hmvod Limited — M&A Activity 2018

May 21, 2018

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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Trillion Grand Corporate Company Limited 萬 泰 企 業 股 份 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF THE TARGET COMPANY

THE DISPOSAL

On 21 May 2018 (after trading hours), the Vendor (a direct wholly-owned subsidiary of the Company) and the Purchaser entered into the SPA, pursuant to which the Purchaser has conditionally agreed to acquire the Sale Shares and the Vendor has conditionally agreed to sell the Sale Shares at the total Consideration of HK$100,000,000.

The Sale Shares represent the entire issued share capital of the Target Company.

GEM LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceeds 25% but all applicable percentage ratios are below 100%, the Disposal constitutes a major transaction for the Company and is therefore subject to the reporting, announcement, circular and shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

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GENERAL

An EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the SPA and the transactions contemplated thereunder. A circular containing, among others, (i) further details of the SPA and the transactions contemplated thereunder; (ii) other information as required under the GEM Listing Rules; and (iii) notice of the EGM will be despatched to the Shareholders as soon as practicable, which is expected to be on or before 22 June 2018 to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder or any of its close associates has any material interest in the SPA and the transactions contemplated thereunder, and therefore no Shareholder is required to abstain from voting on the resolution(s) in respect of the SPA at the EGM.

The SPA shall be conditional upon and subject to the fulfilment and satisfaction of the conditions set out in the section headed ‘‘Conditions precedent’’ in this announcement. Accordingly, the Disposal may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the securities of the Company.

On 21 May 2018 (after trading hours), the Vendor (a direct wholly-owned subsidiary of the Company) and the Purchaser entered into the SPA, pursuant to which the Purchaser has conditionally agreed to acquire the Sale Shares and the Vendor has conditionally agreed to sell the Sale Shares at the total Consideration of HK$100,000,000. The Sale Shares represent the entire issued share capital of the Target Company.

THE SPA

Date

21 May 2018 (after trading hours)

Parties

(i) Vendor : Eastern Robust Limited; and (ii) Purchaser : Sminent International Ltd

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The Purchaser is a company incorporated in the Marshall Islands with limited liability and is an investment holding company. As at the date of this announcement, the Purchaser owns 30% of the shareholding interest of the Project Group. As at the date of this announcement, to the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, each of the Purchaser and its ultimate beneficial owner(s) are Independent Third Parties.

Assets to be disposed

Pursuant to the SPA, the Purchaser has conditionally agreed to acquire the Sale Shares and the Vendor has conditionally agreed to sell the Sale Shares. The Sale Shares represent the entire issued share capital of the Target Company. As at the date of this announcement, the Target Company owns 20% shareholding interest of the Project Group. Further details of the Project Group are set out in the section headed ‘‘Information on the Target Group’’ in this announcement.

Consideration

Pursuant to the terms of the SPA, the Consideration of HK$100,000,000 will be satisfied upon Completion by way of setting off with the principal value of Promissory Note in full. Moreover, upon Completion, the Purchaser will waive all interest accrued on the Promissory Note payable by the Company to the Purchaser.

The Consideration was arrived at based on normal commercial terms after arm’s length negotiations between the Purchaser and the Vendor and was determined with reference to among others, (i) the preliminary valuation of 20% shareholding interest of the Project Group held by the Target Company in the amount of HK$97,000,000 as at 31 March 2018 (the ‘‘Valuation’’) prepared by an independent valuer based on the income approach; and (ii) the reasons for and benefits of the Disposal as stated under the section headed ‘‘Reasons and benefits of the Disposal’’ in this announcement.

The Consideration represents a premium of approximately 3.1% over the Valuation.

In view of the above, the Directors consider that the Consideration is fair and reasonable.

Conditions precedent

The SPA shall be conditional upon and subject to the fulfilment and satisfaction of the following conditions precedent:

• (i) all necessary consents, waivers, licences and approvals required to be obtained from relevant governmental authority and relevant third party, including but not limited to those from the Stock Exchange and/or SFC, on the part of the Vendor, the Purchaser, the Target Company and the Project Group in respect of the SPA and the transactions contemplated thereby having been obtained and remain in full force and effect;

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• (ii) the Board approving and authorising the Disposal; and

• (iii) if so required by the GEM Listing Rules, the passing of the necessary resolution(s) by the Shareholders at the relevant EGM approving and authorising the Disposal.

In the event any of the above conditions are not being fulfilled on or before the Long Stop Date, the Vendor may at its sole and absolute discretion by written notice to the Purchaser terminate the SPA, the SPA shall become void and of no further effect and, save in respect of any antecedent breaches, all liabilities and obligations of the parties shall cease and determine provided that such termination shall be without prejudice to any rights or remedies of the parties thereto which shall have accrued prior to such termination.

Completion

Subject to all the conditions precedent being fulfilled on or before the Long Stop Date to the satisfaction of the Vendor, Completion shall take place at or before 5 p.m. on the 3rd Business Day following the day when all the conditions precedent have been fulfilled at the office of the Vendor’s solicitors (or at such time or at such place as the parties may otherwise agree in writing).

As at the date of this announcement, the Target Company is the indirect wholly-owned subsidiary of the Company. Upon Completion, the Company will cease to hold any interest in the Target Group.

INFORMATION ON THE TARGET GROUP

The Target Company is an investment holding company incorporated in BVI on 6 July 2016 and the sole asset of the Target Company is its 20% shareholding interest of the Project Group.

The Project Group is principally engaged in the business of development and management of the project named as Build-Operate-Transfer Project of Shantou City Chaoren Port Cultural Park* (汕頭市潮人碼頭文化公園特許經營項目) (the ‘‘Project’’). The Project Group has been granted an exclusive right to build and operate the Project over 42.25 years.

The site of the Project covers a total area of over 90,000 square meters located at the center of Shantou City, the Guangdong Province, the PRC. The Project plans to construct buildings with a total floor area of approximately 38,000 square meters, including a yacht terminal, a shopping mall, a business facility, a cultural facility, a public entertainment area and a parking area. The major income of the Project shall be the rental income from the shopping mall and the income from the yacht terminal and marina club.

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Financial information of the Target Company

Set out below are the unaudited financial information of the Target Company as prepared in accordance with Hong Kong Financial Reporting Standards for the two financial years ended 31 March 2017 and 2018:

	For the year ended	For the year ended
	31 March 2018	31 March 2017
	approximate	approximate
	HK$’000	HK$’000
	(unaudited)	(unaudited)
Revenue	—	—
Net loss before taxation	(204)	(13)
Net loss after taxation	(204)	(13)

According to the unaudited financial information of the Target Company as at 16 May 2018, the Target Company recorded an unaudited net assets of approximately HK$99.8 million.

The unaudited carrying value of the Group’s investment in the Target Company as at 16 May 2018 was approximately HK$99.8 million.

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

As at the date of this announcement, the Target Company is an indirect wholly-owned subsidiary of the Company. Upon Completion, the Company will cease to hold any interest in the Target Group.

No proceeds in cash will be received by the Group from the Disposal as the Consideration for the Disposal shall be settled by way of setting off the principal of the Promissory Note and waiver of all interest accrued on the Promissory Note.

For illustrative purpose, upon Completion, it is estimated that the Company will realise an unaudited loss on the Disposal of approximately HK$0.8 million, being the difference between the Consideration and the unaudited carrying amount of the Group’s investment in the Target Company amounting to approximately HK$99.8 million as at 16 May 2018 and deducting the expenses attributable to the Disposal of approximately HK$1 million.

Nevertheless, Shareholders should note that the exact financial effect of the Disposal is subject to the review and approval of the auditors of the Company.

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REASONS AND BENEFITS OF THE DISPOSAL

The Group is principally engaged in system development, professional services, proprietary trading business, money lending business, property investment and over the top services.

As disclosed in the circular of the Company dated 13 April 2017, the construction work of the Project was expected to take 2.5 years from the date of commencement of the construction work and was initially targeted to fully operate in late 2018 or early 2019. However, based on the advice from the management of the Project Group, due to the unexpected events, the construction of the Project may not be completed as scheduled and will be delayed by around one year. The Directors consider that the possible delay in the construction work schedule may lower the expected return on the investment. As such, the Company considers it is appropriate to realise its investment in the Target Group.

Furthermore, it has been the business strategy of the Group to look for opportunities to create shareholders’ value through making investments into and/or acquiring interests in companies or projects that have promising outlook and prospects. The Directors are of the view that the Disposal represents a good opportunity for the Group to divest the Target Group such that more resources can be allocated to other investment opportunities with better prospects.

Notwithstanding that no proceeds in cash will be received by the Group from the Disposal as the Consideration would be set off against the principal of the Promissory Note and the waiver of all accrued interest on the Promissory Note, the Board considers that the Disposal could help improving the gearing ratio and increasing the liquidity of the Group by reducing the debt burden and interest expenses associated with the Promissory Note.

In view of the above, the Directors are of the view that the terms of the Disposal are fair and reasonable, which have been arrived at after arm’s length negotiations and are in the interests of the Company and the Shareholders as a whole.

GEM LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceeds 25% but all applicable percentage ratios are below 100%, the Disposal constitutes a major transaction for the Company and is therefore subject to the reporting, announcement, circular and shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

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GENERAL

An EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the SPA and the transactions contemplated thereunder. A circular containing, among others, (i) further details of the SPA and the transactions contemplated thereunder; (ii) other information as required under the GEM Listing Rules; and (iii) notice of the EGM will be despatched to the Shareholders as soon as practicable, which is expected to be on or before 22 June 2018 to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder or any of its close associates has any material interest in the SPA and the transactions contemplated thereunder, and therefore no Shareholder is required to abstain from voting on the resolution(s) in respect of the SPA at the EGM.

The SPA shall be conditional upon and subject to the fulfilment and satisfaction of the conditions set out in the section headed ‘‘Conditions precedent’’ in this announcement. Accordingly, the Disposal may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing in the securities of the Company.

DEFINITIONS

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

• ‘‘associates’’ has the meaning ascribed to it under the GEM Listing Rules

• ‘‘Board’’ the board of Directors

• ‘‘Business Day(s)’’ a day on which banks are generally open for business in Hong Kong, except a Sunday and a Saturday or a day on which a tropical cyclone warning signal no. 8 or above or a ‘‘black’’ rainstorm warning signal is hoisted in Hong Kong at any time between 9: 00 a.m. and 5: 00 p.m.

• ‘‘BVI’’ British Virgin Islands

• ‘‘BVI Subsidiary’’ Billion Ray Investments Limited, a company incorporated in the BVI with limited liability

• ‘‘Company’’ Trillion Grand Corporate Company Limited (Stock Code: 8103), a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on GEM

• ‘‘Completion’’ completion of the Disposal

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‘‘Completion Date’’	3rd Business Days after all conditions as set out in the SPA are
	being satisfied on which Completion shall take place
‘‘connected	has the meaning ascribed to it under the GEM Listing Rules
person(s)’’
‘‘Consideration’’	the total consideration in the sum of HK$100,000,000 for the
	Disposal under the SPA
‘‘Director(s)’’	director(s) of the Company
‘‘Disposal’’	the disposal of the Sale Shares by the Vendor to the Purchaser
	pursuant to the SPA
‘‘EGM’’	the extraordinary general meeting to be convened by the
	Company for the Shareholders to consider and, if thought fit,
	approve the SPA and the transactions contemplated thereunder
‘‘GEM’’	GEM of the Stock Exchange
‘‘GEM Listing Rules’’	the Rules Governing the Listing of Securities on GEM
‘‘Group’’	the Company and its subsidiaries
‘‘HK$’’	Hong Kong dollar, the lawful currency of Hong Kong
‘‘HK Subsidiary’’	Allied Star Creation Limited, a company incorporated in Hong
	Kong with limited liability
‘‘Hong Kong’’	the Hong Kong Special Administrative Region of the PRC
‘‘Independent Third	third party(ies) who is/are independent of, and not connected
Party(ies)’’	with, the Company and its connected persons
‘‘Long Stop Date’’	30 September 2018 (or any other date as the Vendor and the
	Purchaser may agree in writing)
‘‘PRC’’	the People’s Republic of China which, for the purpose of this
	announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan

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• ‘‘PRC Subsidiary’’ Shantou City Li Chao Tourism Development Limited* (汕頭市 麗潮旅遊開發有限公司), a wholly foreign owned company with limited liability established under the laws of the PRC

• ‘‘Project Company’’ Shantou City Chaoren Port Yacht Club Limited* (汕頭市潮人碼 頭遊艇俱樂部有限公司), a limited liability company established under the laws of the PRC

• ‘‘Project Group’’ collectively, BVI Subsidiary, HK Subsidiary, PRC Subsidiary and Project Company

• ‘‘Promissory Note’’ the promissory note dated 17 July 2017 issued by the Company in favour of the Purchaser in the aggregate principal amount of HK$100,000,000 due on 8 May 2020 and carrying interest of 4% per annum

• ‘‘Purchaser’’ Sminent International Ltd, a company incorporated in the Marshall Islands with limited liability

• ‘‘Sale Shares’’ 2 issued shares of US$1.00 each in the share capital of the Target Company, representing the entire issued share capital of the Target Company

• ‘‘SFC’’ the Securities and Futures Commission of Hong Kong

• ‘‘Share(s)’’ ordinary share(s) of HK$0.001 each in the share capital of the Company

• ‘‘Shareholder(s)’’

• holder(s) of Share(s)

• ‘‘SPA’’ the conditional sale and purchase agreement dated 21 May 2018 and entered into by the Vendor and the Purchaser in respect of the Disposal

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Target Company’’ Jovial Tycoon Holdings Limited, a company incorporated in the BVI with limited liability, which is owned as to 100% by the Vendor as at the date of this announcement and an indirect wholly-owned subsidiary of the Company

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‘‘Target Group’’

the Target Company and its 20% shareholding interest of the Project Group

‘‘Vendor’’

Eastern Robust Limited, a company incorporated in the BVI with limited liability and is a direct wholly-owned subsidiary of the Company

‘‘%’’ per cent.

By order of the Board Trillion Grand Corporate Company Limited Lau Kelly Executive Director

Hong Kong, 21 May 2018

As at the date of this announcement, the Board comprises the following Directors:

Executive Directors: Independent non-executive Directors: Mr. Lau Kelly (Chief Executive Officer) Dr. Wan Ho Yuen, Terence Mr. Leung Chung Nam Mr. Hau Chi Kit Ms. Ho Chi Na Mr. Yuen Koon Tung

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 ‘‘Latest Company Announcements’’ page of the GEM website at www.hkgem.com for at least seven days from the date of its posting and on the Company’s website at www.trilliongrand.com

• For identification purpose only

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