Planetree International Development Limited — Capital/Financing Update 2017

Apr 12, 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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YUGANG INTERNATIONAL LIMITED * ( 渝港國際有限公司 )

(Incorporated in Bermuda with limited liability) (Stock Code: 00613)

DISCLOSEABLE AND CONNECTED TRANSACTION SUBSCRIPTION OF RIGHTS SHARE

INTRODUCTION

The Board announces that on 12 April 2017, Regulator accepted part of its provisional entitlement and subscribed for 31,800,000 Rights Shares pursuant to the Rights Issue at the Subscription Price of HK$2.00 per Rights Share. The aggregate consideration for the Subscription was HK$63,600,000.00 (excluding transaction costs).

LISTING RULES IMPLICATIONS

Since only the profits ratio among all the applicable percentage ratios (as set out in the Listing Rules) in respect of the Subscription is more than 5% but less than 25% and the other applicable percentage ratios are all less than 5%, the Subscription constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As Mr. Cheung Chung Kiu, the Chairman of the Company and an executive Director, and the ultimate controlling shareholder of the Company who is deemed to be interested in approximately 44.06% of the total number of issued shares of the Company as at the date of this announcement, is also deemed to be interested in approximately 60.47% of the total number of issued shares of C C Land as at the date of this announcement, C C Land is a connected person of the Company under the Listing Rules, and the Subscription also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As all the applicable percentage ratios (other than the profits ratio for being inapplicable) in respect of the Subscription exceed 0.1% but all of them are less than 5%, the Subscription is subject to the reporting and announcement requirements but is exempt from circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

THE SUBSCRIPTION

The Board announces that on 12 April 2017, Regulator accepted part of its entitlement and subscribed for 31,800,000 Rights Shares pursuant to the Rights Issue, at the Subscription Price of HK$2.00 per Rights Share for the aggregate consideration of HK$63,600,000.00 (excluding transaction costs).

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The aggregate consideration of HK$63,600,000.00 was funded by internal resources of the Group and paid in cash on acceptance of the Rights Shares subscribed for. As disclosed in the Prospectus, the Subscription Price was determined after arm's length negotiations between C C Land and the underwriter of the Rights Issue with reference to the market price of the C C Land Shares under the prevailing market conditions.

As at the date of this announcement, Regulator held 260,395,559 C C Land Shares (representing approximately 10.06% of the total number of issued shares of C C Land as at the date of this announcement) and is entitled to subscribe for a maximum of 130,197,779 Rights Shares under the Rights Issue, representing approximately 3.35% of the total number of issued shares of C C Land immediately after the Rights Shares. The 31,800,000 Rights Shares subscribed by Regulator represent approximately 0.819% of the total number of issued shares of C C Land immediately after the Rights Issue. Based on the information disclosed in the Prospectus, the Board expects the Subscription to be completed on 28 April 2017. Upon completion of the Subscription, Regulator will hold 292,195,559 C C Land Shares in total, representing approximately 7.53% of the total number of issued shares of C C Land immediately after the Rights Issue.

INFORMATION ON C C LAND

C C Land is a company incorporated in Bermuda with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 01224). C C Land and its subsidiaries are principally engaged in property development and investment as well as treasury investments.

According to the published financial statements of C C Land, the financial results of C C Land for the two years ended 31 December 2015 and 2016 are as follows:

For the year ended 31 December

	2015	2016
	(Audited)	(Agreed with auditors)
	HK$'000	HK$'000
Net profit/(loss) before taxation	3,323,920	(289,889)
Net profit/(loss) after taxation	1,641,613	(356,756)

According to the published financial statements of C C Land, the consolidated net asset value of C C Land as at 31 December 2016 was HK$13,268,788,000.00.

REASONS FOR THE SUBSCRIPTION

The Company is a company incorporated in Bermuda with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange. The Company is an investment holding company and the principal activities of its subsidiaries are (i) treasury management; (ii) property leasing; and (iii) trading of scrap metals and other materials.

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The Group has been cautiously exploring suitable potential investment opportunities to broaden its source of revenue and to create value for the shareholders of the Company. The Group has been holding the investment in C C Land as available-for-sale investment to achieve earnings from dividend distributions. Based on the unaudited pro forma financial information of C C Land as disclosed in the Prospectus, the Subscription Price represents a substantial discount to the adjusted pro forma consolidated net tangible assets per C C Land Share of HK$4.08 immediately after completion of the Rights Issue. The Subscription will also help prevent the Group's shareholding in C C Land from being extensively diluted as a result of the Rights Issue. However, taking into account of the time and cost required to comply with the relevant disclosure and approval requirements under Chapter 14 and Chapter 14A of the Listing Rules, it would not be possible for the Group to accept its provisional entitlement to the Rights Issue in full according to the timetable of the Rights Issue. Accordingly, the Directors consider it more cost efficient to accept part of the Group's provisional entitlement and subscribe for 31,800,000 Rights Shares without triggering any approval requirements under Chapter 14 and Chapter 14A of the Listing Rules and to dispose of the remaining nil-paid Rights Shares in the market, which the Group is otherwise entitled to subscribe for.

Accordingly, the Directors (including the independent non-executive Directors) consider that the Subscription has been made on normal commercial terms and that such terms are fair and reasonable and that the Subscription is in the interest of the Company and the shareholders of the Company as a whole.

LISTING RULES IMPLICATIONS

Since only the profits ratio among all the applicable percentage ratios (as set out in the Listing Rules) in respect of the Subscription is more than 5% but less than 25% and the other applicable percentage ratios are all less than 5%, the Subscription constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

As Mr. Cheung Chung Kiu, the Chairman of the Company and an executive Director, and the ultimate controlling shareholder of the Company who is deemed to be interested in approximately 44.06% of the total number of issued shares of the Company as at the date of this announcement, is also deemed to be interested in approximately 60.47% of the total number of issued shares of C C Land as at the date of this announcement, C C Land is a connected person of the Company under the Listing Rules, and the Subscription also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As all the applicable percentage ratios (other than the profits ratio for being inapplicable) in respect of the Subscription exceed 0.1% but all of them are less than 5%, the Subscription is subject to the reporting and announcement requirements but is exempt from circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

Mr. Cheung has abstained from voting on the relevant resolution approving the Subscription and has not been counted in the quorum of the relevant Board meeting pursuant to the Company's bye-laws. Save for Mr. Cheung, none of Directors is considered as having a material interest in the Subscription. Therefore, all Directors except Mr. Cheung are entitled to vote and be counted in the quorum pursuant to the Company’s bye-laws.

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DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings when used herein:

"Board"	the board of Directors
"C C Land"	C C Land Holdings Limited, a company incorporated in
	Bermuda with limited liability, the issued shares of which are
	listed on the Main Board of the Stock Exchange (stock code:
	01224)
"C C Land Share(s)"	ordinary share(s) of par value HK$0.10 each in the share
	capital of C C Land
"Company"	Yugang International Limited, a company incorporated in
	Bermuda with limited liability, the issued shares of which are
	listed on the Main Board of the Stock Exchange (stock code:
	00613)
"connected person(s)"	has the meanings ascribed to it under the Listing Rules
"Director(s)"	the director(s) of the Company
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	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
"Prospectus"	the prospectus dated 3 April 2017 published by C C Land in
	relation to the Rights Issue
"Regulator"	Regulator Holdings Limited, a company incorporated in the
	British Virgin Islands with limited liability and an indirect
	wholly-owned subsidiary of the Company
"Rights Issue"	the issue by C C Land of 1,294,111,556 Rights Shares at the
	Subscription Price by way of rights on the basis of one Rights
	Share for every two C C Land Shares held on 30 March 2017
"Rights Shares"	1,294,111,556 new C C Land Shares to be issued and allotted
	under the Rights Issue
"Stock Exchange"	The Stock Exchange of Hong Kong Limited

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"Subscription" the subscription of 31,800,000 Rights Shares by Regulator under the Rights Issue "Subscription Price" the subscription price of HK$2.00 per Rights Share "subsidiary"/ "subsidiaries" any entity within the meaning of the term "subsidiary" as defined in the Listing Rules and the term "subsidiaries" shall be construed accordingly

"%"

per cent

By order of the Board Yuen Wing Shing Managing Director

Hong Kong, 12 April 2017

As at the date of this announcement, the Board comprises nine Directors, namely Mr. Cheung Chung Kiu (Chairman), Mr. Yuen Wing Shing (Managing Director), Mr. Zhang Qing Xin, Mr. Lam Hiu Lo and Mr. Liang Kang as executive Directors; Mr. Lee Ka Sze, Carmelo as non-executive director; and Mr. Luk Yu King, James, Mr. Leung Yu Ming, Steven and Mr. Ng Kwok Fu as independent non-executive Directors.

* for identification purpose only

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