Global Strategic Group Limited — Capital/Financing Update 2020

Mar 16, 2020

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 is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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環球戰略集團有限公司

GLOBAL STRATEGIC GROUP LIMITED 環球戰略集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8007)

PROPOSED PLACING OF NEW SHARES UNDER GENERAL MANDATE AND PROPOSED SHARE CONSOLIDATION

Placing Agent

r f f g . c o m . h k

Rifa Securities Limited

THE PLACING

The Board is pleased to announce that on 16 March 2020 (after trading hours), the Company and the Placing Agent entered into the Placing Agreement, pursuant to which the Company agreed to appoint the Placing Agent, and the Placing Agent has agreed to act as placing agent for the purpose of procuring, as agent of the Company, Placees for, or failing which on a best effort basis, a maximum of 260,000,000 Placing Shares to not fewer than six Placees who and whose ultimate beneficial owners are third parties independent of the Company and its connected persons at the Placing Price of HK$0.05 per Placing Share.

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The number of the Placing Shares represents: (a) approximately 19.95% of the total number of Shares in issue as at the date of this announcement; and (b) approximately 16.63% of the enlarged total number of Shares in issue upon the completion of the Placing (assuming there will be no change to the total number of Shares in issue from the date of this announcement to the completion of the Placing other than the issue by the Company of the Placing Shares).

The Placing Price represents: (i) a discount of approximately 3.85% to the closing price of HK$0.052 per Share as quoted on the Stock Exchange on 16 March 2020, being the date of the Placing Agreement; and (ii) a discount of approximately 13.79% to the average closing price of HK$0.058 per Share as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the date of the Placing Agreement.

The Gross proceeds and net proceeds from the Placing will be approximately HK$13.0 million and HK$12.2 million respectively, which will be used for general working capital and settlement of bonds of the Group. On such basis, the net issue price will be approximately HK$0.047 per Placing Share.

GENERAL

The Placing Shares will be issued pursuant to the General Mandate.

Application will be made by the Company to the GEM Listing Committee for the grant of the approval for the listing of, and permission to deal in, the Placing Shares.

Shareholders and potential investors should note that the Placing is subject to conditions under the Placing Agreement to be fulfilled. As the Placing may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

PROPOSED SHARE CONSOLIDATION

The Board is considering a proposed Share Consolidation in the view that the Shares had been traded at around or below HK$0.10 at certain time in the past 3 months (based on the closing price per Share as quoted on the Stock Exchange). An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Consolidated Shares. Details of a proposal on the Proposed Share Consolidation will be announced as and when appropriate.

Should the Proposed Share Consolidation materialise, further announcement(s) will be made in respect of the terms and conditions of the Proposed Share Consolidation in accordance with the applicable requirements of the GEM Listing Rules as and when appropriate. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

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PLACING OF NEW SHARES UNDER GENERAL MANDATE

The Board is pleased to announce that on 16 March 2020 (after trading hours), the Company and the Placing Agent entered into the Placing Agreement, pursuant to which the Company agreed to appoint the Placing Agent, and the Placing Agent has agreed to act as placing agent for the purpose of procuring, as agent of the Company, Placees for, or failing which on a best effort basis, a maximum of 260,000,000 Placing Shares to not fewer than six Placees who and whose ultimate beneficial owners are third parties independent of the Company and its connected persons at the Placing Price of HK$0.05 per Placing Share.

The principal terms of the Placing Agreement are summarized below:

Date:

16 March 2020 (after trading hours)

Issuer: The Company Placing Agent: Rifa Securities Limited

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Placing Agent and its ultimate beneficial owner(s) is an Independent Third Party as at the date of this announcement.

Pursuant to the terms of the Placing Agreement, the Company has conditionally agreed to place through the Placing Agent, on a best effort basis, a maximum of 260,000,000 Placing Shares to not less than six Placees who and whose ultimate beneficial owners are third parties independent of the Company and its connected persons. The terms of the Placing Agreement were arrived at arm’s length negotiations between the Company and the Placing Agent under normal commercial terms and with reference to the prevailing market conditions and the recent trading performance of the Shares. The Directors are of the view that the terms of the Placing Agreement are fair and reasonable based on current market conditions.

Placing commission

The Placing Agent will charge the Company a placing commission of 5% of the aggregate amount equal to the Placing Price multiplied by the number of the Placing Shares being placed by the Placing Agent. The placing commission in respect of the Placing was negotiated on arm’s length basis between the Company and the Placing Agent under normal commercial terms and with reference to the prevailing market conditions.

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Placees

The Placing Agent will, on a best efforts basis, place the Placing Shares to currently expected to be not less than six Placees who and whose ultimate beneficial owner(s) (if applicable) shall be Independent Third Parties.

Number of Placing Shares

The issued share capital of the Company between the date of this announcement and the completion of the Placing, the maximum number of Placing Shares under the Placing represent (i) approximately 19.95% of the existing issued share capital of the Company of 1,303,440,000 Shares as at the date of this announcement; and (ii) approximately 16.63% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares. The aggregate nominal value of the maximum number of Placing Shares under the Placing will be HK$6,500,000.

Ranking of Placing Shares

The Placing Shares under the Placing will rank pari passu in all respects with the existing Shares in issue on the date of allotment and issue of the Placing Shares.

Placing Price

The Placing Price of HK$0.05 per Placing Share represents:

• (a) a discount of approximately 3.85% to the closing price of HK$0.052 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and

• (b) a discount of approximately 13.79% to the average closing price of HK$0.058 per Share as quoted on the Stock Exchange in the last five consecutive trading days immediately prior to the date of the Placing Agreement.

The Placing Price of the Placing was determined with reference to the prevailing market prices of the Shares and was negotiated on an arm’s length basis between the Company and the Placing Agent. The Directors consider that the terms of the Placing are on normal commercial terms and are fair and reasonable based on the current market conditions. Hence, the Placing is in the interests of the Company and the Shareholders as a whole.

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Subject to completion of the Placing, it is expected that the maximum gross proceeds and net proceeds (after deducting placing commission and other relevant costs and expenses) from the Placing will be HK$13.0 million and approximately HK$12.2 million respectively. On such basis, the net issue price will be approximately HK$0.047 per Placing Share.

General Mandate to allot and issue of the Placing Shares

The Placing Shares will be allotted and issued pursuant to the General Mandate. The maximum number of Shares that can be issued under the General Mandate is 260,688,000 Shares. As at the date of this announcement, no Shares have been allotted and issued under the General Mandate. The General Mandate is sufficient for the allotment and issue of all the Placing Shares. As such, the issue of the Placing Shares is not subject to further Shareholders’ approval. The General Mandate will be utilised as to approximately 99.74% upon the allotment and issue of all the Placing Shares.

Application for listing of Placing Shares

Application will be made by the Company to the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

Conditions and completion of the Placing

Completion of the Placing is conditional upon fulfilment of the following conditions:

• (i) the GEM Listing Committee of the Stock Exchange granting the approval for the listing of, and the permission to deal in, the Placing Shares; and

• (ii) all necessary consents and approvals to be obtained on the part of each of the Placing Agent and the Company in respect of the Placing Agreement and the transactions contemplated thereunder having been obtained.

In the event that any of the above conditions is not fulfilled on or before 30 March 2020 (or such later date as may be agreed between the parties to the Placing Agreement in writing), all rights, obligations and liabilities of the parties to the Placing Agreement shall cease and terminate and neither of the parties thereto shall have any claim against the other save for any antecedent breach under the Placing Agreement prior to such termination.

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Completion of the Placing

Completion of the Placing will take place within four (4) Business Days after the fulfillment of the above conditions precedent or such other date to be agreed between the Company and the Placing Agent in writing.

Termination

The Placing Agent may terminate the Placing Agreement without any liability to the Company save for antecedent breach under the Placing Agreement prior to such termination, by notice in writing given to the Company at any time prior to 8:00 a.m. on the the Completion Date upon the occurrence of the following events:

• (i) the occurrence of any event, development or change (whether or not local, national or international or forming part of a series of events, developments or changes occurring or continuing before, on and/or after the date of the Placing Agreement) and including an event or change in relation to or a development of an existing state of affairs of a political, military, industrial, financial, economic, fiscal, regulatory or other nature, resulting in a change in, or which may result in a change in, political, economic, fiscal, financial, regulatory or stock market conditions and which in the Placing Agent’s absolute opinion would adversely affect the success of the Placing; or

• (ii) the imposition of any moratorium, suspension (for more than seven (7) trading days) or restriction on trading in the securities generally on the Stock Exchange occurring due to exceptional financial circumstances or otherwise and which in the Placing Agent’s absolute opinion, would adversely affect the success of the Placing; or

• (iii) any new law or regulation or change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority in Hong Kong or any other jurisdiction relevant to the Group and if in the Placing Agent’s absolute opinion any such new law or change may adversely affect the business or financial prospects of the Group and/or the success of the Placing; or

• (iv) any litigation or claim being instigated against any member of the Group, which has or may have an adverse effect on the business or financial position of the Group and which in the Placing Agent’s absolute opinion would adversely affect the success of the Placing; or

• (v) any material adverse change in the business or in the financial or trading position or prospects of the Group as a whole; or

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• (vi) any breach of any of the representations and warranties of the Company to the Placing Agent under the Placing Agreement comes to the knowledge of the Placing Agent or any event occurs or any matter arises on or after the date of the Placing Agreement and prior to the Completion Date which if had occurred or arisen before the date of the Placing Agreement would have rendered any of such representations and warranties untrue or incorrect or there has been a breach by the Company of any other provision of the Placing Agreement; or

• (vii) there is any material change (whether or not forming part of a series of changes) in market conditions which in the absolute opinion of the Placing Agent would materially and prejudicially affect the Placing or makes it inadvisable or inexpedient for the Placing to proceed.

If notice is given pursuant to this section, the Placing Agreement shall terminate and be of no further effect and neither party shall be under any liability to the other party in respect of this Agreement save for any antecedent breach under this Agreement prior to such termination.

REASONS FOR AND BENEFITS OF THE PLACING AND USE OF PROCEEDS

The Group is principally engaged in natural gas supply and trading of petrochemical products.

The gross proceeds and net proceeds from the Placing will be approximately HK$13.0 million and HK$12.2 million respectively, which will be used for general working capital of the Group.

In addition, the Placing provide an opportunity to raise additional funding for the business operation of the Company for settlement of bonds.

The Directors consider that the Placing Agreement is entered into upon normal commercial terms following arm’s length negotiations between the Company and the Placing Agent and the terms of the Placing Agreement (including the Placing Price and the placing commission) are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

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EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

Assuming there being no other changes in the share capital of the Company from the date of this announcement up to completion of the Placing, set out below is the shareholding structure of the Company (i) as at the date of this announcement and (ii) immediately after completion of the Placing.

Wu Guoming Hong Kong Hao Yue International Trading Co., Limited (Note) Public Shareholders The Placees Other public Shareholders Total	As at the date of this announcement Number of Shares Approx.% 91,050,000 6.99% 220,110,000 16.89% – 0% 992,280,000 76.12% 1,303,440,000 100.00%	Immediately after completion of the Placing (assuming all the Placing Shares are fully placed) Number of Shares Approx.% 91,050,000 5.82% 220,110,000 14.08% 260,000,000 16.63% 992,280,000 63.47% 1,563,440,000 100.00%	Immediately after completion of the Placing (assuming all the Placing Shares are fully placed) Number of Shares Approx.% 91,050,000 5.82% 220,110,000 14.08% 260,000,000 16.63% 992,280,000 63.47% 1,563,440,000 100.00%
			100.00%

Note:

Hong Kong Hao Yue International Trading Co., Limited is wholly-owned by Mr. Zhang Hai Ping.

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EQUITY FUND RAISING ACTIVITIES OF THE COMPANY

The Company had not conducted any fund raising activities involving the issue of its equity securities in the 12 months immediately preceding the date of this announcement.

Completion of the Placing is subject to the fulfillment of the conditions as set out in the Placing Agreement, the Placing may or may not proceed. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

PROPOSED SHARE CONSOLIDATION

The Board is considering a proposed Share Consolidation in the view that the Shares had been traded at around or below HK$0.10 at certain time in the past 3 months (based on the closing price per Share as quoted on the Stock Exchange). An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Consolidated Shares. Details of a proposal on the Proposed Share Consolidation will be announced as and when appropriate.

Should the Proposed Share Consolidation materialise, further announcement(s) will be made in respect of the terms and conditions of the Proposed Share Consolidation in accordance with the applicable requirements of the GEM Listing Rules as and when appropriate. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

DEFINITIONS

Unless the context requires otherwise, the following terms have the following meanings in this announcement:

“Board” the board of Directors “Business Day” any day (other than a Saturday, Sunday and public holiday) on which banks in Hong Kong are open for business throughout their normal business hours

“Company” Global Strategic Group Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands

• “Completion Date” a date falling within four (4) Business Days after the day on which all the conditions set out in the section headed “Conditions and completion of the Placing” of this announcement have been fulfilled (or such later date as may be agreed between the parties hereto in writing)

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“Directors” Directors of the Company

“GEM”	the GEM of the Stock Exchange
“GEM Listing Rules”	the rules governing the listing of securities on GEM
“General Mandate”	the general mandate which was granted to the Directors pursuant to an
	ordinary resolution passed at the Company’s annual general meeting
	held on 21 June 2019 to issue and allot up to 260,688,000 new Shares,
	representing 20% of the issued share capital of the Company on such
	date of the annual general meeting
“Group”	The Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China
“Placee(s)”	any person or entity procured by the Placing Agent or its agent(s) to
	subscribe for any Placing Share
“Placing”	the placing of the Placing Shares on and subject to the terms and
	condition set out in the Placing Agreement
“Placing Agent”	Rifa Securities Limited, a licensed corporation to carry out type 1
	(dealing in securities) under the Securities and Futures Ordinance
	(Chapter 571 of the Laws of Hong Kong)
“Placing Agreement”	the agreement entered into between the Company and the Placing Agent
	dated 16 March 2020 in respect of the Placing
“Placing Price”	HK$0.05 per Placing Share
“Placing Share(s)”	260,000,000 Shares to be issued under the Placing
“Proposed Share	a proposed consolidation of the share capital of the Company
Consolidated”
“Share(s)”	the ordinary shares of HK$0.025 each in the share capital of the
	Company

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“Shareholder(s)” holder(s) of the Shares

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“%”

per cent.

By order of the Board Global Strategic Group Limited Wang Wenzhou

Executive Director and Chief Executive Officer

Hong Kong, 16 March 2020

As at the date of this announcement, the executive Directors are Mr. Wang Wenzhou (Chief Executive Officer), Mr. Wu Guoming, Mr. Duan Fanfan; and the independent non-executive Directors are Mr. Leung Oh Man, Martin and Mr. Sun Zhi Jun and Ms. Huang Yu Jun.

This announcement, 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 Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement 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 announcement misleading.

This announcement will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for at least seven days from the day of its posting and the Company’s website at www.globalstrategicgroup.com.hk.

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