Kingwell Group Limited — M&A Activity 2014

Aug 26, 2014

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.

==> picture [69 x 69] intentionally omitted <==

KINGWELL GROUP LIMITED 京 維 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1195)

ANNOUNCEMENT

LETTER OF INTENT IN RESPECT OF A PROPOSED ACQUISITION

Financial Adviser

==> picture [129 x 35] intentionally omitted <==

This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the SFO.

On 26 August 2014, the Company and the Vendors entered into the Letter of Intent, pursuant to which the Company intended to acquire from the Vendors the Xingdi Interest, being the entire equity interest in Xingdi, which in turn hold 45% equity interest in Shanghai Beidou. Shanghai Beidou is principally engaged in providing navigation, precise timing, message communication and other application based on the Beidou satellite navigation platform.

The consideration of the Proposed Acquisition shall be satisfied by the issue and allotment of 375,000,000 Consideration Shares at the issue price of HK$1.00 per Share. The Proposed Acquisition, on the basis of the current negotiations and if materialised, would constitutes a discloseable transaction of the Company. The Vendors have granted the Company an exclusive right for three months from the date of the Letter of Intent to negotiate on terms of the Proposed Acquisition.

– 1 –

The Board wishes to emphasize that no binding agreement in relation to the Proposed Acquisition has been entered into as at the date of this announcement. The Proposed Acquisition is subject to satisfaction on due diligence of Shanghai Beidou, finalisation of negotiations and entering into a formal agreement, it is also conditional upon, inter alia, approval of Shareholders, and therefore may or may not materialise. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the SFO.

THE PROPOSED ACQUISITION

On 26 August 2014, the Company and the Vendors entered into the Letter of Intent, pursuant to which the Company intended to acquire from the Vendors the Xingdi Interest, being the entire equity interest in Xingdi. Major terms of the Letter of Intent are set out below.

The Letter of Intent

Date: 26 August 2014

• Parties: (i) The Company as the Purchaser; and

• (ii) Shanghai Gongxie Jingmao Development Limited (上海工協經貿發展有限公 司) and Shanghai Xinbo Investment Limited (上海鑫博投資有限公司) as the Vendors.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquires, the Vendors and their ultimate beneficial owners is not a connected person or an associate of any connected person of the Company.

Asset to be Acquired

The Xingdi Interests represent the entire equity interest in Xingdi, which in turn hold 45% equity interest in Shanghai Beidou. Shanghai Beidou is principally engaged in providing navigation, precise timing, message communication and other application based on the Beidou satellite navigation platform.

Consideration

The Consideration of the Proposed Acquisition shall be determined after arm’s length negotiation and set out in a formal sale and purchase agreement, which is subject to the valuation of Shanghai Beidou by an independent qualified valuer. The consideration of the Proposed Acquisition shall be satisfied by the issue and allotment of 375,000,000 Consideration Shares at the issue price of HK$1.00 per Share.

– 2 –

The Proposed Acquisition, on the basis of the current negotiations and if materialised, would constitutes a discloseable transaction of the Company.

Due Diligence Review

The Company will carry out a due diligence review on Shanghai Beidou, and the Vendors will procure Shanghai Beidou to facilitate such review.

Exclusivity

The Vendors have granted the Company an exclusive right for three months from the date of the Letter of Intent to negotiate on terms of the Proposed Acquisition.

Conditions Precedent

In the event the Company is satisfied with the due diligence review (which it may or may not), and a formal sale and purchase agreement is entered into, completion of the Proposed Acquisition is expected to be further subject to certain conditions precedent, including but not limited to the approval of Shareholders.

The Board wishes to emphasize that no binding agreement in relation to the Proposed Acquisition has been entered into as at the date of this announcement. The Proposed Acquisition is subject to satisfaction on due diligence of Shanghai Beidou, finalisation of negotiations and entering into of a formal agreement, it is also conditional upon, inter alia, approval of Shareholders, and therefore may or may not materialise. Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

DEFINITIONS

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

• ‘‘Board’’ the board of directors of the Company

• ‘‘Company’’ Kingwell Group Limited, a company incorporated in Cayman Islands with limited liability whose issued Shares are listed on the Main Board of the Stock Exchange (stock code: 1195)

• ‘‘Consideration Shares’’ a total of 375,000,000 Consideration Shares at HK$1.00 per shares proposed to be issued by the Company as consideration for the acquisition of the Xingdi Interest pursuant to the Letter of Intent

• ‘‘Directors’’ the directors of the Company

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

– 3 –

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Letter of Intent’’ the letter of intent entered into by the Company and the Vendor on 26 August 2014 in respect of the Proposed Acquisition

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange ‘‘PRC’’ the People’s Republic of China but excluding, for the purposes of this announcement, Hong Kong, Macau Special Administrative Region and Taiwan

• ‘‘Proposed Acquisition’’ the proposed acquisition of the Xingdi Interest in Xingdi ‘‘Shanghai Beidou’’ Shanghai Beidou Satellite Navigation Platform Limited (上海北斗衛星 導航平台有限公司), a company incorporated in the PRC with limited liability and 45% equity interest is owned by Xingdi

• ‘‘Shares’’ ordinary shares of par value of HK$0.10 each in the capital of the Company

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Xingdi’’ Shanghai Xingdi Inter Satellite Navigation Limited (上海星地互聯衛星 導航有限公司), a company incorporated in the PRC with limited liability and is wholly-owned by the Vendors

• ‘‘Xingdi Interest’’ 100% equity interest in Xingdi ‘‘%’’ per cent. By order of the Board

KINGWELL GROUP LIMITED Hui Lung Hing Executive Director

Hong Kong, 26 August 2014

As at the date of this announcement, the Board comprises Mr. Hui Lung Hing, Mr. Xiang Song, Mr. Sze Ming Yee, Mr. Lin Wan Xin, Ms. Xu Yue Yue and Mr. Yang Xue Jun as executive Directors, and Mr. Huang Jian Zi, Mr. Cheung Chuen and Ms. Wong Lai Wing as independent non-executive Directors.

– 4 –