G-Resources Group Limited - M&A Activity 2015

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.

PALADIN LIMITED

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

VERY SUBSTANTIAL ACQUISITION CONCERNING ACQUISITION OF COMPANIES WITH RIGHTS TO ACQUIRE PROPERTIES AND RESUMPTION OF TRADING

VERY SUBSTANTIAL ACQUISITION – THE ACQUISITION

The Board is pleased to announce that on Friday, 10 July 2015 (after trading hours), the Company entered into the Provisional Agreement with the Vendor, an indirect whollyowned subsidiary of the Guarantor, and the Guarantor, for the sale and purchase of the Sale Interests in accordance with the Provisional Agreement. The Sale Interests include the Sale Shares and Sale Loans. The Sale Shares comprise the entire issued share capital of each of Target Company 1 and Target Company 2, which are companies with rights to acquire certain properties, namely the 20th Floor and 21st Floor of AXA Centre, 151 Gloucester Road, Hong Kong, together with seven car parking spaces of AXA Centre. The aggregate consideration for the Sale Interests and the properties is HK$498,806,312.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios set out in the Listing Rules in respect of the Acquisition exceeds 100%, the Acquisition constitutes a very substantial acquisition of the Company under Chapter 14 of the Listing Rules. The Acquisition is therefore subject to the reporting, announcement and Shareholders’ approval requirements.

A circular containing, among other matters, further details of the Acquisition, other information as required under the Listing Rules and the notice for the SGM to consider and, if thought fit, to approve the resolution relating to the Acquisition, will be despatched to the Shareholders as soon as practicable. As the Company requires time for compiling the financial information for inclusion in the circular pursuant to the Listing Rules, the circular is expected to be despatched to the Shareholders on or before 31 August 2015.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no Shareholder has any material interest in the Acquisition. Therefore no Shareholder is required to abstain from voting at the SGM.

WARNING

Closing of the Acquisition is conditional upon the satisfaction or, if applicable, waiver of the conditions set out in the section headed “Conditions Precedent to the Provisional Agreement” in this announcement, including the Peak Road SPA having become unconditional in all respects. Accordingly, the Acquisition may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the securities of the Company.

RESUMPTION OF TRADING

The trading in the Shares was halted with effect from 9:00 a.m. on Monday, 13 July 2015, pending the publication of this announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:00 a.m. on Monday, 20 July 2015.

BACKGROUND

The Board is pleased to announce that on Friday, 10 July 2015 (after trading hours), the Company entered into the Provisional Agreement with the Vendor, an indirect wholly-owned subsidiary of the Guarantor, and the Guarantor, pursuant to which the Vendor has agreed to sell and the Purchaser has agreed to purchase the Sale Interests in accordance with the terms and conditions of the Provisional Agreement. The Sale Interests include the Sale Shares and Sale Loans. The Sale Shares comprise the entire issued share capital of each of Target Company 1 and Target Company 2, which are companies with rights to acquire the Properties from the Property Vendor, being an acquisition to be effected upon Completion.

Target Company 1 is the purchaser pursuant to:

(i) the Property SPA 1 in relation to the sale and purchase of Property 1 for the consideration of HK$237,000,000; and
(ii) the CPS SPA 1 in relation to the sale and purchase of the Car Park Space 1 for the consideration of HK$7,000,000.

Target Company 2 is the purchaser pursuant to:

(i) the Property SPA 2 in relation to the sale and purchase of Property 2 for the consideration of HK$240,000,000; and
(ii) the CPS SPA 2 in relation to the sale and purchase of the Car Park Space 2 for the consideration of HK$9,330,000.

An aggregate deposit of HK$40,000 was paid by the Target Companies to the Property Vendor pursuant to the Properties SPA on the date of signing of the Properties SPA.

THE ACQUISITION

The Provisional Agreement includes, amongst others, the following major terms.

Date

10 July 2015

Parties

(1) Focus Master Limited, being the Vendor;
(2) CSI Properties Limited, being the Guarantor; and
(3) Paladin Limited, being the Purchaser.

The Vendor is an indirect wholly-owned subsidiary of the Guarantor, a company listed on the Main Board of the Stock Exchange with stock code 497. The Vendor and the Guarantor are investment holding companies. The principal activities of the Guarantor’s principal subsidiaries include property investment, repositioning and development.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, the Vendor, the Guarantor and their ultimate beneficial owners are Independent Third Parties.

Subject Matter

The Purchaser has conditionally agreed to purchase, and the Vendor has conditionally agreed to sell, the Sale Interests.

Consideration

The consideration payable by the Purchaser includes:

(i) HK$5,516,312 for the Sale Interests, payable to the Vendor pursuant to the Provisional Agreement; and

(ii) HK$493,290,000, representing the respective balance of the purchase price pursuant to the Properties SPA, payable to the Property Vendor.

The Purchaser shall pay to the Vendor: (i) a refundable deposit of HK$3,000,000 upon the signing of the Provisional Agreement; and (ii) the balance of the consideration pursuant to the Provisional Agreement upon Completion. The Purchaser shall pay to the Property Vendor the respective balance of the purchase price pursuant to the Properties SPA upon Completion.

The consideration is determined after arm’s length negotiations between the Purchaser and the Vendor based on the historical sales prices relevant to interests in the AXA Centre and the prevailing market value of the Properties.

Guarantee

The Guarantor, in consideration of the Purchaser’s agreement to purchase the Sale Interests, guarantees the full performance of all obligations of the Vendor under the Provisional Agreement, and shall fully indemnify the Purchaser for all losses and damages, costs and expenses which the Purchaser may suffer or incur as a result of or in connection with any default by the Vendor of any such obligations.

Formal Agreement

The Vendor and the Purchaser shall negotiate in good faith and use their respective reasonable endeavours to enter into a formal agreement for the Acquisition within 30 days from the date of the Provisional Agreement. If no formal agreement has been entered into despite the parties’ reasonable endeavours, the Provisional Agreement shall become the formal agreement.

Conditions Precedent to the Provisional Agreement

Completion is subject to and conditional upon (unless waived in writing by the Purchaser):

(a) the Vendor having proved that the Property Vendor possess good title to the Properties free from any Encumbrances, and that the Property Vendor is able to give good title to the Properties, in each case subject only to the existing tenancies and the existing legal charge(s) which shall be released upon Completion;

(b) the Purchaser having obtained approval of its shareholders in general meeting necessary to approve and implement the transaction in full compliance with the Listing Rules;
(c) the Peak Road SPA having become unconditional in all respects; and
(d) the Purchaser not being aware of any material breach of any of the Vendor’s warranties set out in the Provisional SPA after having conducted due diligence in respect of the Target Companies and the Properties.

If any of the conditions above is not satisfied on or before 31 October 2015 (or such other date as the parties may agree in writing), the Provisional Agreement shall lapse and become null and void and the parties shall be released from all obligations under the Provisional Agreement, save and except (i) liability in respect of any antecedent breaches; and (ii) the Guarantor shall return or procure the return of the deposit to the Purchaser forthwith upon non-fulfilment of the conditions.

Stamp Duty and Costs

Stamp duty (if any) payable on the Provisional Agreement (and/or the subsequent formal agreement), the bought and sold notes, the instruments of transfer and loan assignments shall be borne by the Purchaser. Each party shall bear its own legal costs in relation to the Provisional Agreement (or the subsequent formal agreement).

Stamp duty payable on the Property SPA 1 and the Property SPA 2 (and/or the subsequent formal agreement and the assignment of the relevant office floors) shall be borne by the Purchaser, up to a maximum amount of 4.25% of the total purchase price thereunder, and the Vendor shall be responsible for all amounts in excess thereof (if any). All reasonable legal costs in relation to the Property SPA 1 and the Property SPA 2 and the relevant assignments shall be borne by the Target Companies.

The Vendor shall be responsible for all stamp duty payable under the CPS SPA 1 and the CPS SPA 2 (and/or the subsequent formal agreement and the assignment of the relevant car parks). All reasonable legal costs in relation to the CPS SPA 1 and the CPS SPA 2 shall be borne by the Target Companies.

Completion of the Provisional Agreement

The Provisional Agreement provides that subject to the satisfaction of the conditions precedents set out above, Completion shall take place simultaneously with the completion of the Peak Road SPA.

Completion of the Properties SPA

The Properties SPA provides that completion of the Properties SPA shall take place simultaneously with the completion of the Peak Road SPA. The Provisional Agreement provides that the Vendor shall procure that the Target Companies shall perform all of their obligations under the Properties SPA so as to complete their purchases of the Properties thereunder; while the Purchaser shall pay the respective balance of the purchase price pursuant to the Properties SPA.

INFORMATION ABOUT THE TARGET COMPANIES

The Target Companies hold the rights to acquire interests in the Properties, and are whollyowned by the Vendor.

Set out below is the relevant financial information of each of the Target Companies for the years ended 30 June 2014 and 2015:

Acme Elite Limited	For the year ended 30 June	For the year ended 30 June
	2014	2015
	HK$	HK$
Net loss before and after taxation and
extraordinary items (unaudited)	4,914	4,914

The unaudited net liabilities of Acme Elite Limited as at 30 June 2015 were approximately HK$15,124.20.

Afar Success Limited	For the year ended 30 June	For the year ended 30 June
	2014	2015
	HK$	HK$
Net loss before and after taxation and
extraordinary items (unaudited)	4,914	4,914

The unaudited net liabilities of Afar Success Limited as at 30 June 2015 were approximately HK$16,216.20.

INFORMATION OF THE PROPERTIES

The Properties are part of a 26-storey commercial building (including 3 storeys of car parks) with frontages onto Gloucester Road, Tonnochy Road and Jaffe Road. Property 1 and Property 2 have a total gross floor area of approximately 31,454 square feet.

Each of Property 1 and Property 2 is let to the same tenant (an Independent Third Party), at a monthly rental of HK$684,215.90, for a term of two years from 1 April 2015 to 31 March 2017. Car Park Space 1 and Car Park Space 2 are licenced to the same licencee (an Independent Third Party), for a term of two years from 1 September 2013 to 31 August 2015, and represents a portion of car park spaces of AXA Centre licenced to such licencee, at a monthly licence fee of HK$222,000 for approximately 49 car park spaces. As at the date of this announcement, the Company has not made a decision as to plans for renewal of the above tenancies/licences.

REASONS FOR AND BENEFITS OF THE ACQUISITION

As announced by the Company on 2 July 2015, the Peak Road Property requires material capital expenditure in the absence of which the Peak Road Property and its value may deteriorate. Since the Group does not have readily available resources to undertake its share of funding such capital expenditure, the Company decided to dispose of its interests in the Peak Road Property and rework its property portfolio to properties more manageable and better suited to its current financial position. The Property 1 and Property 2, being fully let to the same tenant, generate stable revenues. The Directors are of the view that the Properties will continue to generate stable rental income for the Company and accordingly, fit with the Company’s financial position and goals. The Directors consider that the terms of the Provisional Agreement are fair and reasonable and in the interests of the Shareholders as a whole.

Furthermore, by completing the Acquisition concurrently with the Peak Road SPA, the Company avoids any risk of it being regarded as a cash company or having insufficient operations.

Apart from the Acquisition, the Company intends to pursue other property investment and/ or property development projects. As at the date of this announcement, no concrete proposal has been reached and the Company has not entered into any definitive agreements with any parties. The Company will disclose details of such projects in accordance with the relevant Listing Rules and comply with the requirements of the relevant Listing Rules as and when appropriate.

INFORMATION ON THE PURCHASER

The principal activities of the Group are re-development of properties and property investment.

INFORMATION ON THE VENDOR AND THE GUARANTOR

The Vendor is an indirect wholly-owned subsidiary of the Guarantor, a company listed on the Main Board of the Stock Exchange. The Vendor and the Guarantor are investment holding companies. The principal activities of the Guarantor’s principal subsidiaries include property investment, repositioning and development.

LISTING RULES IMPLICATIONS

WARNING

RESUMPTION OF TRADING

DEFINITIONS

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

“Acquisition” the acquisition of the Sale Interests by the Purchaser from the Vendor pursuant to the Provisional Agreement “Board” the board of Directors “BVI” the British Virgin Islands

“Car Park Space 1” car parking space nos. 414, 415 and 416 on the 4th Floor of AXA Centre, 151 Gloucester Road, Hong Kong “Car Park Space 2” car parking space nos. 417, 418, 419 and 420 on the 4th Floor of AXA Centre, 151 Gloucester Road, Hong Kong

“Company”, “Paladin” Paladin Limited, a company incorporated in Bermuda with or “Purchaser” limited liability, the ordinary shares and preference shares of which are listed on the Main Board of the Stock Exchange

“Completion”

“CPS SPA 1”
“CPS SPA 2”

“Director(s)”

“Encumbrances”
“Group”

“Guarantor”

“HK$”

“Hong Kong”

the completion of the Provisional Agreement or the formal agreement in accordance with the terms and conditions thereof, as applicable

the provisional sale and purchase agreement in relation to the Car Park Space 1 for HK$7,000,000 dated 9 July 2015 between the Property Vendor (as vendor) and Target Company 1 (as purchaser)

the provisional sale and purchase agreement in relation to the Car Park Space 2 for HK$9,330,000 dated 9 July 2015 between the Property Vendor (as vendor) and Target Company 2 (as purchaser)

directors of the Company

interest of any person (including any right to acquire, option or right of pre-emption or right of first refusal) or any mortgage, charge, pledge, lien, assignment, hypothecation, security, interest, title, retention, leasing, sale and purchase or sale and leaseback arrangement, guarantee, option, restriction, third-party right or interest, or security interest of any kind, or any other agreement or arrangement having similar effect and any agreement or obligation to create or grant any of the aforesaid
the Company and its subsidiaries

CSI Properties Limited, a company whose shares are listed on the Main Board of the Stock Exchange with stock code 497

Hong Kong dollars, the lawful currency of Hong Kong

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

“Independent Third a third party independent of the Company and its associates Party” and connected persons (as those terms are defined in the Listing Rules)
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Ordinary Shares” the ordinary share(s) of par value HK$0.01 each in the issued share capital of the Company
“Peak Road Property” certain residential units, car parking spaces and motorcycle parking spaces situated at Nos. 8, 10 and 12 Peak Road, The Peak, Hong Kong
“Peak Road SPA” the sale and purchase agreement dated 17 June 2015 entered into between the Purchaser and Equal Force Limited in respect of the Peak Road Property
“Preference Shares”
the convertible redeemable preference shares of HK$0.01 each in the issued share capital of the Company
“Property 1” 20th Floor of AXA Centre, 151 Gloucester Road, Hong Kong
“Property 2”
21st Floor of AXA Centre, 151 Gloucester Road, Hong Kong
“Property SPA 1” the provisional sale and purchase agreement in relation to the Property 1 for HK$237,000,000 dated 22 February 2013 between the Property Vendor (as vendor) and Target Company 1 (as purchaser), as supplemented by a completion notification dated 9 July 2015 agreed between the Property Vendor and Target Company 1

“Property SPA 2” the provisional sale and purchase agreement in relation to the Property 2 for HK$240,000,000 dated 22 February 2013 between the Property Vendor (as vendor) and Target Company 2 (as purchaser), as supplemented by a completion notification dated 9 July 2015 agreed between the Property Vendor and Target Company 2

“Property Vendor” City Plan Limited, a company incorporated in Hong Kong which is an indirect wholly-owned subsidiary of the Guarantor “Properties” means Property 1, Property 2, Car Park Space 1 and Car Park Space 2

“Properties SPA” means Property SPA 1, Property SPA 2, CPS SPA 1 and CPS SPA 2

“Provisional Agreement” the provisional sale and purchase agreement dated 10 July 2015 entered into between the Purchaser, the Vendor and the Guarantor in respect of the Sale Interests “Sale Interests” the Sale Shares and the Sale Loans “Sale Loans” the shareholders’ loans due from the Target Companies “Sale Shares” the entire issued share capital of the Target Companies “SGM” the special general meeting of the Company to be convened and held for the Shareholders to consider and, if thought fit, approve the Provisional Agreement and the transactions contemplated thereunder “Share(s)” the Ordinary Share(s) and, or the Preference Share(s) “Shareholder(s)” holders of the Ordinary Shares or the Preference Shares, as the case may be

“Stock Exchange” The Stock Exchange of Hong Kong Limited “Target Company 1” Acme Elite Limited, a company incorporated in the BVI which is wholly-owned by the Vendor “Target Company 2” Afar Success Limited, a company incorporated in the BVI which is wholly-owned by the Vendor “Target Companies” means Target Company 1 and Target Company 2 “Vendor” Focus Master Limited, a company incorporated in the BVI which is an indirect wholly-owned subsidiary of the Guarantor

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

Hong Kong, 17 July 2015

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

AI assistant

G-Resources Group Limited M&A Activity 2015

49648_rns_2015-07-17_719f622c-12f1-4e99-bab1-32872f4cab32.pdf

PALADIN LIMITED

VERY SUBSTANTIAL ACQUISITION CONCERNING ACQUISITION OF COMPANIES WITH RIGHTS TO ACQUIRE PROPERTIES AND RESUMPTION OF TRADING

VERY SUBSTANTIAL ACQUISITION – THE ACQUISITION

LISTING RULES IMPLICATIONS

WARNING

RESUMPTION OF TRADING

BACKGROUND

THE ACQUISITION

Date

Parties

Subject Matter

Consideration

Guarantee

Formal Agreement

Conditions Precedent to the Provisional Agreement

Stamp Duty and Costs

Completion of the Provisional Agreement

Completion of the Properties SPA

INFORMATION ABOUT THE TARGET COMPANIES

INFORMATION OF THE PROPERTIES

REASONS FOR AND BENEFITS OF THE ACQUISITION

INFORMATION ON THE PURCHASER

INFORMATION ON THE VENDOR AND THE GUARANTOR

LISTING RULES IMPLICATIONS

WARNING

RESUMPTION OF TRADING

DEFINITIONS

AI assistant

G-Resources Group Limited — M&A Activity 2015

49648_rns_2015-07-17_719f622c-12f1-4e99-bab1-32872f4cab32.pdf

PALADIN LIMITED

VERY SUBSTANTIAL ACQUISITION CONCERNING ACQUISITION OF COMPANIES WITH RIGHTS TO ACQUIRE PROPERTIES AND RESUMPTION OF TRADING

VERY SUBSTANTIAL ACQUISITION – THE ACQUISITION

LISTING RULES IMPLICATIONS

WARNING

RESUMPTION OF TRADING

BACKGROUND

THE ACQUISITION

Date

Parties

Subject Matter

Consideration

Guarantee

Formal Agreement

Conditions Precedent to the Provisional Agreement

Stamp Duty and Costs

Completion of the Provisional Agreement

Completion of the Properties SPA

INFORMATION ABOUT THE TARGET COMPANIES

INFORMATION OF THE PROPERTIES

REASONS FOR AND BENEFITS OF THE ACQUISITION

INFORMATION ON THE PURCHASER

INFORMATION ON THE VENDOR AND THE GUARANTOR

LISTING RULES IMPLICATIONS

WARNING

RESUMPTION OF TRADING

DEFINITIONS

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G-Resources Group Limited M&A Activity 2015