RemeGen Co., Ltd. — Capital/Financing Update 2012

Nov 6, 2012

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibilities 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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Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

VERY SUBSTANTIAL ACQUISITION AND RESUMPTION OF TRADING

THE ACQUISITION

The Board is pleased to announce that, on 2 November 2012, Excel Founder (as purchaser), an indirectly wholly-owned subsidiary of the Company, and the Vendor entered into the Agreement, pursuant to which, Excel Founder has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose of the entire equity interest in the Target Company and all rights attached thereto for the consideration of RMB384,995,400.

The Supplemental Agreement was also entered into between Excel Founder and the Vendor on 2 November 2012, setting out further arrangement concerning the Land and the financial position of the Target Company.

The Company has also given the Undertaking to the Vendor on 2 November 2012, pursuant to which the Company guarantees the due performance of Excel Founder’s obligations under the Agreement and the Supplemental Agreement and undertakes that the Company will assume joint liability with Excel Founder in respect of the aforesaid performance of obligations.

LISTING RULES IMPLICATION

As the relevant applicable percentage ratios calculated pursuant to the Listing Rules in respect of the Acquisition exceed 100%, the Acquisition constitutes a very substantial acquisition of the Company for the purpose of the Listing Rules and are subject to, among other things, the shareholders’ approval requirement under Chapter 14 of the Listing Rules.

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A circular containing, among other things, (a) further details of the Acquisition and (b) such other information as required under the Listing Rules, is expected to be despatched to the Shareholders on or before 27 November 2012.

Shareholders and potential investors are reminded that the Agreement is subject to, among other things, fulfillment of certain conditions set out in the paragraph headed “Conditions Precedent to the Agreement” in this announcement. There is no assurance by the Company that any of the conditions will be fulfilled. Shareholders and potential investors should exercise caution when dealing in the Shares.

RESUMPTION OF TRADING

Trading in the Shares on the Stock Exchange was suspended with effect from 9:00 a.m on 5 November 2012 pending the release of this 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 7 November 2012.

INTRODUCTION

The Board is pleased to announce that, on 2 November 2012, Excel Founder (as purchaser), an indirectly wholly-owned subsidiary of the Company, and the Vendor entered into the Agreement, pursuant to which, Excel Founder has conditionally agreed to acquire and the Vendor has conditionally agreed to dispose of the entire equity interest in the Target Company and all rights attached thereto for the consideration of RMB384,995,400.

The Supplemental Agreement was also entered into between Excel Founder and the Vendor on 2 November 2012, setting out further arrangement concerning the Land and the financial position of the Target Company.

The Company has also given the Undertaking to the Vendor on 2 November 2012, pursuant to which the Company guarantees the due performance of Excel Founder’s obligations under the Agreement and the Supplemental Agreement and undertakes that the Company will assume joint liability with Excel Founder in relation to the aforesaid performance of obligations.

THE AGREEMENT

Date:

2 November 2012

Parties:

Purchaser: Excel Founder, it is principally engaged in investment holding.

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Vendor:

天津津濱發展股份有限公司 (Tianjin Jinbin Development Company Limited), it is principally engaged in property development.

To the best of the knowledge, information and belief of the Board, having made all reasonable enquiries, the Vendor and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

Assets to be acquired

The entire equity interest in the Target Company held by the Vendor, together with all rights attached thereto.

Details of the Target Company are set out below in the paragraph headed “Information of the Target Company and its development plans”.

Conditions Precedent to the Agreement

The Completion is conditional upon, among other things, fulfillment of the following conditions:

1. the Company having obtained all necessary or appropriate approval, authorisation, consent and licence as a company whose shares are listed on the Stock Exchange (including without limitation, approval from Shareholders at general meeting);

2. the Vendor, Excel Founder and the Target Company having obtained all necessary or appropriate approval, authorisation, consent and licence;

3. the Agreement having obtained approval from the Ministry of Commerce of the PRC or its authorised approval authorities, and all necessary or appropriate approval, consent, authorisation and licences and having fulfilled all statutory requirements (if any); and

4. the Agreement having completed all relevant approval matters pursuant to the relevant requirements of the laws and regulations of the PRC.

According to the Agreement, there is no long stop date for the completion of the above conditions precedent.

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Consideration

The consideration of RMB384,995,400 (equivalent to approximately HK$475,302,963) is to be satisfied by the Company in the following manners upon Completion and completion of the procedures for the amendment of the industry and commerce registration, the filing to the Ministry of the Commerce of the PRC, and the filing modification with the foreign exchange administration in relation to the Acquisition:–

• (a) as to RMB196,347,700 (equivalent to approximately HK$242,404,568) in cash within three business days; and

• (b) as to RMB188,647,700 (equivalent to approximately HK$232,898,395) in cash within three months.

Basis of determination of the consideration

The consideration was determined based on normal commercial terms and arrived at after arm’s length negotiation between Excel Founder and the Vendor, taking into consideration, (i) the preliminary estimate of the value of the Land conducted by an independent valuer (further details will be particularized in the circular to be despatched to the Shareholders); (ii) the assets and liabilities of the Target Company in its unaudited management accounts as at 31 October 2012; and (iii) the development potential of the Land.

Management of the Target Company during the transitional period before Completion

From the entering into of the Agreement to the completion of the amendment of the industry and commerce registration in relation to the Acquisition, Excel Founder shall be entitled to appoint its representatives to participate in the operation and management of the Target Company and appoint two directors to the Target Company’s board of directors.

Land use right certificate

After the signing of the Agreement, the Vendor is obliged to assist Excel Founder and the Target Company in obtaining the land use right certificate.

THE SUPPLEMENTAL AGREEMENT

Excel Founder and the Vendor also entered into the Supplemental Agreement on 2 November 2012, principal terms of which are summarised as follows:

Adjustment of the Land

The Vendor shall be responsible for the application to adjust the terms of use of the Land (the “Adjustment”) as follows:

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• (1) permitted land use shall be changed from residential only, to residential and commercial use;

• (2) term of land use right shall be changed from 70 years for residential use, to 70 years for portion of Land for residential use and 40 years for portion of Land for commercial use; and

• (3) the Land shall have a construction plot ratio of 2.4 and thus a total construction area of 316,230 square meters, out of which commercial area (including facilities and public buildings of not more than 11,000 square meters, while the remaining area as saleable commercial area) shall be not less than 30,000 square meters and not more than 40,000 square meters.

Compensation in relation to Adjustment

Pursuant to the Supplemental Agreement, the Vendor shall pay Excel Founder (i) RMB8,000 for every 1 square meter deficient where the portion of Land for commercial use is less than 30,000 square meters (but subject to a maximum of RMB150,000,000), and (ii) RMB5,000 for every 1 square meter excess where the portion of Land for commercial use is more than 40,000 square meters, based on the total construction area.

The Adjustment shall be completed prior to 30 June 2013 (or another date as agreed by Excel Founder in writing), failure of which the Vendor agreed to pay Excel Founder a sum of RMB150,000,000 as compensation before 30 August 2013. Interest shall be payable at a rate representing 4 times of the one-year benchmark lending rate published by the People’s Bank of China upon default.

The Target Company shall be responsible for all fees and expenses for the application for the Adjustment. Where the final fee incurred exceeds RMB9,000,000, the Vendor shall be responsible for such additional fee.

Delivery of the Land

The Vendor shall complete all removal, demolition and site formation works in relation to the Land before 31 December 2012 and, shall there exist any requirements for resettlement and compensation of workers in relation to the Land pursuant to the relevant laws and regulations of the PRC, the same shall be completed before 31 December 2012. The Land shall be handed over to the Target Company for its commencement of business before 31 December 2012. All costs to be incurred for the removal, demolition and site formation works and the hand-over shall be borne by the Vendor. Shall the Vendor be unable to hand-over the Land to the Target Company before 31 December 2012 according to the terms of the Supplemental Agreement due to the Vendor’s failure to complete the removal, demolition, site formation, resettlement and compensation works in relation to the Land, the Vendor agreed to pay Excel Founder a daily compensation equivalent to 0.1% of the part of consideration already paid by Excel Founder and the amount of debt already repaid by the Target Company. If the Vendor fails to hand-over the Land to the Target Company for over 30 days from 31 December 2012, Excel Founder is entitled to terminate the Supplemental Agreement and the Agreement and claim for its loss from the Vendor.

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Repayment of debt

The Vendor undertakes that the costs of the Land (including land transfer fee, taxes and reserve costs for land consolidation) (the “Land Costs”) shall be acknowledged by the tax authority of Tianjin City (天津市級稅務機關) as RMB1,068,000,000. The Land Costs have been fully paid by the Vendor, its associated company and the Target Company, among which, the amount paid by the Vendor and its associated company in the amount of RMB1,047,812,158.66 has been converted into a debt owed by the Target Company to the Vendor and its associated company. The Vendor guarantees that (1) the Target Company has no outstanding debt or contingent debt other than the aforesaid debt of RMB1,047,812,158.66 as at 31 October 2012, which shall otherwise be repaid by the Vendor, and (2) the Target Company will be provided all invoices and in the amount of not less than RMB1,068,000,000 before 30 June 2013 that are approved by the tax authority and can be counted as the costs of the Land, failure of which the Vendor will be responsible for any consequential additional taxes to be borne by the Target Company.

Where the invoices provided to the Target Company exceed RMB535,000,000 on the date of payment of the first part of the consideration pursuant to the Agreement, the Target Company shall repay RMB535,000,000 to the Vendor and its associated company (the “First Installment”). The remaining debt owed by the Target Company to the Vendor and its associated company (the “Remaining Balance”) shall be repaid by the Target Company upon Excel Founder acknowledging the Target Company has been provided the invoices pursuant to the terms of the Supplemental Agreement, and (1) on 30 June 2013 or (2) upon the completion of the Adjustment or within five business days after the payment of the compensation payable by the Vendor to Excel Founder pursuant to the terms of the Supplemental Agreement, if any, as detailed in the paragraph headed “Compensation in relation to Adjustment” above and upon acknowledgement by Excel Founder in relation to the same; whichever the later. Default in repayment by the Target Company pursuant to the terms of the Supplemental Agreement shall be subject to interest at a rate representing 4 times of the one-year benchmark lending rate published by the People’s Bank of China.

The First Installment shall be interest-free. Interest shall be payable on the Remaining Balance from the date of repayment of the First Installment by the Target Company, or the date the invoices that shall be provided to the Target Company pursuant to the Supplemental Agreement have been provided to the Target Company, whichever the later, until full settlement of the same at a rate same as the oneyear benchmark lending rate published by the People’s Bank of China. Excel Founder has guaranteed for the said repayment of debt by the Target Company, and will assume joint liability for repayment with the Target Company.

Total Commitment of the Group and Source of Funding

In relation to the Acquisition, the total commitment of the Group are the consideration of RMB384,995,400 pursuant to the Agreement and the repayment of debt of RMB1,047,812,158.66 owed by the Target Company to the Vendor and its associated company pursuant to the Supplemental Agreement.

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The Group intends to satisfy the aforesaid amount by internal resources, shareholder’s loans and/or bank borrowings.

UNDERTAKING BY THE COMPANY

The Company has also given the Undertaking to the Vendor on 2 November 2012, pursuant to which the Company guarantees the due performance of Excel Founder’s obligations under the Agreement and the Supplemental Agreement and undertakes that the Company will assume joint liability with Excel Founder in respect of the aforesaid performance of obligations.

The Company is principally engaged in investment holding and the Group is principally engaged in comprehensive development business and the manufacture and sale of paper carton and products.

INFORMATION OF THE TARGET COMPANY AND ITS DEVELOPMENT PLANS

The Target Company was established in the PRC with limited liability in July 2012. It is principally engaged in investment, property development, sale agency of commercial property, design and construction of indoor and outdoor decoration, hotel management, property services, property leasing, the development and sale of construction material and technology, construction engineering, landscape construction.

The major assets of the Target Company is the Land located in the area of Jintang Road (津塘路), Hedong District (河東區), Tianjin, the PRC. The Land has a total site area of approximately 131,763.8 square meters. The costs of the Land was RMB1,068,000,000 and the latest status of the Land is vacant and it is in the process of site formation. As at the date of this announcement, the Land has not yet commenced development, but it is planned to be developed as residential and commercial properties with a total maximum gross floor area of approximately 316,230 square meters. The Target Company will start to develop high-rise buildings, multi-storeyed residential flats and shops on the Land after hand-over. It is expected that part of the construction will commence in 2013 and be completed in 2016.

The Target Company has entered into an agreement (天津市國有土地使用權出讓合同) with the Land Resources and Housing Administration Bureau of Tianjin City (天津市國土資源與房屋管理局) of the PRC on 17 October 2012, pursuant to which the Land Resources and Housing Administration Bureau of Tianjin City agreed to grant the Land to the Target Company through land swap. As the agreement was only entered for less than a month, the Target Company is still in the course of applying for the relevant land use right certificate.

The Target Company is applying for the land use right certificate in accordance with the normal procedures stipulated by the relevant authorities of the PRC. As advised by the Company’s PRC legal advisers, there are no legal obstacles for the Target Company to apply for the land use right certificate. It is expected that the Target Company will obtain the land use right certificate in 2013.

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According to the unaudited management accounts of the Target Company, the net assets value of the Target Company as at 31 October 2012 was RMB30,000,000. As the Target Company was newly established in the PRC in 2012 and in the early stage of development, the profit before and after tax attributable to the Target Company for the two financial years preceding to the signing of the Agreement and the Supplemental Agreement are not available. There was no profit/loss for the period from 19 July 2012 (date of establishment) to 31 October 2012.

REASONS FOR AND BENEFIT OF ENTERING INTO THE ACQUISITION

The Land owned by the Target Company is in a location with a convenient transportation network, comprehensive amenities in the surrounding areas. In view of the development potential of the Land, it is expected that the Acquisition can bring positive return and enhance the overall profitability of the Company.

The Board considers that the terms of the Acquisition are fair and reasonable, and that the Acquisition is in the interest of the Company and the Shareholders as a whole.

IMPLICATION UNDER THE LISTING RULES

As the relevant applicable percentage ratios calculated pursuant to the Listing Rules in respect of the Acquisition exceed 100%, the Acquisition constitutes a very substantial acquisition of the Company for the purpose of the Listing Rules and is subject to, among other things, the shareholders’ approval requirement under Chapter 14 of the Listing Rules.

The EGM will be convened by the Company at which resolution will be proposed to consider and, if thought fit, approve the Acquisition.

A circular containing, among other things, (a) further details of the Acquisition and (b) such other information as required under the Listing Rules, is expected to be despatched to the Shareholders on or before 27 November 2012.

Shareholders and potential investors are reminded that the Agreement is subject to, among other things, fulfillment of certain conditions set out in the paragraph headed “Conditions Precedent to the Agreement” in this announcement. There is no assurance by the Company that any of the conditions will be fulfilled. Shareholders and potential investors should exercise caution when dealing in the Shares.

RESUMPTION OF TRADING

Trading in the Shares on the Stock Exchange was suspended with effect from 9:00 a.m on 5 November 2012 pending the release of this 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 7 November 2012.

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DEFINITIONS

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

“Acquisition”	the acquisition of the entire equity interest in the Target Company
	pursuant to the Agreement (as supplemented by the Supplemental
	Agreement) and the Undertaking
“Agreement”	the conditional agreement entered into between Excel Founder and
	the Vendor on 2 November 2012 in relation to the Acquisition
“Board”	the board of Directors
“Company”	Overseas Chinese Town (Asia) Holdings Limited (華僑城（亞洲）控
	股有限公司), a company incorporated in the Cayman Islands with
	limited liability, the shares of which are listed on the main board of
	the Stock Exchange
“Completion”	completion of the Acquisition pursuant to the Agreement
“connected person(s)”	has the meaning ascribed to it in the Listing Rules
“Director(s)”	director(s) of the Company
“EGM”	the extraordinary general meeting of the Company to be convened
	for approving, among other things, the Acquisition
“Excel Founder”	Excel Founder Limited (銳振有限公司), a limited company
	incorporated in Hong Kong and an indirectly wholly-owned
	subsidiary of the Company
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Land”	a piece of land with an aggregate area of 131,763.8 square meters
	located in the area of Jintang Road (津塘路), Hedong District (河東
	區), Tianjin, the PRC owned by the Target Company
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange

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“PRC”	the People’s Republic of China which, for the purpose of this
	announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“RMB”	Renminbi, the lawful currency of the PRC
“Share(s)”	share(s) of HK$0.10 each in the share capital of the Company
“Shareholder(s)”	holder(s) of the issued Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Supplemental Agreement”	the supplemental agreement to the Agreement entered into between
	Excel Founder and the Vendor on 2 November 2012 in relation to
	the Acquisition
“Target Company”	天津天瀟投資發展有限公司 (Tianjin Tianxiao Investment
	Development Company Limited), a company established in the
	PRC with limited liability
“Undertaking”	the Undertaking given by the Company to the Vendor on 2
	November 2012 in relation to the Acquisition
“Vendor”	天津津濱發展股份有限公司 (Tianjin Jinbin Development
	Company Limited), a company established in the PRC, whose
	shares are listed on the Shenzhen Stock Exchange
“%”	per cent

In this announcement, the English names of the PRC entities or enterprises are translation of their Chinese names. In the event of any inconsistency, the Chinese names shall prevail.

For the purpose of this announcement and solely for the purpose of illustration, all amounts in RMB are translated into HK$ at an exchange rate of RMB0.81: HK$1.

By order of the Board of

Overseas Chinese Town (Asia) Holdings Limited Wang Xiaowen Chairman

Hong Kong, 6 November 2012

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As at the date of this announcement, the Board comprises seven Directors, namely: Ms. Wang Xiaowen, Ms. Xie Mei and Mr. Yang Jie as executive Directors; Mr. He Haibin as non-executive Director; Ms. Wong Wai Ling, Mr. Xu Jian and Mr. Lam Sing Kwong Simon as independent nonexecutive Directors.

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