Kaisa Group Holdings Ltd. — Capital/Financing Update 2021

Apr 28, 2021

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 does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities referred to herein will not be registered under the Securities Act, and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. The Company does not intend to make any public offering of securities in the United States.

The communication of this announcement and any other document or materials relating to the issue of the New Notes offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act 2000, as amended (the “ FSMA ”). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “ Financial Promotion Order ”)), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together being referred to as “ relevant persons ”). In the United Kingdom, the New Notes offered hereby are only available to, and any investment or investment activity to which this announcement relates will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this announcement or any of its contents.

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KAISA GROUP HOLDINGS LTD. 佳兆業集團控股有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1638)

(1) ISSUANCE OF US$500 MILLION 11.7% SENIOR NOTES DUE 2025 AND

(2) MAXIMUM ACCEPTANCE AMOUNT FOR THE EXCHANGE AND TENDER OFFER

This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong).

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Reference is made to the announcement of the Company dated 27 April 2021 (the “ Announcement ”) in relation to the Exchange and Tender Offer and the Concurrent New Money Issuance. Unless otherwise defined herein, capitalised terms used herein shall have the same meanings as defined in the Announcement.

The Board is pleased to announce that on 27 April 2021 (Hong Kong time), the Company and the Subsidiary Guarantors entered into the Purchase Agreement with Credit Suisse, Deustche Bank, China CITIC Bank International, Guotai Junan International, Haitong International, HSBC and UBS in connection with the issue of New Notes under the Concurrent New Money Issuance with respect to the New Notes Offering. The Group intends to use the net cash proceeds from the Concurrent New Money Issuance to fund the Tender Offer and/or refinance other existing medium to long term offshore debts which will become due/puttable within one year.

Application will be made to the SGX-ST for the listing and quotation of the New Notes on the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this announcement. Approval in-principle from, admission to the Official List of, and the listing and quotation of the New Notes on, the SGX-ST are not to be taken as an indication of the merits of the Company, the New Notes, the Subsidiary Guarantees, the Subsidiary Guarantors or their respective Subsidiaries or associated companies (if any). No listing of the New Notes has been sought in Hong Kong.

This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong).

Reference is made to the announcement of the Company dated 27 April 2021 in relation to the Exchange and Tender Offer and the Concurrent New Money Issuance. Unless otherwise defined herein, capitalised terms used herein shall have the same meanings as defined in the Announcement.

THE PURCHASE AGREEMENT IN RELATION TO THE CONCURRENT NEW MONEY ISSUANCE

Date

27 April 2021

Parties to the Purchase Agreement

• (a) the Company;

• (b) the Subsidiary Guarantors;

• (c) Credit Suisse, Deustche Bank, China CITIC Bank International, Guotai Junan International, Haitong International, HSBC and UBS.

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Credit Suisse and Deutsche Bank are the joint global coordinators, and Credit Suisse, Deustche Bank, China CITIC Bank International, Guotai Junan International, Haitong International, HSBC and UBS are the joint bookrunners and joint lead managers in respect of the offer and sale of the New Notes under the Concurrent New Money Issuance. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of Credit Suisse, Deustche Bank, China CITIC Bank International, Guotai Junan International, Haitong International, HSBC and UBS is an independent third party and not a connected person of the Company.

MiFID II professionals/ECPs-only/No PRIIPs KID – Manufacturer target market (MiFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as the New Notes are not available to retail investors in the EEA and UK.

The New Notes and the Subsidiary Guarantees have not been, and will not be, registered under the U.S. Securities Act or any state securities laws and, unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. Accordingly, the New Notes are being offered and sold only to persons outside the United States in compliance with Regulation S under the U.S. Securities Act. None of the New Notes will be offered to the public in Hong Kong and none of the New Notes will be placed with any connected persons of the Company except in accordance with the terms of the Exchange and Tender Offer.

PRINCIPAL TERMS OF THE NEW NOTES

The following is a summary of certain provisions of the New Notes and the Indenture. This summary does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture, the New Notes, the guarantees provided by the Subsidiary Guarantors, and the JV Subsidiary Guarantors, if any.

Offering price

The offering price of the New Notes under the Concurrent New Money Issuance is 100% of the principal amount with respect to the New Notes.

Amount and Tenor

Subject to the fulfillment or waiver of the conditions precedent to the Exchange and Tender Offer and the Concurrent New Money Issuance, the Company will issue an aggregate principal amount of US$500 million of the New Notes, which will mature on 11 November 2025 unless earlier redeemed in accordance with the terms thereof.

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Interest

The New Notes will bear interest from and including 11 May 2021 at the rate of 11.7% per annum, payable semi-annually in arrears on 11 May and 11 November each year, commencing 11 November 2021.

Ranking of the New Notes

The New Notes are (1) general obligations of the Company; (2) senior in right of payment to any existing and future obligations of the Company expressly subordinated in right of payment to the New Notes; (3) at least pari passu in right of payment with all other unsecured, unsubordinated Indebtedness of the Company (subject to any priority rights of such unsubordinated Indebtedness pursuant to applicable law); (4) guaranteed by the Subsidiary Guarantors and the JV Subsidiary Guarantors (if any) on a senior basis, subject to certain limitations; (5) effectively subordinated to the secured obligations of the Company, the Subsidiary Guarantors and the JV Subsidiary Guarantors (if any) to the extent of the value of the assets serving as security therefor; and (6) effectively subordinated to all existing and future obligations of the subsidiaries of the Company which are not Subsidiary Guarantors or JV Subsidiary Guarantors (if any).

Events of Default

The events of default under the New Notes include, among others: (a) default in the payment of principal of (or premium, if any, on) the New Notes when the same becomes due and payable at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any New Note when the same becomes due and payable, and such default continues for a period of 30 consecutive days; (c) default in the performance or breach of the provisions of certain covenants under the Indenture relating to consolidation, merger and sale of assets, the failure by the Company to make or consummate an offer to purchase in the manner described in the Indenture, or the failure by the Company to create, or cause certain of its subsidiaries to create, a lien in the manner described in the Indenture; (d) default by the Company or certain of its subsidiaries in the performance of or breaches of any other covenant or agreement in the Indenture or under the New Notes (other than a default specified in (a), (b) or (c) above) and such default or breach continues for a period of 30 consecutive days after written notice by Citicorp International Limited as trustee or the holders of 25% or more in aggregate principal amount of the New Notes; (e) there occurs with respect to any indebtedness of the Company or certain of its subsidiaries having an outstanding principal amount of US$20.0 million or more in the aggregate for all such indebtedness, whether such indebtedness now exists or shall hereafter be created, (i) an event of default that has caused the holder of such indebtedness to declare such indebtedness to be due and payable prior to its stated maturity and/or (ii) the failure to make a principal payment when due; (f) one or more final judgments or orders for the payment of money are rendered against the Company or certain of its subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such persons to exceed US$20.0 million during which a stay of enforcement, by reason

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of a pending appeal or otherwise, is not in effect; (g) involuntary bankruptcy or insolvency proceedings against the Company or certain of its subsidiaries; (h) voluntary bankruptcy or insolvency proceedings commenced by the Company or certain of its subsidiaries or consent to such similar action or effect any general assignment for the benefit of creditors; (i) any Subsidiary Guarantor or JV Subsidiary Guarantor (if any) denying or disaffirming its obligations under its guarantees with respect to the obligations of the New Notes or, except as permitted by the Indenture, any such guarantee being determined to be unenforceable or invalid or for any reason ceasing to be in full force and effect; (j) any default by the Company or any Subsidiary Guarantor pledgor in the performance of any of its obligations; and (k) the Company or any Subsidiary Guarantor pledgor denies or disaffirms its obligations.

If an event of default (other than an event of default specified in (g) or (h) above) occurs and is continuing under the Indenture, the trustee or the holders of at least 25% in aggregate principal amount of the New Notes then outstanding, may, by written notice to the Company (and to the trustee if such notice is given by the holders), may, and the trustee at the request of such holders shall, declare the principal of, premium, if any, and accrued and unpaid interest on the New Notes to be immediately due and payable. If an event of default specified in clause (g) or (h) above occurs, the principal of, the premium, if any, and accrued and unpaid interest on the Notes then outstanding shall automatically become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder.

Covenants

The New Notes, the Indenture and the Subsidiary Guarantees will limit the Company’s ability and the ability of certain of its subsidiaries to, among other things:

• (a) incur additional indebtedness and issue preferred stock;

• (b) make investments or other specified restricted payments;

• (c) guarantee indebtedness;

• (d) enter into certain transactions with affiliates;

• (e) create liens;

• (f) enter into sale and leaseback transactions;

• (g) sell assets;

• (h) enter into agreements that restrict certain of its subsidiaries’ ability to pay dividends;

• (i) issue and sell capital stock of certain of its subsidiaries;

• (j) effect a consolidation or merger; and

• (k) engage in different business activities.

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Optional Redemption

At any time and from time to time on or after 11 November 2023, the Company may at its option redeem the New Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below, plus accrued and unpaid interest, if any, to (but not including) the redemption date if redeemed during the 12-month period commencing on 11 November of any year set forth below:

	Redemption
Period	Price
2023	104%
2024	102%

At any time prior to 11 November 2023, the Company may at its option redeem the New Notes, in whole but not in part, at a redemption price equal to 100% of principal amount of the New Notes, plus the applicable premium as of, and accrued and unpaid interest (if any) to, the redemption date.

In addition, at any time prior to 11 November 2023, the Company may redeem up to 35% of the aggregate principal amount of the New Notes with the net cash proceeds of one or more sales of common stock of the Company in an equity offering at a redemption price of 111.7% of the principal amount of the New Notes, plus accrued and unpaid interest (if any) to the redemption date; provided that at least 65% of the aggregate principal amount of the New Notes issued on the original issue date remains outstanding after each such redemption and any such redemption takes place within 60 days after the closing of the related equity offering.

PROPOSED USE OF PROCEEDS

The Group intends to use the net cash proceeds from the Concurrent New Money Issuance to fund the Tender Offer and/or refinance other existing medium to long term offshore debts which will become due/puttable within one year. The Group may adjust the plans in response to changing market conditions and thus reallocate the use of the proceeds.

MAXIMUM EXCHANGE ACCEPTANCE AMOUNT AND MAXIMUM TENDER ACCEPTANCE AMOUNT

The Company hereby announces that the Maximum Exchange Acceptance Amount for the Exchange Offer will be US$500 million and the Maximum Tender Acceptance Amount for the Tender Offer will be the maximum aggregate principal amount of Existing Notes that it may purchase with the proceeds from the New Notes Offering, the gross amount of which being US$500 million.

Other terms and conditions of the Exchange and Tender Offer remain the same.

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INFORMATION ABOUT THE COMPANY

The Company is an investment holding company and the Group is principally engaged in property development, property investment, property management, hotel and catering operations, cinema, department store and cultural centre operations, water-way passenger and cargo transportation in the PRC.

LISTING OF NEW NOTES

Application will be made to the SGX-ST for the listing and quotation of the New Notes on the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this announcement. Approval in-principle from, admission to the Official List of, and the listing and quotation of the New Notes on, the SGX-ST are not to be taken as an indication of the merits of the Company, the New Notes, the Subsidiary Guarantees, the Subsidiary Guarantors or their respective Subsidiaries or associated companies (if any). No listing of the New Notes has been sought in Hong Kong.

The distribution of this announcement in certain jurisdictions may be restricted by law. Persons into whose possession this announcement comes are required to inform themselves about, and to observe, any such restrictions. Forward-looking statements in this announcement, including, among others, those statements relating to the Exchange and Tender Offer are based on current expectations. These statements are not guarantees of future events or results. Future events and results involve risks, uncertainties and assumptions and are difficult to predict with any precision. Actual events and results could vary materially from the description contained herein due to many factors including changes in the market and price for the Existing Notes and/or the New Notes, changes in the business and financial condition of the Company and its subsidiaries, changes in the property industry and changes in the capital markets in general.

The Company plans to issue the New Notes in exchange for the Existing Notes validly tendered and accepted for exchange pursuant to the Exchange and Tender Offer on or about the Exchange Settlement Date.

The distribution of the Exchange and Tender Offer Memorandum is restricted by law in certain jurisdictions. Persons who come into possession of the Exchange and Tender Offer Memorandum are required to inform themselves of and to observe any of these restrictions. The Exchange and Tender Offer Memorandum does not constitute, and may not be used in connection with, an offer to buy Existing Notes or New Notes or a solicitation to sell the Existing Notes by anyone in any jurisdiction in which such an offer or solicitation is not authorised or in which the person making such an offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make an offer or a solicitation. The Company will not accept any responsibility for any violation by any person of the restrictions applicable in any jurisdiction.

No assurance can be given that the Exchange and Tender Offer will be completed and the Company reserves the right, at its sole and absolute discretion, to extend, withdraw or terminate the Exchange and Tender Offer if any of the conditions are not satisfied or waived by the Company by the relevant Settlement Date and amend, modify or waive any of the terms and conditions of the Exchange and Tender Offer.

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Shareholders, Holders and potential investors should note that completion of the Exchange and Tender Offer and the Concurrent New Money Issuance is subject to the fulfillment or waiver of the conditions precedent to the Exchange and Tender Offer and the Concurrent New Money Issuance as set forth in the Exchange and Tender Offer Memorandum and summarised in the announcement. No assurance can be given that the Exchange and Tender Offer and the Concurrent New Money Issuance will be completed and the Company reserves the right to amend, withdraw or terminate the Exchange and Tender Offer and the Concurrent New Money Issuance with or without conditions.

The Company may, at its sole discretion, amend or waive certain of the conditions precedent to the Exchange and Tender Offer and the Concurrent New Money Issuance. As the Exchange and Tender Offer and the Concurrent New Money Issuance may or may not proceed, shareholders, Holders and potential investors should exercise caution when dealing in the shares of the Company or the Existing Notes.

IMPORTANT NOTICE – THE EXCHANGE AND TENDER OFFER IS AVAILABLE ONLY TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED UNDER REGULATION S) AND ARE OUTSIDE THE UNITED STATES. U.S. PERSONS (AS DEFINED UNDER REGULATION S), PERSONS ACTING FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS AND PERSONS LOCATED IN THE UNITED STATES ARE NOT PERMITTED TO TENDER THE EXISTING NOTES IN THE EXCHANGE AND TENDER OFFER.

DEFINITIONS

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

“Board”	the board of Directors;
“China CITIC Bank	China CITIC Bank International Limited;
International”
“Clearstream”	Clearstream Banking S.A.;
“Company”	Kaisa Group Holdings Ltd., a company incorporated in the
	Cayman Islands, the shares of which are listed on the main
	board of the Stock Exchange;
“Concurrent New Money	a concurrent offering by the Company to issue and sell New
Issuance”	Notes that will form a single series with the corresponding New
	Notes to be issued as part of the Exchange Consideration under
	the Exchange and Tender Offer upon consummation of the
	Exchange Offer;
“connected person(s)”	has the meaning ascribed to it under the Listing Rules;

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“Credit Suisse” Credit Suisse (Hong Kong) Limited; “Deutsche Bank” Deutsche Bank AG, Singapore Branch; “Director(s)” the director(s) of the Company; “Eligible Holders” holders who are non-U.S. persons located outside the United States (as those terms are defined under Regulation S) and hold the Existing Notes through Euroclear and Clearstream, or certain fiduciaries holding accounts for the benefit of non-U. S. persons outside the United States (as those terms are defined under Regulation S) with the Existing Notes held through Euroclear and Clearstream; “Euroclear” Euroclear Bank SA/NV; “Exchange and Tender the Exchange Offer and the Tender Offer; Offer” “Exchange and Tender the Exchange and Tender Offer Memorandum dated 27 April Offer Memorandum” 2021 in relation to the Exchange and Tender Offer; “Exchange Offer” the exchange offer made by the Company upon the terms and subject to the conditions set forth in the Exchange and Tender Offer Memorandum; “Existing Notes” the Company’s outstanding US$3,051,500,000 9.375% Senior Notes due 2024 (ISIN: XS1627598094, Common Code: 162759809); “Group” the Company and its subsidiaries; “Guotai Junan International” Guotai Junan Securities (Hong Kong) Limited; “Haitong International” Haitong International Securities Company Limited; “Holders” holder(s) of the relevant Existing Notes and “Holder” means any one of them; “Hong Kong” the Hong Kong Special Administrative Region of the PRC; “HSBC” The Hongkong and Shanghai Banking Corporation Limited;

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“Indenture(s)” the indenture to be entered into between the Company, the Subsidiary Guarantors as guarantors and the trustee, pursuant to which the New Notes will be issued;

“JV Subsidiary Guarantees”	guarantees given by the JV Subsidiary Guarantors on the New
	Notes;
“JV Subsidiary Guarantors”	certain subsidiaries of the Company (other than the Subsidiary
	Guarantors) which will provide the JV Subsidiary Guarantees;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“New Notes”	the US$ denominated senior notes due 2025 in the aggregate
	principal amount of US$500 million to be issued by the
	Company subject to the terms and conditions of the Purchase
	Agreement;
“Notes Issue”	The proposed issue of the New Notes by the Company;
“PRC”	the People’s Republic of China excluding, for the purposes
	of this announcement, Hong Kong, the Macao Special
	Administrative Region of the PRC and Taiwan;
“Purchase Agreement”	the agreement dated 27 April 2021 entered into by and amongst,
	the Company, the Subsidiary Guarantors, Credit Suisse,
	Deustche Bank, China CITIC Bank International, Guotai Junan
	International, Haitong International, HSBC and UBS in relation
	to the Notes Issue;
“Regulation S”	Regulation S under the U.S. Securities Act;
“SGX-ST”	Singapore Exchange Securities Trading Limited;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Subsidiary Guarantees”	the guarantees provided by the Subsidiary Guarantors on the
	New Notes;
“Subsidiary Guarantors”	certain subsidiaries of the Company which will provide the
	Subsidiary Guarantees;
“U.S. Securities Act”	the United States Securities Act of 1933, as amended;
“UBS”	UBS AG Hong Kong Branch;

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“United States”

the United States of America;

“US$” United States dollar, the lawful currency of the United States; and

“%”

per cent.

By Order of the Board KAISA GROUP HOLDINGS LTD. Kwok Ying Shing Chairman and Executive Director

Hong Kong, 28 April 2021

As at the date of this announcement, the executive Directors are Mr. Kwok Ying Shing, Mr. Sun Yuenan, Mr. Mai Fan, Mr. Li Haiming and Mr. Kwok Hiu Kwan; the non-executive Director is Ms. Chen Shaohuan; and the independent non-executive Directors are Mr. Zhang Yizhao, Mr. Rao Yong and Mr. Liu Xuesheng.

• For identification purposes only

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