PegBio Co., Ltd. — Capital/Financing Update 2016

May 3, 2016

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 is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities in the Company.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 1141) (Warrant Code: 1153)

SUBSCRIPTION OF NEW SHARES UNDER GENERAL MANDATE

On 3 May 2016, the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to allot and issue 1,450,000,000 new Shares at the Subscription Price of HK$0.18 per Subscription Share. The Subscription Price will be settled by the Subscriber by way of set off against the outstanding principal amount of the Promissory Notes, which amounts HK$261,000,000 as at the date of this announcement.

The Subscription Price represents (i) a discount of approximately 13.46% to the closing price of HK$0.208 per Share as quoted on the Stock Exchange on 3 May 2016, being the date of the Subscription Agreement; and (ii) a discount of approximately 14.69% to the average of the closing prices of HK$0.211 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of the Subscription Agreement. The Subscription Price was arrived at after arm’s length negotiations between the Company and the Subscriber, taking into account of, among others, the recent trading performance of the Shares. The Directors consider that the Subscription Price and the terms of the Subscription Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

* For identification purpose only

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The Subscription Shares represent approximately 11.41% of the existing issued share capital of the Company and approximately 10.24% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares. There will be no net proceeds from the Subscription as the Subscription Price will be set off against the outstanding principal amount of the Promissory Notes of HK$261,000,000.

SUBSCRIPTION AGREEMENT

On 3 May 2016, the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to allot and issue 1,450,000,000 new Shares at the subscription price of HK$0.18 per Subscription Share.

Date: 3 May 2016 (after trading hours)

Parties:

• (i) The Company as issuer

• (ii) The Subscriber as subscriber

The Subscriber

The Subscriber is a company incorporated in the British Virgin Islands with limited liability and is principally engaged in investment holdings.

The Subscriber is the holder of the Promissory Notes with the total outstanding principal amounts of HK$285,000,000.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner(s) are independent third parties and not connected persons (as defined under the Listing Rules) of the Company.

Number of Subscription Shares

The 1,450,000,000 Subscription Shares represent approximately 11.41% of the existing issued share capital of the Company and approximately 10.24% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

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Subscription Price

The subscription price of HK$0.18 per Subscription Share represents:

• (i) a discount of approximately 13.46% to the closing price of HK$0.208 per Share as quoted on the Stock Exchange on 3 May 2016, being the date of the Subscription Agreement; and

• (ii) a discount of approximately 14.69% to the average of the closing prices of HK$0.211 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of the Subscription Agreement.

The net Subscription Price, after deduction of relevant expenses, is approximately HK$0.18 per Subscription Share.

The Subscription Price was arrived at after arm’s length negotiations between the Company and the Subscriber, taking into account, among others, the recent trading performance of the Shares. The Directors consider that the Subscription Price and the terms of the Subscription Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The aggregate Subscription Price for all 1,450,000,000 Subscription Shares shall be settled by the Subscriber upon completion by way of set off against the principal amounts of the Promissory Notes of HK$261,000,000 owed by the Company to the Subscriber under the Promissory Notes. The Company will settle the outstanding interest accrued on the Promissory Notes upon completion of the Subscription.

Rights of the Subscription Shares

The Subscription Shares, when allotted and issued, will rank equally in all respects among themselves and with the Shares in issue on the date of allotment and issue of the Subscription Shares.

Mandate to issue the Subscription Shares

The Subscription Shares will be allotted and issued pursuant to the General Mandate. As at the date of this announcement, the General Mandate has not been utilized prior to the entering into of the Subscription Agreement. The issue and allotment of the Subscription Shares will utilise approximately 76.58% of the General Mandate.

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Conditions of the Subscription

The Subscription is conditional upon:

• i) the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Subscription Shares; and

• ii) all the necessary consents and approvals required to be obtained by the Subscriber in respect of the Subscription having been obtained.

In the event that the condition of the Subscription is not fulfilled on or before 31 May 2016 or such other date as may be agreed between the parties to the Subscription Agreement, the Subscription Agreement shall cease and determine and neither the Company nor the Subscriber shall have any obligations and liabilities under the Subscription Agreement.

Completion of the Subscription

Completion of the Subscription will take place on the second business days after the conditions of the Subscription are fulfilled (or such other date as may be agreed between the parties).

Application for listing

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

REASONS FOR THE SUBSCRIPTION AGREEMENT

The Company and its subsidiaries have been principally engaged in the businesses of supply and procurement of commodities, provision of brokerage service and securities margin financing, provision of futures and options contracts dealing services, provision of finance, securities investments and real estate.

By entering into of the Subscription Agreement, the Group can improve its financial position by settling the Promissory Notes at a reduced value and reducing future financing cost of the Group. Notwithstanding that the total outstanding principal amounts of the Promissory Notes of HK$285,000,000 are due on 4 November 2018, the Subscriber being the holder of the Promissory Notes agreed to give a discount of HK$24,000,000 for the early redemption and cancellation of the Promissory Notes. Thereby, the aggregate Subscription Price at a value of HK$261,000,000 will be set off against the Promissory Notes.

There will be no gross proceeds or net proceeds from the Subscription as the Subscription Price will be settled by way of set off the outstanding principal amount of the Promissory Notes.

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As at the date of this announcement, the total outstanding principal amount owed by the Company to the Subscriber under the Promissory Notes amounts to HK$285,000,000. Upon completion, there will be no outstanding Promissory Notes.

The Directors consider that the Subscription Agreement is entered into upon normal commercial terms following arm’s length negotiations between the Company and the Subscriber and that the terms of the Subscription Agreement are fair and reasonable so far as the interests of the Company and the Shareholders as a whole are concerned. The Directors also consider that the Subscription will strengthen the financial position (in particular, reduction of the gearing ratio) of the Group.

CHANGES OF SHAREHOLDING STRUCTURE

The existing shareholding structure of the Company and the effect on the shareholding structure of the Company upon completion of the Subscription (assuming no other changes in the issued share capital and shareholding in the Company from the date of this announcement up to immediately before the issue of all Subscription Shares) are set out as below:

At the date of

	At the date of
Shareholders China Soft Power Technology Holdings Limited Lam Hoi Sze the Subscriber Other Shareholders Total	this announcement and immediately before completion of the Subscription Number of Shares Approximate percentage 2,749,935,829 21.63% 2,106,000,000 16.57% – – 7,856,320,737 61.8% 12,712,256,566 100.00%	Immediately after completion of the Subscription Number of Shares Approximate percentage 2,749,935,829 19.42% 2,106,000,000 14.87% 1,450,000,000 10.24% 7,856,320,737 55.47% 14,162,256,566 100.00%
			100.00%

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POSSIBLE ADJUSTMENTS TO THE WARRANTS

As a result of the Subscription, adjustments may need to be made to the exercise price of and/or the number of Shares to be allotted and issued upon exercise of the outstanding listed warrants in accordance with the terms of the warrant instrument. The Company may engage the Company’s auditors/financial adviser to review and determine the relevant adjustments and will make further announcements on the appropriate adjustments and the date they are expected to take effect in due course.

EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE-MONTH PERIOD

• Date of Net proceeds and Actual use of announcement Event intended use proceeds 17 March 2015 and Issue of 1,500,000,000 The net proceeds Used as 17 June 2015 Shares to Mason of approximately intended – Financial Holdings HK$148.75 million approximately Limited (formerly will be applied HK$43 million known as Willie towards the general for provision International Holdings working capital of loan Limited) under of the Group – facility and the subscription approximately 30% approximately agreement dated 17 for money lending HK$105.75 March 2015 at the business and million for subscription price of approximately 70% trading of HK$0.10 per Share for listed securities securities investment

Save as disclosed above, the Company has not conducted any other equity fund raising activities in the past twelve months immediately preceding the date of this announcement.

DEFINITIONS

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

“AGM”

the annual general meeting of the Company convened and held on 8 September 2015 to approve, among other things, the grant of the General Mandate

“Board”

the board of Directors

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“Company” Skyway Securities Group Limited, a company incorporated in Bermuda with limited liability and the issued Shares of which are listed on the main board of the Stock Exchange

• “connected person(s)” has the meaning ascribed to this term under the Listing Rules

• “Directors” directors of the Company

• “General Mandate” the general mandate granted to the Directors at the AGM to allot, issue and deal with Shares

• “Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “PRC”

“PRC” the People’s Republic of China “Promissory Notes” the 2.5% per annum promissory notes due on 4 November 2018 with total outstanding principal amount of HK$285,000,000

• “Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company

• “Shareholder(s)” holder(s) of the Share(s)

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

“Subscriber” Capital Union Inc., a company incorporated in the British Virgin Islands and the subscriber to the Subscription Agreement and the holder of the Promissory Notes

• “Subscription” the subscription for the Subscription Shares by the Subscriber pursuant to the Subscription Agreement

“Subscription Agreement” the conditional agreement dated 3 May 2016 and entered into between the Company and the Subscriber in respect of the Subscription

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“Subscription Price”

the subscription price of HK$0.18 per Subscription Share

“Subscription Shares” an aggregate of 1,450,000,000 new Shares to be subscribed by the Subscriber pursuant to the Subscription Agreement

“HK$”

Hong Kong dollars, the lawful currency for the time being of Hong Kong

“%”

per cent.

By Order of the Board Skyway Securities Group Limited Lin Yuehe Chairlady

Hong Kong, 3 May 2016

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

Executive Directors:

Ms. Lin Yuehe (Chairlady) Mr. Ng Kwok Leung (Chief Executive Officer) Mr. Tam Tak Wah

Independent Non-executive Directors: Mr. Siu Siu Ling Robert Mr. Chan Kwan Pak Mr. Siu Gee Tai

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