RemeGen Co., Ltd. — Proxy Solicitation & Information Statement 2019

Jun 24, 2019

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Overseas Chinese Town (Asia) Holdings Limited (the “ Company ”), you should hand this circular together with the accompanying proxy form at once to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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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)

MAJOR TRANSACTION JOINT VENTURE IN RESPECT OF

THE ACQUISITION AND DEVELOPMENT OF THE LAND USE RIGHTS IN CHAOHU, HEFEI, ANHUI PROVINCE, THE PRC

25 June 2019

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix I – Financial Information of the Group . . . . . . . . . . . . . . . . . .	I-1
Appendix II – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1

– i –

DEFINITIONS

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

• “Announcements”

• the announcements made by the Company dated 15 May 2019 and 3 June 2019, in relation to the Transactions

• “Board” the board of Directors

• “Business Day(s)”

• a day on which licensed banks in the PRC are open for business

• “close associate(s)”

• has the meaning ascribed to it under the Listing Rules

• “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

• “Confirmation Letter”

• the auction confirmation letter (成交確認書) entered into among OCT Gangya, Hefei Guojia and the Hefei Natural Resources and Planning Bureau on 15 May 2019 as a result of successfully winning the bid for the auction

• “connected person(s)”

• has the meaning ascribed to it under the Listing Rules

• “Consideration”

• the consideration for the land use rights of the Land amounting to RMB1,129,888,742

• “controlling shareholder(s)”

• has the meaning ascribed to it under the Listing Rules

• “Cooperation Agreement”

• the agreement dated 3 June 2019 and entered into between OCT Gangya and Hefei Guojia, in relation to, amongst others, the joint venture arrangements of the Project Company

• “Director(s)”

• the director(s) of the Company

• “Group”

• the Company and its subsidiaries as at the Latest Practicable Date

• “Hefei Guojia”

• 合肥國嘉產業資本管理有限公司 (Hefei Guojia Industry Capital Management Co., Ltd.*), a limited liability company established in the PRC

– 1 –

DEFINITIONS

• “Hefei Natural Resources and Planning Bureau”

Hefei Municipal Natural Resources and Planning Bureau* (合肥市自然資源和規劃局)

• “HK$” Hong Kong dollar(s), the lawful currency of Hong Kong

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

• “Independent Third Party(ies)”

• third party(ies) independent of and not connected to the Company and any of its connected persons (as defined in the Listing Rules) or their respective associates (as defined in the Listing Rules)

• “JV Partners” OCT Gangya and Hefei Guojia

• “Land”

• a piece of land located at the northwest of the intersection of Jinchao Avenue and Beiwaihuan Road and south of Juzhangshan Road in the Chaohu Economic Development Zone, Hefei, Anhui Province, the PRC (中國安徽省合肥 市巢湖經開區金巢大道北外環路交口西北側、岠嶂山路 以南) (Land plot no. ACK2018-15), with a total site area of 413,878.66 sq.m. and an estimated gross floor area of approximately 460,400 sq.m.

• “Land Acquisition”

• the acquisition of land use rights of the Land through public bidding process at the auction

• “Land Use Rights Grant Contract”

• the State-owned Land Use Rights Grant Contract (國有建 設用地使用權出讓合同) dated 30 May 2019 and entered into between the Hefei Natural Resources and Planning Bureau and the JV Partners pursuant to the Confirmation Letter

• “Latest Practicable Date”

• 21 June 2019, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

• “Listing Rules”

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

• “OCT Gangya”

• 深圳華僑城港亞控股發展有限公司 (Shenzhen OCT Gangya Holdings Development Co., Ltd.), a company established in the PRC and an indirect wholly-owned subsidiary of the Company

– 2 –

DEFINITIONS

“PRC”	the People’s Republic of China, for the purpose of	this
	circular, excluding Hong Kong, the Macau Special
	Administrative Region of the People’s Republic of China
	and Taiwan
“PRC Governmental Body”	has the meaning ascribed to it under the Listing Rules
“Project”	the project for the development of the Land as residential
	properties, hotels, water park and commercial street
“Project Company”	the joint venture company to be established by OCT
	Gangya and Hefei Guojia in the PRC for development of
	the Land
“RMB”	Renminbi, the lawful currency of the PRC
“SFO”	Securities and Futures Ordinance (Chapter 571) of	the
	Laws of Hong Kong
“Share(s)”	ordinary shares of HK$0.10 each in the capital of	the
	Company
“Shareholder(s)”	the shareholder(s) of the Company
“sq.m.”	square metre(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiary(ies)”	has the meaning ascribed to it under the Listing Rules
“Transactions”	the Land Acquisition, the entering into of	the
	Cooperation Agreement and the transactions
	contemplated thereunder
“%”	percent

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

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LETTER FROM THE BOARD

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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)

Executive Directors: Mr. He Haibin (Chairman) Ms. Xie Mei (Chief Executive Officer) Mr. Lin Kaihua

Non-executive Director:

Mr. Zhang Jing

Registered Office: Clifton House 75 Fort Street PO Box 1350 GT George Town Grand Cayman Cayman Islands

Independent Non-executive Directors: Mr. Chu Wing Yiu Ms. Wong Wai Ling Professor Lam Sing Kwong Simon

Head office and principal place of business in Hong Kong: 59/F., Bank of China Tower 1 Garden Road Hong Kong

25 June 2019

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION JOINT VENTURE IN RESPECT OF THE ACQUISITION AND DEVELOPMENT OF THE LAND USE RIGHTS IN CHAOHU, HEFEI, ANHUI PROVINCE, THE PRC

INTRODUCTION

References are made to the Announcements of the Company dated 15 May 2019 and 3 June 2019 in relation to the Transactions.

The purpose of this circular is, among other things, (i) to provide you with further details of the Transactions; and (ii) the financial information of the Group.

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LETTER FROM THE BOARD

THE LAND ACQUISITION

On 15 May 2019, OCT Gangya, an indirect wholly-owned subsidiary of the Company, and Hefei Guojia have jointly bidded and won the bid for the land use rights of the Land situated at Chaohu, Hefei, Anhui Province of the PRC, and jointly entered into the Confirmation Letter with the Hefei Natural Resources and Planning Bureau.

Pursuant to the Confirmation Letter, on 30 May 2019, the JV Partners, jointly, and the Hefei Resources and Planning Bureau entered into the Land Use Rights Grant Contract, the major terms of which are as follows:

Date:

30 May 2019

Parties:

• (1) the Hefei Natural Resources and Planning Bureau (as the transferor)

• (2) JV Partners (as the transferee)

Subject matter:

the Land situated at the northwest of the intersection of Jinchao Avenue and Beiwaihuan Road and south of Juzhangshan Road in the Chaohu Economic Development Zone, Hefei, Anhui Province, the PRC (中國安徽省合肥 市巢湖經開區金巢大道北外環路交口西北側、岠嶂山路 以南) with a total site area of 413,878.66 sq.m. and an estimated gross floor area of approximately 460,400 sq.m. It is expected that the total capacity building area is approximately 341,388 sq.m.

Consideration: RMB1,129,888,742 (i.e. RMB2,730 per sq.m. or RMB1,820,000 per acre)

Payment terms:

The Consideration (a land deposit of RMB400,000,000 which has been paid by OCT Gangya and Hefei Guojia jointly, in proportion to their proposed ownership of the Project Company, at the time of bidding shall be used to offset part of the Consideration for the Land Acquisition) shall be paid by the transferee in the following manner:

• (1) 50% of the Consideration shall be settled within 30 days from the date of entering into the Land Use Rights Grant Contract; and

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LETTER FROM THE BOARD

• (2) the remainder of the Consideration, along with the interest accrued on the remainder of the Consideration (the interest rate of which shall be determined by the rate published by the People’s Bank of China (中國人民銀行) as at the date of the settlement of the first 50% of the Consideration) shall be settled within three months from the date of entering into the Land Use Rights Grant Contract.

Date of completion of the Land On or before 30 June 2019 Acquisition:

Use of the Land:

Commercial use: 40 years

Residential use: 70 years

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Hefei Natural Resources and Planning Bureau, Hefei Guojia and their respective ultimate beneficial owners are Independent Third Parties.

In determining the Consideration (being RMB1,820,000 per acre), the Directors have taken into account of (i) the reference land price listed (being RMB1,520,000 per acre) set by the Hefei Natural Resources and Planning Bureau; (ii) the average floor price of three parcels of land in the proximity of the Land sold in 2018 (ranging from RMB5,200 to RMB6,200 per sq.m, which is estimated by the Group based on information publicly available. Such price range is for reference only as the usage, ratio and location of the three parcels of land may vary from that of the Project); (iii) expected profitability of the Project after taking into account of the average floor price of the Project (being approximately RMB3,315 per sq.m.) and the current selling price of the same type of housing supply in the surrounding area; (iv) the location of the Land which is near the only national tourist resort in Anhui province and the development potential of the Land.

The Directors confirm that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

THE COOPERATION AGREEMENT

Date

3 June 2019

Parties

• (a) OCT Gangya, an indirect wholly-owned subsidiary of the Company

• (b) Hefei Guojia

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LETTER FROM THE BOARD

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Hefei Guojia and its ultimate beneficial owner(s) are Independent Third Parties.

Formation, initial registered capital and capital commitment to the Project Company

Upon the establishment of the Project Company, the land use rights of the Land will be transferred to the Project Company. The initial registered capital of the Project Company shall be RMB400,000,000, which shall be contributed by OCT Gangya and Hefei Guojia in the proportion of 51% and 49% in the amount of RMB204,000,000 and RMB196,000,000, respectively. In addition to the initial registered capital, the JV Partners agreed, among other things:

1. Land Acquisition costs

Each of the JV Partners shall pay to the Project Company, the balance of the Consideration, the relevant tax as a result of the Land Acquisition, ancillary fees for urban construction and other relevant expenses in proportion to their respective shareholdings in the Project Company within three business days before the due date for payment in accordance with the terms of the Land Use Rights Grant Contract and relevant policies, and the Project Company shall then pay the same to the Hefei Resources and Planning Bureau.

The registered capital shall pay the Land Acquisition costs in priority. To the extent that the amount of the registered capital is insufficient to cover the land costs, such shortfalls will be financed by shareholders’ loan in proportion to their respective shareholdings in the Project Company at an annual interest rate not exceeding 40% of the one-year term lending interest rate promulgated by the People’s Bank of China.

2. Financing for the Project development

Before the Project Company is qualified to obtain external loans (i.e. before obtaining the relevant licences for Project development) from financial institutions, the Project shall be financed by shareholders’ loan in proportion to their respective shareholdings in the Project Company. The JV Partners will provide shareholders’ loan in proportion to their respective shareholdings in the Project Company to cover the development and construction costs of the Project.

After the Project Company is qualified to obtain external loans (i.e. after obtaining the relevant licences for Project development) from financial institutions, the Project shall first be financed by external loans from financial institutions. To the extent that the amount of external loans from financial institutions is insufficient to cover the development and construction costs of the Project, such shortfall will be financed by

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LETTER FROM THE BOARD

shareholders’ loan in proportion to their respective shareholdings in the Project Company at an annual interest rate not exceeding 40% of the one-year term lending interest rate promulgated by the People’s Bank of China.

3. Guarantee for the Project Company

The JV Partners shall provide guarantee for the financing of the Project Company in proportion to their respective shareholdings in the Project Company.

4. Capital commitment

In any event, the total capital commitment to be made to the Project Company in accordance with the Cooperation Agreement shall not exceed RMB2,352,941,176, of which RMB1,200,000,000 and RMB1,152,941,176 is attributable to OCT Gangya and Hefei Guojia, respectively, in proportion to their respective shareholdings in the Project Company.

The proportion of capital commitment to be made to the Project Company by OCT Gangya, being RMB1,200,000,000 shall be funded by the Group’s internal resources, shareholders’ loan and banking borrowings.

The aforesaid capital commitment was determined on an arm’s length negotiation between the parties after taking into account, but not limited to the following:

• (i) the Consideration and relevant tax expenses amounts to approximately RMB1,170,000,000;

• (ii) the estimated total construction costs will be approximately RMB2,060,000,000, which will be made by stages and partly covered by cashflow to be generated from the pre-sale of the Project; and

• (iii) guarantee from the shareholders of the Project Company may be required for part of the bank borrowings of the Project Company in the future. Up to the Latest Practicable Date, the Group has not granted or has any plan to grant any guarantee for the Project Company.

The Directors are of the view that the maximum capital commitment to be provided by the Group is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Upon completion of the transactions contemplated under the Cooperation Agreement, OCT Gangya will hold 51% equity interests in the Project Company. The Project Company will become an indirect subsidiary of the Company and its financial results will be consolidated into the consolidated financial statements of the Company.

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LETTER FROM THE BOARD

Distributable idle funds of the Project Company

At the discretion of the board of directors of the Project Company, the distributable idle funds of the Project Company shall firstly be applied to repayment of any outstanding shareholders’ loan in accordance with their respective shareholdings in the Project Company, and then shall be paid out to each of the JV Partners in proportion to their respective shareholdings in the Project Company.

The distributable idle funds refers to, at the relevant time, the amount of cash and bank balances of the Project Company minus (i) the expense payable for the Project within three months of the Project Company from the relevant time; (ii) interest and principal amount of any external loans payable within three months; and (iii) the amount required by any governmental bodies.

Distributable profits of the Project Company after the development stage

The Project Company may distribute to the JV Partners, in proportion to their equity interest in the Project Company, operating profits after tax after deducting the regulatory requirements on legal reserve and the working capital requirements of the Project Company, and complying with the regulatory requirements on the distribution of profits.

Board

The board of directors of the Project Company shall consist of five directors, three of whom shall be nominated by OCT Gangya and two shall be nominated by Hefei Guojia. The chairman of the board of directors of the Project Company shall be the director nominated by OCT Gangya and shall act as the legal representative of the Project Company, and the vice chairman of the board of directors of the Project Company shall be nominated by Hefei Guojia. Each of the director and chairman of the board of directors of the Project Company shall be appointed for a term of three years and shall be eligible for re-election after the end of the three years.

Supervisor

The Project Company will have two supervisors to be appointed by OCT Gangya and Hefei Guojia, respectively. Each of the supervisors shall be appointed for a term of three years and shall be eligible for re-election after the end of the three years.

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LETTER FROM THE BOARD

Other terms

The Project Company must not:

• (i) without the unanimous consent of the parties to the Cooperation Agreement, change the nature or scope of its business, and if there are changes then they must still be consistent with the scope or purpose specified in documents relating to the Land Acquisition; or

• (ii) enter into any transactions which are not on an arm’s length basis.

INFORMATION OF THE LAND

The Land is situated at the northwest of the intersection of Jinchao Avenue and Beiwaihuan Road and south of Juzhangshan Road in the Chaohu Economic Development Zone, Hefei, Anhui Province, the PRC (中國安徽省合肥市巢湖經開區金巢大道北外環路交口西北 側、岠嶂山路以南). The Land has a total site area of 413,878.66 sq.m. and an estimated gross floor area of approximately 460,400 sq.m. It is expected that the total capacity building area is approximately 341,388 sq.m. The Land is designated for commercial and residential usage with a term of 40 and 70 years, respectively. The Land is close to the Chaohu City Hall* (巢 湖市政府), the Chaohu train station and is located in the close vicinity of the only national tourism resort in Anhui Province (Chaohu Bantang Hot Spring Resort in Hefei City), surrounded by some of the famous local attraction sites. The Land is expected to be developed as an international high-quality hot spring destination, which includes, but not limited to, residential properties, hotels, water park and commercial street.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Land, situated in the core zone of the region-wide tourism of Chaohu, which is in the economic hinterland of the Yangtze Delta, presents larger development potential. The Directors believe that the Land Acquisition provides a good investment opportunity and allows the Group to expand its land reserves and in turn enhance the Group’s profitability and scale.

Hefei Guojia has experience in real estate project investment and cultural and tourism private equity investment. Its controlling shareholder is a financial holding group under the Hefei Municipal State-owned Assets Supervision and Administration Commission which has extensive experience in real estate project investment and possesses capital strength. By collaboration with Hefei Guojia, the Group can unleash its years of development and operation experience in large-scale comprehensive development projects, expand its source of fund and achieve complimentary advantages. The Directors believe the cooperation could enhance the efficiency and effectiveness in development of the Project and in turn brings a greater return to the Group.

The Directors confirm that Transactions are in the ordinary and usual course of business of the Company and on normal commercial terms which is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

INFORMATION ON THE GROUP

The principal business activity of the Company is investment holding. The Group is principally engaged in the comprehensive development business (including the development and operation of tourism theme park, developed and sold residential properties, construction contract, development and management of properties, and property investment) and investment in the new urbanization industrial ecosphere business.

OCT Gangya is a limited liability company established in the PRC and an indirect wholly-owned subsidiary of the Company, which is principally engaged in property management consulting, development of cultural tourism and sports facilities, management and investment consulting.

INFORMATION ON HEFEI GUOJIA

Hefei Guojia is a limited liability company established in the PRC, which is principally engaged in the investment, management, consultation and project investment of non-securities businesses including real estate project investment and private equity minority investment.

FINANCIAL EFFECT OF THE TRANSACTIONS ON THE GROUP

Upon establishment of the Project Company, OCT Gangya directly holds 51% of the equity interest in the Project Company. The Company holds, indirectly through OCT Gangya, 51% of the equity interest in the Project Company. Since OCT Gangya controls the majority of the board of directors and the voting rights in the shareholders’ meetings of the Project Company, the Project Company becomes a subsidiary of OCT Gangya and an indirect subsidiary of the Company. As a result, the financial results, assets and liabilities of the Project Company will be consolidated into the accounts of the Group in accordance with Hong Kong Financial Reporting Standard 10.

Assuming the transactions contemplated under the Cooperation Agreement had been fully effected, the financial effects upon the Group are:

• (i) an increase of inventory (from the Land) amounting to approximately RMB1,164,000,000;

• (ii) an expected decrease of the Group’s net cash position by approximately RMB576,000,000;

• (iii) an increase in liabilities (representing the loan from non-controlling shareholder Hefei Guojia, subject to shareholder approval) of approximately RMB392,000,000;

• (iv) an increase in equity (representing the non-controlling interest of Hefei Guojia) of approximately RMB196,000,000; and

• (v) an insignificant effect on the earnings of the Group.

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LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios calculated by reference to Rule 14.07 of the Listing Rules in respect of the maximum capital commitment to be made by OCT Gangya under the Cooperation Agreement exceed 25% but are less than 100%, the entering into of the Cooperation Agreement and the transactions contemplated thereunder constitute a major transaction of the Company under Chapter 14 of the Listing Rules.

The Land Acquisition is regarded as a qualified property acquisition under Rule 14.04(10C) of the Listing Rules as the Land Acquisition involves an acquisition of governmental land(s) from the PRC Governmental Body (as defined under the Listing Rules) through an auction governed by the PRC laws (as defined under the Listing Rules) in the PRC, which is undertaken by the Group in its ordinary and usual course of business.

The Land Acquisition is undertaken by the Group and Hefei Guojia via the Project Company on a joint basis. According to the Cooperation Agreement which is prepared on an arm’s length basis and on normal commercial terms, the Project Company is established for the single purpose relating to the acquisition and development of the Land which is consistent with the purpose of the Auction. The Cooperation Agreement also contains clauses that the Project Company must not, (i) without the unanimous consent from OCT Gangya and Hefei Guojia, change the nature or scope of the Project Company’s business and its scope of business shall be at all times consistent with the requirements specified in the sales documents of the auction of the Land; and (ii) enter into any transactions which are not on an arm’s length basis.

The Board confirms that the Land Acquisition is in the Group’s ordinary and usual course of business and that the Land Acquisition and the joint venture arrangement contemplated under the Cooperation Agreement (including its financing and profit distribution arrangements) are on normal commercial terms, fair and reasonable and in the interests of the Company and Shareholders as a whole. The Transactions are subject to reporting and announcement requirements but is exempt from Shareholders’ approval requirements pursuant to Rule 14.33A of the Listing Rules.

To the best of the Directors’ knowledge, information and belief, no Director is required to abstain from voting on the board resolutions in relation to the approval of the Transactions.

RECOMMENDATION

The Board (including the independent non-executive Directors) considers that the Transactions are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

Although a general meeting will not be convened by the Company to approve the Transactions, if such a general meeting were to be convened by the Company, the Board would recommend the Shareholders to vote in favour of the resolutions to approve the Transactions.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

By order of the Board Overseas Chinese Town (Asia) Holdings Limited He Haibin

Chairman

– 13 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The Company is required to set out in this circular the financial information for the last three financial years with respect to the profits and losses, financial record and position, as a comparative table and the latest published statement of financial position together with the notes on the annual accounts for the last financial year for the Group.

The audited consolidated financial statements of the Group for the year ended 31 December 2016 has been set out in pages 77 to 172 of the 2016 annual report of the Company which was posted on 26 April 2017 on the Stock Exchange’s website (http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0426/LTN20170426481.pdf). The audited consolidated financial statements of the Group for the year ended 31 December 2017 has been set out in pages 77 to 178 of the 2017 annual report of the Company which was posted on 13 April 2018 on the Stock Exchange’s website (http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0413/LTN20180413403.pdf). The audited consolidated financial statements of the Group for the year ended 31 December 2018 has been set out in pages 97 to 230 of the 2018 annual report of the Company which was posted on 26 April 2019 on the Stock Exchange’s website (http://www.hkexnews.hk/listedco/listconews/SEHK/2019/0426/LTN201904261057.pdf).

2. INDEBTEDNESS STATEMENT

As at the close of business on 30 April 2019, being the date of this indebtedness statement prior to the printing of this circular, the Group had a total borrowings of approximately RMB8,827.94 million, comprising secured and guaranteed bank and related party loans of approximately RMB2,348.60 million, unsecured and unguaranteed bank and related party loans of approximately RMB6,683.34 million.

As at 30 April 2019, the Group’s secured and guaranteed bank loans were secured by pledged deposits with total carrying values of approximately RMB740.15 million, and guarantees provided by Shenzhen Overseas Chinese Town Co., Ltd. and Overseas Chinese Town (HK) Co., Ltd., which are intermediate parents of the Company.

As at 30 April 2019, the Group had outstanding obligations under lease with carrying amount of approximately RMB89.58 million.

As at 30 April 2019, save for the guarantees of approximately RMB767.40 million given to financial institutions for mortgage loan facilities granted to purchasers of the Group’s properties, the Group had no other material contingent liabilities.

Foreign currency amounts have been, for the purposes of this indebtedness statement, translated into Renminbi at the approximate rates of exchange applicable at the close of business on 30 April 2019.

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Save as aforesaid and apart from intra-group liabilities and normal trade payables in the ordinary course of business, at the close of business on 30 April 2019, the Group did not have any other outstanding mortgages, charges, debentures or other loan capital, bank overdrafts or loans, other similar indebtedness, lease liabilities under finance lease and operating lease or hire purchase lease commitments, liabilities under acceptance or acceptance credit, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

The Directors are of the opinion that, taking into account the financial resources available to the Group including the internally generated funds and the present available bank facilities, and taking into account the impact of the Transactions, the Group will have sufficient working capital for its requirements for at least the next 12 months from the date of this circular.

4. CONTINGENT LIABILITIES

Save as disclosed in this circular, the Group has no other material contingent liabilities. The Group is not involved in any current material legal proceedings, nor is the Group aware of such material legal proceedings. The Group would record any loss contingencies when, based on information then available, it is probable that a loss had been incurred and the amount of the loss can be reasonably estimated. The Group confirms that there has not been any material change in the level of its contingent liabilities since 31 December 2018 up to the Latest Practicable Date.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

For the year ended 31 December 2018, the Group realised revenue from the continuing operations of approximately RMB1,585 million, representing a year-on-year decrease of approximately 61.4%. For the year ended 31 December 2018, profit attributable to equity holders of the Company was approximately RMB798.70 million, representing a year-on-year decrease of approximately 27.8%. For the year ended 31 December 2018, the Group’s gross profit margin from the continuing operations was approximately 35.2%, representing a decrease of 2.5 percentage points over the same period of 2017. As at 31 December 2018, total assets and total equity of the Group amounted to approximately RMB25.08 billion and approximately RMB12.91 billion, representing a year-on-year increase of approximately 5.6% and decrease of approximately 3.1% respectively.

As OCT Group’s only offshore listed platform, the Group’s new development mode will be “comprehensive development + investment in the urbanisation industrial ecosphere”. The Group will develop the comprehensive development business with added vigour and on a larger scale by fully leveraging OCT’s brand equity and financial strength, and by securing high-quality projects from the areas of prime cities and OCT urbanisation projects. The Group

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

will also actively leverage the domestic and overseas capital markets along with financial products, intensifying its project development to seek new investment opportunities through domestic and overseas investments, mergers and acquisitions, industrial funds, financial leasing and others methods.

Comprehensive development business

In 2019, the various control policies will continue to be stability-oriented assuming that such policies ensure the steady development of the real estate market, while the basic keynotes of “houses are built to be inhabited, not for speculation” and “leasing and purchasing” remain unchanged. In order to ensure reasonable housing consumption for the residents, the effects on the consumption of some improved housing arising from preceding control and upgrade may be adjusted subsequently. Meanwhile, the further release on monetary policy is expected to facilitate improvements in the aspect of real estate market demand.

In future, the various comprehensive development projects of the Group are as follows: Shanghai Suhewan Project will push forward the leasing activities for the commercial properties surrounding Bvlgari Hotel in order to consolidate the market benchmark role of Bvlgari Residence. The Chengdu OCT Project will primarily launch high-end apartments and the high-end customised villa in the only eyot of downtown Chengdu, and will continue its sale of boutique community commercial properties with a total saleable area of approximately 189,000 sq.m.. As to the Chongqing Land Project, a new batch of high-rise and multi-storey residential products with a total saleable area of approximately 176,000 sq.m. will be launched. For the OCT (Changshu) Project, the planning and design work is scheduled to be completed and the construction is expected to commence in 2019, and the project is expected to be released for leasing from 2020. With combined geographical advantages and integrated surrounding resources, the Group will explore and push forward timely planning, development and construction of idle lands for its existing industrial lands.

The Group will also continue to adhere to advanced development philosophy and clear market orientation, pushing forward its comprehensive development business with enhanced strength and size. It will stay on the outlook for diversified investment opportunities, with a view to strengthening the strategic synergy with investment enterprises. Through various ways such as acquisition, cooperation and equity investment, we will acquire high-quality lands at low cost to increase resource reserve for the projects, so as to expand and enhance our comprehensive development business.

Investment in the Urbanisation Industrial Ecosphere Business

In future, aiming at key areas including culture, travel, education, consumption, healthcare and urbanisation, the investment business of the Group will continuously select high-quality projects that meet our strategic orientation with due care, and strive for new equity investment opportunities, so as to build the urbanisation industrial ecosphere and the industrial cooperation alliance, continuously enriching and expanding the contents and essence of the urbanisation industrial ecosphere business. In the future, the Group’s fund management

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

companies will be based in Guangdong-Hong Kong-Macao Greater Bay Area, radiating outwards throughout China with its main focus on industries having strong synergy with urbanisation industrial ecosphere so as to reserve high quality resources for the Company.

Finance Lease Business

In 2019, the Group will continuously engage in the finance lease business in sectors such as theme parks and the manufacturing industry with a primary focus on customer base such as large to mid-scale state-owned enterprises and high quality listed companies, improve its risk management and push forward the development of the business in order to achieve stable operating income.

The Board is very confident about the future development prospects of the Group. With the support of OCT Group, the Group will continue to forge ahead with innovative development and endeavour to generate ideal investment returns for Shareholders.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DIRECTORS’ INTERESTS

Directors’ and chief executive’s interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, no interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) were held by the Directors and chief executives of the Company which have been notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have under such provisions of the SFO) or have been entered in the register maintained by the Company pursuant to section 352 of the SFO, or otherwise have been notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “ Model Code ”).

Persons who have interests or short positions which are discloseable under Divisions 2 and 3 of Part XV of the SFO

As at the Latest Practicable Date, as far as is known to the Directors, the following persons (not being a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares of the Company which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO:

			Approximate %
			of issued share
Name of Substantial		Number of	capital of the
Shareholder	Capacity/Nature	Shares held	Company
Pacific Climax Limited	Beneficial	530,894,000	70.94%
	owner (note 1)	(long position)
Overseas Chinese Town	Interest of a	530,894,000	70.94%
(HK) Company Limited	controlled	(long position)
(“OCT (HK)”)	corporation (note 2)

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GENERAL INFORMATION

APPENDIX II

			Approximate %
			of issued share
Name of Substantial		Number of	capital of the
Shareholder	Capacity/Nature	Shares held	Company
Shenzhen Overseas Chinese	Interest of a	530,894,000	70.94%
Town Company Limited	controlled	(long position)
(深圳華僑城股份有限公	corporation (note 3)
司) (“OCT Ltd.”)
Overseas Chinese Town	Interest of a	530,894,000	70.94%
Company Limited	controlled	(long position)
(華僑城集團有限公司)	corporation (note 4)
(“OCT Group”)

Notes:

• (1) The interests held by Pacific Climax consist of interests (long position) in 530,894,000 Shares. Ms. Xie Mei and Mr. Lin Kaihua, both being executive Directors, and Mr. Zhang Jing, being a non-executive Director, are also directors of Pacific Climax.

• (2) OCT (HK) is the beneficial owner of all the issued share capital in Pacific Climax. Therefore, OCT (HK) is deemed, or taken to be interested in all the Shares beneficially held by Pacific Climax for the purpose of the SFO. Mr. He Haibin and Ms. Xie Mei, both being executive Directors, and Mr. Zhang Jing, being a non-executive Director, are also directors of OCT (HK).

• (3) OCT Ltd. is the beneficial owner of all the issued share capital of OCT (HK), which is in turn the beneficial owner of all the issued share capital of Pacific Climax. OCT Ltd. is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT (HK) and Pacific Climax pursuant to the SFO. OCT Ltd. is a company incorporated in the PRC, the shares of which are listed on the Shenzhen Stock Exchange. OCT Ltd. is a subsidiary of OCT Group.

• (4) OCT Group is the beneficial owner of 46.99% of the issued shares of OCT Ltd., which is the beneficial owner of all the issued shares of OCT (HK) and in turn, the beneficial owner of all the issued share capital of Pacific Climax. Therefore, OCT Group is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT Ltd., OCT (HK) and Pacific Climax for the purpose of the SFO.

Save as disclosed above, no other interests required to be recorded in the register kept under section 336 of the SFO have been notified to the Company as at the Latest Practicable Date.

3. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective close associates has any interest in any business which competes or is likely to compete with the businesses of the Group.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has a service contract with any member of the Group which was not determinable by the Group within one year without payment of compensation (other than statutory compensation).

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GENERAL INFORMATION

APPENDIX II

5. INTEREST IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which have been, since 31 December 2018 (being the date to which the latest published accounts of the Company were made up), acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which is significant in relation to the businesses of the Group.

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2018 (being the date to which the latest published accounts of the Company were made up).

7. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business of the Group) had been entered into by members of the Group within the two years immediately preceding the Latest Practicable Date and are or may be material:

• (a) the equity transfer agreement dated 20 September 2017 entered into between Barwin Development Company Limited, a wholly-owned subsidiary of the Company, and Shanghai Huiyang Industry Co., Ltd. (上海匯陽實業有限公司) in relation to the disposal of 100% equity interest in Shanghai Huali Packaging Co., Ltd. (上海華勵 包裝有限公司) by Barwin Development Company Limited at a consideration of RMB164,673,100;

• (b) the sale and purchase agreement (the “ Capital Converge Sale and Purchase Agreement ”) dated 9 November 2017 entered into among the Company, Capital Converge Holdings Limited and New China Fund (on behalf of New China Fund SP 1) in relation to the disposal of 51 shares and 51% of the shareholder’s loan in Capital Converge Holdings Limited by the Company to New China Fund (on behalf of New China Fund SP 1) at a consideration in the sum equals the US$ equivalent of RMB1,395,249,891.13;

• (c) the supplemental agreement to the Capital Converge Sale and Purchase Agreement dated 15 November 2017 entered into among the Company, Capital Converge Holdings Limited and New China Fund (on behalf of New China Fund SP 1);

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GENERAL INFORMATION

APPENDIX II

• (d) the equity transfer agreements (together with the supplemental agreement thereto) entered into between City Legend International Limited (“ City Legend ”) and Suzhou Wancheng Shengda Travel Development Co., Ltd.* (蘇州萬程晟達旅遊發展 有限公司) on 10 May 2018 in relation to the acquisition of 5.11% equity interest in Tongcheng-Elong Holdings Limited by City Legend at a consideration of approximately RMB1.18 billion;

• (e) the cornerstone investment agreement entered into between City Legend and Tianli Education International Holdings Limited (“ Tianli Education ”) and China International Capital Corporation Limited on 26 June 2018 in relation to subscription of 4.82% of the issued share capital of Tianli Education at a subscription price of approximately HK$266 million;

• (f) the cornerstone investment agreement entered into among City Legend, E-House (China) Enterprise Holdings Limited and China International Capital Corporation Hong Kong Securities Limited on 5 July 2018 in relation to the subscription of 73,371,900 shares in E-House (China) Enterprise Holdings Limited at the subscription price of approximately HK$1,055 million;

• (g) the subscription agreement entered into between City Legend and Yuzhou Properties on 31 August 2018 in relation to the subscription of 460,489,606 new shares in Yuzhou Properties at the aggregate subscription price of HK$1,823,538,839.76;

• (h) the acquisition agreement and leaseback agreement both dated 11 September 2018 entered into between OCT Financial Leasing Co., Ltd, a wholly-owned subsidiary of the Company, and Yibin Grace Co., Ltd, pursuant to which OCT Financial Leasing Co., Ltd agreed to acquire certain equipment from Yibin Grace Co., Ltd at the consideration of RMB300 million and leaseback such equipment to Yibin Grace Co., Ltd.;

• (i) the equity transfer agreement dated 24 December 2018 entered into between Chengdu Tianfu OCT Industry Development Company Limited (成都天府華僑城實 業發展有限公司, “ Chengdu OCT ”), a non-wholly owned subsidiary of the Company, Zhongbao Investment Overseas Chinese Town (Shenzhen) Tourism Cultural City Renewal Equity Investment Fund Partnership (Limited Partnership) (中保投華僑城(深圳)旅遊文化城市更新股權投資基金合夥企業(有限合 夥), “ Zhongbao Investment Fund ”) and Chengdu Tianfu OCT Lakeside Business Management Co. Ltd. (成都天府華僑城湖濱商業管理有限公司, “ OCT Lakeside ”) in relation to the disposal of 51% equity interest in OCT Lakeside by Chengdu OCT to Zhongbao Investment Fund at the consideration of approximately RMB60.53 million;

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GENERAL INFORMATION

APPENDIX II

• (j) the equity transfer agreement dated 27 December 2018 entered into between Wantex Investment Limited (榮添投資有限公司), an indirectly wholly-owned subsidiary of the Company, and Shenzhen Quande Investment Company Limited (深圳市全德投 資有限公司) and Shenzhen Zhijie Investment Company Limited (深圳智捷投資有 限公司) in relation to the disposal of 100% equity interest in Zhongshan Huali Packaging Co., Ltd.* (中山華力包裝有限公司) at the total consideration of approximately RMB150.29 million;

• (k) the cooperation agreement entered into on 26 March 2019, between Zhuhai Yiyun Real Estate Limited (珠海依雲房地產有限公司) (“ Zhuhai Yiyun ”), Xiamen Yuzhou Grand Future Real Estate Development Company Limited (廈門禹洲鴻圖 地產開發有限公司) (“ Xiamen Yuzhou ”), Shenzhen Huajing Investment Limited (深圳市華京投資有限公司) (“ Shenzhen Huajing ”) and Zhongshan Yuhong Real Estate Development Limited (中山禹鴻房地產開發有限公司) (“ Zhongshan Yuhong ”) in relation to the acquisition of 21% of equity interest and debt interest in Zhongshan Yuhong at a total consideration of approximately RMB340,380,433;

• (l) the equity transfer agreement dated 26 March 2019 and entered into between Xiamen Yuzhou and Shenzhen Huajing in respect of the acquisition of 21% of equity interest in Zhongshan Yuhong at a total consideration of RMB1,263,447;

• (m) the debt transfer agreement dated 26 March 2019 and entered into between Xiamen Yuzhou and Shenzhen Huajing in respect of the acquisition of 21% of debt interest in Zhongshan Yuhong at a total consideration of approximately RMB339,116,986;

• (n) the finance lease and factoring framework agreement entered into between OCT Financial Leasing Co., Ltd. (華僑城融資租賃有限公司) (“ OCT Financial Leasing ”), a direct wholly-owned subsidiary of the Company and OCT Ltd. on 7 May 2019 in relation to provision of finance lease and factoring services from OCT Financial Leasing to OCT Ltd. at an annual cap of RMB2,500,000,000 for one year from the date of independent shareholders’ approval;

• (o) the finance lease and factoring framework agreement entered into between OCT Financial Leasing and OCT Group on 7 May 2019 in relation to provision of finance lease and factoring services from OCT Financial Leasing to OCT Group. at an annual cap of RMB1,000,000,000 for one year from the date of independent shareholders’ approval; and

• (p) the Cooperation Agreement.

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GENERAL INFORMATION

APPENDIX II

8. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the Group was engaged in any litigation or arbitration or claim of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against the Company or any member of the Group.

9. GENERAL

• (a) The company secretary and the qualified accountant of the Company is Mr. Fong Fuk Wai, who is a fellow member of the Hong Kong Institute of Certified Public Accountants.

• (b) The Company’s registered office is at Clifton House, 75 Fort Street, PO Box 1350 GT, George Town, Grand Cayman, Cayman Islands. The head office and principal place of business is at 59/F., Bank of China Tower, 1 Garden Road, Hong Kong.

• (c) The Hong Kong branch share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (d) The English text of this circular shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the following documents are available for inspection during normal business hours except on Saturday, Sunday and public holidays at the office of the Company in Hong Kong at 59/F., Bank of China Tower, 1 Garden Road, Hong Kong from the date of this circular up to and including 10 July 2019:

• (a) the memorandum and articles of association of the Company;

• (b) the annual reports of the Company for the years ended 31 December 2016, 2017 and 2018;

• (c) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;

• (d) a copy of each circular issued pursuant to the requirements set out in Chapters 14 and/or 14A of the Listing Rules which has been issued since 31 December 2018 (being the date of which the last published accounts); and

• (e) this circular.

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