RemeGen Co., Ltd. — Capital/Financing Update 2024

Jul 29, 2024

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

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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 DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF INTEREST IN OCT (SHANGHAI) LAND

On 29 July 2024, the Seller (an indirect wholly-owned subsidiary of the Company) entered into the conditional Equity Transfer Agreement with respect to the sale of its entire equity interests in OCT (Shanghai) Land (representing approximately 50.5% of the equity interest in OCT (Shanghai) Land) to the Purchaser for a Consideration of RMB2,055,399,300 in cash.

LISTING RULES IMPLICATIONS

The Disposal constitutes a very substantial disposal for the Company under Chapter 14 of the Listing Rules.

As the Purchaser is a connected person of the Company, the Disposal constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. It is therefore subject to, among other things, the reporting, announcement, circular and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Company will seek the Independent Shareholders’ approval at the EGM for the Disposal and the transactions contemplated under the Equity Transfer Agreement.

GENERAL AND OTHER INFORMATION

An Independent Board Committee has been established to advise the Shareholders with respect to the Disposal. Rainbow Capital (HK) Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on the Disposal.

A circular containing, among other things, further information about the Disposal and the notice of the EGM is expected to be published on or before 19 August 2024.

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Completion of the Disposal is conditional upon satisfaction of the conditions precedent under the Equity Transfer Agreement. The Disposal may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution in dealing in the securities of the Company.

EQUITY TRANSFER AGREEMENT

The principal terms of the Equity Transfer Agreement are summarised as follows:

Date

29 July 2024

Parties

• (1) The Seller (the transferor)

• (2) The Purchaser (the transferee)

• (3) OCT (Shanghai) Land (the Target Company)

The Sale Interests

Equity interest in the Target Company corresponding to RMB1.53 billion out of the Target Company’s registered capital (representing approximately 50.5% equity interests in the Target Company).

Consideration

The Consideration for the Sale Interests is RMB2,055,399,300 in cash.

Pursuant to the Equity Transfer Agreement, the Purchaser shall pay the Consideration to the Seller by a one-off payment to the account designated by the Seller within forty-five working days after the Equity Transfer Agreement comes into effect. The payment mechanism and schedule took into account the requirements and practices applicable to the Disposal, under which payment could be advanced only after all approvals and reviews by supervisory and regulatory institutions for the payment (including tax and foreign exchange control authorities in Chinese Mainland) having been completed. Pursuant to the Equity Transfer Agreement, if due to force majeure or fundamental condition change (which points to fundamental change to the contractual basis that cannot be foreseen when parties conclude their agreement that are not commercial risks, which would render the performance of the contract obviously unfair), the Purchaser is unable to pay the Consideration within the above time frame, the Seller may based on the situations at the relevant time grant an extension of the payment deadline (which shall not be more than 120 calendar days).

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Basis of Consideration

The Consideration was determined after arm’s length negotiations between the Seller and the Purchaser.

The primary assets of the Target Group are its properties in the Suhewan Project, and the Target Group derives almost all of its revenue from the sale, and leasing and management service in connection with these properties. When determining the Consideration, the Seller took into account, among other things, the following principal factors: (1) the consolidated net carrying value of the Target Company of approximately RMB3,545 million as of 30 June 2024. This net carrying value included, among other things, the book value of the real estate properties (including inventories and assets held-for-sale) at its original costs of approximately RMB5,748 million; (2) an increment of the value of these real estate properties (compared with its book value) of approximately RMB1,198 million. Such increment was assessed based on the preliminary appraisal of the market value of the real estate properties of the Target Group as of 30 June 2024 of approximately RMB6,946 million by Savills Valuation and Professional Services (China) Limited. An estimated amount of approximately RMB693 million as taxes, fees, expenses and transaction costs (including land value increment tax) which the Target Group may bear if it realises its real estate properties was also factored in; and (3) the corresponding equity holding percentage to be sold in the Disposal.

The unaudited consolidated total assets of the Target Company was approximately RMB7,181 million as of 30 June 2024, with the remaining assets (other than its properties) mainly being cash and cash equivalent (taking into account the cash consideration received from the disposal of assets as disclosed in the Company’s circular dated 6 November 2023). In line with the Group’s intended use of proceeds from such assets disposal as set out in the aforesaid circular, approximately RMB0.96 billion of the net proceeds from such assets disposal had been applied for repayment of loan.

The Property Valuer is an independent valuer engaged by the Company in connection with the appraisal of the market value of the properties held by the Target Group. The Property Valuer applies direct comparison method, and where applicable, the cost that will be expended in its appraisal of the market value of the Target Group’s real estate properties. The text of the property valuation report prepared by the Property Valuer, together with further details about the financial information of the Target Group will be included in the circular to be published by the Company with respect to the Disposal in due course.

The Board (excluding the independent non-executive Directors, whose view will be set out in the circular to be published by the Company after taking into account (among other things) the advice of the Independent Financial Adviser) considers that the Consideration to be fair and reasonable, and is in the interest of the Company and the Shareholders as a whole.

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Representation and warranties

The Seller has provided certain representations and warranties in relation to the Disposal under the Equity Transfer Agreement. These include, among other things, representations and warranties with respect to (i) the Seller’s right to dispose of the Sale Interests; (ii) the Disposal will not be in breach of any agreement or arrangement that the Target Company or its shareholders has entered into with any third party; (iii) the Disposal will not be in breach of the relevant provisions relating to the management of state-owned assets; (iv) information provided to the Purchaser; and (v) no encumbrance over the Sale Interests.

The Seller will be responsible for the expenses related to the audit, valuation and issue of the legal advice with respect to the Disposal. Taxes and other expenses shall be borne by parties with respect to the relevant tax laws and regulations in the PRC.

Conditions precedent

The Equity Transfer Agreement will come into effect upon (among other things) satisfaction of the following conditions:

• (a) the Company having obtained all necessary approvals, authorisations, consents and permission, and performed relevant procedures required under the Listing Rules and other applicable laws with respect to the Disposal (including making announcements, and having obtained the Independent Shareholders’ approval at a general meeting of the Company); and

• (b) the Disposal having obtained the Supervisory Approvals.

Completion

The Seller and the Purchaser will cooperate with the Target Company to arrange the relevant procedures on changes and registration of the equity interests with the relevant authorities within forty-five working days after the Equity Transfer Agreement comes into effect.

INFORMATION OF THE GROUP

The principal business activity of the Company is investment holding. The Group is principally engaged in comprehensive development, equity investment and fund management. Equity investment and fund management involves direct equity investment and private equity fund investment in the primary market. Comprehensive development involves development and sale of residential properties, development and management of commercial properties, and development and operation of tourism projects.

It has always been a priority of the Company to enhance shareholders’ value, to maintain core competitiveness, minimize undue risks and promote sustainable development. These principles have from time to time proven their significance, guiding the Group through uncertainties and volatilities brought by the external environment in recent years.

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After Completion, the Group’s comprehensive development business will, through its other projects, keep its focus on cities in core metropolitan areas in Hefei (the Hefei International Town Project, and the Hefei OCT Bantang Hot Spring Town Project), Chongqing (the Chongqing OCT Land Project), and Zhongshan (the Zhongshan Yuhong Project). The operation of industrial park projects in Huizhou in Guangdong and Suzhou in Jiangsu, and the provision of property and management services also allow the Group to derive cashflow and income. The Group had saleable properties of approximately 243,500 square meters in aggregate, developer self-held properties (including properties operated or leased by the Group, including industrial parks) with a total construction area of approximately 254,800 square meters, and land reserved for development with a construction area of approximately 1,208,100 square meters as of 30 June 2024 (without taking into account the Suhewan Project operated by the Target Group).

The Group’s equity investment and fund business focuses on the “cultural tourism + technology” industrial ecosystem. As of 31 December 2023, the total size of funds under the Group amounted to approximately RMB4.37 billion, and the size of actively managed funds was approximately RMB1.5 billion.

To live up to the Group’s priority and strategy mentioned above, the Group continues to optimise its business structure, revitalise its assets, focusing its resources on fields with strong growth prospects. Further information about the Group’s business (including further details of its other comprehensive development projects, and its equity investment and fund business summarized above) were set out in the 2023 Annual Report, and will also be included in the forthcoming 2024 Interim Report of the Company.

The Seller is an indirect wholly-owned subsidiary of the Company, and it is principally engaged in investment holding as of the date of this announcement.

INFORMATION OF THE TARGET COMPANY

The Target Company is a company established in the PRC with limited liability on 1 March 2010. As of the date of this announcement, the Target Company has a fully paid-up registered capital of RMB3.03 billion. The following chart summarises the equity holding structure of the Target Company as of the date of this announcement and prior to the Disposal:

Name of equity holder Corresponding registered capital (RMB’000) The Seller 1,530,000 OCT Real Estate 1,500,000 Total 3,030,000	Percentage of equity holding (approximate %) 50.5% 49.5% 100%

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The Target Group is principally engaged in residential development, leasing of commercial and apartments, management of related parking lots and provision of services including property management in block 1, blocks 41 and 42 in Jing’an District, Shanghai (the “ Site ”) in the PRC. The Target Group derives its revenue mainly from the operation of comprehensive development business (the Suhewan Project) located in the Site. As of the date of this announcement, the Suhewan Project has a gross floor area of approximately 454,470 square meters. It includes commercial properties (including area under construction), apartments and underground car parks.

Below summarises certain consolidated financial information of the Target Company for the periods/dates indicated, prepared in accordance with the China Accounting Standards for Business Enterprises:

	For the year ended 31 December	For the year ended 31 December
	2022	2023
	(RMB’000)	(RMB’000)
Revenue	230,248	329,745
Net loss before taxation	(314,841)	(280,054)
Net loss after taxation	(250,605)	(233,279)
	As of 31 December
	2022	2023
	(RMB’000)	(RMB’000)
Total assets	8,029,157	9,395,664
Net assets	3,589,819	3,356,539

INFORMATION OF THE PURCHASER

The Purchaser is a limited company established in the PRC. It is principally engaged in real estate development and operation, property and parking services, department stores, and sales of building materials and related equipment based on information available to the Company.

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The Purchaser is an indirect subsidiary of OCT Ltd. The below chart further illustrates information regarding the Purchaser’s shareholding structure as of the date of this announcement:

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----- Start of picture text -----

OCT Ltd.
100% 100%
Shanghai OCT
OCT Real Estate Investment
Development Co., Ltd.
50% 50%
Shanghai Pu Shen
Investment Management
Co., Ltd.
85% 2.243% 12.757%
Purchaser
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Notes:

1. OCT Ltd. is a controlling shareholder of the Company under the Listing Rules. As of the date of this announcement, OCT Ltd. wholly-owns Overseas Chinese Town (HK) Company Limited, which in turn wholly-owns Pacific Climax Limited (who holds approximately 70.94% of the total issued Shares of the Company). The shares of OCT Ltd. are listed on the Shenzhen Stock Exchange. OCT Ltd. is principally engaged in cultural tourism and real estate businesses.

2. OCT Real Estate is also an equity holder of the Target Company. See “ Information of the Target Company ” above.

3. Each of Shanghai OCT Investment Development Co., Ltd. (上海華僑城投資發展有限公司) and Shanghai Pu Shen Investment Management Co., Ltd. (上海浦深投資管理有限公司) are companies incorporated in the PRC.

FINANCIAL EFFECTS OF THE DISPOSAL ON THE GROUP

The Group will not hold any equity interest in the Target Company following the Completion of the Disposal. Accordingly, the Target Company will cease to be a subsidiary of the Group, and the Target Group’s financial results will no longer be consolidated into the Company’s consolidated financial statement.

The Group expects to realise a gain upon the Completion. Subject to the Completion, the Group estimates the gain arising from the Disposal to be approximately RMB264 million based on the information currently available, including (i) the amount of the Consideration, (ii) the Target Company’s consolidated net assets value as of 30 June 2024 (of approximately RMB3,545 million) and the corresponding percentage of equity interests (i.e. approximately 50.5%) in the Target Company to be disposed of, and (iii) the estimated fees and expenses of the Group arising from the Disposal of approximately RMB1 million.

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The financial effects are shown for reference only. The actual amount of gain or loss to be realised by the Group is subject to audit, and will be assessed based on the financial position of the Target Company as at Completion, and therefore may vary from the amounts mentioned above.

USE OF PROCEEDS

The net proceeds from the Disposal are expected to be approximately RMB2,054 million (after deducting estimated taxes, fees and expenses). The Company intends to apply all net proceeds from the Disposal principally for the repayment of the Group’s borrowings.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Disposal, if materialised, will enable the Group to realise proceeds of over RMB2 billion in the form of cash. The proceeds (proposed to be used as described in “ Use of Proceeds ” above) could materially reduce the Group’s indebtedness and interest payment, and strengthen the Group’s financial profile with an improved overall debt-to-asset ratio and indebtedness structure. The Company’s financial position would be enhanced upon the Completion, and the Group will be benefited from the enhanced financial flexibility, with an improved cashflow and liquidity to support its overall development.

The Board (excluding the independent non-executive Directors, whose views will be set out in the circular to be published by the Company, after taking into account (among other things) the advice of the Independent Financial Adviser) is of the view that the terms of the Equity Transfer Agreement are on normal commercial terms or better, and are fair and reasonable, and that the Disposal is in the interest of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio calculated pursuant to Chapter 14 of the Listing Rules in respect of the Disposal exceeds 75%, the Disposal constitutes a very substantial disposal for the Company under Chapter 14 of the Listing Rules.

The Purchaser is a subsidiary, and thus an associate, of OCT Ltd. (See also “ Information of the Purchaser ” above for more information). As the Purchaser is a connected person of the Company, the Disposal constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules. It is therefore subject to, among other things, the reporting, announcement, circular and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Company will seek the Independent Shareholders’ approval at the EGM for the Disposal and the transactions contemplated under the Equity Transfer Agreement.

GENERAL AND OTHER INFORMATION

No Directors have a material interest in the Disposal and are required to abstain from voting on the Board resolutions approving the Disposal and the transactions contemplated under the Equity Transfer Agreement.

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An Independent Board Committee (comprising all independent non-executive Directors, namely, Ms. Wong Wai Ling, Mr. Lam Sing Kwong Simon and Mr. Chu Wing Yiu) has been established to advise the Shareholders with respect to the Disposal. Rainbow Capital (HK) Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on the Disposal.

A circular containing, among other things, information about the Disposal and the Target Company, the advice of the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, the advice of the Independent Board Committee, and the notice of the EGM is expected to be published on or before 19 August 2024.

Completion of the Disposal is conditional upon satisfaction of the conditions precedent under the Equity Transfer Agreement. The Disposal may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution in dealing in the securities of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of directors of the Company
“Company”	Overseas Chinese Town (Asia) Holdings Limited (華僑城（亞 洲）控股有限公司), an exempted 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 Disposal
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Consideration”	the consideration for the Disposal, being RMB2,055,399,300
“controlling shareholder(s)”	has the meaning ascribed to it under the Listing Rules
“Director(s)”	the director(s) of the Company
“Disposal”	the proposed disposal of the Sale Interests
“EGM”	an extraordinary general meeting of the Company to be
	convened and held for the Independent Shareholders to
	consider and, if thought fit, approve the Disposal
“Equity Transfer Agreement”	the equity transfer agreement dated 29 July 2024 entered into
	between the Seller, the Purchaser and the Target Company
	with respect to the Disposal

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“Group” the Company and its subsidiaries as at the date of this announcement

“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Independent Board the independent committee of the Board comprising all the Committee” independent non-executive Directors (namely, Ms. Wong Wai Ling, Mr. Lam Sing Kwong Simon and Mr. Chu Wing Yiu), which is established for the purpose of advising the Independent Shareholders with respect to the Disposal

• “Independent Financial Adviser”

• Rainbow Capital (HK) Limited a licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), and being the independent financial adviser to the Independent Board Committee and the Independent Shareholders on the Disposal

• “Independent Shareholders” Shareholders (other than OCT Ltd. and its associates) who are not required to abstain from voting on resolution(s) approving the Disposal

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

• “OCT Ltd.” Shenzhen Overseas Chinese Town Company Limited (深 圳華僑城股份有限公司), a company established in the PRC, the shares of which are listed on the Shenzhen Stock Exchange (stock code: SZ000069). It is a controlling shareholder of the Company

• “OCT Real Estate” Shenzhen OCT Real Estate Company Limited (深圳華僑城 房地產有限公司), a company incorporated in the PRC with limited liability. It is wholly-owned by OCT Ltd. as of the date of this announcement

• “PRC” the People’s Republic of China, and for the purposes of this announcement only, excludes the Hong Kong Special Administrative Region of the People’s Republic of China, the Macau Special Administrative Region of the People’s Republic of China and Taiwan

• “Property Valuer” Savills Valuation and Professional Services (China) Limited

• “Purchaser” Shanghai Highpower OCT Investment Co., Ltd. (上海天 祥華僑城投資有限公司), a company incorporated in the PRC with limited liability. It is a connected person of the Company

• “RMB”

• Renminbi, the lawful currency of the PRC

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“Sale Interests” equity interest in the Target Company corresponding to RMB1.53 billion out of the Target Company’s registered capital to be disposed of by the Seller (representing approximately 50.5% equity interest in the Target Company). More information is set out in “ Equity Transfer Agreement – The Sales Interests ” in this announcement “Seller” GREAT TEC INVESTMENT LIMITED, a company incorporated in Hong Kong with limited liability, and an indirect wholly-owned subsidiary of the Company “Share(s)” the share(s) of the Company “Shareholder(s)” the shareholder(s) of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Suhewan Project” the project operated by the Target Group at a site located in the Jing’an district in Shanghai, PRC “Supervisory Approvals” approvals from relevant department(s) and authority(ies) with respect to the supervision and administration of stateowned assets with respect to the Disposal “Target Company” or Overseas Chinese Town (Shanghai) Land Company Limited “OCT (Shanghai) Land” ( 華僑城（上海）置地有限公司 ), a company incorporated in the PRC with limited liability. More information is set out in “ Information of the Target Company ” in this announcement “Target Group” the Target Company and its subsidiary

“%” per cent.

By the order of the Board Overseas Chinese Town (Asia) Holdings Limited Liu Yu Chairman

Hong Kong, 29 July 2024

As at the date of this announcement, the Board comprises seven Directors, including three executive Directors namely Ms. Liu Yu, Mr. Wang Jianwen and Ms. Qi Jianrong, one nonexecutive Director namely Mr. Yang Guobin and three independent non-executive Directors namely Ms. Wong Wai Ling, Mr. Lam Sing Kwong Simon and Mr. Chu Wing Yiu.

Certain figures included in this announcement have been subject to rounding adjustments. Certain Chinese names of institutions, natural persons or other entities or words have been translated into English and included in this announcement as unofficial translations for reference only. In the event of any inconsistency, the Chinese names shall prevail.

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