Macau Legend Development Limited — Proxy Solicitation & Information Statement 2017

Dec 21, 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Macau Legend Development Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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Macau Legend Development Limited 澳 門 勵 駿 創 建 有 限 公 司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1680)

MAJOR TRANSACTION: DISPOSAL OF 100% EQUITY INTEREST IN AND ALL SHAREHOLDER’S LOAN DUE BY NEW MACAU LANDMARK MANAGEMENT LIMITED

No general meeting will be held to approve the Disposal and the transactions contemplated thereunder.

• For identification purposes only

22 December 2017

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		7
APPENDIX I	— FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II	— VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	— GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1

– i –

DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions shall have the following meanings when used herein:

• ‘‘2006 Service Agreement’’

• the agreement, dated 25 September 2006, between SJM and Hong Hock, for the provision of services and the license for occupation and use of space, through which Hong Hock provides Gaming Services to SJM in relation to the casinos in the premises of the Group (which at the time did not include any VIP rooms)

• ‘‘2009 Amendments to the Service Agreement’’

• the amendment, dated 3 August 2009, to the 2006 Service Agreement, providing for Hong Hock to extend its Gaming Services to VIP rooms located in the casinos in the premises of the Group

• ‘‘2011 Amendments to the Service Agreement’’

• the amendment, dated 16 December 2011, to the 2006 Service Agreement and the 2009 Amendments to the Service Agreement, providing for, among other things, Hong Hock to designate more than one gaming promoter (subject to SJM’s approval) to manage VIP rooms in the casinos in the premises of the Group

• ‘‘Affiliated Sellers’’

• NML Properties Holdings Limited and NML Management Holdings Limited, each of them is incorporated in the BVI and is indirect wholly-owned subsidiary of the Company

• ‘‘Audited Accounts’’

• the audited accounts of NML (including relevant audited balance sheets, and audited profit and loss accounts, notes to those accounts, the directors’ and auditors’ reports, statements and other documents which are required by law to be annexed to the accounts of NML concerned) for the period from 1 January 2018 and ending on the Completion Date and shall be delivered to the Buyers on or before 30 June 2018

• ‘‘Board’’

• the board of Directors

• ‘‘BVI’’

• the British Virgin Islands

– 1 –

DEFINITIONS

• ‘‘Business Day’’ any day (other than Saturday and Sunday and public holiday and any day on which a tropical cyclone warning signal no. 8 or above is hoisted or remains hoisted between 9:00 a.m. to 5:00 p.m. and is not lowered at or before 5:00 p.m. or on which a ‘‘black’’ rainstorm warning is hoisted or remains in effect between 9:00 a.m. and 5:00 p.m. and is not discontinued at or before 5:00 p.m.) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours

• ‘‘Buyer A’’ Dong Lap Hong Property Investment Company Limited (東立 鴻地產投資有限公司), a company incorporated under the laws of Macau, one of the Buyers to the Disposal Agreement

• ‘‘Buyer B’’ Tong Lap Tak Real Estate Limited (東立德置業有限公司), a company incorporated under the laws of Macau, one of the Buyers to the Disposal Agreement

• ‘‘Buyer C’’ Tong Hong Wan Real Estate Limited (東鴻運置業有限公司), a company incorporated under the laws of Macau, one of the Buyers to the Disposal Agreement

• ‘‘Buyer D’’ Tong Tak Cheng Real Estate Limited (東德政置業有限公司), a company incorporated under the laws of Macau, one of the Buyers to the Disposal Agreement

• ‘‘Buyers’’ together, the Buyer A, the Buyer B, the Buyer C and the Buyer D

– 2 –

DEFINITIONS

• ‘‘Closely Allied Group’’

• ‘‘Company’’

• ‘‘Completion’’

• ‘‘Deposit(s)’’

• ‘‘DICJ’’

• ‘‘Director(s)’’

• together, (i) Mr. Chow, a co-chairman of the Board and the executive Director, and his associates namely All Landmark Properties Limited (a corporation controlled by Mr. Chow), Madam Chan Mei Yi, Melinda (spouse of Mr. Chow); Madam Lam Fong Ngo (the executive Director and mother of Mr. Chow); and Grand Bright Holdings Limited (a corporation controlled by Madam Lam Fong Ngo) and (ii) Madam Chan and her associates, namely UNIR (HK) Management Limited (a company wholly owned by Madam Chan) and Earth Group Ventures Limited, a company wholly owned by UBS TC (Jersey) Ltd. as trustee of the Earth Settlement (a discretionary trust set up by Madam Chan as founder for her assets planning purposes), the Closely Allied Group is in aggregate holding 3,213,771,001 Shares or approximately 51.28% of the shareholding of and voting rights in the Company at the Latest Practicable Date. Mr. Chow and Dr. Ho Hung Sun are two co-founders of the Group. Their cooperation in the Group can be traced back to 2002. In 2010, Dr. Ho Hung Sun transferred all his interest in the Group to Madam Chan. Prior to the listing of the Company in July 2013, Mr. Chow, Madam Chan and other co-founders of the Group entered into a transfer restrictions agreement, to govern their respective interest in the Company. Details please refer to the prospectus of the Company dated 24 June 2013

• Macau Legend Development Limited, a limited liability company incorporated in the Cayman Islands, the Shares of which are listed on the Main Board of the Stock Exchange

• completion of the Disposal

• the aggregated amount of HK$1,000,000,000 paid or payable by the Buyers to the Sellers as initial Deposit and second Deposit and third Deposit pursuant to the Disposal Agreement as deposits which shall form part of the Consideration

• Direcção de Inspecção e Coordenação de Jogos, the Gaming Inspection and Coordination Bureau in Macau

• the director(s) of the Company

– 3 –

DEFINITIONS

• ‘‘Disposal’’

• ‘‘Disposal Agreement’’

• ‘‘Financial Statements’’

• ‘‘Gaming Services’’

• ‘‘Gaming Tables’’

• ‘‘Group’’

• ‘‘Hong Hock’’

• ‘‘Hong Kong’’

• ‘‘Independent Third Party/ Party(ies)’’

• ‘‘Latest Practicable Date’’

• ‘‘Lao PDR’’

• ‘‘Listing Rules’’

• ‘‘Long Stop Date’’

the disposal of (i) the Sale Shares by Hong Hock and Mr. Chow (or by the Affiliated Sellers if the Seller’s Reorganisation take effect before Completion) to the Buyers and (ii) the Sale Loan by Hong Hock to Buyers pursuant to the Disposal Agreement

• the sale and purchase agreement dated 9 November 2017 and entered into among the Sellers and the Buyers, in relation to the Disposal

• the management accounts of NML (including relevant balance sheets, and profit and loss accounts) for the period from 1 January 2018 and ending on 28 February 2018 and shall be delivered to the Buyers on or before 31 March 2018

• the management of gaming tables in the premises of The Landmark Macau

• initially, the seventy-eight (78) gaming tables at the Pharaoh’s Palace Casino at The Landmark Macau, subject to adjustment as Hong Hock and NML may agree and negotiate in future

• the Company and its subsidiaries

• Hong Hock Development Company Limited or Sociedade de Investimento Predial Hong Hock, S.A., a company incorporated under the laws of Macau on 8 June 1992 and the direct wholly-owned subsidiary of the Company

• the Hong Kong Special Administrative Region of the PRC

• party(ies) who, together with his/her ultimate beneficial owner(s), is/are persons independent of the Company and its connected persons (within the meaning of the Listing Rules)

• 20 December 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

• the Lao People’s Democratic Republic

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

• 31 March 2018 (or such other date as the Sellers and the Buyers may agree in writing)

– 4 –

DEFINITIONS

• ‘‘Macau’’

the Macau Special Administrative Region of the PRC

• ‘‘Madam Chan’’

• Madam Chan Un Chan, one of our co-founders of the Group and a member of the Closely Allied Group

• ‘‘MFW’’ Macau Fisherman’s Wharf, an integrated gaming, hotel, convention and entertainment complex located on the outer harbor of the Macau Peninsula, which opened in 2006 and is owned by Macau Fisherman’s Wharf International Investment Limited, a subsidiary of the Company

• ‘‘Mr. Chow’’ Chow Kam Fai, David, a co-chairman of the Board, executive Director and chief executive officer of the Company and a controlling Shareholder (as defined under the Listing Rules)

• ‘‘NML’’ New Macau Landmark Management Limited or Novo Macau Landmark — Sociedade Gestora, Limitada, a company incorporated under the laws of Macau on 9 December 2002 and the indirect wholly-owned subsidiary of the Company

• ‘‘Participation Agreement’’ the participation agreement to be entered into between NML (or its nominee) and Hong Hock in relation to the management of Gaming Tables at the relevant casino at the Landmark Macau

• ‘‘PRC’’ the People’s Republic of China, for the purpose of this circular, excludes Hong Kong, Macau and Taiwan

• ‘‘Purchase Price’’ HK$4,600,000,000, being the aggregate consideration for the sale and purchase of the Sale Shares and the Sale Loan

• ‘‘Sale Shares’’ the entire issued share capital in NML

• ‘‘Sale Loan’’

• all obligations, liabilities and debts owing or incurred by NML to Hong Hock on or at any time prior to the Completion whether actual, contingent or deferred and irrespective of whether or not the same is due and payable on Completion

• ‘‘Sellers’’ together, Hong Hock and Mr. Chow

• ‘‘Seller’s Reorganisation’’

• the internal reorganisation of the shareholdings of NML so that all the shares in NML will be held by the Affiliated Sellers before the Completion

– 5 –

DEFINITIONS

‘‘Service Agreement’’ together the 2006 Service Agreement, the 2009 Amendments to the Service Agreement and the 2011 Amendments to the Service Agreement as executed between SJM and Hong Hock, under which we provide Gaming Services to SJM in relation to the casinos of the Group ‘‘SFO’’ Securities and Futures Ordinance ‘‘Share(s)’’ the ordinary share(s) of HK$0.1 each in the issued share capital of the Company ‘‘Shareholder(s)’’ holder(s) of issued share(s) of the Company ‘‘SJM’’ Sociedade de Jogos de Macau, S.A. ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘The Landmark Macau’’ the hotel, dining, conference and casino complex situated at 549–567 Avenida da Amizade, Macau, owned and operated by NML ‘‘HK$’’ Hong Kong dollars, the lawful currency of the Hong Kong ‘‘%’’ per cent.

– 6 –

LETTER FROM THE BOARD

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Macau Legend Development Limited 澳 門 勵 駿 創 建 有 限 公 司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1680)

Executive Directors:

Mr. Chow Kam Fai, David (Co-chairman and chief executive officer) Madam Lam Fong Ngo (Vice chairman) Mr. Sheldon Trainor-DeGirolamo Mr. Chow Wan Hok, Donald

Non-executive Directors:

Mr. Tong Ka Wing, Carl (Co-chairman) Ms. Ho Chiulin, Laurinda

Independent non-executive Directors:

Mr. Fong Chung, Mark Mr. Xie Min Madam Tam Wai Chu, Maria

Registered office: Conyers Trust Company (Cayman) Limited Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Shop 102, 1/F, Shun Tak Centre 168–200 Connaught Road Central Hong Kong

22 December 2017

To the Shareholders,

Dear Sir or Madam,

MAJOR TRANSACTION: DISPOSAL OF 100% EQUITY INTEREST IN AND ALL SHAREHOLDER’S LOAN DUE BY NEW MACAU LANDMARK MANAGEMENT LIMITED

INTRODUCTION

Reference is made to the announcement of the Company dated 9 November 2017 in relation to the Disposal.

• For identification purposes only

– 7 –

LETTER FROM THE BOARD

On 9 November 2017 (after trading hours of the Stock Exchange), the Sellers and the Buyers entered into the Disposal Agreement, pursuant to which the Sellers agreed to sell or to procure the Affiliated Sellers to sell and the Buyers agreed to purchase the Sale Shares and the Sale Loan for a cash consideration of HK$4,600,000,000.

The Disposal constitutes a major transaction of the Company for the purpose of the Listing Rules and is subject to the approval of the Shareholders. As no Shareholder has a material interest in the Disposal, none of the Shareholders is required to abstain from voting if the Company were to convene a general meeting for the approval of the Disposal. Moreover, the Closely Allied Group, holding 3,207,072,001 Shares or approximately 51.17% of the shareholding of and voting rights in the Company as at the date of the announcement, has given its written approval for the Disposal and the transactions contemplated thereunder. Accordingly, written approval from the Closely Allied Group has been accepted in lieu of holding a general meeting of the Company for the approval of the Disposal pursuant to Rule 14.44 of the Listing Rules.

The purpose of this circular is to provide you with, among other matters, details of the Disposal, other transactions contemplated thereunder and other general information of the Company.

THE DISPOSAL AGREEMENT

The salient terms of the Disposal Agreement are as follows:

Date: 9 November 2017 Parties Sellers: Hong Hock and Mr. Chow Buyers: Buyer A, Buyer B, Buyer C and Buyer D

Assets to be disposed of

Pursuant to the Disposal Agreement, the parties agree to sell and purchase of:

• (i) the Sale Shares represent 100% of the entire issued capital of NML, of which 58% of the Sale Shares will be sold to Buyer A, 20% of the Sale Shares will be sold to Buyer B, 17% of the Sale Shares will be sold to Buyer C and 5% of the Sale Shares will be sold to Buyer D; and

• (ii) the Sale Loan represents all obligations, liabilities and debts owing or incurred by NML to Hong Hock on or at any time prior to the Completion whether actual, contingent or deferred and irrespective of whether or not the same is due and payable on Completion. As at 30 September 2017, the Sale Loan amounted to approximately HK$1,553,482,000 and such loan is unsecured, carries no interest and has no fixed term of repayment.

– 8 –

LETTER FROM THE BOARD

Sellers’ Reorganisation

The Group intends to undergo an internal reorganisation of the shareholdings in NML, pursuant to which Hong Hock and Mr. Chow will transfer all the Sale Shares held by them to the Affiliated Sellers before the Completion so that the Affiliated Sellers instead of Hong Hock and Mr. Chow will transfer all the Sale Shares to the Buyers on Completion. Notwithstanding the reorganisation of the Sale Shares, the Sale Loan will remain due to Hong Hock which will assign the same to the Buyers on Completion.

Nonetheless, if the Sellers’ Reorganisation cannot take effect before Completion, Hong Hock and Mr. Chow will sell the Sale Shares to the Buyers.

As at the Latest Practicable Date, the Reorganisation has not taken effect.

Purchase Price

The Purchase Price for the Sale Shares and the Sale Loan is HK$4,600,000,000 and shall be payable by the Buyers to the Sellers in cash in the following manner:

• (a) HK$460,000,000 has been paid as the initial Deposit to the Sellers prior to signing of the Disposal Agreement by the Buyers;

• (b) HK$200,000,000 has been paid as the second Deposit to the Sellers upon signing of the Disposal Agreement by the Buyers;

• (c) HK$340,000,000 shall be payable as the third Deposit to the Sellers on 5 January 2018 subject to the receipt of letter from SJM acknowledging the Participation Agreement and the participating arrangement contemplated thereunder; and

• (d) the balance of Purchase Price in the sum of HK$3,600,000,000 shall be payable as part payment of the Purchase Price upon Completion by the Buyers.

The Purchase Price was determined after arm’s length negotiations between the Sellers and the Buyers with reference to the valuation of the Landmark Macau, the amount of the service fee generated from the Gaming Tables and its business development and prospect. Having considered the above and the factors described under the section headed ‘‘Reasons for and benefits of the Disposal’’ below, the Directors consider that the Purchase Price, is fair and reasonable and the Disposal is in the interest of the Company and the Shareholders as a whole.

– 9 –

LETTER FROM THE BOARD

Conditions precedent

Completion of the Disposal Agreement is conditional upon, among other things, the satisfaction of the following conditions:

Buyers’ conditions

The Buyers undertake to use all reasonable endeavours to ensure that the following conditions are satisfied as soon as possible after the date of the Disposal Agreement and in any event by no later than the Long Stop Date:

• (a) the licences, authorisations, consents, registrations and other approvals necessary or desirable for the completion of the Disposal Agreement having been granted or obtained; and

• (b) all the warranties given by the Buyers in the Disposal Agreement being true and accurate in every material respects and remaining so from the date of the Disposal Agreement until Completion and there is no breach by the Buyers of any of their obligations under the Disposal Agreement.

As at the Latest Practicable Date, none of the above Buyers’ conditions had been fulfilled.

Sellers’ conditions

The Sellers undertake to use all reasonable endeavours to ensure that the following conditions are satisfied as soon as possible after the date of the Disposal Agreement and in any event by no later than the Long Stop Date:

• (a) the licences, authorisations, consents, registrations and other approvals necessary or desirable for the completion of the Disposal Agreement having been granted or obtained and the same have not been revoked and/or suspended;

• (b) all the warranties given by the Sellers in the Disposal Agreement being true and accurate in every material respects and remaining so from the date of the Disposal Agreement until Completion and there is no breach by the Sellers of any of their obligations under the Disposal Agreement;

• (c) the written resolutions of the Shareholders of the Company to approve the Disposal Agreement and the transaction contemplated thereunder, including the entering into of the Participation Agreement;

• (d) the written resolutions of Hong Hock to approve the Seller’s Reorganisation, the Disposal Agreement and the transaction contemplated thereunder, including the entering into of the Participation Agreement;

– 10 –

LETTER FROM THE BOARD

• (e) the consent from the existing lenders of MFW in respect of its five-year transferable term loan facility and ancillary security documents, if applicable;

• (f) the obtaining of the acknowledgement from the DICJ and SJM in relation to the Participation Agreement and the participating arrangement contemplated thereunder;

• (g) the duly executed termination agreements to the existing gaming promoter agreements and the slot hall agreement save and exception of the agreement in respect of Neptune VIP Room;

• (h) a legal opinion issued by a Macau legal adviser that the entering into of the Participation Agreement and the participating arrangement contemplated thereunder will not be in violation of any law of Macau; and

• (i) the compliance with the Sellers’ pre-completion undertakings, among others, each of the Sellers shall use its best endeavours that pending Completion it shall procure that NML shall conduct its business in the ordinary and usual course and in the same manner (including as to nature and scope) as carried on prior to the date of the Disposal Agreement.

As at the Latest Practicable Date, save for condition (c) which has been satified, none of the above Sellers’ conditions had been fulfilled.

As to condition (a) of the Sellers’ conditions above, to the best knowledge information and belief of the Directors, save for the bank consents are required to the Disposal and the Seller’s Reorganisation, there is no other licences, authorisations, consents, registrations and approvals necessary or desirable for the completion of the Disposal Agreement.

The Sellers may by notice waive (to the extent thought fit by the Sellers) all or any of the Buyers’ conditions set out above (other than the condition (a) of the Buyers’ conditions). The Buyers may by notice waive (to the extent thought fit by the Buyers) all or any of the Sellers’ conditions set out above (other than the conditions (a) and (c) of the Sellers’ conditions). If any of the conditions precedent above have not been satisfied (or waived as the case may be) by 4:00 p.m. on the Long Stop Date (or such later date as the Sellers and the Buyers may agree), the Disposal Agreement shall cease.

In the event of a termination of the Disposal Agreement for any reason attributable to the Buyers, the Deposit shall be absolutely forfeited by the Sellers, and thereafter the Disposal Agreement shall terminate save for any antecedent breach of its obligations under the Disposal Agreement.

In the event of a termination of the Disposal Agreement for any reason attributable to the Sellers, the Deposit shall be refunded in full (together with an equivalent amount equal to the Deposit as compensation) to the Buyers, thereafter the Disposal Agreement shall terminate save for any antecedent breach of its obligations under the Disposal Agreement.

– 11 –

LETTER FROM THE BOARD

In the event of a termination of the Disposal Agreement for any reason not attributable to the Buyers and the Sellers or beyond the control of the Sellers, the Deposit (with accrued interest at the rate of 2% per annum) shall be refunded in full to the Buyers, thereafter the Disposal Agreement shall terminate save for any antecedent breach of its obligations under the Disposal Agreement.

Undertakings

Pursuant to the Disposal Agreement, the Sellers have undertaken to the Buyers, among other things,

• (a) The Sellers shall properly file letters to SJM and DICJ notifying SJM and DICJ about the entering into of the Disposal Agreement and the transaction contemplated thereunder, including but not limited to the Participation Agreement. As soon as practicable, the Sellers shall provide the salient terms of the Participation Agreement to SJM and DICJ.

• (b) The Sellers shall provide the Financial Statements to the Buyers before Completion.

• (c) The Sellers shall provide the audited accounts of NML for the year ending 31 December 2017, within 7 days upon receipt the same from the auditors of NML.

Completion of the Disposal

The Completion shall take place at 2:00 p.m. on second Business Day on which the last of the conditions of the Disposal Agreement has been fulfilled or waived or such other date as the Sellers and the Buyers may agree in writing. It is expected that the Completion will take place on or before 31 March 2018.

Upon Completion, the Company will no longer have any interest in NML and NML will cease to be a subsidiary of the Company. The financial results of NML will cease to be consolidated into the accounts of the Group.

Post Completion Undertaking

After Completion, the Sellers shall appoint the auditors to prepare the Audited Accounts which shall be delivered to the Buyers on or before 30 June 2018.

Participation Agreement

Upon Completion, Hong Hock shall enter into the Participation Agreement with NML (or its nominee) pursuant to which Hong Hock shall provide the Gaming Services in the premises of The Landmark Macau, including the Pharaoh’s Palace Casino, the VIP Rooms and the slot machine hall therein. Hong Hock shall provide the Gaming Services for as long as SJM maintains its status as a gaming concessionaire in Macau, including extensions and/or renewals of the existing gaming concession and/or a new concession obtained by SJM. The parties to the Participation Agreement shall negotiate in good faith if there is any change in the circumstances for Hong Hock or NML (or

– 12 –

LETTER FROM THE BOARD

its nominee) to perform their duties under the Participation Agreement. Notwithstanding the entering into of the Participation Agreement, there is no change in Hong Hock’s role in relation to the provision of the Gaming Services before and after the completion of the Disposal.

Pursuant to the Service Agreement, SJM is paying to Hong Hock a service fee, being certain percentage of the gross gaming income generated by the Gaming Tables and supporting the operational expenses of an indicated sum of about 15% of gross gaming income but in any event, being the actual operation expenses arising thereof.

Pursuant to the Participation Agreement, Hong Hock shall pay to NML (or its nominee) the participation fee with respect to the service fee received by Hong Hock provided that NML shall reimburse SJM and/or Hong Hock all the costs and expenses incurred by SJM/Hong Hock in relation to the render of Gaming Services and NML shall bear all the tax arising from under the Participation Agreement. NML shall also pay Hong Hock a monthly management fee equivalent to 0.5% of total monthly gross gaming income generated from the Gaming Tables while neither SJM nor Hong Hock is required to pay rent to NML for rendering the Gaming Services in the premises of The Landmark Macau.

INFORMATION OF THE SELLERS, THE AFFILIATED SELLERS AND BUYERS

Hong Hock is a company incorporated under the laws of Macau on 8 June 1992 and is a wholly-owned subsidiary of the Company. Hong Hock is principally engaged in investment holding and provision of the Gaming Services under the Service Agreement.

Mr. Chow is an executive Director, a co-chairman of the Board and a controlling Shareholder of the Company. As at the date of the Disposal Agreement, Mr. Chow is legal and beneficially owned 1% equity interest in NML which is held by Mr. Chow on trust of the Company in compliance with the legal requirement of the laws of Macau.

Each of the Affiliated Sellers, namely NML Properties Holdings Limited and NML Management Holdings Limited, is incorporated in the BVI on 25 October 2017 and is an indirect wholly-owned subsidiary of the Company. The Affiliated Sellers are principally engaged in investment holding.

Buyer A is a company incorporated in Macau on 19 August 2016 and is principally engaged in investment holding. To the best knowledge, information and belief and after having made reasonable enquiry, Buyer A is owned as to 90% by Chong Sio Kin and 10% by Pook Sik Yan, and each of the Buyer A and its ultimate beneficial owner(s) is an Independent Third Party.

Buyer B is a company incorporated in Macau on 9 November 2017 and is principally engaged in investment holding. To the best knowledge, information and belief and after having made reasonable enquiry, Buyer B is owned as to 60% by Chong Vai Kin, 20% by Chong For Ching and 20% by Chong For Shun, and each of the Buyer B and its ultimate beneficial owner(s) is an Independent Third Party.

– 13 –

LETTER FROM THE BOARD

Buyer C is a company incorporated in Macau on 9 November 2017 and is principally engaged in investment holding. To the best knowledge, information and belief and after having made reasonable enquiry, Buyer C is owned as to approximately 29%, 18%, 23%, 12%, 12% and 6% by Kou Kam Tou, Ip Kin Wa, Tsang Yun Tong, Chong Sio Hong, Leong Man Chi and Kwok Chiu Lung respectively and each of the Buyer C and its ultimate beneficial owner(s) is an Independent Third Party.

Buyer D is a company incorporated in Macau on 9 November 2017 and is principally engaged in investment holding. To the best knowledge, information and belief and after having made reasonable enquiry, Buyer D is owned as to 50% by Leung King Nam and 50% by Margarida Silva Inácio Morgado and each of the Buyer D and its ultimate beneficial owner(s) is an Independent Third Party.

INFORMATION OF NML

NML is a company incorporated under the laws of Macau on 9 December 2002 and is an indirect wholly-owned subsidiary of the Company. NML is principally engaged in hotel business operation. The major asset of NML is The Landmark Macau.

The Landmark Macau, a hotel and casino complex of approximately 80,137 square meters in gross floor area, features one of the largest, award-winning, five-star hotels in the Macau Peninsula, offering 439 rooms and suites, as well as casino and gaming areas, recreational and dining space, retail shops, commercial and office premises, residential apartments and car park facilities.

The gaming areas of Pharaoh’s Palace Casino in The Landmark Macau comprise mass market gaming facilities, VIP rooms and a slot machine hall, and occupies a total of approximately 16,698 square meters in gross floor area with 60 mass market gaming tables, 17 VIP gaming tables and 141 slot machines in operation as at 30 June 2017, cater to different market segments and offer a full range of games, 24 hours daily. The Landmark Macau’s non-gaming facilities include a shopping mall which features retail stores for internationally recognized luxury brands.

The Landmark Macau is strategically located along the Amizade strip in the vicinity of the Nam Van entertainment district. The Landmark Macau is approximately a five-minute walk from Wynn Macau, Casino L’Arc Macau, Galaxy Star World, the Grand Lisboa and the Hotel Lisboa, and is in close proximity to other popular attractions, such as MFW, the Macau Science Center and the Grand Prix Museum. The Landmark Macau is also an approximately five to ten-minute drive from the Macau Outer Harbour Ferry Terminal and an approximately fifteen to twenty-minute drive from the Macau International Airport.

– 14 –

LETTER FROM THE BOARD

Set out below is the audited financial information NML for the two years ended 31 December 2015 and 2016:

	For the year ended 31 December	For the year ended 31 December
	2016	2015
	Audited	Audited
	(HK$’000)	(HK$’000)
Revenue	274,814	287,477
Loss before taxation	84,118	87,331
Loss after taxation	84,118	87,331

The unaudited net liabilities value of NML as at 30 September 2017 was approximately HK$434 million.

Set out below is the financial performance of Pharaoh’s Palace Casino for the two years ended 31 December 2015 and 2016 respectively:

Revenue: Mass market tables VIP tables Slot machines Total revenue Adjusted EBITDA	For the year ended 31 December 2016 2015 (HK$’000) (HK$’000) 539,948 594,270 159,361 141,693 8,439 8,478 707,748 744,441 294,066 384,378	For the year ended 31 December 2016 2015 (HK$’000) (HK$’000) 539,948 594,270 159,361 141,693 8,439 8,478 707,748 744,441 294,066 384,378
		744,441
		384,378

Taking into account of the above, if the completion of the Disposal has been taken place on 31 December 2015, the total reported revenue of the Group in 2016 would have been decreased by HK$916,666,000 to approximately HK$554,795,000. However, the actual impact to the Group will be subject to the Group’s business and marketing strategies in other operating facilities.

The Landmark Macau has been operating for 20 years. The Group has to repair and renovate the hotel premises and the facilities in Pharaoh’s Palace Casino from time to time due to the fair wear and tear of the facilities therein. After the completion of Disposal, the Group can focus its resources in developing the core gaming business in Legend Palace Casino, the new casino of the Group opened in 2017, which possesses the most sophisticated and modernised brand new entertainment and gaming facilities. The Group will launch marketing and promotional programmes to attract more gaming patrons to Legend Palace Casino. The Disposal also helps to streamline the

– 15 –

LETTER FROM THE BOARD

manpower and the operation of the Group as the Group will no longer to operate two entertainment complexes in two different venues. It is expected that the Disposal will have a positive impact on the Group’s operational and financial performance for its gaming services business.

Set out below is the breakdown of assets and liabilities of NML as at 30 September 2017:

Assets: Investment properties Property, plant and equipment Prepaid lease payments Other assets(1) Total assets Liabilities: Amounts due to inter-companies(2) Other liabilities(3) Total liabilities	As at 30 September 2017 (HK$’000) 267,662 461,470 391,801 61,197
	1,182,130
	1,553,482 62,304
	1,615,786

Notes:

• (1) Other assets mainly represented bank balances and cash and trade and other receivables, which amounted to approximately HK$24,815,000 and HK$30,911,000 respectively.

• (2) Of the net amounts due to inter-companies in the sum of HK$1,553,482,000, which represents the Sale Loan that will be assigned to the Buyers on Completion.

• (3) Other liabilities mainly represented trade and other payables, which amounted to approximately HK$61,811,000.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Company is an investment holding company. The Group is one of the leading owners of entertainment and casino gaming facilities in Macau. It is principally engaged in (i) the provision of gaming services to SJM through Hong Hock, in three casinos in its properties, namely Pharaoh’s Palace Casino, Babylon Casino and Legend Palace Casino; (ii) the operation of casino inside Savan Resorts Hotel and Entertainment Complex in Lao PDR; and (iii) the operation of hotels, entertainment and leisure facilities within the Group’s properties.

– 16 –

LETTER FROM THE BOARD

Set out the table below are the number of gaming tables and slot machines in each of the three casinos operated and managed by the Group in Macau, namely Pharaoh’s Palace Casino, Babylon Casino and Legend Palace Casino as at the Latest Practicable Date:

Mass market gaming tables Self-run VIP gaming tables Outsourced VIP gaming tables LT Game Mahjong Slot machine	Pharaoh’s Palace Casino 60 4 10 — — 74 —	Babylon Casino 20 5 2 — — 27 28	Legend Palace Casino 46 9 11 2 1 69 88	Total 126 18 23 2 1
				170
				116

The Group underwent the redevelopment of MFW (the ‘‘MFW Redevelopment’’) in order to increase the offerings of MFW and to attract a wider range of customers. The MFW Redevelopment is significant to the Group because the Directors believe that the upgraded and new gaming and leisure facilities in MFW will attract more premium mass market patrons, continue providing luxurious amenities and a high level of service to VIP patrons, and increase revenues from the mass market segment as well as from non-gaming activities. The MFW Redevelopment involves the redevelopment of existing facilities as well as the addition of new facilities, such as Harbourview Hotel, which was opened on 2 February 2015, Legend Palace Hotel and Legend Palace Casino, which were opened on 27 February 2017. The new facilities and features in MFW did attract more gaming patrons and visitors including the existing patrons of The Landmark Macau.

In the past few years, the Group has employed more new staff and reallocated manpower from The Landmark Macau to MFW to cater for the increase in demand as a result of the opening of new hotels and casino in MFW. As the Group is now operating two entertainment complexes, namely The Landmark Macau and MFW, the operating costs including the labour cost of the Group have increased tremendously. The Disposal will streamline the development of hotel and gaming business in MFW.

The Landmark Macau first commenced operation in 1997. The hotel premises and the facilities in The Landmark Macau need more frequent update and renovation. Further, The Landmark Macau is located in the center of Macau peninsula. The surrounding of the Landmark Macau is fully developed and there is no room for its expansion in term of the surrounding space. In contrary, as a waterfront property, MFW has the potential for further development through land reclamation. The Board believes that MFW, which is the only major waterfront entertainment complex in Macau that is easily accessible to Macau residents and overseas visitors, could attract and cater for a greater number of patrons.

– 17 –

LETTER FROM THE BOARD

The Directors consider that the Disposal will enable the Group to streamline its operation and allow the Group to focus on the operation and development of MFW.

Taking into account the abovementioned factors, the Directors consider that the terms and conditions of the Disposal are fair and reasonable and on normal commercial terms and are in the interests of the Company and its Shareholders as a whole.

USE OF PROCEEDS

The net proceeds from the Disposal will be approximately HK$4.5 billion, which will be used for MFW Redevelopment and reducing the Group’s gearing level, of which:

• (1) approximately HK$1.6 billion will be used for MFW Redevelopment, including the redevelopment of existing planned facilities;

• (2) approximately HK$1.7 billion will be used to reduce the Group’s indebtedness, including the repayment of existing bank and other borrowings; and

• (3) approximately 60% of the remaining balance will be used for working capital (including staff costs, utilities fees, cleaning, sales and marketing costs and other expenses) and approximately 40% of the remaining balance will be used for other investment opportunities.

The Directors consider the MFW Redevelopment will enable the Group to continue providing luxurious amenities and a high level service to VIP patrons, and increase revenues from the mass market segment as well as from non-gaming activities, which is in the interests of the Company and the Shareholders as a whole.

The Directors consider reducing the Company’s indebtedness would effectively improve the Company’s financial liquidity, increase the Company’s financing flexibility and potentially lower the borrowing cost of the Company as discussed, which is in the interests of the Company and the Shareholders as a whole.

As at the Latest Practicable Date, the Group is in the course of identifying possible investment opportunity. No binding agreement in respect of the possible investment has been entered into. Should the possible investment be materialised, the Company will make the necessary disclosure in accordance with the requirement of the Listing Rules, when applicable. If within one year from the date of this circular, the Company cannot identify any investment opportunities or the investment opportunities cannot be materialised, the Board will use the relevant proceeds for working capital of the Group in future.

In light of the above, the Directors are of the view that the uses of proceeds are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

– 18 –

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE DISPOSAL

Upon Completion, the Company will no longer have any interest in NML and NML will cease to be a subsidiary of the Company. The financial results of NML will cease to be consolidated into the accounts of the Group.

Assets and liabilities

Having taken into account the Consideration, the audited consolidated financial statements of the Group and the unaudited combined financial statements of NML as at 30 September, it is estimated that upon Completion, the consolidated total assets of the Group will be increased by approximately HK$1.9 billion and the consolidated total liabilities of the Group will be decreased by approximately HK$1.0 billion.

Earnings

The Disposal is expected to accrue a gain before tax of approximately HK$3.3 billion, which is calculated based on the Purchase Price, net liabilities value and carrying amount of the Sale Loan of NML as at 30 September 2017.

The above financial effects are for illustrative purposes only. The actual gain or loss as a result of the Disposal to be eventually recorded by the Group is subject to the financial position of the Disposed Group at Completion and therefore may be different from the illustrative amount mentioned above.

IMPLICATIONS UNDER THE LISTING RULES

As some of the relevant percentages exceed 25% but below 75%, the Disposal together with the payment of the participation fee to NML (or its nominee) pursuant to the Participation Agreement constitute a major transaction of the Company for the purpose of the Listing Rules and is subject to the approval of the Shareholders. As no Shareholder has a material interest in the Disposal, none of the Shareholders is required to abstain from voting if the Company were to convene a general meeting for the approval of the Disposal. Moreover, the Closely Allied Group, holding 3,207,072,001 Shares or approximately 51.17% of the shareholding of and voting rights in the Company at the date of the announcement, has given its written approval for the Disposal and the transactions contemplated thereunder on the date of the announcement. Accordingly, written approval from the Closely Allied Group has been accepted in lieu of holding a general meeting of the Company for the approval of the Disposal pursuant to Rule 14.44 of the Listing Rules.

– 19 –

LETTER FROM THE BOARD

The Board wishes to emphasise that the Disposal is subject to a number of conditions precedent, which may or may not be fulfilled. Shareholders and potential investors of the Company should exercise caution when they deal or contemplate dealing in the Shares.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

By order of the Board Macau Legend Development Limited Chow Kam Fai, David Co-chairman, executive Director and chief executive officer

– 20 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. SUMMARY OF FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for the three years ended 31 December 2014, 2015 and 2016, the six months ended 30 June 2017 are disclosed on pages 65 to 123 of the 2014 annual report published on 22 April 2015, pages 76 to 140 of the 2015 annual report published on 21 April 2016, pages 84 to 151 of the 2016 annual report published on 27 April 2017, and pages 23 to 42 of the 2017 interim report published on 22 September 2017, respectively, which are published on both the website of the Stock Exchange (http://www.hkexnews.hk) and the website of the Company (http://www.macaulegend.com). Please refer to the hyperlinks as stated below:

2014 annual report:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0422/LTN20150422657.pdf

2015 annual report:

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0421/LTN20160421756.pdf

2016 annual report:

http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0427/LTN20170427501.pdf

2017 interim report:

http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0922/LTN20170922407.pdf

2. INDEBTEDNESS STATEMENT

As at the close of business on 31 October 2017, being the latest practicable date for ascertaining information regarding this indebtedness statement, the Group had outstanding consolidated total borrowings of approximately HK$3,436,133,000, comprising secured and guaranteed bank borrowings of approximately HK$2,407,399,000, unsecured and unguaranteed other borrowing of approximately HK$57,500,000 and unsecured and unguaranteed loans from a shareholder of approximately HK$971,234,000, respectively.

The bank borrowings are secured and guaranteed, inter alia, by the followings:

• (a) the mortgage over certain investment properties, buildings and prepaid lease payments of the Group;

• (b) floating charge over all the assets of three subsidiaries, Macau Fisherman’s Wharf International Investment Limited, New Macau Landmark Management Limited and Hong Hock Development Company Limited;

• (c) fixed charge over all the designated bank balances held by three subsidiaries, Macau Fisherman’s Wharf International Investment Limited, New Macau Landmark Management Limited and Hong Hock Development Company Limited;

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

• (d) a corporate guarantee by Hong Hock Development Company Limited, New Macau Landmark Management Limited and the Company as guarantors to guarantee punctual payment and performance;

• (e) all rights and interests in leases, tenancy agreements, proceeds from hotel operation and management, rental income and other proceeds of the pledged properties; and

• (f) all receivables arising from leases, rental income, disposal, hotel operations and other proceeds of the pledged properties.

Pursuant to the amendment in the service agreement on 16 December 2011, in the event of any non-payment by the gaming promoters or any failure to fulfil their obligations related to gaming promotion agreements, the Group undertakes to reimburse SJM for any loss caused by such misconduct of the gaming promoters as well as any possible legal costs associated with litigation. At the close of business on 31 October 2017, there were no such claims from SJM.

For the purpose of the indebtedness statement, foreign currency amounts have been converted into HK$ at the approximate rates of exchange prevailing as at 31 October 2017.

Save as disclosed above and apart from the intra-group liabilities and normal trade payables as at 31 October 2017, the Group did not have any other outstanding intendedness, loan capital, bank overdrafts and liabilities under acceptances or other similar indebtedness, debentures, mortgages, charges or loans or acceptance credits or hire purchase or finance lease commitments, guarantees or contingent liabilities.

3. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2016, being the date to which the latest published audited consolidated financial statements of the Group were made up.

4. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the net proceeds from the Disposal and the financial resources available to the Group including internal resources available and available facilities together with the undertaking from controlling and substantial shareholders to provide financial support when necessary, the Group has sufficient working capital for its present requirements for at least the next 12 months from the date of publication of this circular in the absence of unforeseen circumstances.

– I-2 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. FINANCIAL AND TRADING PROSPECTS OF THE COMPANY

The Group has not much been affected by the general downturn. In response to the situation in Macau, the Group has embarked on several key initiatives to both better position our prospect in Macau and expand its business outside Macau.

The Group underwent the redevelopment of MFW (the ‘‘MFW Redevelopment’’) in order to increase the offerings of MFW and to attract a wider range of customers. The MFW Redevelopment is significant to the Group because the Directors believe that the upgraded and new gaming and leisure facilities in MFW will attract more premium mass market patrons, continue providing luxurious amenities and a high level of service to VIP patrons, and increase revenues from the mass market segment as well as from non-gaming activities. The MFW Redevelopment involves the redevelopment of existing facilities as well as the addition of new facilities, such as Harbourview Hotel, which was opened on 2 February 2015, Legend Palace Hotel and Legend Palace Casino, which were opened on 27 February 2017. The new facilities and features in MFW did attract more gaming patrons and visitors including the existing patrons of The Landmark Macau.

On the other hand, the Group is keen to engage in the continued expansion of its business overseas. On 13 May 2016, the Company entered into the project development agreement with the Government of the Lao PDR in respect of the acquisition of the Savan Legend at the consideration of US$42.0 million (equivalent to approximately HK$325.9 million). The project development agreement shall have an initial term of 50 years. The Group obtained the approval from the Shareholders at an extraordinary general meeting of the Company held on 18 August 2016. On 1 September 2016, the Company has taken over the management and operation of Savan Legend, a full-service casino, hotel and resort located in Savannakhet Province in Laos. It signifies a new era of international development by the Group. The Group is committed to developing Savannakhet into a tourism center. In addition, it is the Company’s responsibility as a private sector business to follow the objective laid out in the ‘‘One-Belt One-Road’’ policy.

The Group will continue to look for overseas destinations which could offer to the Group good development and investment potential and casino management opportunities to cope with its vision to create new market for business development. The Group will continue to focus on Southeast Asian destinations where the ‘‘One Belt, One Road’’ policy from China is supporting new investment in tourism and tourism related infrastructure and will also focus on Portuguese-speaking countries, like Cape Verde, to make good use of the Sino-Portuguese platform for the business diversification overseas.

– I-3 –

VALUATION REPORT

APPENDIX II

The following is the text of a letter and valuation certificate, prepared for the purpose of incorporation in this circular and received from Savills (Macau) Limited, are independent professional property valuer, in connection with the valuation as at 30 September 2017 of the Property.

==> picture [72 x 72] intentionally omitted <==

The Directors

Macau Legend Development Limited The Palace Building Macau Fisherman’s Wharf Avenida Dr. Sun Yat-sen Macau

Savills (Macau) Limited T: (853) 2878 0623 F: (853) 2878 1805

Suite 1309 - 1310 13/F Macau Landmark 555 Avenida da Amizade Macau

savills.com.mo

22 December 2017

Dear Sirs,

• RE: VALUATION OF THE HOTEL AND CAR PARK PORTIONS OF MACAU LANDMARK, AVENIDA DA AMIZADE NOS. 519-597, RUA DE XANGAI NOS. 3878-B, ALAMEDA DR. CARLOS D’ ASSUMPÇÃO NOS. 565-605-C, MACAU (THE ‘‘PROPERTY’’)

TERMS OF REFERENCE

In accordance with your instruction for us to prepare a report on the assessment of Market Value of the captioned Property, we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for providing you with our opinion of the value of the property interest held by Macau Legend Development Limited and its subsidiaries (together referred to as the ‘‘Group’’) as at 30 September 2017 (the ‘‘Valuation Date’’).

BASIS OF VALUATION

Our valuation is our opinion of Market Value of the Property concerned which we would define as ‘‘the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion’’.

– II-1 –

VALUATION REPORT

APPENDIX II

Our valuation is prepared in accordance with ‘‘The HKIS Valuation Standards (2012 Edition)’’ published by the Hong Kong Institute of Surveyors, and the relevant provisions of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) and Chapter 5 of the Rules Governing the Listing of Securities of The Stock Exchange of Hong Kong Limited (Main Board).

VALUATION METHODOLOGY

We have valued the Property by the comparison method on the assumption that property can be sold in its existing state and condition on an open market basis assuming sale with the benefit of immediate vacant possession. Comparison based on prices realised on actual sales and/or offerings of comparable properties is made. Comparable properties with similar sizes, characters, location, etc. are analysed and carefully compared against all of the respective advantages and disadvantages of the property in order to arrive at a fair comparison of value.

TITLE INVESTIGATIONS

We have caused sample title searches to be made at the Real Estate Registry of Macau. However, we have not searched the original documents to verify ownerships or to verify any lease amendments which may not appear on the copies handed to us.

VALUATION ASSUMPTIONS

Our valuation has been made on the assumption that the owner(s) sell(s) the Property in the prevailing market without any deferred term contract, leaseback, joint venture, management agreement or any similar arrangement which could serve to affect the value of the Property. In addition, no account has been taken of any option or right of pre-emption concerning or affecting the sale of the Property and no allowance is made for the Property to be sold to a single party and/ or as a portfolio or portfolios.

We have assumed that the owner of the property interest has free and uninterrupted rights to use and assign the property during the whole unexpired terms granted. Upon the expiration of the terms, the government lease can be renewed upon application for another term of 10 years upon payment of fixed premiums equivalent to 10 times the prevailing government rents provided that the grantee has (a) compiled with covenants of the government leases and (b) settled the annual government rents. The terms of the grant can be renewed until 19 December 2049.

VALUATION CONSIDERATION

We confirm that we have carried out external inspection of the Property on 9 November 2017 and, where possible the interior of the Property. In the course of our inspection, we did not note any serious defects. However, no structural surveys have been made nor were any tests carried out on any of the services. We are therefore unable to report whether the Property is free from rot, infestation or any other defects. In arriving at our valuation, we have assumed that the Property is finished and maintained in reasonable conditions commensurate with its uses and age.

– II-2 –

VALUATION REPORT

APPENDIX II

We have relied to a considerable extent on the information given by the Group and have accepted advice given to us on such matters as planning approvals or statutory notices, development conditions, easements, tenure, tenancy details, floor areas and other relevant matters. All documents have been used for reference only.

Unless otherwise stated, all dimensions, measurements and areas included in the valuation certificate are based on information contained in the document provided to us and are therefore approximate. We have not carried out detailed on-site measurements to verify the correctness of the site/floor areas in respect of the Property but have assumed that the floor areas shown on the documents handed to us are correct. We have no reason to doubt the truth and accuracy of the information provided to us. We have also been advised by the Group that no material facts have been omitted from the information provided and have no reason to suspect that any material information has been withheld.

No allowance has been made in our report for any charges, mortgages or amounts owing on the Property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

While we have exercised our professional judgement in arriving at our valuation, you are urged to consider our valuation assumptions with caution.

REMARKS

Unless otherwise stated, all property values are denominated in Hong Kong Dollars. The exchange rate used in our valuation is HK$1 to MOP1.03 which is prevailing as at the Valuation Date.

Our Valuation Certificate is enclosed herewith.

Yours faithfully,

For and on behalf of Savills (Macau) Limited

Franco P L Liu

BSc (Hons), MRICS, MHKIS, RPS(GP)

Managing Director

Valuation and Professional Services

Note: Mr. Franco P L Liu is a Registered Professional Surveyor (General Practice), a member of both the Royal Institution of Chartered Surveyors, United Kingdom and The Hong Kong Institute of Surveyors. He has over 20 years’ experience in the valuation of properties in Macau, Hong Kong and mainland China.

– II-3 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

No. Property

1 The Hotel and Car Park Portions of Macau Landmark, Avenida da Amizade Nos. 519-597, Rua de Xangai Nos. 38-78B, Alameda Dr. Carlos d’ Assumpção Nos. 565-605C, Macau

Market value in existing state as at 30 September 2017

Particulars of Description and Tenure Occupancy

The Property is currently HK$4,710,000,000 held for owner occupation as a 5-star hotel known as ‘‘Macau Landmark’’.

The Property comprises the hotel and car park portions of Macau Landmark, which is a 28-storey complex development that comprises a mixture of uses including hotel, office, residential and car parking uses on a site of approximately 7,295 sq. m. (78,523 sq. ft.) at the N.A.P.E area, Macau. It is of reinforced concrete construction completed in or about 1997.

The commercial area of the hotel portion of the Property is subject to various tenancies for a combined monthly rental of approximately HK$4,054,910 with the latest expiry date on 30 April 2026.

The hotel portion comprises a 5-star hotel with 439 guest rooms, together with a casino, food and beverage outlets and retailing facilities. The car park portions comprises a total of 383 car parking spaces. According to the information provided to us, the total gross floor area of the Property is approximately 80,136.94 sq. m. (862,594 sq. ft.).

The Property is held under Concessão Por Arrendamento (政府租賃批地) for a lease term of 10 years commencing on 26 December 2014. The ground rent for 2017 is MOP1,054,782 (HK$1,024,060).

– II-4 –

VALUATION REPORT

APPENDIX II

Notes:

1. The Property is registered under Conservatória do Registo Predial (物業登記局) under Property Nos. 22609 — ‘‘P001’’, ‘‘B2001C/V2 to B2146C/V2’’, ‘‘B2148C/V2 to B2179C/V2’’, ‘‘B2181C/V2 to B2185C/V2’’, ‘‘B2189C/V2 to B2193C/V2’’, ‘‘B2197C/V2 to B2198C/V2’’, ‘‘B3001C/V3 to B3086C/V3’’, ‘‘B3095C/V3 to B3110C/V3’’, ‘‘B3119C/V3 to B3134C/V3’’, and ‘‘B3139C/V3 to B3213C/V3’’. According to our recent sample title searches, the registered owner of the Property is Novo Macau Landmark — Sociedade Gestora, Limitada.

2. Upon our recent sample title searches, the Property was subject to a Hipoteca Voluntária (意定抵押) and a Consignação de Rendimentos (收益用途之指定) in favour of Banco Industrial e Comercial da China (Macau), S.A. (中國工商銀行(澳門)股份有限公司) vide Data e N° Da Apresentção (申請日期及編號) 09/04/2014 — 93 and 95 de 09/04/2014 respectively.

3. In the course of our valuation, we are instructed to assess the Market Value of the Property on an ‘‘as-is’’ basis as at the Valuation Date assuming the existence of no unauthorized structures, additions or alterations works and further assuming the casino business is operating in a profit sharing basis under a service agreement with Sociedade de Jogos de Macau, S.A. (SJM). Upon expiry of the SJM gaming concession, the casino portion will be let as a casino subject to a fixed monthly rent.

– II-5 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material aspects and not misleading or deceptive, and there are no other matters, the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

Directors’ and chief executive’s interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO to be entered in the register referred to therein; or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, were as follows:

Long and short positions in Shares and underlying Shares

Name of Directors Capacity/nature of interest Mr. David Chow Beneficial owner Beneficial owner Interest of spouse Controlled corporation Controlled corporation total: Madam Lam Fong Ngo (‘‘Madam Lam’’) Controlled corporation Mr. Sheldon Trainor- DeGirolamo Beneficial owner Controlled corporation	Number of Shares Position 1,554,954,046 Long 1,458,631,654 Short 129,690,066(1) Long 401,653,780(2) Long 319,696,000(3) Short 2,086,297,892 Long 1,778,327,654 Short 112,704,500(4) Long 15,887,159 Long 70,631,345(5) Long 86,518,504 Long	Approximate percentage of interest 24.81% 23.27% 2.07% 6.41% 5.10%
		33.29%
		28.37%
		1.80% 0.25% 1.13%
		1.38%

– III-1 –

GENERAL INFORMATION

APPENDIX III

				Approximate
	Capacity/nature of	Number of		percentage of
Name of Directors	interest	Shares	Position	interest
Mr. Chow Wan Hok,	Beneficial owner	600,000	Long	0.01%
Donald (‘‘Mr.
Donald Chow’’)
Mr Tong Ka Wing,	Beneficial owner	8,120,579	Long	0.13%
Carl
Ms Ho Chiulin,	Beneficiary of a trust	934,269,609(6)	Long	14.91%
Laurinda

Notes:

1. Mr David Chow was deemed to be interested in 129,690,066 Shares through the interest of his spouse, Ms Chan Mei Yi, Melinda (‘‘Ms. Melinda’’).

2. These Shares were held by All Landmark Properties Limited (‘‘All Landmark’’), a controlled corporation of Mr. Chow.

3. The short position in the Shares was held by All Landmark.

4. These Shares were held by Grand Bright Holdings Limited, a controlled corporation of Madam Lam.

5. These Shares were held by PacBridge Capital Partners (HK) Limited, a controlled corporation of Mr Sheldon Trainor-DeGirolamo.

6. These Shares were held directly by UBS Nominees Limited, which is a nominee holding the Shares for Earth Group Ventures Ltd., a company wholly owned by UBS TC (Jersey) Ltd. as trustee of the Earth Settlement. Earth Settlement is a discretionary trust set up by Madam Chan as founder for her assets planning purposes. Ms Ho Chiulin, Laurinda is a daughter of Madam Chan, a substantial shareholder of the Company.

7. The percentage represents the number of Shares interested divided by the number of the issued Shares as at the Latest Practicable Date.

Save as disclosed above, none of the Directors or chief executive of the Company, as at the Latest Practicable Date, had registered an interest or a short position in the Shares, underlying Shares or debenture of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules.

– III-2 –

GENERAL INFORMATION

APPENDIX III

Substantial Shareholders and other persons’ interests in Shares and underlying Shares

As at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares of the Company as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO or which would fall to be disclosed to the Company under the provisions in Divisions 2 and 3 of Part XV of the SFO, or, who was, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

Long and short positions in Shares and underlying Shares

Name of Shareholders Capacity/nature of interest All Landmark Beneficial owner Beneficial owner Ms. Melinda Chan Beneficial owner Interest of spouse Interest of spouse total: Elite Success International Limited Beneficial owner Mr. Li Chi Keung Beneficial owner Controlled corporation Ms. Wong Hoi Ping Controlled corporation Interest of spouse	Number of Shares Position 401,653,780(1) Long 319,696,000(8) Short 129,690,066 Long 1,956,607,826(2) Long 1,778,327,654(7) Short 2,086,297,892 Long 1,778,327,654 Short 662,599,750 Long 31,738,429 Long 662,599,750(3) Long 694,338,179 Long 662,599,750(3) Long 31,738,429(4) Long 694,338,179 Long	Approximate percentage of interest 6.41% 5.10% 2.07% 31.22% 28.37%
		33.29%
		28.37%
		10.57% 0.51% 10.57%
		11.08%
		10.57% 0.51%
		11.08%

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Name of Shareholders Capacity/nature of interest Madam Chan Beneficial owner Founder of discretionary trust Controlled corporation Earth Group Ventures Ltd. Beneficial owner UBS TC (Jersey) Ltd. Trustee/controlled corporation	Number of Shares Position 75,664,000 Long 934,269,609(5) Long 2,835,000(6) Long 1,012,768,609 Long 934,269,609(5) Long 934,269,609(5) Long	Approximate percentage of interest 1.21% 14.91% 0.05%
		16.17%
		14.91% 14.91%

Notes:

1. The interest of All Landmark was disclosed as the interest of Mr David Chow in the above section headed ‘‘Directors’ and chief executives’ interests and short positions in securities of the Company and its associated ’’

corporations .

1. Ms Melinda Chan was deemed to be interested in 1,956,607,826 Shares through the interest of her spouse, Mr David Chow.

2. These Shares were held by Elite Success International Limited (a company in which each of Mr Li Chi Keung and Ms Wong Hoi Ping, spouse of Mr Li Chi Keung, held 44.5% of the total issued capital).

3. Ms Wong Hoi Ping was deemed to be interested in 31,738,429 Shares through the interest of her spouse, Mr Li Chi Keung.

4. These Shares were held directly by UBS Nominees Limited, which is a nominee holding the Shares for Earth Group Ventures Ltd., a company wholly-owned by UBS TC (Jersey) Ltd. as trustee of the Earth Settlement. Earth Settlement is a discretionary trust set up by Madam Chan as founder for her assets planning purposes.

5. These Shares were held by UNIR (HK) Management Limited, a controlled corporation of Madam Chan.

6. Ms Melinda Chan was deemed to have a short position in 1,778,327,654 Shares through the short position of her spouse, Mr David Chow. Details of the above short position in Shares have been disclosed in the above section headed ‘‘Directors’ and chief executives’ interests and short positions in securities of the Company and its associated corporations’’.

7. The short position of All Landmark was disclosed as the short position of Mr David Chow in the above section headed ‘‘Directors’ and chief executives’ interests and short positions in securities of the Company and its associated corporations’’

8. The percentage represents the number of Shares interested divided by the number of the issued Shares as at the Latest Practicable Date.

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Save as disclosed above, the Directors are not aware of any other corporation or individual (other than a Director or the chief executive of the Company) who, as at the Latest Practicable Date, had registered an interest or a short position in the Shares or underlying Shares as recorded in the register of interests required to be kept pursuant to section 336 of the SFO.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into any service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

4. LITIGATION

As at the Latest Practicable Date, so far as the Directors were aware of, no member of the Group was engaged in any litigation, arbitration or claim of material importance and no litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

5. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) have been entered into by the members of the Group within the two years immediately preceding the date of this circular and are or may be material:

• (1) the project development agreement dated 13 May 2016 entered into between the Government of Lao PDR which is an Independent Third Party and the Company in respect of the project which consisted of the Savan Vegas Hotel and Entertainment Complex located in Nongdeune Village, Kaisonphomvihanh District, Savannakhet Province of the Lao PDR, for the consideration of US$42,000,000; and

• (2) the Disposal Agreement.

6. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective associates had any interests in a business which competed or might compete with the businesses of the Group or had any other conflicts of interest with the Group.

7. DIRECTOR’S INTERESTS IN ASSETS, CONTRACT OR ARRANGEMENT

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to any business of the Group.

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As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been since 31 December 2016 (being the date to which the latest published audited financial statements of the Group were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

8 EXPERT AND CONSENT

The following is the qualification of the expert who has given opinions or advice which is contained in this circular:

Name Qualifications

Savills (Macau) Limited Professional valuer

Savills (Macau) Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and/or reference to its name in the form and context in which it appears as at the Latest Practicable Date.

As at the Latest Practicable Date, Savills (Macau) Limited did not have any shareholding, directly or indirectly, in any member of the Group or any right or option (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, Savills (Macau) Limited did not have any direct or indirect interests in any assets which had been since 31 December 2016, the date of which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by, or leased to, or proposed to be acquired or disposed of by, or leased to, any members of the Group.

9. MISCELLANEOUS

• (1) The secretary of the Company is Mr.Wong Man Cheung. He is an associate member of the Hong Kong Institute of Certified Public Accountants and he was also a fellow of the Association of Chartered Certified Accountants.

• (2) The registered office of the Company is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

• (3) The principal place of business of the Company in Hong Kong is at Shop 102, 1/F, Shun Tak Centre, 168–200 Connaught Road Central, Hong Kong. The headquarters and principal place of business in Macau are at Palace Building, Macau Fisherman’s Wharf, Avenida da Amizade e Avenida da Dr. Sun Yat-Sen, Macau.

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• (4) The Company’s branch share registrar and transfer office in Hong Kong is Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.

• (5) This circular has been prepared in both English and Chinese. In the case of any discrepancies, the English texts shall prevail over their respective Chinese texts.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection during normal business hours at the head office and principal place of business in Macau of the Company at Palace Building, Macau Fisherman’s Wharf, Avenida da Amizade e Avenida da Dr. Sun Yat-Sen, Macau from the date of this circular up to and including the date which is 14 days from the date of this circular:

• (1) the memorandum and articles of association of the Company;

• (2) the material contracts as referred to under the section headed ‘‘Material Contracts’’ in this appendix;

• (3) the annual reports of the Company for each of the two years ended 31 December 2015 and 2016;

• (4) the unaudited interim report of the Company for the six months ended 30 June 2017;

• (5) the valuation report in appendix II to this circular; and

• (6) this circular.

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