Greenheart Group Limited — M&A Activity 2011

Jul 8, 2011

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.

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(incorporated in Bermuda with limited liability) (Stock Code: 00059)

VERY SUBSTANTIAL ACQUISITION IN RELATION TO ACQUISITION OF LAND USE RIGHTS IN YONGZHOU, THE PRC AND RESUMPTION OF TRADING

THE FRAMEWORK AGREEMENT

On 30 June 2011, the Company and the City Government of Yongzhou entered into the Framework Agreement in respect of the Acquisition and the management of the development of the Yongzhou Government Project. The parties have agreed under the Framework Agreement that Yongzhou Tian Yu, a joint venture enterprise which equity interest is held as to 70% indirectly by the Company and as to 30% by the JV Partner, will represent the Company in carrying out its obligations under the Framework Agreement. Under the Framework Agreement, the Company has agreed to acquire the Yongzhou Land through public biddings to be conducted by the City Government of Yongzhou by stages. Pursuant to the Framework Agreement, the Company will acquire the land use rights over the Yongzhou Land of up to 1,000 mu (representing approximately 666,670 square meters). The actual size of the Yongzhou Land to be acquired by the Company will subject to the results of the public biddings. Accordingly, the aggregate consideration for the 1,000 mu Yongzhou Land would be not less than RMB800 million (equivalent to approximately HK$960 million) and, effectively, not more than RMB1,040 million (equivalent to approximately HK$1,248 million) (as more particularly discussed in the paragraph headed “Consideration” in this announcement below).

Apart from the development of the Skyfame Yongzhou Project, which would be a residential and commercial property development project, by Yongzhou Tian Yu, the Yongzhou Land will comprise the construction of a five-star hotel and properties to resettle the occupants of land covered by the Yongzhou Government Project as required by the City Government of Yongzhou.

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Pursuant to the Framework Agreement, in consideration of the Yongzhou Land offered by the City Government of Yongzhou through public biddings, Yongzhou Tian Yu will be responsible for the management of the development of the Yongzhou Government Project (which would comprise the Scenic Zone and the Commercial District) for the City Government of Yongzhou. According to the Framework Agreement, the total estimated development costs for the Yongzhou Government Project would be not less than RMB800 million (equivalent to approximately HK$960 million) and not more than RMB1,040 million (equivalent to approximately HK$1,248 million) which will be funded by the sales proceeds received by the City Government of Yongzhou from the public biddings of the Yongzhou Land. Upon completion of the construction of the Scenic Zone, the City Government of Yongzhou has agreed to grant the Company a 50-year operation rights of the Scenic Zone.

LISTING RULES IMPLICATIONS

The Acquisition and the transactions contemplated under the Framework Agreement constitute a very substantial acquisition for the Company pursuant to Rule 14.06(5) of the Listing Rules. According to Rule 14.33A of the Listing Rules, the Acquisition is subject to the reporting and announcement requirements while the Shareholders’ approval requirement is exempted provided that all the conditions as referred to in Rule 14.33A of the Listing Rules are satisfied.

DESPATCH OF CIRCULAR

The circular containing, among other things, (i) details of the Acquisition; (ii) financial information of the Group; (iii) pro forma financial information of the Group taking into account the effect of the Acquisition; and (iv) the valuation report on the Yongzhou Land will be sent to the Shareholders as soon as possible.

It is currently expected that it will take about five weeks for the Company and the professional parties to prepare the relevant information for inclusion in the circular including the unaudited pro forma financial information and the valuation report. Accordingly, the date of despatch of the circular is expected to be on or before 15 August 2011.

SUSPENSION AND RESUMPTION OF TRADING IN THE SHARES

Trading in Shares on the Stock Exchange was suspended with effect from 1:30 p.m. on 30 June 2011 at the request of the Company pending the publication of this announcement. An application has been made to the Stock Exchange for the resumption of trading in the Shares with effect from 9:00 a.m. on 11 July 2011.

Reference is made to the announcement (the “ Announcement ”) of the Company dated 11 May 2011 in relation to, among other things, the winning of a tender by the Company which confirms the contractual relationship between the City Government of Yongzhou and the Company in relation to the possible development of the Yongzhou Government Project. It was stated in the Announcement that by making such commitment, the land use rights over certain pieces of land in a total area of 1,000 mu (being the Yongzhou

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Land as defined in this announcement) would be granted to Yongzhou Tian Yu for its development of the Skyfame Yongzhou Project and that an agreement will be entered into between the City Government of Yongzhou and Yongzhou Tian Yu for the allocation and acquisition of the land use rights over the Yongzhou Land within two months upon the publication of the tender result. Accordingly, on 30 June 2011, the Company and the City Government of Yongzhou entered into the Framework Agreement to set out the principle terms in respect of the acquisition of the Yongzhou Land and the management of the development of the Yongzhou Government Project. Details of the Framework Agreement are set out in this announcement below.

THE FRAMEWORK AGREEMENT

Date

30 June 2011

Parties

• (i) The Company;

• (ii) City Government of Yongzhou, which, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, is a PRC Governmental Body (as defined in Rule 19A.04 of the Listing Rules) and an Independent Third Party.

The Framework Agreement is legally binding. The parties have agreed under the Framework Agreement that Yongzhou Tian Yu, a joint venture enterprise which equity interest is held as to 70% by the Company and as to 30% by the JV Partner, will represent the Company in carrying out its obligations under the Framework Agreement.

Assets to be acquired

The land use rights over the Yongzhou Land, being certain plots of land with a total area of up to 1,000 mu (approximately 666,670 square meters) located in Lingling District, Yongzhou City, Hunan Province, the PRC. The actual size of the Yongzhou Land to be acquired by the Company will subject to the result of the public biddings.

According to the Framework Agreement, the Company has agreed to acquire the entire 1,000 mu Yongzhou Land subject to the results of the public biddings to be conducted by the City Government of Yongzhou in stages. Of the 1,000 mu Yongzhou Land, 395 mu of which will be located in the Scenic Zone and 405 mu of which will be located in the Commercial District, with the remaining 200 mu located in the eastern part of Yangming Road in Lingling District. The entire 1,000 mu Yongzhou Land (including those area located in the Scenic Zone and Commercial District) would be designated for the Skyfame Yongzhou Project.

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Consideration

Pursuant to the terms of the Framework Agreement, the Company is obliged to bid for the plot of land being auctioned at a minimum price of RMB1 million (equivalent to approximately HK$1.2 million) per mu and the land premium shall be payable by the Company upon winning of the relevant bids. In respect of the remaining 200 mu Yongzhou Land, it has been agreed by the parties to the Framework Agreement that the Company or its subsidiary may apply the money from the Co-managed Account (as defined in the paragraph headed “Other terms of the Framework Agreement” below) in settling the land premium upon winning of the relevant bids. Given it is a term of the Framework Agreement that all payment of the land premium received by the City Government of Yongzhou from the public biddings will be deposited back into the Co-managed Account for the purpose of the development costs of the Yongzhou Government Project, the acquisition cost of the entire 1,000 mu Yongzhou Land to the Company would be its total payments upon the winning of the bids of the 800 mu land located in the Scenic Zone and Commercial District.

According to the Framework Agreement, the Company has agreed to participate in the auctions and submit bid price of not less than RMB1 million (equivalent to approximately HK$1.2 million) per mu and up to RMB1.3 million (equivalent to approximately HK$1.56 million) per mu for any part of the 800 mu Yongzhou Land located in the Scenic Zone and the Commercial District in case there are other bidders. Accordingly, the minimum land cost for the entire 1,000 mu Yongzhou Land is RMB800 million (equivalent to approximately HK$960 million) (being 800 mu times RMB1 million (equivalent to approximately HK$1.2 million) per mu). In the event that there are other bidders participating in the public biddings to be conducted by the City Government of Yongzhou in offering any part of the Yongzhou Land, and the successful bid price offered by the Company exceeds RMB1.3 million (equivalent to approximately HK$1.56 million) per mu, such surplus amount will be reimbursed to the Company from the Co-managed Account (as defined in the paragraph headed “Other terms of the Framework Agreement” below) where all the sale proceeds of the Yongzhou Land are deposited which will be used for the Company’s development of the Skyfame Yongzhou Project. In view of the above mechanism as stated in the Framework Agreement, as at the date of the this announcement, the Company intends to submit a bid price of over RMB1.3 (equivalent to approximately HK$1.56 million) million per mu in case there are other bidders for the plot of land being auctioned. Accordingly, the effective maximum land cost for the entire 1,000 mu Yongzhou Land is RMB1,040 million (equivalent to approximately HK$1,248 million) (being 800 mu times RMB1.3 million (equivalent to approximately HK$1.56 million) per mu).

The Company has sought legal advice from a PRC law firm and was confirmed that the abovementioned mechanism of the bidding as stipulated in the Framework Agreement is legal and in compliance with the laws in the conveyance of land on the mainland.

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After taking into consideration of the location and potential return which can be generated from the Yongzhou Land, and a preliminary valuation of the entire 1,000 mu Yongzhou Land of approximately RMB1,150 million (equivalent to approximately HK$1,380 million) indicated by an independent property valuer, the Directors, including the independent non-executive Directors, consider the effective maximum consideration for the Yongzhou Land of RMB1,040 million (equivalent to approximately HK$1,248 million) to be fair and reasonable.

The Company intends to finance its share of the land cost by way of internal resources, bank borrowings and pre-sales proceeds to be received from the sales of properties developed in the Skyfame Yongzhou Project.

Completion

Pursuant to the Framework Agreement, the first 105 mu of the Yongzhou Land will be offered by the City Government of Yongzhou through public bidding within three months from the date of the Framework Agreement and the remaining 895 mu of the Yongzhou Land will be offered in stages by the City Government of Yongzhou within three years from the date of the Framework Agreement.

Other terms of the Framework Agreement

Commitment to manage the development of the Yongzhou Government Project

Pursuant to the Framework Agreement, in consideration of the Yongzhou Land offered by the City Government of Yongzhou through public biddings, Yongzhou Tian Yu will be responsible for the management of the development of the Yongzhou Government Project which would comprise the Scenic Zone and the Commercial District. According to the Framework Agreement, the total estimated development cost for the Yongzhou Government Project would be not less than RMB800 million (equivalent to approximately HK$960 million) and not more than RMB1,040 million (equivalent to approximately HK$1,248 million), which would cover the costs for site clearance (including the expropriation expenses) and construction of infrastructure and remodeling of the Scenic Zone and the Commercial District. The Company, Yongzhou Tian Yu and the City Government of Yongzhou will set up a jointly-managed bank account in the name of the management committee of the Yongzhou Government Project (the “ Comanaged Account ”) for the purpose of the investment and development of the Scenic Zone and Commercial District of the Yongzhou Government Project. It is agreed under the Framework Agreement that after the receipt by the City Government of Yongzhou of the land premium from the public bidding of any part of the Yongzhou Land, the City Government of Yongzhou will, within 15 days of such receipt, deposit the land premium received into the Co-managed Account for the use as the development costs of the Scenic Zone and Commercial District of the Yongzhou Government Project. In the event that the cost incurred in expropriation of land in the Scenic Zone and the Commercial District exceeds the agreed amounts totaling RMB640 million (equivalent to approximately HK$768 million), the City Government of Yongzhou will finance the amount in excess.

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The Yongzhou Government Project covers the development of (i) the Scenic Zone which involves the restoration of temples, antiques and relics, development of landscape, installation of water and electricity distribution system and plantation works in the Scenic Zone in order to restore the natural landscape to develop the Scenic Zone into a tourist attraction point of National 4A grade or above as approved by CNTA; and (ii) the Commercial District which involves infrastructural development such as modification of the high voltage electricity cable and extension of the 安康廣場(Ankang Square*) such that the Commercial District will comprise commercial, cultural, residential and leisure elements. Both of the Scenic Zone and the Commercial District shall demonstrate the ancient architectural style and features of Xiangnan, as well as the history and culture of Lingling District. The development of the Yongzhou Government Project shall be completed within a period of six years, commencing from the date of the transfer of a parcel of land of 105 mu for the development of Skyfame Yongzhou Project from the City Government of Yongzhou.

The Company has submitted a preliminary design plan of the Scenic Zone and the Commercial District to the City Government of Yongzhou which has been approved by the City Government of Yongzhou.

Operation right of the Scenic Zone

The City Government of Yongzhou has agreed to grant the Company a 50-year operation rights of the Scenic Zone which will be leased to the Company in three terms, with the first two terms of 20 years each and the last term of 10 years. It is expected that the operation right will be granted to Yongzhou Tian Yu as the Company will nominate it to execute all rights and take up all obligations of the Company under the Framework Agreement. All lease payments will be reimbursed to the Company for the use of repair and maintenance, promotion and marketing, operating and remodeling of the Scenic Zone. The Company considers that, with the aforesaid lease reimbursement arrangement, the operation rights of the Scenic Zone, in substance, would be granted to the Company at nil consideration. Detailed terms of the lease of the operation rights will be determined by the parties in a separate contract near the completion of construction of the Scenic Zone.

The operation of the Scenic Zone will empower the operator to receive income from ticketing and sub-leasing of operations in food and beverages and retailing businesses in the Scenic Zone. The operation right would be a secondary income earner of the Group apart from the earnings from the development of the Skyfame Yongzhou Project.

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Commitment to construct a five-star hotel and properties for resettlement

The Company has committed to the City Government of Yongzhou under the Framework Agreement that it will invest not less than RMB200 million (equivalent to approximately HK$240 million) for the construction of a five-star hotel on the Yongzhou Land and the exact location of which is yet to be decided. The five-star hotel shall be in operation within three years from the date when the Company obtained the relevant approval to commence construction of the hotel. Besides, the Company has to build certain properties for the resettlement of existing occupants on the Scenic Zone and in the Commercial District for which the estimated construction cost is RMB90 million (equivalent to approximately HK$108 million). For the avoidance of doubt, the investment costs for the construction of the five-star hotel and resettlement is a commitment of the Company which do not form any part of the costs for the development of the Yongzhou Government Project as described in the paragraph headed “Commitment to manage the development of the Yongzhou Government Project” in this section.

It is intended that Yongzhou Tian Yu will own and operate the five-star hotel upon completion of the construction as the Company will nominate Yongzhou Tian Yu to execute all rights and take up all obligations of the Company under the Framework Agreement.

Application of the deposit paid

As at the date of this announcement, the Company has made a refundable earnest money of RMB2 million (equivalent to approximately HK$2.4 million) to the City Government of Yongzhou and a further deposit of RMB100 million (equivalent to approximately HK$120 million) was placed in a bank account of Yongzhou Tian Yu. As agreed between the parties under the Framework Agreement, the Company is required to pay the City Government of Yongzhou RMB10 million (equivalent to approximately HK$12 million) as earnest money for the entering into of the Framework Agreement within three business days of the date of the Framework Agreement. The Company has paid the remaining RMB8 million (equivalent to approximately HK$9.6 million) to the City Government of Yongzhou on 5 July 2011. According to the terms of the Framework Agreement, the earnest money will be refunded by the City Government of Yongzhou to the Company as to RMB5 million (equivalent to approximately HK$6 million) after the Company has tendered bids for 800 mu of the Yongzhou Land and as to RMB5 million (equivalent to approximately HK$6 million) after the Scenic Zone has turned into a tourist attraction point of National 4A grade or above as approved by CNTA.

In respect of the RMB100 million (equivalent to approximately HK$120 million) placed in Yongzhou Tian Yu’s bank account, it will be transferred to the Co-managed Account and can be applied by the Company to settle the consideration for the land premium upon winning of the relevant bids for any part of the Yongzhou Land and the payment of a surety deposit to secure the Company’s due performance of the construction of the hotel that will be reimbursed by the City Government of Yongzhou in three installments upon commencement of construction of the hotel, completion of major constructions, and commencement of operation of the hotel respectively.

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Indemnities to the City Government of Yongzhou

Under the Framework Agreement, the Company has given certain indemnities to the City Government of Yongzhou including:

• (a) if the Company fails to participate in the bidding for the Yongzhou Land nor is successful in turning the Scenic Zone with accreditation as a National 4A graded tourist attraction point as approved by CNTA, the Company will indemnify the City Government of Yongzhou for the breach with a compensation of RMB80 million (equivalent to approximately HK$96 million), and surrender the earnest money of RMB10 million (equivalent to approximately HK$12 million) and immovable assets on the Scenic Zone (other than properties developed in the Skyfame Yongzhou Project);

• (b) if the Company cannot complete the construction of the five-star hotel within three years from the date of the governmental approval nor the properties used for resettlement within the investment period, the Company needs to pay for the land premium for the land on which the hotel and the resettlement properties are erected, or else the properties on the land will be surrendered to the City Government of Yongzhou; and

• (c) if the Company fails to complete the development in the Yongzhou Land within the investment period (i.e. six years from the date of obtaining of the land use rights of the first 105 mu of the Yongzhou Land) and costs specified under the Framework Agreement, the City Government of Yongzhou is entitled to confiscate the land acquired by the Company.

THE YONGZHOU LAND

Of the 1,000 mu Yongzhou Land, 395 mu will be designated for the Scenic Zone and 405 mu for the Commercial District. Other than the construction of a five-star hotel and a resettlement area for the occupants on the Scenic Zone and the Commercial District which is required by the City Government of Yongzhou to be built on the 1,000 mu Yongzhou Land, the Yongzhou Land is planned for the development of the Skyfame Yongzhou Project, which would be a residential and commercial property development project, by Yongzhou Tian Yu. Pursuant to the Framework Agreement, the Company is required to invest not less than RMB1,000 million (equivalent to approximately HK$1,200 million) for the development of the Skyfame Yongzhou Project in each of the Scenic Zone and the Commercial District respectively. At present the Company plans to develop the Skyfame Yongzhou Project into commercial and residential composite developments in four phases with a planned total gross floor area of approximately 1.7 million square meters. The development will offer apartments and low density villas for residence and commercial complex for retailing and commercial uses. The total construction cost of the entire development is estimated at RMB2,452 million (equivalent to approximately HK$2,942.4 million) which will be financed by capital contribution from the joint venture partners, bank borrowing and sale proceeds to be received from properties developed and put for pre-sale in phases.

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According to the current development plan, the development of the first phase of the Skyfame Yongzhou Project will be commenced in the 3rd quarter of 2011 whilst the last phase will be completed in late 2015. Other than the hotel for operation which construction will be completed in 2016 and excluding the estimated area of 80,000 square meters reserved for the construction of properties for resettlement, the remaining gross floor area that will be developed for sales is approximately 1.5 million square meters that will be launched for pre-sale in each of the years commencing 2012 until 2015 with gross floor areas of 117,000 square meters, 271,000 square meters, 461,000 square meters and 674,000 square meters respectively.

INFORMATION ON YONGZHOU TIAN YU

Parties

The joint venture in Yongzhou Tian Yu was formed on 27 June 2011 for the purpose of managing the development of the Yongzhou Government Project and to acquire the Yongzhou Land for the development of the Skyfame Yongzhou Project. The JV Partner is a limited company established in the PRC and is principally engaged in tourism investment, development and consultancy services. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, each of the JV Partner and its ultimate beneficial owner is Independent Third Party.

Registered capital

Yongzhou Tian Yu is held as to 70% by Yu Jun and as to 30% by the JV Partner. Yongzhou Tian Yu has a registered capital of RMB100 million (equivalent to approximately HK$120 million), of which RMB70 million (equivalent to approximately HK$84 million) is contributed by Yu Jun and RMB30 million (equivalent to approximately HK$36 million) is contributed by the JV Partner. As at the date of this announcement, the registered capital of Yongzhou Tian Yu has been fully paid-up by Yu Jun and the JV Partner accordingly. The parties to the Framework Agreement have agreed that Yongzhou Tian Yu will be appointed to carry out the responsibilities and obligations of the Company under the Framework Agreement, including its commitment in relation to (i) the acquisition of the Yongzhou Land at an effective maximum consideration of RMB1,040 million (equivalent to approximately HK$1,248 million); (ii) the investment of not less than RMB200 million (equivalent to approximately HK$240 million) for the development of a five-star hotel; (iii) the construction of properties for resettlement for which the development cost is estimated to be approximately RMB90 million (equivalent to approximately HK$108 million); (iv) the investment of not less than RMB1,000 million (equivalent to approximately HK$1,200 million) in developing the Skyfame Yongzhou Project in each of the Scenic Zone and Commercial District. The Company and the JV Partner will assume the commitment of Yongzhou Tian Yu in proportion to their equity interest in Yongzhou Tian Yu.

Terms of operation

Yongzhou Tian Yu has a term of operation of 50 years from the date of incorporation.

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Board composition

The board of directors of Yongzhou Tian Yu shall comprise 5 members. Four members of the board of directors of Yongzhou Tian Yu will be appointed by Yu Jun and one member of the board of directors of Yongzhou Tian Yu will be appointed by the JV Partner.

Share of profits/losses

Yu Jun and the JV Partner shall share the profits or assume the losses of Yongzhou Tian Yu in proportion to their respective capital contribution in the registered capital of Yongzhou Tian Yu. Yongzhou Tian Yu will declare dividends and distribute to its holder in proportion to their respective capital contribution in the registered capital of Yongzhou Tian Yu at the time of dividend declaration.

Financial and capital commitment

If required, Yu Jun and the JV Partner will finance Yongzhou Tian Yu by way of shareholder’s loan or increased its capital interest in Yongzhou Tian Yu in proportion to their respective capital contribution in the registered capital of Yongzhou Tian Yu.

Restrictions on change of scope of business and entering into transactions

Yongzhou Tian Yu may not, without the unanimous consent of Yu Jun and the JV Partner, (i) change the nature or scope of its business, and if there are changes then they must still be consistent with the scope or purpose specified in the auction or tender document; or (ii) enter into any transactions which are not on an arm’s length basis.

REASONS FOR THE ACQUISITION AND THE FORMATION OF YONGZHOU TIAN YU

The Company is an investment holding company and the principal activities of its subsidiaries are property development, property investment, hotel operation and provision of related ancillary services.

It has been the Company’s business strategy to seek for acquisition opportunities or investments with a view to enhancing the business prospect and profit potential of the Group. As stated in the annual report of the Company for the year ended 31 December 2010, the Company would remain a property developer which brings a high standard of performance to its customers. The Company is of the view that the Acquisition represents a unique investment opportunities and is in line with the Company’s business strategy,

Given the location of the Skyfame Yongzhou Project will be constructed next to the Scenic Spot and Commercial District and the sizeable area of the site, the Directors consider the Skyfame Yongzhou Project will have great investment potential which represents a valuable opportunity for the Group to expand its property development project portfolio and increase its revenue and earnings base in the long run.

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The primary purpose of establishing Yongzhou Tian Yu is to participate in the management of the development of the Yongzhou Government Project and to develop the Skyfame Yongzhou Project. Since the JV Partner is a reputable property developer in Yongzhou City and has good connection with the relevant authorities in Yongzhou City and is experienced in remodeling of scenic spots and property development in the PRC, the Company considers the JV Partner possesses the relevant experience in projects similar to the Yongzhou Government Project and expertise in property development and it is in the interest of the Group to cooperate by way of formation of Yongzhou Tian Yu with the JV Partner in the development of the Skyfame Yongzhou Project and the management of the development of the Yongzhou Government Project.

Based on the above, the Board confirmed that the Acquisition is conducted in the Company’s ordinary and usual course of business, and that the Acquisition and the establishment of Yongzhou Tian Yu, including its financing and profit contribution arrangements, are on normal commercial terms, fair and reasonable and in the interests of the Company and its Shareholders as a whole.

LISTING RULES IMPLICATIONS

The Acquisition and the transactions contemplated under the Framework Agreement constitute a very substantial acquisition for the Company pursuant to Rule 14.06(5) of the Listing Rules. According to Rule 14.33A of the Listing Rules, the Acquisition is subject to the reporting and announcement requirements while the Shareholders’ approval requirement is exempted provided that all the conditions as referred to in Rule 14.33A of the Listing Rules are satisfied.

DESPATCH OF CIRCULAR

The circular containing, among other things, (i) details of the Acquisition; (ii) financial information of the Group; (iii) pro forma financial information of the Group taking into account the effect of the Acquisition; and (iv) the valuation report on the Yongzhou Land will be sent to the Shareholders as soon as possible.

It is currently expected that it will take about five weeks for the Company and the professional parties to prepare the relevant information for inclusion in the circular including the unaudited pro forma financial information and the valuation report. Accordingly, the date of despatch of the circular is expected to be on or before 15 August 2011.

SUSPENSION AND RESUMPTION OF TRADING IN THE SHARES

Trading in Shares on the Stock Exchange was suspended with effect from 1:30 p.m. on 30 June 2011 at the request of the Company pending the publication of this announcement. An application has been made to the Stock Exchange for the resumption of trading in the Shares with effect from 9:00 a.m. on 11 July 2011.

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DEFINITIONS

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

• “associate(s)” has the meaning ascribed to it under the Listing Rules “Acquisition” the acquisition of the Yongzhou Land by the Company or Yongzhou Tian Yu pursuant to the terms of the Framework Agreement

• “Board” board of Directors

• “CNTA” 中國國家旅遊局(National Tourism Administration of the People’s Republic of China), which is the issuing authority of National Tourist Spots with grades ranging from “5A” to “A”

• “Commercial District” the commercial district to be developed which will be located at east of Nanjin Zhong Road, north from Huanggu Shan Dong Road, south to Yanjiang Da Road in Lingling District, Yongzhou City, Hunan Province, the PRC

• “Company” Skyfame Realty (Holdings) Limited, a company incorporated in Bermuda with limited liability, the issued Shares of which are listed on the Stock Exchange

• “connected persons” has the meaning ascribed to it under the Listing Rules

• “Director(s)” the director(s) of the Company

• “Framework Agreement”

• the cooperative principle agreement dated 30 June 2011 entered into between the Company and the City Government of Yongzhou which sets out the structure and principles of the Acquisition and the development of the Yongzhou Government Project

• “Group” the Company and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Independent Third Party” Independent third party not connected with the Company and its connected persons

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• “JV Partner” 永州澳業旅遊有限公司 (Yongzhou Aoye Tourism Company Limited*), being the joint venture partner holding 30% equity interest in Yongzhou Tian Yu

• “Listing Rules”

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

• “PRC” the People’s Republic of China, which, for the purpose of this announcement, shall exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Scenic Zone” the scenic tourist district to be developed which will be extended from the east of Nanjin Nan Road, south to Yangjiao Shan Road, west to Zhongshan Road, north to Zhisui Road in Linling District of Yongzhou City, Hunan province, the PRC with an area of approximately one square kilometer

• “Share(s)” the existing ordinary share(s) of HK$0.01 each in the share capital of the Company

• “Shareholder(s)” holder(s) of the Share(s)

• “Skyfame Yongzhou Project”

• the residential and commercial property development project to be developed by Yongzhou Tian Yu on the Yongzhou Land

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “ Yongzhou Land”

• certain plots of land with site area of an aggregate of 1,000 mu located in Lingling District, Yongzhou City, Hunan Province, the PRC

• “Yongzhou Government Project”

• the development of the Scenic Zone and Commercial District involving the remodeling of some scenic tourist spots, construction of certain public amenities and infrastructure facilities in the Scenic Zone and the Commercial District located in Lingling District of Yongzhou Ciyt, Hunan Province, the PRC

• “Yongzhou Tian Yu”

• 永州天譽旅游發展有限公司 (Yongzhou Tian Yu Tourism Development Co Ltd*), the joint venture enterprise established in the PRC and held as to 70% by Yu Jun and 30% by the JV Partner

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“Yu Jun”	廣州譽浚諮詢服務有限公司(Guangzhou Yu Jun
	Consulting Service Company Limited*), an indirectly
	wholly-owned subsidiary of the Company
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	per cent.

Unless otherwise specified in this announcement, translation of RMB into HK$ is made in this announcement, for illustration purpose only, at the rate of RMB1 to HK$1.2. No representation is made that any amount in RMB could have been converted at that rate or any other rates.

By Order of the Board Skyfame Realty (Holdings) Limited Yu Pan Chairman

Hong Kong, 8 July 2011

As at the date of this announcement, the Board comprises three executive directors, namely Mr. Yu Pan (Chairman), Mr. Lau Yat Tung, Derrick (Deputy Chairman) and Mr. Wong Lok; and three independent non-executive directors, namely Mr. Choy Shu Kwan, Mr. Cheng Wing Keung, Raymond and Ms. Chung Lai Fong.

• For identification purpose only

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