ( 關新 ) (“ Ms. Guan ”), aged 47, is currently the general manager of a company providing management, training and consultancy services in the PRC. She has extensive experience in other major industries including finance, renewable energy, telecommunication and public accounting. Ms. Guan graduated from the Guanghua School of Management of Peking University with a master degree in professional accounting and is a certified public accountant in the PRC. She was appointed as an independent non-executive Director of the Company in July 2016.

LITIGATION

The Company was not engaged in any litigation or arbitration or claims of material importance, and no such litigation or arbitration or claim of material importance was known to the Directors to be pending or threatened by or against the Company, as at the Latest Practicable Date.

No member of the Group is engaged in any litigation or claims of material importance known to the directors to be pending or threatened against any members of the Group.

30 -

GENERAL INFORMATION

APPENDIX II

INTERESTS IN ASSETS OF THE GROUP

As at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which have been acquired or disposed of by, or leased to, or which were proposed to be acquired or disposed of by, or leased to, any member of the Group since 31 December 2022, being the date to which the latest published audited consolidated financial statements of the Group were made up.

INTERESTS IN CONTRACTS OR ARRANGEMENT

As at the Latest Practicable Date, none of the Directors was materially interested in any contracts or arrangements subsisting as at the Latest Practicable Date which was significant in relation to the business of the Group.

QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has given opinion and advice contained in this circular:

Name Qualification

Grant Thornton Hong Kong Limited Certified Public Accountants (“ Grant Thornton ”)

Grant Thornton has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its report and/or its letter and/or its advice and/or references to its name and qualification in the form and context in which they respectively appear.

As at the Latest Practicable Date, Grant Thornton:

(a) was not interested, either directly or indirectly, in any assets which had been acquired or disposed of by, or leased to, any member of the Group or were proposed to be acquired or disposed of by, or leased to, any member of the Group since 31 December 2022, being the date to which the latest published audited consolidated accounts of the Group were made up; and
(b) did not have any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

MATERIAL CONTRACTS

As at the Latest Practicable Date, the following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the members of the Group within the two years immediately preceding the issue of this circular, and are material:

(a) the guarantee agreement dated 5 June 2023 entered into between Xiamen BMW, Quanzhou Fubao and Fujian Xingbao on the one hand and FZZB on the other whereby Xiamen BMW, Quanzhou Fubao and Fujian Xingbao have conditionally agreed to guarantee FZZB’s banking facilities incurred
31 -

GENERAL INFORMATION

APPENDIX II

or may be incurred in their ordinary course of business up to a maximum amount of RMB39.6 million (equivalent to approximately HK$43.8 million) in favour of BOCOM(FZ) from 1 August 2023 to 31 July 2025 for fees totalling RMB1,200,000 per annum, and save for such fees, no other fees, charges or security of any kind is required from any party thereto; and

(b) the Guarantee Agreement dated 16 October 2023 entered into between Xiamen BMW, GAPL on the one hand and Xiamen Zhong Bao on the other whereby Xiamen BMW and GAPL have conditionally agreed to guarantee Xiamen Zhong Bao’s banking facilities incurred or may be incurred in its ordinary course of business up to a maximum aggregate amount of RMB101.0 million (equivalent to approximately HK$110.1 million) from 1 January 2024 to 31 December 2025 with no other fees, charges or security of any kind is required from any party thereto save for the pledge of the NonBusiness Operation Property.

DOCUMENTS ON DISPLAY

Copies of the following documents will be on display on the websites of the Stock Exchange (www.hkexnews.hk) and the Company from the date of this circular for a period of not less than 14 days:

(a) the Guarantee Agreement;
(b) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;
(c) the written consent referred to in the paragraph headed “Qualification and Consent of Expert”;
(d) the annual reports of the Company for the financial years ended 31 December 2020, 2021 and 2022; and
(e) this circular.

GENERAL INFORMATION

(a) The company secretary of the Company is Mr. Ma Hang Kon, Louis, who is a member of the Hong Kong Institute of Certified Public Accountants, the Association of Chartered Certified Accountants and the Chartered Governance Institute.
(b) The registered office of the Company is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.
(c) The head office of the Company is at 51 Goldhill Plaza, #15-05, Singapore 308900.
(d) The principal place of business of the Company in Hong Kong is at Unit 1007, Level 10, Tower I, Grand Century Place, 193 Prince Edward Road West, Mongkok, Kowloon, Hong Kong.
(e) The Company’s share registrar and transfer office in Hong Kong is Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.
32 -

GENERAL INFORMATION

APPENDIX II

(f) The English text of this circular shall prevail over the Chinese text in the case of any inconsistency.
(g) Mr. Choy Choong Yew, an executive Director, also acts as the Managing Director and compliance officer of the Company.
33 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [239 x 87] intentionally omitted <==

(Incorporated in the Cayman Islands with limited liability and carrying on business in Hong Kong under the trading name of German Automobiles International Limited)

(Stock Code: 8126)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the extraordinary general meeting (the “ EGM ”) of the shareholders of G.A. Holdings Limited (the “ Company ”) will be held at 11:00 a.m. on Friday, 8 December 2023, at Unit 1007, Level 10, Tower 1, Grand Century Place, 193 Prince Edward Road West, Mongkok, Kowloon, Hong Kong, for the following purposes. Unless otherwise indicated, capitalised terms used in this notice and the following resolution shall have the same meanings as those defined in the circular of the Company dated 22 November 2023 of which the notice convening the EGM forms part.

To consider and, if thought fit, pass with or without amendments, the following resolutions as ordinary resolutions.

ORDINARY RESOLUTION

“ THAT :
(a) the Guarantee Agreement entered into among Xiamen BMW, GAPL and Xiamen Zhong Bao, a copy has been produced at this meeting marked “A” and initialled by the chairman of the EGM for the purpose of identification, its terms and the transactions contemplated thereunder are hereby approved, confirmed and ratified; and
(b) any director of the Company be and is hereby authorised on behalf of the Company to do all such things and sign, seal, execute, perfect and deliver all such documents as he/she may in his/her discretion consider necessary, desirable or expedient, for the purposes of or in connection with the implementation and/or give effect to any matters relating to the Guarantee Agreement and the transactions contemplated thereunder, including but not limited to the New Facilities Guarantee Agreements.”

Yours faithfully By Order of the Board G.A. Holdings Limited Yuen Kin Pheng Chairman

Hong Kong, 22 November 2023

34 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal Place of Business in Hong Kong: Unit 1007, Level 10, Tower1 Grand Century Place 193 Prince Edward Road West Mongkok, Kowloon, Hong Kong

Head office in Singapore: 51 Goldhill Plaza #15-05 Singapore 308900

Notes:

Any member of the Company entitled to attend and vote at the EGM convened by the above notice is entitled to appoint one or, if he holds two or more Shares, more proxies to attend and vote on his behalf. A proxy need not be a member of the Company.
To be valid, a form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority must be deposited at the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude a member from attending and voting in person.
If two or more persons are joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the other joint holder(s). For this purpose, seniority shall be determined by the order in which the names stand in the principal or branch register of members of the Company in respect of the joint holding.
35 -

AI assistant

G. A. Holdings Limited — Proxy Solicitation & Information Statement 2023

51283_rns_2023-11-22_8139a42a-cc0a-45ac-a984-d529fbe8127a.pdf

(I) MAJOR TRANSACTION – FACILITIES GUARANTEES UNDER THE GUARANTEE AGREEMENT; AND (II) NOTICE OF EXTRAORDINARY GENERAL MEETING

CHARACTERISTICS OF GEM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

(I) MAJOR TRANSACTION – FACILITIES GUARANTEES UNDER THE GUARANTEE AGREEMENT; AND

(II) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

THE GUARANTEE AGREEMENT

1. The principal terms and conditions of the Guarantee Agreement

Parties

Date

Period

LETTER FROM THE BOARD

Guarantee amount

Fees, charges and security

Conditions

2. Reasons for and benefits of the Guarantee Agreement

The Group’s business model

LETTER FROM THE BOARD

The background

LETTER FROM THE BOARD

The reasons for and benefits of the Guarantee Agreement

LETTER FROM THE BOARD

3. Estimated maximum amount of interest and fees under the Facilities Guarantees

(a) Assumptions

(b) Calculation

LETTER FROM THE BOARD

(c) Financial significance

LETTER FROM THE BOARD

4. Details of the New Facilities Framework Agreements

Parties

Proposed Principal Terms

Parties

Proposed Principal Terms

INFORMATION OF THE PARTIES

Xiamen BMW, GAPL and the Company

Xiamen Zhong Bao

The Lenders to the Facilities

GEM LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

THE EGM

VOTING BY WAY OF POLL

RECOMMENDATIONS

OTHER INFORMATION

FINANCIAL INFORMATION OF THE GROUP

INDEBTEDNESS STATEMENT

BORROWINGS

APPENDIX I

Pledge of assets

Contingent liabilities and guarantees

WORKING CAPITAL STATEMENT

FINANCIAL EFFECT

Assessment of Xiamen Zhong Bao’s credit risk

MATERIAL ADVERSE CHANGE

FINANCIAL AND TRADING PROSPECTS

RESPONSIBILITY STATEMENT

DISCLOSURE OF INTERESTS

Interests of Directors

Long position in Shares

Substantial Shareholders

APPENDIX II

GENERAL INFORMATION

COMPETING INTERESTS

DIRECTORS’ SERVICE CONTRACTS

AUDIT COMMITTEE

Mr. Zhou Ming

Mr. Lin Zu Zheng

Ms. Guan Xin

LITIGATION

INTERESTS IN ASSETS OF THE GROUP

INTERESTS IN CONTRACTS OR ARRANGEMENT

QUALIFICATION AND CONSENT OF EXPERT

Name Qualification

G. A. Holdings Limited Proxy Solicitation & Information Statement 2023