G-Resources Group Limited — Capital/Financing Update 2014

Sep 26, 2014

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

PALADIN LIMITED

(Incorporated in Bermuda with limited liability) (Stock code: 495 and 642 (Preference Shares))

ANNOUNCEMENT

PROPOSED OPEN OFFER OF CONVERTIBLE NOTES WITH AN ORDINARY SHARE ALTERNATIVE

AND

RESUMPTION OF TRADING

Advised by Anglo Chinese Corporate Finance, Limited

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Proposed Open Offer

Paladin Limited proposes to raise up to HK$125.9 million, before expenses, by way of an Open Offer to holders of Ordinary Shares of Convertible Notes in denominations of HK$0.25 principal amount each, to be issued at face value, with a Share Alternative of new Ordinary Shares at a subscription price of HK$0.25 per Ordinary Share. Each Convertible Note may be converted into one Ordinary Share. The Convertible Notes and new Ordinary Shares will be offered to the Qualifying Shareholders on the basis of assured allotments of one Convertible Note or one new Ordinary Share for every two existing Ordinary Shares held on the Record Date on 17 October, 2014.

The net proceeds of the Open Offer are expected to be approximately HK$120.9 million. The net proceeds from the Open Offer will be used by Paladin for general working capital purposes.

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As at the date of this announcement, the Oung family concert group is beneficially interested in an aggregate of 660,745,285 Ordinary Shares and 3,043,100 Preference Shares, representing approximately 70.60% and 4.27% of the existing issued ordinary and preference share capital of Paladin respectively.

The Convertible Notes and Ordinary Shares to be issued under the Open Offer, (other than those in the assured allotments of Gold Seal Holdings Limited, Dr. Oung Shih Hua, James, and Mr. Oung Da Ming, who have irrevocably undertaken to Paladin to apply in full for their assured allotments of Convertible Notes in the Open Offer and not to elect for the Share Alternative, and not to sell any Shares until the Open Offer has either been completed or terminated) will be fully underwritten by Gold Seal Holdings Limited on the terms and subject to the conditions set out in the underwriting agreement.

To qualify for the Open Offer, a Shareholder must be registered as an Ordinary Shareholder on the Record Date on 17 October, 2014. In order to be so registered Shareholders must lodge any transfers of Ordinary Shares, together with the relevant share certificates, for registration no later than 4:30 p.m. on 14 October, 2014.

The latest time for application and payment for the Convertible Notes and/or the new Ordinary Shares in assured allotments under the Open Offer is expected to be 4:00 p.m. on 3 November, 2014. Paladin will apply to the Listing Committee of The Stock Exchange of Hong Kong Limited for the listing of, and permission to deal in, the new Ordinary Shares falling to be issued upon conversion of the Convertible Notes and those falling to be issued to Ordinary Shareholders who elect for the Share Alternative. No application will be made for a listing of the Convertible Notes.

Paladin expects to send the Open Offer offering document, and the forms of application, to the Ordinary Shareholders on the Record Date who are Qualifying Shareholders on or about 20 October, 2014. The Open Offer offering document (but not the forms of application) will be sent to other Ordinary Shareholders for information only.

The entitlements of the Qualifying Shareholders to apply for Convertible Notes or new Ordinary Shares in their assured allotments will not be transferable or renounceable. There will be no trading in those entitlements on The Stock Exchange of Hong Kong Limited.

The Open Offer is conditional upon, amongst other things, the underwriting agreement becoming unconditional and not being terminated. If the underwriting agreement does not become unconditional or is terminated, the Open Offer will not proceed.

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Resumption of trading

At the request of Paladin, trading in the Shares on The Stock Exchange of Hong Kong Limited was halted from 1:00 p.m. on Monday, 4 August, 2014. An application has been made by Paladin to The Stock Exchange of Hong Kong Limited for resumption of trading in the Shares with effect from 9:00 a.m. on Monday, 29 September, 2014.

THE OPEN OFFER

Paladin proposes to raise up to HK$125.9 million, before expenses, by way of an Open Offer to holders of Ordinary Shares of Convertible Notes in denominations of HK$0.25 each to be issued at face value, with a Share Alternative of new Ordinary Shares at a subscription price of HK$0.25 per Ordinary Share. Each Convertible Note will be convertible into one Ordinary Share. The Convertible Notes will be offered to the Qualifying Shareholders on the basis of assured allotments of one Convertible Note, with the Share Alternative of one new Ordinary Share for every two existing Ordinary Shares held on the Record Date, being 17 October, 2014.

Qualifying Shareholders may apply for any number of Convertible Notes or Ordinary Shares in the Share Alternative, or a combination of both, but are assured of allocations only up to the numbers in their assured allotments. Allocations of Convertible Notes or Ordinary Shares to those who apply for more than their assured allotments will be made on an equitable basis. Please refer to the section headed “Application(s) for Convertible Notes or Ordinary Shares in excess of assured allotments” for details.

The Open Offer is not subject to the shareholders’ approval requirements under Rule 7.24(5) of the Listing Rules.

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Issue Statistics

Basis of the Open Offer – Assured allotments of one Convertible Note or one new Ordinary Share for every two Ordinary Shares held on the Record Date.

– Existing issued share 935,924,489 Ordinary Shares capital of Paladin 71,343,529 Preference Shares

– Maximum principal HK$116,990,561 amount of Convertible Notes to be issued (assuming no election for Share Alternative and no conversion of Preference Shares before the Record Date)

– Maximum principal HK$125,908,502.25 amount of Convertible Notes to be issued (assuming no election for Share Alternative and full conversion of Preference Shares before the Record Date)

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– Subscription price for the Convertible Notes

100% of the principal amount of the Convertible Notes

As each Convertible Note may be converted into one Ordinary Share, the subscription price effectively represents (i) a discount of approximately 23.1% to the closing price of HK$0.325 per Ordinary Share as quoted on the Stock Exchange on 4 August, 2014, being the date on which the Shares last traded on the Stock Exchange prior to suspension of trading of the Shares at 1:00 p.m. on that day; (ii) a discount of approximately 21.5% to the average closing price per Ordinary Share as quoted on the Stock Exchange for the last ten trading days ended on 4 August, 2014 of approximately HK$0.3185; and (iii) a discount of approximately 16.7% to the theoretical ex-entitlement to Open Offer price of approximately HK$0.30 per Ordinary Share based on the closing price of HK$0.325 per Ordinary Share as quoted on the Stock Exchange on 4 August, 2014.

– Subscription price for HK$0.25 per Ordinary Share new Ordinary Shares in the Share Alternative

Maximum number of – new Ordinary Shares to be issued in the Share Alternative (assuming 100% of Qualifying Shareholders elect for the Share Alternative and full conversion of Preference Shares before the Record Date)

503,634,009 (with an aggregate nominal value of HK$5,036,340)

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– 467,962,244 (with an aggregate nominal value of HK$4,679,622)

• Maximum number of new Ordinary Shares to be issued upon conversion of the Convertible Notes (assuming 100% of Qualifying Shareholders elect for the Convertible Notes and no conversion of Preference Shares before the Record Date)

• Net proceeds to be raised upon completion of the Open Offer

• approximately HK$0.24 per Convertible Note/new Ordinary Share.

Terms of the Convertible Notes

• Aggregate amount : HK$125,908,502.25 assuming no election for the Share Alternative and full conversion of all Preference Shares before the Record Date

• Maturity : The date falling on the tenth anniversary of the date of issue of the Convertible Notes or if that is not a Business Day, the first Business Day thereafter, subject to the Company’s right of earlier redemption.

• Conversion : Holders of the Convertible Notes will be entitled to convert rights and (at a conversion price of HK$0.25 per Convertible Note) each conversion price Convertible Note into one Ordinary Share, subject to adjustment provisions which are common for convertible securities of similar type below. The adjustment events will include certain changes in the share capital of Paladin including consolidation, subdivision or reclassification of Shares, capitalisation of profits or reserves, rights issues of Ordinary Shares or options over Ordinary Shares, rights issues of other securities and modifications of rights of conversion, etc.

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Holders of the Convertible Notes will not be required to pay any extra amount should they convert their Convertible Notes into Ordinary Shares.

The certificates for the Ordinary Shares in respect of the conversion of Convertible Notes shall be available for collection by the relevant Noteholders after 10 Business Days following the receipt of the conversion notice by the Registrar.

• Cash Settlement Option

• : Notwithstanding the conversion right of each Noteholder in respect of each Convertible Note, upon election of the Noteholder for conversion of any Convertible Note, in the event that the issue of new Ordinary Shares upon conversion of the Convertible Notes will cause the public float of the Ordinary Shares to fall below the minimum prescribed percentage, the Company shall exercise the Cash Settlement Option, at any time upon issue of a written notice to the relevant Noteholders (within 5 Business Days after receipt of a conversion notice from the relevant Noteholders), to pay to the relevant Noteholders an amount of cash in Hong Kong dollars equal to the Cash Settlement Amount in order to satisfy such conversion right in full or in part. The Company shall pay to the relevant Noteholders the Cash Settlement Amount not less than 10 Business Days but no later than 15 Business Days following the issue of such notice.

• Redemption : At any time after issue and prior to the day that is 5 Business at the Option of Day prior to the maturity date, the Company may redeem all the the Company Convertible Notes on the redemption date at a redemption price equal to the Early Redemption Amount. On the maturity date, all then outstanding Convertible Notes will automatically be converted into Ordinary Shares.

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• Notwithstanding the automatic conversion of all outstanding Convertible Notes on the maturity date, in the event that automatic conversion of all outstanding Convertible Notes on the maturity date will cause the public float of the Ordinary Shares to fall below the minimum prescribed percentage required under the Listing Rules, the Company will have an option, at any time upon issue of a written notice to the relevant Noteholders no later than 2 Business Days prior to the maturity date, to redeem the Convertible Notes by paying to the relevant Noteholders an amount of cash in Hong Kong dollars equal to the Redemption Amount. The Company shall pay to the relevant Noteholders the Redemption Amount not less than 10 Business Days but no later than 15 Business Days following the issue of such notice.

• Voting : The Convertible Notes will not entitle the holders to attend or vote at general meetings of Paladin.

• Further issues : The terms of the Convertible Notes will not prohibit further issues of notes or other debt obligations ranking pari passu or in priority to the Convertible Notes.

• Status : The Convertible Notes will on issue constitute direct, unconditional, unsubordinated and unsecured obligations of Paladin. The payment obligations of Paladin under the Convertible Notes shall at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.

• Distributions : The Convertible Notes will have no entitlement to interest but

• if and whenever Paladin shall pay or make any cash dividend or distribution of any kind or any distribution of assets in specie (other than distribution of Ordinary Shares) to its Shareholders (a “ Distribution ”), Paladin shall, subject to compliance with relevant laws, rules, regulations and requirements in Hong Kong, (including the Listing Rules and where applicable, shareholders’ approval requirements under the Listing Rules) and Bermuda, at the same time pay or distribute to each Noteholder an amount of cash or

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other assets the subject matter of the Distribution which is equal to (i) the amount of cash or other assets the subject matter of the Distribution per Ordinary Share receivable by the Shareholders under the Distribution, multiplied by (ii) the number of Ordinary Shares which the Noteholder would have become a holder of, had such Noteholder’s Convertible Notes then outstanding been converted on the relevant record date for determining entitlement to the Distribution.

• Transferability : The Convertible Notes may be transferred or assigned from time to time

• Conversion : A Noteholder must complete and sign a conversion notice, and arrangement and lodge such notice together with relevant certificate(s) of the procedures Convertible Notes at the office of the Registrar in Hong Kong. Share certificate(s) in respect of the conversion will be available for collection at the office of the Registrar by the 10th Business Days after receipt of the conversion notice and the certificate(s) of the Convertible Notes.

No charges will be levied for the conversion of Convertible Notes.

• Listing

• : No application will be made to the Stock Exchange to list the Convertible Notes, but it will be a condition of the issue of the Convertible Notes that a listing is granted in respect of the Ordinary Shares falling to be issued upon conversion of the Convertible Notes and those under the Share Alternative.

Paladin will apply to the Stock Exchange for the listing of, and permission to deal in, the Ordinary Shares falling to be issued upon conversion of the Convertible Notes and the new Ordinary Shares to be issued under the Share Alternative.

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Effects on the shareholding structure

The table below shows certain possible effects of the Open Offer on the shareholding structure of Paladin (assuming no conversion of Preference Shares before the Record Date and no issue or repurchase of Ordinary Shares before conversion of the relevant Convertible Notes):

Mr. Oung Da Ming (Note 1) Gold Seal Holdings Limited (Note 1) Cityguard Holdings Limited (Notes 1 & 2) Dr. Oung Shih Hua, James (Note 1) Sward Finance Limited (Note 1) Goldenfield Equities Limited (Note 3) Public Total Oung family concert group		Existing structure	Existing structure	% 0.00% 0.76% 0.00% 3.50% 0.00% 12.75% 82.98% 100.00% 4.27%		Assuming every Ordinary Shareholder applies for full assured allotment of Convertible Notes and converts all Convertible Notes into Ordinary Shares immediately, or elects for Share Alternative for 100% of assured allotments	Assuming every Ordinary Shareholder applies for full assured allotment of Convertible Notes and converts all Convertible Notes into Ordinary Shares immediately, or elects for Share Alternative for 100% of assured allotments	Assuming every Ordinary Shareholder applies for full assured allotment of Convertible Notes and converts all Convertible Notes into Ordinary Shares immediately, or elects for Share Alternative for 100% of assured allotments	Assuming every Ordinary Shareholder applies for full assured allotment of Convertible Notes and converts all Convertible Notes into Ordinary Shares immediately, or elects for Share Alternative for 100% of assured allotments
	Ordinary Shares held 50,000,000 94,696,754 508,848,531 7,000,000 200,000 29,449,000 245,730,204 935,924,489 660,745,285	% 5.34% 10.12% 54.37% 0.75% 0.02% 3.15% 26.26% 100.00% 70.60%	Preference Shares held – 543,100 – 2,500,000 – 9,099,014 59,201,415		Convertible Notes held 25,000,000 47,348,377 – 3,500,000 – – – 75,848,377 75,848,377	% 32.96% 62.42% 0.00% 4.61% 0.00% 0.00% 0.00% 100.00% 100.00%	Ordinary Shares held 50,000,000 94,696,754 763,272,796 7,000,000 300,000 44,173,500 368,595,306 1,328,038,356 915,269,550	% 3.76% 7.13% 57.47% 0.53% 0.02% 3.33% 27.75% 100.00% 68.92%	Preference Shares held – 543,100 – 2,500,000 – 9,099,014 59,201,415 71,343,529 3,043,100	% 0.00% 0.76% 0.00% 3.50% 0.00% 12.75% 82.98%
			71,343,529							100.00%
			3,043,100							4.27%

Mr. Oung Da Ming (Note 1) Gold Seal Holdings Limited (Note 1) Cityguard Holdings Limited (Notes 1 & 2) Dr. Oung Shih Hua, James (Note 1) Sward Finance Limited (Note 1) Goldenfield Equities Limited (Note 3) Public Total Oung family concert group		Assuming no Ordinary Sharehold apply in the Open Offer other th Shareholders who have given irrevo undertakings, and before conversion of any C	Assuming no Ordinary Sharehold apply in the Open Offer other th Shareholders who have given irrevo undertakings, and before conversion of any C	Assuming no Ordinary Sharehold apply in the Open Offer other th Shareholders who have given irrevo undertakings, and before conversion of any C	ers an cable onvertible Notes	% 0.00% 0.76% 0.00% 3.50% 0.00% 12.75% 82.98% 100.00% 4.27%		Assuming no Ordinary Shareholders apply in the Open Offer other than Shareholders who have given irrevocable undertakings, and conversion of all Convertible Notes other than those the subject of irrevocable undertakings	Assuming no Ordinary Shareholders apply in the Open Offer other than Shareholders who have given irrevocable undertakings, and conversion of all Convertible Notes other than those the subject of irrevocable undertakings	Assuming no Ordinary Shareholders apply in the Open Offer other than Shareholders who have given irrevocable undertakings, and conversion of all Convertible Notes other than those the subject of irrevocable undertakings	Assuming no Ordinary Shareholders apply in the Open Offer other than Shareholders who have given irrevocable undertakings, and conversion of all Convertible Notes other than those the subject of irrevocable undertakings
	Convertible Notes held 25,000,000 439,462,244 – 3,500,000 – – – 467,962,244 467,962,244	% 5.34% 93.91% 0.00% 0.75% 0.00% 0.00% 0.00% 100.00% 100.00%	Ordinary Shares held 50,000,000 94,696,754 508,848,531 7,000,000 200,000 29,449,000 245,730,204 935,924,489 660,745,285	% 5.34% 10.12% 54.37% 0.75% 0.02% 3.15% 26.26% 100.00% 70.60%	Preference Shares held – 543,100 – 2,500,000 – 9,099,014 59,201,415 71,343,529 3,043,100		Convertible Notes held 25,000,000 47,348,377 – 3,500,000 – – –	% 32.96% 62.43% 0.00% 4.61% 0.00% 0.00% 0.00% 100.00% 100.00%	Ordinary Shares held 50,000,000 486,810,710 508,848,531 7,000,000 200,000 29,449,000 245,730,204 1,328,038,445 1,052,859,241	% 3.76% 36.66% 38.32% 0.53% 0.02% 2.22% 18.50% (Note 4) 100.00% 79.28%	Preference Shares held – 543,100 – 2,500,000 – 9,099,014 59,201,415 71,343,529 3,043,100	% 0.00% 0.76% 0.00% 3.50% 0.00% 12.75% 82.98%
							75,848,377					100.00%
							75,848,377					4.27%

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Notes:

1. These Shareholders are members of the Oung family concert group. Gold Seal Holdings Limited is an investment holding company incorporated in the British Virgin Islands with limited liability. Its ultimate beneficial shareholders are Mr. Oung Da Ming who owns 66.7% of its issued shares, and his sister Ms. Uon Margaret who owns 33.3% of its issued shares. Dr. Oung Shih Hua, James is the Chairman of Paladin and the nephew of Mr. Oung Da Ming and Ms. Uon Margaret. The Oung family concert group is beneficially interested in an aggregate of 660,745,285 Ordinary Shares and 3,043,100 Preference Shares, representing approximately 70.60% and 4.27% of the existing issued ordinary and preference share capital of Paladin respectively.

2. Cityguard Holdings Limited is a wholly-owned subsidiary of Five Star Investments Limited, which is in turn a subsidiary of Basurto Holdings Limited which owns 107,126,006 Ordinary Shares, representing 11.45% of the issued Ordinary Shares in trust for Cityguard Holdings Limited. The shares in Basurto Holdings Limited are held by Mr. Oung Da Ming on trust for the estate of his deceased mother, Ms. Oung Chin Liang Fung (as to 67%) and his sister, Ms. Lilian Oung (as to 33%).

3. Goldenfield Equities Limited is a presumed concert party of the Oung family concert group under paragraphs (1) and (8) of the definition of acting in concert under the Takeovers Code but it is not included in the calculation of the Shares held by the Oung family concert group in respect of the Company due to differences of opinion with the Oung family concert group. Its directors are Mr. Oung Da Ming, his sister, Ms. Lilian Oung and his nephew, Dr. Oung Shih Hua, James. It is owned as to 40% by Ms. Lilian Oung, 40% by her son Mr. Chen Te Kuang Mike, and 20% by Dr. Oung Shih Hua, James.

4. The public float in respect of the Ordinary Shares of 18.50% shown in the table above is for illustration purpose only. As mentioned above, Noteholders shall not have the right to convert the whole or part of the principal amount of the Convertible Notes into Ordinary Shares to the extent that immediately after such conversion there will not be sufficient public float of the Ordinary Shares as required under the Listing Rules.

Qualifying Shareholders

Paladin will send the Open Offer offering document and the forms of application to the Qualifying Shareholders only. The Open Offer offering document (but not the forms of application) will be sent to other Ordinary Shareholders for information only.

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To qualify for the Open Offer, a shareholder must be registered as an Ordinary Shareholder at the close of business on the Record Date on 17 October, 2014 and have an address that is in Hong Kong on the Record Date. The Board will make enquiries of legal advisers as to whether the offer or issue of Convertible Notes or new Ordinary Shares to the Ordinary Shareholders whose addresses are not in Hong Kong on the Record Date may contravene the applicable securities legislation of the relevant overseas places or the requirements of the relevant regulatory body or stock exchange pursuant to Rule 13.36(2)(a) of the Listing Rules. If, after making such enquiry, the Board is of the opinion that it would be necessary or expedient, on account either of the legal restrictions under the laws of the relevant place or of any requirement of the relevant regulatory body or stock exchange in that place, not to offer Convertible Notes or new Ordinary Shares to such Ordinary Shareholders whose addresses are not in Hong Kong on the Record Date, no offer of Convertible Notes or new Ordinary Shares will be made to such Ordinary Shareholders.

In order to be registered as a holder of an Ordinary Share on the Record Date, Shareholders to be registered on the Hong Kong branch register must lodge any transfer of Ordinary Shares, together with the relevant share certificates, with Computershare Hong Kong Investor Services Limited at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong by no later than 4:30 p.m. on 14 October, 2014 (Hong Kong time) (or, for Ordinary Shares on the principal register, with Appleby Management (Bermuda) Limited at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda by not later than 5:30 p.m. on 13 October, 2014 (Bermuda time)).

Closure of register of members

The register of members will be closed from 15 October, 2014 to 17 October, 2014, both days inclusive. No transfer of Shares will be registered during this period.

Payment

The subscription price for the Convertible Notes and, or new Ordinary Share is payable in by cheque or cashier order when a Qualifying Shareholder applies for Convertible Notes or Share Alternative.

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Certificates for the Convertible Notes and Ordinary Shares

Certificates for fully paid Convertible Notes and new Ordinary Shares are expected to be posted by ordinary mail to subscribers, at their own risk, who have been allotted the relevant Convertible Notes or new Ordinary Shares on or before 12 November, 2014.

Minimum size of Convertible Notes

Paladin will not issue fractions of Convertible Notes or fractions of Ordinary Shares to Qualifying Shareholders.

Application(s) for Convertible Notes or Ordinary Shares in excess of assured allotments

Qualifying Shareholders who validly apply for Convertible Notes or Ordinary Shares in amounts equal to or less than the numbers of Convertible Notes or Ordinary Shares in their assured allotments are assured of allotments in full of the Convertible Notes or Ordinary Shares for which they apply and pay on application. Qualifying Shareholders will have the right to apply for Convertible Notes or Ordinary Shares in excess of their assured allotments but are not assured of receiving any Convertible Notes or Ordinary Shares in excess of those in their assured allotments. Any Convertible Notes or Ordinary Shares (i) not taken up by the Qualifying Shareholders in accordance with their proportional allocation; (ii) to which the non-Qualifying Shareholders would otherwise have been entitled, will be made available for excess applications by the Qualifying Shareholders. The Directors will allocate the excess Convertible Notes or Ordinary Shares, if any, at their discretion, but on a fair and equitable basis, to the Qualifying Shareholders who have applied for excess Convertible Notes or Ordinary Shares on a pro-rata basis with reference to the number of excess Convertible Notes or Ordinary Shares applied for.

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UNDERWRITING ARRANGEMENTS

Underwriting agreement

Date : 26 September, 2014 Underwriter : Gold Seal Holdings Limited, an investment holding company incorporated in the British Virgin Islands with limited liability, is not in its ordinary course of business to underwrite issue of securities. Its ultimate beneficial owners are Mr. Oung Da Ming who owns 66.7% of its issued shares, and his sister Ms. Uon Margaret who owns 33.3% of its issued shares. Dollar value of Convertible : HK$98,028,917.5 being the maximum principal amount of Notes and Ordinary the Convertible Notes and Ordinary Shares expected to be Shares underwritten issued under the Open Offer excluding those that are the subject of the irrevocable undertakings referred to below. Commission : A commission of 2.0% of the amount underwritten will be charged by Gold Seal Holdings Limited. The underwriting commission is determined with reference to market practice. The Directors (including the independent non-executive Directors) consider the underwriting commission to be in line with the market rate.

Gold Seal Holdings Limited as the underwriter will underwrite all the Convertible Notes and, or Ordinary Shares in the Share Alternative (subject to compliance with the Takeovers Code and public float requirements under the Listing Rules) excluding the Convertible Notes to be applied for by those Shareholders that have given irrevocable undertakings as described below, on the terms and subject to the conditions of the underwriting agreement. All the legal costs incurred in the preparation of the underwriting agreement will be borne by Paladin. The Board considers that the underwriting agreement is on normal commercial terms and is fair and reasonable so far as the Shareholders are concerned.

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Irrevocable undertakings

As at the date of this announcement, Gold Seal Holdings Limited owns 94,696,754 Ordinary Shares and 543,100 Preference Shares, representing 10.12% and 0.76% of the existing issued Ordinary and Preference Shares, respectively. Mr. Oung Da Ming owns 50,000,000 Ordinary Shares, representing 5.34% of the existing issued Ordinary Shares. Dr. Oung Shih Hua, James owns 7,000,000 Ordinary Shares and 2,500,000 Preference Shares, representing 0.75% and 3.5% of the existing issued Ordinary and Preference Shares, respectively. Each of Gold Seal Holdings Limited, Mr. Oung Da Ming and Dr. Oung Shih Hua, James has irrevocably undertaken to Paladin that it/he will apply in full for its/his assured allotment of Convertible Notes in the Open Offer and will not elect for the Share Alternative, and not to sell or convert any Shares until the Open Offer has either been closed or terminated.

Conditions of the underwriting agreement

The underwriting agreement is conditional upon, amongst other things, fulfilment of the following:

• (i) the registration of the relevant documents, together with all other consents and documents required to be endorsed on or attached to the relevant documents on or before the posting date with the Registrar of Companies in Bermuda and the Registrar of Companies in Hong Kong (if required);

• (ii) the delivery of one copy of the relevant documents relating to the Open Offer to the Stock Exchange on or prior to the offering document posting date;

• (iii) the posting of the Open Offer offering document to the Qualifying Shareholders on the offering document posting date; and

• (iv) the Stock Exchange granting a listing of the Ordinary Shares falling to be issued upon conversion of the Convertible Notes and the new Ordinary Shares falling to be issued under the Share Alternative.

In the event that the above conditions of the underwriting agreement have not been satisfied on or before 5 November, 2014 (or such later date as the underwriter and the Company may agree), all liabilities of the parties to the underwriting agreement shall cease and determine and neither party shall have any claim against the other save in respect of certain costs and expenses.

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Termination of the underwriting agreement

Gold Seal Holdings Limited may terminate the arrangements set out in the underwriting agreement by notice in writing to Paladin at any time prior to 4:00 p.m. on the second Business Day following the latest day for application for the Convertible Notes or the Share Alternative in assured allotments if there occurs, amongst other things:

• any material change in existing law or regulation or other occurrence of any nature of any local, national or international event or any change of a political, military, financial, economic, currency or other nature affecting local securities market or the occurrence of any combination of circumstances which may, in the opinion of the underwriter, adversely affect the business or the financial or trading position or prospects of the Paladin group or adversely prejudice the success of the Open Offer or the taking up of the Convertible Notes, making it inexpedient or inadvisable for Paladin or the underwriter to proceed with the Open Offer; or

• any change in market conditions in Hong Kong (including without limitation suspension or material restriction or trading in securities) which affect the success of the Open Offer or otherwise in the opinion of the underwriter makes it inexpedient or inadvisable or inappropriate for Paladin or the underwriter to proceed with the Open Offer; or

• any change in the circumstances of Paladin or any other members of the Paladin group which may, in the opinion of the underwriter, adversely affect the prospects of Paladin.

• Upon giving the notice of termination, all obligations of Gold Seal Holdings Limited under the underwriting agreement shall cease and terminate and no party shall have any claim against any other party in respect of any matter or thing arising out of or in connection with the underwriting agreement except for, inter alia, the payment by Paladin of any fees incidental to the Open Offer.

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Conditions of the Open Offer

The Open Offer is conditional upon, amongst other things, the obligations of Gold Seal Holdings Limited under the underwriting agreement becoming unconditional and the underwriting agreement not being terminated.

Preference Share

Under the Bye-laws of the Company, the current conversion price of the Preference Shares of HK$0.25 per Preference Share will be adjusted to take into account the subscription price of the Open Offer and the conversion price of Convertible Notes. The adjusted conversion prices of the Preference Shares will become effective on the day following the Record Date. An announcement relating to the adjusted conversion price of the Preference Shares will be made on the Record Date.

If the underwriting agreement does not become unconditional or is terminated, the Open Offer will not proceed.

EXPECTED TIMETABLE

Last day of dealings in the Ordinary Shares

on a cum-Open Offer basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 October, 2014

First day of dealings in the Ordinary Shares on an ex-Open Offer basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 October, 2014

Latest time for lodging transfers of the Ordinary Shares

in order to qualify for the Open Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on

14 October, 2014 (Hong Kong time) 5:30 p.m. on 13 October, 2014 (Bermuda time) Register of members closes, both days inclusive . . . . . . . . . . . . . . . . . . . .15 October, 2014 to 17 October, 2014 Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 October, 2014

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Effective date of the adjusted conversion price of the Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 October, 2014 Despatch of Open Offer offering document and forms of application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 October, 2014 Latest time for application, and payment, for the Convertible Notes or Ordinary Shares in assured allotments and in excess of assured allotments . . . . . . . . . . . . . . . . 4:00 p.m. on 3 November, 2014 Latest time for underwriting agreement to become unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on 5 November, 2014 Announcement of results of the Open Offer . . . . . . . . . . . . . . . . . . . . . . . . 11 November, 2014 Certificates for the Convertible Notes and Ordinary Shares in the Share Alternative expected to be despatched on or before . . . . . . . . . . . . . . . . . . . . . . . . . 12 November, 2014 Trading in Ordinary Shares in the Share Alternative . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on 13 November, 2014

All times and dates in this announcement refer to Hong Kong local times and dates. Shareholders should note that the dates or deadlines specified in the expected timetable of the Open Offer as set out above, and in other parts of this announcement, are indicative only and may be varied by agreement between the Company and Gold Seal Holdings Limited as the underwriter. In the event that any special circumstances arise, the Board may extend, or make adjustments to, the timetable if it considers appropriate. Any such extension or adjustment to the expected timetable will be notified to the Shareholders and the Stock Exchange as and when appropriate.

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REASONS FOR THE OPEN OFFER

As at 31 December, 2013, the net current liabilities of the Group were some HK$467 million. The current ratio was 0.62. The pledged bank deposits, bank balances and cash were some HK$68 million. For the six months ended 31 December, 2013, Paladin had a negative cash flow from operating activities of some HK$4.8 million. Paladin has a high level of borrowing and relies to a material extent on bank borrowing. As at 31 December, 2013, Paladin had outstanding indebtedness borrowings of some HK$1,216 million comprising (i) secured bank loans of some HK$854 million; (ii) amount due to directors of subsidiaries of some HK$203 million; and (iii) other payables of some HK$159 million. The Open Offer is therefore designed to raise funds to meet the Group’s working capital requirements in the near term.

The subscription price of the Convertible Notes represents (i) a discount of 23.1% to the closing price of the Ordinary Shares of HK$0.325 on 4 August, 2014; and (ii) a discount of approximately 16.7% to the theoretical ex-Open Offer entitlement price of approximately HK$0.30 per Ordinary Share based on the closing price of the Ordinary Shares of HK$0.325 on 4 August, 2014. The Board considers the subscription price to be fair to Shareholders.

USE OF PROCEEDS FROM THE OPEN OFFER

The net proceeds of the Open Offer are expected to be approximately HK$120.9 million, and will be used by Paladin for general working capital purposes.

GENERAL

The principal activities of Paladin and its subsidiaries are property development of a property project at Nos. 8, 10, 12 Peak Road, property investment and indent trading. The principal property interest is Bowen Hill Apartments which, as stated above, has been redeveloped.

As at the date of this announcement, Paladin has in issue 71,343,529 Preference Shares which can be converted into Ordinary Shares on a 1:1 basis.

Paladin had not conducted any fund raising exercise during the last 12 months preceding the date of this announcement save for loans borrowed from third parties and, or related parties and the proposed placing announced on 29 April, 2014, which lapsed and did not proceed.

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The entitlements of Qualifying Shareholders to apply for Convertible Notes or new Ordinary Shares in their assured allotments will not be transferable or renounceable. There will be no trading in those entitlements on the Stock Exchange.

Shareholders should note that the Ordinary Shares will be dealt in on an ex-Open Offer basis commencing from 13 October, 2014 and that dealing in Ordinary Shares will take place while the conditions to which the underwriting agreement is subject remain unfulfilled.

If the underwriting agreement is terminated, or the conditions of the Open Offer are not fulfilled, the Open Offer will not proceed. Any dealings in the Shares from now up to the date on which all conditions to which the Open Offer is subject are fulfilled will accordingly bear the risk that the Open Offer may not become unconditional. Investors may wish to seek professional advice regarding dealings in the Shares during these periods.

RESUMPTION OF TRADING IN THE SHARES

Trading in the Shares on the Stock Exchange was halted with effect from 1:00 p.m. on Monday, 4 August, 2014 pending the release of an announcement in relation to inside information of the Company. The Directors have confirmed that other than the Open Offer there is no other inside information discloseable under the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and Rule 13.09 of the Listing Rules. An application has been made to the Stock Exchange for resumption of trading in the Shares with effect from 9:00 a.m. on Monday, 29 September, 2014.

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DEFINITIONS

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

• “acting in concert”

the meaning ascribed to it under the Takeovers Code

• “associate(s)”

the meaning ascribed to it under the Takeovers Code

• “Board”

the board of directors of Paladin Limited

• “Business Day”

• a day on which the Stock Exchange is open for the transaction of business

• “Cash Settlement Amount”

• the product of (i) the number of Ordinary Shares otherwise deliverable upon exercise of the conversion right in respect of the Convertible Notes for which the Company has elected the Cash Settlement Option and (ii) the arithmetic average of the volume weighted average price of the Ordinary Shares for each Business Day during the five Business Days last preceding the delivery date of the notice of conversion by the Noteholder

• “Cash Settlement Option”

• an option of the Company to pay to the relevant Noteholder an amount of cash in HK$ equal to the Cash Settlement Amount in order to satisfy the conversion right of the Noteholder in respect of each Convertible Note

• “Convertible Notes”

• Unsecured Zero Coupon Participating Convertible Notes due 2024 be issued under the Open Offer

• “Director(s)”

the director(s) of the Company

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“Early Redemption the product of (i) the number of Ordinary Shares deliverable Amount” upon exercise of the conversion rights in respect of those Convertible Notes then outstanding and (ii) the arithmetic average of the volume weighted average price of the Ordinary Shares for each Business Day during the sixty Business Days ending on date of the notice from the Company electing to redeem all the Convertible Notes on the redemption date specified therein

• “Group”

Paladin and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange

• “Noteholder”

• the registered holder of a Convertible Note

• “Open Offer”

• the Open Offer of on the basis of assured allotments of one Convertible Note (with the Share Alternative of one new Ordinary Share) for every two Ordinary Shares held on the Record Date

• “Ordinary Share(s)”

• the ordinary share(s) of par value HK$0.01 each in the issued share capital of the Company

• “Ordinary Shareholder(s)”

holder(s) of Ordinary Share(s)

• “Oung family concert group”

Mr. Oung Da Ming and parties acting in concert with him, namely, his brother, Mr. Oung Da Ming, James, his sisters Ms. Lilian Oung and Ms. Margaret Uon, the estate of the late Madam Oung Chin Liang Fung (mother of Mr. Oung Da Ming), Dr. Oung Shih Hua, James (nephew of Mr. Oung Da Ming) and companies controlled by them

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• “Overseas Shareholder(s)” Ordinary Shareholder(s) whose address(es), as shown on the register of members of the Company, is/are outside Hong Kong

• “Paladin” or the

• “Company”

• Paladin Limited, a company incorporated in Bermuda with limited liability, the Ordinary Shares and Preference Shares of which are listed on the Main Board of the Stock Exchange (Stock Codes: 495 for Ordinary Shares, and 642 for Preference Shares)

• “Preference Share(s)”

• the convertible redeemable preference shares of HK$0.01 each in the issued share capital of the Company

• “Preference Shareholder(s)”

• holders of Preference Shares

• “Qualifying Shareholder(s)”

• Ordinary Shareholder(s) other than those overseas shareholder(s) whom the Directors, after making relevant enquiries as required under Rule 13.36(2)(a) of the Listing Rules, consider their exclusion from the Open Offer to be necessary or expedient on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place

• “Record Date”

• 17 October, 2014 being the tentative date on which Ordinary Shareholders must be registered on the register of Ordinary Shareholders to be entitled to subscribe for the Open Offer

• “Redemption Amount”

• the product of (i) the number of Ordinary Shares deliverable upon exercise of the conversion rights in respect of the Convertible Notes then outstanding on the maturity date and (ii) the subscription price of HK$0.25 per new Ordinary Share

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“Registrar” Computershare Hong Kong Investors Services Limited, being the Hong Kong branch share registrar and transfer office of the Company located at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong “Shareholder(s)” holders of Ordinary Share and, or Preference Shares “Share(s)” the Ordinary Share(s) and, or Preference Share(s) “Share Alternative” the share alternative to the Convertible Notes, on the basis of assured allotments of one Ordinary Share for every two existing Ordinary Shares held on Record Date “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” The Hong Kong Code on Takeovers and Mergers “underwriting agreement” the agreement dated 26 September, 2014 entered into between Paladin and Gold Seal Holdings Limited relating to the underwriting of the Open Offer “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent

By order of the board of directors of Paladin Limited Oung Shih Hua, James Chairman

Hong Kong, 26 September, 2014

As at the date of this announcement, the Chairman and executive Director is Dr. Oung Shih Hua, James; the two non-executive Directors are Mr. Yuen Chi Wah and Mr. Chan Chi Ho and the independent non-executive Directors are Mr. Zhu Pei Qing, Mr. Kwok Wai Chi and Professor Huang Weizong Martin.

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