Persistence Gold Group Ltd — Capital/Financing Update 2019

May 23, 2019

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.

APAC RESOURCES LIMITED 亞太資源有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

DISCLOSEABLE TRANSACTION AND

CONTINUING CONNECTED TRANSACTION

LOAN TRANSACTION

On 23 May 2019, the Lender (a wholly-owned subsidiary of the Company) as the lender entered into the Loan Agreement with the Borrower as the borrower and the Guarantor as the guarantor, pursuant to which, the Lender agreed to, among other things, make available to the Borrower the Loan facility on the terms and subject to the conditions therein.

LISTING RULES IMPLICATIONS

As the Lender is a wholly-owned subsidiary of the Company, the Transaction entered into by the Lender shall be a deemed transaction of the Company under the Listing Rules as the definition of “listed issuer” under Chapter 14 of the Listing Rules shall include the listed issuer’s subsidiaries. The Transaction constitutes a discloseable transaction for the Company on the basis that the relevant percentage ratio(s) of the Company exceeds 5% but is below 25%.

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As at the date of this announcement, the Company is owned as to approximately 35.92% by Allied Properties Investments, being an indirect wholly-owned subsidiary of APL, a controlling shareholder of the Company and hence a connected person of the Company. APL also indirectly holds approximately 48.66% of the total number of issued shares of the Guarantor and the Borrower is a wholly-owned subsidiary of the Guarantor. Hence, the Borrower is an associate of APL under Rule 14A.13(3) of the Listing Rules and a connected person of the Company. As a result, the Transaction constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules, and accordingly, is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

INTRODUCTION

On 23 May 2019, the Lender (a wholly-owned subsidiary of the Company) as the lender entered into the Loan Agreement with the Borrower as the borrower and the Guarantor as the guarantor, pursuant to which, the Lender agreed to, among other things, make available to the Borrower the Loan facility on the terms and subject to the conditions therein.

THE PRINCIPAL TERMS OF THE LOAN AGREEMENT

The principal terms of the Loan Agreement are set out as below:

Date:

23 May 2019

Parties:

• (1) the Lender as the lender under the Loan Agreement;

• (2) the Borrower as the borrower under the Loan Agreement; and

• (3) the Guarantor as the guarantor under the Loan Agreement.

Loan facility:

A revolving loan in the amount not exceeding HK$235,000,000 (or an amount equivalent to HK$235,000,000 in such alternative currency as acceptable to and agreed by the Lender)

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Availability period: The period commencing on the date of the Loan Agreement and ending on the date falling one (1) month prior to the Repayment Date

Condition precedent: The Loan Agreement is conditional upon, among others, the approval by the Independent Shareholders of the Loan Agreement and the Transaction and all other consents and acts required under the Listing Rules being obtained and completed

Repayment Date: Twenty-four (24) months from the date of first Drawdown or such other date as agreed in writing between the Lender and the Borrower

Purpose: The Loan facility shall be applied and used by the Borrower for its general working capital

• Interest Rate: 5.5% per annum Interest Period: One (1) month

Guarantee: The Guarantor provided a guarantee and indemnity in favour of the Lender pursuant to the terms of the Loan Agreement to secure the payment of all sums outstanding under the Loan Agreement and the performance of the Borrower of all its obligations under the Loan Agreement

Default: If the Borrower fails to pay any sum payable under the Loan Agreement when due, the Borrower shall pay interest on such sum from and including the due date to the date of actual payment at the rate of the Interest Rate plus 3% per annum

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PROPOSED ANNUAL CAP AMOUNTS OF THE LOAN AGREEMENT

The proposed annual cap amounts for the maximum principal amount outstanding under the Loan Agreement and the maximum interest amount of the Loan facility are as follows:

	Financial	Financial	Financial
	year ended	year ended	year ended
	30 June	30 June	30 June
	2020 (Note 1)	2021	2022 (Note 3)
Maximum principal amount outstanding	HK$235,000,000	HK$235,000,000	HK$235,000,000
Maximum interest amount (Note 2)	HK$14,900,000	HK$14,900,000	HK$1,300,000
Proposed annual cap amounts	HK$249,900,000	HK$249,900,000	HK$236,300,000

• Note 1: The proposed annual cap amounts for this period is calculated on the assumption that the expected date of first Drawdown upon fulfilment of the conditions precedent set forth in the Loan Agreement is 2 July 2019.

• Note 2: The maximum interest amount is adjusted upwards by approximately 15% as reasonable buffer taking into account of any currency appreciation in the event that the Loan facility is drawn in an alternative currency.

• Note 3: Interest for an additional Interest Period is added to the proposed annual cap amounts for this period for any potential delay of the said expected date of first Drawdown by up to one month.

The above proposed annual cap amounts are determined with reference to, among others, the maximum principal amount outstanding under the Loan facility to be granted by the Lender, the maximum interest amount payable under the Loan Agreement, based on the assumption that the Borrower will borrow the maximum principal in the amount of HK$235,000,000 for each of the above periods respectively and the assumptions stated in the notes of the table immediately above.

Pursuant to the Loan Agreement, it is agreed that the Borrower shall pay interest on the aggregate principal amount outstanding under the Loan facility from time to time at the Interest Rate and such interest shall be paid to the Lender on the last date of each Interest Period.

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REASONS FOR AND BENEFITS OF THE TRANSACTION

The Transaction, which forms part of the Group’s financial services activities, allows the Group to apply its funds in an effective manner with a view to obtain a higher return to the Group. The terms of the Loan Agreement, including the Interest Rate applicable, and the proposed annual cap amounts, were arrived at after arm’s length negotiations between the Lender and the Borrower having taken into account the current market norm in relation to similar transactions.

In view of the above, the Directors (excluding Mr. Lee Seng Hui (“ Mr. Lee ”) and Mr. Chang Chu Fai, Johnson Francis (“ Mr. Chang ”) who have abstained from voting at the relevant Board meeting, and the Independent Board Committee who shall form their view after considering the advice of the independent financial adviser) are of the view that the terms of the Loan Agreement are on normal commercial terms and the terms of the Transaction (including the proposed annual cap amounts) are fair and reasonable and in the interests of the Company and its shareholders as a whole.

Mr. Lee, being a non-executive Director, is also the chief executive and an executive director of each of AGL and APL, and the chairman and a non-executive director of the Guarantor. Mr. Lee is one of the trustees of Lee and Lee Trust, being a discretionary trust which together with Mr. Lee’s personal interest, controls approximately 74.95% interest in the total number of issued shares of AGL, which is directly and indirectly interested in an aggregate of approximately 74.99% of the total number of issued shares of APL. APL is indirectly interested in approximately 35.92% of the total issued share capital of the Company and approximately 48.66% of the total number of issued shares of the Guarantor and the Borrower is a wholly-owned subsidiary of the Guarantor. Accordingly, Mr. Lee is deemed to be interested in the Transaction and therefore has abstained from voting at the relevant Board meeting for approving, among others, the Transaction.

Mr. Chang, being an independent non-executive Director, is also an independent non-executive director of the Guarantor, has abstained from voting at the relevant Board meeting for approving, among others, the Transaction to avoid any potential conflicts of interest.

Save as disclosed above, none of the Directors has abstained (or is required to abstain) from voting on the Board resolution for considering and approving the Loan Agreement, the proposed annual cap amounts and the Transaction.

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INFORMATION ABOUT THE COMPANY, THE GROUP, THE LENDER, THE BORROWER AND THE GUARANTOR

The Company and the Group

The Company is a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange.

The Group is an established investment fund and commodity trading house which owns strategic interests in natural resource companies with the main business lines comprising of primary strategic investment, resource investment, and commodity trading business, focused primarily on metals, mining and energy and investment in financial assets.

The Lender

The Lender is a company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company. The principal business activity of the Lender is principal investments and financial services.

The Borrower

The Borrower is a company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of the Guarantor. The principal business activity of the Borrower is investment holding.

The Guarantor

The Guarantor is a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of the Stock Exchange. The principal business activity of the Guarantor is investment holding. The Guarantor and its subsidiaries are principally engaged in the development of apartments, villas, office buildings and commercial properties, property investment and property management on the mainland in the PRC, as well as property investment and property management in Hong Kong.

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LISTING RULES IMPLICATIONS

As the Lender is a wholly-owned subsidiary of the Company, the Transaction entered into by the Lender shall be a deemed transaction of the Company under the Listing Rules as the definition of “listed issuer” under Chapter 14 of the Listing Rules shall include the listed issuer’s subsidiaries. The Transaction constitutes a discloseable transaction for the Company on the basis that the relevant percentage ratio(s) of the Company exceeds 5% but is below 25%.

As at the date of this announcement, the Company is owned as to approximately 35.92% by Allied Properties Investments, being an indirect wholly-owned subsidiary of APL, a controlling shareholder of the Company and hence a connected person of the Company. APL also indirectly holds approximately 48.66% of the total number of issued shares of the Guarantor and the Borrower is a wholly-owned subsidiary of the Guarantor. Hence, the Borrower is an associate of APL under Rule 14A.13(3) of the Listing Rules and a connected person of the Company. As a result, the Transaction constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules, and accordingly, is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

GENERAL

The SGM will be held to consider and, if thought fit, pass the ordinary resolution to approve, among other things, the Loan Agreement, the proposed annual cap amounts and the Transaction.

The Independent Board Committee has been established by the Company to advise the Independent Shareholders as to whether the terms of the Loan Agreement and the proposed annual cap amounts are fair and reasonable and whether the Transaction is in the interests of the Company and its shareholders as a whole and to advise the Independent Shareholders on how to vote.

An independent financial adviser has also been appointed to make recommendations to the Independent Board Committee and the Independent Shareholders as to whether the terms of the Loan Agreement and the proposed annual cap amounts are fair and reasonable and whether the Transaction is in the interests of the Company and its shareholders as a whole and to advise the Independent Shareholders on how to vote.

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To the best of the knowledge and belief of the Directors having made all reasonable enquiries, save as and except for APL and its associates (including Allied Properties Investments), no other shareholder of the Company has a material interest in the Transaction such that he or she or it shall abstain from voting at the SGM on the resolution to approve the Loan Agreement, the proposed annual cap amounts and the Transaction.

The Circular containing, among other things, (i) further information on the Loan Agreement, the proposed annual cap amounts and the Transaction; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; (iii) a letter of advice by an independent financial adviser to both the Independent Board Committee and the Independent Shareholders; and (iv) a notice convening the SGM, is expected to be despatched to the shareholders of the Company on or before 14 June 2019.

DEFINITIONS

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

• “AGL” Allied Group Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of the Stock Exchange (Stock Code: 373) and is a substantial shareholder of APL and the Company;

• “Allied Properties Allied Properties Investments (1) Company Limited, a Investments” controlling shareholder which holds 437,872,014 ordinary shares of the Company, representing approximately 35.92% of the total issued share capital of the Company as at the date of this announcement and is indirectly wholly-owned by APL;

“APL” Allied Properties (H.K.) Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of the Stock Exchange (Stock Code: 56), is a substantial shareholder of the Company; “associate(s)” has the meaning ascribed to it under the Listing Rules;

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“Board”

the board of Directors;

“Borrower”	Best Advantage Limited, a company incorporated in the
	British Virgin Islands with limited liability and a
	wholly-owned subsidiary of the Guarantor, being the
	borrower under the Loan Agreement;
“Circular”	the circular to be issued by the Company to the shareholders
	of the Company in accordance with the Listing Rules in
	respect of the Loan Agreement and the Transaction;
“Company”	APAC Resources Limited, a company incorporated in
	Bermuda with limited liability, the shares of which are listed
	on the main board of the Stock Exchange (Stock Code:
	1104);
“connected person”	has the meaning ascribed to it under the Listing Rules;
“controlling shareholder(s)”	has the meaning ascribed to it under the Listing Rules;
“Directors”	directors of the Company;
“Drawdown”	a drawdown of the Loan facility under the Loan Agreement;
“Group”	the Company and its subsidiaries;
“Guarantor”	Tian An China Investments Company Limited, a company
	incorporated in Hong Kong with limited liability, the shares
	of which are listed on the main board of the Stock Exchange
	(Stock Code: 28), and is the holding company of the
	Borrower, being the guarantor under the Loan Agreement;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”	Hong Kong Special Administrative Region of the PRC;

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• “Independent Board Committee”

• the independent committee of the Board, comprising all of the independent non-executive Directors excluding Mr. Chang Chu Fai, Johnson Francis (who is also an independent non-executive director of the Guarantor), formed to advise the Independent Shareholders with respect to the Loan Agreement, the proposed annual cap amounts and the Transaction;

• “Independent Shareholder(s)”

• the holder(s) of the ordinary share(s) of the Company other than APL and its associates (including Allied Properties Investments) which are required to abstain from voting at the SGM;

• “Interest Period”

• one (1) month;

• “Interest Rate”

• 5.5% per annum;

• “Lender”

• Ultra Effort Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company, being the lender under the Loan Agreement;

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

• “Loan Agreement”

• the loan agreement entered into between the Lender as the lender, the Borrower as the borrower and the Guarantor as the guarantor dated 23 May 2019 relating to the Loan facility;

• “Loan facility”

• a revolving loan in the amount not exceeding HK$235,000,000 (or an amount equivalent to HK$235,000,000 in such alternative currency as acceptable to and agreed by the Lender) made available by the Lender to the Borrower on the terms and subject to the conditions set out in the Loan Agreement;

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“percentage ratio(s)”	percentage ratio(s) as set out in Rule 14.07 of the Listing
	Rules to be applied for determining the classification of a
	transaction;
“PRC”	the People’s Republic of China, for the purpose of this
	announcement only, excludes Taiwan, Hong Kong and
	Macau Special Administrative Region of the People’s
	Republic of China;
“Repayment Date”	twenty-four (24) months from the date of first Drawdown or
	such other date as agreed in writing between the Lender and
	the Borrower;
“SGM”	the special general meeting of the Company to be convened
	and held for the Independent Shareholders to consider and,
	if thought fit, approve the entering into of the Loan
	Agreement, the proposed annual cap amounts and the
	Transaction;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“substantial shareholder(s)”	has the meaning ascribed to it under the Listing Rules;
“Transaction”	the transaction contemplated under the Loan Agreement;
	and
“%”	per cent.

By Order of the Board APAC Resources Limited Andrew Ferguson Executive Director

Hong Kong, 23 May 2019

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As at the date of this announcement, the Directors are:

Executive Directors

Mr. Brett Robert Smith (Deputy Chairman) and Mr. Andrew Ferguson (Chief Executive Officer)

Non-Executive Directors

Mr. Arthur George Dew (Chairman) (Mr. Wong Tai Chun, Mark as his alternate) , Mr. Lee Seng Hui and Mr. So Kwok Hoo

Independent Non-Executive Directors

Dr. Wong Wing Kuen, Albert, Mr. Chang Chu Fai, Johnson Francis and Mr. Robert Moyse Willcocks

• For identification purpose only

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