Hunlicar Group Limited — Capital/Financing Update 2018

Jul 10, 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.

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

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(Incorporated in the Cayman Islands with limited liability) (Stock code: 3638)

PLACING OF NEW SHARES UNDER GENERAL MANDATE

Placing Agent

Huabang

THE PLACING

On 10 July 2018 (after trading hours), the Placing Agent and the Company entered into the Placing Agreement pursuant to which the Company has conditionally agreed to place through the Placing Agent, on a best effort basis, up to 320,000,000 Placing Shares at the Placing Price of HK$0.50 per Placing Share to not less than six Placees, who and whose beneficial owners shall be Independent Third Parties. The Placing Shares will be allotted and issued pursuant to the General Mandate granted to the Directors at the AGM held on 25 August 2017.

Assuming that there will be no change in the issued share capital of the Company between the date of this announcement and completion of the Placing, the maximum number of Placing Shares under the Placing represents (i) approximately 7.82% of the existing issued share capital of the Company of 4,089,492,000 Shares as at the date of this announcement; and (ii) approximately 7.26% 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 approximately HK$267,000.

The Placing Price of HK$0.50 per Placing Share represents (i) a discount of approximately 18.03% to the closing price of HK$0.610 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and (ii) a discount of approximately 14.38% to the average closing price of HK$0.584 per Share in the last five trading days immediately prior to the date of the Placing Agreement.

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It is expected that the maximum gross proceeds and net proceeds from the Placing will be approximately HK$160 million and approximately HK$152 million respectively. The net proceeds from the Placing are intended to be used for the payment for procurement of computer and peripheral products, the repayment of bank borrowings and general working capital of the Group. The net price per Placing Share is approximately HK$0.475.

Since the completion of the Placing is subject to the fulfilment of the condition set out in the Placing Agreement, the Placing may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

THE PLACING AGREEMENT

Date

10 July 2018 (after trading hours)

Issuer

The Company

Placing Agent

Huabang Securities Limited, being an indirect wholly-owned subsidiary of the Company

The Company has conditionally agreed to place through the Placing Agent, on a best effort basis, up to 320,000,000 Placing Shares to not less than six Placees and the Placing Agent will receive a placing commission of 5% on the aggregate Placing Price of the Placing Shares placed by the Placing Agent (i.e. gross proceeds of the Placing) upon completion of the Placing, which was arrived at arm’s length negotiations between the parties.

Placees

The Placing Agent will, on a best effort basis, place the Placing Shares to not less than six Placees (who are independent institutional, professional and/or other private investors), who and whose ultimate beneficial owner(s) are Independent Third Parties. It is not expected that any of the Placees will become a substantial Shareholder (as defined under the Listing Rules) after completion of the Placing.

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Number of Placing Shares

Assuming that there will be no change in the issued share capital of the Company between the date of this announcement and completion of the Placing, the maximum number of 320,000,000 Placing Shares under the Placing represents (i) approximately 7.82% of the existing issued share capital of the Company of 4,089,492,000 Shares as at the date of this announcement; and (ii) approximately 7.26% 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 approximately HK$267,000.

Ranking of Placing Shares

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

Placing Price

The Placing Price of HK$0.50 per Placing Share represents (i) a discount of approximately 18.03% to the closing price of HK$0.610 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and (ii) a discount of approximately 14.38% to the average closing price of HK$0.584 per Share in the last five trading days immediately prior to the date of the Placing Agreement.

The Placing Price was determined with reference to the prevailing market price 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.

General Mandate to allot and issue the Placing Shares

The Placing Shares will be issued under the General Mandate granted to the Directors by resolution of the Shareholders passed at the AGM subject to the limit up to 20% of the then number of issued Shares as at the date of the AGM. Under the General Mandate, the Company is authorised to issue up to 771,312,000 Shares. As at the date of this announcement, 231,000,000 Shares had been issued and allotted on 15 February 2018 pursuant to the acquisition of entire issued share capital of Huabang Securities Limited involving the issuance of consideration shares under the General Mandate, as disclosed in the circular of the Company dated 12 February 2018 and the Company’s announcements dated 7 March 2017, 31 October 2017, 17 November 2017, 26 January 2018 and 15 February 2018, represented a total of approximately 29.95% of the General Mandate being utilized. Accordingly, the issue of the Placing Shares is not subject to the approval of the Shareholders. Upon Completion, the Company will still have unused General Mandate to issue up to 220,312,000 Shares.

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Application for listing of Placing Shares

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

Condition of the Placing Agreement

Completion of the Placing Agreement is conditional upon the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Placing Shares to be issued under the Placing on or before the Long Stop Date.

The Company shall use all reasonable endeavors to procure the condition above is fulfilled in accordance with its terms (including by making an application to the Stock Exchange for the listing of, and permission to deal in, the Placing Shares as soon as practicable) on or before the Long Stop Date and for that purpose will give all such undertakings, execute such documents and do such other things as may be reasonably necessary to procure the fulfillment of such condition.

If the condition is not satisfied by the Long Stop Date, the obligations and liabilities of the Company and the Placing Agent under the Placing Agreement shall be null and void and the Company and the Placing Agent shall be released from all rights and obligations pursuant to the Placing Agreement. Neither party shall have any right to damages for any costs and expenses that it may have incurred in connection with or arising out of the Placing Agreement.

Completion of the Placing

Completion of the Placing shall take place on or before 8 August 2018, after fulfillment of the condition precedent set out in the Placing Agreement or such other time and date as may be agreed between the Placing Agent and the Company.

Termination of the Placing

The Placing Agent may terminate the Placing Agreement without any liability to the Company, by giving notice in writing to the Company at any time prior to 10:00 a.m. on the completion date (i.e. on or before 8 August 2018, after fulfillment of the condition precedent set out in the Placing Agreement or such other time and date as may be agreed between the Placing Agent and the Company) upon the occurrence of any of the following events which, in the reasonable opinion of the Placing Agent, the success of the Placing or the business or financial prospects of the Group would or might be adversely affected by:

• (a) any material breach of any of the representations and warranties by the Company set out in the Placing Agreement; or

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(b) any of the following events:

• i. the introduction of any new law or regulation or any change in existing laws or regulations or change in the interpretation or application thereof; or

• ii. the occurrence of any event, development or change (whether or not local, national or international or forming part of a series of events 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 or other nature, whether or not sui generis with any of the foregoing, resulting in a material adverse change in, or which might be expected to result in a material adverse change in, political, economic or stock market conditions; or

• iii. the imposition of any moratorium, suspension or material restriction on trading in securities generally on the Stock Exchange occurring due to exceptional financial circumstances or otherwise; or

• iv. a change or development involving a prospective change in taxation in Hong Kong, the Cayman Islands, the British Virgin Islands or the People’s Republic of China or the implementation of exchange controls which shall or might materially and adversely affect the Group (as a whole) or its present or prospective shareholders in their capacity as such; or

• v. any change or deterioration in the conditions of local, national or international securities markets occurs.

Upon termination of the Placing Agreement pursuant to the above paragraphs, all obligations of each of the Placing Agent and the Company under the Placing Agreement shall cease and determine and no party shall have any claim against any other party in respect of any matter arising out of or in connection with the Placing Agreement except for any antecedent breach of any obligation under the Placing Agreement.

Since the completion of the Placing is subject to the fulfilment of the condition set out in the Placing Agreement, the Placing may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

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REASONS FOR THE PLACING AND USE OF PROCEEDS

The Group is principally engaged in computer and peripheral products business and financial services business. The maximum gross proceeds and net proceeds from the Placing will be HK$160 million and approximately HK$152 million respectively. The net proceeds from the Placing are intended to be used for the payment for procurement of computer and peripheral products, the repayment of bank borrowings and general working capital of the Group. The net price per Placing Share is approximately HK$0.475.

The Directors have considered various ways of raising funds and believe that the Placing represents an opportunity to raise capital for the Company while broadening its Shareholder and capital base. It also signifies the confidence of the Placees in the potential of the Company and demonstrates their willingness to support the Company. The Directors are of the view that the Placing would strengthen the financial position of the Group and provide working capital to the Group to meet any future development and obligations.

The Directors consider that the terms and conditions of the Placing Agreement are fair and reasonable and are on normal commercial terms and the Placing is in the interest of the Company and the Shareholders as a whole.

FUND RAISING ACTIVITY IN THE PAST TWELVE MONTHS

On 15 February 2018, Goldenmars Technology Investments Limited, an indirect wholly-owned subsidiary of the Company, completed the acquisition of 100% equity interest in Huabang Securities Limited from an independent third party pursuant to a sale and purchase agreement dated 7 March 2017 at a consideration of HK$180.15 million, to be satisfied by cash of HK$30.0 million and by issuance of 231,000,000 ordinary Shares of the Company as consideration shares which were issued and allotted on 15 February 2018 accordingly. There were no proceeds to the Company on issuance and allotment of such consideration shares. Save as disclosed above, during the past twelve months immediately preceding the date of this announcement, the Company had not conducted any equity fund raising activities.

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EFFECTS ON SHAREHOLDING STRUCTURE

The existing shareholding structure of the Company and the effect on the shareholding structure of the Company upon completion of the Placing is set out as below:

Forever Star Capital Limited (Note 1) Mr. George Lu (Note 1) Qianhai Health Holdings Limited (Note 2) Nice Rate Limited (Note 3) Ms. Lau Wing Sze (Note 3) The Placees Other public shareholders	Shareholding at the date of this announcement Shares Approximate shareholding % 2,396,064,000 58.59 145,800,000 3.57 409,044,000 10.00 4,320,000 0.11 18,936,000 0.46 – – 1,115,328,000 27.27 4,089,492,000 100	Shareholding immediately after completion of the Placing (assuming that the maximum number of Placing Shares is placed and there will be no other change in the issued share capital of the Company between the date of this announcement and completion of the Placing) Shares Approximate shareholding % 2,396,064,000 54.34 145,800,000 3.31 409,044,000 9.27 4,320,000 0.10 18,936,000 0.43 320,000,000 7.26 1,115,328,000 25.29 4,409,492,000 100	Shareholding immediately after completion of the Placing (assuming that the maximum number of Placing Shares is placed and there will be no other change in the issued share capital of the Company between the date of this announcement and completion of the Placing) Shares Approximate shareholding % 2,396,064,000 54.34 145,800,000 3.31 409,044,000 9.27 4,320,000 0.10 18,936,000 0.43 320,000,000 7.26 1,115,328,000 25.29 4,409,492,000 100
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Notes:

• (1) Mr. George Lu, an executive Director and the Chairman and Chief Executive Officer of the Company, is the beneficial owner of 145,800,000 Shares. There are also 2,396,064,000 Shares which were registered in the name of Forever Star Capital Limited. Each of Mr. George Lu and his spouse, Ms. Shen Wei, holds 50% interest in Forever Star Capital Limited and is therefore deemed to be interested in the 2,396,064,000 Shares held by Forever Star Capital Limited.

• (2) According to the information available to the Company, Qianhai Health Holdings Limited is deemed to be interested in the 409,044,000 shares as it is a deemed as person having a security interest in shares. Qianhai Health Holdings Limited is owned as to 47.38% by Super Generation Group Ltd. which is wholly owned by Mr. George Lu.

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• (3) Ms. Lau Wing Sze, an executive Director of the Company, is the beneficial owner of 18,936,000 Shares. There are also 4,320,000 Shares which were registered in the name of Nice Rate Limited. Ms. Lau Wing Sze is the sole shareholder of Nice Rate Limited and is therefore deemed to be interested in the 4,320,000 Shares held by Nice Rate Limited.

TERMS AND DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the meaning ascribed to them below:

“AGM”	the annual general meeting of the Company held on 25 August
	2017
“Board”	the board of Directors
“Business Day”	a day (excluding Saturday, Sunday, public holiday and any day on
	which a tropical cyclone warning 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.) on which banks are open in Hong
	Kong for general banking business
“Company”	Huabang Financial Holdings Limited, a company duly incorporated
	in the Cayman Islands with limited liability, whose shares are listed
	and traded on the Stock Exchange
“Director(s)”	the director(s) of the Company
“General Mandate”	the mandate granted to the Directors by the Shareholders at the
	AGM to allot, issue and deal with up to 20% of the then issued
	share capital of the Company (being 3,856,560,000 Shares) as at
	the date of the AGM, which was equivalent to 771,312,000 Shares
“Group”	the Company and its subsidiaries
“Hong Kong”	Hong Kong Special Administrative Region of the People’s Republic
	of China
“Independent Third	third party(ies) independent of and not connected with the
Party(ies)”	Company and any of its connected persons within the meaning of
	the Listing Rules
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange

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“Long Stop Date” 8 August 2018 (or such later date as may be agreed by the parties in writing)

• “Placee(s)” any institutional, professional and/or other private investor(s) procured by the Placing Agent to subscribe for any of the Placing Shares pursuant to the Placing Agreement

• “Placing” the proposed placing of up to 320,000,000 Placing Shares by the Placing Agent on a best effort basis pursuant to the terms of the Placing Agreement

• “Placing Agent” Huabang Securities Limited, being an indirect wholly-owned subsidiary of the Company, is a corporation licensed to carry on type 1 (dealing in securities) and type 4 (advising on securities) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), acting as the placing agent of the Placing Shares under the Placing Agreement

• “Placing Agreement” the conditional placing agreement entered into between the Company and the Placing Agent dated 10 July 2018 in relation to the Placing

• “Placing Price” HK$0.50 per Placing Share “Placing Share(s)” up to 320,000,000 new Shares to be placed pursuant to the Placing Agreement

• “Share(s)” ordinary share(s) of HK$0.0008333 each in the issued share capital of the Company

• “Shareholder(s)” holder(s) of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited

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“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“%”

per cent.

By order of the Board Huabang Financial Holdings Limited George Lu Chairman & Chief Executive Officer

Hong Kong, 10 July 2018

As at the date of this announcement, the executive Directors of the Company are Mr. George Lu and Ms. Lau Wing Sze; the non-executive Directors of the Company are Mr. Pang Chung Fai Benny, Mr. Lau Wan Po and Mr. Yeung Wai Fai Andrew; and the independent non-executive Directors of the Company are Mr. Loo Hong Shing, Vincent, Mr. Shin Yick Fabian and Mr. Lam Allan Loc.

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