Planetree International Development Limited - M&A Activity 2019

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

This joint announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Yugang International Limited.

FUTURE CAPITAL GROUP LIMITED YUGANG INTERNATIONAL LIMITED (Incorporated in the British Virgin Islands （渝港國際有限公司）* with limited liability)

(Incorporated in Bermuda with limited liability)

(Stock code: 00613)

JOINT ANNOUNCEMENT

(1) CHANGE OF CONTROLLING SHAREHOLDER OF YUGANG INTERNATIONAL LIMITED

(2) CONDITIONAL MANDATORY CASH OFFER BY GET NICE SECURITIES LIMITED FOR AND ON BEHALF OF FUTURE CAPITAL GROUP LIMITED TO ACQUIRE ALL THE ISSUED SHARES (OTHER THAN THOSE ALREADY OWNED BY FUTURE CAPITAL GROUP LIMITED AND PARTIES ACTING IN CONCERT WITH IT) OF YUGANG INTERNATIONAL LIMITED

(3) ESTABLISHMENT OF THE INDEPENDENT BOARD COMMITTEE

AND

(4) RESUMPTION OF TRADING

Joint Financial Advisers to Future Capital Group Limited

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For identification purposes only

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CHANGE OF CONTROLLING SHAREHOLDER

The Company was informed by the Vendors (together, the Controlling Shareholder of the Company immediately before the Share Completion) that on 16 January 2019 (after trading hours), they had entered into the Sale and Purchase Agreement with the Offeror, pursuant to which the Vendors agreed to sell and the Offeror agreed to purchase the Sale Shares, being 4,099,709,732 Shares, for a total consideration of HK$717,449,203.10, equivalent to HK$0.175 per Sale Share, which was agreed between the Vendors and the Offeror after arm’s length negotiations, and that Share Completion took place on 17 January 2019. The Sale Shares represent approximately 44.06% of the entire issued share capital of the Company as at the date of the Sale and Purchase Agreement and this joint announcement.

Upon Share Completion, the 1st Vendor still beneficially holds the Retained Shares (representing approximately 0.00% of the entire issued share capital of the Company) whereas the 2 nd Vendor and 3rd Vendor ceased to hold any Shares and ceased to be a Shareholder. The 1 st Vendor has undertaken to the Offeror that it (1) has not sold, transferred or disposed of the Retained Shares; (2) will remain as the beneficial owner of the Retained Shares until the expiry of the Offer Period in respect of the Offer, and will not sell, transfer or dispose of any of the Retained Shares or any interests therein prior to such expiry; and (3) will not accept the Offer in respect of the Retained Shares.

CONDITIONAL MANDATORY CASH OFFER

As at the date of this joint announcement, the Company has 9,305,276,756 Shares in issue. Before entering into the Sale and Purchase Agreement and immediately before the Share Completion, Ms. Lo was interested in 52,718,000 Shares, representing approximately 0.57% of the entire issued share capital of the Company. Immediately following the Share Completion and as at the date of this joint announcement, the Offeror and parties acting in concert with it are interested in an aggregate of 4,152,427,732 Shares, representing approximately 44.62% of the entire issued share capital of the Company. Pursuant to Rule 26.1 of the Takeovers Code, the Offeror is required to make a conditional mandatory general offer in cash for all the issued Shares other than those already owned by the Offeror and parties acting in concert with it.

As at the date of this joint announcement, the Company does not have any outstanding options, derivatives, warrants or securities which are convertible or exchangeable into Shares or other types of equity interest and has not entered into any agreement for the issue of such options, derivatives, warrants or relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) convertible into Shares.

Get Nice Securities, on behalf of the Offeror, will make the Offer in accordance with the Takeovers Code on the following basis:

For each Offer Share

HK$0.175 in cash

The Offer Price of HK$0.175 per Offer Share equals to the purchase price per Sale Share paid by the Offeror under the Sale and Purchase Agreement.

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The Offer is conditional upon the Offeror having received valid acceptances of the Offer which, together with the Shares already acquired or agreed to be acquired by the Offeror and the parties acting in concert with it before or during the Offer Period, will result in the Offeror and parties acting in concert with it holding more than 50% of the voting rights of the Company.

The principal terms of the Offer are set out under the section headed “CONDITIONAL MANDATORY CASH OFFER” below in this joint announcement. Get Nice Capital and Veda Capital have been appointed as the joint financial advisers to the Offeror in respect of the Offer. Get Nice Capital and Veda Capital are satisfied that there are sufficient financial resources available to the Offeror to satisfy the full acceptances of the Offer.

ESTABLISHMENT OF THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee has been established to make recommendation to the Independent Shareholders in relation to the Offer pursuant to Rule 2.1 of the Takeovers Code.

An independent financial adviser to the Independent Board Committee will be appointed to advise the Independent Board Committee pursuant to Rule 2.1 of the Takeovers Code as to whether the terms of the Offer are fair and reasonable and as to the acceptance of the Offer. Further announcement will be made by the Company as soon as practicable after the appointment of the independent financial adviser.

GENERAL

It is the intention of the Offeror and the Company to combine the offer document and the offeree board circular into the Composite Document. Accordingly, the Composite Document (accompanied by the Form of Acceptance) in connection with the Offer setting out, inter alia, details of the Offer (including the expected timetable) and information of the Group and incorporating the letter from Get Nice Securities in respect of the Offer, the letter from the Independent Board Committee to the Independent Shareholders containing its recommendation and advice to the Independent Shareholders on the Offer and the letter from the Independent Financial Adviser containing its recommendation and advice to the Independent Board Committee on the Offer will be issued and despatched by or on behalf of the Offeror and the Company jointly to all Shareholders in accordance with Rule 8.2 of the Takeovers Code, within 21 days after the date of this joint announcement, or such later date as the Executive may approve.

The Independent Shareholders are encouraged to read the Composite Document carefully, including the advice of the Independent Financial Adviser to the Independent Board Committee and the recommendation from the Independent Board Committee to the Independent Shareholders as to whether the terms of the Offer are fair and reasonable so far as the Independent Shareholders are concerned and its acceptance, before deciding whether or not to accept the Offer.

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RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange was halted with effect from 9:00 a.m. on 17 January 2019 pending the publication of this joint announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:00 a.m. on 24 January 2019.

WARNING

As the Offer is conditional upon fulfillment of the condition set out in the section headed “Condition of the Offer” in this joint announcement, Shareholders and potential investors are advised to exercise caution when dealing in the Shares during the Offer Period. If the Shareholders and potential investors are in any doubt about their position, they should consult their professional advisers.

SALE AND PURCHASE AGREEMENT

Date: 16 January 2019

Parties:

(i) Chongqing Industrial Limited as the 1st Vendor; (ii) Timmex Investment Limited as the 2nd Vendor;
(iii) Mr. Cheung as the 3rd Vendor; and
(iv) Offeror as the Purchaser.

Subject matter of the Sale and Purchase Agreement

Pursuant to the Sale and Purchase Agreement, the Vendors agreed to sell and the Offeror agreed to purchase the Sale Shares, being 4,099,709,732 Shares, representing approximately 44.06% of the entire issued share capital of the Company as at the date of the Sale and Purchase Agreement and this joint announcement, free from all Encumbrances and together with all rights attached or accruing thereto at the Share Completion Date (including the right to receive all dividends or other distributions declared, made or paid on or after the Share Completion Date) with effect from the Share Completion.

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Consideration for the Sale Shares

The total consideration for the Sale Shares was HK$717,449,203.10, equivalent to HK$0.175 per Sale Share, which was agreed between the Vendors and the Offeror after arm’s length negotiations. The total consideration was paid by the Offeror to the Vendors in full and in cash upon the Share Completion as to:

(i) HK$559,026,068.30 to the 1 st Vendor for the 1 st Sales Shares of 3,194,434,676 Shares, representing approximately 34.33% of the entire issued share capital of the Company as at the date of the Sale and Purchase Agreement;
(ii) HK$149,092,134.80 to the 2 nd Vendor for the 2 nd Sales Shares of 851,955,056 Shares, representing approximately 9.16% of the entire issued share capital of the Company as at the date of the Sale and Purchase Agreement; and
(iii) HK$9,331,000.00 to the 3rd Vendor for the 3rd Sales Shares of 53,320,000 Shares, representing approximately 0.57% of the entire issued share capital of the Company as at the date of the Sale and Purchase Agreement.

The consideration for the Sale Shares under the Sale and Purchase Agreement was fully settled by the Offeror from its internal resources.

Share Completion

The Share Completion took place on 17 January 2019.

Upon Share Completion and as at the date of this joint announcement, the 1 st Vendor still beneficially holds the Retained Shares whereas each of the 2nd Vendor and 3rd Vendor ceased to hold any Shares and ceased to be a Shareholder. The 1st Vendor has undertaken to the Offeror that it (1) has not sold, transferred or disposed of the Retained Shares; (2) will remain as the beneficial owner of the Retained Shares until the expiry of the Offer Period in respect of the Offer, and will not sell, transfer or dispose of any of the Retained Shares or any interests therein prior to such expiry; and (3) will not accept the Offer in respect of the Retained Shares.

CONDITIONAL MANDATORY CASH OFFER

Before entering into the Sale and Purchase Agreement and immediately before the Share Completion, Ms. Lo was interested in 52,718,000 Shares, representing approximately 0.57% of the entire issued share capital of the Company. Immediately following the Share Completion and as at the date of this joint announcement, the Offeror and parties acting in concert with it are interested in an aggregate of 4,152,427,732 Shares, representing approximately 44.62% of the entire issued share capital

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of the Company. Pursuant to Rule 26.1 of the Takeovers Code, the Offeror is required to make a conditional mandatory general offer in cash for all the issued Shares other than those already owned by the Offeror and parties acting in concert with it.

As at the date of this joint announcement, the Company has 9,305,276,756 Shares in issue. The Company does not have any outstanding options, derivatives, warrants or securities which are convertible or exchangeable into Shares or other types of equity interest and has not entered into any agreement for the issue of such options, derivatives, warrants or relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) convertible into Shares.

Principal terms of the Offer

Get Nice Securities will, on behalf of the Offeror, make the Offer to all the Independent Shareholders to acquire all the issued Shares other than those already owned by the Offeror and parties acting in concert with it, in compliance with the Takeovers Code on the following basis:

For each Offer Share

HK$0.175 in cash

The Offer Price of HK$0.175 per Offer Share equals to the purchase price per Sale Share paid by the Offeror under the Sale and Purchase Agreement. The Offer Shares to be acquired under the Offer shall be fully paid and free from all Encumbrances and together with all rights attaching thereto, including all rights to any dividend or other distribution declared, made or paid on or after the date on which the Offer is made, being the date of the Composite Document.

Condition of the Offer

Comparison of value

The Offer Price of HK$0.175 per Offer Share represents:

(i) a premium of approximately 2.94% over the closing price of HK$0.170 per Share as quoted on the Stock Exchange on the Last Trading Day;
(ii) a premium of approximately 4.17% over the average closing prices of the Shares as quoted on the Stock Exchange for the 5 consecutive trading days up to and including the Last Trading Day of approximately HK$0.168 per Share;

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(iii) a premium of approximately 5.42% over the average closing prices of the Shares as quoted on the Stock Exchange for the 10 consecutive trading days up to and including the Last Trading Day of approximately HK$0.166 per Share;
(iv) a premium of approximately 3.55% over the average closing prices of the Shares as quoted on the Stock Exchange for the 30 consecutive trading days up to and including the Last Trading Day of approximately HK$0.169 per Share;
(v) a discount of approximately 41.67% to the audited consolidated net asset value attributable to owners of the Company of approximately HK$0.300 per Share (based on the number of issued Shares as at the date of this joint announcement) as at 31 December 2017, the date to which the latest audited financial results of the Group were made up;
(vi) a discount of approximately 42.43% to the unaudited consolidated net asset value attributable to owners of the Company of approximately HK$0.304 per Share (based on the number of issued Shares as at the date of this joint announcement) as at 30 June 2018, the date to which the latest unaudited financial results of the Group for the 6 months ended 30 June 2018 were made up;
(vii) a premium of approximately 2.94% over the audited consolidated net asset value attributable to owners of the Company of approximately HK$0.170 per Share as adjusted for a distribution in specie of 51,179,018 shares in CHH on 19 September 2018 and 273,000,000 shares in YT on 23 November 2018 (based on the number of issued Shares as at the date of this joint announcement) as at 31 December 2017, the date to which the latest audited financial results of the Group were made up; and
(viii) a premium of approximately 1.74% over the unaudited consolidated net asset value attributable to owners of the Company of approximately HK$0.172 per Share as adjusted for a distribution in specie of 51,179,018 shares in CHH on 19 September 2018 and 273,000,000 shares in YT on 23 November 2018 (based on the number of issued Shares as at the date of this joint announcement) as at 30 June 2018, the date to which the latest unaudited financial results of the Group for the 6 months ended 30 June 2018 were made up.

In respect of paragraph (vii) above, the audited consolidated net asset value attributable to owners of the Company of approximately HK$0.170 per Share is arrived at by dividing the adjusted audited consolidated net asset value of the Company of approximately HK$1,577,517,000 by the 9,305,276,756 Shares in issue as at the date of this joint announcement. The adjusted audited consolidated net asset value of the Company of approximately HK$1,577,517,000 represents the audited consolidated net asset value of the Company of approximately HK$2,792,004,000 as at 31 December 2017 as adjusted by (1) approximately HK$660,209,000, being the fair value of the 51,179,018 shares of CHH as at 31 December 2017, as such shares of CHH were recorded by the Group as listed equity investments at fair value through profit or loss; and (2) approximately HK$554,278,000, being the share of net asset value of the 273,000,000 shares of YT as at 31 December 2017, as such shares of YT were recorded by the Group as an investment in an associate.

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In respect of paragraph (viii) above, the unaudited consolidated net asset value attributable to owners of the Company of approximately HK$0.172 per Share is arrived at by dividing the adjusted unaudited consolidated net asset value of the Company of approximately HK$1,601,837,000 by the 9,305,276,756 Shares in issue as at the date of this joint announcement. The adjusted unaudited consolidated net asset value of the Company of approximately HK$1,601,837,000 represents the unaudited consolidated net asset value of the Company of approximately HK$2,825,683,000 as at 30 June 2018 as adjusted by (1) approximately HK$669,422,000, being the fair value of the 51,179,018 shares of CHH as at 30 June 2018, as such shares of CHH were recorded by the Group as listed equity investments at fair value through profit or loss; and (2) approximately HK$554,424,000, being the share of net asset value of the 273,000,000 shares of YT as at 30 June 2018, as such shares of YT were recorded by the Group as an investment in an associate.

Highest and lowest Share price

During the six-month period preceding the Last Trading Day:

(i) the highest closing price of the Shares as quoted on the Stock Exchange was HK$0.183 per Share on 12, 23 and 30 November 2018; and
(ii) the lowest closing price of the Shares as quoted on the Stock Exchange was HK$0.108 per Share on 17 and 25 July 2018.

Value of the Offer

As at the date of this joint announcement, the Company has 9,305,276,756 Shares in issue. Based on the Offer Price of HK$0.175 per Offer Share, the entire issued share capital of the Company is valued at HK$1,628,423,432.30 and assuming that the Offer is accepted in full by the Independent Shareholders of 5,152,849,024 Offer Shares, the total amount of cash required to effect the Offer will be HK$901,748,579.20.

Financial resources available to the Offeror

The Offeror intends to finance the consideration payable under the Offer through its internal resources and a loan facility. Get Nice Capital and Veda Capital are satisfied that sufficient financial resources are available to the Offeror to satisfy the full acceptances of the Offer.

Effect of accepting the Offer

By accepting the Offer, the Independent Shareholders will sell their Shares to the Offeror free from all Encumbrances and together with all rights attaching or accruing thereto (including all rights to receive any dividend or other distribution declared, made or paid on or after the date on which the Offer is made, being the date of the Composite Document).

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Hong Kong stamp duty

The seller’s Hong Kong ad valorem stamp duty on acceptances of the Offer at a rate of 0.1% (or part thereof) of the consideration payable in respect of the relevant acceptances by the Independent Shareholders or if higher, the market value of the Offer Shares subject to such acceptance, will be deducted from the amount payable to those Independent Shareholders who accept the Offer.

The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the relevant Independent Shareholders who accept the Offer and pay the buyer’s Hong Kong ad valorem stamp duty in connection with the acceptances of the Offer and the transfers of the Offer Shares in accordance with the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong).

Payment

Payment in cash in respect of acceptances of the Offer will be made as soon as possible but in any event within seven (7) business days (as defined in the Takeovers Code) of the later of the date on which the Offer becomes, or is declared, unconditional and the date on which the relevant documents of title in respect of such acceptances are received by the Offeror (or its agent) to render each such acceptance complete and valid.

In the event that the Offer cannot be declared unconditional, the Offer will lapse and the Offeror will as soon as practicable thereafter return the Share certificates and/or any other documents of title lodged with the Form of Acceptance by ordinary post to the Shareholders who have accepted the Offer at their own risk.

Taxation advice

Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offer. None of the Offeror, parties acting in concert with the Offeror, the Company, Get Nice Securities, Get Nice Capital and Veda Capital and their respective ultimate beneficial owners, directors, officers, advisers, agents or associates or any other person involved in the Offer accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offer.

Dealing and interests in the Company’s securities

Save for the Sale Shares, none of the Offeror, its ultimate beneficial owner, nor parties acting in concert with any of them has dealt in any Shares, options, derivatives, warrants or other securities convertible into Shares during the six-month period prior to the date of this joint announcement.

Mr. Shum Kin Wai Frankie, a responsible officer and director of Get Nice Securities, acquired 1,000,000 Shares on 5 September 2018 at the price of HK$0.265 per Share and disposed of 500,000 Shares on 31 October 2018 at the price of HK$0.223 per Share. Mr Shum is currently holding 500,000 Shares and only came to know about the proposed transaction which crystalized in the Sale and Purchase Agreement on 7 January 2019.

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Overseas Shareholders

The availability of the Offer to any Overseas Shareholders may be affected by the applicable laws and regulations of their relevant jurisdictions of residence. Overseas Shareholders should observe any applicable legal and regulatory requirements and, where necessary, consult their own professional advisers. It is the responsibilities of the Overseas Shareholders who wish to accept the Offer to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with the acceptance of the Offer (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer or other taxes due by such Overseas Shareholders in respect of such jurisdictions).

Other arrangements

Other than the consideration under the Sale and Purchase Agreement as disclosed in the section headed “Consideration for the Sale Shares” in this joint announcement, there is no other consideration, in whatever form, which has been or will be paid by any of the Offeror, Ms. Lo and/ or parties acting in concert with any of them, their respective nominees and/or representatives (the “ Offeror Group ”) to each of the Vendors and/or their respective ultimate beneficial owners (if applicable) and/or the parties acting in concert with any of them and/or their respective nominees and/or representatives in connection with the Sale and Purchase Agreement or otherwise.

There is no special deal under Rule 25 of the Takeovers Code between any members of the Offeror Group on one hand and any Shareholders (including their respective concert parties) on the other.

There is no agreement, arrangement or understanding (including any compensation arrangement) existing between the Offeror, Ms. Lo and/or parties acting in concert with any of them and any of the Directors, recent Directors, Shareholders or recent Shareholders (including the Vendors and parties acting in concert with any of them) having any connection with or dependence upon the Sale and Purchase Agreement and/or the Offer.

The Offeror confirms that, save for an aggregate of 4,152,427,732 Shares owned by the Offeror and Ms. Lo, as at the date of this joint announcement:

(i) the Offeror, its ultimate beneficial owner, and/or parties acting in concert with any of them have not received any irrevocable commitment to accept the Offer;
(ii) there is no outstanding derivative in respect of securities in the Company which has been entered into by the Offeror, its ultimate beneficial owner and/or any person acting in concert with any of them;
(iii) there is no arrangement (whether by way of option, indemnity or otherwise) in relation to the shares of the Offeror or the Company and which may be material to the Offer (as referred to in Note 8 to Rule 22 of the Takeovers Code);

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(iv) none of the Offeror, its ultimate beneficial owner and/or parties acting in concert with any of them owns or has control or direction over any voting rights or rights over the Shares or convertible securities, options, warrants or derivatives of the Company;
(v) there is no agreement or arrangement to which the Offeror, its ultimate beneficial owner and/or parties acting in concert with any of them is a party which relates to circumstances in which it may or may not invoke or seek to invoke a pre-condition or a condition to the Offer; and
(vi) there is no relevant security (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company which the Offeror, its ultimate beneficial owner, and/or any party acting in concert with any of them has borrowed or lent.

The Independent Shareholders are encouraged to read the Composite Document carefully, including the recommendation of the Independent Board Committee and the advice of the Independent Financial Adviser as to whether the terms of the Offer are fair and reasonable and whether the Offer is in the interests of the Company and the Shareholders as a whole and its acceptance before deciding whether or not to accept the Offer.

Information on the Offeror

The Offeror is an investment holding company incorporated in the BVI with limited liability. As at the date of this joint announcement, the Offeror is wholly and directly beneficially owned by Ms. Lo. Ms. Lo is the sole director of the Offeror. She is a seasoned investor with real estate (which is one of the principal businesses of the Group) and other investments in Hong Kong and overseas. In 2014, Ms. Lo acquired the controlling interest in another listed company on the main board of the Stock Exchange, formerly known as Qualipak International Holdings Limited (Stock Code: 01332). The Offeror acquired the controlling interest in the Company with a medium term of investment horizon.

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Information on the Group

The Company is incorporated in Bermuda with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange. The Company is an investment holding company principally engaged in property businesses. The principal activities of the Group are (i) treasury management; (ii) money lending; and (iii) property leasing.

The following table is a summary of certain audited financial information of the Group for the two financial years ended 31 December 2016 and 31 December 2017 and certain unaudited financial information for the six months ended 30 June 2018, respectively.

	Year ended	Year ended	Six months
	31 December	31 December	ended
	2016	2017	30 June 2018
	(Audited)	(Audited)	(Unaudited)
	HK$’000	HK$’000	HK$’000
Revenue	30,114	34,293	40,105
Profit before taxation	26,034	142,785	62,759
Profit for the year/period	21,848	127,505	60,959
	As at	As at	As at
	31 December	31 December	30 June
	2016	2017	2018
	(Audited)	(Audited)	(Unaudited)
	HK$’000	HK$’000	HK$’000
Consolidated net asset value attributable to
owners of the Company	2,791,417	2,792,004	2,825,683

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Shareholding structure of the Company

The following table sets out the shareholding structure of the Company (i) immediately before the Share Completion; and (ii) immediately after the Share Completion but before the Offer is made:

The Offeror and parties acting in concert with it 1 stVendor 1 2 ndVendor 2 3 rdVendor Independent Shareholders - Mr. Zhang Qing Xin 4 - Mr. Lam Hiu Lo 4 - Mr. Liang Kang 4 - Other Independent Shareholders Total	(i) Immediately before the Share Completion Number of Shares held Approximate % of Shares in issue 52,718,000 0.57 3,194,434,680 34.33 851,955,056 9.16 53,320,000 0.57 13,600,000 0.15 41,800,000 0.45 30,000,000 0.32 5,067,449,020 54.46 9,305,276,756 100.00	(ii) Immediately after the Share Completion but before the Offer is made Number of Shares held Approximate % of Shares in issue 4,152,427,732 44.62 4 0.00 0 0.00 0 0.00 13,600,000 0.15 41,800,000 0.45 30,000,000 0.32 5,067,449,020 54.46 9,305,276,756 100.00

Notes:

1st Vendor is owned as to 35%, 30%, 5% and 30% by 3rd Vendor, Peking Palace Limited (“ Peking Palace ”), Miraculous Services Limited (“ Miraculous Services ”) and Prize Winner Limited (“ Prize Winner ”) respectively. Prize Winner is beneficially owned by 3rd Vendor and his associates. Peking Palace and Miraculous Services are held by Palin Holdings Limited as the trustee for Palin Discretionary Trust, a family discretionary trust, the objects of which include 3rd Vendor and his family. 3rd Vendor is the sole shareholder of Palin Holdings Limited.
2nd Vendor is 100% beneficially owned by 3rd Vendor.
1st Vendor has undertaken to the Offeror that it (1) has not sold, transferred or disposed of the Retained Shares; (2) will remain as the beneficial owner of the Retained Shares until the expiry of the Offer Period in respect of the Offer, and will not sell, transfer or dispose of any of the Retained Shares or any interests therein prior to such expiry; and (3) will not accept the Offer in respect of the Retained Shares.

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An executive Director
The Company adopted a share option scheme on 21 May 2015. As of the date of this joint announcement, there is no outstanding share option and no share option will be granted pursuant to the share option scheme prior to the expiry of the Offer Period in respect of the Offer.

OFFEROR’S INTENTION ON THE COMPANY

Following the close of the Offer, the Offeror intends to continue the existing principal businesses of the Group. The Offeror will conduct a review on the financial position and the operations of the Company and will formulate long-term business plans and strategy of the Company, explore other business opportunities and consider whether any asset disposal, asset acquisition, business rationalisation, business divestment, fund raising, restructuring of the business and/or business diversification will be appropriate in order to enhance the long-term growth potential of the Company. Should such corporate actions materialise, further announcement(s) will be made in accordance with the Listing Rules. The Offeror has no intention to (i) discontinue the employment of any employees of the Group; or (ii) redeploy the fixed assets of the Company other than those in its ordinary and usual course of business.

Compulsory Acquisition

The Offeror does not intend to exercise any power of compulsory acquisition of any Offer Shares outstanding and not acquired under the Offer after the close of the Offer.

MAINTENANCE OF THE LISTING STATUS OF THE COMPANY

The Offeror intends to maintain the listing of the Shares on the Stock Exchange after the close of the Offer and each of the Offeror and the Company will undertake to the Stock Exchange to take appropriate steps as soon as possible following the close of the Offer to ensure that a sufficient public float exists for the Shares.

In the event that after the completion of the Offer, the public float of the Company falls below 25%, the Offeror and the Directors will undertake to the Stock Exchange that they will take appropriate steps to restore the minimum public float as required under the Listing Rules as soon as possible following the close of the Offer to ensure that sufficient public float exists for the Shares.

The Stock Exchange has stated that if, upon closing of the Offer, less than the minimum prescribed percentage applicable to the Company, being 25% of the Shares, are held by the public or if the Stock Exchange believes that (i) a false market exists or may exist in the trading of the Shares; or (ii) there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares until the prescribed level of public float is restored.

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ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE

The Independent Board Committee, comprising the non-executive Director, namely, Mr. Lee Ka Sze, Carmelo and all the independent non-executive Directors, namely, Mr. Luk Yu King, James, Mr. Leung Yu Ming, Steven and Mr. Ng Kwok Fu, has been established to make recommendation to the Independent Shareholders in relation to the Offer pursuant to Rule 2.1 of the Takeovers Code.

GENERAL

It is the intention of the Offeror and the Company to combine the offer document and the offeree board circular into the Composite Document. Accordingly, the Composite Document (accompanied by the Form of Acceptance) in connection with the Offer setting out, inter alia, details of the Offer (including the expected timetable) and information of the Group and incorporating the letter from Get Nice Securities in respect of the Offer, the letter from the Independent Board Committee to the Independent Shareholders containing its recommendation and advice to the Independent Shareholders on the Offer and the letter from the Independent Financial Adviser containing its recommendation and advice to the Independent Board Committee on the Offer, will be issued and despatched by or on behalf of the Offeror and the Company jointly to all Shareholders in accordance with Rule 8.2 of the Takeovers Code, within 21 days after the date of this joint announcement, or such later date as the Executive may approve.

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Disclosure in dealing

In accordance with Rule 3.8 of the Takeovers Code, the respective associates (as defined under the Takeovers Code and including a person who owns or controls 5% or more of any class of relevant securities) of the Company and the Offeror (within the meaning of the Takeovers Code) are hereby reminded to disclose their dealings in the securities of the Company pursuant to the Takeovers Code.

In accordance with Rule 3.8 of the Takeovers Code, the full text of Note 11 to Rule 22 of the Takeovers Code is reproduced below:

“Responsibilities of stockbrokers, banks and other intermediaries

Stockbrokers, banks and others who deal in relevant securities on behalf of clients have a general duty to ensure, so far as they are able, that those clients are aware of the disclosure obligations attaching to associates of an offeror or the offeree company and other persons under Rule 22 and that those clients are willing to comply with them. Principal traders and dealers who deal directly with investors should, in appropriate cases, likewise draw attention to the relevant Rules. However, this does not apply when the total value of dealings (excluding stamp duty and commission) in any relevant security undertaken for a client during any 7 day period is less than HK$1 million.

This dispensation does not alter the obligation of principals, associates and other persons themselves to initiate disclosure of their own dealings, whatever total value is involved.

Intermediaries are expected to co-operate with the Executive in its dealings enquiries. Therefore, those who deal in relevant securities should appreciate that stockbrokers and other intermediaries will supply the Executive with relevant information as to those dealings, including identities of clients, as part of that co-operation.”

RESUMPTION OF TRADING

WARNING

— 16 —

DEFINITIONS

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

“1st Sale Shares” 3,194,434,676 Shares, beneficially owned by the 1st Vendor as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion, representing approximately 34.33% of the total issued share capital of the Company as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion
“1st Vendor” Chongqing Industrial Limited, a company incorporated in Hong Kong with limited liability and is owned as to 35%, 30%, 5% and 30% by 3rd Vendor, Peking Palace, Miraculous Services and Prize Winner respectively. Prize Winner is beneficially owned by 3rd Vendor and his associates. Peking Palace and Miraculous Services are held by Palin Holdings Limited as the trustee for Palin Discretionary Trust, a family discretionary trust, the objects of which include 3rd Vendor and his family. 3rd Vendor is the sole shareholder of Palin Holdings Limited
“2nd Sale Shares”
851,955,056 Shares, beneficially owned by the 2nd Vendor as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion, representing approximately 9.16% of the total issued share capital of the Company as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion
“2nd Vendor”
Timmex Investment Limited, a company incorporated in the BVI with limited liability and is 100% beneficially owned by the 3rd Vendor
“3rd Sale Shares” 53,320,000 Shares, beneficially owned by the 3rd Vendor as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion, representing approximately 0.57% of the total issued share capital of the Company as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion
“3rd Vendor” or Mr. Cheung Chung Kiu, Chairman of the Company and an executive “Mr. Cheung” Director
“acting in concert”
has the same meaning ascribed to it under the Takeovers Code
“associate(s)” has the same meaning ascribed to it under the Listing Rules
“Board”

the board of Directors

— 17 —

“BVI”

the British Virgin Islands

“CHH”
The Cross-Harbour (Holdings) 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: 00032)
“Company” Yugang International Limited （渝港國際有限公司）*, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 00613)
“Composite Document” the formal composite document proposed to be jointly issued by or on behalf of the Offeror and the Company in connection with the Offer in accordance with the Takeovers Code containing, amongst other things, further details of the Offer
“Controlling has the same meaning ascribed to it under the Listing Rules Shareholder”
“Director(s)” the director(s) of the Company
“Encumbrances” pledges, charges, liens, mortgages, security interests, pre-emption rights, options and any other encumbrances or third-party rights, interests or claims of any kind
“Executive” executive director of the Corporate Finance Division of the SFC or any delegate of the executive director
“Form of Acceptance” the form of acceptance and transfer of Shares in respect of the Offer
“Get Nice Capital” Get Nice Capital Limited, a licensed corporation permitted to carry out business in type 6 (advising on corporate finance) regulated activity under the SFO, which is appointed as one of the joint financial advisers to the Offeror in respect of the Offer
“Get Nice Securities” Get Nice Securities Limited, a licensed corporation permitted to carry out businesses in type 1 (dealing in securities), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO
“Group” the Company and its subsidiaries
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“HK$” Hong Kong dollars, the lawful currency of Hong Kong

— 18 —

“Independent Board an independent committee of the Board comprising the non-executive Committee” Director, namely, Mr. Lee Ka Sze, Carmelo and all the independent non-executive Directors, namely, Mr. Luk Yu King, James, Mr. Leung Yu Ming, Steven and Mr. Ng Kwok Fu, which has been established by the Board to make a recommendation to the Independent Shareholders in relation to the terms of the Offer and its acceptance
“Independent Financial the independent financial adviser to be appointed by the Company Adviser” to advise the Independent Board Committee pursuant to Rule 2.1 of the Takeovers Code as to whether the terms of the Offer are fair and reasonable and as to the acceptance of the Offer
“Independent Shareholders other than the Offeror and parties acting in concert with it Shareholders”
“Last Trading Day” 16 January 2019, being the last trading day for the Shares prior to the suspension of trading in the Shares pending the release of this joint announcement
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Ms. Lo” Ms. Lo Ki Yan Karen, who directly and beneficially owns 100% of the Offeror
“Offer” the conditional mandatory cash offer to be made by Get Nice Securities for and on behalf of the Offeror for all the issued Shares (other than those already owned by the Offeror and parties acting in concert with it) pursuant to Rule 26.1 of the Takeovers Code
“Offer Period” has the same meaning ascribed to it under the Takeovers Code
“Offer Price” the price per Offer Share at which the Offer will be made in cash, being HK$0.175 per Offer Share
“Offer Shares” 5,152,849,024 Shares, being all the Shares in issue, other than those Shares already owned by the Offeror and parties acting in concert with it
“Offeror” Future Capital Group Limited, a company incorporated in the BVI with limited liability and wholly and beneficially owned by Ms. Lo
“Overseas Shareholder(s) whose addresses, as shown on the register of members of Shareholder(s)” the Company, are outside Hong Kong

— 19 —

“PRC” the People’s Republic of China which, for the purpose of this joint announcement, shall exclude Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan

“Retained Shares” 4 Shares beneficially owned by the 1st Vendor upon the Share Completion, which have not been accounted for under the Sale and Purchase Agreement
“Sale and Purchase the sale and purchase agreement dated 16 January 2019 and entered into Agreement” between the Vendors and the Offeror (as amended by a side letter dated 23 January 2019 and signed by the Vendors and the Offeror) for the sale and purchase of the Sale Shares
“Sale Shares” an aggregate of 4,099,709,732 Shares beneficially owned by the Vendors as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion, representing approximately 44.06% of the total issued share capital of the Company as at the date of the Sale and Purchase Agreement and immediately prior to Share Completion
“SFC” Securities and Futures Commission of Hong Kong
“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Shareholder(s)” holder(s) of the Share(s)
“Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company
“Share Completion” completion of the sale and purchase of the Sale Shares pursuant to the Sale and Purchase Agreement
“Share Completion the date on which Share Completion took place, i.e. 17 January 2019 Date”
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Takeovers Code” the Hong Kong Code on Takeovers and Mergers
“Veda Capital” Veda Capital Limited, a licensed corporation to carry out business in type 6 (advising on corporate finance) regulated activity under the SFO, which is appointed as one of the joint financial advisers to the Offeror in respect of the Offer

— 20 —

“Vendors” collectively the 1st Vendor, the 2nd Vendor and the 3rd Vendor

“YT”

Y.T. Realty Group 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: 00075)

By order of the board of By order of the Board Future Capital Group Limited Yugang International Limited Lo Ki Yan Karen Yuen Wing Shing Director Managing Director

Hong Kong, 23 January 2019

As at the date of this joint 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.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement (other than the information relating to the Offeror, Ms. Lo, and parties acting in concert with any one of them), and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this joint announcement (other than the opinions expressed by the Offeror, Ms. Lo, and parties acting in concert with any one of them) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement (other than those relating to the Offeror, Ms. Lo, and parties acting in concert with any one of them) contained in this joint announcement misleading.

As at the date of this joint announcement, Ms. Lo is the sole director of the Offeror.

The sole director of the Offeror accepts full responsibility for the accuracy of the information contained in this joint announcement (other than the information relating to the Group, the Vendors and parties acting in concert with any one of them), and confirms, having made all reasonable enquires, that to the best of her knowledge, opinions expressed in this joint announcement (other than the opinions expressed by the Group, the Vendors and parties acting in concert with any one of them) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement contained in this joint announcement misleading.

The English text of this joint announcement shall prevail over its Chinese text.

— 21 —

AI assistant

Planetree International Development Limited — M&A Activity 2019

49339_rns_2019-01-23_01deaca9-8032-48da-9ab5-daeb157cd629.pdf

JOINT ANNOUNCEMENT

(1) CHANGE OF CONTROLLING SHAREHOLDER OF YUGANG INTERNATIONAL LIMITED

(3) ESTABLISHMENT OF THE INDEPENDENT BOARD COMMITTEE

(4) RESUMPTION OF TRADING

CHANGE OF CONTROLLING SHAREHOLDER

CONDITIONAL MANDATORY CASH OFFER

For each Offer Share

HK$0.175 in cash

ESTABLISHMENT OF THE INDEPENDENT BOARD COMMITTEE

GENERAL

RESUMPTION OF TRADING

WARNING

SALE AND PURCHASE AGREEMENT

Parties:

Subject matter of the Sale and Purchase Agreement

Consideration for the Sale Shares

Share Completion

CONDITIONAL MANDATORY CASH OFFER

Principal terms of the Offer

For each Offer Share

HK$0.175 in cash

Condition of the Offer

Comparison of value

Highest and lowest Share price

Value of the Offer

Financial resources available to the Offeror

Effect of accepting the Offer

Hong Kong stamp duty

Payment

Taxation advice

Dealing and interests in the Company’s securities

Overseas Shareholders

Other arrangements

Information on the Offeror

Information on the Group

Shareholding structure of the Company

OFFEROR’S INTENTION ON THE COMPANY

Compulsory Acquisition

MAINTENANCE OF THE LISTING STATUS OF THE COMPANY

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE

GENERAL

Disclosure in dealing

“Responsibilities of stockbrokers, banks and other intermediaries

RESUMPTION OF TRADING

WARNING

DEFINITIONS

“BVI”

“YT”

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Planetree International Development Limited M&A Activity 2019