PegBio Co., Ltd. — M&A Activity 2017

Jul 27, 2017

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.

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CMBC CAPITAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

CONNECTED TRANSACTIONS ACQUISITIONS OF THE ENTIRE EQUITY INTEREST IN CMBCIC AND CMBCCF

THE ACQUISITIONS

On 27 July 2017, the Company has entered into the Acquisition Agreements with CMBCI, pursuant to which the Company has agreed to acquire and CMBCI has agreed to sell the entire issued share capital of CMBCIC and CMBCCF for a consideration of HK$19,931,674 and HK$1, respectively. Upon the Completion, each of CMBCIC and CMBCCF will become a direct wholly-owned subsidiary of the Company.

LISTING RULES IMPLICATIONS

CMBCI is a controlling shareholder of the Company and is therefore a connected person of the Company. As such, the Acquisitions constitute connected transactions of the Company under Chapter 14A of the Listing Rules.

Pursuant to Rule 14A.81 of the Listing Rules, the Acquisitions shall be aggregated. As one or more of the applicable percentage ratios (as defined under the Listing Rules) exceeds 0.1% but is less than 5%, the Acquisitions are subject to reporting and announcement requirement, but are exempted from independent shareholders’ approval requirement of the Company under Chapter 14A of the Listing Rules.

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THE ACQUISITIONS

On 27 July 2017, the Company has entered into the Acquisition Agreements with CMBCI, pursuant to which the Company has agreed to acquire and CMBCI has agreed to sell the entire issued share capital of CMBCIC and CMBCCF for a consideration of HK$19,931,674 and HK$1, respectively. Upon the Completion, each of CMBCIC and CMBCCF will become a direct wholly-owned subsidiary of the Company.

The Acquisitions will be funded by internal resources of the Company.

THE CMBCIC ACQUISITION AGREEMENT

• Date : 27 July 2017 Parties : the Company as purchaser

CMBCI as vendor

• Interest to be acquired : 20,000,000 shares of CMBCIC, representing the entire issued share capital of CMBCIC

• Consideration : HK$19,931,674, which was determined with reference to the unaudited net asset value of CMBCIC as at the date of the CMBCIC Acquisition Agreement

• Payment terms : the Company shall settle the consideration by cash in full on the date of CMBCIC Completion

• Conditions precedent : the CMBCIC Acquisition is conditional upon, inter alia , that:

• the SFC granting approval to the Company becoming a substantial shareholder of the CMBCIC, (either unconditionally or subject only to conditions to which neither the Company nor CMBCI reasonably objects) as a result of the CMBCIC Acquisition; and

• CMBCIC not having received any notice of termination of any responsible officers (as defined in the SFO) and directors of CMBCIC.

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• Representations and : CMBCI represents and warrants to the Company, inter warranties alia, that the net asset value of CMBCIC will be no less than the consideration for the CMBCIC Acquisition as at each of the date of the CMBCIC Acquisition Agreement and the date of CMBCIC Completion

• Completion : the CMBCIC Completion shall occur on the third Business Day after the fulfilment (or waiver) of the conditions precedent as set out in the CMBCIC Acquisition Agreement (or such other date as agreed in writing by the Company and CMBCI)

• THE CMBCCF ACQUISITION AGREEMENT Date : 27 July 2017 Parties : the Company as purchaser CMBCI as vendor

• Interest to be acquired : 1 share of CMBCCF, representing the entire issued share capital of CMBCCF

• Consideration : HK$1, which was determined with reference to the issued share capital of CMBCCF

• Payment terms : the Company shall settle the consideration by cash in full on the date of the CMBCCF Completion

• Completion : the CMBCCF Completion shall occur on the next Business Day after the date of the CMBCCF Acquisition Agreement (or such other date as agreed in writing by Company and CMBCI)

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INFORMATION ON CMBCIC, CMBCCF AND CMBCI

CMBCIC

CMBCIC is a company incorporated in Hong Kong with limited liability in March 2013. In September 2016, CMBCI acquired the entire issued share capital of CMBCIC at the consideration of HK$1, which was determined with references to, inter alia , the paid up share capital of CMBCIC at that time. In December 2016, CMBCIC allotted and issued 19,999,999 shares to CMBCI at the consideration of HK$19,999,999. Upon completion of such allotment and up to the date of this announcement, the issued share capital of CMBCIC is HK$20,000,000, which is wholly and beneficially owned by CMBCI.

CMBCIC has been licensed by the SFC to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities since March 2017. CMBCIC had not carried out any business until its obtaining the aforementioned licenses. Upon the CMBCIC Completion, it is expected that CMBCIC will principally engage in the provision of corporate finance services. As at the date of this announcement, the unaudited net asset value of CMBCIC is HK$19,931,674.

Set out below is certain financial information of CMBCIC:

	For the year ended	For the year ended
	31 December 2015	31 December 2016
	HK$	HK$
	(Audited)	(Audited)
Loss before taxation	0	54,720
Loss after taxation	0	54,720
Net asset value	1	19,945,280

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CMBCCF

CMBCCF is a company incorporated in Hong Kong with limited liability in March 2013. In February 2015, CMBCI acquired the entire issued share capital of CMBCCF at the consideration of HK$1, which was determined with references to, inter alia , the paid up share capital of CMBCCF at that time. Since the date of its incorporation and up to the date of this announcement, the issued share capital of CMBCCF is HK$1, which is wholly and beneficially owned by CMBCI.

CMBCCF has obtained a money lender license under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong) since July 2017. CMBCCF had not carried out any business until its obtaining the aforementioned license. Upon the CMBCCF Completion, it is expected that CMBCCF will principally engage in the provision of loan financing business. As at the date of this announcement, the unaudited net asset value of CMBCCF is HK$1.

Set out below is certain financial information of CMBCCF:

	For the year ended	For the year ended
	31 December 2015	31 December 2016
	HK$	HK$
	(Audited)	(Audited)
Loss before taxation	13,565	7,655
Loss after taxation	13,565	7,655
Net asset value	(24,929)	(32,584)

CMBCI

CMBCI is a direct wholly-owned subsidiary of China Minsheng Bank Corp., Ltd. incorporated in Hong Kong in February 2015 with the approval of China Banking Regulatory Commission. As at the date of the announcement, CMBCI is principally engaged in the business of investment banking.

As at the date of this announcement, CMBCI holds approximately 60.22% of total issued share capital of the Company and is a controlling shareholder of the Company.

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REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in the business of brokerage and related services, securities investment and provision of finance.

It is always the Group’s intention to enhance its service capacity in the financial services industry with a view to establish a full spectrum financial services platform in Hong Kong. As at the date of this announcement, the Group is licensed to engage in Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 9 (asset management) regulated activities. Upon Completion, the Group will also be able to engage in Type 6 (advising on corporate finance) regulated activity, as well as the licensed money lending business and will have all material licenses required for services expected to be required by most of its potential clients at current stage. The Directors are of the view that the Acquisitions will further broaden the Group’s client bases, procure new sources of revenue for the Group and create synergy effect of the Group’s principal businesses. On the other hand, the Acquisitions represent a more efficient way to allow the Group to obtain the relevant licenses, as compared to the application of such licenses by the Group.

In light of the above and taking into the consideration to be paid by the Company in respect of the CMBCIC Acquisition and CMBCCF Acquisition (which is no more than the net asset value and issued share capital of CMBCIC and CMBCCF as at the date of this announcement, respectively), the Directors (including the independent non-executive Directors) consider that the terms and conditions of the Acquisition Agreements and the Acquisitions are reasonable and fair and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

CMBCI is a controlling shareholder of the Company and is therefore a connected person of the Company. As such, the Acquisitions constitute connected transactions of the Company under Chapter 14A of the Listing Rules.

Pursuant to Rule 14A.81 of the Listing Rules, the Acquisitions shall be aggregated. As the As one or more of the applicable percentage ratios (as defined under the Listing Rules) exceeds 0.1% but is less than 5%, the Acquisitions are subject to reporting and announcement requirement, but are exempted from independent shareholders’ approval requirement of the Company under Chapter 14A of the Listing Rules.

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As Mr. Li Jinze, Mr. Ren Hailong and Mr. Liao Zhaohui, all being Directors, hold positions in CMBCI and/or its associates, they have abstained from voting for the approval of the Acquisitions at the Board meeting. Save for the above, no other Directors have any material interests in the Acquisitions or were otherwise required to evade or abstain from voting in respect of the relevant Board resolutions.

DEFINITIONS

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

“Acquisitions”	collectively, the CMBCCF Acquisition and CMBCIC
	Acquisition
“Acquisition Agreements”	the CMBCCF Acquisition Agreement and CMBCIC Acquisition
	Agreement
“associates”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors from time to time
“Business Day”	a day (other than a Saturday, Sunday or public holiday) on which
	licensed banks are generally open for business in Hong Kong
	throughout their normal business hours
“CMBCCF”	CMBC Capital Finance Limited, a limited liability company
	incorporated in Hong Kong and a direct wholly-owned
	subsidiary of CMBCI as at the date of this announcement
“CMBCCF Acquisition”	the acquisition by the Company of the entire issued share capital
	of CMBCCF subject to and upon the terms and conditions of the
	CMBCCF Acquisition Agreement
“CMBCCF Acquisition	the acquisition agreement dated 27 July 2017 entered into
Agreement”	between Company and CMBCI for the entire issued share capital
	of CMBCCF

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“CMBCCF Completion” the completion of the CMBCCF Acquisition according to the terms and conditions of the CMBCCF Acquisition Agreement

“CMBCI” CMBC International Holdings Limited, a company incorporated in Hong Kong with limited liability and a controlling shareholder of the Company “CMBCIC” CMBC International Capital Limited, a company incorporated in Hong Kong with limited liability and a direct wholly-owned subsidiary of CMBCI as at the date of this announcement “CMBCIC Acquisition” the acquisition by the Company of the entire issued share capital of CMBCIC subject to and upon the terms and conditions of the CMBCIC Acquisition Agreement “CMBCIC Acquisition the acquisition agreement dated 27 July 2017 entered into Agreement ” between the Company and CMBCI for the entire issued share capital of CMBCIC “CMBCIC Completion” the completion of the CMBCIC Acquisition according to the terms and conditions of the CMBCIC Acquisition Agreement “Company” CMBC Capital Holdings 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 (stock code: 1141) “Completion” collectively, the CMBCIC Completion and CMBCCF Completion “connected person” has the meaning ascribed to it under the Listing Rules “controlling shareholder” has the meaning ascribed to it under the Listing Rules “Directors” directors of the Company from time to time

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“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Listing Rules”	the rules Governing the Listing of Securities on the Stock
	Exchange
“regulated activity(ies)”	has the meaning ascribed to this term under the SFO
“Shareholders”	holders of the Shares
“SFC”	the Securities and Futures Commission of Hong Kong
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)
“Shares”	ordinary shares of HK$0.01 each in the capital of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.
	By order of the Board
	CMBC Capital Holdings Limited
	Li Jinze
	Chairman

Hong Kong, 27 July 2017

As at the date of this announcement, the executive director of the Company is Mr. Li Jinze, the non-executive directors are Mr. Ren Hailong and Mr. Liao Zhaohui, and the independent non-executive directors are Mr. Lee, Cheuk Yin Dannis, Mr. Wu Bin and Mr. Wang Lihua.

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