Redsun Properties Group Limited — Capital/Financing Update 2021

Jan 7, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities referred to herein will not be registered under the Securities Act and may not be offered, sold or delivered in the United States except pursuant to an exemption from or a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Senior Notes are being offered and sold only outside the United States. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the Company making the offer and its management and, financial statements. The Company does not intend to make any public offering of securities in the United States. None of the Senior Notes will be offered to the public in Hong Kong and none of the Senior Notes will be placed to any connected persons of the Company.

Redsun Properties Group Limited 弘陽地產集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1996)

ISSUANCE OF US$350,000,000 7.30% SENIOR NOTES DUE 2025

The Board is pleased to announce that on 6 January 2021 (after trading hours), the Company and the Subsidiary Guarantors entered into the Purchase Agreement with China International Capital Corporation, Deutsche Bank, Credit Suisse, UBS, CCB International, China CITIC Bank International, CMB International, Guotai Junan International, Haitong International, HSBC, J.P. Morgan, Morgan Stanley, Nomura and Standard Chartered Bank in relation to the Notes Issue.

The estimated net proceeds of the Notes Issue, after deducting the underwriting discounts and commissions and other estimated expenses payable in connection with the Notes Issue, will be approximately US$343 million. The Company intends to use the net proceeds for refinancing its existing medium to long term offshore indebtedness which will become due within one year.

The Company will seek a listing of the Senior Notes on the Stock Exchange. A confirmation of the eligibility for the listing of the Senior Notes has been received from the Stock Exchange. Listing of the Senior Notes on the Stock Exchange is not to be taken as an indication of the merits of the Company or the Senior Notes.

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Reference is made to the announcement of the Company dated 6 January 2021. The Board is pleased to announce that on 6 January 2021 (after trading hours), the Company and the Subsidiary Guarantors entered into the Purchase Agreement with China International Capital Corporation, Deutsche Bank, Credit Suisse, UBS, CCB International, China CITIC Bank International, CMB International, Guotai Junan International, Haitong International, HSBC, J.P. Morgan, Morgan Stanley, Nomura and Standard Chartered Bank in relation to the Notes Issue.

THE PURCHASE AGREEMENT

Date: 6 January 2021 (after trading hours)

Parties to the Purchase Agreement

• (a) the Company as the issuer;

• (b) the Subsidiary Guarantors;

• (c) China International Capital Corporation, Deutsche Bank, Credit Suisse, UBS, CCB International, China CITIC Bank International, CMB International, Guotai Junan International, Haitong International, HSBC, J.P. Morgan, Morgan Stanley, Nomura and Standard Chartered Bank

China International Capital Corporation, Deutsche Bank, Credit Suisse, UBS, CCB International, China CITIC Bank International, CMB International, Guotai Junan International, Haitong International, HSBC, J.P. Morgan, Morgan Stanley, Nomura and Standard Chartered Bank have been appointed as joint lead managers and joint bookrunners of the Notes Issue. They are also the initial purchasers of the Senior Notes. To the best of the Directors’ knowledge, information and belief, having made all reasonable inquiries, each of China International Capital Corporation, Deutsche Bank, Credit Suisse, UBS, CCB International, China CITIC Bank International, CMB International, Guotai Junan International, Haitong International, HSBC, J.P. Morgan, Morgan Stanley, Nomura and Standard Chartered Bank is an independent third party and not a connected person of the Company.

The Senior Notes have not been and will not be registered under the Securities Act. The Senior Notes are being offered outside the United States in offshore transactions in accordance with Regulation S, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirement of the Securities Act. None of the Senior Notes will be offered to the public in Hong Kong and none of the Senior Notes will be placed to any connected persons of the Company.

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Principal Terms of the Senior Notes

Notes Offered

Subject to certain conditions to completion, the Company will issue the Senior Notes in the aggregate principal amount of US$350,000,000 which will mature on 13 January 2025, unless redeemed earlier pursuant to the terms thereof.

Offering Price

The offering price of the Senior Notes will be 99.320% of the principal amount of the Senior Notes.

Interest

The Senior Notes will bear interest from and including 13 January 2021 at a rate of 7.30% per annum, payable semi-annually and in arrears on 13 January and 13 July, commencing on 13 July 2021.

Ranking of the Senior Notes

The Senior Notes are:

• (1) general obligations of the Company;

• (2) senior in right of payment to any existing and future obligations of the Company expressly subordinated in right of payment to the Senior Notes;

• (3) at least pari passu in right of payment with the Existing Notes and all other unsecured, unsubordinated obligations of the Company (subject to any priority rights of such unsecured, unsubordinated obligations pursuant to applicable law);

• (4) guaranteed by the Subsidiary Guarantors and the JV Subsidiary Guarantors (if any) on a senior basis, subject to certain limitations;

• (5) effectively subordinated to the secured obligations of the Company, the Subsidiary Guarantors and the JV Subsidiary Guarantors (if any), to the extent of the value of the assets serving as security therefor; and

• (6) effectively subordinated to all existing and future obligations of the Non-Guarantor Subsidiaries.

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Events of Default

The events of default under the Senior Notes include:

• (1) default in the payment of principal of (or premium, if any, on) the Senior Notes when the same becomes due and payable at maturity, upon acceleration, redemption or otherwise;

• (2) default in the payment of interest on any Senior Note when the same becomes due and payable, and such default continues for a period of 30 consecutive days;

• (3) default in the performance or breach of certain provisions of the covenants described in the Indenture or the occurrence of an ‘‘Event of Default’’ as defined under the Hong Seng Notes;

• (4) the Company or any Restricted Subsidiary defaults in the performance of or breaches any other covenant or agreement in the Indenture or under the Senior Notes (other than a default specified in clause (1), (2) or (3) above) and such default or breach continues for a period of 30 consecutive days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the Senior Notes;

• (5) there occurs with respect to any indebtedness of the Company, any Restricted Subsidiary, Hong Yang Group Company or any of its subsidiaries which constitute the ‘‘Restricted Subsidiaries’’ as defined in the indentures governing the Hong Seng Notes, having an outstanding principal amount of US$15 million (or the Dollar Equivalent thereof) or more in the aggregate for all such indebtedness of all such persons, whether such indebtedness now exists or shall hereafter be created, (a) an event of default that has caused the holder thereof to declare such indebtedness to be due and payable prior to its stated maturity and/or (b) the failure to make a principal payment when due;

• (6) one or more final judgments or orders for the payment of money are rendered against the Company or any of its Restricted Subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such persons to exceed US$15 million (or the Dollar Equivalent thereof) (in excess of amounts which the Company’s insurance carriers have agreed to pay under applicable policies) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect;

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• (7) an involuntary case or other proceeding is commenced against the Company or any Significant Restricted Subsidiary with respect to it or its debts under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Restricted Subsidiary or for any substantial part of the property and assets of the Company or any Significant Restricted Subsidiary and such involuntary case or other proceeding remains undismissed and unstayed for a period of 60 consecutive days; or an order for relief is entered against the Company or any Significant Restricted Subsidiary under any applicable bankruptcy, insolvency or other similar law as now or hereafter in effect;

• (8) the Company or any Significant Restricted Subsidiary, other than in connection with a solvent liquidation or reorganization (except for any solvent liquidation or reorganization of the Company), (a) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (b) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Restricted Subsidiary or for all or substantially all of the property and assets of the Company or any Significant Restricted Subsidiary or (c) effects any general assignment for the benefit of creditors; or

• (9) any Subsidiary Guarantor or JV Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee or JV Subsidiary Guarantee or, except as permitted by the Indenture, any Subsidiary Guarantee or JV Subsidiary Guarantee is determined to be unenforceable or invalid or shall for any reason cease to be in full force and effect;

If an event of default (other than an event of default specified in clause (7) or (8) above) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding, by written notice to the Company (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the written request of such Holders shall, subject to receiving indemnity and/or security and/or pre-funding to its satisfaction, declare the principal of, premium, if any, and accrued and unpaid interest on the Senior Notes to be immediately due and payable. Upon a declaration of acceleration, such principal of, premium, if any, and accrued and unpaid interest shall be immediately due and payable. If an event of default specified in clause (7) or (8) above occurs with respect to the Company or any Significant Restricted Subsidiary, the principal of, premium, if any, and accrued and unpaid interest on the Senior Notes then outstanding shall automatically become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

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Covenants

The Senior Notes, the Indenture governing the Senior Notes, the Subsidiary Guarantees and the JV Subsidiary Guarantees will limit the ability of the Restricted Subsidiaries to, among other things:

• (1) incur or guarantee additional indebtedness or issue disqualified or preferred stock;

• (2) declare dividends on its capital stock or purchase or redeem capital stock;

• (3) make investments or other specified restricted payments;

• (4) issue or sell capital stock of Restricted Subsidiaries;

• (5) guarantee indebtedness by Restricted Subsidiaries;

• (6) sell assets;

• (7) create liens;

• (8) enter into sale and leaseback transactions;

• (9) enter into agreements that restrict the Restricted Subsidiaries’ ability to pay dividends, transfer assets or make intercompany loans;

• (10) enter into transactions with shareholders or affiliates;

• (11) engage in any business other than Permitted Businesses; and

• (12) effect a consolidation or merger.

These covenants are subject to a number of important qualifications and exceptions described in the Indenture.

Optional Redemption

At any time and from time to time on or after 13 January 2023, the Company may redeem the Senior Notes, in whole or in part, at a redemption price equal to the percentage of the principal amount of the Senior Notes redeemed set forth below plus accrued and unpaid interest (if any) to (but not including) the redemption date if redeemed during the twelve-month period beginning on 13 January of the year indicated below:

Period

Redemption Price

2023 103% 2024 101.5%

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At any time and from time to time prior to 13 January 2023, the Company may at its option redeem the Senior Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Senior Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date.

At any time and from time to time prior to 13 January 2023, the Company may at its option redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of one or more sales of common stock of the Company in an equity offering at a redemption price of 107.3% of the principal amount of the Senior Notes redeemed, plus accrued and unpaid interest, if any, to (but not including) the applicable redemption date; provided that at least 65% of the aggregate principal amount of the Senior Notes (including any additional notes) originally issued remains outstanding after each such redemption and any such redemption takes place within 60 days after the closing of the related equity offering.

REASONS FOR THE NOTES ISSUE AND THE PROPOSED USE OF PROCEEDS

We are a comprehensive property developer with a strong foothold in the Yangtze River Delta Region and a national strategic layout, focusing on the development of residential properties and the development, operation and management of commercial and integrated properties. Through implementing the national layout strategy of ‘‘penetrating the Greater Jiangsu Region, strengthening foothold in major metropolitan areas and expanding into core cities’’ (做透大江蘇、深耕都市圈、做強中 心城), the Group has promoted and stabilized its national strategic layout and strengthened its regional foothold with focus on core areas, bringing it to the stage of rapid and balanced development.

The estimated net proceeds of the Notes Issue, after deducting the underwriting discounts and commissions and other estimated expenses payable in connection with the Notes Issue, will be approximately US$343 million. The Company intends to use the net proceeds for refinancing its existing medium to long term offshore indebtedness which will become due within one year.

LISTING AND RATINGS

The Company will seek a listing of the Senior Notes on the Stock Exchange. A confirmation of the eligibility for the listing of the Senior Notes has been received from the Stock Exchange. Listing of the Senior Notes on the Stock Exchange is not to be taken as an indication of the merits of the Company or the Senior Notes.

The Senior Notes are expected to be rated ‘‘B+’’ by Fitch, ‘‘B3’’ by Moody’s and ‘‘BB-’’ by Lianhe Global. The ratings do not constitute a recommendation to purchase, hold or sell the securities and may be subject to suspension, reduction or withdrawal of any time by Fitch, Moody’s and Lianhe Global.

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DEFINITIONS

• ‘‘Board’’ the board of Directors

• ‘‘CCB International’’ CCB International Capital Limited, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘China CITIC Bank China CITIC Bank International Limited, one of the joint International’’ bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘China International China International Capital Corporation Hong Kong Securities Capital Limited, one of the joint bookrunners and joint lead managers in Corporation’’ respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘CMB International’’ CMB International Capital Limited, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Company’’ Redsun Properties Group Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

• ‘‘connected persons’’ has the meaning ascribed to it under the Listing Rules

• ‘‘Credit Suisse’’ Credit Suisse (Hong Kong) Limited, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Deutsche Bank’’

• Deutsche Bank AG, Singapore Branch, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Directors’’

• the directors of the Company

• ‘‘Dollar Equivalent’’ with respect to any monetary amount in a currency other than US$, at any time for the determination thereof, the amount of US$ obtained by converting such foreign currency involved in such computation into US$ at the best rate for the purchase of US$ with the applicable foreign currency as quoted by the Federal Reserve Bank of New York on the date of determination

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‘‘Existing Notes’’

• (i) the US$300 million 11.5% senior notes due 2021 issued by the Company in March 2019; (ii) the US$300 million 9.95% senior notes due 2022 issued by the Company in April 2019, and consolidated with an additional US$150,000,000 principal amount of 9.95% senior notes due 2022 issued by the Company in November 2019; (iii) the US$250 million 10.5% senior notes due 2022 issued by the Company in July 2019; (iv) the US$100 million 13.0% senior notes due 2021 issued by the Company in October 2019; and (v) the US$300,000,000 9.70% senior notes due 2023 issued by the Company in January 2020 and consolidated with an additional US$155,000,000 principal amount of 9.70% senior notes due 2023 issued by the Company in July 2020

• ‘‘Fitch’’ Fitch Ratings, Inc. and its affiliates

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘Guotai Junan Guotai Junan Securities (Hong Kong) Limited, one of the joint International’’ bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Haitong Haitong International Securities Company Limited, one of the International’’ joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Holder’’ the holder in whose name a Senior Note is registered in the Senior Note register

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

• ‘‘Hong Seng Notes’’ the 9.875% guaranteed senior notes due 2022 issued by Hong Seng Limited (弘昇有限公司), a company incorporated in the British Virgin Islands and wholly owned by Hong Yang Group Company

• ‘‘Hong Yang Group Hong Yang Group Company Limited, a limited liability Company’’ company incorporated in Hong Kong and a controlling shareholder of the Company

• ‘‘HSBC’’ The Hongkong and Shanghai Banking Corporation Limited, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

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• ‘‘Indenture’’

• the written agreement to be entered into amongst the Company, the Subsidiary Guarantors and the Trustee on or about 13 January 2021, that specifies the terms of the Senior Notes including the interest rate and the maturity date

• ‘‘JV Subsidiary any limited recourse guarantees given by any JV Subsidiary Guarantee’’ Guarantor on the Senior Notes

• ‘‘JV Subsidiary any subsidiary of the Company which in the future provides a JV Guarantor’’ Subsidiary Guarantee

• ‘‘J.P. Morgan’’ J.P. Morgan Securities plc, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Lianhe Global’’ Lianhe Ratings Global Limited and its successors

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• ‘‘Moody’s’’

• Moody’s Investors Services Inc. and its successors

• ‘‘Morgan Stanley’’ Morgan Stanley & Co. International plc, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Nomura’’

• Nomura International (Hong Kong) Limited, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Non-Guarantor subsidiaries of the Company which are not providing guarantees Subsidiaries’’ under the Senior Notes

• ‘‘Notes Issue’’ the issuance of the Senior Notes by the Company

• ‘‘Permitted any business which is the same as or related, ancillary or Businesses’’ complementary to any of the business of the Company and its Restricted Subsidiaries on the original issue date of the Senior Notes

• ‘‘PRC’’ the People’s Republic of China, which, for the purposes of this announcement, excludes Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan

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• ‘‘Purchase the agreement entered into among the Company, the Subsidiary Agreement’’ Guarantors, China International Capital Corporation, Deutsche Bank, Credit Suisse, UBS, CCB International, China CITIC Bank International, CMB International, Guotai Junan International, Haitong International, HSBC, J.P. Morgan, Morgan Stanley, Nomura and Standard Chartered Bank in relation to the Notes Issue on 6 January 2021 (after trading hours)

• ‘‘Regulation S’’ means Regulation S under the Securities Act

• ‘‘Restricted any subsidiary of the Company other than an Unrestricted Subsidiary’’ Subsidiary

• ‘‘Securities Act’’ the United States Securities Act of 1933, as amended

• ‘‘Senior Notes’’ the US$350,000,000 7.30% senior notes due 2025 proposed to be issued by the Company subject to the terms and conditions of the Purchase Agreement

• ‘‘Significant means a Restricted Subsidiary, or group of Restricted Restricted Subsidiaries, that would, when taken together, be a Subsidiary’’ ‘‘significant subsidiary’’ within the meaning of the definition of ‘‘significant subsidiary’’ in Article 1, Rule 1–2(w) of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the original issue date of the Senior Notes; provided that in each instance in such definition in which the term ‘‘10 percent’’ is used, the term ‘‘5 percent’’ shall be substituted therefor

• ‘‘Standard Chartered Standard Chartered Bank, one of the joint bookrunners and Bank’’ joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Subsidiary any guarantee of the obligations of the Company under the Guarantee’’ Indenture and the Senior Notes provided by any Subsidiary Guarantor

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• ‘‘Subsidiary any Restricted Subsidiary which guarantees the payment of the Guarantor’’ Senior Notes pursuant to the Indenture and the Senior Notes, excluding (i) any person whose Subsidiary Guarantee has been released in accordance with the Indenture and the Senior Notes or (ii) any JV Subsidiary Guarantor

• ‘‘Trustee’’ The Bank of New York Mellon, London Branch

• ‘‘UBS’’ UBS AG Hong Kong Branch, one of the joint bookrunners and joint lead managers in respect of the Notes Issue and an initial purchaser of the Senior Notes

• ‘‘Unrestricted (1) any subsidiary of the Company that at the time of Subsidiary’’ determination shall be designated an Unrestricted Subsidiary by the Board in the manner provided in the Indenture; and (2) any subsidiary of an Unrestricted Subsidiary

• ‘‘US$’’ United States dollars, the lawful currency of the United States of America

On behalf of the Board Redsun Properties Group Limited Zeng Huansha Chairman

Hong Kong, 7 January 2021

As of the date of this announcement, the executive Directors are Mr. Zeng Huansha, Mr. He Jie and Mr. Lui Wai Pang; the non-executive Director is Mr. Jiang Daqiang; and the independent non-executive Directors are Mr. Lee Kwok Tung Louis, Mr. Leung Yau Wan John and Mr. Au Yeung Po Fung.

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